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MORNINGSTAR GROUP REPORTS RECORD FIRST QUARTER RESULTS; COMPANY'S FIRST REPORT SINCE ITS INITIAL PUBLIC OFFERING

 MORNINGSTAR GROUP REPORTS RECORD FIRST QUARTER RESULTS;
 COMPANY'S FIRST REPORT SINCE ITS INITIAL PUBLIC OFFERING
 DALLAS, May 13 /PRNewswire/ -- The Morningstar Group Inc. (NASDAQ: MSTR) today announced record sales and earnings from remaining operations for its first quarter ended March 31, 1992.
 For the quarter, Morningstar reported net sales of $84.9 million from remaining operations (those not divested or scheduled to be divested), an increase of 9.9 percent from $77.2 million from remaining operations for the first quarter of 1991. Operating profit from remaining operations was $5.2 million for the first quarter of 1992, up 8.3 percent from $4.8 million from remaining operations in the prior year period. Total net sales (including both remaining operations and the above-mentioned divested operations) were $109.4 million vs. $115.3 million for the first quarters of 1992 and 1991, respectively, and total operating income increased 22.7 percent to $4.7 million in 1992 from $3.5 million for the comparable 1991 period. The company recorded a net profit of $201,000 for the first quarter of 1992 compared to a net loss before extraordinary gains of $629,000 in the same period in 1991. Per share amounts are not meaningful since the company's initial public offering was completed on April 24, 1992.
 "We are very pleased that Morningstar has exceeded its growth and profitability objectives for the first quarter and has recorded its first ever quarterly net profit," said James A. Bach, Morningstar's president and chief executive officer.
 In a letter to shareholders issued today, Bach and Clifford L. Marquart, executive vice president and chief operating officer, said: "Sales of our branded specialty products, which were up 63 percent over last year's first quarter, continued to fuel the company's growth in sales and profitability. Both Second Nature(R), our line of non- cholesterol egg products, and International Delight(R), our line of flavored non-dairy coffee creams, improved their respective category market shares during the quarter, as measured by A. C. Nielsen. We will introduce extensions of both product lines nationally during the remainder of 1992, and are updating the packaging of each.
 "Our business strategy is based on the development and marketing of branded, niche products and other specialty, dairy-based cultured and ultra-high temperature pasteurized products. Now with our strengthened balance sheet and our many other strengths -- including our national distribution systems for refrigerated products, our strategically located manufacturing facilities, our extensive network of independent food brokers and our national sales force -- we believe we are very well positioned to successfully execute that strategy and thereby build the value of Morningstar for our shareholders, customers, employees and other constituents," Bach and Marquart said.
 On April 24, 1992, Morningstar completed an initial public offering of 6.2 million shares of common stock, of which 5.0 million shares were offered by the company. Net proceeds from the offering together with borrowings under a renewed senior credit facility were used to retire $34 million of subordinated debentures with a 13 percent interest rate and $18 million of preferred stock with a 15 percent dividend. A controlling interest in Morningstar is held by an investor group led by Hicks, Muse & Co. Incorporated, a private investment firm with offices in Dallas and New York.
 In addition to Second Nature and International Delight, Morningstar's products include several private-label dairy-based cultured and ultra-pasteurized products. Morningstar also operates Velda Farms, a leading manufacturer and distributor of dairy products in the State of Florida.
 -0- 5/13/92
 /CONTACT: Tracy L. Noll, vice president and chief financial officer of The Morningstar Group, 214-360-4777, or Roy Winnick of Kekst and Company, 212-593-2655, for The Morningstar Group/
 (MSTR) CO: Morningstar Group Inc. ST: Texas IN: FOD SU: ERN


SH -- NY019 -- 9514 05/13/92 09:15 EDT
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Date:May 13, 1992
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