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As filed with the Securities and Exchange Commission on January 15, 1999.
Registration No. 333-69627
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SUIZA FOODS CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware 75-2559681
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
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2515 MCKINNEY AVENUE, SUITE 1200
DALLAS, TEXAS 75201
(214) 303-3400
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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Gregg L. Engles COPIES TO:
Chairman of the Board and William A. McCormack
Chief Executive Officer Hughes & Luce, L.L.P.
2515 McKinney Avenue 1717 Main Street, Suite 2800
Suite 1200 Dallas, Texas 75201
Dallas, Texas 75201 (214) 939-5500
(214) 303-3400
(Name, address, and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BE COME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SUIZA FOODS CORPORATION
32,574 SHARES
COMMON STOCK
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The stockholder identified below under the caption "Selling
Stockholder" may offer to sell up to 32,574 shares of our common stock.
We have already issued to the selling stockholder the shares being
offered by the selling stockholder, or we will issue the shares being offered by
the selling stockholder prior to the sale of the shares. This offering is not
part of the original issuance of the shares of common stock. We will not receive
any of the proceeds from the selling stockholder's sale of their shares. The
selling stockholder may offer the shares in transactions on the New York Stock
Exchange, in negotiated transactions, or through a combination of these methods.
The selling stockholder may offer the shares at prices relating to the
prevailing market prices or at negotiated prices.
Our common stock is quoted on the NYSE under the symbol "SZA." On
January 14, 1999, the last reported sale price of our common stock, as reported
on the NYSE, was $40.38 per share.
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INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
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The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if the prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
------------------------------------
You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you with
information that is different from that contained in this Prospectus. The
selling stockholder may offer to sell, and seek offers to buy, shares of common
stock only in jurisdictions where offers and sales are permitted. The
information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale
of the common stock.
This Prospectus is dated January 15, 1999.
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TABLE OF CONTENTS
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PAGE
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Where You Can Get More Information 1
Incorporation of Certain Documents by Reference 2
Prospectus Summary 3
Risk Factors 7
Selling Stockholder 14
Plan of Distribution 14
Use of Proceeds 15
Legal Matters 15
Experts 15
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We are a Delaware corporation. Our principal executive offices are
located at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201, and our
telephone number is 214-303-3400. We maintain a worldwide web site at
http://www.suizafoods.com. In this Prospectus, the "Company," "Suiza," "we,"
"us" and "our" refer to Suiza Foods Corporation and its subsidiaries, unless the
context otherwise requires. In addition, "Common Stock" refers to our Common
Stock, $0.01 par value per share.
Our national brands include International Delight(R), Second Nature(R),
Naturally Yours(R) and Mocha Mix(R). Our regional brands include Country
Fresh(R), Dairymens(R), Lehigh Valley Farms(R), Model(TM), Natural by Garelick
Farms(R), Suiza(TM), Louis Trauth(TM), Tuscan(R), Velda Farms(R) and West Lynn
Creamery(R). Our partner or licensed brands include Lactaid(R) (manufactured
under a license with McNeil Consumer Products, an affiliate of Johnson &
Johnson), Flav-O-Rich(R) (licensed from Dairy Farmers of America, Inc.) and
Pet(R) (licensed from Grand Metropolitan Public Liability Company).
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WHERE YOU CAN GET MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
exhibits to our registration statement incorporated by reference in this
Prospectus. If you want more information, write or call us at:
Suiza Foods Corporation
2515 McKinney Avenue, Suite 1200
Dallas, Texas 75201
(214) 303-3400
Our fiscal year ends on December 31. We furnish our stockholders annual
reports containing audited financial statements and other appropriate reports.
In addition, we are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information we file at the SEC's public
reference room in Washington D.C. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC Internet site
at http://www.sec.gov.
We have filed with the Commission a Registration Statement on Form S-3,
(together with all exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
common stock we are offering in this Prospectus. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in exhibits to the Registration Statement, as permitted by the rules
and regulations of the SEC. For further information with respect to us and the
securities we are offering in this Prospectus, reference is made to the
Registration Statement, including the exhibits thereto, and the financial
statements and notes incorporated by reference as a part thereof, which are on
file at the SEC and may be obtained upon payment of the fee prescribed by the
SEC, or may be examined without charge at the SEC. Statements made in this
Prospectus concerning the contents of any contract, agreement or other document
referred to herein are not necessarily complete, and, in each such instance, are
qualified in all respects by reference to the applicable documents filed with
the SEC. The Registration Statement and the exhibits thereto filed by the
Company with the SEC may be inspected and copied at the locations described
above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission pursuant
to the Securities Act and the Exchange Act are incorporated herein by reference
and shall be deemed a part hereof:
1. Suiza's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 (File No. 1-12755).
2. Suiza's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998 (File No. 1-12755).
3. Suiza's Current Report on Form 8-K filed July 14, 1997 (as amended on
August 22, 1997), which includes the audited financial statements of
Dairy Fresh L.P. and The Garelick Companies (File No. 1-12755).
4. Suiza's Current Report on Form 8-K filed March 9, 1998 (as amended on
April 7, 1998), which includes the audited financial statements of
Land-O-Sun Diaries, L.L.C. (File No. 1-12755).
5. Suiza's Current Reports on Form 8-K filed January 15, 1998, February
18, 1998, February 25, 1998, March 10, 1998, March 18, 1998, March 20,
1998, June 2, 1998, September 14, 1998 and December 18, 1998 (File No.
1-12755).
6. Continental Can Company, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1997 (File No. 1-6690).
7. Continental Can Company, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 (File No. 1-6690).
8. The description of the Common Stock contained in Suiza's Registration
Statement on Form 8-A filed on February 19, 1997 (File No. 1-12755),
including any amendments or reports filed for the purpose of updating
such description.
9. The description of the Common Stock Purchase Rights contained in
Suiza's Registration Statement on Form 8-A filed on March 10, 1998
(File No. 1-12755), including any amendments or reports filed for the
purpose of updating such description
All reports and other documents filed by Suiza pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this Offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the dates of
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified, replaced or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is incorporated or deemed to be incorporated by reference
herein, modifies, replaces or supersedes the earlier statement. Any statement so
modified, replaced or superseded shall not be deemed, except as so modified,
replaced or superseded, to constitute a part of this Prospectus.
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PROSPECTUS SUMMARY
You should read this summary together with the more detailed
information, our financial statements and notes and the financial statements and
notes of certain acquired businesses appearing elsewhere in, or incorporated by
reference in, this Prospectus. You should carefully consider, among other
things, the matters set forth in "Risk Factors."
THE COMPANY
We are a leading manufacturer and distributor of dairy products and a
leading manufacturer of rigid plastic packaging in the United States. Our
principal businesses have well-established reputations in their markets for
product quality and high levels of customer service. We have grown primarily
through an aggressive acquisition and integration strategy. We intend to
continue to pursue this strategy.
DAIRY
Our dairy products and related distribution businesses contributed
approximately 79% of our net sales on a pro forma basis for the nine months
ended September 30, 1998. Pursuant to our expansion strategy, we have completed
24 dairy acquisitions since our initial public offering in April 1996, including
13 acquisitions in 1998.
In our dairy business, we have established a strong regional presence
in the northeastern, southeastern and central United States, Puerto Rico, Nevada
and parts of California. We also manufacture and distribute certain
refrigerated, frozen and extended shelf-life products on a national basis.
Our dairy products include:
o fluid milk, including flavored milks
o ice cream and novelties
o dairy and non-dairy coffee creamers
o half-and-half and whipping cream
o sour cream
o cottage cheese
o yogurt
o dairy and non-dairy frozen whipped toppings
We also manufacture and distribute fruit juices and other flavored
drinks, bottled water and coffee.
We manufacture and market our dairy products under proprietary brand
names. We also manufacture products on a private-label basis for certain
customers. Our brands include:
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o national brands including International Delight, Second Nature,
Naturally Yours and Mocha Mix
o regional brands including Country Fresh, Dairymens, Lehigh Valley
Farms, Model, Natural by Garelick Farms, Suiza, Louis Trauth,
Tuscan, Velda Farms and West Lynn Creamery
o partner or licensed brands in certain regions including Lactaid,
Flav-O-Rich and Pet
Our dairy customers include grocery stores, convenience stores and
institutional food service customers.
PACKAGING
Our rigid plastic packaging business contributed approximately 21% of
our net sales on a pro forma basis for the nine months ended September 30, 1998.
We entered the packaging business through our acquisition of Franklin Plastics,
Inc. in August 1997 as a part of our acquisition of The Garelick Companies. We
extended our market presence in packaging through the acquisition of Continental
Can Company, Inc. in May 1998 and seven smaller acquisitions during 1998.
We manufacture rigid plastic bottles and containers and metal cans. Our
packaging customers include regional dairy manufacturers, bottled water
processors, beverage manufacturers, and consumer and industrial products
companies.
We are currently considering strategic alternatives for our packaging
business, which could include a partial or complete spin-off, a sale of all or a
portion of the business or a continuation of our acquisition and integration
strategy.
RECENT ACQUISITIONS
During 1998, we completed 13 dairy and eight packaging acquisitions.
Our most significant acquisitions in 1998 were the following:
o Land-O-Sun (February 1998). Land-O-Sun Dairies, L.L.C., a
manufacturer and distributor of dairy products in the
southeastern and central United States, had net sales of
approximately $464 million for its 1997 fiscal year.
o Continental Can (May 1998). Continental Can, a manufacturer of
packaging products with operations in the United States and
Europe, had net sales of approximately $546 million for its 1997
fiscal year.
o Tuscan/Lehigh Dairies (December 1998). Tuscan/Lehigh, L.P., a
manufacturer and distributor of dairy products in the
northeastern United States, had net sales of approximately $517
million for the twelve month period ended September 30, 1998. We
merged Tuscan/Lehigh into our northeastern dairy operations to
form a new subsidiary in which Dairy Farmers of America, Inc.
("DFA") owns a 25% interest. The combined net sales of our
northeastern dairy operations and Tuscan/Lehigh were
approximately $1.2 billion for the twelve month period ended
September 30, 1998.
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Primarily as a result of our acquisitions, we have increased our net
sales and operating income from $579.3 million and $12.4 million, respectively,
for the year ended December 31, 1993 to $3,089.4 million and $188.4 million,
respectively, for the year ended December 31, 1997 on a pro forma basis for our
acquisitions of Land-O-Sun and Continental Can.
OUR STRATEGY
We remain focused on achieving continued revenue and profit growth
through the following strategies:
ACQUISITION AND INTEGRATION. According to statistics published by the
Milk Industry Foundation, the United States fluid milk industry totaled
approximately $23 billion in wholesale value in 1997. We believe that the
industry remains fragmented and is undergoing consolidation. To capitalize on
this trend, we intend to acquire strong dairy businesses in new markets and to
strengthen our presence in existing markets through add-on acquisitions. By
pursuing this strategy, we seek to accomplish the following objectives:
o expand the geographic coverage of our dairy business to better
serve an increasingly national customer base
o gain scale efficiencies in purchasing, product development and
consumer research as we increase our sales base
o develop a more efficient direct store delivery ("DSD") system for
distributing a greater volume and variety of branded and higher
margin products to our customers
o combine the increased geographic scope of our DSD system with our
national warehouse system to increase the productivity of our
manufacturing, distribution and marketing assets
o reduce manufacturing costs and increase product quality through
the continued integration of manufacturing operations into
specialized, scale-efficient facilities
In pursuing our acquisition and integration strategy for our packaging
business, we seek to accomplish the following objectives:
o expand the geographic coverage of our manufacturing facilities to
better serve our national customers and to minimize
transportation costs
o broaden our product line and technological capabilities to better
meet our customers' needs
As noted, we are currently considering strategic alternatives for our
packaging business. Pending any final decision, we intend to pursue our current
acquisition and integration strategy.
ORGANIC GROWTH. We continue to build our existing dairy distribution
network and extend our dairy and packaging product offerings. We are currently
test marketing and introducing new products and packaging innovations and
investing in product research and marketing to develop additional product and
packaging innovations. We intend to develop or acquire new product lines
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that are compatible with our manufacturing, distribution and marketing
infrastructure and that can serve as additional platforms for future growth.
ENHANCEMENT OF OPERATING MARGINS. We continue to seek margin
improvements through increased production and purchasing efficiencies, operating
synergies from acquired businesses and increased sales of higher-margin branded
products. In pursuing this strategy, we have improved our operating margin from
2.1% for the year ended December 31, 1993 to 7.2% for the nine months ended
September 30, 1998 on a pro forma basis.
In order to implement our growth strategies, we have expanded our
management team and invested in product development, marketing and other
centralized functions.
We are incorporated in Delaware and our principal offices are located
at 2515 McKinney Avenue, Suite 1200, Dallas, TX 75201, and our telephone number
is (214) 303-3400.
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RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below are not the only
ones facing us. Additional risks that we do not yet know of or that we currently
think are not material may also have an adverse effect on our business
operations. If any of those risks or any of the risks described below actually
occur, our business, financial condition, results of operations or prospects
could be adversely affected. In that case, the price of the Common Stock could
decline, and you could lose all or part of your investment. You should also
refer to the other information set forth or incorporated by reference in this
Prospectus, including "Selected Historical Consolidated Financial Data" and "Pro
Forma Consolidated Financial Data" and notes thereto, our audited consolidated
financial statements and notes thereto, our unaudited interim consolidated
financial statements and notes thereto, the separate audited financial
statements and notes of Dairy Fresh, Garelick, Land-O-Sun and Continental Can
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
This Prospectus contains or incorporates by reference certain
forward-looking statements. These statements refer to future events affecting
our business, financial condition, results of operations or prospects. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual performance or results to be materially and adversely
different from any performance or results expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"anticipates," "plans," "believes," "estimates," "intends," "predicts,"
"potential" or "continue" or the negative of such terms and other comparable
terminology. These statements are only predictions, and in evaluating those
statements, you should specifically consider the risks outlined below. Actual
performance or results may differ materially. We are under no duty to update any
of the forward-looking statements after the date of this Prospectus to conform
these statements to actual performance or results.
WE MAY HAVE DIFFICULTIES EXECUTING OUR ACQUISITION STRATEGY
We intend to expand our dairy and packaging businesses primarily
through acquisitions. Our ability to expand through acquisitions is subject to
various risks, including:
o increased competition for acquisitions
o higher acquisition prices
o fewer suitable acquisition candidates
o limitations on our capital resources to complete acquisitions
o inability to enter into definitive agreements for desired
acquisitions
o inability to complete desired acquisitions
o increased antitrust constraints on our proposed acquisitions and
acquisition strategy
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Federal antitrust authorities have reviewed or are reviewing in detail
several of our recent proposed acquisitions. We cannot predict whether these
authorities will approve, or what conditions they may impose upon, pending or
future acquisitions.
WE MAY HAVE DIFFICULTIES MANAGING OUR GROWTH
We have expanded our operations rapidly in recent years and intend to
continue this expansion. This rapid growth places a significant demand on our
management and our financial and operational resources. Our growth strategy is
subject to various risks, including:
o inability on our part to successfully integrate or operate
acquired businesses
o inability to retain key customers of acquired businesses
o inability to realize or delays in realizing economies of scale
and operating efficiencies from acquired businesses
The integration of businesses we have acquired or may acquire in the
future may also require us to invest more capital than we expected or require
more time and effort by management than we expected.
WE OPERATE IN HIGHLY COMPETITIVE MARKETS
Our dairy and packaging businesses are subject to significant
competition.
We compete in the dairy business on the basis of a number of factors
including service, price, brand recognition, quality and breadth of product
line. Our principal competitors are national and regional dairy products
companies and national food service distributors that operate in our markets.
Certain of our competitors are large and well capitalized and have greater
financial, operational and marketing resources than we do.
The dairy industry has excess capacity and has been consolidating for
many years. This excess capacity is the result of improved manufacturing
techniques, the establishment of captive dairy operations by large grocery
retailers and limited growth in the demand for fresh milk products. Excess
production capacity in our markets can result in lower prices for our products.
We compete in the packaging business on the basis of a number of
factors, including price, quality and service. Our principal competitors in this
business are larger independent manufacturing companies and vertically
integrated food and industrial companies that operate captive plastic packaging
manufacturing facilities. Many of our competitors are larger and better
capitalized than we are and have greater resources than we do.
We could be adversely affected by any expansion of capacity by our
existing competitors or by new entrants in our dairy or packaging markets. We
expect to encounter additional competition as we enter new markets.
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WE HAVE SUBSTANTIAL INDEBTEDNESS AND OTHER OBLIGATIONS AND
MAY INCUR ADDITIONAL INDEBTEDNESS
As of September 30, 1998, we had substantial indebtedness and other
obligations, including:
o $878.4 million of indebtedness (including $648 million under our
senior credit facility, $26.2 million under our subsidiary lines
of credit and $204.2 million of subsidiary debt obligations). In
addition, $23 million of letters of credit secured by the senior
credit facility were issued but undrawn
o $682.8 million of 5.0% Preferred Securities and 5.5% Preferred
Securities
Those amounts compare to our stockholders' equity of $645.8 million as of
September 30, 1998.
Under our senior credit facility, we can incur substantial amounts of
additional indebtedness in the future. On a pro forma basis as of September 30,
1998 after giving effect to this offering, we would have been able to borrow an
additional $610 million under our senior credit facility. We have pledged the
stock of certain subsidiaries to secure this facility and the assets of other
subsidiaries to secure other indebtedness. The senior credit facility and
related debt service obligations:
o limit our ability to obtain additional financing in the future
o require us to dedicate a significant portion of our cash flow to
the payment of principal and interest on our indebtedness (which
reduces the funds we have available for other purposes)
o limit our flexibility in planning for, or reacting to, changes in
our business and market conditions
o impose on us additional financial and operational restrictions
Our ability to make scheduled payments on our indebtedness and other
financial obligations depends on our financial and operating performance. Our
financial and operating performance is subject to prevailing economic conditions
and to financial, business and other factors, some of which are beyond our
control. If we do not comply with the financial and other restrictive covenants
under our senior credit facility, we may default under this facility. Upon
default, our lenders could accelerate the indebtedness under this facility,
foreclose against their collateral or seek other remedies.
We periodically enter into various interest hedging agreements to
manage our exposure to interest rate fluctuations under our floating rate
indebtedness. These agreements could result in higher interest rates, increased
interest expense or charges for fluctuations in the market values of these
hedges.
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OUR RAW MATERIAL COSTS COULD INCREASE
The most important raw materials that we use in our operations are raw
milk, cream (including butterfat) and high density polyethylene resin. The
prices of these materials increase and decrease depending on supply and demand
and, in some cases, governmental regulation. Volatility in the cost of our raw
materials may adversely affect our performance.
Pursuant to the Federal Milk Marketing Order program, the federal
government and several state agencies establish minimum regional prices paid to
producers for raw milk. In 1996, the U.S. Congress passed legislation to phase
out the Federal Milk Marketing Order program. This program is currently
scheduled to be phased out by October 1999. The U.S. Department of Agriculture
has also recently proposed changes to this program, including changes in pricing
classifications for certain dairy products. We do not know whether the
Department of Agriculture will adopt its proposed changes in their current or
another form, and we do not know what effect any final changes or the
termination of this federal program will have on the market for dairy products.
In addition, various states have adopted or are considering adopting compacts
among milk producers, which would establish minimum prices paid by milk
processors, including us, to raw milk producers. We do not know whether new
compacts will be adopted or the extent to which these compacts would affect the
prices we pay for milk.
WE COULD BE ADVERSELY AFFECTED BY CHANGES IN REGULATIONS
As a manufacturer and distributor of food products, we are subject to
federal, state and local laws and regulations relating to:
o food quality
o manufacturing standards
o labeling
o packaging
The United States Food and Drug Administration and various state and
local agencies enforce these laws and regulations. An actual or alleged problem
with the quality or safety of products at any of our facilities could result in:
o product withdrawals
o product recalls
o negative publicity
o temporary plant closings
o substantial costs of compliance
Our operations are subject to other federal, foreign, state and local
governmental regulation, including laws and regulations relating to occupational
health and safety, labor, discrimination and other matters. We cannot be certain
what effect any material changes in these laws and regulations could have on our
business.
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WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS
We sell food products for human consumption, which involves risks such
as:
o product contamination or spoilage
o product tampering
o other adulteration of food products
Consumption of an adulterated, contaminated or spoiled product may
result in personal illness or injury. We could be subject to claims or lawsuits
relating to an actual or alleged illness or injury, and we could incur
liabilities that are not insured or that exceed our insurance coverages.
LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS
Our success depends to a large extent on the skills, experience and
performance of our executive management. The loss of one or more of these
persons could hurt our business. We do not maintain key man life insurance on
any of our executive officers or directors.
A SPIN-OFF OR SALE OF OUR PACKAGING BUSINESS COULD AFFECT OUR STOCK PRICE
We are considering strategic alternatives with respect to our packaging
business. We cannot predict how any partial or complete spin-off or sale of this
business, or how a decision to retain and expand this business, could affect the
market price of our Common Stock.
WE MAY BE AFFECTED BY YEAR 2000 PROBLEMS
We are in the process of addressing our Year 2000 computer problem. If
we do not complete the necessary systems modifications on a timely basis or if
important service providers, suppliers or customers are unable to resolve their
Year 2000 issues in a timely manner, we could be adversely affected.
CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND
DELAWARE LAW COULD DETER TAKEOVER ATTEMPTS
Some provisions in our Certificate of Incorporation and Bylaws could
delay, prevent or make more difficult a merger, tender offer, proxy contest or
change of control. Our stockholders might view any such transaction as being in
their best interests since the transaction could result in a higher stock price
than the current market price for our Common Stock. Among other things, our
Certificate and Bylaws:
o authorize our Board of Directors to issue preferred stock in
series with the terms of each series to be fixed by our Board of
Directors
o divide our Board of Directors into three classes so that only
approximately one-third of the total number of directors is
elected each year
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o permit directors to be removed only for cause
o specify advance notice requirements for stockholder proposals and
director nominations
In addition, with certain exceptions, Section 203 of the Delaware
General Corporation Law restricts mergers and other business combinations
between us and any holder that acquires 15% or more of our voting stock.
We also have a stockholder rights plan. Under this plan, after the
occurrence of specified events, our stockholders will be able to buy stock from
us or our successor at reduced prices. These rights do not extend, however, to
persons participating in takeover attempts without the consent of our Board of
Directors. Accordingly, this plan could delay, defer, make more difficult or
prevent a change of control.
WE ARE SUBJECT TO ENVIRONMENTAL REGULATIONS
We, like others in similar businesses, are subject to a variety of
federal, foreign, state and local environmental, health and safety laws and
regulations including, but not limited to, those regulating waste water and
stormwater, air emissions, storage tanks and hazardous materials. We believe
that we are in material compliance with these laws and regulations. Future
developments, including increasingly stringent regulations, could require us to
make currently unforeseen environmental expenditures.
AVAILABILITY OF SIGNIFICANT AMOUNTS OF COMMON STOCK FOR SALE
COULD ADVERSELY AFFECT OUR MARKET PRICE
Upon completion of this offering, Suiza will have 39,591,784 shares of
Common Stock outstanding. The 6,000,000 shares of Common Stock offered hereby
will be eligible for immediate resale in the public market without restriction,
unless any of these shares are acquired by one or more of our affiliates.
In addition to the shares outstanding upon completion of this offering,
as of December 31, 1998 there were additional shares of Common Stock that may be
available for resale in the public market, including:
o 3,157,268 shares of Common Stock under stock options that were
exercisable as of December 31, 1998
o 1,560,105 shares of Common Stock under stock options that have
been granted and may become exercisable in the future
o 9,096,303 shares of Common Stock issuable upon conversion of the
5.0% Preferred Securities and 5.5% Preferred Securities
o 900,000 shares of Common Stock issuable pursuant to the
underwriters' over-allotment option in this offering
12
<PAGE> 16
We believe that substantially all of these shares of Common Stock will
be freely tradable under the federal securities laws following this offering,
subject to limitations. These limitations include vesting provisions in option
and restricted stock agreements, restrictions pursuant to lock-up agreements,
and volume and manner of sale restrictions under Rule 144 of the Securities Act.
The future sale of a substantial number of shares of Common Stock in the public
market following this offering, or the perception that such sales could occur,
could adversely affect the prevailing market price of the Common Stock.
As of December 31, 1998, our directors and executive officers held
approximately 8.26% of the outstanding Common Stock and 1,116,055 shares of
Common Stock subject to stock options. We and our directors and executive
officers will execute lock-up agreements that limit our and their ability,
subject to certain exceptions, to sell Common Stock. These stockholders and we
will agree not to sell or otherwise dispose of any shares of Common Stock for a
period of 90 days after the date of this Prospectus without the prior written
approval of Goldman, Sachs & Co. and us. Goldman, Sachs & Co. and we may, in our
discretion and at any time without notice, release all or any portion of the
securities subject to lock-up agreements.
13
<PAGE> 17
SELLING STOCKHOLDER
The table below sets forth information with respect to the beneficial
ownership of the common stock of Suiza by the selling stockholder immediately
prior to this offering and as adjusted to reflect the sale of shares of common
stock pursuant to the offering. The selling stockholder does not own in excess
of one percent (1%) of the outstanding common stock of Suiza. All information
with respect to the beneficial ownership has been furnished by the selling
stockholder:
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering (2)
--------------------------------------------------------------------------
Number of Percent of Shares to Number of Percent of
Name of Beneficial Owner Shares Class (1) be Sold (2) Shares Class
- ------------------------ ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Wesperada Limited 32,574 0.097% 32,574 -0- -0-
</TABLE>
- ------------------
(1) Computed based on common stock outstanding as of December 31, 1998.
(3) Assumes all the shares of common stock that may be offered are sold.
PLAN OF DISTRIBUTION
The common stock being offered by the selling stockholder pursuant to
this Prospectus may be sold from time to time by the selling stockholder, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on one or more exchanges or in the over-the-counter market, or otherwise at
prices and on terms then prevailing or at prices related to the then-current
market price of the common stock, or in negotiated transactions. The shares may
be sold by one or more of the following methods: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; and (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
In addition, any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 or Rule 145 under the Act may be sold under either of such
rules rather than pursuant to this Prospectus. From time to time the selling
stockholder may engage in short sales, short sales versus the box, puts and
calls and other transactions in securities issued by the Company or derivatives
thereof, and may sell and deliver the Shares in connection therewith.
In effecting sales, brokers or dealers engaged by the selling
stockholder may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholder in
amounts to be negotiated immediately prior to the sale. The selling stockholder
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Securities Act and a portion of
any proceeds or sales discounts, commissions or other compensation may be deemed
to be underwriting compensation for purposes of the Act.
14
<PAGE> 18
USE OF PROCEEDS
The Company will not receive any proceeds from this offering.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
the Company by Hughes & Luce, L.L.P., Dallas, Texas. William A. McCormack, a
partner with Hughes & Luce, L.L.P., beneficially owns 41,795 shares of Common
Stock.
EXPERTS
The consolidated financial statements of Suiza Foods Corporation as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 have been incorporated in this Prospectus by reference from
the Suiza Foods Corporation Annual Report on Form 10-K for the year ended
December 31, 1997. Such consolidated financial statements, except The
Morningstar Group Inc.'s consolidated financial statements as of December 31,
1996 and for each of the two years in the period ended December 31, 1996, which
have been consolidated with those of Suiza Foods Corporation, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report which
is incorporated herein by reference. The consolidated financial statements of
The Morningstar Group Inc. as of December 31, 1996 and for each of the two years
in the period ended December 31, 1996 (consolidated with those of Suiza Foods
Corporation for those periods and which are not presented separately) have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report which is incorporated herein by reference.
The consolidated financial statements of Continental Can Company, Inc.
as of December 31, 1997 and 1996 and for each of the three years in the period
ended December 31, 1997 incorporated by reference in this Prospectus have been
audited by KPMG LLP, independent auditors, as stated in their report which is
incorporated herein by reference.
The financial statements of Dairy Fresh L.P., a Delaware limited
partnership, as of December 31, 1996 and 1995 and for the years then ended and
the period from July 1, 1994 (date of acquisition) to December 31, 1994,
incorporated by reference into this Prospectus have been audited by McGladrey &
Pullen, LLP, independent auditors, as stated in their report which is
incorporated herein by reference.
The combined financial statements of The Garelick Companies, as of
September 30, 1996 and 1995 and for each of the three years in the period ended
September 30, 1996, incorporated by reference into this Prospectus have been
audited by PricewaterhouseCoopers LLP, independent accountants, as stated in
their report which is incorporated herein by reference.
15
<PAGE> 19
Such financial statements are incorporated herein by reference in
reliance upon the respective reports of such firms given upon their authority as
experts in accounting and auditing.
16
<PAGE> 20
32,574 SHARES
SUIZA FOODS CORPORATION
COMMON STOCK
------------
PROSPECTUS
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Get More Information 1
Incorporation of Certain Documents by Reference 2
Prospectus Summary 3
Risk Factors 7
Selling Stockholder 14
Plan of Distribution 14
Use of Proceeds 15
Legal Matters 15
Experts 15
January 15, 1999
</TABLE>
<PAGE> 21
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table indicates the estimated expenses to be incurred in
connection with the offering described in this Registration Statement, all of
which will be paid by the Company.
<TABLE>
<CAPTION>
<S> <C>
Registration fee $ 396
Accounting fees and expenses 2,500
Legal fees and expenses 5,000
Blue Sky fees and expenses (including counsel fees) 1,000
Miscellaneous expenses 2,000
--------
Total: $ 10,896
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that no director of
the Company will be personally liable to the Company or any of its stockholders
for monetary damages arising from the director's breach of fiduciary duty as a
director, with certain limited exceptions.
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with such action, suit or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner such
person reasonably believed to be in the best interests, or not opposed to the
best interests, of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of negligence or misconduct
unless the court, in its discretion, believes that in light of all the
circumstances indemnification should apply.
The Company's Certificate of Incorporation contains provisions
requiring it to indemnify its officers and directors to the fullest extent
permitted by the Delaware General Corporation Law.
II-1
<PAGE> 22
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on page II-6 of this Registration Statement, which Index is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities
offered (if the total dollar value of securities
offered would not exceed that which was registered)
and any deviation from the low or high and of the
estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20
percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the Registration Statement or
any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) and 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new
II-2
<PAGE> 23
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to Registration Statement on Form S-3 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Dallas, State of Texas, on January 15, 1999.
SUIZA FOODS CORPORATION
By: /s/ GREGG L. ENGLES
------------------------------------
Gregg L. Engles
Chairman of the Board,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*By: /s/ GREGG L. ENGLES Chairman of the Board, Chief January 15, 1999
----------------------------
Gregg L. Engles Executive Officer and Director
Attorney-in-fact (Principal Executive Officer)
Director
Alan J. Bernon
* Director January 15, 1999
- --------------------------------
Cletes O. Beshears
* Director January 15, 1999
- --------------------------------
Stephen L. Green
* Director January 15, 1999
- --------------------------------
Joseph S. Hardin, Jr.
* Director January 15, 1999
- --------------------------------
Robert L. Kaminski
* Director January 15, 1999
- --------------------------------
David F. Miller, Sr.
</TABLE>
II-4
<PAGE> 25
<TABLE>
<S> <C> <C>
* Director January 15, 1999
- --------------------------------
John R. Muse
* Director January 15, 1999
- --------------------------------
Hector M. Nevares
* Director January 15, 1999
- --------------------------------
Delton C. Parks
* Director January 15, 1999
- --------------------------------
P. Eugene Pender
Director
Jim L. Turner
* Executive Vice President January 15, 1999
- -------------------------------- and Chief Financial Officer
Barry A. Fromberg (Principal Financial and
Accounting Officer)
</TABLE>
II-5
<PAGE> 26
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- -------- ------------------------
<S> <C>
4.1 Specimen of Common Stock Certificate. (Filed Exhibit 4.1 to the
Company's Registration Statement on Form S-1, Registration No.
333-1858, and incorporated herein by reference).
5.1* Opinion of Hughes & Luce, L.L.P.
23.1* Consent of Hughes & Luce, L.L.P. (contained in its opinion filed as
Exhibit 5.1 to Registration Statement on Form S-3 filed December 23,
1998, Registration No. 333-69627).
23.2** Consent of Deloitte & Touche LLP
23.3** Consent of KPMG LLP
23.4** Consent of McGladrey & Pullen, LLP
23.5** Consent of PricewaterhouseCoopers LLP
23.6** Consent of Arthur Andersen LLP
24.1* Power of Attorney.
</TABLE>
- -------------
* Previously filed
** Filed herewith
<PAGE> 1
EXHIBIT 23.2
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration
Statement of Suiza Foods Corporation on Pre-effective Amendment No. 1 to Form
S-3 of our report dated March 27, 1998, appearing in the Annual Report on Form
10-K of Suiza Foods Corporation for the year ended December 31, 1997, and our
report dated February 6, 1998 (February 20, 1998 as to Note 11) with respect to
the financial statements of Land-O-Sun Dairies, L.L.C., appearing in the Current
Report on Form 8-K filed March 9, 1998, as amended on April 7, 1998, of Suiza
Foods Corporation.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
January 15, 1999
II-7
<PAGE> 1
EXHIBIT 23.3
CONSENT OF KPMG LLP
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Suiza Foods Corporation of our report on the consolidated financial
statements of Continental Can Company, Inc., dated March 5, 1998 appearing in
the Annual Report on Form 10-K of Continental Can Company, Inc. for the year
ended December 31, 1997; and to the reference to our firm under the heading
"Experts" in this Prospectus, which is part of such Registration Statement.
/s/ KPMG LLP
KPMG LLP
Melville, New York
January 15, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF MCGLADREY & PULLEN, LLP
We hereby consent to the incorporation by reference in this
Registration Statement of Suiza Foods Corporation on Form S-3 of our report
dated March 10, 1997, except for Note 13 as to which the date is July 1, 1997,
with respect to the financial statements of Dairy Fresh, L.P., a Delaware
limited partnership, included in the Current Report on Form 8-K filed July 14,
1997, as amended on August 22, 1997, of Suiza Foods Corporation, and to the
reference to us under the heading "Experts" in the Prospectus which is part of
such Registration Statement.
/s/ McGLADREY & PULLEN, LLP
Winston-Salem, North Carolina
January 15, 1999
II-9
<PAGE> 1
EXHIBIT 23.5
CONSENT OF PRICEWATERHOUSECOOPERS LLP
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of Suiza Foods Corporation to register 32,574
shares of Common Stock of our report dated July 31, 1997 with respect to the
combined financial statements of The Garelick Companies, included in the Current
Report on Form 8-K filed July 14, 1997, as amended on August 22, 1997, of Suiza
Foods Corporation and to the reference to our Firm under the heading "Experts"
in this Prospectus which is part of such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
January 15, 1999
<PAGE> 1
EXHIBIT 23.6
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of Suiza Foods
Corporation on Form S-3 of our report dated November 26, 1997, included in Suiza
Foods Corporation's Form 10-K for the year ended December 31, 1997 and to all
references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas
January 15, 1999
