Michael Foods 8-K Michael Foods Reports Fourth Quarter Results

Exhibit 99.1

[Logo of Michael Foods, Inc.]

NEWS

	301 Carlson Parkway¡ Suite 400¡ Minnetonka, MN 55305¡ (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 FOURTH QUARTER RESULTS

MINNETONKA, March 24 — Michael Foods, Inc. today reported financial results for the fourth quarter of 2007. Net earnings for the quarter ended December 29, 2007 were $12.7 million, compared to $4.6 million in the 2006 quarterly period. Net sales for the quarter ended December 29, 2007 were $410.8 million, compared to $332.1 million in the 2006 period, an increase of 24%. Net earnings for the year ended December 29, 2007 were $27.6 million, compared to $19.2 million in 2006, an increase of 44%. Net sales for the year ended December 29, 2007 were $1,467.8 million, compared to $1,247.3 million in 2006, an increase of 18%.

Earnings before interest, taxes, depreciation and amortization (EBITDA, as defined in our senior credit facility) for the quarter ended December 29, 2007 were $51.5 million, compared to $50.8 million in the 2006 period, an increase of 1%. EBITDA for the year ended December 29, 2007 was $175.9 million, compared to $180.9 million in 2006, a decrease of 3%. 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 credit facility.

Commenting on the results, President and Chief Executive Officer David S. Johnson said, “As was true for the year, in the fourth quarter we faced tremendous cost pressures. We are clearly in a new cost environment, with key raw materials, such as grains, eggs and cheese, at record levels. Beyond this, the energy complex is very high, which affects our plant and distribution costs. Our fourth quarter EBITDA increase reflects our ability to manage our expenses and execute price increases. However, given the magnitude of the cost increases, we have more work ahead of us.”

Johnson added, “Our fourth quarter EBITDA by division followed the pattern of the full year. That is, the Egg Products Division showed gains due to the market-driven pricing improvements in our Food Ingredients business. The key Foodservice sector of Egg Products had significant margin pressure related to costs that were not fully offset by pricing action. Crystal Farms cheese margins were down due to pricing actions lagging the rapid run-up in cheese costs. Potato Products results were generally flat, with improved Retail earnings offsetting lower results from Foodservice.”

Johnson concluded, “We generated strong free cash flow in 2007, which led to our decision to prepay $50 million of credit facility debt in late December.”

Unaudited segment data follows (in thousands):

	Egg Products		Crystal Farms		Potato Products		Corporate			Total
Quarter ended December 29, 2007:
External net sales	$	275,358	$	102,995	$	32,424	$	—		$	410,777
Net earnings		15,329		1,776		4,235		(8,628	)		12,712
EBITDA*		40,706		4,172		8,245		(1,664	)		51,459
Quarter ended December 30, 2006:
External net sales	$	221,216	$	78,916	$	31,972	$	—		$	332,104
Net earnings		7,922		4,409		4,351		(12,091	)		4,591
EBITDA*		36,083		7,491		7,875		(638	)		50,811
Year ended December 29, 2007:
External net sales	$	1,014,588	$	334,141	$	119,033	$	—		$	1,467,762
Net earnings		44,388		7,089		11,940		(35,852	)		27,565
EBITDA*		142,023		15,895		25,181		(7,191	)		175,908
Year ended December 30, 2006:
External net sales	$	858,352	$	275,016	$	113,980	$	—		$	1,247,348
Net earnings		34,869		11,975		12,400		(40,089	)		19,155
EBITDA*		137,134		23,086		25,155		(4,510	)		180,865

* As defined in our senior credit facility.

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 quarter ended December 29, 2007 (unaudited, in thousands):

	Egg Products			Crystal Farms		Potato Products		Corporate			Total
Net earnings (loss)	$	15,329		$	1,776	$	4,235	$	(8,628	)	$	12,712
Interest expense, excluding amortization of debt issuance costs		(16	)		—		—		11,861			11,845
Amortization of debt issuance costs		—			—		—		1,444			1,444
Income tax expense		8,796			1,122		2,518		(5,460	)		6,976
Depreciation and amortization		15,377			1,137		1,356		2			17,872
Equity sponsor management fee		—			—		—		435			435
Industrial revenue bonds related expenses		246			—		—		—			246
Other		1,418			137		136		(1,318	)		373
		41,150			4,172		8,245		(1,664	)		51,903
Less:
Unrealized gains on swap contracts		444			—		—		—			444
EBITDA (as defined in our senior credit facility)	$	40,706		$	4,172	$	8,245	$	(1,664	)	$	51,459

The following table reconciles our net earnings to EBITDA for the quarter ended December 30, 2006 (unaudited, in thousands):

	Egg Products		Crystal Farms		Potato Products		Corporate			Total
Net earnings (loss)	$	7,922	$	4,409	$	4,351	$	(12,091	)	$	4,591
Interest expense, excluding amortization of debt issuance costs		123		—		—		13,544			13,667
Amortization of debt issuance costs		—		—		—		3,601			3,601
Income tax expense		8,676		1,990		1,968		(5,440	)		7,194
Depreciation and amortization		15,796		1,019		1,478		3			18,296
Equity sponsor management fee		—		—		—		439			439
Industrial revenue bonds related expenses		250		—		—		—			250
Other		4,030		73		78		(694	)		3,487
		36,797		7,491		7,875		(638	)		51,525
Less:
Unrealized gains on swap contracts		714		—		—		—			714
EBITDA (as defined in our senior credit facility)	$	36,083	$	7,491	$	7,875	$	(638	)	$	50,811

The following table reconciles our net earnings to EBITDA for the year ended December 29, 2007 (unaudited, in thousands):

	Egg Products		Crystal Farms		Potato Products		Corporate			Total
Net earnings (loss)	$	44,388	$	7,089	$	11,940	$	(35,852	)	$	27,565
Interest expense, excluding amortization of debt issuance costs		276		—		—		47,814			48,090
Amortization of debt issuance costs		—		—		—		4,435			4,435
Income tax expense		24,390		3,792		6,387		(19,178	)		15,391
Depreciation and amortization		64,392		4,401		6,240		10			75,043
Equity sponsor management fee		—		—		—		1,759			1,759
Industrial revenue bonds related expenses		987		—		—		—			987
Other		8,083		613		614		(6,179	)		3,131
		142,516		15,895		25,181		(7,191	)		176,401
Less:
Unrealized gains on swap contracts		493		—		—		—			493
EBITDA (as defined in our senior credit facility)	$	142,023	$	15,895	$	25,181	$	(7,191	)	$	175,908

The following table reconciles our net earnings to EBITDA for the year ended December 30, 2006 (unaudited, in thousands):

	Egg Products			Crystal Farms		Potato Products		Corporate			Total
Net earnings (loss)	$	34,869		$	11,975	$	12,400	$	(40,089	)	$	19,155
Interest expense, excluding amortization of debt issuance costs		415			—		—		51,475			51,890
Amortization of debt issuance costs		—			—		—		4,743			4,743
Income tax expense		24,465			6,160		6,388		(20,719	)		16,294
Depreciation and amortization		64,443			4,492		5,913		10			74,858
Equity sponsor management fee		—			—		—		1,809			1,809
Industrial revenue bonds related expenses		996			—		—		—			996
Other		11,097			459		454		(1,739	)		10,271
		136,285			23,086		25,155		(4,510	)		180,016
Less:
Unrealized losses on swap contracts		(849	)		—		—		—			(849	)
EBITDA (as defined in our senior credit facility)	$	137,134		$	23,086	$	25,155	$	(4,510	)	$	180,865

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 are as follows:

Michael Foods, Inc.

Consolidated Statements of Earnings

(in thousands)

	Quarter ended				Year ended
	December 29, 2007		December 30, 2006		December 29, 2007		December 30, 2006
	(Unaudited)
Net sales	$	410,777	$	332,104	$	1,467,762	$	1,247,348
Cost of sales		342,296		270,842		1,223,416		1,016,832
Gross profit		68,481		61,262		244,346		230,516
Selling, general & administrative		35,712		29,359		147,375		133,287
Plant closing expenses		—		3,139		1,525		3,139
Operating profit		32,769		28,764		95,446		94,090
Interest expense, net		13,081		16,979		52,490		55,928
Earnings before income taxes and equity in losses of unconsolidated subsidiary		19,688		11,785		42,956		38,162
Income tax expense		6,976		7,194		15,391		16,294
Earnings before equity in losses of unconsolidated subsidiary		12,712		4,591		27,565		21,868
Equity in losses of unconsolidated subsidiary		—		—		—		2,713
Net earnings	$	12,712	$	4,591	$	27,565	$	19,155

	December 29, 2007		December 30, 2006
Selected Balance Sheet Information:
Cash and equivalents	$	30,077	$	21,576
Accrued interest	$	6,276	$	2,497
Total debt, including current maturities	$	601,783	$	645,794

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. 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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3-24-08