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CELESTIAL SEASONINGS REPORTS 53 PERCENT INCREASE IN PRO FORMA ANNUAL RESULTS

 BOULDER, Colo., Oct. 28 /PRNewswire/ -- Celestial Seasonings Inc. (NASDAQ: CTEA) today reported pro forma earnings per share for the three months ended Sept. 30, 1993 of 2 cents versus 17 cents in the comparable period in 1992. Case volume was up 5.9 percent and net sales increased 8.7 percent to $9.3 million in the 1993 period compared to $8.6 million in 1992. The decrease in earnings was a result of the previously announced advertising and promotional expenses associated with the company's iced tea product -- Iced Delight. The company introduced a full line of Iced Delight products in 1993 and for the first time committed significant marketing expenses during the summer in support of an iced tea product. Historically, the company's business has been seasonal with a concentration of sales of hot herb tea products in the winter. The fourth quarter of the fiscal year is traditionally the low volume and least profitable quarter.
 For the company's fiscal year ended Sept. 30, 1993 pro forma earnings per share totaled $1.09 per share versus 71 cents for the comparable 1992 period. This 53 percent increase in pro forma earnings per share was a result of an 8.4 percent increase in net sales and an improvement in gross profit to 62.5 percent of net sales from 61.7 percent in the 1992. Net sales totaled $59.1 million in fiscal 1993 compared to $54.5 million in fiscal 1992. Operating income improved to 10.7 percent of net sales in 1993 from 8.6 percent in 1992.
 Mo Siegel, chairman and chief executive officer said, "Volume and profitability were better than expected in the fourth quarter of our fiscal year and, as a result, our earlier concerns of a pro forma loss for the quarter turned into a positive result. We view our investment in marketing support for Iced Delight as very successful as we ended the year with iced tea case sales of 303,000, a 130 percent increase over the prior year. Based on these strong results the company has recently planned to accelerate the marketing support of Iced Delight in fiscal 1994."
 The company's pro forma results exclude a $3.1 million extraordinary charge in the fourth quarter for the early extinguishment of debt. On July 19, 1993 the company completed its initial public offering and simultaneously retired certain bank debt, subordinated debt and preferred stock.
 Celestial Seasonings is the largest manufacturer and marketer of herb tea in the United States. Its leading brands of herb tea include Sleepytime, Lemon Zinger, Mandarin Orange Spice, Peppermint and a variety of other proprietary blends. The company's new Iced Delight line was introduced nationally in 1993. In addition, Perrier Group of America manufactures and markets a line of ready-to-drink Celestial Seasonings iced tea under a licensing agreement with the company.
 CELESTIAL SEASONINGS INC.
 Consolidated Statement of Operations
 (in thousands, except per share amounts)
 Three Months Ended Twelve Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Case volume 535 505 3,468 3,281
 Net sales $9,327 $8,582 $59,109 $54,549
 Cost of goods sold 3,888 3,503 22,142 20,912
 Gross profit 5,439 5,079 36,967 33,637
 Operating expenses:
 Selling and
 marketing 3,172 2,493 23,479 22,264
 General and
 administrative 1,040 794 4,218 3,796
 Amortization of
 intangibles 754 722 2,959 2,893
 Total operating
 expenses 4,966 4,009 30,656 28,953
 Operating income 473 1,070 6,311 4,684
 Interest expense 507 1,190 3,851 5,204
 Income (loss) before
 income taxes (34) (120) 2,460 (520)
 Income taxes --- (2) 68 ---
 Net loss before
 extraordinary item (34) (118) 2,392 (520)
 Extraordinary item --
 early extinguishment of
 debt (net of tax
 benefit) 3,058 --- 3,058 ---
 Net loss (3,092) (118) (666) (520)
 Preferred stock
 dividend requirements 156 712 2,468 2,695
 Net loss attributable
 to common stock $(3,248) $(830) $(3,134) $(3,215)
 Net loss per common
 share:
 Loss before
 extraordinary item $(0.05) $(0.45) $(0.03) $(1.77)
 Extraordinary item (0.86) --- (1.35) ---
 Net loss $(0.91) $(0.45) $(1.38) $(1.77)
 Weighted average
 common shares 3,571 1,830 2,263 1,820
 Supplemental pro forma
 information:
 Net income(a) (b) $75 $700 $4,493 $2,943
 Net income per
 common share(a) $0.02 $0.17 $1.09 $0.71
 Weighted average
 common shares(a) 4,141 4,129 4,135 4,160
 (a) Pro forma adjustments have been made to present the results on
 a comparable basis. The pro forma earnings figures assume that
 the offering of 2,130,000 shares at $20 per share was completed
 on the first day of each fiscal year presented and adjust for
 the resultant interest savings. The figures exclude non-
 recurring charges of $3.1 million related to the refinancing.
 Such charges are recorded in the company's historical financial
 statements in the fourth quarter of 1993.
 (b) For comparative purposes the pro forma net income reflects the
 utilization of the company's net operating loss carryforward to
 reduce income taxes.
 -0- 10/28/93
 /CONTACT: Philip Livingston or Paul Esposito of Celestial Seasonings, 303-581-1245/
 (CTEA)


CO: Celestial Seasonings Inc. ST: Colorado IN: FOD SU: ERN

MC-BB -- DV001 -- 7656 10/28/93 06:54 EDT
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Date:Oct 28, 1993
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