##### Table of Contents



FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

|    |  |                                                                                          | 
|--- |  | ---------------------------------------------------------------------------------------- | 
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF 1934 | 

For the quarterly period ended March 30, 2002

OR

|      |  |                                                                                          | 
|----- |  | ---------------------------------------------------------------------------------------- | 
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 | 

Commission file number 0-14190

DREYERS GRAND ICE CREAM, INC.
(Exact name of registrant as specified in its charter)

| |                                 |  |                    
| | ------------------------------- |  | -------------------
| | Delaware                        |  | No. 94-2967523     
| | (State or other jurisdiction of |  | (I.R.S. Employer   
| | incorporation or organization)  |  | Identification No.)

5929 College Avenue, Oakland, California 94618
(Address of principal executive offices) (Zip Code)

(510) 652-8187
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]     No [   ]

Indicate the number of shares outstanding of each of the issuers classes
of common stock as of the latest practicable date.

|                           |  |                    |  | 
|-------------------------- |  | ------------------ |  | 
|                           |  | Shares Outstanding | 
|                           |  | May 11, 2002       | 
|                           |  |                    | 
|Common stock, $1 par value |  | 34,699,000         | 





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TABLE OF CONTENTS



|                              |                                                                                                             |                                                           |  |  |  |  |  | 
|----------------------------- | ----------------------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS.                                                                              
|                              |                                                                                                             | CONSOLIDATED BALANCE SHEET                               
|                              |                                                                                                             | CONSOLIDATED STATEMENT OF OPERATIONS                     
|                              |                                                                                                             | CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
|                              |                                                                                                             | CONSOLIDATED STATEMENT OF CASH FLOWS                     
|                              |                                                                                                             | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS               
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
 CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.                                        
|PART II: OTHER INFORMATION   
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                                   
|SIGNATURE                    



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##### Table of Contents






PART I: FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS.

DREYERS GRAND ICE CREAM, INC.




CONSOLIDATED BALANCE SHEET

|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |         |         | 
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------- | ------------- | ------- | - | ------------- | ------- | ------- | 
|                                                     |                                                                                                                                                                            |                                                                                                                           |         | Mar. 30, 2002 |         |   | Dec. 29, 2001 |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|($ in thousands, except per share
          amounts) |                                                                                                                                                                            | (Unaudited)                                                                                                               |         |               |         |   |              
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Assets                                               |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Current
          Assets:                            |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|                                                     |                                                                                                                                                                            | Cash and
          cash equivalents                                                                                       |         | $             | 1,596   |   |               | $       | 1,650   | 
|                                                     |                                                                                                                                                                            | Trade
          accounts receivable, net of allowance for doubtful accounts of$1,699
          in 2002 and $1,024 in 2001 |         |               | 118,438 |   |               |         | 89,721  | 
|                                                     |                                                                                                                                                                            | Other
          accounts receivable                                                                                       |         |               | 17,515  |   |               |         | 16,116  | 
|                                                     |                                                                                                                                                                            | Inventories                                                                                                               |         |               | 90,499  |   |               |         | 81,298  | 
|                                                     |                                                                                                                                                                            | Deferred
          income taxes                                                                                           |         |               | 3,443   |   |               |         | 3,547   | 
|                                                     |                                                                                                                                                                            | Prepaid
          expenses and other                                                                                      |         |               | 18,201  |   |               |         | 8,849   | 
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|                                                     |                                                                                                                                                                            | Total
          current assets                                                                                            |         |               | 249,692 |   |               |         | 201,181 | 
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Property,
          plant and equipment, net         |                                                                                                                                                                            |                                                                                                                           | 204,144 |               |         |   | 198,565       |        
|Goodwill                                             |                                                                                                                                                                            |                                                                                                                           | 84,382  |               |         |   | 39,114        |        
|Other
          intangibles, net                     |                                                                                                                                                                            |                                                                                                                           | 2,188   |               |         |   | 55,354        |        
|Other
          assets                               |                                                                                                                                                                            |                                                                                                                           | 5,736   |               |         |   | 4,475         |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|Total
          assets                               |                                                                                                                                                                            | $                                                                                                                         | 546,142 |               |         | $ | 498,689       |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|                                                    
|                                                    
|                                                    
|                                                    
|Liabilities
          and Stockholders Equity       |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Current
          Liabilities:                       |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|                                                     | Accounts
          payable and accrued liabilities                                                                                                                         |                                                                                                                           | $       | 109,883       |         |   | $             | 91,794  |        
|                                                     | Accrued
          payroll and employee benefits                                                                                                                            |                                                                                                                           |         | 21,270        |         |   |               | 25,369  |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|                                                     | Total
          current liabilities                                                                                                                                        |                                                                                                                           |         | 131,153       |         |   |               | 117,163 |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Long-term
          debt                             |                                                                                                                                                                            |                                                                                                                           | 190,871 |               |         |   | 148,671       |        
|Deferred
          income taxes                      |                                                                                                                                                                            |                                                                                                                           | 14,333  |               |         |   | 24,490        |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|Total
          liabilities                          |                                                                                                                                                                            |                                                                                                                           | 336,357 |               |         |   | 290,324       |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|Commitments
          and contingencies              |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|Stockholders
          Equity:                      |                                                                                                                                                                            |                                                                                                                           |         |               |         |   |               |        
|                                                     | Preferred
          stock, $1 par value  10,000,000 shares authorized;no shares issued
          or outstanding in 2002 and 2001                                          |                                                                                                                           |         |               |         |   |               |         |        
|                                                     | Common stock, $1 par value  60,000,000
          shares authorized;34,625,000 shares and 34,461,000 shares issued and
          outstandingin 2002 and 2001, respectively |                                                                                                                           |         | 34,625        |         |   |               | 34,461  |        
|                                                     | Capital
          in excess of par                                                                                                                                         |                                                                                                                           |         | 162,250       |         |   |               | 160,103 |        
|                                                     | Notes
          receivable from stockholders                                                                                                                               |                                                                                                                           |         | (2,670        | )       |   |               | (2,546  | )      
|                                                     | Retained
          earnings                                                                                                                                                |                                                                                                                           |         | 15,580        |         |   |               | 16,347  |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|Total
          stockholders equity                 |                                                                                                                                                                            |                                                                                                                           | 209,785 |               |         |   | 208,365       |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  
|Total
          liabilities and stockholders equity |                                                                                                                                                                            | $                                                                                                                         | 546,142 |               |         | $ | 498,689       |        
|                                                     |                                                                                                                                                                            |                                                                                                                           |         |               |         |  

See accompanying Notes to Consolidated Financial Statements.

2



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##### Table of Contents



DREYERS GRAND ICE CREAM, INC.




CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

|                                                              |                                                |               |                      |         |               |   |         |         |  
|------------------------------------------------------------- | ---------------------------------------------- | ------------- | -------------------- | ------- | ------------- | - | ------- | ------- | -
|                                                              |                                                |               | Thirteen Weeks Ended |        
|                                                              |                                                |               |                      |        
|($ in thousands, except per share
          amounts)          |                                                | Mar. 30, 2002 |                      |         | Mar. 31, 2001 |  
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|Revenues:                                                     |                                                |               |                      |         |               |   |         |        
|                                                              | Net sales                                      |               | $                    | 290,414 |               |   | $       | 239,413 |  
|                                                              | Other
          income                         |               |                      | 1,138   |               |   |         | 239     |  
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               | 291,552              |         |               |   | 239,652 |        
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|Costs
          and expenses:                                 |                                                |               |                      |         |               |   |         |        
|                                                              | Cost of
          goods sold                   |               |                      | 262,161 |               |   |         | 216,790 |  
|                                                              | Selling,
          general and administrative  |               |                      | 25,558  |               |   |         | 27,007  |  
|                                                              | Interest,
          net of amounts capitalized |               |                      | 1,786   |               |   |         | 3,014   |  
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|                                                              |                                                |               | 289,505              |         |               |   | 246,811 |        
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|Income
          (loss) before income tax provision (benefit) |                                                |               | 2,047                |         |               |   | (7,159  | )      
|                                                              |                                                |               |                      |         |               |   |         |        
|Income
          tax provision (benefit)                      |                                                |               | 737                  |         |               |   | (2,727  | )      
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|Net income
          (loss)                                   |                                                |               | 1,310                |         |               |   | (4,432  | )      
|                                                              |                                                |               |                      |         |               |   |         |        
|Accretion
          of preferred stock to redemption value    |                                                |               |                      |         |               |   | 106     |        
|Preferred
          stock dividends                           |                                                |               |                      |         |               |   | 348     |        
|                                                              |                                                |               |                      |         |               |  
|                                                             
|Net income
          (loss) available to common stockholders  |                                                | $             | 1,310                |         |               | $ | (4,886  | )      
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|                                                              |                                                |               |                      |         |               |   |         |        
|Net
          income (loss) per common share:                 |                                                |               |                      |         |               |   |         |        
|                                                              | Basic                                          |               | $                    | .04     |               |   | $       | (.17    | )
|                                                              |                                                |               |                      |         |               |  
|                                                              | Diluted                                        |               | $                    | .04     |               |   | $       | (.17    | )
|                                                              |                                                |               |                      |         |               |  
|                                                              |                                                |               |                      |         |               |   |         |        
|Dividends
          per common share                          |                                                | $             | .06                  |         |               | $ | .06     |        
|                                                              |                                                |               |                      |         |               |  

See accompanying Notes to Consolidated Financial
Statements.

3



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DREYERS GRAND ICE CREAM, INC.




CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)

|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        |        |   |   |         |        |  
|--------------------------------------- | ---------------------------------------------------------------------------- | ------ | ------------ | --- | ------ | ---------- | ------ | ------------- | ---- | ---------- | ------------ | -------- | - | -------- | ------ | ---- | ----- | - | ------ | ------ | - | - | ------- | ------ | -
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          | Notes  |      |       |   |        |        |   |   |         |       
|                                        |                                                                              |        | Common Stock |     |        |            |        |               |      | Receivable |              |          |   |          |        |      |       |   |       
|                                        |                                                                              |        |              |     |        | Capital in |        |               | From |            |              | Retained |   |          |        |      |      
|(In thousands)                          |                                                                              | Shares |              |     | Amount |            |        | Excess of Par |      |            | Stockholders |          |   | Earnings |        |      | Total |  
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |  
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        |        |   |   |         |       
|Balances
          at December 30, 2000 |                                                                              |        | 28,268       |     |        | $          | 28,268 |               |      | $          | 58,396       |          |   | $        | (2,284 | )    |       | $ | 15,992 |        |   | $ | 100,372 |       
|                                        | Net loss                                                                     |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | (4,432 | ) |   |         | (4,432 | )
|                                        | Accretion
          of preferred stock to
          redemption value         |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | (106   | ) |   |         | (106   | )
|                                        | Preferred
          stock dividends declared                                 |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | (348   | ) |   |         | (348   | )
|                                        | Common
          stock dividends declared                                    |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | (1,714 | ) |   |         | (1,714 | )
|                                        | Issuance
          of common stock under
          employee stock plans, net |        |              | 347 |        |            |        | 347           |      |            |              | 4,636    |   |          |        | (299 | )     |   |        |        |   |   |         | 4,684  |  
|                                        | Repurchases
          and retirements of
          common stock              |        |              | (46 | )      |            |        | (46           | )    |            |              | (604     | ) |          |        |      |       |   |        |        |   |   |         | (650   | )
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |  
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        |        |   |   |         |       
|Balances
          at March 31, 2001    |                                                                              |        | 28,569       |     |        | $          | 28,569 |               |      | $          | 62,428       |          |   | $        | (2,583 | )    |       | $ | 9,392  |        |   | $ | 97,806  |       
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |  
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        |        |   |   |         |       
|Balances
          at December 29, 2001 |                                                                              |        | 34,461       |     |        | $          | 34,461 |               |      | $          | 160,103      |          |   | $        | (2,546 | )    |       | $ | 16,347 |        |   | $ | 208,365 |       
|                                        | Net income                                                                   |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | 1,310  |   |   |         | 1,310  |  
|                                        | Common
          stock dividends declared                                    |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |   |        | (2,077 | ) |   |         | (2,077 | )
|                                        | Issuance
          of common stock under
          employee stock plans, net |        |              | 196 |        |            |        | 196           |      |            |              | 3,444    |   |          |        | (380 | )     |   |        |        |   |   |         | 3,260  |  
|                                        | Repurchases
          and retirements of
          common stock              |        |              | (32 | )      |            |        | (32           | )    |            |              | (1,297   | ) |          |        | 256  |       |   |        |        |   |   |         | (1,073 | )
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |  
|                                       
|Balances
          at March 30, 2002    |                                                                              |        | 34,625       |     |        | $          | 34,625 |               |      | $          | 162,250      |          |   | $        | (2,670 | )    |       | $ | 15,580 |        |   | $ | 209,785 |       
|                                        |                                                                              |        |              |     |        |            |        |               |      |            |              |          |   |          |        |      |       |  

See accompanying Notes to Consolidated Financial
Statements.

4



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##### Table of Contents



DREYERS GRAND ICE CREAM, INC.




CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |        |       |         |  
|-------------------------------------------------------- | ----------------------------------------------------------------------------- | --------------------------------------------------------------------- | -------------------------------------------------- | ------- | -------------------- | ------- | ------- | ------ | ----- | ------- | -
|                                                         |                                                                               |                                                                       |                                                    |         | Thirteen Weeks Ended |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|(In thousands)                                           |                                                                               | Mar. 30, 2002                                                         |                                                    |         | Mar. 31, 2001        |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|Cash
          flows from operating activities:          |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|                                                         | Net income
          (loss)                                                   |                                                                       | $                                                  | 1,310   |                      |         | $       | (4,432 | )    
|                                                         | Adjustments
          to reconcile net income (loss) to cash from operations: |                                                                       |                                                    |         |                      |         |         |        |      
|                                                         |                                                                               | Depreciation
          and amortization                               |                                                    |         | 8,477                |         |         |        | 9,169 |        
|                                                         |                                                                               | Deferred
          income taxes                                       |                                                    |         | 113                  |         |         |        | (502  | )      
|                                                         |                                                                               | Changes
          in assets and liabilities, net of amounts acquired: |                                                    |         |                      |         |         |        |       |        
|                                                         |                                                                               |                                                                       | Trade
          accounts receivable                |         |                      | (28,717 | )       |        |       | (30,327 | )
|                                                         |                                                                               |                                                                       | Other
          accounts receivable                |         |                      | (1,399  | )       |        |       | (4,100  | )
|                                                         |                                                                               |                                                                       | Inventories                                        |         |                      | (9,201  | )       |        |       | (9,555  | )
|                                                         |                                                                               |                                                                       | Prepaid
          expenses and other               |         |                      | (9,352  | )       |        |       | (51     | )
|                                                         |                                                                               |                                                                       | Accounts
          payable and accrued liabilities |         |                      | 18,080  |         |        |       | 22,012  |  
|                                                         |                                                                               |                                                                       | Accrued
          payroll and employee benefits    |         |                      | (4,099  | )       |        |       | (6,385  | )
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       | (24,788                                            | )       |                      |         | (24,171 | )     
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|Cash
          flows from investing activities:          |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|                                                         | Acquisition
          of property, plant and equipment                        |                                                                       |                                                    | (13,985 | )                    |         |         | (7,178 | )    
|                                                         | Retirement
          of property, plant and equipment                         |                                                                       |                                                    | 188     |                      |         |         | 372    |      
|                                                         | Purchase
          of independent distributors and other intangibles          |                                                                       |                                                    | (2,438  | )                    |         |         | (2,000 | )    
|                                                         | Increase
          in other assets                                            |                                                                       |                                                    | (1,350  | )                    |         |         | (797   | )    
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       | (17,585                                            | )       |                      |         | (9,603  | )     
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|Cash
          flows from financing activities:          |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|                                                         | Proceeds
          from long-term debt, net                                   |                                                                       |                                                    | 42,200  |                      |         |         | 33,900 |      
|                                                         | Repayments
          of long-term debt                                        |                                                                       |                                                    |         |                      |         |         | (3,400 | )    
|                                                         | Issuance
          of common stock under employee stock plans, net            |                                                                       |                                                    | 3,260   |                      |         |         | 4,684  |      
|                                                         | Repurchases
          and retirements of common stock                         |                                                                       |                                                    | (1,073  | )                    |         |         | (650   | )    
|                                                         | Cash dividends
          paid                                                 |                                                                       |                                                    | (2,068  | )                    |         |         | (1,022 | )    
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       | 42,319                                             |         |                      |         | 33,512  |       
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|Decrease
          in cash and cash equivalents          |                                                                               |                                                                       | (54                                                | )       |                      |         | (262    | )     
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|Cash and
          cash equivalents, beginning of period |                                                                               |                                                                       | 1,650                                              |         |                      |         | 2,721   |       
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|Cash
          and cash equivalents, end of period       |                                                                               | $                                                                     | 1,596                                              |         |                      | $       | 2,459   |       
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|                                                         |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|Supplemental
          cash flow information:            |                                                                               |                                                                       |                                                    |         |                      |         |         |       
|                                                         | Cash paid
          during the period for:                                    |                                                                       |                                                    |         |                      |         |         |        |      
|                                                         |                                                                               |                                                                       | Interest
          (net of amounts capitalized)    |         | $                    | 1,320   |         |        | $     | 1,391   |  
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        
|                                                         |                                                                               |                                                                       | Income
          taxes (net of refunds)            |         | $                    | 140     |         |        | $     | 2       |  
|                                                         |                                                                               |                                                                       |                                                    |         |                      |        

See accompanying Notes to Consolidated Financial Statements.

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DREYERS GRAND ICE CREAM, INC.




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1  Operations and Financial Statement Presentation

Dreyers Grand Ice Cream, Inc. and its subsidiaries (the Company) are
engaged primarily in the business of manufacturing and distributing premium and
superpremium ice cream and other frozen dessert products to grocery and
convenience stores, foodservice accounts and independent distributors in the
United States.

The Company accounts for its operations geographically for management
reporting purposes. These geographic segments have been aggregated for
financial reporting purposes due to similarities in the economic
characteristics of the geographic segments and the nature of the products,
production processes, customer types and distribution methods throughout the
United States.

The consolidated financial statements for the thirteen-week periods ended
March 30, 2002 and March 31, 2001 have not been audited by independent public
accountants, but include all adjustments, such as normal recurring accruals,
which management considers necessary for a fair presentation of the
consolidated operating results for the interim periods. The statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
conformity with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules and
regulations. The operating results for interim periods are not necessarily
indicative of results to be expected for an entire year. The aforementioned
statements should be read in conjunction with the Consolidated Financial
Statements for the year ended December 29, 2001, appearing in the Companys
2001 Annual Report on Form 10-K. Certain reclassifications have been made to
prior years financial statements to conform to the current year presentation.

NOTE 2  Significant Accounting Assumptions and Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions. These estimates include
assessing the recoverability of accounts receivable, the adequacy of the
valuation allowance for deferred tax assets, the recoverability of goodwill,
the adequacy of the Companys liabilities for self-insured health, workers
compensation and vehicle plans, and the adequacy of the Companys liabilities
for employee bonuses and profit-sharing plan contributions, among others.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

NOTE 3  Inventories

Inventories are stated at the lower of cost (determined by the first-in,
first-out method) or market. Inventories at March 30, 2002 and December 29,
2001 consisted of the following:

|               |  |               |        |  |               |   |        | 
|-------------- |  | ------------- | ------ |  | ------------- | - | ------ | 
|(In thousands) |  | Mar. 30, 2002 |        |  | Dec. 29, 2001 |  
|               |  |               |        |  |               |  
|Raw materials  |  | $             | 9,018  |  |               | $ | 9,099  | 
|Finished goods |  |               | 81,481 |  |               |   | 72,199 | 
|               |  |               |        |  |               |  
|               |  | $             | 90,499 |  |               | $ | 81,298 | 
|               |  |               |        |  |               |  

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NOTE 4  Net Income (Loss) Per Common Share

The denominator for basic net income (loss) per share includes the number
of weighted-average common shares outstanding. The denominator for diluted net
income (loss) per share includes the number of weighted-average shares
outstanding plus the effect of potentially dilutive securities which include
stock options and redeemable convertible preferred stock.

|                                                                                           |         |               |                      |     |               |   |        |      |  
|------------------------------------------------------------------------------------------ | ------- | ------------- | -------------------- | --- | ------------- | - | ------ | ---- | -
|                                                                                           |         |               | Thirteen Weeks Ended |    
|                                                                                           |         |               |                      |    
|(In thousands, except per share amounts)                                                   |         | Mar. 30, 2002 |                      |     | Mar. 31, 2001 |  
|                                                                                           |         |               |                      |     |               |  
|                                                                                           |         |               |                      |     |               |   |        |     
|Net income
          (loss) available to common
          stockholders  basic and diluted |         | $             | 1,310                |     |               | $ | (4,886 | )   
|                                                                                           |         |               |                      |     |               |  
|                                                                                           |         |               |                      |     |               |   |        |     
|                                                                                           |         |               |                      |     |               |   |        |     
|Weighted-average
          shares  basic                                                  |         |               | 34,510               |     |               |   | 28,370 |     
|Dilutive
          effect of options                                                       |         |               | 2,643                |     |               |   |        |     
|                                                                                           |         |               |                      |     |               |  
|Weighted-average
          shares  diluted                                                |         |               | 37,153               |     |               |   | 28,370 |     
|                                                                                           |         |               |                      |     |               |  
|                                                                                           |         |               |                      |     |               |   |        |     
|Net income
          (loss) per common share:                                              |         |               |                      |     |               |   |        |     
|                                                                                           | Basic   |               | $                    | .04 |               |   | $      | (.17 | )
|                                                                                           |         |               |                      |     |               |  
|                                                                                           | Diluted |               | $                    | .04 |               |   | $      | (.17 | )
|                                                                                           |         |               |                      |     |               |  

Anti-dilutive securities

Potentially dilutive securities are excluded from the calculations of
diluted net income (loss) per common share when their inclusion would have an
anti-dilutive effect. There were no potentially dilutive securities to be
excluded during the first quarter of 2002. During the first quarter of 2001,
potentially dilutive securities included 2,129,000 stock options and 5,800,0000
equivalent common shares relating to redeemable convertible preferred stock
(which was converted to common stock in the second quarter of 2001); these
securities were excluded from the calculation of diluted net loss per common
share in the first quarter 2001 net loss period due to their anti-dilutive
effects.


NOTE 5  Adoption of New Accounting Pronouncements

Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendors Products)

In November 2001, the Emerging Issues Task Force of the Financial
Accounting Standards Board (EITF) issued EITF 01-9, Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendors Products) (EITF 01-9). This pronouncement requires that discounts
(off-invoice promotion and coupons), amounts paid to retailers to advertise a
companys products (fixed trade promotion) and fees paid to retailers to obtain
shelf space (slotting fees) be recorded as a reduction of revenue.


The Company adopted EITF 01-9 in the first quarter of 2002, presented
$47,670,000 of first quarter 2002 expenses in accordance with this
pronouncement and reclassified $32,616,000 of first quarter 2001 expenses on a
retroactive basis. The retroactive reclassification of these expenses resulted
in a decrease in total sales and gross profit, along with a corresponding
decrease in selling, general and administrative expenses, with no effect on net
loss as previously reported.

Accounting for Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
(SFAS No. 142). This pronouncement, which the Company adopted at the beginning
of the first quarter of 2002, requires recognition of goodwill and other
unidentifiable intangible assets with indeterminate lives as long-term assets,
however, amortization as previously required by Accounting Principles Board
Opinion No. 17, Intangible Assets, is no longer permitted beginning with the
first quarter of 2002. In lieu of


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amortization, these assets are now being
tested for impairment on an annual basis and between annual tests if an event
occurs or circumstances change that would more likely than not reduce the fair
value of a reporting unit below its carrying amount. The Company completed its
transitional impairment test during the first quarter of 2002 and did not
record any impairment charges.

A reconciliation of reported net income (loss) and net income (loss) per
common share to the amounts adjusted for the exclusion of first quarter 2001
goodwill amortization of $1,113,000, net of the related income tax effect of
$424,000, follows:

|                                              |                                             |               |                      |     |               |   |        |      |  
|--------------------------------------------- | ------------------------------------------- | ------------- | -------------------- | --- | ------------- | - | ------ | ---- | -
|                                              |                                             |               | Thirteen Weeks Ended |    
|                                              |                                             |               |                      |    
|(In thousands, except per share amounts)      |                                             | Mar. 30, 2002 |                      |     | Mar. 31, 2001 |  
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |     
|Reported
          net income (loss)          |                                             | $             | 1,310                |     |               | $ | (4,886 | )   
|Goodwill
          amortization, net of tax   |                                             |               |                      |     |               |   | 689    |     
|                                              |                                             |               |                      |     |               |  
|Adjusted
          net income (loss)          |                                             | $             | 1,310                |     |               | $ | (4,197 | )   
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |     
|Net income
          (loss) per common share: |                                             |               |                      |     |               |   |        |     
|                                              | Reported
          basic                    |               | $                    | .04 |               |   | $      | (.17 | )
|                                              | Goodwill
          amortization, net of tax |               |                      |     |               |   |        | .02  |  
|                                              |                                             |               |                      |     |               |  
|                                              | Adjusted
          basic                    |               | $                    | .04 |               |   | $      | (.15 | )
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |      |  
|                                              | Reported
          diluted                  |               | $                    | .04 |               |   | $      | (.17 | )
|                                              | Goodwill
          amortization, net of tax |               |                      |     |               |   |        | .02  |  
|                                              |                                             |               |                      |     |               |  
|                                              | Adjusted
          diluted                  |               | $                    | .04 |               |   | $      | (.15 | )
|                                              |                                             |               |                      |     |               |  

In accordance with SFAS No. 142, the Company reclassified the long-term
deferred income tax liability associated with nondeductible goodwill, resulting
in a noncash reduction in goodwill and a corresponding reduction in the
deferred income tax liability of $10,166,000. Also in accordance with SFAS No.
142, the Company now presents goodwill separately from other intangibles in the
Consolidated Balance Sheet. In addition, the Company reclassified its
acquisition-related intangibles (e.g. distribution rights) to goodwill at the
beginning of the first quarter of 2002. Fiscal 2001 acquisition-related
intangibles are included in Other Intangibles, net, in the Consolidated Balance
Sheet.

Accounting for the Impairment or Disposal of Long-Lived Assets

In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No.
144). This pronouncement clarifies certain issues related to SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of and develops a single accounting model for long-lived assets
to be disposed of. The Company adopted SFAS No. 144 in the first quarter of
2002. The adoption of SFAS No. 144 did not impact the Companys financial
position, results of operations or cash flows.


NOTE 6-Investment in Momentx Corporation

The Company has a $1,100,000 investment in Momentx Corporation (Momentx),
which is an e-market solution provider for the dairy, food and beverage
industries. The Company follows the cost method in accounting for this
investment since its ownership interest is less than three percent. Momentx is
currently a development stage enterprise and its future success is uncertain at
this time. The Company continues to monitor the recoverability of this
investment.

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##### Table of Contents






|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Unaudited)
|------- | --------------------------------------------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

The Company may from time to time make written or oral forward-looking
statements. Written or oral forward-looking statements may appear in documents
filed with the Securities and Exchange Commission, and in press releases,
conference calls and webcasts (whether live or recorded), and in reports to
stockholders. The Private Securities Litigation Reform Act of 1995 contains a
safe harbor for forward-looking statements upon which the Company relies in
making such disclosures. In accordance with this safe harbor provision, we
have determined that forward-looking statements are contained in this
Managements Discussion and Analysis of Consolidated Financial Condition and
Results of Operations. The Company undertakes no obligation to publicly revise
these forward-looking statements to reflect subsequent events or circumstances.

Also, in connection with this safe harbor provision, the Company
identifies important factors that could cause the Companys actual results to
differ materially from those contained in any forward-looking statement made by
or on behalf of the Company. Any such statement is qualified by reference to
the cautionary statements set forth in this and other filings with the
Securities and Exchange Commission.

This Managements Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with Managements
Discussion and Analysis for the year ended December 29, 2001, appearing in the
Companys 2001 Annual Report on Form 10-K.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Critical Accounting Policies

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions. The Company believes that the
following critical accounting policies represent the most significant judgments
and estimates used in the preparation of the consolidated financial statements:



| |  | The Company assesses the recoverability of trade accounts receivable
based on estimated losses resulting from the inability of customers to
make required payments. The Companys estimates are based on the aging
of accounts receivable balances and historical write-off experience, net
of recoveries. The Company reviews trade accounts receivable for
recoverability regularly and whenever events or circumstances, such as
deterioration in the financial condition of a customer, indicate that
additional allowances might be required.                                                                                                                     
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The Company records a valuation allowance related to deferred tax assets
when it is determined that the deferred tax assets will not be utilized
to offset future taxable income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| 
| |  | The Company has goodwill related to business acquisitions. The Company
tests goodwill for impairment on an annual basis and between annual tests
if an event occurs or circumstances change that would more likely than
not reduce the fair value of a reporting unit below its carrying amount.
The assessment of impairment is based on the estimated undiscounted
future cash flows from operating activities compared with the carrying
value of the assets. If the undiscounted future cash flows are less than
the carrying value, a write-down is recorded, measured by the amount of
the difference between the carrying value and the fair value of the
asset.
| 
| |  | The Companys liabilities for self-insured health, workers compensation
and vehicle plans are developed from actuarial valuations that rely on
various key assumptions. Changes in key assumptions may occur in the
future, which could result in changes to related self-insurance costs.                                                                                                                                                                                                                                                                                                                                                                             

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| |  | The Companys liabilities for employee bonuses and profit-sharing plan
contributions are based primarily on estimated full-year profitability at
the end of each quarter. Changes in the performance of the business and
in estimated full-year profitability could result in significant interim
adjustments to the cost of these programs.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Adoption of New Accounting Pronouncements

Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendors Products)

In November 2001, the Emerging Issues Task Force of the Financial
Accounting Standards Board (EITF) issued EITF 01-9, Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendors Products) (EITF 01-9). This pronouncement requires that discounts
(off-invoice promotion and coupons), amounts paid to retailers to advertise a
companys products (fixed trade promotion) and fees paid to retailers to obtain
shelf space (slotting fees) be recorded as a reduction of revenue.


The Company adopted EITF 01-9 in the first quarter of 2002, presented
$47,670,000 of first quarter 2002 expenses in accordance with this
pronouncement and reclassified $32,616,000 of first quarter 2001 expenses on a
retroactive basis. The retroactive reclassification of these expenses resulted
in a decrease in total sales and gross profit, along with a corresponding
decrease in selling, general and administrative expenses, with no effect on net
loss as previously reported.

Accounting for Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
(SFAS No. 142). This pronouncement, which the Company adopted at the beginning
of the first quarter of 2002, requires recognition of goodwill and other
unidentifiable intangible assets with indeterminate lives as long-term assets,
however, amortization as previously required by Accounting Principles Board
Opinion No. 17, Intangible Assets, is no longer permitted beginning with the
first quarter of 2002. In lieu of amortization, these assets are now being
tested for impairment on an annual basis and between annual tests if an event
occurs or circumstances change that would more likely than not reduce the fair
value of a reporting unit below its carrying amount. The Company completed its
transitional impairment test during the first quarter of 2002 and did not
record any impairment charges.


A reconciliation of reported net income (loss) and net income (loss) per
common share to the amounts adjusted for the exclusion of first quarter 2001
goodwill amortization of $1,113,000, net of the related income tax effect of
$424,000, follows:

|                                              |                                             |               |                      |     |               |   |        |      |  
|--------------------------------------------- | ------------------------------------------- | ------------- | -------------------- | --- | ------------- | - | ------ | ---- | -
|                                              |                                             |               | Thirteen Weeks Ended |    
|                                              |                                             |               |                      |    
|(In thousands, except per share amounts)      |                                             | Mar. 30, 2002 |                      |     | Mar. 31, 2001 |  
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |     
|Reported
          net income (loss)          |                                             | $             | 1,310                |     |               | $ | (4,886 | )   
|Goodwill
          amortization, net of tax   |                                             |               |                      |     |               |   | 689    |     
|                                              |                                             |               |                      |     |               |  
|Adjusted
          net income (loss)          |                                             | $             | 1,310                |     |               | $ | (4,197 | )   
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |     
|Net income
          (loss) per common share: |                                             |               |                      |     |               |   |        |     
|                                              | Reported
          basic                    |               | $                    | .04 |               |   | $      | (.17 | )
|                                              | Goodwill
          amortization, net of tax |               |                      |     |               |   |        | .02  |  
|                                              |                                             |               |                      |     |               |  
|                                              | Adjusted
          basic                    |               | $                    | .04 |               |   | $      | (.15 | )
|                                              |                                             |               |                      |     |               |  
|                                              |                                             |               |                      |     |               |   |        |      |  
|                                              | Reported
          diluted                  |               | $                    | .04 |               |   | $      | (.17 | )
|                                              | Goodwill
          amortization, net of tax |               |                      |     |               |   |        | .02  |  
|                                              |                                             |               |                      |     |               |  
|                                              | Adjusted
          diluted                  |               | $                    | .04 |               |   | $      | (.15 | )
|                                              |                                             |               |                      |     |               |  

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In accordance with SFAS No. 142, the Company reclassified the long-term
deferred income tax liability associated with nondeductible goodwill, resulting
in a noncash reduction in goodwill and a corresponding reduction in the
deferred income tax liability of $10,166,000. Also in accordance with SFAS No.
142, the Company now presents goodwill separately from other intangibles in the
Consolidated Balance Sheet. In addition, the Company reclassified its
acquisition-related intangibles (e.g. distribution rights) to goodwill at the
beginning of the first quarter of 2002. Fiscal 2001 acquisition-related
intangibles are included in Other Intangibles, net, in the Consolidated Balance
Sheet.

Accounting for the Impairment or Disposal of Long-Lived Assets

In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No.
144). This pronouncement clarifies certain issues related to SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of and develops a single accounting model for long-lived assets
to be disposed of. The Company adopted SFAS No. 144 in the first quarter of
2002. The adoption of SFAS No. 144 did not impact the Companys financial
position, results of operations or cash flows.


RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percent which
the items in the Consolidated Statement of Operations bear to net sales and the
percentage change of such items compared to the indicated prior period:

|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |       |  
|------------------------------------------------------------- | ---------------------------------------------- |  | ----------------------- | ----- | - | ----------------------- | ----- | ----- | --------------------- |  | ---------------- | ----- | -
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  | Period-to-Period |      
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  | Variance         |      
|                                                              |                                                |  | Percentage of Net Sales |       |   | Favorable (Unfavorable) |      
|                                                              |                                                |  |                         |       |   |                         |      
|                                                              |                                                |  |                         |       |   |                         |       |      
|                                                              |                                                |  | Thirteen Weeks Ended    |       |   |                         |       |      
|                                                              |                                                |  |                         |       |   | Thirteen Weeks Ended    |      
|                                                              |                                                |  | Mar. 30, 2002           |       |   | Mar. 31, 2001           |       |       | 2002 Compared to 2001 | 
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|Revenues:                                                     |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|                                                              | Net sales                                      |  |                         | 100.0 | % |                         |       | 100.0 | %                     |  |                  | 21.3  | %
|                                                              | Other
          income                         |  |                         | 0.4   |   |                         |       | 0.1   |                       |  |                  | 376.2 |  
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|                                                              |                                                |  | 100.4                   |       |   |                         | 100.1 |       |                       |  | 21.7             |      
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|Costs
          and expenses:                                 |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|                                                              | Cost of
          goods sold                   |  |                         | 90.3  |   |                         |       | 90.6  |                       |  |                  | (20.9 | )
|                                                              | Selling,
          general and administrative  |  |                         | 8.8   |   |                         |       | 11.3  |                       |  |                  | 5.4   |  
|                                                              | Interest,
          net of amounts capitalized |  |                         | 0.6   |   |                         |       | 1.2   |                       |  |                  | 40.7  |  
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|                                                              |                                                |  | 99.7                    |       |   |                         | 103.1 |       |                       |  | (17.3            | )    
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|Income
          (loss) before income tax provision (benefit) |                                                |  | 0.7                     |       |   |                         | (3.0  | )     |                       |  | 128.6            |      
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|Income
          tax provision (benefit)                      |                                                |  | 0.2                     |       |   |                         | (1.1  | )     |                       |  | (127.0           | )    
|                                                              |                                                |  |                         |       |   |                         |       |       |                       | 
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|Net income
          (loss)                                   |                                                |  | 0.5                     |       |   |                         | (1.9  | )     |                       |  | 129.6            |      
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|Accretion
          of preferred stock to redemption value    |                                                |  |                         |       |   |                         |       |       |                       |  | (100.0           | )    
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                  |      
|Preferred
          stock dividends                           |                                                |  |                         |       |   |                         | 0.1   |       |                       |  | (100.0           | )    
|                                                              |                                                |  |                         |       |   |                        
|                                                              |                                                |  |                         |       |   |                         |       |       |                       |  |                 
|Net income
          (loss) available to common stockholders  |                                                |  | 0.5                     | %     |   |                         | (2.0  | )%    |                       |  | 126.8            | %    
|                                                              |                                                |  |                         |       |   |                         |       |       |                      

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Thirteen Weeks ended March 30, 2002 Compared with Thirteen Weeks ended March
31, 2001

Consolidated sales for the first quarter of 2002 increased $51,001,000, or
21 percent, to $290,414,000 from $239,413,000 for the same quarter last year.


Sales of the Companys branded products, including licensed and joint
venture products (company brands), increased $20,217,000, or 14 percent, to
$166,616,000 from $146,399,000 for the same quarter last year. Company brands
represented 57 percent of consolidated sales in 2002 compared with 61 percent
in the same quarter last year. Gallon sales of the Companys branded products,
including novelties, increased approximately 3,400,000 gallons, or 15 percent,
to approximately 26,300,000 gallons. The products that led this increase were
Dreyers and Edys® Grand Ice Cream, Grand Light and Whole Fruit Bars. The
average price of the Companys branded products, net of the effect of trade
promotion expenses (which are now classified as a reduction of sales),
decreased by two percent.

Sales of products distributed for other manufacturers (partner brands),
including Ben & Jerrys Homemade, Inc. (Ben & Jerrys), increased $30,784,000,
or 33 percent, to $123,798,000 from $93,014,000 for the same quarter last year.
This increase was driven largely by increased sales of Ben & Jerrys
superpremium products and by the acquisition of independent distributors in
2000. The Company began distributing Ben & Jerrys products to a larger
distribution territory in March 2001 and distributes Ben & Jerrys products for
the grocery channel in all of the Companys company-owned distribution markets
across the country. Sales of partner brands represented 43 percent of
consolidated net sales compared with 39 percent in the same quarter last year.
Average wholesale prices for partner brands increased approximately 11 percent.
Unit sales of partner brands increased by 22 percent over the same quarter
last year.

Cost of goods sold increased $45,371,000, or 21 percent, to $262,161,000
from $216,790,000 for the same quarter last year. The Companys gross profit
increased by $5,630,000, or 25 percent, to $28,253,000 from $22,623,000,
representing a 9.7 percent gross margin compared with a 9.4 percent gross
margin for the same quarter last year. The improvement in gross profit was
primarily attributable to strong company brand sales growth, increased sales of
Ben & Jerrys products, and lower dairy raw material costs. These improvements
were partially offset by an increase in slotting expenses and other expenses
related to the introduction of new products and a new package size for the
Companys premium brands. During the first quarter of 2002, the decrease in
dairy raw material costs favorably impacted gross profit by approximately
$1,600,000 (net of the results of butter trading activities) as compared to the
same quarter last year.

Other income increased $899,000, or 376 percent, to $1,138,000 from
$239,000 for the same quarter last year, primarily due to an increase in
earnings from joint ventures accounted for under the equity method.

Selling, general and administrative expenses decreased $1,449,000, or five
percent, to $25,558,000 from $27,007,000 for the same quarter last year. The
decrease primarily reflects lower marketing expenses and a $1,113,000 reduction
in amortization of goodwill. These decreases were partially offset by
increased administrative expenses including the recording of a $300,000 bad
debt provision as a result of a bankruptcy filing by a major customer.
Selling, general and administrative expenses represented nine percent of
consolidated net sales in the first quarter of 2002 and 11 percent in the same
quarter last year.

Interest expense decreased $1,228,000, or 41 percent, to $1,786,000 from
$3,014,000, due to lower interest rates, partially offset by higher borrowings.

Income taxes increased to a provision of $737,000 from a benefit of
$(2,727,000) for the same quarter last year. The effective tax rate decreased to
36.0 percent for the first quarter of 2002 from 38.1 percent for the first
quarter of 2001 due primarily to the reversal of income taxes provided in prior
periods, the elimination of certain permanent differences in connection with
the adoption of SFAS No. 142 and income tax credits.

The Company has a $1,100,000 investment in Momentx Corporation (Momentx),
which is an e-market solution provider for the dairy, food and beverage
industries. The Company follows the cost method in accounting for this
investment since its ownership interest is less than three percent. Momentx is
currently a development stage enterprise and its future success is uncertain at
this time. The Company continues to monitor the recoverability of this
investment.

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LIQUIDITY AND CAPITAL RESOURCES

Working capital at March 30, 2002 increased $34,521,000 from year-end
2001. The Companys cash flows used in operating activities increased to
$24,788,000 from $24,171,000 for the same period last year. These increases
were primarily comprised of increases in accounts receivable and inventories,
partially offset by increases in accounts payable and accrued liabilities, and
resulted from both seasonality and the additional Ben & Jerrys business.

Cash flows used in investing activities totaled $17,585,000 and
$9,603,000, in 2002 and 2001, respectively. Cash flows used in investing
activities consisted primarily of property, plant and equipment purchases of
$13,985,000 and $7,178,000, in 2002 and 2001, respectively.

Cash flows from financing activities totaled $42,319,000 and $33,512,000,
in 2002 and 2001, respectively. Cash flows from financing activities for the
first quarter of 2002 primarily consisted of a net increase of $42,200,000 in
the Companys revolving line of credit. Cash flows from financing activities
for the first quarter of 2001 primarily consisted of a net increase of
$33,900,000 in the revolving line of credit, partially offset by repayments of
debt totaling $3,400,000.

At March 30, 2002, the Company had $1,596,000 in cash and cash
equivalents, and an unused credit line of $77,700,000. The Company believes
that its credit line, along with its liquid resources, internally-generated
cash and financing capacity, are adequate to meet both short-term and long-term
operating and capital requirements.




ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

This Item 3 should be read in conjunction with Item 7A of the Companys
2001 Annual Report on Form 10-K.

During the first quarter of 2002, the decrease in dairy raw material costs
favorably impacted gross profit by approximately $1,600,000 (net of the results
of butter trading activities) as compared to the first quarter of 2001.

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PART II: OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | The following exhibits are filed herewith:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(b) |  | A Report on Form 8-K was filed on January 30, 2002 reporting a letter
agreement dated January 28, 2002, between the Company and General Electric
Pension Trust, GE Investment Private Placement Partners I, Limited
Partnership, and General Electric Capital Corporation (collectively the
GE Entities), which among other things confirms certain understandings
between the parties with respect to registration rights held by the GE
Entities and removal of restrictive legends from stock owned by the GE
Entities. Concurrently therewith, Jack O. Peiffer resigned from the
Companys board of directors.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| | DREYERS GRAND ICE CREAM, INC.
| | ------------------------------







|Dated: May 14, 2002 | By: | /s/ Timothy F. Kahn
Timothy F. Kahn
Vice President  Finance and Administration
    and Chief Financial Officer (Principal Financial Officer)
|------------------- | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

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