Horizon Organic Sees Sales Increases Internationally for3Q02

Horizon Organic Sees Sales Increases Internationally for3Q02

BOULDER, Colo.--Horizon Organic Holding Corp. (NASDAQ:HCOW)experienced heightened sales for its third quarter (3Q02), ended Sept. 30 andreported Nov. 4, due to expanded distribution in the United States and highpopularity for its branded milk products, Rachel's Organics, overseas.

For the quarter, sales were up 22.1 percent to $48.0 million, while grossmargin shimmied up to 31.4 percent of sales from 30.2 percent, due to controlledcompany costs. Operating expenses rose to around $13.0 million from $9.8 millionlogged in 3Q01. Net income, as a result, fell to $324,000, or $.03 per shareearned, from $592,000, or $.06 per share earned.

"We are delighted that our sales growth has increased each quarter from12 percent in 1Q02 to 16 percent in 2Q02 to 22 percent in 3Q02," said ChuckMarcy, president and chief executive officer. He added that sales growth in theUnited States was largely due to expanded distribution; Horizon products cancurrently purchased in 60 percent of conventional grocery stores nationwide,"a goal we achieved three months earlier than anticipated," Marcysaid.

Dairy sales rose 27 percent to $8.4 million, with cheese and cottage cheeseposting 33-percent growth or better. Ultra pasteurized milk rose 43 percent,driven by more distribution, and now accounts for 52 percent of milk sales.While the company's pudding and singe-serve milk products continue to influencesales growth, Horizon plans to add fruit jels in 4Q02. Internationally, Rachel'sOrganic branded products posted an 88-percent sales increase in the UnitedKingdom.

Marcy expects Horizon to experience 20-percent to 25-percent sales growth in2003 and plans to reduce the company's debt upon sale of its Idaho farm.

In additional company news, Marcy opened the NASDAQ Stock Market Oct. 21 tomark the implementation of the national organic standards.

"Horizon Organic fully supports the new USDA [U.S. Department ofAgriculture] regulations, and we are thrilled to be kicking off this significantday in the organic industry by opening the NASDAQ," Marcy said.