BOULDER, COLO., Nov. 3 /PRNewswire-FirstCall/ -- Horizon Organic Holding Corporation (NASDAQ:HCOW) , which markets the leading brand of certified organic foods in the United States, grew sales 18 percent to $56 million during the third quarter of 2003, compared with the third quarter of 2002.
Income from continuing operations increased to $752,000, or $0.07 per diluted share, compared to $723,000, or $0.07 per diluted share, in the third quarter of 2002. These results include $327,000 in transaction costs associated with the announced merger with Dean Foods Company, which on an after-tax basis impacted earnings by $0.02 per diluted share. These earnings, excluding the $0.02 of transaction costs, compare favorably to analysts' consensus of $0.09, which also do not include transaction costs. Net income for the third quarter of 2003, including discontinued operations and transaction costs, was $573,000 or $0.05 per diluted share, compared with net income of $324,000, or $0.03 per diluted share, in the 2002 third quarter.
On June 30, Horizon Organic and Dean Foods announced a definitive merger agreement under which Dean will acquire the 87 percent of Horizon Organic's shares that it does not already own for $24 a share. The merger is expected to close in December 2003.
"We are very pleased with our continued strong sales growth and margins as we capitalize on the acceptance of organic foods by mainstream consumers, particularly in the U.S.," said Chuck Marcy, president and CEO of Horizon Organic. "We continue to successfully execute on our strategic plan and build on our strong market leadership position. The Dean Foods merger will provide the company with additional resources to allow us to accelerate this growth and take advantage of new opportunities."
Highlights for the third quarter included:
* An 18 percent increase in U.S. milk sales due to increased
distribution and strong promotion results. This includes the
continued expansion of large size milk distribution.
* Gallon sales now account for 37 percent of Horizon Organic milk
sales to a major customer in the southwest and that business is
* A 40 percent increase in single serve milk sales over the prior
quarter, due largely to the expanded distribution at Costco. Costco
also is testing 12-pack yogurt in Southern California.
* Initial shipments of Horizon Organic Infant Formula to western markets
* Shipments of new multi-pack baby and kids' yogurts and yogurt tubes in
* The 30 percent growth of Rachel's Organic branded products in the
U.K., which now account for a record 52 percent of U.K. sales.
For the first nine months of 2003, sales rose 20 percent to $161.8 million. U.S. sales were up 21 percent to $133.2 million, with milk posting a 23 percent gain.
Income from continuing operations for the first nine months of 2003 was $2.3 million, or $0.21 per diluted share, compared with $2.2 million, or $0.21 per diluted share, in the comparable 2002 period. The 2003 results include $0.06 per diluted share in transaction costs.
After losses on discontinued operations in both years, net income for the first nine months of 2003 was $943,000, or $0.09 per diluted share, compared with a loss of $997,000, or $0.09 per diluted share, in the 2002 period.
Marcy said that the Company's new product introductions and expanded distribution should continue to support 20 to 25 percent sales growth for the remainder of the year. In looking toward 2004, Marcy said he is very excited about the potential for Horizon Organic, especially once the Dean Foods merger is concluded.
Horizon Organic markets the leading brand of certified organic foods in the U.S. and the leading brand of organic milk in both the U.S. and U.K. In the U.S. its products include organic milk, a full-line of organic dairy products, organic eggs and juices. In the U.K., the Company markets organic yogurt, milk and butter under the Rachel's Organic brand. For more information, please visit the Company's web site at www.horizonorganic.com .
Note on Forward-Looking Statements: This news release contains forward- looking statements that involve risks and uncertainties. Future events may differ materially from those discussed herein, due to a number of factors, including uncertainties related to the Company's ability to continue to maintain and expand its brands, avoid adverse publicity, manage its supply chain efficiently, continue and effectively manage its rapid growth, and maintain key management, as well as the volatility in the cost of organic farm products, increased competition, changes in consumer preferences, and increases in charges under governmental dairy programs. These factors and others are more fully discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.