Caribou Coffee Company, Inc. (Nasdaq:CBOU), the second largest
U.S.-based company-owned gourmet coffeehouse operator based on the
number of coffeehouses, today reported financial results for first
quarter 2006 (thirteen weeks ended April 2, 2006.) HIGHLIGHTS FOR
THE FIRST QUARTER OF 2006 INCLUDE: -- Total net sales grew 24% to
$56.0 million compared to the first quarter of 2005 -- Opened 10
company-operated coffeehouses and one licensed coffeehouse --
"Other Sales" increased 158% compared to the first quarter of 2005
Michael Coles, Chairman, CEO and President commented, "We are
pleased to have increased total net sales by 24% and other sales by
158%. We are encouraged by recent trends and have several new
initiatives underway to drive sales in other distribution channels
as well as co-branding opportunities." Mr. Coles added, "We believe
co-branding is an excellent way to gain brand recognition for the
Caribou name." FIRST QUARTER 2006 RESULTS Total net sales increased
$11.0 million, or 24%, to $56.0 million for the thirteen weeks
ended April 2, 2006 from $45.0 million for the thirteen weeks ended
April 3, 2005. This increase is primarily attributable to the
opening of 86 new company-owned coffeehouses during the last twelve
months. "Other Sales" increased by $1.6 million, or 158% to $2.7
million for the thirteen weeks ended April 2, 2006 from $1.0
million for the thirteen weeks ended April 3, 2005, as a result of
an increase in club store, mass merchandiser, grocery and office
coffee service sales. This increase was due to growth in our
existing accounts and new accounts added during the last twelve
months. Comparable coffeehouse net sales decreased 1% for the
thirteen weeks ended April 2, 2006 compared with the same thirteen
weeks in the prior year. During the thirteen weeks ended April 3,
2005 comparable coffeehouse net sales increased 10% when compared
to the thirteen weeks ended March 28, 2004. Licensed coffeehouses
are not included in the comparable coffeehouse net sales
calculations. The Company recognized $0.1 million of compensation
expense related to the implementation of FAS 123(R) for stock based
compensation during the thirteen weeks ended April 2, 2006.
Adjusted EBITDA decreased $0.4 million to $3.8 million during the
thirteen weeks ended April 2, 2006 from $4.2 million during the
thirteen weeks ended April 3, 2005. (EBITDA and Adjusted EBITDA are
non-GAAP measures. See EBITDA reconciliation at the end of this
release.) The Company's net loss for the thirteen weeks ended April
2, 2006 increased $1.2 million to a net loss of $1.6 million or
($0.08) per share from a net loss of $0.4 million or ($0.03) per
share for the thirteen weeks ended April 3, 2005. The increase in
the net loss is attributable to general and administrative expenses
increases for staffing to support the Company's growth plan and
public company costs and higher coffeehouse occupancy, marketing
and depreciation expense. 2006 OUTLOOK The Company does not
anticipate updating its guidance for fiscal year 2006 until after
release of second quarter results on or about August 3, 2006.
CONFERENCE CALL Caribou Coffee will host a conference call today,
Thursday May 4, 2006, at 4:30pm Eastern Time to discuss these
results. Hosting the call will be Michael Coles, Chairman of the
Board, Chief Executive Officer and President, and George Mileusnic,
Chief Financial Officer. The call will be webcast live from the
Company's website at www.cariboucoffee.com. The webcast link will
be available under the investor relations section. If you are
unable to join the call, a replay will be available beginning at
7:30pm Eastern Time and can be accessed by dialing 1-888-203-1112,
passcode 1558234. ABOUT THE COMPANY Caribou Coffee Company, Inc.,
founded in 1992 and headquartered in Minneapolis, Minnesota, is the
second largest company-owned gourmet coffeehouse operator in the
United States based on the number of coffeehouses. As of April 2,
2006, Caribou Coffee had 402 coffeehouses, including eight licensed
locations. Caribou Coffee's coffeehouses are located in 16 states
and the District of Columbia. Caribou Coffee offers its customers
high-quality gourmet coffee and espresso-based beverages, as well
as specialty teas, baked goods, whole bean coffee, branded
merchandise and related products. In addition, Caribou Coffee sells
products to club stores, grocery stores, mass merchandisers, office
coffee providers, airlines, hotels, sports and entertainment
venues, college campuses and other commercial customers. In
addition, Caribou Coffee licenses third parties to use the Caribou
Coffee brand on quality food and merchandise items. Caribou Coffee
focuses on creating a unique experience for customers through a
combination of high-quality products, a comfortable and welcoming
coffeehouse environment and customer service. FORWARD-LOOKING
STATEMENTS Certain statements in this release, and other written or
oral statements made by or on behalf of Caribou Coffee are
"forward-looking statements" within the meaning of the federal
securities laws. Statements regarding future events and
developments and our future performance, as well as management's
current expectations, beliefs, plans, estimates or projections
relating to the future, are forward-looking statements within the
meaning of these laws. These forward-looking statements are subject
to a number of risks and uncertainties. Among the important factors
that could cause actual results to differ materially from those
indicated by such forward-looking statements are: fluctuations in
quarterly and annual results, incurrence of net losses, adverse
effects of management focusing on implementation of a growth
strategy, failure to develop and maintain the Caribou Coffee brand
and other factors disclosed in the Company's filings with the
Securities and Exchange Commission. The Company undertakes no
obligation to update any forward-looking statements in order to
reflect events or circumstances that may arise after the date of
this release. -0- *T CARIBOU COFFEE COMPANY, INC. AND AFFILIATES (A
Majority Owned Subsidiary of Caribou Holding Company Limited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Thirteen Weeks
Ended ------------------------ April 3, April 2, 2005 2006
------------------------ (Unaudited) Coffeehouse sales $43,997,861
$53,283,822 Other sales 1,041,818 2,682,389
------------------------ Total net sales 45,039,679 55,966,211 Cost
of sales and related occupancy costs 18,044,840 23,266,067
Operating expenses 18,372,178 23,100,856 Opening expenses 308,320
415,251 Depreciation and amortization 3,686,938 4,805,233 General
and administrative expenses 4,600,953 6,101,178 Closing expense and
disposal of assets 897 7,998 ------------------------ Operating
income (loss) 25,553 (1,730,372) Other income (expense): Other
income 193,443 322,950 Interest income 1,365 187,003 Interest
expense (424,233) (147,742) ------------------------ Loss before
provision for income taxes and minority interest (203,872)
(1,368,161) Provision for income taxes 151,323 147,039
------------------------ Loss before minority interest (355,195)
(1,515,200) Minority interest 82,022 56,865
------------------------ Net loss $ (437,217)$(1,572,065)
======================== Basic and diluted net loss per share $
(0.03) $ (0.08) ======================== Basic and diluted weighted
average number of shares outstanding 13,802,021 19,274,102
======================== CARIBOU COFFEE COMPANY, INC. AND
AFFILIATES (A Majority Owned Subsidiary of Caribou Holding Company
Limited) CONDENSED CONSOLIDATED BALANCE SHEETS January 1, April 2,
2006 2006 -------------------------- (Unaudited) ASSETS Current
assets: Cash and cash equivalents $33,846,111 $20,521,846 Accounts
receivable (net of allowance for doubtful accounts of approximately
$237,595 and $85,735 at January 1, 2006 and April 2,2005) 1,137,120
1,452,945 Other receivables 2,260,254 1,254,967 Income tax
receivable 135,750 53,355 Inventories 11,182,512 10,456,268 Prepaid
expenses and other current assets 1,251,555 1,356,919
-------------------------- Total current assets 49,813,302
35,096,300 Property and equipment, net of accumulated depreciation
and amortization 96,022,720 95,469,325 Notes receivable 64,531
60,501 Restricted cash 321,030 321,030 Other assets 1,738,717
1,638,507 -------------------------- Total assets $147,960,300
$132,585,663 ========================== LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable
$14,553,743 $7,314,547 Accrued compensation 5,462,657 3,241,629
Accrued expenses 8,504,552 6,275,981 Deferred revenue 8,165,260
5,507,739 -------------------------- Total current liabilities
36,686,212 22,339,896 Revolving credit facility -- -- Asset
retirement liability 760,997 781,992 Deferred rent liability
10,485,177 10,847,109 Deferred revenue 2,964,000 2,956,000 Minority
interests in affiliates 138,159 167,844 --------------------------
Total long term liabilities 14,348,333 14,752,945 Commitments and
contingencies Shareholders' equity: Preferred stock, par value
$.01, 20,000,000 shares authorized; no shares issued and
outstanding -- -- Common stock, par value $.01, 200,000,000 shares
authorized; 19,269,133 and 19,278,980 shares issued and outstanding
at January 1, 2006 and April 2, 2006, respectively 192,699 192,790
Treasury stock (9,011) -- Additional paid-in capital 121,626,855
121,756,885 Accumulated deficit (24,884,788) (26,456,853)
-------------------------- Total shareholders' equity 96,925,755
95,492,822 -------------------------- Total liabilities and
shareholders' equity $147,960,300 $132,585,663
========================== EBITDA RECONCILIATION The following is a
reconciliation of the Company's net loss to EBITDA and Adjusted
EBITDA. Thirteen Weeks Ended -------------------- April 3, April 2,
2005 2006 -------------------- (Thousands) Net loss $ (437)$(1,572)
Interest expense 424 148 Interest income (1) (187) Depreciation and
amortization(1) 4,106 5,281 Provision for income taxes 151 147
-------------------- EBITDA 4,243 3,817 Adjusted EBITDA $ 4,243 $
3,817 ==================== (1) Includes depreciation and
amortization associated with our headquarters and roasting facility
that are categorized as general and administrative expenses and
cost of sales and related occupancy costs on our statement of
operations. *T EBITDA is equal to net income (loss) excluding: (a)
interest expense; (b) interest income; (c) depreciation and
amortization; and (d) income taxes. Adjusted EBITDA may be
different from EBITDA due to one-time nonrecurring costs or
charges. For the periods presented, there are no such one-time
costs or charges, and EBITDA is equal to Adjusted EBITDA. We
believe EBITDA and Adjusted EBITDA are useful to investors in
evaluating our operating performance for the following reasons: --
Our coffeehouse leases are generally short-term (5-10 years) and we
must depreciate all of the cost associated with those leases on a
straight-line basis over the initial lease term excluding renewal
options (unless such renewal periods are reasonably assured at the
inception of the lease). We opened 265 coffeehouses from the
beginning of fiscal 2001 through the first thirteen weeks of 2006.
As a result, we believe depreciation expense is disproportionately
large when compared to the sales from a significant percentage of
our coffeehouses that are in their initial years of operations.
Also, many of the assets being depreciated have actual useful lives
that exceed the initial lease term excluding renewal options.
Consequently, we believe that adjusting for depreciation and
amortization is useful for evaluating the operating performance of
our coffeehouses. Our management uses EBITDA and Adjusted EBITDA:
-- As measurements of operating performance because they assist us
in comparing our operating performance on a consistent basis as
they remove the impact of items not directly resulting from our
coffeehouse operations; -- For planning purposes, including the
preparation of our internal annual operating budget; -- To
establish targets for certain management compensation matters; and
-- To evaluate our capacity to incur and service debt, fund capital
expenditures and expand our business. EBITDA and Adjusted EBITDA as
calculated by us are not necessarily comparable to similarly titled
measures used by other companies. In addition, EBITDA and Adjusted
EBITDA: (a) do not represent net income or cash flows from
operating activities as defined by GAAP; (b) are not necessarily
indicative of cash available to fund our cash flow needs; and (c)
should not be considered as alternatives to net income, operating
income, cash flows from operating activities or our other financial
information as determined under GAAP. We prepare Adjusted EBITDA by
adjusting EBITDA to eliminate the impact of a number of items that
we do not consider indicative of our core operating performance.
You are encouraged to evaluate each adjustment and the reasons we
consider them appropriate for supplemental analysis. As an
analytical tool, Adjusted EBITDA is subject to all of the
limitations applicable to EBITDA. In addition, in evaluating
Adjusted EBITDA, you should be aware that in the future we may
incur expenses similar to the adjustments in this presentation. Our
presentation of Adjusted EBITDA should not be construed as an
implication that our future results will be unaffected by unusual
or non-recurring items.
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