Michael Foods, Inc. (Nasdaq: MIKL) yesterday announced financial results for the fourth quarter and year ended December 31, 2000.

New annual financial records were set in 2000. Diluted net earnings per share for the year ended December 31, 2000 were $2.33 compared to $2.12 per share in 1999, an increase of 10%. Net earnings for 2000 increased 1% to $44.7 million compared to $44.1 million in 1999. Net sales for the year ended December 31, 2000 were $1.08 billion compared to $1.05 billion in the previous year, an increase of 3%.

Diluted net earnings per share for the three months ended December 31, 2000 were $0.60 compared to $0.64 per share in 1999's fourth quarter, a decrease of 6%. Net earnings for the fourth quarter of 2000 decreased 16% to $11.1 million compared to $13.2 million in 1999's fourth quarter. Net sales for the three months ended December 31, 2000 were $285.5 million compared to $272.0 million in the previous year period, an increase of 5%.

Chairman, President and Chief Executive Officer Gregg A. Ostrander commented, "Last year reflected another solid financial performance for our Company. Our fourth quarter earnings per share did not meet the prior year's level mainly due to a difficult comparison versus quite favorable market conditions for industrial egg products in late 1999. In contrast, fourth quarter of 2000 industrial egg products earnings were near break-even levels -- a condition which prevailed for much of 2000. However, earnings from our value-added egg products rose for both the quarter and the year.

"Our stand-out performer last year was the Refrigerated Distribution Division, which had excellent volume gains and outstanding earnings growth. Potato Products results for the year showed good growth in both sales and earnings. Results for Dairy Products remained disappointing and reflected impacts from our efforts to rebuild the Kohler Mix business."

Ostrander added, "We are preparing for the transition to being a privately-held firm. We still anticipate a spring shareholder vote to consider the acquisition of the Company."

By background, in December 2000, Michael Foods' Board of Directors approved a definitive merger agreement providing for the acquisition of the Company for $30.10 per share in cash, by an investor group comprised of a management group led by the Company's Chairman, President and Chief Executive Officer Gregg A. Ostrander, affiliates of the Michael family, and affiliates of two private equity investment firms, Vestar Capital Partners and Goldner Hawn Johnson and Morrison.

    Unaudited segment data follows (in thousands):

                            External Net Sales          Operating Profit
                            Three Months Ended         Three Months Ended
                               December 31,                December 31,
                            2000          1999          2000         1999
    Egg Products          $164,506      $160,238      $16,901       $20,994
    Refrigerated Dist.      72,041        63,953        4,039         3,610
    Dairy Products          32,164        32,614         (949)          478
    Potato Products         16,780        15,147        3,116         2,186
    Corporate                  N/A           N/A       (1,371)       (2,126)


                            External Net Sales          Operating Profit
                           Twelve Months Ended         Twelve Months Ended
                               December 31,                December 31,
                            2000          1999          2000         1999

    Egg Products          $637,355      $620,719      $67,658       $73,531
    Refrigerated Dist.     241,114       230,335       16,001        10,656
    Dairy Products         141,401       144,865        1,322         3,750
    Potato Products         60,731        57,353        7,650         6,751
    Corporate                  N/A           N/A       (5,825)       (8,358)


Michael Foods, Inc. is a diversified food processor and distributor with particular interests in egg products, refrigerated grocery products, specialty dairy products and refrigerated potato products. Principal subsidiaries include Papetti's Hygrade Egg Products, Inc., M. G. Waldbaum Company, Crystal Farms Refrigerated Distribution Company, Kohler Mix Specialties, Inc. and Northern Star Co.

Certain items in this release are forward-looking statements, which are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous risks and uncertainties, including uncertainty that the financings required to complete the Company's acquisition will be completed and factors affecting the anticipated timeline for closing the merger transaction, including the completion of financings and regulatory review processes.

Consolidated statements of earnings follow.

                             Michael Foods, Inc.
                     Consolidated Statements of Earnings
                      (000's, except per share amounts)

                            Three Months Ended       Twelve Months Ended
                               December 31,              December 31,
                            2000          1999        2000          1999

    Net sales             $285,491      $271,952   $1,080,601    $1,053,272
    Cost of sales          238,266       217,955      889,138       860,256
      Gross profit          47,225        53,997      191,463       193,016
    Selling, general &
     administrative         25,489        28,855      104,657       106,686
      Operating profit      21,736        25,142       86,806        86,330
    Interest expense, net    3,428         2,802       13,206        11,664
      Earnings before
       income taxes         18,308        22,340       73,600        74,666
    Income tax expense       7,180         9,160       28,890        30,610
      NET EARNINGS         $11,128       $13,180      $44,710       $44,056

    Earnings per share
      Basic                  $0.61         $0.65        $2.36         $2.15
      Diluted                $0.60         $0.64        $2.33         $2.12

    Weighted average common
     shares Outstanding
      Basic                 18,286        20,278       18,950        20,500
      Diluted               18,585        20,544       19,192        20,750