Ben & Jerry's expects fourth quarter loss and delay in opening new plant.

WATERBURY, Vt.--(BUSINESS WIRE)--Dec. 19, 1994--Chuck Lacy, president & chief operating officer of Ben & Jerry's Homemade Inc. (NASDAQ: BJICA) announced today that the company's sales have declined in the fourth quarter from fourth quarter 1993 sales, and that the company expects to report a loss for the current quarter.

This anticipated loss is currently estimated at approximately $700,000-$900,000 on anticipated revenues of $30-31 million. Definitive fourth quarter numbers will be released in mid-March 1995, in accordance with the company's regular timetable for release of fourth quarter and annual financial results.

Lacy stated that, "While our earnings have been negatively impacted in 1994 by the inefficiencies in the company's production planning, purchasing, and inventory management systems to which we referred in the second and third quarters, the anticipated loss in the current quarter is due primarily to lower than expected sales levels. Through mid-December, total fourth quarter pint volume is down from the fourth quarter of 1993 by 5 percent." He added that the company has developed and begun to implement strategies to resolve the operational shortcomings that have affected gross margins in 1994, and expects improvements to be realized early in 1995.

Lacy noted that the company's market share has held steady at 42 percent since Ben & Jerry's assumed leadership of the superpremium category in the early summer of 1994. "However, the entire superpremium category has been sluggish this year," stated Lacy. He added that the company is reviewing the factors contributing to this sluggishness and that there appears to be some crossover in consumer buying patterns from superpremium ice cream to premium products. "The premium category has seen unprecedented promotional activity this year," said Lacy, "with both heavy media advertising and sales promotion from the leading premium brands."

Lacy also stated that the weak sales trend in the current quarter has caused the company to cut operating budgets and refine operating plans for the coming year.

Lacy also announced that there would be a delay in the startup of the company's new production facility in St. Albans, Vt., due to delays in implementation and installation of computer software programming associated with the plant's Finished Product Material Handling System. This is an integrated and automated turnkey system which is designed to harden, bundle, and palletize ice cream.

The company plans to put one production line into operation at the new plant in the second quarter of 1995, using a more conventional and less automated Finished Product Material Handling System, like that in use at the company's Waterbury, Vt. production facility. The company will also continue to operate its temporary production facility at the St. Albans Cooperative Creamery, will assess the ability of its other production facilities to increase production, and will pursue increased co-packing arrangements to meet its production needs in the interim until the new plant is fully operational.

The company will retain an outside engineering firm experienced in food manufacturing to evaluate the software for the system as currently configured, and assess the system and its layout for its ability to meet the plant's projected production capacity and operating efficiency. Included in the review will be an evaluation of alternative designs and/or modifications which, if implemented, would require additional time and additional capital costs to complete, as well as the potential for a partial write-off that would increase the fourth quarter loss.

According to Lacy, the company believes that, even with additional costs, the completed new plant will still result in significant manufacturing cost savings compared to the costs of the company's current co-packing arrangement.

CONTACT: Ben & Jerry's Inc.

Alan F. Parker, 802/244-6957 x2513