Tuesday, 7 August 2001

Suiza Foods Corporation Delivers $1.11 in Second Quarter Diluted Earnings Per Share

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Tuesday, 7 August 2001

Suiza Announces $1.31 in Diluted Cash Earnings Per Share

DALLAS, Aug. 7 /PRNewswire/ — 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 June 30, 2001, an increase of
6.5% over the second quarter of 2000. Diluted earnings per share before
non-recurring items for the quarter totaled $1.11, an increase of 4.7% from
$1.06 in the second quarter of 2000.

Diluted cash earnings per share for the second quarter increased 4.8% to
$1.31. 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 delivered another quarter of strong results despite a
very challenging raw material environment,” said Gregg Engles, Chairman and
Chief Executive Officer of Suiza Foods. “Butterfat averaged $2.10 per pound,
up 63% over last year, and raw milk costs increased 25% to $14.21 per hundred
weight. This is clearly one of the most difficult operating environments we
have experienced, and in light of these conditions, our performance is a real
tribute to the strength of our management team.”

During the second quarter of 2000, the company recorded a one-time pretax
gain of $3.6 million related to the curtailment of certain benefit plans.
This gain had a $1.4 million impact net of taxes and minority interest, equal
to $0.03 per diluted share. Excluding this gain, diluted earnings per share
and diluted cash earnings per share would have increased 7.8% and 7.6%
respectively in the second quarter period.

Second quarter consolidated operating income before non-recurring items
totaled $102.9 million, or 6.7% of sales, compared with $104.5 million
reported in the second quarter of 2000. Excluding the curtailment gain,
operating income would have increased 1.9%, and operating margins would have
declined 30 basis points. The margin decline is due primarily to
significantly higher raw material costs in the current period.

Sales for the first six months of 2001 totaled $3.0 billion, an increase
of 6.1% over last year. Operating income before non-recurring items grew
2.8% to $187.6 million. Before non-recurring items, diluted earnings per
share totaled $1.92, an increase of 8.5% over last year, and diluted cash
earnings per share totaled $2.33, an increase of 8.9%.

RECENT HIGHLIGHTS

  • In May, the company announced an agreement with Procter & Gamble to
    launch and market Folgers Jakada(TM), a chilled coffee drink made
    from Folgers coffee and lowfat milk. Under this new licensing
    agreement Morningstar Foods will produce, promote and distribute
    Folgers Jakada, and P&G will receive a licensing fee generated from
    all Folgers Jakada sales while retaining ownership of the Folgers
    trademark. The company expects to launch Folgers Jakada in the
    fourth quarter of this year.

  • In July, Suiza filed a preliminary joint proxy statement/prospectus
    with the Securities and Exchange Commission in connection with its
    proposed merger with Dean Foods (NYSE: DF). The company intends to
    finalize and mail the proxy statement/prospectus to its shareholders
    in mid August. A separate press release was issued today to provide
    additional information regarding the company’s merger with Dean
    Foods.

  • On July 31, the company completed the syndication of its
    $2.7 billion bank financing. The proceeds will be used to provide
    funding for the Dean Foods transaction and to provide funds for
    general corporate purposes.

CONFERENCE CALL WEBCAST

A conference call to discuss the company’s second 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
and Webcasts” 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), Dairymen’s(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) 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

Some of the statements in this press release are “forward-looking” and are
made pursuant to the safe harbor provision of the Securities Litigation Reform
Act of 1995. These “forward-looking” statements include statements relating
to the company’s expectations regarding its proposed merger with Dean Foods.
These statements involve risks and uncertainties, which may 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. 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 any such statement is based.

Other Legal Information

Suiza Foods and Dean Foods have filed with the SEC a preliminary joint
proxy statement/prospectus and other relevant documents concerning the
proposed merger. In addition, Suiza Foods and Dean Foods will prepare and
file a definitive joint proxy statement/prospectus and other relevant
documents concerning the proposed merger. Investors are urged to read the
definitive joint proxy statement/prospectus, when it becomes available, and
any amendments or supplements to the definitive joint proxy
statement/prospectus as well as any other documents filed with the SEC,
because they will contain important information concerning the proposed
merger. Investors will be able to obtain the definitive joint proxy
statement/prospectus and other documents filed with the SEC free of charge at
the SEC’s website (http://www.sec.gov ). In addition, the definitive joint
proxy statement/prospectus and other documents filed by Dean Foods and Suiza
Foods with the SEC may be obtained free of charge by contacting Dean Foods,
3600 North River Road, Franklin Park, Illinois 60131, Attention: Investor
Relations (Tel: 847-678-1680) or Suiza Foods, 2515 McKinney Avenue, Suite
1200, Dallas, Texas 75201, Attention: Investor Relations (Tel: 800-431-9214).

Suiza Foods, Dean Foods and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Suiza Foods and Dean Foods in favor of the transaction.
The directors and executive officers of Suiza Foods and their beneficial
ownership of Suiza Foods common stock are set forth in the proxy statement for
the 2000 annual meeting of Suiza Foods. The directors and executive officers
of Dean Foods and their beneficial ownership of Dean Foods common stock are
set forth in the proxy statement for the 2000 annual meeting of Dean Foods.
You may obtain the proxy statements of Suiza Foods and Dean Foods free of
charge at the SEC’s website (http://www.sec.gov ). Stockholders of Suiza
Foods and Dean Foods may obtain additional information regarding the interest
of such participants by reading the joint proxy statement/prospectus.

                              (Tables to follow)

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

                                 Three months ended       Six months ended
                                      June 30,                June 30,
                                  2001        2000        2001        2000

    Net sales                  $1,527,074  $1,434,354  $3,001,427  $2,828,495
    Cost of sales               1,163,947   1,074,136   2,281,774   2,128,118

      Gross profit                363,127     360,218     719,653     700,377

    Operating costs and
     expenses                     260,225     255,712     532,030     517,785
    Plant closing costs               ---       1,190         843       2,964

      Operating income            102,902     103,316     186,780     179,628


    Interest expense &
     financing charges on
     preferred securities          34,329      35,309      70,027      70,940
    Equity in earnings of
     unconsolidated affiliates     (1,186)     (3,535)     (2,859)     (5,404)
    Other (income) expense           (189)       (528)        502      (1,075)

      Income before income
       taxes and minority
       interest                    69,948      72,070     119,110     115,167

    Income taxes                   25,982      27,700      44,649      43,879
    Minority interest               9,363      10,837      16,341      17,161

        Net income before
         extraordinary items       34,603      33,533      58,120      54,127

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

        Net income                $34,603     $33,533     $56,674     $59,095

        Net income before non-
         recurring items          $34,603     $34,352     $58,449     $55,626

    Diluted EPS before non-
     recurring items                $1.11       $1.06       $1.92       $1.77

    Diluted cash EPS before
     non-recurring items            $1.31       $1.25       $2.33       $2.14

    Basic earnings per share:
        Income before
         extraordinary items        $1.26       $1.16       $2.11       $1.87
        Extraordinary gain            ---         ---         ---        0.17
        Cumulative effect of
         accounting change            ---         ---       (0.05)        ---
        Net income                  $1.26       $1.16       $2.06       $2.04

        Basic average common
         shares (000's)            27,560      28,897      27,458      28,984

    Diluted earnings per
     share:
        Income before
         extraordinary items        $1.11       $1.04       $1.91       $1.73
        Extraordinary gain            ---         ---         ---        0.13
        Cumulative effect of
         accounting change            ---         ---       (0.04)        ---
        Net income                  $1.11       $1.04       $1.87       $1.86

        Diluted average common
         shares (000's)            36,114      37,322      35,948      37,470

    Summary Financial
     Information:
      Depreciation                $24,008     $24,052     $47,830     $48,097
      Amortization of
       intangibles                $13,457     $12,994     $26,798     $25,699
      Amortization shown in
       interest expense              $666      $1,141      $1,332      $2,265


                             SUIZA FOODS CORPORATION
                             Condensed Balance Sheet
                                 (in thousands)

                                                   June 30,       December 31,
    ASSETS                                          2001              2000

    Cash and cash equivalents                      $22,938           $31,110
    Other current assets                           795,980           786,821
      Total current assets                         818,918           817,931

    Property, plant & equipment                  1,006,372         1,003,769

    Intangibles & other assets                   1,935,678         1,958,778

        Total Assets                            $3,760,968        $3,780,478


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Total current liabilities                     $689,071          $699,908

    Long-term debt                               1,135,563         1,225,045

    Other long-term liabilities                    171,553           157,816

    Mandatorily redeemable TIPES                   584,323           584,032

    Minority interest in subsidiaries              524,271           514,845

    Stockholders' equity:
      Common stock                                     277               273
      Additional paid-in capital                   182,151           166,361
      Retained earnings                            489,983           433,309
      Other comprehensive income                   (16,224)           (1,111)
        Total stockholders' equity                 656,187           598,832

        Total Liabilities and
         Stockholders' Equity                   $3,760,968        $3,780,478


                               Segment Information
                              (Dollars in Thousands)

                                 Three Months Ended       Six Months Ended
                                      June 30,               June 30,
                                  2001        2000        2001        2000
    Revenue
      Suiza Dairy Group        $1,242,045  $1,165,529  $2,444,862  $2,287,534
      Morningstar Foods           186,203     169,440     359,702     328,644
      Corporate / Other            98,826      99,385     196,863     212,317
      Consolidated             $1,527,074  $1,434,354  $3,001,427  $2,828,495

    Operating Income before
     Non-Recurring Items
      Suiza Dairy Group           $75,930     $82,299    $143,655    $144,697
      Morningstar Foods            24,748      23,337      46,265      43,790
      Corporate / Other             2,224      (1,130)     (2,297)     (5,895)
      Consolidated               $102,902    $104,506    $187,623    $182,592

                    MAKE YOUR OPINION COUNT -  Click Here
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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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