Redhook Ale Brewery, Incorporated (Nasdaq: HOOK) announced that it sold 58,700 barrels in the second quarter of 2000, a 14.2% increase compared to 51,400 barrels in the 1999 second quarter. Sales increased to $10,408,000 and gross profit increased to $2,918,000 in the 2000 second quarter, compared to $9,309,000 and $2,658,000, respectively, in the three months ended June 30, 1999. The Company's net income in the 2000 second quarter totaled $89,000, or $0.01 per share, an improvement of $418,000 from the 1999 second quarter net loss of $(329,000), or $(0.04) per share.

CEO Paul Shipman commented, "I am pleased to report our fourth consecutive quarter-over-quarter increase in sales volume. The positive trend established over the last four quarters will hopefully continue throughout the year. In mid-1999 we kicked off an aggressive advertising program in certain key markets. The radio, print and outdoor campaign continues to be well-received by wholesalers, retailers and consumers, and we closely monitor the trends in those markets. I believe this program is essential because the fragmented craft beer segment's fundamentals have changed. We plan to continue the campaign throughout 2000 with the objective of increasing our positive momentum. Redhook's financial condition remains strong and we expect to fund the campaign through internally-generated cash and, to the extent necessary, with the $5.7 million of cash on hand as of June 30, 2000. Cash increased further when we sold a real estate parcel for $1.7 million in a nonrecurring transaction that was recorded in July. Additionally, the Company has purchased 71,000 shares of its common stock under the 500,000 share repurchase program authorized by the Board of Directors in May."

Gross profit increased 9.8% to $2,918,000 in the 2000 second quarter compared to $2,658,000 in the second quarter of 1999, resulting primarily from the effect of higher sales volume. Gross profit, as a percentage of net sales, was essentially unchanged at 31.0% in the 2000 second quarter compared to 31.5% in the 1999 period.

Operating income totaled $211,000 in the three months ended June 30, 2000, a $638,000 improvement compared to the operating loss of $(427,000) in the comparable 1999 period. The improvement was due primarily to the gross profit improvement and lower expenses related to the creative work associated with the advertising program. Interest expense totaled $148,000 in the 2000 second quarter compared to $128,000 in the 1999 period due to higher average interest rates. Other income-net for the 2000 second quarter increased to $85,000 compared to $48,000 in the 1999 second quarter, primarily due to interest income earned on the higher cash balance. The Company's net income totaled $89,000, or $0.01 per share in the 2000 second quarter, compared to a net loss of $(329,000) or $(0.04) per share in the 1999 quarter.

For the six months ended June 30, 2000, total sales increased 9.3% to $18,564,000, from $16,984,000 in the comparable period of 1999. The effect of the 10,600 barrel increase in sales volume to 105,200 barrels was partially offset by small decreases in prices, net of promotional discounts. Gross profit increased 7.8% to $4,881,000 in the six months ended June 30, 2000, due primarily to increased sales volume. Gross profit as a percentage of net sales was substantially unchanged at 29.0% during the six-month period, compared to the corresponding 1999 period. Selling, general and administrative expenses increased $92,000, primarily due to the advertising and promotional program that began during the second quarter of 1999, partially offset by decreased creative work expenses incurred this year compared to the front-end of the advertising program in 1999. Interest expense increased to $288,000 in the six months of 1999, compared to $258,000 in 1999. The Company recorded a net loss of $(413,000), or $(0.05) per share in the 2000 period compared to a net loss of $(586,000), or $(0.08) per share in the 1999 period.

Cash provided by operating activities totaled $696,000 in the six months ended June 30, 2000, and the Company's cash balance was $5.7 million at June 30, 2000.

Shipments in July 2000 increased approximately 10% compared to shipments in July 1999. The Company has historically operated with little or no backlog and, therefore, its ability to predict sales for future periods, including the remainder of the 2000 third quarter, is limited.

With the exception of the historical information contained herein, the matters described may contain forward-looking statements that involve risks and uncertainties, including those described under the caption entitled "Certain Considerations: Issues and Uncertainties" in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the Securities and Exchange Commission, and elsewhere in the Company's periodic reports.

Redhook is one of the leading independent brewers of craft beers in the United States, and is the premier craft brewer in Washington State. The Company produces eight styles of beer, marketed under distinct brand names: its flagship brand Redhook ESB, Redhook India Pale Ale, Redhook Hefe-Weizen, Blackhook Porter, Double Black Stout, and its seasonal offerings Redhook Blonde Ale, Winterhook and Redhook Nut Brown Ale. Redhook owns and operates two technologically-advanced breweries, one in the Seattle suburb of Woodinville, Washington and the other in Portsmouth, New Hampshire. The Fremont Brewery building in Seattle serves as Redhook's world headquarters and home of the landmark Trolleyman Pub. Redhook beer is available in 48 states. Visit our Internet website at to learn about our products and locate them through your nearest distributor.

CONTACT: Bradley A. Berg of Redhook Ale Brewery, Incorporated, 206-548-8000. ext. 219.


Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999

Sales(A) $10,407,707 $9,308,704 $18,564,181 $16,983,600
Less Excise Taxes 984,131 865,458 1,748,946 1,568,105

Net Sales 9,423,576 8,443,246 16,815,235 15,415,495
Cost of Sales 6,506,026 5,785,682 11,933,760 10,885,751

Gross Profit 2,917,550 2,657,564 4,881,475 4,529,744
Selling, General
and Administrative 2,706,527 3,084,414 5,348,660 5,256,833

Operating Income
(Loss) 211,023 (426,850) (467,185) (727,089)
Interest Expense 147,900 127,679 288,444 258,097
Other Income - Net 85,016 47,623 148,297 83,368

Income (Loss)
before Income Taxes 148,139 (506,906) (607,332) (901,818)
Income Tax Expense
(Benefit) 58,737 (177,425) (194,346) (315,645)

Net Income (Loss) $89,402 $(329,481) $(412,986) $(586,173)

Basic Earnings (Loss)
per Share(B) $0.01 $(0.04) $(0.05) $(0.08)

Diluted Earnings
(Loss) per Share(B) $0.01 $(0.04) $(0.05) $(0.08)

Barrels Shipped 58,700 51,400 105,200 94,600

June 30,
2000 1999

Net Income (Loss) $(412,986) $(586,173)
Depreciation and Amortization 1,646,039 1,628,119
Other (536,861) 554,598

Cash Provided by Operating Activities 696,192 1,596,544

Cash Used in Investing Activities (161,321) (51,770)

Cash Used in Financing Activities (291,000) (124,001)

Increase in Cash and Cash Equivalents $243,871 $1,420,773

CONDENSED BALANCE SHEET DATA Jun. 30, 2000 Dec. 31, 1999

Cash and Cash Equivalents $5,706,650 $5,462,779
Other Current Assets 4,798,917 3,913,131
Fixed Assets, Net 76,257,831 77,739,550
Other 455,912 591,431

Total Assets $87,219,310 $87,706,891

Current Liabilities $7,160,716 $6,740,757
Long-Term Debt and Other 7,200,000 7,425,000
Deferred Income Taxes 1,423,513 1,627,067
Convertible Redeemable Preferred Stock 16,077,255 16,055,055
Common Stockholders' Equity 55,357,826 55,859,012

Total Liabilities, Preferred
Stock, and Common Stockholders' Equity $87,219,310 $87,706,891

(A) Includes retail and other sales of $1,082,000 and $978,000 for the
three months ended June 30, 2000 and 1999, respectively; and
$1,917,000 and $1,679,000 for the six months ended June 30, 2000 and
1999, respectively.

(B) Weighted-average shares totaled 7.7 million in all periods presented
that have net losses and 9.0 million for the period with reported net