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During 2003, Flowers Foods focused its full attention on the bakery foods business, which has been our core since the company was founded in 1919.The result? Flowers Foods outperformed the baked foods industry, increasing sales across numerous product categories – white breads, soft variety breads, specialty breads, buns and rolls, and snack cakes.We ended the 53-week year with sales of $1.45 billion and income from continuing operations of $52.8 million, or $1.15 per share. 

Our operating strategies, developed over the last several decades, have created bakeries, products, brands, information and distribution systems, and baking professionals that set us apart in our industry. Our strategies work.This report outlines those strategies.We are committed to refining these strategies as the marketplace changes, just as we have in the past. Our purpose is to continue growing successfully in the bakery foods industry. By providing our customers and consumers with the products and service they need, we will continue to build value for our shareholders. 

There were a number of significant events in fiscal 2003, including: 

• The January acquisition of Bishop Baking Company, with sales of $30 million, that brought new snack cake items; 

• The February introduction of Nature’s Own Wheat ’n Fiber to appeal to carb-conscious consumers; 

• The sale of Mrs. Smith’s frozen dessert business in April; 

• The pay-off of all bank debt with proceeds from the Mrs. Smith’s sale; 

• The formation of the Specialty Group, which combined Flowers’ snack cake and frozen bread and roll businesses; 

• A three-fold dividend increase to shareholders in May; 

• The acquisition of property and a building in Denton,Texas for a new bakery to serve the Dallas/Ft.Worth market; 

• The October introduction of the Nature’s Own Healthline brand extension for breads appealing to consumers’ specific dietary or health concerns; and 

• The October introduction of Pan Dulce de Mi Casa and Tesoritos snack cakes targeting Latino and Hispanic markets. 

## LETTER TO SHAREHOLDERS 

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