Odwalla, Inc. today announced financial results for its third quarter ended May 27, 2000. Third quarter net sales were $25.7 million, compared to $19.1 million in the same quarter a year ago. Odwalla recorded a $3.97 million net income for the quarter compared to a loss of $279,000 for the same period last year. Financial information includes the results of Fresh Samantha since May 2, 2000, the merger closing date.

"We had a very good third quarter; the best quarter in the company's history," said Stephen Williamson, Chairman and Chief Executive Officer. "Sales grew 34% over last year and we earned $1.3 million in operating income. We completed our merger with Fresh Samantha. And finally, we settled the lawsuit against our insurance company for our 1996 business interruption claim, resulting in a $5.5 million net settlement. We have made good progress in bringing our East and West Coast operations together, creating a unified single company focused on delivering nourishment coast to coast."

Gross profit for the third quarter was 50.6% of net sales compared to 47.3% in the third quarter of fiscal 1999. The end of the impact of the December 1998 California citrus crop freeze contributed to the improved gross profit.

Sales and distribution costs for the third quarter were 32.4% of net sales compared to 33.8% for the same period last year. The company began to see results from its investment in new markets in prior periods and did not enter any new markets during the quarter. With the completion of the Fresh Samantha merger, some structural changes occurred in the third quarter within the sales and distribution organization, which may cause a short-term increase in expenses for the remainder of fiscal 2000. Odwalla intends to continue to invest in strengthening its overall sales and distribution organization.

Marketing and general and administrative expenses were $3.4 million for the third quarter of this year compared to $2.9 million for the same quarter last year. The increase was primarily due to the merger with Fresh Samantha. In April 2000, Odwalla settled its business interruption insurance claim filed following the product recall in 1996 and recorded the net proceeds of $5.5 million. In May 2000, following shareholder approval at our April annual meeting, all of our redeemable and convertible Series A preferred stock was converted into common stock at the close of the Fresh Samantha acquisition. This early conversion was accomplished by issuing 258,667 additional shares of common stock to the Series A shareholder as an inducement for early conversion. The $1.6 million non-cash expense for this conversion was recorded in the third quarter.

Net income was $1.1 million or $0.16 per basic and diluted share for the third quarter of fiscal 2000, before considering, net of tax, the insurance settlement proceeds, the cost of converting the Series A preferred stock and the preferred stock dividend. This compares to a net loss of $279,000 or $0.05 per share for the same period in fiscal 1999.

For the first thirty-nine weeks of fiscal 2000, net sales were $60.5 million or 19% higher than the $50.8 million of net sales for the same period last year. Gross profit was 48.4% compared to 47.4% for the first thirty-nine weeks of fiscal 1999. The end of the impact of the December 1998 California citrus freeze accounts for much of the improved gross profit.

Sales and distribution costs were 34.4% of net sales for the first thirty-nine weeks of this year compared to 34.7% in the first thirty-nine weeks of fiscal 1999. Marketing and general and administrative expenses were $8.3 million in the first thirty-nine weeks of fiscal 2000 compared to $8.1 million for the same period last year. Net income was $69,000 or $0.01 per basic and diluted share for the first thirty-nine weeks of this year, before considering, net of tax, the insurance settlement proceeds, the cost of converting the Series A preferred stock and the preferred stock dividend, compared to a loss of $1.6 million or $0.31 per share for the same period last year.

This press release contains forward-looking statements that involve certain risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including without limitation, those described in documents the Company files periodically with the Securities and Exchange Commission.

Odwalla, Inc. is the nation's leading brand of all-natural, super-premium juices and smoothies, dairy-free shakes, natural spring water and food bars serving thousands of accounts coast to coast from its production facility in Dinuba, California. As a brand of Odwalla, Fresh Samantha will continue to be the leading supplier of all-natural, super premium fruit and vegetable juices, soy shakes, water, and frozen fruit bars from the facility in Saco, Maine. To learn more about the Odwalla and Fresh Samantha brands, please visit us at www.odwalla.com and at www.freshsamantha.com.


 ODWALLA, INC.
Consolidated Statements of Operations
(in thousands, except per share data)

Thirteen weeks ended Thirty-nine weeks ended

May 29, May 27, May 29, May 27,
1999 2000 1999 2000
-------- -------- -------- --------
Net sales $ 19,124 $ 25,682 $ 50,798 $ 60,541

Cost of sales 10,076 12,688 26,721 31,228
-------- -------- -------- --------
Gross profit 9,048 12,994 24,077 29,313
-------- -------- -------- --------
Operating expenses
Sales and
distribution 6,455 8,328 17,635 20,827
Marketing 806 726 2,375 1,858
General and
administrative 2,089 2,638 5,743 6,441
-------- -------- -------- --------
Total
operating
expenses 9,350 11,692 25,753 29,126
-------- -------- -------- --------
Income (loss)
from operations (302) 1,302 (1,676) 187

Proceeds from
insurance settlement,
net of legal fees -- 5,458 -- 5,458
Series A preferred
stock inducement expense
to convert to common stock -- (1,587) -- (1,587)
Interest and other income
(expense), net (26) (55) (176) (106)
-------- -------- -------- --------

Income (loss)
before income taxes (328) 5,118 (1,852) 3,952

Income tax
benefit (expense) 49 (1,006) 277 (831)
-------- -------- -------- --------
Net income (loss) (279) 4,112 (1,575) 3,121

Preferred
stock dividend -- (142) -- (568)
-------- -------- -------- --------
Net income (loss)
applicable to
common shareholders $ (279) $ 3,970 $ (1,575) $ 2,553
======== ======== ======== ========

Net income (loss)
applicable to common
shareholders after
stock dividend -
Basic $ (0.05) $ 0.59 $ (0.31) $ 0.45
======== ======== ======== ========
Diluted $ (0.05) $ 0.58 $ (0.31) $ 0.45
======== ======== ======== ========

Shares used
in per share
amounts
Basic 5,104 6,710 5,077 5,654
======== ======== ======== ========
Diluted 5,104 6,796 5,077 5,704
======== ======== ======== ========

Odwalla, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

August 28, May 27,
1999 2000
------- -------
Current assets
Cash, cash equivalents and
short-term investments $ 7,369 $ 5,900
Trade accounts receivable 6,072 10,551
Inventories 3,718 5,285
Prepaid expenses and other 1,530 3,983
Deferred tax asset 1,358 577
------- -------
Total current assets 20,047 26,296

Plant, property and equipment, net 12,877 19,395

Total other assets 2,381 32,882
------- -------
$35,305 $78,573
======= =======

Current liabilities
Accounts payable $ 6,876 $ 8,639
Other accrued liabilities 3,268 5,993
Line of credit 2,319 1,950
Current maturities of capital
lease obligations and long-term debt 200 439
------- -------
Total current liabilities 12,663 17,021

Long-term liabilities,
less current maturities 688 1,414
------- -------
Total liabilities 13,351 18,435
Mandatorily redeemable and
convertible preferred stock 7,505 --
Shareholders' equity 14,449 60,138
------- -------
$35,305 $78,573
======= =======