Hershey Foods Corporation (NYSE: HSY) today announced sales and earnings for the third quarter ended October 1, 2000. Consolidated net sales for the third quarter of 2000 were $1,196,755,000 compared with $1,066,695,000 for the third quarter of 1999. Net income for the third quarter of 2000 was $107,405,000, or $.78 per share diluted, compared with $87,578,000, or $.62 per share diluted, for the comparable period in 1999, an EPS increase of 25.8 percent.

For the first nine months of 2000, consolidated net sales were $3,026,074,000 compared with $2,865,086,000 for the first nine months of 1999. Net income for the first nine months of 2000 was $218,581,000, or $1.58 per share diluted, compared with $362,303,000, or $2.55 per share diluted, for the same period in 1999. In addition to the gain on the sale of the Corporation's pasta business in January 1999, as well as one month's operational results for that business, these results include a gain from changes in the retiree medical program which occurred in the first quarter of 1999 and a $.03 per share one-time gain on the swap of corporate aircraft in the first quarter of 2000. On a pro forma basis, which excludes all of these one-time items, earnings per share for the first nine months of 2000 were $1.55 per share diluted versus $1.33 per share diluted in 1999, an increase of 16.5 percent.

"As anticipated, our third quarter results were quite solid as all business units posted sales volume gains," said Kenneth L. Wolfe, Chairman and Chief Executive Officer. "Admittedly we were in the depths of our shipping difficulties during last year's third quarter, but this year our new information system and revamped Eastern distribution facilities were much improved during this period of high demand for our domestic confectionery business. While our Back-to-School/Halloween shipments were very strong, our regular turn, everyday business was also quite healthy during the period.

"Operating income increased nicely in the quarter based on the higher sales volumes and favorable commodity costs, primarily cocoa and milk, offset partially by higher logistics costs, as well as higher marketing and administrative costs.

"Our nine months performance puts us well ahead of last year's results for the same period. We expect a good finish for the year, although our challenge, as always, will be to strive for continuous improvement in customer service, while controlling costs and executing effective marketing programs," Wolfe concluded.

SAFE HARBOR STATEMENT

This release contains statements which are forward-looking. These statements are made based upon current expectations which are subject to risk and uncertainty. Actual results might differ materially from those contained in the forward-looking statements. Factors which could cause results to differ materially include, but are not limited to: changes in the confectionery and grocery business environment, including actions of competitors and changes in consumer preferences; changes in governmental laws and regulations, including taxes; market demand for new and existing products; the Corporation's ability to implement improvements to and reduce costs associated with the Corporation's customer service, warehousing and order fulfillment processes and systems; and changes in raw material costs, as discussed in the Corporation's Annual Report on Form 10-K for 1999.

                          Hershey Foods Corporation
Summary of Consolidated Statements of Income
for the periods ended October 1, 2000 and October 3, 1999
(in thousands of dollars except per share amounts)

Third Quarter Nine Months
2000 1999 2000 1999

Net Sales $1,196,755 $1,066,695 $3,026,074 $2,865,086

Costs and Expenses:
Cost of Sales 696,431 634,042 1,803,598 1,709,002
Selling, Marketing
and Administrative 303,688 268,575 808,210 776,700
Gain on Sale of Business - - - (243,785)

Total Costs and
Expenses 1,000,119 902,617 2,611,808 2,241,917

Income Before Interest
and Income Taxes 196,636 164,078 414,266 623,169
Interest Expense, net 21,152 20,507 56,525 55,962

Income Before Income
Taxes 175,484 143,571 357,741 567,207
Provision for Income
Taxes 68,079 55,993 139,160 204,904

Net Income $107,405 $87,578 $218,581 $362,303

Net Income Per Share
- Basic $.78 $.63 $1.59 $2.58
- Diluted $.78 $.62 $1.58 $2.55


NOTE: Net Income Per Share - Basic and Diluted have been computed based
on the provisions of Statement of Financial Accounting Standards
No. 128 Earnings per Share. Basic shares outstanding for the
third quarter of 2000 were 136,836,000 compared with 139,504,000
for the third quarter of 1999. Diluted shares outstanding for the
third quarter of 2000 were 137,690,000 compared with 140,834,000
for the third quarter of 1999. Basic shares outstanding for the
first nine months of 2000 were 137,568,000 compared with
140,451,000 for the first nine months of 1999. Diluted shares
outstanding for the first nine months of 2000 were 138,480,000
compared with 141,841,000 for the comparable period of 1999. Net
income for the first nine months of 1999 includes a one-time,
after-tax gain on the January 1999 sale of the corporation's pasta
business of $165,016,000, or $1.16 per share diluted.


Consolidated Balance Sheets
as of October 1, 2000 and December 31, 1999
(in thousands of dollars)

Assets 2000 1999

Current Assets $1,502,328 $1,279,980
Property & Equipment, net 1,510,298 1,510,460
Intangibles Resulting from
Business Acquisitions 437,439 450,165
Other Assets 97,831 106,047

$3,547,896 $3,346,652

Liabilities and
Stockholders' Equity 2000 1999

Current Liabilities $938,294 $712,829
Long-term Debt 877,803 878,213
Other Long-term Liabilities 323,073 330,938
Deferred Income Taxes 309,126 326,045
Stockholders' Equity 1,099,600 1,098,627
$3,547,896 $3,346,652


Hershey Foods Corporation
Pro Forma Summary of Consolidated Statements of Income
Excluding One-Time Items
for the periods ended October 1, 2000 and October 3, 1999
(in thousands except per share amounts)

Third Quarter Nine Months
2000 1999 2000 1999**

Net Sales $1,196,755 $1,062,740 $3,026,074 $2,824,613

Costs and Expenses:
Cost of Sales 696,431 634,042 1,803,598 1,705,412***
Selling, Marketing
and Administrative 303,688 264,620 815,522* 754,757

Total Costs and
Expenses 1,000,119 898,662 2,619,120 2,460,169

Income Before Interest
and Income Taxes 196,636 164,078 406,954 364,444
Interest Expense, net 21,152 20,507 56,525 55,962

Income Before Income
Taxes 175,484 143,571 350,429 308,482
Provision for Income
Taxes 68,079 55,993 136,317 120,308

Net Income $107,405 $87,578 $214,112 $188,174

Net Income Per Share
- Basic $.78 $.63 $1.56 $1.34
- Diluted $.78 $.62 $1.55 $1.33

Shares Outstanding
- Basic 136,836 139,504 137,568 140,451

Shares Outstanding
- Diluted 137,690 140,834 138,480 141,841

EBIT $196,636 $164,078 $406,954 $364,444

EBITDA $240,861 $205,870 $538,076 $484,886


* Excludes airplane swap pre-tax gain of $7.3 million recorded in the
first quarter of 2000.

** Excludes gain on the sale of the corporation's pasta business in
January 1999, as well as one month's operational results for the
pasta business.

*** Excludes FAS 106 pre-tax gain on retiree medical benefits of $12.5
million recorded in the first quarter of 1999.