Caribou Coffee Company Inc., the second largest U.S.-based company-owned gourmet coffeehouse operator based on the number of coffeehouses, reported financial results for second quarter 2008 (thirteen weeks ended June 29, 2008).

HIGHLIGHTS FOR THE SECOND QUARTER OF 2008 INCLUDE:

• “Other Sales” increased 68 percent compared to the second quarter of 2007

• Comparable Coffeehouse Net Sales decreased 1.7 percent

• Opened 12 franchise units

Speaking on behalf of the Company, Rosalyn (Roz) Mallet comments, “The actions that we have taken over the past year are beginning to show positive results, and we are making progress to improve the overall health of the company.” Mallet adds, “Our commercial and franchise business are both delivering healthy growth, indicative of the strength of the Caribou Coffee brand.”

SECOND QUARTER 2008 RESULTS

Total net sales increased $0.4 million, or 0.5 percent, to $63.2 million for the quarter ended June 29, 2008, from $62.8 million for the quarter ended July 1, 2007. This increase was attributable to a 68 percent increase in Other Sales.

Coffeehouse sales were $57.3 million in fiscal second quarter 2008, a decrease of 3.5 percent from the same period in the prior year. The decrease primarily reflects a 1.7 percent decline in comparable coffeehouse sales and 318 fewer operating coffeehouse weeks in the second thirteen weeks of fiscal 2008 as compared to the same period in fiscal 2007. Other net sales were $5.9 million in fiscal second quarter 2008, an increase of 68 percent over fiscal second quarter 2007. The increase was due to higher sales from new and existing commercial customers, royalties, and product sales from 36 franchise coffeehouses opened during last 12 months.

General and administrative expenses decreased $0.6 million, or 7.5 percent, to $6.6 million during the thirteen weeks ended June 29, 2008, from $7.2 million during the thirteen weeks ended July 1, 2007. The decrease in general and administrative expenses was largely due to lower labor costs.

Store closing expense and disposal of assets increased $1.2 million to $1.3 million during second quarter 2008, from $0.1 million during second quarter 2007. The increase in closing expense and disposal of assets is primarily attributable to asset write-off and lease termination costs associated with the closing of six underperforming company-owned coffeehouses during the thirteen weeks ended June 29, 2008.

Reported EBITDA was $2.9 million during the thirteen weeks ended June 29, 2008, compared to EBITDA of $2.4 million during the thirteen weeks ended July 1, 2007. The year over year EBITDA increase was impacted by a $1.2 million increase in closing expense and disposal of assets. (EBITDA is a non-GAAP measure. See EBITDA reconciliation at the end of this release).

Depreciation and amortization decreased $1.4 million, or 22.4 percent, to $4.6 million during the thirteen weeks ended June 29, 2008, from $6.0 million during the same period in the prior year. This decrease was due to fewer coffeehouse operating weeks in the second quarter of 2008 and the impairment of 38 company-operated coffeehouses during the last three quarters of fiscal 2007.

Coffeehouse depreciation and amortization includes $0.2 million in accelerated depreciation associated with coffeehouse asset impairments during the second quarter of fiscal 2008 as compared to $0.5 million during the same period in the prior year.

The Company’s net loss for the second quarter of 2008, was $2.5 million or ($0.13) per share compared to a net loss of $3.9 million or ($0.20) per share for the same period in 2007.

CONFERENCE CALL

Caribou Coffee will host a conference call on August 5, 2008, at 4:30 p.m. (Eastern Time) to discuss these results. Hosting the call will be Rosalyn (Roz) Mallet and Kaye O’Leary. The call will be webcast and can be accessed from the Company’s website at www.cariboucoffee.com. The webcast link is in the Investor Relations section. The dial in number is 1-888-211-0353 or 1-913-312-0860 for international calls. Confirmation number is 2347705. If you are unable to join the call, a replay will be available beginning at 7:30 p.m. (Eastern Time) on August 5, 2008 through 11:59 p.m. on August 12, 2008 and can be accessed by dialing 1-888-203-1112 or international callers 1-719-457-0820 and enter pin number 2347705. In addition, the webcast will be archived on the Company’s website.