Horizon Organic Holding Corporation (Nasdaq: HCOW), the world's leading producer of organic dairy products, announced today results for its first quarter ended March 31, 2001. Net sales for the quarter rose 43 percent to $37.6 million, compared with $26.3 million for the comparable period a year ago. The company reported a loss of $235,000 for the fiscal 2001 first quarter versus a profit of $307,000 reported in the first quarter of last year. Loss per diluted share for the quarter was $0.02, versus a profit of $0.03 per diluted share reported in the same period last year. The loss per share for the first quarter was less than analyst expectations, which ranged from a loss of $0.03 to $0.05 per share.

"Our first quarter results demonstrate that the plans we have put in place in both the U.S. and the U.K. are having the desired impact," said Chuck Marcy, president and chief executive officer of Horizon Organic. "The better than anticipated performance indicates that we should continue to see improvements throughout the year."

In the U.S., the company's results were stronger than anticipated. Horizon Organic achieved additional distribution through the success of its ultra-pasteurized (UP) milk products and expanded product offerings. The company anticipates these initiatives, coupled with the growth in organic dairy sections in conventional supermarkets, will drive future growth. During the quarter, UP milk accounted for 39 percent of the company's $21 million in total milk sales. Horizon Organic now has UP capacity in place to support the overwhelmingly high demand and believes UP milk holds significant growth potential.

The company also saw a substantial increase in cheese sales during the quarter due to a re-launch of this product line, which now consists of 14 items including several new varieties. The company also will begin to ship an expanded line of its very popular juices, including six single serve products, in May of this year.

In the United Kingdom, the initiatives the company instituted in the fourth quarter are beginning to impact results, which are in line with expectations. Horizon Organic is now focusing on three initiatives to build sales and distribution. First, the company is testing a direct store delivery program with Sainsbury's, its largest private label customer. This is part of a new partnership with Dairy Crest, the leading conventional dairy in the U.K. While it is too soon to fully evaluate the test, initial results are positive. Secondly, Horizon Organic branded products are doing well in specialty stores in London, with sales up more than 30 percent since the products were converted to the Horizon Organic brand. The company will continue to focus on expanding its distribution. Lastly, the company will utilize the 20th anniversary of Rachel's Organic to implement a comprehensive sales and marketing plan in the fall.

"We are very pleased that the initiatives we have implemented are beginning to show promise," said Marcy. "We have sufficient UP capacity, an exciting line of new products and are moving rapidly in the development of organic dairy sections in conventional supermarkets. We also believe that external factors in both the U.S. and U.K. will help increase consumer interest in organic dairy products this year. In the U.S., we expect to benefit from a rise in farm-level prices for conventional milk, which should narrow the retail price gap between conventional and organic milk and dairy products. We already have experienced a positive impact from a rise in conventional butter and cream prices. In the U.K., we are benefiting from heightened consumer awareness and concern about food safety due to foot and mouth disease, which fortunately never impacted our milk supply. Our experience indicates that consumers turn to organic dairy foods when such issues arise," concluded Marcy.

The company said that it expects the improved performance in the first quarter will likely continue. By focusing on increasing sales and minimizing costs, Horizon Organic anticipates a profit in the range of $0.02 to $0.04 per share for the fiscal 2001 second quarter.

Horizon Organic produces and markets the leading brand of certified organic milk and a full line of refrigerated, certified organic dairy products. The company also markets certified organic eggs and juices. Horizon Organic products can be found in conventional supermarkets and natural foods stores across the U.S. and in the U.K. For more information, please visit the Company's web site at www.horizonorganic.com.

Note on Forward-Looking Statements: This news release contains forward-looking statements that involve risks and uncertainties. Future events may differ materially from those discussed herein, due to a number of factors, including uncertainties related to the company's ability to continue strong growth, to achieve distribution and operational efficiencies, and to expand domestically and internationally, as well as increased milk costs, inbound and outbound freight and distribution costs, higher costs related to new-product introductions and increased personnel costs. These factors and others are more fully discussed in the company's Annual Report on Form 10-K for the year ended December 31,2000.

                             SELECTED FINANCIAL DATA
                      (In thousands, except per share data)

                                  Three Months Ended March 31,
                             2001          %NS          2000           %NS
    Net sales              $37,598        100.0%      $26,336        100.0%
     Growth vs.
      prior year             42.8%                      60.4%
    Cost of sales           26,543         70.6%       17,935         68.1%
    Gross profit            11,055         29.4%        8,401         31.9%

    Selling expense          7,641         20.3%        5,443         20.7%
    General and
     administrative          1,925          5.1%        1,947          7.4%
    Goodwill Amortization      824          2.2%          374          1.4%

    Operating income           665          1.8%          637          2.4%

    Interest and
     other, net             (1,044)        -2.8%         (117)        -0.4%

    Pretax income (loss)      (379)        -1.0%          520          2.0%

    Income tax benefit
     (expense)                 144          0.4%         (213)        -0.8%

    Net income (loss)         (235)        -0.6%          307          1.2%

    Earnings (loss)
     per share
      Basic                 ($0.02)                     $0.03
      Diluted               ($0.02)                     $0.03

    Weighted average shares
      Basic                  9,901                      9,753
      Diluted                9,901                     10,025

    Selected Balance Sheet Data                      Mar 31,        Dec 31,
                                                       2001          2000
    Working capital                                  $24,672        $23,714
    Total assets                                     128,572        132,164
    Current liabilities                               23,227         25,245
    Long-term debt, less current portion              45,967         45,685
    Stockholders' equity                              56,794         58,644