SUIZA FOODS CORP, S-3, 1999-01-07

SUIZA FOODS CORP
S-3, 1999-01-07
ICE CREAM & FROZEN DESSERTS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 7, 1999.

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

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

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------

SUIZA FOODS CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 75-2559681
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>

2515 MCKINNEY AVENUE, SUITE 1200
DALLAS, TEXAS 75201
(214) 303-3400
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
---------------------

GREGG L. ENGLES
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
2515 MCKINNEY AVENUE, SUITE 1200
DALLAS, TEXAS 75201
(214) 303-3400
(Name, address, and telephone number,
including area code, of agent for service)

COPIES TO:

<TABLE>
<S> <C> <C>
WILLIAM A. MCCORMACK MICHELLE GOOLSBY JEREMY W. DICKENS
HUGHES & LUCE, L.L.P. SUIZA FOODS CORPORATION WEIL, GOTSHAL & MANGES LLP
1717 MAIN STREET, SUITE 2800 2515 MCKINNEY AVENUE, SUITE 1200 100 CRESCENT COURT, SUITE 1300
DALLAS, TEXAS 75201 DALLAS, TEXAS 75201 DALLAS, TEXAS 75201
(214) 939-5500 (214) 303-3400 (214) 746-7700
</TABLE>

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

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) FEE(3)
- --------------------------------------------------------------------------------------------------------------------------

Common Stock, $.01 par value............ 6,900,000 $48.50 $334,650,000 $93,032.70
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</TABLE>

(1) Includes up to 900,000 shares of Common Stock to cover over-allotments, if
any.

(2) Estimated solely for the purpose of calculating the registration fee.

(3) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as
amended, based on the average of the high and low sales price of the Common
Stock on the New York Stock Exchange on January 6, 1999.

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

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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION. DATED JANUARY 7, 1999.
6,000,000 Shares

[SUIZA LOGO]

SUIZA FOODS CORPORATION
Common Stock
------------------------
The Common Stock is listed on the New York Stock Exchange under the symbol
"SZA". The last reported sale price of our Common Stock on January 6, 1999 was
$48.50 per share.

See "Risk Factors" on page 11 to read about certain factors you should
consider before buying shares of the Common Stock.

------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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

<TABLE>
<CAPTION>
Per Share Total
--------- ------
<S> <C> <C>
Initial public offering price............................. $ $
Underwriting discount..................................... $ $
Proceeds, before expenses, to Suiza Foods Corporation..... $ $
</TABLE>

The underwriters may, under certain circumstances, purchase up to an
additional 900,000 shares from Suiza Foods Corporation at the initial public
offering price less the underwriting discount.

------------------------
The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payment in New York, New York
on , 1999.

GOLDMAN, SACHS & CO. DONALDSON, LUFKIN & JENRETTE

BEAR, STEARNS & CO. INC. J.P. MORGAN & CO.

------------------------
Prospectus dated , 1999.
<PAGE> 3

We are a Delaware corporation. Our principal executive offices are located
at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201, and our telephone
number is (214) 303-3400. We maintain a worldwide web site at
http://www.suizafoods.com. In this Prospectus, the "Company", "Suiza", "we",
"us" and "our" refer to Suiza Foods Corporation and its subsidiaries, unless the
context otherwise requires.

Our national brands include International Delight(R), Second Nature(R),
Naturally Yours(R) and Mocha Mix(R). Our regional brands include Country
Fresh(R), Dairymens(R), Lehigh Valley Farms(R), Model(TM), Natural by Garelick
Farms(R), Suiza(TM), Louis Trauth(TM), Tuscan(R), Velda Farms(R) and West Lynn
Creamery(R). Our partner or licensed brands include Lactaid(R) (manufactured
under a license with McNeil Consumer Products, an affiliate of Johnson &
Johnson), Flav-O-Rich(R) (licensed from Dairy Farmers of America, Inc.) and
Pet(R) (licensed from Grand Metropolitan Public Liability Company).

[MAP OF OUR DAIRY AND PACKAGING OPERATIONS APPEARS HERE]

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<PAGE> 4

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS OR THEIR AFFILIATES OR
AGENTS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE
MARKET PRICES OF THE SHARES AT LEVELS WHICH MIGHT NOT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON SEAQ INTERNATIONAL, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

WHERE YOU CAN GET MORE INFORMATION

At your request, we will provide you, without charge, a copy of any
exhibits to our registration statement incorporated by reference in this
Prospectus. If you want more information, write or call us at:

Suiza Foods Corporation
2515 McKinney Avenue, Suite 1200
Dallas, Texas 75201
(214) 303-3400

Our fiscal year ends on December 31. We furnish our stockholders annual
reports containing audited financial statements and other appropriate reports.
In addition, we are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information we file at the SEC's public
reference room in Washington D.C. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC Internet site
at http://www.sec.gov.

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<PAGE> 5

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed with the Commission pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange
Act of 1934, as amended (the "Exchange Act"), are incorporated herein by
reference and shall be deemed a part hereof:

1. Suiza's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (File No. 1-12755).

2. Suiza's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998 (File No. 1-12755).

3. Suiza's Current Report on Form 8-K filed July 14, 1997 (as amended
on August 22, 1997), which includes the audited financial statements of
Dairy Fresh L.P. and The Garelick Companies (File No. 1-12755).

4. Suiza's Current Report on Form 8-K filed March 9, 1998 (as amended
on April 7, 1998), which includes the audited financial statements of
Land-O-Sun Dairies, L.L.C. (File No. 1-12755).

5. Suiza's Current Reports on Form 8-K filed January 15, 1998,
February 18, 1998, February 25, 1998, March 10, 1998, March 18, 1998, March
20, 1998, June 2, 1998, September 14, 1998 and December 18, 1998 (File No.
1-12755).

6. Continental Can Company, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1997 (File No. 1-6690).

7. Continental Can Company, Inc.'s Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 (File No. 1-6690).

8. The description of the Common Stock contained in Suiza's
Registration Statement on Form 8-A filed on February 19, 1997 (File No.
1-12755), including any amendments or reports filed for the purpose of
updating such description.

9. The description of the Common Stock Purchase Rights contained in
Suiza's Registration Statement on Form 8-A filed on March 10, 1998 (File
No. 1-12755), including any amendments or reports filed for the purpose of
updating such description.

All reports and other documents filed by Suiza pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering shall be deemed to be incorporated
by reference herein and to be a part hereof from the dates of filing of such
reports and documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified,
replaced or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is incorporated or deemed to be incorporated by reference herein, modifies,
replaces or supersedes the earlier statement. Any statement so modified,
replaced or superseded shall not be deemed, except as so modified, replaced or
superseded, to constitute a part of this Prospectus.

4
<PAGE> 6

PROSPECTUS SUMMARY

You should read this summary together with the more detailed information,
our financial statements and notes and the financial statements and notes of
certain acquired businesses appearing elsewhere in, or incorporated by reference
in, this Prospectus. You should carefully consider, among other things, the
matters set forth in "Risk Factors". Unless we specify otherwise, we assume in
this Prospectus that the underwriters do not exercise their over-allotment
option.

THE COMPANY

We are a leading manufacturer and distributor of dairy products and a
leading manufacturer of rigid plastic packaging in the United States. Our
principal businesses have well-established reputations in their markets for
product quality and high levels of customer service. We have grown primarily
through an aggressive acquisition and integration strategy. We intend to
continue to pursue this strategy.

DAIRY

Our dairy products and related distribution businesses contributed
approximately 79% of our net sales on a pro forma basis for the nine months
ended September 30, 1998. Pursuant to our expansion strategy, we have completed
24 dairy acquisitions since our initial public offering in April 1996, including
13 acquisitions in 1998.

In our dairy business, we have established a strong regional presence in
the northeastern, southeastern and central United States, Puerto Rico, Nevada
and parts of California. We also manufacture and distribute certain
refrigerated, frozen and extended shelf-life products on a national basis.

Our dairy products include:

- fluid milk, including flavored milks

- ice cream and novelties

- dairy and non-dairy coffee creamers

- half-and-half and whipping cream

- sour cream

- cottage cheese

- yogurt

- dairy and non-dairy frozen whipped toppings

We also manufacture and distribute fruit juices and other flavored drinks,
bottled water and coffee.

We manufacture and market our dairy products under proprietary brand names.
We also manufacture products on a private-label basis for certain customers. Our
brands include:

- national brands including International Delight, Second Nature, Naturally
Yours and Mocha Mix

- regional brands including Country Fresh, Dairymens, Lehigh Valley Farms,
Model, Natural by Garelick Farms, Suiza, Louis Trauth, Tuscan, Velda
Farms and West Lynn Creamery

- partner or licensed brands in certain regions including Lactaid,
Flav-O-Rich and Pet

Our dairy customers include grocery stores, convenience stores and institutional
food service customers.

PACKAGING

We manufacture rigid plastic bottles and containers and metal cans. Our
packaging customers include regional dairy manufac-

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<PAGE> 7

turers, bottled water processors, beverage manufacturers, and consumer and
industrial products companies.

We are currently considering strategic alternatives for our packaging
business, which could include a partial or complete spin-off, a sale of all or a
portion of the business or a continuation of our acquisition and integration
strategy.

RECENT ACQUISITIONS

During 1998, we completed 13 dairy and eight packaging acquisitions. Our
most significant acquisitions in 1998 were the following:

- Land-O-Sun (February 1998). Land-O-Sun Dairies, L.L.C., a manufacturer
and distributor of dairy products in the southeastern and central United
States, had net sales of approximately $464 million for its 1997 fiscal
year.

- Continental Can (May 1998). Continental Can, a manufacturer of packaging
products with operations in the United States and Europe, had net sales
of approximately $546 million for its 1997 fiscal year.

- Tuscan/Lehigh Dairies (December 1998). Tuscan/Lehigh, L.P., a
manufacturer and distributor of dairy products in the northeastern United
States, had net sales of approximately $517 million for the twelve month
period ended September 30, 1998. We merged Tuscan/Lehigh into our
northeastern dairy operations to form a new subsidiary in which Dairy
Farmers of America, Inc. ("DFA") owns a 25% interest. The combined net
sales of our northeastern dairy operations and Tuscan/Lehigh were
approximately $1.2 billion for the twelve month period ended September
30, 1998.

Primarily as a result of our acquisitions, we have increased our net sales
and operating income from $579.3 million and $12.4 million, respectively, for
the year ended December 31, 1993 to $3,089.4 million and $188.4 million,
respectively, for the year ended December 31, 1997 on a pro forma basis for our
acquisitions of Land-O-Sun and Continental Can.

OUR STRATEGY

We remain focused on achieving continued revenue and profit growth through
the following strategies:

ACQUISITION AND INTEGRATION. According to statistics published by the Milk
Industry Foundation, the United States fluid milk industry totaled approximately
$23 billion in wholesale value in 1997. We believe that the industry remains
fragmented and is undergoing consolidation. To capitalize on this trend, we
intend to acquire strong dairy businesses in new markets and to strengthen our
presence in existing markets through add-on acquisitions. By pursuing this
strategy, we seek to accomplish the following objectives:

- expand the geographic coverage of our dairy business to better serve an
increasingly national customer base

- gain scale efficiencies in purchasing, product development and consumer
research as we increase our sales base

- develop a more efficient direct store delivery ("DSD") system for
distributing a greater volume and variety of branded and higher margin
products to our customers

- combine the increased geographic scope of our DSD system with our
national warehouse system to increase the productivity of our
manufacturing, distribution and marketing assets

- reduce manufacturing costs and increase product quality through the
continued integration of manufacturing operations into specialized,
scale-efficient facilities

In pursuing our acquisition and integration strategy for our packaging
business, we seek to accomplish the following objectives:

- expand the geographic coverage of our manufacturing facilities to better
serve

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<PAGE> 8

our national customers and to minimize transportation costs

- broaden our product line and technological capabilities to better meet
our customers' needs

As noted, we are currently considering strategic alternatives for our
packaging business. Pending any final decision, we intend to pursue our current
acquisition and integration strategy.

ORGANIC GROWTH. We continue to build our existing dairy distribution
network and extend our dairy and packaging product offerings. We are currently
test marketing and introducing new products and packaging innovations and
investing in product research and marketing to develop additional product and
packaging innovations. We intend to develop or acquire new product lines that
are compatible with our manufacturing, distribution and marketing infrastructure
and that can serve as additional platforms for future growth.

ENHANCEMENT OF OPERATING MARGINS. We continue to seek margin improvements
through increased production and purchasing efficiencies, operating synergies
from acquired businesses and increased sales of higher-margin branded products.
In pursuing this strategy, we have improved our operating margin from 2.1% for
the year ended December 31, 1993 to 7.2% for the nine months ended September 30,
1998 on a pro forma basis.

In order to implement our growth strategies, we have expanded our
management team and invested in product development, marketing and other
centralized functions.

We are incorporated in Delaware and our principal offices are located at
2515 McKinney Avenue, Suite 1200, Dallas, TX 75201, and our telephone number is
(214) 303-3400.

7
<PAGE> 9

THE OFFERING

Common Stock offered....... 6,000,000 shares

Common Stock outstanding
after the offering(1).... 39,591,784 shares

Use of Proceeds............ We plan to use the net proceeds of this offering to
repay a portion of the outstanding indebtedness
under our senior credit facility. This facility
provides for revolving loans of up to $1 billion.
As of September 30, 1998, our outstanding
indebtedness under this facility was $648 million
(excluding $23 million of issued but undrawn
letters of credit). As of January 4, 1999, our
outstanding indebtedness under this facility was
$724 million (excluding $16 million of issued but
undrawn letters of credit). On a pro forma basis as
of September 30, 1998, upon application of the net
proceeds of this offering to repay indebtedness
under this facility, we would have had $610 million
of available credit. We are able to borrow all or a
portion of our available credit to fund
acquisitions and for general corporate purposes.

NYSE symbol................ SZA
- ------------------------------

(1) Excludes: (a) 900,000 shares of Common Stock issuable pursuant to the
underwriters' over-allotment option; (b) 4,717,373 shares of Common Stock
subject to options outstanding as of December 31, 1998 at a weighted average
exercise price of $30.62 per share, of which 3,157,268 were exercisable as
of that date; (c) 1,428,571 shares of Common Stock issuable upon conversion
of the 5.0% preferred securities issued in connection with the acquisition
of Land-O-Sun (the "5.0% Preferred Securities"), which are convertible at a
conversion price of $70 per share; and (d) 7,667,732 shares of Common Stock
issuable upon conversion of the 5.5% preferred securities issued in a
private placement completed on March 24, 1998 (the "5.5% Preferred
Securities"), which are convertible at a conversion price of $78.25 per
share.

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<PAGE> 10

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

The following table sets forth summary historical consolidated financial
data of Suiza as of and for each of the three years in the period ended December
31, 1997 and the unaudited nine months ended September 30, 1997 and 1998, and
summary unaudited pro forma consolidated financial data of Suiza for the year
ended December 31, 1997 and as of and for the nine months ended September 30,
1998.

The summary unaudited pro forma consolidated operating data for the year
ended December 31, 1997 and the nine months ended September 30, 1998 give effect
to (i) the completed acquisitions by Suiza of Dairy Fresh, L.P. on July 1, 1997,
Garelick on July 31, 1997, Land-O-Sun on February 20, 1998 (including the
issuance of the 5.0% Preferred Securities) and Continental Can on May 29, 1998,
all of which have been accounted for using the purchase method of accounting;
(ii) the sale of the 5.5% Preferred Securities on March 24, 1998 and the use of
the proceeds therefrom to repay outstanding indebtedness and (iii) this offering
and the use of the proceeds therefrom to repay outstanding indebtedness, as if
these transactions had all been consummated on January 1, 1997. The unaudited
pro forma consolidated operating data are not necessarily indicative of the
operating results that would have occurred had the above transactions occurred
on January 1, 1997, nor are they necessarily indicative of the future operating
results of Suiza. The summary unaudited pro forma consolidated balance sheet
data as of September 30, 1998 gives effect to this offering and the use of the
proceeds therefrom to repay outstanding indebtedness as if this offering had
been consummated on September 30, 1998.

The summary historical and pro forma consolidated financial data have been
derived from and should be read in conjunction with "Selected Historical
Consolidated Financial Data" and "Pro Forma Consolidated Financial Data" and
notes thereto appearing elsewhere in this Prospectus, our audited consolidated
financial statements and notes thereto, our unaudited interim consolidated
financial statements and notes thereto and the separate audited financial
statements and notes thereto of Dairy Fresh, Garelick, Land-O-Sun and
Continental Can incorporated herein by reference.

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<PAGE> 11

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------- -------------------------------------
1995 1996 1997 1997 1997 1998 1998
---------- ---------- ---------- ----------- ---------- ---------- -----------
(PRO FORMA) (PRO FORMA)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales................... $1,014,926 $1,207,565 $1,794,876 $3,089,440 $1,247,203 $2,329,345 $2,605,092
Gross profit................ 201,835 236,769 402,660 680,694 287,062 543,675 590,951
Operating income(1)......... 39,392 61,010 95,292 188,445 87,821 175,232 187,041
Interest expense, net, and
financing charges on
preferred securities...... 18,942 15,707 36,664 56,550 23,351 56,492 48,325
Income from continuing
operations(2)............. 12,688 46,863 39,330 82,236 55,605 75,996 87,879
Net income(3)............... 5,555 46,963 28,764 54,757 104,533
Net income applicable to
Common Stock.............. 5,251 46,661 28,464 54,532 104,296
Income from continuing
operations per common
share:
Basic..................... 0.60 1.99 1.32 2.18 1.90 2.31 2.20
Diluted................... 0.59 1.90 1.25 2.07 1.78 2.15 2.07
Income per common share(3):
Basic..................... 0.25 1.99 0.96 1.87 3.18
Diluted................... 0.25 1.91 0.91 1.75 2.84
Average common shares:
Basic..................... 20,708,467 23,424,322 29,508,791 37,559,426 29,225,850 32,752,669 39,891,911
Diluted................... 20,935,161 24,491,899 31,348,591 39,552,685 31,071,025 41,242,617 51,066,958
BALANCE SHEET DATA
(AT END OF PERIOD):
Total assets................ $ 484,852 $ 833,624 $1,403,462 $2,766,167 $2,766,167
Long-term debt(4)........... 265,749 455,880 828,569 878,376 597,136
Mandatorily redeemable
convertible trust issued
preferred securities...... -- -- -- 682,792 682,792
Total stockholders'
equity.................... 111,909 213,854 359,310 645,818 927,058
</TABLE>

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

(1) Includes pre-tax charges for merger, financing and other costs of $9.3
million, $0.6 million and $37.0 million for the years ended December 31,
1995, 1996 and 1997, respectively.

(2) Includes the after-tax effect of the charges for merger, financing and other
costs discussed in footnote (1) of $8.6 million, $0.4 million and $34.7
million for the years ended December 31, 1995, 1996 and 1997, respectively,
and the after-tax effect of the gains on the sale or recognition of Puerto
Rico tax credits of $14.0 million, $9.6 million and $11.5 million for the
years ended December 31, 1996 and 1997 and the nine months ended September
30, 1997, respectively; and excludes income (losses) from discontinued
operations and extraordinary gains and losses discussed in footnote (3).

(3) Includes income (loss) from discontinued operations, net of taxes, of $1.3
million, $2.3 million, $0.7 million, $2.4 million and $(3.2) million for the
years ended December 31, 1995, 1996 and 1997 and the nine months ended
September 30, 1997 and 1998, respectively; extraordinary losses, net of
taxes, from the early extinguishment of debt of $8.5 million, $2.2 million,
$11.3 million, $3.3 million and $3.8 million for the years ended December
31, 1995, 1996 and 1997 and the nine months ended September 30, 1997 and
1998, respectively; and an extraordinary gain, net of taxes, of $35.5
million from the sale of Reddy Ice Corporation for the nine months ended
September 30, 1998.

(4) Includes amounts outstanding under subsidiary lines of credit and the
current portion of long-term debt.

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<PAGE> 12

RISK FACTORS

You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below are not the only
ones facing us. Additional risks that we do not yet know of or that we currently
think are not material may also have an adverse effect on our business
operations. If any of those risks or any of the risks described below actually
occur, our business, financial condition, results of operations or prospects
could be adversely affected. In that case, the price of the Common Stock could
decline, and you could lose all or part of your investment. You should also
refer to the other information set forth or incorporated by reference in this
Prospectus, including "Selected Historical Consolidated Financial Data" and "Pro
Forma Consolidated Financial Data" and notes thereto, our audited consolidated
financial statements and notes thereto, our unaudited interim consolidated
financial statements and notes thereto, the separate audited financial
statements and notes of Dairy Fresh, Garelick, Land-O-Sun and Continental Can
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations".

This Prospectus contains or incorporates by reference certain
forward-looking statements. These statements refer to future events affecting
our business, financial condition, results of operations or prospects. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual performance or results to be materially and adversely
different from any performance or results expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expects",
"anticipates", "plans", "believes", "estimates", "intends", "predicts",
"potential" or "continue" or the negative of such terms and other comparable
terminology. These statements are only predictions, and in evaluating those
statements, you should specifically consider the risks outlined below. Actual
performance or results may differ materially. We are under no duty to update any
of the forward-looking statements after the date of this Prospectus to conform
these statements to actual performance or results.

WE MAY HAVE DIFFICULTIES EXECUTING OUR ACQUISITION STRATEGY

We intend to expand our dairy and packaging businesses primarily through
acquisitions. Our ability to expand through acquisitions is subject to various
risks, including:

- increased competition for acquisitions

- higher acquisition prices

- fewer suitable acquisition candidates

- limitations on our capital resources to complete acquisitions

- inability to enter into definitive agreements for desired acquisitions

- inability to complete desired acquisitions

- increased antitrust constraints on our proposed acquisitions and
acquisition strategy

Federal antitrust authorities have reviewed or are reviewing in detail several
of our recent proposed acquisitions. We cannot predict whether these authorities
will approve, or what conditions they may impose upon, pending or future
acquisitions.

WE MAY HAVE DIFFICULTIES MANAGING
OUR GROWTH

We have expanded our operations rapidly in recent years and intend to
continue this expansion. This rapid growth places a significant demand on our
management and our financial and operational resources. Our growth strategy is
subject to various risks, including:

- inability on our part to successfully integrate or operate acquired
businesses

- inability to retain key customers of acquired businesses

- inability to realize or delays in realizing economies of scale and
operating efficiencies from acquired businesses

The integration of businesses we have acquired or may acquire in the future may
also require us to invest more capital than we expected or require more time and
effort by management than we expected.

11
<PAGE> 13

WE OPERATE IN HIGHLY COMPETITIVE MARKETS

Our dairy and packaging businesses are subject to significant competition.

We compete in the dairy business on the basis of a number of factors
including service, price, brand recognition, quality and breadth of product
line. Our principal competitors are national and regional dairy products
companies and national food service distributors that operate in our markets.
Certain of our competitors are large and well capitalized and have greater
financial, operational and marketing resources than we do.

The dairy industry has excess capacity and has been consolidating for many
years. This excess capacity is the result of improved manufacturing techniques,
the establishment of captive dairy operations by large grocery retailers and
limited growth in the demand for fresh milk products. Excess production capacity
in our markets can result in lower prices for our products.

We compete in the packaging business on the basis of a number of factors,
including price, quality and service. Our principal competitors in this business
are larger independent manufacturing companies and vertically integrated food
and industrial companies that operate captive plastic packaging manufacturing
facilities. Many of our competitors are larger and better capitalized than we
are and have greater resources than we do.

We could be adversely affected by any expansion of capacity by our existing
competitors or by new entrants in our dairy or packaging markets. We expect to
encounter additional competition as we enter new markets.

WE HAVE SUBSTANTIAL INDEBTEDNESS AND OTHER OBLIGATIONS AND MAY INCUR ADDITIONAL
INDEBTEDNESS

As of September 30, 1998, we had substantial indebtedness and other
obligations, including:

- $878.4 million of indebtedness (including $648 million under our senior
credit facility, $26.2 million under our subsidiary lines of credit and
$204.2 million of subsidiary debt obligations). In addition, $23 million
of letters of credit secured by the senior credit facility were issued
but undrawn

- $682.8 million of 5.0% Preferred Securities and 5.5% Preferred Securities

Those amounts compare to our stockholders' equity of $645.8 million as of
September 30, 1998.

Under our senior credit facility, we can incur substantial amounts of
additional indebtedness in the future. On a pro forma basis as of September 30,
1998 after giving effect to this offering, we would have been able to borrow an
additional $610 million under our senior credit facility. We have pledged the
stock of certain subsidiaries to secure this facility and the assets of other
subsidiaries to secure other indebtedness. The senior credit facility and
related debt service obligations:

- limit our ability to obtain additional financing in the future

- require us to dedicate a significant portion of our cash flow to the
payment of principal and interest on our indebtedness (which reduces the
funds we have available for other purposes)

- limit our flexibility in planning for, or reacting to, changes in our
business and market conditions

- impose on us additional financial and operational restrictions

Our ability to make scheduled payments on our indebtedness and other
financial obligations depends on our financial and operating performance. Our
financial and operating performance is subject to prevailing economic conditions
and to financial, business and other factors, some of which are beyond our
control. If we do not comply with the financial and other restrictive covenants
under our senior credit facility, we may default under this facility. Upon
default, our lenders could accelerate the indebtedness under this facility,
foreclose against their collateral or seek other remedies.

We periodically enter into various interest hedging agreements to manage
our exposure to interest rate fluctuations under our floating

12
<PAGE> 14

rate indebtedness. These agreements could result in higher interest rates,
increased interest expense or charges for fluctuations in the market values of
these hedges.

OUR RAW MATERIAL COSTS COULD INCREASE

The most important raw materials that we use in our operations are raw
milk, cream (including butterfat) and high density polyethylene resin. The
prices of these materials increase and decrease depending on supply and demand
and, in some cases, governmental regulation. Volatility in the cost of our raw
materials may adversely affect our performance.

Pursuant to the Federal Milk Marketing Order program, the federal
government and several state agencies establish minimum regional prices paid to
producers for raw milk. In 1996, the U.S. Congress passed legislation to phase
out the Federal Milk Marketing Order program. This program is currently
scheduled to be phased out by October 1999. The U.S. Department of Agriculture
has also recently proposed changes to this program, including changes in pricing
classifications for certain dairy products. We do not know whether the
Department of Agriculture will adopt its proposed changes in their current or
another form, and we do not know what effect any final changes or the
termination of this federal program will have on the market for dairy products.
In addition, various states have adopted or are considering adopting compacts
among milk producers, which would establish minimum prices paid by milk
processors, including us, to raw milk producers. We do not know whether new
compacts will be adopted or the extent to which these compacts would affect the
prices we pay for milk.

WE COULD BE ADVERSELY AFFECTED BY CHANGES IN REGULATIONS

As a manufacturer and distributor of food products, we are subject to
federal, state and local laws and regulations relating to:

- food quality

- manufacturing standards

- labeling

- packaging

The United States Food and Drug Administration and various state and local
agencies enforce these laws and regulations. An actual or alleged problem with
the quality or safety of products at any of our facilities could result in:

- product withdrawals

- product recalls

- negative publicity

- temporary plant closings

- substantial costs of compliance

Our operations are subject to other federal, foreign, state and local
governmental regulation, including laws and regulations relating to occupational
health and safety, labor, discrimination and other matters. We cannot be certain
what effect any material changes in these laws and regulations could have on our
business.

WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS

We sell food products for human consumption, which involves risks such as:

- product contamination or spoilage

- product tampering

- other adulteration of food products

Consumption of an adulterated, contaminated or spoiled product may result in
personal illness or injury. We could be subject to claims or lawsuits relating
to an actual or alleged illness or injury, and we could incur liabilities that
are not insured or that exceed our insurance coverages.

13
<PAGE> 15

LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS

Our success depends to a large extent on the skills, experience and
performance of our executive management. The loss of one or more of these
persons could hurt our business. We do not maintain key man life insurance on
any of our executive officers or directors.

A SPIN-OFF OR SALE OF OUR PACKAGING BUSINESS COULD AFFECT OUR STOCK PRICE

We are considering strategic alternatives with respect to our packaging
business. We cannot predict how any partial or complete spin-off or sale of this
business, or how a decision to retain and expand this business, could affect the
market price of our Common Stock.

WE MAY BE AFFECTED BY YEAR 2000 PROBLEMS

We are in the process of addressing our Year 2000 computer problem. If we
do not complete the necessary systems modifications on a timely basis or if
important service providers, suppliers or customers are unable to resolve their
Year 2000 issues in a timely manner, we could be adversely affected.

CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW
COULD DETER TAKEOVER ATTEMPTS

Some provisions in our Certificate of Incorporation and Bylaws could delay,
prevent or make more difficult a merger, tender offer, proxy contest or change
of control. Our stockholders might view any such transaction as being in their
best interests since the transaction could result in a higher stock price than
the current market price for our Common Stock. Among other things, our
Certificate and Bylaws:

- authorize our Board of Directors to issue preferred stock in series with
the terms of each series to be fixed by our Board of Directors

- divide our Board of Directors into three classes so that only
approximately one-third of the total number of directors is elected each
year

- permit directors to be removed only for cause

- specify advance notice requirements for stockholder proposals and
director nominations

In addition, with certain exceptions, Section 203 of the Delaware General
Corporation Law restricts mergers and other business combinations between us and
any holder that acquires 15% or more of our voting stock.

We also have a stockholder rights plan. Under this plan, after the
occurrence of specified events, our stockholders will be able to buy stock from
us or our successor at reduced prices. These rights do not extend, however, to
persons participating in takeover attempts without the consent of our Board of
Directors. Accordingly, this plan could delay, defer, make more difficult or
prevent a change of control.

WE ARE SUBJECT TO ENVIRONMENTAL REGULATIONS

We, like others in similar businesses, are subject to a variety of federal,
foreign, state and local environmental, health and safety laws and regulations
including, but not limited to, those regulating waste water and stormwater, air
emissions, storage tanks and hazardous materials. We believe that we are in
material compliance with these laws and regulations. Future developments,
including increasingly stringent regulations, could require us to make currently
unforeseen environmental expenditures.

AVAILABILITY OF SIGNIFICANT AMOUNTS
OF COMMON STOCK FOR SALE COULD
ADVERSELY AFFECT OUR MARKET PRICE

Upon completion of this offering, Suiza will have 39,591,784 shares of
Common Stock outstanding. The 6,000,000 shares of Common Stock offered hereby
will be eligible for immediate resale in the public market without restriction,
unless any of these shares are acquired by one or more of our affiliates.

14
<PAGE> 16

In addition to the shares outstanding upon completion of this offering, as
of December 31, 1998 there were additional shares of Common Stock that may be
available for resale in the public market, including:

- 3,157,268 shares of Common Stock under stock options that were
exercisable as of December 31, 1998

- 1,560,105 shares of Common Stock under stock options that have been
granted and may become exercisable in the future

- 9,096,303 shares of Common Stock issuable upon conversion of the 5.0%
Preferred Securities and 5.5% Preferred Securities

- 900,000 shares of Common Stock issuable pursuant to the underwriters'
over-allotment option in this offering

We believe that substantially all of these shares of Common Stock will be
freely tradable under the federal securities laws following this offering,
subject to limitations. These limitations include vesting provisions in option
and restricted stock agreements, restrictions pursuant to lock-up agreements,
and volume and manner of sale restrictions under Rule 144 of the Securities Act.
The future sale of a substantial number of shares of Common Stock in the public
market following this offering, or the perception that such sales could occur,
could adversely affect the prevailing market price of the Common Stock.

As of December 31, 1998, our directors and executive officers held
approximately 8.26% of the outstanding Common Stock and 1,116,055 shares of
Common Stock subject to stock options. We and our directors and executive
officers will execute lock-up agreements that limit our and their ability,
subject to certain exceptions, to sell Common Stock. These stockholders and we
will agree not to sell or otherwise dispose of any shares of Common Stock for a
period of 90 days after the date of this Prospectus without the prior written
approval of Goldman, Sachs & Co. and us. Goldman, Sachs & Co. and we may, in our
discretion and at any time without notice, release all or any portion of the
securities subject to lock-up agreements.

15
<PAGE> 17

USE OF PROCEEDS

Suiza estimates that the net proceeds from this offering (after deducting
estimated expenses) will be approximately $281 million (or $324 million assuming
full exercise of the underwriters' over-allotment option). Suiza plans to use
the net proceeds of this offering to repay a portion of its outstanding
indebtedness under its senior credit facility. This facility provides for
revolving loans of up to $1 billion to Suiza. As of September 30, 1998, the
outstanding indebtedness under this facility was $648 million (excluding $23
million of issued but undrawn letters of credit). As of January 4, 1999, the
outstanding indebtedness under this facility was $724 million (excluding $16
million of issued but undrawn letters of credit). On a pro forma basis as of
September 30, 1998, upon application of the net proceeds of this offering to
repay indebtedness under this facility, Suiza would have had $610 million of
available credit under its senior credit facility. Suiza is able to borrow all
or a portion of its available credit under its senior credit facility to fund
acquisitions and for general corporate purposes. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources -- Current Debt Obligations".

As of September 30, 1998, borrowings by Suiza under its senior credit
facility accrued interest at a floating rate of approximately 7%. Suiza has used
borrowings under its senior credit facility to fund acquisitions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

16
<PAGE> 18

PRICE RANGE OF COMMON STOCK

Our Common Stock began trading on the Nasdaq Stock Market's National Market
("Nasdaq") on April 17, 1996. Effective March 5, 1997, the Common Stock began
trading on the New York Stock Exchange, Inc. (the "NYSE"). The following table
sets forth, for the periods from April 17, 1996 to January 6, 1999, the high and
low sales prices of the Common Stock as quoted on Nasdaq and the NYSE, as
applicable. On January 6, 1999, the last reported sale price of the Common Stock
on the NYSE was $48.50 per share. At December 31, 1998, there were approximately
402 recordholders of Common Stock.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1996
Second Quarter (commencing April 17, 1996)................ $19 1/4 $14
Third Quarter............................................. 17 3/4 15 3/4
Fourth Quarter............................................ 20 3/4 16 3/4
1997
First Quarter............................................. 29 1/4 19 1/2
Second Quarter............................................ 42 24 3/4
Third Quarter............................................. 57 1/2 39 1/8
Fourth Quarter............................................ 62 1/2 43 1/2
1998
First Quarter............................................. 67 55
Second Quarter............................................ 63 53 5/16
Third Quarter............................................. 61 1/4 26 1/2
Fourth Quarter............................................ 51 5/8 25 11/16
1999
First Quarter (through January 6, 1999)................... 50 1/4 48 1/8
</TABLE>

COMMON STOCK DIVIDEND POLICY

Suiza has never declared or paid a cash dividend on its Common Stock. Suiza
intends to retain all earnings to cover working capital requirements and to fund
capital expenditures, scheduled debt repayments and acquisitions. Suiza does not
anticipate paying cash dividends on its Common Stock in the foreseeable future.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

17
<PAGE> 19

CAPITALIZATION

The following table sets forth the capitalization of Suiza as of September
30, 1998: (i) on an actual basis and (ii) on a pro forma basis, as adjusted to
give effect to this offering and the application of the estimated net proceeds
therefrom as described under "Use of Proceeds". This table should be read in
conjunction with Suiza's financial statements and notes and the more detailed
information appearing elsewhere in, or incorporated by reference in, this
Prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
-------------------------
ACTUAL PRO FORMA
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Subsidiary lines of credit and current portion of long-term
debt...................................................... $ 47,413 $ 47,413
========== ==========
Long-term debt, net of current portion:
Senior credit facility(1)................................. $ 648,000 $ 366,760
Subsidiary debt obligations............................... 182,963 182,963
---------- ----------
Total long-term debt................................... 830,963 549,723
5.0% Preferred Securities and 5.5% Preferred Securities..... 682,792 682,792
Stockholders' equity:
Common Stock, $.01 par value, 500,000,000 shares
authorized:
33,992,672 actual shares outstanding(2); 39,992,672 pro
forma shares outstanding.............................. 350 410
Additional paid-in capital................................ 488,135 769,315
Retained earnings......................................... 187,721 187,721
Treasury stock............................................ (30,388) (30,388)
---------- ----------
Total stockholders' equity............................. 645,818 927,058
---------- ----------
Total capitalization.............................. $2,159,573 $2,159,573
========== ==========
</TABLE>

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

(1) As of January 4, 1999, Suiza's outstanding borrowings under its senior
credit facility were approximately $724 million (excluding $16 million of
issued but undrawn letters of credit).

(2) Excludes: (a) 1,000,000 shares held in treasury; (b) 900,000 shares of
Common Stock issuable pursuant to the underwriters' over-allotment option;
(c) 4,742,611 shares of Common Stock subject to options outstanding as of
September 30, 1998 at a weighted average exercise price of $30.36 per share,
of which 3,198,479 were exercisable as of that date; (d) 1,428,571 shares of
Common Stock issuable upon conversion of the 5.0% Preferred Securities,
which are convertible at a conversion price of $70.00 per share; and (e)
7,667,732 shares of Common Stock issuable upon conversion of the 5.5%
Preferred Securities, which are convertible at a conversion price of $78.25
per share. As of December 31, 1998, Suiza had retired all its treasury
stock, including an additional 510,400 shares of Common Stock acquired by
Suiza since September 30, 1998.

18
<PAGE> 20

PRO FORMA CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma consolidated financial data is based on
adjustments to the historical consolidated balance sheet and related
consolidated statements of income of Suiza. The unaudited pro forma consolidated
statements of income for the year ended December 31, 1997 and the nine months
ended September 30, 1998 give effect to (i) the completed acquisitions by Suiza
of Dairy Fresh on July 1, 1997, Garelick on July 31, 1997, Land-O-Sun on
February 20, 1998, which was partially funded through the issuance of $100
million of 5.0% Preferred Securities, and Continental Can on May 29, 1998, all
of which have been accounted for using the purchase method of accounting, (ii)
the offering of $600 million of 5.5% Preferred Securities on March 24, 1998 and
the use of the proceeds therefrom to repay outstanding indebtedness and (iii)
this offering and the use of the proceeds therefrom to repay outstanding
indebtedness, as if these transactions had all been consummated on January 1,
1997. The unaudited pro forma consolidated income statement data are not
necessarily indicative of the operating results that would have occurred had the
above transactions occurred on January 1, 1997, nor are they necessarily
indicative of the future operating results of Suiza.

The unaudited pro forma consolidated balance sheet as of September 30, 1998
gives effect to the proposed issuance of 6,000,000 shares of Common Stock in
this offering and the use of the proceeds therefrom to repay outstanding debt,
as if this offering had been consummated on September 30, 1998. There is no pro
forma consolidated balance sheet effect of the completed acquisitions by Suiza,
since these acquisitions were completed prior to September 30, 1998 and, as a
result, their balance sheets are already included in the historical consolidated
balance sheet of Suiza as of that date. There is also no pro forma consolidated
balance sheet effect of the offering of the 5.5% Preferred Securities, since
this offering was completed prior to September 30, 1998 and, as a result, the
use of the related proceeds to repay outstanding indebtedness is already
included in the historical consolidated balance sheet of Suiza as of that date.

The unaudited pro forma consolidated financial data should be read in
conjunction with "Selected Historical Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Prospectus and Suiza's audited
consolidated financial statements and notes thereto, Suiza's unaudited interim
consolidated financial statements and notes thereto and the separate audited
financial statements and notes thereto of Dairy Fresh, Garelick, Land-O-Sun and
Continental Can incorporated herein by reference.

19
<PAGE> 21

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
1997
ACQUIRED CONTINENTAL
SUIZA BUSINESSES(a) CAN LAND-O-SUN ADJUSTMENTS PRO FORMA
---------- ------------- ----------- ---------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net sales........................... $1,794,876 $284,285 $546,284 $463,995 $ -- $3,089,440
Cost of sales....................... 1,392,216 222,046 456,998 341,608 (4,122)(b)(c) 2,408,746
---------- -------- -------- -------- -------- ----------
Gross profit........................ 402,660 62,239 89,286 122,387 4,122 680,694
Operating expenses:
Selling, distribution and
administrative.................. 255,449 32,613 55,941 88,964 (7,220)(b)(c)(d) 425,747
Amortization of intangibles....... 14,916 1,257 1,858 633 10,835(e) 29,499
Merger and other costs............ 37,003 -- -- -- -- 37,003
---------- -------- -------- -------- -------- ----------
Total operating expenses.... 307,368 33,870 57,799 89,597 3,615 492,249
---------- -------- -------- -------- -------- ----------
Operating income.................... 95,292 28,369 31,487 32,790 507 188,445
Other (income) expense:
Interest expense, net............. 36,664 3,753 15,965 4,319 (44,134)(f)(g)(h) 16,567
Financing charges on the preferred
securities...................... -- -- -- -- 39,983(g) 39,983
Other (income) expense............ (24,077) (18) 438 -- -- (23,657)
---------- -------- -------- -------- -------- ----------
Total other................. 12,587 3,735 16,403 4,319 (4,151) 32,893
---------- -------- -------- -------- -------- ----------
Income before income taxes.......... 82,705 24,634 15,084 28,471 4,658 155,552
Income taxes........................ 43,375 787 3,850 -- 25,120(i) 73,132
---------- -------- -------- -------- -------- ----------
Income before minority interest..... 39,330 23,847 11,234 28,471 (20,462) 82,420
Minority interest................... -- -- 3,248 -- (3,064)(j) 184
---------- -------- -------- -------- -------- ----------
Income from continuing operations... $ 39,330 $ 23,847 $ 7,986 $ 28,471 $(17,398) $ 82,236
========== ======== ======== ======== ======== ==========
Income from continuing operations
applicable to common shares....... $ 39,030 $ 23,847 $ 7,986 $ 28,471 $(17,398) $ 81,936
========== ======== ======== ======== ======== ==========
Income per common share from
continuing operations:
Basic............................. $ 1.32 $ 2.18
========== ==========
Diluted........................... $ 1.25 $ 2.07
========== ==========
Average common shares:
Basic............................. 29,508,791 37,559,426
========== ==========
Diluted........................... 31,348,591 39,552,685
========== ==========
</TABLE>

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

(a) The "1997 Acquired Businesses" includes the pre-acquisition results of
operations for Suiza's 1997 acquisition of Dairy Fresh for the six months
ended June 30, 1997 and Garelick for the seven months ended July 31, 1997.

(b) Pro forma adjustments to eliminate the excess of historical depreciation
expense of the 1997 Acquired Businesses, Land-O-Sun and Continental Can
over the depreciation of the fair value of property and equipment, which
resulted in a decrease of approximately $3.5 million and $0.8 million in
amounts charged to cost of sales and selling, distribution and
administrative expense, respectively.

(c) Pro forma adjustment to reduce Continental Can's employee benefits and
other expenses due to the adjustments to the fair value of the related
employee benefits and other liabilities at the acquisition date, resulting
in an estimated reduction of historical cost of sales and selling,
distribution and administrative costs of approximately $0.6 million and
$0.1 million, respectively.

(d) Pro forma adjustments to eliminate the salaries and benefits paid primarily
to former shareholders and officers of the 1997 Acquired Businesses,
Land-O-Sun and Continental

20
<PAGE> 22

Can, whose employment was either terminated or salaries were reduced in
contemplation of the purchase transaction, along with the elimination of
certain related party expenses of the 1997 Acquired Businesses and
Land-O-Sun, pursuant to an agreement with such related parties at
acquisition date, resulting in a reduction of historical selling,
distribution and administrative costs for the 1997 Acquired Businesses,
Land-O-Sun and Continental Can of approximately $1.3 million, $2.0 million
and $3.0 million, respectively.

(e) Amortization of goodwill and other intangibles, over the following
amortization periods, in excess of historical amounts, as follows (dollars
in thousands):

<TABLE>
<CAPTION>
1997
ACQUIRED CONTINENTAL
LIFE BUSINESSES CAN LAND-O-SUN TOTAL
----- ---------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C>
Organization costs......... 5 $ 5 $ -- $ -- $ 5
Tradenames................. 25-40 233 -- -- 233
Goodwill................... 40 2,770 2,002 5,825 10,597
------ ------ ------ -------
$3,008 $2,002 $5,825 $10,835
====== ====== ====== =======
</TABLE>

(f) Pro forma adjustment to interest expense on the average outstanding balance
of floating rate debt borrowings under Suiza's senior credit facility used
to fund the purchases of the 1997 Acquired Businesses and a portion of the
purchase price for Land-O-Sun, at an assumed interest rate of 7.25%, net of
the reduction in interest expense due to the refinancing of Land-O-Sun's
existing debt at the acquisition date, along with the reduction of interest
expense for Continental Can's fixed rate debt to a current market yield of
7.75%, as follows (in thousands):

<TABLE>
<S> <C>
1997 Acquired Businesses.................................... $11,569
Land-O-Sun.................................................. 8,809
Continental Can............................................. (1,891)
-------
Total............................................. $18,487
=======
</TABLE>

The effect of a 0.125% change in the interest rate on the new floating rate
borrowings to fund the purchases of the 1997 Acquired Businesses and
Land-O-Sun, would have resulted in a change in the pro forma interest
expense adjustment of approximately $0.4 million.

(g) Pro forma financing charges on the $100 million of 5.0% Preferred
Securities and the $20 million of 7% preferred interests issued to the
sellers in the Land-O-Sun acquisition, along with the pro forma adjustment
to reduce interest expense by approximately $42.2 million from the use of
the proceeds of the 5.5% Preferred Securities offering to repay amounts
outstanding under Suiza's senior credit facility at an assumed interest
rate of 7.25%, and the related pro forma financing charges, including the
accretion of the issue discount on the 5.5% Preferred Securities over the
term of the securities (in thousands).

<TABLE>
<CAPTION>
5.5% PREFERRED
LAND-O-SUN SECURITIES TOTAL
---------- -------------- --------
<S> <C> <C> <C>
Interest expense....................... $ -- $(42,231) $(42,231)
Financing charges on preferred
securities........................... 5,000 33,583 38,583
Land-O-Sun minority interest charge.... 1,400 -- 1,400
------ -------- --------
Total........................ $6,400 $ (8,648) $ (2,248)
====== ======== ========
</TABLE>

(h) Pro forma reduction in interest expense of approximately $20.4 million at
an assumed interest rate of 7.25% due to repayment of a portion of the
senior credit facility from the proceeds of this offering.

21
<PAGE> 23

(i) Pro forma adjustment to reflect pro forma income taxes at the estimated
effective tax rate of 40% for the 1997 Acquired Businesses, 38.5% for
Land-O-Sun, 40% for Continental Can, excluding the effects of
non-deductible goodwill, and 38% for the pro forma effect of the 5.5%
Preferred Securities offering and this offering (in thousands):

<TABLE>
<S> <C>
1997 Acquired Businesses.................................... $ 4,526
Land-O-Sun.................................................. 4,210
Continental Can............................................. 5,350
5.5% Preferred Securities................................... 3,286
This offering............................................... 7,748
-------
Total............................................. $25,120
=======
</TABLE>

(j) Pro forma adjustment of approximately $3.1 million to adjust the minority
interest charge to reflect the purchase of substantially all of the
outstanding minority owned shares of Continental Can's subsidiaries for
cash immediately prior to the Continental Can acquisition.

22
<PAGE> 24

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

NINE MONTHS ENDED SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
CONTINENTAL
SUIZA CAN(a) LAND-O-SUN(a) ADJUSTMENTS PRO FORMA
---------- ----------- ------------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net sales.............................. $2,329,345 $210,411 $65,336 $ -- $2,605,092
Cost of sales.......................... 1,785,670 178,265 50,980 (774)(b)(c) 2,014,141
---------- -------- ------- -------- ----------
Gross profit........................... 543,675 32,146 14,356 774 590,951
Operating expenses:
Selling, distribution and
administrative..................... 346,314 22,486 16,771 (6,259)(b)(c)(d) 379,312
Amortization of intangibles.......... 22,129 774 398 1,297(e) 24,598
Merger and other costs............... -- 2,100 -- (2,100)(c) --
---------- -------- ------- -------- ----------
Total operating expenses....... 368,443 25,360 17,169 (7,062) 403,910
---------- -------- ------- -------- ----------
Operating income (loss)................ 175,232 6,786 (2,813) 7,836 187,041
Other (income) expense:
Interest expense, net................ 35,951 6,552 953 (24,962)(f)(g)(h) 18,494
Financing charges on preferred
securities......................... 20,541 -- -- 9,290(g) 29,831
Other (income) expense............... (2,362) 40 9 -- (2,313)
---------- -------- ------- -------- ----------
Total other.................... 54,130 6,592 962 (15,672) 46,012
---------- -------- ------- -------- ----------
Income before income taxes............. 121,102 194 (3,775) 23,508 141,029
Income taxes........................... 43,978 (232) -- 8,226(i) 51,972
---------- -------- ------- -------- ----------
Income before minority interest........ 77,124 426 (3,775) 15,282 89,057
Minority interest...................... 1,128 615 -- (565)(j) 1,178
---------- -------- ------- -------- ----------
Income (loss) from continuing
operations........................... $ 75,996 $ (189) $(3,775) $ 15,847 $ 87,879
========== ======== ======= ======== ==========
Income (loss) from continuing
operations applicable to common
shares............................... $ 75,759 $ (189) $(3,775) $ 15,847 $ 87,642
========== ======== ======= ======== ==========
Income per common share from continuing
operations:
Basic................................ $ 2.31 $ 2.20
========== ==========
Diluted.............................. $ 2.15 $ 2.07
========== ==========
Average common shares:
Basic................................ 32,752,669 39,891,911
========== ==========
Diluted.............................. 41,242,617 51,066,958
========== ==========
</TABLE>

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

(a) Includes the pre-acquisition results of operations of Suiza's acquisitions
of Land-O-Sun for the two months ended February 20, 1998 and Continental
Can for the five months ended May 29, 1998.

(b) Pro forma adjustments to eliminate the excess of historical depreciation
expense of Land-O-Sun and Continental Can over the depreciation of the fair
value of property and equipment, which resulted in a decrease of
approximately $0.5 million and $0.1 million in amounts charged to cost of
sales and selling, distribution and administrative expense, respectively.

(c) Pro forma adjustment to reduce Continental Can's employee benefits and
other expenses due to the adjustments to the fair value of the related
employee benefits and other liabilities at acquisition date, resulting in
an estimated reduction of historical cost of sales and selling,
distribution and administrative costs of approximately $0.3 million and
$0.1 million, respectively, along with the elimination of $2.1 million of
merger costs related to the acquisition, which were expensed by Continental
Can.

(d) Pro forma adjustments to eliminate salaries and benefits paid primarily to
former shareholders and officers of Land-O-Sun and Continental Can, whose
employment was either terminated or salaries were reduced in contemplation
of the purchase transaction,

23
<PAGE> 25

along with the elimination of special acquisition stay bonuses paid to
certain key officers of Land-O-Sun and the elimination of certain related
party expenses of Land-O-Sun pursuant to an agreement with such related
parties at acquisition date, resulting in a reduction of historical
selling, distribution and administrative costs for Land-O-Sun and
Continental Can of approximately $4.9 million and $1.3 million,
respectively.

(e) Pro forma adjustment for the amortization of goodwill, over a 40 year life,
in excess of historical amounts, resulting in increases in the charges for
amortization of intangibles for Continental Can and Land-O-Sun of
approximately $0.8 million and $0.5 million, respectively.

(f) Pro forma adjustment to interest expense on the average outstanding balance
of floating rate debt borrowings under Suiza's senior credit facility used
to fund a portion of the purchase price for Land-O-Sun, at an assumed
interest rate of 7%, net of the reduction in interest expense due to the
refinancing of Land-O-Sun's existing debt at the acquisition date, along
with the reduction of interest expense for Continental Can's fixed rate
debt to a current market yield of 7.75%, as follows (in thousands):

<TABLE>
<S> <C>
Land-O-Sun.................................................. $ 818
Continental Can............................................. (821)
-----
Total............................................. $ (3)
=====
</TABLE>

The effect of a 0.125% change in the interest rate on the new floating rate
borrowings to fund the purchase of Land-O-Sun would have resulted in no
material change in the pro forma interest expense adjustment.

(g) Pro forma financing charges on the $100 million of the 5.0% Preferred
Securities and the $20 million of 7% preferred interests issued to the
sellers in the Land-O-Sun acquisition, along with the pro forma adjustment
to reduce interest expense by approximately $10.2 million from the use of
the proceeds of the 5.5% Preferred Securities offering to repay amounts
outstanding under Suiza's senior credit facility at an assumed interest
rate of 7.0%, and the related pro forma financing charges, including the
accretion of the issue discount on the 5.5% Preferred Securities over the
term of the securities (in thousands):

<TABLE>
<CAPTION>
5.5%
PREFERRED
LAND-O-SUN SECURITIES TOTAL
---------- ---------- --------
<S> <C> <C> <C>
Interest expense.......................... $ -- $(10,194) $(10,194)
Financing charges on preferred
securities.............................. 699 8,396 9,095
Land-O-Sun minority interest charge....... 195 -- 195
---- -------- --------
Total........................... $894 $ (1,798) $ (904)
==== ======== ========
</TABLE>

(h) Pro forma reduction in interest expense of approximately $14.8 million at
an assumed interest rate of 7% due to repayment of a portion of the senior
credit facility from the proceeds of this offering.

(i) Pro forma adjustment to reflect pro forma income taxes at the estimated
effective tax rate of 38.5% for Land-O-Sun, 40% for Continental Can,
excluding the effects of non-deductible goodwill, and 38% for the pro forma
effect of the 5.5% Preferred Securities offering and this offering (in
thousands):

<TABLE>
<S> <C>
Land-O-Sun.................................................. $ (407)
Continental Can............................................. 2,339
5.5% Preferred Securities................................... 683
This offering............................................... 5,611
------
Total............................................. $8,226
======
</TABLE>

(j) Pro forma adjustment of approximately $0.6 million to adjust the minority
interest charge to reflect the purchase of substantially all of the
outstanding minority owned shares of Continental Can's subsidiaries for
cash immediately prior to the Continental Can acquisition.

24
<PAGE> 26

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
Assets
SUIZA ADJUSTMENTS PRO FORMA
---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents...................... $ 32,073 $ 32,073
Temporary investments.......................... 27,395 27,395
Accounts receivable............................ 411,240 411,240
Inventories.................................... 221,619 221,619
Prepaid expenses and other..................... 17,065 17,065
Refundable income taxes........................ 19,083 19,083
Deferred income taxes.......................... 6,617 6,617
---------- ----------
Total current assets................... 735,092 735,092
Property and equipment, net...................... 746,438 746,438
Deferred income taxes............................ 2,527 2,527
Intangible and other assets...................... 1,282,110 1,282,110
---------- ----------
Total.................................. $2,766,167 $2,766,167
========== ==========

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses.......... $ 446,589 $ 446,589
Income taxes payable........................... 10,085 10,085
Lines of credit and current portion of
long-term debt.............................. 47,413 47,413
---------- ----------
Total current liabilities.............. 504,087 504,087
Long-term debt................................... 830,963 $(281,240)(a) 549,723
Other liabilities................................ 62,473 62,473
Deferred income taxes............................ 15,241 15,241
Minority interest................................ 24,793 24,793
Company-obligated mandatorily redeemable
convertible preferred securities of
subsidiaries................................... 682,792 682,792
Stockholders' Equity:
Common stock................................... 350 60(a) 410
Additional paid-in capital..................... 488,135 281,180(a) 769,315
Retained earnings.............................. 187,721 187,721
Treasury stock................................. (30,388) (30,388)
---------- --------- ----------
Total stockholders' equity............. 645,818 281,240 927,058
---------- --------- ----------
Total.................................. $2,766,167 $ -- $2,766,167
========== ========= ==========
</TABLE>

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

(a) To reflect $281 million in estimated net proceeds from the issuance of
6,000,000 shares of Common Stock at an assumed public offering price of
$49.00 per share, which is to be used to repay amounts outstanding under
the senior credit facility.

25
<PAGE> 27

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

(IN THOUSANDS, EXCEPT SHARE DATA)

The following table presents selected historical consolidated financial
data of Suiza for each of the five years in the period ended December 31, 1997,
which have been derived from Suiza's audited consolidated financial statements.
The selected historical consolidated financial data for the nine months ended
September 30, 1997 and 1998 are unaudited, and in the opinion of management,
reflect all adjustments (consisting of normal recurring adjustments) that are
necessary to present fairly the financial results for such periods. The selected
historical consolidated financial data do not purport to indicate results of
operations as of any future date or for any future period. The selected
historical consolidated financial data have been derived from and should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing elsewhere in this Prospectus and Suiza's
audited consolidated financial statements and notes thereto, Suiza's unaudited
interim consolidated financial statements and notes thereto and the separate
audited financial statements and notes thereto of Dairy Fresh, Garelick,
Land-O-Sun and Continental Can incorporated herein by reference.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales.................... $ 579,276 $ 891,165 $1,014,926 $1,207,565 $1,794,876 $1,247,203 $2,329,345
Cost of sales................ 471,622 710,175 813,091 970,796 1,392,216 960,141 1,785,670
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit................. 107,654 180,990 201,835 236,769 402,660 287,062 543,675
Operating costs and expenses:
Selling and distribution..... 60,110 99,877 107,885 123,161 197,147 145,615 267,347
General and administrative... 23,893 34,903 39,649 44,352 58,302 43,549 78,967
Amortization of
intangibles................ 4,109 5,378 5,609 7,675 14,916 10,077 22,129
Restructuring charges........ 7,100 -- -- -- -- -- --
Merger and other costs....... -- 832 9,300 571 37,003 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating costs and
expenses................... 95,212 140,990 162,443 175,759 307,368 199,241 368,443
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income............. 12,442 40,000 39,392 61,010 95,292 87,821 175,232
Other (income) expense:
Interest expense, net...... 6,266 16,855 18,942 15,707 36,664 23,351 35,951
Financing charges on
preferred securities..... -- -- -- -- -- -- 20,541
Other income, net.......... (1,406) (1,422) (2,241) (4,499) (24,077) (20,114) (2,362)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total other expense........ 4,860 15,433 16,701 11,208 12,587 3,237 54,130
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations before income
taxes and minority
interests.................. 7,582 24,567 22,691 49,802 82,705 84,584 121,102
Income taxes................. 2,185 7,452 10,003 2,939 43,375 28,979 43,978
Minority interest............ -- -- -- -- -- -- 1,128
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations................. 5,397 17,115 12,688 46,863 39,330 55,605 75,996
Income (loss) from
discontinued operations.... 1,730 1,745 1,329 2,315 717 2,422 (3,161)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of change in
accounting and
extraordinary items........ 7,127 18,860 14,017 49,178 40,047 58,027 72,835
Cumulative effect of change
in accounting.............. -- (2,272) -- -- -- -- --
Extraordinary gain (loss).... (164) (197) (8,462) (2,215) (11,283) (3,270) 31,698
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................... $ 6,963 $ 16,391 $ 5,555 $ 46,963 $ 28,764 $ 54,757 $ 104,533
========== ========== ========== ========== ========== ========== ==========
Net income applicable to
Common stock............... $ 6,963 $ 16,391 $ 5,251 $ 46,661 $ 28,464 $ 54,532 $ 104,296
========== ========== ========== ========== ========== ========== ==========
</TABLE>

26
<PAGE> 28

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Basic income per common
share:
Income from continuing
operations............... $ 0.30 $ 0.78 $ 0.60 $ 1.99 $ 1.32 $ 1.90 $ 2.31
Income (loss) from
discontinued
operations............... 0.09 0.08 0.06 0.10 0.02 0.08 (0.10)
Cumulative effect of
accounting change........ -- (0.10) -- -- -- -- --
Extraordinary gain
(loss)................... (0.01) (0.01) (0.41) (0.10) (0.38) (0.11) 0.97
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................. $ 0.38 $ 0.75 $ 0.25 $ 1.99 $ 0.96 $ 1.87 $ 3.18
========== ========== ========== ========== ========== ========== ==========
Diluted income per common
share:
Income from continuing
operations............... $ 0.28 $ 0.75 $ 0.59 $ 1.90 $ 1.25 $ 1.78 $ 2.15
Income (loss) from
discontinued
operations............... 0.09 0.08 0.06 0.10 0.02 0.08 (0.08)
Cumulative effect of
accounting change........ -- (0.10) -- -- -- -- --
Extraordinary gain
(loss)................... (0.01) (0.01) (0.40) (0.09) (0.36) (0.11) 0.77
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................. $ 0.36 $ 0.72 $ 0.25 $ 1.91 $ 0.91 $ 1.75 $ 2.84
========== ========== ========== ========== ========== ========== ==========
Average common shares:
Basic...................... 18,312,371 21,844,157 20,708,467 23,424,322 29,508,791 29,225,850 32,752,669
========== ========== ========== ========== ========== ========== ==========
Diluted.................... 19,321,127 22,761,925 20,935,161 24,491,899 31,348,591 31,071,025 41,242,617
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA (AT END OF
PERIOD):
Total assets................. $ 417,641 $ 443,307 $ 484,852 $ 833,624 $1,403,462 $2,766,167
Long-term debt(1)............ 227,084 209,355 265,749 455,880 828,659 878,376
Company-obligated mandatorily
redeemable convertible
preferred securities of
subsidiaries............... -- -- -- -- -- 682,792
Total stockholders' equity... 104,302 127,954 111,909 213,854 359,310 645,818
</TABLE>

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

(1) Includes amounts outstanding under subsidiary lines of credit and the
current portion of long-term debt.

27
<PAGE> 29

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

THE FOLLOWING DISCUSSION AND ANALYSIS OF SUIZA'S FINANCIAL CONDITION AND
RESULTS OF OPERATIONS HAS BEEN DERIVED FROM AND SHOULD BE READ IN CONJUNCTION
WITH "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" AND "PRO FORMA
CONSOLIDATED FINANCIAL DATA" AND NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS AND SUIZA'S AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
THERETO, SUIZA'S UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
THERETO AND THE SEPARATE AUDITED FINANCIAL STATEMENTS AND NOTES THERETO OF DAIRY
FRESH, GARELICK, LAND-O-SUN AND CONTINENTAL CAN INCORPORATED HEREIN BY
REFERENCE. CERTAIN INFORMATION CONTAINED IN THE DISCUSSION AND ANALYSIS SET
FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS, INCLUDING INFORMATION WITH RESPECT
TO SUIZA'S PLANS AND STRATEGY FOR ITS BUSINESS AND RELATED FINANCING, INCLUDES
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SEE "RISK
FACTORS" FOR A DISCUSSION OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
PERFORMANCE OR RESULTS TO DIFFER MATERIALLY FROM THE PERFORMANCE OR RESULTS
DESCRIBED IN OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.

OVERVIEW

Suiza is a leading manufacturer and distributor of dairy products ("Dairy")
and a leading manufacturer of rigid plastic packaging ("Packaging") in the
United States. Suiza's principal businesses have well-established reputations in
their markets for product quality and high levels of customer service.

The markets in which Suiza operates tend to be relatively mature. Because
of this, Suiza's strategy has been to grow primarily through acquisitions,
having consummated 33 Dairy and Packaging acquisitions since its initial public
offering in April 1996. Through these acquisitions, Suiza has realized and
continues to realize economies of scale and operating efficiencies. In addition,
these acquisitions give Suiza the opportunity to add complementary product lines
and extend its geographic reach.

RECENT DEVELOPMENTS

COMPLETED ACQUISITIONS

On December 17, 1998, Suiza merged Tuscan/Lehigh into its northeastern
dairy operations to form a new subsidiary in which DFA owns a 25% interest.
Tuscan/Lehigh had net sales of approximately $517 million for the twelve month
period ended September 30, 1998. The combined net sales of our northeastern
dairy operations and Tuscan/Lehigh were approximately $1.2 billion for the
twelve month period ended September 30, 1998. In the future, Suiza and DFA will
conduct dairy operations in the states of Delaware, Maryland, Pennsylvania, New
Jersey, New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Maine
and Vermont solely through this new subsidiary.

In addition to the acquisition of Tuscan/ Lehigh, Suiza acquired four small
dairy businesses and one small packaging business during the fourth quarter of
1998.

PENDING ACQUISITIONS

Suiza has entered into two definitive agreements for the acquisition of
dairy businesses, one of which is described below. Suiza engages in discussions
with other potential acquisition candidates on an ongoing basis. The completion
of one or more of any future acquisitions could be material to Suiza.

On September 10, 1998, Suiza signed a definitive agreement to acquire
publicly-traded Broughton Foods Company. Broughton is a leading manufacturer and
distributor of milk, cultured products, ice cream, extended shelf-life and other
dairy products in Michigan, Ohio, West Virginia, Kentucky, Tennessee and parts
of the eastern United States. Completion of the acquisition of Broughton is
subject to customary conditions including, among other things, the receipt of
certain governmental approvals. Federal antitrust authorities are currently
reviewing this acquisition in detail.

28
<PAGE> 30
RESULTS OF OPERATIONS

Suiza currently operates in two distinct businesses, Dairy and Packaging,
as shown below (dollars in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1995 1996 1997
-------------------- -------------------- --------------------
DOLLARS PERCENT DOLLARS PERCENT DOLLARS PERCENT
---------- ------- ---------- ------- ---------- -------

<S> <C> <C> <C> <C> <C> <C>
Net sales:
Dairy.................... $1,014,926 100.0% $1,207,565 100.0% $1,742,248 97.1%
Packaging................ -- -- -- -- 52,628 2.9%
---------- ----- ---------- ----- ---------- -----
Total net sales........ 1,014,926 100.0 1,207,565 100.0 1,794,876 100.0
Cost of sales............. 813,091 80.1 970,796 80.4 1,392,216 77.6
---------- ----- ---------- ----- ---------- -----
Gross profit.............. 201,835 19.9 236,769 19.6 402,660 22.4
Operating expenses:
Selling and
distribution........... 107,885 10.6 123,161 10.2 197,147 11.0
General and
administrative......... 39,649 3.9 44,352 3.7 58,302 3.2
Amortization of
intangibles............ 5,609 0.6 7,675 0.6 14,916 0.8
Merger costs............. 9,300 0.9 571 0.0 37,003 2.1
---------- ----- ---------- ----- ---------- -----
Total operating
expenses................. 162,443 16.0 175,759 14.5 307,368 17.1
Operating income:
Dairy.................... 50,631 64,770 134,402
Packaging................ -- -- 4,862
Corporate office and
unallocated expenses... (11,239) (3,760) (43,972)
---------- ----- ---------- ----- ---------- -----
Operating income.......... $ 39,392 3.9% $ 61,010 5.1% $ 95,292 5.3%
========== ===== ========== ===== ========== =====

<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------
1997 1998
-------------------- --------------------
DOLLARS PERCENT DOLLARS PERCENT
---------- ------- ---------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales:
Dairy.................... $1,221,919 98.0% $1,995,213 85.7%
Packaging................ 25,284 2.0 334,132 14.3
---------- ----- ---------- -----
Total net sales........ 1,247,203 100.0 2,329,345 100.0
Cost of sales............. 960,141 77.0 1,785,670 76.7
---------- ----- ---------- -----
Gross profit.............. 287,062 23.0 543,675 23.3
Operating expenses:
Selling and
distribution........... 145,615 11.7 267,347 11.4
General and
administrative......... 43,549 3.5 78,967 3.4
Amortization of
intangibles............ 10,077 0.8 22,129 1.0
Merger costs............. -- -- -- --
---------- ----- ---------- -----
Total operating
expenses................. 199,241 16.0 368,443 15.8
Operating income:
Dairy.................... 90,918 149,555
Packaging................ 2,389 36,816
Corporate office and
unallocated expenses... (5,486) (11,139)
---------- ----- ---------- -----
Operating income.......... $ 87,821 7.0% $ 175,232 7.5%
========== ===== ========== =====
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997

NET SALES. Suiza's net sales increased by 86.8% for the first nine months
of 1998 compared to the like period of 1997. Dairy net sales increased by 63.3%
for the first nine months of 1998 compared to the like period of 1997 primarily
due to (i) the acquisitions of Garelick, Dairy Fresh and Country Delite in the
last half of 1997, (ii) the acquisitions of Land-O-Sun, Louis Trauth Dairy,
Inc., Oberlin Farms Dairy, Inc., West Lynn and Cumberland Farms in the first
nine months of 1998 and (iii) increased sales and higher pricing of our branded
products. Suiza began operating in Packaging with the acquisition of Franklin
Plastics in July 1997 and extended our market presence through the acquisition
of Continental Can in May 1998. Packaging has experienced rapid growth through
these acquisitions, as well as through several smaller acquisitions and through
newly opened facilities at Franklin Plastics.

COST OF SALES. Suiza's cost of sales ratio was 76.7% for the nine months
ended September 30, 1998 compared to 77.0% for the same period in 1997. For the
first nine months of 1998, the Dairy cost of sales ratio decreased from the
prior year due to (i) realized operating synergies in Suiza's fluid dairy
operations and (ii) increased branded sales, which have a higher gross margin
than other products.

OPERATING EXPENSES. Suiza's operating expense ratio was 15.8% for the first
nine months of 1998 compared to 16.0% for the same period in 1997. The operating
expense ratio decreased slightly in the year-to-date periods as a result of
realized efficiencies in purchasing and the addition of Packaging, which has
lowered Suiza's overall operating expense ratio.

OPERATING INCOME. For the first nine months of 1998, operating income was
$175.2 million, an increase of 99.5% from 1997 operating income of $87.8
million. Suiza's operating income margin increased to 7.5% in the first nine
months of 1998 from 7.0% in the first nine months of 1997 due to acquisitions,
realized operating efficiencies and the growth of Packaging.

29
<PAGE> 31

OTHER (INCOME) EXPENSE. Interest expense increased to $36.0 million during
the first nine months of 1998 from $23.4 million in the first nine months of
1997, primarily due to the increased level of debt used to finance the
aforementioned acquisitions. Financing charges on preferred securities amounted
to $20.5 million for the first nine months of 1998, reflecting (i) the issuance
on February 20, 1998 of $100 million of 5.0% Preferred Securities related to the
acquisition of Land-O-Sun and (ii) the issuance on March 24, 1998 of $600
million of 5.5% Preferred Securities. Other income decreased to $2.4 million in
the first nine months of 1998 from $20.1 million in the first nine months of
1997 due to the recognition in the 1997 period of an $18.1 million gain from the
sale of Puerto Rico tax credits.

DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEMS. Suiza reported a loss from
discontinued operations of $3.2 million (net of tax benefit of $2.1 million)
during the first nine months in 1998 as compared to income from discontinued
operations of $2.4 million (net of tax expense of $1.7 million) during the first
nine months in 1997. In connection with the sale of the discontinued Reddy Ice
subsidiary in April 1998, Suiza reported a $35.5 million extraordinary gain (net
of $22.0 million of income taxes) and a $3.8 million extraordinary loss (net of
$2.3 million of income tax benefit) from the write-off of deferred financing
costs and the recognition of interest rate swap losses in connection with the
early extinguishment of the term loan portion of the senior credit facility.
Suiza incurred a $3.3 million extraordinary loss (net of a $2.0 million tax
benefit) in the first nine months of 1997 related to the early extinguishment of
subordinated debt, which included the write-off of deferred financing costs and
certain prepayment penalties.

NET INCOME. Suiza reported net income of $104.5 million in the first nine
months of 1998 ($72.8 million excluding the net extraordinary gain of $31.7
million) compared to $54.8 million in the first nine months of 1997 ($46.6
million excluding the after-tax gain on the sale of tax credits of $11.5 million
and the extraordinary loss of $3.3 million).

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

NET SALES. Net sales increased 48.6% to $1.8 billion in 1997 from $1.21
billion in 1996. Net sales for Dairy increased by 44.3%, or $534.7 million, to
$1.7 billion in 1997 from $1.21 billion in 1996, primarily due to the
acquisitions of Garrido y Compania, Inc. in July 1996, Swiss Dairy, a
Corporation in September 1996, Model Dairy, Inc. and Presto Foods, Inc. in
December 1996 and Dairy Fresh and Garelick in July 1997. The increased sales
reported from these acquired companies in 1997 over 1996 was $513.8 million. Net
sales in Packaging of $52.6 million were reported by Franklin Plastics, which
was acquired along with Garelick in July 1997. Suiza owned no packaging business
during 1996.

COST OF SALES. Suiza's cost of sales ratio was 77.6% for 1997 compared to
80.4% for the same period in 1996. The cost of sales ratio for Dairy decreased
from 80.4% in 1996 to 77.6% in 1997 primarily due to (i) lower average milk
costs in Suiza's domestic milk operations, which reduced sales and cost of sales
by similar amounts as cost decreases were passed through to customers, and (ii)
increases in sales of The Morningstar Group, Inc.'s portfolio of higher margin
branded and specialty dairy products. The cost of sales ratio for Packaging was
77.6% in 1997 with no comparison to 1996 due to the recent acquisition of these
operations.

OPERATING EXPENSES. Suiza's operating expense ratio was 17.1% in 1997
compared to 14.5% in 1996. Operating expense increases were experienced in both
of Suiza's operating groups reflecting the aforementioned acquisition activity.
Operating expenses also increased significantly due to $37.0 million in merger
and other costs recorded in the fourth quarter of 1997 primarily related to the
costs paid in connection with the Country Fresh Inc. and Morningstar mergers
compared to $0.6 million in merger and other costs recorded in 1996. Suiza's
operating expense ratio prior to the recognition of these merger and other costs
was 15.0% in 1997 compared to 14.5% in 1996. This operating expense ratio
increase was
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<PAGE> 32

primarily the result of lower average milk costs in 1997 when compared to 1996.
The operating expense ratio in Packaging was 13.2% during the portion of 1997 it
was owned.

OPERATING INCOME. Suiza's operating income in 1997 was $95.3 million, an
increase of 56.2% from operating income of $61.0 million during 1996. Suiza's
operating income margin increased slightly from 5.1% in 1996 to 5.3% in 1997.
When adjusted for merger and other costs, the operating income margin increased
from 5.1% in 1996 to 7.4% in 1997 primarily due to: (i) lower average milk costs
in Suiza's domestic Dairy operations and (ii) higher inherent margins at
Morningstar in addition to improved Morningstar operating margins as a result of
cost improvements resulting from the Presto acquisition.

OTHER (INCOME) EXPENSE. Interest expense increased from $15.7 million in
1996 to $36.7 million in 1997 resulting from higher average outstanding debt
levels due to the acquisitions made during 1996 and 1997. While the Country
Fresh and Morningstar mergers were stock transactions, the remaining
acquisitions were primarily funded with debt. Morningstar also financed its
December 1996 acquisition of Presto with debt. Suiza reported $24.1 million in
other income during 1997 compared to $4.5 million during 1996. The increase in
other income was primarily the result of gains of $21.8 million in 1997 and $3.4
million in 1996 from the sale of tax credits.

DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEMS. Income from discontinued
operations was $0.7 million (net of tax expense of $0.4 million) in 1997 as
compared to $2.3 million (net of tax expense of $1.5 million) in 1996. In
addition, during 1997, Suiza incurred $11.3 million in extraordinary costs (net
of $7.0 million in tax benefits) as a result of the early extinguishment of
debt. Of this amount, $3.3 million (net of a related tax benefit of $2.0
million) was related to the first quarter early extinguishment of subordinated
debt and $8.0 million (net of a related tax benefit of $5.0 million) was related
to the refinancing accomplished during the fourth quarter in connection with
Suiza's acquisition of Country Fresh and Morningstar. Both of these
extraordinary items included the write-off of deferred financing costs. During
1996, Suiza incurred $2.2 million in extraordinary costs (net of a related tax
benefit of $0.9 million) resulting from the early extinguishment of debt from
the net cash proceeds of Suiza's initial public offering in April 1996. These
costs included $1.3 million for the write-off of deferred financing costs and
$1.8 million in prepayment penalties.

NET INCOME. Suiza reported net income of $28.8 million in 1997 compared to
$47.0 million for 1996. Pretax income for 1997 was $82.7 million, which includes
merger and other costs of $37.0 million, compared to $49.8 million for 1996.
Income tax expense increased from $2.9 million in 1996 to $43.4 million in 1997.
Income tax expense was lower than statutory rates at 5.9% of pretax income in
1996 primarily as a result of the recognition of $11.75 million of deferred tax
assets from Puerto Rico tax credits, as compared to income tax expense as a
percent of pretax income of 52.4% in 1997, which was higher than statutory rates
primarily as a result of the tax effect of non-deductible merger costs in 1997.
Net income declined primarily due to the merger and other costs which were in
large part not deductible for tax purposes, only generating a tax benefit of
approximately $2.0 million. The increased level of extraordinary items also
contributed to the reduced reported income.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

NET SALES. Net sales increased to $1.2 billion for the year ended December
31, 1996 compared to $1.0 billion for the year ended December 31, 1995, an
increase of 19.0%, primarily due to (i) the acquisition of Garrido in July 1996,
Swiss Dairy in September 1996 and Model Dairy and Presto in December 1996, which
collectively reported net sales of $73.1 million during 1996 for periods
subsequent to their respective acquisition dates, and (ii) an increase in
selling prices to recoup increases in raw milk costs in Suiza's domestic Dairy
operations.

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<PAGE> 33

COST OF SALES. Suiza's cost of sales ratio was 80.4% for 1996 compared to
80.1% for the same period in 1995. The cost of sales ratio increased primarily
due to higher raw milk costs.

OPERATING EXPENSES. Operating expenses increased by $13.3 million or 8.2%
in 1996 compared to 1995. As a percentage of net sales, operating expenses
decreased to 14.5% in 1996 compared to 16.0% in 1995. The dollar increase is
primarily due to operating expenses associated with acquired businesses,
partially offset by a reduction in merger and other costs from $9.3 million in
1995 to $0.6 million in 1996. The operating expense ratio decreased in the
year-to-year comparison because of (i) reduced merger and other costs, (ii)
increased Dairy net sales due to higher milk costs (which had little impact on
operating expense levels) and (iii) the addition of Garrido, Swiss Dairy and
Model Dairy during 1996, which had lower operating expense ratios than did the
other operations.

OPERATING INCOME. Operating income in 1996 was $61.0 million, an increase
of 54.9% from operating income in 1995 of $39.4 million, which resulted in an
increase in the operating income margin to 5.1% in 1996 from 3.9% in 1995. This
increase was primarily due to the results of operations attributable to several
acquisitions consummated during 1996 and to lower merger and other costs.

OTHER (INCOME) EXPENSE. Interest expense declined to $15.7 million during
1996 from $18.9 million during 1995. The reduction in interest expense resulted
from a decrease in average interest rates from the repayment of certain
subordinated notes in April 1996 and lower average debt levels resulting
primarily from the use of proceeds from equity issuances during 1996. Other
income rose to $4.5 million in 1996 from $2.2 million in 1995 primarily as a
result of a $3.4 million gain realized during the third quarter of 1996 from the
sale of tax credits associated with Suiza's Puerto Rico operations.

DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEMS. Income from discontinued
operations was $2.3 million (net of income tax expense of $1.5 million) in 1996
compared to $1.3 million (net of income tax expense of $0.8 million) in 1995. In
addition, during 1996, Suiza incurred $2.2 million in extraordinary costs (net
of a $0.9 million tax benefit) as a result of the early extinguishment of debt
using the net cash proceeds of Suiza's initial public offering. These costs
included $1.3 million for the write-off of deferred financing costs and $1.8
million in prepayment penalties. During 1995, Suiza incurred $8.5 million in
extraordinary costs (net of $0.7 million tax benefit) to refinance indebtedness,
which included the write-off of deferred financing costs and certain prepayment
penalties.

NET INCOME. Suiza reported net income of $47.0 million in 1996 compared to
net income of $5.6 million for 1995. The 1996 net income improved due to (i)
improved results of operations resulting primarily from several acquisitions
consummated during 1996; (ii) gains and tax benefits from the recognition of tax
credits in Puerto Rico; (iii) reduced interest expense; and (iv) the reduction
in merger and other costs.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1998, Suiza had total stockholders' equity of $645.8
million and total indebtedness of $878.4 million (including $648 million under
the senior credit facility, $26.2 million under our subsidiary lines of credit
and $204.2 million of subsidiary debt obligations). In addition, there were $23
million of issued but undrawn letters of credit secured by the senior credit
facility as of that date. Suiza also had $682.8 million of 5.5% Preferred
Securities and 5.0% Preferred Securities as of September 30, 1998. As of January
4, 1999, Suiza had $724 million of borrowings outstanding and $16 million of
issued but undrawn letters of credit secured by the senior credit facility.
Suiza is currently in compliance with all covenants and financial ratios
contained in its debt agreements.

CASH FLOW

Historically, the working capital needs of Suiza have been met with cash
flow from operations along with borrowings under the senior credit facility. Net
cash provided by
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<PAGE> 34

continuing operations was $119.9 million for the first nine months of 1998 as
contrasted to $100.9 million for the first nine months of 1997. Investing
activities in the first nine months of 1998 included approximately $113.7
million in capital expenditures of which $68.6 million was spent at Dairy, $39.5
million was spent at Packaging and $5.6 million was spent at corporate.
Investing activities during the first nine months of 1998 also included $566.8
million of cash paid for acquisitions and net proceeds of $172.7 million from
the sale of Reddy Ice.

On February 20, 1998, Suiza completed the acquisition of Land-O-Sun for a
purchase price of approximately $248 million, including approximately $128
million in cash. The non-cash portion of the purchase price was funded through
the issuance of $100 million of 5.0% and the issuance of $20 million of
preferred interests of Land-O-Sun. In addition, Suiza refinanced Land-O-Sun's
existing outstanding long-term indebtedness, which totaled approximately $52
million as of the closing date. Suiza financed the cash portion of the purchase
price and refinanced the existing long-term indebtedness with borrowings of $180
million under its Senior Credit Facility. Land-O-Sun reported net sales of
approximately $464 million during 1997.

On March 24, 1998, Suiza completed the sale of $600 million of 5.5%
Preferred Securities, resulting in net proceeds after expenses of approximately
$582.5 million. The net proceeds were used to repay amounts outstanding under
the revolving loan facility of Suiza's senior credit facility.

On May 29, 1998, Suiza completed the acquisition of Continental Can for a
purchase price of approximately $181 million, which was funded through the
issuance of 2,050,635 shares of Common Stock and Suiza stock options to replace
outstanding stock options of Continental Can, along with cash of $41 million.
Suiza also assumed Continental Can's long-term indebtedness of approximately
$200 million at the acquisition date. Continental Can reported net sales of
approximately $546 million during 1997.

On June 30, 1998, Suiza acquired West Lynn, which processes and distributes
milk, juice, water, ice cream and ultra pasteurized products in the northeast.
West Lynn reported net sales of approximately $214 million in 1997.

On August 14, 1998, Suiza completed the purchase of the assets of the fluid
dairy division of Cumberland Farms. Cumberland Farms' fluid dairy division,
which processes and distributes milk, juice, water and related dairy products
and operates in the northeast, reported net sales of approximately $200 million
in 1997. Suiza financed the purchase price with borrowings under its senior
credit facility.

During the first nine months of 1998 Suiza also acquired Trauth, Oberlin,
three additional small dairy businesses and six small plastic packaging
businesses. Suiza financed these acquisitions with borrowings under its senior
credit facility.

On September 15, 1998, Suiza's Board of Directors authorized an open market
share repurchase program of up to $100 million of Common Stock. During the third
quarter of 1998, Suiza repurchased one million shares of Common Stock for a
total purchase price of approximately $30.4 million pursuant to this Board
authorization. In addition, subsequent to September 30, 1998, Suiza has
repurchased an additional 510,400 shares of Common Stock for a total purchase
price of approximately $15.6 million pursuant to this Board authorization. On
September 29, 1998, Suiza also redeemed all outstanding shares of Series A
preferred stock for the stated value of $320 per share, plus accumulated unpaid
dividends, for a total cost of $3.8 million. Suiza has suspended the share
repurchase program pending the consummation of this offering.

In addition to the acquisition of Tuscan/ Lehigh, Suiza has acquired four
small dairy businesses during the fourth quarter of 1998, which were funded
through additional borrowings under its senior credit facility.

CURRENT DEBT OBLIGATIONS

On May 29, 1998, Suiza amended its senior credit facility. Pursuant to this
amendment, Suiza terminated and repaid the term
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<PAGE> 35

loan facility and expanded the revolving loan facility to $1 billion. At
September 30, 1998, Suiza had outstanding borrowings of $648 million under the
senior credit facility. In addition, $23 million of letters of credit secured by
the senior credit facility were issued but undrawn. As of September 30, 1998,
approximately $329 million was available for future borrowings under the senior
credit facility. As of January 4, 1999, the outstanding balance of the senior
credit facility was approximately $724 million. In addition, $16 million of
letters of credit secured by the senior credit facility were issued but undrawn
as of that date. On a pro forma basis as of September 30, 1998, upon application
of the net proceeds of this offering to repay indebtedness under the senior
credit facility, Suiza would have had $610 million of available credit to fund
acquisitions and for general corporate purposes.

FUTURE CAPITAL REQUIREMENTS

Suiza intends to invest a total of approximately $150 to $160 million in
its manufacturing facilities and distribution capabilities during 1999. Of this
amount, Dairy intends to spend approximately $100 to $110 million for the year
to expand and maintain its manufacturing facilities and for fleet replacement
and Packaging intends to spend approximately $40 to $50 million to maintain and
improve facilities and equipment. These amounts are comparable to 1998
expenditures.

Suiza has current commitments, subject to certain conditions, to expend
approximately $163 million on currently pending acquisitions during 1999.

Suiza expects that cash flow from operations will be sufficient to meet
Suiza's requirements for its existing businesses for the foreseeable future.
Management expects to fund currently proposed acquisitions out of cash flow from
operations and borrowings under the senior credit facility. In the future, Suiza
intends to pursue additional acquisitions in its existing regional markets as
well as in new markets, and to seek strategic acquisition opportunities that are
compatible with its core businesses. Management believes that Suiza has the
ability to secure additional financing to pursue its acquisition and
consolidation strategy. There can be no assurance, however, that Suiza will have
sufficient available capital resources to realize its acquisition and
consolidation strategy.

KNOWN TRENDS AND UNCERTAINTIES

YEAR 2000 COMPLIANCE

The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the Year 2000 problem. The Year 2000
problem is rooted in the way dates are recorded and computed in most
applications, operating systems, hardware and embedded chips. If the problem is
not corrected, systems that use the date for calculations may fail or produce
erroneous results on or before the year 2000.

As is the case with most other companies using computers in their
operations, Suiza is currently engaged in a comprehensive project to address its
Year 2000 issues in the following areas: enterprise systems and applications;
plant floor systems; personal computers and applications; networks and
communications; supply chain; Electronic Data Interchange and miscellaneous
equipment. These areas encompass both information technology ("IT") systems
(such as enterprise systems, networks and communications, and Electronic Data
Interchange) and non-IT systems (such as plant floor systems). Each functional
area plan details specific tasks needed to assess the extent of Year 2000
issues, and to implement and test solutions to these issues. Suiza's Year 2000
readiness project is being led by a project manager and Suiza has adopted a
structural approach that has included the development of corporate standards,
the communication of the status of the project with management, and consultation
with outside experts.

Suiza has completed the assessment phase in all IT system areas and
implementation processes are underway in these areas, using both internal and
external resources. Suiza has also completed the preliminary assessment of Year
2000 issues with its plant

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<PAGE> 36

floor systems and is in the process of performing detailed inventories for these
systems. For IT and non-IT applications that are provided by a third party
software vendor, available upgrades are in the process of being implemented.
Suiza has received or requested assurances from these vendors that these systems
are already Year 2000 compliant and that timely updates will be made available
for purchased software. All critical systems, including plant floor systems, are
targeted to be Year 2000 compliant by mid-1999.

As a result of the numerous systems used by companies that Suiza has
acquired in recent years and also due to technological enhancements, Suiza has
had an ongoing information systems development plan to move these acquired
companies' systems to Suiza's platform systems, with scheduled replacements of
systems throughout the organization. Year 2000 compliance is a part of Suiza's
overall development plan. Suiza has delayed certain non-essential IT projects in
order to reassign resources to the Year 2000 strategic plan.

Suiza has incurred and expensed approximately $1 million to date for
remediation costs associated with the implementation of its Year 2000 strategic
plan for existing IT and non-IT systems that are being modified, and expects to
incur and expense approximately up to an additional $5 million in the future to
remediate internally-developed software, to inventory and test plant floor
systems and to write off unamortized costs for systems replaced. In addition to
these remediation costs expensed, Suiza has also incurred approximately $3
million of capital expenditures to date for the replacement and upgrading of
purchased software and hardware for both existing systems and the systems of
acquired businesses pursuant to its Year 2000 strategic plan and its on-going
information systems development plan. Suiza has budgeted an additional $12
million (approximately) of capital expenditures in 1999 for the purchase of
additional replacement systems; however, budgeted amounts are based on
management's estimates and actual results could differ as the plan is further
implemented. The majority of the remaining budgeted expenditures are for
replacement of plant floor systems, and until Suiza has completed its detailed
inventories for its plant floor systems, there can be no assurance whether
replacement of such systems will be necessary to the extent budgeted.

A critical step in Suiza's strategic plan is the coordination of Year 2000
readiness with third parties. Suiza is communicating with its significant
suppliers and customers to determine the extent to which Suiza and its interface
systems are vulnerable if the customer, supplier or third party fails to resolve
its Year 2000 issues. Suiza will continue to work with all of its major trading
partners to understand the associated risks and plan for contingencies. There
can be no guarantee that the systems of other companies on which Suiza's systems
and operations rely will be timely converted or that the failure of these
systems would not have an adverse effect on Suiza's systems.

Management believes that necessary modifications and replacements of
Suiza's critical IT and non-IT systems will be completed on a timely basis. If,
for any reason, critical service providers, suppliers or customers are unable to
resolve their Year 2000 issues in a timely manner, such matters could have a
material adverse impact on Suiza's results of operations. Suiza's current
assessment of risks based on the most reasonable worst case scenario, however,
is that there will be no material adverse impact on Suiza's operations or
financial performance, because management believes that if any disruption to
operations does occur, it will be isolated and/or short-term in duration.

Suiza has prioritized its efforts and is addressing areas that it considers
the most strategic first. Development of contingency plans is underway and such
plans will address individual business units and corporate applications as well
as actions necessary to mitigate the impact of third party disruptions.

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EURO CURRENCY CONVERSION

Companies conducting business in or having transactions denominated in
certain European currencies are facing the European Union's conversion to a new
common currency, the "euro". This conversion is expected to be implemented over
a three year period. On January 1, 1999, the euro became the official currency
for accounting and tax purposes of several countries of the European Union and
the exchange rate between the euro and local currencies was fixed. In 2002, the
euro will replace the individual nation's currencies. Since Suiza's Packaging
group has manufacturing facilities, and otherwise conducts business, in Europe,
the conversion to the euro will have an effect on Suiza. Suiza is currently
considering the specific nature of the impact of the conversion on its
operations, but management currently believes that there will be no material
adverse impact of the conversion on Suiza's operations or financial performance.

TRENDS IN TAX RATES

Suiza experienced increased income tax rates throughout 1998. For the nine
months ended September 30, 1998, income taxes averaged 36% of pretax income
compared to 34% of pretax income in the like period of 1997. This increase
reflects a shift of Suiza's business from Puerto Rico, which has a lower tax
rate, to the United States. This trend has been caused by Suiza's acquisitions
and is expected to continue, with 1999 income tax rates estimated to be
approximately 38%.

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BUSINESS

Suiza Foods is a leading manufacturer and distributor of dairy products and
a leading manufacturer of rigid plastic packaging in the United States. Our
principal businesses have well-established reputations in their markets for
product quality and high levels of customer service. We have grown Suiza
primarily through an aggressive acquisition and integration strategy and intend
to continue to pursue this expansion.

BUSINESS STRATEGY

We remain focused on achieving continued revenue and profit growth through
the following strategies:

ACQUISITION AND INTEGRATION

According to statistics published by the Milk Industry Foundation, the
United States fluid milk industry totaled approximately $23 billion in wholesale
value in 1997. The industry remains fragmented and is undergoing consolidation.
To capitalize on this trend, we intend to acquire strong dairy businesses in new
markets and to strengthen our presence in existing markets through add-on
acquisitions. By pursuing this strategy, we seek to accomplish the following
objectives:

- expand the geographic coverage of our dairy business to better serve an
increasingly national customer base

- gain scale efficiencies in purchasing, product development and consumer
research as we increase our sales base

- develop a more efficient DSD system for distributing a greater volume and
variety of branded and higher margin products to our customers

- combine the increased geographic scope of our DSD system with our
national warehouse system to increase the productivity of our
manufacturing, distribution and marketing assets

- reduce manufacturing costs and increase product quality through the
continued integration of manufacturing operations into specialized,
scale-efficient facilities

In pursuing our acquisition and integration strategy for our packaging
business, we seek to accomplish the following objectives:

- expand the geographic coverage of our manufacturing facilities to better
serve our national customers and to minimize transportation costs

- broaden our product line and technological capabilities to better meet
our customers' needs

Suiza currently has two pending acquisitions and engages in discussions
with other potential acquisition candidates on an ongoing basis. The completion
of one or more of any future acquisitions could be material to Suiza.

As noted, we are currently considering our strategic alternatives for our
packaging business. Pending any final decision, we intend to pursue our current
acquisition and integration strategy.

ORGANIC GROWTH

We continue to build our existing dairy distribution network and extend our
dairy and packaging product offerings. We are currently test marketing and
introducing new products and packaging innovations and investing in product
research and marketing to develop additional product and packaging innovations.
We intend to develop or acquire new product lines that are compatible with our
manufacturing, distribution and marketing infrastructure and that can serve as
additional platforms for future growth.

ENHANCEMENT OF OPERATING MARGINS

We continue to seek margin improvements through increased production and
purchasing efficiencies, operating synergies from acquired businesses and
increased sales of higher-margin products sales. By pursuing this strategy, we
have improved our operating margin from 2.1% for the year

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<PAGE> 39

ended December 31, 1993 to 7.2% for the
nine months ended September 30, 1998 on a pro forma basis.

In order to implement our growth strategies, we have expanded our
management team and invested in product development, marketing and other
centralized functions.

PRODUCTS AND SERVICES

DAIRY

Our dairy products include:

- fluid milk, including flavored milks

- ice cream and novelties

- dairy and non-dairy coffee creamers

- half-and-half and whipping cream

- sour cream

- cottage cheese

- yogurt

- dairy and non-dairy frozen whipped toppings

We also manufacture and distribute fruit juices and other flavored drinks,
bottled water and coffee.

We manufacture and market our dairy products under proprietary brand names.
We also manufacture products on a private-label basis for large customers. Our
brands include International Delight, Mocha Mix, Second Nature, Naturally Yours,
Lactaid, Flav-O-Rich, Pet, Country Fresh, Dairymens, Lehigh Valley Farms, Model,
Natural by Garelick Farms, Suiza, Louis Trauth, Tuscan, Velda Farms and West
Lynn Creamery.

PACKAGING

Our rigid plastic packaging business contributed approximately 21% of our
net sales on a pro forma basis for the nine months ended September 30, 1998. We
entered the packaging business through our acquisition of Franklin Plastics in
August 1997 as a part of our acquisition of Garelick. We extended our market
presence in packaging through the acquisition of Continental Can in May 1998 and
seven smaller acquisitions during 1998. We manufacture blow-molded plastic
containers made primarily from polyethylene for packaging food grade products
such as milk, water and other beverages. We also produce plastic containers in a
variety of sizes for use in packaging consumer and industrial products.

We are currently considering our strategic alternatives for our packaging
business, which could include a partial or complete spin-off, a sale of all or a
portion of the business, or a continuation of our acquisition and integration
strategy.

SALES AND DISTRIBUTION

DAIRY

We market and sell our dairy products to a wide variety of retail and food
service customers including grocery stores, club stores, convenience stores,
institutional food service, gas stores, schools, restaurants and hotels. We
market and sell our specialty food products on a national basis to a wide
variety of retail, food service and dairy outlets and in a number of foreign
countries through an internal sales force and independent brokers.

PACKAGING

Our packaging customers include regional dairy manufacturers, bottled water
processors, beverage manufacturers and consumer and industrial products
companies. We operate stand-alone manufacturing facilities and facilities
located on our customers' premises. Our on-site manufacturing facilities

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<PAGE> 40

manufacture and convey plastic containers directly to our customers' filling
operations. At these facilities, we also manufacture plastic containers for
distribution to off-site customers. Our packaging business markets and sells its
products through its internal sales force.

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<PAGE> 41

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the executive
officers and directors of the Company as of December 31, 1998.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Gregg L. Engles(1)........................ 41 Chairman of the Board and Chief Executive Officer
G. Irwin Gordon........................... 48 President -- Suiza Dairy Group
William P. Brick.......................... 47 Chief Operating Officer -- Suiza Dairy Group
William L. Estes.......................... 51 President and Chief Operating Officer -- Suiza
Packaging Group
Barry A. Fromberg......................... 43 Executive Vice President and Chief Financial
Officer
Tracy L. Noll............................. 50 Executive Vice President -- Corporate Development
Miguel Calado............................. 43 Executive Vice President -- Strategic Planning,
President -- Suiza Dairy International
Operations
Michelle P. Goolsby....................... 40 Executive Vice President and General Counsel
Cletes O. Beshears(1)..................... 72 Vice Chairman of the Board
Hector M. Nevares(1)...................... 48 Vice Chairman of the Board
Alan J. Bernon............................ 44 Director
Stephen L. Green(2)(3)(4)................. 47 Director
Joseph S. Hardin, Jr.(3)(4)............... 53 Director
Robert L. Kaminski........................ 48 Director
David F. Miller(5)........................ 69 Director
John R. Muse.............................. 48 Director
Delton C. Parks........................... 59 Director
P. Eugene Pender(2)(3)(4)(5).............. 67 Director
Jim L. Turner(2)(5)....................... 52 Director
</TABLE>

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

(1) Member of the Executive Committee of the Board.

(2) Member of the Audit Committee of the Board.

(3) Member of the Compensation Committee of the Board.

(4) Member of the Stock Option Committee of the Board.

(5) Member of the Nominating Committee of the Board.

GREGG L. ENGLES. Mr. Engles joined Suiza in October 1994 as Chairman of the
Board and Chief Executive Officer. Prior to the formation of Suiza, Mr. Engles
served as Chairman of the Board and Chief Executive Officer of Reddy Ice
Corporation, Chairman of the Board of Suiza-Puerto Rico, and Chairman of the
Board of Velda Farms. Mr. Engles is a director of Evercom, Inc., an independent
provider of inmate telecommunications services.

G. IRWIN GORDON. Mr. Gordon joined Suiza in September 1997 as Executive
Vice President and Chief Marketing Officer. In February 1998, Mr. Gordon became
President -- Suiza Dairy Group. Prior to joining Suiza, Mr. Gordon served in
various capacities for PepsiCo, Inc. ("PepsiCo") beginning in March 1983,
including most recently as Senior Vice President -- Global Branding, from May
1996 until August 1997, Senior Vice President -- Marketing from September 1992
until April 1996, and Region President --

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<PAGE> 42

Southern Europe from November 1991 until August 1992. Prior to joining PepsiCo
in 1983, Mr. Gordon served in various capacities for Kellogg Company. Mr. Gordon
is a director of Horizon Organic Holding Corporation.

WILLIAM P. BRICK. Mr. Brick joined Suiza in July 1996 as Executive Vice
President. In October 1996, Mr. Brick became Chief Operating Officer of our
Suiza Dairy Group. Prior to joining Suiza, Mr. Brick served as Vice
President -- Sales and Marketing for the Metropoulos Management Group from
February 1996 until June 1996. From August 1995 until January 1996, Mr. Brick
served as Vice President -- Sales and Marketing for Ultra Products. From April
1995 until August 1995, Mr. Brick operated a private golf course in Ontario,
Canada. Mr. Brick served in various marketing capacities, including Vice
President of Sales, for Morningstar from October 1991 until December 1994. From
1988 until August 1991, Mr. Brick served in various marketing capacities for
Palm Dairies Inc. in Calgary, Alberta.

WILLIAM L. ESTES. Mr. Estes joined Suiza in February 1998. In August 1998,
Mr. Estes became President and Chief Operating Officer -- Suiza Packaging Group.
From November 1996 until February 1998, Mr. Estes served as President and Chief
Operating Officer of McKesson Corporation's McKesson -- Carrollton operations.
From December 1993 until November 1996, Mr. Estes served in various capacities
with Foxmeyer Health Corporation ("Foxmeyer"), most recently as President and
Chief Operating Officer. Prior to joining Foxmeyer, Mr. Estes served as Vice
President and Chief Operating Officer of The Body Shop, Inc. from October 1991
until December 1993. For the period from 1983 until 1991, Mr. Estes served in
various capacities with PepsiCo, primarily with its Frito-Lay, Inc. subsidiary.

BARRY A. FROMBERG. Mr. Fromberg joined Suiza in July 1998 as Executive Vice
President and Chief Financial Officer. Prior to joining Suiza, Mr. Fromberg
served from December 1995 to July 1998 as Chairman and Chief Executive Officer
of Paging Network International, Inc., a wholly-owned subsidiary of Paging
Network, Inc. ("PageNet"), a NASDAQ company which is a leading wireless
communications company. Mr. Fromberg also served as Senior Vice President and
Chief Financial Officer of PageNet from May 1993 to December 1995. From 1987
until May 1993, Mr. Fromberg served as Executive Vice President and Chief
Financial Officer of Simmons Communications, Inc., a national cable television
operator.

TRACY L. NOLL. Mr. Noll joined Suiza in October 1994. Since June 1998, Mr.
Noll has served as Executive Vice President -- Corporate Development. From
October 1994 until June 1998, Mr. Noll served as Vice President, Chief Financial
Officer and Secretary of Suiza. From November 1997 until June 1998, Mr. Noll
also served as Executive Vice President and Chief Administrative Officer of the
Company. Prior to joining Suiza, Mr. Noll served as Controller of Foxmeyer
Corporation from June 1994 until September 1994. From March 1988 until June
1994, Mr. Noll served as Vice President and Chief Financial Officer of
Morningstar.

MIGUEL CALADO. Mr. Calado joined Suiza in September 1998 as Executive Vice
President and President of International Operations. Prior to joining the
company, Mr. Calado served in a number of senior executive positions at PepsiCo
from 1983 until September 1998, most recently as Senior Vice
President -- Finance and Chief Financial Officer for Frito-Lay International.
Prior to joining PepsiCo in 1983, Mr. Calado served in various capacities in
Samarco Mineracao, S.A. in Brazil.

MICHELLE P. GOOLSBY. Ms. Goolsby joined Suiza in July 1998 as Executive
Vice President and General Counsel. From September 1988 until July 1998, Ms.
Goolsby held various positions with the law firm of Winstead Sechrest & Minick,
most recently as a partner, chair of the Business section and a member of the
Compensation Committee. Prior to joining Winstead Sechrest & Minick in 1988, Ms.
Goolsby held various positions with the Trammell Crow Company.

CLETES O. BESHEARS. Mr. Beshears joined Suiza in October 1994 as director,
President and Chief Operating Officer. In July 1997,

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Mr. Beshears became Vice Chairman of the Board. Mr. Beshears relinquished the
title of Chief Operating Officer in October 1996 and President in June 1997. Mr.
Beshears served as President and Chief Executive Officer of Velda Farms from
April 1994 to April 1995. From March 1988 to April 1994, Mr. Beshears provided
consulting services to companies pursuing acquisitions of dairy companies. From
1980 to 1988, Mr. Beshears served as Vice President of The Southland Corporation
and Chief Operating Officer of its Dairy Group. From 1965 to 1980, Mr. Beshears
served as Division Manager of several of The Southland Corporation's regional
dairies, including Velda Farms.

HECTOR M. NEVARES. Mr. Nevares was elected to the board in October 1994.
Mr. Nevares served as President of Suiza-Puerto Rico from June 1983 until
September 1996, having served in additional executive capacities at Suiza-Puerto
Rico since June 1974. In September 1996, Mr. Nevares became Vice Chairman of the
Board. Mr. Nevares is a director of First Federal Savings Bank, a public
company, in San Juan, Puerto Rico.

ALAN J. BERNON. Mr. Bernon was elected to the board in August 1997,
following Suiza's acquisition of Garelick. From September 1985 until December
1988, Mr. Bernon served as President of Garelick, and now serves as President of
Suiza's new subsidiary formed in connection with Suiza's acquisition of
Tuscan/Lehigh.

STEPHEN L. GREEN. Mr. Green was elected to the board in October 1994. Mr.
Green has served as a General Partner of Canaan Capital Partners, L.P., the
former general partner of Canaan Capital Limited Partnership and Canaan Capital
Offshore Limited Partnership, C.V., principal stockholders of Suiza, since
November 1991. From October 1985 until November 1991, Mr. Green served as
Managing Director of GE Capital Corporation's Corporate Finance Group. Mr. Green
is a director of Chartwell Re Corporation, Advance Paradigm, Inc. and Alarmguard
Holdings, Inc., each of which is a public company.

JOSEPH S. HARDIN, JR. Mr. Hardin was elected to the Board in May 1998.
Since May 1997, Mr. Hardin has served as Chief Executive Officer of Kinko's,
Inc., which provides business services through more than 850 retail locations
worldwide. From 1986 to April 1997, Mr. Hardin held a variety of positions with
increasing responsibility at Wal-Mart Stores, Inc., most recently as an
Executive Vice President and as the President and Chief Executive Officer of
SAM's Club, the wholesale division of Wal-Mart Stores, Inc.

ROBERT L. KAMINSKI. Mr. Kaminski was elected to the Board in November 1994.
Mr. Kaminski has served as President of Robert Kaminski Interests, Inc. since
1984 and has been a principal in Kaminski Engles Capital Corporation ("KECC")
since 1988. Robert Kaminski Interests, Inc. and KECC are both investment banking
and consulting firms.

DAVID F. MILLER. Mr. Miller was elected to the Board in March 1997. Prior
to his retirement in 1990, Mr. Miller served as Vice Chairman of the Board and
Chief Operating Officer of J.C. Penney Company, Inc. ("JCPenney") since 1987. At
the time of his retirement, Mr. Miller had served in various capacities for
JCPenney for a total of 37 years. Mr. Miller is a director of Winn-Dixie Stores,
Inc. and What A World.

JOHN R. MUSE. Mr. Muse was elected to the Board in November 1997, in
connection with Suiza's acquisition of The Morningstar Group, Inc. Mr. Muse
co-founded Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse") in 1989 and has
recently been named Chief Operating Officer. Prior to the formation of Hicks
Muse, Mr. Muse headed the investment/merchant banking activities of Prudential
Securities for the southwestern region of the United States from 1984 to 1989.
Mr. Muse is Chairman of Atrium Companies, Inc. and Hat Brands, Inc. and serves
as director of Arena Brands, Inc., Arnold Palmer Golf Management Co., Coho
Energy, Inc., Glass's Group, International Home Foods, Inc., LIN Television
Corporation, Lucchese, Inc., Olympus Real Estate Corporation, Regal Cinemas,
Inc. and Sunrise Television Corp.

DELTON C. PARKS. Mr. Parks was elected to the board in November 1997,
following

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Suiza's acquisition of Country Fresh. Since 1980, Mr. Parks has served as
President and Chief Executive Officer of Country Fresh.

P. EUGENE PENDER. Mr. Pender was elected to the board in October 1994.
Prior to his retirement in December 1987, Mr. Pender served as Vice President
and Controller of The Southland Corporation. Thereafter, Mr. Pender served as a
consultant to The Southland Corporation until March 1991.

JIM L. TURNER. Mr. Turner was elected to the board in November 1997, in
connection with Suiza's acquisition of The Morningstar Group, Inc. Since March
1985, Mr. Turner has served as the Chairman, President and Chief Executive
Officer of Dr Pepper Bottling Holdings, Inc. and Dr Pepper Bottling Company of
Texas. Mr. Turner is a director of All American Bottling Corporation.

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DESCRIPTION OF SUIZA CAPITAL STOCK

The authorized capital stock of Suiza consists of 501,000,000 shares, of
which 500,000,000 shares are Common Stock, par value $.01 per share, and
1,000,000 shares are preferred stock, par value $.01 per share.

As of December 31, 1998, Suiza had 33,591,784 shares of Common Stock
outstanding, with 4,717,373 additional shares of Common Stock subject to options
outstanding, of which 3,157,268 shares were then currently exercisable, and
9,096,303 shares of Common Stock issuable upon conversion of the 5.0% Preferred
Securities and 5.5% Preferred Securities.

COMMON STOCK

Subject to the rights of the holders of any outstanding shares of preferred
stock and any restrictions that may be imposed under the senior credit facility,
holders of Common Stock are entitled to receive such dividends, if any, as may
be declared by the Board of Directors out of legally available funds. Suiza has
never declared or paid a cash dividend on its Common Stock and does not
anticipate paying cash dividends on its Common Stock in the foreseeable future.
In the event of the liquidation, dissolution or winding up of Suiza, holders of
Common Stock are entitled to share equally and ratably, based on the number of
shares held, in the assets, if any, remaining after payment of all of Suiza's
debts and liabilities and the liquidation preference of any outstanding
preferred stock.

Holders of Common Stock are entitled to one vote per share held of record
on any matter submitted to the holders of Common Stock for a vote. Because
holders of Common Stock do not have cumulative voting rights, the holders of a
majority of the shares of Common Stock represented at a meeting can elect all
the directors. The shares of Common Stock are neither redeemable nor
convertible, and the holders thereof have no preemptive rights to subscribe for
or purchase any additional shares of capital stock issued by Suiza.

PREFERRED STOCK

Suiza is authorized to issue shares of preferred stock in one or more
series, and to designate the rights, preferences, limitations and restrictions
of and upon shares of each series, including voting, redemption and conversion
rights. The Board of Directors also may designate dividend rights and
preferences in liquidation. It is not possible to state the actual effect of the
authorization and issuance of additional series of preferred stock upon the
rights of holders of Common Stock until the Board of Directors determines the
specific terms, rights and preferences of a series of preferred stock. Such
effects might include, among other things, granting the holders of preferred
stock priority over the holders of Common Stock with respect to the payment of
dividends; diluting the voting power of the Common Stock; or granting the
holders of preferred stock preference with respect to liquidation rights. In
addition, under certain circumstances, the issuance of preferred stock may
render more difficult or tend to discourage a merger, tender offer or proxy
contest, the assumption of control by a holder of a large block of Suiza's
securities or the removal of incumbent management.

RIGHTS PLAN

On February 27, 1998, the Board of Directors of Suiza declared a dividend
of one common share purchase right (a "Right") for each outstanding share of
Common Stock. The dividend was made to the shareholders of record at the close
of business on March 18, 1998 (the "Record Date"). Each Right entitles the
registered holder to purchase from Suiza one share of Common Stock, at a price
of $210 (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement dated as of March 6, 1998 (the
"Rights Agreement") between Suiza and Harris Trust Company as Rights Agent (the
"Rights Agent").

Until the earlier to occur of (1) ten business days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained

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<PAGE> 46

the right to acquire, beneficial ownership of 15% or more of the outstanding
Common Stock (an "Acquiring Person") or (2) ten business days following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of such outstanding Common Stock
(the earlier of such dates being the "Distribution Date"), the Rights will be
evidenced, with respect to any Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate with a copy of a summary of rights
(the "Summary Rights") attached to the certificate. A majority of the Continuing
Directors (as defined below) may in their discretion vote to extend the
Distribution Date.

The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Stock
outstanding even without such notation or a copy of a Summary of Rights being
attached to such Certificate, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (the "Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights.

The Rights are not exercisable until the Distribution Date. The Rights will
expire on March 18, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by Suiza,
in each case, as described below.

The Purchase Price payable and the number of shares of Common Stock or
other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (1) in the event of a stock
dividend on, or a subdivision, combination, or reclassification of, the Common
Stock; (2) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for or purchase Common Stock at a price, or securities
convertible into Common Stock with a conversion price, less than the then
current market price of the Common Stock or (3) upon the distribution to holders
of the Common Stock of evidences of indebtedness or assets or of subscription
rights or warrants (other than those referred to above). With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu of such
fractional shares, an adjustment in cash will be made based on the market price
of the Common Stock on the last trading day prior to the date of exercise.

In the event that any person or entity becomes an Acquiring Person (the
beneficial owner of 15% or more of the Common Stock), provision will be made so
that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will then be void), will have the right to purchase from
Suiza upon exercise that number of shares of Common Stock having a market value
of two times the applicable exercise price of the Right of $210.

The Rights Agreement excludes from the definition of Acquiring Persons
those Persons who certify to Suiza that they inadvertently acquired in excess of
14.9% of the outstanding Common Stock and thereafter divest such excess Common
Stock or who acquire 15% or more of the Common Stock in a Permitted Transaction.
A "Permitted Transaction" is a stock acquisition or tender or exchange offer
pursuant to a definitive agreement which would result in a person beneficially
owning 15% or more of the Common Stock and which has been approved by the Board
of Directors (including a majority of the

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Continuing Directors) prior to the execution of the agreement or the public
announcement of the offer.

In the event that Suiza is acquired in a merger or other business
combination transaction, or 50% or more of its consolidated assets or earning
power are sold, proper provisions will be made so that each holder of a Right
will have the right to purchase from the acquiring company, upon the exercise of
the Right at the then applicable exercise price, that number of shares of Common
Stock of the acquiring company that at the time of such transaction will have a
market value of two times the applicable exercise price of the Right of $210.

After a person becomes an Acquiring Person, Suiza's Board of Directors may
exchange the Rights, other than those Rights owned by the Acquiring Person, in
whole or in part, at an exchange ratio of one share of Common Stock per Right,
subject to adjustment. However, the Board of Directors cannot conduct an
exchange at any time after any Person, together with its affiliates and
associates, becomes the Beneficial Owner of 50% or more of the outstanding
Common Stock.

At any time prior to a Distribution Date, a requisite majority may redeem
the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). In addition, the Board of Directors may extend or reduce
the period during which the Rights are redeemable, so long as the Rights are
redeemable at the time of such extension or reduction. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Board of Directors of Suiza
without the consent of the holders of the Rights, including an amendment to
extend the final expiration date, except that from and after the date any Person
becomes an Acquiring Person, no such amendment may adversely affect the economic
interests of the holders of the Rights.

Until a Right is exercised, the holder of the Right, as such, will have no
rights as a stockholder of Suiza, including, without limitation, the right to
vote, or to receive dividends.

The term "Continuing Director" means any member of the Board of Directors
of Suiza who (1) is not an Acquiring Person or an affiliate or associate of an
Acquiring Person and (2) was either a member of the Board of Directors of Suiza
on the date of the Rights Agreement or who subsequently became a director of
Suiza and whose initial election or initial nomination for election was approved
by a majority of the Continuing Directors then on the Board of Directors of
Suiza.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Suiza in
certain circumstances. Accordingly, the existence of the Rights may deter
certain acquirors from making takeover proposals or tender offers. However, the
Rights are not intended to prevent a takeover, but rather are designed to
enhance the ability of the Board of Directors to negotiate with an acquiror on
behalf of all of the stockholders.

SECTION 203 OF THE DELAWARE GENERAL
CORPORATION LAW

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"), which prohibits certain persons ("Interested Stockholders")
from engaging in a "business combination" with a Delaware corporation for three
years following the date such persons become Interested Stockholders. Interested
Stockholders generally include: (1) persons who are the beneficial owners of 15%
or more of the outstanding voting stock of the corporation; and (2) persons who
are affiliates or associates of the corporation and who hold 15% or more of the
corporation's outstanding voting stock at any time within three years before the
date on which such person's status as an Interested Stockholder is determined.
Subject to certain exceptions, a "business combination" includes, among other
things: (1) mergers or consolidations; (2) the sale, lease, exchange, mortgage,

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pledge, transfer or other disposition of assets having an aggregate market value
equal to 10% or more of either the aggregate market value of all assets of the
corporation determined on a consolidated basis or the aggregate market value of
all the outstanding stock of the corporation; (3) transactions that result in
the issuance or transfer by the corporation of any stock of the corporation to
the Interested Stockholder, except pursuant to a transaction that effects a pro
rata distribution to all stockholders of the corporation; (4) any transaction
involving the corporation that has the effect of increasing the proportionate
share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the corporation that is owned directly or
indirectly by the Interested Stockholder; or (5) any receipt by the Interested
Stockholder of the benefit (except proportionately as a stockholder) of any
loans, advances, guarantees, pledges or other financial benefits provided by or
through the corporation.

Section 203 does not apply to a business combination if: (1) before a
person becomes an Interested Stockholder, the board of directors of the
corporation approves the transaction in which the Interested Stockholder became
an Interested Stockholder or approved the business combination; (2) upon
consummation of the transaction that resulted in the Interested Stockholder
becoming an Interested Stockholder, the Interested Stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commences (other than certain excluded shares); or (3) following a
transaction in which the person became an Interested Stockholder, the business
combination is (a) approved by the board of directors of the corporation, and
(b) authorized at a regular or special meeting of stockholders (and not by
written consent) by the affirmative vote of the holders of at least two-thirds
of the outstanding voting stock of the corporation not owned by the Interested
Stockholder.

CERTAIN PROVISIONS RELATING TO CHANGES IN CONTROL

Suiza's Certificate of Incorporation and Bylaws contain several provisions
that could have the effect of delaying, deterring or preventing the acquisition
of control of Suiza by means of tender offer, open market purchases, a proxy
contest or otherwise. Set forth below is a description of those provisions.

CLASSIFIED BOARD OF DIRECTORS

The Certificate of Incorporation divides the Board of Directors into three
classes, with one class elected annually to the Board of Directors for a
three-year term. Each class is as nearly equal in number as possible, and the
stockholders elect approximately one-third of the directors each year to
three-year terms. At each annual meeting of stockholders, directors will be
elected to succeed those directors whose terms have expired, and each newly
elected director will serve for a three-year term. Suiza believes that a
classified Board of Directors will help assure the continuity and stability of
Suiza's Board of Directors and Suiza's business strategies and policies. The
classified board provision could increase the likelihood that, in the event of a
takeover of Suiza, incumbent directors will retain their positions. In addition,
the classified board provision will help ensure that Suiza's Board of Directors,
if confronted with an unsolicited proposal from a third party that has acquired
a block of the voting stock of Suiza, will have sufficient time to review the
proposal and appropriate alternatives and to seek the best available result for
all stockholders.

NUMBER OF DIRECTORS; REMOVAL; FILLING VACANCIES

The Bylaws provide that the exact number of directors shall be fixed from
time to time by the Board of Directors. With a classified board, directors may
only be removed "for cause" and only by the affirmative vote of a majority of
the stockholders entitled to vote. As defined in Suiza's Bylaws, "for cause"
means: (1) commission of an act of fraud or embezzlement against Suiza; (2)
conviction of a felony or a crime involving moral turpitude; (3) gross
negligence or willful misconduct in performing the director's duties to Suiza or
its stockholders; or (4) breach of fiduciary duty owned to Suiza.
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The Bylaws also provide that vacant directorships may be filled by the Board of
Directors.

SPECIAL MEETINGS OF STOCKHOLDERS

Suiza's Bylaws provide that special meetings of stockholders may be called
only by the Chief Executive Officer, and shall be called by the Chief Executive
Officer or the Secretary at the written request of a majority of the Board of
Directors. Special meetings may not be called by the stockholders.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

Suiza's Bylaws establish advance notice procedures with regard to
stockholder proposals and the nomination, other than by or at the direction of
the Board of Directors or a committee thereof, of candidates for election as
directors. These procedures provide that the notice of stockholder proposals and
stockholder nominations for the election of directors at an annual meeting must
be in writing and received by the Secretary of Suiza no later than March 1 of
any calendar year (or if less than 35 days' notice of a meeting of stockholders
is given, stockholder nominations must be delivered to the Secretary of Suiza no
later than the close of business on the seventh day following the day notice was
mailed). Stockholder proposals and nominations for the election of directors at
a special meeting must be in writing and received by the Secretary of Suiza no
later than the close of business on the tenth day following the day on which
notice of the meeting was mailed or public disclosure of the date of the meeting
was made, whichever occurs first. The notice of stockholder nominations must set
forth certain information with respect to each nominee who is not an incumbent
director.

CERTAIN EFFECT OF AUTHORIZED BUT UNISSUED STOCK

Unissued and unreserved shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital and for
facilitating corporate acquisitions. One of the effects of unissued and
unreserved shares of capital stock may be to enable the Board of Directors to
render more difficult or discourage an attempt to obtain control of Suiza by
means of a merger, tender offer, proxy contest or otherwise, and thereby to
protect the continuity of Suiza's management. If, in the due exercise of its
fiduciary obligations, for example, the Board of Directors determines that a
takeover proposal was not in Suiza's best interests, such shares could be issued
by Board of Directors without stockholder approval in one or more private
transactions or other transactions that might prevent or render more difficult
or costly the completion of the takeover transaction by 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.

TRANSFER AGENT AND REGISTRAR

Harris Trust and Savings Bank is the transfer agent and registrar for the
Common Stock.

NEW YORK STOCK EXCHANGE LISTING

The Common Stock is listed for trading on the New York Stock Exchange under
the symbol "SZA".

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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States Federal
income and estate tax considerations with respect to the ownership and
disposition of Common Stock applicable to Non-U.S. Holders. In general, a
"Non-U.S. Holder" is any holder other than (i) a citizen or resident of the
United States; (ii) a corporation or partnership created or organized in the
United States or under the laws of the United States of any state; (iii) an
estate, the income of which is includable in gross income for United States
federal income tax purposes regardless of its source; or (iv) a trust if (a) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more United States persons have the
authority to control all substantial decisions of the trust. This discussion is
based on current provisions of the Internal Revenue Code of 1986, as amended,
Treasury Regulations promulgated thereunder, judicial opinions, published
positions of the Internal Revenue Service (the "IRS"), and all other applicable
authorities, all of which are subject to change (possibly with retroactive
effect). This discussion does not address all aspects of income and estate
taxation or any aspects of state, local or non-United States taxes, nor does it
consider any specific facts or circumstances that may apply to a particular Non-
U.S. Holder that may be subject to special treatment under the United States
federal income tax laws (such as insurance companies, tax-exempt organizations,
financial institutions, brokers, dealers in securities, and certain U.S.
expatriates). ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL, AND NON-UNITED
STATES INCOME AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING AND DISPOSING
OF SHARES OF COMMON STOCK.

DIVIDENDS

In general, dividends paid to a Non-U.S. Holder will be subject to United
States withholding tax at a 30% rate of the gross amount (or a lower rate
prescribed by an applicable income tax treaty) unless the dividends are either
(i) effectively connected with a trade or business carried on by the Non-U.S.
Holder within the United States or (ii) if certain income tax treaties apply,
attributable to a permanent establishment (or, in the case of an individual
performing personal services, a fixed base) in the United States maintained by
the Non-U.S. Holder. Dividends effectively connected with such a United States
trade or business or attributable to such a United States permanent
establishment or fixed base generally will not be subject to United States
withholding tax if the Non-U.S. Holder files certain forms, including IRS Form
4224 (or any successor form), with the payor of the dividend, but will generally
be subject to United States federal income tax on a net income basis in the same
manner as if the Non-U.S. Holder were a resident of the United States. A
Non-U.S. Holder that is a corporation may be subject to an additional branch
profits tax at a rate of 30% (or such lower rate as may be specified by an
applicable income tax treaty) on the repatriation from the United States of its
"effectively connected earnings and profits," subject to certain adjustments. To
determine the applicability of a tax treaty providing for a lower rate of
withholding under the currently effective Treasury Regulations (the "Current
Regulations") and published IRS positions, dividends paid to an address in a
foreign country are presumed to be paid to a resident of that country absent
knowledge to the contrary. Under Treasury Regulations issued on October 6, 1997
(the "Final Regulations"), generally effective for payments made after December
31, 1999, a Non-U.S. Holder (including, in certain cases of Non-U.S. Holders
that are pass-through entities, the owner or owners of such entities) will be
required to satisfy certain certification requirements in order to claim a
reduced rate of withholding pursuant to an applicable income tax treaty.

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GAIN OR SALE OR OTHER DISPOSITION
OF COMMON STOCK

In general, a Non-U.S. Holder will not be subject to United States federal
income tax on any gain realized upon the sale or other disposition of such
holder's shares of Common Stock unless (i) the gain either is effectively
connected with a trade or business carried on by the Non-U.S. Holder within the
United States or, if certain income tax treaties apply, is attributable to a
permanent establishment (or, in the case of an individual performing personal
services, a fixed base) in the United States maintained by the Non-U.S. Holder
(and, in either case, the branch profits tax discussed above may also apply if
the Non-U.S. Holder is a corporation); (ii) the Non-U.S. Holder is an individual
who holds shares of Common Stock as a capital asset and is present in the United
States for 183 days or more in the taxable year of disposition and certain other
tests are met; (iii) the Non-U.S. Holder is subject to tax pursuant to the
provisions of U.S. tax law applicable to certain U.S. expatriates (including
certain former citizens and residents of the United States); or (iv) Suiza is or
has been a United States real property holding corporation (a "USRPHC") for
United States Federal income tax purposes (which Suiza does not believe that it
has been, currently is, or will become) at any time within the shorter of the
five-year period preceding such disposition or such Non-U.S. Holder's holding
period. If Suiza were or were to become a USRPHC at any time during this period,
gains realized upon a disposition of Common Stock by a Non-U.S. Holder that did
not directly or indirectly own more than 5% of the Common Stock during this
period generally would not be subject to United States Federal income tax,
provided that the Common Stock is regularly traded on an established securities
market.

ESTATE TAX

Common Stock owned or treated as owned by an individual who is not a
citizen or resident (as defined for United States Federal estate tax purposes)
of the United States at the time of death will be includable in the individual's
gross estate for United States Federal estate tax purposes unless an applicable
estate tax treaty provides otherwise, and therefore may be subject to United
States Federal estate tax.

BACKUP WITHHOLDING, INFORMATION REPORTING,
AND OTHER REPORTING REQUIREMENTS

Suiza must report annually to the Internal Revenue Service and to each Non-
U.S. Holder the amount of dividends paid to, and the tax withheld with respect
to, each Non-U.S. Holder. These reporting requirements apply regardless of
whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of this information also may be made available under the provisions of a
specific treaty or agreement with the tax authorities in the country in which
the Non-U.S. Holder resides or is established.

Under the Current Regulations, United States backup withholding tax (which
generally is imposed at the rate of 31% on certain payments to persons that fail
to furnish the information required under the United States information
reporting requirements) and information reporting requirements (other than those
discussed above under "Dividends") generally will not apply to dividends paid on
Common Stock to a Non-U.S. holder at an address outside the United States.
Backup withholding and information reporting generally will apply, however, to
dividends paid on shares of Common Stock to a Non-U.S. Holder at an address in
the United States, if such holder fails to establish an exemption or to provide
certain other information to the payor.

Under the Current Regulations, the payment of proceeds from the disposition
of Common Stock to or through a United States office of a broker will be subject
to information reporting and backup withholding unless the beneficial owner,
under penalties of perjury, certifies, among other things, its status as a
Non-U.S. Holder or otherwise establishes an exemption. The payment of proceeds
from the disposition of Common Stock to or through a non-U.S. office of a broker
generally will not be subject to backup withholding and information reporting
except as noted below. In the case of proceeds from
50
<PAGE> 52

a disposition of Common Stock paid to or through a non-U.S. office of a broker
that is (i) a United States person; (ii) a "controlled foreign corporation" for
United States Federal income tax purposes; or (iii) a foreign person 50% or more
of whose gross income from certain periods is effectively connected with a
United States trade or business, information reporting (but not backup
withholding) will apply unless the broker has documentary evidence in its files
that the owner is a Non-U.S. Holder (and the broker has no actual knowledge to
the contrary).

Under the Final Regulations, the payment of dividends or the payment of
proceeds from the disposition of Common Stock to a Non-U.S. Holder may be
subject to information reporting and backup withholding unless such recipient
satisfies applicable certification requirements or otherwise establishes an
exemption.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded or
credited against the Non-U.S. Holder's United States Federal income tax
liability, if any, provided that the required information is furnished to the
Internal Revenue Service in a timely manner.

51
<PAGE> 53
UNDERWRITING

The Company and the underwriters for the offering (the "Underwriters")
named below have entered into an underwriting agreement with respect to the
shares being offered. Subject to certain conditions, each Underwriter has
severally agreed to purchase the number of shares indicated in the following
table. Goldman, Sachs & Co.; Donaldson, Lufkin & Jenrette Securities
Corporation; Bear, Stearns & Co. Inc. and J.P. Morgan Securities Inc. are
collectively acting as the representatives of the Underwriters.

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Goldman, Sachs & Co. .......................................
Donaldson, Lufkin & Jenrette Securities Corporation.........
Bear, Stearns & Co. Inc. ...................................
J.P. Morgan Securities Inc. ................................
---------
Total............................................. 6,000,000
=========
</TABLE>

If the Underwriters sell more shares than the total number set forth in the
table above, the Underwriters have an option to buy up to an additional 900,000
shares from the Company to cover such sales. They may exercise that option for
30 days. If any shares are purchased pursuant to this option, the Underwriters
will severally purchase shares in approximately the same proportion as set forth
in the table above.

The following tables show the per share and total underwriting discounts
and commissions to be paid to the Underwriters by the Company. Such amounts are
shown assuming both no exercise and full exercise of the Underwriters' option to
purchase additional shares.

<TABLE>
<CAPTION>
Paid by the Company
-------------------
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per Share............ $ $
Total................ $ $
</TABLE>

Shares sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this Prospectus. Any
shares sold by the Underwriters to securities dealers may be sold at a discount
of up to $ per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the Underwriters to
certain other brokers or dealers at a discount of up to $ per share from the
initial public offering price. If all the shares are not sold at the initial
offering price, the representatives may change the offering price and the other
selling terms.

The Company has agreed with the Underwriters not to dispose of or hedge any
of its Common Stock or securities convertible into or exchangeable for shares of
Common Stock during the period from the date of this Prospectus continuing
through the date 90 days after the date of this Prospectus, except with the
prior written consent of the Underwriters and subject to certain exceptions.
This agreement does not apply to any existing employee benefit plans.

In connection with the offering, the Underwriters may purchase and sell
shares of Common Stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the Underwriters of a greater
number of shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the Common Stock while
the offering pursuant to this prospectus is in progress.

52
<PAGE> 54

The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such Underwriter in stabilizing or short covering
transactions.

These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Common Stock. As a result, the price of the
Common Stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
Underwriters any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.

Each Underwriter has agreed that (a) it has not offered or sold and prior
to the date six months after the date of issue of the shares of Common Stock
will not offer or sell any shares of Common Stock to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances that have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 and (b)
it has complied, and will comply, with all applicable provisions of the
Financial Services Act of 1986 of Great Britain with respect to anything done by
it in relation to the shares of Common Stock in, from or otherwise involving the
United Kingdom.

There are restrictions on the offer and sale of the shares of Common Stock
offered hereby in the United Kingdom. All applicable provisions of the Financial
Services Act 1986 and the Public Offers of Securities Regulations 1995 with
respect to anything done by any person in relation to the shares of Common Stock
offered hereby in, from or otherwise involving the United Kingdom must be
complied with.

Buyers of shares of Common Stock offered hereby may be required to pay
stamp taxes and other charges in accordance with the laws and practices of the
country of purchase in addition to the initial public offering price.

Sales of shares of Common Stock made outside of the United States will be
effected through selling agents of the Underwriters. No shares of Common Stock
offered hereby have been registered for the purpose of sales outside the United
States, as any such sales will be made in reliance on Regulation S under the
Securities Act.

The Company estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately $1.0
million.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act.

EXPERTS

The consolidated financial statements of Suiza Foods Corporation as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 have been incorporated in this Prospectus by reference from
the Suiza Foods Corporation Annual Report on Form 10-K for the year ended
December 31, 1997. Such consolidated financial statements, except The
Morningstar Group Inc.'s consolidated financial statements as of December 31,
1996 and for each of the two years in the period ended December 31, 1996, which
have been consolidated with those of Suiza Foods Corporation, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report which
is incorporated herein by reference. The consolidated financial statements of
The Morningstar Group Inc. as of December 31, 1996 and for each of the two years
in the period ended December 31, 1996 (consolidated with those of Suiza Foods
Corporation for those periods and which are not presented separately) have been
audited by Arthur Andersen LLP, independent public
53
<PAGE> 55

accountants, as indicated in their report which is incorporated herein by
reference.

The financial statements of Land-O-Sun Dairies, L.L.C. as of December 31,
1997 and 1996 and for the year ended December 31, 1997 and the two-month period
ended December 31, 1996, incorporated by reference in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference.

The consolidated financial statements of Continental Can Company, Inc. as
of December 31, 1997 and 1996 and for each of the three years in the period
ended December 31, 1997 incorporated by reference in this Prospectus have been
audited by KPMG LLP, independent auditors, as stated in their report which is
incorporated herein by reference.

The financial statements of Dairy Fresh, L.P., a Delaware limited
partnership, as of December 31, 1996 and 1995 and for the years then ended and
the period from July 1, 1994 (date of acquisition) to December 31, 1994,
incorporated by reference into this Prospectus have been audited by McGladrey &
Pullen, LLP, independent auditors, as stated in their report which is
incorporated herein by reference.

The combined financial statements of Garelick, as of September 30, 1996 and
1995 and for each of the three years in the period ended September 30, 1996,
incorporated by reference into this Prospectus have been audited by
PricewaterhouseCoopers LLP, independent accountants, as stated in their report
which is incorporated herein by reference.

Such financial statements are incorporated herein by reference in reliance
upon the respective reports of such firms given upon their authority as experts
in accounting and auditing.

LEGAL MATTERS

The validity of the Common Stock and certain legal matters relating thereto
has been passed upon on behalf of Suiza by Hughes & Luce, L.L.P. A partner with
Hughes & Luce, L.L.P. beneficially owns 41,795 shares of Common Stock. Certain
legal matters will be passed upon for the Underwriters by Weil, Gotshal & Manges
LLP.

54
<PAGE> 56

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

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
rely on any unauthorized information or representations. This prospectus is an
offer to sell only the shares offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Get More Information... 3
Incorporation of Certain Documents by
Reference.......................... 4
Prospectus Summary................... 5
Risk Factors......................... 11
Use of Proceeds...................... 16
Price Range of Common Stock.......... 17
Common Stock Dividend Policy......... 17
Capitalization....................... 18
Pro Forma Consolidated Financial
Data............................... 19
Selected Historical Consolidated
Financial Data..................... 26
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 28
Business............................. 37
Management........................... 40
Description of Suiza Capital Stock... 44
Certain United States Federal Tax
Considerations for Non-United
States Holders..................... 49
Underwriting......................... 52
Experts.............................. 53
Legal Matters........................ 54
</TABLE>

------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
6,000,000 Shares

SUIZA FOODS CORPORATION

Common Stock

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

[SUIZA LOGO]

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

GOLDMAN, SACHS & CO.

DONALDSON, LUFKIN & JENRETTE

BEAR, STEARNS & CO. INC.

J.P. MORGAN & CO.

Representatives of the Underwriters

------------------------------------------------------
------------------------------------------------------
<PAGE> 57

PART II

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table indicates the estimated expenses to be incurred in
connection with the offering described in this Registration Statement, all of
which will be paid by the Company.

<TABLE>
<S> <C>
Registration fee............................................ $ 93,033
Printing fees............................................... 150,000
Accounting fees and expenses................................ 150,000
Legal fees and expenses..................................... 200,000
Blue Sky fees and expenses (including counsel fees)......... 1,000
NYSE listing fee............................................ 89,000
Miscellaneous expenses...................................... 316,967
----------
Total:............................................ $1,000,000
----------
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Certificate of Incorporation provides that no director of the
Company will be personally liable to the Company or any of its stockholders for
monetary damages arising from the director's breach of fiduciary duty as a
director, with certain limited exceptions.

Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with such action, suit or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner such
person reasonably believed to be in the best interests, or not opposed to the
best interests, of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.

The power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct unless the
court, in its discretion, believes that in light of all the circumstances
indemnification should apply.

The Company's Certificate of Incorporation contains provisions requiring it
to indemnify its officers and directors to the fullest extent permitted by the
Delaware General Corporation Law.

ITEM 16. EXHIBITS.

The Exhibits to this Registration Statement are listed in the Index to
Exhibits on page II-5 of this Registration Statement, which Index is
incorporated herein by reference.

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, 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

II-1
<PAGE> 58

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 the purpose of determining any liability under the Securities
Act of 1933, 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.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) and 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement 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.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of 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 of 1933 and will be governed by the final adjudication of such issue.

II-2
<PAGE> 59

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on January 7, 1999.

SUIZA FOODS CORPORATION

By: /s/ GREGG L. ENGLES
----------------------------------
Gregg L. Engles
Chairman of the Board,
Chief Executive Officer and
Director

POWER OF ATTORNEY

We, the undersigned officers and directors of Suiza Foods Corporation,
hereby severally constitute and appoint Gregg L. Engles and Lisa N. Tyson, and
each of them, our true and law attorneys-in-fact and agents, with full power of
substitution and resubstitution, for each of us in our name, place and stead, in
any and all capacities, to sign Suiza Food Corporation's Registration Statement
on Form S-3, and any other Registration Statement relating to the same offering,
and any and all amendments thereto (including post-effective amendments), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grant to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as each of us might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them or his or their substitute or substitutes may lawfully do or cause
to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:

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

/s/ GREGG L. ENGLES Chairman of the Board, January 7, 1999
- ----------------------------------------------------- Chief Executive Officer and
Gregg L. Engles Director (Principal
Executive Officer)

/s/ ALAN J. BERNON Director January 7, 1999
- -----------------------------------------------------
Alan J. Bernon

/s/ CLETES O. BESHEARS Director January 7, 1999
- -----------------------------------------------------
Cletes O. Beshears

/s/ STEPHEN L. GREEN Director January 7, 1999
- -----------------------------------------------------
Stephen L. Green

/s/ JOSEPH S. HARDIN, JR. Director January 7, 1999
- -----------------------------------------------------
Joseph S. Hardin, Jr.
</TABLE>

II-3
<PAGE> 60

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

/s/ ROBERT L. KAMINSKI Director January 7, 1999
- -----------------------------------------------------
Robert L. Kaminski

/s/ DAVID F. MILLER, SR Director January 7, 1999
- -----------------------------------------------------
David F. Miller, Sr.

/s/ JOHN R. MUSE Director January 7, 1999
- -----------------------------------------------------
John R. Muse

/s/ HECTOR M. NEVARES Director January 7, 1999
- -----------------------------------------------------
Hector M. Nevares

/s/ DELTON C. PARKS Director January 7, 1999
- -----------------------------------------------------
Delton C. Parks

/s/ P. EUGENE PENDER Director January 7, 1999
- -----------------------------------------------------
P. Eugene Pender

/s/ JIM L. TURNER Director January 7, 1999
- -----------------------------------------------------
Jim L. Turner

/s/ BARRY A. FROMBERG Executive Vice President January 7, 1999
- ----------------------------------------------------- and Chief Financial Officer
Barry A. Fromberg (Principal Financial and
Accounting Officer)
</TABLE>

II-4
<PAGE> 61

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S>
1.1* -- Underwriting Agreement.
5.1* -- Opinion of Hughes & Luce, LLP, special counsel to Suiza
Foods Corporation, as to the legality of the Common Stock
being registered hereby.
23.1 -- Consent of Hughes & Luce, LLP (included in Exhibit 5.1).
23.2** -- Consent of Deloitte & Touche LLP.
23.3** -- Consent of Arthur Andersen LLP.
23.4** -- Consent of KPMG LLP.
23.5** -- Consent of McGladrey & Pullen, LLP.
23.6** -- Consent of PricewaterhouseCoopers LLP.
24.1 -- Power of Attorney (included in Part II of this
Registration Statement).
</TABLE>

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

* To be filed by amendment.

** Filed herewith.

II-5

<PAGE> 1

EXHIBIT 23.2

CONSENT OF DELOITTE & TOUCHE LLP

We consent to the incorporation by reference in this Registration Statement
of Suiza Foods Corporation on Form S-3 of our report dated March 27, 1998,
appearing in the Annual Report on Form 10-K of Suiza Foods Corporation for the
year ended December 31, 1997, and our report dated February 6, 1998 (February
20, 1998 as to Note 11) with respect to the financial statements of Land-O-Sun
Dairies, L.L.C., appearing in the Current Report on Form 8-K filed March 9,
1998, as amended on April 7, 1998, of Suiza Foods Corporation.

/s/ DELOITTE & TOUCHE LLP

Dallas, Texas
January 5, 1999

<PAGE> 1

EXHIBIT 23.3

CONSENT OF ARTHUR ANDERSEN LLP

As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of Suiza Foods Corporation on Form
S-3 of our report dated November 26, 1997, included in Suiza Foods Corporation's
Form 10-K for the year ended December 31, 1997 and to all references to our firm
included in this Registration Statement.

/s/ ARTHUR ANDERSEN LLP

Dallas, Texas
January 5, 1999

<PAGE> 1

EXHIBIT 23.4

CONSENT OF KPMG LLP

We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Suiza Foods Corporation of our report on the consolidated
financial statements of Continental Can Company, Inc., dated March 5, 1998
appearing in the Annual Report on Form 10-K of Continental Can Company, Inc. for
the year ended December 31, 1997; and to the reference to our firm under the
heading "Experts" in this Prospectus, which is part of such Registration
Statement.

/s/ KPMG LLP

Melville, New York
January 5, 1999

<PAGE> 1

EXHIBIT 23.5

CONSENT OF MCGLADREY & PULLEN, LLP

We hereby consent to the incorporation by reference in this Registration
Statement of Suiza Foods Corporation on Form S-3 of our report dated March 10,
1997, except for Note 13 as to which the date is July 1, 1997, with respect to
the financial statements of Dairy Fresh, L.P., a Delaware limited partnership,
included in the Current Report on Form 8-K filed July 14, 1997, as amended on
August 22, 1997, of Suiza Foods Corporation, and to the reference to us under
the heading "Experts" in the Prospectus which is part of such Registration
Statement.

/s/ MCGLADREY & PULLEN, LLP

Winston-Salem, North Carolina
January 5, 1999

<PAGE> 1

EXHIBIT 23.6

CONSENT OF PRICEWATERHOUSECOOPERS LLP

We hereby consent to the incorporation by reference in this Registration
Statement of Suiza Foods Corporation to register 6,000,000 shares of Common
Stock on Form S-3 of our report dated July 31, 1997, with respect to the
combined financial statements of The Garelick Companies, included in the Current
Report on Form 8-K filed July 14, 1997, as amended on August 22, 1997, of Suiza
Foods Corporation, and to the reference to us under the heading "Experts" in
this Prospectus which is part of such Registration Statement.

/s/ PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
January 5, 1999