San Francisco, California
January 25,  2001

Del Monte Foods Company (NYSE: DLM), today reported earnings per share, as adjusted, of $0.29 for the second quarter of fiscal 2001. This compares with the consensus of analyst estimates of $0.31, as reported by First Call, and with $0.40, as adjusted, in the second quarter of fiscal 2000. Net sales for the quarter were $428 million compared to $455 million in the comparable prior year period. 

The decline in net sales for the quarter, when compared to the prior year period, reflects the impact of unusually high Y2K-related sales volumes in the second quarter of fiscal 2000. Earnings per share, as adjusted, decreased primarily due to these lower volumes and higher production costs. "As anticipated, our revenues and resulting bottom-line are down significantly versus last year reflecting difficult comparisons stemming from last year's Y2K disruptions," said Richard G. Wolford, Chairman and Chief Executive Officer. "In addition, as previously discussed, higher than planned production costs negatively impacted our bottom-line and will put pressure on the full
year's results. Ongoing, our business remains healthy, as evidenced by our strong and improving market shares." 

"We are excited about our recently announced acquisition of S&W," Mr. Wolford continued. "This acquisition is consistent with our strategy to seek premium branded businesses that leverage our selling and operating infrastructure. As with our entire line, S&W products are healthy, convenient and meet the needs of today's consumer." EBITDA, as adjusted, for the quarter was $51.5 million compared to $62.0 million in the same quarter last year. Net income, as adjusted, for the quarter was $15.2 million compared to $21.4 million for the same quarter last year. These adjusted results exclude special charges related to plant consolidations and other non-recurring items and use a projected income tax rate for the year of 34.6% compared to the 39.0% rate used last year. The Company's effective income tax rate for this year includes the benefit of net operating losses and other tax adjustments. Actual diluted earnings per share for the second quarter ended December 31, 2000 were $0.16 per share compared to $0.43 per share in last year's second quarter, and net income was $8.5 million compared to $22.8 million last year. 

Six Months Ended December 31, 2000

Net sales for the first six months of fiscal 2001 were $739.0 million compared to net sales of $789.1 million for the same period last year. EBITDA, as adjusted, for the first six months of fiscal 2001 was $85.3 million compared to $98.6 million for the comparable period last year. Net income, as adjusted, for the first six months was $19.2 million compared to $28.5 million for the first six months of last year. Earnings per share, as adjusted, for the first six months of fiscal 2001 were $0.37, compared to $0.53 for the first six months of fiscal 2000. Actual diluted earnings per share for the first six months of fiscal 2001 were $0.28 per share compared to $0.56 per share in last year's second quarter, and net income was $14.9 million compared to $29.7 million last year. 

Outlook

Looking forward for the full fiscal year 2001, the Company continues to expect that net sales will be approximately 4 to 6% higher than in fiscal 2000 and that adjusted earnings per share for fiscal 2001 will be essentially flat, compared with fiscal 2000. However, the Company's earnings for the full fiscal 2001 may be adversely affected by several factors, including increased interest expense and higher production costs, such as lower fruit recoveries, higher energy costs and higher fixed costs. 

The Company is actively pursuing mitigation of these increased costs. Del Monte Foods Company, with net sales of approximately $1.5 billion in fiscal 2000, 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. The Company also sells its products to the U.S. military, certain export markets, the foodservice industry and food processors. The Company operates fourteen 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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