Vermont Pure Holdings, Ltd. Announces Record Fiscal Year 2001 Results
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 RANDOLPH, Vt.--(BUSINESS WIRE)--Jan. 4, 2002--Vermont Pure Holdings, Ltd. announced today record (unaudited) results for its fiscal year ending October 31, 2001. To provide a more meaningful comparison, the results discussed are compared to fiscal 2000 pro forma results reflecting the merger with Crystal Rock Spring Water Company in October 2000.

Sales revenue increased 13% to $67.1 million from $59.6 million in fiscal year 2000.Operating income advanced 183% to $6.8 million in fiscal year 2001 versus $2.4 million the previous year. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) increased 77% to $13.1 million in fiscal year 2001 compared to $7.4 million the previous year. Earnings before taxes increased 125% from $800,000 million in fiscal year 2000 to $1.8 million in fiscal year 2001. Net income was $1.1 million in 2001 compared to $700,000, a 57% increase.

Commenting on the results, Timothy Fallon, Chairman and CEO of Vermont Pure Holdings, Ltd., said, "We are extremely pleased with the results after the merger with Crystal Rock. The synergies between the two companies that were identified in our pro forma plans have been achieved and have resulted in outstanding post-merger performance. The combination resulted in the creation of the eighth largest bottled water company and the fourth largest Home & Office distribution entity in the United States. Though its Crystal Rock subsidiary, the Company now serves 85,000 customers in the Northeast. Vermont Pure Holdings represents the only "Pure Play" for investors in the fastest growing beverage category, bottled water."

On an actual comparison basis, reflecting pre-merger results for most of fiscal year 2000, sales revenue increased 91% from $35.1 million in fiscal year 2000 to $67.1 million in fiscal year 2001. The company recorded an operating profit of $6.8 million versus a loss of $900,000 the previous year. Income before taxes in fiscal year 2001was $1.8 million versus a loss of $3.1 million in fiscal year 2000. The fiscal year 2000 loss reflected approximately $1.8 million in restructuring expenses resulting from the merger. EBITDA advanced from $2.6 million in fiscal year 2000 to $13.1 million in fiscal year 2001. Net income increased from a loss of $2.2 million in fiscal year 2000, when the company recognized an $800,000 tax benefit, to $1.1 million in the current year after booking tax expense of $700,000.

Fallon added, "The cash generation of this business as measured by EBITDA enabled the Company to service its debt and continue to invest in the assets required to meet our future growth plans. The merger has created a solid platform for continued accretive consolidation of smaller regional Home & office entities."

The Company also announced guidance for fiscal year 2002. Sales revenue is projected to increase in a range of 12% to 16% resulting in an EBITDA increase of between 15% to 20%. This guidance reflects the Company's current view only, and the Company does not undertake any obligation to update this information at any time or from time to time. The Company also expects net income to increase compared to prior years from new accounting standards (SFAS 141 and 142), which eliminate amortization of goodwill for business combinations. The impact on Vermont Pure Holdings, Ltd. will be the elimination of approximately $2.3 million of amortization from the fiscal year 2002 income statement.

Vermont Pure Holdings, Ltd., located in Randolph Vermont, is a bottler and distributor of natural spring water under the Vermont Pure(R) and Hidden Spring(R) brands. It also markets distilled with minerals added bottled water through the Crystal Rock(R) 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.

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.

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