Wednesday, 21 March 2001

Dean Foods Reports Third Quarter Earnings

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Wednesday, 21 March 2001

FRANKLIN PARK, Ill., March 21 /PRNewswire/ — Dean Foods Company
(NYSE: DF) today announced its third quarter and year-to-date fiscal 2001
results.

Third quarter sales increased 11.9% to $1,093.3 million, compared to
$976.8 million in the third quarter of fiscal 2000. Acquisitions in the Dairy
and Specialty Foods Groups, along with continued growth of nationally branded
products in the National Refrigerated Products Group, drove the sales
increase. Net income was $16.7 million, compared to $25.2 million in the
third quarter of fiscal 2000. Diluted earnings per share declined to $0.47
from $0.67 last year. Operating earnings were $45.9 million, compared to
$54.5 million in the third quarter of fiscal 2000. Net interest expense was
$5.4 million higher as a result of higher debt levels for acquisitions and
fiscal 2000 share repurchases.

Year-to-date sales were $3,251.1 million, a 6.8% increase over fiscal
2000. Net income for the first nine months was $72.9 million compared to
$80.0 million last year. Diluted earnings per share were $2.04 versus $2.05
in fiscal 2000. Net income and earnings per share in fiscal 2001 include a
$6.2 million after-tax gain ($0.18 per diluted share) on the sale of a note
associated with the fiscal 1999 divestiture of the Company’s vegetables
segment.

The Dairy Group’s third quarter sales increased 9.0% to $806.6 million
from $739.7 million last year. The increase was due primarily to
acquisitions. Operating earnings increased 1.5%, to $32.9 million from
$32.4 million in the prior year. The Dairy Group’s earnings were negatively
impacted by lower fluid volumes in certain markets, increased energy and fuel
costs, and higher raw milk and butterfat costs.

The Specialty Foods Group reported sales of $185.4 million in the third
quarter compared to $166.4 million in the prior year. The sales increase was
primarily due to the acquisition of a pickles business at the beginning of the
fiscal year. Earnings, however, decreased slightly from $18.6 to
$18.2 million, as the quarter reflected lower gross margins resulting from
increased competition and higher energy costs, especially for powdered and
aseptic products.

The Company continued to generate substantial revenue growth in its
National Refrigerated Products (NRP) Group. Sales increased 43.3% in the
third quarter and 36.1% year-to-date as a result of growth in sales of
intermediate and extended shelf life products and new products. New product
introductions, including Dips-for-One and Marie’s pourable salad dressings,
continued to progress well in the third quarter.

Operating earnings in the NRP Group were $2.7 million, versus $9.6 million
in the third quarter of last year, as the Company continued to support new
product introductions by investing approximately $4.0 million in the third
quarter, and a total of $16.0 million during the first nine months of the year
in marketing and promotional programs. Costs associated with the significant
ramp-up of complex, state-of-the-art technology to produce intermediate and
extended shelf life products also impacted third quarter earnings by
approximately $2.0 million. The Company is focused on improving the
production processes and continued progress is expected throughout the
remainder of the year, although inefficiencies are expected to impact the
fourth quarter.

Howard Dean, Chairman and Chief Executive Officer, commented, “We are
obviously disappointed in the performance of the third quarter and in the
projections for the rest of the year. This has been a challenging year for
all of our businesses, with cost increases, challenges with the technology to
produce intermediate and extended shelf life products, and increased
competition in certain of our product lines. We are pleased, however, with
the continued strong demand for our products, especially in the National
Refrigerated Products Group. We are taking a number of steps to address the
operational issues, including further cost savings initiatives and pricing
adjustments. We also recently announced that we are working with Goldman,
Sachs & Co. to explore strategic and financial alternatives. This is an
ongoing process and the Company’s management will carefully consider
alternatives.”

The Company expects full year diluted earnings per share in the range of
$2.50 to $2.55 per share for fiscal 2001. This estimate excludes the
$6.2 million after-tax gain ($0.18 per diluted share) on the sale of the note
associated with the fiscal 1999 divestiture of the vegetables segment.

Dean Foods is one of the nation’s leading dairy processors and
distributors producing a full line of branded and private label products,
including fluid milk, ice cream and extended shelf life products, which are
sold under the Dean’s and other strong regional brand names. Dean Foods is
the industry leader in other food products including pickles, powdered non-
dairy coffee creamers, aseptically packaged foodservice products, and
refrigerated dips and salad dressings. More information about Dean Foods can
be found on its web site at http://www.deanfoods.com .

The Company’s quarterly earnings conference call will be held today at
8:00 a.m. Central Time. The call may be heard live at the Company’s web site,
http://www.deanfoods.com , using Real Player8 Basic Software. The basic version of
Real Player8 may be downloaded at no charge from
http://www.real.com/products/player/index.html prior to the call. Please allow
approximately 15 minutes to download the software. Replays will be available
at the same internet address.

Certain statements in this press release are forward-looking as defined by
the Private Securities Litigation Reform Act of 1995. These statements
involve certain risks and uncertainties that may cause actual results to
differ materially from expectations as of the date of this press release.
These risks include, but are not limited to, the ability to integrate
acquisitions, adverse weather conditions resulting in poor harvest conditions,
raw milk, resin, and fuel costs, interest rate fluctuations, the level of
promotional spending, competitive pricing pressures, the effectiveness of
marketing and cost-management programs and shifts in the market demand.



                                DEAN FOODS COMPANY
                    CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
                   (In millions, except for per share amounts)


                          Third Quarter Ended            Nine Months Ended
                        Feb. 25,        Feb. 27,        Feb. 25,     Feb. 27,
                         2001             2000            2001         2000

    Net sales           $1,093.3         $976.8         $3,251.1     $3,045.2

    Costs of
      products sold        844.5          743.3          2,492.5      2,333.3

    Delivery, selling
      and administrative
      expenses             202.9          179.0             597.2       544.2

    Operating earnings      45.9           54.5             161.4       167.7

    Interest expense, net of
     interest income        18.6           13.2              53.3        36.5

    Gain on sale of note       -              -              10.0           -

    Income before
      income taxes          27.3           41.3             118.1       131.2

    Provision for
      income taxes          10.6           16.1              45.2        51.2

    Net income             $16.7          $25.2             $72.9       $80.0

    Net income per share:
      Basic                 $.47           $.67             $2.05       $2.07
      Diluted               $.47           $.67             $2.04       $2.05

    Weighted average
      common shares:
      Basic                 35.6           37.3             35.5         38.6
      Diluted               35.7           37.7             35.7         39.1



                                DEAN FOODS COMPANY
                           BUSINESS SEGMENT INFORMATION
                                   (Unaudited)
                                  (In Millions)

    For the Three Months Ended February 25, 2001 and February 27, 2000

                                      National
                           Specialty Refrigerated
                    Dairy     Foods   Products    Corporate   Consolidated
    Fiscal 2001
    Net sales      $ 806.6   $ 185.4  $ 101.3    $     -        $1,093.3
    Operating
      earnings     $  32.9   $ 18.2   $   2.7    $  (7.9)       $   45.9


    Fiscal 2000
    Net sales      $ 739.7   $166.4   $  70.7    $     -        $  976.8
    Operating
      earnings     $  32.4   $ 18.6   $   9.6    $  (6.1)       $   54.5

    For the Nine Months Ended February 25, 2001 and February 27, 2000

                                      National
                           Specialty Refrigerated
                   Dairy      Foods   Products   Corporate   Consolidated
    Fiscal 2001
    Net sales     $2,407.3   $ 555.9  $ 287.9    $     -        $3,251.1
    Operating
      earnings    $  118.4   $  61.6  $   7.1    $ (25.7)       $  161.4


    Fiscal 2000
    Net sales     $2,312.1   $ 521.5  $ 211.6    $     -        $3,045.2
    Operating
      earnings      $103.4   $  63.8  $  27.9    $ (27.4)       $  167.7




                                DEAN FOODS COMPANY

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                   (Unaudited)

                                  (In millions)


                                               February 25,         May 28,
                                                  2001               2000
                   ASSETS
    Current Assets:
        Cash and temporary cash
         investments                        $      41.0         $      26.6
        Accounts and notes receivable,
         net of allowance for doubtful
         accounts                                 330.2               302.6
        Inventories                               223.7               178.4
        Other current assets                       75.2                92.8

             Total current assets                 670.1               600.4

    Property, Plant and Equipment, net            920.4               815.2

    Other Assets                                  711.5               587.9

             Total Assets                   $   2,302.0         $   2,003.5


    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
        Current installments of long-term
         obligations                        $       5.1         $       3.6
        Accounts payable and accrued
         expenses                                 431.4               396.4
        Dividends payable                           8.1                 7.9
        Federal and state income taxes             41.1                41.2

             Total current liabilities            485.7               449.1

    Long-Term Obligations                         972.7               758.7

    Deferred Liabilities                          134.7               138.0

    Shareholders' Equity                          708.9               657.7

             Total Liabilities and
              Shareholders' Equity          $   2,302.0         $   2,003.5


SOURCE  Dean Foods Company


Web site: http://www.deanfoods.com

Company News On-Call: http://www.prnewswire.com/comp/109161.htmlor fax, 800-758-5804, ext. 109161

CONTACT: Richard Bailey, President and Chief Operating Officer,Barbara Klein, V. P., Finance and Chief Financial Officer, bothof Dean Foods, 847-678-1680

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