• Entenmann's revenue growth + 49%
  • Ready Meals revenue growth + 25%

Hibernia Foods plc (Nasdaq:HIBNY; the "Company") Friday (21 September) announced its results for its fiscal year and fourth quarter ended March 31, 2001.

Sales for the fiscal year were IR pound 103.76 million ($115.86 million), an increase of 15% compared to sales of IR pound 90.01 million ($100.50 million) for fiscal 2000. Sales in the frozen ready-meals division, showed significant growth of 25% and Entenmann's year on year growth of 49% made it one of the fastest growing brands in the UK food sector. Sales in the frozen desserts division were 1% lower than the previous year, principally due to the intensity of competition across the market, but remained significantly ahead of the market, which showed a decline of 6% for the same period.

For the fiscal year, the operating loss after a one-off restructuring and impairment charge of IR pound 1.92m ($2.15m) amounted to IR pound 9.68 million ($10.80 million) compared to an operating loss of IR pound 2.61 million ($2.92 million) for fiscal 2000. Excluding the one-off restructuring and impairment charge, the operating loss for the year was IR pound 7.75 million ($8.66 million). The restructuring and impairment charge related to closure costs associated with one of the Company's smaller frozen dessert production facilities. The majority of the revenues derived from the closed facility were transferred to other production facilities. This action is anticipated to yield significant production efficiencies and fixed overhead reductions in fiscal 2002 and onwards. The increase in the normalised operating loss was attributable to a number of key factors. Firstly, the intensive price competition, particularly in the frozen desserts market, adversely impacted revenues and margins during the year. The Company's post year-end acquisition of it's major competitor in that market-place, Sara Lee Bakery UK with $75 million in revenues is anticipated to significantly improve margins in fiscal 2002 and onwards through a combination of production synergies, purchasing synergies, and through price inflation within that market. Secondly, during the course of fiscal 2001, Hibernia adopted a strategy of growing its frozen desserts market share with the major UK retailers and repositioning its customer base. The repositioning of the Company's customer base, particularly in the frozen desserts division, was a key element of the Company's strategy to ensure that its customer profile was consistent with the market share held by each of its key customers and therefore based on a profile offering greatest growth opportunities. Having achieved that objective, the next stage of this strategy, in conjunction with the Sara Lee Bakery UK acquisition, is to pursue a more balanced approach between revenue growth and profitability, but from a position of scale. Thirdly, the Company incurred certain once-off charges in fiscal 2001 in connection with the restructuring of its frozen desserts division comprising inventory write-offs in conjunction with its SKU rationalisation programme, the purpose of which was to reduce the number of SKUs in order to focus on higher margin products and to simplify the manufacturing process.

The Company's interest expense for the year reduced from IR pound 7.82 million ($8.73 million) in fiscal 2000 to IR pound 4.42 million ($4.93 million) in fiscal 2001, principally due to the pre-payment of all of the Senior Subordinated Loan Notes on April 20, 2000. In addition the Company achieved a foreign exchange gain of IR pound 0.76 million ($0.85 million) in fiscal 2001 compared to a gain of IR pound 0.04 million ($0.04 million) in fiscal 2000. Overall, Interest, Foreign Exchange and Other Charges reduced by 53% compared to fiscal 2000.

During fiscal 2001, the Company incurred a once-off non-cash extraordinary charge of IR pound 4.27 million ($4.76 million) in connection with the write-off of the deferred financing costs attributable to the pre-paid Senior Subordinated Loan Notes.

Basic and fully diluted loss per share before the extraordinary item above was IR pound 0.77 ($0.86) compared to a basic and fully diluted loss per share in fiscal 2000 of IR pound 1.22 ($1.36), a reduction of 37% in losses per share.

Commenting on the results, Oliver Murphy, Chairman and Chief Executive Officer, said, "Fiscal 2001 was a year in which Hibernia achieved its key objectives in terms of excellent revenue growth, successfully repositioning our customer base and commencing a profit focused rationalisation programme in our frozen desserts division. These strategies represented a significant investment and, given the competitive nature of the markets we operate in, impacted on our profitability for the year. However, I am firmly convinced that we adopted the right strategy to lay a firm base from which to drive profitability within the current fiscal year and onwards, particularly in light of the two acquisitions we subsequently completed in Quarter 1 of fiscal 2002. The La Boheme chilled desserts business, which we acquired in April 2001, is a natural extension of both our frozen desserts and Entenmann's chilled desserts businesses and offers a number of cross fertilisation opportunities, which we are currently assessing. The acquisition of the Sara Lee Bakery UK business on June 4th 2001, in many respects, re-affirms our aggressive strategy within the frozen desserts sector, as we are now the number One producer in both the private label and branded sectors of that market, with an overall market share in excess of 40%.

In relation to ready-meals, we have seen dramatic growth in our revenues and our goal for the current fiscal year is to profitably capitalise on the scale we have achieved through process of product innovation and effective overhead management.

Entenmann's surpassed our expectations, with year on year growth of 49%, achieved through a combination of organic growth within our existing product range and through the successful launch of a range of Entenmann's chilled desserts. Our plans for 2002 are to further expand the range of Entenmann's products to enter the vast single serve market and also to commence our European roll-out strategy, having clearly demonstrated our achievements within the UK and Irish markets.

In addition, we successfully completed a pre-payment of the Senior Subordinated Loan Notes early in the fiscal year, which significantly reduced our interest charge compared to the previous fiscal.

We have successfully achieved our goal of positioning Hibernia, within a three-year time frame, as a food group of material scale with trailing pro-forma revenues approaching $250 million. We are now in a position to execute our profitability goals in the current fiscal and beyond."

Sales for the quarter were IR pound 24.12 million ($26.93 million), an increase of 13% compared to IR pound 21.38 million ($23.87 million) for the similar three-month period ended March 31, 2000.

The operating loss for quarter 4, before the one-off restructuring cost, amounted to IR pound 4.08 million ($4.56 million) compared to an operating loss of IR pound 3.61 million ($4.03 million) for the similar three month period ended March 31, 2000.

The net loss for Quarter 4, excluding the one-off restructuring and extraordinary charges, amounted to IR pound 4.53 million ($5.06 million) compared to a net loss of IR pound 6.00 million ($6.70 million) for the similar three-month period in 2000.

Hibernia Foods plc is a leading European manufacturer of branded cakes, branded and private-label ready-meals and branded and private-label frozen desserts, headquartered in Dublin, Ireland, with significant manufacturing facilities in the United Kingdom. It is the exclusive European license holder for Entenmann's branded sweet-baked cakes throughout all of geographical Europe, representing 52 countries and a population of over 700 million people and is the exclusive UK and Ireland license holder for Sara Lee branded frozen desserts.

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                  HIBERNIA FOODS PLC AND SUBSIDIARIES
                    Summary Consolidated Statements
                         of Operations for the
                        Quarter Ended March 31,

                                2001(1)       2001           2000
                               US$000s   IR pound 000s  IR pound 000s

Product Revenue                 26,927     25,116          21,379
Gross Profit                     2,510      2,248           2,339
Operating Expenses              (7,067)    (6,329)         (5,946)
Restructuring &
  Impairment charge             (2,147)    (1,923)            -
Operating Profit / (Loss)       (6,704)    (6,004)         (3,607)
Interest, Foreign Exchange
 and Other charges                (502)      (449)         (2,390)
Extraordinary Item                (590)      (528)             -
Net Profit / (Loss)             (7,796)    (6,981)         (5,997)

                 Profit/(Loss) per Share Data for the
                        Quarter Ended March 31,

                                2001(1)       2001           1999
                                 US$        IR pound       IR pound

Basic Profit/
 (Loss) per Share                (0.40)     (0.36)          (0.50)
Weighted Average
 Number of Ordinary Shares
 Outstanding ('000s)            19,449     19,449          11,888


                  HIBERNIA FOODS PLC AND SUBSIDIARIES
                         Summary Consolidated
                    Balance Sheets as of March 31,

                                 2001(1)      2001           2000
                                US$000s  IR pound 000s  IR pound 000s

Total Current Assets            42,488     38,051          59,611
Total Fixed Assets              41,939     37,560          38,112
Total Intangible
 & Other Assets                  5,316      4,761           8,571
Total Assets                    89,743     80,372         106,294
Total Current
 Liabilities                    65,175     58,369          42,648
Other Liabilities                7,347      6,580          40,280
Total Liabilities               72,522     64,949          82,928
Net Assets                      17,221     15,423          23,366


                  HIBERNIA FOODS PLC AND SUBSIDIARIES

                    Summary Consolidated Statements
                         of Operations for the
                         Year Ended March 31,

                                2001(1)       2001           2000
                               US$000s   IR pound 000s  IR pound 000s

Product Revenue                115,855    103,757          90,007
Gross Profit                    15,972     14,304          14,832
Operating Expenses             (24,629)   (22,057)        (17,446)
Restructuring &
 Impairment charge              (2,147)    (1,923)           -
Operating Profit/(Loss)        (10,804)    (9,676)         (2,614)
Interest, Foreign Exchange
 and Other charges              (4,084)    (3,657)         (7,784)
Extraordinary Item              (4,764)    (4,267)           -
Net (Loss)                     (19,652)   (17,600)        (10,398)


                      Loss per Share Data for the
                      Fiscal Year Ended March 31,

                                 2001(1)      2001           2000
                                   US$      IR pound       IR pound

Basic and Diluted (Loss)
 per Share before
Extraordinary Item               (0.86)     (0.77)          (1.22)
Basic and Diluted (Loss)
 per Share after
Extraordinary Item               (1.13)     (1.02)          (1.22)
Weighted Average Number of
Ordinary Shares
 Outstanding ('000s)            17,321     17,321           8,560

    (1) The summary financial information above is expressed in U.S.
        Dollars, solely for convenience, at the U.S. Dollar rate of
        exchange against the Irish pound at March 31, 2001 of IR pound
        1 = US$1.1166.

This report contains forward-looking statements regarding the company's future performance. These forward-looking statements are based on management's views and assumptions, and involve risks, uncertainties and other important factors, certain of which are beyond the Company's control, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These include, but are not limited to, sales, earnings and volume growth, competitive conditions, production costs, currency valuations, achieving cost savings and working capital and debt reduction programs, success of acquisitions, innovations, and supply chain and overhead initiatives and other factors described in "Risk Factors" in the Company's Form 20-F for the fiscal year ended March 31, 2001, as updated from time to time by the Company in its subsequent filings with the Securities and Exchange Commission. The Company specifically disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.