Dreyer's Announces First Quarter 2005 Results; Double-Digit Growth of Company Brands Continues.OAKLAND Oakland, city (1990 pop. 372,242), seat of Alameda co., W Calif., on the eastern side of San Francisco Bay; inc. 1852. Together with San Francisco and San Jose, the city comprises the fourth largest metropolitan area in the United States. , Calif. -- Dreyer's Not to be confused with Breyers. Dreyer's Grand Ice Cream Holdings, Inc., a division of Nestlé, is a United States-based producer of ice cream and frozen yogurt. Its products are marketed under the Dreyer's name in the western United States and Texas, and under the Edy's Grand Ice Cream Holdings, Inc. (the company or Dreyer's) (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 first quarter ended March 26, 2005. 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 14 percent for the first quarter of 2005 compared with the prior year period. This strong growth was driven by the continued success of Dreyer's and Edy's(R) Slow Churned(TM) Light ice cream, double-digit growth of Dreyer's and Edy's classic premium ice cream, and the ongoing resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. of Haagen-Dazs(R) branded products. ACNielsen data on the US grocery channel shows that Dreyer's company brands of packaged ice cream grew 10 percent in the quarter ended March 26, 2005 and reached a dollar market share of 23 percent for the quarter, the highest first quarter share ever held by the company. 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 March 26, 2005 of $(101,839,000), or $(1.07) 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. common share, compared with $(80,361,000), or $(.85) per diluted common share, for the quarter ended March 27, 2004. Operating Results Net sales of company brands for the first quarter of 2005 increased $36,529,000, or 14 percent, to $289,976,000 after promotional costs. The increase was driven by net sales increases for the company's premium and superpremium products reflecting continued strong sales of premium Dreyer's and Edy's Slow Churned Light ice cream, classic Dreyer's and Edy's Grand ice cream and Haagen-Dazs branded superpremium products. The increase also reflects an increase in net sales of the company's frozen snacks primarily due to the addition of 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) ice cream products to the company-owned portfolio following the acquisition of Silhouette silhouette (sĭl'  ĕt`), outline image, especially a profile drawing solidly filled in or a cutout pasted against a lighter background. Brands, Inc. in July
2004.Net sales of partner brands, products distributed for other manufacturers, decreased $25,043,000, or 34 percent, to $47,569,000 for the first quarter of 2005. The decrease is primarily due to the classification of the sales of Skinny Cow as company brands during the period. The decrease also reflects reduced net sales of certain other brands and the termination of certain distribution agreements. The decrease was partially offset by the classification of the sales of the Dreamery(R), Whole Fruit(TM) Sorbet and Godiva(R) brands as partner brands following a September 2004 agreement with Integrated Brands, Inc. (Integrated Brands), a subsidiary of CoolBrands International, Inc. (CoolBrands). Other revenues decreased $4,198,000, or 36 percent, to $7,626,000 for the first quarter of 2005. The decrease in other revenues was driven primarily by a $4,011,000 decrease in revenues received from Integrated Brands for transitional manufacturing and distribution. Company brands represented 84 percent, partner brands represented 14 percent and other revenues represented two percent of total net revenues for the first quarter of 2005, compared with 75 percent, 21 percent, and four percent, respectively, for the same period in 2004. Total net revenues increased $7,288,000, or two percent, to $345,171,000 for the quarter. 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 increased $22,320,000, or seven percent, to $338,663,000 for the first quarter of 2005. The increase was driven by increased sales, higher product costs, including an approximate $4,400,000 increase in the cost of cream, and higher distribution expenses. The increase was partially offset by a decrease in drayage Drayage A trucking company freight charge for the pick up or delivery of an ocean container. expense paid to CoolBrands for the delivery of certain of the company's products. The company's gross profit decreased by $15,032,000 to $6,508,000 for the first quarter of 2005, representing a two percent gross margin compared with a six percent gross margin for the same period in 2004. The decrease was driven by increased promotional costs associated with new product launches and the higher cost of goods sold, partially offset by a product mix shift from sales of lower margin partner brands to higher margin company brands. Selling, general and administrative expense decreased by $10,160,000, or 21 percent, to $38,206,000 for the first quarter of 2005, representing 11 percent of total net revenues, compared with $48,366,000, or 14 percent of total net revenues, for the same period in 2004. The decrease in expense in the quarter was primarily driven by decreases in marketing and bad debt expense. Interest expense increased by $557,000, or 37 percent, to $2,043,000 for the first quarter of 2005, primarily due to higher average borrowings. Royalty expense paid to affiliates increased by $1,198,000, or 24 percent, to $6,181,000 for the first quarter of 2005 driven by increased net sales of products marketed under brand names or incorporating technology which is licensed to the company by affiliates of Nestle S.A. Other expense was $1,624,000 for the first quarter of 2005, driven primarily by $1,511,000 in losses from butter trading activities. Other income was $5,641,000 for the first quarter of 2004 driven primarily by $5,074,000 in gains from butter trading activities. Finally, 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 $3,119,000 for the first quarter of 2005 as the majority of the Dreyer's Nestle Transaction severance and retention programs were completed in 2004. 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 or 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, Slow Churned(TM) Light, 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), 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), Skinny 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 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, 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; the company's ability to achieve efficiencies in its manufacturing and distribution operations without negatively affecting sales; costs or difficulties related to the company's combination of Dreyer's Grand Ice Cream, Inc. and Nestle Ice Cream Company, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , including the integration of the operations of those businesses and the compliance with the Federal Trade Commission's order relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of assets; costs or difficulties related to the expansion and closing of the company's manufacturing and distribution facilities; 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, manufacture, 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.
FIRST QUARTER 2005
FINANCIAL RESULTS
Consolidated Statement of Operations
(In thousands, except per share amounts, unaudited)
Quarter Ended
-------------
March 26, 2005 March 27, 2004
-------------- --------------
Revenues:
Net sales $ 337,545 $ 326,059
Other revenues 7,626 11,824
-------------- --------------
Total net revenues 345,171 337,883
-------------- --------------
Costs and expenses:
Cost of goods sold 338,663 316,343
Selling, general and administrative
expense 38,206 48,366
Interest, net of amounts capitalized 2,043 1,486
Royalty expense to affiliates 6,181 4,983
Other expense (income), net 1,624 (5,641)
Severance and retention (adjustment)
expense (22) 3,097
-------------- --------------
386,695 368,634
-------------- --------------
Loss before income tax benefit (41,524) (30,751)
Income tax benefit 10,627 11,993
-------------- --------------
Net loss (30,897) (18,758)
Accretion of Class A callable
puttable common stock (70,942) (61,603)
-------------- --------------
Net loss available to Class A callable
puttable and Class B common
stockholders $ (101,839) $ (80,361)
============== ==============
Weighted-average shares outstanding 95,260 94,120
Net loss per share of Class A callable
puttable and Class B common stock --
basic and diluted $ (1.07) $ (.85)
============== ==============
Dividends declared per share of Class A
callable puttable and Class B common
stock $ .06 $ .06
============== ==============
Condensed Consolidated Balance Sheet
(In thousands, unaudited)
Mar. 26, 2005 Dec. 25, 2004
-------------- --------------
Assets
Current Assets:
Cash and cash equivalents $ 335 $ 870
Receivables 130,614 98,645
Inventories 205,794 178,107
Prepaid expenses and other 34,915 26,450
Income taxes refundable 2,252 11,797
Deferred income taxes 5,643 5,643
-------------- --------------
Total current assets 379,553 321,512
Property, plant and equipment, net 544,296 519,562
Other assets 10,882 14,578
Goodwill and other intangibles, net 2,387,613 2,391,042
-------------- --------------
Total assets $3,322,344 $3,246,694
============== ==============
Liabilities, Class A Callable Puttable Common Stock and
Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $ 218,651 $ 240,319
Nestle S.A. credit facility, current 498,200 -
-------------- --------------
Total current liabilities 716,851 240,319
Nestle S.A. credit facility - 354,600
Long-term stock option liability 50,976 73,209
Other long-term obligations 37,702 41,655
Deferred income taxes 24,278 38,400
-------------- --------------
Total liabilities 829,807 748,183
Class A callable puttable common stock 2,352,629 2,251,040
Stockholders' equity 139,908 247,471
-------------- --------------
Total liabilities, Class A callable
puttable common stock and
stockholders' equity $3,322,344 $3,246,694
============== ==============
Conference Call Dreyer's Grand Ice Cream Holdings, Inc. (NNM:DRYR) will hold a conference call for analysts and investors on Friday, May 6, 2005, 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 this news release. 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 for a limited period from the audio archives at the same website location and is incorporated by reference into this news release. |
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