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Green Mountain Coffee, Inc. Reports Strong First Quarter.

Business Editors

WATERBURY, Vt.--(BUSINESS WIRE)--Feb. 17, 2000

Green Mountain Coffee, Inc. (NASDAQ: GMCR) today announced record sales and earnings for its fiscal first quarter of 2000, the sixteen week period ended January 15, 2000.

Total coffee pounds sold during the quarter increased 17.0% year-over-year to 3,242,000 pounds. The area of the highest sales growth was office coffee services, where the Keurig Premium Coffee System(TM), a revolutionary single cup brewing system, continued to be received with enthusiasm in the market, resulting in 62.9% year-over-year growth in office coffee service coffee pound sales for the first quarter. The convenience store channel also drove higher coffee pound sales with a 20.7% increase over this same period. Sales dollar growth was stronger than coffee pound growth due primarily to the impact of sales of single serve Keurig-Brewed(TM) coffee products and the Company's Monte Verde(TM) line of frozen granita and hot cappuccino beverages.

For the first fiscal quarter, Green Mountain Coffee's gross profit increased year-over-year by 33.4% to $10,046,000, due to a combination of top line growth, favorable coffee prices, and improved distribution costs. Operating margins improved dramatically to 9.3 percent of sales, compared to 5.8 percent of sales in the year-ago quarter, as the Company continued to leverage sales growth and maintain stringent cost controls. The Company also benefited from lower interest expenses in the recent quarter. Net income for the sixteen weeks more than doubled to a first fiscal quarter record of $1,300,000, or $0.37 per share, compared to $541,000, or $0.15 per share for the comparable year-ago period.

Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, &uot;This quarter we increased our sales growth rate above the level achieved for fiscal 1999. The hard work of employees throughout Green Mountain Coffee resulted in our overall strong performance, demonstrating our continued commitment to running a financially strong and growing business that builds value for shareholders.&uot;

Stiller added, &uot;The Company is achieving this impressive growth by welcoming new customers and by working closely with those customers who have been with us for some time. This month we signed an agreement with Kash n' Karry Food Stores, a food retailer in Florida, to sell whole bean and pre-packaged coffee in their 147 stores. The rollout is in progress and targeted for completion by mid-May. During January we reached an agreement with General Cinema Theatres, which will be serving Green Mountain Coffee in 28 of their upscale cinemas, half of which have full service sit down cafes, and accommodating a total of 318 screens in 16 states.&uot;

Stiller said, &uot;Green Mountain Coffee is a vibrant, growing company with tremendous potential to do good while doing well financially. In addition to ongoing programs, this past quarter we installed a 95-kilowatt co-generation unit in our roasting facility, which went into standby operation on December 30, 1999 and on line at the beginning of February. The system captures heat that would otherwise have been wasted and converts it to hot water for use in space heating and cleaning. It deploys energy in a highly efficient manner, reducing our use of nonrenewable resources while it improves the reliability and lowers the cost of our power by reducing our demand rate. Also during the quarter, the Green Mountain Coffee Roasters Foundation helped launch the Vermont Occupational Safety and Health Administration's Partnership in Safety Program at our Java University, a public/private cooperative program designed to improve workplace safety and health in Vermont small businesses.&uot;

Talking more about the Company's strong first quarter financial performance, Robert D. Britt, Chief Financial Officer, said, &uot;This past quarter we continued to improve our rolling four quarter return on equity (ROE) to a record 25.1%. EBITDA, our earnings before interest expense, income taxes, depreciation and amortization, was a record $3.2 million in the first quarter of fiscal 2000, compared to $2.1 million in the prior year quarter.&uot;

Last month the Company expanded its latest stock repurchase program, first announced on November 16, 1999, by an additional $1 million, bringing the Company's total stock repurchase goal under the program to $1.5 million. As of February 16, 2000, the Company has succeeded in repurchasing 130,509 shares under the most recent program at a cost of approximately $1.21 million, equating to an average per share cost of $9.27. Since the Company began repurchasing its shares in September 1998, the Company has repurchased 268,195 shares through February 16, 2000 at an average per share cost of $8.20.

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 website (http:\\ with secure on-line ordering for customers from its Waterbury, Vermont headquarters.

Certain statements contained herein are not based on historical fact and are &uot;forward-looking statements&uot; 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, fluctuations in availability and cost of green coffee, competition and other business conditions in the coffee industry and more generally in the food and beverage industry, the impact of the loss of one or more major customers, the Company's level of success in continuing to attract new customers, economic conditions, variances from budgeted sales mix and growth rate, customer acceptance of the Company's new products, the impact of a tighter job market, weather and special or unusual events, as well as other risk factors as described more fully in the Company's filings with the Securities and Exchange Commission.

 Consolidated Statement of Operations
 (Dollars in thousands except per share data)

 Sixteen Weeks Ended
 Jan. 15, 2000 Jan. 16, 1999

Net sales:
 Wholesale $ 23,027 $ 18,741
 Direct mail 1,715 1,327
Net sales 24,742 20,068

Cost of sales 14,696 12,540

 Gross profit 10,046 7,528

Selling and operating expenses 6,049 4,968
General and administrative expenses 1,684 1,399

 Operating income 2,313 1,161

Other income (expense) (4) 4
Interest expense (141) (300)

 Income before income taxes 2,168 865

Income tax expense (868) (324)

Net income $ 1,300 $ 541

Basic income per share:
Weighted average shares outstanding 3,464,105 3,515,277
Net income $ 0.38 $ 0.15

Diluted income per share:
Weighted average shares outstanding 3,542,668 3,533,058
Net income $ 0.37 $ 0.15

 Consolidated Balance Sheet
 (Dollars in thousands)

 Jan. 15, Sept. 25,
 2000 1999

Current assets:
 Cash and cash equivalents $ 1,083 $ 415
 Receivables, less allowances of
 $210 at January 15, 2000 and
 $190 at September 25, 1999 6,930 6,223
 Inventories 5,074 5,409
 Income tax receivable -- 233
 Other current assets 164 264
 Loans to officers 210 250
 Deferred income taxes, net 290 490

 Total current assets 13,751 13,284

Fixed assets, net 10,332 10,183
Other long-term assets 236 250
Deferred income taxes, net 148 161
 $ 24,467 $ 23,878

 Liabilities and Stockholders' Equity
Current liabilities:
 Current portion of long-term debt $ 1,099 $ 1,127
 Accounts payable 4,518 4,551
 Accrued payroll 1,131 1,005
 Accrued expenses 727 357
 Income tax payable 401 --
 Accrued losses and other costs
 of discontinued operations, net 178 192

 Total current liabilities 8,054 7,232

Long-term debt 1,676 1,908

Long-term line of credit 2,780 3,056

Stockholders' equity:
 Common stock, $0.10 par value:
 Authorized - 10,000,000 shares;
 Issued - 3,616,003 shares and
 3,615,404 shares at January 15, 2000
 and September 25, 1999,
 respectively 362 362
 Additional paid-in capital 13,410 13,409
 Accumulated deficit (135) (1,435)
 Treasury shares, at cost -
 217,995 shares and 100,609 shares
 at January 15, 2000 and September 25,
 1999, respectively (1,680) (654)

 Total stockholders' equity 11,957 11,682
 $ 24,467 $ 23,878
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Publication:Business Wire
Date:Feb 17, 2000
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