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Maple Leaf Reports 2002 Third Quarter Financial Results

Operating Earnings Up 52%; Earnings Per Share Up 33%

Toronto, Ontario
– Maple Leaf Foods Inc. (TSX:MFI) today reported
its financial results for the third quarter
ended September 30, 2002.

“Maple Leaf achieved a 52% improvement in
operating earnings in the third quarter compared
to last year,” said Michael H. McCain, President
and Chief Executive Officer. “We are extremely
pleased with this performance considering the
challenging market conditions we have faced in
the past six months – specifically, a North
American over-supply of animal proteins, rapidly
rising wheat and feed grain prices, turbulent
conditions in export markets. This solid
improvement reflects on-going progress we are
making in implementing our fundamental business
strategies across the entire Company, and we are
executing a large number of initiatives designed
to grow our sales, improve our margins, and
reduce volatility in our portfolio.”

In accordance with changes in generally accepted
accounting principles, effective January 1, 2002
the Company no longer amortizes goodwill,
resulting in a positive impact on 2002 reported
earnings. The effect of this is explained more
fully in note 1 to the Company’s financial
statements. All comparative percentage increases
noted herein are after taking account of this
change.

Sales for the third quarter increased 6% to $
1.27 billion from $1.20 billion for the same
period last year, driven both by the acquisition
of bakery businesses and internal growth. During
the quarter, prices for meat products declined
across the industry due to lower raw material
input prices. Accordingly, actual tonnage growth
for the Company exceeded this level of dollar
sales growth.

Earnings from operations increased by 52% to
$49.8 million compared to $30.2 million last
year ($32.7 million before goodwill
amortization). The Meat Products Group reported
improved results, while lower earnings were
reported in the Agribusiness Group. The Meat
Products Group and Agribusiness Group, which
comprise the Company’s protein value chain
operations, are linked through the Company’s
Vertical Coordination strategic model. The
combined operating earnings for these two groups
of $28.8 million increased 47% from $19.6
million in the third quarter last year. The
Bakery Products Group recorded an 82% increase
in earnings over the prior year period.

Net earnings for the third quarter increased to
$19.3 million ($0.16 per share) compared to
$10.2 million ($0.10 per share) in 2001 ($12.5
million or $0.12 per share before goodwill
amortization), an earnings per share increase of
33%. Net earnings for the first nine months were
$58.8 million or $0. 49 per share compared to
$32.7 million ($0.31 per share) for the prior
year ($39.5 million or $0.38 per share before
goodwill amortization).

Other income for the third quarter of $0.2
million compared to $4.0 million for the same
period last year, when the Company received a
$3.5 million dividend from a passive investment.
Interest expense for the quarter of $13.9
million decreased from $16.0 million for the
prior year due to lower debt and interest rates.
Year-to-date interest expense was $42.3 million
compared to $49.5 million in 2001.

The Company’s cash flow from operating
activities for the third quarter increased to
$37.9 million compared to $6.1 million last
year, reflecting higher cash earnings and
significantly reduced investments in working
capital.

Meat Products Group (branded value-added
prepared meat products; fresh, frozen and
branded value-added pork products; fresh, frozen
and branded value-added chicken and turkey
products; and global food marketing,
distribution and trading)

Meat Products Group sales for the third quarter
decreased 9% to $717.6 million compared to
$792.3 million last year, as the market price
for meat products declined across the industry
due to lower raw material input prices.
Year-to-date sales of $2.2 billion compare to
$2.3 billion for the prior year period. Earnings
from operations improved to $11.9 million
compared to a loss of $4.5 million for the prior
year period (a loss of $3.3 million before
goodwill amortization), while earnings for the
first nine months increased 112% to $39.0
million compared to $18.4 for the same period
last year. Maple Leaf Consumer Foods, Maple Leaf
International and Maple Leaf Pork all reported
stronger earnings in the third quarter compared
to the prior year period. Maple Leaf Pork
continues to make steady progress in shifting
its sales mix to higher value-added products and
markets, while Maple Leaf Consumer Foods
benefited from reduced raw material prices and
growing market demand for Maple Leaf Top Dogs
and Maple Leaf Mega Bites wieners, as well as
Maple Leaf bacon and ham products. Partly
offsetting these results was the operating
performance of Maple Leaf Poultry, which
continued to be impacted by an oversupply of
Canadian poultry products and corresponding
price declines.

Agribusiness Group (research, development and
supply of quality livestock nutrition products
and services; pet food; swine production; and
animal by-products recycling)

Agribusiness Group sales for the third quarter
increased by 5.0% to $239.6 million compared to
$227.3 million last year, while year-to-date
sales were $701.5 million compared to $652.8
million last year. Operating earnings were $16.9
million compared to $24.1 million for the same
period last year ($ 24.5 million before goodwill
amortization), while earnings for the first nine
months were $ 51.7 million compared to $62.1
million for the prior year period. Lower
industry pricing for hogs, which affected the
Group’s interests in hog production operations,
was the principal reason for the lower earnings.
While rising grain prices adversely impacted the
profitability of the Company’s hog production
operations in the quarter, increased grain costs
had no material impact on the profitability of
the Company’s feed operations.

Bakery Products Group (fresh, frozen and branded
value-added bakery products, including frozen
par-baked bakery products; and specialty pasta
and sauces)

Bakery Products Group sales for the third
quarter increased 75% to $311.5 from $178.3
million for the same period last year, while
year-to-date sales increased 67% to $ 863.9
million from $515.8 million last year. Earnings
from operations for the third quarter increased
82% to $21.0 million from $10.6 million for the
same period last year ($11.5 million before
goodwill amortization), while earnings for the
first nine months were $52.1 million, a 93%
increase from $27.0 million last year. The
increase in sales and earnings was due to
contributions from recent acquisitions increased
sales of the Company’s branded fresh and
par-baked products, and continued operational
improvements. Excluding the effect of
acquisitions, sales for the quarter increased by
12%.

In the fourth quarter of 2001, Canada Bread
Company, Limited (“Canada Bread”), a 68% owned
subsidiary of Maple Leaf Foods, acquired the
remaining 75% interest in Multi-Marques Inc., to
hold 100%. As of September 30, 2002, Canada
Bread had committed to a restructuring plan for
the business and has completed the purchase
accounting for this acquisition. Included in
accounts payable and accrued charges as at
September 30, 2002 are accruals of $5.0 million
related to the costs associated with
restructuring and related rationalization costs.

On July 18, 2002 the Company acquired Olafson’s
Baking Company Inc. of Delta, British Columbia.
The initial purchase price was $11 million.
Additional consideration, up to a maximum of $11
million, may be payable depending on the
attainment of certain financial targets, up
until February 28, 2004.

On October 8, 2002 the Company announced the
purchase of Grace Baking Company of San
Francisco, California. Grace Baking is a leading
U.S. producer of premium fresh and frozen
artisan bread products.

On October 9, 2002, Maple Leaf Foods and Canada
Bread announced an agreement in principle
whereby Canada Bread will purchase all of Maple
Leaf Foods’ other bakery operations for $266
million, inclusive of debt assumption.
Completion of the transaction is subject to
finalization of documentation and approval by a
majority of Canada Bread’s shareholders,
excluding Maple Leaf Foods. Canada Bread expects
to mail an information circular to its
shareholders before the end of October and to
hold a meeting of its shareholders in early
December. If approved at that meeting, the
transaction would be scheduled to close in early
December 2002. The transaction is not expected
to have any material effect on Maple Leaf Foods’
earnings per share.

Other Matters
Maple Leaf Foods declared a dividend of $0.04
per share payable on December 31, 2002 to
shareholders of record on December 13, 2002.

Maple Leaf Foods Inc. is a leading Canadian food
processing company committed to delivering
quality food products to consumers around the
world. Headquartered in Toronto, Canada, the
Company employs more than 15,000 at its
operations across Canada and in the United
States, Europe and Asia. Maple Leaf Foods Inc.
reported sales of $4.8 billion in 2001.

A conference call will be held at 2:00 p.m.
(EST) on October 23, 2002 to review Maple Leaf
Foods’ financial results for the third quarter
ended September 30, 2002. The call will be
hosted by Michael H. McCain, President & Chief
Executive Officer; Tom P. Muir, Chief Financial
Officer and Michael H. Vels, Executive
Vice-President, Finance.

To participate in the call, please dial in to
1-888-774-1632. For those unable to participate
playback will be made available an hour after
the event at 1-800-558-5253 passcode #20941765.