Dreyer's Announces Third Quarter 2004 Results: Double-Digit Sales Growth from Company Brands.OAKLAND, Calif. -- Dreyer's Grand Ice Cream Holdings, Inc. (the company, Dreyer's, Dreyer's Holdings, and DGICH) (NNM NNM Network Node Manager NNM NASDAQ National Market (financial) NNM National Nutrition Month (March; American Dietetic Association) NNM Naryan-Mar (Russia) NNM Net New Money :DRYR) today announced results for the quarter ended September 25, 2004. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of company brands, including owned, licensed and joint venture brands of packaged ice cream and frozen snacks, increased 18 percent in the quarter ended September 25, 2005. This strong growth was driven by the continued success of Slow Churned(TM) Grand Light(R) ice cream, increased growth in Dreyer's and Edy's(R) classic premium ice cream, and the resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. of the Haagen-Dazs(R) brand following a summer advertising and promotional campaign. AC Nielsen data on the US grocery channel shows that Dreyer's company brands of packaged ice cream grew 18 percent in the quarter ended September 25, 2004 and reached a dollar market share of 23 percent for the quarter, the highest share ever held by the company for the seasonally competitive third quarter. Operating Results Net sales of the company brands increased $62,873,000, or 18 percent, to $410,412,000 for the third quarter of 2004, driven primarily by double-digit growth of premium brands, renewed growth from the company's superpremium portfolio and an increased of $13,142,000 with the addition of net sales from the branded products of Silhouette silhouette (sĭl'  ĕt`), outline image, especially a profile drawing solidly filled in or a cutout pasted against a lighter background. Brands, Inc. (Silhouette) following the Company's acquisition of
Silhouette on July, 26, 2004. The increase in company brand net sales
was offset by increased promotional expenses Noun 1. promotional expense - the cost of promoting a productbusiness expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade in the quarter and the termination of a joint venture which decreased net sales by $11,976,000. Company brands represented 87 percent of total net revenues for the quarter compared to 67 percent for the same period last year. Net sales of partner brands, products manufactured or distributed for other companies, decreased $91,248,000, or 63 percent, to $53,819,000 for the third quarter of 2004. The decrease was driven primarily by a $69,658,000 reduction in net sales following the termination of certain distribution agreements resulting from the Dreyer's Nestle Transaction and the reduction in partner brand net sales following the classification of Silhouette's branded products as company brands. Partner brands represented 11 percent of total net revenues for the quarter compared to 28 percent for the same period last year. Other revenues decreased $12,841,000, or 58 percent, to $9,446,000 for the third quarter of 2004. The decrease was driven by a $4,569,000 reduction in revenues received from Integrated Brands, Inc., a subsidiary of CoolBrands International (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :COB.A) (CoolBrands) for the transitional manufacturing and distribution of divested brands. The decrease also included a $7,662,000 reduction in reimbursements received from Eskimo Pie Eskimo Pie is a brand name for a chocolate-covered vanilla ice cream bar wrapped in foil, the first such dessert sold in the United States. Danish immigrant Christian Kent Nelson, a schoolteacher and candy store owner, claimed to have received the inspiration for the Eskimo Frozen Distribution, Inc., a subsidiary of CoolBrands, for the expenses incurred by the company for distribution services in the territories divested to Eskimo Pie Distribution. Other revenues represented two percent of total net revenues for the quarter, compared to five percent for the same period last year. Total net revenues decreased $41,216,000, or 8 percent, to $473,677,000 for the third quarter of 2004 from $514,893,000 for the third quarter of 2003. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold decreased $17,175,000, or four percent, to $416,363,000 for the third quarter of 2004. The decrease in cost of goods sold was driven by a shift in product mix from partner brands to company brands and a $4,559,000 decrease in drayage Drayage A trucking company freight charge for the pick up or delivery of an ocean container. expense paid to Integrated Brands for the delivery of certain products. The decrease was offset by an $18,100,000 increase in the cost of cream. The company's gross profit decreased by $24,041,000, or 30 percent, to $57,314,000 for the third quarter of 2004, and represented a 12 percent gross margin compared with a 16 percent gross margin for the same period last year. The decrease in gross profit was driven by an $18,100,000 increase in the cost of cream and reduced gross profit from the decrease in partner brand sales, which was partially offset by a product mix shift from lower margin partner brands towards higher margin company brands. Selling, general and administrative expenses decreased $19,111,000, or 23 percent, to $62,258,000 for the third quarter of 2004 and represented 13 percent of total net revenues, compared with $81,369,000, or 16 percent of total net revenues, for the same period last year. The decrease in expenses in the quarter was driven by a reduction in compensation related expenses, stock option compensation expense, broker commissions and merger-related professional fees. The decrease was partially offset by an increase in marketing expenses in the quarter. Interest expense decreased seven percent to $1,744,000 for the third quarter of 2004 due to lower weighted average interest rates, offset by higher average borrowings. Royalty expense to affiliates increased 36 percent to $8,931,000 for the third quarter of 2004 due to an increase in net sales of products marketed under brands which are licensed to the company. Other expense, net increased 314 percent to $2,196,000 in the third quarter of 2004 primarily as a result of increased butter trading losses The following contains a list of trading losses which eventually forced major corporations to go bankrupt or restructure parts of their organisation. This list is not exhaustive. during the quarter. Severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and retention expense decreased $5,718,000 to $(637,000) in the third quarter of 2004 reflecting the final phases of programs begun in 2003 following the Dreyer's Nestle Transaction. The company reported a net loss available to Class A callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. puttable and Class B common stockholders for the quarter ended September 25, 2004 of $(76,824,000), or $(.81) per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of common stock, compared to a net loss available to Class A callable puttable and Class B common stockholders of $(64,965,000) or $(.71) per diluted share of common stock for the quarter ended September 27, 2003. Comparability of Results The company's financial statements reflect the June 26, 2003 combination of Dreyer's Grand Ice Cream, Inc. (DGIC DGIC Dirección General de Investigaciones Criminalisticas (Spanish: Criminal Investigation Division; Honduran police) ) and Nestle Ice Cream Company, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (NICC See NIC. ), Nestle's U.S. frozen dessert business (the Dreyer's Nestle Transaction) through which Dreyer's Grand Ice Cream Holdings, Inc. became the parent of DGIC and NICC. The transaction was accounted for as a reverse acquisition under the purchase method of accounting, which deemed NICC to be the acquirer and DGIC to be the acquiree. The third quarter of 2004 is the first quarter following the Dreyer's Nestle Transaction in which the Consolidated Statement of Operations See Income statement. for the quarter can be directly compared to the prior year period. However, the Consolidated Statement of Operations for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. periods ending September 25, 2004 and September 27, 2003 are not directly comparable. Results for the three quarters ended September 25, 2004 reflect the results of operations of the combined entity, Dreyer's Holdings, for the entire period. Results for the three quarters ended September 27, 2003 reflect the operations of stand-alone NICC for the period from January 1, 2003 through the June 26, 2003 combination, and the operations of the combined entity, Dreyer's Holdings, for the period from June 27, 2003 through September 27, 2003. Investors are urged to read the quarterly report on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission (SEC) for more details on the ongoing effects of the Dreyer's Nestle Transaction on the financial statements. Dreyer's Grand Ice Cream Holdings, Inc., and its subsidiaries manufacture and distribute a full spectrum of ice cream and frozen dessert products. Brands of frozen dessert products currently manufactured and distributed by Dreyer's in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. include Grand, Grand Light(R), Slow Churned(TM), Haagen-Dazs(R), Nestle(R) Drumstick drumstick /drum·stick/ (-stik) a nuclear lobule attached by a slender strand to the nucleus of some polymorphonuclear leukocytes of normal females but not of normal males. (R), Nestle Crunch (1) To process data. See number crunching. (2) To compress data. See data compression. 1. (jargon) crunch - To process, usually in a time-consuming or complicated way. (R), Butterfinger(R), Baby Ruth(R), Toll House(R), Carnation carnation: see pink. carnation Herbaceous plant (Dianthus caryophyllus) of the pink family, native to the Mediterranean, widely cultivated for its fringe-petaled, often spicy-smelling flowers. (R), Push-Up(R), Dole dole, distribution to the poor, usually of food or money. In medieval times doles were usually from bequests of money or land, and the income was given to charity or distributed to the local poor at funerals. (R), Homemade home·made adj. 1. Made or prepared in the home: homemade pie. 2. Made by oneself. 3. Crudely or simply made. Adj. 1. , Fruit Bars, Starbucks(R), Silhouette(R), Skinny (Skinny Station Protocol) Cisco's proprietary implementation of the H.323 IP telephony model. Skinny phones can also be configured for the SIP protocol. See IP telephony. Cow(R), Skinny Carb Bar(TM) and Healthy Choice(R). The company's premium products are marketed under the Dreyer's brand name throughout the western states and Texas, and under the Edy's(R) name throughout the remainder of the United States. Internationally, the Dreyer's brand extends to select markets in the Far East and the Edy's brand extends to the Caribbean and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . For more information on the company, please visit www.dreyersinc.com. Edy's, the Dreyer's and Edy's logo design, Grand Light, Slow Churned, and Homemade, are all trademarks or trade names of Dreyer's Grand Ice Cream, Inc. The Nestle and Haagen-Dazs trademarks in the U.S. are licensed to Dreyer's by Nestle. All other trademarks and trade names are owned by their respective companies and licensed to Dreyer's. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements contained in this press release, the forthcoming conference call, simultaneous webcast and audio replay are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding expectations, beliefs, intentions, or strategies regarding the future. Such forward-looking statements involve known and unknown risks and uncertainties at the time such statements are made which may cause the company's actual actions or results to differ materially from those contained in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to, the following: the level of consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. for frozen dessert products; costs or difficulties related to the company's combination of DGIC and NICC, including the integration of the operations of those companies and compliance with the Federal Trade Commission's order; and costs or difficulties associated with the integration of the operations of other companies that have been acquired, costs or difficulties related to the expansion and closing of the company's manufacturing and distribution facilities, the company's ability to achieve efficiencies in its manufacturing and distribution operations without negatively affecting sales; the cost of energy and gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by used in manufacturing and distribution; the cost of dairy raw materials and other commodities, such as vanilla vanilla, a plant of the genus Vanilla of the family Orchidaceae (orchid family). Vines of hot, damp climates, most are indigenous to Central and South America, especially Mexico, but are now cultivated in other tropical regions. , used in the company's products; the company's ability to develop, market and sell new frozen dessert products; the success of the company's marketing and promotion programs and competitors' responses; market conditions affecting the prices of the company's products; responsiveness of both the trade and consumers to the company's new products and marketing and promotional programs; and the costs associated with any litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. proceedings.
DREYER'S GRAND ICE CREAM HOLDINGS, INC.
THIRD QUARTER 2004
FINANCIAL RESULTS
Consolidated Statement of Operations
(In thousands, except per share amounts)
Quarter Ended Three Quarters Ended
------------------- ----------------------
Sept. 25, Sept. 27, Sept. 25, Sept. 27,
2004 2003 2004 2003
--------- --------- ----------- ----------
Revenues:
Net sales $464,231 $492,606 $1,208,810 $782,458
Other revenues 9,446 22,287 32,591 24,028
--------- --------- ----------- ----------
Total net revenues 473,677 514,893 1,241,401 806,486
--------- --------- ----------- ----------
Operating costs and
expenses:
Cost of goods sold 416,363 433,538 1,115,507 670,845
Selling, general and
administrative 62,258 81,369 184,098 141,285
Interest, net of
amounts capitalized 1,744 1,880 5,407 2,638
Royalty expense to
affiliates 8,931 6,553 21,629 18,685
Other expense, net 2,196 531 224 454
Severance and retention
expense (637) 5,081 2,593 45,905
In-process research and
development 11,495
Loss on divestiture
(Reversal of accrued
divestiture expenses) 323 (216) 11,931
--------- --------- ----------- ----------
490,855 529,275 1,329,242 903,238
--------- --------- ----------- ----------
Loss before income tax
benefit (17,178) (14,382) (87,841) (96,752)
Income tax benefit 6,699 4,746 34,258 31,928
--------- --------- ----------- ----------
Net loss (10,479) (9,636) (53,583) (64,824)
Accretion of Class A
callable puttable common
stock (66,345) (55,329) (191,967) (56,570)
--------- --------- ----------- ----------
Net loss available to
common stockholders $(76,824) $(64,965) $(245,550) $(121,394)
========= ========= =========== ==========
Weighted average common
shares outstanding -
diluted 94,810 90,898 94,446 73,629
========= ========= =========== ==========
Net loss per common share -
diluted $ (.81) $ (.71) $ (2.60) $ (1.65)
========= ========= =========== ==========
Dividends declared per
common share $ .06 $ .06 $ .18 $ .12
========= ========= =========== ==========
Condensed Consolidated Balance Sheet
(In thousands)
Sept. 25, Dec. 27,
2004 2003
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 10,463 $ 1,623
Receivables 155,650 121,961
Inventories 164,735 148,426
Prepaid expenses and other 25,927 37,723
Income taxes refundable 14,411 18,283
Taxes receivable due from affiliate 12,236
Deferred income taxes 17,265 17,265
----------- -----------
Total current assets 388,451 357,517
Property, plant and equipment, net 430,474 392,613
Other assets 16,225 20,735
Other intangibles, net and Goodwill 2,364,854 2,320,558
----------- -----------
Total assets $3,200,004 $3,091,423
=========== ===========
Liabilities, Class A callable puttable common
stock and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $ 204,173 $ 189,719
Current portion of long-term debt 2,143 2,143
----------- -----------
Total current liabilities 206,316 191,862
Long-term debt, less current portion 332,143 149,286
Long-term stock option liability 85,671 135,121
Other long-term obligations 23,515 18,207
Deferred income taxes 37,816 81,065
----------- -----------
Total liabilities 685,461 575,541
Class A callable puttable common stock 2,164,552 1,903,314
Stockholders' equity 349,991 612,568
----------- -----------
Total liabilities, Class A callable puttable
common stock and Stockholders' equity $3,200,004 $3,091,423
=========== ===========
Conference Call Dreyer's Grand Ice Cream Holdings, Inc. (NNM:DRYR) will hold a conference call for analysts and investors on Friday, November 5, 2004, at 10:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (7:30 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ) to discuss the company's financial results. The call will be webcast in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. from the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of www.dreyersinc.com. A replay of the call will be available from the audio archives at the same website location. |
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