Saputo Inc announced today its financial results for the third quarter of 2001, ended December 31, 2000. During this quarter, the Company had to contend with a substantial devaluation of its inventories due to the significant decrease in the average selling price per pound of cheese on the American market. In fact, it fell to its lowest level in ten years. The ongoing improvement in the Company’s manufacturing processes and the synergies developed in the normal course of activities could not fully offset the negative impact of the low average selling price per pound of cheese.

REVENUES DOWN 1.5%


Revenues reached $490.1 million for the three months ended December 31, 2000, which was 1.5% less than the $497.4 million attained a year earlier. The fact that the average selling price of cheese on the American market was more than 11% lower than during the same period in 1999 was the main reason for this drop in revenues.


EBITDA DOWN 12.2%


Earnings before interest, income taxes, depreciation and amortization (EBITDA) amounted to $57.6 million, which was 12.2% less than the $65.6 million recorded for the corresponding period in the previous fiscal
year.


In Canada, EBITDA increased slightly due to the improvement in the Company’s manufacturing processes and the ongoing integration plan for Cayer- JCB Group Inc.

However, this increase was not enough to compensate for the lower EBITDA in the United States. Two main factors explain this lower EBITDA, both of them linked to the average selling price per pound of cheese on the American market, which is beyond the Company’s control.

Firstly, the low average selling price per pound of cheese has made it necessary to reassess the Company’s inventories at a lower value compared with the value at March 31, 2000. The impact of this re-evaluation accounts for nearly 62% of the reduction in EBITDA, or $6.4 million for this quarter alone. The cumulative negative effect of this re-evaluation since the beginning of the current fiscal year is $3.5 million.

Secondly, the cost of manufacturing a pound of cheese is made up of two components: milk cost and other operating costs. The price of milk, which accounts for the larger part of the Company’s manufacturing costs, fluctuates with the selling price of cheese. This does not apply to the other operating costs. However, the proportion of these other costs within the total manufacturing cost will vary with the selling price per pound of cheese. The higher the price of cheese, the lower the proportion. The reverse is also true. The lower the price of cheese, the greater the proportion of these other expenses in the total manufacturing cost. During this quarter, the average selling price of cheese was approximately US$1.08 per pound, which is US$0.14 lower than the $US1.22 for the same quarter last year. Accordingly, the other operating costs represented a larger proportion of the Company’s manufacturing costs this quarter and reduced EBITDA by $3.5 million compared with the third quarter of the previous fiscal year. The cumulative impact since the beginning of the current fiscal year is less, but still negative, and amounted to $1.0 million.

NET EARNINGS DOWN 14.8%


Net earnings totalled $22.4 million or $0.44 (basic) per share, a 14.8% drop compared with the $26.3 million or $0.51 (basic) per share for the same
quarter last year.


CASH FLOW UP 6.5%


Cash generated before changes in non-cash working capital items since the beginning of fiscal 2001 amounted to $134.5 million or $2.63 (basic) per share, a 6.5% increase compared with the $126.3 million or $2.55 (basic) per share for the corresponding period last year. The Company used this major inflow of funds to repay $91.1 million of its long-term debt.


DIVIDENDS


The Company’s Board of Directors has declared a dividend of $0.09 per common share payable on March 17, 2001 to shareholders of record at March 3, 2001. This dividend relates to the third quarter beginning October 1, 2000 and
ended December 31, 2000.


ABOUT SAPUTO


Saputo Inc. is a North American manufacturer of dairy and grocery products. From its dairy processing operations, Saputo manufactures predominantly Mozzarella, with expertise extending to other Italian cheeses, European cheeses and North American cheeses, as well as fluid milk, yogurt, butter, skim-milk powder, juices and value-added whey by-products such as lactose and whey protein. Some of the Dairy Products Sector’s leading brands are “Saputo”, “Stella”, “Frigo“, “Dragone”, “Dairyland”, “Dairy Producers”, “Baxter”, “Armstrong”, “Caron” and “Cayer”. In Canada, Saputo also operates a distribution network where it markets a wide variety of imported cheeses and non-dairy products to complement its cheese offerings. Through its Grocery Products Sector, Saputo manufactures and distributes snack cakes, cookies, fine breads and soups, under such well-known brand names as “Vachon”, “Viau-McCormicks”, “Grissol” and “Loney’s”.


Saputo employs over 8,450 people in its workforce. In its Dairy Products Sector, the Company operates 15 plants in the United States, as well as 35 plants and a network of 17 distribution centres in Canada. In the Grocery Products Sector, Saputo operates five plants in Canada along with a direct-to- store delivery network of 53 warehouses and five distribution centres. Saputo shares are listed on the Toronto Stock Exchange under the symbol SAP. For more information, visit the Company’s web site at www.saputo.com.

FINANCIAL HIGHLIGHTS


(In thousands of dollars, For the three-month periods except per share amounts) ended December 31

                                          2000          1999          Change
$ $
_________________________________________________________________________
Revenues
Dairy Products sector
Canada 153,080 135,790 12.7%
United States 276,617 296,412 (6.7%)
_________________________________________________________________________
429,697 432,202 (0.6%)

Grocery Products sector 60,438 65,189 (7.3%)
_________________________________________________________________________
490,135 497,391 (1.5%)
_________________________________________________________________________
Earnings before interest,
depreciation, amortization
and income taxes
Dairy Products sector
Canada 22,652 20,013 13.2%
United States 26,273 36,678 (28.4%)
_________________________________________________________________________
48,925 56,691 (13.7%)

Grocery Products sector 8,676 8,876 (2.3%)
_________________________________________________________________________
57,601 65,567 (12.1%)
_________________________________________________________________________

Depreciation of fixed assets 11,960 10,777
Interest 8,553 10,661
Income taxes 11,480 14,965
_________________________________________________________________________

Earnings before amotization
of goodwill 25,608 29,434 (13,0%)
_________________________________________________________________________

Amortization of goodwill 3,235 3,137 (3.1%)
_________________________________________________________________________

Net earnings 22.373 26,297 (14.9%)
_________________________________________________________________________
_________________________________________________________________________
Net inflow of cash related to
operations before changes in
non-cash operating working
capital items

Net additions to fixed assets

Repayment of long-term debt
_________________________________________________________________________
_________________________________________________________________________

PER SHARE

Earnings before amortization
of goodwill
Basic 0.50 0.58 (13.8%)
Fully diluted 0.48
Net earnings
Basic 0.44 0.51 (13.7%)
Fully diluted 0.42

Net inflow of cash related to
operations before changes in
non-cash operating working
capital items
Basic
Fully diluted
_________________________________________________________________________
_________________________________________________________________________

For the nine-month periods
ended december 31

2000 1999 Change
$ $
_________________________________________________________________________
Revenues
Dairy Products sector
Canada 454,033 400,412 13.4%
United States 831,294 297,608 (10.4%)
_________________________________________________________________________
1,285,327 1,328,020 (3.2%)

Grocery Products sector 188,265 79,333 137.3%
_________________________________________________________________________
1,473,592 1,407,353 4.7%
_________________________________________________________________________
Earnings before interest,
depreciation, amortization
and income taxes
Dairy Products sector
Canada 64,890 58,444 11.0%
United States 96,660 102,524 (5.7%)
_________________________________________________________________________
161,550 160,968 0.4%

Grocery Products sector 29,840 10,369 187.8%
_________________________________________________________________________
191,390 171,337 11.7%
_________________________________________________________________________

Depreciation of fixed assets 36,404 27,556
Interest 27,575 26,735
Income taxes 40,036 38,837
_________________________________________________________________________

Earnings before amotization
of goodwill 87,375 78,209 11.7%
_________________________________________________________________________

Amortization of goodwill 9,592 7,076 35.6%
_________________________________________________________________________

Net earnings 77,783 71,133 9.3%
_________________________________________________________________________
_________________________________________________________________________
Net inflow of cash related to
operations before changes in
non-cash operating working
capital items 134,512 126,336 6.5%

Net additions to fixed assets (26,182) (46,370) (43.5%)

Repayment of long-term debt (91,072) (106,805) (14.7%)
_________________________________________________________________________
_________________________________________________________________________

PER SHARE

Earnings before amortization
of goodwill
Basic 1.71 1.58 8.2%
Fully diluted 1.65
Net earnings
Basic 1.52 1.43 6.3%
Fully diluted 1.47

Net inflow of cash related to
operations before changes in
non-cash operating working
capital items
Basic 2.63 2.55 3.1%
Fully diluted 2.54
_________________________________________________________________________
_________________________________________________________________________

BALANCE SHEET ITEMS As at december 31
2000 1999
$ $
Working capital 178,062 162,833

Bank loans and overdraft 7,493 13,712
Current portion of
long-term debt 40,000 60,000
Long term debt 385,063 471,491
_________________________________________________________________________
Total debt 432,556 545,203

Shareholder’s equity 705,118 601,238
_________________________________________________________________________