New Company Highlight         June 2007

Green Mountain Coffee Inc. (GMCR) is a wholesale coffee supplier to supermarkets, convenience stores, offices and some restaurants. The company roasts premium quality Arabica coffees and offers over 75 different coffee selections which include its proprietary blends, fair trade coffees, organics, estate and single-origin. The company’s main source of revenue comes from its wholesale coffee sales (73.4% in Q1-07); however, since its acquisition of Keurig Coffee in June of 2006, its revenue mix has changed. The Kuerig business brings a razor/razor blade business model to Green Mountain along with higher revenue growth and higher margins. With the addition of Kuerig, Green Mountain now distributes three models of the Keurig single-cup brewer and an assortment of patented K-cups. The K-cups are specifically designed to work with the brewer in order to provide the user with a single serving of fresh, high quality coffee or tea. The company has seen strong demand for the one-cup brewer as it has increased its presence from 3,500 retail stores in 2005 to 7,000 in 2006. Green Mountain recently moved into the hotel industry through a distribution contract with Loews Hotels, which places the single-cup brewer in its 7,500 rooms. The Keurig business is still in early innings and represents the largest growth driver for the company moving forward, which makes Green Mountain Coffee a timely addition to the portfolio.

(Pictured above is the Keurig B70, which retails for $199.95. The other two models, the B40 and B60, retail for $99.95 and $149.95 respectively.)

www.greenmountaincoffee.com.

Source: Green Mountain Coffee, Scott Van Winkle, CFA, Canaccord Adams

Rocket Capital Checklist for Green Mountain Coffee Inc.

Rapid revenue and earnings growth

Revenue growth of 26%, 27%, 84%, and 30% year over year the last 4 quarters.
Earnings growth of 54% in the most recent quarter.

Obvious leader in its category

Ranks #1 in the Retail/Wholesale Food Group according to IBD®: RS rating of 99, EPS rating of 88 and Composite rating of 99.

Competitive edge within its sector

GMCR leads the organic coffee space and continues to gain traction as retailers expand their organic food offerings. The company also has a dominant position in single-cup brewers.

Keep it small – greater upside potential

$617 million market cap with 8 million shares outstanding.

Economic effects of supply/demand

40% institutionally owned. Acc/Dis Rating of A- according to IBD®

Technical analysis to decide timing

Broke out of a base on base pattern with more than double average daily volume on 6/15/07

As of the time of this post, clients of Rocket Capital Management own approximately 5,425 shares.

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