BOULDER, Colo., Aug. 7 /PRNewswire-FirstCall/ -- Horizon Organic Holding
Corporation (Nasdaq: HCOW), which markets the leading brand of certified
organic foods in the United States, grew sales 21 percent to $54.0 million --
21 percent in the U.S. and 20 percent in the U.K. -- during the second quarter
of 2003, compared with the second quarter of 2002.
Earnings from continuing operations declined to $534,000, or $0.05 per
diluted share, from $647,000, or $0.06 per diluted share, in the second
quarter of 2002. These results include $691,000 in transaction costs
associated with the announced merger with Dean Foods Company, which on an
after-tax basis impacted earnings by $0.04 per diluted share. These earnings,
excluding the $0.04 of transaction costs, compare favorably to analysts'
consensus of $0.08, which also does not include transaction costs. Net income
for the second quarter of 2003, including discontinued operations and
transaction costs, was $183,000 or $0.02 per diluted share, compared with net
income of $353,000, or $0.03 per diluted share, in the 2002 second 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.
"Our leadership in the organic industry, coupled with the growing public
awareness of the many advantages of healthy organic foods, continues to
generate strong sales growth. With the backing of Dean Foods and its nation-
wide distribution network, this trend is likely to accelerate," said Chuck
Marcy, president and CEO of Horizon Organic. "At the same time, the Dean
Foods offer provides an immediate opportunity for our shareholders to
capitalize on this growth."
Highlights for the second quarter included:
* A 23 percent increase in U.S. milk sales driven by ultra pasteurized
milk, which now accounts for 57 percent of total milk sales.
* An increase in milk distribution to 65 percent of U.S. grocery stores
during June compared with 56 percent in June 2002.
* A 54 percent increase since the first quarter of 2003 in single-serve
milk sales, reflecting the Company's expanded distribution at Costco.
* An increase of 19 percent in sales of Rachel's Organic branded products
in the U.K., driven by growth of 69 percent in Rachel's Organic retail
For the first six months of 2003, income from continuing operations of
$1.5 million or $0.14 per diluted share was unchanged from the first half of
2002. Again, these results include $0.04 per diluted share in transaction
After losses on discontinued operations in both years, net income for the
first six months of 2003 was $370,000, or $0.03 per diluted share, compared
with a loss of $1.3 million, or $0.12 per diluted share, in the 2002 period.
Six-month sales rose 22 percent to $105.8 million in the first half of
2003. U.S. sales were up 22 percent to $86.8 million, with milk posting a
25 percent gain and dairy up 16 percent. Juice sales declined 6 percent. In
the U.K., sales rose 19 percent to $19.0 million.
The Company is continuing to work with an experienced dairy farmer as well
as new prospective buyers for the sale of its Idaho dairy farm.
Marcy said the Company is excited about the rollout of the nation's first
organic infant formula in September and a new line of baby and children's
yogurts that are expected to be on the shelf late this month. Marcy said that
with new product introductions and ongoing distribution gains, the Company
continues to support its previous guidance of a 20 to 25 percent increase in
sales in 2003, and earnings per diluted share from continuing operations in
line with analysts' consensus which does not include transaction costs.
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 http://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.