Thursday, 2 November 2000

Suiza Foods Corporation Reports Record Third Quarter Diluted Earnings Per Share of $1.02

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Thursday, 2 November 2000

DALLAS, Nov. 2 /PRNewswire/ — Suiza Foods Corporation (NYSE: SZA), the
nation’s leading dairy processor and distributor, today announced record sales
of $1.4 billion for the quarter ended September 30, 2000, an increase of 33.1%
from $1.1 billion in the same period in 1999. Third quarter net income was
$31.2 million, an increase of 2.4% compared with $30.4 million in the prior
year period. Diluted earnings per share before non-recurring items increased
12.1% to $1.02, compared with $0.91 in the third quarter of 1999.

“We are pleased to report our 19th consecutive quarter of record sales and
earnings per share,” said Gregg Engles, Chairman and Chief Executive Officer
of Suiza Foods. “Dairy Group fluid milk volumes were strong in the quarter,
increasing 1.6% over last year. Our Morningstar operations also performed
well, with sales up 11.1% and operating margins improving 300 basis points
over last year. Our core food businesses remain strong and the operating
environment appears stable as we head into the balance of this year and into

Third quarter operating income before non-recurring items increased 35.8%
to $95.4 million, compared with $70.3 million in the 1999 third quarter.
Consolidated operating margins before non-recurring items for the quarter were
6.6%, an improvement of 13 basis points from the prior year period. In the
third quarter, the company recorded a charge of $0.4 million related to
corporate restructuring and severance.

Diluted cash earnings per share before non-recurring items for the third
quarter totaled $1.19, an increase of 15.2% over last year. Cash earnings per
share is defined as earnings per share before goodwill amortization, net of
the related income tax effects.


Sales for the first nine months of 2000 totaled $4.3 billion, an increase
of 27.3% over last year. Operating income before non-recurring items grew
27.1% to $278.0 million. Net income was $90.3 million compared with
$83.5 million in 1999.

Diluted earnings per share excluding non-recurring items for the first
nine months of 2000 totaled $2.78, an increase of 19.8% over last year,
excluding the effects of the U.S. packaging business, which was sold in July
1999, and diluted cash earnings per share grew 22.0% to $3.27.


Most recently, Suiza:

  • Announced that its Morningstar Foods subsidiary formed a strategic
    partnership with Hershey Foods Corp. whereby Morningstar will
    manufacture, sell and distribute Hershey brand name dairy products
    nationally. The agreement couples the significant brand recognition
    of the Hershey name with Morningstar’s manufacturing, marketing and
    distribution strength. The product launch of the three new flavors —
    Hershey(R)’s Fat Free Chocolate Milk, Hershey(R)’s 2% Reduced Fat
    Chocolate Milk and Hershey(R)’s 2% Reduced Fat Strawberry Milk —
    began regionally in September and is expected to reach nationwide
    distribution in January 2001.

  • Repurchased 3.3 million common shares in 2000 as of October 16 at a
    total investment of $148.4 million. The company also announced today
    that it has increased its share repurchase program by $100 million,
    resulting in a total authorization of $107.5 million.

  • Promoted John Robinson to Senior Vice President of Sales and Marketing
    for Suiza Dairy Group and welcomed Bill Tinkelpaugh to the position of
    Senior Vice President of Government and Industry Relations. Mr.
    Robinson most recently served as President of Robinson Dairy in
    Colorado. Mr. Robinson replaces Mike Hogan, Senior Vice President and
    Chief Marketing Officer, who announced his resignation effective
    November 30, 2000. Mr. Tinkelpaugh, based in Arlington, Va., has more
    than 27 years of agricultural and dairy industry experience and most
    recently served as president and CEO of Master Dairies, a privately-
    held purchasing association that represents milk companies with plants
    throughout the United States and Canada.

A conference call to discuss the company’s financial results and outlook
will be held at 10:00 a.m. eastern today. The call may be heard live by
visiting the Conference Calls section of the company’s web site at

Suiza Foods Corporation, based in Dallas, Texas, 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(TM). Regional brands consist of Adohr Farms(R), Barbe’s(R),
Brown’s Dairy(TM), Broughton(R), Country Fresh(R), Dairymen’s(R), Flav-O-
Rich(R), Lehigh Valley Farms(R), London’s(R), Meadow Gold(R), Model Dairy(TM),
Garelick Farms(TM), Oak Farms(R), Robinson(R), Schepps(R), Shenandoah’s
Pride(R), Suiza(TM), Louis Trauth(TM), Tuscan(R), Velda Farms(R) and West Lynn
Creamery(R), as well as Celta(R) in Spain. Suiza also sells products under
partner or licensed brands in certain regions, including Borden(R),
Lactaid(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.

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 about its performance for the balance of 2000 and into 2001 is a
“forward-looking” statement and it is made pursuant to the safe harbor
provision of the Securities Litigation Reform Act of 1995. This statement
involves risks and uncertainties that may cause results to differ materially
from the statement 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 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 any such statement is based.

                           SUIZA FOODS CORPORATION
                           Condensed Balance Sheet
                                (in thousands)

                                                 September 30,  December 31,
    ASSETS                                           2000           1999

    Cash and cash equivalents                        $42,997        $25,155
    Other current assets                             737,258        614,252
      Total current assets                           780,255        639,407

    Property, plant & equipment                      975,627        758,485

    Intangibles & other assets                     1,927,873      1,261,030

      Total Assets                                $3,683,755     $2,658,922


    Total current liabilities                       $628,754       $479,117

    Long term debt                                 1,282,521        689,397

    Other long-term liabilities                      115,911         81,181

    Mandatorily redeemable TIPES                     583,891        683,505

    Minority interest in subsidiaries                508,283        141,750

    Stockholders' equity:
      Common stock                                       272            293
      Additional paid-in capital                     163,648        275,527
      Retained earnings                              404,873        314,590
      Other comprehensive income                      (4,398)        (6,438)
        Total stockholders' equity                   564,395        583,972

        Total Liabilities and Stockholders'
         Equity                                   $3,683,755     $2,658,922

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

                               Three months ended       Nine months ended
                                 September 30,            September 30,
                              2000         1999          2000        1999

    Net sales             $1,439,947    $1,082,060   $4,268,442  $3,354,090
    Cost of sales          1,085,627       834,410    3,213,745   2,610,932

      Gross profit           354,320       247,650    1,054,697     743,158

    Operating costs and
     expenses                258,901       177,400      776,685     524,402
    Plant and administrative
     restructurings              424         3,520        3,388       8,191

      Operating income        94,995        66,730      274,624     210,565

    Interest expense &
     financing charges on
     preferred securities     37,382        18,079      108,322      68,551
    Equity in earnings of
     affiliates               (5,169)       (4,692)     (10,572)     (4,692)
    Other (income) expense      (594)          384       (1,670)        283

    Income before income
     taxes and minority
     interest                 63,376        52,959      178,544     146,423

    Income taxes              24,021        20,359       67,901      56,462
    Minority interest          8,166         2,151       25,327       6,493

      Net income before
       extraordinary items    31,189        30,449       85,316      83,468

    Extraordinary gain                                    4,968

      Net income             $31,189       $30,449      $90,284     $83,468

      Net income before
       nonrecurring items    $31,461       $33,602      $87,087     $89,486

    Diluted EPS before
     nonrecurring items        $1.02         $0.91        $2.78       $2.45

    Diluted cash EPS before
     nonrecurring items        $1.19         $1.03        $3.27       $2.86

    Basic earnings per share:
      Income before
       extraordinary items     $1.13         $0.90        $2.99       $2.48
      Extraordinary gain         ---           ---         0.17         ---
      Net income               $1.13         $0.90        $3.16       $2.48

      Basic average common
       shares (000's)         27,624        33,666       28,531      33,680

    Diluted earnings per share:
      Income before
       extraordinary items     $1.01         $0.83        $2.73       $2.32
      Extraordinary gain         ---           ---         0.14         ---
      Net income               $1.01         $0.83        $2.87       $2.32

      Diluted average common
       shares (000's)         36,198        43,642       37,062      43,772

    Summary Financial Information:
      Depreciation           $23,768       $17,243      $71,865     $59,983
      Amortization           $14,090        $8,926      $42,054     $29,388

SOURCE Suiza Foods Corporation

CONTACT: Cory M. Olson, Vice President and Treasurer of Suiza Foods
Corporation, 214-303-3645/

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