Green Mountain Coffee, Inc. Reports Record Third Quarter Sales and Earnings.

WATERBURY, Vt.--(BUSINESS WIRE)--Aug. 3, 1999--

Green Mountain Coffee, Inc. (NASDAQ:GMCR) today announced record financial results for its third fiscal quarter, the twelve weeks ended July 3, 1999.

For the fiscal quarter ended July 3, 1999, net sales from continuing operations increased 18.1% to a record $14,973,000 compared to net sales of $12,675,000 from continuing operations for the third fiscal quarter of 1998. Gross profit increased year-over-year from 36.2% to 41.1% of sales, due to a combination of sales growth and lower green coffee prices. Net income for the twelve weeks ended July 3, 1999, was a record $515,000, or $0.14 per share, compared to a loss of $1,236,000, or $0.35 per share, for the prior year quarter. Results for the quarter ended July 4, 1998 included a $1.3 million charge related to the discontinuance of the Company's retail store operation.

For the forty weeks ended July 3, 1999, net sales from continuing operations for the year-to-date period increased 16.5% to a record $49,493,000 compared to net sales of $42,479,000 from continuing operations for the comparable year-ago period. The Company reported record net income of $1,600,000, or $0.45 per share, for the forty weeks ended July 3, 1999, compared to a net loss of $1,519,000, or $0.43 per share for the comparable fiscal period in 1998. Income for the fiscal 1999 period included a $186,000 favorable adjustment, net of income taxes, to the Company's estimated loss on disposal of its discontinued company-owned retail store operation. The net loss for the fiscal 1998 period included the previously described $1.3 million disposal charge.

The Company's record performance over the most recent twelve and forty week periods was fueled by growth in the office coffee service, convenience store, supermarket, food service and travel categories of its wholesale business. In the third quarter, growth was most notable in the office coffee service category, where the Company has expanded the number of distributors in new and existing territories and where single-cup coffee sales used in the Keurig Premium Coffee System(TM) have been popular. Working with its wholesale customers, the Company continued to make inroads into strategic geographic markets during the quarter, experiencing strong growth in particular in the South Atlantic and Mid-Atlantic regions as well as in its traditional northern and southern New England markets. During the most recent period, the Company also benefited from lower interest expenses. Earnings were partially offset by higher marketing costs designed to continue building the brand.

Commenting on the quarter, Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, "I believe our strong financial performance, as reported today, reflects our focus over the past year on profitably building our specialty wholesale business. We are doing what we do best, and doing it better than ever. With the conversion of our direct mail business this week to our PeopleSoft system, we now have a state-of-the-art information technology infrastructure that supports our fulfillment and distribution systems throughout all areas of the business. Our initiatives to expand our line of beverages for the convenience store category are going well and the single-cup Keurig Premium Coffee System(TM) has proven, in a very short time, to be incredibly popular."

Speaking about the Company's financial strength, Robert D. Britt, Chief Financial Officer said, "In addition to Green Mountain Coffee's earnings growth, our balance sheet demonstrates our financial improvement and the underlying strength of the business. Our rolling 12-month EBITDA from continuing operations as of July 3, 1999 is now over $6.6 million, or 10.5% of sales. Over the past year, we have reduced our debt by over $2.5 million. Primarily because of our improved financial condition, we also have seen a 75 basis point year-to-date performance pricing reduction in the interest rates our lead bank charges us, further contributing to a 32.0% year-over-year decline in third quarter interest expense."

Stiller concluded, "I personally am gratified by our financial success at Green Mountain Coffee because it is a testimony to a public company's ability to not only build value for our stockholders, but also be socially and environmentally pro-active and responsible. As the Company's CEO and largest stockholder, I care about building stockholder value. As a concerned citizen and parent, I care equally about the positive difference we are making, for generations to come, in the communities where we do business, and the world at large."

Green Mountain Coffee, Inc. is a leader in the specialty coffee industry. The Company roasts high-quality arabica coffees and offers over 60 varieties including single-origin, estate, certified organic, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters(R) brand. The majority of Green Mountain Coffee's revenue is derived from its wholesale operation which services restaurant, supermarket, specialty food store, convenience store, food service, in-room hotel hospitality, university, airline, train, and office coffee service customers. Green Mountain Coffee also operates a direct mail operation and e-commerce web site (http:\\www.GreenMountainCoffee.com) with secure on-line ordering for customers from its Waterbury, Vermont headquarters.

Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the applicable securities laws and regulations. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those set forth in forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, business conditions in the coffee industry and food industry in general, the impact of the loss of one or more major customers, fluctuations in availability and cost of green coffee, economic conditions, competition, the management challenges of rapid growth, variances from budgeted sales mix and growth rate, customer acceptance of the Company's new products, the impact of a tighter job market, Year 2000 issues, weather and special or unusual events, as well as other risk factors described from time to time in the Company's SEC filings.

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                       GREEN MOUNTAIN COFFEE, INC.
                   Consolidated Statement of Operations
               (Dollars in thousands except per share data)


                      Twelve Weeks Ended         Forty Weeks Ended
                July 3, 1999  July 4, 1998  July 3, 1999  July 4, 1998

Net sales:
   Wholesale           $ 14,254    $ 12,040   $  46,718      $ 40,019
   Direct mail              719         635       2,775         2,460
Net sales                14,973      12,675      49,493        42,479

Cost of sales             8,821       8,090      30,253        28,255


   Gross profit           6,152       4,585      19,240        14,224

Selling and
 operating
 expenses                 3,969       3,209      12,648        10,404
General and
 administrative
 expenses                 1,184       1,017       3,686         3,228


   Operating
    income                  999         359       2,906           592


Other income                 (5)         13           6            53
Interest
 expense                   (164)       (241)       (639)         (647)


   Income from
    continuing
    operations
    before income
    taxes                   830         131       2,273            (2)

Income tax
 benefit (expense)         (315)        (52)       (859)           39


    Income from
     continuing
     operations             515          79       1,414            37


Discontinued

 operations (1):

Loss from
 discontinued
 retail stores
 operations,
 net of income
 tax benefits                 -         (56)          -          (297)
Income (loss) on
 disposal
 of retail stores
 operations, net of
 income tax benefit
 (expense)                    -      (1,259)        186        (1,259)


Net income (loss)        $  515    $ (1,236)    $ 1,600      $ (1,519)


Basic income
 (loss) per share:
Weighted average
 shares outstanding   3,494,399   3,530,818   3,499,299     3,530,818
Income from
 continuing
 operations              $ 0.15     $  0.02      $ 0.40      $   0.01
Income (loss) from
 discontinued
 operations                   -       (0.37)       0.06         (0.44)


Net income (loss)        $ 0.15     $ (0.35)    $  0.46       $ (0.43)


Diluted income
 (loss) per share:
Weighted average
 shares
 outstanding          3,552,574   3,530,818   3,532,541     3,530,818
Income from
 continuing
 operations              $ 0.14     $  0.02  $     0.40      $   0.01

Income (loss) from
 discontinued
 operations                   -       (0.37)       0.05         (0.44)

Net income (loss)        $ 0.14     $ (0.35)    $  0.45       $ (0.43)


    (1) The Company discontinued its company-owned retail store
operation in the third quarter of fiscal 1998.


                      GREEN MOUNTAIN COFFEE, INC.
                      Consolidated Balance Sheet
                        (Dollars in thousands)

                                      July 3,            September 26,
                                       1999                   1998

         Assets
Current assets:
   Cash and cash equivalents             $    958            $    777
   Receivables, less allowances
    of $180 at July 3, 1999
    and $378 at September 26, 1998           5,450              4,789
   Inventories                               5,342              5,636
   Other current assets                        536                489
   Loans to officers                           523                185
   Deferred income taxes, net                  695                880


      Total current assets                  13,504             12,756

Fixed assets, net                           10,264             10,800
Other long-term assets                         254                270
Deferred income taxes, net                     409                737

                                        $   24,431          $  24,563


     Liabilities and
      Stockholders' Equity
Current liabilities:
 Current portion of long-term debt      $      233          $     249
 Current portion of obligation
   under capital lease                           -                 12
  Accounts payable                           3,547              3,131
  Accrued payroll                              878                827
  Accrued expenses                             612                507
  Accrued losses and other costs
   of discontinued operations, net             185                178

         Total current liabilities           5,455              4,904

Long-term debt                               3,858              5,041

Long-term line of credit                     4,234              5,150


Stockholders' equity:
   Common stock, $0.10 par value:
   Authorized - 10,000,000 shares;
    Issued - 3,594,753 shares and
    3,545,841 shares at July 3,
    1999 and September 26, 1998;
    Outstanding - 3,514,635 shares
    and 3,538,491 shares at July 3,
    1999 and September 26, 1998,
    respectively                               359                355
   Additional paid-in capital               13,287             13,018
   Accumulated deficit                      (2,268)            (3,868)
   Treasury shares, at cost,
    80,118 shares and 7,350 shares
    at July 3, 1999 and September
    26, 1998, respectively                    (494)               (37)

   Total stockholders' equity               10,884              9,468

                                        $   24,431          $  24,563