International Multifoods Corp. (NYSE:IMC) today reported second-quarter earnings from continuing operations before unusual items of $5 million, or 27 cents per diluted share, compared with $5.1 million, or 27 cents per share, in the same period last year. These figures exclude an after-tax unusual gain of $200,000, or 1 cent per share, in the current quarter and a loss from discontinued operations of $11.8 million, or 62 cents per diluted share, a year ago.

Operating earnings, excluding unusual items, were $11.7 million, up 7 percent from $10.9 million in the year-earlier quarter. Net sales for the second quarter ended Aug. 26 were $585.3 million, compared with $568.7 million in the prior year. During the quarter, the company generated a $2 million improvement in Economic Value Added.

"Second-quarter results were in line with expectations, and we remain on track to deliver on analysts' consensus estimate for the full year," said Gary Costley, International Multifoods chairman and chief executive officer. "We had a record second quarter in North America Foods, driven by continued improvement in our business mix and better asset utilization. In our distribution business, we benefited in last year's second quarter from inflation in cheese prices, which resulted in a $1.5 million unfavorable year-over-year comparison. Profitability this year also was affected by regional pricing pressures. These factors masked the headway we are making in reducing costs and improving productivity."

Including the $200,000 unusual gain in this year's second quarter and the year-earlier $11.8 million loss from discontinued operations, net earnings in the quarter were $5.2 million, or 28 cents per diluted share, compared with a loss of $6.7 million, or 35 cents per diluted share, last year. This year's results included a pre-tax net gain of $5.6 million from the sale of the company's headquarters building and net charges of $300,000 in the distribution business. Included in the charges were costs for severance and expenses to close two small facilities. These costs were largely offset by a reversal of the company's reserve for the closing of a distribution center that is no longer planned. In addition, the company incurred about $5.1 million in one-time taxes on the sale of the building and on the repatriation of a dividend from its Canadian subsidiary. The company will use the dividend to rebalance its debt portfolio between Canada and the United States.

Second-Quarter Operating Results by Segment

Multifoods Distribution Group. Operating earnings before unusual items were $3.8 million, down from $4.8 million last year. Net sales were $468.8 million, up about 4 percent from $452.5 million in the second quarter a year ago.

During the quarter, the company continued to achieve greater penetration among vending operators, with sales up nearly 6 percent over the prior year. The company also reported sales gains in the targeted segments of sandwich shops and theaters. Excluding the impact of lower cheese prices on sales and the loss of an unprofitable account relinquished in March, volume in the sandwich segment grew 13 percent in the quarter. Overall, cheese prices reduced second-quarter sales by about $13 million. The company also secured several new contracts during the quarter with growing regional pizza restaurant chains.

Costley said that the company is continuing to see improvements in productivity and is encouraged by an increase in new business activity. He noted that delivery and distribution expenses as a percentage of sales were flat versus the prior year.

"With the major consolidation projects completed, our attention is now turned to growing sales and improving our core business processes to better serve customers systemwide," Costley said.

North America Foods. Operating earnings increased 14 percent to $9.1 million, up from $8 million in the second quarter last year. Net sales were $116.5 million, relatively flat compared with strong year-earlier levels. Sales in the quarter also were affected by the impact of lower raw material costs on prices.

In the United States, the company continued to benefit from growing demand among foodservice customers for value-added products, such as its ready-to-bake muffins and frozen desserts. The company's Canadian business reported strong results, driven by volume gains in commercial flour, bakery mixes and frozen desserts, as well as retail ethnic flours.

North America Foods' operating margins improved as a result of a more favorable foodservice product mix, lower ingredient costs and better asset utilization.

Costley noted that increased freight costs driven by higher fuel prices reduced North America Foods results by about $350,000 in the quarter.

"The tight labor market remains a key driver of demand among foodservice and bakery operators for easy-to-use, labor-saving products," Costley said. "With our ability to provide customized solutions that help our customers achieve better results, we are well positioned to seize opportunities and effectively expand our market position."

Six-Month Summary

In the first half of fiscal 2001, International Multifoods reported earnings from continuing operations before unusual items of $9.8 million, or 52 cents per diluted share, compared with $9.7 million, or 51 cents per share, a year ago. Including unusual items and discontinued operations, net earnings for the first six months were $10 million, or 53 cents per diluted share. This compares with a net loss of $9.9 million, or 53 cents per diluted share, in the first half last year.

Year to date, sales increased to $1.2 billion, up 3 percent from $1.16 billion in the prior year. Operating earnings before unusuals rose 8 percent to $22.9 million, up from $21.2 million in the year-earlier period.

International Multifoods is a manufacturer for and distributor to the foodservice industry in North America. The company also is a leading manufacturer and marketer of consumer foods in Canada.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; market or weather conditions that may affect the costs of grain, cheese, other raw materials and fuel; changes in laws and regulations; fluctuations in interest rates; the company's ability to realize the book value of its remaining Venezuelan assets; fluctuations in foreign exchange rates; the company's ability to increase the distribution group's sales and reduce delivery and distribution costs, and realize the earnings benefits from the distribution group's consolidation and expansion plans; risks commonly encountered in international trade; and other factors as may be discussed in the company's Report on Form 10-K for the year ended Feb. 29, 2000, and other reports filed with the Securities and Exchange Commission.

                International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)


FY 2001 - Second Quarter Ended August 26
----------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
-------- --------- -------- -------- ---------
Multifoods
Distribution Group $ 468.8 $ (465.0) $ 3.8 $ (0.3) $ 3.5
North America Foods 116.5 (107.4) 9.1 - 9.1
Corporate Expenses - (1.2) (1.2) 5.6 4.4
-------- --------- -------- -------- ---------
Total $ 585.3 $ (573.6) $ 11.7 $ 5.3 $ 17.0
======== ========= ======== ======== =========

Reconciliation of operating earnings to net earnings:
-----------------------------------------------------
Before
Unusual Unusual
Items Items Total
-------- -------- ---------
Operating earnings $ 11.7 $ 5.3 $ 17.0
Interest, net (3.3) - (3.3)
Other income (expense), net (0.3) - (0.3)
-------- -------- ---------
Earnings from continuing operations
before income taxes 8.1 5.3 13.4
Income taxes (3.1) (5.1) (8.2)
-------- -------- ---------
Earnings from continuing operations 5.0 0.2 5.2
Loss from discontinued operations - - -
-------- -------- ---------
Net earnings $ 5.0 $ 0.2 $ 5.2
======== ======== =========

Basic earnings per share:
Continuing operations $ 0.27 $ 0.01 $ 0.28
Discontinued operations - - -
-------- -------- ---------
Total $ 0.27 $ 0.01 $ 0.28
======== ======== =========

Diluted earnings per share:
Continuing operations $ 0.27 $ 0.01 $ 0.28
Discontinued operations - - -
-------- -------- ---------
Total $ 0.27 $ 0.01 $ 0.28
======== ======== =========



International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)


FY 2000 - Second Quarter Ended August 31
----------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
-------- --------- -------- -------- ---------
Multifoods
Distribution Group $ 452.5 $ (447.7) $ 4.8 $ - $ 4.8
North America Foods 116.2 (108.2) 8.0 - 8.0
Corporate Expenses - (1.9) (1.9) - (1.9)
-------- --------- -------- -------- ---------
Total $ 568.7 $ (557.8) $ 10.9 $ - $ 10.9
======== ========= ======== ======== =========

Reconciliation of operating earnings to net loss:
-------------------------------------------------
Before
Unusual Unusual
Items Items Total
-------- -------- ---------
Operating earnings $ 10.9 $ - $ 10.9
Interest, net (2.5) - (2.5)
Other income (expense), net (0.2) - (0.2)
-------- -------- ---------
Earnings from continuing operations
before income taxes 8.2 - 8.2
Income taxes (3.1) - (3.1)
-------- -------- ---------
Earnings from continuing operations 5.1 - 5.1
Loss from discontinued operations (11.8) - (11.8)
-------- -------- ---------
Net loss $ (6.7) $ - $ (6.7)
======== ======== =========

Basic earnings (loss) per share:
Continuing operations $ 0.27 $ - $ 0.27
Discontinued operations (0.63) - (0.63)
-------- -------- ---------
Total $ (0.36) $ - $ (0.36)
======== ======== =========

Diluted earnings (loss) per share:
Continuing operations $ 0.27 $ - $ 0.27
Discontinued operations (0.62) - (0.62)
-------- -------- ---------
Total $ (0.35) $ - $ (0.35)
======== ======== =========



International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)


FY 2001 - Six Months Ended August 26
------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
-------- --------- -------- -------- ---------
Multifoods
Distribution Group $ 964.7 $ (955.7) $ 9.0 $ (0.3) $ 8.7
North America Foods 230.9 (214.3) 16.6 - 16.6
Corporate Expenses - (2.7) (2.7) 5.6 2.9
-------- --------- -------- -------- ---------
Total $1,195.6 $(1,172.7) $ 22.9 $ 5.3 $ 28.2
======== ========= ======== ======== =========

Reconciliation of operating earnings to net earnings:
-----------------------------------------------------
Before
Unusual Unusual
Items Items Total
-------- -------- ---------
Operating earnings $ 22.9 $ 5.3 $ 28.2
Interest, net (6.5) - (6.5)
Other income (expense), net (0.6) - (0.6)
-------- -------- ---------
Earnings from continuing operations
before income taxes 15.8 5.3 21.1
Income taxes (6.0) (5.1) (11.1)
-------- -------- ---------
Earnings from continuing operations 9.8 0.2 10.0
Loss from discontinued operations - - -
-------- -------- ---------
Net earnings $ 9.8 $ 0.2 $ 10.0
======== ======== =========

Basic earnings per share:
Continuing operations $ 0.53 $ 0.01 $ 0.54
Discontinued operations - - -
-------- -------- ---------
Total $ 0.53 $ 0.01 $ 0.54
======== ======== =========

Diluted earnings per share:
Continuing operations $ 0.52 $ 0.01 $ 0.53
Discontinued operations - - -
-------- -------- ---------
Total $ 0.52 $ 0.01 $ 0.53
======== ======== =========



International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)


FY 2000 - Six Months Ended August 31
------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
-------- --------- -------- -------- ---------
Multifoods
Distribution Group $ 924.5 $ (913.4) $ 11.1 $ - $ 11.1
North America Foods 233.0 (218.7) 14.3 - 14.3
Corporate Expenses - (4.2) (4.2) - (4.2)
-------- --------- -------- -------- ---------
Total $1,157.5 $(1,136.3) $ 21.2 $ - $ 21.2
======== ========= ======== ======== =========

Reconciliation of operating earnings to net loss:
-------------------------------------------------
Before
Unusual Unusual
Items Items Total
-------- -------- ---------
Operating earnings $ 21.2 $ - $ 21.2
Interest, net (5.2) - (5.2)
Other income (expense), net (0.4) - (0.4)
-------- -------- ---------
Earnings from continuing operations
before income taxes 15.6 - 15.6
Income taxes (5.9) - (5.9)
-------- -------- ---------
Earnings from continuing operations 9.7 - 9.7
Loss from discontinued operations (19.6) - (19.6)
-------- -------- ---------
Net loss $ (9.9) $ - $ (9.9)
======== ======== =========

Basic earnings (loss) per share:
Continuing operations $ 0.51 $ - $ 0.51
Discontinued operations (1.04) - (1.04)
-------- -------- ---------
Total $ (0.53) $ - $ (0.53)
======== ======== =========

Diluted earnings (loss) per share:
Continuing operations $ 0.51 $ - $ 0.51
Discontinued operations (1.04) - (1.04)
-------- -------- ---------
Total $ (0.53) $ - $ (0.53)
======== ======== =========



International Multifoods Corporation
Consolidated Statements of Operations
(unaudited)


Second Quarter Ended
-----------------------
August 26, August 31,
(in millions, except per share data) 2000 1999
-----------------------------------------------------------------
Net sales $ 585.3 $ 568.7
Cost of materials and production (496.8) (485.1)
Delivery and distribution (43.5) (41.1)
-----------------------------------------------------------------
Gross profit 45.0 42.5
Selling, general and administrative (33.3) (31.6)
Unusual items 5.3 -
-----------------------------------------------------------------
Operating earnings 17.0 10.9
Interest, net (3.3) (2.5)
Other income (expense), net (0.3) (0.2)
-----------------------------------------------------------------
Earnings from continuing operations
before income taxes 13.4 8.2
Income taxes (8.2) (3.1)
-----------------------------------------------------------------
Earnings from continuing operations 5.2 5.1
Loss from discontinued operations - (11.8)
-----------------------------------------------------------------
Net earnings (loss) $ 5.2 $ (6.7)
=================================================================

Basic earnings (loss) per share:
Continuing operations $ 0.28 $ 0.27
Discontinued operations - (0.63)
-----------------------------------------------------------------
Total $ 0.28 $ (0.36)
=================================================================

Diluted earnings (loss) per share:
Continuing operations $ 0.28 $ 0.27
Discontinued operations - (0.62)
-----------------------------------------------------------------
Total $ 0.28 $ (0.35)
=================================================================

Average shares outstanding:
Basic 18.7 18.7
Diluted 18.9 18.8
-----------------------------------------------------------------






International Multifoods Corporation
Consolidated Statements of Operations
(unaudited)


Six Months Ended
-----------------------
August 26, August 31,
(in millions, except per share data) 2000 1999
-----------------------------------------------------------------
Net sales $ 1,195.6 $ 1,157.5
Cost of materials and production (1,018.9) (989.5)
Delivery and distribution (87.0) (81.7)
-----------------------------------------------------------------
Gross profit 89.7 86.3
Selling, general and administrative (66.8) (65.1)
Unusual items 5.3 -
-----------------------------------------------------------------
Operating earnings 28.2 21.2
Interest, net (6.5) (5.2)
Other income (expense), net (0.6) (0.4)
-----------------------------------------------------------------
Earnings from continuing operations
before income taxes 21.1 15.6
Income taxes (11.1) (5.9)
-----------------------------------------------------------------
Earnings from continuing operations 10.0 9.7
Loss from discontinued operations - (19.6)
-----------------------------------------------------------------
Net earnings (loss) $ 10.0 $ (9.9)
=================================================================

Basic earnings (loss) per share:
Continuing operations $ 0.54 $ 0.51
Discontinued operations - (1.04)
-----------------------------------------------------------------
Total $ 0.54 $ (0.53)
=================================================================

Diluted earnings (loss) per share:
Continuing operations $ 0.53 $ 0.51
Discontinued operations - (1.04)
-----------------------------------------------------------------
Total $ 0.53 $ (0.53)
=================================================================

Average shares outstanding:
Basic 18.7 18.8
Diluted 18.8 18.8
-----------------------------------------------------------------






International Multifoods Corporation
Consolidated Condensed Balance Sheets
(unaudited)



Aug. 26, Feb. 29, Aug. 31,
(in millions) 2000 2000 1999
-------------------------------------------------------------------
Assets
------
Current assets:
Cash and cash equivalents $ 8.2 $ 11.2 $ 6.6
Trade accounts receivable, net 130.5 122.6 133.0
Inventories 187.1 171.3 178.5
Other current assets 52.7 48.9 51.7
-------------------------------------------------------------------
Total current assets 378.5 354.0 369.8
-------------------------------------------------------------------

Property, plant and equipment, net 203.7 204.9 176.1
Goodwill, net 83.4 84.9 80.9
Other assets 96.9 92.4 87.9
-------------------------------------------------------------------
Total assets $762.5 $736.2 $714.7
===================================================================


Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 62.9 $ 41.5 $ 65.3
Current portion of long-term debt 11.0 20.0 10.5
Accounts payable 178.2 167.3 167.4
Other current liabilities 47.4 48.7 52.1
-------------------------------------------------------------------
Total current liabilities 299.5 277.5 295.3
-------------------------------------------------------------------

Long-term debt 146.2 147.2 121.2
Employee benefits and other liabilities 61.3 56.4 54.2
-------------------------------------------------------------------
Total liabilities 507.0 481.1 470.7
-------------------------------------------------------------------

Shareholders' equity 255.5 255.1 244.0
-------------------------------------------------------------------
Total liabilities and
shareholders' equity $762.5 $736.2 $714.7
===================================================================