Green Mountain Coffee, Inc. (NASDAQ: GMCR) yesterday reported its financial results for its fiscal third quarter of 2001. The Company delivered strong earnings growth, with a 67.3% year-over-year increase in net income for the quarter.

Total coffee pounds sold for the quarter increased 15.9% year-over-year to 2,935,000 pounds. Net sales increased 9.0% to $21,447,000 for the twelve weeks ended July 7, 2001, compared to $19,668,000 for the twelve weeks ended July 1, 2000.

The area of the highest volume increase was the Company's largest sales channel - convenience stores - where coffee pounds sold were up 43.9% in the current quarter. The strong growth in this channel was driven by the continued ramp up in sales to the distributor McLane Company, Inc. under the Company's previously announced new agreement with Exxon Mobil Corporation. The difference between coffee pound and sales growth during the quarter was due primarily to growth in the Company's Exxon Mobil business, under the new agreement, whereby both sales prices and costs are lower. Sales in the office coffee service channel grew 4.1%, which was below the growth rate in recent quarters. Management believes this reduced growth rate was due primarily to quality issues with a batch of a part in Keurig® brewers and a batch of foil lids used in manufacturing the single-serve K-Cup(TM) coffee package for the Keurig brewing system, and potentially also the impact of a slower economy. The Keurig quality issues were experienced by all licensed roasters and distributors of the Keurig brewing system and appear to have been resolved.

Green Mountain Coffee's gross profit for the quarter was 43.9% of sales compared to 39.4% of sales in the year ago period, as the Company continued to benefit from brand strength and low green coffee commodity prices. Operating expenses as a percentage of sales were 33.2%, compared to 32.1% in the prior year quarter. The higher expenses in the current quarter were due primarily to higher compensation, employee benefit, recruiting and relocation costs. Operating margins improved to 10.7% of sales, compared to 7.3% of sales a year ago. The Company achieved a 67.3% year-over-year increase in net income to $1,342,000, and earnings per share rose from $0.11 a year ago, to $0.18 for the twelve weeks ended July 7, 2001.

For the forty weeks ended July 7, 2001, the Company sold 9.6 million pounds of coffee realizing an 18.1% year-over-year increase in coffee pounds sold. Green Mountain Coffee's sales were up 19.8% for the first three quarters of its fiscal year 2001, to $75,093,000, compared to $62,669,000 for the forty weeks ended July 1, 2000. Net income increased 61.0% to $4,375,000, or $0.61 per share, for the forty weeks ended July 7, 2001, compared to $2,717,000, or $0.38 per share, for the forty weeks ended July 1, 2000.

Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, "There are tremendous opportunities, as well as challenges, for continued growth in our business. We are excited about our successful expansion under our new agreement with Exxon Mobil Corporation. Throughout the business, we are focused on continuing our solid track record for both top and bottom line growth. In terms of new initiatives, we are pleased with the integration of Frontier(TM) organic coffee into our business. The acquisition has provided us with an entree into the natural foods distribution arena, and added depth to our organic product line for this important market. Last, but not least, we were extremely pleased by the recognition we received from KLD & Co., when they added Green Mountain Coffee to the Domini 400 Social Index last month. With the currently very low cost of green coffee, the opportunities to 'do good and do well' have never been more compelling, and we welcome the added visibility the index provides with socially responsible investors."

Robert D. Britt, Chief Financial Officer, said, "It was another solid earnings quarter for Green Mountain Coffee. Our cash flow also was very good, with our year-over-year fiscal third quarter earnings before interest, taxes, depreciation, and amortization increasing over 47%, further strengthening an already strong balance sheet. Our challenge now is to drive higher levels of top line growth with both existing and new customers, taking into account the possible impact of a slower economy on the office coffee services channel. Looking forward, we remain well positioned to leverage our brand strength and infrastructure across our multiple sales channels, including convenience stores and supermarkets."

Continuing, Britt said, "For fiscal year 2002, in light of the current economic environment, we believe it is reasonable to expect top line growth in the range of 15% to 20%, which is below our longer-term cumulative average annual growth rate target of 20+%. We now anticipate delivering earnings growth above sales growth next year, in the range of 20% to 25%. Looking at the remainder of this fiscal year, we remain concerned about the residual impact of the Keurig issues this past quarter. When combined with the fact that last year's fiscal fourth quarter contained 13 weeks compared to only 12 weeks this year, we now believe our fourth quarter year-over-year sales dollar and coffee pounds sold growth rate could be 2% to 5%, or 10% to 13% on a 12-week pro-forma basis, with coffee pounds sold growth slightly greater than sales dollar growth. We are now expecting even stronger fourth quarter earnings per share than we previously anticipated, in the range of 17 to 19 cents, for our fiscal fourth quarter. This translates into 78 to 80 cents for the full year, compared to 60 cents per share in fiscal 2000." Britt indicated there would be further discussion of financial results and the Company's expectations on its conference call later this morning.

Green Mountain Coffee, Inc. is a leader in the specialty coffee industry and has been recognized by Forbes Magazine as one of the "200 Best Small Companies in America." The Company roasts high-quality arabica coffees and offers over 60 varieties including single-origin, estate, certified organic, Fair Trade, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters® and Frontier(TM) organic coffee brands.

The majority of Green Mountain Coffee's revenue is derived from its wholesale operation that serves supermarkets, convenience stores, offices, and other locations where fine coffees are sold. 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. The Company seeks to make the world a better place for present and future generations by operating in an environmentally and socially conscientious manner.

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, the impact of a weaker economy, 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, delays in the timing of adding new locations with existing customers, the Company's level of success in continuing to attract new customers, variances from budgeted sales mix and growth rate, 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 urges coffee lovers, investors and everyone else who is interested in the Company and its news to sign up for automatic e-mail receipt of its press releases. To take advantage of this free service, go to the investor services section of the Company's Web site, which can be accessed directly at http://GreenMountainCoffee.com/scripts/investor.asp. Next, click on "News Releases via E-mail" to sign up.
                      GREEN MOUNTAIN COFFEE, INC.
                 Consolidated Statement of Operations
             (Dollars in thousands except per share data)
                               Unaudited



                            Twelve      Twelve     Forty     Forty
                            weeks       weeks      weeks     weeks
                            ended       ended      ended     ended
                            7/7/01      7/1/00     7/7/01    7/1/00
                           ---------   --------   --------  --------

Net sales:
  Wholesale                 $ 20,701   $ 19,039   $ 71,651  $ 59,847
  Consumer direct                746        629      3,442     2,822
                           ---------   --------   --------  --------
Net sales                     21,447     19,668     75,093    62,669

Cost of sales                 12,030     11,909     43,475    37,595
                           ---------   --------   --------  --------

     Gross profit              9,417      7,759     31,618    25,074

Selling and operating
 expenses                      5,404      4,912     18,544    15,603
General and administrative
 expenses                      1,710      1,403      5,318     4,459
Loss on abandonment of
 fixed assets                      -          -          -       135
                           ---------   --------   --------  --------

     Operating income          2,303      1,444      7,756     4,877

Other income                      21         30         36        40
Interest expense                 (96)      (141)      (440)     (389)
                           ---------   --------   --------  --------

Income before income taxes     2,228      1,333      7,352     4,528

Income tax expense              (886)      (531)    (2,977)   (1,811)
                           ---------   --------   --------  --------

Net income                    $1,342      $ 802     $4,375    $2,717
                           =========   ========   ========  ========

Basic income per share:
Weighted average shares
 outstanding               6,469,931  6,452,830  6,352,628 6,723,578
Net income                    $ 0.21      $0.12      $0.69     $0.40

Diluted income per share:
Weighted average shares
 outstanding               7,268,547  7,022,564  7,163,293 7,069,034
Net income                     $0.18      $0.11      $0.61     $0.38




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

                                                 July 7, September 30,
                                                    2001        2000
                                               ----------- -----------
                                               (Unaudited)
           Assets
Current assets:
   Cash and cash equivalents                         $ 918      $559
   Receivables, less allowances of $463 at
     July 7, 2001 and $320 at September 30,
     2000                                           10,555     8,454
   Inventories                                       5,614     5,350
   Other current assets                                299       481
   Income tax receivable                             1,726        29
   Deferred income taxes, net                           98       182
                                                   -------   -------

       Total current assets                         19,210    15,055

Fixed assets, net                                   13,676    11,274
Goodwill and other intangibles                       1,594         -
Other long-term assets                                 297       348
Deferred income taxes, net                             376       497
                                                   -------   -------

                                                  $ 35,153  $ 27,174
                                                  ========  ========

           Liabilities and Stockholders' Equity
Current liabilities:
   Current portion of long-term debt                $  194    $  135
   Accounts payable                                  5,538     6,125
   Accrued compensation costs                        2,072     1,381
   Accrued expenses                                  2,094       614
   Accrued losses and other costs of
    discontinued operations, net                       119       119
                                                   -------   -------

         Total current liabilities                  10,017     8,374
                                                   -------   -------

Long-term debt                                         298       283
                                                   -------   -------

Long-term line of credit                             7,990     8,500
                                                   -------   -------

Commitments and contingencies

Stockholders' equity:
   Common stock, $0.10 par value:
   Authorized - 10,000,000 shares; Issued -
    7,749,005 and 7,342,010 shares at July 7,
    2001 and September 30, 2000, respectively          775       734
   Additional paid-in capital                       17,893    13,534
   Retained earnings                                 7,153     2,778
   Other comprehensive (loss)                          (77)        -
   ESOP unallocated shares, at cost -
    68,800 shares                                   (1,867)        -
   Treasury shares, at cost - 1,137,506 shares
    at July 7, 2001 and September 30, 2000          (7,029)   (7,029)
                                                   -------   -------

   Total stockholders' equity                       16,848    10,017
                                                   -------   -------

                                                  $ 35,153  $ 27,174
                                                  ========  ========



                      GREEN MOUNTAIN COFFEE, INC.
     Total Company Coffee Pounds Sold by Sales Channel - Unaudited
              (As a Percent of Total Coffee Pounds Sold)

Channel
                                 Q3        Q3          Q3         Q3
                               12 wks.  12 wks.    Y/Y lb.   % Y/Y lb.
                               ended    ended     Increase   Increase
                              7/7/01    7/1/00

Convenience Store               33.3%      26.8%   298,000      43.9%

Office Coffee Service           23.1%      25.7%    27,000       4.1%

Supermarket                     22.6%      24.6%    42,000       6.8%

Restaurant                       9.0%      10.7%    (7,000)     -2.6%

Other Food Service               8.2%       7.9%    39,000      19.5%

Other Retail                     1.7%       2.3%    (7,000)    -12.1%

Consumer Direct                  2.1%       2.0%    11,000      22.0%

Totals                     2,935,000  2,532,000    403,000      15.9%



                            Q3 YTD       Q3 YTD     Q3 YTD      Q3 YTD
                            40 wks.      40 wks.    Y/Y lb.  % Y/Y lb.
                             ended        ended
                            7/7/01       7/1/00   Increase    Increase


Convenience Store               29.9%      27.0%   676,000      30.7%

Office Coffee Service           24.6%      23.7%   434,000      22.4%

Supermarket                     23.6%      24.4%   284,000      14.3%

Restaurant                       9.2%      11.3%   (32,000)     -3.5%

Other Food Service               8.4%       8.8%    89,000      12.4%

Other Retail                     1.9%       2.4%    (8,000)     -4.1%

Consumer Direct                  2.4%       2.4%    33,000      17.0%

Totals                     9,632,000  8,156,000  1,476,000      18.1%

Note 1: Certain prior year customer channel classifications were
reclassified to conform to current year classifications.

Note 2: Consumer Direct is comprised of direct mail and e-commerce Web
site sales to consumers.


    Wholesale Coffee Pounds Sold, by Geographic Region - Unaudited
        (As a Percentage of Total Wholesale Coffee Pounds Sold)

                                 Q3         Q3         Q3       Q3
                              12 wks     12 wks    Y/Y lb.   %Y/Y lb.
                               ended      ended
                              7/7/01     7/7/00   Increase   Increase

Northern New England            29.3%      31.4%    62,000       8.0%

Southern New England            22.1%      25.0%    16,000       2.6%

Mid-Atlantic                    19.7%      22.1%    18,000       3.3%

South Atlantic                   9.4%       7.5%    85,000      45.7%

South Central                    6.6%       0.5%   176,000    1353.8%

Midwest                          2.3%       2.6%     1,000       1.5%

West                             3.5%       1.7%    59,000     140.5%

Multi-Regional                   6.2%       7.9%   (18,000)     -9.2%

International                    0.9%       1.3%    (7,000)    -21.9%

Totals                     2,874,000  2,482,000    392,000      15.8%



                              Q3 YTD     Q3 YTD     Q3 YTD     Q3 YTD
                              40 wks     40 wks     Y/Y lb.  % Y/Y lb.
                              ended      ended
                              7/7/01      7/1/00  Increase   Increase


Northern New England            30.3%      32.9%   236,000       9.0%

Southern New England            23.9%      24.5%   302,000      15.5%

Mid-Atlantic                    21.3%      21.5%   283,000      16.5%

South Atlantic                   8.4%       6.8%   246,000      45.2%

South Central                    3.6%       0.5%   296,000     759.0%

Midwest                          2.4%       2.5%    29,000      14.6%

West                             2.4%       1.7%    90,000      66.7%

Multi-Regional                   6.6%       8.5%   (53,000)     -7.9%

International                    1.1%       1.1%    14,000      16.3%

Totals                     9,405,000  7,962,000  1,443,000      18.1%


Note 1: Excludes coffee pounds sold in the Consumer Direct channel.

Note 2: The allocation by region of coffee pounds sold to certain
McLane Company, Inc. warehouses for distribution to ExxonMobil
convenience stores has been estimated. This information will be
adjusted in future quarters once the detailed sales data to ExxonMobil
locations is readily available.

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