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FILED BY SUIZA FOODS CORPORATION PURSUANT TO
RULE 425 OF THE SECURITIES ACT OF 1933 AND
DEEMED FILED PURSUANT TO RULE 14a-12 OF THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: DEAN FOODS COMPANY
COMMISSION FILE NO. 333-64936
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Some of the statements in this document are "forward-looking" and are made
pursuant to the safe harbor provision of the Securities Litigation Reform Act of
1995. These "forward-looking" statements include statements relating to (1) the
impact the companies expect the proposed transaction to have on earnings per
share, (2) the companies' expectations about their ability to successfully
integrate the combined businesses, (3) the amount of cost savings and overall
operational efficiencies the companies expect to realize as a result of the
proposed transaction, (4) when the companies expect to close the proposed
transaction, (5) the level of divestitures necessary to obtain regulatory
approval, (6) the companies' projected combined sales, EBITDA and margins, (7)
the ability of the companies to implement and continue branding initiatives and
product innovations in a cost effective manner, (8) the ability of the companies
to obtain financing for the transaction upon the terms contemplated, and (9) the
ability to meet their stated financial goals. These statements involve risks and
uncertainties which may cause results to differ materially from those set forth
in these statements. The ability to achieve the earnings per share projected and
to realize projected cost savings and operational efficiencies is dependent upon
their ability in the time periods projected, to (i) consolidate or reduce
certain administrative or centralized functions, (ii) obtain certain goods and
services more cost effectively, (iii) shift production and distribution between
operating locations without disruption in their operations or in their relations
with their customers, and (iv) close the proposed transactions on the terms
contemplated. The ability to close the proposed transaction in the third quarter
is subject to receipt of shareholder approval and regulatory approval. The level
of divestitures necessary to obtain regulatory approval of the transaction is
subject to the extent of competition in the various markets in which the
combining companies operate, as determined by the Department of Justice, other
regulatory authorities and potentially, state and federal courts. The ability of
the companies to achieve projected combined sales, EBITDA and margins is
dependent upon the ability of the combining companies to maintain their existing
customer and other business relationships or to replace such customers or
business relationships with other comparable relationships and upon economic,
governmental and competitive conditions generally. The ability of the companies
to obtain financing and the terms of such financing is subject to the financial
condition and operating performance of each of the combining companies prior to
closing and to economic and financial market conditions generally. Other risks
affecting the business of the companies are identified in their filings with the
Securities and Exchange Commission, including the Suiza Foods Annual Report on
Form 10-K for the year ended December 31, 2000 and the Dean Foods Annual Report
on Form 10-K for the year ended May 28, 2000. All forward-looking statements in
this press release speak only as of the date hereof. Suiza and Dean Foods
expressly disclaim any obligation or undertaking to release publicly any updates
or revisions to any such statements to reflect any change in their expectations
or any changes in the events, conditions or circumstances on which any such
statement is based.
Other Legal Information
Suiza and Dean Foods have filed with the SEC a preliminary joint proxy
statement/prospectus and other relevant documents concerning the proposed
transaction. In addition, Suiza and Dean Foods will prepare and file a
definitive joint proxy statement/prospectus and other relevant documents
concerning the proposed merger transaction. INVESTORS ARE URGED TO READ THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS, WHEN IT BECOMES AVAILABLE, AND ANY
AMENDMENTS OR SUPPLEMENTS TO THE DEFINITIVE
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JOINT PROXY STATEMENT/PROSPECTUS AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION CONCERNING THE
PROPOSED TRANSACTION. Investors will be able to obtain the definitive joint
proxy statement/prospectus and other documents filed with the SEC free of charge
at the SEC's website (http: //www.sec.gov). In addition, definitive the joint
proxy statement/prospectus and other documents filed by Suiza and Dean Foods
with the SEC may be obtained free of charge by contacting Suiza Foods
Corporation, 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201, Attn:
Investor Relations (tel 214-303-3400), or Dean Foods, 3600 North River Road,
Franklin Park, Illinois 60131, Attn: Corporate Secretary (tel 847-678-1680).
Suiza, Dean Foods and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of Suiza and Dean Foods in connection with the transaction. The directors and
executive officers of Suiza and their beneficial ownership of Suiza common stock
are set forth in the proxy statement for the 2001 annual meeting of Suiza. The
directors and executive officers of Dean Foods and their beneficial ownership of
Dean Foods common stock are set forth in the proxy statement for the 2000 annual
meeting of Dean Foods. You may obtain the proxy statements of Suiza and Dean
Foods free of charge at the SEC's website (http://www.sec.gov). Stockholders of
Suiza and Dean Foods may obtain additional information regarding the interest of
such participants by reading the joint proxy statement/prospectus when it
becomes available.
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[SUIZA FOODS LOGO]
NEWS RELEASE
Contacts: Cory M. Olson
Vice President and Treasurer
(214) 303-3645
P.I. Aquino
Assistant Treasurer
(214) 303-3437
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SUIZA FOODS CORPORATION DELIVERS $1.11
IN SECOND QUARTER DILUTED EARNINGS PER SHARE
Suiza Announces $1.31 in Diluted Cash Earnings Per Share
DALLAS, Aug. 7 /PRNewswire/ -- Suiza Foods Corporation (NYSE: SZA), the
nation's leading dairy processor and distributor, today announced net
sales totaled $1.5 billion for the quarter ended June 30, 2001, an
increase of 6.5% over the second quarter of 2000. Diluted earnings per
share before non-recurring items for the quarter totaled $1.11, an
increase of 4.7% from $1.06 in the second quarter of 2000.
Diluted cash earnings per share for the second quarter increased 4.8%
to $1.31. The calculation of cash earnings per share excludes
amortization of goodwill and certain intangibles as if the recently
issued Financial Accounting Standard No. 142, "Goodwill and Other
Intangible Assets" had been effective for the periods.
"Our operating units delivered another quarter of strong results
despite a very challenging raw material environment," said Gregg
Engles, Chairman and Chief Executive Officer of Suiza Foods. "Butterfat
averaged $2.10 per pound, up 63% over last year, and raw milk costs
increased 25% to $14.21 per hundred weight. This is clearly one of the
most difficult operating environments we have experienced, and in light
of these conditions, our performance is a real tribute to the strength
of our management team."
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During the second quarter of 2000, the company recorded a one-time
pretax gain of $3.6 million related to the curtailment of certain
benefit plans. This gain had a $1.4 million impact net of taxes and
minority interest, equal to $0.03 per diluted share. Excluding this
gain, diluted earnings per share and diluted cash earnings per share
would have increased 7.8% and 7.6% respectively in the second quarter
period.
Second quarter consolidated operating income before non-recurring items
totaled $102.9 million, or 6.7% of sales, compared with $104.5 million
reported in the second quarter of 2000. Excluding the curtailment gain,
operating income would have increased 1.9%, and operating margins would
have declined 30 basis points. The margin decline is due primarily to
significantly higher raw material costs in the current period.
Sales for the first six months of 2001 totaled $3.0 billion, an
increase of 6.1% over last year. Operating income before non-recurring
items grew 2.8% to $187.6 million. Before non-recurring items, diluted
earnings per share totaled $1.92, an increase of 8.5% over last year,
and diluted cash earnings per share totaled $2.33, an increase of 8.9%.
RECENT HIGHLIGHTS
o In May, the company announced an agreement with Procter &
Gamble to launch and market Folgers Jakada(TM), a chilled
coffee drink made from Folgers coffee and lowfat milk. Under
this new licensing agreement Morningstar Foods will produce,
promote and distribute Folgers Jakada, and P&G will receive a
licensing fee generated from all Folgers Jakada sales while
retaining ownership of the Folgers trademark. The company
expects to launch Folgers Jakada in the fourth quarter of this
year.
o In July, Suiza filed a preliminary joint proxy
statement/prospectus with the Securities and Exchange
Commission in connection with its proposed merger with Dean
Foods (NYSE: DF). The company intends to finalize and mail the
proxy statement/prospectus to its shareholders in mid August.
A separate press release was issued today to provide
additional information regarding the company's merger with
Dean Foods.
o On July 31, the company completed the syndication of its $2.7
billion bank financing. The proceeds will be used to provide
funding for the Dean Foods transaction and to provide funds
for general corporate purposes.
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CONFERENCE CALL WEBCAST
A conference call to discuss the company's second quarter financial performance
and the outlook for the balance of the year, including an update on the
company's pending merger with Dean Foods, will be held at 10:00 a.m. eastern
today. The call may be heard live by visiting the "Conference Calls and
Webcasts" section of the company web site at www.suizafoods.com.
Suiza Foods Corporation, based in Dallas, is the nation's leading dairy
processor and distributor, producing a full line of company-branded and
customer-branded products. National brands include International Delight(R),
Second Nature(R), Naturally Yours(R), Mocha Mix(R), Sun Soy(TM), kidsmilk(TM)
and fitmilk(R). Regional brands include Adohr Farms(R), Barbe's(R),
Broughton(R), Brown's Dairy(TM), Country Delite(R), Country Fresh(R), Dairy
Gold(R), Dairymen's(R), Flav-O-Rich(R), Garelick Farms(R), Hygeia(R), Lehigh
Valley Farms(R), London's(R), Meadow Gold(R), Model Dairy(R), Oak Farms(R),
Poudre Valley(R), Robinson(R), Schenkel's All Star Dairy, Schepps(R),
Shenandoah's Pride(R), Suiza Dairy(R), Swiss Dairy(TM), Louis Trauth Dairy(R),
Tuscan(R) and Velda Farms(R), as well as Celta(R) in Spain. Suiza also sells
products under partner or licensed brands in certain regions, including
Borden(R), Foremost(R) and Pet(R). Additionally, the company owns approximately
43% of Consolidated Container Company, one of the nation's largest manufacturers
of rigid plastic containers.
Forward-Looking Statement
Some of the statements in this press release are "forward-looking" and are made
pursuant to the safe harbor provision of the Securities Litigation Reform Act of
1995. These "forward-looking" statements include statements relating to the
company's expectations regarding its proposed merger with Dean Foods. These
statements involve risks and uncertainties, which may cause results to differ
materially from the statements set forth in this press release. The company's
ability to close the proposed transaction on the terms and in the timeframe
contemplated depends primarily on the company's ability to obtain regulatory
approval for the transaction on the terms and within the timeframe contemplated.
Other risks relating to the proposed merger with Dean Foods are identified in
the joint press release of the company and Dean Foods filed by the company with
the Securities and Exchange Commission with its Form 8-K dated April 5, 2001, as
amended on April 10, 2001. The forward-looking statements in this press release
speak only as of the date of this release. Suiza expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to such
statements to reflect any change in its expectations with regard thereto or any
changes in the events, conditions or circumstances on which any such statement
is based.
Other Legal Information
Suiza Foods and Dean Foods have filed with the SEC a preliminary joint proxy
statement/prospectus and other relevant documents concerning the proposed
merger. In addition, Suiza Foods and Dean Foods will prepare and file a
definitive joint proxy statement/prospectus and other relevant documents
concerning the proposed merger. Investors are urged to read the definitive joint
proxy statement/prospectus, when it becomes available, and any amendments or
supplements to the definitive joint proxy statement/prospectus as well as any
other documents filed with the SEC, because they will contain important
information concerning the proposed merger. Investors will be able to obtain the
definitive joint proxy statement/prospectus and other documents filed with the
SEC free of charge at the SEC's website (http://www.sec.gov ). In addition, the
definitive joint proxy statement/prospectus and other documents filed by Dean
Foods and Suiza Foods with the SEC may be obtained free
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of charge by contacting Dean Foods, 3600 North River Road, Franklin Park,
Illinois 60131, Attention: Investor Relations (Tel: 847-678-1680) or Suiza
Foods, 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201, Attention:
Investor Relations (Tel: 800-431-9214).
Suiza Foods, Dean Foods and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
stockholders of Suiza Foods and Dean Foods in favor of the transaction. The
directors and executive officers of Suiza Foods and their beneficial ownership
of Suiza Foods common stock are set forth in the proxy statement for the 2000
annual meeting of Suiza Foods. The directors and executive officers of Dean
Foods and their beneficial ownership of Dean Foods common stock are set forth in
the proxy statement for the 2000 annual meeting of Dean Foods. You may obtain
the proxy statements of Suiza Foods and Dean Foods free of charge at the SEC's
website (http://www.sec.gov ). Stockholders of Suiza Foods and Dean Foods may
obtain additional information regarding the interest of such participants by
reading the joint proxy statement/prospectus.
(Tables to follow)
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SUIZA FOODS CORPORATION
CONDENSED BALANCE SHEET
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
ASSETS 2001 2000
-------------- --------------
Cash and cash equivalents $ 22,938 $ 31,110
Other current assets 795,980 786,821
-------------- --------------
Total current assets 818,918 817,931
Property, plant & equipment 1,006,372 1,003,769
Intangibles & other assets 1,935,678 1,958,778
-------------- --------------
Total Assets $ 3,760,968 3,780,478
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 689,071 $ 699,908
Long-term debt 1,135,583 1,225,045
Other long-term liabilities 171,553 157,816
Mandatorily redeemable TIPES 584,323 584,032
Minority interest in subsidiaries 524,271 514,845
Stockholders' equity:
Common stock 277 273
Additional paid-in-capital 182,151 166,381
Retained earnings 489,983 433,309
Other comprehensive income (16,224) (1,111)
-------------- --------------
Total stockholders' equity 656,187 598,832
-------------- --------------
Total Liabilities and Stockholders' Equity $ 3,760,968 $ 3,780,478
============== ==============
SEGMENT INFORMATION
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ----------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Revenue
Suiza Dairy Group $ 1,242,045 $ 1,165,529 $ 2,444,862 $ 2,287,534
Morningstar Foods 186,203 169,440 359,702 328,644
Corporate / Other 98,826 99,385 196,863 212,317
------------ ------------ ------------ ------------
Consolidated $ 1,527,074 $ 1,434,354 $ 3,001,427 $ 2,828,495
============ ============ ============ ============
Operating Income before Non-Recurring Items
Suiza Dairy Group $ 75,930 $ 82,299 $ 149,655 $ 144,697
Morningstar Foods 24,748 23,337 46,265 43,790
Corporate / Other 2,224 (1,130) (2,297) (5,895)
------------ ------------ ------------ ------------
Consolidated $ 102,902 $ 104,506 $ 187,623 $ 182,592
============ ============ ============ ============
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SUIZA FOODS CORPORATION
(DOLLAR IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Net sales $ 1,527,074 $ 1,434,354 $ 3,001,427 $ 2,828,495
Cost of sales 1,163,947 1,074,136 2,281,774 2,128,118
------------ ------------ ------------ ------------
Gross profit 363,127 360,218 719,653 700,377
Operating costs and expenses 260,225 255,712 532,030 517,785
Plant closing costs -- 1,190 843 2,964
------------ ------------ ------------ ------------
Operating income 102,902 103,316 186,780 179,628
Interest expense & financing charges on
preferred securities 34,329 35,309 70,027 70,940
Equity in earnings of unconsolidated affiliates (1,186) (3,535) (2,859) (5,404)
Other (income) expense (189) (528) 502 (1,075)
------------ ------------ ------------ ------------
Income before income taxes and minority interest 69,948 72,070 119,110 115,167
Income taxes 25,982 27,700 44,649 43,879
Minority interest 9,363 10,837 16,341 17,161
------------ ------------ ------------ ------------
Net income before extraordinary items 34,603 33,533 58,120 54,127
Extraordinary gain -- -- -- 4,968
Cumulative effect of accounting change -- -- (1,446) --
------------ ------------ ------------ ------------
Net income $ 34,603 $ 33,533 $ 56,674 $ 59,095
============ ============ ============ ============
Net income before non-recurring items $ 34,603 $ 34,352 $ 58,449 $ 55,626
============ ============ ============ ============
Diluted EPS before non-recurring items $ 1.11 $ 1.06 $ 1.92 $ 1.77
============ ============ ============ ============
Diluted cash EPS before non-recurring items $ 1.31 $ 1.25 $ 2.33 $ 2.14
============ ============ ============ ============
Basic earnings per share:
Income before extraordinary items $ 1.26 $ 1.16 $ 2.11 $ 1.87
Extraordinary gain -- -- -- 0.17
Cumulative effect of accounting change -- -- (0.05) --
------------ ------------ ------------ ------------
Net income $ 1.26 $ 1.16 $ 2.06 $ 2.04
============ ============ ============ ============
Basic average common shares (000's) 27,560 28,897 27,458 28,984
Diluted earnings per share:
Income before extraordinary items $ 1.11 $ 1.04 $ 1.91 $ 1.73
Extraordinary gain -- -- -- 0.13
Cumulative effect of accounting change -- -- (0.04) --
------------ ------------ ------------ ------------
Net income $ 1.11 $ 1.04 $ 1.87 $ 1.86
============ ============ ============ ============
Diluted average common shares (000's) 36,114 37,322 35,948 37,470
Summary Financial Information:
Depreciation $ 24,008 $ 24,052 $ 47,830 $ 48,097
Amortization of intangibles $ 13,457 $ 12,994 $ 26,798 $ 25,699
Amortization shown in interest expense $ 666 $ 1,141 $ 1,332 $ 2,265