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Second-Highest Annual Operating Income Highlights Financial Results

NORWAY, IOWA ( September 9 , 2004) - Just two years after suffering a potentially devastating loss of almost $10 million, Frontier Natural Products Co-op, a leading natural products company, announced near-record operating income for fiscal year 2004 at its annual meeting last month. On strong net sales of $37.4 million, operating income rose to $2.7 million, the second-highest in the co-op's 28-year history.

CEO Tony Bedard says Frontier's strategy over the last two years—strengthening traditional categories and services while aggressively developing new products—has paid off. "We've reestablished production efficiencies and our customer service by concentrating on what we do best," says Bedard, "and we're getting outstanding sales from our new products at the same time."

Frontier exceeded its projections with over $1.3 million in sales of new products in fiscal year 2004—lead by the Aura Cacia® Foam Bath line, which was the most successful new product launch in the brand's history. A line of small packages of Frontier bulk spices and Simply Organic® Dips & Dressings also performed exceptionally well when introduced.

Bedard told the members that the co-op had achieved record market share for natural products in aromatherapy and packaged seasonings, with Aura Cacia items accounting for 15 of the 16 top-selling new aromatherapy items in the last year, and six of the top 12 new seasoning items spots held by Simply Organic Dips & Dressings, according to SPINSsource.

Other highlights of the fiscal year Bedard presented at the co-op's annual meeting included:

- Growth in organic leadership, with Frontier brands accounting for over 67% of the organic spices sold in natural food stores and Frontier's organic sales increasing at over 20% per year.
- An on-time order delivery rate of 99.5%
- More than 2,500 new products from other manufacturers added for distribution
- $250,000 deferred patronage paid to members
- Reduction of long-term liabilities by nearly $2.4 million
- Sale of the pasta portion of the Simply Organic business to allow Frontier to focus on the spices, seasonings and mixes in the line

The meeting also featured a sneak preview of Frontier's new fall product introductions by Vice President of Marketing Clint Landis. Sales of new products were very strong in fiscal year 2004, and the goal is to continue that trend in 2005. The co-op has an aggressive schedule of new product introductions focused on natural personal care and certified organic seasoning products for the current year.

The annual meeting was held in conjunction with HerbFest, the country's largest herbal and natural living conference, which Frontier held again this year after a two-year absence.

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Frontier Natural Products Co-op(TM)
Founded in 1976 and based in Norway, Iowa, Frontier Natural Products Co-op(TM) offers a full line of natural and organic products under the Frontier, Simply Organic®, Aura Cacia® and Aura Cacia Organics® brands. Products include culinary herbs, spices and baking flavors; bulk herbs and spices; and natural and organic aromatherapy products. Frontier's goal is to provide consumers with the highest-quality organic and natural products while supporting and promoting social and environmental responsibility. For more information, visit Frontier's website at