Horizon Organic Dairy's 1998 Sales Rise 67%; Company Posts Record Sales and Profits.

LONGMONT, Colo., Jan. 26 /PRNewswire/ -- Horizon Organic Holding Corporation (Nasdaq: HCOW) today announced that its 1998 net sales were a record $49.4 million, up 67% from $29.6 million in 1997. Net income for 1998 was a record $486,000 or $.12 per basic share and $.11 per diluted share, before an extraordinary item, compared to a net loss of $1.0 million or $.23 per basic and diluted share in 1997. Net income for the fourth quarter was $586,000 or $.06 per basic and diluted share compared to a net loss of $281,000 or $.06 per basic and diluted share for the comparable period last year. Fourth quarter sales were $14.7 million versus $9.0 million for the comparable period last year, an increase of 63%.

"This year marks a terrific turning point for the Company. We continued to show strong sales growth and also achieved profitable operations in 1998. We view this performance as validation that we are meeting consumer demand for pure, fresh, healthful organic dairy products," said Barney Feinblum, president and CEO of Horizon Organic.

Don Gaidano, CFO, noted that the Company has achieved solid profitability. "In the fourth quarter, Horizon's profit margins remained strong due to the Company's improving economies of scale and the maturity of its Idaho farm. Additionally, moving our chocolate milk and cottage cheese production to facilities owned by Suiza Foods benefited our overall margins."

Horizon's recently introduced organic juices also contributed more than a half-million dollars to fourth quarter sales growth. "Our organic citrus juices' reception is very encouraging," said Feinblum. "Juice sales were higher than anticipated, making their first full quarter in the market very successful."

Feinblum also noted that Joe Langley, a twenty-year sales and marketing professional, formerly with the Dannon Company, has been appointed vice president of sales. Langley succeeds Horizon cofounder Mark Retzloff, who will direct the Company's strategies regarding acquisitions and strategic partnerships in the new position of senior vice president, corporate development.

Horizon Organic is the only national fresh milk brand -- organic or conventional -- in the country. The Company produces, processes and markets the leading brand of certified organic milk and a full line of refrigerated certified organic dairy products, certified organic eggs, and certified organic juices. In addition to its Company-owned farms, Horizon Organic has established a national network of organic farm milk producers, processors and distributors that allows consumers to buy Horizon Organic's products in more than 8,100 conventional supermarkets and natural foods stores across the United States.

Note: News releases and other information on Horizon Organic can be accessed at no charge at www.horizonorganic.com or www.ctaonline.com/hcow on the Internet.

Note on Forward-Looking Statements: This news release contains forward- looking statements that involve risks and uncertainties. Future events may differ materially from those discussed herein, due to a number of factors, including uncertainties related to the prices the Company is able to obtain when it sells its excess organic milk at conventional prices and the acceptance of the Company's products by distributors and customers. These factors are more fully discussed in the Company's Prospectus dated July 2, 1998, under the headings "Risk Factors-Risks Associated with Perishable Products" and "Risk Factors-Risks Associated with Trade and Consumer Acceptance in Distribution Channels". In addition, the Company's results could also be affected by a number of other risks and uncertainties which are more fully discussed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Prospectus dated July 2, 1998.

HORIZON ORGANIC

SELECTED FINANCIAL DATA

(in thousands, except per share data)

(UNAUDITED)

                                   Three months ended         Year ended                                      December 31,           December 31,                                  1998          1997       1998        1997      Net sales                  $14,703       $9,043     $49,360     $29,565      Gross profit                 5,306        2,436      16,745       6,926      Operating income (loss)        772          (44)      2,400      (1,114)      Pretax income (loss)           975         (428)      1,575      (2,222)     Income tax benefit (expense)  (389)         147        (675)        513     Minority interest               --           --          --         687     Extraordinary item, net         --           --        (414)         --     Net income (loss)             $586        $(281)       $486     $(1,022)      Net income (loss)      per share before      extraordinary item:         Basic                    $0.06        $(0.06)     $0.12      $(0.23)         Diluted                  $0.06        $(0.06)     $0.11      $(0.23)     Net income (loss):         Basic                    $0.06        $(0.06)     $0.07      $(0.23)         Diluted                  $0.06        $(0.06)     $0.06      $(0.23)      Weighted average shares      outstanding:         Basic                    9,611        5,047       7,339       4,488         Diluted                 10,052        5,047       7,742       4,488