YOCREAM International, Inc. (Nasdaq: YOCM), a manufacturer and wholesaler of frozen desserts and smoothies, today reported the financial results for the fourth quarter and fiscal year ended October 31, 2000.

For the twelve months, sales of $15.1 million increased 5.8% from $14.3 million, and net income increased .7% to $1,025,000, or $.45 per share compared to $1,018,000, or $.43 per share in 1999. Gross margins of 32.4% reflected over a 1% increment due to supply chain management and production efficiencies. The Company also enjoyed over a 5% increase in income from operations.

“The year was a stable one that enabled us to concentrate on plant expansion,” commented CEO John Hanna. “We are investing more than $2,000,000 in plant and equipment. Fiscal 2000 investments of approximately $900,000 were substantially funded from cash flow, and that still allowed us to earn a 27% return on average equity prior to income taxes.” The plant expansion was concentrated in the last fiscal quarter of 2000, and will be completed by the end of fiscal year 2001’s first quarter.

“A major capital project is always a diversion,” Hanna said. “Sales and net profit for the fourth quarter were essentially the same as the previous year, but the investment in plant and equipment is indicative of our commitment to customers and to the market place.” The project is expected to more than double production capacity, automate a number of production processes, and upgrade bottling and bag-in-box filling capabilities. “We are now poised to roll out a superb coffee smoothie product to one of our major customers, and we are in the process of aggressively pursuing new co-packaging opportunities.”

Douglas Caudell, Chief financial Officer, stated that during fiscal year 2000, YOCREAM repurchased 98,710 shares of its common stock pursuant to a board-approved plan. It has been the Company’s practice to repurchase shares of its stock, from time to time, depending on market conditions and the availability of funds, because management believes that the Company’s stock is undervalued.

Caudell also pointed out that “book value at October 31, 2000 is $2.69 per share and cash and equivalents are $719,000, even after funding plant project expenditures, to date, with internal cash flow.”

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YOCREAM International, Inc. makes, markets and sells frozen desserts, snacks and smoothies throughout the United States and in several foreign countries. It sells primarily to food distributors and wholesale clubs; and the company’s products are available in restaurants, convenience stores, schools, hospitals, corporate cafeterias and wholesale clubs.

This release may contain certain forward-looking statements, which are based on management’s current expectations. Factors that could cause future results to vary materially from these expectations include, but are not limited to, change in distribution abilities, level of customer acceptance of new products, change in co-packing relationships and strategic alliances and other economic, competitive, governmental, regulatory and factors affecting the company’s operations, pricing, products and service. For a more complete discussion of the risks associated with forward-looking information, refer to the Risk Factors contained in the company’s Form 10-K which is expected to be filed with the Securities and Exchange Commission on January 29, 2001.

                         YOCREAM INTERNATIONAL, INC.

Three Months Ended Fiscal Year Ended
October 31, October 31,
2000 1999 2000 1999

Sales $3,799,634 $3,834,629 $15,088,532 $14,259,358
Cost of goods sold 2,519,244 2,698,143 10,196,307 9,814,338

Gross profit 1,280,390 1,136,486 4,892,225 4,445,020

Selling, general and
administrative expenses 964,786 771,848 3,349,488 2,976,575

Income from
operations 315,604 364,638 1,542,737 1,468,445

Other income, net 31,817 13,649 30,181 (44,379)

Income before
income taxes 347,421 378,287 1,572,918 1,424,066

Income tax provision 84,800 112,800 548,000 406,000

Net income $262,621 $265,487 $1,024,918 $1,018,066

Earnings per common
share — basic $0.12 $0.11 $0.45 $0.44
Earnings per common
share — diluted $0.12 $0.11 $0.45 $0.43
Shares used in basic
earnings per share 2,261,814 2,309,343 2,282,180 2,314,861
Shares used in diluted
earnings per share 2,274,744 2,360,249 2,303,639 2,371,351


October 31,

2000 1999

Current assets
Cash and cash equivalents $719,139 $737,408
Trade accounts receivable,
net of allowance for doubtful
accounts of $20,586 in 2000 and
$25,827 in 1999 997,076 1,061,618
Inventories 2,497,413 2,626,162
Other current assets 159,176 212,116

Total current assets 4,372,804 4,637,304

Fixed assets, net 2,706,420 1,983,669
Deferred income taxes 54,000 467,000
Intangible and other long-term assets, net 293,351 268,942

$7,426,575 $7,356,915


Current liabilities
Current portion of long-term debt $106,675 $96,227
Current obligations under capital leases — 16,383
Accounts payable 880,882 1,529,732
Other accrued liabilities 183,453 161,605

Total current liabilities 1,171,010 1,803,947

Long-term debt, less current portion 125,073 201,238

Total liabilities 1,296,083 2,005,185

Shareholders’ equity
Preferred stock, no par value,
5,000,000 shares authorized,
none issued or outstanding — —

Common stock, no par value,
30,000,000 shares authorized 4,862,541 5,108,697
Retained earnings 1,267,951 243,033

Total shareholders’ equity 6,130,492 5,351,730

$7,426,575 $7,356,915