-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sj4phFpiC7oxdLTVonGpz+viNwuzOezG8QlOveWXksohHBOTFYNnJJ/gpdPub7FM e8P2/dI/++5iUuScvllX/g== 0000950124-99-000216.txt : 19990114 0000950124-99-000216.hdr.sgml : 19990114 ACCESSION NUMBER: 0000950124-99-000216 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981129 FILED AS OF DATE: 19990113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEAN FOODS CO CENTRAL INDEX KEY: 0000027500 STANDARD INDUSTRIAL CLASSIFICATION: DAIRY PRODUCTS [2020] IRS NUMBER: 360984820 STATE OF INCORPORATION: DE FISCAL YEAR END: 0527 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08262 FILM NUMBER: 99505873 BUSINESS ADDRESS: STREET 1: 3600 N RIVER RD CITY: FRANKLIN PARK STATE: IL ZIP: 60131 BUSINESS PHONE: 8476781680 MAIL ADDRESS: STREET 1: 3600 N RIVER RD CITY: FRANKLIN PARK STATE: IL ZIP: 60131 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X Quarterly report pursuant to Section 13 of 15(d) of the Securities - ------- Exchange Act of 1934 For the quarterly period ended November 29, 1998 --------------------------- or Transition report pursuant to Section 13 of 15(d) of the Securities - ------- Exchange Act of 1934 For the transition period from to ------------------ ------------------ Commission file number 1-08262 ------------- DEAN FOODS COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 36-0984820 - -------------------------------- ---------------------- (State or other jurisdiction of (I.R.S Employer incorporation or organization) Identification No.) 3600 North River Road, Franklin Park, Illinois 60131 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (847) 678-1680 ----------------------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- The number of shares of the Registrant's Common Stock, par value $1 per share, outstanding as of the date of this report was 40,299,801. 1 2 PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS DEAN FOODS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED NOVEMBER 29, 1998 AND NOVEMBER 23, 1997 (In Thousands, Except for Per Share Amounts)
Second Quarter Ended Six Months Ended November 29, November 23, November 29, November 23, 1998 1997 1998 1997 ------------------ ------------- ------------- -------------- (Unaudited) Net sales $ 934,377 $ 624,933 $ 1,759,481 $ 1,244,789 Costs of products sold 732,363 479,520 1,366,291 949,275 Delivery, selling and administrative expenses 155,971 108,274 300,838 215,208 ---------------- -------------- -------------- -------------- Operating earnings 46,043 37,139 92,352 80,306 Interest expense 7,993 4,552 17,049 8,178 Interest income 236 893 545 1,278 ---------------- -------------- -------------- -------------- Income from continuing operations before income taxes 38,286 33,480 75,848 73,406 Provision for income taxes 14,932 12,955 29,581 28,573 ---------------- -------------- -------------- -------------- Income from continuing operations 23,354 20,525 46,267 44,833 ---------------- -------------- -------------- -------------- Discontinued operations, net of taxes: Income (loss) from discontinued operations (1,188) 6,050 (2,929) 3,289 Gain on sale of discontinued operations 83,820 83,820 - ---------------- -------------- -------------- --------------- Total discontinued operations 82,632 6,050 80,891 3,289 ---------------- -------------- -------------- --------------- Net income $ 105,986 $ 26,575 $ 127,158 $ 48,122 ================ ============== ============== =============== Basic income (loss) per share: Income from continuing operations $ .59 $ .51 $ 1.16 $ 1.11 Income (loss) from discontinued operations (.03) .15 (.07) .08 Gain on sale of discontinued operations 2.10 - 2.10 - ---------------- -------------- -------------- --------------- Net income $ 2.66 $ .66 $ 3.19 $ 1.19 ================ ============== ============== =============== Diluted income (loss) per share: Income from continuing operations $ .58 $ .50 $ 1.14 $ 1.08 Income (loss) from discontinued operations (.03) .14 (.07) .08 Gain on sale of discontinued operations 2.05 - 2.05 - ---------------- -------------- -------------- --------------- Net income $ 2.60 $ .64 $ 3.12 $ 1.16 ================ ============== ============== =============== Weighted average common shares: Basic 39,722 40,508 39,874 40,508 ================ ============== ============== =============== Diluted 40,483 41,375 40,723 41,375 ================ ============== ============== ===============
See accompanying Notes to Condensed Consolidated Financial Statements. 2 3 DEAN FOODS COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS NOVEMBER 29, 1998 AND MAY 31, 1998 (In Thousands)
November 29, May 31, 1998 1998 ---- ---- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 32,252 $ 11,932 Accounts and notes receivable, less allowance for doubtful accounts of $10,147 and $4,212, respectively 305,015 225,970 Inventories 200,578 135,405 Other current assets 62,233 46,931 ---------- ---------- Total Current Assets 600,078 420,238 ---------- ---------- PROPERTIES: Property, plant and equipment, at cost 1,148,936 966,226 Accumulated depreciation 448,428 415,162 ---------- ---------- Total Properties, net 700,508 551,064 ---------- ---------- NET ASSETS OF DISCONTINUED OPERATIONS - 288,037 ---------- ---------- OTHER ASSETS: Intangibles, net of amortization of $16,750 and $11,537, respectively 453,185 334,597 Other assets 7,103 13,253 ---------- ---------- Total Other Assets 460,288 347,850 ---------- ---------- TOTAL ASSETS $1,760,874 $1,607,189 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable to banks $ 9,500 $ 12,000 Current installments of long-term obligations 9,277 9,014 Accounts payable and accrued expenses 366,960 311,303 Dividends payable 8,529 8,079 Federal and state income taxes payable 66,608 12,518 ---------- ---------- Total Current Liabilities 460,874 352,914 LONG-TERM OBLIGATIONS 478,681 558,233 DEFERRED LIABILITIES 79,621 76,776 SHAREHOLDERS' EQUITY 741,698 619,266 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,760,874 $1,607,189 ========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements. 3 4 DEAN FOODS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED NOVEMBER 29, 1998 AND NOVEMBER 23, 1997 (In Thousands)
Six Months Ended ------------------------------------------ November 29, November 23, 1998 1997 ---------- ---------- (Unaudited) Net cash provided from continuing operations $ 9,515 $ 52,997 ---------- ---------- Cash flows from investing activities: Capital expenditures (57,296) (54,780) Proceeds from disposition of property, plant and equipment 517 1,384 Acquisitions, net of cash acquired (120,677) (53,510) ---------- ---------- Net cash used in investing activities (177,456) (106,906) ---------- ---------- Cash flows from financing activities Issuance of long-term obligations 280,052 147,574 Repayment of long-term obligations (403,806) (196) Repayment of notes payable to banks, net (2,500) (3,000) Unexpended industrial revenue bond proceeds 5,965 4,741 Cash dividends paid (16,401) (15,755) Issuance of common stock 5,574 10,140 Repurchase of treasury stock (32,949) - ---------- ---------- Net cash provided by financing activities (164,065) 143,504 ---------- ---------- Cash flow from discontinued operations: Net cash used by discontinued operations (12,667) (18,690) Cash proceeds on sale of discontinued operations 364,993 - ---------- ---------- Total discontinued operations 352,326 (18,690) ---------- ---------- Increase in cash and temporary cash investments 20,320 70,905 Cash and temporary cash investments - beginning of period 11,932 4,386 ---------- ---------- Cash and temporary cash investments - end of period $ 32,252 $ 75,291 ========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements. 4 5 DEAN FOODS COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Dollar amounts in thousands unless otherwise noted. 1. BASIS OF PRESENTATION In the opinion of the Company, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the following unaudited condensed consolidated financial statements have been included herein. Certain information and footnote disclosures normally included in the financial statements have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's 1998 Annual Report on Form 10-K. The results of operations for the six-month period ended November 29, 1998 are not necessarily indicative of the operating results for the full year. 2. DISCONTINUED OPERATIONS On September 23, 1998, the Company sold the stock of Dean Foods Vegetable Company to Agrilink Foods, Inc. ("Agrilink") for $365.0 million in cash, a $30.0 million Agrilink subordinated note and Agrilink's aseptic foods business, which has been valued at $80.0 million. Cash proceeds were utilized to repay debt outstanding under the Company's revolving credit agreement. Due to the uncertainty of realizability of the $30.0 million subordinated note, the note has been valued at a nominal amount. The Company recorded an after-tax gain on the sale of the Vegetables segment of $83.8 million. The gain is subject to final valuations and appraisals of assets. Net sales of discontinued operations were $139.8 million and $256.6 million for the six months ended November 29, 1998 and November 23, 1997, respectively. The income tax provision (benefit) included in discontinued operations was $(1.9) million and $2.2 million for the November 29, 1998 and November 23, 1997 six months ended periods, respectively. Income (loss) from discontinued operations includes interest expense allocations (based on the short-term interest expense incurred and changes in working capital levels) of $2.5 million and $4.7 million for the six months ended November 29, 1998 and November 23, 1997, respectively. 3. INVENTORIES The following is a tabulation of inventories by class at November 29, 1998, November 23, 1997, and May 31, 1998.
November 29, November 23, May 31, 1998 1997 1998 ----------- ----------- -------- (Unaudited) Raw materials and supplies $ 52,199 $ 29,508 $ 45,266 Materials in process 22,740 25,305 12,432 Finished goods 135,322 101,380 87,390 -------- -------- -------- 210,261 156,193 145,088 Less: Excess of current cost over stated value of last-in, first-out inventories 9,683 10,892 9,683 -------- -------- -------- Total inventories $200,578 $145,301 $135,405 ======== ======== ========
5 6 4. BUSINESS SEGMENT INFORMATION The following is a tabulation of the Company's business segment information for the quarters and six months ended November 29, 1998 and November 23, 1997.
(Unaudited) Dairy Pickles Specialty Corporate Consolidated ----- ------- --------- --------- ------------ SECOND QUARTER ENDED November 29, 1998 Net sales $ 741,942 $ 85,889 $106,546 $ - $ 934,377 Operating earnings $ 30,063 $ 8,882 $ 15,443 $ (8,345) $ 46,043 November 23, 1997 Net sales $ 457,236 $ 79,337 $ 88,360 $ - $ 624,933 Operating earnings $ 27,561 $ 8,063 $ 12,996 $(11,481) $ 37,139 SIX MONTHS ENDED November 29, 1998 Net sales $1,393,607 $179,294 $186,580 $ - $1,759,481 Operating earnings $ 62,566 $ 19,986 $ 26,612 $(16,812) $ 92,352 November 23, 1997 Net sales $ 913,198 $169,797 $161,794 $ - $1,244,789 Operating earnings $ 59,974 $ 17,385 $ 23,989 $(21,042) $ 80,306
5. ACQUISITIONS During the first half of fiscal 1999, the Company acquired the assets of Hillside Dairy in Cleveland Heights, Ohio on July 1, 1998, the assets of Barber Dairies of Birmingham, Alabama on August 11, 1998, the stock of the U.C. Milk Company in Madisonville, Kentucky on September 17, 1998 and the stock of Berkeley Farms, Inc. of Hayward, California on November 4, 1998. The acquisitions were all made for cash consideration except for the Berkeley Farms acquisition which was for a combination of cash and Company common stock. The total consideration for all the above mentioned transactions was $120.7 million in cash and $37.4 million in Company common stock. In addition, as discussed in Note 2, the Company acquired the assets of the aseptic foods business of Agrilink Foods, Inc. in Benton Harbor, Michigan as part of the consideration for the Company's Vegetables business. These acquisitions were accounted for as purchases and have been recorded using preliminary valuations of the assets and liabilities acquired. Goodwill arising from these acquisitions will be amortized using the straight-line method over periods up to 40 years. The operating results of each acquisition have been included in the Company's results of operations since the date of acquisition. 6. LEGAL PROCEEDINGS See PART II, Item 1 for a discussion of pending legal proceedings. 6 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SECOND QUARTER FISCAL 1999 VERSUS SECOND QUARTER FISCAL 1998 RESULTS OF CONTINUING OPERATIONS Net sales of $934.4 million for the second quarter of fiscal 1999 increased from $624.9 million in the prior year. Net sales increased primarily the result of acquisitions made during the latter half of fiscal 1998 and the beginning of fiscal 1999. Operating earnings increased 24.0% to $46.0 million from $37.1 million in fiscal 1998. Each business segment reported higher fiscal 1999 earnings in comparison to the prior year. Second quarter fiscal 1999 income from continuing operations was $23.4 million, or $.58 per diluted share, versus $20.5 million, or $.50 per diluted share, in the prior year. BUSINESS SEGMENTS DAIRY - Net sales in the dairy segment were $741.9 million in fiscal 1999 compared to $457.2 million in fiscal 1998, a 62.3% increase. The majority of the net sales increase is due to recent acquisitions, with slight improvements due to higher Milk Chug product sales and base dairy business volume increases. Dairy segment operating earnings, however, only increased 9.1% to $30.1 million, due to volatility in butterfat and raw milk costs and costs associated with integration of acquisitions. The segment's operating margins declined from 6.0% in the second quarter of fiscal 1998 to 4.1% in fiscal 1999. Fiscal 1999 butterfat prices peaked in September and fell sharply by November, while raw milk prices continued to rise to record levels. Such volatility had a negative earnings impact of approximately $2 million on the second quarter of fiscal 1999. Short-term expectations are for butterfat to further decline and for raw milk costs to peak during the third quarter before gradually declining into the fourth quarter. Second quarter improved operating efficiencies were partially offset by continued acquisition assimilation and integration costs totaling approximately $4 million. PICKLES - The Pickles segment experienced higher second quarter fiscal 1999 net sales of $85.9 million, an 8.3 % increase, compared to $79.3 million for the same period a year ago. Operating earnings increased 10.2% to $8.9 million. The sales and earnings increases are attributed to the Schwartz Pickle Company, a refrigerated food service pickle company, acquired at the end of fiscal 1998, as the base branded business declined slightly from the prior year. SPECIALTY - Specialty segment net sales increased 20.6%, to $106.5 million, in the second quarter of fiscal 1999. Operating earnings for the second quarter of fiscal 1999 of $15.4 million were 18.8% higher than earnings in the prior year. The sales and earnings increases are due primarily to the acquisition of the aseptic foods business acquired in conjunction with disposition of the Company's Vegetables segment. Also contributing to the sales and earnings increases were increased sales of powdered products and improved efficiencies from fiscal 1998 facility expansion. CORPORATE Corporate expenses decreased $3.1 million in the second quarter of fiscal 1999 versus the same period of the prior year primarily due to lower incentive and stock-related compensation plan expenses. 7 8 INTEREST EXPENSE Interest expense increased $3.4 million in the second quarter compared to the same period of the prior year. Additional interest expense associated with increased borrowing under the revolving credit agreement used to fund acquisitions and the issuance of $150 million of Senior Notes during the second quarter of fiscal 1998 contributed to the increase. INCOME TAXES The effective income tax rate for the second quarter of fiscal 1999 was 39.0% compared to a rate of 38.7% for the second quarter a year ago. DISCONTINUED OPERATIONS The loss from discontinued operations, net of taxes, for the second quarter of fiscal 1999 was $1.2 million, or $.03 per diluted share, compared to income from discontinued operations, net of taxes, of $6.1 million, or $.14 per diluted share, for the prior year. On September 23, 1998, the Company sold the stock of Dean Foods Vegetable Company to Agrilink Foods, Inc. (Agrilink) for $365.0 million in cash, a $30.0 million Agrilink subordinated note and Agrilink's aseptic foods business. Due to the uncertainty of realizability of the $30.0 million subordinated note, the note has been valued at a nominal amount. Sale of the discontinued operations resulted in an after-tax gain of $83.8 million, or $2.05 per diluted share. The gain is subject to final valuations and appraisals of assets. SIX MONTHS ENDED FISCAL 1999 VERSUS SIX MONTHS ENDED FISCAL 1998 RESULTS OF CONTINUING OPERATIONS Net sales for the six months ended fiscal 1999 of $1.8 billion were $514.7 million, or 41.3%, higher than sales of $1.2 billion in the prior year. Net sales increased in all business segments, with the majority of the increase due to acquisitions completed in the Dairy and Specialty segments. Operating earnings increased to $92.4 million, or 15.0%, from $80.3 million in fiscal 1998, reflecting improved earnings in all business segments and a reduction in Corporate expenses. Income from continuing operations for the six months ended fiscal 1999 was $46.3 million, or $1.14 per diluted share, versus $44.8 million, or $1.08 per diluted share, for the same period in the fiscal 1998. BUSINESS SEGMENTS DAIRY - Dairy segment net sales of $1.4 billion were $480.4 million, or 52.6%, higher than fiscal 1998. The majority of the sales increase was related to fiscal 1998 and 1999 acquisitions, and to a lesser extent, volume increases in base Dairy business. Operating earnings of $62.6 million were 4.3% greater than earnings of the prior year. First quarter earnings were relatively flat compared to the prior year as rising butterfat costs which benefited the fluid milk business were offset by negative impacts in the ice cream and extended shelf life operations. Second quarter operating efficiency improvements were partially offset by commodity volatility and acquisition integration costs. PICKLES - Fiscal 1999 Pickle segment net sales increased $9.5 million, or 5.6%, over the six month period of fiscal 1998. Increased sales due to the May 1998 acquisition of the Schwartz Pickle Company offset a slight volume decrease in the base business. Schwartz earnings more than offset the impact of the base volume decreases, resulting in an operating earnings increase of $2.6 million, or 15.0%. SPECIALTY - The Specialty segment reported a sales increase of $24.8 million, to $186.6 million. Operating earnings increased 10.9% to $26.6 million for the six months ended fiscal 1999. The increases in sales and earnings are primarily a result of the aseptic foods business acquired in conjunction with the sale of the Vegetables segment. 8 9 CORPORATE Corporate expenses decreased $4.2 million for the six months of fiscal 1999 compared to the same period of the prior year, primarily due to lower compensation expense related to certain stock-based incentive plans. INTEREST EXPENSE Interest expense for the six months of fiscal 1999 increased $8.9 million versus the same period of the prior year. Increased borrowing under the revolving credit agreement used to fund acquisitions and the issuance of $150 million of Senior Notes during the second quarter of fiscal 1998 accounted for the increased expense. INCOME TAXES The effective income tax rate of fiscal 1999 was 39.0% compared to a rate of 38.9% for the first six months of fiscal 1998. DISCONTINUED OPERATIONS The loss from discontinued operations, net of taxes, for the six months ended fiscal 1999 was $2.9 million versus income from discontinued operations, net of taxes, of $3.3 million in fiscal 1998. The sale of the Vegetables segment resulted in an after-tax gain of $83.8 million, or $2.05 per diluted share. LIQUIDITY AND CAPITAL RESOURCES As of November 29, 1998 there have been no material changes in the Company's liquidity or its capital resources from those described in the Management's Discussion and Analysis contained in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1998. The Company's use of the cash proceeds received from the disposition of its Vegetables segment and the financing of acquisition activity is discussed below. Cash and temporary cash investments were $32.3 million at November 29, 1998. Working capital at November 29, 1998 was $139.2 million compared to $67.3 million at May 31, 1998, and inventories at November 29, 1998 were $200.6 million, an increase of $65.2 million over the balance at May 31, 1998. The increase in working capital and inventories were primarily the result of fiscal 1999 Dairy and Specialty acquisitions. The inventories increase also reflects the typical seasonal increase resulting from the cucumber harvest. November 1998 accounts receivable were impacted by higher sales which reflect the pass-through of higher dairy costs and the initial funding of receivables for a fiscal 1999 acquisition in which receivables were not included in the assets purchased. November 29, 1998 inventories were $55.3 million higher than inventories a year ago due to the additional inventory associated with acquisitions completed during fiscal 1999 and the latter half of fiscal 1998. Seasonal working capital requirements are funded using the Company's Revolving Credit Agreement and bilateral lines of credit. There were $9.5 million of short-term borrowings outstanding at November 29, 1998, compared to $12.0 million at May 31, 1998. CASH FLOW - The net change in cash for the six months ended fiscal 1999 was an increase of $20.3 million. Net cash provided from continuing operations was $9.5 million for the six months ended November 29, 1998 versus $53.0 million in fiscal 1998. The decrease is due to the increased financing of working capital in fiscal 1999 discussed previously. 9 10 Net cash used in investing activities was $177.5 million for the first six months of fiscal 1999 compared to $106.9 million for the same period in fiscal 1998. Fiscal 1999 investing activities include $120.7 million of cash paid for acquisitions versus $53.5 million paid during the first half of fiscal 1998. Capital expenditures were relatively flat in comparison to the prior year. Net cash used in financing activities was $164.1 million for the six months of fiscal 1998 versus net cash provided of $143.5 million for the same period of fiscal 1998. Cash proceeds from the sale of discontinued operations used to repay debt outstanding under the Company's Revolving Credit Agreement account for the majority of this change. Fiscal 1999 financing activities also include additional long-term borrowings under the Company's Revolving Credit Agreement used to fund current fiscal year acquisitions. Discontinued operations for the six months of fiscal 1999 generated net cash of $352.3 million, which included cash proceeds on the sale of the Vegetables segment of $365.0 million. YEAR 2000 COMPLIANCE As discussed in the Company's Annual Report on Form 10-K, the Company is currently assessing and modifying its computer, production and facility systems and business processes to provide for their continued functionality. The Company is also continuing to assess the readiness of external parties and coordinating efforts to address the Year 2000 issue with those entities. The Company is augmenting previously scheduled computer maintenance with procedures designed to locate and correct Year 2000 problems and accelerating normal equipment and software replacement schedules. The Company continues to expect that substantially all new systems upgrades or reprogramming efforts will be completed by June 30, 1999. The costs associated with these procedures have not been and are not expected to be material to the Company's financial condition or results of operations. The Company believes that modification of existing software and conversions to new software will result in Year 2000 compliance. However, given the complexity of the Year 2000 issue, the impact on business operations due to failure by the Company to achieve compliance or failure by external entities, such as suppliers and vendors, to achieve compliance, which the Company cannot control, could adversely affect the Company's consolidated results of operations. FORWARD LOOKING STATEMENTS Certain statements in this Quarterly Report are "forward looking statements" as defined by the Private Securities Litigation Reform Law of 1995. These statements, which may be indicated by words such as "expects", "intends", "believes", "forecasts", or other words of similar meaning, involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this Report. These risks include, but are not limited to, risks associated with the Company's acquisition strategy, adverse weather conditions resulting in poor harvest conditions, raw milk costs and butterfat prices, interest rate fluctuations, competitive pricing pressures, marketing and cost-management programs, changes in government programs and shifts in market demand. Additional information concerning these and other risks is contained in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1998. 10 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings There has been no material change in the legal proceedings reported under Item 3 - Legal Proceedings, of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1998. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11 Basic and Diluted Income per Share 12 Computation of Ratio of Earnings to Fixed Charges 27 Financial Data Schedules .1 Six Months Ended November 29, 1998 .2 Six Months Ended November 23, 1997 (Restated) (b) Reports on Form 8-K None filed. 11 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEAN FOODS COMPANY ------------------- (Registrant) DATE: January 13, 1999 /s/ William R. McManaman ---------------- ------------------------ WILLIAM R. McMANAMAN Vice President, Finance and Chief Financial Officer DATE: January 13, 1999 /s/ William M. Luegers, Jr. ---------------- --------------------------- WILLIAM M. LUEGERS, JR. Controller 12 EX-11 2 BASIC AND DILUTED INCOME PER SHARE 1 Exhibit 11 Dean Foods Company Computation of Basic and Diluted Income Per Share (In thousands, except for per share amounts)
Second Quarter Ended Six Months Ended November 29, November 23, November 29, November 23, 1998 1997 1998 1997 ----------- ----------- ------------ ---------- Income from Continuing Operations $ 23,354 $ 20,525 $ 46,267 $ 44,833 Income (Loss) from Discontinued Operations (1,188) 6,050 (2,929) 3,289 Gain on Sale of Discontinued Operations 83,820 - 83,820 - ---------- --------- ---------- ---------- Net Income $ 105,986 $ 26,575 $ 127,158 $ 48,122 ========== ========= ========== ========== BASIC INCOME (LOSS) PER SHARE: Income from Continuing Operations $ .59 $ .51 $ 1.16 $ 1.11 Income (Loss) from Discontinued Operations (.03) .15 (.07) .08 Gain on Sale of Discontinued Operations 2.10 - 2.10 - ----------- --------- ----------- ---------- Net Income $ 2.66 $ .66 $ 3.19 $ 1.19 ========== ========= ========== ========== Weighted average common shares outstanding 39,722 40,508 39,874 40,508 ========== ========= ========== ========== DILUTED INCOME (LOSS) PER SHARE: Income from Continuing Operations $ .58 $ .50 $ 1.14 $ 1.08 Income (Loss) from Discontinued Operations (.03) .14 (.07) .08 Gain on Sale of Discontinued Operations 2.05 - 2.05 - ----------- --------- ----------- ---------- Net Income $ 2.60 $ .64 $ 3.12 $ 1.16 ========== ========= ========== ========== Adjusted weighted average common shares* 40,483 41,375 40,723 41,375 ========== ========= ========== ==========
* Includes weighted average number of potential common shares outstanding. Potential common shares consist solely of the outstanding options under the Company's stock option plan. EX-12 3 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12 DEAN FOODS COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In thousands)
26 Weeks Ended November 29, 1998 ----------------- Income before taxes $75,848 -------------------- Fixed charges: Interest expense 17,049 Portion of rentals (33%) 5,380 -------------------- Total fixed charges 22,429 -------------------- Earnings before taxes and fixed charges $ 98,277 ==================== Ratio of earnings to fixed charges 4.4 ====================
EX-27.1 4 FINANCIAL DATA SCHEDULE SIX MONTHS ENDED 11/29/98
5 This schedule contains summary financial information extracted from the Registrants' Quarterly Report on Form 10-Q for the quarterly period ended November 29, 1998. 1,000 6-MOS MAY-30-1999 JUN-01-1998 NOV-29-1998 32,252 0 315,162 10,147 200,578 600,078 1,148,936 448,428 1,760,874 460,874 478,681 0 0 42,140 699,558 1,760,874 1,759,481 1,759,481 1,366,291 1,366,291 300,232 606 17,049 75,848 29,581 46,267 80,891 0 0 127,158 3.19 3.12
EX-27.2 5 RESTATED FIN DATA SCH. SIX MONTHS ENDED 11/23/97
5 This schedule contains summary financial information extracted from the Registrants' Quarterly Report on Form 10-Q for the quarterly period ended November 23, 1997. 1,000 6-MOS MAY-31-1998 MAY-26-1997 NOV-23-1997 75,291 0 185,341 3,286 145,301 446,210 812,207 392,568 1,312,600 284,378 356,528 0 0 41,870 568,015 1,312,600 1,244,789 1,244,789 949,275 949,275 214,864 344 8,178 73,406 28,573 44,833 3,289 0 0 48,122 1.19 1.16
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