Michael Foods, Inc. (Nasdaq: MIKL) yesterday announced financial results for the fourth quarter and year ended December 31, 2000.
New annual financial records were set in 2000. Diluted net earnings per share for the year ended December 31, 2000 were $2.33 compared to $2.12 per share in 1999, an increase of 10%. Net earnings for 2000 increased 1% to $44.7 million compared to $44.1 million in 1999. Net sales for the year ended December 31, 2000 were $1.08 billion compared to $1.05 billion in the previous year, an increase of 3%.
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Diluted net earnings per share for the three months ended December 31, 2000 were $0.60 compared to $0.64 per share in 1999’s fourth quarter, a decrease of 6%. Net earnings for the fourth quarter of 2000 decreased 16% to $11.1 million compared to $13.2 million in 1999’s fourth quarter. Net sales for the three months ended December 31, 2000 were $285.5 million compared to $272.0 million in the previous year period, an increase of 5%.
Chairman, President and Chief Executive Officer Gregg A. Ostrander commented, “Last year reflected another solid financial performance for our Company. Our fourth quarter earnings per share did not meet the prior year’s level mainly due to a difficult comparison versus quite favorable market conditions for industrial egg products in late 1999. In contrast, fourth quarter of 2000 industrial egg products earnings were near break-even levels — a condition which prevailed for much of 2000. However, earnings from our value-added egg products rose for both the quarter and the year.
“Our stand-out performer last year was the Refrigerated Distribution Division, which had excellent volume gains and outstanding earnings growth. Potato Products results for the year showed good growth in both sales and earnings. Results for Dairy Products remained disappointing and reflected impacts from our efforts to rebuild the Kohler Mix business.”
Ostrander added, “We are preparing for the transition to being a privately-held firm. We still anticipate a spring shareholder vote to consider the acquisition of the Company.”
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By GlobalDataBy background, in December 2000, Michael Foods’ Board of Directors approved a definitive merger agreement providing for the acquisition of the Company for $30.10 per share in cash, by an investor group comprised of a management group led by the Company’s Chairman, President and Chief Executive Officer Gregg A. Ostrander, affiliates of the Michael family, and affiliates of two private equity investment firms, Vestar Capital Partners and Goldner Hawn Johnson and Morrison.
Unaudited segment data follows (in thousands):
External Net Sales Operating Profit
Three Months Ended Three Months Ended
December 31, December 31,
2000 1999 2000 1999
Egg Products $164,506 $160,238 $16,901 $20,994
Refrigerated Dist. 72,041 63,953 4,039 3,610
Dairy Products 32,164 32,614 (949) 478
Potato Products 16,780 15,147 3,116 2,186
Corporate N/A N/A (1,371) (2,126)
External Net Sales Operating Profit
Twelve Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
Egg Products $637,355 $620,719 $67,658 $73,531
Refrigerated Dist. 241,114 230,335 16,001 10,656
Dairy Products 141,401 144,865 1,322 3,750
Potato Products 60,731 57,353 7,650 6,751
Corporate N/A N/A (5,825) (8,358)
Michael Foods, Inc. is a diversified food processor and distributor with particular interests in egg products, refrigerated grocery products, specialty dairy products and refrigerated potato products. Principal subsidiaries include Papetti’s Hygrade Egg Products, Inc., M. G. Waldbaum Company, Crystal Farms Refrigerated Distribution Company, Kohler Mix Specialties, Inc. and Northern Star Co.
Certain items in this release are forward-looking statements, which are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous risks and uncertainties, including uncertainty that the financings required to complete the Company’s acquisition will be completed and factors affecting the anticipated timeline for closing the merger transaction, including the completion of financings and regulatory review processes.
Consolidated statements of earnings follow.
Michael Foods, Inc.
Consolidated Statements of Earnings
(000’s, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
Net sales $285,491 $271,952 $1,080,601 $1,053,272
Cost of sales 238,266 217,955 889,138 860,256
Gross profit 47,225 53,997 191,463 193,016
Selling, general &
administrative 25,489 28,855 104,657 106,686
Operating profit 21,736 25,142 86,806 86,330
Interest expense, net 3,428 2,802 13,206 11,664
Earnings before
income taxes 18,308 22,340 73,600 74,666
Income tax expense 7,180 9,160 28,890 30,610
NET EARNINGS $11,128 $13,180 $44,710 $44,056
Earnings per share
Basic $0.61 $0.65 $2.36 $2.15
Diluted $0.60 $0.64 $2.33 $2.12
Weighted average common
shares Outstanding
Basic 18,286 20,278 18,950 20,500
Diluted 18,585 20,544 19,192 20,750
