Horizon Organic Expands Distribution, Reports SalesIncreases for 2Q02

Horizon Organic Expands Distribution, Reports SalesIncreases for 2Q02

BOULDER, Colo.--For its second quarter (2Q02) ended June 30 andreported Aug. 5, Horizon Organic Holding Corp. (NASDAQ:HCOW) reported increasedsales due to having expanded product distribution.

Net sales were up 15.8 percent to $44.7 million, and gross margin increasedto 31.5 percent of sales, due to improved milk balance in the United States,better inventory management and a shift to higher margin branded products in theUnited Kingdom. Expenses increased to $12.6 million, while earnings dippedslightly to $353,000, or $.03 per share earned, from $442,000, or $.04 per shareearned in the same period of the prior year.

"We are very pleased with the stronger sales growth in both the UnitedStates and the United Kingdom, which have been driven by distribution gains andnew products," said Chuck Marcy, president and chief executive officer ofHorizon. He added that in the United States, products are now available inapproximately 54 percent of conventional grocery stores, and overseas, Horizon'sdecision to convert sales from private label to branded has been successful.

Horizon's U.S. dairy sales were up 24 percent to $7.9 million, led byincreases in cheese (39 percent), butter (25 percent) and cottage cheese (26percent) sales. Reportedly, expanded distribution was responsible for the salesimprovements. Yogurt volume was up 10 percent compared to the same period lastyear, and pudding, which was introduced in natural foods stores in 2Q02, willsoon be rolling out in conventional supermarkets.

Marcy stated he expects the company to end the year with a 16-percent to20-percent increase in sales, with earnings from continuing operations rangingfrom $.33 to $.36 per share.