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Heinz Makes $60 Million Earn-Out Payment for Foodstar Business in China, Resulting in a $0.04 EPS Impact in Third Quarter



  Heinz Makes $60 Million Earn-Out Payment for Foodstar Business in China,
  Resulting in a $0.04 EPS Impact in Third Quarter

Business Wire

PITTSBURGH -- January 23, 2013

H.J. Heinz Company (NYSE:HNZ) announced today that it has made an early
earn-out payment of $60 million to Transpac Industrial Holdings Ltd., a
Singapore-based private equity holding company, and various Transpac Funds,
the previous owners of Heinz’s Foodstar business in China. Heinz acquired
Foodstar in November 2010. The earn-out payment is in addition to the original
purchase price of $165 million.

This payment, which is 20% higher than the original provision, is based on the
outstanding financial performance of Foodstar in China and was accelerated
from July 2014 based on the parties’ decision that the objectives of the
earn-out arrangement have now been achieved. Heinz will record this payment as
a special item of $0.04 of earnings per share (EPS) in the fiscal third
quarter, which ends January 27, 2013.

“Foodstar has delivered excellent results and has performed well beyond our
expectations since joining Heinz. The business has grown to well over $200
million in sales and we continue to invest in the business to drive further
growth,” said Heinz Chairman, President and CEO William R. Johnson. “Led by
Foodstar’s Master soy sauce, our Ketchup and Sauces business in China more
than doubled in Fiscal 2012. Heinz has received a strong return on our
investment in Foodstar, which is well-positioned to deliver continued growth
in China’s $4 billion soy sauce market.”

Foodstar manufactures, markets and sells soy sauce and fermented bean curd and
has delivered dynamic growth since Heinz acquired the business from Transpac
in November 2010. The company has five factories in China, including a
state-of-the-art soy sauce factory in Shanghai.

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS:

This press release and our other public pronouncements contain forward-looking
statements within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
generally identified by the words “will,” “expects,” “anticipates,”
“believes,” “estimates” or similar expressions and include our expectations as
to future revenue growth, earnings, capital expenditures and other spending,
dividend policy, and planned credit rating, as well as anticipated reductions
in spending. These forward-looking statements reflect management’s view of
future events and financial performance. These statements are subject to
risks, uncertainties, assumptions and other important factors, many of which
may be beyond Heinz’s control, and could cause actual results to differ
materially from those expressed or implied in these forward-looking
statements. Factors that could cause actual results to differ from such
statements include, but are not limited to:

  * sales, volume, earnings, or cash flow growth,
  * general economic, political, and industry conditions, including those that
    could impact consumer spending,
  * competitive conditions, which affect, among other things, customer
    preferences and the pricing of products, production, and energy costs,
  * competition from lower-priced private label brands,
  * increases in the cost and restrictions on the availability of raw
    materials, including agricultural commodities and packaging materials, the
    ability to increase product prices in response, and the impact on
    profitability,
  * the ability to identify and anticipate and respond through innovation to
    consumer trends,
  * the need for product recalls,
  * the ability to maintain favorable supplier and customer relationships, and
    the financial viability of those suppliers and customers,
  * currency valuations and devaluations and interest rate fluctuations,
  * changes in credit ratings, leverage, and economic conditions and the
    impact of these factors on our cost of borrowing and access to capital
    markets,
  * our ability to effectuate our strategy, including our continued evaluation
    of potential opportunities, such as strategic acquisitions, joint
    ventures, divestitures, and other initiatives, our ability to identify,
    finance, and complete these transactions and other initiatives, and our
    ability to realize anticipated benefits from them,
  * the ability to successfully complete cost reduction programs and increase
    productivity,
  * the ability to effectively integrate acquired businesses,
  * new products, packaging innovations, and product mix,
  * the effectiveness of advertising, marketing, and promotional programs,
  * supply chain efficiency,
  * cash flow initiatives,
  * risks inherent in litigation, including tax litigation,
  * the ability to further penetrate and grow and the risk of doing business
    in international markets, particularly our emerging markets; economic or
    political instability in those markets, strikes, nationalization, and the
    performance of business in hyperinflationary environments, in each case
    such as Venezuela; and the uncertain global macroeconomic environment and
    sovereign debt issues, particularly in Europe,
  * changes in estimates in critical accounting judgments and changes in laws
    and regulations, including tax laws,
  * the success of tax planning strategies,
  * the possibility of increased pension expense and contributions and other
    people-related costs,
  * the potential adverse impact of natural disasters, such as flooding and
    crop failures, and the potential impact of climate change,
  * the ability to implement new information systems, potential disruptions
    due to failures in information technology systems, and risks associated
    with social media,
  * with regard to dividends, dividends must be declared by the Board of
    Directors and will be subject to certain legal requirements being met at
    the time of declaration, as well as our Board’s view of our anticipated
    cash needs, and
  * other factors described in “Risk Factors” and “Cautionary Statement
    Relevant to Forward-Looking Information” in the Company’s Annual Report on
    Form 10-K for the fiscal year ended April 29, 2012 and reports on Forms
    10-Q thereafter.

The forward-looking statements are and will be based on management’s then
current views and assumptions regarding future events and speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by the securities laws.

ABOUT HEINZ: H.J. Heinz Company, offering “Good Food Every Day”™ is one of the
world’s leading marketers and producers of healthy, convenient and affordable
foods specializing in ketchup, sauces, meals, soups, snacks and infant
nutrition. Heinz provides superior quality, taste and nutrition for all eating
occasions whether in the home, restaurants, the office or “on-the-go.” Heinz
is a global family of leading branded products, including Heinz® Ketchup,
sauces, soups, beans, pasta and infant foods (representing over one third of
Heinz’s total sales), Ore-Ida® potato products, Weight Watchers® Smart Ones®
entrées, T.G.I. Friday’s® snacks, and Plasmon infant nutrition. Heinz is
famous for its iconic brands on six continents, showcased by Heinz® Ketchup,
The World’s Favorite Ketchup®.

Contact:

H.J. Heinz Company
Media:
Michael Mullen, 412-456-5751
Michael.mullen@us.hjheinz.com
or
Investors:
Mary Ann Bell, 412-237-9760
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