(Corrects in 7th graf GMCR 2007 revenue to $336 mln instead of $51.7 mln)
* Some Vermonters confused by dive in share price
* State’s 4th-largest employer, $2.7 bln in revenue
By Melvin Backman
June 14 (Reuters) - Green Mountain Coffee Roasters Inc did not crack the Fortune 500 list this year, but it is a big deal to folks back home.
Many of the coffee manufacturer’s hometown supporters are puzzled at how the fast-growing company’s stock has gone almost overnight from one of Wall Street’s most loved to one of its most scorned.
For many in Vermont, it is a classic case of Wall Street not connecting with Main Street. That is because in Vermont, Green Mountain is not just one of the largest employers, its very presence supports many much smaller businesses.
“If Green Mountain were to disappear, I wouldn’t have a paycheck,” said Kelly Brooks, who puts in hours at Zachary’s Pizza House less than a mile from Green Mountain’s headquarters in Waterbury, a small town of fewer than 1,800. Brooks said her income depends in large part on the paychecks of Green Mountain employees.
Roughly 1,850 of Green Mountain’s 5,600 employees are located in Vermont. The maker of Keurig coffee machines and its popular single-serve “K-cups” coffee product also is Vermont’s fourth-largest employer.
Green Mountain - named after the Vermont mountain range - has been a shining example of economic growth in the state.
Revenue at the company has skyrocketed over the past five years to $2.7 billion by the end of 2011 from $336 million.
But after years of astronomical growth, with its stock hitting a 52-week high of $115.98 last September and a peak market capitalization of $18 billion, the company is coming back to earth.
Green Mountain’s stock has fallen by half this year and currently trades around $21.50 in the wake of corporate governance issues and an SEC investigation into its accounting practices. Green Mountain is also fighting a shareholder lawsuit alleging misrepresentation of growth in its earnings reports and regularly finds itself the focus of criticism from short-sellers betting against the stock.
“People are perplexed by Wall Street,” said former Green Mountain employee Gaelan Brown, who now works at a Burlington, Vermont, non-profit.
Brown said he knows many people in the state who also are stockholders of Green Mountain because they were impressed by the company’s rapid growth. Now, he said, local shareholders like himself are left scratching their heads, wondering why Wall Street views Green Mountain with such disdain.
The company paid $11.3 million in taxes to four states where it has operations, including Vermont. The company does not provide a breakdown of state-by-state tax payments.
Betsy Bishop, president of the Vermont Chamber of Commerce, said most companies in Vermont are small businesses, noting that 90 percent employ fewer than 20 individuals.
Green Mountain also has some big names backing it at home.
Hinda Miller, a Democratic member of the Vermont state Senate, is on Green Mountain’s board of directors.
Miller, who owns her own business consulting firm and was one of the inventors of the sports bra, has been on Green Mountain’s board since 1999. Green Mountain and its founder, Robert Stiller, along with his wife, Christine, each gave Miller $300 during her 2004 state Senate bid.
In 2008, she co-sponsored a bill in the Vermont Senate honoring Stiller and his role in making the coffee maker an economic giant in the state.
Tomi Kilburn, an administrative assistant at the Central Vermont Chamber of Commerce in nearby Berlin, said the Green Mountain factory is popular enough that tourists coming through the region ask about taking tours.
“When people come to Vermont, they think of three things: coffee, cheese and ice cream,” she said, referencing Ben and Jerry’s, another iconic Vermont business, which was bought by Anglo-Dutch food and personal care conglomerate Unilever , and cheese maker Cabot Creamery Cooperative. By comparison, each of those companies has fewer than 1,000 employees total.
Dick Heaps, a Westford, Vermont, consultant, said that 1,000 employee threshold is a major one.
“If you have 1,000 employees, you’re a big deal up here,” he said.
With competitors like Starbucks in the K-cup market and crucial patent expirations looming, the company faces an uphill battle.
All told, Bishop said: “I think Vermonters will always root for a local company to do well,” she said.
Editing by Jennifer Ablan, Matthew Goldstein and Steve Orlofsky