Del Monte Foods Company (NYSE: DLM) today reported earnings per share, as adjusted, of $0.03, for the fiscal 2002 first quarter, compared to $0.08 for the same period in fiscal 2001. Net sales, as
adjusted, for the quarter were $273.6 million, compared to $263.0 million for the first fiscal quarter of 2001. Net income, as adjusted, for the quarter was $1.4 million compared to $4.0 million for the same quarter last year. EBITDA, as adjusted, for the quarter was $25.5 million compared to $33.8 million in the same quarter last year. As adjusted results exclude special charges related to plant consolidations and other non-recurring items.

"Our first quarter performance is right in line with what we expected," said Richard G. Wolford, Chairman and Chief Executive Officer. "Our SunFresh and S&W acquisitions, recent broker consolidation and the impact of our recent price increases are all on track and providing positive results. We also continue to invest marketing dollars behind our products. As expected, this
investment spending has had a negative impact on earnings in the short term but is the right thing to do for the long-term health of the business."

The increase in net sales for the quarter, when compared to the first quarter of fiscal 2001, was due to the acquisitions of the S&W and SunFresh businesses, the impact of a July 1 price increase and increased sales in non-retail channels, partially offset by increased marketing investments in existing products and new products. The price increase resulted in higher sales which were partially offset by related volume losses and increased trade spending in support of the increase. Earnings per share, as adjusted, reflect these higher sales; an unfavorable sales mix; increased energy expenses and  other operating costs as well as increased fixed costs, as production volumes are reduced to decrease inventory levels, to reduce debt and lower interest expense.

The Company reported net sales of $272.3 million and a net loss of $0.8 million, or $0.01 per share, for the first quarter ended September 30, 2001, compared to net sales of $263.0 million and net income of $6.4 million, or $0.12 per share, in the prior year period.

The Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board has concluded that certain consumer and trade sales promotion expenses should be classified as a reduction of sales rather than as selling, administrative and general expenses. The Company has adopted this change effective for its first quarter of fiscal 2002. The impact of this change in classification is to reduce both net sales and selling, administrative and general expenses by $47.8 million in the three months ended September 30, 2000. These changes will not affect the Company's financial position or net earnings.

Outlook

Looking forward for the full fiscal year 2002, the Company continues to expect top line growth of 2 to  4% and adjusted earnings per share of approximately $0.83 to $0.87. The increase in net sales for the year, when compared to fiscal 2001, is expected to be due to the acquisitions of the S&W and SunFresh businesses and the impact of a July 1 price increase, partially offset by increased marketing investments in existing products and new products. The price increase is expected to result in higher sales which are expected to be partially offset by related volume losses and increased trade spending in support of the increase. Earnings per share, as adjusted, are expected to reflect these higher sales; an unfavorable sales mix; increased energy expenses and other operating costs as well as increased fixed costs, as production volumes are reduced to decrease inventory levels, to reduce debt and lower interest expense.

Del Monte Foods Company, with net sales (adjusted for the impact of the EITF changes noted above) of approximately $1.3 billion in fiscal 2001, is the largest producer and distributor of premium quality, branded processed fruit, vegetable and tomato products in the United States. The Del Monte brand was introduced in 1892 and is one of the best known brands in the United States. Del Monte products are sold through national grocery chains, independent grocery stores, warehouse club stores, mass merchandisers, drug stores and convenience stores under the Del Monte, Contadina, S&W and SunFresh brands. The Company also sells its products to the U.S. military, certain export markets, the foodservice industry and food processors. The Company operates twelve production facilities and seven distribution centers in the U.S., has operations in Venezuela and owns Del Monte
brand marketing rights in South America.

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