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Fresh Brands Reports Record Sales and EPS for 2001

SHEBOYGAN, Wis. - Fresh Brands Inc. today reported record sales and earnings per share for its fiscal year ended Dec. 29, 2001.

Net sales for 2001 were $580.2 million, a 15.6 percent increase over the prior year's sales of $502.1 million. The significant sales increase was largely attributable to the June 2001 acquisition of Dick's Supermarkets Inc., which contributed $57.2 million to net sales in 2001. Net earnings for the year were $7.8 million, compared to net earnings of $7.9 million in 2000. Diluted earnings per share for 2001 were $1.48, an 11.3 percent increase over diluted earnings per share of $1.33 in the prior year. The improvement in 2001 earnings per share was principally attributable to share repurchases during the year.

EBITDA (earnings before interest, taxes, depreciation and amortization) for 2001 was $20.1 million, a 14.9 percent increase from EBITDA of $17.5 million in the prior year. Dick's Supermarkets added $2.0 million to 2001 EBITDA.

Retail sales for 2001 improved 30.8 percent to $271.4 million, compared to $207.5 million in the prior year. The acquisition of Dick's Supermarkets, which was completed in June, added $54.7 million to 2001 retail sales. Net wholesale sales for fiscal 2001 increased 4.9 percent to $308.8 million, compared to $294.5 million in 2000.

"We are pleased with our 2001 performance and with the progress we made during the year in pursuing our strategy to grow by adding additional brands and expanding our geographic reach," said Elwood F. Winn, president and CEO of Fresh Brands. "The addition of Dick's Supermarkets to the Fresh Brands family in June, and the opening of our state-of-the-art flagship store in Sheboygan, Wisconsin, in August, were major accomplishments for our company in 2001.

"In addition, we took steps to build the management information systems and facilities infrastructure that will support our future growth. We initiated the process of expanding our freezer and warehouse square footage in Sheboygan to increase the current mix of frozen food items, dairy products and general merchandise we offer and to support our future growth plans. We are also investigating potential products and services that are at the forefront of national industry trends that have the potential to increase same-store sales. These include expanded general merchandise offerings, pharmacies and gas stations," Winn said.

Winn noted that same store sales for Piggly Wiggly franchise and corporate retail stores increased 2.1 percent for the fourth quarter and 3.4 percent for the year, compared to the same periods in 2000. Same store sales represent sales of all Piggly Wiggly corporate and franchise stores that were open throughout 2001 and 2000. "Other factors contributing to fourth quarter and 2001 sales increases included our successful Preferred Power Pricing program, new store replacements and conversions, and store closures by certain competitors. Our gross margin increased to 18.2 percent in 2001 from 16.5 percent for the prior year, reflecting a higher retail sales mix following the acquisition of Dick's," Winn said.
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