Michael Foods 8-K Michael Foods Reports Third Quarter Results

Exhibit 99.1

[Logo of Michael Foods Inc.]		NEWS
	301 Carlson Parkwayn Suite 400n Minnetonka, MN 55305n (952) 258-4000 FAX (952) 258-4911 Visit Michael Foods, Inc. on the Internet: www.michaelfoods.com
CONTACT:	Mark D. Witmer Treasurer & Secretary (952) 258-4906

For Immediate Release

MICHAEL FOODS REPORTS THIRD QUARTER RESULTS

MINNETONKA, Nov. 3 — Michael Foods, Inc. today reported financial results for the quarterly period ended September 30, 2005. Net earnings for the three months ended September 30, 2005 were $9.3 million, compared to $8.1 million in the 2004 period, an increase of 15%. Net sales for the three months ended September 30, 2005 were $309.2 million, compared to $323.9 million in the 2004 period, a decrease of 5%. Net earnings for the nine months ended September 30, 2005 were $24.4 million, compared to $23.7 million in the 2004 period, an increase of 3%. Net sales for the nine months ended September 30, 2005 were $915.2 million, compared to $989.2 million in the 2004 period, a decrease of 7%.

Earnings before interest, taxes, depreciation and amortization (EBITDA, as defined in our credit agreement) for the three months ended September 30, 2005 were $45.7 million, compared to $42.2 million in the 2004 period, an increase of 8%. EBITDA for the nine months ended September 30, 2005 was $130.5 million, compared to $128.5 million in the 2004 period, an increase of 2%. We use EBITDA as a measurement of our financial results because we believe it is indicative of the relative strength of our operating performance, it is used to determine incentive compensation levels and it is a key measurement contained in the financial covenants of our senior indebtedness.

Commenting on the third quarter results, Chairman, President and Chief Executive Officer Gregg A. Ostrander said, “We are pleased to have higher EBITDA in the current cost environment. We are battling much higher diesel, natural gas and packaging costs. Our efforts to effectively manage costs elsewhere, coupled with volume growth in our Egg Products and Potato Products divisions, largely resulted in the net earnings and EBITDA improvement year-over-year. Our largest division, Egg Products, matched the third quarter 2004 EBITDA level thanks to volume growth in higher value-added lines in both the retail and foodservice markets. By contrast, food ingredients egg products results were lower compared to 2004 period levels and reflect much lower market-driven pricing. This variability is not unusual within our egg products portfolio.”

Ostrander added, “Our Refrigerated Distribution operations were very pleasing. Although net sales fell slightly, EBITDA for the division increased 27%, reflecting good results from our core branded cheese line. The Potato Products Division again showed strong net sales and EBITDA growth, with the latter ahead 56%. These results reflected a better sales mix, strong unit sales growth in both the foodservice and retail markets, and improved raw material quality.”

Ostrander concluded, “Our free cash flow generation remains strong, with cash and equivalents currently in excess of $70 million. Given our business trends, working capital needs, and capital spending forecast, we would expect to continue to generate meaningful free cash flow into 2006 and beyond.”

Unaudited segment data follows (in thousands):

	Egg Products		Refrigerated Distribution		Potato Products		Corporate		Total
Quarter ended Sept. 30, 2005:
External net sales	$	218,524	$	66,078	$	24,552	N/A		$	309,154
EBITDA*		36,731		4,607		5,298	(963	)		45,673
Quarter ended Sept. 30, 2004:
External net sales	$	234,945	$	68,713	$	20,213	N/A		$	323,871
EBITDA*		36,859		3,640		3,402	(1,706	)		42,195
Nine months ended Sept. 30, 2005:
External net sales	$	645,609	$	196,986	$	72,648	N/A		$	915,243
EBITDA*		105,241		13,988		15,817	(4,505	)		130,541
Nine months ended Sept. 30, 2004:
External net sales	$	719,658	$	210,652	$	58,857	N/A		$	989,167
EBITDA* (a)		111,912		12,281		9,231	(4,953	)		128,471

* as defined in our senior credit facility.

(a) Egg Products results include approximately $2,000 related to amounts received under patent infringement settlements in the 2004 period.

We believe EBITDA is a widely accepted financial indicator used to analyze and compare companies on the basis of operating performance. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles and is not indicative of operating profit or cash flow from operations as determined under generally accepted accounting principles.

The following table reconciles our net earnings to EBITDA for the three months ended September 30, 2005 (in thousands):

	Egg Products		Refrigerated Distribution		Potato Products		Corporate			Total
Net earnings (loss)	$	12,607	$	2,071	$	2,230	$	(7,620	)	$	9,288
Interest expense, excluding amortization of debt issuance costs		87		—		—		11,079			11,166
Amortization of debt issuance costs		—		—		—		516			516
Income tax expense (benefit)		6,801		1,230		1,340		(3,802	)		5,569
Depreciation and amortization		14,854		1,166		1,595		1			17,616
Equity sponsor management fee		—		—		—		444			444
Industrial revenue bonds related expenses		241		—		—		—			241
Other		2,027		140		133		(1,581	)		719
		36,617		4,607		5,298		(963	)		45,559
Less:
Unrealized gains on swap contracts		114		—		—		—			114
EBITDA (as defined in our senior credit facility)	$	36,731	$	4,607	$	5,298	$	(963	)	$	45,673

The following table reconciles our net earnings to EBITDA for the three months ended September 30, 2004 (in thousands):

	Egg Products		Refrigerated Distribution		Potato Products		Corporate			Total
Net earnings (loss)	$	12,960	$	1,464	$	884	$	(7,203	)	$	8,105
Interest expense, excluding amortization of debt issuance costs		73		—		—		9,699			9,772
Amortization of debt issuance costs		—		—		—		510			510
Income tax expense		7,942		920		560		(4,340	)		5,082
Depreciation and amortization		14,049		1,122		1,832		3			17,006
Equity sponsor management fee		—		—		—		375			375
Industrial revenue bonds related expenses		227		—		—		—			227
Other non-recurring charges related to acquisition accounting		166		—		—		—			166
Other		1,442		134		126		(750	)		952
EBITDA (as defined in our senior credit facility)	$	36,859	$	3,640	$	3,402	$	(1,706	)	$	42,195

Michael Foods, Inc. is a diversified food processor and distributor with particular interests in egg products, refrigerated grocery products, and refrigerated potato products. Principal subsidiaries include M. G. Waldbaum Company, Papetti’s Hygrade Egg Products, Inc., Crystal Farms Refrigerated Distribution Company, and Northern Star Co.

Consolidated statements of earnings follow:

Michael Foods, Inc.

Consolidated Statements of Earnings

(000’s, unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2005		2004			2005		2004
Net sales	$	309,154	$	323,871		$	915,243	$	989,167
Cost of sales		249,923		267,140			739,981		819,614
Gross profit		59,231		56,731			175,262		169,553
Selling, general & administrative		32,816		33,117			100,428		97,986
Operating profit		26,415		23,614			74,834		71,567
Interest expense, net		11,535		10,576			35,150		32,137
Other expense		23		(149	)		711		923
Earnings before income taxes		14,857		13,187			38,973		38,507
Income tax expense		5,569		5,082			14,610		14,832
NET EARNINGS	$	9,288	$	8,105		$	24,363	$	23,675
Selected Balance Sheet Information (unaudited):						September 30, 2005		December 31, 2004
Cash and equivalents						$	64,460	$	31,816
Accrued interest							8,008		5,144
Total debt, including current maturities							756,948		750,783

Certain items in this release may be forward-looking statements. Such forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, changes in domestic and international economic conditions. Risks and uncertainties also include how the Company’s cash management activities, and those of its customers and suppliers, along with the Company’s growth plans, affect working capital components. Also, the Company faces normal, and at times notable, variances in the supply of, and demand for, eggs, grain feed inputs, and cheese, which can result in pricing and profit margin volatility for certain egg products and cheese. As a result, the Company’s actual financial results could differ materially from the results estimated by, forecasted by, or implied by the Company in such forward-looking statements.

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