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CELESTIAL SEASONINGS REPORTS 31 PERCENT INCREASE IN FIRST QUARTER EARNINGS

 BOULDER, Colo., Jan. 11 /PRNewswire/ -- Celestial Seasonings Inc. (NASDAQ: CTEA) today reported earnings per share for the three months ended Dec. 31, 1993, of 46 cents versus pro forma earnings per share of 35 cents in the comparable period of the prior year. In the first quarter of fiscal year 1994, case volume was up 11.5 percent and net sales increased 11.7 percent to $19.8 million compared to $17.7 million in the 1993 period. Gross profit margins improved slightly in the first quarter of fiscal 1994 to 64.0 percent from 63.6 percent in the first quarter of fiscal 1993. Operating income increased 43 percent to $2.7 million from $1.9 million in the 1993 period. Historically, the company's business has been seasonal with a concentration of sales of hot herb tea products in the winter, resulting in high volume and operating income in the first quarter of the fiscal year.
 The increase in sales was the result of new products and expansion into new channels. Mo Siegel, chairman and chief executive officer, said, "We've continued to gain market share due to the success of some of our new products such as Wild Berry Zinger(R), Harvest Spice(TM) and After Dinner Teas(TM). In addition, we believe our television campaign, launched in late November, had a very positive influence on first quarter sales."
 Celestial Seasonings is the largest manufacturer and marketer of herb tea in the United States. Its leading brands of herb tea include Sleepytime(R), Lemon Zinger(R), Mandarin Orange Spice(R), Peppermint and a variety of other proprietary blends. The company's new Iced Delight(R) 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)
 (unaudited)
 Three Months Ended
 Dec. 31,
 1993 1992
 Case volume 1,143 1,025
 Net sales $19,752 $17,687
 Cost of goods sold 7,102 6,445
 Gross profit 12,650 11,242
 Operating expenses:
 Selling and marketing 8,010 7,546
 General and administrative 1,358 1,059
 Amortization of intangibles 552 728
 Total operating expenses 9,920 9,333
 Operating income 2,730 1,909
 Interest expense 373 1,200
 Income before income taxes 2,357 709
 Income taxes 471 24
 Net income 1,886 685
 Preferred stock
 dividend requirements --- 744
 Net income (loss) attributable
 to common stock $1,886 $(59)
 Net per common share $0.46 $(0.03)
 Weighted average common shares 4,143 1,838
 Supplemental pro forma information:
 Net income (a) (b) N/A $1,424
 Net income per common share(a) N/A $0.35
 Weighted average common shares(a) N/A 4,127
 (a) Pro forma adjustments have been made to present the results on
 a comparable basis. The pro forma earnings figures assume that
 the initial public offering of 2,130,000 shares at $20 per
 share was completed on the first day of fiscal year 1993. The
 figures exclude non-recurring charges related to the
 refinancing.
 (b) Income tax expense is provided at lower than statutory rates
 due to the utilization of net operating loss carryforwards.
 -0- 1/11/94
 /CONTACT: Philip Livingston or Paul Esposito of Celestial Seasonings, 303-581-1245/
 (CTEA)


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

BB -- DV007 -- 1014 01/11/94 13:03 EST
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Date:Jan 11, 1994
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