Flowers Foods Announces First Quarter Results

THOMASVILLE, Ga., May 27 /PRNewswire-FirstCall/ -- Flowers Foods, Inc. (NYSE:
FLO), today reported sales and earnings for its 16-week first quarter ended
April 25, 2009. In summary, Flowers Foods:

-- Increased first quarter sales 19.3%.
-- Improved net income attributable to Flowers Foods by 4.5% over last
year's first quarter.
-- Delivered diluted earnings per share of $.40 for the quarter.
-- Achieved 1.5% unit volume increase in its direct-store-delivery (DSD)
segment, excluding acquisitions and new western markets.
-- Achieved branded retail sales increase of 14.8% over last year's
quarter.

-- Generated net cash from operating activities of $58.3 million.

"We are pleased with the results this quarter. Our team delivered sales growth
in excess of 19% and earnings in line with our expectation in spite of
headwinds from the economy and competitive pressures," commented George E.
Deese, chairman, chief executive officer, and president. "We are particularly
pleased with the results considering we faced continued challenges in the
quarter from higher input costs compared to the same time frame last year. Our
branded retail sales grew 14.8% in the quarter, evidence that Flowers' brands
are performing well in recessionary conditions and a testament to our product
quality, brand strength, and execution in the marketplace.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080530/CLF007LOGO )

"We remain focused on the bakery segment and we continue to see opportunities
for growth. Consumers are eating more at home due to the economy, which
translates into more purchases in the bread aisle. Although other food
categories in the supermarket are experiencing growth in private label, IRI*
reports that private label share in the fresh packaged bread category grew
less than one percentage point in the trailing 12 months. The strength of
Nature's Own and our other brands allows us to increase our promotional
activity, and we will continue to do so to protect and grow our market share
and our brand presence," Deese said. "To help offset promotional activities,
we are reducing our cost through improved efficiencies and we also will
benefit from improved input costs in the second half of the year. We remain
confident in our strategy of growing our core markets, expanding into new
markets and strengthening the company through strategic acquisitions."

First Quarter 2009 Results
For the 16-week first quarter of 2009, sales increased 19.3% to $807.0 million
over the $676.7 million reported for last year's 16-week first quarter. Net
income attributable to Flowers Foods for the quarter was $37.4 million, or
$.40 per diluted share, an increase of 4.5% over the $35.8 million, or $.39
per diluted share, reported for the first quarter of fiscal 2008.

The sales increase of 19.3% was achieved through favorable pricing/mix of
6.8%, a volume increase of 0.5%, and a 12.0% contribution from acquisitions.
Volume increases on the retail side of the business were partially offset by
volume decreases in non-retail business. During the quarter, the company's DSD
sales grew at 20.7% through favorable pricing/mix of 4.6%, a unit volume
increase of 1.5%, and a 14.6% contribution from acquisitions. Sales through
warehouse delivery increased 13.0%, reflecting positive pricing/mix of 14.9%,
partially offset by a volume decrease of 1.9%. The volume decrease in the
warehouse segment was primarily attributable to a planned decrease in contract
manufacturing,

Gross margin as a percentage of sales for the quarter was 46.8% of sales
compared to 48.3% over the prior year's first quarter. The decrease in margin
was due primarily to an increase in ingredient costs. Start-up costs
associated with the company's new bakery in Bardstown, Ky., also impacted
gross margin in the quarter. These items were partially offset by pricing
gains, lower labor costs as a percent of sales, and improved manufacturing
efficiencies resulting from continued strategic capital improvements and
better manufacturing controls.

Selling, marketing, and administrative costs as a percentage of sales for the
first quarter were 36.4% of sales compared to 37.2% in the same quarter last
year. The improvement was due primarily to increased sales and lower
employee-related costs as a percent of sales. This was achieved despite a
significant increase in pension costs year over year. In the quarter, the
company also invested more in advertising to support its Nature's Own brand.

Depreciation and amortization expenses for the quarter remained relatively
stable as a percent of sales compared to the prior year quarter despite an
increase in both depreciation and amortization resulting from the
acquisitions. Net interest income for the quarter was $3.0 million lower than
last year's first quarter due to higher interest expense on debt incurred in
connection with the acquisitions made in the second half of 2008. The
effective tax rate for the quarter was 36.6% as compared to 35.7% last year.
This increase was the result of state tax benefits recorded in the prior year
quarter and lower earnings of the company's variable interest entity during
the first quarter of this year as compared to the first quarter last year. The
full-year tax rate is expected to be approximately 36.5%.

Operating margin for the quarter was $59.2 million, or 7.3% of sales, an
increase of 9.4% over operating margin for the prior year quarter. EBITDA for
the first quarter was $83.5 million, or 10.3% of sales, an increase of 11.3%
over EBITDA for the first quarter of 2008.

Net cash provided by operating activities remained strong at $58.3 million for
the quarter. The company invested $14.9 million in capital expenditure
projects during the quarter, including continued construction of the Bardstown
bakery, which began production in early May. During the quarter, shareholders
received $14.0 million in dividend payments, marking the 26th consecutive
quarterly dividend paid by Flowers Foods since its 2001 spin-off from Flowers
Industries.

During the quarter, the company acquired 944,591 shares of its common stock
under its share repurchase plan for $21.6 million, an average of $22.88 per
share. Since the inception of the share repurchase plan, the company has
acquired 21.8 million shares of its common stock for $346.1 million, an
average of $15.88 per share. The plan authorizes the company to repurchase up
to 30.0 million shares of common stock.

Fiscal 2009 Guidance
The company previously provided guidance for fiscal 2009, which will be a
52-week year compared to 53 weeks in fiscal 2008. Sales growth of 12.6% to
14.5% is expected, with recent acquisitions accounting for 7.0% to 7.5% of the
increase. Therefore, sales for fiscal 2009 are expected to be $2.720 billion
to $2.765 billion. For 2009, net income is expected to be 4.7% to 5.0% of
sales, or $127.8 million to $138.3 million. With approximately 93.2 million
average shares outstanding, earnings per share are expected to be $1.37 to
$1.48, an increase of 7.0% to 15.6% over fiscal 2008.

Capital spending in fiscal 2009 is expected to be approximately $75.0 million,
including the completion of the bread line at the new bakery in Kentucky as
well as costs for maintenance and efficiency improvements in the company's
other bakeries.

"I have confidence in the experience of our team, the efficiency of our
bakeries and our distribution systems, the quality of our product, and the
strength of our brands," Deese said. "We expect to deliver good earnings
growth in 2009 as we continue to execute our strategies in the marketplace."

The board of directors will consider the dividend at its regularly scheduled
meeting. Any action taken will be announced following that meeting.

Conference Call
Flowers Foods will broadcast its first quarter 2009 conference call over the
Internet at 10:30 a.m. (Eastern) on May 27, 2009. The call will be broadcast
live on Flowers' Web site, www.flowersfoods.com, and can be accessed by
clicking on the webcast link on the home page. The call also will be archived
on the company's Web site.

Company Information
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. Among the company's top brands are Nature's Own,
Whitewheat, Cobblestone Mill, Blue Bird, and Mrs. Freshley's. Flowers operates
39 bakeries that are among the most efficient in the baking industry. Flowers
Foods produces, markets, and distributes fresh bakery products that are
delivered to customers daily through a direct-store-delivery system serving
the Southeast, Mid-Atlantic, and Southwest as well as select markets in
California and Nevada. The company also produces and distributes fresh snack
cakes and frozen breads and rolls nationally through warehouse distribution.
For more information, visit www.flowersfoods.com.

*Information Resources, Inc. (a market research firm)

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, (f) our ability to fully integrate recent
acquisitions into our business, and (g) 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
Consolidated Statement of Income
--------------------------------
(000's omitted, except per share data)

For the 16 Week For the 16 Week
Period Ended Period Ended
--------------- ---------------
04/25/09 04/19/08
-------- --------
Sales $807,007 $676,707
Materials, supplies, labor
and other production costs 429,462 349,971
Selling, marketing and
administrative expenses 294,022 251,675
Depreciation and amortization 24,277 20,912
------ ------
Income before interest and
income taxes (EBIT) 59,246 54,149
Interest income, net 459 3,497
--- -----
Income before income taxes (EBT) 59,705 57,646
Income tax expense 21,872 20,562
------ ------
Net income 37,833 37,084
Less: Net income attributable to
noncontrolling interest (452) (1,301)
---- ------
Net income attributable to
Flowers Foods, Inc. $37,381 $35,783
======= =======

Per share amounts:
Net income attributable to
Flowers Foods, Inc. $0.40 $0.39
===== =====

Diluted weighted average
shares outstanding 93,238 92,542
====== ======

Flowers Foods
Segment Reporting
-----------------
(000's omitted)

For the 16 Week For the 16 Week
Period Ended Period Ended
--------------- ---------------
04/25/09 04/19/08
-------- --------
Sales:
Direct-Store-Delivery $668,275 $553,881
Warehouse Delivery 138,732 122,826
------- -------
$807,007 $676,707
======== ========

EBITDA:
Direct-Store-Delivery $76,467 $69,349
Warehouse Delivery 18,870 12,981
Flowers Foods (11,814) (7,269)
------- ------
$83,523 $75,061
======= =======

Depreciation and Amortization:
Direct-Store-Delivery $19,537 $15,957
Warehouse Delivery 4,646 4,722
Flowers Foods 94 233
-- ---
$24,277 $20,912
======= =======

EBIT:
Direct-Store-Delivery $56,930 $53,392
Warehouse Delivery 14,224 8,259
Flowers Foods (11,908) (7,502)
------- ------
$59,246 $54,149
======= =======

Note: During the second quarter of 2008, the company's Tucker, Georgia
operation was transferred from the Direct-Store-Delivery segment to the
Warehouse Delivery segment. Prior year information has been reclassified
to reflect this change for comparability purposes.

Flowers Foods
Condensed Consolidated Balance Sheet
------------------------------------
(000's omitted)

04/25/09
--------
Assets
------
Cash and Cash Equivalents $18,517

Other Current Assets 326,619

Property, Plant & Equipment, net 578,764

Distributor Notes Receivable (includes $12,357 current
portion) 106,716

Other Assets 12,828

Cost in Excess of Net Tangible Assets, net 304,614
-------

Total Assets $1,348,058
==========

Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities $234,407

Bank Debt (includes $15,000 current portion) 243,000

Other Debt and Capital Leases (includes $6,481 current
portion) 29,240

Other Liabilities 180,527

Stockholders' Equity 660,884
-------

Total Liabilities and Stockholders' Equity $1,348,058
==========

Flowers Foods
Condensed Consolidated Statement of Cash Flows
----------------------------------------------
(000's omitted)

For the 16 Week
Period Ended
---------------
04/25/09
--------
Cash flows from operating activities:
Net income $37,833
Adjustments to reconcile net income to net cash
from operating activities:
Total non-cash adjustments 38,813
Changes in assets and liabilities (18,305)
-------
Net cash provided by operating activities 58,341
------
Cash flows from investing activities:
Purchase of property, plant and equipment (14,889)
Other 737
---
Net cash disbursed for investing activities (14,152)
-------
Cash flows from financing activities:
Dividends paid (13,960)
Stock options exercised 1,397
Income tax benefit related to stock awards 1,382
Stock repurchases (21,616)
Decrease in book overdraft 1,440
Proceeds from debt borrowings 243,500
Debt and capital lease obligation payments (257,779)
--------
Net cash disbursed for financing activities (45,636)
-------
Net decrease in cash and cash equivalents (1,447)
Cash and cash equivalents at beginning of period 19,964
------
Cash and cash equivalents at end of period $18,517
=======

Flowers Foods
Reconciliation of Net Income to EBITDA
--------------------------------------
(000's omitted)

For the 16 Week
Period Ended
---------------
April 25, 2009
--------------

Net Income attributable to Flowers Foods, Inc. $37,381
Net income attributable to noncontrolling interest 452
Income tax expense 21,872
Interest income, net (459)
Depreciation and amortization 24,277
------
EBITDA $83,523
=======

SOURCE Flowers Foods, Inc.

Investors Marta J. Turner, Executive VP/Corporate Relations, +1-229-227-2348;
Media: Mary A. Krier, VP/Communications, +1-229-227-2333