Vermont Pure Holdings, Ltd. (Amex – VPS) announced yesterday that for the six months ended April 30, 2001 revenues amounted to $29,765,000. This compares to sales of $14,648,000 for the same period a year ago. Sales more than doubled as a result of the effect of the merger with Crystal Rock which was completed in October 2000. After adjusting for the effect of the Crystal Rock merger on a pro forma basis, sales increased 10% for the period over the prior year. Sales for the second quarter were $15,546,000 compared to $8,225,000 for the same period last year. On a pro forma basis, sales increased 7% for the quarter over the prior year.

Income from operations gained 61% to $2,752,000 for the first six months compared to $1,706,000 last year, on a pro forma basis. For the second quarter, operating income improved to $1,388,000 compared to $1,170,000 last year, on a pro forma basis. Net income for the six-month period was $98,000 compared to a net loss of $180,000 for the same period last year. On a pro forma basis, the improvement was even greater, since the effect of interest expense and amortization of goodwill results in a pro forma net loss for the first half of last year of $831,000. Net income for the second quarter was $74,000 compared to a net loss of $89,000 and pro forma net loss of $317,000 last year.

For the first half of the year, Earnings Before Interest, Taxes, Depreciation, and Interest amounted to $5,761,000.

Commenting on the report, Timothy Fallon, Chairman and CEO stated, “The strong performance during the first half of our fiscal year is a reflection of the increased market penetration and operating efficiencies which are continuing to unfold, following the merger with Crystal Rock last fall. As we enter the significantly stronger second half of the year, we believe this progress will continue.”

He added, “Recent packaging agreements for private label products with Ahold Group (Stop & Shop, TOPS, Giant, Finast) and Hannford Brothers have added to the strength of our retail business. In addition, we are committed to expansion in the home and office delivery category which now makes up 76% of our revenues.”

Fallon concluded, “Bottled water continues to be the fastest growing segment of the beverage industry. As the largest independent, publicly traded provider we feel we are well positioned to take advantage of the opportunities that the market presents for the benefit of our company and shareholders.”

Vermont Pure Holdings, LTD., located in Randolph Vermont, is a bottler and distributor of natural spring water under the Vermont Pure® and Hidden Spring® brands and distilled with minerals added bottled water through the Crystal Rock® brand. The company’s primary businesses are the marketing of these brands throughout the New England, New York, and the Mid-Atlantic regions. The company is currently executing a growth strategy through expansion of the home and office customer base, acquisitions, and consolidation of regional home and office bottled water and coffee distributors. Vermont Pure Holdings Ltd.’s common stock trades on the American Stock Exchange under the symbol: VPS.

In order to present a more meaningful analysis of the company’s results, pro forma comparative financial information has been provided with this release. Pro forma information is the combined historical results of Vermont Pure and Crystal Rock (a privately held company prior to the combination) including adjustments reflecting certain changes in costs and expenses as a result of the transaction. The company will continue to present its results with this information for all of its reporting periods in the current fiscal year.

Note: This press release contains forward looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from those indicated by such forward looking statements, including integration of acquisitions, ability to sustain and manage growth, changing market conditions, and other risks detailed in the company’s filings with the Securities and Exchange Commission.

                      VERMONT PURE HOLDINGS, LTD
Results of Operations

(Unaudited) (Unaudited)
Six Months Endings Three Months Ended:
Pro Forma Pro Forma
Apr. 30, Apr. 30, Apr. 30, Apr. 30, Apr. 30, Apr. 30,
2001 2000 2000 2001 2000 2000
(000’s $)

Sales $29,765 $ 14,648 $ 27,074 $15,546 $ 8,225 $ 14,564
Income (Loss)
from Operations $ 2,752 $ 282 $ 1,706 $ 1,388 $ 367 $ 1,170
Net Income (Loss) $ 98 ($ 180)($ 831)$ 74 ($ 89)($ 317)
Basic Net Earnings
(Loss) per Share $ 0.00 ($ 0.02)($ 0.04)$ 0.00 ($ 0.01)($ 0.02)
Diluted Net
Earnings (Loss)
per Share $ 0.00 ($ 0.02)($ 0.04)$ 0.00 ($ 0.01)($ 0.02)
Basic Wgt. Avg
Shares Out
(000’s) 20,224 10,290 20,163 20,280 10,290 20,163
Diluted Wgt Avg
Shares Out
(000’s) 20,290 10,290 20,163 20,330 10,290 20,163
(1)EBITDA $ 5,761 $ 1,805 $ 5,362 $ 2,909 $ 998 $ 3,001

(1)Earnings Before Interest, Taxes, Depreciation and Amortization