DOANE PET CARE ENTERPRISES INC, S-1/A, 1999-03-17

DOANE PET CARE ENTERPRISES INC
S-1/A, 1999-03-17
GRAIN MILL PRODUCTS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 1999

REGISTRATION NO. 333-61027
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 5

TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DOANE PET CARE ENTERPRISES, INC.
(Exact Name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 2047 76-0472875
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>

103 POWELL COURT, SUITE 200
BRENTWOOD, TENNESSEE 37027
(615) 373-7774
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

THOMAS R. HEIDENTHAL
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
103 POWELL COURT, SUITE 200
BRENTWOOD, TENNESSEE 37027
(615) 373-7774
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies to:

<TABLE>
<S> <C>
ALAN P. BADEN DAVID P. OELMAN
VINSON & ELKINS L.L.P. ANDREWS & KURTH L.L.P.
2300 FIRST CITY TOWER 600 TRAVIS, SUITE 4200
1001 FANNIN HOUSTON, TEXAS 77002
HOUSTON, TEXAS 77002 (713) 220-4200
(713) 758-2222
</TABLE>

---------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MARCH 17, 1999

PROSPECTUS
, 1999
DOANE PET CARE ENTERPRISES LOGO

14,600,000 SHARES

DOANE PET CARE ENTERPRISES, INC.
COMMON STOCK

Of the 14,600,000 shares of Class A Common Stock, par value $0.0001 per
share, of Doane Pet Care Enterprises, Inc. (the "Company") offered hereby (the
"Offering"), 10,000,000 shares are being sold by the Company and 4,600,000
shares are being sold by certain selling stockholders (the "Selling
Stockholders"). The Company has two classes of common stock, Class A Common
Stock and Class B Common Stock (collectively, the "Common Stock"), that are
identical except that Class B Common Stock, which is convertible into Class A
Common Stock, has no voting rights. The Company will not receive any of the
proceeds from the sale of shares of Common Stock by the Selling Stockholders.
See "Principal and Selling Stockholders."

Prior to the Offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price of the
Common Stock offered hereby will be between $11.00 and $13.00 per share. For
information relating to the factors considered in determining the initial public
offering price, see "Underwriting."

The Company has received approval to have the Common Stock included on the
National Association of Securities Dealers Automated Quotation National Market
System (the "Nasdaq National Market") under the symbol "DPCE."

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS
TO THE DISCOUNTS AND TO THE TO THE SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
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Per Share......................... $ $ $ $
Total(3).......................... $ $ $ $
</TABLE>

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(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters (as defined below) against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities
Act"). See "Underwriting."

(2) Before deducting expenses estimated at $1.8 million which will be paid by
the Company.

(3) Certain Selling Stockholders have granted the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to 2,190,000
additional shares of Common Stock at the Price to the Public less
Underwriting Discounts and Commissions, solely to cover over-allotments, if
any. If the option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be
$ , $ and $ , respectively. See "Underwriting."

The shares of Common Stock offered hereby are being offered by the several
Underwriters when, as and if delivered to and accepted by the Underwriters
against payment therefor and subject to certain prior conditions, including
their right to reject orders in whole or in part. It is expected that delivery
of the share certificates representing the Common Stock will be made in New
York, New York, on or about , 1999.

DONALDSON, LUFKIN & JENRETTE
MERRILL LYNCH & CO.
SCHRODER & CO. INC.
CHASE SECURITIES INC.
<PAGE> 3

[A SERIES OF PICTURES REPRESENTING
COMPANY MANUFACTURING FACILITIES
AND PRODUCTS]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING
AND MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise indicated, the information in
this Prospectus (i) assumes an initial public offering price of $12.00 per
share, (ii) assumes that the Underwriters' over-allotment option is not
exercised and (iii) gives effect to the Company's four-for-one stock split
effected immediately prior to the Offering. Unless the context indicates
otherwise, references in this Prospectus to the Company mean Doane Pet Care
Enterprises, Inc. and its subsidiaries. The Company's pro forma financial and
operating data set forth herein gives effect to the acquisition (the "Windy Hill
Acquisition") of Windy Hill Pet Food Holdings, Inc. and its subsidiaries ("Windy
Hill") in August 1998, the acquisition (the "IPES Acquisition") of IPES IBERICA,
S.A. ("IPES") in April 1998 and the Refinancing Transactions (as defined herein)
in November 1998. Investors should carefully consider the information set forth
in "Risk Factors."

THE COMPANY

The Company is the largest manufacturer of dry pet food in the United
States, producing approximately 26% of the total volumes sold in 1998 on a pro
forma basis. The Company manufactures products for store brands owned by retail
customers (also known as private labels), contract manufactures products for
national branded pet food companies and produces and sells under regional brands
owned by the Company.

The Company manufactures for its customers a full range of pet food
products for both dogs and cats, including dry, canned, semi-moist, soft dry,
soft treats and dog biscuits. The Company provides products that meet customer
specifications across all retail channels and price points, from super premium
to value products. Accordingly, the Company manufactures store brands for over
350 customers in the United States, including the three largest mass
merchandisers, the five largest grocery companies and the largest national pet
specialty retailer. The Company also manufactures dry pet food and treats for
five of the six largest national branded pet food companies through
co-manufacturing agreements pursuant to which the Company produces, packages and
ships a portion of such companies' products.

The Company has the most extensive manufacturing and distribution network
in the industry, providing it with certain operational, cost and competitive
advantages. The Company manufactures and distributes its products in the United
States through 32 combination manufacturing and distribution facilities and
eight additional distribution centers. One additional manufacturing and
distribution facility located in Clinton, Oklahoma is expected to open in the
second quarter of fiscal 1999. The number and strategic location of the
Company's facilities reduce distribution expenses, which represent a meaningful
portion of the delivered cost of pet food due to its bulk and weight relative to
its selling price. The Company's extensive network can further reduce expenses
by enabling certain of its customers to bypass their distribution centers and
deliver directly to their stores. Direct store delivery service currently
accounts for approximately 45% of the Company's sales by volume.

The Company has achieved strong internal growth. From 1992 to 1998, the
Company increased sales volumes at a compound annual growth rate of 9.3%,
exclusive of acquisitions. The Company believes its growth is primarily due to
an increase in consumer acceptance of dry products versus canned products and
store brands versus national brands. In addition, the Company has been the
primary supplier of store brand pet food to WalMart Stores Inc. ("Wal*Mart")
since 1970. The Company manufactures and distributes, under a direct store
delivery program, a variety of products for Wal*Mart including its store brand,
Ol' Roy, which is the largest selling brand of dry pet food in the United States
by volume. In 1998, sales of store brand products to Wal*Mart, including its
Sam's Club division, accounted for 36.5% of the Company's sales on a pro forma
basis.

THE PET FOOD INDUSTRY

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1994 and accounted for approximately $5.7 billion of sales in the industry in
1998. Sales of biscuits and treats have grown at a compound rate of 4.5% per
year since 1994 and accounted for approximately $1.3 billion of sales during
1998.

Improved product quality, consumer value and increased retailer support
have generally enabled store brands to outgrow the category in many traditional
branded categories, including pet food. Since 1994, the volume of sales of store
brand dry pet food has grown at a compound annual rate of 9.0% per year versus
the category, which has grown at 5.2% per year. The volume of sales of store
brand canned pet food over the same period has grown at a compound rate of 15.3%
per year versus the category, which has declined by 0.9%. Store brand dog
biscuits and treats have grown at a compound rate of 13.5% since 1994 with the
category growing at 4.5% per year. Sales of store brand pet food accounted for
in excess of 25% of the total pet food market in 1998 and have grown at a
compound annual growth rate in excess of 7% over the past five years. Store
brands have increased market share in each of the segments of the pet food
industry over the past five years. In 1998, store brands represented
approximately 38%, 31%, 24%, 18% and 16% of total sales volume of biscuits and
treats, dry dog, dry cat, canned dog and canned cat food, respectively. Store
brands today encompass a full range of pet food products at all price points
including economy, premium and super premium.

RECENT DEVELOPMENTS

Refinancing Transactions. In November 1998, the Company refinanced its
capital structure pursuant to the following series of transactions collectively
referred to herein as the "Refinancing Transactions:"

-- Windy Hill was merged into Doane Pet Care Company, the Company's
principal operating subsidiary ("Doane");

-- Doane completed a cash tender offer for approximately $97 million
principal amount of its 10 5/8% Senior Notes due 2006 (the "Senior
Notes");

-- Windy Hill completed a cash tender offer for $46 million principal
amount of its 9 3/4% Senior Subordinated Notes due 2007 (the "Windy Hill
Notes"), which tender offer was required by a change of control
provision in the indenture governing such notes;

-- Doane completed an exchange offer (the "Exchange Offer") of $150 million
principal amount of its 9 3/4% Senior Subordinated Notes due 2007 (the
"Senior Subordinated Notes") for the remaining approximately $63 million
principal amount of Senior Notes and the remaining approximately $74
million principal amount of Windy Hill Notes; and

-- Doane entered into a new senior credit facility (the "Senior Credit
Facility") with a syndicate of financial institutions providing for
total commitments of $345 million. Doane borrowed $292 million under the
Senior Credit Facility to fund the cash requirements of the Refinancing
Transactions, repay borrowings under and retire its previous credit
facilities, repay other debt and repay a bridge financing incurred in
connection with the tender offer for the Windy Hill Notes.

Windy Hill Acquisition. In August 1998, the Company acquired Windy Hill for
approximately 6.4 million shares of Common Stock and the assumption of $183.5
million of indebtedness. Windy Hill was a leading manufacturer of pet food
products for both dogs and cats, including dry, canned, semi-moist, soft dry,
soft treats and dog biscuits. With Windy Hill, the Company became the largest
manufacturer of dog biscuits in the United States. In 1997, Windy Hill generated
pro forma net sales, EBITDA and a net loss before extraordinary item of $304.0
million, $26.7 million and $1.6 million, respectively.

The Windy Hill Acquisition strengthens the Company's presence in the dry
pet food and dog biscuit market segments, provides revenue synergies and
enhances the Company's position as a low-cost manufacturer and distributor of
pet food products. The Company believes the Windy Hill Acquisition provides the
opportunity for revenue growth by (i) enabling the Company to offer regional
brands, semi-moist, soft dry and canned pet food products to its traditional
customer base and (ii) enabling the Company to offer soft treats and other
specialized dry food products to Windy Hill's traditional customer base. With
the addition of Windy Hill's 19 plants, the Company believes cost savings can be
achieved through optimizing production schedules
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and lowering distribution costs by reducing the distance products are shipped.
The Windy Hill Acquisition also provides the Company with the opportunity to
achieve cost savings by obtaining purchasing synergies and eliminating redundant
overhead functions.

IPES Acquisition. In April 1998, the Company acquired IPES for $26.2
million (net of cash purchased of $1.9 million) and the assumption of
indebtedness of $1.9 million. IPES, located in Spain, is a manufacturer of both
store and regional brands. In fiscal 1997, IPES had net sales, EBITDA and net
income of $21.1 million, $3.8 million and $1.0 million, respectively. The
Company believes that the IPES Acquisition, together with the Company's
investment in the Italian pet food manufacturer, Effeffe, S.p.a., provides the
Company with a platform for growth in Europe.

STRATEGY

The Company's business objective is to increase revenues and earnings and
to enhance its leadership position within the pet food industry. The key
elements of the strategy to achieve the Company's business objective are as
follows:

Continue to be the Low Cost Quality Provider in the Pet Food Industry. The
Company believes it is the low cost provider of quality dry pet food. The
Company believes its position as the largest manufacturer of dry pet food
provides it with certain economies of scale, including production efficiencies
and packaging purchasing leverage. In addition, the number and strategic
location of the Company's facilities enhance the Company's position as the low
cost provider by reducing transportation costs for raw materials and finished
goods. The Company also maintains in-house engineering, machining and
fabrication capabilities that enable the Company to design, construct and
maintain facilities on a cost-effective basis.

Leverage Distribution System. The Company's manufacturing and distribution
network enables it to service customers on a national basis and facilitates the
Company's direct store delivery program, the scope of which the Company believes
is unique in the industry. In addition, the Company has developed capabilities
that allow it to provide vendor managed inventory services ("VMI") to certain
key customers. VMI allows the Company to communicate on-line with its customers,
evaluate their inventory status and place orders on their behalf. The Company
intends to leverage its manufacturing and distribution network by expanding
sales of its full range of pet food products to its existing customers. For
example, the Company recently completed the construction of a soft treat
manufacturing facility, which will enable the Company to offer soft treats to
its traditional customer base, and intends to expand sales of certain products
acquired in the Windy Hill Acquisition including semi-moist, soft dry, canned
and regional brands to its existing customers.

Provide a Full Range of Pet Food Products. The Company offers customers a
full range of pet food products for both dogs and cats, including dry, canned,
semi-moist, soft dry, soft treats and dog biscuits. By offering a full range of
products under a variety of brand formats (store, co-manufactured national and
regional brands) and price points, the Company can be a significant source for
its customers' total pet food requirements. This enables customers to realize
administrative and distribution savings by aggregating a variety of products and
brands into a single shipment.

Focus on Diversified Brand Formats. The Company believes that store,
co-manufactured national and regional brand formats offer significant growth
opportunities. Sales of store brands have exceeded the overall growth in the pet
food industry. The Company believes this growth will continue due to (i) an
increased awareness of retailers concerning the advantages of store brands,
including enhanced margins and customer loyalty, (ii) improved quality,
innovation and variety of store brand products and (iii) increasingly informed
and value-conscious consumers. The Company believes co-manufactured national
brands offer growth opportunities as national branded pet food companies
increasingly take advantage of the Company's low-cost status, quality products
and logistic and specialty product capabilities. The Company believes that the
regional brands acquired with the Windy Hill Acquisition complement its existing
product lines and intends to capitalize on demand for such brands within the
Company's existing customer base.

Acquire Additional Pet Food Companies. To supplement its internal growth,
the Company has acquired eight pet food companies over the last four years. The
Company believes that there are substantial

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opportunities in the United States and abroad to acquire additional pet food
companies. The Company will continue to seek accretive acquisitions that offer
complementary product lines, geographic scope, additional distribution channels
and cost saving opportunities.

Expand International Presence. The Company believes substantial
opportunities exist to increase sales in international markets. The Company
believes that the approximately $9.3 billion European pet food market is
particularly attractive due to the strength and demand for store brand products
and the strong growth of dry pet food products. The Company is currently
expanding its manufacturing and distribution capabilities in Spain and Italy and
intends to pursue acquisitions of additional pet food companies and expand its
product offerings. In addition, the Company believes that an opportunity exists
to expand export sales to the Pacific Rim and South America.

THE OFFERING

Common Stock offered by:

The Company........................... 10,000,000 shares

The Selling Stockholders.............. 4,600,000 shares(1)

Total............................ 14,600,000 shares

Common Stock to be outstanding after the
Offering................................... 29,135,268 shares(2)

Use of Proceeds............................ The net proceeds to the Company
from the Offering will be used to
repay borrowings under the Senior
Credit Facility and to repurchase
the outstanding senior preferred
stock of Doane (the "Senior
Preferred Stock"). See "Use of
Proceeds."

Nasdaq National Market symbol.............. "DPCE"
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(1) Includes 733,272 shares of Common Stock to be issued by the Company upon the
exercise by the Underwriters of warrants that were previously held by
certain of the Selling Stockholders. See "Certain Transactions."

(2) Does not include (i) 1,669,600 shares of Common Stock issuable upon exercise
of options outstanding under the Company's stock option plan and (ii)
4,684,640 shares of Common Stock issuable upon exercise of outstanding
warrants with an exercise price of $0.0025 per share. See
"Management -- Stock Option and Stock Purchase Plans" and "Principal and
Selling Stockholders."

RISK FACTORS

Prior to making an investment in the Common Stock offered hereby,
prospective purchasers of the Common Stock should take into account the specific
risks set forth under "Risk Factors" as well as the other information set forth
in this Prospectus.

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SUMMARY FINANCIAL INFORMATION

The summary historical financial information for the periods ended December
31, 1996, 1997 and 1998 are derived from the consolidated financial statements
of the Company included elsewhere in this Prospectus. The unaudited condensed
pro forma as adjusted income statement data give effect to the Windy Hill
Acquisition, including the pro forma effects of each of the transactions
included in the pro forma financial statements of Windy Hill, the IPES
Acquisition, the Refinancing Transactions and the Offering as if each of such
transactions had occurred on January 1, 1998. The unaudited pro forma balance
sheet gives effect to the Offering and the use of proceeds therefrom, as if such
transactions had occurred on December 31, 1998. Such pro forma data are
presented for illustrative purposes only and do not purport to represent the
Company's actual results if such events had occurred at the dates indicated, nor
do such data purport to project the results of operations for any future period.
The information set forth below is qualified in its entirety and should be read
in conjunction with the consolidated financial statements and notes thereto of
the Company, the consolidated financial statements and notes thereto of Windy
Hill, "Unaudited Condensed Pro Forma Financial Statements," "Selected
Consolidated Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
PRO FORMA
1996 1997 1998(1) 1998
-------- -------- -------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................. $513,217 $564,741 $686,663 $865,346
Gross profit.............................. 66,441 81,845 132,216 175,556
Transition expenses(2).................... -- -- 7,043 15,499
Product recall(3)......................... -- -- 3,000 3,000
Income from operations.................... 24,911 31,984 44,320 48,262
Interest expense, net..................... 22,471 22,463 31,503 36,639
Non-recurring finance charge(4)........... 4,815 -- 4,599 4,599
Income (loss) before extraordinary
items.................................. $ (1,518) $ 6,234 $ 4,576 $ 1,762(5)
Basic earnings (loss) per share(6)........ $ (0.66) $ (0.01) $ (2.04) $ 0.06
Basic weighted average number of shares
outstanding............................ 11,006 11,350 14,429 28,913
Diluted earnings (loss) per share......... $ (0.66) $ (0.01) $ (2.04) $ 0.05(5)
Diluted weighted average number of shares
outstanding............................ 11,006 11,350 14,429 34,991
OTHER DATA:
EBITDA(7)................................. $ 30,449 $ 43,216 $ 57,433 $ 68,876
Adjusted EBITDA(7)........................ 35,264 43,216 72,075 91,974
Depreciation and amortization expense..... 10,135 10,971 17,877 24,763
Capital expenditures(8)................... 7,901 14,437 23,327 28,221
Pet food sold (thousands of tons)......... 1,189 1,237 1,513 1,864
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1998
-------------------------
HISTORICAL PRO FORMA
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 3,350 $ 3,350
Working capital........................................... 31,183 31,541
Total assets.............................................. 710,448 709,865
Total debt................................................ 459,170 406,763
Stockholders' equity...................................... 70,674 160,290
</TABLE>

(footnotes on next page)

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- ------------------------------

(1) Results for the year ended December 31, 1998 include the results of Windy
Hill for the period from August 3, 1998 to December 31, 1998.
(2) Represents certain non-recurring transition expenses in connection with the
Windy Hill Acquisition.

(3) Represents costs associated with a product recall in the fourth quarter of
1998. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Commitments and Contingencies."

(4) Non-recurring finance charges include $4,815 and $4,599 of interim bridge
debt financing costs that were incurred in conjunction with the issuance of
the Senior Notes in 1996 and the Refinancing Transactions in 1998,
respectively.

(5) Income before extraordinary items was reduced by $16,259, or $0.46 of
diluted earnings per share, as a result of transition expenses, product
recall expenses and the non-recurring finance charge, net of a tax benefit
of $6,839. Excluding these charges, income before extraordinary items would
have been $18,021 or $0.51 of diluted earnings per share.

(6) In the fiscal years ended December 31, 1996, 1997, and 1998, the effect of
common stock equivalents was antidilutive resulting in the same earnings per
share amount for basic and diluted net income (loss) per common share.

(7) EBITDA for any relevant period presented above is defined as income before
extraordinary items plus interest expense, net, income taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA as defined plus
transition and product recall expenses and non-recurring finance charges.
EBITDA is not a measure recognized by generally accepted accounting
principles and should not be considered in isolation or as a substitute for
operating income as an indicator of liquidity or as a substitute for net
cash provided by operating activities, which are determined in accordance
with generally accepted accounting principles. EBITDA is included because
management believes that certain investors may find it useful. See
"Unaudited Condensed Pro Forma Financial Statements" and the Company's
Consolidated Financial Statements and the notes thereto included elsewhere
in this Prospectus.
(8) Capital expenditures exclude payments for acquisitions.

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FORWARD-LOOKING STATEMENTS

All statements other than statements of historical facts included in this
Prospectus, including, without limitation, statements under "Summary," "Risk
Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" regarding planned capital expenditures,
the availability of capital resources to fund capital expenditures, the
Company's financial position, business strategy and other plans and objectives
for future operations, are forward-looking statements. The words "anticipate,"
"believe," "expect," "plan," "intend," "estimate," "project," "will," "may" and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. There are numerous uncertainties inherent
in estimating the cost of raw materials and labor, including many factors beyond
the control of the Company. Additional important factors that could cause actual
results to differ materially from the Company's expectations are disclosed below
and elsewhere in this Prospectus. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by such factors.

RISK FACTORS

LEVERAGE; RESTRICTIVE COVENANTS

The Company is highly leveraged and will continue to be highly leveraged
following the consummation of the Offering. At December 31, 1998, on a pro forma
basis, the Company would have had approximately $406.8 million in aggregate
principal amount of outstanding indebtedness (excluding trade payables and other
accrued liabilities). See "Capitalization." Subject to the restrictions in the
Senior Credit Facility and the indenture governing the Senior Subordinated Notes
(the "Note Indenture"), the Company may incur additional indebtedness from time
to time to finance working capital, capital expenditures, acquisitions or for
other purposes.

The level of the Company's indebtedness will have important consequences to
common stockholders, including: (i) a substantial portion of the Company's cash
flow from operations must be dedicated to debt service and will not be available
for other purposes, (ii) the Company's ability to obtain additional debt
financing in the future for working capital, capital expenditures, general
corporate purposes or other purposes may be impaired, (iii) a portion of the
Company's borrowings under the Senior Credit Facility will be at a floating rate
of interest, which could result in higher interest expense in the event of an
increase in interest rates, (iv) the Senior Credit Facility and the Note
Indenture contain financial and other restrictive covenants that could limit the
Company's operating and financial flexibility and, if violated, would result in
an event of default that could preclude the Company's access to credit under the
Senior Credit Facility or otherwise have a material adverse effect on the
Company and (v) the level of the Company's indebtedness could limit its
flexibility in reacting to changes in its industry and economic conditions
generally.

The Senior Credit Facility and the Note Indenture restrict, among other
things, the Company's ability to incur additional indebtedness, incur liens, pay
dividends or make certain other restricted payments, consummate certain asset
sales, enter into certain transactions with affiliates, merge or consolidate
with, or otherwise acquire, any other person or sell, assign, transfer, lease,
convey or otherwise dispose of substantially all of the assets of the Company.
See "Description of Senior Subordinated Notes" and "Description of Senior Credit
Facility." The Senior Credit Facility also requires the Company to maintain
specified financial ratios and satisfy certain financial condition tests. The
Company's ability to meet such financial ratios and tests can be affected by
events beyond its control, and there can be no assurance that the Company will
meet such tests. A breach of any of these covenants could result in a default
under the Senior Credit Facility or the Note Indenture. Upon the occurrence of
an event of default under the Senior Credit Facility, the lenders could elect to
declare all amounts outstanding under the Senior Credit Facility, together with
accrued interest, to be immediately due and payable. If the Company were unable
to repay those amounts, the lenders could proceed against the collateral granted
to them to secure that indebtedness. If the Senior Subordinated Notes and the
indebtedness under the Senior Credit Facility were to be accelerated, there can
be no assurance that the assets

9
<PAGE> 11

of the Company would be sufficient to repay in full that indebtedness. See
"Description of Senior Credit Facility" and "Description of Senior Subordinated
Notes." In connection with the Senior Credit Facility, the Company has pledged
to the lenders substantially all of its assets. If an event of default occurs
under the Senior Credit Facility, the lenders have the right to foreclose upon
such collateral. These restrictions could limit the ability of the Company to
effect future financings or may otherwise restrict corporate activities.

Future acquisition or development activities may require the Company to
alter its capitalization significantly. These changes in capitalization may
significantly increase the leverage of the Company. The Company's ability to
meet its debt service obligations and to reduce its total indebtedness will be
dependent upon the Company's future performance, which will be subject to
general economic conditions and to financial, business and other factors
affecting the operations of the Company, many of which are beyond its control.
If the Company is unable to generate sufficient cash flow from operations in the
future to service its indebtedness and to meet its other commitments, the
Company will be required to adopt one or more alternatives, such as refinancing
or restructuring its indebtedness, selling material assets or operations or
seeking to raise additional debt or equity capital. There can be no assurance
that any of these actions could be effected on a timely basis or on satisfactory
terms or that these actions would enable the Company to continue to satisfy its
capital requirements. The terms of the Company's indebtedness, including the
Senior Credit Facility and the Note Indenture, also may prohibit the Company
from taking such actions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

DEPENDENCE ON CERTAIN CUSTOMERS

For the years ended December 31, 1996, 1997 and 1998, sales to Wal*Mart and
Sam's Club accounted for approximately 63%, 61% and 52%, respectively, of the
Company's net sales. For the year ended December 31, 1998 on a pro forma basis,
sales of store brand products to Wal*Mart and Sam's Club accounted for an
aggregate of 36.5% of the Company's net sales. The Company does not have a
long-term contract with Wal*Mart, Sam's Club or any other customer. A
significant decrease in business from either Wal*Mart or Sam's Club would have a
material adverse effect on the Company's results of operations, financial
condition and cash flows. In addition, the Company's results of operations would
be negatively impacted to the extent that Wal*Mart or Sam's Club is unable to
make payments on outstanding accounts receivable. See "Business -- Customers."

RAW MATERIALS AND PACKAGING COSTS

The Company's financial results depend to a large extent on the cost of raw
materials and packaging and the ability of the Company to pass along to its
customers increases in these costs. Historically, market prices for commodity
grains and food stocks have fluctuated in response to a number of factors,
including changes in United States government farm support programs, changes in
international agricultural and trading policies and weather conditions during
the growing and harvesting seasons. Fluctuations in paper prices have resulted
from changes in supply and demand, general economic conditions and other
factors. In the event of any increases in raw materials costs, the Company would
be required to increase sales prices for its products in order to avoid margin
deterioration. There can be no assurance as to the timing or extent of the
Company's ability to implement future price adjustments in the event of
increased raw material costs or as to whether any price increases implemented by
the Company may affect the volumes of future shipments. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Overview" and "Business -- Raw Materials and Packaging." Although
the Company manages the price risk created by market fluctuations by hedging
portions of its primary commodity product purchases, there can be no assurance
that the Company's results of operations will not be exposed to volatility in
the commodity markets. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Overview" and "-- Inflation and Changes
in Prices."

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<PAGE> 12

HEDGING

The Company manages price risk created by market fluctuations by hedging
portions of its primary commodity products purchases, principally through
exchange traded futures and options contracts that are designated as hedges. The
terms of such contracts are generally less than one year. Settlement of
positions are either through financial settlement with the exchanges or via
exchange for the physical commodity in which case the Company delivers the
contract against the acquisition of the physical commodity.

The Company's policy does not permit speculative commodity trading. Futures
and options contracts are accounted for as hedges, and gains and losses are
recognized in the period realized as part of the cost of products sold and in
the cash flows. Although the Company manages the price risk of market
fluctuations by hedging portions of its primary commodity product purchases,
there can be no assurance that the Company's results of operations will not be
exposed to volatility in the commodity markets. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Overview" and
"-- Inflation and Changes in Prices."

ACQUISITION STRATEGY

The Company's acquisition strategy is based on identifying and acquiring
businesses engaged in manufacturing and distributing pet food products in
markets where the Company currently does not operate or businesses with products
that would complement the Company's product mix. The Company will evaluate
specific acquisition opportunities based on prevailing market and economic
conditions. The Company's lack of experience in new markets it may enter through
future acquisitions could have an adverse effect on the Company's results of
operations and financial condition. Acquisitions may require investment of
operational and financial resources and could require integration of dissimilar
operations, assimilation of new employees, diversion of management time and
resources, increases in administrative costs, potential loss of key employees of
the acquired company and additional costs associated with debt or equity
financing. Any future acquisition by the Company could have an adverse effect on
the Company's results of operations or could result in dilution to existing
shareholders, including those purchasing shares of Common Stock in this
Offering. The Company may encounter increased competition for acquisitions in
the future, which could result in acquisition prices the Company does not
consider acceptable. There can be no assurance that the Company will find
suitable acquisition candidates at acceptable prices or succeed in integrating
any acquired business into the Company's existing business or in retaining key
customers of acquired businesses. There can be no assurance that the Company
will have sufficient available capital resources to execute its acquisition
strategy. See "Business -- Business Strategy" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

INTEGRATION OF RECENT ACQUISITIONS

There can be no assurance that the Company will succeed in integrating
Windy Hill into the Company's existing business. In addition, the Company may
experience a loss of certain customers as a result of the Windy Hill
Acquisition. If the expected operating efficiencies from the Windy Hill
Acquisition do not materialize, if the Company fails to integrate the Windy Hill
Acquisition into its existing operations, if the costs of such integration
exceed expectations or if the Company experiences unexpected costs or
liabilities at Windy Hill, the Company's operating results and financial
condition could be materially and adversely affected. There can also be no
assurance that the Company will succeed in integrating other recent
acquisitions, including acquisitions made by Windy Hill, into the Company's
existing operations. See "Unaudited Condensed Pro Forma Financial Statements"
and "Business -- Recent Developments."

GOODWILL AND OTHER INTANGIBLE ASSETS

The Company had an aggregate $299.6 million of goodwill and other
intangible assets on its balance sheet as of December 31, 1998. Goodwill has
been recorded under purchase accounting to represent the excess of the amount
paid over the book value of the assets acquired. Other intangibles include
trademarks and miscellaneous intangible assets such as software development
costs. No assurance can be given that the amount of such goodwill and other
intangible assets equivalent to the value of such assets will be realized by the
Company in the future. Goodwill and other intangible assets represented 42.2% of
total assets as of December 31, 1998. The Company is amortizing goodwill over 40
years, trademarks over 30 years and
11
<PAGE> 13

miscellaneous intangible assets over four to five years. No assurance can be
given that these amortization rates approximate the time period over which these
businesses and assets will be valuable to the Company. The Company's earnings in
future periods would be reduced if the amortization periods were shortened or
the amount of such goodwill or other intangible assets were to be written off
prior to amortization.

COMPETITION

The pet food industry is highly competitive. The companies that produce and
market the major national branded pet foods are national or international
conglomerates that are substantially larger than the Company and possess
significantly greater financial and marketing resources than the Company. The
store brand pet food products sold by the Company's customers compete for access
to shelf space with national branded products on the basis of quality and price.
National branded products compete principally through advertising to create
brand awareness and loyalty, and, increasingly, on price. The Company
experiences price competition from national branded manufacturers. To the extent
that there is significant price competition from the national branded
manufacturers or such manufacturers significantly increase their presence in the
store brand market, the Company's operating results and cash flow could be
adversely affected. The Company also competes with regional branded
manufacturers and other store brand manufacturers. See "Business --
Competition."

INTERNATIONAL OPERATIONS

The Company operates a portion of its business and markets products
internationally and plans to increase its international marketing and business
activities. The Company is, therefore, subject to and will increasingly become
subject to, the risks customarily attendant to international operations and
investments in foreign countries. These risks include nationalization,
expropriation, war and civil disturbance, restrictive action by local
governments, limitation on repatriation of earnings, change in foreign tax laws
and change in currency exchange rates, any of which could have an adverse effect
on the Company's operations in such countries. Interruption of the Company's
international operations could have a material adverse effect on its financial
condition and results of operations.

The Company may, from time to time, conduct a portion of its business in
currencies other than the United States dollar, thus subjecting the Company's
results to fluctuations in foreign currency exchange rates. There can be no
assurance that the Company will be able to protect itself against such
fluctuations in the future.

CONTROL OF THE BOARD OF DIRECTORS

In connection with the Windy Hill Acquisition, the Company, Doane,
Summit/DPC Partners, L.P. ("Summit"), Summit Capital Inc. ("SCI"), Chase
Manhattan Investment Holdings, Inc. ("CMIHI") and an affiliate thereof, DLJ
Merchant Banking Partners, L.P. ("DLJMB") and certain of its affiliates, all of
Windy Hill's former stockholders and certain other stockholders of the Company
(collectively, the "Stockholders") entered into an Investors' Agreement (the
"Investors' Agreement"). The Investors' Agreement provides that the Board of
Directors of the Company (the "Board" or "Board of Directors") will consist of
eight members, one being the Chief Executive Officer of the Company. Other than
the Chief Executive Officer, certain of the remaining seven directors will be
designated by one or a combination of the Stockholders, subject to certain
percentage ownership requirements. DLJMB and its affiliates do not have any
right to designate Board members and are not parties to the governance
provisions of the Investors' Agreement. Through their control of the Board of
Directors, certain of the Stockholders, excluding DLJMB and its affiliates, will
be in a position to control the policies, management and affairs of the Company
and to effectively prevent or cause a change in control of the Company. The
Stockholders who have the right to designate individuals to the Board of
Directors will not have such right if their Percentage Ownership (as defined in
the Investors' Agreement) of Common Stock is reduced below 5%. Immediately after
the Offering, the Stockholders will beneficially own in the aggregate
approximately 55% of the outstanding Common Stock. See "Certain
Transactions -- Investors' Agreement." It is expected that the Board of
Directors will be expanded to ten members after the consummation of the
Offering.

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<PAGE> 14

DEPENDENCE ON KEY PERSONNEL

The Company's success depends in part upon the continued services of its
highly skilled personnel involved in management, production and distribution,
and, in particular, upon the efforts and abilities of its executive management
group. The loss of service of any of the members of its executive management
group could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company has entered into employment
agreements with members of its executive management group. The Company does not
have key-person life insurance covering any of its employees. The success of the
Company also depends upon its ability to attract and retain additional highly
qualified employees. See "Management."

ENVIRONMENTAL, REGULATORY AND SAFETY MATTERS; PRODUCT RECALL

The Company is subject to a broad range of federal, state, local and
foreign laws and regulations intended to protect the public health and the
environment, including those governing discharges to the air and water, the
storage of petroleum substances and chemicals, the handling and disposal of
solid or hazardous wastes, and the remediation of contamination associated with
releases of wastes or hazardous substances. The Company is also subject to
regulation by the Occupational Safety and Health Administration ("OSHA"), the
Food and Drug Administration ("FDA") and the United States Department of
Agriculture ("DOA") and by various state and local authorities. Violations of
these regulatory requirements can result in administrative, civil or criminal
penalties being levied against the Company, permit revocation or modification or
in a cease and desist order against operations that are not in compliance.

On October 30, 1998 the Company initiated a voluntary product recall for
certain dry dog food manufactured at its Temple, Texas plant. The recall covers
dry dog food manufactured at its Temple plant between July 1 and August 31, 1998
and does not apply to dry dog food manufactured at other plants or the Company's
dry cat food, biscuits, treats or canned products. The recall resulted from
reported sickness and death of dogs in the State of Texas. These conditions were
attributed to elevated levels of aflatoxins in corn, which is an ingredient in
dry dog food. Aflatoxins are compounds produced from certain kinds of crop molds
that can be caused by extreme weather conditions such as drought and heat. The
Company has an extensive corn testing program for the detection of aflatoxins
and that program has been intensified since the problems were reported. The
Company maintains insurance against losses from illness or death of animals;
however, the cost of the product recall is not covered by insurance. The Company
recorded a $3.0 million product recall charge in the fourth quarter of fiscal
1998.

The Company believes that its operations are in material compliance with
environmental, safety and other regulatory requirements; however, there can be
no assurance that such requirements will not change in the future or that the
Company will not incur significant costs in the future (i) to comply with such
requirements, (ii) to effect future recalls, or (iii) in connection with the
effect on the Company's business of such matters. See
"Business -- Environmental, Regulatory and Safety Matters; Product Recall."

INTERESTS OF UNDERWRITERS

DLJMB, an affiliate of Donaldson, Lufkin & Jenrette Securities Corporation
("DLJSC"), will receive approximately $6.4 million in proceeds of the Offering
as a Selling Stockholder (assuming an initial public offering price of $12.00
per share). CMIHI, an affiliate of Chase Securities Inc. ("CSI"), will receive
(i) approximately $9.1 million in proceeds of the Offering as payment for the
repurchase of 200,000 shares of Senior Preferred Stock (based upon the
liquidation value of the Senior Preferred Stock as of March 31, 1999) and (ii)
approximately $2.4 million in proceeds of the Offering as a Selling Stockholder
(assuming an initial public offering price of $12.00 per share). In addition,
affiliates of CMIHI and DLJSC will receive proceeds from the Offering in
connection with the partial repayment of the Senior Credit Facility. Each of CSI
and DLJSC will receive underwriting discounts and commissions in connection with
the Offering. See "Use of Proceeds," "Certain Transactions" and "Underwriting."

Pursuant to the Investors' Agreement, CMIHI has the right to designate one
representative to the Board of Directors (the "Chase Designee"). See "Certain
Transactions -- Investors' Agreement."

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<PAGE> 15

Under Rule 2720 of the Conduct Rules ("Rule 2720") of the National
Association of Securities Dealers, Inc. ("NASD"), each of DLJSC and CSI may be
deemed to have a "conflict of interest" with the Company by virtue of the fact
that affiliates of DLJSC and CSI may be deemed to beneficially own greater than
10% of the common equity of the Company and affiliates of CSI may receive
greater than 10% of the proceeds of the Offering. Under Rule 2720, when a member
of the NASD, such as DLJSC and CSI, proposes to underwrite or otherwise assist
in the public distribution of securities by an issuer with which they may have a
"conflict of interest," the price to public at which such securities are to be
distributed to the public must not be lower than that recommended by a
"qualified independent underwriter," who must participate in the preparation of
the registration statement and the prospectus and who must exercise the usual
standards of due diligence with respect thereto. Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") has agreed to act as "qualified independent
underwriter" within the meaning of such rules and will assume the
responsibilities of acting as such in pricing the Offering and conducting due
diligence. See "Underwriting."

ABSENCE OF PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common
Stock. Although the Common Stock will be traded on the Nasdaq National Market,
there can be no assurance that an active trading market will develop or continue
upon completion of the Offering. The initial public offering price of the Common
Stock will be determined by negotiations among the Company, the Selling
Stockholders and the representatives of the Underwriters (including the
qualified independent underwriter) and may not be indicative of the market price
of the Common Stock after the Offering. For a discussion of the factors to be
considered in determining the initial public offering price, see "Underwriting."
The market price of the Common Stock could be subject to significant
fluctuations in response to variations in quarterly and yearly operating
results, the success of the Company's business strategy, general trends in the
pet food industry, cost of raw materials, competition and other factors. In
addition, stock markets experience extreme price and volume fluctuations that
are unrelated or disproportionate to the operating performance of affected
companies. A broad fluctuation in the market in which the Company's securities
is traded may adversely affect the market price of the Common Stock.

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK

Sales of substantial amounts of Common Stock in the public market
subsequent to the Offering, or the perception that such sales may occur, could
adversely affect the market price of the Common Stock. Upon consummation of the
Offering, the Company will have 29,135,268 shares of Common Stock outstanding
(29,484,392 shares if the Underwriters' over-allotment option is exercised in
full). Of these shares, the 14,535,268 shares of Common Stock outstanding not
being registered in the Offering will be "restricted securities" within the
meaning of Rule 144 under the Securities Act and will be eligible for resale
subject to the volume, manner of sale, holding period and other limitations of
Rule 144. Certain stockholders of the Company have been granted registration
rights. See "Certain Transactions -- Investors' Agreement." In addition, options
and warrants to purchase 5,247,604 shares of Common Stock (which number excludes
733,272 shares of Common Stock to be issued and sold in the Offering upon the
exercise by the Underwriters of warrants held by certain Selling Stockholders)
are exercisable prior to or upon consummation of the Offering. The Company, the
executive officers and directors of the Company, certain other stockholders and
certain of the Selling Stockholders have agreed not to sell any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock for a period of 180 days from the date of this Prospectus without the
prior written consent of DLJSC. See "Shares Eligible for Future Sale" and
"Underwriting."

ANTITAKEOVER PROVISIONS

The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws contain various provisions, including staggered terms for
directors, certain notice provisions, provisions prohibiting the taking of
stockholder action by written consent and provisions authorizing the Company to
issue preferred stock, that may make it more difficult for a third party to
acquire, or may discourage acquisition bids for, control of the Company and
could limit the price that certain investors might be willing to pay in the
future for shares of Common Stock. After the Offering, the ownership by Summit,
DLJMB and
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<PAGE> 16

CMIHI, together with the beneficial ownership of Common Stock of the Company's
officers, directors and their affiliates, of a substantial number of shares of
Common Stock could also discourage such bids. See "Description of Capital
Stock -- Antitakeover Provisions" and "Principal and Selling Stockholders."

The Company's Board of Directors is authorized to issue, from time to time,
without any action on the part of the Company's stockholders, up to 10,000,000
shares of preferred stock in one or more series, with such relative rights,
powers, preferences, limitations and restrictions as are determined by the Board
of Directors at the time of issuance. Accordingly, the Board of Directors is
empowered to issue preferred stock with dividend, liquidation, conversion,
voting or other rights which could adversely affect the voting power or other
rights of the holders of Common Stock. In the event of such issuance, the
preferred stock could be utilized, under either circumstance, as a method of
discouraging, delaying or preventing a change in control of the Company. See
"Description of Capital Stock -- Preferred Stock" and "-- Antitakeover
Provisions."

NO ANTICIPATED DIVIDENDS

The Company expects to retain cash generated from future operations to
support its cash needs and does not anticipate the payment of any dividends on
the Common Stock for the foreseeable future. In addition, dividends or
distributions by the Company may be restricted by the Senior Credit Facility,
the Note Indenture and other indebtedness that may be incurred by the Company.
See "Dividend Policy" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

DILUTION

Investors in the Common Stock offered hereby will experience immediate and
substantial dilution in net tangible book value per share of $16.78 (based on an
initial public offering price of $12.00 per share). See "Dilution."

YEAR 2000

The Company has conducted a comprehensive review of its computer software
to identify the systems that could be affected by the "year 2000" issue. The
year 2000 issue results from computer programs being written using two digits
(rather than four) to define the applicable year. As a result, certain of the
Company's programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This calculation could result
in a major system failure or miscalculations.

The Company has made an assessment of year 2000 compliance and reviewed its
business application software, which resulted in plans to either replace or
upgrade all essential business software at an estimated cost of $5.6 million.
The Company is currently reviewing its administrative hardware and software
(networks, communications and security systems) and the software related to
manufacturing equipment. The Company has implemented a program to confirm year
2000 compliance with all third parties with which the Company has material
relationships.

As of December 31, 1998, the Company had incurred costs of approximately
$3.0 million in connection with year 2000 compliance. The Company intends to
test and verify its year 2000 compliance by July 1999, including third party
compliance. Management believes that a failure to complete its year 2000
compliance, or a failure by parties with whom the Company has material
relationships to complete their year 2000 compliance, by such date could have a
material adverse effect on the Company's financial condition and results of
operations. The Company believes that it can provide the resources necessary to
ensure year 2000 compliance prior to the year 2000. However, should the Company
be delayed in its year 2000 compliance, the Company may experience a decrease in
efficiency that could have a material adverse effect on results of operations.
The Company also believes that a sufficient number of suppliers exist if the
Company's current suppliers are delayed in their efforts to achieve year 2000
compliance, thereby minimizing risk to the Company. The Company has developed
contingency plans that include moving production within its plant network,
securing additional ingredient storage facilities and transferring procurement
to year 2000 compliant suppliers. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Year 2000."

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<PAGE> 17

THE COMPANY

The Company was formed in 1995 by a group of investors led by SCI, DLJMB,
CMIHI and certain members of existing management to acquire Doane for an
aggregate purchase price of $249.1 million, including existing indebtedness. Bob
L. Robinson, a director of the Company and Doane, Terry W. Bechtel, a Vice
President of Doane, Dick Weber, Managing Director of Field Sales of Doane, and
Earl Clements, Central Regional Director -- Production of Doane, are the only
four persons from such existing management who are still affiliated with the
Company. Doane had previously been a manufacturer of dry pet food for 37 years.

In April 1998, the Company acquired IPES for $26.2 million (net of cash
purchased of $1.9 million) and the assumption of indebtedness of $1.9 million.
In August 1998, the Company acquired Windy Hill for approximately 6.4 million
shares of Common Stock and the assumption of $183.5 million of indebtedness.
Windy Hill was a manufacturer of pet food products based in Tennessee. In
November 1998, Windy Hill was merged into Doane.

Windy Hill was formed in February 1995 by a group of investors led by
Dartford Partnership, L.L.C. to acquire substantially all of the assets and
liabilities of the pet food division of Martha White Foods, Inc. for $21.0
million. In April 1996, Windy Hill acquired the assets and liabilities
associated with certain pet food product lines of Heinz Inc. for a purchase
price of $52.5 million. In May 1997, Windy Hill acquired Hubbard Milling Company
("Hubbard") for a net purchase price of $131.1 million. Subsequent to such
acquisition, Windy Hill sold the animal feed division of Hubbard for a sales
price of approximately $50.0 million, net of taxes. In February 1998, Windy Hill
acquired all of the assets of the AGP pet food division ("AGP") of Consolidated
Nutrition, L.C. for a purchase price of approximately $12.4 million. In April
1998, Windy Hill acquired certain pet food assets and certain liabilities
associated with the NuPet division of Nulaid Foods, Inc. ("NuPet") for a
purchase price of approximately $3.1 million. In June 1998, Windy Hill acquired
Deep Run Packing Company, Inc. ("Deep Run") for a net purchase price of
approximately $16.4 million.

The Company is incorporated under the laws of the State of Delaware. The
Company's principal executive offices are located at 103 Powell Court, Suite
200, Brentwood, Tennessee 37027, and its telephone number at such offices is
(615) 373-7774.

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<PAGE> 18

USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated at
approximately $110.7 million, assuming an initial public offering price of
$12.00 per share.

The Company intends to use approximately $52.4 million of the proceeds of
the Offering to repay borrowings under the Senior Credit Facility and $58.3
million of the proceeds to repurchase the Senior Preferred Stock of Doane.
Borrowings under the Senior Credit Facility carry floating rates of interest
that, as of January 31, 1999, equaled a weighted average of 8.5% per annum, and
are due as follows: (i) borrowings of $75 million under the Tranche A Facility
have a final maturity of March 31, 2005, (ii) borrowings of $85 million under
the Tranche B Facility have a final maturity of December 31, 2005, (iii)
borrowings of $85 million under the Tranche C Facility have a final maturity of
December 31, 2006 and (iv) borrowings under the revolver have a final maturity
of March 31, 2005. See "Unaudited Pro Forma Financial Statements."

Borrowings under the Senior Credit Facility to be repaid with the proceeds
of this Offering were incurred in November 1998 in order to fund the cash
requirements of the Refinancing Transactions, repay borrowings under and retire
the Company's previous credit facilities, repay other debt and repay a bridge
financing incurred in connection with the tender offer for the Windy Hill Notes.

DIVIDEND POLICY

The Company does not intend to pay cash dividends on the Common Stock in
the foreseeable future. The Company currently intends to retain its cash for the
continued growth of its business. In addition, the Senior Credit Facility and
the Note Indenture restrict the ability of Doane to pay dividends to the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

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<PAGE> 19

DILUTION

The deficit in net tangible book value of the Company as of December 31,
1998 was $(12.44) per share of Common Stock. The deficit in net tangible book
value per share is determined by dividing the tangible net worth of the Company
(tangible assets less total liabilities) by the total number of outstanding
shares of Common Stock. After giving effect to the sale of the shares offered
hereby and the receipt of the estimated net proceeds (after deducting estimated
underwriting discounts and commissions and estimated expenses of the Offering),
the deficit in pro forma net tangible book value of the Company at December 31,
1998 would have been $(4.78) per share. This represents an immediate increase in
the net tangible book value of $7.66 per share to existing stockholders and an
immediate dilution (i.e., the difference between the initial public offering
price and the pro forma net tangible book value after the Offering) to new
investors purchasing Common Stock in the Offering. The following table
illustrates the per share dilution to new investors purchasing Common Stock in
the Offering of $16.78 per share:

<TABLE>
<S> <C> <C>
Assumed public offering price per share.............................. $12.00
Deficit in net tangible book value per share at December
31, 1998.............................................. $(12.44)
Increase per share attributable to new investors........ 7.66
Pro forma deficit in net tangible book value per share after the
Offering........................................................... (4.78)
------
Dilution per share to new investors.................................. $16.78
======
</TABLE>

The following table sets forth, as of December 31, 1998, the number of
shares of Common Stock and warrants purchased from the Company, the total
consideration paid therefor and the average price per share or warrant paid by
existing stockholders (including the stockholders that received shares of Common
Stock in the Windy Hill Acquisition), warrantholders and by new investors:

<TABLE>
<CAPTION>
SHARES AND WARRANTS AVERAGE
PURCHASED TOTAL CONSIDERATION PRICE PER
-------------------- ---------------------- SHARE OR
NUMBER PERCENT AMOUNT PERCENT WARRANT
<S> <C> <C> <C> <C> <C>
Existing stockholders................ 18,409,840 54% $ 93,770,860 41% $ 5.09
Warrantholders*...................... 5,417,912 16 12,925,000 6 2.39
New investors........................ 10,000,000 30 120,000,000 53 12.00
---------- --- ------------ ---
33,827,752 100% $226,695,860 100%
========== === ============ ===
</TABLE>

- ---------------

* As of December 31, 1998, the warrantholders had not exercised their warrants.
Warrants to purchase 733,272 shares of Common Stock previously held by certain
Selling Stockholders will be exercised, and such shares will be sold, by the
Underwriters in the Offering.

18
<PAGE> 20

CAPITALIZATION

The following table sets forth, as of December 31, 1998, (i) the historical
capitalization of the Company and (ii) the pro forma capitalization of the
Company after giving effect to the Offering. This table should be read in
conjunction with "Use of Proceeds," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements of the Company and Windy Hill and the related notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
----------------------
HISTORICAL PRO FORMA
---------- ---------
(IN THOUSANDS)
<S> <C> <C>
Total debt(1):
Senior Credit Facility................................. $277,000 $224,593
Foreign debt........................................... 25,391 25,391
Senior Subordinated Notes.............................. 146,996 146,996
Industrial revenue bonds............................... 9,783 9,783
-------- --------
Total debt........................................ 459,170 406,763
Senior Preferred Stock, 3,000,000 shares authorized;
1,200,000 shares issued and outstanding; no shares issued
and outstanding, pro forma(2)............................. 37,792 --
Stockholders' equity:
Common Stock, par value $0.0001 per share, 70,000,000
shares authorized; 18,409,840 shares issued and
outstanding; 29,135,268 shares issued and outstanding,
pro forma(3)(4)....................................... 2 3
Additional paid-in capital............................. 107,371 218,070
Accumulated other comprehensive income................. 489 489
Accumulated deficit.................................... (37,188) (58,272)
-------- --------
Total stockholders' equity........................ 70,674 160,290
-------- --------
Total capitalization............................ $567,636 $567,053
======== ========
</TABLE>

- ------------------------------

(1) Total debt includes current portion of long-term debt.

(2) The Senior Preferred Stock had an initial liquidation preference of $30.0
million (accreted liquidation value of $47.2 million at December 31, 1998)
and was sold as a unit with warrants to purchase shares of Common Stock of
the Company for aggregate consideration of $30.0 million. Approximately
$12.9 million of such consideration was allocated to the value of the
warrants and is recorded as stockholders' equity.

(3) The Company has two classes of Common Stock, Class A Common Stock and Class
B Common Stock. As of February 28, 1999, there were 16,069,996 shares of
Class A Common Stock outstanding and 2,332,000 shares of Class B Common
Stock outstanding. Class A and Class B Common Stock are identical except
that Class B Common Stock has no voting rights. All of the shares of Class B
Common Stock are owned by CMIHI and are convertible into Class A Common
Stock at the holder's election. References to shares of Common Stock in the
table above and throughout this Prospectus are to the Company's Class A
Common Stock and Class B Common Stock on a combined basis.

(4) Shares issued and outstanding do not include warrants convertible into
5,417,912 shares of Common Stock and 1,669,600 shares of Common Stock
issuable upon exercise of options outstanding under the Company's 1996 Stock
Option Plan. See "Management -- Stock Option and Stock Purchase Plans."
Shares issued and outstanding, pro forma, include 733,272 shares to be
issued by the Company in the Offering upon the exercise by the Underwriters
of warrants that were previously held by certain Selling Stockholders.

19
<PAGE> 21

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited condensed consolidated pro forma financial
statements consist of (i) the unaudited pro forma condensed combined statement
of operations of the Company and Windy Hill for the fiscal year ended December
31, 1998 and related notes, (ii) the unaudited pro forma condensed consolidated
balance sheet of the Company as of December 31, 1998 and related notes, (iii)
the unaudited pro forma condensed consolidated statement of operations of the
Company for the fiscal year ended December 31, 1998 and related notes and (iv)
the unaudited pro forma condensed consolidated statement of operations of Windy
Hill for the seven months ended August 2, 1998. The unaudited pro forma
financial statements of the Company give effect to the IPES Acquisition as if
such transaction had occurred on January 1, 1998. The unaudited pro forma
financial statements of Windy Hill give effect to the acquisitions of AGP,
NuPet, Deep Run and the purchase by Windy Hill of certain joint venture
interests held by third parties as if such transactions had occurred on January
1, 1998. The unaudited pro forma condensed combined statement of operations
gives effect to the pro forma results of the Company as if the Windy Hill
Acquisition, the Refinancing Transactions and the Offering had occurred on
January 1, 1998. The combined unaudited pro forma balance sheet gives effect to
the Offering and the use of proceeds therefrom as if such transactions had
occurred on December 31, 1998.

The historical data of the Company for the fiscal year ended December 31,
1998 have been derived from the Company's audited consolidated financial
statements. The historical data of Windy Hill for the seven months ended August
2, 1998 have been derived from Windy Hill's unaudited interim financial
statements.

The unaudited condensed consolidated pro forma financial statements are
based on assumptions and include adjustments as explained in the notes thereto.
The unaudited condensed consolidated pro forma financial statements are not
necessarily indicative of the actual financial results if the transactions
described above had been effective on and as of the dates indicated and should
not be indicative of operations in future periods or as of future dates. The
unaudited condensed consolidated pro forma financial statements should be read
in conjunction with the notes thereto, the historical audited consolidated
financial statements of the Company and the notes thereto and the unaudited
interim financial statements of Windy Hill and the notes thereto.

20
<PAGE> 22

CONDENSED COMBINED DOANE PET CARE ENTERPRISES, INC.
AND WINDY HILL PET FOOD HOLDINGS, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA PRO FORMA ADJUSTMENTS COMBINED
COMPANY WINDY HILL FOR COMBINED PRO FORMA COMPANY
(SEE (SEE WINDY HILL COMPANY ADJUSTMENTS PRO FORMA
TABLE 1-A)(A) TABLE 2-A) ACQUISITION PRO FORMA FOR OFFERING AS ADJUSTED(G)
------------- ---------- ----------- --------- ------------ --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net sales.................... $692,649 $175,111 $(2,414)(b) $865,346 $ -- $865,346
Cost of goods sold........... 558,995 130,795 689,790 -- 689,790
-------- -------- ------- -------- ------- --------
Gross profit................. 133,654 44,316 (2,414) 175,556 -- 175,556
Operating expenses:
Promotion and
distribution.......... 45,346 19,874 (2,414)(b) 62,806 -- 62,806
Selling, general and
administrative........ 26,530 9,457 -- 35,987 -- 35,987
Amortization of
intangibles........... 6,579 2,557 866(c) 10,002 -- 10,002
Transition expenses.......... 7,043 8,456 15,499 -- 15,499
Product recall............... 3,000 -- -- 3,000 -- 3,000
-------- -------- ------- -------- ------- --------
Income from operations... 45,156 3,972 (866) 48,262 -- 48,262
Interest expense, net........ 31,979 11,194 43,173 (6,534)(d) 36,639
Non-recurring finance
charge..................... 4,599 -- -- 4,599 -- 4,599
Other (income) expense,
net........................ 100 (550) (450) (450)
-------- -------- ------- -------- ------- --------
Income before income
taxes and
extraordinary loss.... 8,478 (6,672) (866) 940 6,534 7,474
Income tax expense
(benefit).................. 3,649 (420) -- 3,229 2,483(e) 5,712
-------- -------- ------- -------- ------- --------
Income before
extraordinary loss.... $ 4,829 $ (6,252) $ (866) $ (2,289) $ 4,051 $ 1,762
======== ======== ======= ======== ======= ========
Basic earnings per share..... $ 0.06
Basic weighted average number
of shares outstanding...... 28,913
Diluted earnings per share... $ 0.05
Diluted weighted average
number of shares
outstanding................ 34,991
EBITDA(f).................... $ 68,876
========
Adjusted EBITDA(f)........... $ 91,974
========
</TABLE>

See accompanying notes to unaudited pro forma financial statements.

21
<PAGE> 23

CONDENSED COMBINED DOANE PET CARE ENTERPRISES, INC.
AND WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(IN THOUSANDS)

(a) The Company's historical financial statements for the year ended December
31, 1998 include the results of Windy Hill for the period from August 3,
1998 to December 31, 1998 and the results of IPES for the period from April
18, 1998 to December 31, 1998.

(b) Adjustment to reclassify $2,414 for the seven months ended August 2, 1998
of Windy Hill's cash discounts to net sales from promotion and distribution
expenses to conform the accounting policies of Windy Hill to those of the
Company.

(c) Adjustment to selling, general and administrative expenses to recognize
additional amortization for goodwill resulting from the Windy Hill
Acquisition. The Company recorded the Windy Hill Acquisition as a purchase
transaction with the purchase price and direct acquisition costs allocated
based on the fair value of assets acquired and the liabilities assumed.

(d) Pro forma as adjusted interest expense, which includes amortization of
deferred financing costs, has been calculated on pro forma debt levels and
applicable interest rates after giving effect to the Offering and the
application of the net proceeds to the Company therefrom. The table below
presents pro forma as adjusted interest expense noted with the respective
interest rates:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
--------------
(IN THOUSANDS)
<S> <C>
Senior Credit Facility ($224.6 million at a blended
rate of 8.12%)....................................... $18,241
Senior Subordinated Notes ($150.0 million at 9.75%).... 14,984
IPES debt ($25.4 million at 6.50%)..................... 1,650
Industrial revenue bonds ($6.0 million at a rate of
7.5%)................................................ 450
Amortization of deferred financing costs ($10.0 million
amortized over seven to nine years).................. 1,314
-------
Total interest expense at year-end................. $36,639
Less historical interest expense....................... 43,173
-------
Adjustment............................................. $(6,534)
=======
</TABLE>

The adjustment for interest expense on the Senior Subordinated Notes
includes $359 amortization of original issue discount.

Pro forma interest on the industrial revenue bonds has been calculated
excluding interest on approximately $3.8 million of the bonds outstanding
at December 31, 1998 as these bonds were purchased by Doane's wholly-owned
subsidiary, Doane/Windy Hill Joint Venture Corp.

(e) Reflects an adjustment to income tax expense to tax effect the pro forma
adjustments at the combined state and federal statutory rate of 38% for the
year ended December 31, 1998. In calculating the tax adjustment, the
goodwill amortization as calculated in (c) above has not been tax effected
as it is non-deductible for tax purposes.

(f) EBITDA for any relevant period presented above is defined as income before
extraordinary items plus interest expense, net, income taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA as defined plus
transition and product recall expenses and non-recurring finance charges.
EBITDA is not a measure recognized by generally accepted accounting
principles and should not be considered in isolation or as a substitute for
operating income, as an indicator of liquidity or as a substitute for net
cash provided by operating activities, which are determined in accordance
with generally accepted accounting principles. EBITDA is included because
management believes that certain investors may find it useful.

(g) The Windy Hill Acquisition provides the Company with the opportunity to
achieve cost savings in the following areas that have not been reflected in
the Pro Forma Statement of Operations:

(i)Selling, general and administrative expense primarily due to headcount
reductions and elimination of certain advisory fees;

(ii)
Purchasing cost savings through economies of scale and raw material
cost savings through formula rationalizations; and

(iii)
Distribution cost savings, improved efficiencies and reduced overtime
through optimizing production schedules at the network of 32 domestic
manufacturing facilities.

22
<PAGE> 24

DOANE PET CARE ENTERPRISES, INC.
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1998

<TABLE>
<CAPTION>
PRO FORMA
COMPANY ADJUSTMENTS COMPANY
HISTORICAL FOR OFFERING PRO FORMA
---------- ------------ -----------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 3,350 $ $ 3,350
Trade and other accounts receivable, net................ 96,510 96,510
Inventories, net........................................ 51,499 51,499
Deferred tax asset...................................... 4,473 358(b) 4,831
Prepaid expenses and other current assets............... 17,131 17,131
-------- -------- --------
Total current assets................................ 172,963 358 173,321
Property, plant and equipment, net.......................... 206,353 206,353
Goodwill and other intangible assets, net................... 299,631 299,631
Other assets................................................ 31,501 (941)(b) 30,560
-------- -------- --------
Total assets........................................ $710,448 $ (583) $709,865
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt.................. $ 12,889 $ 12,889
Accounts payable........................................ 79,013 79,013
Accrued liabilities..................................... 49,878 49,878
-------- -------- --------
Total current liabilities........................... 141,780 141,780
Long-term debt, excluding current installments.............. 446,281 (52,407)(a) 393,874
Other long term liabilities................................. 9,160 9,160
Deferred tax liability...................................... 4,761 4,761
-------- -------- --------
Total liabilities................................... 601,982 (52,407) 549,575
Senior Preferred Stock...................................... 37,792 (37,792)(a) --
Stockholders' equity
Class A Common Stock.................................... 2 1(a) 3
Class B Common Stock.................................... -- -- --
Additional paid-in capital.............................. 107,371 110,699(a) 218,070
Accumulated other comprehensive income...................... 489 489
Accumulated deficit..................................... (37,188) (20,501)(a) (58,272)
(583)(b)
-------- -------- --------
Total stockholders' equity.......................... 70,674 89,616 160,290
-------- -------- --------
Total liabilities and stockholders' equity.......... $710,448 $ (583) $709,865
======== ======== ========
</TABLE>

See accompanying notes to unaudited pro forma financial statements.

23
<PAGE> 25

DOANE PET CARE ENTERPRISES, INC.
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
(IN THOUSANDS)

(a) Reflects the assumed proceeds to the Company from the Offering and the
application of proceeds therefrom:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Sources:
The Offering......................................... $120,000
--------
Total sources..................................... $120,000
========
Uses:
Repayment of Senior Credit Facility.................. $ 52,407
Repurchase of Senior Preferred Stock(1).............. 37,792
Underwriting discounts and related expenses.......... 9,300
Cost to repurchase Senior Preferred Stock(1)......... 20,501
--------
Total uses........................................ $120,000
========
</TABLE>

- ---------------

(1) The Senior Preferred Stock will be repurchased on the open market at the
prevailing market prices. The Company will pay the liquidation value of
the Senior Preferred Stock as of March 31, 1999, which will be $48,898
plus a repurchase premium, currently estimated to be $9,395. The cost of
repurchasing the Senior Preferred Stock has been reflected as a charge
to retained earnings of $20,501 and has not been reflected in the Pro
Forma Statement of Operations.

(b) Reflects the impact on retained earnings of the write-off of financing
costs of $941, net of a tax benefit of $358, associated with the Senior
Credit Facility. The adjustment has not been reflected in the Pro Forma
Statement of Operations and will be charged to operations upon the
consummation of the Offering.

24
<PAGE> 26

TABLE 1-A

DOANE PET CARE ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
COMPANY IPES ADJUSTMENTS FOR PRO FORMA
HISTORICAL(A) HISTORICAL(B) IPES ACQUISITION COMPANY
------------- ------------- ---------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net sales................................. $686,663 $5,986 $ -- $692,649
Cost of goods sold........................ 554,447 4,480 68(c) 558,995
-------- ------ ----- --------
Gross profit.............................. 132,216 1,506 (68) 133,654
Operating expenses:
Promotion and distribution.............. 45,039 307 -- 45,346
Selling, general and administrative..... 26,346 184 -- 26,530
Amortization of intangibles............. 6,468 -- 111(d) 6,579
Transition expenses....................... 7,043 -- -- 7,043
Product recall............................ 3,000 -- -- 3,000
-------- ------ ----- --------
Income from operations.................. 44,320 1,015 (179) 45,156
Interest expense, net..................... 31,503 28 448(e) 31,979
Non-recurring finance charge............ 4,599 -- -- 4,599
Other (income) expense, net............... 164 (64) -- 100
-------- ------ ----- --------
Income before taxes.................. 8,054 1,051 (627) 8,478
Income tax expense........................ 3,478 367 (196)(f) 3,649
-------- ------ ----- --------
Income before extraordinary items.... $ 4,576 $ 684 $(431) $ 4,829
======== ====== ===== ========
EBITDA(g)................................. $ 58,760
========
Adjusted EBITDA(g)........................ $ 73,402
========
</TABLE>

See accompanying notes to unaudited pro forma financial statements.

25
<PAGE> 27

DOANE PET CARE ENTERPRISES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
(IN THOUSANDS)

(b) Includes results for IPES for the period January 1, 1998 to April 17, 1998
(the date of acquisition).

(c) Adjustment to reflect $68 of additional depreciation resulting from the
write-up of property, plant and equipment to fair value related to the IPES
Acquisition.

(d) Adjustment to reflect $111 of additional goodwill and intangible
amortization resulting from the IPES Acquisition.

(e) Adjustment to interest expense to reflect the following:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1998
--------------
(IN THOUSANDS)
<S> <C>
Effect of additional financing incurred in connection with
the IPES Acquisition ($25.3 million at a blended rate of
6.8%)..................................................... $430
Additional amortization of deferred financing cost resulting
from the IPES Acquisition................................. 18
----
$448
====
</TABLE>

(f) Reflects an adjustment to income tax expense to tax effect the pro forma
adjustments at the combined federal and state statutory rate of 38%. In
calculating the tax adjustment, the goodwill amortization as calculated in
(d) above has not been tax effected as it is non-deductible for tax
purposes.

(g) EBITDA for any relevant period presented above is defined as income before
extraordinary items plus interest expense, net, income taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA as defined plus
transition and product recall expenses and non-recurring finance charges.
EBITDA is not a measure recognized by generally accepted accounting
principles and should not be considered in isolation or as a substitute for
operating income, as an indicator of liquidity or as a substitute for net
cash provided by operating activities, which are determined in accordance
with generally accepted accounting principles. EBITDA is included because
management believes that certain investors may find it useful.

26
<PAGE> 28

TABLE 2-A

WINDY HILL PET FOOD HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SEVEN MONTHS ENDED AUGUST 2, 1998

<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS FOR WINDY HILL
WINDY HILL AGP DEEP RUN OTHER RECLASSIFICATIONS PRO FORMA
HISTORICAL(A) HISTORICAL(B) HISTORICAL(C) ACQUISITIONS(D) AND ACQUISITIONS COMBINED
------------- ------------- ------------- --------------- ----------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net sales...................... $151,460 $5,651 $13,740 $4,260 $ -- $175,111
Cost of goods sold............. 110,367 5,419 11,782 3,418 (191)(e) 130,795
-------- ------ ------- ------ ----- --------
Gross profit................... 41,093 232 1,958 842 191 44,316
Operating expenses:
Promotion and
distribution............. 18,934 30 673 237 -- 19,874
Selling, general and
administrative........... 8,401 302 590 164 -- 9,457
Amortization of
intangibles.............. 2,456 -- -- -- 101(f) 2,557
Transition expenses............ 8,456 -- -- -- -- 8,456
-------- ------ ------- ------ ----- --------
Income from operations..... 2,846 (100) 695 441 90 3,972
Interest expense, net.......... 10,226 5 2 (3) 964(g) 11,194
Other (income) expense, net.... (568) 15 (102) -- 105(h) (550)
-------- ------ ------- ------ ----- --------
Income before taxes........ (6,812) (120) 795 444 (979) (6,672)
Income tax expense (benefit)... (331) -- -- -- (89)(i) (420)
-------- ------ ------- ------ ----- --------
Income (loss) before
extraordinary items...... $ (6,481) $ (120) $ 795 $ 444 $(890) $ (6,252)
======== ====== ======= ====== ===== ========
EBITDA(j)...................... $ 10,116
========
Adjusted EBITDA(j)............. $ 18,572
========
</TABLE>

See accompanying notes to unaudited pro forma financial statements.

27
<PAGE> 29

WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
(IN THOUSANDS)

(a) Windy Hill Pet Food Holdings, Inc. ("Windy Hill") was a private holding
company that owned 100% of its subsidiary, Windy Hill Pet Food Company,
Inc.

(b) Includes results for AGP for the period from January 1, 1998 to February
23, 1998 (the date of acquisition).

(d) Other acquisitions include the purchase of NuPet and the remaining 50%
interest not previously owned in the Cartersville, Georgia joint venture.
Results of NuPet are included for the period January 1, 1998 to March 30,
1998 (the date of acquisition) and results of Cartersville are included
from January 1, 1998 to February 28, 1998 (the date of acquisition).

(e) Adjustment to cost of goods sold to reflect $191 of reductions in
depreciation expense resulting from the AGP, Deep Run, NuPet and
Cartersville acquisitions (the "WH Acquisitions").

(f) Adjustment to selling, general and administrative expense reflect $101 of
additional amortization of goodwill resulting from the WH Acquisitions.

(g) Adjustment to interest expense to reflect the following:

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
AUGUST 2, 1998
--------------
(IN THOUSANDS)
<S> <C>
Credit facility ($12.5 million at 8.17%).................... $162
Credit facility ($20.5 million at 10%)...................... 801
Additional amortization of deferred financing cost resulting
from the WH Acquisitions.................................. 1
----
$964
====
</TABLE>

The interest adjustment for the credit facility includes interest for AGP,
NuPet and Deep Run from the beginning of the year through their dates of
acquisition.

(h) To eliminate equity in earning of joint ventures for the months prior to
acquisition.

(i) Reflects an adjustment to income tax expense (benefit) to tax effect the
pro forma adjustments at the combined state and federal rate of 39% for
Windy Hill. In calculating the tax adjustment, approximately $90 of the
goodwill as calculated in (f) above has not been tax effected as it is
non-deductible for tax purposes.

(j) EBITDA for any relevant period presented above is defined as income before
extraordinary items plus interest expense, net, income taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA as defined plus
transition expenses. EBITDA is not a measure recognized by generally
accepted accounting principles and should not be considered in isolation or
as a substitute for operating income, as an indicator of liquidity or as a
substitute for net cash provided by operating activities, which are
determined in accordance with generally accepted accounting principles.
EBITDA is included because management believes that certain investors may
find it useful.

28
<PAGE> 30

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data, except for pet food sold, as of
and for the years ended December 31, 1996, 1997 and 1998 are derived from the
audited consolidated financial statements of the Company included elsewhere in
this Prospectus. The selected financial data presented below as of and for the
year ended December 31, 1994, the nine months ended September 30, 1995 and the
three months ended December 31, 1995 are derived from consolidated financial
statements of the Company not included in this Prospectus. The information set
forth below is qualified in its entirety and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the consolidated financial statements of the Company and notes
thereto and the consolidated financial statements of Windy Hill and notes
thereto, included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PREDECESSOR(1) THE COMPANY
---------------------------- ---------------------------------------------
THREE
NINE MONTHS MONTHS YEAR ENDED
YEAR ENDED ENDED ENDED DECEMBER 31,
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, ------------------------------
1994 1995 1995 1996 1997 1998(2)
------------ ------------- ------------ -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................ $377,018 $303,633 $ 114,958 $513,217 $564,741 $686,663
Cost of goods sold....................... 308,622 247,394 97,184 446,776 482,896 554,447
-------- -------- --------- -------- -------- --------
Gross profit............................. 68,396 56,239 17,774 66,441 81,845 132,216
Operating expenses:
Promotion and distribution............. 23,007 17,675 6,484 26,480 31,876 45,039
Selling, general and administrative.... 11,550 8,558 2,660 11,512 14,384 26,346
Amortization of intangibles............ -- -- 1,017 3,538 3,601 6,468
Unusual items(3)....................... -- 9,440 -- -- -- --
Transition expenses(4)................. -- -- -- -- -- 7,043
Product recall(5)...................... -- -- -- -- -- 3,000
-------- -------- --------- -------- -------- --------
Income from operations............... 33,839 20,566 7,613 24,911 31,984 44,320
Interest expense, net.................... 2,494 3,611 5,806 22,471 22,463 31,503
Non-recurring finance charge(6).......... -- -- -- 4,815 -- 4,599
Other (income) expense, net.............. (11) (8) 29 (2) (102) 164
-------- -------- --------- -------- -------- --------
Income before taxes.................. 31,356 16,963 1,778 (2,373) 9,623 8,054
Income tax expense (benefit)............. 356 217 754 (855) 3,389 3,478
-------- -------- --------- -------- -------- --------
Income (loss) before extraordinary
item(7)................................ 31,000 16,746 1,024 (1,518) 6,234 4,576
Extraordinary item, net of tax(8)........ -- -- -- -- -- 26,788
-------- -------- --------- -------- -------- --------
Net income (loss).................. $ 31,000 $ 16,746 $ 1,024 $ (1,518) $ 6,234 $(22,212)
======== ======== ========= ======== ======== ========
Basic and diluted earnings (loss) per
share.................................. -- -- $ (0.03) $ (0.66) $ (0.01) $ (2.04)
Basic and diluted weighted average number
of shares outstanding.................. -- -- 11,000 11,006 11,350 14,429
OTHER DATA:
Cash flows provided by operating
activities............................. $ 39,250 $ 12,954 $ 2,711 $ 18,583 $ 20,972 $ 33,993
Cash flows provided by (used in)
investing activities................... 12,368 (3,677) (209,346) (11,489) (15,161) (65,300)
Cash flows provided by (used in)
financing activities................... (16,808) (20,568) 204,635 (8,644) (5,811) 34,432
EBITDA(9)................................ 38,613 24,364 10,063 30,449 43,216 57,433
Adjusted EBITDA(9)....................... 38,613 33,804 10,063 35,264 43,216 72,075
Depreciation and amortization expense.... 4,660 3,694 2,574 10,135 10,971 17,877
Capital expenditures(10)................. 12,159 4,224 1,297 7,901 14,437 23,327
Pet food sold (thousands of tons)........ 942 774 288 1,189 1,237 1,513
</TABLE>

29
<PAGE> 31

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................................... $ 35,410 $ 38,894 $ 26,123 $ 25,645 $ 31,183
Total assets............................................ 142,710 309,584 338,293 338,184 710,448
Total debt.............................................. 68,436 209,738 206,603 200,410 459,170
Preferred stock......................................... -- 18,414 24,160 30,545 37,792
Stockholders' equity.................................... 31,759 40,111 33,247 33,946 70,674
</TABLE>

- ---------------

(1) The Company was formed by a group of investors in 1995 to acquire Doane
(the "1995 Acquisition"). For financial statement purposes, the 1995
Acquisition was accounted for as a purchase acquisition effective October
1, 1995. The effects of the 1995 Acquisition have been reflected in the
Company's consolidated assets and liabilities at that date. As a result,
the Company's consolidated financial statements for the periods subsequent
to September 30, 1995 are presented on the successor's new basis of
accounting, while financial statements for September 30, 1995 and prior
periods are presented on the predecessor's historical cost basis of
accounting.

(2) Results for the year ended December 31, 1998 include the results of Windy
Hill for the period from August 3, 1998 to December 31, 1998.

(3) Represents non-recurring bonus payments to senior management in connection
with the 1995 Acquisition.

(4) Represents certain non-recurring transition expenses in connection with the
Windy Hill Acquisition.

(5) Represents costs associated with a product recall in the fourth quarter of
1998. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Commitments and Contingencies."

(6) Non-recurring finance charges represent $4,815 and $4,599 of interim bridge
debt financing costs that were incurred in conjunction with the issuance of
the Senior Notes in 1996 and the Refinancing Transactions in 1998,
respectively.

(7) Income (loss) before extraordinary items of the Company's predecessor does
not include any provision for federal income taxes. Prior to the 1995
Acquisition, Doane was organized as a subchapter S corporation.
Consequently, Doane did not pay federal, state or local income taxes except
in those states that did not recognize subchapter S status or that required
the payment of franchise taxes based on income.

(8) Represents charges associated with the early extinguishment of debt
incurred in connection with the Refinancing Transactions.

(9) EBITDA for any relevant period presented above is defined as income before
extraordinary items plus interest expense, net, income taxes, depreciation
and amortization. Adjusted EBITDA represents EBITDA as defined plus unusual
items, transition and product recall expenses and non-recurring finance
charges. EBITDA is not a measure recognized by generally accepted
accounting principles and should not be considered in isolation or as a
substitute for operating income, as an indicator of liquidity or as a
substitute for net cash provided by operating activities, which are
determined in accordance with generally accepted accounting principles.
EBITDA is included because management believes that certain investors may
find it useful. See "Unaudited Condensed Pro Forma Financial Statements"
and the Company's Consolidated Financial Statements and the notes thereto
included elsewhere in this Prospectus.

(10) Capital expenditures exclude payments for acquisitions.

30
<PAGE> 32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

HISTORY OF THE COMPANY

The Company was formed in 1995 by a group of investors led by SCI, DLJMB,
CMIHI and certain members of existing management to acquire Doane for an
aggregate purchase price of $249.1 million, including existing indebtedness.
Doane had previously been a manufacturer of dry pet food for 37 years. The
Company's sole asset and activities are its ownership of the common stock of
Doane. The Company has no other operations.

Windy Hill was formed in February 1995 by a group of investors led by
Dartford Partnership, L.L.C. to acquire substantially all of the assets and
liabilities of the pet food division of Martha White Foods, Inc. for $21.0
million. In April 1996, Windy Hill acquired the assets and liabilities
associated with certain pet food product lines of Heinz Inc. for a purchase
price of $52.5 million. In May 1997, Windy Hill acquired Hubbard for a net
purchase price of $131.1 million. Subsequent to such acquisition, Windy Hill
sold the animal feed division of Hubbard for a sales price of approximately
$50.0 million, net of taxes. In February 1998, Windy Hill acquired all of the
assets of AGP for a purchase price of approximately $12.4 million. In April
1998, Windy Hill acquired certain pet food assets and certain liabilities
associated with NuPet for a purchase price of approximately $3.1 million. In
June 1998, Windy Hill acquired Deep Run for a net purchase price of
approximately $16.4 million.

THE REFINANCING TRANSACTIONS

In November 1998, the Company refinanced its capital structure pursuant to
the following Refinancing Transactions:

-- Windy Hill was merged into Doane;

-- Doane completed a cash tender offer for approximately $97 million
principal amount of its Senior Notes;

-- Windy Hill completed a cash tender offer for $46 million principal
amount of Windy Hill Notes, which tender offer was required by a change
of control provision in the indenture governing such notes;

-- Doane completed the Exchange Offer of $150 million principal amount of
its Senior Subordinated Notes for the remaining approximately $63
million principal amount of Senior Notes and the remaining approximately
$74 million principal amount of Windy Hill Notes; and

-- Doane entered into the Senior Credit Facility with a syndicate of
financial institutions providing for total commitments of $345 million.
Doane borrowed $292 million under the Senior Credit Facility to fund the
cash requirements of the Refinancing Transactions, repay borrowings
under and retire its previous credit facilities, repay other debt and
repay bridge financing incurred in connection with the tender offer for
the Windy Hill Notes.

OVERVIEW

The Company derives substantially all of its revenue from the sale of dry
pet food products. Historically, approximately 75% to 85% of pet food cost of
goods sold has been comprised of raw material and packaging costs with labor,
insurance, utilities and depreciation comprising the remainder. Historically,
market prices for commodity grains and food stocks have fluctuated in response
to a number of factors, including changes in U.S. government farm support
programs, changes in international agricultural and trading policies and weather
conditions during the growing and harvesting seasons.

The Company manages the price risk created by market fluctuations by
hedging portions of its primary commodity products purchases on an on-going and
continuous basis, principally through exchange traded futures and options
contracts. The Company implemented a hedging policy in 1996 that does not permit
trading in commodities not utilized by the Company. All futures and options
activity is based on the projected requirements of the Company. The term of such
contracts is generally less than one year. Settlement of positions are either
through financial settlement with the exchanges or via exchange for the physical
commodity in which case the Company delivers the contract against the
acquisition of the physical commodity.

The Company accounts for its futures and options contracts as hedges and
gains and losses are recognized in the period realized as part of the cost of
products sold. The Company's deferred net futures and options position is
reported on the balance sheet as a current asset for net loss positions and as a
deferred credit for net gain positions. In addition to futures and options, the
Company also contracts for future physical procurement, in which case unrealized
gains and losses are deferred to the applicable accounting period. Typically,
maturities vary and do not exceed twelve months. The Company has hedged over
half of its corn and over 30% of its soybean meal requirements through September
30, 1999. Corn and soybean meal are the two principal commodities used by the
Company in the manufacture of pet food. Unrealized losses of $3.0 million were
deferred on outstanding hedging contracts at December 31, 1998. See
"Business -- Raw Materials and Packaging."

The sales and expenses of two of the Company's subsidiaries are denominated
in foreign currencies. The Company may encounter exchange rate risk to the
extent that the values of such currencies fluctuate. The Company does not
currently hedge, and does not anticipate hedging, against adverse foreign
currency fluctuations.

Operating expenses consist of promotion and distribution expenses and
selling, general and administrative expenses. Promotion and distribution
expenses are primarily (i) brokerage fees, (ii) promotions, volume incentive
discounts and rebates paid to customers and (iii) freight and distribution
expenses. The Company's selling, general and administrative expenses represent
salaries and related expenses, amortization expense and other corporate overhead
costs. These expenses typically do not increase proportionately with increases
in volume and product sales.

The Company's sales are somewhat seasonal. The Company typically
experiences an increase in net sales during the first and fourth quarters of
each year, as is typical in the pet food industry. The seasonality of the pet
food business is generally attributable to cooler weather, which results in
increased dog food consumption.

32
<PAGE> 34

RESULTS OF OPERATIONS

The following discussion is based on the historical financial statements of
the Company and the notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1997 1998
------------------ ------------------ ------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net sales.............................. $513,217 100.0% $564,741 100.0% $686,663 100.0%
Cost of goods sold..................... 446,776 87.1 482,896 85.5 554,447 80.7
-------- ----- -------- ----- -------- -----
Gross profit........................... 66,441 12.9 81,845 14.5 132,216 19.3
Operating expenses:
Promotion and distribution........... 26,480 5.2 31,876 5.6 45,039 6.6
Selling, general and
administrative..................... 11,512 2.2 14,384 2.6 26,346 3.9
Amortization of intangibles.......... 3,538 0.7 3,601 0.6 6,468 0.9
Transition expenses.................. -- -- -- -- 7,043 1.0
Product recall....................... -- -- -- -- 3,000 0.4
-------- ----- -------- ----- -------- -----
Income from operations............. 24,911 4.8 31,984 5.7 44,320 6.5
Interest expense, net.................. 22,471 4.4 22,463 4.0 31,503 4.6
Non-recurring finance charge........... 4,815 0.9 -- -- 4,599 0.6
Other (income) expense, net............ (2) -- (102) -- 164 --
-------- ----- -------- ----- -------- -----
Income (loss) before taxes......... (2,373) (0.5) 9,623 1.7 8,054 1.3
Income tax expense (benefit)........... (855) (0.2) 3,389 0.6 3,478 0.5
-------- ----- -------- ----- -------- -----
Income (loss) before extraordinary
item............................. (1,518) (0.3) 6,234 1.1 4,576 0.8
Extraordinary item, net of tax......... -- -- -- -- 26,788 4.0%
-------- ----- -------- ----- -------- -----
Net income (loss).................. $ (1,518) (0.3)% $ 6,234 1.1% $(22,212) (3.2)%
======== ===== ======== ===== ======== =====
</TABLE>

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Net Sales. Net sales for 1998 increased 21.6% to $686.7 million from $564.7
million in 1997. Included in this increase are $135.2 million in sales
attributable to the Windy Hill Acquisition and the IPES Acquisition
(collectively, the "Acquisitions"). Excluding the Acquisitions, pet food net
sales decreased 1.1% to $518.1 million for 1998 from $523.7 in 1997. Of this
increase, the volume-related increases of 2.2% were offset by price declines of
3.3% attributable to the pass-through of certain raw material cost decreases to
customers.

Gross profit. Gross profit for 1998 increased 61.5% to $132.2 million from
$81.8 million in 1997. Of this increase, (i) 42.8% was attributable to the
Acquisitions, (ii) 18.4% resulted from improvements in pet food margins due to
margin management efforts, automation savings, acquisition synergies, improved
product mix and reductions in certain raw material costs and (iii) approximately
2.4% was due to increased pet food tons sold. The increase in gross profit was
partially offset by a decrease in non-manufactured product gross profit.

Promotion and distribution expenses. Promotion and distribution expenses
increased 41.3% (39.9% of which was attributable to the Acquisitions) to $45.0
million for 1998 from $31.9 million in 1997. The balance of the increase
resulted from increases in variable sales promotions, incentive discounts and
brokerage costs on increased pet food tons sold.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased 83.2% (45.6% of which was attributable to the
Acquisitions) to $26.3 million for 1998 from $14.4 million in 1997. The balance
of the increase resulted from increases in (i) salaries and related fringe
benefits (22.7%), (ii) professional fees for acquisitions that were not
consummated and information systems consulting (5.2%) and (iii) insurance and
taxes for new facilities (3.2%). Salaries and related fringe benefits increased
due to the restructuring of the senior management team in 1997 and 1998,
recognition of stock compensation expense and performance based bonuses.

Amortization of intangibles. Amortization of intangible expenses increased
79.6% to $6.5 million for 1998 from $3.6 million in 1997 primarily due to the
Acquisitions (79.1%).

33
<PAGE> 35

Transition expenses. Transition expenses represent $7.0 million of expenses
incurred in connection with the merger and integration of Windy Hill with the
Company. These costs include compensation for transitional personnel, severance
and bonus expenses, relocation expenses, recruiting and training expenses,
systems conversion and other unique transition expenses.

Product recall. Product recall represents non-recurring costs of $3.0
million related to the product recall discussed in "-- Commitments and
Contingencies."

Income from operations. Income from operations, excluding the transition
and product recall costs, for 1998 increased 70.0% (39.3% of which was
attributable to the Acquisitions) to $54.4 million (7.9% of net sales) from
$32.0 million (5.7% of net sales) in 1997. The balance of the increase was
principally due to improved pet food margins and increased pet food tons sold,
which were offset in part by the increase in selling, general and administrative
expenses.

Interest expense, net. Net interest expense for 1998 increased 40.2% to
$31.5 million from $22.5 million in 1997 primarily due to $206.0 million of debt
incurred in connection with the Acquisitions.

Non-recurring finance charge. In 1998, $4.6 million in non-recurring
interim debt financing costs were written off concurrent with the issuance of
the Senior Subordinated Notes.

Income (loss) before extraordinary item. Income before extraordinary item
for 1998 decreased to $4.6 million from $6.2 million in 1997. Excluding the
impact net of tax of the non-recurring finance charge, income before
extraordinary item for 1998 increased to $13.7 million from $6.2 million in
1997. The Acquisitions represented $4.1 million of this increase, and the
balance was principally due to improved pet food margins and increased pet food
tons sold.

Extraordinary item, net of tax. The net amount of $26.8 million in 1998
represents costs of $42.8 million incurred in connection with the Refinancing
Transactions, which included tender premiums for the Senior Notes, change of
control costs for the Windy Hill Notes and the write off of deferred financing
costs for all debt repaid in the Refinancing Transactions. These costs have been
partially offset by a $16.0 million tax benefit recognized by the Company.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

Net sales. Net sales for 1997 increased 10.0% to $564.7 million from $513.2
million in 1996. Pet food net sales increased 9.1% to $524.7 million for 1997
from $480.8 million in 1996. Of this amount, approximately 4.3% was due to
increases in tons sold, and the balance was principally the result of price
increases implemented in late 1996 to mitigate increases in raw material costs
that occurred throughout 1996. Net sales of non-manufactured products increased
in 1997 due to distribution of additional products that was partially offset by
a decrease in net sales of engineering products due to the focusing of the
Company's efforts on internal engineering projects at Everson, Pennsylvania,
Washington Court House, Ohio and Miami, Oklahoma.

Gross profit. Gross profit for 1997 increased 23.2% to $81.8 million from
$66.4 million in 1996. Of this amount, 16.8% represents improvements in pet food
margins due to the aforementioned price increases and reductions in the cost of
certain raw materials in the latter part of 1997. The balance of the gross
profit improvement was largely due to additional non-manufactured products
sales. Gross profit increased as a percentage of net sales to 14.5% for 1997
from 12.9% in 1996.

Promotion and distribution expenses. Promotion and distribution expenses
increased to $31.9 million in 1997 from $26.5 million in 1996 due to increases
in sales promotions, volume incentive discounts and brokerage costs resulting
from increased pet food tons sold.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased to $14.4 million in 1997 from $11.5 million in
1996 due to (i) increases in salaries and related fringe benefits associated
with annual wage increases, additional personnel and increased bonuses due to
improved performance, (ii) increases in property taxes on new and expanded
facilities and (iii) increases in expenses associated with the installation of
new information systems.
34
<PAGE> 36

Income from operations. Income from operations for 1997 increased 28.4% to
$32.0 million from $24.9 million in 1996. Income from operations as a percentage
of net sales increased to 5.7% for 1997 from 4.8% in 1996, due to improved pet
food margins and additional non-manufactured products sales.

Interest expense, net. Net interest expense remained unchanged at $22.5
million for 1997 and 1996. Interest expense reductions resulting from payments
on the Term Loan Facility (as defined below) were largely offset by additional
interest expense on proceeds from the Industrial Development Bonds that were
used to finance the construction of the new Miami, Oklahoma facility. Interest
expense as a percentage of net sales decreased to 4.0% in 1997 from 4.4% in
1996.

Net income. Net income for 1997 increased to $6.2 million from a net loss
of $1.5 million in 1996, primarily as a result of increased pet food margins and
additional non-manufactured products sales.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically funded its operations, capital expenditures
and working capital requirements from cash flow from operations, bank borrowings
and industrial development bonds. The Acquisitions were funded through bank
borrowings and the issuance of Common Stock. The Company had working capital of
$31.2 million at December 31, 1998. Net cash provided by operating activities
was $18.6 million, $21.0 million and $34.0 million for the years ended December
31, 1996, 1997 and 1998, respectively. Net cash provided by (used for)
borrowings was approximately $(9.0) million, $(6.7) million and $33.1 million,
respectively, for such periods.

During the three-year period ended December 31, 1998, the Company spent
$45.7 million on capital expenditures, of which $37.3 million was used to
acquire and construct additional manufacturing capacity, including new
manufacturing facilities, a renovated manufacturing facility and five new
production lines in existing facilities and $8.4 million was used to maintain
existing manufacturing facilities.

It is expected that existing manufacturing facilities will not be
sufficient to meet the Company's anticipated volume growth. The Company has
continued to examine alternatives for expanding its business either through
construction of additional manufacturing capacity or acquisition of
manufacturing assets. Such potential acquisitions could include acquisitions of
operating companies. The Company intends to finance such expansions or
acquisitions with borrowings under existing or expanded credit facilities, or
the issuance of additional equity.

On April 17, 1998, the Company acquired IPES for $26.2 million (net of cash
purchased of $1.9 million) and the assumption of indebtedness of $1.9 million.
The Company financed the IPES Acquisition through non-recourse borrowings in
Spain for $21.3 million of the purchase price and borrowings under a credit
facility for the remainder.

On August 3, 1998, the Company acquired Windy Hill for approximately 6.4
million shares of Common Stock and the assumption of $183.5 million of
indebtedness.

On November 12, 1998, the Company completed the Refinancing Transactions.
As part of the Refinancing Transactions, the Company entered into the Senior
Credit Facility, which provides for total commitments of $345.0 million. As of
January 31, 1999, the Company had outstanding borrowings of $245.0 million under
the Term Loan Facility, $28.0 million under the Revolving Credit Facility and
$6.7 million under the swingline facility. In addition, at such date there were
$2.4 million of outstanding letters of credit under the Senior Credit Facility.

The Company is highly leveraged and has significant cash requirements for
debt service relating to the Senior Credit Facility, the Senior Subordinated
Notes, the IPES debt and industrial development bonds. The Company's ability to
borrow is limited by the Senior Credit Facility and the limitations on the
incurrence of indebtedness in the Note Indenture. The Company anticipates that
its operating cash flow, together with amounts available to it under the Senior
Credit Facility and new industrial development bonds, will be sufficient to
finance working capital requirements, debt service requirements and capital
expenditures through the 1999 fiscal year.

35
<PAGE> 37

Following the completion of the Offering, the Company will record an
estimated charge of $941 ($583 net of a tax benefit) for the write-off of
financing costs associated with the Senior Credit Facility.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"), was issued by the
Financial Accounting Standards Board in June 1998. SFAS 133 standardizes the
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts. Under the standard, entities are required to carry
all derivative instruments in the statement of financial position at fair value.
The accounting for changes in the fair value (i.e., gains or losses) of a
derivative instrument depends on whether it has been designated and qualifies as
part of a hedging relationship and, if so, on the reason for holding it. If
certain conditions are met, entities may elect to designate a derivative
instrument as a hedge of exposures to changes in fair values, cash flows, or
foreign currencies. If the hedged exposure is a fair value exposure, the gain or
loss on the derivative instrument is recognized in earnings in the period of
change together with the offsetting loss or gain on the hedged item attributable
to the risk being hedged. If the hedged exposure is a cash flow exposure, the
effective portion of the gain or loss on the derivative instrument is reported
initially as a component of other comprehensive income (outside earnings) and
subsequently reclassified into earnings when the forecasted transaction affects
earnings. Any amounts excluded from the assessment of hedge effectiveness, as
well as the ineffective portion of the gain or loss, is reported in earnings
immediately. Accounting for foreign currency hedges is similar to the accounting
for fair value and cash flow hedges. If the derivative instrument is not
designated as a hedge, the gain or loss is recognized in earnings in the period
of change.

The Company will adopt SFAS 133 beginning in fiscal 2000. The Company has
not determined the impact that SFAS 133 will have on its financial statements
and believes that such determination will not be meaningful until closer to the
date of initial adoption.

YEAR 2000

As of December 31, 1998, the Company had incurred costs of approximately
$3.0 million in connection with year 2000 compliance. The Company intends to
test and verify its year 2000 compliance projects by July 1999, including third
party compliance. Management believes that a failure to complete its year 2000
compliance, or a failure by parties with whom the Company has material
relationships to complete their year 2000 compliance, by such date could have a
material adverse effect on the Company's financial condition and results of
operations. The Company believes that it can provide the resources necessary to
ensure year 2000 compliance prior to the year 2000. However, should the Company
be delayed in its year 2000 compliance, the Company may experience a decrease in
efficiency that could have a material adverse effect on results of operations.
The Company also believes that a sufficient number of suppliers exist if the
Company's current suppliers are delayed in their efforts to achieve year 2000
compliance thereby minimizing risk to the Company. The Company has developed
contingency plans that include moving production within its plant network,
securing additional ingredient storage facilities and transferring procurement
to year 2000 compliant suppliers.

36
<PAGE> 38

COMMITMENTS AND CONTINGENCIES

On October 30, 1998 the Company initiated a voluntary product recall for
certain dry dog food manufactured at its Temple, Texas plant between July 1 and
August 31, 1998. The recall covers dry dog food manufactured at its Temple plant
and does not apply to dry dog food manufactured at other plants or the Company's
dry cat food, biscuits, treats or canned products. The recall resulted from
reported sickness and death of dogs in the State of Texas. These conditions were
attributed to elevated levels of aflatoxins in corn, which is an ingredient in
dry dog food. Aflatoxins are compounds produced from certain kinds of crop molds
that can be caused by extreme weather conditions such as drought and heat. The
Company has an extensive corn testing program for the detection of aflatoxins
and that program has been intensified since the problems were reported. The
Company maintains insurance against losses from illness or death of animals;
however, the cost of the product recall is not covered by insurance. The Company
recorded a $3.0 million product recall charge in the fourth quarter of fiscal
1998. See "Risk Factors -- Environmental, Regulatory and Safety Matters; Product
Recall."

EURO

Effective January 1, 1999, eleven of the fifteen countries comprising the
European Union began a transition to a single monetary unit, the "Euro," which
is scheduled to be completed by July 1, 2002. The Company is currently
considering options to ensure that its European subsidiaries can operate
effectively in the Euro. The Company's subsidiaries in Italy and Spain may incur
significant costs in conversion of their systems to the Euro. The Company is
unable to predict whether such costs can be passed on to customers. The
customers of these subsidiaries may also begin conducting operations using the
Euro prior to the completion of the conversion of the systems of such
subsidiaries. Delays in conversion could have a material adverse effect on the
results of the operations of these subsidiaries. In addition, the introduction
of the Euro may increase competition, as manufacturers in other European
countries become able to compete more easily in the Company's markets.
Management does not believe that the implementation of the Euro will have a
material effect on the Company's operations or financial condition taken as a
whole.

INFLATION AND CHANGES IN PRICES

The Company manages the price risk created by market fluctuations by
hedging portions of its primary commodity product purchases, principally through
exchange traded futures and options contracts that are designated as hedges. The
terms of such contracts are generally less than one year. Settlement of
positions are either through financial settlement with the exchanges or via
exchange for the physical commodity in which case the Company delivers the
contract against the acquisition of the physical commodity. The Company's policy
does not permit speculative commodity trading. Although the Company manages the
price risk of market fluctuations by hedging portions of its primary commodity
product purchases, there can by no assurance that the Company's results of
operations will not be exposed to volatility in the commodity market. See
"-- Overview" and "Business -- Raw Materials and Packaging."

37
<PAGE> 39

BUSINESS

OVERVIEW

The Company has achieved strong internal growth. From 1992 to 1998, the
Company increased sales volumes at a compound annual growth rate of 9.3%,
exclusive of acquisitions. The Company believes its growth is primarily due to
an increase in consumer acceptance of dry products versus canned products and
store brands versus national brands. In addition, the Company has been the
primary supplier of store brand pet food to Wal*Mart since 1970. The Company
manufactures and distributes, under a direct store delivery program, a variety
of products for Wal*Mart including its store brand, Ol' Roy, which is the
largest selling brand of dry pet food in the United States by volume. In 1998,
sales to Wal*Mart, including its Sam's Club division, accounted for 36.5% of the
Company's sales on a pro forma basis.

THE PET FOOD INDUSTRY

The U.S. pet food industry is a $10.0 billion industry that has grown at a
compound annual rate of 4.2% from 1994 to 1998 in terms of sales. Growth in the
dry pet food and the biscuit and treats segments of the industry has exceeded
the growth of the overall pet food industry by capturing market share from other
segments, including canned pet food. Dry pet food sales have grown at a compound
annual rate of 6.4% since 1994 and accounted for approximately $5.7 billion of
sales in the industry in 1998. Sales of biscuits and treats have grown at a
compound rate of 4.5% per year since 1994 and accounted for approximately $1.3
billion of sales during 1998.

38
<PAGE> 40

increased market share in each of the segments of the pet food industry over the
past five years. In 1998, store brands represented approximately 38%, 31%, 24%,
18% and 16% of total sales volume of biscuits and treats, dry dog, dry cat,
canned dog and canned cat food, respectively. Store brands today encompass a
full range of pet food products at all price points, including economy, premium
and super premium.

RECENT DEVELOPMENTS

Refinancing Transactions. In November 1998, the Company refinanced its
capital structure pursuant to the following Refinancing Transactions:

-- Windy Hill was merged into Doane;

-- Doane completed a cash tender offer for approximately $97 million
principal amount of its Senior Notes;

The Windy Hill Acquisition strengthens the Company's presence in the dry
pet food and dog biscuit market segments, provides revenue synergies and
enhances the Company's position as a low-cost manufacturer and distributer of
pet food products. The Company believes the Windy Hill Acquisition provides the
opportunity for revenue growth by (i) enabling the Company to offer regional
brands, semi-moist, soft dry and canned pet food products to its traditional
customer base and (ii) enabling the Company to offer soft treats and other
specialized dry food products to Windy Hill's traditional customer base. With
the addition of Windy Hill's 19 plants, the Company believes cost savings can be
achieved through optimizing production schedules and lowering distribution costs
by reducing the distance products are shipped. The Windy Hill Acquisition also
provides the Company with the opportunity to achieve cost savings by obtaining
purchasing synergies and eliminating redundant overhead functions.

IPES Acquisition. In April 1998, the Company acquired IPES for $26.2
million (net of cash purchased of $1.9 million) and the assumption of
indebtedness of $1.9 million. IPES, located in Spain, is a manufacturer of both
store and regional brands. In fiscal 1997, IPES had net sales, EBITDA and net
income of $21.1 million, $3.8 million and $1.0 million, respectively. The
Company believes that the IPES Acquisition, together with the Company's
investment in the Italian manufacturer, Effeffe, S.p.a., provides the Company
with a platform for growth in Europe.

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STRATEGY

Continue to be the Low Cost Quality Provider in the Pet Food Industry. The
Company believes it is the low cost provider of quality dry pet food. The
Company believes its position as the largest manufacturer of dry pet food
provides it with certain economies of scale, including production efficiencies
and packaging purchasing leverage. In addition, the number and strategic
location of the Company's facilities enhances the Company's position as the low
cost provider by reducing transportation costs for raw materials and finished
goods. The Company also maintains in-house engineering, machining and
fabrication capabilities that enable the Company to design, construct and
maintain facilities on a cost-effective basis.

Leverage Distribution System. The Company's manufacturing and distribution
network enables it to service customers on a national basis and facilitates the
Company's direct store delivery program, the scope of which the Company believes
is unique in the industry. In addition, the Company has developed capabilities
that allow it to provide VMI to certain key customers. VMI allows the Company to
communicate on-line with its customers, evaluate their inventory status and
place orders on their behalf. The Company intends to leverage its manufacturing
and distribution network by expanding sales of its full range of pet food
products to its existing customers. For example, the Company recently completed
the construction of a soft treat manufacturing facility, which will enable the
Company to offer soft treats to its traditional customer base, and intends to
expand sales of certain products acquired in the Windy Hill Acquisition
including semi-moist, soft dry, canned and regional brands to its existing
customers.

Focus on Diversified Brand Formats. The Company believes that store,
co-manufactured national and regional brand formats offer significant growth
opportunities. Sales of store brands have exceeded the overall growth in the pet
food industry. The Company believes this growth will continue due to (i) an
increased awareness of retailers concerning the advantages of store brands,
including enhanced margins and customer loyalty, (ii) improved quality,
innovation and variety of store brand products and (iii) increasingly informed
and value-conscious consumers. The Company believes co-manufactured national
brands offer growth opportunities as national branded pet food companies
increasingly take advantage of the Company's low-cost status, quality products
and logistic and speciality product capabilities. The Company believes that the
regional brands acquired with the Windy Hill Acquisition complement its existing
product lines and intends to capitalize on demand for such brands within the
Company's existing customer base.

Acquire Additional Pet Food Companies. To supplement its internal growth,
the Company has acquired eight pet food companies over the last four years. The
Company believes that there are substantial opportunities in the United States
and abroad to acquire additional pet food companies. The Company will continue
to seek accretive acquisitions that offer complementary product lines,
geographic scope, additional distribution channels and cost saving
opportunities.

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<PAGE> 42

PRODUCTS AND SERVICES

The Company provides its customers with comprehensive pet food category
management services designed to expand each customer's pet food product lines
and to improve the category's profitability. Category management services
include product development and testing, packaging design services and
assistance in formulating pricing and marketing strategies in connection with
their store brand programs. The Company sells its products as store brands owned
by customers (also known as private labels) and regional brands owned by the
Company and contract manufactures products for national pet food companies. The
Company's store brand program involves the formulation and supply of a wide
variety of high quality pet food products, including dry, canned, semi-moist,
soft dry and soft treats, as well as dog biscuits, that are comparable in
quality to, but lower in cost than, competing branded pet food products. For
national brand customers, the Company manufactures dry pet food, treats and
biscuits to such customers' specifications and standards. The regional brands
are used for economy priced products that are generally marketed as a complement
to customers' store brand programs. Accordingly, the Company is able to provide
customers with a single source for store brands, certain co-manufactured
national brands and regional brands. The Company is able to ship all such
product offerings together, giving customers the ability to address a
substantial portion of their pet food requirements from one source.

The Company manufactures dry pet food under approximately 350 store brands,
including Kirkland Signature, Retriever, Dura Life, Great Choice, Hy Vee, Ol'
Roy, Exceed, Maxximum Nutrition, Remarkable, Pathmark, Pet Club, PMI-Nutrition,
Special Kitty and Sportsman's Choice. The Company also co-manufactures branded
pet food products for national pet food companies in accordance with such
companies' specifications and standards. The Company's regional brands include
Kozy Kitten(R), G. Whiskers(R), Trail Blazer(R), and Tuffy's(R), which are sold
to allow the Company's customers to broaden their product offerings and to
provide them with a single source for their pet food requirements. The Company
also has Bonkers(R) and Pet Lovers(TM) branded treats available for its
retailers.

In addition to its pet food products, the Company sells products
manufactured by third parties and maintains an engineering group. A description
of each of the Company's product lines is set forth below:

Dry Pet Food Products (80.2% of 1998 Pro Forma Net Sales)

The Company is the largest manufacturer of dry pet food products in the
United States. The Company produces, markets and distributes a wide selection of
high quality dry pet food products predominantly for dogs and cats. The dog food
product line includes high protein, chunk style, premium blended, puppy food and
gravy style products. The dog food product line has accounted for the largest
portion of the Company's dry pet food shipments over the past three years, with
such products representing approximately 84.1% of the Company's dry pet food
shipments (tonnage) in 1998 on a pro forma basis. The Company's cat food lines
accounted for approximately 15.9% of the Company's dry pet food shipments
(tonnage) in 1998 on a pro forma basis.

Biscuits and Treats (10.5% of 1998 Pro Forma Net Sales)

The Company is the largest manufacturer of dog biscuits in the United
States and is also a leading supplier of soft treats. Biscuits undergo a
different manufacturing process from dry pet food that primarily involves baking
rather than the use of extruders.

Semi-Moist, Soft Dry and Canned Pet Food (4.9% of 1998 Pro Forma Net Sales)

In connection with the Windy Hill Acquisition, the Company has expanded its
operations into the semi-moist, soft dry and canned pet food segments.
Semi-moist, soft dry and canned products are distinguishable from dry pet food
based on their higher moisture levels, the manufacturing technology used to
process such products and their higher costs of packaging.

Non-Manufactured Products (3.5% of 1998 Pro Forma Net Sales)

Sales of non-manufactured products include sales of cat litter, canned pet
products and pet treats produced by third parties. The Company receives these
items at its manufacturing facilities and warehouses and aggregates them with
the Company's products into truckload quantities for combined shipment to
certain

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customers. The Company provides this service as a part of its direct shipment
program and receives a handling fee for this service.

Engineering Services Group

The Company's engineering services group designs and builds extruders,
conveyors, dryers and other parts and equipment, including replacement parts,
for pet food manufacturing facilities of the Company and third parties. The
engineering services group also includes a repair staff that is available to
service and repair machinery and equipment at the Company's production
facilities, giving the Company the ability to make timely repairs, thereby
minimizing downtime. The Company's in-house engineers generally design and
supervise plant construction, thereby reducing plant construction costs and
ensuring consistent manufacturing processes and quality control. The Company
believes that its engineering services group provides it services at a lower
cost and more efficiently than could be obtained from third parties.

SALES AND DISTRIBUTION

The Company's direct sales force seeks new accounts and works directly with
mass merchandisers, membership clubs, feed stores and specialty pet stores. The
Company also uses independent food brokers. The Company also generates new
business through the expansion of its product line and the development of new
marketing programs to existing customers.

Most of the Company's products are distributed utilizing its customers'
transportation networks. Several of the Company's largest customers utilize the
Company as a "just-in-time" supplier and maintain trailers at the Company's
manufacturing and distribution facilities. The trailers are loaded and shipped
either directly to individual stores or to customers' distribution centers.
Those customers that ship product directly from the Company's manufacturing
facilities to their retail outlets are able to reduce their inventory, freight
and handling costs by avoiding shipment to a customer distribution center. Those
customers that use their own transportation fleet are able to utilize their
trucks that would otherwise be empty to backhaul a load of pet food on return to
their distribution center or directly to another store. The ability of the
Company to ship directly to certain of its customers is a key consideration in
locating the Company's manufacturing facilities and is a significant competitive
advantage.

The Company's customers not utilizing their own fleet either arrange their
own transportation or have the Company arrange transportation on a contract
basis through common carriers. The Company does not own or operate any
transportation equipment.

The Company has developed capabilities that allow it to provide VMI service
to certain key customers. VMI allows the Company to communicate on-line with its
customers, evaluate their inventory status then place the order for the
customer. The Company utilizes VMI for both direct store and warehouse
deliveries. VMI's benefits include shorter lead-time, higher inventory turns,
and reduced out-of-stock positions.

CUSTOMERS

The Company manufactures store brands for over 350 customers. Store brand
customers include mass merchandisers such as Wal*Mart and Costco, specialty pet
stores such as PetsMart and grocery chains such as Safeway, Food Lion, Kroger,
Publix, Albertson's, Royal Ahold and Lucky's. In addition, the Company
manufactures products for farm and feed stores including Tractor Supply and
Purina Mills and national branded pet food companies such as Iams, Heinz,
Kal-Kan, Hill's Science Diet and Nestle.

For the year ended December 31, 1998 on a pro forma basis, sales of store
brand products to Wal*Mart and Sam's Club accounted for an aggregate of 36.5% of
the Company's net sales. The Company has been the primary supplier of private
label dry pet food products to Wal*Mart since 1970 and to Sam's Club since 1990.
The Company utilizes a computerized order and distribution system to ship
product directly to virtually all domestic Wal*Mart stores, a majority of which
are located within 250 miles of the Company's facilities. The direct ship
program, which reduces customer inventory, handling and warehouse expenses, is
enhanced by the

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<PAGE> 44

number and strategic locations of the Company's facilities. The Company also
offers direct shipment programs and electronic data interchange systems to other
customers who see these services as a benefit.

The loss of any significant customer or customers, who in the aggregate
represent a significant portion of the Company's sales, would have an adverse
impact on the Company's operating results and cash flows. See "Risk
Factors -- Dependence on Certain Customers."

COMPETITION

The pet food business is highly competitive. The companies that produce and
market the major national branded pet foods are national or international
conglomerates that are substantially larger than the Company and possess
significantly greater financial and marketing resources than the Company. The
store brand pet food products sold by the Company's customers compete for access
to shelf space with national branded products on the basis of quality and price.
National branded products compete principally through advertising to create
brand awareness and loyalty. The Company experiences price competition from
national branded manufacturers. To the extent that there is significant price
competition from the national branded manufacturers or such manufacturers
significantly increase their presence in the store brand segment, the Company's
operating results and cash flow could be adversely affected. The Company also
competes with regional branded manufacturers and other store brand
manufacturers.

The Company believes that it differentiates itself from the national
branded dry pet food manufacturers by offering comparable products at lower
prices giving retailers the opportunity for greater pet food category
profitability. The Company believes that it differentiates itself from other
store brand dry pet food manufacturers by offering higher quality products,
national production and distribution capabilities and a reputation for
increasing customers' store brand dry pet food sales.

RAW MATERIALS AND PACKAGING

The principal raw materials required for the Company's manufacturing
operations are bulk commodity grains and foodstocks, including corn, soybean
meal, wheat middlings, meat and bone meal, and corn gluten meal. The Company
generally purchases raw materials one to three months in advance. The Company
purchases the raw material requirements of each of its manufacturing facilities
locally due to the high freight cost of transporting bulk commodity products. As
a result, raw material costs may vary substantially among manufacturing
facilities due to local supply and demand and varying freight costs. Raw
materials are generally purchased from large national commodity companies and
local grain cooperatives. The Company does not maintain long-term contracts with
any of its suppliers; however, the Company believes that alternative sources of
supply are readily available.

The Company manages the price risk created by market fluctuations by
hedging portions of its primary commodity products purchases, principally
through exchange traded futures and options contracts that are designated as
hedges. The terms of such contracts are generally less than one year. Settlement
of positions are either through financial settlement with the exchanges or via
exchange for the physical commodity in which case the Company delivers the
contract against the acquisition of the physical commodity. The Company's
hedging policy does not permit speculative commodity trading. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Overview."

Packaging is a material component of the Company's raw material costs. The
Company has five main suppliers of packaging and believes that additional
suppliers of packaging are available. A majority of the Company's requirements
are not covered by long term contracts with any of its packaging suppliers.

The Company generally prices its pet food products based on the cost of raw
materials, packaging and certain other costs plus a conversion charge (which
includes a profit factor). The Company periodically adjusts prices based on
fluctuations in raw material and packaging costs. There can be no assurance that
future price increases will be obtained in the event of increased raw material
costs. See "Risk Factors -- Raw

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Materials and Packaging Costs" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

RESEARCH AND DEVELOPMENT

The Company's research and development department consists of a staff of
chemists and nutritionists, a central laboratory used for research and
development and laboratories at each of the Company's production facilities used
for quality control. The Company is continually developing new products. The
research and development department formulates the mix of raw materials and
vitamins and minerals and tests the nutritional content of new products.
Independent commercial kennels and catteries are used for comparison taste tests
to nationally branded products to assure digestibility and palatability as well
as to substantiate the nutritional content of new products.

Quality control is an integral part of the Company's research and
development. The Company maintains a program of testing raw materials to ensure
nutritional adequacy and to test for the presence of bacteria and other harmful
substances. The Company continuously tests pet food production at each of its
plants by analyzing the finished pet food product against formulas and
regulatory requirements. Packaging is inspected to ensure print quality, proper
dimensions and compliance with labeling regulations.

FACILITIES

The Company's corporate headquarters are located in Brentwood, Tennessee.
The Company owns combination manufacturing and distribution facilities in the
following states: one each in New York, Virginia, Indiana, Tennessee, South
Carolina, Georgia, Iowa, Oklahoma, Nebraska, Colorado and Texas; two each in
Ohio, Wisconsin, Minnesota, Missouri, Alabama and Kansas; and three each in
Pennsylvania and California. The Company also has a 50% joint interest in
facilities located in Butler, Missouri; Caldwell, Idaho; Hereford, Texas; and
Italy. The Company is in the process of building a state of the art facility in
Clinton, Oklahoma. The Company also owns a facility in Spain. In addition, the
Company owns or leases eight warehouses.

The manufacturing facilities are generally located in rural areas in
proximity to customers, raw materials and transportation networks, including
rail transportation. Management believes the number and strategic locations of
its manufacturing facilities enhance its position as the low cost producer by
reducing freight costs for raw material and finished goods and facilitating
direct store delivery programs. The rural locations also minimize land and labor
costs. Management believes it is able to construct new manufacturing facilities
at a lower cost than competitors due to the Company's engineering services group
which designs and constructs most of the necessary production equipment.

ENVIRONMENTAL, REGULATORY AND SAFETY MATTERS; PRODUCT RECALL

The Company is subject to a broad range of federal, state, local and
foreign environmental laws and regulations, including those governing discharges
to the air and water, the storage of petroleum substances and chemicals, the
handling and disposal of solid or hazardous wastes, and the remediation of
contamination arising from spills and releases. Failure to comply with these
laws and regulations may result in the assessment of administrative, civil and
criminal penalties, permit revocation and modification as well as, in certain
instances, the issuance of injunctions. Aside from costs associated with the
product recall discussed below, the Company has not been subject to any material
environmental liabilities and compliance of its business and operations with
environmental laws and regulations has not had a material adverse effect on the
Company's capital expenditures, earnings, or competitive position. Environmental
laws and regulations have changed substantially in recent years and the Company
believes that the trend of more expansive and more strict environmental
legislation and regulations will continue. While the Company believes it is in
substantial compliance with applicable environmental and public health laws,
there can be no assurance that additional costs for compliance will not be
incurred in the future or that such costs will not be material.

The Company's business involves the use of aboveground and underground
storage tanks. Under applicable laws and regulations, the Company is responsible
for the proper use, maintenance and abandonment of regulated storage tanks owned
or operated by it, and for remediation of subsurface soils and

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<PAGE> 46

groundwater impacted by releases from such existing or abandoned aboveground or
underground storage tanks. The Company is also subject to laws and regulations
governing remediation, recycling, or disposal. The Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), also known as the
"Superfund" law, and analogous state laws impose liability, without regard to
fault or the legality of the original conduct, on certain classes of persons who
are considered statutorily responsible for the release of a "hazardous
substance" into the environment. These persons include the owner or operator of
a facility where a hazardous substance release occurred and companies that
disposed or arranged for the disposal of hazardous substances. Persons who are
or were responsible for the releases of hazardous substances under CERCLA may be
subject to joint, several and retroactive liability for the costs of
environmental response measures. While there can be no assurance of the position
that may be taken by any environmental agency with respect to the Company's past
operations in connection with any CERCLA site, the Company has not received, nor
does it expect to receive, any notice that it is or will be designated a
potentially responsible party to any CERCLA site.

The Company currently owns or leases, and in connection with its
acquisition program will in the future own or lease, properties that in some
instances have been used for pet food manufacturing or feed mill operations for
many years. Although the Company has utilized operating and disposal practices
that were standard in the industry at the time, in some locations
environmentally sensitive materials were spilled or released on or under the
properties owned or leased by the Company or on or under other locations where
such materials were taken for disposal. In addition, many of these properties
have been operated by third parties whose use, handling and disposal of such
environmentally sensitive materials or similar wastes were not under the
Company's control. These properties and the waste materials spilled, released or
otherwise found thereon may be subject to CERCLA, the federal Resource
Conservation and Recovery Act, and analogous state laws. Under such laws, the
Company has been required to remove or remediate previously spilled or released
waste materials (including such materials spilled or released by prior owners or
operators), or property contamination (including groundwater contamination
caused by prior owners or operators), or to perform monitoring or remedial
activities to prevent future contamination (including releases from underground
storage tanks or aboveground bulk petroleum storage facilities). Moreover, some
of the Company's manufacturing facilities are located within industrial areas.
It is possible that in the future additional environmental response costs may be
required for existing sites as well as any additional sites that may be
identified. In the past, nearby industries have suffered releases of hazardous
substances to the environment that are the subject of CERCLA investigations. It
is possible that these neighboring environmental activities may have impacted
some of the Company's properties. The Company has not been advised, nor does it
expect to be advised, by any environmental agency that it is considered a
potentially responsible party for the neighboring environmental conditions, and
the Company has no reason to believe that such conditions would have a material
adverse effect on the Company.

The Company's operations are subject to the federal Clean Air Act ("CAA")
and comparable state and local requirements. Regulations implementing the CAA
require the installation of pollution control devices on operating sources with
air emissions exceeding applicable threshold levels. As part of an overall
evaluation of its current operations, the Company is planning to install an air
scrubbing unit at one of its facilities, and is assessing whether to install
such a unit at another of its facilities. The Company does not expect the
installation of one or both of these units to have a material adverse impact on
its operations. It is possible that in the future additional air control devices
may be installed at other Company facilities as necessary to satisfy existing or
future requirements.

The manufacturing and marketing of the Company's products are subject to
regulation by federal regulatory agencies, including OSHA, the FDA and the DOA,
and by various state and local authorities. The FDA also regulates the labeling
of the Company's products. Substantial administrative, civil, and criminal
penalties may be imposed for violations of OSHA, FDA, and DOA regulations, and
violations may be restrained through injunction proceedings. The Company
procures and maintains the necessary permits and licenses in order to operate
its facilities and considers itself to be in material compliance with applicable
OSHA, DOA, and FDA requirements.

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The Company's pet food operations outside the United States are potentially
subject to similar foreign governmental controls and restrictions pertaining to
the environment. Management believes that compliance with existing requirements
of such governmental bodies has not had a material adverse effect on the
Company's operations.

TRADEMARKS

Certain of the Company's brands are protected by trademark registrations in
the United States and in certain foreign markets. The Company believes that its
registered trademarks are adequate to protect such brand names.

EMPLOYEES

As of January 31, 1999, the Company had approximately 2,453 employees, of
which approximately 272 were management and administrative personnel and
approximately 2,181 were manufacturing personnel. Of this number, 396 employees
in five of the Company's plants are represented by labor unions. The collective
bargaining agreement with respect to the Birmingham, Alabama plant covers 92
employees and expires on January 20, 2001. The collective bargaining agreement
with the Joplin, Missouri plant covers 191 employees and expires on January 31,
2003. The collective bargaining agreement with the Muscatine, Iowa plant covers
44 employees and expires in December 1999. The collective bargaining agreement
with respect to the NuPet plant in Ripon, California covers 25 employees and
expires in October 2000, subject to renewal for subsequent one-year terms. The
collective bargaining agreement with respect to the Lincoln, Nebraska plant
covers 44 employees and expires in July 1999. The Company considers its
relations with its employees to be satisfactory.

LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceedings, other
than ordinary routine litigation incidental to its business that management
believes would not have a material adverse effect on its financial condition or
results of operations.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names, ages and titles of the current
directors of the Company and executive officers of the Company and Doane. The
Board of Directors is currently composed of eight members, and it is expected to
be expanded to ten members after the consummation of the Offering. The Board of
Directors is expected to be divided into three classes in connection with the
consummation of the Offering, with the terms of the directors of each class
expiring at the Company's Annual Meeting of Stockholders as follows: 2000 (Class
I), 2001 (Class II) and 2002 (Class III). Certain of the Company's directors are
designated pursuant to an Investors' Agreement. If the Windy Hill Investors (as
defined in the Investors' Agreement) sell shares of Common Stock to the
Underwriters pursuant to the Underwriters' exercise of the over-allotment
option, it is anticipated that the Windy Hill Investors will own less than 50%
of the shares of Common Stock owned by them as of August 3, 1998. Under such
circumstances, the Windy Hill Investors would only be entitled to designate one
Board nominee and such nominee would initially be Mr. Ray Chung. Mr. Stephen C.
Sherrill, the second Windy Hill Board designee, is expected to resign if the
Windy Hill Investors' ownership is less than 50% of their ownership as of August
3, 1998. See "Certain Transactions -- Investors' Agreement." Officers serve at
the discretion of the Board of Directors. For information regarding employment
agreements with the executive officers of the Company and Doane, see
"-- Employment and Termination Agreements."

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
George B. Kelly(1).......... 49 Chairman of the Board and Director
Douglas J. Cahill........... 39 Chief Executive Officer, President and Director
Thomas R. Heidenthal........ 47 Senior Vice President and Chief Financial Officer
F. Donald Cowan, Jr......... 53 Senior Vice President, Business Development and
Quality of Doane
Richard A. Hannasch......... 45 Vice President, Fulfillment of Doane
Richard D. Wohlschlaeger.... 46 Vice President, Sales and Marketing of Doane
David L. Horton............. 38 Vice President, Manufacturing and Engineering of
Doane
Terry W. Bechtel............ 56 Vice President, Co-Manufacturing (Sales) of Doane
Charles W. Dunleavy......... 54 Vice President and Managing Director, European
Operations of Doane
Joseph J. Meyers............ 37 Vice President and Chief Information Officer of
Doane
Philip K. Woodlief.......... 45 Vice President, Finance of Doane
Peter T. Grauer(1).......... 53 Director
M. Walid Mansur(2).......... 40 Director
Bob L. Robinson............. 61 Director
Jeffrey C. Walker(1)(2)..... 43 Director
Ray Chung(2)................ 49 Director
Stephen C. Sherrill......... 45 Director
</TABLE>

- ------------------------------

(1) Member of Compensation Committee.

(2) Member of Audit Committee.

Set forth below is a brief description of the business experience of the
directors and executive officers of the Company and Doane.

George B. Kelly has been Chairman of the Board of the Company since June
1995. Mr. Kelly has been the Chairman of the Board of SCI since July 1990. Mr.
Kelly currently is a director of Alegis Group, Inc., Billboard Acquisition
Company, LLC, Independent Gas Company Holdings and Sevenday International, Inc.

Douglas J. Cahill became Chief Operating Officer of the Company in
September 1997, began serving as President of the Company in January 1998 and
began serving as Chief Executive Officer of the Company in July 1998. He has
been a director of the Company since September 1998. Prior to joining the
Company, Mr. Cahill served as President of Olin Corporation's Winchester
Division, Corporate Vice President of Olin

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<PAGE> 49

Corporation and held various other positions with Olin Corporation during the
period from July 1984 through September 1997.

Thomas R. Heidenthal became Senior Vice President and Chief Financial
Officer of the Company in March 1997. Prior to joining the Company, Mr.
Heidenthal served as Vice President Finance and Administration of TA
Instruments, Inc. from August 1990 to February 1997.

F. Donald Cowan, Jr. began serving as Senior Vice President, Business
Development and Quality of Doane in January 1999. Before joining the Company in
August 1998 as Senior Vice President, Operations of Doane, he served as Vice
President of Operations for Windy Hill. Prior to joining Windy Hill in 1995, Mr.
Cowan was Vice President of Operations for Martha White Foods, Inc. From 1987 to
1995, Mr. Cowan held various positions at Martha White Foods, Inc. including
Vice President of Operations.

Richard A. Hannasch joined the Company in October 1996, has served as Vice
President, Fulfillment of Doane since January 1999 and served as Vice President,
Strategic Planning of Doane from June 1998 to January 1999 and Vice President of
Marketing of Doane from November 1997 to January 1999. Prior to joining the
Company, Mr. Hannasch served as Director, Business Development for Ralston
Purina Company's International Division and held various other positions at
Ralston Purina Company from September 1978 to October 1996.

Richard D. Wohlschlaeger joined the Company in April 1993, has served as
Vice President, Sales and Marketing of Doane since January 1999 and served as
Vice President, Customer Development of Doane from November 1997 to January
1999. Prior to joining the Company, Mr. Wohlschlaeger held various other
positions at Ralston Purina Company from March 1976 to April 1993, including
Group Director, Trade Marketing and Eastern Division Sales Director.

David L. Horton joined the Company in November 1997, has served as Vice
President, Manufacturing and Engineering of Doane since January 1999 and served
as Vice President, Fulfillment of Doane from November 1997 to January 1999.
Prior to joining the Company, Mr. Horton served as Vice President of
Manufacturing and Engineering of Olin Corporation's Winchester Division and held
various other positions with Olin Corporation from January 1984 to November
1997.

Terry W. Bechtel has served as Vice President, Co-Manufacturing (Sales) of
Doane since November 1997. Mr. Bechtel joined the Company in June 1973 and
served as Vice President, Administration of Doane from March 1990 until November
1997, and as Vice President, Sales of Doane from September 1976 through February
1990.

Charles W. Dunleavy began serving as Vice President and Managing Director,
European Operations of Doane in February 1999. Before joining the Company in
August 1998 as Vice President, Finance of Doane, he served as Vice President of
Finance for Windy Hill. Prior to joining Windy Hill in September 1997, Mr.
Dunleavy was Vice President of Operations for Hudson Technologies, Inc. from
1993 to 1997. From 1989 to 1993, Mr. Dunleavy was the Managing Partner of the
Detroit office of BDO Seidman, LLP, a public accounting firm.

Joseph J. Meyers became Chief Information Officer of Doane in August 1998
and began serving as Vice President of Doane in January 1999. Prior to joining
us, Mr. Meyers held various information technology positions at Realtime
Consulting, PricewaterhouseCoopers and Olin Corporation from 1992 to 1998.

Philip K. Woodlief has served as Vice President, Finance for Doane since
February 1999. Prior to joining the Company, Mr. Woodlief was an independent
financial consultant from June 1998 to January 1999. From April 1997 to May 1998
Mr. Woodlief was Vice President and Corporate Controller of Insilco Corporation,
a diversified consumer and industrial products manufacturing company, and from
January 1989 to April 1997 he served as Corporate Controller of Insilco.

Peter T. Grauer has been a director of the Company since October 5, 1995
and has been a Managing Director of DLJ Merchant Banking, Inc. since September
1992. Mr. Grauer is a director of Total Renal Care Holdings Inc., Decision One
Holdings, Inc., Nebco Evans Holdings, Inc., Bloomberg L.P., Thermadyne Holdings,
LLC and Formica Corporation.
48
<PAGE> 50

M. Walid Mansur has been a director of the Company since October 5, 1995.
Mr. Mansur has served as the president of Drafil Investments Inc. since 1990 and
has been a managing director of Aspen Venture Partners since 1993.

Bob L. Robinson joined the Company in August 1960 and served as President
and Chief Executive Officer of the Company from March 1992 until his resignation
effective June 30, 1998. Mr. Robinson became a director of the Company on
October 5, 1995. Prior to being named President and Chief Executive Officer, Mr.
Robinson served as Executive Vice President from January 1976 through February
1992.

Jeffrey C. Walker has been a director of the Company since April 1996. Mr.
Walker has been Managing General Partner of Chase Capital Partners, the private
equity investment arm of The Chase Manhattan Corporation, since 1988, and a
General Partner thereof since 1984. Mr. Walker is a director of the Monet Group,
Inc., 800-Flowers, Guitar Center, House of Blues and Domaine.

Ray Chung became a director of the Company in August 1998. He is a partner
in Dartford Partnership, L.L.C. ("Dartford") and an Executive Vice President of
Aurora Foods Inc. Mr. Chung previously served as Executive Vice President and a
director of Windy Hill. Mr. Chung served as a director, Executive Vice President
and Chief Financial Officer of Windmill Corporation from 1989 to 1995 and as a
director, Executive Vice President and Chief Financial Officer of Wyndham Foods
Inc. from 1985 to 1990. From May 1984 to September 1985, Mr. Chung served as
Vice President -- Finance for the Kendall Company. Between 1981 and 1984, Mr.
Chung served as Vice President -- Finance for Riviana Foods, Inc. Both the
Kendall Company and Riviana Foods, Inc. were subsidiaries of the
Colgate-Palmolive Company at the time.

Stephen C. Sherrill became a director of the Company in August 1998. He has
been a Managing Director of Bruckmann, Rosser, Sherrill & Co., Inc. since its
formation in 1995. Bruckmann, Rosser, Sherrill & Co., Inc. is the management
company for Bruckmann, Rosser, Sherrill & Co., L.P. ("BRS"). Mr. Sherrill
previously served as a director of Windy Hill. Mr. Sherrill was an officer of
Citicorp Venture Capital from 1983 through 1994. Previously, he was an associate
at the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison. Mr.
Sherrill is a director of Galey & Lord, Inc., Jitney-Jungle Stores of America,
Inc., B&G Foods, Inc., HealthPlus Corporation, Alliance Laundry Systems, L.L.C.
and Mediq, Inc. As discussed above, if the Windy Hill Investors sell shares of
Common Stock to the Underwriters pursuant to the Underwriters' exercise of the
over-allotment option, and as a result the Windy Hill Investors own less than
50% of the shares of Common Stock that they owned as of August 3, 1998, the
Windy Hill Investors would only be entitled to designate one Board nominee.
Under such circumstances, it is expected that Mr. Sherrill would resign from his
position on the Board.

49
<PAGE> 51

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the Chief
Executive Officer of the Company and certain other persons serving as executive
officers for the fiscal year ended December 31, 1998 who earned $100,000 or more
in combined salary and bonus during such year (collectively, the "Named
Executive Officers").

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL SECURITIES
COMPENSATION(1) UNDERLYING
NAME AND PRINCIPAL POSITION FISCAL ------------------- OPTIONS/SARS ALL OTHER
AT THE COMPANY YEAR SALARY BONUS (#) COMPENSATION
<S> <C> <C> <C> <C> <C>
Douglas J. Cahill(2).......... 1998 $327,082 $424,000 100,000 $1,778,538(3)(4)(6)(10)
President and Chief 1997 91,667 100,000 400,000 305,717(5)(6)
Executive Officer

Thomas R. Heidenthal.......... 1998 199,583 166,950 -- 303,198(3)(4)
Senior Vice President and 1997 145,833 93,000 200,000 47,023(5)
Chief Financial Officer

Bob L. Robinson(7)............ 1998 183,000 800,000 -- 299,300(8)(9)
1997 366,000 569,294 -- 38,712(9)
1996 366,000 420,289 500,000 37,052(9)

Richard D. Wohlschlaeger...... 1998 152,361 92,750 38,000 170,810(3)(4)
Vice President, Sales 1997 116,616 40,000 -- 794
and Marketing 1996 109,853 22,380 38,000 --

Richard A. Hannasch........... 1998 147,917 92,750 -- 186,327(3)(4)
Vice President, Fulfillment 1997 108,627 40,000 -- 30,794(5)
1996 22,222 -- 72,000 --

David L. Horton............... 1998 154,583 92,750 60,000 154,711(3)(4)
Vice President, 1997 14,071 -- -- 80,794(6)
Manufacturing
and Engineering
</TABLE>

- ---------------

(1) All amounts shown were paid by Doane, the Company's operating subsidiary.
Amounts exclude perquisites and other personal benefits because such
compensation did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus reported for each executive officer.

(2) Mr. Cahill served as the Company's Chief Operating Officer from September
1997 to January 1998, became the Company's President in January 1998 and
became the Company's Chief Executive Officer in July 1998. Annual
compensation amounts for 1997 represent compensation for the portion of
1997 of which Mr. Cahill was employed by the Company.

(3) Includes bonuses received in connection with the Windy Hill Acquisition as
follows: Mr. Cahill -- $750,000; Mr. Heidenthal -- $250,000; Mr.
Wohlschlaeger -- $100,000; Mr. Hannasch -- $150,000; and Mr.
Horton -- $100,000.

(4) Includes relocation expenses and gross up for taxes as follows: Mr.
Cahill -- $94,010; Mr. Heidenthal -- $43,670; Mr. Wohlschlaeger -- $61,282;
Mr. Hannasch -- $26,798; and Mr. Horton -- $45,183.

(5) Includes relocation expenses and gross up for taxes of $128,335 for Mr.
Cahill, $44,641 for Mr. Heidenthal and $30,000 for Mr. Hannasch.

(6) Includes sign-on bonuses as follows: Mr. Cahill -- $175,000 (in each of
1997 and 1998); and Mr. Horton -- $80,000.

(7) Mr. Robinson served as the Company's Chief Executive Officer until his
resignation effective June 30, 1998. Upon his resignation, options for
202,000 shares of Common Stock were terminated. See "-- Stock Option
Exercises" and "-- Employment and Termination Agreements."

50
<PAGE> 52

(8) Includes compensation of $183,000 under Mr. Robinson's retirement agreement
dated June 30, 1998, supplemental retirement benefits of $60,745 under Mr.
Robinson's employment agreement and amounts vested under the Company's
Deferred Compensation Plan set forth in footnote 9 below.

(9) Includes the following amounts vested under the Company's Deferred
Compensation Plan: 1998 -- $53,950; 1997 -- $34,860; and 1996 -- $33,200.

(10) Includes compensation of $750,000, which is the difference between the fair
market value and the exercise price of options for 100,000 shares of Common
Stock that Mr. Cahill received and exercised in fiscal 1998.

EMPLOYMENT AND RETIREMENT AGREEMENTS

The Company entered into employment agreements with Messrs. Cahill,
Heidenthal, Wohlschlaeger, Hannasch and Horton, effective January 1, 1998. The
terms of such employment agreements are substantially similar except for salary
and bonus amounts. Mr. Cahill's current base salary is $400,000 with a base
bonus of 100% of base salary. Mr. Heidenthal's current base salary is $225,000
with a base bonus of 70% of base salary and Messrs. Wohlschlaeger, Hannasch and
Horton's current base salary is $175,000 with a base bonus of 50% of base
salary. Earnings targets are established annually by the Company's Board of
Directors under the Company's Annual Bonus Program. The base bonus is linked to
achievement of targeted earnings. There is no cap on additional bonuses in such
employment agreements. Each employment agreement provides for a term of two to
three years with automatic one year extensions. Such agreements are subject to
early termination by the Company for cause without severance. The employment
agreements for Messrs. Wohlschlaeger, Hannasch and Horton provide (i) that
terminations without cause entitle the executive to receive severance payments
equal to one year's base salary and bonus and (ii) for a one year
non-competition agreement commencing upon termination for any reason. The
employment agreements of Messrs. Heidenthal and Cahill contain similar
provisions except that the severance and non-competition terms are two years and
three years, respectively. Pursuant to his employment agreement, Mr. Cahill was
paid a sign-on bonus of $175,000 in 1997 and an additional $175,000 in 1998.

The Company entered into an Early Retirement Agreement and Release (the
"Retirement Agreement") with Mr. Robinson effective June 30, 1998 pursuant to
which Mr. Robinson resigned from employment with the Company and Doane. Pursuant
to the Retirement Agreement, the Company paid Mr. Robinson his base salary, at
the rate in effect on the Retirement Date (June 30, 1998), through December 31,
1998. The Company also paid Mr. Robinson an annual bonus for 1998 in the amount
of $800,000, which bonus was in lieu of any bonus Mr. Robinson was entitled to
receive under the terms of his employment agreement with the Company effective
as of September 1, 1994. Effective as of the Retirement Date, options for 72,000
shares of Common Stock issued under the terms of two stock option agreements
dated November 1, 1996 became fully vested.

COMPENSATION OF DIRECTORS

No compensation has been paid by the Company to its directors prior to the
Offering. Upon completion of the Offering, directors who are not employees of
the Company will receive directors fees to be determined by the Board of
Directors.

Certain directors of the Company are partners or directors of entities that
received fees in connection with the Windy Hill Acquisition, the Exchange Offer,
the tender offer for the Senior Notes and the repayment of bridge financing
incurred in connection with the tender offer for the Windy Hill Notes and will
receive underwriting discounts and commissions in connection with this Offering.
See "Certain Transactions" and "Principal and Selling Stockholders."

COMMITTEES

The Company's Board of Directors has recently established Audit and
Compensation Committees. The Audit Committee consists of Messrs. Mansur, Chung
and Walker, each of whom is a non-employee director of the Company. The Audit
Committee meets separately with representatives of the Company's independent
51
<PAGE> 53

auditors and with representatives of senior management in performing its
functions. The Audit Committee reviews the general scope of audit coverages, the
fees charged by the independent auditors, matters relating to the Company's
internal control systems, and other matters related to audit functions.

The Compensation Committee consists of Messrs. Grauer, Kelly and Walker,
each of whom is a non-employee director of the Company. The Compensation
Committee administers the Company's stock option plans, and in this capacity
makes all option grants or awards to Company employees, including executive
officers, under the plans. In addition, the Compensation Committee is
responsible for making recommendations to the Board of Directors with respect to
the compensation of the Company's Chief Executive Officer and its other
executive officers, and is responsible for the establishment of policies dealing
with various compensation and employee benefit matters for the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

For transactions with Compensation Committee members Grauer and Kelly, see
"Certain Transactions -- Transactions with DLJMB and its Affiliates" and
"-- Transactions with SCI."

STOCK OPTION AND STOCK PURCHASE PLANS

Effective as of November 1, 1996, the Company adopted the Company's 1996
Management Stock Purchase Plan (the "1996 Management Stock Purchase Plan") and
the Company's 1996 Stock Option Plan, as amended (the "1996 Stock Option Plan").
Under the 1996 Stock Option Plan, 3,000,000 shares are authorized for issuance
and as of February 28, 1999, options to acquire 544,620 shares of Common Stock
had been exercised and 1,669,600 shares were reserved for issuance under the
plan. In connection with the Offering, all shares not reserved for issuance
under the 1996 Stock Option Plan or already exercised will be cancelled. The
Company's stock option and purchase plans are intended to encourage certain
employees of the Company to develop a sense of proprietorship and personal
involvement in the development and financial success of the Company.

Effective as of June 19, 1997, the Company adopted the 1997 Management
Stock Purchase Plan (the "1997 Management Stock Purchase Plan"). Pursuant to the
1996 Management Stock Purchase Plan and the 1997 Management Stock Purchase Plan,
500,000 shares of Common Stock of the Company were sold for $2.50 per share to
certain key employees, including sales of 200,000 shares to Mr. Heidenthal,
46,000 shares to Mr. Wohlschlaeger and 46,000 shares to Mr. Hannasch.

In March 1999, the Board of Directors and the stockholders of the Company
approved the adoption of the Company's 1999 Stock Incentive Plan (the "1999
Plan"). The number of shares of Common Stock that may be issued under the 1999
Plan may not exceed 4.2 million shares. The 1999 Plan provides for the granting
of incentive stock options intended to qualify under Section 422 of the Internal
Revenue Code of 1986, options that do not qualify as incentive stock options,
restricted stock awards and stock appreciation rights. The 1999 Plan is
administered by the Board of Directors or a committee selected by the Board of
Directors (the "Committee"). In general, the Committee is authorized to select
the recipients of awards and to establish the terms and conditions of those
awards.

The price at which a share of Common Stock may be purchased upon exercise
of an option granted under the 1999 Plan will be determined by the Committee,
but (a) in the case of an incentive stock option, such purchase price will not
be less than the fair market value of a share of Common Stock on the date such
option is granted and (b) in the case of an option that does not qualify as an
incentive stock option, such purchase price will not be less than 50% of the
fair market value of a share of Common Stock on the date such option is granted.
Additionally, a stock appreciation right may be granted in connection with the
grant of an option. A stock appreciation right allows the holder to surrender
the right to purchase shares under the related option in return for a payment in
cash, shares of Common Stock, or a combination thereof, in an amount equal to
the difference between the fair market value of the shares of Common Stock on
the date such right is exercised and the purchase price for such shares under
the related option.

52
<PAGE> 54

Shares of Common Stock that are the subject of a restricted stock award
under the 1999 Plan will be subject to restrictions on disposition by the holder
and an obligation of such holder to forfeit and surrender the shares to the
Company under certain circumstances.

The 1999 Plan provides that if (a) the Company is involved in a merger or
consolidation pursuant to which the stockholders of the Company immediately
prior to such transaction own less than 50% of the total voting power of the
outstanding voting stock of the surviving entity immediately after the
transaction or (b) any person, entity or group acquires or gains ownership or
control of more than 50% of the outstanding shares of the Company's voting
stock, then, except as provided in any award agreement, outstanding awards will
immediately vest and become exercisable or satisfiable, as applicable. In
addition, upon the occurrence of any such event, each outstanding option will
continue to be exercisable for the remainder of the applicable option term
unless the Committee determines that, in connection with such transaction, such
option must be exercised in full or surrendered in exchange for a payment in
cash, securities or other property.

The Company intends to grant options to acquire approximately 1,400,000
shares of Common Stock following the consummation of the Offering at an exercise
price equal to the initial public offering price, including options to acquire
521,000 shares to Mr. Cahill, options to acquire 81,000 shares to Mr. Heidenthal
and options to acquire 32,000 shares to each of Messrs. Wohlschlaeger, Hannasch
and Horton. The options granted to such Named Executive Officers will be
weighted 60% for "performance-vesting" options and 40% for "time-vesting"
options. The performance-vesting options will vest if, at anytime during the
four-year period following the date of grant, the Common Stock per share price
equals or exceeds, for a period of 20 consecutive trading days, an assumed per
share price that would represent a 20% compound annual price increase from the
date of grant to the fourth anniversary thereof. The time-vesting options will
be five-year options, with one-third of the total options under each grant
vesting at the end of three, four and five years from the date of grant
(assuming continued employment).

STOCK OPTION GRANTS

The following table sets forth, as of December 31, 1998, certain
information as to options granted in 1998 under the 1996 Stock Option Plan to
the Named Executive Officers.

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------------------------------- -------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS PRICE
UNDERLYING OPTIONS GRANTED TO PER EXPIRATION
NAME GRANTED(#) EMPLOYEES SHARE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Douglas J. Cahill......... 100,000 27.3% $2.50 1999(1) -- --
Richard D.
Wohlschlaeger........... 38,000 10.4 5.00 2008 $119,320 $302,860
David L. Horton........... 60,000 16.4 5.00 2008 188,400 478,200
</TABLE>

- ---------------

(1) Mr. Cahill was issued 100,000 options on May 1, 1998 with a term of one
year, all of which he exercised on June 1, 1998.

53
<PAGE> 55

STOCK OPTION EXERCISES

The following table sets forth certain information with respect to
exercises by the Company's Named Executive Officers of stock options during
fiscal year 1998 and the value of all unexercised employee stock options as of
December 31, 1998 held by such officers.

AGGREGATED OPTION EXERCISES IN LAST YEAR AND YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
ACQUIRED --------------------------- ---------------------------
NAME ON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C>
Douglas J. Cahill................. 200,000 75,000 225,000 $525,000 $1,575,000
Thomas R. Heidenthal.............. -- 64,800 135,200 615,600 1,284,400
Richard D. Wohlschlaeger.......... -- 24,776 51,224 216,372 410,628
Richard A. Hannasch............... -- 25,376 46,624 218,392 395,608
David L. Horton................... -- 12,000 48,000 84,000 336,000
Bob L. Robinson(2)................ 298,000 0 0 -- --
</TABLE>

- ---------------

(1) The value of unexercised in-the-money options is based upon the difference
between the exercise price and an assumed initial public offering price of
$12.00 per share.

(2) Effective as of Mr. Robinson's retirement on June 30, 1998, options for
72,000 shares of Common Stock issued under the terms of two stock option
agreements dated November 1, 1996 became fully vested and his remaining
unexercised options for 202,000 shares were terminated.

OTHER COMPENSATORY ARRANGEMENTS

Employee Retirement Plan. On May 31, 1998, the Company terminated its
Employee Retirement Plan (the "Retirement Plan"). The Retirement Plan was a
non-contributory, tax qualified plan that provided retirement benefits based on
the employee's tenure with the Company and average monthly compensation. The
Company is currently structuring a plan for liquidating the Retirement Plan and
anticipates providing a lump sum payment that former plan participants may elect
to contribute to the newly established Doane Products Company Savings and
Investment Plan (see "-- 401(k) Plans") or to use to purchase annuities.

401(k) Plans. As of June 1, 1998 the Company adopted the Doane Products
Company Savings and Investment Plan for eligible employees not covered by
collective bargaining arrangements and the Doane Products Company Savings and
Investment Plan -- Union Plan for eligible union employees at the Joplin,
Missouri plant. The plans are intended to be qualified retirement plans under
the Internal Revenue Code. Both plans permit employee contributions between 1%
and 15% of pre-tax earnings subject to annual dollar limits set by the IRS, an
annual employer profit sharing contribution of $400 for each eligible
participant and a variety of investment options. The Doane Products Company
Savings and Investment Plan also includes an employer matching contribution in
an amount equal to 50% of participant contribution, up to 6% of compensation.
Vesting for the employer match is 25% per year for each full year of service.

Windy Hill adopted the Windy Hill Pet Food Company, Inc. Profit Sharing and
Savings Plan on March 1, 1995, as amended. The plan is intended to be a
qualified plan under the Internal Revenue Code. It permits employee
contributions from 1% to 15% of pre-tax earnings subject to annual dollar limits
set by the IRS. Of this amount, the Company will match 50% of the first 6% of
the employee contribution. In addition, the plan provides for contribution to
participant accounts of amounts equal to 2 1/2% of the employee's compensation.

Non-Qualified Salary Continuation Agreements. The Company has entered into
agreements with all Named Executive Officers to provide benefits to such
employees or their beneficiaries in the event of the death of the employee or
retirement by the employee at age 65 or on or after age 55 with 20 years of
service with the Company. If the employee remains employed until age 65, the
employee (or the employee's beneficiary) will receive an annual retirement
benefit payable for 10 years in accordance with a specified formula. If the
employee terminates employment before age 65 but after age 55 and with 10 years
of service with the Company, the employee's retirement benefit will be reduced
in accordance with percentages specified in the agreement, depending upon the
employee's age at retirement ranging from 100% at age 65 to 55.8% at age 55.

54
<PAGE> 56

CERTAIN TRANSACTIONS

INVESTORS' AGREEMENT

In connection with the Windy Hill Acquisition, the Company, Doane, Summit,
SCI, CMIHI and an affiliate thereof, DLJMB and certain of its affiliates, all of
the stockholders of Windy Hill and certain other shareholders of the Company
(collectively, the "Stockholders") entered into the Investors' Agreement. The
Investors' Agreement contains provisions concerning the governance of the
Company and Doane, restrictions on the transferability of the securities of the
Company and Doane acquired by the Stockholders and registration rights for such
securities. The governance provisions of the Investors' Agreement provide that
the Board of Directors of the Company will consist of eight members, of whom two
will be designated by SCI on behalf of the Summit-Investors (as defined in the
Investors' Agreement) (each such designee, a "Summit-Investor Designee"), one
will be designated by CMIHI (the "Chase Designee"), one will be the Windy Hill
Representative (as defined in the Investors' Agreement) on behalf of the Windy
Hill Investors (the "Windy Hill Designee"), one will be the Chief Executive
Officer of the Company and one (the "Kelly Designee") will be designated by
George B. Kelly so long as Mr. Kelly serves as one of the Summit-Investor
Designees or by the Summit-Investor Designees, acting jointly, if Mr. Kelly is
not one of the Summit-Investor Designees. At any time the number of shares of
Common Stock owned of record by the Summit-Investors is less than 50% of the
number of shares of Common Stock owned as of August 3, 1998 (in each case,
disregarding stock splits, recapitalizations and similar adjustments in number
of shares and stock dividends), the Summit-Investors will only have the right to
designate one individual in addition to the Kelly Designee. Notwithstanding the
foregoing, at any time any of CMIHI's, the Summit-Investors' or the Windy Hill
Investors' respective Percentage Ownership (as defined in the Investors'
Agreement) is less than 5%, such person or group shall not have the further
right to designate any individual to the Board pursuant to the Investors'
Agreement. In addition, until the earlier of August 3, 1999 and the date the
Windy Hill Investors no longer have the right to designate any individual to the
Board, Windy Hill Pet Food Company L.L.C. will have the right to designate one
Board observer. The Investors' Agreement also provides that the board of
directors of Doane will be comprised of the individuals who are serving as
directors on the Company's Board. DLJMB and its affiliates are not parties to
the governance provisions of the Investors' Agreement.

The Investors' Agreement also provides for certain registration rights for
the benefit of the Stockholders. The Company shall not be obligated to effect
more than three demand registrations for the Summit-Investors, collectively,
three demand registrations for the DLJ Entities (as defined in the Investors'
Agreement), collectively, three demand registrations for the Windy Hill
Investors, collectively, and three demand registrations for CMIHI. Following the
date the Company is eligible to use Form S-2 or S-3 for registration of its
securities, demand registrations on Form S-2 or S-3 for the DLJ Entities, CMIHI,
the Summit-Investors and the Windy Hill Investors will be unlimited. The
Stockholders also have piggy-back registration rights if the Company proposes to
register any of its Common Stock or warrants, or if Doane proposes to register
any of its Senior Preferred Stock under the Securities Act.

TRANSACTIONS WITH DLJMB AND ITS AFFILIATES

In 1995, DLJSC entered into a financial advisory agreement with the Company
and Doane. The financial advisory agreement provides for an annual retainer fee
of $100,000 plus reimbursable expenses; such agreement will terminate upon
consummation of the Offering.

In connection with the 1995 Acquisition, DLJMB purchased 1,000,000 shares
of Senior Preferred Stock and warrants to purchase 4,514,928 shares of Common
Stock for an aggregate purchase price of $25 million. In December 1997, DLJMB
and certain of its affiliates sold their shares of Senior Preferred Stock to
DLJSC, who thereupon sold such shares to qualified institutional buyers (as
defined in Rule 144A under the Securities Act). DLJMB will receive proceeds from
the Offering of $6.4 million as a Selling Stockholder in the Offering (assuming
an initial public offering price of $12.00 per share). DLJMB is also a party to
the Investors' Agreement. See "-- Investors' Agreement." Mr. Grauer, a Managing
Director of DLJMB, is a member of the Boards of Directors of the Company and
Doane.

55
<PAGE> 57

DLJMB is an affiliate of DLJSC and DLJ Capital Funding, Inc. ("DLJ
Capital"). DLJSC and DLJ Capital and their affiliates perform various investment
banking and commercial banking services from time to time for the Company. DLJ
Capital serves as an agent bank and a lender to the Company under the Senior
Credit Facility. DLJSC will serve as lead manager in connection with this
Offering and served as financial advisor to the Company in connection with the
Windy Hill Acquisition. DLJSC also served as dealer manager in connection with
the tender offer for the Senior Notes and for the Exchange Offer. DLJ Bridge
Finance, Inc., an affiliate of DLJSC, also provided, together with an affiliate
of CMIHI, a bridge loan to the Company in connection with the Refinancing
Transactions. DLJSC received $1.0 million in connection with the Windy Hill
Acquisition, and DLJSC and DLJ Capital received approximately $3.8 million in
connection with the Refinancing Transactions. DLJSC, DLJ Capital and their
affiliates have received, and will receive, customary compensation for acting in
the foregoing capacities.

TRANSACTIONS WITH SCI

SCI is the general partner of Summit, which is the owner of 2,880,000
shares of Common Stock of the Company. In addition to certain payments of fees
and reimbursements for out-of-pocket expenses in connection with the 1995
Acquisition, SCI entered into a management advisory agreement with Doane for a
term of five years or until such time as the Company consummates an initial
public offering of its Common Stock resulting in the receipt by the Company of
at least $35 million in gross proceeds, whichever is shorter, and pursuant to
which Doane will pay SCI an annual fee of $200,000 plus reimbursable expenses;
such agreement will terminate upon consummation of the Offering.

SCI received fees of $2.0 million in connection with the Windy Hill
Acquisition. SCI and Summit are also parties to the Investors' Agreement.
Pursuant to the Investors' Agreement, SCI has designated Messrs. Kelly and
Mansur to the Boards of Directors of the Company and Doane. See "-- Investors'
Agreement."

TRANSACTIONS WITH CMIHI AND AFFILIATES

CMIHI is an affiliate of CSI and The Chase Manhattan Bank ("Chase"). CMIHI
and an affiliate of CMIHI own (i) 200,000 shares of Senior Preferred Stock that
will be repurchased by the Company in connection with the Offering, (ii) 428,000
shares of Class A Common Stock and 2,332,000 shares of Class B (non-voting)
Common Stock and (iii) warrants to purchase 902,984 shares of Common Stock.
CMIHI and CSI received fees of $1,000,000 and $500,000, respectively, in
connection with the Windy Hill Acquisition. CMIHI will receive proceeds from the
Offering (i) through the repurchase of the Senior Preferred Stock (approximately
$9.1 million (based upon the liquidation value of the Senior Preferred Stock as
of March 31, 1999)) and (ii) as a Selling Stockholder (approximately $2.4
million (assuming an initial public offering price of $12.00 per share)). In
addition, CMIHI is a party to the Investors' Agreement. Pursuant to the
Investors' Agreement, CMIHI has designated Jeffrey C. Walker, the Managing
General Partner of Chase Capital Partners, which is an affiliate of CMIHI, to
the Boards of Directors of the Company and Doane. See "-- Investors' Agreement."

CSI, Chase and their affiliates perform various investment banking and
commercial banking services from time to time for the Company and its
affiliates. Chase serves as an agent bank and a lender, and CSI served as
co-arranger, to the Company under the Senior Credit Facility. Chase also acted
as agent bank and a lender under Windy Hill's prior credit facility, which was
repaid in connection with the Refinancing Transactions. CSI acted as an initial
purchaser of the May 1997 offering of the Windy Hill Notes and is an Underwriter
of this Offering. CSI acted as financial advisor to Windy Hill in connection
with the Windy Hill Acquisition. CSI also acted as dealer manager in connection
with the Exchange Offer. An affiliate of CMIHI also provided, together with an
affiliate of DLJSC, a bridge loan to the Company in connection with the
Refinancing Transactions. CSI, Chase and their affiliates received approximately
$3.9 million in connection with the Refinancing Transactions. CSI, Chase and
their affiliates have received, and will receive, customary compensation for
acting in the foregoing capacities.

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<PAGE> 58

TRANSACTIONS WITH M. WALID MANSUR

M. Walid Mansur, a director of the Company and Doane, was paid $500,000 for
services rendered in connection with the 1995 Acquisition and related
financings. Mr. Mansur owns 1,400,000 shares of Common Stock, Mr. Mansur's
spouse, Laura Hawkins Mansur, owns 1,612,000 shares of Common Stock and 300,000
shares of Common Stock are held in trust for their children.

OTHER TRANSACTIONS

In addition to the fees paid to CMIHI, DLJSC and SCI in connection with the
Windy Hill Acquisition, Dartford received a fee of $3.0 million and BRS received
a fee of $1.0 million. BRS also was paid $500,000 at the closing of the Windy
Hill Acquisition, representing a deferred transaction fee earned by BRS in
connection with Windy Hill's acquisition of certain assets from Heinz Inc. in
April 1996.

WARRANT EXERCISES

At or prior to the closing of the Offering, certain Selling Stockholders
will sell warrants to purchase 733,272 shares of Common Stock to the
Underwriters. If the Underwriters' over-allotment option is exercised in full,
those Selling Stockholders will sell warrants to purchase an additional 349,124
shares of Common Stock to the Underwriters. The warrants purchased by the
Underwriters from such Selling Stockholders will be exercised for a number of
shares of Common Stock equal to the number of shares underlying the warrants.
All such shares of Common Stock obtained by the Underwriters as a result of the
exercise of the warrants will be offered by the Underwriters in the Offering.
Unless the context otherwise requires, shares of Common Stock sold in the
Offering by the Underwriters as a result of the exercise of warrants purchased
from the Selling Stockholders are treated as if the corresponding number of
shares of Common Stock were sold by the Selling Stockholders.

The Company believes that the terms of the transactions described above
were no less favorable to the Company than could have been obtained from
unaffiliated parties.

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<PAGE> 59

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 28, 1999, and as adjusted
to reflect the sale of the Common Stock offered hereby, by (i) each director,
(ii) each Named Executive Officer, (iii) each person who is known by the Company
to own beneficially 5% or more of the Common Stock, (iv) all parties to the
Investors' Agreement as a group, (v) each Selling Stockholder and (vi) all
directors and executive officers as a group. Unless otherwise indicated, each
person has sole voting and dispositive power over the shares indicated as owned
by such person. Certain of the Company's principal stockholders are parties to
the Investors' Agreement. See "Certain Transactions -- Investors' Agreement."

In its capacity as an escrow agent, IBJ Whitehall Bank & Trust Company,
formerly IBJ Schroder Bank & Trust Company ("IBJ"), has been, until immediately
prior to the effectiveness of the Registration Statement of which this
Prospectus is a part, the record owner of 6,357,376 shares of Common Stock (the
"Escrow Shares") (34.6% of the outstanding shares of Common Stock prior to the
Offering). While in escrow, the Escrow Shares are beneficially owned by the
former shareholders of Windy Hill, including BRS, Dartford and PNC Capital Corp
("PNC"). Immediately prior to the effectiveness of the Registration Statement,
the Escrow Shares will be released to the beneficial owners thereof. The number
of Escrow Shares released to each beneficial owner will depend in part on the
initial public offering price of this Offering. The table below has been
prepared based on the assumption that the initial public offering price is
$12.00. If the offering price is not $12.00 per share, the number of Escrow
Shares released to each former Windy Hill shareholder may differ and, as a
result, the number of Escrow Shares beneficially owned and the number of Escrow
Shares to be sold in the Offering, in each case, by each former Windy Hill
shareholder (including those former Windy Hill shareholders listed in the table
below) may also differ, although the amount of any such difference would be
immaterial. Of the total Escrow Shares, 3,090,160 are being sold in the Offering
(subject to minor adjustments in the event the initial public offering price
differs from $12.00). Immediately following the Offering, the Escrow Shares not
sold in the Offering will be held beneficially and of record by the former Windy
Hill shareholders, except for former Windy Hill shareholders who will continue
to beneficially own shares pursuant to their interests in Windy Hill Pet Food
Company, L.L.C. The following table includes a breakdown of the shares being
sold and beneficial ownership before and after the Offering and assumes that the
over-allotment option is not exercised.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE SHARES BENEFICIALLY
OWNED PRIOR TO THE SOLD IN THE OWNED AFTER THE
OFFERING OFFERING OFFERING(2)
---------------------- ------------ -----------------------
NAME(1) NUMBER PERCENT NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Summit(3)............................ 2,880,000 15.7% -- 2,880,000 9.9%
DLJMB(4)............................. 4,514,928 19.7 534,748 3,980,180 12.0
CMIHI(5)............................. 3,662,984 19.0 198,524 3,464,460 11.6
BRS(6)............................... 2,975,476(12) 16.2 2,015,760 959,716(12) 3.3
Dartford(11)......................... 2,733,868 14.9 1,005,348 1,728,520 5.9
PNC.................................. 648,032 3.5 69,052 578,980 2.0
Laura Hawkins Mansur(7).............. 3,312,000 18.0 575,840 2,736,160 9.4
Peter T. Grauer(4)................... 4,514,928 19.7 534,748 3,980,180 12.0
George B. Kelly(3)................... 2,880,000 15.7 -- 2,880,000 9.9
Jeffrey C. Walker(5)................. 3,662,984 19.0 198,524 3,464,460 11.6
Ray Chung(11)........................ 2,733,868 14.9 1,005,348 1,728,520 5.9
Stephen C. Sherrill(6)............... 2,975,476 16.2 2,015,760 959,716 3.3
M. Walid Mansur(7)................... 3,312,000 18.0 575,840 2,736,160 9.4
Bob L. Robinson(8)................... 1,098,000 6.0 60,972 1,037,028 3.6
Douglas J. Cahill(9)................. 275,000 1.5 -- 275,000 *
Thomas R. Heidenthal(9).............. 264,800 1.4 -- 264,800 *
Richard D. Wohlschlaeger(9).......... 85,776 * -- 85,776 *
Richard A. Hannasch(9)............... 86,376 * -- 86,376 *
David L. Horton(9)................... 27,000 * -- 27,000 *
Earl R. Clements(9)(10).............. 339,260 2.1 67,744 271,516 *
Dick H. Weber(9)(10)................. 227,260 1.4 47,424 179,836 *
Roy E. Hess(10)...................... 240,000 1.3 24,388 215,612 *
Larry D. Morris...................... 632 * 200 432 *
All parties to the Investors'
Agreement as a group............... 23,221,664 96.8 4,599,800 18,621,864 54.8
All executive officers and directors
as a group (14 persons)............ 22,194,064 92.1 4,391,192 17,802,872 52.2
</TABLE>

(footnotes on next page)

58
<PAGE> 60

- ------------------------------

* Represents less than one percent.

(1) The address of Summit and Mr. Kelly is 8 Greenway Plaza, Suite 714,
Houston, Texas 77046. The address of DLJMB and Mr. Grauer is 277 Park
Avenue, New York, New York 10172. The address of CMIHI and Mr. Walker is
380 Madison Avenue, 12th floor, New York, New York 10017. The address of
BRS and Mr. Sherrill is 126 East 56th Street, New York, New York 10022. The
address of Dartford and Mr. Chung is 456 Montgomery, Suite 2200, San
Francisco, California 94109. The address of Mr. Robinson, Mr. Cahill, Mr.
Heidenthal, Mr. Wohlschlaeger, Mr. Hannasch, Mr. Horton, Laura Hawkins
Mansur and Mr. Mansur is 103 Powell Court, Suite 200, Brentwood, Tennessee
37027. The address of PNC is 3150 CNG Tower, 625 Liberty Avenue,
Pittsburgh, Pennsylvania 15222. The address of Mr. Clements and Mr. Weber
is West 20th & State Line Road, Joplin, Missouri 64804. The address of Mr.
Hess is 2515 West 30th Street, Joplin, Missouri 64804. The address of Mr.
Morris is 3201 W. Calvert, South Bend, Indiana 46680.

(2) Assumes no exercise of the Underwriters' over-allotment option. If the
Underwriters' over-allotment option is exercised in full, after the
Offering 29,484,392 shares of Common Stock will be outstanding and the
following Selling Stockholders will beneficially own the following number
of shares, which represent the percentage ownership indicated:
DLJMB -- 3,725,572, 11.2%; CMIHI -- 3,369,944, 11.2%;
Dartford -- 1,249,868, 4.2%; PNC -- 546,104, 1.9%; Mr. and Mrs.
Mansur -- 2,462,000, 8.4%; Mr. Robinson -- 1,008,000, 3.4%; Mr.
Clements -- 239,260, 0.8%; Mr. Weber -- 157,260, 0.5%; and Mr.
Hess -- 204,000, 0.6%; all directors and executive officers as a group (14
persons) -- 15,712,192 shares, 46.1%; and all parties to the Investors'
Agreement as a group -- 16,431,864, 48.3%. Except as set forth in footnote
12 below, BRS will not own any shares of Common Stock if the Underwriters'
over-allotment option is exercised in full. No other share numbers or
percentages set forth in the above table will change as a result of the
exercise of the Underwriters' over-allotment option.

(3) Summit is a limited partnership of which SCI serves as the general partner.
Mr. Kelly, a director of the Company, is Chairman of the Board and a
stockholder of SCI. Mr. Kelly may be deemed to beneficially own the shares
indicated because of Mr. Kelly's affiliation with Summit. Mr. Kelly
disclaims beneficial ownership of such shares within the meaning of Rule
13d-3 of the Exchange Act.

(4) All of the shares indicated as owned by DLJMB are shares that may be
acquired by DLJMB within 60 days pursuant to the exercise of warrants. Of
the shares indicated, warrants to purchase 2,126,748, 950,960, 55,136,
857,640 and 524,444 shares are held by DLJ Merchant Banking Partners, L.P.,
DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc. and DLJ First ESC L.P., respectively. The foregoing
entities are selling 251,892, 112,632, 6,530, 101,579 and 62,115 shares in
the Offering, respectively. DLJMB is a limited partnership, the general
partner of which is DLJ Merchant Banking, Inc., an affiliate of DLJSC. Mr.
Grauer is a director of the Company and serves as a Managing Director of
DLJ Merchant Banking, Inc. and, as such, may be deemed to beneficially own
such shares. Mr. Grauer disclaims beneficial ownership of such shares
within the meaning of Rule 13d-3 of the Exchange Act. The shares to be sold
in the Offering include 534,748 shares of Common Stock to be issued by the
Company upon the exercise by the Underwriters of warrants previously held
by the entities listed above. See "Certain Transactions."

(5) Represents shares held by CMIHI and related parties. Of the 3,662,984
shares indicated as owned by CMIHI, (i) 428,000 represent shares of Class A
Common Stock, (ii) 2,332,000 represent shares of Class B Common Stock and
(iii) 902,984 are shares issuable within 60 days upon exercise of warrants.
Mr. Walker, a director of the Company, is Managing General Partner of Chase
Capital Partners, an affiliate of CMIHI, and may be deemed to beneficially
own the shares indicated as owned by CMIHI. Mr. Walker disclaims beneficial
ownership of such shares within the meaning of Rule 13d-3 of the Exchange
Act. The shares to be sold in the Offering include 198,524 shares of Common
Stock to be issued by the Company upon the exercise by the Underwriters of
warrants previously held by CMIHI. See "Certain Transactions."

(6) Includes shares held by BRS and certain other entities and individuals
affiliated with BRS. Mr. Sherrill, a director of the Company, is a
principal of BRS and in addition to the 58,140 shares individually owned by
him (and 1,623 shares beneficially owned by him through his interest in
Windy Hill Pet Food Company, L.L.C., as discussed in footnote 12 below), he
may be deemed to beneficially own 2,917,336 shares beneficially owned by
BRS and certain other entities and individuals affiliated with BRS. Mr.
Sherrill disclaims beneficial ownership of those 2,917,336 shares within
the meaning of Rule 13d-3 of the Exchange Act. Of the 2,015,760 shares
indicated as to be sold by BRS in the Offering, 1,887,944 shares will be
sold by BRS, 5,864 shares will be sold by Paul Kaminski, 2,222 shares will
be sold by BCB Partnership, 1,095 shares will be sold by NAZ Partnership,
37,859 shares will be sold by Bruce C. Bruckmann, 764 shares will be sold
by Elizabeth McShane, 764 shares will be sold by Beverly Place, 5,132
shares will be sold by Donald J. Bruckmann, 7,636 shares will be sold by
Harold Rosser,

59
<PAGE> 61

25,540 shares will be sold by H. Virgil Sherrill, 39,387 shares will be
sold by Stephen Sherrill and 1,553 shares will be sold by Nancy Zweng. The
address of each person and entity listed above is 126 East 56th Street, New
York, New York 10022.

(7) Of the shares indicated as owned by Mr. and Mrs. Mansur, (i) 1,400,000 are
held in Mr. Mansur's name, 237,112 of which are being sold in the Offering,
(ii) 1,612,000 are owned by Mrs. Mansur, 287,920 of which are being sold in
the Offering and (iii) 300,000 are held in trust for their children, 50,808
of which are being sold in the Offering. The shares held by Mrs. Mansur and
the Mansurs' children may be deemed to be beneficially owned by Mr. Mansur;
Mr. Mansur disclaims beneficial ownership of such shares within the meaning
of Rule 13d-3 of the Exchange Act. The shares held by Mr. Mansur and the
Mansurs' children may be deemed to be beneficially owned by Mrs. Mansur;
Mrs. Mansur disclaims beneficial ownership of such shares within the
meaning of Rule 13d-3 of the Exchange Act.

(8) Of the shares indicated as owned by Mr. Robinson, 154,000 are held in Mr.
Robinson's name, of which 60,972 are being sold in the Offering, 560,000
are held in a limited partnership of which Mr. Robinson is the managing
partner, 192,000 are held in trust for Mr. Robinson and 192,000 are held in
trust for Mr. Robinson's wife, Jeanine L. Robinson. The shares held by the
partnership and in Mr. Robinson's wife's trust may be deemed to be
beneficially owned by Mr. Robinson; Mr. Robinson disclaims beneficial
ownership of such shares within the meaning of Rule 13d-3 of the Exchange
Act.

(9) Amounts include 75,000 options granted to Mr. Cahill, 64,800 options
granted to Mr. Heidenthal, 24,776 options granted to Mr. Wohlschlaeger,
25,376 options granted to Mr. Hannasch, 12,000 options granted to Mr.
Horton, 59,260 options granted to Mr. Clements and 59,260 options granted
to Mr. Weber, all of which are exercisable within 60 days.

(10) Messrs. Clements, Weber and Hess each previously served as Vice Presidents
of Doane, and each are parties to the Investors' Agreement. See "Certain
Transactions -- Investors' Agreement." Messrs. Clements and Weber are still
employees of Doane.

(11) The shares indicated as owned by Dartford are beneficially owned by Windy
Hill Pet Food Company, L.L.C. and certain other entities and individuals
affiliated with Windy Hill Pet Food Company, L.L.C. Dartford beneficially
owns 569,000 of the 2,733,868 shares and is the entity that controls Windy
Hill Pet Food Company, L.L.C. Mr. Chung, a director of the Company, is a
partner in Dartford and a managing member of Windy Hill Pet Food Company,
L.L.C. and in addition to the 154,620 shares beneficially owned by him
pursuant to his interest in Windy Hill Pet Food Company, L.L.C., he may be
deemed to beneficially own an additional 2,579,248 shares beneficially
owned by Windy Hill Pet Food Company, L.L.C. and certain other entities and
individuals affiliated with Windy Hill Pet Food Company, L.L.C., other than
himself. Mr. Chung disclaims beneficial ownership of those 2,579,248 shares
within the meaning of Rule 13d-3 of the Exchange Act.

(12) Excludes 84,185 shares beneficially owned by BRS and certain other entities
and individuals affiliated with BRS pursuant to such parties interests in
Windy Hill Pet Food Company, L.L.C., including 1,623 shares beneficially
owned by Mr. Sherrill. In addition to the shares to which Mr. Sherrill
disclaims beneficial ownership in footnote 6 above, Mr. Sherrill disclaims
beneficial ownership of the remaining 82,562 shares owned by BRS and the
other entities and individuals affiliated with BRS, other than himself,
pursuant to such parties interests in Windy Hill Pet Food Company, L.L.C.
within the meaning of Rule 13d-3 of the Exchange Act.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 70,000,000 shares
of Common Stock, par value $0.0001 per share (of which 5,000,000 shares are
classified as Class B Common Stock), and 10,000,000 shares of preferred stock,
par value $0.01 per share ("Preferred Stock"). As of February 28, 1999,
18,401,996 shares of Common Stock were outstanding, and no shares of Preferred
Stock were outstanding. Prior to the Offering, there has been no public market
for the Common Stock. Although the Common Stock will trade on the Nasdaq
National Market, there can be no assurance that a market for the Common Stock
will develop or, if developed, will be sustained. See "Risk Factors -- Absence
of Public Market" and "Dilution."

The following descriptions of certain provisions of the Amended and
Restated Certificate of Incorporation (the "Charter") and the Amended and
Restated Bylaws (the "Bylaws") of the Company are intended only as a summary and
do not purport to be complete and are qualified in their entirety by reference
to such documents, which are included as exhibits to the Registration Statement
of which this Prospectus is a part.

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<PAGE> 62

COMMON STOCK

The Company's Common Stock consists of two classes, Class A and Class B.
The Class A and Class B Common Stock are identical in all respects except that
the Class B Common Stock has no voting rights. The Class B Common Stock is
convertible into shares of Class A Common Stock at any time at the option of the
holder thereof. The Company's Charter prohibits CMIHI and its affiliates from
converting Class B Common Stock into Class A Common Stock if, following such
conversion, CMIHI and its affiliates would own more than 5% of the Class A
Common Stock, subject to certain exceptions. References to Common Stock in this
Prospectus are references to Class A and Class B Common Stock on a combined
basis. Each holder of Class A Common Stock is entitled to one vote for each
share of Class A Common Stock held of record on all matters submitted to a vote
of stockholders. The holders of Class A Common Stock do not have cumulative
voting rights in the election of directors. Subject to any preferences accorded
to the holders of the Preferred Stock, if and when issued pursuant to
authorization of the Board of Directors, holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors of the Company out of legally available funds. The Company has never
paid cash dividends on its Common Stock and does not intend to pay dividends for
the foreseeable future. In addition, the Senior Credit Facility and the Note
Indenture contain provisions that restrict the Company from paying dividends on
the Common Stock. See "Description of Senior Credit Facility" and "Description
of Senior Subordinated Notes." Upon liquidation, dissolution or winding up of
the Company, after payments of debts, expenses and the liquidation preference
plus any accrued dividends on any outstanding shares of Preferred Stock, the
holders of Common Stock will be entitled to share ratably in all remaining
assets of the Company. The holders of Common Stock have no preemptive,
subscription, redemptive or conversion rights, except that holders of Class B
Common Stock may, at their option, convert their shares into Class A Common
Stock. The outstanding shares of Common Stock are, and the shares of Common
Stock being sold in the Offering will be, validly issued, fully paid and
nonassessable.

PREFERRED STOCK

The Charter authorizes the Board of Directors, without stockholder
approval, to issue shares of Preferred Stock, from time to time, in one or more
series and to fix the number of shares and rights, preferences and limitations
thereof of each such series. Among the specific matters that may be determined
by the Board of Directors are the designations, preferences, dividend rights,
conversion rights, voting powers, redemption rights and liquidation preferences
of each such series. It is not possible to state the actual effect of the
authorization of the Preferred Stock upon the rights of holders of the Common
Stock until the Board of Directors determines the respective rights of the
holders of one or more series of the Preferred Stock. Such effects, however,
might include: (i) restrictions on dividends on Common Stock if dividends on the
Preferred Stock are in arrears; (ii) dilution of the voting power of the Common
Stock to the extent that a series of the Preferred Stock would have voting
rights; (iii) the holders of Common Stock not being entitled to share in the
Company's assets upon dissolution until satisfaction of any liquidation
preference guaranteed to the Preferred Stock; and (iv) potential dilution of the
equity of holders of Common Stock to the extent that a series of the Preferred
Stock might be convertible into Common Stock. The Company has no present plans
to issue any Preferred Stock.

Holders of Common Stock have no preemptive rights to purchase or otherwise
acquire any Preferred Stock that may be issued in the future. Each series of
Preferred Stock, could, as determined by the Board of Directors at the time of
issuance, rank, with respect to dividends, redemption and liquidation rights,
senior to the Common Stock.

One of the effects of the existence of authorized but unissued Common Stock
and undesignated Preferred Stock may be to enable the Board of Directors to make
more difficult or to discourage an attempt to obtain control of the Company by
means of a merger, tender offer, proxy contest or otherwise, and thereby to
protect the continuity of the Company's management. If, in the exercise of its
fiduciary obligations, the Board of Directors were to determine that a takeover
proposal was not in the Company's best interest, such shares could be issued
pursuant to authorization by the Board of Directors without stockholder approval
in one or more transactions that might prevent or make more difficult or costly
the completion of the takeover transaction by
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<PAGE> 63

diluting the voting or other rights of the proposed acquiror or insurgent
stockholder group, by creating a substantial voting block in institutional or
other hands that might undertake to support the position of the incumbent Board
of Directors, by effecting an acquisition that might complicate or preclude the
takeover or otherwise. In this regard, the Charter grants the Board of Directors
broad power to establish the rights and preferences of the authorized and
unissued Preferred Stock, one or more series of which could be issued entitling
holders (i) to vote separately as a class on any proposed merger or
consolidation, (ii) to cast a proportionately larger vote together with the
Common Stock on any such transaction or for all purposes, (iii) to elect
directors having terms of office or voting rights greater than those of other
directors, (iv) to convert Preferred Stock into a greater number of shares of
Common Stock or other securities, (v) to demand redemption at a specified price
under prescribed circumstances related to a change of control for the Company or
(vi) to exercise other rights designed to impede a takeover. See
" -- Antitakeover Provisions." The issuance of shares of Preferred Stock
pursuant to the authority of the Board of Directors described above may
adversely affect the rights of holders of Common Stock.

ANTITAKEOVER PROVISIONS

The Charter and Bylaws of the Company contain provisions that could have an
antitakeover effect. These provisions are intended to enhance the likelihood of
continuity and stability in the composition of the Board of Directors of the
Company and in the policies formulated by the Board of Directors and to
discourage certain types of transactions that may involve an actual or
threatened change of control of the Company. The provisions are designed to
reduce the vulnerability of the Company to an unsolicited proposal for a
takeover of the Company that does not contemplate the acquisition of all of its
outstanding shares or an unsolicited proposal for the restructuring or sale of
all or part of the Company. The provisions are also intended to discourage
certain tactics that may be used in proxy fights. The provisions may deprive the
stockholders of opportunities to sell shares of Common Stock at prices higher
than the prevailing market prices; however, the Board of Directors believes
that, as a general rule, such takeover proposals would not be in the best
interest of the Company and its stockholders. Set forth below is a description
of such provisions in the Charter and Bylaws.

Classified Board of Directors. The classification of directors will have
the effect of making it more difficult for stockholders to change the
composition of the Board of Directors. At least two annual meetings of
stockholders generally will be required to effect a change in a majority of the
Board of Directors. Such a delay may help ensure that the Company's directors,
if confronted by a stockholder attempting to force a proxy contest, a tender or
exchange offer or an extraordinary corporate transaction, would have sufficient
time to review the proposal as well as any available alternatives to the
proposal and to act in what they believe to be the best interests of the
stockholders. The classification provisions will apply to every election of
directors, however, regardless of whether a change in the composition of the
Board of Directors would be beneficial to the Company and its stockholders and
whether a majority of the Company's stockholders believes that such a change
would be desirable. Pursuant to the Charter, the provisions relating to the
classification of directors may only be amended by the affirmative vote of
eighty percent of the voting power of the then outstanding shares of capital
stock entitled to vote thereon ("Voting Stock").

Removal of Directors Only for Cause. Pursuant to the Charter, directors can
be removed from office only for cause and only by the affirmative vote of eighty
percent of the Voting Stock other than at the expiration of their term of
office. Vacancies on the Board of Directors may be filled only by a majority
vote of the remaining directors and not by the stockholders.

Number of Directors. The Bylaws provide that the entire Board of Directors
will consist of not less than eight members, the exact number to be set from
time to time by resolution of the Board of Directors. Accordingly, the Board of
Directors, and not the stockholders, has the authority to determine the number
of directors and could delay any stockholder from obtaining majority
representation on the Board of Directors by enlarging the Board of Directors and
filling the new vacancies with its own nominees until the next stockholder
election.

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<PAGE> 64

No Written Consent of Stockholders. The Charter also provides that any
action required or permitted to be taken by the stockholders of the Company must
be taken at a duly called meeting of stockholders and may not be taken by
written consent. The Bylaws provide that special meetings may only be called (i)
by the Chairman of the Board, (ii) by the President, (iii) by a majority of the
Board of Directors, (iv) by a majority of the executive committee, if any, or
(v) upon written request signed by the holders of at least 50% of the
outstanding Voting Stock.

Amendment of the Bylaws. The Charter provides that the Board of Directors
may adopt, alter, amend or repeal the Bylaws.

Preferred Stock. As described above under "-- Preferred Stock," the Board
of Directors may designate and issue shares of Preferred Stock without
stockholder approval under certain circumstances. As a result, the Preferred
Stock could be issued quickly with terms designed to make more difficult a
proposed takeover of the Company or the removal of its management. The Board of
Directors will make any determination to issue such shares based on its judgment
as to the best interests of the Company and its stockholders.

Advance Notice of Director Nominations and Stockholder Proposals. The
Bylaws provide that the only business (including election of directors) that may
be considered at an annual meeting of holders of Common Stock, in addition to
business proposed (or persons nominated to be directors) by the directors of the
Company, is business proposed (or persons nominated to be directors) by holders
of Common Stock who comply with the notice and disclosure requirements set forth
in the Bylaws. In general, the Bylaws require that a stockholder give the
Company notice of proposed business or nominations not less than 90 days prior
to the anniversary date of the immediately preceding annual meeting of
stockholders. The notice must also contain information about the stockholder
proposing the business or nomination, the stockholder's interest in the business
and (with respect to nominations for director) information about the nominee of
the nature ordinarily required to be disclosed in public proxy statements.

Section 203 of the Delaware General Corporation Law. The Company is subject
to Section 203 of the Delaware General Corporation Law, which prohibits Delaware
corporations from engaging in a wide range of specified transactions with any
interested stockholder. An interested stockholder is defined to include any
person, other than such corporation and any of its majority-owned subsidiaries,
who owns 15% or more of any class or series of stock entitled to vote generally
in the election of directors, unless, among other exceptions, the transaction is
approved by (i) the Board of Directors prior to the date the interested
stockholder obtained such status or (ii) the holders of two-thirds of the
outstanding shares of each class or series of stock entitled to vote generally
in the election of directors, not including those shares owned by the interested
stockholder.

63
<PAGE> 65

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 29,135,268 shares of
Common Stock outstanding (29,484,392 shares if the Underwriters' over-allotment
option is exercised in full). Of these outstanding shares of Common Stock,
14,600,000 shares to be sold in this Offering will be freely tradeable without
restriction or further registration under the Securities Act, unless purchased
by "affiliates" of the Company, as that term is defined in Rule 144 under the
Securities Act ("Rule 144") described below. The remaining 14,535,268 shares of
Common Stock outstanding after the Offering will be "restricted securities"
within the meaning of Rule 144 under the Securities Act and may not be sold in a
public distribution except in compliance with the registration requirements of
the Securities Act or an applicable exemption under the Securities Act,
including an exemption pursuant to Rule 144 thereunder. Restricted securities
are eligible for sale in the public market pursuant to Rule 144 no sooner than
one year from the date of acquisition. In general, under Rule 144, a person (or
persons whose shares are aggregated) who has beneficially owned shares for at
least one year (including the holding period of any prior owner except an
affiliate) is entitled to sell in "broker's transactions" or to market makers,
within any three-month period commencing 90 days after the date of this
Prospectus, a number of shares that does not exceed the greater of: (i) one
percent of the number of shares of Common Stock outstanding (approximately
291,000 shares immediately after the Offering); or (ii) generally, the average
weekly trading volume of the Common Stock during the four calendar weeks
preceding the required filing of a Form 144 with respect to such sale. Sales
under Rule 144 are also subject to certain "manner of sale" provisions and
notice requirements and to the availability of current public information about
the Company. Under Rule 144(k), a person who is not deemed to have been an
affiliate of the Company at any time during the 90 days preceding a sale, and
who has beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without having to comply with the manner of sale,
public information, volume limitation or notice provisions of Rule 144.

The Company has granted certain stockholders registration rights. See
"Certain Transactions -- Investors' Agreement."

As of February 28, 1999, there were 1,669,600 options to purchase shares of
Common Stock issued and outstanding, of which 562,964 were exercisable. In
addition, the Company plans to adopt the 1999 Plan in connection with the
Offering and anticipates granting options to purchase approximately 1,400,000
shares thereunder. See "Management -- Executive Compensation -- Stock Option and
Stock Purchase Plans, "-- Stock Option Grants" and "-- Stock Option Exercises."

DESCRIPTION OF SENIOR CREDIT FACILITY

As part of the Refinancing Transactions, the Company entered into the
Senior Credit Facility with a syndicate of banks and other institutional
investors, as lenders, and Chase, as administrative agent, DLJ Capital, as
syndication agent, and Mercantile Bank National Association, as documentation
agent. DLJ Capital and CSI served as the co-arrangers of the Senior Credit
Facility. Each of Chase and DLJ Capital is an affiliate of one of the
Underwriters. The Senior Credit Facility consists of a $245.0 million term loan
facility (the "Term Loan Facility") and a $100.0 million revolving
credit/swingline facility (the "Revolving Credit Facility"). The Revolving
Credit Facility enables the Company to obtain revolving credit loans and issue
letters of credit for the account of the Company from time to time for working
capital, permitted acquisitions and general corporate purposes. As of January
31, 1999, the Company had borrowed $245.0 million under the Term Loan Facility,
$28.0 million under the Revolving Credit Facility and $6.7 million under the
swingline facility. In addition, at such date the Company had $2.4 million of
letters of credit outstanding under the Revolving Credit Facility. Loans under
the Senior Credit Facility bear interest at: (i) the prime rate of the
administrative agent (or, if higher, the secondary market rate for certificates
of deposit plus 1% or the federal funds rate plus 0.5%) plus a specified margin
based on the type of loan and the then current ratio of senior debt to EBITDA
(the "Applicable Margin") or (ii) the Eurodollar rate plus the Applicable
Margin. The Company also pays certain fees with respect to the Senior Credit
Facility. The Term Loan Facility consists of three tranches with terms between
six and one-half years and eight years, unless terminated sooner upon an

64
<PAGE> 66

event of default (as defined in the Senior Credit Facility). The Term Loan
Facility must be repaid in quarterly installments commencing on March 31, 1999.
The principal amounts under the Term Loan Facility shall be repaid, as follows:
(i) approximately $11.7 million in each of the calendar years 1999 and 2000,
(ii) approximately $14.2 million in each of the calendar years 2001, 2002, 2003
and 2004, (iii) $85.8 million in the calendar year 2005 and (iv) $79.0 million
in 2006. The Revolving Credit Facility has a term of six and one-half years,
unless terminated sooner upon an event of default, and outstanding revolving
credit loans will be payable on such date or such earlier date as may be
accelerated following the occurrence of any event of default.

The Senior Credit Facility contains various covenants that restrict the
Company from taking various actions and that require the Company to achieve and
meet certain financial tests, including meeting a consolidated leverage ratio, a
consolidated senior debt ratio, a consolidated interest coverage ratio and a
consolidated fixed charge coverage ratio. The Senior Credit Facility includes
covenants relating to balance sheet, fixed charge coverage, interest coverage
and leverage ratios and limitations on, among other things, capital and other
permitted expenditures, liens, indebtedness, guarantees, mergers, acquisitions,
disposition of assets, dividends, changes in business activities and certain
corporate activities.

The Senior Credit Facility also contains events of default, including
nonpayment of principal, interest or fees, violation of covenants, inaccuracy of
representations or warranties in any material respect, cross default and cross
acceleration to certain other indebtedness, bankruptcy, ERISA, material
judgments and certain changes in control of the Company.

Contemporaneously with the Offering, the Company intends to amend the
Senior Credit Facility to allow proceeds from the Offering to be used to
repurchase the outstanding Senior Preferred Stock and to amend various other
provisions of the Senior Credit Facility.

DESCRIPTION OF SENIOR SUBORDINATED NOTES

On November 12, 1998, Doane issued $150 million in aggregate principal
amount of its 9 3/4% Senior Subordinated Notes under the Note Indenture, a copy
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The following summary of certain provisions of the
Note Indenture and the Senior Subordinated Notes does not purport to be
complete, is subject to, and is qualified in its entirety by reference to, the
provisions of the Note Indenture and the Senior Subordinated Notes.

The Senior Subordinated Notes are general unsecured obligations and are
subordinated in right of payment to all senior indebtedness and senior in right
of payment to any current or future indebtedness of Doane that, by its terms, is
subordinated to the Senior Subordinated Notes. The payment of obligations of
each subsidiary guarantor are subordinated to the payment of senior indebtedness
of such subsidiary guarantor. The Senior Subordinated Notes are limited to $150
million aggregate principal amount and mature on May 15, 2007. The Senior
Subordinated Notes accrue interest at the rate of 9 3/4% payable semiannually on
May 15 and November 15 of each year.

Doane may redeem the Senior Subordinated Notes at any time on or after May
15, 2002, in whole or in part, at the option of Doane, at the redemption prices
set forth below, plus accrued and unpaid interest, if any, to the redemption
date:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2002...................................................... 104.875%
2003...................................................... 103.250%
2004...................................................... 101.625%
2005 and thereafter....................................... 100.000%
</TABLE>

In addition, prior to May 15, 2000 Doane may redeem up to 35% of the
aggregate principal amount of the Senior Subordinated Notes with the proceeds of
one or more Equity Offerings (as defined in the Note

65
<PAGE> 67

Indenture), at a redemption price equal to 109.75% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the redemption
date; provided, however, that at least 65% in aggregate principal amount of the
Senior Subordinated Notes remain outstanding immediately after each such
redemption. At any time prior to May 15, 2002, the Senior Subordinated Notes may
also be redeemed in whole, but not in part, at the option of Doane upon the
occurrence of a Change in Control (as defined herein) at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium (as
defined in the Note Indenture) and the unpaid accrued interest, if any, to the
date of redemption.

Upon the occurrence of any of the following events (each, a "Change of
Control"), each holder of the Senior Subordinated Notes will have the right to
require Doane to repurchase all or any part of such holder's Senior Subordinated
Notes at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase: (i) prior to
the first public offering of Voting Stock (as defined in the Note Indenture) of
Doane or the Company, as the case may be, the Permitted Holders (as defined in
the Note Indenture) cease to be the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), directly or indirectly, of majority voting power of the Voting
Stock of Doane, whether as a result of issuance of securities of Doane or the
Company, as the case may be, any merger, consolidation, liquidation or
dissolution of Doane or the Company, as the case may be, any direct or indirect
transfer of securities by any Permitted Holder or otherwise; (ii) following the
first public offering of Voting Stock of Doane or the Company, as the case may
be, any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the
beneficial owner, directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of Doane or the Company, as the case may be; provided
that the Permitted Holders beneficially own, directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting Stock of
Doane or the Company, as the case may be, than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of Doane or the
Company, as the case may be; or (iii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of Doane was
approved by a vote of a majority of the directors of Doane then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.

The Note Indenture contains restrictive covenants that, among things,
impose limitations (subject to certain exceptions) on Doane with respect to (i)
limitations on incurrence of indebtedness, (ii) limitations on restricted
payments, (iii) restrictions on distributions from subsidiaries, (iv) sales of
assets and subsidiary capital stock, (v) affiliate transactions and (vi) lines
of business.

Events of Default (as defined in the Note Indenture) include: (i) a default
for 30 days in the payment of interest on the Senior Subordinated Notes when the
same becomes due and payable; (ii) a default in payment of principal on the
Senior Subordinated Notes when the same becomes due and payable at maturity,
upon optional redemption pursuant to the Note Indenture, upon declaration or
otherwise; (iii) failure by Doane to comply with other agreements in the Note
Indenture or the Senior Subordinated Notes, in certain cases subject to notice
and lapse of time; (iv) certain accelerations of other indebtedness of Doane or
its subsidiaries if the amount accelerated (or so unpaid) exceeds $5 million and
such acceleration or failure to pay is not rescinded or cured within a 10-day
period; (v) certain events of bankruptcy or insolvency with respect to Doane or
any significant subsidiary; (vi) certain final, non-appealable judgments or
decrees for the payment of money in excess of $5 million; and (vii) the failure
of any subsidiary guarantee to be in full force and effect or the denial or
disaffirmation by any subsidiary guarantor of its obligations under the Note
Indenture or the Senior Subordinated Notes in certain cases. If an Event of
Default occurs and is continuing, the trustee or the holders of at least 25% in
principal amount of the Senior Subordinated Notes may declare all the Senior
Subordinated Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default that will result in the Senior
Subordinated Notes being due and payable immediately upon the occurrence of such
Events of Default.

66
<PAGE> 68

UNDERWRITING

Subject to the terms and subject to the conditions of an Underwriting
Agreement, dated , 1999 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), who are represented by DLJSC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Schroder &
Co. Inc. and CSI (the "Representatives"), have severally agreed to purchase from
the Company and the Selling Stockholders the respective number of shares of
Common Stock set forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Schroder & Co. Inc..........................................
Chase Securities Inc........................................

----------
Total............................................. 14,600,000
==========
</TABLE>

The numbers presented above include 733,272 shares of Common Stock to be
issued by the Company upon the exercise by the Underwriters of warrants that
were purchased from certain Selling Stockholders. If the Underwriters'
over-allotment option is exercised in full, an additional 349,124 shares of
Common Stock will be issued by the Company upon the exercise by the Underwriters
of warrants that will be purchased from certain Selling Stockholders. The
warrants will not be sold to the public.

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to
purchase and accept delivery of all the shares of Common Stock offered hereby
(other than those covered by the over-allotment option described below) if any
are purchased.

The Underwriters initially propose to offer the shares of Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain dealers (including the
Underwriters) at such price less a concession not in excess of $ per share.
The Underwriters may allow, and such dealers may re-allow to certain other
dealers, a concession not in excess of $ per share. After the initial
offering of the Common Stock, the public offering price and other selling terms
may be changed by the Representatives at any time without notice. The
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

Pursuant to the Underwriting Agreement, certain Selling Stockholders have
granted the Underwriters an option, exercisable within 30 days after the date of
this Prospectus, to purchase, from time to time, in whole or in part, up to
2,190,000 additional shares of Common Stock at the initial public offering price
less underwriting discounts and commissions. The Underwriters may exercise such
option solely to cover over-allotments, if any, made in connection with the
Offering. To the extent that the Underwriters exercise such option, each
Underwriter will become obligated, subject to certain conditions, to purchase
its pro rata share of such additional shares based on such Underwriter's
percentage underwriting commitment in the Offering as indicated in the preceding
table.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

67
<PAGE> 69

Each of the Company, its executive officers and directors and certain
stockholders of the Company (including the Selling Stockholders) has agreed,
subject to certain exceptions, not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, such other securities, in cash
or otherwise) for a period of 180 days after the date of this Prospectus without
the prior written consent of DLJSC. In addition, during such period, the Company
has also agreed not to file any registration statement with respect to, and each
of its executive officers, directors and certain stockholders of the Company
(including the Selling Stockholders) has agreed not to make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock without DLJSC's prior written consent.

At the Company's request, the Underwriters have reserved up to five percent
of the shares offered hereby for sale at the initial public offering price to
certain of the Company's employees, officers, directors and other individuals
associated with the Company and members of their families. The number of shares
of Common Stock available for sale to the general public will be reduced to the
extent these individuals purchase such reserved shares. Any reserved shares not
purchased will be offered by the Underwriters to the general public on the same
basis as the other shares offered hereby.

Prior to the Offering, there has been no established trading market for the
Common Stock. The initial public offering price for the shares of Common Stock
offered hereby will be determined by negotiations among the Company,
representatives of the Selling Stockholders and the Representatives. The factors
to be considered in determining the initial public offering price include the
history of and the prospects for the industry in which the Company competes, the
past and present operations of the Company, the historical results of operations
of the Company, the prospects for future earnings of the Company, the recent
market prices of securities of generally comparable companies and the general
condition of the securities markets at the time of the Offering.

The Common Stock has been approved for inclusion on the Nasdaq National
Market. In order to meet the requirements for listing the Common Stock on the
Nasdaq National Market, the Underwriters have undertaken to sell lots of 100 or
more shares to a minimum of 2,000 beneficial owners.

Other than in the United States, no action has been taken by the Company,
the Selling Stockholders or the Underwriters that would permit a public offering
of the shares of Common Stock offered hereby in any jurisdiction where action
for that purpose is required. The shares of Common Stock offered hereby may not
be offered or sold, directly or indirectly, nor may this Prospectus or any other
offering material or advertisements in connection with the offer and sale of any
such shares of Common Stock be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable
laws, rules and regulations of such jurisdiction. Persons into whose possession
this Prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the Offering and the distribution of this Prospectus.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any shares of Common Stock offered hereby in any jurisdiction in
which such offer or solicitation is unlawful.

In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot the Offering,
creating a syndicate short position. The Underwriters may bid for and purchase
shares of Common Stock in the open market to cover such syndicate short position
or to stabilize the price of the Common Stock. In addition, the underwriting
syndicate may reclaim selling concessions from syndicate members, if the
syndicate repurchases previously distributed Common Stock in syndicate covering
transactions, in stabilizing transactions or otherwise or if DLJSC receives a
report that indicates that the clients of such syndicate members have "flipped"
the Common Stock. These activities may stabilize or maintain the market price of
the Common

68
<PAGE> 70

Stock above independent market levels. The Underwriters are not required to
engage in these activities and may end any of these activities at any time.

Each of DLJSC and CSI and their affiliates have performed financial
advisory, investment banking and commercial banking services for the Company in
the past and received compensation in connection therewith. Affiliates of CSI
and DLJSC will receive proceeds from this Offering in connection with the
repayment of the Senior Credit Facility. In addition, each of DLJMB, an
affiliate of DLJSC, and CMIHI, an affiliate of CSI, is a Selling Stockholder in
the Offering and an affiliate of CSI will receive proceeds of the Offering as
consideration for redemption of its shares of Senior Preferred Stock. Peter
Grauer, a Managing Director at DLJMB, and Jeffrey Walker, Managing General
Partner of Chase Capital Partners are members of the Company's Board of
Directors. For a more complete description of these relationships and services,
see "Risk Factors -- Interest of Underwriters," "Certain Transactions" and
"Principal and Selling Stockholders."

Under Rule 2720 of the Conduct Rules ("Rule 2720") of the NASD, each of
DLJSC and CSI may be deemed to have a "conflict of interest" with the Company by
virtue of the fact that affiliates of DLJSC and CSI may be deemed to
beneficially own greater than 10% of the common equity of the Company and
affiliates of CSI may receive greater than 10% of the proceeds of the Offering.
Under Rule 2720, when a member of the NASD, such as DLJSC and CSI, proposes to
underwrite or otherwise assist in the public distribution of securities by an
issuer with which they may have a "conflict of interest," the price to public at
which such securities are to be distributed to the public must not be lower than
that recommended by a "qualified independent underwriter," who must participate
in the preparation of the registration statement and the prospectus and who must
exercise the usual standards of due diligence with respect thereto. In
accordance with such requirements, Merrill Lynch (the "QIU") has agreed to act
as the qualified independent underwriter in connection with the Offering, has
participated in the preparation of this Prospectus and the Registration
Statement of which this Prospectus forms a part and has exercised the usual
standards of due diligence with respect thereto. The price to public of the
Common Stock when sold will be no lower than that recommended by the QIU. In
addition, the Company has agreed to indemnify the QIU against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments which the QIU may be required to make in respect thereof.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Vinson & Elkins L.L.P., Houston, Texas.
Certain legal matters in connection with the sale of the Common Stock offered
hereby will be passed upon for the Underwriters by Andrews & Kurth L.L.P.,
Houston, Texas.

EXPERTS

The consolidated financial statements of Doane Pet Care Enterprises, Inc.
as of December 31, 1997 and 1998 and for each of the years in the three-year
period ended December 31, 1998 have been included herein and in the Registration
Statement in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

The consolidated financial statements of Windy Hill Pet Food Holdings, Inc.
as of December 27, 1997 and December 28, 1996 and for the period from inception
(March 1, 1995) through December 30, 1995 and for the years ended December 28,
1996 and December 27, 1997 have been included herein and in the Registration
Statement in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

69
<PAGE> 71

AVAILABLE INFORMATION

The Company has not previously been subject to the reporting requirements
of the Exchange Act. However, the Company's operating subsidiary, Doane, is
subject to the reporting requirements of the Exchange Act. The Company has filed
with the Commission a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act, with respect to the offer and sale of
Common Stock pursuant to this Prospectus. This Prospectus, filed as a part of
the Registration Statement, does not contain all of the information set forth in
the Registration Statement or the exhibits and schedules thereto in accordance
with the rules and regulations of the Commission and reference is hereby made to
such omitted information. Statements made in this Prospectus concerning the
contents of any contract, agreement or other document filed as an exhibit to the
Registration Statement are summaries of the terms of such contracts, agreements
or documents and are not necessarily complete. Reference is made to each such
exhibit for a more complete description of the matters involved and such
statements shall be deemed qualified in their entirety by such reference. The
Registration Statement and the exhibits and schedules thereto filed with the
Commission may be inspected, without charge, and copies may be obtained at
prescribed rates, at the public reference facility maintained by the Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, 13th Floor,
New York, New York 10048 and CitiCorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60621-2511. Such materials also may be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. For further information pertaining to the Common Stock
offered by this Prospectus and the Company, reference is made to the
Registration Statement.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements certified by independent auditors and
quarterly reports for the first three quarters of each fiscal year containing
unaudited financial statements.

70
<PAGE> 72

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES
Independent Auditors' Report.............................. F-2
Consolidated Balance Sheets as of December 31, 1996, 1997
and 1998............................................... F-3
Consolidated Statements of Income for the years ended
December 31, 1996, 1997 and 1998....................... F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1997 and 1998....................... F-5
Consolidated Statements of Stockholders' Equity and
Comprehensive Income for the years ended December 31,
1996, 1997 and 1998.................................... F-6
Notes to Consolidated Financial Statements................ F-7
WINDY HILL PET FOOD HOLDINGS, INC.
Independent Auditors' Report.............................. F-26
Consolidated Balance Sheets as of December 28, 1996,
December 27, 1997 and June 27, 1998 (unaudited)........ F-27
Consolidated Statements of Operations for the ten months
ended December 30, 1995, for the years ended December
28, 1996 and December 27, 1997, and for the six months
ended June 28, 1997 and June 27, 1998 (unaudited)...... F-28
Consolidated Statements of Changes in Stockholders' Equity
for the ten months ended December 30, 1995, for the
years ended December 28, 1996 and December 27, 1997,
and for the six months ended June 28, 1997 and June 27,
1998 (unaudited)....................................... F-29
Consolidated Statements of Cash Flows for the ten months
ended December 30, 1995, for the years ended December
28, 1996 and December 27, 1997, and for the six months
ended June 28, 1997 and June 27, 1998 (unaudited)...... F-30
Notes to Consolidated Financial Statements................ F-31
</TABLE>

F-1
<PAGE> 73

When the transaction referred to in Note 2 of the Notes to Consolidated
Financial Statements has been consummated, we will be in a position to render
the following report.

/s/ KPMG LLP

INDEPENDENT AUDITORS' REPORT

Board of Directors
Doane Pet Care Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of Doane Pet
Care Enterprises, Inc. and subsidiaries as of December 31, 1997 and 1998 and the
related consolidated statements of income, stockholders' equity and
comprehensive income and cash flows for each of the years in the three-year
period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Doane Pet Care Enterprises,
Inc. and subsidiaries at December 31, 1997 and 1998, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1998 in conformity with generally accepted accounting
principles.

Houston, Texas
February 25, 1999, except as to
Note 2, which is as of March , 1999.

F-2
<PAGE> 74

DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1997 1998
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ -- $ 3,350
Trade accounts receivable, net of allowances.............. 66,369 96,510
Inventories, net.......................................... 32,426 51,499
Deferred tax asset........................................ 1,252 4,473
Prepaid expenses and other current assets................. 2,298 17,131
-------- --------
Total current assets.............................. 102,345 172,963
Property, plant, and equipment, net......................... 99,994 206,353
Goodwill and other intangible assets, net................... 122,882 299,631
Other assets................................................ 12,963 31,501
-------- --------
Total assets...................................... $338,184 $710,448
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt.................... $ 11,667 $ 12,889
Accounts payable.......................................... 42,422 79,013
Accrued liabilities....................................... 22,611 49,878
-------- --------
Total current liabilities......................... 76,700 141,780
Long-term debt, excluding current installments.............. 188,743 446,281
Other long-term liabilities................................. 4,081 9,160
Deferred tax liability...................................... 4,169 4,761
-------- --------
Total liabilities................................. 273,693 601,982
Senior Preferred Stock, 3,000 shares authorized, 1,200
shares issued............................................. 30,545 37,792
Stockholders' equity:
Class A Common Stock, par value $.0001, 65,000 shares
authorized, 9,168 and 16,078 shares issued and
outstanding at December 31, 1997 and 1998,
respectively........................................... 1 2
Class B Common Stock, par value $.0001, 5,000 shares
authorized, 2,332 shares issued and outstanding at
December 31, 1997 and 1998............................. -- --
Additional paid-in capital................................ 41,674 107,371
Accumulated other comprehensive income.................... -- 489
Accumulated deficit....................................... (7,729) (37,188)
-------- --------
Total stockholders' equity........................ 33,946 70,674
-------- --------
Total liabilities and stockholders' equity........ $338,184 $710,448
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 75

DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Net sales.................................................. $513,217 $564,741 $686,663
Cost of goods sold......................................... 446,776 482,896 554,447
-------- -------- --------
Gross profit............................................... 66,441 81,845 132,216
Operating expenses:
Promotion and distribution............................... 26,480 31,876 45,039
Selling, general and administrative...................... 11,512 14,384 26,346
Amortization of intangibles.............................. 3,538 3,601 6,468
Transition expenses...................................... -- -- 7,043
Product recall........................................... -- -- 3,000
-------- -------- --------
Income from operations........................... 24,911 31,984 44,320
Interest expense, net...................................... 22,471 22,463 31,503
Non-recurring finance charge............................... 4,815 -- 4,599
Other (income) expense, net................................ (2) (102) 164
-------- -------- --------
Income (loss) before income taxes and
extraordinary loss............................. (2,373) 9,623 8,054
Income tax expense (benefit)............................... (855) 3,389 3,478
-------- -------- --------
Income (loss) before extraordinary loss.......... (1,518) 6,234 4,576
Extraordinary loss, net of income tax benefit.............. -- -- 26,788
-------- -------- --------
Net income (loss)................................ $ (1,518) $ 6,234 $(22,212)
======== ======== ========
Net loss applicable to common stock........................ $ (7,264) $ (151) $(29,459)
Basic and diluted net income (loss) per common share....... $ (0.66) $ (0.01) $ (2.04)
Basic and diluted weighted average number of shares
outstanding.............................................. 11,006 11,350 14,429
</TABLE>

F-4
<PAGE> 76

DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
FOR THE YEARS ENDING DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (1,518) $ 6,234 $ (22,212)
Items not requiring (providing) cash:
Depreciation and amortization of intangibles............ 10,135 10,971 17,877
Extraordinary items..................................... -- -- 26,788
Non-recurring finance fees.............................. 4,815 -- --
Noncash interest expense................................ 1,022 1,170 1,931
Stock compensation expense.............................. -- -- 765
Loss on sale of property and equipment.................. 26 115 --
Deferred income tax expense (benefit)................... (855) 3,389 3,228
Equity in foreign joint venture......................... -- (186) (273)
Other................................................... 282 51 1,012
Changes in current assets and liabilities (excluding
amounts acquired):
Accounts receivable................................... (21,176) 1,910 (5,287)
Inventories........................................... (3,141) (1,689) 72
Prepaid expenses and other............................ (5,479) 3,818 (2,665)
Accounts payable...................................... 32,155 (8,881) 10,457
Accrued expenses...................................... 2,317 4,070 2,300
--------- -------- ---------
Net cash provided by operating activities.......... 18,583 20,972 33,993
--------- -------- ---------
Cash flows from investing activities:
Proceeds from sale of property and equipment.............. 26 39 72
Capital expenditures, including interest
capitalized............................................. (7,901) (14,437) (23,327)
Acquisition related payments.............................. (1,087) -- (31,907)
Investment in joint venture............................... (1,979) -- 371
Purchase of Industrial Development Bonds.................. -- -- (9,000)
Other..................................................... (548) (763) (1,509)
--------- -------- ---------
Net cash used in investing activities.............. (11,489) (15,161) (65,300)
--------- -------- ---------
Cash flows from financing activities:
Proceeds from issuance of long-term debt.................. 163,136 5,698 454,764
Payment for debt issuance costs........................... (5,909) (468) (11,356)
Payment for Refinancing Transactions...................... -- -- (28,353)
Net borrowings (repayments) under revolving credit
agreement............................................... 1,475 (1,475) 32,000
Principal payments on long-term debt...................... (167,746) (10,416) (413,982)
Proceeds from issuance of Common Stock.................... 400 850 1,359
--------- -------- ---------
Net cash provided by (used in) financing
activities....................................... (8,644) (5,811) 34,432
--------- -------- ---------
Effect of exchange rates on cash................... -- -- 225
--------- -------- ---------
Increase (decrease) in cash and cash equivalents... (1,550) -- 3,350
Cash and cash equivalents, beginning of period.............. 1,550 -- --
--------- -------- ---------
Cash and cash equivalents, end of period.................... $ -- $ -- $ 3,350
========= ======== =========
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE> 77

DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED
-------------------------------- OTHER
SHARES -- SHARES -- TOTAL PAID-IN RETAINED COMPREHENSIVE
CLASS A CLASS B SHARES AMOUNT CAPITAL EARNINGS INCOME TOTAL
--------- --------- -------- ------ -------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1995.......... 8,668 2,332 11,000 $ 1 $ 40,424 $ (314) $ -- $ 40,111
Net loss........................... -- -- -- -- -- (1,518) -- (1,518)
Preferred stock dividends.......... -- -- -- -- -- (4,670) -- (4,670)
Accretion of preferred stock....... -- -- -- -- -- (1,076) -- (1,076)
Stock rights exercised............. 200 -- 200 -- 400 -- -- 400
------ ----- ------ --- -------- -------- ---- --------
Balances, December 31, 1996.......... 8,868 2,332 11,200 1 40,824 (7,578) -- 33,247
Net income......................... -- -- -- -- -- 6,234 -- 6,234
Preferred stock dividends.......... -- -- -- -- -- (5,308) -- (5,308)
Accretion of preferred stock....... -- -- -- -- -- (1,077) -- (1,077)
Stock rights exercised............. 300 -- 300 -- 850 -- -- 850
------ ----- ------ --- -------- -------- ---- --------
Balances, December 31, 1997.......... 9,168 2,332 11,500 1 41,674 (7,729) -- 33,946
Comprehensive income (loss):
Net loss......................... -- -- -- -- -- (22,212) -- (22,212)
Comprehensive income, unrealized
gain on foreign currency
translation.................... -- -- -- -- -- -- 489 489
--------
Total comprehensive loss.... (21,723)
Preferred stock dividends.......... -- -- -- -- -- (6,170) -- (6,170)
Accretion of preferred stock....... -- -- -- -- -- (1,077) -- (1,077)
Stock compensation expense......... -- -- -- -- 765 -- -- 765
Stock options exercised............ 544 -- 544 -- 1,359 -- -- 1,359
Issuance of common stock in
connection with the acquisition
of Windy Hill.................... 6,366 -- 6,366 1 63,573 -- -- 63,574
------ ----- ------ --- -------- -------- ---- --------
Balances, December 31, 1998.......... 16,078 2,332 18,410 $ 2 $107,371 $(37,188) $489 $ 70,674
====== ===== ====== === ======== ======== ==== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 78

DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
DECEMBER 31, 1996, 1997 AND 1998

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Doane Pet Care Enterprises, Inc. ("Company") manufactures dry and canned
pet foods and operates a machine shop and a structural steel fabrication plant.
The Company extends unsecured credit in the form of current accounts receivable,
principally to large distributors and retailers throughout the United States,
with credit extended to one customer approximating 70%, 65% and 50% of accounts
receivable at December 31, 1996, 1997, and 1998, respectively.

Principles of Consolidation

On October 5, 1995, the Company acquired Doane Pet Care Company, ("Doane"),
formerly Doane Products Company. The accompanying consolidated financial
statements for December 31, 1996, 1997, and 1998, include the accounts of the
Company and its wholly-owned subsidiaries. All inter-company transactions and
balances have been eliminated. The Company is accounting for its 50% investment
in a foreign joint venture under the equity method of accounting.

Basis of Presentation

Certain reclassifications have been made to previously reported
consolidated financial statements to conform with the fiscal 1998 presentation.

52-Week Fiscal Year

For the years ended December 31, 1996, 1997 and 1998, the Company's fiscal
year end was a calendar year end. Effective January 1, 1999, the Company has
implemented a fiscal year that ends on the Saturday nearest to the end of
December.

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of
three months or less to be cash equivalents. Cash equivalents consist primarily
of repurchase agreements and certificates of deposit.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined
using the first-in, first out cost method.

Property and Equipment

Property and equipment are depreciated over the estimated useful life of
each asset ranging from three to forty years. Annual depreciation is computed
using the straight-line method.

In fiscal 1996, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-lived Assets and for Long Lived Assets to be Disposed Of (SFAS 121).
Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. When such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the asset exceeds the fair value of the
asset. The adoption of SFAS 121 did not have a material impact on the Company's
consolidated financial statements.

F-7
<PAGE> 79
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect of a change in tax rates on deferred tax
assets and liabilities is recognized in income in the period that includes the
enactment date.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets include goodwill, trademarks and
certain identifiable intangible assets. Goodwill represents the excess of the
purchase price over the fair value of the net assets acquired. Trademarks and
goodwill are being amortized over thirty and forty years using the straight-line
method, respectively. Other intangible assets, primarily software, are being
amortized using the straight-line method over periods ranging from four to five
years. The Company's policy is to periodically evaluate such costs to determine
whether there has been any impairment in value. The measurement of possible
impairment is based primarily on the ability to recover the balance of the
goodwill from expected future operating cash flows on an undiscounted basis.
Accumulated amortization of goodwill and other intangible assets was $7,300 and
$13,039 at December 31, 1997 and 1998, respectively.

Financial Instruments

Fair value of cash, accounts receivable, accounts payable and accrued
liabilities approximate book value at December 31, 1997 and 1998. Fair value of
debt is based upon market value, if traded, or discounted at the estimated rate
the Company would incur currently on similar debt.

Recognition of Revenue

Revenue is recognized at the time the product is shipped.

Commodity Hedges

The Company manages price risk created by market fluctuations by hedging
portions of its primary commodity products purchases, principally through
exchange traded futures and options contracts which are designated as hedges.
The terms of such contracts are generally less than one year. Settlement of
positions are either through financial settlement with the exchanges or via
exchange for the physical commodity in which case the Company delivers the
contract against the acquisition of the physical commodity.

The Company's policy does not permit speculative commodity trading. Futures
and options contracts are accounted for as hedges, and gains and losses are
recognized in the period realized as part of the cost of products sold and in
the cash flows. The deferred net futures and options position is reported on the
balance sheet as a current asset for net loss positions and as a deferred credit
for net gain positions. In addition to futures and options, the Company also
contracts for future physical procurement, in which case unrealized gains and
losses are deferred to the applicable accounting period. Typically, maturities
vary and do not exceed twelve months.

Deferred losses on these outstanding contracts were $917 and $3,022 at
December 31, 1997 and 1998, respectively.

F-8
<PAGE> 80
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Interest Rate Hedges

The Company periodically uses interest rate hedges (swaps) to limit its
exposure to the interest rate risk associated with its floating rate long term
foreign debt. Amounts received under swap agreements are recorded as a reduction
(addition) to interest expense.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Net Income (Loss) Per Common Share

In 1997, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings per Share", which simplifies the
computation of earnings per share ("EPS"). All prior period earnings per share
amounts have been restated to conform to SFAS 128 requirements. Under SFAS 128,
the Company computes two earnings per share amounts -- basic EPS and EPS
assuming dilution. Basic EPS is calculated based upon the weighted average
number of common shares of common stock outstanding during the period after
decreasing (increasing) net income (loss) by unpaid cumulative preferred stock
dividends and the accretion of the preferred stock. EPS assuming dilution
adjusts the weighted average number of shares of common stock outstanding for
the period for the common stock equivalents thereby reflecting the dilutive
effect of stock options and warrants granted. In all periods presented the
effect of common stock equivalents was antidilutive resulting in the same EPS
amount for basic and diluted net income (loss) per common share. The following
table summarizes the calculation of net income (loss) and, basic and dilutive
weighted average number of shares outstanding for purposes of computing net
income (loss) per common share:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
Numerator:
Income (loss) before extraordinary loss..................... $(1,518) $ 6,234 $ 4,576
Less:
Extraordinary loss........................................ -- -- (26,788)
Preferred stock dividends and accretion of preferred
stock.................................................. (5,746) (6,385) (7,247)
------- ------- --------
Net loss applicable to common stock......................... $(7,264) $ (151) $(29,459)
======= ======= ========
Denominator:
Basic and diluted weighted average number of shares
outstanding............................................... 11,006 11,350 14,429
======= ======= ========
Basic and diluted net income (loss) per common share:
Income (loss) before extraordinary loss................... $ (0.14) $ 0.55 $ 0.32
Extraordinary loss........................................ -- -- (1.86)
Preferred stock dividends and accretion of preferred
stock.................................................. (0.52) (0.56) (0.50)
------- ------- --------
Net loss applicable to common stock....................... $ (0.66) $ (0.01) $ (2.04)
======= ======= ========
</TABLE>

Stock Compensation

In 1996, the Company adopted Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," (SFAS 123). The Company has
elected to continue to apply the provisions of Accounting Principles Board
("APB") Opinion No. 25 "Accounting for Stock Issued to Employees" and related
interpretations. As such, compensation expense is recorded on the date of grant
only if the current
F-9
<PAGE> 81
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

market price of the underlying stock exceeds the exercise price at the date of
grant. The pro forma disclosure provisions of SFAS 123 are provided in note 13.

Recent Accounting Pronouncements

Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"), was issued by the
Financial Accounting Standards Board in June 1998. SFAS 133 standardizes the
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts. Under the standard, entities are required to carry
all derivative instruments in the statement of financial position at fair value.
The accounting for changes in the fair value (i.e., gains or losses) of a
derivative instrument depends on whether it has been designated and qualifies as
part of a hedging relationship and, if so, on the reason for holding it. If
certain conditions are met, entities may elect to designate a derivative
instrument as a hedge of exposures to changes in fair values, cash flows, or
foreign currencies. If the hedged exposure is a fair value exposure, the gain or
loss on the derivative instrument is recognized in earnings in the period of
change together with the offsetting loss or gain on the hedged item attributable
to the risk being hedged. If the hedged exposure is a cash flow exposure, the
effective portion of the gain or loss on the derivative instrument is reported
initially as a component of other comprehensive income (outside earnings) and
subsequently reclassified into earnings when the forecasted transaction affects
earnings. Any amounts excluded from the assessment of hedge effectiveness, as
well as the ineffective portion of the gain or loss, is reported in earnings
immediately. Accounting for foreign currency hedges is similar to the accounting
for fair value an cash flow hedges. If the derivative instrument is not
designated as a hedge, the gain or loss is recognized in earnings in the period
of change.

(2) STOCK DIVIDEND

The Company declared and paid a 4 for 1 stock dividend on April , 1999
pursuant to which each holder of a share of Common Stock will receive a dividend
equal to three shares of Common Stock. The consolidated financial statements,
including all references to the number of shares of common stock and all per
share information, have been adjusted to reflect the common stock dividend.

(3) ACQUISITIONS

IPES Iberica, S.A. Acquisition

On April 17, 1998 Doane purchased 100% of the outstanding stock of Ipes
Iberica, S.A. ("IPES") for $26.2 million, net of cash acquired. IPES is a
private label pet food manufacturer located in Spain with 1997 net sales of
$21.1 million. The transaction was financed through a $20.9 million non recourse
facility provided by the HSBC Investment Bank, Plc. in Spain, and $7.4 million
from the Company's Senior Credit Facility. This transaction has been accounted
for as a purchase with the purchase price and direct acquisition costs allocated
based on the fair value of assets acquired and liabilities assumed. Goodwill of
approximately $15.1 million was recorded in connection with this transaction.
The goodwill is being amortized over 40 years on a straight line basis.

Windy Hill Pet Food Holdings Inc. ("Holdings") Acquisition

On August 3, 1998, the Company acquired Holdings for approximately 6.4
million shares of its common stock valued at $63,574 and the assumption of
$183.5 million of indebtedness. Holdings was liquidated into the Company at the
date of acquisition. Windy Hill Pet Food Company, Inc. ("Windy Hill"), a
wholly-owned

F-10
<PAGE> 82
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subsidiary of Holdings, was merged into Doane in November 1998 in connection
with the Refinancing Transactions as discussed in Note 4. Windy Hill is a
leading manufacturer of pet food products. Windy Hill manufactures products for
both dogs and cats, including dry, canned, semi-moist, soft dry and soft treats
and dog biscuits. With Windy Hill, the Company is the largest manufacturer of
dog biscuits in the United States. This acquisition has been accounted for as a
purchase with the purchase price and direct acquisition costs allocated based on
the fair value of assets acquired and liabilities assumed. The allocation of the
purchase price is preliminary because estimates were made regarding the fair
value of certain assets and liabilities for which the Company is obtaining
valuation information either from sale transactions or internal studies. The
Company has recorded an estimated accrual associated with such valuations at
December 31, 1998. The final determination of the fair values is expected to be
completed no later than the second quarter of 1999, and any resulting changes to
the estimate, which are not expected to be material, will be recorded as an
adjustment to goodwill. Goodwill of approximately $59.4 million was recorded in
connection with this transaction. The goodwill is being amortized over 40 years
on a straight-line basis.

The unaudited pro forma information below has been prepared assuming Windy
Hill and IPES were acquired January 1, 1997:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------------
1997 1998
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net sales................................................... $885,681 $865,346
Income before income taxes
and extraordinary loss.................................... 10,841 940
Income before extraordinary loss............................ $ 5,963 $ (2,289)
======== ========
</TABLE>

These pro forma results have been prepared for comparative purposes only
and do not purport to be indicative of the results of operations which would
have resulted had the acquisition occurred on the date indicated. The pro forma
results reflect certain adjustments for amortization, interest expense, fixed
overhead, and general and administrative expenses.

(4) EXCHANGE OFFER AND REFINANCING TRANSACTIONS

In November 1998, the Company refinanced its capital structure pursuant to
the following series of transactions collectively referred to herein as the
"Refinancing Transactions."

-- Windy Hill was merged into Doane, the Company's principal operating
subsidiary;

-- Doane completed a cash tender offer for approximately $97 million
principal amount of its 10 5/8% Senior Notes due 2006;

-- Windy Hill completed a cash tender offer for $46 million principal
amount of its 9 3/4% Senior Subordinated Notes due 2007, which tender
offer was required by a change of control provision in the indenture
governing such notes;

-- Doane completed an exchange offer (the "Exchange Offer") of $150 million
principal amount of its 9 3/4% Senior Subordinated Notes due 2007 for
the remaining approximately $63 million principal amount of Senior Notes
and the remaining approximately $74 million principal amount of Windy
Hill Notes; and

-- Doane entered into a new senior credit facility with a syndicate of
financial institutions providing for total commitments of $345 million.
Doane borrowed $292 million under the Senior Credit Facility to fund the
cash requirements of the Refinancing Transactions, repay borrowings
under and retire its

F-11
<PAGE> 83
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

previous credit facilities, repay other debt and repay a bridge
financing incurred in connection with the tender offer for the Windy
Hill Notes.

As a result of the Exchange Offer and Refinancing Transactions, an
extraordinary loss of $26,788, net of tax, was recorded due to the early
extinguishment of debt. The extraordinary loss consists of the write-off of
deferred financing costs associated with the extinguished debt and associated
fees and expenses.

(5) INVENTORIES

Inventories consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1997 1998
------- -------
<S> <C> <C>
Raw materials............................................... $ 8,449 $13,349
Packaging materials......................................... 10,735 22,003
Finished goods.............................................. 13,242 16,147
------- -------
$32,426 $51,499
======= =======
</TABLE>

(6) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1998
------- --------
<S> <C> <C>
Land........................................................ $ 4,037 $ 7,627
Buildings and improvements.................................. 29,439 56,394
Machinery and equipment..................................... 76,442 149,131
Furniture and fixtures...................................... 2,536 4,421
Automotive equipment........................................ 1,016 1,257
Construction in progress.................................... 1,972 18,320
------- --------
115,442 237,150
Less accumulated depreciation............................... 15,448 30,797
------- --------
$99,994 $206,353
======= ========
</TABLE>

(7) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Goodwill.................................................... $130,182 $249,931
Trademarks.................................................. -- 61,990
Other intangibles........................................... -- 749
-------- --------
130,182 312,670
Less accumulated amortization.......................... 7,300 13,039
-------- --------
$122,882 $299,631
======== ========
</TABLE>

F-12
<PAGE> 84
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1997 1998
------- -------
<S> <C> <C>
Salaries and commissions.................................... $ 4,714 $ 9,883
Accrued interest............................................ 6,223 5,541
Rebates and other promotions................................ 9,064 17,747
Acquisition related accruals................................ -- 5,734
Worker's comp............................................... 1,296 1,840
Health insurance............................................ 410 1,454
Real estate/franchise taxes................................. 792 944
Other....................................................... 112 6,735
------- -------
$22,611 $49,878
======= =======
</TABLE>

(9) LONG-TERM DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Bank revolving credit facility.............................. $ 775 $ 32,000
Bank term loans............................................. 33,937 245,000
Senior subordinated notes................................... 160,000 146,996
Industrial development revenue bonds........................ 5,698 9,783
Foreign subsidiaries........................................ -- 25,391
-------- --------
200,410 459,170
Less current maturities..................................... (11,667) (12,889)
-------- --------
$188,743 $446,281
======== ========
</TABLE>

Bank loans

In November 1998, the Company entered into the Senior Credit Facility with
a syndicate of banks and other institutional investors, as lenders, and Chase,
as administrative agent, DLJ Capital Funding, Inc. ("DLJ Capital"), as
syndication agent, and Mercantile Bank National Association, as documentation
agent. DLJ Capital and CSI served as the co-arrangers of the Senior Credit
Facility. The Senior Credit Facility consists of a $245.0 million term loan
facility (the "Term Loan Facility") and a $100.0 million revolving
credit/swingline facility (the "Revolving Credit Facility") with a $10 million
sub limit for issuance of letters of Credit ($2.4 million outstanding at
December 31, 1998). Loans under the Senior Credit Facility will bear interest
at: (i) the prime rate of the administrative agent (or, if higher, the secondary
market rate for certificates of deposit plus 1% or the federal funds rate plus
0.5%) plus a specified margin based on the type of loan and the then current
ratio of senior debt to EBITDA (the "Applicable Margin") or (ii) the Eurodollar
rate plus the Applicable Margin. The Company will also pay certain fees with
respect to the Senior Credit Facility. The Term Loan Facility bore interest at
9.14% and the Revolving Credit Facility bore interest at 8.39% during the period
in 1998 when the borrowings were outstanding. The Term Loan Facility consists of
three traunches with terms between six and one-half years and eight years,
unless terminated sooner upon an event of default. The principal amount under
the Term Loan Facility shall be repaid in quarterly installments starting March
31, 1999, as follows: (i) approximately $11.7 million in each of the calendar
years 1999 and 2000, (ii) approximately $14.2 million in each of the calendar
years 2001, 2002, 2003 and 2004, (iii) $85.8 million in the calendar year 2005
and (iv) $79.0 million in 2006. The Revolving Credit Facility has a term of six
and

F-13
<PAGE> 85
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

one-half years. At December 31, 1998, the Company had approximately $65,600
available under the Revolving Credit Facility.

The Company and certain restricted subsidiaries are required to guarantee
amounts outstanding under the Senior Credit Facility. The indebtedness incurred
pursuant to the Senior Credit Facility is secured by a first priority lien on
substantially all of the material assets of the Company and its restricted
domestic subsidiaries. The Senior Credit Facility contains certain financial and
other covenants usual and customary for a secured credit agreement. The Company
was in compliance with these covenants at December 31, 1998.

In connection with the Refinancing Transactions (see Note 3), the Company
repaid borrowings under and retired its previous bank credit facility ("Prior
Bank Facility"). The Prior Bank Facility, as amended, provided for an aggregate
principal amount of loans of up to $85,000 consisting of $60,000 in aggregate
principal amount of term loans and a $25,000 revolving credit facility.

The Prior Bank Facility was to mature on September 30, 2001 and was due in
quarterly installments in increasing amounts, ranging from $2,100 to $3,700.

Indebtedness under the Prior Bank Facility bore interest at a rate based,
at the Company's option, upon (i) the Base Rate plus 1.50% with respect to Base
Rate Loans and (ii) the LIBOR Rate for one, two, three or six months plus 2.75%
with respect to LIBOR Rate Loans. The revolving credit facility bore interest at
9.5%, 9.3% and 9.26% for the years ended December 31, 1996, 1997 and 1998,
respectively. The term loans bore interest at a weighted average rate of 7.95%,
8.44% and 8.11% for the years ended December 31, 1996, 1997 and 1998,
respectively.

The Prior Bank Facility was secured by substantially all of the assets of
the Company and a pledge of all of the Company's common stock.

Senior Subordinated Notes, Net of Discount

On November 12, 1998, Doane issued $150 million in aggregate principal
amount of its 9 3/4% Senior Subordinated Notes due May 15, 2007 with interest
payable semiannually. The Senior Subordinated Notes are general unsecured
obligations and are subordinated in right of payment to all senior indebtedness
and senior in right of payment to any current or future indebtedness of Doane
that, by its terms, is subordinated to the Senior Subordinated Notes. The
payment of obligations of each subsidiary guarantor are subordinated to the
payment of senior indebtedness of such subsidiary guarantor.

<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C> <C>
2002...................................................... 104.875%
2003...................................................... 103.250%
2004...................................................... 101.625%
2005 and thereafter....................................... 100.000%
</TABLE>

In addition, prior to May 15, 2000 Doane may redeem up to 35% of the
aggregate principal amount of the Senior Subordinated Notes with the proceeds of
one more Equity Offerings (as defined in the Note Indenture), at a redemption
price equal to 109.75% of the principal amount thereof, plus accrued and unpaid
interest, if any, provided, however, that at least 65% in aggregate principal
amount of the Senior Subordinated Notes remain outstanding immediately after
each such redemption. At any time prior to May 15, 2002, the Senior Subordinated
Notes may also be redeemed in whole, but not in part, at the option of Doane
upon the occurrence of a Change in Control (as defined in the Note Indenture) at
a redemption price equal to 100% of

F-14
<PAGE> 86
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the principal amount thereof plus the Applicable Premium (as defined in the Note
Indenture) and the unpaid accrued interest, if any, to the date of redemption.
Upon a Change in Control, holders of the Senior Subordinated Notes may require
Doane to purchase all or a portion of the Senior Subordinated Notes at a
purchase price equal to 101% of their principal amount plus accrued interest, if
any. The Senior Subordinated Notes have certain covenants that have restrictions
on dividends, distributions, indebtedness, affiliate transactions and lines of
business. In connection with the Refinancing Transactions, Doane retired its
Senior Notes that were originally due on March 1, 2006 and bore interest at
10.625% per annum, payable semiannually. The Senior Notes were issued in 1996 in
connection with a debt refinancing, which resulted in a $4,815 nonrecurring
finance charge to write off interim debt issuance costs.

Industrial Development Revenue Bonds

On March 12, 1997 the Company issued the 7.25% $6,000 Ottawa County Finance
Authority Industrial Development Revenue Bonds (the "Miami Bonds"). The Miami
Bonds are subject to mandatory redemption prior to maturity, in part, at a
redemption price of 100% of the principal amount thereof, plus accrued interest
to the redemption date, in varying principal amounts on June 1 of each year from
2007 through 2017. The Miami Bonds are general secured obligations of the
Company and ranking on a parity in right of payment with all other senior
indebtedness of the Company.

On July 24, 1998, the Company issued the 6.25% $9,000 Oklahoma Development
Finance Authority, Industrial Development Revenue Bonds, Series 1998 (Doane
Products Company Clinton, Oklahoma Project) (the "Clinton Bonds") through the
Oklahoma Development Finance Authority. At December 31, 1998 $4,087 had been
drawn down by the Company. The Clinton Bonds are subject to mandatory redemption
prior to maturity, in part, at a redemption price of 100% of the principal
amount thereof, plus accrued interest to the redemption date, in varying
principal amounts on July 15 of each year from 2018 through 2023. The Clinton
Bonds are general obligations of the Company and rank on parity in right of
payment with all other senior indebtedness of the Company. On July 24, 1998, the
Clinton Bonds were purchased by the Company's wholly owned subsidiary,
Doane/Windy Hill Joint Venture Corp., formerly DPC Funding Corp. It is
anticipated that such entity will attempt to sell the Clinton Bonds.

Annual Maturities of Long-Term Debt

Aggregate annual maturities of long-term debt at December 31, 1998 were:

<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
1999........................................................ $12,889
2000........................................................ 14,186
2001........................................................ 17,054
2002........................................................ 17,072
Thereafter.................................................. 397,969
</TABLE>

FOREIGN SUBSIDIARIES DEBT

Debt of foreign subsidiaries consists of peseta denominated borrowings from
HSBC Investment Bank Plc, for which the Midland Bank Plc, Branch in Spain is the
Facility agent. The borrowings are comprised of Tranche A, $17.6 million
(2,500,000,000 pesetas) amortizing over seven years, and Tranche B, $1.0 million
(142,000,000 pesetas) payable in full at the end of its eight year term. The
interest rates were 5.5625% and 6.5625% on Tranche A and B respectively and will
adjust with changes in MIBOR (Madrid Inter-Bank Offer Rate). The borrowings
under the Tranche B loan may be increased up to $4.2 million (600,000,000
pesatas) under certain circumstances.

F-15
<PAGE> 87
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Doane Pet Care Spain also entered into an interest rate swap starting
October 1998 for the notional amount of approximately $18,600, decreasing over
the three-year term of the hedge. The resulting fixed rate MIBOR is 4.495%.

(10) FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value at December 31 of financial instruments, other
than current assets and liabilities, follows:

<TABLE>
<CAPTION>
1997 1998
----------------------- -----------------------
ESTIMATED ESTIMATED
BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Debt:
Revolving credit facility.............. $775 $775 $32,000 $32,000
Bank term loan......................... 33,937 33,937 245,000 245,000
Senior subordinated notes.............. 160,000 160,000 146,996 152,800
Other.................................. 5,698 5,698 35,174 35,174
--------- --------- --------- ---------
$200,410 $200,410 $459,170 $464,974
========= ========= ========= =========
Hedges:
Interest rate (asset).................. $-- $-- $-- $400
------ ------ ------ ------
------ ------ ------ ------
</TABLE>

(11) SENIOR PREFERRED STOCK

The Senior Preferred Stock has an initial liquidation preference of $25.00
per share (aggregate initial liquidation preference is $30,000). The Senior
Preferred Stock was recorded at the net proceeds of $17,075 after deducting
$12,925 paid to the Company for 5,417,912 warrants that were issued in
conjunction with the Senior Preferred Stock. The excess of the liquidation
preference over the carrying value is being accreted quarterly over a twelve
year period ended September 30, 2007 by a direct reduction to retained earnings.

Dividends on the Senior Preferred Stock are payable quarterly at the rate
of 14.25% per annum per share. Dividends on the Senior Preferred Stock accrete
to the liquidation value of the Senior Preferred Stock and, at the option of the
holders of a majority of the shares of Senior Preferred Stock, may be paid
through the issuance of additional shares of Senior Preferred Stock on each
dividend payment date through September 30, 2000. The Company does not expect to
pay dividends on the Senior Preferred Stock in cash for any period prior to
September 30, 2000. Cumulative dividends on Senior Preferred Stock that have not
been paid at December 31, 1997 and 1998, are $11,047 and $17,217, respectively,
and are included in the carrying amount of the Senior Preferred Stock. As of
December 31, 1997, and 1998, the cumulative accretion to redemption value and
cumulative dividends on the Senior Preferred Stock are $2,422 and $3,499,
respectively and $11,047 and $17,217, respectively.

Subsequent to September 30, 1998, and prior to September 30, 2000, the
Company is not precluded from purchasing in whole or in part the Senior
Preferred Stock on the open market at prevailing market prices. On

F-16
<PAGE> 88
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and after September 30, 2000, the Company may, at its option, redeem the Senior
Preferred Stock in whole or in part at redemption prices per share set forth
below, together with accrued and unpaid dividends:

<TABLE>
<CAPTION>
YEAR PERCENT OF
BEGINNING LIQUIDATION
SEPTEMBER 30, VALUE
- ------------- -----------
<S> <C> <C>
2000............................................................... 107.125%
2001............................................................... 105.700
2002............................................................... 104.275
2003............................................................... 102.850
2004............................................................... 101.425
2005............................................................... 100.000
2006............................................................... 100.000
</TABLE>

The Company will be required to redeem all outstanding shares of Senior
Preferred Stock on September 30, 2007 at 100% of the then liquidation value,
together with accrued and unpaid dividends.

In the event of a change of control, as defined, the holders of Senior
Preferred Stock have the right to require the Company to redeem such Senior
Preferred Stock, in whole or in part, at a price equal to 101% of the then
liquidation value together with any unpaid dividends.

The terms of the Senior Preferred Stock prohibit (i) the payment of
dividends on securities ranking on a parity with or junior to the Senior
Preferred Stock and (ii) redemption, repurchase or acquisition of any Junior
Securities with certain exceptions, in each case, unless full cumulative
dividends have been paid on the Senior Preferred Stock.

Holders of the Senior Preferred Stock have limited voting rights customary
for preferred stock, and the right to elect two additional directors upon
certain events such as the Company failing to declare and pay dividends on any
six consecutive dividend payment dates.

(12) COMMON STOCK

(13) STOCK OPTION AND STOCK PURCHASE PLANS

Effective November 1, 1996, the Company adopted the 1996 Management Stock
Option Plan, as amended (the "1996 Stock Option Plan"). The maximum number of
options that may be granted under the 1996 Stock Option Plan is 3,000,000. The
options vest over a period of three to eight years. The plan provides for
accelerated vesting based on performance levels as defined in the plan. Set
forth below is certain information regarding such issuances, exercises and
cancellations of options in each of the indicated fiscal years.

F-17
<PAGE> 89
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
WEIGHTED
SHARES AVERAGE EXERCISE PRICE
---------- ----------------------
<S> <C> <C>
Balance at December 31, 1995................................ -- --
Fiscal 1996:
Granted................................................... 1,499,000 $2.55
Exercised................................................. -- --
Cancelled................................................. -- --
----------
Balance at December 31, 1996................................ 1,499,000 2.55
Fiscal 1997:
Granted................................................... 704,000 3.71
Exercised................................................. -- --
Cancelled................................................. (129,000) 2.50
----------
Balance at December 31, 1997................................ 2,074,000 2.94
----------
Fiscal 1998:
Granted................................................... 365,800 4.32
Exercised................................................. (543,672) 2.50
Cancelled................................................. (285,580) 2.61
----------
Balance at December 31, 1998................................ 1,610,548 $3.47
==========
</TABLE>

The 1,610,548 options outstanding as of December 31, 1998 had exercise
prices ranging between $2.50 and $5.00, a weighted average exercise price of
$3.47, and a weighted average remaining contract life of 8.22 years. At December
31, 1998, options to purchase 563,912 shares were exercisable with exercise
prices ranging between $2.50 and $5.00, and a weighted average exercise price of
$3.12.

The Company has elected to continue to follow APB Opinion No. 25 to account
for stock awards granted to employees; however, if the Company adopted SFAS 123
to account for stock awards granted to employees, the Company's net income and
earnings per share for the years ended December 31, 1996, 1997 and 1998 would
have been reduced as follows:

<TABLE>
<CAPTION>
1996 1997 1998
---------------------- ---------------------- ----------------------
AS REPORTED PROFORMA AS REPORTED PROFORMA AS REPORTED PROFORMA
----------- -------- ----------- -------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Net loss................ $(7,264) $(7,359) $ (151) $ (481) $(29,459) $(30,303)
Basic and diluted
earnings per common
share................. (0.66) (0.67) (0.01) (0.04) (2.04) (2.10)
</TABLE>

Pro forma information regarding net income and earnings per common share
has been determined as if the Company had accounted for its employee stock
options under the minimum value method of SFAS 123 under the assumptions of a
risk free rate of 5.75% and an expected life of options of 6 years. The Company
has no present plans to pay dividends on its Common Stock. The effects of
applying SFAS 123 as calculated above may not be representative of the effects
on reported net income for future years.

For the year ended December 31, 1998, the Company recorded compensation
expense of $765 as an addition to additional paid-in-capital in connection with
stock option grants under the 1996 Stock Option Plan.

Effective November 1, 1996, the Company adopted the 1996 Management Stock
Purchase Plan (the "1996 Plan"). The 1996 Plan provides that officers and other
key employees may be granted an aggregate of 200,000 rights to purchase one
share of the Company's common stock at $2.50 per share. Effective June 19, 1997,
the Company adopted the 1997 Management Stock Purchase Plan (the "1997 Plan")
which authorized the Company to grant an additional 300,000 rights to officers
and key employees to purchase one share of the Company's common stock at $2.50
per share. In fiscal 1996, and 1997, 200,000 and 300,000 shares, respectively,
were purchased under the plans.

F-18
<PAGE> 90
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(14) LEASES

The Company leases certain facilities, machinery and equipment under
operating lease agreements with varying terms and conditions. Future annual
minimum lease payments under these leases are summarized as follows (dollars in
thousands):

<TABLE>
<S> <C>
1999........................................................ $ 2,181
2000........................................................ 2,631
2001........................................................ 2,762
2002........................................................ 2,857
2003........................................................ 2,897
Thereafter.................................................. 5,919
-------
$19,247
=======
</TABLE>

Rent expense was $552 for the year ended December 31, 1998.

(15) TRANSITION EXPENSES

Non-recurring costs for 1998 represent the non-recurring transition
expenses incurred in connection with the acquisition and integration of Windy
Hill with the Company follow:

<TABLE>
<S> <C>
Relocation expense.......................................... $2,571
Merger/Relocation bonuses................................... 2,016
Severance................................................... 943
Professional fees........................................... 819
Travel...................................................... 348
Miscellaneous............................................... 346
------
$7,043
======
</TABLE>

The relocation expense represents liabilities incurred to relocate
personnel from the former Doane corporate office to merged corporate
headquarters. Merger bonuses were paid to Doane personnel in connection with the
acquisition. Professional fees represent costs for consultants in human
resources, employment, law, accounting and information systems to assist in the
transition. As of December 31, 1998, $2.6 million of these expenses were accrued
and expected to be paid in the next six months.

(16) INCOME TAXES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1997 1998
----- ------ --------
<S> <C> <C> <C>
Total taxes before extraordinary loss:
Current -- foreign........................................ $ -- $ -- $ 250
----- ------ --------
Deferred:
Federal................................................ (855) 3,084 2,666
State and local........................................ -- 305 524
Foreign................................................ -- -- 38
----- ------ --------
(855) 3,389 3,228
----- ------ --------
Total before extraordinary loss............................. (855) 3,389 3,478
Tax benefit related to extraordinary loss................... -- -- (16,001)
----- ------ --------
Total income taxes (benefit)...................... $(855) $3,389 $(12,523)
===== ====== ========
</TABLE>

F-19
<PAGE> 91
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income before income tax by domestic and foreign source follows (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1997 1998
------- ------ ------
<S> <C> <C> <C>
Domestic.................................................... $(2,373) $9,623 $6,548
Foreign..................................................... -- -- 1,506
------- ------ ------
$(2,373) $9,623 $8,054
======= ====== ======
</TABLE>

Income tax expense differs from the amount computed by applying the Federal
statutory rate to pretax income due to the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1997 1998
------- ------ ------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit)................... $ (807) $3,272 $2,738
State and local taxes....................................... -- -- 341
Goodwill amortization....................................... -- -- 661
Meals and entertainment, other.............................. (48) 117 (262)
------- ------ ------
$ (855) $3,389 $3,478
======= ====== ======
</TABLE>

The tax effects of temporary differences that give rise to the significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1996 and 1997 are presented below:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
CURRENT DEFERRED
Deferred tax assets:
Accounts receivable....................................... $ 40 $ 544
Inventory................................................. 291 618
Accruals and provisions................................... 921 3,311
-------- --------
Current deferred tax asset........................ $ 1,252 $ 4,473
======== ========
NONCURRENT DEFERRED
Deferred tax assets -- net operating loss carryforwards..... $ 10,093 $ 27,506
Deferred tax liabilities:
Tax over book amortization.................................. (5,751) (12,364)
Difference between book and tax basis of property and
equipment................................................. (8,511) (19,903)
-------- --------
(14,262) (32,267)
Net noncurrent deferred tax liability....................... (4,169) (4,761)
-------- --------
Total net deferred tax asset (liability).......... $ (2,917) $ (288)
======== ========
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which these temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in working this assessment. Based upon the
historical taxable income and projections for future taxable income over the
periods which the deferred tax assets are deductible, management believes it is
more likely than not the Company will realize the benefits of these deductible
differences at December 31, 1998.

At December 31, 1998, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $68,767 which are available to
offset future taxable income through 2013.

F-20
<PAGE> 92
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(17) EMPLOYEE BENEFIT PLANS

The Company has three defined benefit, noncontributory pension plans. The
Doane plan covers substantially all non-bargaining employees (terminated on May
31, 1998). Benefits under the Doane plan are based on the employee's
compensation during the five most highly compensated consecutive years during
the ten years preceding normal retirement date. The Company has two plans
covering hourly and salaried employees of the former Hubbard Milling Company.
The Company's funding policy for these plans is to make the minimum annual
contribution required by applicable regulations. The disclosure for all of the
Company's defined benefit, noncontributory plans are aggregated in the following
footnote.

Net periodic pension cost for the Company's defined benefit pension plans
consisted of the following components for the years ended:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Service cost (benefits) earned................. $1,059 $1,276 $ 520
Interest cost on projected benefit
obligation................................... 781 903 867
Actual return on plan assets................... (906) (1,914) (1,391)
Net amortization and deferral.................. 71 983 204
------ ------ -------
Net periodic pension cost...................... $1,005 $1,248 $ 200
====== ====== =======
</TABLE>

Assumptions used by the Company in the determination of pension plan
information consisted of the following as of:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Discount rate............................................... 7.0% 7.0% 6.75%
Rate of increase in compensation levels..................... 5.5% 5.5% 5.5%
Expected long-term rate of return on plan assets............ 7.5% 7.5% 7.5%
</TABLE>

The following table sets forth the plan's funded status and amounts
recognized in the accompanying balance sheets as of:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits........................................... $ (8,936) $(30,817)
======== ========
Accumulated benefits...................................... $ (9,192) $(31,270)
======== ========
Projected benefits........................................ $(14,818) $(31,270)
Plan assets at fair value................................. 14,557 36,641
-------- --------
Projected benefit obligation in excess of plan
assets.......................................... (261) 5,371
Items not yet recognized in earnings:
Unrecognized net loss (gain).............................. (1,144) 674
Unrecognized net asset at December 31, 1986, being
recognized over 14.49 to 17.95 years................... 313 --
-------- --------
Pension asset (liability) recognized in the
balance sheet................................... $ (1,092) $ 6,045
======== ========
</TABLE>

F-21
<PAGE> 93
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table reconciles the beginning and ending balances of the
accumulated post retirement pension obligation as of:

<TABLE>
<CAPTION>
<S> <C>
Projected benefit obligation, December 31, 1996............. $13,060
Service cost.............................................. 1,276
Interest cost............................................. 904
Benefits paid............................................. (286)
Actuarial gain............................................ (136)
-------
Projected benefit obligation, December 31, 1997............. 14,818
Increase due to assumption charge......................... 302
Service costs............................................. 520
Interest cost............................................. 866
Benefits paid............................................. (605)
Actuarial gain............................................ 580
Effect of plan termination................................ (741)
Business combination...................................... 15,530
-------
Projected benefit obligation, December 31, 1998............. $31,270
=======
</TABLE>

The following table reconciles the beginning and ending balances of plan
assets as of:

<TABLE>
<CAPTION>
<S> <C>
Plan assets, December 31, 1996.............................. $12,586
Employer contributions.................................... 343
Actual return............................................. 1,914
Benefits paid............................................. (286)
-------
Plan assets, December 31, 1997.............................. 14,557
Employer contributions.................................... 14
Actual return............................................. 1,391
Benefits paid............................................. (606)
Business combination...................................... 21,285
-------
Plan assets, December 31, 1998.............................. $36,641
=======
</TABLE>

On October 1, 1995, the Company adopted SFAS 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions. The Company sponsors two defined
contribution postretirement plans that provide medical coverage for eligible
retirees and their dependents of Doane and the former Hubbard Milling Company
(as defined in the plans). The following sets forth the plans' funded status
reconciled with the amount shown in the Company's consolidated balance sheets
and consolidated statements of income on an accrual basis rather than a
pay-as-you-go (cash) basis as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1998
------ ------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees and dependents..................................... $ 824 $3,166
Fully eligible active plan participants..................... 343 274
Other active plan participants.............................. 329 295
Unrecognized net gain....................................... 73 22
------ ------
Accrued postretirement benefit cost......................... $1,569 $3,757
====== ======
</TABLE>

F-22
<PAGE> 94
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Net periodic postretirement benefit cost included the
following components:
Service cost -- benefits attributed to service during
the period.......................................... $ 17 $ 18 $ 16
Interest cost on accumulated postretirement benefit
obligation.......................................... 104 102 157
------ ------ ------
Net periodic postretirement benefit cost....... $ 121 $ 120 $ 173
====== ====== ======
</TABLE>

The following table reconciles the beginning and ending balances of the
accumulated post retirement pension obligation as of:

<TABLE>
<S> <C>
Projected benefit obligation, December 31, 1996............. $1,497
Service costs............................................. 18
Interest costs............................................ 102
Benefits paid............................................. (48)
------
Projected benefit obligation, December 31, 1997............. 1,569
Service costs............................................. 16
Interest costs............................................ 157
Benefits paid............................................. (138)
Business combination...................................... 2,153
------
Projected benefit obligation, December 31, 1998............. $3,757
======
</TABLE>

For measurement purposes per capita claims costs for participants over age
65 were assumed to increase at 7.07%, 6.50% and 6.00% annually for 1996, 1997
and 1998 respectively; the rate used to calculate the net periodic
postretirement benefit cost was assumed to decrease gradually to 2001 at the
annual rates of 4.50%, 4.00% and 3.75% for physical years ending December 31,
1996, December 31, 1997 and December 31, 1998 respectively: The rate used to
calculate the accumulated postretirement benefit obligation was assumed to
decrease gradually to 2001 at the notes of 4.00%, 4.00% and 3.75% as of December
31, 1996, December 31, 1997 and December 31, 1998 respectively. The medical cost
trend rate assumption has a significant effect on the amounts reported. To
illustrate, increasing the assumed medical cost trend rates by 1 percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1998 by $384 and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
year ended 1998 by $36.

The weighted-average discount rate used in determining the net periodic
postretirement benefit cost was 7.50%, 7.00% and 7.00% for physical years ending
December 31, 1996, December 31, 1997 and December 31, 1998 respectively. The
weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.00%, 7.00% and 6.75% as of December 31,
1996, December 31, 1997 and December 31, 1998 respectively.

As of June 1, 1998 the Company adopted the Doane Products Company Savings
and Investment Plan for eligible employees not covered by collective bargaining
arrangements and the Doane Products Company Savings and Investment Plan -- Union
Plan for eligible union employees at the Joplin, Missouri plant. The plans are
intended to be qualified retirement plans under the Internal Revenue Code. Both
plans permit employee contributions between 1% and 15% of pre-tax earnings
subject to annual dollar limits set by the IRS, an annual employer profit
sharing contribution of $400 for each eligible participant and a variety of
investment options. The Doane Products Company Savings and Investment Plan also
includes an employer matching contribution in an amount equal to 50% of
participant contribution, up to 6% of compensation. Vesting for the employer
match is 25% per year for each full year of service. For the year ended December
31, 1998, the Company contributed $666 to the Doane Products Company Savings and
Investment Plan.
F-23
<PAGE> 95
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Windy Hill adopted the Windy Hill Pet Food Company, Inc. Profit Sharing and
Savings Plan on March 1, 1995, as amended. The plan is intended to be a
qualified plan under the Internal Revenue Code. It permits employee
contributions from 1% to 15% of pre-tax earnings subject to annual dollar limits
set by the IRS. Of this amount, the Company will match 50% of the first 6% of
the employee contribution. In addition, the plan provides for employer
contribution to participant accounts of amounts equal to 2 1/2% of the
employee's compensation. For 1998, the Company contributed $542 towards the
Windy Hill Pet Food Company, Inc. Profit Sharing and Savings Plan.

(18) DEFERRED COMPENSATION AGREEMENTS AND SALARY CONTINUATION PLAN

The Company has deferred compensation agreements with two individuals which
provide, upon retirement, annual payments to be paid over ten consecutive years.
The liability is approximately $1,150 and $1,254 at December 31, 1997 and 1998,
respectively.

The Company also has a salary continuation plan in which there were
twenty-two and twenty-nine participants at December 31, 1997 and 1998,
respectively. Participants in the plan, who reach age fifty-five and have ten
years of service with the Company, become vested as to benefits which are
payable in ten equal annual installments after retirement. The Company has
recorded an expected future liability equal to the present value of future
payments under this plan. The liability is approximately $1,362 and $1,539 at
December 31, 1997 and 1998, respectively.

(19) MAJOR CUSTOMER

For the years ended December 31, 1996, 1997 and 1998, the same customer
accounted for approximately 63%, 61% and 52%, respectively, of the Company's net
sales. The Company does not have a long-term contract with this customer.

(20) RELATED PARTY TRANSACTIONS

The Company has a management advisory agreement with Summit Capital Inc.
(SCI) and Donaldson, Lufkin & Jenrette Securities Corporation (DLJ), both
stockholders of the Company and each has a member who are directors of the
Company, in which the Company pays SCI and DLJ an annual fee of $200,000 and
$100,000, respectively; such agreements terminate upon the consummation of an
initial public offering. In addition, the Company paid SCI, DLJ, Chase Manhattan
Investment Holdings Inc. and Chase Securities, Inc. both affiliates of the Chase
Manhattan Bank (collectively "Chase") Dartford Partnership, L.L.C. and BRS,
stockholders of the Company and each has members who are directors of the
Company, fees of $2.0 million, $1.0 million, $1.5 million, $3.0 million and $1.5
million in connection with the Windy Hill acquisition. In connection with the
Refinancing Transactions, DLJ and Chase received fees of $3.8 million and $3.9
million, respectively.

(21) ADDITIONAL CASH FLOW INFORMATION

The following is additional cash flow information for the years ended
December 31, 1996, 1997 and 1998.

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amounts capitalized)................. $21,028 $21,924 $ 27,202
Income taxes (refunded)............................... 351 -- (299)
Supplemental schedule of noncash investing and financing
activities:
Exchange notes........................................... -- -- 137,000
Common stock issued in connection with the acquisition of
Windy Hill............................................ -- -- 63,574
</TABLE>

F-24
<PAGE> 96
DOANE PET CARE ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(22) COMMITMENTS AND CONTINGENCIES

On October 30, 1998 the Company initiated a voluntary product recall for
certain dry dog food manufactured at its Temple, Texas plant. The recall covers
dry dog food manufactured at its Temple plant between July 1 and August 31, 1998
and does not apply to dry dog food manufactured at other plants or the Company's
dry cat food, biscuits, treats or canned products. The recall resulted from
reported sickness and death of dogs in the State of Texas. These conditions were
attributed to elevated levels of aflatoxins in corn which, is an ingredient in
dry dog food. Aflatoxins are compounds produced from certain kinds of crop molds
that can be caused by extreme weather conditions such as drought and heat. The
Company has an extensive corn testing program for the detection of aflatoxins
and that program has been intensified since the problems were reported. The
Company maintains insurance against losses from illness or death of animals;
however, the cost of the product recall is not covered by insurance. The Company
recorded a $3.0 million product recall charge in the fourth quarter of fiscal
1998.

The Company is party, in the ordinary course of business, to other claims
and litigation. In management's opinion, the resolution of such matters is not
expected to have a material impact on the financial condition or results of
operations of the Company.

(23) QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1998 QUARTER QUARTER QUARTER QUARTER
---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales.......................................... $144,307 $140,843 $176,511 $225,002
Gross profit....................................... 24,340 24,768 33,970 49,138
Net income (loss).................................. 3,279 2,783 278 (28,552)
</TABLE>

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1997 QUARTER QUARTER QUARTER QUARTER
---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales.......................................... $141,741 $137,215 $132,445 $153,340
Gross profit....................................... 19,016 18,885 20,623 23,321
Net income......................................... 995 481 1,905 2,853
</TABLE>

F-25
<PAGE> 97

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Windy Hill Pet Food Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of Windy Hill
Pet Food Holdings, Inc. as of December 28, 1996 and December 27, 1997, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the ten-month period ended December 30, 1995, and for the years ended
December 28, 1996 and December 27, 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Windy Hill
Pet Food Holdings, Inc. as of December 28, 1996 and December 27, 1997, and the
results of their operations and their cash flows for the years then ended and
for the ten-month period ended December 30, 1995 in conformity with generally
accepted accounting principles.

/s/ KPMG LLP

San Francisco, California
March 13, 1998

F-26
<PAGE> 98

WINDY HILL PET FOOD HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 570 $ 731 $ 1,063
Accounts receivable (net of $48, $372 and $386 allowance,
respectively).......................................... 8,224 19,252 21,894
Accounts receivable -- other.............................. 19 1,694 1,716
Inventories (Note 4)...................................... 5,141 13,312 17,181
Prepaid expenses.......................................... 811 990 1,356
Current deferred tax asset (Note 11)...................... 30 2,335 2,394
------- -------- --------
Total current assets.............................. 14,795 38,314 45,604
Property, plant and equipment, net (Note 5)................. 22,484 60,774 79,277
Investments in joint ventures (Note 6)...................... -- 3,527 1,975
Goodwill and other intangible assets, net (Note 7).......... 51,515 98,465 108,570
Other assets, net (Note 8).................................. 3,431 13,612 15,617
------- -------- --------
Total assets...................................... $92,225 $214,692 $251,043
======= ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt (Note 9)................ $ 5,800 $ 1,312 $ 1,937
Senior secured revolving debt facility (Note 9)........... 2,000 2,000 --
Accounts payable.......................................... 9,816 20,178 21,140
Accrued liabilities....................................... 2,699 8,154 10,750
------- -------- --------
Total current liabilities......................... 20,315 31,644 33,827
Accrued interest -- non-current (Note 9).................... 962 2,595 3,458
Deferred tax liability (Note 11)............................ 1,867 12,390 13,004
Senior secured term debt (Note 9)........................... 35,750 13,688 44,223
Senior subordinated notes (Note 9).......................... 7,551 120,000 120,000
PIK A promissory notes (Note 9)............................. 3,750 3,750 3,750
PIK A-1 promissory note (Note 9)............................ -- 417 417
Convertible subordinated promissory note (Note 9)........... 10,500 10,500 10,500
Other liabilities........................................... 325 3,257 4,788
------- -------- --------
Total liabilities................................. 81,020 198,241 233,967
------- -------- --------
Stockholders' equity:
Preferred stock, $1.00 par value; 45,000 shares
authorized, 4,167 shares issued and outstanding,
liquidation preference of $4,163 (Note 16)............. 3,750 4,167 4,167
Class A common stock, $0.01 par value; 5,000 shares
authorized, 2,540 shares issued and outstanding (Note
16).................................................... -- -- --
Class B common stock, $0.01 par value; 2,000 shares
authorized, 569 shares issued and outstanding (Note
16).................................................... -- -- --
Additional paid-in capital (Note 16)...................... 7,681 16,624 16,624
Accumulated deficit....................................... (226) (4,340) (3,715)
------- -------- --------
Total stockholders' equity........................ 11,205 16,451 17,076
------- -------- --------
Commitments and contingent liabilities (Notes 9, 12 and 17)
Total liabilities and stockholders' equity........ $92,225 $214,692 $251,043
======= ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-27
<PAGE> 99

WINDY HILL PET FOOD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
TEN MONTH YEARS ENDED ENDED
PERIOD ENDED --------------------------- -------------------
DECEMBER 30 DECEMBER 28, DECEMBER 27, JUNE 28, JUNE 27,
1995 1996 1997 1997 1998
------------ ------------ ------------ -------- --------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
Net sales................................ $34,481 $82,993 $164,288 $60,323 $127,791
Cost of good sold 22,107 54,379 113,288 39,330 92,580
------- ------- -------- ------- --------
Gross profit................... 12,374 28,614 51,000 20,993 35,211
------- ------- -------- ------- --------
Operating expenses:
Promotion and distribution.......... 8,483 17,165 28,980 13,581 16,217
Selling, general and
administrative.................... 1,978 4,934 10,886 4,171 8,943
Non-recurring transition costs (Note
10)............................... -- -- 1,571 107 513
------- ------- -------- ------- --------
Total operating expenses....... 10,461 22,099 41,437 17,859 25,673
------- ------- -------- ------- --------
Operating income............... 1,913 6,515 9,563 3,134 9,538
Interest expense, net.................... 1,192 4,981 12,241 4,424 8,561
Equity in earnings of joint ventures..... -- -- (377) (29) (485)
Other expenses, net...................... -- 40 93 31 58
------- ------- -------- ------- --------
Income (loss) before income
taxes and extraordinary
item......................... 721 1,494 (2,394) (1,292) 1,404
Income tax expense (benefit)............. -- 824 (574) (514) 779
------- ------- -------- ------- --------
Income (loss) before
extraordinary item........... 721 670 (1,820) (778) 625
Extraordinary loss on early
extinguishment of debt, net of tax of
$0 in 1996 and $1,529 in 1997 (Note
9)..................................... -- 604 2,294 2,294 --
------- ------- -------- ------- --------
Net income (loss).............. $ 721 $ 66 $ (4,114) $(3,072) $ 625
======= ======= ======== ======= ========
</TABLE>

See accompanying notes to financial statements.

F-28
<PAGE> 100

WINDY HILL PET FOOD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CLASS A CLASS B PREFERRED RETAINED
COMMON STOCK COMMON STOCK STOCK EARNINGS
MEMBERS' --------------- --------------- --------------- PAID-IN (ACCUMULATED
CAPITAL SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT) TOTAL
-------- ------ ------ ------ ------ ------ ------ ------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Members' capital contribution,
net of syndication costs of
$109........................ $5,891 -- $ -- -- $ -- -- $ -- $ -- $ -- $ 5,891
Net income.................... -- -- -- -- -- -- -- -- 721 721
------ ----- ----- --- ----- ----- ------ ------- ------- -------
Balance at December 30,
1995........................ 5,891 -- -- -- -- -- -- -- 721 6,612
Contribution of Windy Hill Pet
Food Company, LLC members'
capital to Windy Hill Pet
Food Holdings, Inc. (Note
1).......................... (5,891) 500 -- -- -- 3,750 3,750 2,141 -- --
Deferred tax liability
recognized.................. -- -- -- -- -- -- -- -- (1,013) (1,013)
Capital contribution from
Windy Hill Pet Food
Holdings, Inc., net of
syndication cost of $210.... -- 500 -- 301 -- -- -- 4,540 -- 4,540
Warrants issued (Note 16)..... -- -- -- -- -- -- -- 1,000 -- 1,000
Net income.................... -- -- -- -- -- -- -- -- 66 66
------ ----- ----- --- ----- ----- ------ ------- ------- -------
Balance at December 28,
1996........................ -- 1,000 -- 301 -- 3,750 3,750 7,681 (226) 11,205
Contribution, net of
syndication cost of $224.... -- 1,429 -- 240 -- -- -- 9,776 -- 9,776
Warrants exercised (Note
16)......................... -- 111 -- 28 -- 417 417 (833) -- (416)
Net loss...................... -- -- -- -- -- -- -- -- (4,114) (4,114)
------ ----- ----- --- ----- ----- ------ ------- ------- -------
Balance at December 27,
1997........................ -- 2,540 -- 569 -- 4,167 4,167 16,624 (4,340) 16,451
Net loss (unaudited).......... -- -- -- -- -- -- -- -- 625 625
------ ----- ----- --- ----- ----- ------ ------- ------- -------
Balance at June 27, 1998
(unaudited)................. $ -- 2,540 $ -- 569 $ -- 4,167 $4,167 $16,624 $(3,715) $17,076
====== ===== ===== === ===== ===== ====== ======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 101

WINDY HILL PET FOOD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTH
TEN MONTH YEARS ENDED PERIODS ENDED
PERIOD ENDED --------------------------- --------------------
DECEMBER 30, DECEMBER 28, DECEMBER 27, JUNE 28, JUNE 27,
1995 1996 1997 1997 1998
------------ ------------ ------------ --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................... $ 721 $ 66 $ (4,114) $ (3,072) $ 625
Adjustments to reconcile net income
(loss) to cash provided by
operating activities:
Depreciation and amortization..... 787 2,719 6,882 2,543 4,470
Interest expense -- non-current... -- 962 1,633 1,077 1,365
Deferred income taxes............. -- 824 2,582 5,809 923
Early extinguishment of debt, net
of tax.......................... -- 604 2,294 2,294 --
Gain on sale of fixed assets...... -- -- 4 -- --
Equity in earnings of joint
ventures........................ -- -- (377) (29) (485)
Operating advances from joint
ventures........................ -- -- 1,015 84 1,063
Change in assets and liabilities,
net of effects of businesses
acquired:
(Increase) decrease in accounts
receivable................... (960) (3,941) (4,650) 1,348 540
(Increase) decrease in
inventories.................. 352 (454) (1,726) (243) 2,123
Increase in prepaid expenses.... (34) (412) (50) 66 (960)
Increase (decrease) in accounts
payable...................... 847 6,250 313 (3,121) (1,390)
Increase (decrease) in accrued
liabilities.................. -- 1,063 4,436 17,150 2,262
-------- -------- --------- --------- --------
Net cash provided by
operating activities....... 1,713 7,681 8,242 23,906 10,537
-------- -------- --------- --------- --------
Cash flows from investing activities:
Additions to property, plant and
equipment......................... (1,120) (1,091) (4,175) (944) (3,700)
Change to other non-current assets
and liabilities................... (321) (357) (1,087) (2,534) (678)
Proceeds from sale of assets......... -- -- 51,704 49,889 --
Payment for acquisition of
businesses, net of cash
acquired.......................... (22,165) (56,768) (135,350) (138,528) (34,523)
-------- -------- --------- --------- --------
Net cash used in investing
activities................. (23,606) (58,216) (88,908) (92,117) (38,901)
-------- -------- --------- --------- --------
Cash flows from financing activities:
Proceeds from senior secured term and
revolving debt.................... 17,000 48,000 71,500 189,917 34,000
Proceeds from senior subordinated
notes............................. -- 8,500 120,000 -- --
Proceeds from PIK A promissory
notes............................. -- 3,750 -- -- --
Proceeds from convertible
subordinated promissory note...... -- 10,500 -- -- --
Repayment of borrowings.............. -- (21,450) (109,952) (109,952) (5,263)
Capital contributions................ 6,000 4,750 10,000 9,583
Debt issuance and syndication
costs............................. (780) (3,272) (10,721) (10,565) (41)
-------- -------- --------- --------- --------
Net cash provided by (used
in) financing activities... 22,220 50,778 80,827 78,983 28,696
-------- -------- --------- --------- --------
Increase (decrease) in cash and cash
equivalents.......................... 327 243 161 10,772 332
Cash and cash equivalents, beginning of
period............................... -- 327 570 570 731
-------- -------- --------- --------- --------
Cash and cash equivalents, end of
period............................... $ 327 $ 570 $ 731 $ 11,342 $ 1,063
======== ======== ========= ========= ========
Supplemental cash flow disclosure:
Cash paid for interest............... $ 1,179 $ 3,759 $ 6,660 $ 3,391 $ 3,757
Income taxes paid.................... -- -- 8,806 -- --
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 102

WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All information related to the six-month periods ended June 28, 1997 and
June 27, 1998 is unaudited.)

NOTE 1 -- THE COMPANY

Organization

Windy Hill Pet Food Holdings, Inc. ("Holdings"), a Delaware corporation, is
a private holding company formed in April 1996 to invest in pet food processing
operations. Holdings owns 100% of its indirect subsidiary, Windy Hill Pet Food
Company, Inc. (the "Company"), which is a Minnesota corporation. The Company
commenced operations March 1, 1995, under its previous ownership structure as
Windy Hill Pet Food Company, L.L.C. ("LLC"). In connection with the Company's
acquisition of certain brands from Heinz Pet Products ("Heinz") in April 1996,
as further described in Note 3, LLC's net assets were contributed at net book
value to Holdings.

On May 21, 1997, Windy Hill Pet Food Acquisition Co., a newly formed
indirect subsidiary of Holdings, merged with and into Hubbard Milling Company
("Hubbard"), and Windy Hill Pet Food Company, Inc. ("Old Windy Hill") purchased
all of the stock of Armour Corporation. Concurrently, Hubbard, the surviving
corporation in the merger, was renamed Windy Hill Pet Food Company, Inc., and
Holdings transferred all of the operating assets and liabilities of Old Windy
Hill to the Company (Note 3). The Company was capitalized with a senior secured
term debt facility and senior subordinated notes (Note 9).

Operations

The Company manufactures and sells dog and cat food products and treats,
which are sold throughout the United States. The products are manufactured out
of thirteen plants, nine of which are wholly-owned and four of which are managed
under joint venture agreements in which the Company owns a 50% equity interest.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

The policies utilized by Holdings in the preparation of the consolidated
financial statements conform to generally accepted accounting principles and
require management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses and the disclosure of
contingent assets and liabilities. Actual amounts could differ from these
estimates and assumptions. The accompanying consolidated financial statements
include the accounts of Holdings and its subsidiaries. All significant
intercompany balances have been eliminated in consolidation.

Fiscal Year

Holdings' fiscal year ends on the last Saturday of December. Certain prior
year amounts have been reclassified to conform to the current year's
presentation.

Cash and Cash Equivalents

Holdings considers all highly liquid financial instruments with a maturity
of three months or less to be cash equivalents.

Inventories

Inventories are stated at the lower of cost or market value. Cost is
determined using the first-in first-out (FIFO) method. Inventories include the
cost of raw materials, packaging, labor and manufacturing overhead.

F-31
<PAGE> 103
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the individual assets ranging from four to thirty
years. Costs which improve an asset or extend its useful life are capitalized,
while repairs and maintenance costs are expensed as incurred. Leasehold
improvements are amortized over the estimated useful life of the property or
over the terms of the leases, whichever is shorter.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets include goodwill, trademarks and
certain identifiable intangible assets. Trademarks and goodwill are being
amortized over thirty and forty years using the straight-line method,
respectively. Other intangible assets (primarily software) are being amortized
using the straight-line method over periods ranging from four to five years. The
Company's policy is to periodically evaluate such costs to determine whether
there has been any impairment. The measurement of possible impairment is based
primarily on the ability to recover the balance of the goodwill from expected
future operating cash flows on an undiscounted basis. Amortization of goodwill
and other intangible assets charged against income during the ten-month period
ended December 30, 1995, the years ended December 28, 1996 and December 27, 1997
and for the unaudited six-month periods ended June 28, 1997 and June 27, 1998
was $0.3 million, $1.1 million, $2.9 million, $0.8 million and $1.8 million,
respectively.

Impairment of Long-Lived Assets

Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
establishes the accounting and reporting requirements for recognizing and
measuring impairment of long-lived assets to be either held and used or held for
disposal. Holdings has evaluated the carrying value for evidence of impairment,
and management believes at December 27, 1997, there were no indications of
impairment.

Holdings assesses the recoverability of long-lived assets by determining
whether the recorded balance over its remaining life can be recovered through
undiscounted future operating cash flows of the acquired operation. The amount
of impairment, if any, is measured based upon projected discounted future
operating cash flows using a discount rate reflecting the Company's average cost
of funds. The assessment of the recoverability of the asset will be impacted if
estimated future operating cash flows are not achieved.

Other Assets

Other assets consist of debt issuance costs, packaging design costs, and
other miscellaneous assets. Debt issuance costs of the senior subordinated notes
are being amortized using the interest method over the term of the respective
notes. Debt issuance costs of the senior secured debt are being amortized using
the straight-line method over the terms of the related debt. Aggregate
amortization of debt issuance costs and other assets charged against income in
the ten-month period ended December 30, 1995, the years ended December 28, 1996
and December 27, 1997, and the unaudited six-month periods ended June 28, 1997
and June 27, 1998 was $67,000, $259,000, $715,000, $154,000, and $486,000,
respectively. Amortization of packaging design costs charged against income was
$158,000, $205,000, $283,000, $120,000 and $230,000, for the same periods
respectively.

Disclosure About Fair Value of Financial Instruments

For purposes of financial reporting, Holdings has determined that the fair
value of its financial instruments approximates book value at December 28, 1996,
December 27, 1997, and June 27, 1998 (unaudited) based on terms currently
available to the Company in financial markets for similar instruments.

F-32
<PAGE> 104
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Concentration of Credit Risk

The Company sells its products to supermarkets, wholesalers and other
retailers. The Company performs ongoing credit evaluations of its customers and
generally does not require collateral. The Company maintains reserves for
potential credit losses and had no significant concentration of credit risk at
December 28, 1996, December 27, 1997, and June 27, 1998 (unaudited).

Income Taxes

Holdings records income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. This method of accounting for income taxes uses an asset and liability
approach which requires the recognition of deferred tax liabilities and assets
for the expected future tax consequences of temporary differences between he
carrying amounts and the tax bases of assets and liabilities.

NOTE 3 -- BUSINESS ACQUISITIONS

On April 29, 1996, the Company acquired substantially all of the assets and
assumed certain liabilities of the Kozy Kitten(R) and Tuffy's(R) dry pet food
brands (the "Heinz Business") from Heinz Pet Products ("Heinz"), a division of
Heinz, Inc. The purchase price was $52.5 million, which included a contractually
agreed upon amount of working capital (as defined in the agreement). In
conjunction with the acquisition, the Company and Heinz entered into a
royalty-free licensing agreement, which entitles the Company to use the Kozy
Kitten trademark and trade name for dry cat food until April 29, 2006. The
Trademark License and Option Agreement gives the Company the irrevocable right
to purchase the trademark and trade name from Heinz no earlier than April 29,
2001 and no later than April 29, 2006 for a cash payment of $2.5 million. The
acquired assets also included a manufacturing facility in Perham, Minnesota. The
acquisition was accounted for using the purchase method of accounting and the
results of operations have been included since the date of acquisition.

In order to effect the Heinz Business acquisition and to refinance the
$17.0 million of existing debt of LLC at April 29, 1996, the Company entered
into a series of financings, as further described in Note 9. The financings
included (i) a capital contribution of $19.8 million from Holdings, (ii) senior
secured term debt of $43.0 million and a senior secured revolving debt facility
of $9.0 million, and (iii) issuance of a senior subordinated note in the amount
of $8.5 million.

The purchase price of the acquired Heinz Business has been allocated to
tangible and intangible assets as follows (dollars in thousands):

<TABLE>
<S> <C>
Cash paid to acquire assets................................. $ 52,500
Other acquisition costs..................................... 4,257
--------
56,757
Cost assigned to net tangible assets........................ (19,282)
--------
Cost assigned to intangible assets.......................... $ 37,475
========
</TABLE>

Concurrent with the 1996 purchase of assets, the Company and Heinz entered
into a five year co-packing agreement in which the Company will manufacture
certain pet food products for Heinz. The agreement requires Heinz to meet a
minimum supply amount at a co-packing rate which covers the variable costs of
the pet food products as well as an amount to cover a specified rate of fixed
costs at the Perham facility where the products are manufactured.

On May 21, 1997, Windy Hill Pet Food Acquisition Co. merged with and into
Hubbard, and Old Windy Hill purchased all of the capital stock of Armour
Corporation, a holding company which prior to the closing of

F-33
<PAGE> 105
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the transaction owned 5% of the capital stock of Hubbard and after the
consummation of the transaction owned 39% of the capital stock of Hubbard.
Concurrently, Hubbard, the surviving corporation in the merger, was renamed
Windy Hill Pet Food Company, Inc., and Old Windy Hill transferred all the
operating assets and liabilities, including $27.0 million of equity and $51.0
million of indebtedness (the "Existing Indebtedness") of Old Windy Hill to the
Company. The net combined purchase price of Hubbard and the Armour Corporation
stock was approximately $131.1 million (net of cash acquired). For financial
reporting purposes, these transactions were accounted for as a purchase of
Hubbard by Old Windy Hill and the results of operations of Hubbard have been
included since the date of acquisition. The allocation of the purchase price has
been finalized.

The acquisition and the repayment of Existing Indebtedness was financed
with (i) a $9.8 million net capital contribution from Holdings, (ii) term debt
of $20.0 million and revolving debt of $45.0 million under a $65.0 million
senior secured debt facility, and (iii) proceeds from the issuance of $120.0
million of senior subordinated notes. Immediately following the merger, the
Company sold its animal feed business to Feed-Rite (US) Animal Feeds, Inc., a
subsidiary of the Ridley Group. The net after tax proceeds, subject to certain
adjustments, were approximately $50.0 million. The net proceeds were used to
repay $5.0 million of the senior secured term debt and $45.0 million of net
senior secured revolving debt facility.

The purchase price of the acquisitions have been allocated to tangible and
intangible assets as follows (in thousands):

<TABLE>
<CAPTION>
HUBBARD
--------
<S> <C>
Cash paid to acquire business, net of cash acquired......... $131,052
Other acquisition costs..................................... 5,438
--------
136,490
Cost assigned to net tangible assets and assets held for
sale...................................................... (86,305)
--------
Cost assigned to intangible assets.......................... $ 50,185
========
</TABLE>

The unaudited pro forma information below has been prepared assuming the
businesses were acquired December 31, 1995 (dollars in thousands):

<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
DECEMBER 27, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
Net sales.......................................... $208,100 $216,709
======== ========
Income before taxes and extraordinary item......... 882 4,465
======== ========
Net income......................................... $ (1,625) $ 2,679
======== ========
</TABLE>

These pro forma results have been prepared for comparative purposes only
and do not purport to be indicative of the results of operations which would
have resulted had the acquisitions occurred on the date indicated. The pro forma
results reflect certain adjustments for amortization, interest expense, fixed
overhead and general and administrative expenses.

F-34
<PAGE> 106
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- INVENTORIES

Inventories consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials............................ $ 1,253 $ 3,004 $ 3,787
Packaging supplies....................... 2,339 5,536 8,230
Finished goods........................... 1,549 4,772 4,597
------- ------- -------
$ 5,141 $13,312 $16,614
======= ======= =======
</TABLE>

At December 27, 1997, the Company had commitments to purchase raw materials
aggregating approximately $13.2 million.

NOTE 5 -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (dollars in
thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Land.......................................... $ 203 $ 2,663 $ 2,968
Machinery and equipment....................... 17,043 42,882 56,393
Buildings and improvements.................... 6,266 16,328 19,781
Furniture and fixtures........................ 238 1,390 1,517
Computer equipment............................ 70 127 155
Construction-in-progress...................... 11 1,626 5,098
------- ------- -------
23,831 65,016 85,912
Less accumulated depreciation............... 1,347 4,242 (6,636)
------- ------- -------
$22,484 $60,774 $79,276
======= ======= =======
</TABLE>

At December 27, 1997, the Company had commitments for facility construction
and related machinery and equipment purchases aggregating approximately
$332,000.

NOTE 6 -- INVESTMENTS IN JOINT VENTURES

The Company has a 50% equity interest in each of four manufacturing joint
ventures with each of the following joint venture partners, none of which are
affiliates of the Company or Holdings: Merrick PetFoods, Inc., MFA, Inc., J.R.
Simplot Company, and Flint River Mills, Inc. See Note 3. The Company accounts
for the joint ventures using the equity method of accounting.

F-35
<PAGE> 107
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7 -- GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consist of the following (dollars in
thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Goodwill...................................... $ 7,588 $ 35,122 $ 46,948
Trademarks.................................... 45,000 66,807 66,807
Other intangibles............................. 332 852 852
------- -------- --------
52,920 102,781 114,607
Less accumulated amortization............... 1,405 4,316 6,037
------- -------- --------
$51,515 $ 98,465 $108,570
======= ======== ========
</TABLE>

NOTE 8 -- OTHER ASSETS

Other assets consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Debt issuance costs........................... $2,978 $10,464 $10,464
Defined benefit pension plan asset............ -- 2,474 2,923
Packaging, plate cost and other costs......... 1,059 1,899 4,171
------ ------- -------
4,037 14,837 17,558
Less accumulated amortization............... 606 1,225 1,941
------ ------- -------
$3,431 $13,612 $15,617
====== ======= =======
</TABLE>

F-36
<PAGE> 108
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- LONG TERM DEBT

Long term debt consists of the following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
SENIOR SECURED DEBT
Senior secured tranche A-1 debt; interest rate of
8.29% at December 28, 1996.......................... $27,550 $ -- $ --
Senior secured tranche A-2 debt; interest rate of
8.29% at December 28, 1996.......................... 14,000 -- --
Senior secured revolving debt facility -- interest
rate of 8.37% at December 28, 1996.................. 2,000 -- --
Senior secured term debt -- interest rate of 8.38% at
December 27, 1997; principal due in quarterly
installments through November 21, 2003; floating
interest rate at the prime rate plus 1.5% or,
alternatively, the one, three or six month
Eurodollar rate plus 2.5% payable quarterly at the
termination of the Eurodollar contract period....... -- 15,000 46,160
Senior secured revolving debt facility -- interest
rate of 10.0% at December 27, 1997; principal due
November 21, 2003; floating interest rate at the
prime rate plus 1.50% or alternatively, the one,
three, or six month Eurodollar rate plus 2.50%;
payable quarterly or at the termination of the
Eurodollar contract period.......................... -- 2,000 --
SENIOR SUBORDINATED NOTES
Senior subordinated note issued April 29, 1996; coupon
interest rate of 12.0% with interest payable
quarterly; net of original issue discount of
$949,000............................................ 7,551 -- --
Senior subordinated notes issued May 15, 1997 at par
value of $120,000; coupon interest rate of 9.75%
with interest payable each May 15 and November 15;
matures on May 15, 2007............................. -- 120,000 120,000
PROMISSORY NOTES
PIK A promissory notes issued April 29, 1996; coupon
interest rate of (i) 10% per annum through April 29,
2003 and (ii) interest payable at 12.0% per annum
from April 30, 2003 through December 31, 2005;
compounded semi-annually with interest payable
annually beginning April 29, 2004; matures on
December 31, 2005, with original principal and
accrued interest through April 29, 2003............. 3,750 3,750 3,750
PIK A-1 promissory note issued May 21, 1997, effective
April 29, 1996; coupon interest rate of (i) 10% per
annum through April 29, 2003 and (ii) interest
payable at 12.0% per annum from April 30, 2003
through December 31, 2005; compounded semi-annually
with interest payable annually beginning April 29,
2004; matures on December 31, 2005, with original
principal and accrued interest through April 29,
2003................................................ -- 417 417
</TABLE>

F-37
<PAGE> 109
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27, JUNE 27,
1996 1997 1998
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Convertible subordinated promissory note issued April
29, 1996; coupon interest rate of (i) 10% per annum
through April 29, 2003 and (ii) interest payable at
12.0% per annum from April 30, 2003 through April
29, 2006; compounded semi-annually with interest
payable annually beginning April 29, 2004; matures
on April 29, 2006, with original principal and
accrued interest through April 29, 2003............. 10,500 10,500 10,500
------- -------- --------
65,351 151,667 180,827
Less: current portion of senior secured debt.......... 5,800 1,312 1,937
current portion of senior secured revolving debt
facility........................................ 2,000 2,000 --
------- -------- --------
Long term debt........................................ $57,551 $148,355 $178,890
======= ======== ========
</TABLE>

Annual principal payments for the next five years and thereafter consist of
the following (dollars in thousands):

<TABLE>
<CAPTION>
DECEMBER 27,
1997
------------
<S> <C>
1998........................................................ $ 3,312
1999........................................................ 1,781
2000........................................................ 2,156
2001........................................................ 2,531
2002........................................................ 2,906
Thereafter.................................................. 138,981
--------
$151,667
========
</TABLE>

Senior Secured Debt

Old Windy Hill and Holdings entered into a Credit and Guarantee Agreement,
dated April 29, 1996 (the "Agreement"), with several banks for $43.0 million of
senior secured term debt and a senior secured revolving debt facility. The
proceeds from the debt were used to acquire certain assets and brands from
Heinz, pay fees and expenses and fund working capital. The debt was guaranteed
by Holdings and Old Windy Hill. The Agreement contained optional prepayment
provisions with no premium. Substantially all of the assets of Old Windy Hill
were pledged as collateral for the debt.

The Agreement included $9.0 million of available borrowing under a senior
secured revolving debt facility, of which $2.5 million was reserved to support
the Trademark License and Option Agreement (Note 3). The available borrowings
were also subject to limitations related to aggregate inventory and accounts
receivable levels. The Agreement required a commitment fee of 0.50% per annum
payable quarterly on the unused portions of the revolving debt facility.

In conjunction with the acquisition of Hubbard, the Company entered into a
Credit Agreement, dated May 21, 1997 (the "Credit Agreement"), among Windy Hill
Pet Food Acquisition Co., Credit Suisse First Boston, The Chase Manhattan Bank
and the several banks and other financial institutions parties thereto, which
provided the Company with senior secured debt facilities (the "Senior Bank
Facilities") in the aggregate principal amount of $85.0 million. The proceeds
from the Senior Bank Facilities and the $120.0 million senior subordinated notes
were used to retire the senior secured term debt and the senior secured
revolving debt facility under the Agreement.

F-38
<PAGE> 110
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Senior Bank Facilities consist of (i) a senior secured term loan
facility providing for term loans to the Company in a principal amount of $20.0
million (the "Term Loan Facility"), (ii) an acquisition debt facility (the
"Acquisition Facility") providing revolving loans to the Company for permitted
acquisitions in a principal amount of $45.0 million, and (iii) a working capital
revolving debt facility providing for revolving loans to the Company and the
issuance of letters of credit for the account of the Company as well as swing
line loans in an aggregate principal amount of $20.0 million. The senior secured
working capital debt facility is subject to a commitment fee of 0.5% per annum
payable quarterly on the unused portions of the facility.

As a result of the Hubbard and Heinz acquisitions, the Existing
Indebtedness and the $17.0 million of existing debt of LLC were refinanced and
in conjunction with the retirement of those debt facilities, $604,000 (together
with unamortized note discounts and other charges totaling $1.2 million in
fiscal 1997) and $2.6 million of debt issuance costs were written off as
extraordinary items in the statements of operations for the years ended December
28, 1996 and December 27, 1997, respectively. The effective tax rate was applied
to the write-off for the year ended December 27, 1997, while no income tax
effect was reflected to the write-off for the year ended December 28, 1996, as
the write-off was attributable to the members of LLC.

The Credit Agreement includes restrictive covenants, which limit
borrowings, cash dividends, and capital expenditures, while also requiring the
Company to maintain certain financial ratios. The Company was in compliance with
these covenants at December 27, 1997.

Senior Subordinated Notes

On April 29, 1996, Old Windy Hill issued a senior subordinated note (the
"Old Note") in the amount of $8.5 million to a bank. The Old Note could be
prepaid at any time, subject to a prepayment penalty of 4% in the first year, 3%
in the second year, 2% in the third year, and 1% in the fourth year, and no
prepayment penalty thereafter.

The Old Note included a provision for warrants for 10% of the stock of
Holdings with a nominal exercise price. The warrants were subject to
anti-dilution covenants. The warrants would have expired the later of ten years
from the date of issuance or four years after the Old Note has been repaid. The
warrants were freely assignable and detachable. The holder of the Old Note also
had the right to "put" the warrants or stock to Holdings, beginning after the
earlier of five years from the closing, a sale or merger of the Company, or an
event of default on the Old Note. The value assigned to the warrants as of the
issuance date was $1.0 million and was recorded at Holdings and contributed to
Old Windy Hill as paid in capital. The capital contribution was recorded by Old
Windy Hill with a corresponding discount to the value of the Old Note. The
discount was being amortized over eight years, or the life of the Old Note.
Accumulated amortization as of December 28, 1996 was $51,000. In conjunction
with the acquisition of Hubbard, the holder of the Old Note exercised its
warrants for common and preferred stock of Holdings and a note due from Holdings
for $416,667.

In conjunction with the acquisition of Hubbard on May 21, 1997, the Company
issued $120.0 million of senior subordinated notes (the New Notes). The proceeds
from the New Notes, along with the proceeds from the Senior Bank Facilities and
a capital contribution from Holdings (Note 3), were used to (i) retire the
senior secured term debt and the senior secured revolving debt facility financed
under the Agreement, (ii) retire the Old Note and (iii) acquire Hubbard. In
connection with the retirement of the Old Note, $606,000 of debt issuance costs
were written off as an extraordinary item in the statement of operations for the
year ended December 27, 1997. The effective tax rate was applied to the
extraordinary item.

The Company may redeem the New Notes at any time after May 15, 2002, at the
redemption price together with accrued and unpaid interest. In addition, the
Company may redeem up to $42.0 million of the New Notes at any time prior to May
15, 2002, subject to certain requirements, with the cash proceeds received from
one or more equity offerings (as defined), at a redemption price of 109.750%
together with accrued and unpaid interest. Upon a change of control (as
defined), the Company has an option at any time

F-39
<PAGE> 111
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

prior to May 15, 2002, to redeem the New Notes at a redemption price of 100%
plus the applicable premium (as defined), together with accrued and unpaid
interest. If the Company does not redeem the New Notes or if the change of
control occurs after May 15, 2002, the Company is required to offer to
repurchase the New Notes at a price equal to 101% together with accrued and
unpaid interest.

The New Notes include restrictive covenants, which limit additional
borrowings, cash dividends, sale of assets, mergers and the sale of stock. The
Company was in compliance with these covenants at December 27, 1997.

PIK A Promissory Notes

On April 29, 1996, Holdings issued $3,750,000 in PIK A promissory notes
("PIK A Notes") to shareholders of Holdings. The PIK A Notes can be prepaid at
any time without penalty. The PIK A Notes include restrictive covenants, which
limit cash dividends and distributions.

PIK A-1 Promissory Note

On May 21, 1997, in conjunction with the exercise of the warrants by the
holder of the Old Note, Holdings issued a $416,667 PIK A-1 Note ("PIK A-1
Note"). The PIK A-1 Note can be prepaid at any time without penalty. The PIK A-1
Note includes restrictive covenants, which limit cash dividends and
distributions.

Convertible Subordinated Promissory Note

On April 29, 1996, Holdings issued a $10.5 million convertible subordinated
promissory note ("Promissory Note") to Heinz. The Promissory Note can be prepaid
at any time without penalty. The Promissory Note includes restrictive covenants,
which limit cash dividends and distributions.

Interest Rate Hedge Agreements

The Company uses interest rate collar agreements (the "Agreements") to
reduce the impact of changes in interest rates on its floating rate term debt.
Premiums paid for such Agreements are being amortized to debt issuance costs
over the terms of the Agreements. Unamortized premiums are included in other
assets in the balance sheets. Amounts to be paid or received, if any, under the
Agreements are recognized as an increase or decrease, respectively, in interest
expense. The counterparty to the Company's Agreements is a major financial
institution.

The current effective cap rate is set at 7.50% (plus the applicable
margin). The effective floor rate is set at 5.50% (plus the applicable margin).
The notional principal under the Agreements is $25.0 million. As of December 28,
1996, and December 27, 1997, the Company had total variable rate debt
outstanding in the amount of $43.6 million and $17.0 million, respectively. The
aggregate premiums paid for the Agreements was $103,000.

Under the Agreements, the Company would receive payments from the
counterparty if the three-month LIBOR rate exceeds the cap rate and make payment
to the counterparties if the three-month LIBOR rate falls below the floor rates.
The payments would be calculated based upon the respective notional principal
amount. During fiscal 1996 and 1997 the Company made no payments under the
Agreements. At December 27, 1997, the three-month LIBOR rate was 5.91%.

Risk associated with the Agreements include those associated with changes
in market value and interest rates. At December 27, 1997, the fair value of the
Company's interest rate collars was immaterial and management considers the
potential loss in future earnings and cash flows attributable to such Agreements
to be immaterial.

F-40
<PAGE> 112
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10 -- TRANSITION RELATED COSTS

Transition related expenses represent one time costs incurred to integrate
the Hubbard acquisition. These costs include transitional employee compensation,
relocation expenses, recruiting fees, training costs, system conversion costs
and other unique transitional expenses. Transition related costs for the year
ended December 27, 1997 were approximately $1.6 million.

NOTE 11 -- INCOME TAXES

Holdings files a federal income tax return on a consolidated basis with its
wholly-owned subsidiaries. State income tax returns are filed by Holdings and
the Company on a separate company basis or on a combined basis depending on the
particular laws in each state. Holdings' income tax provision is computed as if
all income tax returns were filed on a consolidated basis.

The income tax expense (benefit) is summarized as follows (dollars in
thousands):

<TABLE>
<CAPTION>
TEN MONTH YEARS ENDED
PERIOD ENDED ---------------------------
DECEMBER 30, DECEMBER 28, DECEMBER 27,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Current tax expense:
Federal.......................................... $ -- $ -- $ 7,763
State............................................ -- -- 1,443
---- ---- -------
Total current provision.................. -- -- 9,206
---- ---- -------
Deferred tax expense (benefit):
Federal.......................................... -- 641 (8,249)
State............................................ -- 183 (1,531)
---- ---- -------
Total deferred expense (benefit)......... -- 824 (9,780)
---- ---- -------
Total income tax expense (benefit)....... $ -- $824 $ (574)
==== ==== =======
</TABLE>

Holdings' tax provision in 1997 reflects taxes paid on the gain for tax
purposes on the sale of the animal feed business as well as the recognition of a
$12.3 million reduction in deferred taxes established for the gain at the time
of the acquisition of Hubbard.

F-41
<PAGE> 113
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred tax assets and liabilities consist of the following (dollars in
thousands):

<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27,
1996 1997
------------ ------------
<S> <C> <C>
Deferred tax assets -- current:
Post-retirement benefits.................................. $ -- $ 1,006
Accrued expenses.......................................... -- 502
Package design costs...................................... -- 323
Other..................................................... 30 504
------- --------
Total deferred tax assets -- current.............. 30 2,335
------- --------
Deferred tax assets -- non-current:
Loss carryforwards........................................ 1,078 --
State taxes............................................... -- 666
------- --------
Total deferred tax assets -- non-current.......... 1,078 666
------- --------
Deferred tax liabilities -- non-current:
Depreciation.............................................. (202) (7,805)
Goodwill.................................................. (2,743) (4,144)
Prepaid pension........................................... -- (981)
Other..................................................... -- (126)
------- --------
Total deferred tax liabilities -- non-current..... (2,945) (13,056)
------- --------
Net deferred tax liability........................ $(1,837) $(10,055)
======= ========
</TABLE>

Holdings has not recorded a valuation allowance for its deferred tax
assets. Management believes that Holdings' deferred tax assets are more likely
than not to be realized.

The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory federal income tax rate to
pretax income as a result of the following differences (dollars in thousands):

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------
DECEMBER 28, DECEMBER 27,
1996 1997
------------ ------------
<S> <C> <C>
(Benefit) provision for income taxes at U.S.
statutory rate..................................... $638 $(814)
(Decrease) increase in tax resulting from:
Nondeductible expenses............................. 65 314
State taxes, net of federal benefit................ 121 (74)
---- -----
$824 $(574)
==== =====
</TABLE>

NOTE 12 -- LEASES

The Company leases certain facilities, machinery and equipment under
operating lease agreements with varying terms and conditions. The leases are
noncancellable operating leases which expire on various dates through 2012.

F-42
<PAGE> 114
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Future annual minimum lease payments under these leases at December 27,
1997 are summarized as follows (dollars in thousands):

<TABLE>
<S> <C>
1998........................................................ $ 890
1999........................................................ 850
2000........................................................ 748
2001........................................................ 607
2002........................................................ 604
Thereafter.................................................. 2,037
------
$5,736
======
</TABLE>

Rent expense was $159,000, $248,000, $669,000, $160,000, and $412,000 for
the ten-month period ended December 30, 1995, the years ended December 28, 1996
and December 27, 1997, and for the unaudited six-month periods ended June 28,
1997 and June 27, 1998, respectively.

NOTE 13 -- SAVINGS AND BENEFIT PLANS

The Company maintains a defined contribution plan for all employees with
eligibility conditioned upon full time employment. The Company makes annual
contributions based upon a percent of the employee's annual taxable wages.
Vesting in the plan is according to a graduated scale of one third per year with
full vesting at the end of the third year of employment. The employer
contribution for the ten month period ended December 30, 1995, the years ended
December 28, 1996 and December 27, 1997, and the unaudited six-month periods
ended June 28, 1997 and June 27, 1998 was $72,000, $206,000 and $369,000, $0,
and $0, respectively. Eligible employees are also given the opportunity to make
their own contributions to the plan on a tax deferred basis.

Employee Benefit Plans

In connection with the acquisition of Hubbard, the Company succeeded in
interest to two noncontributory, defined benefit pension plans covering hourly
and salaried employees. The following tables set forth the funded status of the
pension plans and the amount recognized in the Company's balance sheet as of
December 27, 1997 (dollars in thousands):

<TABLE>
<CAPTION>
HOURLY SALARIED
PLAN PLAN TOTAL
------- -------- -------
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested.............................................. $ 5,382 $ 9,739 $15,122
Nonvested........................................... 325 311 636
------- ------- -------
Accumulated benefit obligation.............. 5,707 10,050 15,758
Effect of projected future salary increases........... 1 939 940
------- ------- -------
Projected benefit obligation................ 5,708 10,989 16,698
Market value of plan assets........................... 5,894 15,323 21,217
------- ------- -------
Plan assets in excess of projected benefit
obligation................................ 186 4,334 4,519
Unrecognized net gain................................. (596) (1,449) (2,045)
------- ------- -------
(Pension liability) prepaid pension cost.... $ (410) $ 2,885 $ 2,474
======= ======= =======
</TABLE>

F-43
<PAGE> 115
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
HOURLY SALARIED
PLAN PLAN TOTAL
------- -------- -------
<S> <C> <C> <C>
The net periodic pension cost (benefit) components
were as follows for the year ended December 27, 1997
(dollars in thousands):
Service cost earned during the year................. $ 54 $ 148 $ 202
Interest cost on projected benefit obligation....... 277 531 808
Actual return on plan assets........................ (1,340) (2,775) (4,115)
Deferred gain....................................... 987 1,882 2,869
------- ------- -------
Pension (benefit)........................... $ (22) $ (214) $ (236)
======= ======= =======
</TABLE>

The principal actuarial assumptions used for December 27, 1997 were:

<TABLE>
<CAPTION>
HOURLY SALARIED
PLAN PLAN
------ --------
<S> <C> <C>
Discount rate............................................... 7.25% 7.25%
Long-term rate of compensation increase..................... 5.0% 5.0%
Long-term rate of return on plan assets..................... 8.0% 8.0%
</TABLE>

Other Benefits

In connection with the acquisition of Hubbard, the Company acquired a
retiree medical payment plan, which provides health care benefits for eligible
retired associates and their covered dependents and spouses. Employees must be
55 years or older with 10 years of service upon retirement to be eligible for
coverage under the current plan. Depending on the date of retirement, the
retiree must pay the premium cost associated with health care coverage. The plan
is not funded.

The accumulated post-retirement obligation included the following
components (dollars in thousands):

<TABLE>
<S> <C>
Retirees.................................................... $2,046
Eligible active plan participants........................... 114
Other active plan participants.............................. 672
------
Accumulated post-retirement benefit obligation.... 2,832
Unrecognized loss........................................... 318
------
Accrued post-retirement benefit obligation........ $2,514
======
</TABLE>

Under Statement of Financial Accounting Standards No. 106, Employers'
Accounting for Postretirement Benefits Other Than Pensions, postretirement
benefit expense included the following components (dollars in thousands):

<TABLE>
<S> <C>
Current service............................................. $ 27
Interest on accumulated benefits obligation................. 111
----
Total postretirement benefit expense.............. $138
====
</TABLE>

The discount rate used to determine the accumulated post-retirement benefit
obligation was 7.25%. The assumed health care cost trend rate used to measure
the obligation was 9.7% for 1997. A one-percentage point increase in the assumed
health care cost trend rate would have increased the 1997 accumulated post-
retirement obligation by $341,000.

F-44
<PAGE> 116
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14 -- RELATED PARTY TRANSACTIONS

The Company is party to an Amended and Restated Management Services
Agreement, dated as of May 2, 1997, with Dartford Partnership, L.L.C.
("Dartford") pursuant to which Dartford provides management oversight to the
Company. Management services provided by Dartford include, but are not limited
to, operations oversight, corporate and financial planning, identification of
possible acquisitions and advice on the financing thereof and definition and
development of business opportunities. In the ten-month period ended December
30, 1995, and the years ended December 28, 1996 and December 27, 1997, the
Company paid a total of $250,000, $458,000 and $807,000, respectively, in
management fees to Dartford, a member of LLC, who is also a shareholder of
Holdings. The annual management fee was $250,000 prior to the acquisition of the
Heinz Pet Food Brands, $500,000 prior to the merger of Old Windy Hill and
Hubbard, and $1.0 million after the merger of Old Windy Hill and Hubbard. The
terms of the Amended and Restated Management Services Agreement were negotiated
among the equity investors of Holdings.

In connection with the acquisitions of the Heinz pet food brands and
Hubbard, the Company paid to certain members of LLC and shareholders of
Holdings, who are also represented on the Board of Directors or officers of the
Company and beneficial owners, fees for services rendered in connection with the
acquisitions of Heinz pet food brands and Hubbard and related financing of
acquisitions. The aggregate amount paid to certain members of LLC and
shareholders of Holdings was $2.5 million and was funded by the proceeds of the
financings. Of this $2.5 million, $1.8 million was paid to Dartford and $0.7
million was paid to Bruckmann, Rosser, Sherrill & Co. The fee amounts were
negotiated among the equity investors of Holdings.

The Company paid certain members of LLC fees totaling $420,000 during the
ten-month period ended December 30, 1995 and $525,000 during the year ended
December 28, 1996. The fees were paid for services provided in identifying,
negotiating and consummating the Company's acquisitions. The fees were included
in the costs of the acquisitions.

NOTE 15 -- INCENTIVE COMPENSATION PLAN

The Windy Hill Pet Food Holdings, Inc. Stockholders Agreement
("Stockholders Agreement") dated as of April 29, 1996 and amended as of May 21,
1997, contains an incentive compensation arrangement (the "Incentive Plan") a
means by which certain key employees and other specifically designated persons
("Key Personnel") of the Company, and/or affiliated with the Company, may be
given an opportunity to benefit from the appreciation in value of the Company.
Under the Incentive Plan, Key Personnel were issued non-voting Class B Common
Stock of Holdings ("Class B Stock"), at a $.01 per share, as a means to
participate in the appreciation of the Company. The Class B Stock is subject to
vesting requirements based on terms of employment or other factors. A portion of
the vesting period was deemed achieved at date of issuance of the Class B Stock.

The holders of vested Class B Stock will be entitled to receive certain
payments or distributions based on the amounts paid or distributed to investors
in Holdings. In general, there will be no payments to holders of vested Class B
Stock until the Preferred Series A and B Stock of Holdings ("Preferred Stock")
and associated accrued and unpaid dividends on the Preferred Stock, and Class A
Common Stock of Holdings ("Class A Stock") have received their respective return
of capital. The type of payment will be cash or non-cash consideration,
depending on the type of distribution to the Holdings' investors. Shares of
Class B Stock are convertible into an equal number of shares of Class A Stock
once the Preferred Stock and Class A Stock have received their priority
distribution.

Based on management's assessment of the valuation of the Company at the
date of issuance of the Class B Stock, there was no excess value attributable to
the Class B stock and therefore, no accrual for compensation expense was
necessary.

F-45
<PAGE> 117
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 16 -- STOCKHOLDERS' EQUITY

On February 28, 1995, under Old Windy Hill's previous ownership structure,
LLC was initially capitalized with a capital contribution from its members in
the gross amount of $6.0 million. Offering costs associated with this capital
contribution were $109,000. In connection with the acquisition of the Heinz
Business (Note 3), LLC contributed its capital in the net amount of $5.9 million
to Holdings. In exchange for the net capital contribution, LLC was issued Series
B preferred stock and 500 shares of Class A common stock.

On April 29, 1996, Holdings was capitalized with LLC's net capital
contribution and an additional capital contribution from its shareholders in the
gross amount of approximately $4.8 million. Offering costs associated with this
capital contribution were $210,000. The aggregate equity capital along with the
PIK A Notes and the Promissory Note were contributed to the Company and used to
fund the Company's acquisition of certain assets from Heinz.

On May 21, 1997, the shareholders of Holdings contributed an additional
gross capital contribution of $10.0 million. Offering costs associated with this
capital contribution were $224,000. In connection with the acquisition of
Hubbard (Note 3), Holdings contributed its additional capital in the net amount
of approximately $9.8 million to the Company. In exchange for the net capital
contribution, the shareholders were issued 1,428.6 shares of Class A common
stock.

Preferred Stock

Each holder of preferred stock is entitled to a cumulative 10% annual stock
dividend on the stated value through April 29, 2003. Thereafter, each holder is
entitled to a cumulative 12% annual return on the stated value. Each share of
preferred stock (i) is not entitled to vote, with few exceptions, (ii) can be
redeemed at the option of Holdings, and (iii) possess anti-dilution privileges.
The stock dividend is payable upon the Board of Directors' approval and payment
is also restricted by the Credit Agreement. In addition, when the holder of the
Old Note exercised its warrants, the holder was issued 416.667 shares of Series
B preferred stock of Holdings. The Company also has authorized 45,000 shares of
Series A preferred stock with no shares issued.

Common Stock

In addition to the Company's issued and outstanding Class A common stock,
the Company has also authorized 2,000 shares of Class B common stock, with 569
shares issued and outstanding. Under the securities purchase agreements dated
April 29, 1996 and May 21, 1997, certain officers and Dartford were issued Class
B common stock, par value $0.01 per share. In addition, when the holder of the
Old Note exercised its stock warrants, the holder was issued 111.11 shares of
Class A common stock of Holdings and 27.77 shares of Class B common stock of
Holdings.

Warrants

On April 28, 1996, warrants were issued to a bank affiliate (Note 9), which
entitled the holder to purchase up to 10% of the stock of Holdings at a nominal
exercise price. The holder of the warrants was also the holder of the Old Note.
The warrants were subject to anti-dilution covenants. The warrants expired the
later of ten years from closing or four years after the Old Note was repaid. The
holder of the warrants also had the right to "put" the warrants or stock to
Holdings at a price as specified in the agreement, beginning after the earlier
of five years from the closing, a sale or merger of the Company, or an event of
default on the Old Note.

On May 21, 1997, in conjunction with the merger of Hubbard and Old Windy
Hill and payment of the Old Note, the holder of the warrants exercised the
warrants in exchange for 416.667 shares of Series B preferred stock of Holdings,
111.11 shares of Class A common stock of Holdings, 27.77 shares of Class B
F-46
<PAGE> 118
WINDY HILL PET FOOD HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

common stock of Holdings and was issued a PIK A-1 Promissory Note of Holdings in
the principal amount of $416,667.

NOTE 17 -- COMMITMENTS AND CONTINGENCIES

The Company is subject to litigation in the ordinary course of business. In
the opinion of management, the ultimate outcome of any existing litigation will
not have a material adverse effect on the Company's financial condition or
results of operations.

NOTE 18 -- SUBSEQUENT EVENT (UNAUDITED)

On February 23, 1998, the Company acquired all of the assets of the pet
food division (the "AGP Business") of Consolidated Nutrition, L.C. The assets
acquired by the Company include four plants located in the states of Alabama,
Kansas, Missouri and Nebraska. The Company intends to use the acquired assets to
produce its current products. The purchase price was approximately $12.4
million. The acquisition was accounted for using the purchase method of
accounting. The Company financed the acquisition of the AGP Business and related
costs with a $12.5 million borrowing under the terms of its Acquisition
Facility.

F-47
<PAGE> 119

================================================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS OR ANY OTHER PERSON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 3
Forward-looking Statements............ 9
Risk Factors.......................... 9
The Company........................... 16
Use of Proceeds....................... 17
Dividend Policy....................... 17
Dilution.............................. 18
Capitalization........................ 19
Unaudited Pro Forma Financial
Statements.......................... 20
Selected Consolidated Financial
Data................................ 29
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 31
Business.............................. 38
Management............................ 47
Certain Transactions.................. 55
Principal and Selling Stockholders.... 58
Description of Capital Stock.......... 60
Shares Eligible for Future Sale....... 63
Description of Senior Credit
Facility............................ 63
Description of Senior Subordinated
Notes............................... 64
Underwriting.......................... 67
Legal Matters......................... 69
Experts............................... 69
Available Information................. 70
Index to Financial Statements......... F-1
</TABLE>

------------------

UNTIL , 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

================================================================================

14,600,000 SHARES

[DOANE PET CARE ENTERPRISES LOGO]

DOANE PET CARE
ENTERPRISES, INC.

COMMON STOCK

------------------------
PROSPECTUS
------------------------

DONALDSON, LUFKIN & JENRETTE
MERRILL LYNCH & CO.
SCHRODER & CO. INC.
CHASE SECURITIES INC.

, 1999

================================================================================
<PAGE> 120

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The expenses of the Offering are estimated to be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 67,850
NASD filing fee............................................. 23,500
Nasdaq National Market listing fee.......................... 95,000
Legal fees and expenses..................................... 600,000
Accounting fees and expenses................................ 225,000
Printing expenses........................................... 350,000
Transfer Agent fees......................................... 10,000
Miscellaneous............................................... 428,650
----------
TOTAL............................................. $1,800,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 145 of the Delaware General Corporation Law, a Delaware
corporation has the power, under specified circumstances, to indemnify its
directors, officers, employees and agents in connection with threatened, pending
or completed actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in right of the
corporation), brought against them by reason of the fact that they were or are
such directors, officers, employees or agents, against expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred in any
such action, suit or proceeding. Article Ten of the Amended and Restated
Certificate of Incorporation of the Registrant provides that the Registrant may
indemnify any director, officer, employee or agent of the Registrant to the
fullest extent permitted by the Delaware General Corporation Law as the same
exists or may be hereafter amended. Article VI of the Registrant's Amended and
Restated Bylaws provides that the Registrant shall indemnify each person who is
or was made a party to any actual or threatened civil, criminal, administrative
or investigative action, suit or proceeding because such person is or was an
officer or director of the Registrant or is a person who is or was serving at
the request of the Registrant as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service relating to employee benefit plans, to the fullest
extent permitted by the Delaware General Corporation Law as it existed at the
time the indemnification provisions of the Registrant's Amended and Restated
Bylaws were adopted or as may be thereafter amended.

Article VI of the Registrant's Amended and Restated Bylaws also provide
that the Registrant may maintain insurance, at its own expense, to protect
itself and any director, officer, employee or agent of the Registrant or of
another entity against any expense, liability, or loss, regardless of whether
the Registrant would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.

Section 102(b)(7) of the Delaware General Corporation Law provides that a
certificate of incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Eight of the Registrant's Amended and Restated Certificate of
Incorporation contains such a provision.

II-1
<PAGE> 121

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Pursuant to the 1996 Management Stock Purchase Plan and the 1997 Management
Stock Purchase Plan, 500,000 shares of Common Stock of the Company were sold for
$2.50 per share to certain key employees. The sales of such Common Stock were
deemed to be exempt from registration under Rule 701 of Regulation F under the
Securities Act. See "Management -- Stock Option and Stock Purchase Plans."

Pursuant to the 1996 Stock Option Plan, 543,672 shares of Common Stock have
been sold to certain employees as a result of the exercise of options, all at an
exercise price of $2.50 per share, including 298,000 shares purchased by Bob L.
Robinson and 200,000 shares purchased by Douglas J. Cahill. The sales of such
shares of Common Stock were deemed to be exempt from registration under the
Securities Act in reliance on Rule 701 of Regulation F thereof. See
"Management -- Stock Option Grants" and "-- Stock Option Exercises."

On August 3, 1998, the Company issued 6,366,168 shares of Common Stock to
certain stockholders of Windy Hill in connection with the Windy Hill
Acquisition. The issuances of such securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof as
transactions by an issuer not involving any public offering. In addition, the
recipients of the securities in such transactions represented their intentions
to acquire the securities for investment only and not with a view to or for sale
in connection with any distribution thereof and appropriate legends were affixed
to the share certificates issued in such transactions. To the Company's
knowledge, all recipients had adequate access, through their relationships with
the Company, to information about the Company.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
**1.1 -- Form of Underwriting Agreement
**3.1 -- Amended and Restated Certificate of Incorporation of
Doane Pet Care Enterprises, Inc.
**3.2 -- Amended and Restated Bylaws of Doane Pet Care
Enterprises, Inc.
**4.1 -- Specimen Common Stock certificate
**5.1 -- Opinion of Vinson & Elkins L.L.P.
**9.1 -- Amended and Restated Investors' Agreement dated as of
August 3, 1998 among Doane Pet Care Enterprises, Inc.,
Doane, Summit Capital Inc., Summit/DPC Partners, L.P.,
Chase Manhattan Investment Holdings, Inc., Baseball
Partners, DLJ Merchant Banking Partners, L.P., DLJ
International Partners, C.V., DLJ Offshore Partners,
C.V., DLJ Merchant Banking Funding, Inc., DLJ First Esc,
L.P., Dartford Partnership, L.L.C., Bruckmann, Rosser,
Sherrill & Co., L.P., PNC Capital Corp, Windy Hill Pet
Food Company, L.L.C. and certain other persons named
therein
9.2 -- First Amendment to First Amended and Restated Investors'
Agreement dated as of October 14, 1998 among Doane Pet
Care Company, Doane Pet Care Enterprises, Inc., Summit
Capital Inc., Summit/DPC Partners, L.P., Chase Manhattan
Investment Holdings, Inc., Baseball Partners, DLJ
Merchant Banking Partners, L.P., DLJ International
Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc., DLJ First Esc, L.P., Dartford
Partnership, L.L.C., Bruckmann, Rosser, Sherrill & Co.,
L.P., PNC Capital Corp, Windy Hill Pet Food Company,
L.L.C. and certain other persons named therein
(incorporated by reference to Exhibit 9.2 of Doane's
Registration Statement on Form S-4, Reg. No 333-70757
(the "Doane Form S-4")
</TABLE>

II-2
<PAGE> 122

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
**9.3 -- Second Amendment to First Amended and Restated Investors'
Agreement dated as of February 4, 1999 among Doane Pet
Care Company, Doane Pet Care Enterprises, Inc., Summit
Capital Inc., Summit/DPC Partners, L.P., Chase Manhattan
Investment Holdings, Inc., Baseball Partners, DLJ
Merchant Banking Partners, L.P., DLJ International
Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc., DLJ First Esc, L.P., Dartford
Partnership, L.L.C., Bruckmann, Rosser, Sherrill & Co.,
L.P., PNC Capital Corp, Windy Hill Pet Food Company,
L.L.C. and certain other persons named therein
**10.1 -- Early Retirement Agreement and Release effective as of
June 30, 1998 between Doane and Bob L. Robinson
10.2 -- Employment Agreement dated January 1, 1998, between Doane
and Douglas J. Cahill (incorporated by reference to
Exhibit 10.3 to the Annual Report of Doane on Form 10-K
for the year ended December 31, 1997 (the "Doane 1997
Form 10-K"))
10.3 -- Employment Agreement dated January 1, 1998, between Doane
and Thomas R. Heidenthal (incorporated by reference to
Exhibit 10.4 to the Doane 1997 Form 10-K)
10.4 -- Employment Agreement dated January 1, 1998, between Doane
and Richard D. Wohlschlaeger (incorporated by reference
to Exhibit 10.4 to the Doane Form S-4)
10.5 -- Employment Agreement dated January 1, 1998, between Doane
and Richard A. Hannasch (incorporated by reference to
Exhibit 10.5 to the Doane Form S-4)
10.6 -- Employment Agreement dated January 1, 1998, between Doane
and David L. Horton (incorporated by reference to Exhibit
10.6 to the Doane Form S-4)
10.7 -- Doane Pet Care Enterprises, Inc.'s 1996 Stock Option Plan
(incorporated by reference to Exhibit 10.7 to the Annual
Report on Form 10-K for the year ended December 31, 1996)
10.8 -- First Amendment to Doane Pet Care Enterprises, Inc.'s
1996 Stock Option Plan (incorporated by reference to
Exhibit 10.8 to the Doane 1997 Form 10-K)
10.9 -- Second Amendment to Doane Pet Care Enterprises, Inc.'s
1996 Stock Option Plan (incorporated by reference to
Exhibit 10.9 to the Doane 1997 Form 10-K)
**10.10 -- Doane Pet Care Enterprises, Inc.'s 1999 Stock Option Plan
10.11 -- Termination and Dissolution Agreement, dated March 25,
1998, between Flint River Mills, Inc. and Windy Hill Pet
Food Company, Inc. (incorporated by reference to the
Quarterly Report of Windy Hill Pet Food Company, Inc. on
Form 10-Q filed on May 12, 1998)
**10.12 -- Indenture, dated November 12, 1998 between Doane and
Wilmington Trust Company
**10.13 -- Revolving Credit and Term Loan Agreement dated as of
November 12, 1998 among Doane Pet Care Enterprises, Inc.,
Doane, DLJ Capital Funding, Inc., as syndication agent,
Mercantile Bank National Association, as documentation
agent, and The Chase Manhattan Bank, as administrative
agent, and the banks named therein
*10.14 -- Employment Agreement dated February 15, 1999, between
Doane and Philip K. Woodlief
**21.1 -- List of subsidiaries of Doane Pet Care Enterprises, Inc.
*23.1 -- Consent of KPMG LLP
**23.2 -- Consent of Vinson & Elkins L.L.P. (contained in Exhibit
5.1 hereto)
**24.1 -- Powers of Attorney
**27.1 -- Financial Data Schedule
</TABLE>

- ------------------------------

* Filed herewith.
** Previously filed.

(b) Consolidated Financial Statement Schedules, Years ended December 31,
1996, 1997 and 1998.

II-3
<PAGE> 123

All schedules are omitted because the required information is inapplicable
or the information is presented in the Consolidated Financial Statements or
related notes.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 124

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Houston, State of Texas, on the 17th day of March, 1999.

DOANE PET CARE ENTERPRISES, INC.

By /s/ THOMAS R. HEIDENTHAL
-----------------------------------
Thomas R. Heidenthal
Senior Vice President and
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>

* Chairman of the Board and Director March 17, 1999
- -----------------------------------------------------
George B. Kelly

* Chief Executive Officer, President March 17, 1999
- ----------------------------------------------------- and Director (Principal
Douglas J. Cahill Executive Officer)

/s/ THOMAS R. HEIDENTHAL Senior Vice President and Chief March 17, 1999
- ----------------------------------------------------- Financial Officer (Principal
Thomas R. Heidenthal Financial Officer and Principal
Accounting Officer)

* Director March 17, 1999
- -----------------------------------------------------
Peter T. Grauer

* Director March 17, 1999
- -----------------------------------------------------
M. Walid Mansur

Director March 17, 1999
- -----------------------------------------------------
Bob L. Robinson

* Director March 17, 1999
- -----------------------------------------------------
Jeffrey C. Walker

* Director March 17, 1999
- -----------------------------------------------------
Ray Chung

* Director March 17, 1999
- -----------------------------------------------------
Stephen C. Sherrill

*By: /s/ THOMAS R. HEIDENTHAL
------------------------------------------------
Thomas R. Heidenthal,
as attorney-in-fact
Dated: March 17, 1999
</TABLE>

II-5
<PAGE> 125

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>

**1.1 -- Form of Underwriting Agreement
**3.1 -- Amended and Restated Certificate of Incorporation of
Doane Pet Care Enterprises, Inc.
**3.2 -- Amended and Restated Bylaws of Doane Pet Care
Enterprises, Inc.
**4.1 -- Specimen Common Stock certificate
**5.1 -- Opinion of Vinson & Elkins L.L.P.
**9.1 -- Amended and Restated Investors' Agreement dated as of
August 3, 1998 among Doane Pet Care Enterprises, Inc.,
Doane, Summit Capital Inc., Summit/DPC Partners, L.P.,
Chase Manhattan Investment Holdings, Inc., Baseball
Partners, DLJ Merchant Banking Partners, L.P., DLJ
International Partners, C.V., DLJ Offshore Partners,
C.V., DLJ Merchant Banking Funding, Inc., DLJ First Esc,
L.P., Dartford Partnership, L.L.C., Bruckmann, Rosser,
Sherrill & Co., L.P., PNC Capital Corp, Windy Hill Pet
Food Company, L.L.C. and certain other persons named
therein
9.2 -- First Amendment to First Amended and Restated Investors'
Agreement dated as of October 14, 1998 among Doane Pet
Care Company, Doane Pet Care Enterprises, Inc., Summit
Capital Inc., Summit/DPC Partners, L.P., Chase Manhattan
Investment Holdings, Inc., Baseball Partners, DLJ
Merchant Banking Partners, L.P., DLJ International
Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc., DLJ First Esc, L.P., Dartford
Partnership, L.L.C., Bruckmann, Rosser, Sherrill & Co.,
L.P., PNC Capital Corp, Windy Hill Pet Food Company,
L.L.C. and certain other persons named therein
(incorporated by reference to Exhibit 9.2 of the Doane
Form S-4)
**9.3 -- Second Amendment to First Amended and Restated Investors'
Agreement dated as of February 4, 1999 among Doane Pet
Care Company, Doane Pet Care Enterprises, Inc., Summit
Capital Inc., Summit/DPC Partners, L.P., Chase Manhattan
Investment Holdings, Inc., Baseball Partners, DLJ
Merchant Banking Partners, L.P., DLJ International
Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant
Banking Funding, Inc., DLJ First Esc, L.P., Dartford
Partnership, L.L.C., Bruckmann, Rosser, Sherrill & Co.,
L.P., PNC Capital Corp, Windy Hill Pet Food Company,
L.L.C. and certain other persons named therein
**10.1 -- Early Retirement Agreement and Release effective as of
June 30, 1998 between Doane and Bob L. Robinson
10.2 -- Employment Agreement dated January 1, 1998, between Doane
and Douglas J. Cahill (incorporated by reference to
Exhibit 10.3 to the Doane 1997 Form 10-K)
10.3 -- Employment Agreement dated January 1, 1998, between Doane
and Thomas R. Heidenthal (incorporated by reference to
Exhibit 10.4 to the Doane 1997 Form 10-K)
10.4 -- Employment Agreement dated January 1, 1998, between Doane
and Richard D. Wohlschlaeger (incorporated by reference
to Exhibit 10.4 to the Doane Form S-4)
10.5 -- Employment Agreement dated January 1, 1998, between Doane
and Richard A. Hannasch (incorporated by reference to
Exhibit 10.5 to the Doane Form S-4)
10.6 -- Employment Agreement dated January 1, 1998, between Doane
and David L. Horton (incorporated by reference to Exhibit
10.6 to the Doane Form S-4)
</TABLE>

<PAGE> 126

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.7 -- Doane Pet Care Enterprises, Inc.'s 1996 Stock Option Plan
(incorporated by reference to Exhibit 10.7 to the Annual
Report on Form 10-K for the year ended December 31, 1996)
10.8 -- First Amendment to Doane Pet Care Enterprises, Inc.'s
1996 Stock Option Plan (incorporated by reference to
Exhibit 10.8 to the Doane 1997 Form 10-K)
10.9 -- Second Amendment to Doane Pet Care Enterprises, Inc.'s
1996 Stock Option Plan (incorporated by reference to
Exhibit 10.9 to the Doane 1997 Form 10-K)
**10.10 -- Doane Pet Care Enterprises, Inc.'s 1999 Stock Option Plan
10.11 -- Termination and Dissolution Agreement, dated March 25,
1998, between Flint River Mills, Inc. and Windy Hill Pet
Food Company, Inc. (incorporated by reference to the
Quarterly Report of Windy Hill Pet Food Company, Inc. on
Form 10-Q filed on May 12, 1998)
**10.12 -- Indenture, dated November 12, 1998 between Doane and
Wilmington Trust Company
**10.13 -- Revolving Credit and Term Loan Agreement dated as of
November 12, 1998 among Doane Pet Care Enterprises, Inc.,
Doane, DLJ Capital Funding, Inc., as syndication agent,
Mercantile Bank National Association, as documentation
agent, and The Chase Manhattan Bank, as administrative
agent, and the banks named therein
*10.14 -- Employment Agreement dated February 15, 1999, between
Doane and Philip K. Woodlief
**21.1 -- List of subsidiaries of Doane Pet Care Enterprises, Inc.
*23.1 -- Consent of KPMG LLP
**23.2 -- Consent of Vinson & Elkins L.L.P. (contained in Exhibit
5.1 hereto)
**24.1 -- Powers of Attorney
**27.1 -- Financial Data Schedule
</TABLE>

- ------------------------------

* Filed herewith.
** Previously filed.

<PAGE> 1
EXHIBIT 10.14

STRICTLY CONFIDENTIAL

EMPLOYMENT AGREEMENT
BETWEEN
DOANE PET CARE COMPANY
AND
PHILIP K. WOODLIEF

THIS EMPLOYMENT AGREEMENT dated as of February 15, 1999 is made
between Doane Pet Care Company (the "Company"), a Delaware corporation, and
Philip K. Woodlief (the "Executive"). This Agreement is made with reference to
the following facts and objectives:

R E C I T A L S

A. The Executive shall be the Vice President, Finance of the
Company.

B. The Executive acknowledges that the services to be performed
by him under this Agreement are of a special and unique character; the business
of the Company is currently international in scope and the Company has plans to
continue to expand its business throughout the world; and the Company competes
with other persons that are or could be located in any part of the world; and
in order to assure the Company that the Company will retain its value and the
Company's business as a going concern, it is necessary that the Executive
undertake not to utilize his special knowledge of the Company, its business and
its relationships with customers and suppliers to compete with the Company if
the Executive were to leave the Company.

C. The Executive further acknowledges that, during his employment
by the Company, he will occupy a position of trust and confidence with the
Company and, during such employment, the Company will compensate him, among
other purposes, to develop and preserve customer relationships and other
goodwill exclusively for the Company's benefit and that, as a result, he will
develop customer relationships and goodwill that are valuable and important to
the Company, and will become familiar with the Company's trade secrets,
including, without limitation, its profit margins, customer preferences and
requirements, and with other proprietary and confidential information
concerning the Company and its business.

D. The Executive further acknowledges that, throughout his
employment under this Agreement, he is expected to continue to occupy a
position of trust and confidence with the Company. In return, the Company will
compensate him, among other purposes, to develop and preserve customer
relationships and goodwill exclusively for the Company's benefit, which will be
valuable and important to the Company. Further, he will likely be familiar
with the Company's trade secrets, including, without

1
<PAGE> 2
limitation, its profit margins, customer preferences and requirements, and with
other confidential and proprietary information concerning the Company and its
business.

E. The Executive further acknowledges that the use by him for his
own benefit or that of others of such goodwill, trade secrets or proprietary
and confidential information or the solicitation of and/or doing business with
any of the Company's customers and potential customers would have a material
adverse effect on the Company and its business, and would place the Company at
a substantial competitive disadvantage.

F. The Executive further acknowledges that the agreements and
covenants contained in this Agreement, and, in particular, sections 6
(Non-Competition Covenants) and 7 (Confidentiality and Proprietary
Information), are essential to protect the Company and the goodwill of the
Company's business, are a condition precedent to the Company's willingness to
enter this Agreement and to pay the consideration set forth in this Agreement,
and are necessary and reasonable in light of the particular business of the
Company, his knowledge thereof and the services he will perform under this
Agreement.

THE PARTIES ACCORDINGLY AGREE AS FOLLOWS:

AGREEMENT

1. EMPLOYMENT The Company hereby agrees to
employ the Executive, and the Executive hereby accepts employment by the
Company, on the terms and conditions of this Agreement.

2. EMPLOYMENT TERM

(a) Subject to section 9 (Termination of Employment), the
term of the Executive's employment under this Agreement begins on the date of
this Agreement and ends on the third anniversary of that date; provided,
however, that, commencing on the third anniversary of the date of this
Agreement and each subsequent anniversary, the term shall be extended for an
additional one year period unless either the Executive or the Company gives the
other party written notice at least thirty (30) days before such anniversary
that this Agreement shall terminate on the then scheduled expiration date (the
"non-extension notice"). If such non-extension notice is given, this Agreement
shall automatically terminate on such expiration date.

(b) The actual term of the Executive's employment under
this Agreement, including any extension, continuation or earlier termination of
the original term, is referred to in this Agreement as the "employment term."

3. RESPONSIBILITIES During the employment term,
the Executive shall serve as Vice President, Finance or in any other position
or capacity to which he may from time to time be elected or appointed, and
shall perform such services for the Company as are reasonably required by the
Company, and as may be required by virtue of the offices and positions held by
the Executive. The Executive agrees that, as a part of

2
<PAGE> 3
his duties under this Agreement, he may be required from time to time to
perform services for affiliates of the Company. The Executive will not be
required to relocate his residence outside the continental United States, but
will be available for such travel as his responsibilities under this Agreement
may reasonably require. The Executive shall devote his full time and best
efforts to the performance of all responsibilities to the Company and its
affiliates and to further their respective businesses and interests.

4. COMPENSATION

(a) The Company agrees to pay the Executive throughout
the employment term an initial base salary at the rate of $175,000.00 per annum
(as adjusted pursuant to the provision of this paragraph 4(a)) (the "base
salary") payable in equal installments in accordance with Company payroll
practices from time to time in effect. Executive's base salary will be
reviewed and may be adjusted annually by the president of the Company or by the
board of directors of the Company (or the compensation committee thereof) (the
"board"), after taking into consideration the recommendations of the president
of the Company, provided that Executive's base salary may not be decreased
below his initial base salary.

(b) Subject to Section 9 (Termination of Employment), the
Company agrees to pay the Executive throughout the employment term an annual
bonus (the "annual bonus") calculated pursuant to Exhibit A attached hereto.
Except as set forth in Section 9 (Termination of Employment), the amount of
bonus payable to the Executive shall be prorated for the portion of a year the
Executive is employed by multiplying the annual bonus determined pursuant to
Exhibit A by a fraction with a numerator equal to the number of days of the
fiscal year during which the Executive was employed, and with a denominator of
365.

5. OTHER EXECUTIVE BENEFITS

(a) The Executive shall, during the employment term, be
eligible to participate in such 401(k), profit sharing, bonus, life insurance,
hospitalization and major medical and other employee benefit plans of the
Company in effect from time to time, to the extent that he is eligible under
and complies with the terms of those plans, but the allocation of benefits
under any plan that provides that allocations thereunder shall be in the
discretion of the board shall be as determined from time to time solely by the
board in its discretion.

(b) The Executive shall also participate in the Company's
paid vacation plan but in no event shall Executive's annual entitlement be less
than 4 weeks. Vacation not used by the end of a year shall be forfeited and
shall not be eligible to be carried over to another year or eligible for
reimbursement except as otherwise provided by Company policies.

6. NON-COMPETITION COVENANTS Throughout the employment
term and commencing with the date of this Agreement and ending on the later of
the end of the period that Executive receives severance pay from the Company
pursuant to Section 9 or

3
<PAGE> 4
the first anniversary of the date on which the Executive ceases to be employed
by the Company for any reason whatsoever, (the "Non-Compete Period"), the
Executive promises and agrees that he will not: (a) directly or indirectly
assist in, engage in, have any financial interest in, or participate in any way
in, as an owner, partner, employee, agent, board member, or shareholder, any
business that involves, in whole or in part, the design, manufacture,
distribution or sale of dry pet foods (or any other business in which the
Company may engage or begin preparation to engage during the employment term)
or make preparation with any person to do any of the foregoing; provided,
however, that the Executive may own, solely as an investment, up to 1.0% of any
class of securities of any person if such securities are listed on any national
or regional securities exchange; (b) call upon or have any contact with any
person or any successor in interest to any person who was at any time during
the Executive's last three years of employment with the Company, a customer of
the Company, or call upon or have any contact with any person or any successor
in interest to any person who is a prospective customer of the Company, and
with whom the Executive dealt, or on whose account the Executive worked, at any
time during the Executive's last three years of employment with the Company,
for the purpose of (i) diverting any business of such person from the Company,
or (ii) selling or offering to sell to any such customer any product or service
that is of the same general type or that performs similar functions as any
product or service which has been sold, provided or offered for sale by the
Company at any time during the Executive's last three years of employment with
the Company, (c) solicit any employee of the Company to terminate his or her
employment with the Company or employ any such individual during his or her
employment with the Company and for a period of twelve months after such
individual terminates his or her employment with the Company, or (d) without
the prior written consent of the Company's board of directors, acquire or
discuss the acquisition of any ownership interest in or warrant or right to
acquire any such interest, or acquire any employment or other pecuniary benefit
from any person that, at the time, is a prospective candidate for or was a
party to a control transaction. The term "control transaction" means any
transaction or series of transactions whereby the Company or a controlling
interest in the Company is acquired by another Person (whether by purchase,
merger, consolidation or sale of all or substantially all of the Company's
consolidated assets). The Executive acknowledges and agrees that the
consideration and benefits to be provided to the Executive under this Agreement
have been bargained and negotiated in exchange for, and in consideration of,
Executive's agreement to abide by the terms and provisions of this section 6
and section 7 (Confidentiality and Proprietary Information). The Executive
acknowledges and agrees that all of the Executive's duties and obligations
under this section 6 shall survive the expiration or termination of the
Executive's employment with the Company, regardless of the causes therefor.

7. CONFIDENTIALITY AND PROPRIETARY INFORMATION In
addition to any common-law restriction upon the Executive's use, disclosure or
exploitation of confidential, proprietary or secret information of the Company,
the Executive covenants and agrees that, without prior written consent of the
Company, he will not at any time during or after the employment term use for
himself or disclose to or use for any other person, directly or indirectly, any
secret, confidential or proprietary information of the Company, including,
without limitation, the Company's processes, formulas, techniques,

<PAGE> 5
customer identities, preferences, requirements, reports and other sensitive
customer information, servicing methods, profit margins, analyses, employee,
vendor and supplier information, business or marketing plans or strategies,
financial data and presentation or sales materials, technologies, computer
programs, software, designs and inventions (collectively, the "confidential
information"); provided, however, that the term confidential information does
not include or refer to any information that is in the public domain (other
than by a breach of this Agreement). The Executive acknowledges that the
confidential information is vital, sensitive, confidential and proprietary to
the Company. The Executive covenants and agrees that all files, reports,
lists, materials, records, documents, notes, memoranda, specifications, product
or other formulas, equipment and other items, and any originals, copies,
recordings, abstracts or notes thereof, relating to the confidential
information or the Company business that the Executive is or was either
provided, prepares or prepared himself, uses or used or simply acquires or
acquired during this employment with the Company (either before or during the
employment term), are and shall remain the sole and exclusive property of the
Company and shall be immediately returned to the Company at any time upon
demand and, in all events, immediately at the end of the employment term. The
Executive acknowledges and agrees that all of the Executive's duties and
obligations under this section 7 shall survive the expiration or termination of
the Executive's employment with the Company, regardless of the cause therefor.

8. REMEDIES FOR BREACH In the event of a breach or
threatened breach of any of the Executive's duties and obligations under
sections 6 (Non-Competition Covenants) or 7 (Confidentiality and Proprietary
Information), the Company shall be entitled, in addition to any other legal or
equitable remedies the Company may have in that connection (including any right
to damages that the Company may suffer), to a temporary, preliminary, and/or
permanent injunction restraining such breach or threatened breach. The
Executive hereby expressly acknowledges that the harm that might result to the
Company's goodwill or its relationships with customers, or as a result of the
disclosure or use of the confidential information, is largely irreparable. The
Executive specifically agrees that, in the event there is a question as to the
enforceability of sections 6 (Non-Competition Covenants) or 7 (Confidentiality
and Proprietary Information), the Executive will not engage in any conduct
inconsistent with or contrary to either of such sections until after the
question has been resolved by a non-appealable final judgement.

9. TERMINATION OF EMPLOYMENT

(a) The employment term and the Executive's employment by the
Company shall terminate: (i) upon the death of the Executive; (ii) upon the
disability of the Executive (as defined in section 9(b)(2)) upon thirty (30)
days prior written notice given by the Company to the Executive; (iii) for
cause (as defined in section 9(b)(1)), immediately upon the giving of written
notice thereof by the Company to the Executive or at such later time as the
notice may specify; (iv) without cause, upon not less than thirty (30) days
prior written notice given by the Company to the Executive, or (v)

5
<PAGE> 6
voluntarily by the Executive upon not less than thirty (30) days prior
written notice given to the Company by the Executive.

(b) In this section 9:

(1) "Cause" means; (a) the Executive has been
indicted for or convicted of a felony; (b) the
commission of any act by Executive constituting
financial dishonesty against the Company (including
fraud or embezzlement); (c) gross dereliction of duty
to the Company (other than by reason of death or
disability) after Executive has been advised by the
board of directors or the Company's president of any
such dereliction of duty (whether of the same or
similar nature) and has been given an opportunity to
correct his performance; (d) commission of an act
involving moral turpitude which (i) brings the
Company into public disrepute or disgrace, or (ii)
causes material injury to the customer relations,
operations or the business prospects of the Company;
(e) the repeated refusal or failure by Executive to
follow the lawful directives of the board of
directors or the president of the Company; or (f) the
material breach by Executive of the provisions of
this Agreement.

(2) "Disability" refers to any circumstances in
which the Executive, by reason of illness, incapacity
or other disability, has failed to perform his duties
or fulfill his obligations under this Agreement for a
cumulative total of 180 days in any 12-month period.

(c) Upon the termination of the Executive's employment
under the Agreement, the employment term shall end and all rights of the
Executive under this Agreement shall terminate, except that the Executive shall
nonetheless be entitled to receive the following:

(1) If the termination occurs by reason of the
death or disability of the Executive, the Executive
shall be entitled to receive the base salary accrued
through the date of termination and annual bonus
prorated through the date of termination.

(2) If the termination is made by the Company
without cause, or as a result of the Company
delivering a non-extension notice (but not as a
result of the Executive delivering a non- extension
notice to the Company), the Executive shall be
entitled to receive severance pay equivalent to his
base salary and annual bonus, if and as each would
have been payable if the Executive had not been so
terminated, for the period commencing on the first
day after the date of termination and terminating on
the first anniversary of the

6
<PAGE> 7
date on which Executive ceases to be employed by the
Company. With respect to the annual bonus, for the
year in which the termination of employment occurred,
the Executive shall receive the annual bonus the
Executive would have been entitled to receive if the
Executive had remained employed for the entire year,
and for the last calendar year in which the Executive
is receiving severance payments, the Executive shall
receive a pro rata portion of the annual bonus the
Executive would have been entitled to receive if the
Executive had remained employed for the entire year
with such pro rata portion being equal to a fraction
with a numerator equal to the number of days of the
fiscal year during which the Executive receives
severance pay and with a denominator of 365.

(3) If the termination is made by the Company for
cause, or voluntarily by Executive, the Executive
shall be entitled to receive his base salary through
the date of termination. If any termination for
cause made by the Company is ever ultimately
determined by a court, agency or other tribunal to
have been without cause, then the Company's sole
liability under the Agreement or otherwise at law or
in equity shall be to pay the Executive those amounts
that would have otherwise been paid to the Executive
under section 9(c)(2) (Termination of Employment,
without cause) and the reasonable attorney's fees and
costs incurred by the Executive in successfully
obtaining this determination from the court, agency
or other tribunal.

(4) To the extent permitted by law or group
insurance plans maintained for the Company's
employees, Executive will be entitled to continue
coverage under any health, disability and life
insurance program during the period Executive is
receiving severance payments in accordance with
paragraphs 9(c)(1), (2) or (3), at no cost to the
Executive. The Executive's rights will continue
under benefit programs that, by their own terms or by
law, extend beyond the date of termination or
continued coverage provided for in the preceding
sentence, including, without limitation, health care
under COBRA, 401(k), stock purchase or stock option
agreements, and non-qualified salary continuation
agreements.

10. NOTICE Any notice required or permitted to be given
under this agreement must be in writing and is effectively given:

(1) To the Company, when signed by the Executive and delivered in
person to the chairman of the board, president, or secretary
(excluding the Executive) of the Company, or, one day after
the date sent by national commercial courier for next day
delivery, or two days after the date mailed, by certified or
registered

7
<PAGE> 8
mail, postage prepaid, in either case to the address set forth
below, or at such other address as the Company may designate
for this purpose in a notice given to the Executive.

Attn: President and Chief Executive Officer
Doane Pet Care Company
103 Powell Court, Suite 200
Brentwood, TN 37207

(2) To the Executive, when signed by an officer of the Company
(excluding the Executive) and delivered to the Executive in
person, or, one day after the date sent by national commercial
courier for next day delivery, or two days after the date
mailed, by certified or registered mail, postage prepaid, in
either case to the address set forth under the Executive's
signature at the end of this Agreement or at such other
address as the Executive may designate for this purpose in a
notice given to the Company.

11. INVALIDITY OF PROVISIONS If any provision of this
Agreement is adjudicated to be invalid or unenforceable under applicable law,
the validity or enforceability of the remaining provisions shall be unaffected.
To the extent that any provision of this agreement is adjudicated to be invalid
or unenforceable because it is over broad, that provision shall not be void but
rather shall be limited only to the extent required by applicable law and
enforced as so limited.

12. ENTIRE AGREEMENT; WRITTEN MODIFICATIONS This
Agreement contains the entire agreement between the parties and supersedes all
prior or contemporaneous representations, promises, understandings and
agreements between the Executive and the Company. This Agreement may not be
changed except by written agreement of the parties.

13. GOVERNING LAW In light of the Company's contacts with the
state of Tennessee and its significant interest in insuring that disputes as to
the validity and enforceability of section 6 (Non-Competition Covenants) and 7
(Confidentiality and Proprietary Information) of this Agreement are resolved on
a uniform basis, the Executive and the Company agree that any litigation
involving noncompliance with or alleged breach of sections 6 (Non-Competition
Covenants) or 7 (Confidentiality and Proprietary Information) must be filed and
conducted in Tennessee and the Executive and the Company consent to the
personal jurisdiction of the federal and state courts sitting in Tennessee for
purposes of any such litigation. This Agreement shall be governed by the
internal laws of the State of Tennessee without regard to Tennessee conflict of
laws principles.

14. CERTAIN DEFINED TERMS In this agreement:

(1) "Affiliate" of the Company means any person
controlling, controlled by or under common control
with the Company.

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<PAGE> 9
(2) "Annual bonus" is defined in section 4(b).

(3) "Base salary" is defined in section 4(a).

(4) "Board" is defined in section 4(a).

(5) "Company" as used in sections 6
(Non-Competition Covenants) and 7 (Confidentiality
and Proprietary Information), includes each affiliate
of the Company for which the Executive performs
services at any time during his employment if the
affiliate is engaged in any business that involves,
in whole or in part, the design, manufacture,
distribution or sale of dry pet foods (or any other
business in which the Company may engage or begin
preparation to engage during the employment term).

(6) "Control transaction" is defined in section
6(d).

(7) "Employment term" is defined in section 2(b).

(8) "Non-extension notice" is defined in section
2(a).

(9) "Person" includes any individual, trust,
estate, business trust, partnership, corporation,
unincorporated association, governmental entity,
limited liability company and any other juridical
person.

15. COMPANY'S AND EXECUTIVE'S RIGHT TO RECOVER COSTS
The Company and the Executive undertake and agree that, if either party
breaches or threatens to breach any provision of this Agreement, the breaching
party shall be liable for reasonable attorneys' fees and costs incurred by the
other party in enforcing its rights under this Agreement.

16. RULE OF CONSTRUCTION The rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be employed in interpreting this Agreement.

17. TOLLING In view of the parties' recognition and
agreement that the Company is entitled after the expiration or termination of
the employment term to certain limited protection from competition by the
Executive, the Executive and the Company agree that the running of the period
set forth in section 6 (Non-Competition Covenants) shall be tolled during any
period of time in which the Executive violates that section.

18. SUCCESSORS AND ASSIGNS The Company may assign this
Agreement or any right or interest under this Agreement to any person that
hereafter becomes an affiliate of the Company or to any person to which the
Company sells all or

9
<PAGE> 10
any substantial part of its assets and, in such event, the Company shall,
automatically upon the assignee's assumption of the Company's obligations
hereunder, be released from any such obligations. This Agreement shall inure
to the benefit of the Company, and its successors and assigns.

19. NONWAIVER OF RIGHTS The Company's or the
Executive's failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by the other party of any of
the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement, or any part
hereof, or the right of the Company or the Executive thereafter to enforce each
and every provision in accordance with the terms of this Agreement.

- The remainder of this page is intentionally left blank -

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PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY
CERTIFYING THAT THE EXECUTIVE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW
AND STUDY BEFORE EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING
IT; (C) HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THIS AGREEMENT TO ASK ANY
QUESTIONS THE EXECUTIVE HAD ABOUT THIS AGREEMENT AND RECEIVED SATISFACTORY
ANSWERS TO ALL SUCH QUESTIONS; (D) UNDERSTANDS THE EXECUTIVE'S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT; AND (E) EXECUTED AND DELIVERED THIS AGREEMENT
AT THE OFFICES OF THE COMPANY IN BRENTWOOD, TENNESSEE.

EXECUTED AND EFFECTIVE as of the date first written above.

<TABLE>
<S> <C>
WITNESS: DOANE PET CARE COMPANY

/s/ DEBRA J. SHECTERLE By: /s/ DOUGLAS J. CAHILL
- ------------------------------------------ ---------------------------
Douglas J. Cahill
President & CEO

WITNESS: EXECUTIVE:

/s/ PHILIP K. WOODLIEF
- ------------------------------------------ ---------------------------
Philip K. Woodlief

115 Penn Warren Drive,
Suite 300-307
---------------------------
Street Address

Brentwood, TN 37027
---------------------------
City, State, Zip Code
</TABLE>

11
<PAGE> 12
EXHIBIT A
TO EMPLOYMENT AGREEMENT WITH
PHILIP K. WOODLIEF

DOANE PET CARE COMPANY

ANNUAL BONUS PROGRAM

1. For each fiscal year of the Company during the employment
term, the board, after taking into consideration the recommendations of the
president of the Company, will establish objectives comprised of both
corporate and individual goals (each goal will be referred to herein as a
"Target"), as well as the percentage weighting (the "weight") that will apply
to each Target, wherein the sum of the weights shall equal 100%.

2. For the Company's 1999 fiscal year, the board will set an
EBITDA Target for the Company and its subsidiaries which will be weighted at
100% for the calculation of the bonus payable under this program for the 1998
fiscal year. The term "EBITDA" will have the same meaning as set forth in the
DPC Acquisition Corp. (now known as "Doane Pet Care Enterprises, Inc.) Option
Agreements granted under the DPC Acquisition Corp. 1996 Stock Option Plan.

3. For purposes of computing the Executive's annual bonus, the
bonus will be equal to 50% of his base salary in effect at the end of the
fiscal year (the "base bonus") and the annual bonus will be computed by summing
the percentages earned for each Target, as determined by computing the sum of
paragraphs in 3(a) through 3(d) below for each Target that has been assigned a
weight, and then multiplying that sum times the base bonus.

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<PAGE> 13
(a) Where the actual performance exceeds 85% of
the Target for such fiscal year, Executive will receive 55% of
the weight assigned for the Target.

(b) For each of the first full 15 percentage
points by which actual performance exceeds 85% of the Target,
Executive will receive 3% of the weight assigned for the
Target. The maximum which Executive may receive under this
paragraph 3(b) cannot exceed 45% of the weight assigned for
the Target.

(c) For each of the first full 15 percentage
points by which the actual performance exceeds 100% of the
Target, Executive will receive 6% of the weight assigned for
the Target. The maximum which Executive may receive under
this paragraph 3(c) cannot exceed 90% of the weight assigned
for the Target.

(d) For each full percentage point by which the
actual performance exceeds 115% of the Target, Executive will
receive 9% of the weight assigned for the target.

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<PAGE> 14
For illustrative purposes, assume the Executive's base bonus is
$30,000 and his weighting is as follows:

<TABLE>
<CAPTION>
Target Weight Description of Target
------ ------ ---------------------
<S> <C> <C>
1 50% Corporate EBITDA
2 35% Territory Margin Contribution
3 15% Expense Control
</TABLE>

Bonus Calculation:

<TABLE>
<CAPTION>
Assumed % Earned Weighted
Target Performance for Target Weight % Earned
------ ----------- ---------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
1 95% 85% x 50% = 42.5%
2 120% 235% x 35% = 82.3%
3 80% 0 x 15% = 0
--------
</TABLE>

% of base bonus earned 124.8%
Base bonus $30,000
Bonus earned $37,440

4. In the event that, after the setting of the Targets, the
Company or any of its subsidiaries acquires additional assets,
entities or subsidiaries that produce the same or similar products,
which acquisition, either singly or together with one or more other
acquisitions, the board determines in good faith may significantly
affect the Targets for the fiscal year, the board may, in good faith,
either (a) adjust such Targets to reflect the projected effect of such
acquisition or acquisitions on any Targets or (b) exclude the effects
of such acquisition or acquisitions on the Targets for purposes of
determining Executive's annual bonus by calculating the Targets for
such fiscal year on a pro forma basis as though such acquisition or
acquisitions had not been consummated. Similarly, in the event that,
after setting the Targets, the Company is acquired by another Person
(whether by purchase, merger, consolidation or sale of all or
substantially all of the Company's

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<PAGE> 15
consolidated assets) and the board determines in good faith that such
acquisition may significantly affect the Targets for the fiscal year,
the board may, in good faith, either (x) adjust such Targets to
reflect the projected effect of such acquisition on any Target or (y)
exclude the effects of such acquisition on the Targets for purposes of
determining Executive's annual bonus by calculating the Targets for
such fiscal year on a pro forma basis as though such acquisition had
not been consummated.

5. The annual bonus payable for any fiscal year will be
paid within 30 days after the delivery of the Company's audited
financial statements for such fiscal year. In the event of any
dispute between the Company and Executive as to the amount of the
bonus for any fiscal year, such dispute will be resolved by the
Company's auditors or any one of Price Waterhouse, Arthur Andersen, or
Ernst & Young, or their successors, as selected by the board, by
having such accounting firm calculate the amount of the bonus for such
fiscal year utilizing the Company's audited financial statements for
such fiscal year. The decision of such accounting firm will be final
and binding on the Company and Executive.

6. Except as otherwise provided herein, capitalized
terms used herein which are not defined herein have the meanings given
to such terms under the Employment Agreement to which this Annual
Bonus Program is attached.

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors
Doane Pet Care Enterprises, Inc.

We consent to the use of our reports included herein and to the reference
to our firm under the heading "Experts" in the registration statement.

/s/ KPMG LLP
KPMG LLP

Houston, Texas
March 17, 1999