Suiza Foods Corporation (NYSE: SZA), the nation’s leading dairy processor and distributor, today announced net sales totaled $1.5 billion for the quarter ended December 31, 2000, an increase of 31.9% over 1999. Diluted earnings per share before non-recurring items for the quarter totaled $1.08, an increase of 18.9% over last year, and diluted cash earnings per share before non-recurring items grew 18.5% to $1.25. Cash earnings per share is defined as earnings per share before goodwill amortization, net of the related income tax effects.

Fourth quarter operating income before non-recurring items increased 42.8% to $100.9 million, compared with $70.7 million in the 1999 fourth quarter. Consolidated operating margins before non-recurring items for the quarter were 6.8%, an improvement of 52 basis points from the comparable prior year period.

“We are extremely pleased with the performance of our operating units during the fourth quarter. Strong performance at the Dairy Group and Morningstar allowed us to deliver strong results despite continued weakness at our minority-owned packaging business,” said Gregg Engles, Chairman and Chief Executive Officer of Suiza Foods. “2000 was a tremendous year for Suiza, and we remain very confident in our ability to grow 2001 earnings per share in the range of 10% to 12%, despite predictions of an otherwise slowing economy.”


The company recorded net sales growth of 28.4% to $5.8 billion for the year ended December 31, 2000, compared with $4.5 billion in 1999. Diluted earnings per share before non-recurring items increased 14.4% to $3.86 in 2000, compared with $3.37 in 1999. Diluted cash earnings per share in 2000 totaled $4.52, an increase of 15.3% over the prior year.

Excluding the effects of the sale of the company’s U.S. packaging business in July 1999, net sales rose 35.9% in 2000. Operating income excluding the U.S. packaging business and before non-recurring items increased 49.7% and operating margin expanded 61 basis points over 1999. Excluding U.S. packaging, diluted earnings per share before non-recurring items increased 20.4% and diluted cash earnings per share grew 21.9%.

During the year, the company accomplished the following:

— Completed the acquisition of Southern Foods Group L.P., making Suiza
Foods the nation’s first fluid dairy company with national reach.

— Repurchased a total of 3.3 million shares of its common stock for a
total cost of $148.4 million. In 2001, as of January 18, the company
had bought back 30,000 additional shares for $1.4 million. Currently,
$106.1 million remains available under its share repurchase

— Formed a strategic partnership between its Morningstar Foods
subsidiary and Hershey Foods Corp. whereby Morningstar will
manufacture, sell and distribute Hershey brand name dairy products
nationally. The product launch of Hershey®’s Fat Free Chocolate
Milk, Hershey®’s 2% Reduced Fat Chocolate Milk and Hershey®’s 2%
Reduced Fat Strawberry Milk reached nationwide distribution in January

— Completed the acquisitions of Valley of Virginia, with dairy
processing plants in Springfield, Va. and Mt. Crawford, Va.;
Schenkel’s All Star Dairy, based in Huntington, Ind., which serves the
northeast Indiana market; and Poudre Valley Creamery, based in Fort
Collins, Co. These acquisitions contribute approximately $280 million
in annualized sales.

— Announced the formation of, the first business-to-business
online vertical exchange focused specifically on bringing farmers,
farm cooperatives, processors and manufacturers together in an
electronic marketplace for the exchange of goods and services, supply
chain efficiency tools and dairy farm optimization tools. In
December, was merged with INC2inc to form Momentx, thereby
combining an accomplished management team with additional access to
capital, customers and technology.

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— Completed the acquisition of Leche Celta, the fourth largest dairy in
Spain. The acquisition provides another platform for growth, improves
alignment with large retail customers with European operations and
offers greater access to advances in ultra-high temperature (UHT)

— Launched Sun Soy(TM), a non-dairy, lactose-free, cholesterol-free milk
made from soy and enriched with calcium and vitamins A, B12, D and E,
through its Morningstar subsidiary.

— Expanded the marketing area for branded milks, kidsmilk(TM) and
fitmilk(TM), targeted toward specific segments of milk-drinkers, into
New England and Michigan. The company also introduced chocolate
kidsmilk(TM) and plans additional market roll-outs in 2001.

— Entered into a long-term supply agreement to provide all private-label
milk and related dairy products to Stop & Shop stores, the largest
grocery store operator in New England.

— Sold Ferembal S.A. and Dixie Union GmbH & Co KG, the company’s
European packaging subsidiaries, leaving its 43% minority interest in
Consolidated Container as the company’s remaining packaging

— Closed and fully funded an asset securitization financing totaling
$150 million. The proceeds from the new financing were used to pay
down higher cost debt.


The company also announced that Tracy Noll, Executive Vice President and Chief Development Officer, will retire from Suiza Foods effective June 30, 2001. “Tracy has been an integral part of Suiza’s growth and success over the last seven years. We are grateful for his invaluable contributions and wish him well in his future endeavors,” said Engles. John Madden and Ron Klein, both Vice Presidents of Corporate Development for Suiza with a combined 15 years of service in the company’s corporate development group, will assume Mr. Noll’s responsibilities.

Suiza Foods Corporation, based in Dallas, is the nation’s leading dairy processor and distributor, producing a full line of company-branded and customer-branded products. National brands include International Delight®, Second Nature®, Naturally Yours®, Mocha Mix®, Sun Soy(TM), kidsmilk(TM) and fitmilk®. Regional brands consist of Adohr Farms®, Barbe’s®, Brown’s Dairy(TM), Broughton®, Country Fresh®, Dairy Gold®, Dairymen’s®, Flav-O-Rich®, Lehigh Valley Farms®, London’s®, Meadow Gold®, Model Dairy®, Natural by Garelick Farms®, Oak Farms®, Poudre Valley®, Robinson®, Schenkel’s All Star Dairy, Schepps®, Shenandoah’s Pride®, Suiza Dairy®, Louis Trauth Dairy®, Tuscan®, Velda Farms® and West Lynn Creamery®, as well as Celta® in Spain. Suiza also sells products under partner or licensed brands in certain regions, including Borden®, Lactaid®, Foremost® and Pet®. Additionally, the company owns approximately 43% of Consolidated Container Company, one of the nation’s largest manufacturers of rigid plastic containers.

The company’s historical results of operations may not be indicative of the company’s future prospects. Therefore, statements of historical fact contained in this press release should not be construed as indicators of the company’s future. The statement in this press release regarding the company’s confidence in its performance for the balance of 2001 and its estimated earnings per share for 2001 are “forward looking” statements and they are made pursuant to the safe harbor provision of the Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from statements set forth in this press release. The company’s ability to meet targeted financial results depends on a variety of economic, competitive and governmental factors, many of which are beyond the company’s control and which are described in Suiza’s filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this release. Suiza expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which such statements are based.

                             SUIZA FOODS CORPORATION
Condensed Balance Sheet
(in thousands)

December 31,
ASSETS 2000 1999

Cash and cash equivalents $31,110 $25,155
Other current assets 786,821 614,252
Total current assets 817,931 639,407

Property, plant & equipment 1,003,769 758,485

Intangibles & other assets 1,958,778 1,261,030

Total Assets $3,780,478 $2,658,922


Total current liabilities $673,228 $479,117

Long-term debt 1,244,380 689,397

Other long-term liabilities 157,661 81,181

Mandatorily redeemable TIPES 584,032 683,505

Minority interest in subsidiaries 517,380 141,750

Stockholders’ equity:
Common stock 273 293
Additional paid-in capital 166,361 275,527
Retained earnings 438,274 314,590
Other comprehensive income (1,111) (6,438)
Total stockholders’ equity 603,797 583,972

Total Liabilities and
Stockholders’ Equity $3,780,478 $2,658,922

(Dollars in thousands, except per share data)

Three months ended Twelve months ended
December 31, December 31,
2000 1999 2000 1999

Net sales $1,487,862 $1,127,909 $5,756,303 $4,481,999
Cost of sales 1,116,322 876,143 4,330,067 3,487,075

Gross profit 371,540 251,766 1,426,236 994,924

Operating costs and
expenses 270,600 181,083 1,047,285 705,484
Plant and administrative
restructurings — 4,375 3,388 12,566

Operating income 100,940 66,308 375,563 276,874

Interest expense &
financing charges on
preferred securities 37,859 19,267 146,181 87,817
Equity in earnings of
unconsolidated affiliates (125) (1,330) (10,697) (7,578)
Equity in restructuring
charges of unconsolidated
affiliates (756) 3,391 (756) 4,948
Other (income) expense 1,039 (1,699) (630) (1,416)

Income before income
taxes and minority
interest 62,923 46,679 241,465 193,103

Income taxes 22,403 19,001 90,303 75,463
Minority interest 7,120 2,320 32,446 8,813

Net income before
extraordinary items 33,400 25,358 118,716 108,827

Extraordinary gain 904 4,968 904

Net income $33,400 $26,262 $123,684 $109,731

Net income before
non-recurring items $32,970 $30,404 $120,057 $119,891

Diluted EPS before
non-recurring items $1.08 $0.91 $3.86 $3.37

Diluted cash EPS before
non-recurring items $1.25 $1.06 $4.52 $3.92

Basic earnings per share:
Income before
extraordinary items $1.23 $0.83 $4.21 $3.31
Extraordinary gain — 0.03 0.18 0.03
Net income $1.23 $0.86 $4.39 $3.34

Basic average common
shares (000’s) 27,199 30,433 28,195 32,861

Diluted earnings per share:
Income before
extraordinary items $1.09 $0.78 $3.82 $3.11
Extraordinary gain — 0.02 0.13 0.02
Net income $1.09 $0.80 $3.95 $3.13

Diluted average common
shares (000’s) 35,556 40,324 36,671 42,858

Summary Financial Information:
Depreciation $16,050 $17,223 $87,915 $77,205
Amortization of
intangibles $13,288 $9,804 $52,441 $38,513
Amortization shown in
interest expense $1,188 $224 $4,627 $890