Back to GetFilings.com
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended May 29, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
COMMISSION FILE NO.: 0-1118
DEAN FOODS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-0984820
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
3600 N. RIVER ROAD, FRANKLIN PARK, 60131
ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (708) 678-1680
SECURITIES REGISTERED PURSUANT TO SECTIONS 12(B) AND 12(G) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
Common Stock, Par Value $1 Per Share New York Stock Exchange
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 Common Stock, Par Value $1 Per Share, of the
Registrant outstanding as of August 5, 1994 was 39,821,839. The aggregate
market value of such outstanding shares on August 5, 1994 was $1.19 billion,
based upon the closing price for the Common Stock on the New York Stock
Exchange on such date.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference in the
respective Parts hereof indicated:
1. Registrant's Annual Report to Shareholders for Fiscal Year Ended May
29, 1994 (referred to herein as the "Company's Fiscal 1994 Annual
Report"): Part I and Part II
2. Registrant's Proxy Statement for its Annual Meeting of Stockholders to
be held on October 4, 1994 (referred to herein as the "Company's 1994
Proxy Statement"): Part III
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PART I
ITEM 1. BUSINESS.
Dean Foods Company and its subsidiaries ("the Company") is engaged in the
processing, purchase and distribution of dairy and specialty food products.
The Company's principal products are Dairy Products (fluid milk, specialty
dairy products and ice cream) and Specialty Food Products (canned and frozen
vegetables; pickles, relishes and specialty items; powdered products; and
sauces, puddings and dips). A significant portion of the Company's products are
sold under private labels. The Company also operates a trucking business
hauling less-than-truckload freight, concentrating primarily on refrigerated
and frozen cartage.
The predecessor to Dean Foods Company was incorporated in Illinois in 1925.
Acquisitions have been an important factor in the Company's strategy. The
Company does not have specific acquisition criteria, but generally focuses on
food companies having a well-established reputation for quality products and
service.
The Company has made 14 acquisitions in the last five years. During fiscal
1994, the Company acquired Longlife Dairy Products of Jacksonville, Florida, an
ultra-high temperature (UHT) processor of specialty dairy products, the Birds
Eye frozen vegetable business and the Bennett's premium sauce line. During
fiscal year 1993, the Company acquired W. B. Roddenbery Co., Inc. of Cairo,
Georgia, a processor of pickles, peanut butter, boiled peanuts and syrups and
acquired an East Coast replacement sour cream product line. In fiscal year
1992, the Company acquired Meadow Brook Dairy Company, a dairy processor with
plants in Pennsylvania and New York; and Frio Foods, Inc., a Texas frozen
vegetable processor. In fiscal year 1991, the Company acquired a fluid milk and
ice cream business located in Utah and Nevada operating as Cream o'Weber; Ready
Food Products, Inc., a UHT processor of specialty dairy products; and Pilgrim
Farms, Inc., an Indiana pickle processor. The Company, in fiscal year 1990,
acquired Chas. F. Cates & Sons, Inc., a North Carolina pickle processor;
Bellingham Frozen Foods, Inc., a Washington frozen vegetable processor;
Mayfield Dairy Farms, Inc., a fluid milk and ice cream processor located in
Tennessee; and the business and assets of Western Food Products, Inc., a pickle
processor in LaJunta, Colorado. The results of operations of these
acquisitions, from their respective dates of acquisition, have been included in
the Company's results of operations.
With two exceptions, these companies, businesses and assets were acquired for
cash, installment notes or a combination thereof. The Company in 1993 exchanged
535,000 shares of its common stock for all the outstanding shares of W. B.
Roddenbery Co., Inc. In 1990, the Company exchanged 865,000 shares of its
common stock for all the outstanding shares of Chas. F. Cates & Sons, Inc.
Information regarding the Company's Dairy Products and Specialty Food
Products business segments for the last three fiscal years is set forth in the
Company's Fiscal 1994 Annual Report (Exhibit 13a hereto) at page 29 in the note
to consolidated financial statements captioned "Business Segment Information".
Such information, excluding the first sentence of such note, is hereby
incorporated herein by reference.
DAIRY PRODUCTS BUSINESS SEGMENT
Fluid Milk and Specialty Dairy Products
The Company processes raw milk and other raw materials into fluid milk and
specialty dairy products. Included in the fluid products category is
homogenized, low-fat and skim milk plus buttermilk, chocolate milk and juice
products. Specialty dairy products include cottage cheese, yogurt, portion
2
control cream cheese and sour cream, all cultured fresh dairy products, and an
assortment of UHT processed and aseptic packaged products. The specialty dairy
UHT products include whipping creams, half and half, aerosol toppings, coffee
creamers, flavored milks and lactose-reduced milks.
Fluid milk and fresh cultured specialty products are sold to grocery store
chains, convenience stores, smaller retail grocery outlets, warehouse club
stores, grocery warehouses and institutional customers in the Midwest and mid-
Southern states, in parts of the Southwestern, Southeastern and Rocky Mountain
states, parts of Pennsylvania and New York, and the Caribbean and Mexico.
In addition to the strong Dean brand in the Midwest and mid-South, fluid milk
and fresh cultured specialty dairy products are sold in various areas under
well-established labels such as Bell, Bowman, Creamland, Cream o'Weber,
Fairmont, Fieldcrest, Gandy's, T. G. Lee, Mayfield, McArthur, Meadow Brook,
Price's, Reiter, St. Thomas Dairies and Verifine. A substantial portion of the
Company's fluid milk and specialty dairy products volume is sold under private
labels.
Specialty UHT processed products produced and marketed by Ryan Milk Company,
Ready Food Products, Inc. and Longlife Dairy Products are distributed
nationwide under various branded and private labels.
The fluid milk and specialty dairy products business is extremely competitive
and productivity is therefore very important. The Company continues to reinvest
a substantial portion of its total capital budget in its dairy plants and
distribution systems to maintain and improve efficiencies. Capital expenditure
projects for 1994 included cooler expansions at its Evart, Michigan, Chemung,
Illinois and Louisville, Kentucky dairy plants, corrugated caser and palletizer
at its El Paso, Texas dairy plant, blowmold packaging equipment at its
Rochester, Indiana dairy plant and construction of a dairy distribution and
cooler facility in Greenville, North Carolina. Major capital projects during
fiscal 1993 included completion of a cooler expansion at its Orlando, Florida
dairy operations, additional processing capacity at its Sharpsville,
Pennsylvania dairy plant, and additional processing equipment at the Company's
Philadelphia, Pennsylvania UHT operation and at its Albuquerque, New Mexico
dairy plant.
Capital expenditure projects for fiscal 1992 included the expansion of cold
room capacity at the Company's Lubbock, Texas dairy operation; blowmold
packaging equipment at the Company's Huntley, Illinois location; expansion of
the cooler at its Orlando, Florida dairy operation; construction of a dairy
distribution and cooler facility at Atlanta, Georgia; and addition of
processing capacity at Murray, Kentucky and Philadelphia, Pennsylvania UHT
operations. Major capital projects in fiscal 1991 included the additional
processing and distribution equipment at the Company's Salt Lake City, Utah and
Akron, Ohio dairy operation and office expansion at the Orlando, Florida dairy
plant. Capital expenditures in fiscal 1990 included the addition of blowmold
packaging equipment at several dairy operations and completion of a UHT plant
renovation at Murray, Kentucky.
Sales of fluid milk to unaffiliated customers for the fiscal years 1994, 1993
and 1992 were $1,077 million, $1,070 million and $1,044 million, respectively.
Sales of specialty dairy products to unaffiliated customers for fiscal 1994,
1993 and 1992 were $184 million, $168 million and $184 million, respectively.
Ice Cream
The Company produces packaged and bulk ice cream products which are sold
through supermarkets, convenience stores, smaller retail grocery outlets,
restaurants and other foodservice users. The product line includes ice cream
(regular, light, reduced fat, lowfat and non-fat), fruit sherbets, frozen
yogurts, and novelties made with ice cream, sherbet and ices. These products
are sold under a variety of regional brands and numerous private labels in the
Midwest, Southwest, Florida, Georgia, South Carolina, Ohio, Tennessee,
Wisconsin, the Caribbean and parts of the Rocky Mountain states
3
under numerous well-established brands. Such brands include Dean, Country
Charm, Gandy's, Creamland, Cream o'Weber, Bell, Price's, Fitzgerald, Mayfield,
Fieldcrest, McArthur/T. G. Lee, Reiter, Verifine, Carnival and Calypso. Sales
of ice cream products are substantially greater during the summer months than
during the rest of the year.
Additionally, the Company produces and supplies Baskin-Robbins ice cream
products in the midwest and southwest United States.
Major projects in 1994 included a stick novelty line, freezer expansion and
new distribution facilities in Athens, Tennessee and new processing equipment
in Akron, Ohio. Capital expenditure projects in fiscal 1992 included expansion
of ice cream production capacity at the Company's Akron, Ohio operation. In
fiscal 1991, additional processing equipment was installed at its Albuquerque,
New Mexico ice cream plant.
Sales to unaffiliated customers for the fiscal years 1994, 1993 and 1992 were
$208 million, $199 million, and $202 million, respectively.
SPECIALTY FOOD PRODUCTS BUSINESS SEGMENT
Canned and Frozen Vegetables
The Company processes and markets canned and frozen vegetables consisting of
corn, peas, green beans, carrots, beets, spinach, peas and carrots, green lima
beans and various mixed vegetable blends. Additional products in the frozen
vegetable line include asparagus, broccoli, Brussels sprouts, cauliflower,
fordhook lima beans, celery and vegetable blends with pasta and with rice. The
processing and canning of fresh vegetables is seasonal in nature, with most of
the canning activity in the Midwest occurring during and shortly after
harvesting periods. The Company believes the geographic diversity of its plants
and growing areas provides the ability to balance production. The packaging of
processed frozen vegetables occurs year-round. As a result of the seasonal
nature of the vegetable business, inventory levels vary significantly during
the year.
Frozen vegetables account for approximately 60% of the total vegetable sales.
Products are marketed under several brand names including Birds Eye, Veg-All,
Freshlike, Larsen, Rancho Fiesta, and Shaw, as well as under customer brand
names or in-house brands. The Company's Birds Eye vegetable brand is marketed
in all markets throughout the United States. The Company's canned mixed
vegetable, Veg-All, is marketed in all major and secondary markets throughout
the United States, while Veg-All frozen and canned single vegetable items are
marketed in the Southeast and the South. The Freshlike canned and frozen
vegetable line is marketed primarily in the Midwest, Pennsylvania, West
Virginia and Texas. Other vegetable products are marketed under private labels
or in-house brands throughout the United States and exported to the Far East,
Mid-East, Europe, Mexico, Canada and the Caribbean. Retail or consumer sizes
are distributed for ultimate sales to consumers through chain and independent
retail stores and include Company brands and buyers' brands of all products.
Institutional customers, including hotels, restaurants, in-plant feeding
programs, and schools are serviced through foodservice distributors with
products packaged in larger containers.
Major capital projects in 1994 included the installation of a carrot
processing line at Uvalde, Texas and an expansion of the office facilities in
Green Bay, Wisconsin. Fiscal 1993 and 1992 capital expenditures included the
construction of a waste water treatment facility at the Company's Bellingham,
Washington location. Major capital expenditures in fiscal 1991 included
expansion of the frozen vegetable processing capacity at the Company's
Hartford, Michigan plant. Capital expenditures in fiscal 1990 included
expansion of the Company's Darien, Wisconsin frozen vegetable processing
facility and installation of freezer equipment at its Oxnard, California
vegetable processing plant.
4
Sales to unaffiliated customers for fiscal years 1994, 1993 and 1992 were
$415 million, $347 million and $364 million, respectively.
Pickles, Relishes and Specialty Items
The Company is one of the largest pickle processors and marketers in the
United States with sales nationwide. Pickles, relishes, pickled peppers and
other assorted specialty items are sold under several brand names, including
Roddenbery, Peter Piper, Heifetz, Pesta, Atkins, Whitfield, Aunt Jane's, Ma
Brown, Tree, Rainbo, Cates and Dailey. Products are also sold for private label
distribution to retail grocery store chains, wholesalers and the foodservice
industry and in bulk to other food processors. Late in fiscal 1993 the Company
acquired W. B. Roddenbery Co., Inc., located in Cairo, Georgia, a processor of
pickles, peanut butter, boiled peanuts and syrups. During fiscal 1992 the
Company's Green Bay Food Company became the exclusive U.S. marketer of green
olives for a leading Spanish olive packer.
Fiscal 1994 capital expenditures included the construction of a new
processing room at the Company's LaJunta, Colorado plant. Major capital
expenditures in fiscal 1993 included installation of processing equipment at
the Company's Plymouth, Indiana plant and construction of administrative office
facilities at its Atkins, Arkansas location. In fiscal 1992, additional
warehouse capacity was added at its Atkins, Arkansas location. Capital
expenditures in fiscal 1991 included tank yard additions and packaging
equipment at the Faison, North Carolina pickle processing plant.
The processing of pickle products is seasonal, dependent to a large extent
upon the growing season of cucumbers in the summer months. Inventories are
therefore higher in the fall and winter months than in the spring and early
summer.
The Company markets a number of specialty sauces, including shrimp, seafood,
tartar, horseradish, chili and sweet and sour sauces, in the Eastern,
Midwestern and Southern United States to retail grocers.
Sales to unaffiliated customers for the fiscal years 1994, 1993 and 1992 were
$353 million, $304 million, and $282 million, respectively.
Powdered Products
Non-dairy coffee creamers are the Company's principal powdered products.
Powdered premium and low-fat products are sold primarily under private labels
to vending operators, office beverage service companies and institutional
foodservice distributors with national distribution which supply restaurants,
schools, health care institutions, hotels and vending and fast-food operations.
Non-dairy creamers are also sold for private label distribution to all classes
of the retail trade and sold in bulk to a number of other food companies for
use as an ingredient in their food products. Powdered products are also sold to
international customers in Australia, Canada, the Far East, Mexico, South
America, Europe and the Middle East. The Company's non-dairy coffee creamers
are an economical and convenient substitute for milk and cream. They require no
refrigeration and have long shelf lives.
The Company provides stabilizers for low-fat shake and frozen yogurt mixes
supplied to McDonald's restaurants throughout the United States and, through an
affiliate, the Company supplies the United Kingdom, Continental Europe and
other foreign markets with stabilizers and other dry ingredients.
The Company's powdered products are sold in a broad variety of product
formulations and package sizes. No major capital expenditures were required
during the past five years.
5
Sales to unaffiliated customers for the fiscal years 1994, 1993 and 1992 were
$100 million, $88 million, and $82 million, respectively.
Sauces, Puddings and Dips
The Company's aseptic products primarily include ready-to-serve natural
cheese sauces, puddings and other specialty sauces which are sterilized under a
process which allows storage for prolonged periods without refrigeration.
Aseptic products are sold nationwide, primarily under private labels to
distributors which supply restaurants, schools, hotels and other segments of
the foodservice industry. Major capital expenditures in 1994 include the
beginning of a multi-phase project to significantly upgrade the Dixon, Illinois
facility with the completion of a new batch make-up room.
The Company manufactures vegetable-fat-based party dips, low-fat sour cream
and sour cream replacements at its Rockford, Illinois facility. These products
are sold nationally, but primarily east of the Rockies, under the Dean's, King
and private label brands in supermarkets and other retail outlets through
distributor or direct warehouse delivery.
Sales to unaffiliated customers for the fiscal years 1994, 1993 and 1992 were
$69 million, $67 million and $61 million, respectively.
Corporate and Other
DFC Transportation Company, a trucking subsidiary of the Company, operates
nationwide with a fleet of approximately 74 tractors and 167 trailers,
providing less-than-truckload refrigerated and frozen cartage service. The
majority of its revenues are derived from refrigerated freight. Its customers
include food and industrial companies. A significant portion of its revenues
are derived from the brokerage of various types of freight. During the fourth
quarter of 1992, the Company decided to terminate operation of the refrigerated
truckload transportation portion of its trucking business and an appropriate
charge to earnings was provided for the costs associated with such termination.
Revenues for the trucking division from unaffiliated customers in fiscal
years 1994, 1993 and 1992 were $20 million, $21 million and $45 million,
respectively. Revenues relating to hauling products for other divisions and
subsidiaries of the Company have been eliminated.
Also included in Corporate and Other are sales of canned meats processed
under bid contracts with the federal government. Such sales vary greatly from
year to year because of the nature of the federal government's procurement
practices. Margins are small since these contracts are taken primarily to
absorb overhead of the Company's canning operation during seasonally idle
periods of production. Sales in fiscal years 1994, 1993 and 1992 were $5
million, $10 million and $24 million, respectively.
RAW MATERIALS AND SUPPLIES
The Company's business is dependent upon obtaining adequate supplies of raw
and processed agricultural products. Historically, the Company has been able to
obtain adequate supplies of agricultural products.
Raw milk and other agricultural products are generally purchased directly
from farmers and farm cooperatives. The Company does not have long-term
purchase contracts for agricultural products. The price of raw milk is
extensively regulated. In fiscal 1994, raw milk costs exceeded last year's
levels during the first quarter, fell in the second quarter and then increased
significantly during the last half of
6
the year, remaining higher than fiscal 1993 levels. Raw milk costs rose
slightly during the first part of fiscal 1993, declining somewhat during the
latter part of the year as costs were moderately higher than fiscal 1992 cost
levels. The cost of raw milk rose steadily during the first nine months of
fiscal 1992 declining slightly in the fourth quarter, but still remained higher
than the 1991 cost levels.
The Company produces most of its plastic gallon and half-gallon container
requirements for its fluid milk business. Can requirements for canned
vegetables are primarily furnished by three can manufacturers, and glass
containers for pickles and related products are purchased from two main
suppliers, as required, at competitive prices.
Certain commodities, such as corn syrups, vegetable oils, sugar and casein,
and various packaging supplies are purchased from numerous sources on a normal
purchase order basis, with vegetables and cucumbers purchased under seasonal
grower contracts. The Company is not dependent upon any single supplier and is
confident that any lost supplier requirements could be replaced in the ordinary
course of business.
In its vegetable and pickle operations, the Company supplies seed to and
advises growers regarding planting techniques, monitors and arranges for the
control of insects, directs the harvest, and, for some crops, provides
automated harvesting service. Vegetable supplies are largely dependent on
regional weather and growing conditions. Weather-related crop shortages and
harvest delays in the midwest growing region resulted in higher fiscal 1994
profit margins in the Company's vegetable businesses. Excessive industry-wide
inventories of certain vegetables during fiscal years 1993 and 1992 resulted in
decreased profit margins. Short supplies of certain vegetables during fiscal
1989 and 1990, the result of the 1988 Midwest drought, required purchases of
frozen vegetables from other domestic and foreign sources to minimize loss of
vegetable sales volume. The prices for raw cucumbers have been relatively
stable over the last three years.
DISTRIBUTION
Dairy Products are principally delivered to grocery chain stores or
warehouses directly from the Company's processing plants by the Company, in
trucks which it owns or leases, and by independent distributors. In certain
states, products are also delivered to the Company's distribution branches from
which distribution is then made to customers. The Company has continued its
efforts to streamline its distribution system for Dairy Products. Major
economies have been effected in recent years through consolidation of
distribution branches and routes, with emphasis on direct truck delivery to
retail stores and warehouses of grocery chains. The Company's Specialty Food
Products are delivered to warehouses and food distributors by the Company's
fleet of trucks and outside freight carriers. Inventories of canned and frozen
vegetables are maintained by the Company in warehouses throughout the country
in order to maintain a ready supply for rapid delivery to local retailers.
COMPETITION
The Company's business is highly price competitive with relatively low
operating margins. Quality and customer service are important factors in
securing and maintaining business. The Company's Dairy Products business
operates in a number of different geographical markets, competing in some
against national companies and in others against regional or local companies.
In certain markets, some supermarket chain stores have their own dairy products
processing plants. Generally, in each major market and product class there are
a number of competitors, some of which have greater sales and assets than the
Company. The Company's Specialty Food Products are marketed nationwide and
internationally. The degree of penetration and competitive conditions in each
market varies, but the Company does not consider that it has any material
competitive advantage in any of its major markets or product classes.
7
EMPLOYEES
The Company has approximately 12,100 full-time employees, of whom
approximately 4,200 are represented by the International Brotherhood of
Teamsters and other unions under thirty-nine collective bargaining agreements.
Twelve of these agreements expire during fiscal 1995. These include agreements
with employees at Sheboygan, Wisconsin; El Paso, Texas; Sharpsville,
Pennsylvania; Huntley, Chemung, Franklin Park, Belvidere and Rockford, Illinois
dairy products plants and Pecatonica, Illinois; Green Bay, Wisconsin; Eaton
Rapids, Michigan and Watsonville, California specialty food products plants.
Generally, the Company considers its employee relations to be good.
The Company has approximately 8,400 seasonal positions at its vegetable
operations and its pickle processing plants, principally during the summer
months. The Company has been successful in meeting its seasonal employment
needs, as many such employees return annually to fill these positions.
ENVIRONMENT
The Company's compliance with Federal, State and local regulations relating
to the discharge of material into the environment or otherwise relating to the
protection of the environment has not had a material effect on the Company's
capital expenditures, earnings or competitive position. The Company continues
to give considerable attention to the impact or potential impact of its
operations on the environment.
ITEM 2. PROPERTIES.
The Company owns fifty-four of its processing plants (six of which are
subject to mortgage) and leases the other four under leases expiring from
fiscal 1995 through fiscal 2011. The Company has various distribution branches
and storage warehouses located throughout the country, some of which are owned
and some leased. The Company considers its properties suitable and adequate for
the conduct of its business. A number of the vegetable canning production
facilities are operated only during the vegetable intake season. All other
production facilities are principally operated at or near capacity levels, but
generally on the basis of fewer than three shifts per day.
Further information relating to the Company's leases is contained in the note
to consolidated financial statements captioned "Leases" appearing in the
Company's Fiscal 1994 Annual Report (Exhibit 13a hereto) on page 28. Such
information is hereby incorporated herein by reference.
8
The locations of the Company's processing facilities, by product category
within business segments, are set forth below:
DAIRY PRODUCTS
Fluid Milk and Specialty Dairy
Jacksonville, Florida Barberton, Ohio
Miami, Florida Springfield, Ohio
Orange City, Florida Belleville, Pennsylvania
Orlando, Florida Erie, Pennsylvania
Chemung, Illinois Philadelphia, Pennsylvania
Huntley, Illinois Sharpsville, Pennsylvania
Rockford, Illinois Athens, Tennessee
Rochester, Indiana El Paso, Texas
Louisville, Kentucky Lubbock, Texas
Murray, Kentucky San Angelo, Texas
Evart, Michigan Salt Lake City, Utah
Albuquerque, New Mexico St. Thomas, Virgin Islands
Cuba, New York Sheboygan, Wisconsin
Ice Cream
Ft. Lauderdale, Florida Athens, Tennessee
Belvidere, Illinois Lubbock, Texas
Albuquerque, New Mexico St. Thomas, Virgin Islands
Barberton, Ohio
SPECIALTY FOOD PRODUCTS
Canned and Frozen Vegetables
Oxnard, California Brillion, Wisconsin
Watsonville, California Cambria, Wisconsin
Hartford, Michigan Cedar Grove, Wisconsin
Arlington, Minnesota Darien, Wisconsin
Waseca, Minnesota Fairwater, Wisconsin
Fulton, New York Fort Atkinson, Wisconsin
Uvalde, Texas Green Bay, Wisconsin
Bellingham, Washington Hortonville, Wisconsin
Bloomer, Wisconsin Celaya, Mexico
Pickles, Relishes and Specialty Items
Atkins, Arkansas Plymouth, Indiana
LaJunta, Colorado Croswell, Michigan
Sanford, Florida Faison, North Carolina
Cairo, Georgia Green Bay, Wisconsin
Powdered Products
Pecatonica, Illinois Wayland, Michigan
Rockford, Illinois
Sauces, Puddings and Dips
Dixon, Illinois Rockford, Illinois
9
Distribution branches for Dairy Products are located in New Mexico, Texas,
Florida, Ohio, Tennessee, New York, Georgia, Pennsylvania, South Carolina,
Virginia, Illinois and Wisconsin.
Specialty Food Products distribution warehouses are maintained in Wisconsin
and Michigan with public warehouses utilized throughout the United States for
further distribution of vegetable products. The Company maintains powdered
product distribution branches in Illinois, Texas and Utah. One Company-owned
transportation terminal and maintenance facility is located in Illinois.
ITEM 3. LEGAL PROCEEDINGS.
Information on legal proceedings is contained in the Company's Fiscal 1994
Annual Report (Exhibit 13a hereto) on page 29 in the note to consolidated
financial statements captioned "Commitments and Contingent Liabilities". Such
information is hereby incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended May 29, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's executive officers is set forth in Item
10 of Part III of this Report.
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded on the New York Stock Exchange under the
ticker symbol DF. The range of Common Stock sales prices for each of the
quarters during the past two fiscal years (as reported by the New York Stock
Exchange) and the frequency and amount of Common Stock dividends declared the
past two fiscal years are set forth under the caption "Quarterly Financial
Data" at page 30 of the Company's Fiscal 1994 Annual Report (Exhibit 13a
hereto) in the rows captioned "Stock Price Range" and "Dividend Rate". Such
rows and the column and row captions related thereto are hereby incorporated
herein by reference.
The approximate number of holders of record of the Company's Common Stock on
August 5, 1994, was 8,988.
Restrictions on the Company's ability to pay dividends on its Common Stock
are described in the first paragraph of the "Borrowing Arrangements" note to
the consolidated financial statements at page 25 of the Company's Fiscal 1994
Annual Report (Exhibit 13a hereto), which paragraph is hereby incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for each of the Company's last five fiscal years is
set forth at page 31 of the Company's Fiscal 1994 Annual Report (Exhibit 13a
hereto) under the caption "Summary of Operations". Such selected financial data
is hereby incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A discussion of the Company's financial condition, cash flows and results of
operations, including information with respect to liquidity and capital
resources, is set forth at pages 16 through 20 of the Company's Fiscal 1994
Annual Report (Exhibit 13a hereto) under the caption "Financial Review", which
discussion is hereby incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's consolidated balance sheets as of May 29, 1994 and May 30,
1993, and related consolidated statements of income, of shareholders' equity
and of cash flows for each of the three fiscal years in the period ended May
29, 1994, and the notes thereto, together with the report thereon of
independent accountants, are set forth on pages 21 through 30 of the Company's
Fiscal 1994 Annual Report (Exhibit 13a hereto).
Such financial statements and the report thereon of independent accountants
are hereby incorporated herein by reference.
Financial data for each quarter within the two most recent fiscal years is
set forth under the caption "Quarterly Financial Data" at page 30 of the
Company's Fiscal 1994 Annual Report (Exhibit 13a hereto) in the rows captioned
"Net Sales", "Gross Profit", "Net Income" and "Per Common Share Data: Net
Income". Such rows and row captions related thereto are hereby incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
11
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's directors (including nominees for
election at the Company's Annual Meeting of Stockholders to be held October 4,
1994) is set forth at pages 1 through 6 of the Company's 1994 Proxy Statement
under the captions "ELECTION OF DIRECTORS" and "CERTAIN INFORMATION REGARDING
THE BOARD OF DIRECTORS". Such information is hereby incorporated herein by
reference.
Information supplied by the Company's executive officers who are not also
directors of the Company concerning their ages, business experiences, and
periods of service as executive officers is as follows:
SERVED IN
POSITION WITH SUCH POSITION
THE COMPANY AGE SINCE
------------- --- -------------
Eric A. Blanchard.................... Vice President, 38 1993
Secretary and
General Counsel
Timothy J. Bondy..................... Vice President 44 1989
Finance
Gary A. Corbett...................... Vice President 46 1993
Governmental and
Dairy Industry Relations
Gary D. Flickinger................... Vice President 52 1993
Production
Daniel E. Green...................... Group Vice President 49 1992
Specialty Dairy Division
James R. Greisinger.................. Group Vice President 53 1992
and President of Dean
Pickle and Specialty
Products Company
Dale I. Hecox........................ Treasurer 62 1985
George A. Muck....................... Vice President 56 1970
Research & Development
Douglas A. Parr...................... Vice President 52 1993
Sales & Marketing--
Milk and Ice Cream
Dennis J. Purcell.................... Vice President 51 1993
Sales--National Accounts
Roger A. Ragland..................... Vice President 60 1993
Sales and Marketing
Food Products
Jeffrey P. Shaw...................... Group Vice President 37 1992
and President of Dean
Foods Vegetable Company
Terrence J. Smith.................... Vice President 62 1974
Industrial Relations
12
Each of the executive officers, including executive officers who are also
directors, was elected to serve as an executive officer until the next annual
meeting of directors, scheduled for October 4, 1994.
Messrs. Blanchard, Green, Greisinger, Purcell, Ragland and Shaw have been
employees of the Company for more than five years. Prior to assuming their
current positions, Mr. Blanchard was the Company's secretary and general
counsel; Mr. Green was the Company's Vice President, Corporate planning and
development and previously held positions of a marketing executive, divisional
general manager and the Company's Director of Research; Mr. Greisinger was a
Company Vice President and President of Green Bay Food Company; Mr. Purcell was
Senior Vice President of Sales and Marketing of Green Bay Food Company; and Mr.
Ragland was a divisional sales vice president. Mr. Corbett has been employed by
the Company since 1990. Prior to assuming his present duties, Mr. Corbett was
in the Company's sales administration management. Mr. Corbett prior to his
Company employment was an executive at Swiss Valley Farms Co., an Iowa
cooperative dairy processor. Mr. Parr has been employed by the Company since
1992. Prior to assuming his present duties he was a Company regional sales
manager. Mr. Parr, prior to his employment by the Company, was the Vice
President--Western Zone Dairy Group of Borden, Inc., a diversified food and
dairy company. Prior to assuming his present duties, Mr. Shaw was President of
the Company's Richard A. Shaw, Inc. subsidiary, which was subsequently merged
into Dean Foods Vegetable Company.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding the cash compensation of the Company's executive
officers, compensation pursuant to plans and compensation of the Company's
directors (including nominees for election at the Company's Annual Meeting of
stockholders to be held October 4, 1994) is set forth in the Company's 1994
Proxy Statement at pages 5 through 6 under the caption "CERTAIN INFORMATION
REGARDING THE BOARD OF DIRECTORS" and at pages 6 through 15 under the caption
"EXECUTIVE COMPENSATION." Such information is hereby incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management is set forth in the Company's 1994 Proxy Statement at pages 16 and
17 under the caption "PRINCIPAL HOLDERS OF VOTING SECURITIES". Such information
is hereby incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding certain transactions is set forth in the Company's 1994
Proxy Statement at page 15 under the caption "CERTAIN TRANSACTIONS." Such
information is hereby incorporated herein by reference.
13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Report. The page
number, if any, listed opposite a document indicates the page number in the
sequential numbering system in the manually signed original of this Report
where such document can be found.
PAGE
NO.
-----
(1) Financial Statements
The consolidated balance sheets at May 29, 1994 and May 30,
1993, the related consolidated statements of income, of share-
holders' equity and of cash flows for each of the three fiscal
years in the period ended May 29, 1994, and the notes thereto,
together with the report thereon of Price Waterhouse dated June
29, 1994, as incorporated by reference in Part II, Item 8 of
this Report.
(2) Financial Statement Schedules
Report of independent accountants on financial statement sched- 16
ules
Schedule V--Property, plant and equipment 17
Schedule VI--Accumulated depreciation of property, plant and 18
equipment
Schedule VIII--Valuation and qualifying accounts 19
Schedule X--Supplemental income statement information 20
All other schedules have been omitted because they are not ap-
plicable, or not required, or because the required information
is shown in the consolidated financial statements or notes
thereto.
Separate financial statements of the Registrant have been omit-
ted since the Registrant is primarily an operating company and
all subsidiaries included in the consolidated financial state-
ments, in the aggregate, do not have minority equity interest
and/or indebtedness to any person other than the Registrant or
its consolidated subsidiaries in amounts which together exceed
5% of total consolidated assets at May 29,1994, except for in-
debtedness incurred in the ordinary course of business which is
not overdue and which matures within one year from the date of
its creation.
(3) Exhibits
See Exhibit Index.............................................. 21-22
(b) Reports on Form 8-K.
Registrant filed a Current Report on Form 8-K, dated June 20, 1994, in
respect of Registrant's press release dated June 10, 1994, announcing
that the Board of Directors of Curtice-Burns Foods, Inc., Rochester,
New York (Curtice-Burns), voted to pursue a proposal whereby the
Registrant would acquire all of the outstanding stock of Curtice-Burns
for $20 per share, subject to the resolution of a number of specified
contingencies, (Item 5).
14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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
Thomas L. Rose
By: _________________________________
Thomas L. Rose
(President and Chief Operating
Officer)
Date: August 19, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
Howard M. Dean Chairman of the Board and August 19, 1994
____________________________________ Director
Howard M. Dean
Lewis M. Collens Director August 19, 1994
____________________________________
Lewis M. Collens
Paula H. Crown Director August 19, 1994
____________________________________
Paula H. Crown
William D. Fischer Director August 19, 1994
____________________________________
William D. Fischer
John P. Frazee, Jr. Director August 19, 1994
____________________________________
John P. Frazee, Jr.
Bert A. Getz Director August 19, 1994
____________________________________
Bert A. Getz
Andrew J. McKenna Director August 19, 1994
____________________________________
Andrew J. McKenna
Thomas A. Ravencroft Senior Vice President and August 19, 1994
____________________________________ Director
Thomas A. Ravencroft
Thomas L. Rose President and Director August 19, 1994
____________________________________
Thomas L. Rose
Delbert C. Staley Director August 19, 1994
____________________________________
Delbert C. Staley
Alexander J. Vogl Director August 19, 1994
____________________________________
Alexander J. Vogl
Timothy J. Bondy Vice President, Finance-- August 19, 1994
____________________________________ Principal Financial
Timothy J. Bondy Officer
Dale I. Hecox Treasurer--Principal August 19, 1994
____________________________________ Accounting Officer
Dale I. Hecox
15
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
Dean Foods Company
Our audits of the consolidated financial statements referred to in our report
dated June 29, 1994 appearing on page 30 of the Dean Foods Company Annual
Report to Shareholders for Fiscal Year Ended May 29, 1994 (which report and
consolidated financial statements are incorporated by reference in this Annual
Report on Form 10-K) also included an audit of the Financial Statement
Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these
Financial Statement Schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
Price Waterhouse LLP
Chicago, Illinois
June 29, 1994
16
DEAN FOODS COMPANY AND SUBSIDIARIES
----------------
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BALANCE
AT ASSETS OF BALANCE
BEGINNING ACQUIRED ADDITIONS RETIREMENTS AT END
CLASSIFICATION OF PERIOD COMPANIES AT COST OR SALES OTHER OF PERIOD
- - -------------- --------- --------- --------- ----------- ------- ---------
(IN THOUSANDS)
FISCAL YEAR ENDED MAY 29, 1994
Land.................... $ 27,917 $ 1,129 $ 3,280 $( 2,540) $ (107) $ 29,679
Buildings and
improvements........... 199,520 15,744 24,552 (4,547) (78) 235,191
Machinery and equipment. 448,973 41,312 46,960 (19,398) 21,345 539,192
Transportation equipment
....................... 57,644 782 3,507 (7,530) 49 54,452
Construction in
Progress............... 36,844 8,375 2,678 -- -- 47,897
-------- ------- -------- -------- ------- --------
$770,898 $67,342 $ 80,977 $(34,015) $21,209 $906,411
======== ======= ======== ======== ======= ========
FISCAL YEAR ENDED MAY 30, 1993
Land.................... $ 26,386 $ 551 $ 983 $ (3) -- $ 27,917
Buildings and
improvements........... 175,030 807 23,968 (285) -- 199,520
Machinery and equipment. 407,060 4,059 53,107 (15,253) -- 448,973
Transportation equipment
....................... 54,890 -- 7,532 (4,778) -- 57,644
Construction in
Progress............... 47,631 -- (10,787) -- -- 36,844
-------- ------- -------- -------- ------- --------
$710,997 $ 5,417 $ 74,803 $(20,319) -- $770,898
======== ======= ======== ======== ======= ========
FISCAL YEAR ENDED MAY 31, 1992
Land.................... $ 25,376 $ 1,020 $ 385 $ (395) -- $ 26,386
Buildings and
improvements........... 160,071 5,781 12,091 (2,913) -- 175,030
Machinery and equipment. 370,125 6,851 42,668 (12,584) -- 407,060
Transportation equipment
....................... 53,008 1,394 5,706 (5,218) -- 54,890
Construction in
Progress............... 30,614 -- 17,017 -- -- 47,631
-------- ------- -------- -------- ------- --------
$639,194 $15,046 $ 77,867 $(21,110) -- $710,997
======== ======= ======== ======== ======= ========
DEPRECIATION AND AMORTIZATION (STRAIGHT-LINE METHOD)
Buildings and Improvements............................. 2 1/2% to 20%
Machinery and Equipment................................ 5% to 33 1/3%
Transportation Equipment............................... 10% to 33 1/3%
17
DEAN FOODS COMPANY AND SUBSIDIARIES
----------------
SCHEDULE VI--ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
AMOUNT
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND RETIREMENTS AT END
CLASSIFICATION OF PERIOD EXPENSES OR SALES OTHER OF PERIOD
- - -------------- ---------- ---------- ----------- ----- ---------
(IN THOUSANDS)
FISCAL YEAR ENDED MAY 29,
1994
Buildings and improvements.. $ 61,148 $ 8,964 $ (1,921) -- $ 68,191
Machinery and equipment..... 231,730 43,489 (15,858) $915 260,276
Transportation equipment.... 34,256 6,096 (5,619) -- 34,733
-------- ------- -------- ---- --------
$327,134 $58,549 $(23,398) $915 $363,200
======== ======= ======== ==== ========
FISCAL YEAR ENDED MAY 30,
1993
Buildings and improvements.. $ 53,677 $ 7,929 $ (458) -- $ 61,148
Machinery and equipment..... 209,311 37,667 (15,248) -- 231,730
Transportation equipment.... 32,218 6,219 (4,181) -- 34,256
-------- ------- -------- ---- --------
$295,206 $51,815 $(19,887) -- $327,134
======== ======= ======== ==== ========
FISCAL YEAR ENDED MAY 31,
1992
Buildings and improvements $ 48,609 $ 7,317 $ (2,249) -- $ 53,677
Machinery and equipment..... 184,397 34,872 (9,958) -- 209,311
Transportation equipment.... 30,258 6,159 (4,199) -- 32,218
-------- ------- -------- ---- --------
$263,264 $48,348 $(16,406) -- $295,206
======== ======= ======== ==== ========
18
DEAN FOODS COMPANY AND SUBSIDIARIES
----------------
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
AMOUNT
CHARGED
BALANCE AT (CREDITED) ACCOUNTS BALANCE
BEGINNING TO COSTS WRITTEN AT END
CLASSIFICATION OF PERIOD AND EXPENSES OFF OF PERIOD
- - -------------- ---------- ------------ -------- ---------
(IN THOUSANDS)
FISCAL YEAR ENDED MAY 29, 1994
Allowance for doubtful accounts and
notes receivable................... $4,470 $ 326 $ 878 $3,918
Allowance for doubtful long-term
receivables........................ 4 (4) -- --
------ ------ ------ ------
Total reserves deducted in balance
sheet from assets to which they
apply.............................. $4,474 $ 322 $ 878 $3,918
====== ====== ====== ======
FISCAL YEAR ENDED MAY 30, 1993
Allowance for doubtful accounts and
notes receivable................... $5,331 $ 833 $1,694 $4,470
Allowance for doubtful long-term
receivables........................ 26 (22) -- 4
------ ------ ------ ------
Total reserves deducted in balance
sheet from assets to which they
apply.............................. $5,357 $ 811 $1,694 $4,474
====== ====== ====== ======
FISCAL YEAR ENDED MAY 31, 1992
Allowance for doubtful accounts and
notes receivable................... $4,284 $1,988 $ 941 $5,331
Allowance for doubtful long-term
receivables........................ 15 11 -- 26
------ ------ ------ ------
Total reserves deducted in balance
sheet from assets to which they
apply.............................. $4,299 $1,999 $ 941 $5,357
====== ====== ====== ======
19
DEAN FOODS COMPANY AND SUBSIDIARIES
----------------
SCHEDULE X--SUPPLEMENTAL INCOME STATEMENT INFORMATION
CHARGED TO COST AND
EXPENSE
-----------------------
ITEM 1994 1993 1992
---- ------- ------- -------
(IN THOUSANDS)
Maintenance and Repairs................................ $43,620 $39,521 $47,133
All other supplemental expense items have been excluded as they do not exceed
one percent of net sales.
20
EXHIBIT INDEX
The following documents are the exhibits to this Report. For convenient
reference, each exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K. The page number, if any, listed
opposite an exhibit indicates the page number in the sequential numbering
system in the manually signed original of this Report where such exhibit can be
found.
(3)Articles of Incorporation and by-laws
a. Dean Foods Company Restated Certificate of Incorporation dated February 8,
1988 (filed as Exhibit 3(a) to Registrant's Form 10-K Annual Report for
Fiscal Year Ended May 29, 1988 and incorporated herein by reference)
b. By-Laws of Registrant, as amended December 2, 1988 (filed as Exhibit 3(b)
to the Registrant's
Form 10-K Annual Report for Fiscal Year Ended May 28, 1989 and
incorporated herein by reference)
(4)Instruments defining the rights of security holders, including indentures
a. Rights Agreement dated July 28, 1988 (filed as Exhibit 4(a) to the
Registrant's Form 10-K Annual Report for Fiscal Year Ended May 28, 1989
and incorporated herein by reference)
b. Amendment dated December 1, 1989, to Rights Agreement dated July 28, 1988
(filed as exhibit 4(b) to Registrant's Form 10-K Annual Report for Fiscal
Year Ended May 27, 1990 and incorporated herein by reference)
(10)Material contracts
a. Amended and Restated Dean Foods Company Management Deferred Compensation
Plan, dated as of June 1, 1994
b. Dean Foods Company Retirement Plan for Certain Directors (filed as Exhibit
10(a) to Registrant's Form 10-K Annual Report for Fiscal Year Ended
December 28, 1985 and incorporated herein by reference)
c. Form of Agreement dated March 17, 1986, between Registrant and each of its
current executive officers (filed as Exhibit 10(b) to Registrant's Form
10-K Annual Report for Fiscal Year Ended December 28, 1985 and
incorporated herein by reference)
d. Form of Indemnification Agreement between Registrant and each of its
directors and officers serving at any time after October 5, 1987 (filed as
Exhibit 10(m) to Registrant's Form 10-K Annual Report for Fiscal Year
Ended May 29, 1988, and incorporated herein by reference)
e. Amended and Restated Dean Foods Company Directors Deferred Compensation
Plan, dated March 25, 1988 (filed as Exhibit 10(j) to Registrant's Form
10-K Annual Report for Fiscal Year Ended May 28, 1989 and incorporated
herein by reference)
f. Dean Foods Company Supplemental Benefit Plan for eligible officers, as
amended and restated on May 24, 1991 (filed as Exhibit 10(k) to
Registrant's Form 10-K Annual Report for Fiscal Year ended May 26, 1991
and incorporated herein by reference)
g. Dean Foods Company Supplemental Incentive Compensation Plan for certain
officers, as amended March 31, 1989 (filed as Exhibit 10(l) to
Registrant's Form 10-K Annual Report for Fiscal Year Ended May 28, 1989
and incorporated herein by reference)
21
h. Dean Foods Company Director Stock Option Plan, dated September 30, 1992
(Filed as Exhibit 10(i) to Registrant's Form 10-K Annual Report for
Fiscal Year ended May 30, 1993 and incorporated herein by reference)
(11)Statement re computation of per share earnings
(13)Annual report to security holders, Form 10-Q or quarterly report to
security holders
a. Dean Foods Company Annual Report to Shareholders for Fiscal Year Ended
May 29, 1994
With the exception of the financial statements, report of independent
accountants thereon and certain other information expressly incorporated
herein by reference, the Registrant's Annual Report to Shareholders for
Fiscal Year Ended May 29, 1994 is not to be deemed filed as part of this
Report.
(22)Subsidiaries of the Registrant
a. Subsidiaries of the Registrant as of May 29, 1994
(24)Consents of Experts and Counsel
a. Consent of Independent Accountants dated August 19, 1994
22