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SPARTA FOODS ANNOUNCES THIRD-QUARTER AND NINE-MONTH SALES AND EARNINGS AND NEW BUSINESS OPPORTUNITIES

 SPARTA FOODS ANNOUNCES THIRD-QUARTER AND NINE-MONTH
 SALES AND EARNINGS AND NEW BUSINESS OPPORTUNITIES
 ST. PAUL, Minn., Aug. 24 /PRNewswire/ -- Sparta Foods, Inc. today announced sales and earnings for its third-quarter and nine-month period ending June 30, 1992.
 Sales for the three-month period increased 47 percent to $2,318,435, from $1,576,717 for the same period a year ago. Net income for the quarter was $70,646, compared with $59,642 for the third quarter of 1991, which represents an 18 percent increase.
 For the nine-month period, sales grew 34 percent to $5,443,711, versus $4,072,505 for the first nine months of the previous year. Net income was $92,714, compared with $78,170 for the year-ago period, which represents an 18 percent increase.
 The primary increase in sales is attributable to the acquisition of Cruz Mexican Foods, Inc. on Jan. 2, 1992. "The opportunities which Cruz brings to Sparta Foods are very exciting and will add greatly to sales and profits," said Nicholas Grammas, president of Sparta Foods.
 "This month truckload shipments were made to four separate distribution centers to begin the Target "Food Avenue" Mexican food program. When completed, we will be servicing over 450 Target stores nationally through 26 distribution centers," he said. "Sparta has entered several other new marketing ventures, making it necessary to expand our production capabilities. We are now installing our third flour tortilla line and our first meatless burrito line which will result in a reduced requirement from outside contract manufacturers. We will, however, continue to manufacture on the outside our press flour tortillas and meat burritos due to the extensive sales demand for these products."
 "We will be manufacturing flour tortillas for three major McDonald's distribution centers in Minnesota, Wisconsin and Ohio. These regional distribution centers supply tortillas to approximately 750 restaurants for McDonald's Breakfast Burritos and Chicken Fajitas," Grammas said. "We are also preparing to launch a national program shortly with Crystal Farms to produce their Crystados private-label Mexican food items. In addition, we have developed a number of tomato-based products such as salsas, taco sauces, spaghetti sauces and pizza sauces, that have received widespread interest for private label products."
 Grammas continued, "Mexican food items represent the fastest growing ethnic food category in both retail and food service industries. With its two subsidiaries, La Canasta and Cruz, Sparta is well-positioned to take advantage of this demand."
 Sparta Foods, Inc. manufactures tortillas, tortilla chips, picante salsas and other sauces for sale and distribution to retail food stores and food service establishments, through its wholly-owned subsidiaries, La Canasta of Minnesota, Inc. and Cruz Mexican Foods, Inc. In addition, Sparta manufactures barbecue sauces which are marketed by Ken Davis Products, Inc. under the "Ken Davis" label, and manufactures tortillas chips and picante salsas under private label for others. Sparta is a publicly held corporation and trades on the over-the-counter market in Minneapolis/St. Paul, Minn.
 SPARTA FOODS, INC.
 Consolidated Statement of Operations
 (unaudited)
 Three Months Ended Nine Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 Sales $2,318,435 $1,576,717 $5,443,711 $4,072,505
 Cost of Sales 1,777,786 1,088,407 4,155,097 2,871,991
 Gross Profit 540,649 488,310 1,288,614 1,200,514
 Selling, General
 and Administrative
 Expenses 391,147 372,320 1,061,997 1,007,681
 Operating Income 149,502 115,990 226,617 192,833
 Other Income (Expense)
 Interest Income 3,423 3,675 13,065 6,125
 Interest Expense (35,279) (20,323) (85,468) (79,558)
 -- (31,856) (16,648) (72,403) (73,433)
 Income Before Income
 Taxes 117,646 99,342 154,214 119,400
 Provision For Income
 Taxes 47,000 39,700 61,500 41,230
 Net Income $70,646 $59,642 $92,714 $78,170
 Net Income per
 Common Share 0.01 0.01 0.01 0.01
 Weighted Average
 Number of Common
 and Common
 Equivalent Shares
 Outstanding 8,357,076 7,531,203 8,122,967 6,627,459
 /CONTACT: Nicholas G. Grammas of Sparta Foods, 612-646-1888, or Melissa Quinn of Padilla Speer Beardsley, 612-871-8877, for Sparta Foods/ CO: Sparta Foods, Inc. ST: Minnesota IN: FOD SU: ERN


DS -- MN002 -- 2482 08/24/92 09:39 EDT
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Date:Aug 24, 1992
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