THOMASVILLE, Ga., Feb 23, 2005 /PRNewswire-FirstCall via COMTEX/ -- In a presentation
yesterday, executives of Flowers Foods (NYSE: FLO) outlined the company's
growth strategies and reiterated previous guidance for fiscal 2005 of an
estimated $1.6 billion to $1.625 billion in sales and income of 3.75% to 4% of
sales. The presentation was part of the Consumer Analysts Group of New York
(CAGNY) annual conference, held in Scottsdale, Ariz.
George E. Deese, president and chief executive officer, said the company
expects to continue to grow organically and through acquisitions. New products
and further expansion of the territory served by the company's direct-store-
delivery routes (DSD) were cited as part of the plan for internal growth.
The company expects to introduce additional whole grain products in both its
Nature's Own and Cobblestone Mill brand product lines over the next few
months.
In late 2003, Flowers revealed its plan to extend DSD service 100 miles to
150 miles into states that adjoin the current territories served by the
company, primarily the Southeastern, Southwestern, and Mid-Atlantic States.
Since then, the company has added DSD routes to serve new markets in northern
Virginia, Kentucky, Missouri, Oklahoma, and Washington, D.C. Deese said he is
pleased with the progress made and that the growth initiative will continue in
2005. Sales in the new markets are expected to contribute one percent to one
and one half percent sales growth to the company's fresh bakery business on an
annual basis.
Deese and Jimmy Woodward, senior vice president and chief financial
officer, outlined Flowers' long-term strategies that have resulted in
competitive advantages for the company. Those strategies include growing sales
organically, through acquisitions, and by expanding the company's DSD
territories; developing bakery products that meet consumers' needs; giving
exceptional customer service; operating the most efficient bakeries;
innovating to improve all aspects of the company's operation; and nurturing
team spirit and professional growth.
Woodward noted the company's long term financial goals are to grow sales
3% to 5% annually and earn an EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization) margin of 10% to 12%. Woodward said sales
increased 6.8% in its 52-week fiscal 2004, compared to the 53-week fiscal
2003, and EBITDA margin was 9.0%. Discussing the company's 2005 sales goal of
$1.6 billion to $1.625 billion in more detail, Woodward said a 2004
acquisition in Texas, DSD market expansion, and organic growth are expected to
add between $63 million and $88 million in additional sales. The company is
focusing on higher margin sales, and over time plans to reduce its co-pack
snack cake business for other food companies. In 2005, the company expects
$14 million less in sales of co-pack snack cakes, primarily in the second half
of the year. The result is the company's projection of sales growth of 3.2% to
4.8% for fiscal 2005.
"Flowers Foods is different," Deese said in concluding the presentation to
analysts. "We may be small, but we play big. We are a packaged consumer goods
company focused on opportunities for bakery products. We work to stay ahead of
consumer trends, to invest wisely, to manage our costs, to grow our business,
to consistently perform well. By doing this, we have created value for our
shareholders and we plan to continue doing that in 2005."
The company's presentation at CAGNY was broadcast live over the internet
at 3:45 p.m. MT on February 22. The archived presentation may be viewed
at http://www.flowersfoods.com .
Headquartered in Thomasville, Ga., Flowers Foods is one of the nation's
leading producers and marketers of packaged bakery foods for retail and
foodservice customers. Flowers operates 34 bakeries that produce a wide range
of bakery products marketed throughout the Southeastern, Southwestern, and
mid-Atlantic states via an extensive direct-store-delivery network and
nationwide through other delivery systems. Among the company's top brands are
Nature's Own, Cobblestone Mill, Sunbeam, BlueBird, and Mrs. Freshley's. For
more information, visit http://www.flowersfoods.com .
Statements contained in this press release that are not historical facts
are forward-looking statements. All forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ from those
projected. Other factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may affect the
company's prospects in general include, but are not limited to, (a)
competitive conditions in the baked foods industry, including promotional and
price competition, (b) changes in consumer demand for our products, (c) the
success of productivity improvements and new product introductions, (d) a
significant reduction in business with any of our major customers including a
reduction from adverse developments in any of our customer's business, (e)
fluctuations in commodity pricing and (f) our ability to achieve cash flow
from capital expenditures and acquisitions and the availability of new
acquisitions that build shareholder value. In addition, our results may also
be affected by general factors such as economic and business conditions
(including the baked foods markets), interest and inflation rates and such
other factors as are described in the company's filings with the Securities
and Exchange Commission.
Flowers Foods Fiscal 2005 Sales Projection
(in millions)
FY 04 Consolidated Sales $1,551.0 $1,551.0
Eliminate VIE Sales -12.0 -12.0
FY 04 FLO Sales w/o VIE 1,539.0 1,539.0
Texas Acquisition (Q1-3) 23.0 1.5% 23.0 1.5%
04 Market Expansion 4.0 0.3% 4.0 0.3%
05 Market Expansion 8.0 0.5% 8.0 0.5%
Organic Growth 28.0 1.8% 53.0 3.4%
Contract Production -14.0 -0.9% -14.0 -0.9%
FY 05 FLO Sale Proj. w/o VIE 1,588.0 3.2% 1,613.0 4.8%
VIE Sale Projection 12.0 12.0
FY 05 Consolidated Sales Proj. $1,600.0 $1,625.0
The table below provides a reconciliation of EBIT and EBITDA to net cash
provided by operations for the 52 weeks ended January 1, 2005
52 Weeks Ended
January 1, 2005 % of sales
(000's omitted)
Income from continuing operations
before income taxes and minority
interest $91,100 5.9%
Net interest income ($8,826) 0.6%
Income from operations (EBIT) $82,274 5.3%
Depreciation and Amortization $56,702 3.7%
EBITDA $138,976 9.0%
Income tax expense ($35,071)
Net interest income $8,826
Other operating cash flows, net $9,912
Net cash provided by operations $122,643
*EBITDA - Earnings before interest, taxes, depreciation and amortization
from continuing operations
SOURCE Flowers Foods
Marta J. Turner, Senior VP - Corporate Relations, +1-229-227-2348, or Mary Krier, VP
- Communications, +1-229-227-2333, both of Flowers Foods
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