Green Mountain Coffee, Inc. (NASDAQ:GMCR) today reported robust growth for its fiscal second quarter of 2000, the twelve-week period ended April 8, 2000.

Total coffee pounds sold increased 17.3% year-over-year to 2,382,000 pounds for the twelve weeks ended April 8, 2000, and net sales were up 26.3 percent to $18,259,000. Sales to office coffee service distributors led year-over-year growth for the quarter, with a 58.2% increase in coffee pounds sold, fueled in large part by Keurig Premium Coffee System(TM) coffee sales. The convenience store channel also contributed to higher coffee pound sales with a 20.2% increase over this same period. The Company cited continued sales momentum with existing customers, such as Exxon Mobil convenience stores, and new customers, including more than 40 Quickway Convenience Stores in up-state New York. The difference in percentage growth between the year-over-year increase in net sales and the increase in coffee pounds sold was primarily due to the impact of sales of the single-cup Keurig line of coffees, whose sales price per coffee pound sold is greater than the Company's traditional product line, and sales of non-coffee products such as the new Monte Verde(TM) line of powdered hot cappuccino and frozen granita products.

For the second fiscal quarter, Green Mountain Coffee's gross profit margin increased to 39.8 percent of sales from 38.5 percent of sales in the year ago quarter, with the 1.3 percentage point improvement stemming primarily from lower distribution costs and sales of Monte Verde(TM) and other non-coffee products. Operating margins increased to 6.1 percent of sales, compared to 5.2 percent of sales in the year-ago quarter, as the Company continued to focus on improving its operating processes. The Company also benefited from lower interest expenses in the recent quarter due to having less year-over-year debt. As a result of these factors, Green Mountain Coffee achieved a 71.8 percent increase in income from continuing operations to $615,000, or $0.17 per share, for the twelve weeks ended April 8, 2000 compared to $358,000, or $0.10 per share, for the comparable year ago period.

For the twenty-eight weeks ended April 8, 2000, Green Mountain Coffee realized a 17.1 percent increase in coffee pounds sold. Year-over-year net sales for the period were up 24.6 percent to $43,001,000, compared to sales of $34,520,000 for the prior year period. Income from continuing operations increased 113.0 percent to $1,915,000, or $0.54 per share, for the current period, compared to $899,000, or $0.25 per share, for the twenty-eight weeks ended April 10, 1999.

Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, "This quarter, once again, we have produced great coffee for consumers, and great results for stockholders - and all within the context of being socially and environmentally responsible. Thanks to the enthusiastic partnership and support of our expanding base of customers, and the hard work of employees throughout the Company, we are proud to report strong growth in sales and income from continuing operations at this point in our fiscal year."

Talking more about the Company's strong second quarter financial performance, Robert D. Britt, Chief Financial Officer, said, "As we have grown, we have continued to leverage our expenses through the use of technology and an overall focus on productivity. This leverage has been actively managed throughout the organization. Consequently, our year-over-year sales and operating and general and administrative expenses as a percent of sales were down for the quarter and operating income improved from 5.2 percent a year ago to 6.1 percent for the current quarter. The success of the past quarter is reflected not only in our top line growth, but equally in the expense control and leverage that bring those sales increases to the bottom line and build stockholder value. "

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® 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, 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.

 


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


Twelve Weeks Twenty-eight Weeks
Ended Ended
April 8, April 10, April 8, April 10,
2000 1999 2000 1999
(unaudited) (unaudited)
Net sales:
Wholesale $ 17,481 $ 13,723 $ 40,508 $ 32,464
Direct mail 778 729 2,493 2,056
Net sales 18,259 14,452 43,001 34,520

Cost of sales 10,990 8,892 25,686 21,432

Gross profit 7,269 5,560 17,315 13,088

Selling and operating
expenses 4,642 3,686 10,691 8,654
General and
administrative expenses 1,372 1,103 3,056 2,502
Loss on abandonment
of fixed assets 135 25 135 25

Operating income 1,120 746 3,433 1,907

Other income 14 7 10 11
Interest expense (107) (175) (248) (475)


Income from continuing
operations before
income taxes 1,027 578 3,195 1,443

Income tax expense (412) (220) (1,280) (544)


Income from continuing
operations 615 358 1,915 899

Discontinued operations:

Income from discontinued
retail stores operations,
net of income tax expense(a) -- 186 -- 186

Net income $ 615 $ 544 $ 1,915 $ 1,085


Basic income per share:
Weighted average shares
outstanding 3,359,978 3,483,044 3,419,445 3,501,446
Income from continuing
operations $ 0.18 $ 0.10 $ 0.56 $ 0.25
Income from discontinued
operations -- 0.06 -- 0.06
Net income $ 0.18 $ 0.16 $ 0.56 $ 0.31



Diluted income per share:
Weighted average shares
outstanding 3,546,884 3,537,410 3,544,475 3,523,955
Income from continuing
operations $ 0.17 $ 0.10 $ 0.54 $ 0.25
Income from discontinued
operations -- 0.05 -- 0.06
Net income $ 0.17 $ 0.15 $ 0.54 $ 0.31



(a) The Company discontinued its company-owned retail store
operation in the third quarter of fiscal 1998. In the twelve weeks
ended April 10, 1999, the Company recorded a partial reversal of its
original estimated loss on disposal of $186,000 (net of income tax of
$114,000), due to larger than expected proceeds from the sale of
assets and lower lease termination costs.


Green Mountain Coffee, Inc.
Consolidated Balance Sheet
(Dollars in thousands)



April September
8, 25,
2000 1999
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 819 $ 415
Receivables, less allowances of $225 at
April 8, 2000 and $190 at September 25, 1999 7,794 6,223
Inventories 5,379 5,409
Income tax receivable -- 233
Other current assets 555 264
Loans to officers 214 250
Deferred income taxes, net 220 490

Total current assets 14,981 13,284

Fixed assets, net 10,208 10,183
Other long-term assets 238 250
Deferred income taxes, net 298 161

25,725 23,878

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 169 $ 1,127
Accounts payable 5,110 4,551
Accrued payroll 1,301 1,005
Accrued expenses 942 357
Income tax payable 233 --
Accrued losses and other costs of
discontinued operations, net 180 192


Total current liabilities 7,935 7,232

Long-term debt 276 1,908

Long-term line of credit 5,475 3,056

Stockholders' equity:
Common stock, $0.10 par value:
Authorized - 10,000,000 shares;
Issued \226 3,635,167 shares and 3,615,404
shares at April 8, 2000 and September 25, 1999,
respectively 364 362
Additional paid-in capital 13,543 13,409
Accumulated earnings (deficit) 480 (1,435)
Treasury shares, at cost \226 280,195 shares
and 100,609 shares at April 8, 2000
and September 25, 1999, respectively (2,348) (654)

Total stockholders' equity 12,039 11,682

25,725 23,878