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 2009 (thirteen weeks ended March 29, 2009).
HIGHLIGHTS FOR THE FIRST QUARTER OF 2009 INCLUDE:
- Net Income of $0.3 million or
$0.02 per share and EBITDA of $4.6 million for the quarter.
- Commercial sales increased 61%
while franchise sales increased 14% compared to first quarter
2008.
Michael Tattersfield, the Company�s President and CEO commented,
"I am pleased with the progress we continue to make in improving
profitability. We have communicated that the turnaround will be a
multi-year effort, and although we are operating in a challenging
economic environment, we are continuing to see progress. We are
accomplishing this by focusing on key strategic initiatives;
improving our guest experience, strengthening our brands and
focusing on the expansion of our franchise and commercial
channels.� Mr. Tattersfield added, �Non-coffeehouse sales continue
to exhibit strong growth and have helped to offset the past
emphasis on company-owned coffeehouse expansion, reinforcing our
stated goal of evolving to a branded coffee company.�
FIRST QUARTER 2009 RESULTS
Total net sales were $60.4 million for the quarter ended March
29, 2009, a decrease of $1.4 million or 2.2% from $61.8 million for
the quarter ended March 30, 2008. This decrease is attributable to
204 fewer operating coffeehouse weeks due to coffeehouse closures
in 2008, a 5.0% decrease in comparable coffeehouse sales in the
first quarter of 2009 compared to the same period in 2008,
partially offset by commercial and franchise segment sales
growth.
Coffeehouse sales were $52.9 million in the first quarter of
2009, a decrease of 6.6% from the same period in the prior year.
The decrease primarily reflects the 5.0% decline in comparable
coffeehouse sales and fewer coffeehouse operating weeks. No new
company-owned coffeehouses opened during the quarter. Commercial
sales were $5.7 million in the first quarter of 2009, an increase
of 60.6% over the first quarter of 2008. The increase was due to
higher sales from existing and new commercial customers, as the
company opened 711 new doors. Franchise sales were $1.8 million in
the first quarter of 2009, an increase of 14.2% over the first
quarter of 2008. The increase was due to higher sales from
franchise fees, royalties and product sales from 38 franchise
coffeehouses opened during the last 12 months, including 6
coffeehouse openings during the first quarter of 2009.
Cost of sales and related occupancy costs in the first quarter
of 2009 was $26.3 million and remained relatively flat for the
quarter compared to the same period of the prior year.
Operating expenses in the first quarter of 2009 were $23.3
million compared to $25.4 million in the same period of the prior
year. This decrease was the result of improved operating
performance within the retail segment as well as having fewer
coffeehouse operating weeks. As a percentage of revenue, operating
costs were 38.6%, down from 41.1% in the same period of the prior
year.
General and administrative expenses decreased $0.9 million, or
11.3%, to $6.6 million during the thirteen weeks ended March 29,
2009, from $7.5 million during the thirteen weeks ended March 30,
2008. The decrease in general and administrative expenses was the
result of cost reduction actions taken during fiscal 2008 and the
on-going focus on overall cost management.
Store closing expense and disposal of assets decreased $2.4
million to $0.1 million during first quarter 2009, from $2.5
million during first quarter 2008. The decrease in closing expense
and disposal of assets is primarily attributable to asset write-off
and lease termination costs associated with the closing of 16
underperforming company-owned coffeehouses during the thirteen
weeks ended March 30, 2008. There were no company �owned stores
closed in the first quarter of 2009.
EBITDA was $4.6 million during the thirteen weeks ended March
29, 2009, compared to EBITDA of $0.5 million during the thirteen
weeks ended March 30, 2008. The year over year EBITDA increase was
primarily due to improved performance within our retail
coffeehouses, continued growth in the commercial and franchise
segments, operating cost reductions and lower retail coffeehouse
closing expenses. (EBITDA is a non-GAAP measure. See EBITDA
reconciliation at the end of this release).
Depreciation and amortization decreased $2.2 million, or 36.8%,
to $3.7 million during the thirteen weeks ended March 29, 2009,
from $5.9 million during the same period in the prior year. The
decrease was due to $1.5 million in accelerated deprecation
associated with company-owned coffeehouses during the first quarter
2008 and lower depreciable assets during 2009 from impairments
taken in the past year.
The Company�s net income for the first quarter of 2009 was $0.3
million or $0.02 per share compared to a net loss of $6.4 million
or ($0.33) per share for the same period in 2008.
BALANCE SHEET AND CASH FLOW
The company ended the quarter with $10.8 million in cash and no
long-term debt. Capital expenditures in the quarter amounted to
$0.2 million.
CONFERENCE CALL
Caribou Coffee will host a conference call on May 7, 2009, at
4:30 p.m. (Eastern Time) to discuss these results. Hosting the call
will be Michael Tattersfield, President and CEO, and Timothy
Hennessy, CFO. 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
1-888-724-9518 or 1-913-312-0374 for international calls.
Confirmation number is 2403265. If you are unable to join the call,
a replay will be available beginning at 7:30 p.m. (Eastern Time) on
May 7, 2009 through 11:59 p.m. on May 14, 2009 and can be accessed
by dialing 1-888-203-1112 or international callers 1-719-457-0820
and enter pin number 2403265. In addition, the webcast will be
archived on the Company�s website.
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 March 29, 2009, Caribou Coffee had
515 coffeehouses, including 101 franchised locations. 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
online customers. Caribou Coffee focuses on creating a unique
experience for customers through a combination of high-quality
products, a comfortable and welcoming coffeehouse environment and a
unique style of customer service. For more information, visit the
Caribou Coffee web site at www.cariboucoffee.com.
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.
�
CARIBOU COFFEE COMPANY, INC.
AND AFFILIATES
(A Majority Owned Subsidiary of
Caribou Holding Company Limited)
�
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
�
Thirteen Weeks Ended
�
March 29,
2009
�
March 30,
2008
(In thousands, except for per
share
amounts)
(Unaudited) Coffeehouse sales $ 52,864 $ 56,620 Commercial
and franchise sales �
7,516 � �
5,137 �
Total net sales 60,380 61,757 Cost of sales and related occupancy
costs 26,272 26,213 Operating expenses 23,322 25,395 Opening
expenses 10 85 Depreciation and amortization 3,741 5,921 General
and administrative expenses 6,606 7,450 Closing expense and
disposal of assets �
53 � �
2,546 �
Operating income (loss) 376 (5,853 ) Other income (expense):
Interest income - 18 Interest expense �
(58 ) �
(512 ) Income (loss) before provision for income taxes
318 (6,347 ) (Benefit) provision for income taxes �
(101 ) �
6 � Net Income
(loss) 419 (6,353 ) Less: Net income attributable to noncontrolling
interest �
73 � �
53 � Net Income (loss)
attributable to Caribou Coffee Company, Inc.
$
346 �
$ (6,406 ) Basic net
income (loss) attributable to Caribou Coffee Company, Inc. common
shareholders per share $ 0.02 � $ (0.33 ) Diluted net income (loss)
attributable to Caribou Coffee Company, Inc. common shareholders
per share $ 0.02 � $ (0.33 ) Basic weighted average number of
shares outstanding �
19,371 � �
19,371 �
Diluted weighted average number of shares outstanding �
19,526 � �
19,371 � � �
CARIBOU COFFEE COMPANY, INC.
AND AFFILIATES
(A Majority Owned Subsidiary of
Caribou Holding Company Limited)
�
CONDENSED CONSOLIDATED BALANCE
SHEETS
� �
March 29,
2009
December 28,
2008
(In thousands, except for per
share
amounts)
(Unaudited) ASSETS Current assets: Cash and cash
equivalents $ 10,751 $ 11,060 Accounts receivable (net of allowance
for doubtful accounts of $76 and $72 at March 29, 2009 and December
28, 2008, respectively) 4,330 5,311 Other receivables 1,399 916
Income tax receivable 41 60 Inventories 9,832 10,218 Prepaid
expenses and other current assets �
870 � �
881 � Total current assets 27,223 28,446 Property and
equipment, net of accumulated depreciation and amortization 56,203
60,312 Notes receivable 12 16 Restricted cash 327 327 Other assets
�
426 � �
471 � Total assets
$ 84,191 �
$
89,572 �
LIABILITIES AND EQUITY � Current
liabilities: Accounts payable $ 8,604 $ 8,229 Accrued compensation
4,291 6,241 Accrued expenses 6,885 8,317 Deferred revenue �
6,889 � �
9,473 � Total current
liabilities 26,669 32,260 � Asset retirement liability 1,056 1,035
Deferred rent liability 9,104 9,245 Deferred revenue 2,408 2,538
Income tax liability �
367 � �
486 �
Total long term liabilities 12,935 13,304 Equity: Preferred stock,
par value $.01, 20,000 shares authorized; no shares issued and
outstanding � � Common stock, par value $.01, 200,000 shares
authorized; 19,371 shares issued and outstanding at March 29, 2009
and December 28, 2008 194 194 Additional paid-in capital 125402
125,222 Accumulated deficit �
(81,133 ) �
(81,479 ) Total Caribou Coffee Company, Inc.
shareholders� equity 44,463 43,937 Noncontrolling interest �
124 � �
71 � Total equity �
44,587 � �
44,008 � Total liabilities and
equity
$ 84,191 �
$
89,572 � � �
Coffeehouse Openings and
Closings
�
Thirteen Weeks Ended March 29,
2009 �
March 30, 2008 Operating
Data: Percentage change in comparable coffeehouse net sales(1)
(5.0 )% (2.3 )%
COFFEEHOUSE DATA Company-Owned: Coffeehouses
open at beginning of period 414 432 Coffeehouses opened during the
period 0 5 Coffeehouses closed during the period
0 �
16 � Total Company-Owned Open at Period End 414 421
Franchised: Coffeehouses open at beginning of period 97 52
Coffeehouses opened during the period 6 11 Coffeehouses closed
during the period
2 �
� � Total
Franchised Open at Period End
101 �
63 �
Total coffeehouses open at end of period
515 �
484 � �
___________
(1) �
Percentage change in comparable
coffeehouse net sales compares the net sales of coffeehouses during
a fiscal period to the net sales from the same coffeehouses for the
equivalent period in the prior year. A coffeehouse is included in
this calculation beginning in its thirteenth full fiscal month of
operations. A closed coffeehouse is included in the calculation for
each full month that the coffeehouse was open in both fiscal
periods. Franchised coffeehouses are not included in the comparable
coffeehouse net sales calculations.
� � � �
EBITDA RECONCILIATION
�
The following is a reconciliation
of the Company�s net income (loss) to EBITDA.
�
Thirteen Weeks Ended March 29,
2009 �
March 30, 2008
(Thousands) Net Income (loss) attributable to Caribou Coffee
Company, Inc. $ 346 $ (6,406 ) Interest expense 58 512 Interest
income (18 ) Depreciation and amortization(1) 4,294 6,421 (Benefit)
provision for income taxes �
(101 ) �
6 � EBITDA $
4,597 � $
515 �
� (1) Includes depreciation and amortization associated with the
headquarters and roasting facility that are categorized as general
and administrative expenses and cost of sales and related occupancy
costs on the statement of operations. �
EBITDA is equal to net income (loss) excluding: (a) interest
expense; (b) interest income; (c) depreciation and amortization;
and (d) income taxes.
Management believes EBITDA is useful to investors in evaluating
the Company�s operating performance for the following reason:
- Coffeehouse leases are generally
short-term (5-10 years) and Caribou 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). The
Company opened a net 212 company-operated coffeehouses from the
beginning of fiscal 2003 through the end of the first thirteen
weeks of fiscal 2009. As a result, management believes depreciation
expense is disproportionately large when compared to the sales from
a significant percentage of the 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, management believes
that adjusting for depreciation and amortization is useful for
evaluating the operating performance of the coffeehouses.
Management uses EBITDA:
- As a measurement of operating
performance because it assists management in comparing its
operating performance on a consistent basis as it removes the
impact of items not directly resulting from 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 the Company�s
capacity to incur and service debt, fund capital expenditures and
expand the business.
EBITDA as calculated by Caribou Coffee is not necessarily
comparable to similarly titled measures used by other companies. In
addition, EBITDA: (a) does not represent net income or cash flows
from operating activities as defined by GAAP; (b) is not
necessarily indicative of cash available to fund cash flow needs;
and (c) should not be considered an alternative to net income,
operating income, cash flows from operating activities or Caribou
Coffee�s other financial information as determined under GAAP.
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