Michael Foods 8-K Michael Foods Reports Third 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 THIRD QUARTER RESULTS

MINNETONKA, MN November 10 — Michael Foods, Inc. today reported financial results for the third quarter of 2008. Net earnings for the three months ended September 27, 2008 were $11.0 million, compared to $7.2 million in 2007. Net sales for the three months ended September 27, 2008 were $450.1 million, compared to $381.1 million in 2007, an increase of 18%. Net earnings for the nine months ended September 27, 2008 were $33.6 million, compared to $14.9 million in 2007. Net sales for the nine months ended September 27, 2008 were $1,320.1 million, compared to $1,057.0 million in 2007, an increase of 25%. A primary driver for the 2008 net earnings increases for both the three and nine month periods was reduced interest expense, reflecting reduced interest rates and the December 2007 $50 million credit facility debt prepayment.

Earnings before interest, taxes, depreciation, amortization and other adjustments (EBITDA, as defined in our senior credit facility) for the three months ended September 27, 2008 increased 12% to $51.6 million, compared to $45.9 million in 2007. EBITDA for the nine months ended September 27, 2008 increased 17% to $145.8 million, compared to $124.4 million in 2007. 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, David S. Johnson, Chief Executive Officer and President said, “We experienced another quarter of EBITDA growth as a result of our balanced portfolio of businesses. The EBITDA growth was driven by positive performances in food ingredient egg products and retail low/no cholesterol liquid eggs. Crystal Farms’ EBITDA also grew in the third quarter as a result of pricing actions taken to cover elevated cheese costs, as well as sales and volume growth in Crystal Farms branded and private label cheese. These areas of strength were partially offset by weak foodservice egg products results, due to commodity cost increases and reduced volume growth as compared to the first half of 2008. Egg Products Division sales growth reflects product pricing increases due to the continued high egg markets and high corn and soybean meal markets during the third quarter and unit sales growth for several product categories. Our Potato Products Division saw retail unit sales growth, but earnings were down due to raw material and manufacturing cost pressures.”

Johnson noted, “Looking ahead, our key concern remains the potential adverse impact on volume from the overall economic environment. We experienced some slowdown in volume growth in the third quarter, compared to the first half of 2008, which we will monitor carefully.”

Unaudited segment data follows (in thousands):

	Egg Products		Potato Division		Crystal Farms		Corporate & Eliminations			Total
Quarter ended September 27, 2008:
External net sales	$	318,908	$	30,524	$	100,626	$	—		$	450,058
Net earnings		12,714		2,166		2,897		(6,753	)		11,024
EBITDA*		44,062		5,224		5,775		(3,482	)		51,579
Quarter ended September 29, 2007:
External net sales	$	266,549	$	30,026	$	84,536	$	—		$	381,111
Net earnings		12,071		2,835		1,030		(8,733	)		7,203
EBITDA*		38,806		6,050		2,802		(1,783	)		45,875
Nine months ended September 27, 2008:
External net sales	$	939,444	$	89,859	$	290,767	$	—		$	1,320,070
Net earnings		47,608		5,953		5,690		(25,701	)		33,550
EBITDA*		127,885		14,616		12,594		(9,269	)		145,826
Nine months ended September 29, 2007:
External net sales	$	739,230	$	86,609	$	231,146	$	—		$	1,056,985
Net earnings		29,059		7,705		5,313		(27,224	)		14,853
EBITDA*		101,317		16,936		11,723		(5,527	)		124,449

* 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 September 27, 2008 (in thousands):

	Egg Products		Potato Products		Crystal Farms		Corporate			Total
Net earnings (loss)	$	12,714	$	2,166	$	2,897	$	(6,753	)	$	11,024
Interest expense, excluding amortization of debt issuance costs		399		—		—		7,305			7,704
Amortization of debt issuance costs		—		—		—		953			953
Income tax expense (benefit)		5,540		1,087		1,450		(3,448	)		4,629
Depreciation and amortization		16,176		1,676		1,131		1			18,984
Equity sponsor management fee		—		—		—		473			473
Industrial revenue bonds related expenses		244		—		—		—			244
Other		1,891		295		297		(2,013	)		470
		36,964		5,224		5,775		(3,482	)		44,481
Plus:
Unrealized losses on swap contracts		7,098		—		—		—			7,098
EBITDA (as defined in our senior credit facility)	$	44,062	$	5,224	$	5,775	$	(3,482	)	$	51,579

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

	Egg Products		Potato Products		Crystal Farms		Corporate			Total
Net earnings (loss)	$	12,071	$	2,835	$	1,030	$	(8,733	)	$	7,203
Interest expense, excluding amortization of debt issuance costs		118		—		—		11,622			11,740
Amortization of debt issuance costs		—		—		—		964			964
Income tax expense (benefit)		6,390		1,424		510		(4,442	)		3,882
Depreciation and amortization		16,242		1,628		1,100		2			18,972
Equity sponsor management fee		—		—		—		441			441
Industrial revenue bonds related expenses		247		—		—		—			247
Other		3,076		163		162		(1,637	)		1,764
		38,144		6,050		2,802		(1,783	)		45,213
Plus:
Unrealized losses on swap contracts		662		—		—		—			662
EBITDA (as defined in our senior credit facility)	$	38,806	$	6,050	$	2,802	$	(1,783	)	$	45,875

The following table reconciles our net earnings to EBITDA for the nine months ended September 27, 2008 (in thousands):

	Egg Products		Potato Products		Crystal Farms		Corporate			Total
Net earnings (loss)	$	47,608	$	5,953	$	5,690	$	(25,701	)	$	33,550
Interest expense, excluding amortization of debt issuance costs		1,167		—		—		27,355			28,522
Amortization of debt issuance costs		—		—		—		2,864			2,864
Income tax expense (benefit)		20,297		2,986		2,860		(10,454	)		15,689
Depreciation and amortization		48,535		5,027		3,395		3			56,960
Equity sponsor management fee		—		—		—		1,390			1,390
Industrial revenue bonds related expenses		733		—		—		—			733
Other		5,710		650		649		(4,726	)		2,283
		124,050		14,616		12,594		(9,269	)		141,991
Plus:
Unrealized losses on swap contracts		3,835		—		—		—			3,835
EBITDA (as defined in our senior credit facility)	$	127,885	$	14,616	$	12,594	$	(9,269	)	$	145,826

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

	Egg Products		Potato Products		Crystal Farms		Corporate			Total
Net earnings (loss)	$	29,059	$	7,705	$	5,313	$	(27,224	)	$	14,853
Interest expense, excluding amortization of debt issuance costs		292		—		—		35,953			36,245
Amortization of debt issuance costs		—		—		—		2,991			2,991
Income tax expense (benefit)		15,594		3,869		2,670		(13,718	)		8,415
Depreciation and amortization		49,015		4,884		3,264		8			57,171
Equity sponsor management fee		—		—		—		1,324			1,324
Industrial revenue bonds related expenses		741		—		—		—			741
Other		6,665		478		476		(4,861	)		2,758
		101,366		16,936		11,723		(5,527	)		124,498
Minus:
Unrealized gains on swap contracts		49		—		—		—			49
EBITDA (as defined in our senior credit facility)	$	101,317	$	16,936	$	11,723	$	(5,527	)	$	124,449

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.

Condensed consolidated statements of earnings are as follows:

Michael Foods, Inc.

Consolidated Statements of Earnings

For the Periods Ended September 27, 2008 and September 29, 2007

(Unaudited, in thousands)

	Quarter				Nine months
	2008		2007		2008		2007
Net sales	$	450,058	$	381,111	$	1,320,070	$	1,056,985
Cost of sales		383,922		317,984		1,115,891		881,120
Gross profit		66,136		63,127		204,179		175,865
Selling, general & administrative		41,650		38,105		122,820		111,663
Plant closing expenses		—		1,293		—		1,525
Operating profit		24,486		23,729		81,359		62,677
Interest expense, net		8,833		12,644		32,120		39,409
Earnings before income taxes		15,653		11,085		49,239		23,268
Income tax expense		4,629		3,882		15,689		8,415
Net earnings	$	11,024	$	7,203	$	33,550	$	14,853

	September 27, 2008		December 29, 2007
	(Unaudited)
Selected Balance Sheet Data:
Cash and equivalents	$	49,490	$	30,077
Accrued interest	$	7,365	$	6,276
Total debt, including current maturities	$	599,788	$	601,783

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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11-10-08