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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. 1-08262
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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 expect to file with the SEC a joint proxy
statement/prospectus and other relevant documents concerning the proposed
transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
WHEN ITS BECOMES AVAILABLE AND ANY AMENDMENTS OR SUPPLEMENTS TO THE JOINT PROXY
STATEMENT/PROSPECTUS AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
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CONCERNING THE PROPOSED TRANSACTION. Investors will be able to obtain the 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 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 2000 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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The communication filed herewith is a May 3, 2001 press release
announcing earnings for the first quarter ended March 31, 2001.
[SUIZA LOGO]
NEWS RELEASE
Contacts: Cory M. Olson
Vice President and Treasurer
(214) 303-3645
SUIZA FOODS CORPORATION REPORTS 15.5% GROWTH
IN FIRST QUARTER DILUTED EARNINGS PER SHARE
BEFORE NON-RECURRING ITEMS TO $0.82
Suiza Records 21st Consecutive Quarter of Record Sales and Earnings Per Share
Sales Grow 5.8% to $1.5 Billion;
Net Income Before Non-Recurring Items Rises 12.1% to $23.8 Million
DALLAS, May 3, 2001 - 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 March 31, 2001, an increase of 5.8% over the first
quarter of 2000. First quarter net income before non-recurring items increased
12.1% to $23.8 million from $21.3 million in the first quarter of 2000.
Diluted earnings per share before non-recurring items for the quarter
totaled $0.82, an increase of 15.5% over the first quarter of 2000. Diluted cash
earnings per share before non-recurring items grew 14.6% to $1.02. The
calculation of cash earnings per share incorporates the guidelines contained
within the Business Combination and Intangibles exposure draft issued by the
Financial Accounting Standards Board.
First quarter operating income before non-recurring items increased
8.5% to $84.7 million, compared with $78.1 million in the 2000 first quarter.
Consolidated operating margins before non-recurring items improved 15 basis
points to 5.7%.
"We are pleased with our first quarter results, and we continue to have
confidence in our ability to deliver diluted earnings per share growth in the
range of 10% to 12% for 2001," said Gregg Engles, Chairman and Chief Executive
Officer of Suiza Foods. "We benefited during the first quarter of this year from
lower operating expenses due to organizational changes effected in 2000 and
improvements in
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our Puerto Rico operations. These improvements were offset by slight margin
erosion at Suiza Dairy Group and Morningstar due to the rising raw material
environment. Nevertheless, we successfully managed through the rising cost
environment this quarter, and we expect to continue to do so as the year
progresses."
During the quarter, the company also recorded a non-recurring charge of
approximately $843,000 related to closing its Canton, Miss. plant.
FIRST QUARTER HIGHLIGHTS
During the first quarter, the company:
o Repurchased a total of 123,334 shares of its common stock for
a total cost of $6.1 million. Currently, $101.3 million
remains available under the company's share repurchase
authorization.
o Launched the Sun Soy Coffee Latte flavored soymilk beverage in
February as part of the company's commitment to continuing to
deliver innovative products to customers and consumers.
o Announced a definitive agreement to merge with Dean Foods
Company, creating a $10 billion national dairy and specialty
foods company. The proposed merger will bring together two
companies with complementary operations, products and
distribution networks, and expands both Suiza's and Dean's
geographic reach.
"We are extremely proud and excited about our recently announced
transaction with Dean Foods. We believe that the merger will create a
well-capitalized company capable of generating significant cash flow and that
has an opportunity to accelerate both sales and earnings growth," said Engles.
"This is a tremendous opportunity to generate value for our shareholders,
customers and consumers. Not only will the merged company have the scale and
geographic reach to better serve our customers, but we will also have greater
opportunities to invest against innovative new products. The end result will be
better product offerings for customers and consumers, which should translate
into increased overall fluid milk consumption, thereby benefiting the entire
industry."
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The company noted that it filed its Hart-Scott Rodino application with
the Justice Department on April 9, 2001.
CONFERENCE CALL WEBCAST
A conference call to discuss the company's financial results and
outlook 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 consist of Adohr Farms(R), Barbe's(R), Brown's
Dairy(TM), Broughton(R), Country Fresh(R), Dairy Gold(R), Dairymen's(R),
Flav-O-Rich(R), Garelick Farms(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), Louis Trauth
Dairy(R), Tuscan(R), Velda Farms(R) and West Lynn Creamery(R), as well as
Celta(R) in Spain. Suiza also sells products under partner or licensed brands in
certain regions, including Borden(R), Lactaid(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 (1) the
company's projected earnings per share growth for 2001, (2) the company's
projected operating results for the balance of 2001, particularly in light of
the company's expectations for the raw material pricing environment, and (3) the
company's expectations regarding its proposed merger with Dean Foods, including
the company's expectation that the merger will enhance the company's ability to
generate sales and earnings growth as well as its innovation capabilities. 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 meet targeted financial and operating results during the remainder of
2001, including targeted sales, operating margins and earnings per share,
depends on a variety of economic, competitive and governmental factors, many of
which are beyond the company's control and which are described in Suiza's
filings with the Securities and Exchange Commission. The company's ability to
generate increased sales and earnings as a result of the proposed merger with
Dean Foods is dependent upon economic, governmental and competitive conditions
generally, and on the company's ability in the time period projected, to (i)
maintain existing customer and other business relationships or to replace such
customers or business relationships with other comparable relationships, (ii)
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 operations or
in customer relations, and (iv) close the proposed transaction on the terms
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
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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 expect to file with the SEC a joint proxy
statement/prospectus and other relevant documents concerning the proposed
merger. Investors are urged to read the joint proxy statement/prospectus when
its becomes available and any amendments or supplements to the 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 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 joint proxy
statement/prospectus and other documents filed by Suiza Foods and Dean Foods
with the SEC may be obtained free of charge by contacting Suiza Foods, 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: Investor Relations (tel 847-678-1680).
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 when it becomes available.
# # #
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SUIZA FOODS CORPORATION
(Dollars in thousands, except per share data)
Three months ended
March 31,
--------------------------
2001 2000
----------- -----------
Net sales $ 1,474,352 $ 1,394,141
Cost of sales 1,117,837 1,053,983
----------- -----------
Gross profit 356,515 340,158
Operating costs and expenses 271,794 262,073
Plant closing costs 843 1,774
----------- -----------
Operating income 83,878 76,311
Interest expense & financing charges on preferred securities 35,697 35,630
Equity in earnings of unconsolidated affiliates (1,673) (1,869)
Other (income) expense 691 (547)
----------- -----------
Income before income taxes and minority interest 49,163 43,097
Income taxes 18,667 16,179
Minority interest 6,979 6,324
----------- -----------
Net income before extraordinary items 23,517 20,594
Extraordinary gain 4,968
Cumulative effect of accounting change (1,446)
----------- -----------
Net income $ 22,071 $ 25,562
=========== ===========
Net income before non-recurring items $ 23,846 $ 21,274
=========== ===========
Diluted EPS before non-recurring items $ 0.82 $ 0.71
=========== ===========
Diluted cash EPS before non-recurring items $ 1.02 $ 0.89
=========== ===========
Basic earnings per share:
Income before extraordinary items $ 0.86 $ 0.71
Extraordinary gain -- 0.17
Cumulative effect of accounting change (0.05) --
----------- -----------
Net income $ 0.81 $ 0.88
=========== ===========
Basic average common shares (000's) 27,355 29,071
Diluted earnings per share:
Income before extraordinary items $ 0.81 $ 0.69
Extraordinary gain -- 0.13
Cumulative effect of accounting change (0.04) --
----------- -----------
Net income $ 0.77 $ 0.82
=========== ===========
Diluted average common shares (000's) 35,785 37,611
Summary Financial Information:
Depreciation $ 23,822 $ 24,070
Amortization of intangibles $ 13,341 $ 12,706
Amortization shown in interest expense $ 666 $ 572
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SUIZA FOODS CORPORATION
Condensed Balance Sheet
(in thousands)
March 31, December 31,
ASSETS 2001 2000
----------- ------------
Cash and cash equivalents $ 21,089 $ 31,110
Other current assets 769,855 786,821
----------- -----------
Total current assets 790,944 817,931
Property, plant & equipment 1,002,431 1,003,769
Intangibles & other assets 1,950,352 1,958,778
----------- -----------
Total Assets $ 3,743,727 $ 3,780,478
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 688,470 $ 699,908
Long-term debt 1,163,338 1,225,045
Other long-term liabilities 183,250 157,816
Mandatorily redeemable TIPES 584,177 584,032
Minority interest in subsidiaries 512,577 514,845
Stockholders' equity:
Common stock 274 273
Additional paid-in capital 171,968 166,361
Retained earnings 455,380 433,309
Other comprehensive income (15,707) (1,111)
----------- -----------
Total stockholders' equity 611,915 598,832
----------- -----------
Total Liabilities and Stockholders' Equity $ 3,743,727 $ 3,780,478
=========== ===========
Segment Information
(Dollars in Thousands)
Three Months Ended
March 31,
2001 2000
----------- -----------
Revenue
Dairy $ 1,202,816 $ 1,122,005
Morningstar 173,499 159,204
Packaging 38,108
Other 98,037 74,824
----------- -----------
Consolidated $ 1,474,352 $ 1,394,141
=========== ===========
Operating Income before Non-Recurring Items
Dairy $ 67,724 $ 65,764
Morningstar 21,517 20,452
Packaging 220
Other (4,520) (8,351)
----------- -----------
Consolidated $ 84,721 $ 78,085
=========== ===========