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FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

For the quarterly period ended June 29, 2002

OR

Commission file number 0-14190

DREYER’S GRAND ICE CREAM, INC.
(Exact name of registrant as specified in its charter)

5929 College Avenue, Oakland, California 94618
(Address of principal executive offices) (Zip Code)

(510) 652-8187
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [X]     No [   ]

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

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PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

DREYER’S GRAND ICE CREAM, INC.

CONSOLIDATED BALANCE SHEET

				June 29, 2002				Dec. 29, 2001
($ in thousands, except per share amounts)				(Unaudited)
Assets
Current Assets:
	Cash and cash equivalents			$	1,700			$	1,650
	Trade accounts receivable, net of allowance for doubtful accounts of $1,755 in 2002 and $1,024 in 2001				145,374				89,721
	Other accounts receivable				14,578				16,116
	Inventories				96,227				81,298
	Deferred income taxes				2,517				3,547
	Prepaid expenses and other				29,614				8,849
		Total current assets			290,010				201,181
Property, plant and equipment, net					210,004				198,565
Goodwill					84,856				39,114
Other intangibles, net					2,019				55,354
Other assets					3,138				4,475
Total assets				$	590,027			$	498,689
Liabilities and Stockholders’ Equity
Current Liabilities:
	Accounts payable and accrued liabilities			$	128,290			$	91,794
	Accrued payroll and employee benefits				24,514				25,369
	Current portion of long-term debt				2,143
	Total current liabilities				154,947				117,163
Long-term debt, less current portion					199,429				148,671
Deferred income taxes					14,404				24,490
Total liabilities					368,780				290,324
Commitments and contingencies
Stockholders’ Equity:
	Preferred stock, $1 par value — 10,000,000 shares authorized; no shares issued or outstanding in 2002 and 2001
	Common stock, $1 par value — 60,000,000 shares authorized; 34,746,000 shares and 34,461,000 shares issued and outstanding in 2002 and 2001, respectively				34,746				34,461
	Capital in excess of par				163,809				160,103
	Notes receivable from stockholders				(2,489	)			(2,546	)
	Retained earnings				25,181				16,347
Total stockholders’ equity					221,247				208,365
Total liabilities and stockholders’ equity				$	590,027			$	498,689

See accompanying Notes to Consolidated Financial Statements.

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DREYER’S GRAND ICE CREAM, INC.

CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

				Thirteen Weeks Ended								Twenty-six Weeks Ended
($ in thousands, except per share amounts)				June 29, 2002				June 30, 2001				June 29, 2002				June 30, 2001
Net sales				$	376,811			$	335,424			$	667,225			$	574,837
Costs and expenses:
	Cost of goods sold				322,865				293,326				585,026				510,116
	Selling, general and administrative				29,370				28,313				54,928				55,320
	Interest, net of amounts capitalized				2,102				3,264				3,888				6,278
	Other expense (income)				1,327				(930	)			189				(1,169	)
	Merger transaction expenses				2,888								2,888
					358,552				323,973				646,919				570,545
Income before income tax provision					18,259				11,451				20,306				4,292
Income tax provision					6,573				4,410				7,310				1,683
Net income					11,686				7,041				12,996				2,609
Accretion of preferred stock to redemption value									106								212
Preferred stock dividends																	348
Net income available to common stockholders				$	11,686			$	6,935			$	12,996			$	2,049
Net income per common share:
	Basic			$	.34			$	.24			$	.38			$	.07
	Diluted			$	.31			$	.20			$	.35			$	.07
Dividends per common share				$	.06			$	.06			$	.12			$	.12

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)

															Notes
			Common Stock												Receivable
											Capital in				From				Retained
(In thousands)			Shares				Amount				Excess of Par				Stockholders				Earnings				Total
Balances at December 30, 2000				28,268			$	28,268			$	58,396			$	(2,284	)		$	15,992			$	100,372
	Net income																			2,609				2,609
	Accretion of preferred stock to redemption value																			(212	)			(212	)
	Preferred stock dividends declared																			(348	)			(348	)
	Common stock dividends declared																			(3,777	)			(3,777	)
	Conversion of mandatorily redeemable convertible preferred stock to common stock			5,800				5,800				94,952												100,752
	Issuance of common stock under employee stock plans, net			391				391				5,858				(20	)							6,229
	Repurchases and retirements of common stock			(74	)			(74	)			(2,096	)											(2,170	)
Balances at June 30, 2001				34,385			$	34,385			$	157,110			$	(2,304	)		$	14,264			$	203,455
Balances at December 29, 2001				34,461			$	34,461			$	160,103			$	(2,546	)		$	16,347			$	208,365
	Net income																			12,996				12,996
	Common stock dividends declared																			(4,162	)			(4,162	)
	Issuance of common stock under employee stock plans, net			338				338				5,776				(339	)							5,775
	Repurchases and retirements of common stock			(53	)			(53	)			(2,070	)			396								(1,727	)
Balances at June 29, 2002				34,746			$	34,746			$	163,809			$	(2,489	)		$	25,181			$	221,247

See accompanying Notes to Consolidated Financial Statements.

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DREYER’S GRAND ICE CREAM, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

See accompanying Notes to Consolidated Financial Statements.

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DREYER’S GRAND ICE CREAM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 — Operations and Financial Statement Presentation

     Dreyer’s Grand Ice Cream, Inc. and its subsidiaries (the Company) are engaged primarily in the business of manufacturing and distributing premium and superpremium ice cream and other frozen dessert products to grocery and convenience stores, foodservice accounts and independent distributors in the United States.

     The Company accounts for its operations geographically for management reporting purposes. These geographic segments have been aggregated for financial reporting purposes due to similarities in the economic characteristics of the geographic segments and the nature of the products, production processes, customer types and distribution methods throughout the United States.

     The consolidate