Wednesday, 7 November 2001

Suiza Foods Corporation Announces Third Quarter Results; Company Reports Operating Results in Line With Expectations Despite Difficult Environment

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Wednesday, 7 November 2001

DALLAS, Nov. 7 /PRNewswire/ — Suiza Foods Corporation (NYSE: SZA), the
nation’s leading dairy processor and distributor, today announced net sales
grew 8.0% over the third quarter of 2000 to $1.6 billion for the quarter ended
September 30, 2001. Diluted earnings per share before non-recurring items for
the quarter totaled $0.98, a decline of 3.9% from $1.02 in the third quarter
of 2000. As previously announced, the decline in earnings per share was
entirely attributable to weaker than expected results at Consolidated
Container Company, the packaging business in which Suiza owns a 43% interest.
Had Consolidated Container’s results been in line with expectations, Suiza
would have reported diluted earnings per share of $1.10, growth of 7.8% over
the prior year and consistent with consensus estimates.

Diluted cash earnings per share before non-recurring items for the third
quarter totaled $1.18 compared with $1.23 in the prior year comparable period.
Excluding Consolidated Container’s shortfall, cash earnings per share would
have been $1.30, an increase of 5.7% over the prior year third quarter. The
calculation of cash earnings per share excludes amortization of goodwill and
certain intangibles as if the recently issued Financial Accounting Standard
No. 142, “Goodwill and Other Intangible Assets” had been effective for the
periods.

“Our operating units turned in solid performances in spite of continued
high raw material prices and softness in volumes due to September 11th,” said
Gregg Engles, Chairman and Chief Executive Officer of Suiza Foods Corporation.
“Our operating results this quarter once again demonstrate our ability to
manage through a difficult environment.”

Third quarter consolidated operating income before non-recurring items
grew 2.9% to $98.2 million, or 6.3% of sales, compared with $95.4 million
reported in the third quarter of 2000. Consolidated operating margin before
non-recurring items declined 32 basis points due to high raw material costs
during the quarter. Butterfat averaged $2.32 per pound during the quarter, up
82% over the prior year, and raw milk averaged $15.43 per hundred weight, 28%
higher than the third quarter of 2000.

Sales for the first nine months of 2001 totaled $4.6 billion, an increase
of 6.8% over last year. Operating income before non-recurring items for the
nine months grew 2.8% to $285.8 million. Before non-recurring items, diluted
earnings per share totaled $2.90, an increase of 4.3% over last year, and
diluted cash earnings per share totaled $3.50, an increase of 4.2%. Excluding
Consolidated Container’s shortfall in the third quarter, diluted earnings per
share before non-recurring items would have risen 8.6% to $3.02 and diluted
cash earnings per share would have been $3.62, an increase of 7.7%.

RECENT DEVELOPMENTS

  • During the third quarter, Suiza’s Morningstar subsidiary began bottling
    and distributing Hershey(R)’s flavored milks and milkshakes in plastic
    bottles, using new European extended-shelf-life technology that was
    successfully installed in the company’s Mt. Crawford plant in Virginia.
    The flavored milks are available in fat free chocolate, 2% reduced fat
    chocolate and 2% reduced fat strawberry; and the new milkshakes are
    available in creamy chocolate and cookies-n-cream. The new flavored
    milks and shakes will have a longer shelf life of up to 60 days. The
    company anticipates installing another line in spring 2002 to meet
    increasing demand.

  • In September, both Suiza and Dean Foods (NYSE: DF) independently
    announced that their shareholders approved the proposed merger. The
    companies continue to await regulatory approval from the Department of
    Justice.

“We believe that we are near completion of the process, and we continue to
expect to close the transaction by year end,” said Engles.

CONFERENCE CALL WEBCAST

A conference call to discuss the company’s third quarter financial
performance and the outlook for the balance of the year, including an update
on the company’s pending merger with Dean Foods, will be held at 10:00 a.m.
eastern today. The call may be heard live by visiting the “Conference Calls
Online” section of the company web site at www.suizafoods.com .

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(R),
Second Nature(R), Naturally Yours(R), Mocha Mix(R), Sun Soy(TM), kidsmilk(TM)
and fitmilk(R). Regional brands include Adohr Farms(R), Barbe’s(R),
Broughton(R), Brown’s Dairy(TM), Country Delite(R), Country Fresh(R), Dairy
Gold(R), Dairymens(R), Flav-O-Rich(R), Garelick Farms(R), Hygeia(R), Lehigh
Valley Farms(R), London’s(R), Meadow Gold(R), Model Dairy(R), Oak Farms(R),
Poudre Valley(R), Robinson(R), Schenkel’s All Star Dairy, Schepps(R),
Shenandoah’s Pride(R), Suiza Dairy(R), Swiss Dairy(TM), Louis Trauth Dairy(R),
Tuscan(R) and Velda Farms(R), as well as Celta(R) in Spain. Suiza also sells
products under partner or licensed brands in certain regions, including
Borden(R), Foremost(R), Hershey(R)’s and Pet(R). Additionally, the company
owns approximately 43% of Consolidated Container Company, one of the nation’s
largest manufacturers of rigid plastic containers.

Forward-Looking Statement

The statement in this press release regarding the expected timing for
completion of the proposed merger with Dean Foods is “forward-looking” and is
made pursuant to the safe harbor provision of the Securities Litigation Reform
Act of 1995. This statement involves risks and uncertainties that could cause
results to differ materially from the statements set forth in this press
release. The company’s ability to close the proposed transaction on the terms
and in the timeframe contemplated depends primarily on the company’s ability
to obtain regulatory approval for the transaction on the terms and within the
timeframe contemplated. Other risks relating to the proposed merger with Dean
Foods are identified in the joint press release of the company and Dean Foods
filed by the company with the Securities and Exchange Commission with its
Form 8-K dated April 5, 2001, as amended on April 10, 2001. Risks regarding
the company’s business are set forth in its quarterly report on Form 10-Q for
the quarter ended June 30, 2001. The forward-looking statement in this press
release speaks only as of the date of this release. Suiza expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to
such statement to reflect any change in its expectations with regard thereto
or any changes in the events, conditions or circumstances on which such
statement is based.

                              (Tables to follow)


                           SUIZA FOODS CORPORATION
                           Condensed Balance Sheet
                            (Dollars in thousands)

                                               September 30,      December 31,
    ASSETS                                          2001              2000

    Cash and cash equivalents                      $25,761           $31,110
    Other current assets                           868,693           786,821
      Total current assets                         894,454           817,931

    Property, plant & equipment                  1,011,645         1,003,769

    Intangibles & other assets                   1,926,679         1,958,778

        Total Assets                            $3,832,778        $3,780,478


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Total current liabilities                     $719,007          $699,908

    Long-term debt                               1,119,087         1,225,045

    Other long-term liabilities                    200,281           157,816

    Mandatorily redeemable TIPES                   584,459           584,032

    Minority interest in subsidiaries              515,472           514,845

    Stockholders' equity:
      Common stock                                     281               273
      Additional paid-in capital                   199,593           166,361
      Retained earnings                            519,405           433,309
      Other comprehensive income                   (24,807)           (1,111)
        Total stockholders' equity                 694,472           598,832

        Total Liabilities and
         Stockholders' Equity                   $3,832,778        $3,780,478


                             Segment Information
                            (Dollars in Thousands)

                                 Three Months Ended      Nine Months Ended
                                   September 30,           September 30,
                                  2001        2000        2001        2000
    Revenue
      Suiza Dairy Group        $1,272,119  $1,176,168  $3,716,980  $3,463,702
      Morningstar Foods           184,105     175,473     543,807     504,118
      Corporate / Other            99,507      88,306     296,371     300,622
      Consolidated             $1,555,731  $1,439,947  $4,557,158  $4,268,442

    Operating Income before
     Non-Recurring Items
      Suiza Dairy Group           $76,143     $71,817    $219,298    $216,014
      Morningstar Foods            21,825      25,415      68,090      69,205
      Corporate / Other               199      (1,813)     (1,597)     (7,208)
      Consolidated                $98,167     $95,419    $285,791    $278,011


                           SUIZA FOODS CORPORATION
                (Dollars in thousands, except per share data)

                                 Three months ended      Nine months ended
                                   September 30,           September 30,
                                  2001        2000        2001        2000

    Net sales                  $1,555,731  $1,439,947  $4,557,158  $4,268,442
    Cost of sales               1,195,435   1,085,627   3,477,209   3,213,745

      Gross profit                360,296     354,320   1,079,949   1,054,697

    Operating costs and
     expenses                     262,129     258,901     794,158     776,685
    Plant closing costs               ---         424         843       3,388

      Operating income             98,167      94,995     284,948     274,624

    Interest expense & financing
     charges on preferred
     securities                    31,653      37,382     101,680     108,322
    Equity in (earnings) loss
     from unconsolidated
     affiliates                     3,700      (5,169)        841     (10,572)
    Equity in restructuring
     charges of unconsolidated
     affiliates                     1,724         ---       1,724         ---
    Other (income) expense          1,097        (594)      1,600      (1,670)

      Income before income taxes
       and minority interest       59,993      63,376     179,103     178,544

    Income taxes                   20,803      24,021      65,452      67,901
    Minority interest               9,768       8,166      26,109      25,327

      Net income before
       extraordinary items         29,422      31,189      87,542      85,316

    Extraordinary gain                ---         ---         ---       4,968
    Cumulative effect of
     accounting change                ---         ---      (1,446)        ---

      Net income                  $29,422     $31,189     $86,096     $90,284

      Net income before
       non-recurring items        $30,408     $31,461     $88,857     $87,087

    Diluted EPS before
     non-recurring items            $0.98       $1.02       $2.90       $2.78

    Diluted cash EPS before
     non-recurring items            $1.18       $1.23       $3.50       $3.36

    Basic earnings per share:
      Income before extraordinary
       items                        $1.06       $1.13       $3.17       $2.99
      Extraordinary gain              ---         ---         ---        0.17
      Cumulative effect of
       accounting change              ---         ---       (0.05)        ---
      Net income                    $1.06       $1.13       $3.12       $3.16

      Basic average common
       shares (000's)              27,861      27,624      27,595      28,531

    Diluted earnings per share:
      Income before extraordinary
       items                        $0.95       $1.01       $2.86       $2.73
      Extraordinary gain              ---         ---         ---        0.14
      Cumulative effect of
       accounting change              ---         ---       (0.04)        ---
      Net income                    $0.95       $1.01       $2.82       $2.87

      Diluted average common
       shares (000's)              36,604      36,198      36,180      37,062

    Summary Financial Information:
      Depreciation                $23,748     $23,768     $71,578     $71,865
      Amortization of intangibles $13,116     $13,532     $39,914     $39,231
      Amortization shown in
       interest expense              $643        $558      $1,975      $2,823

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SOURCE Suiza Foods Corporation

CONTACT: Cory M. Olson, Vice President and Treasurer, +1-214-303-3645,
or P.I. Aquino, Assistant Treasurer, +1-214-303-3437, both of Suiza Foods
Corporation/

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