IRVINE, Calif., Jan. 26 /PRNewswire-FirstCall/ -- Diedrich Coffee,
Inc. (NASDAQ:DDRX) today announced operating results for its second
quarter ended December 10, 2008. For the quarter, the Company
reported a net loss of $995,000, or $0.18 loss per share, compared
to a net loss of $1,159,000, or $0.21 loss per share, for the
second quarter of the prior fiscal year. Year-to-date, the Company
reported a net loss of $2,778,000, or $0.51 loss per share,
compared to a net loss of $1,429,000, or $0.26 loss per share, for
the comparable period in the prior fiscal year. The year-to-date
results of the prior fiscal year included an after-tax gain of
$767,000, or $0.14 per share, from escrow proceeds received in the
first quarter of fiscal year 2008 from the sale of the majority of
the Company's Diedrich Coffee and Coffee People company-operated
locations, which was completed in the 2007 fiscal year. Revenue
Total revenue increased by $3,154,000, or 25.3%, to $15,602,000 for
the second quarter of fiscal year 2009 as compared with total
revenue of $12,448,000 in the same period of the prior year. With
respect to the components of total revenue, wholesale revenue
increased $3,295,000, up 31.8% from the prior year period,
franchise revenue decreased $239,000, down 29.8% from the prior
year period, and retail sales increased $98,000, up 7.7% from the
prior year period. Year-to-date, total revenue increased by
$6,726,000, or 32.6%, to $27,334,000 as compared with $20,608,000
in the same period of the prior year. With respect to the
components of total revenue, wholesale revenue increased
$7,143,000, up 42.4% from the prior year period, franchise revenue
declined $363,000, down 25.3% from the prior year period, and
retail sales decreased $54,000, down 2.3% from the prior year
period, as compared to the same period of the prior year. Wholesale
revenue increased for the second quarter of fiscal year 2009 by
$3,295,000 or 31.8% over the second quarter of fiscal year 2008.
For the current quarter wholesale sales to office coffee
distributors ("OCS"), specialty retail and foodservice customers
increased $3,622,000, or 41.4%, from the prior year quarter, with
Keurig "K-cup" sales increasing 48.6% from the prior year quarter.
Wholesale sales to franchise locations decreased $327,000, or
20.1%, for the second quarter of the current fiscal year.
Year-to-date, wholesale revenue increased $7,143,000 or 42.4% to
$23,977,000 from $16,834,000 compared to the same period in the
prior fiscal year. Wholesale sales to OCS and foodservice customers
increased $7,626,000, or 53.3%, from the same period of the prior
year, with Keurig "K-cup" sales increasing 66.3% from the prior
year and wholesale sales to franchise locations decreasing
$483,000, or 18.7% from the same period of the prior year.
Franchise revenue decreased by $239,000 for the second quarter of
the current fiscal year from the prior year period and by $363,000
year-to-date period from the prior year period, primarily due to a
net decrease in unit count and negative comparable store sales.
Gloria Jean's continues to be affected by the current economy,
factors which contributed in part to the 4.3% negative comparable
store sales reported by the Gloria Jean's franchise system for both
the second quarter and the year-to-date period of fiscal year 2009.
Retail sales increased $98,000 for the second quarter of fiscal
2009 from the prior year period and decreased $54,000 year-to-date
from the prior year period. E-commerce related sales decreased
$21,000, or 4.7% for the second quarter of fiscal year 2009 from
the prior year period, and remained relatively flat for the
year-to-date period at $744,000 for fiscal 2009 compared to
$746,000 for the prior fiscal year. Costs and Expenses Cost of
sales and related occupancy costs for the second quarter of fiscal
year 2009 increased $3,068,000, or 32.8%, to $12,430,000 from
$9,362,000 in the prior year period. Cost of sales and related
occupancy increased as a percentage of wholesale and retail
revenues to 82.7% for the current quarter compared to 80.4% in the
prior year period. Year-to-date cost of sales and related occupancy
costs increased $6,301,000, or 41.1%, to $12,635,000 from
$15,334,000 in the prior year period. Cost of sales and related
occupancy increased as a percentage of wholesale and retail
revenues to 82.4% for the year to date period compared to 80.0% in
the prior year period. For the year-to-date period, wholesale cost
of goods sold increased from 81.4% to 84.1% of wholesale sales in
the current year due primarily to the higher percentage of Keurig
business in the current year as compared to the prior year period.
Occupancy costs decreased $150,000 for the second quarter of fiscal
year 2009 and decreased $231,000 for the year-to-date period
compared to the prior year period. This decrease resulted primarily
from a decrease in franchise rent expense associated with closed
stores. Operating expenses for the second quarter of fiscal year
2009 decreased $367,000, or 15.6%, to $1,979,000 from $2,346,000
for the prior year period and decreased as a percentage of total
revenue to 12.7% in the second quarter of the current fiscal year
from 18.8% in the second quarter of last year. Year-to-date,
operating expenses decreased $745,000, or 16.3%, to $3,833,000 from
$4,578,000 for the prior year period and decreased as a percentage
of total revenue to 14.0% in the current fiscal year from 22.2% in
the prior year period. The decrease for the current year-to-date
period is due primarily to decreases in overhead costs associated
with the wholesale and franchise operations. For the second quarter
of fiscal year 2009, general and administrative expenses decreased
$104,000 and decreased as a percentage of revenues to 10.2% in the
current year quarter from 13.6% in the second quarter of the prior
year. Year-to-date, general and administrative expenses increased
$323,000 and as a percentage of revenues decreased to 12.7% in the
current year from 15.3% in the same period of the prior year. For
the current year-to-date period, the increase of $323,000 resulted
primarily from an increase in compensation costs and legal fees.
Discontinued Operations Income from Discontinued Operations for the
year-to-date period of the prior fiscal year was $767,000, or $0.14
per share, and was the result of the escrow proceeds received from
the sale of the majority of the Company's Diedrich Coffee and
Coffee People company-operated locations, which was completed in
the 2007 fiscal year. About Diedrich Coffee With headquarters in
Irvine, California, Diedrich Coffee specializes in sourcing,
roasting and selling the world's highest quality coffees. The
Company's three brands are Diedrich Coffee, Gloria Jean's Coffees
and Coffee People. Diedrich Coffee sells its coffees through more
than 900 wholesale accounts including office coffee service
distributors, restaurants and specialty retailers, and via the
Company's web stores. As of December 10, 2008, the Company's 114
retail outlets, the majority of which are franchised, are located
in 25 states. For more information about Diedrich Coffee, call
800/354-5282, or visit the Company's web sites at
http://www.diedrich.com/, http://www.gloriajeans.com/,
http://www.coffeepeople.com/ or http://www.coffeeteastore.com/.
Forward Looking Statements Statements in this news release that
relate to future plans, financial results or projections, events or
performance are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and fall
under the safe harbor. Actual results and financial position could
differ materially from those anticipated in the forward-looking
statements as a result of a number of factors, including, but not
limited to, the financial and operating performance of the
Company's wholesale operations, the Company's ability to maintain
profitability over time, the successful execution of the Company's
growth strategies, franchisee's adherence to the Company's
practices, policies and procedures, the impact of competition, the
availability of working capital, and other risks and uncertainties
described in detail under "Risk Factors and Trends Affecting
Diedrich Coffee and its Business" in the Company's annual report on
Form 10-K for the fiscal year ended June 25, 2008. Except where
required by law, the Company does not undertake an obligation to
revise or update any forward-looking statements, whether as a
result of new information, future events or changed circumstances.
Information Contact: Sean McCarthy Chief Financial Officer (949)
260-6734 DIEDRICH COFFEE, INC. SELECTED CONSOLIDATED FINANCIAL
INFORMATION (in thousands, except per share amounts) OPERATIONS
DATA (unaudited): Twelve Twelve Twenty-Four Twenty-Four Weeks Ended
Weeks Ended Weeks Ended Weeks Ended December 10, December 12,
December 10, December 12, 2008 2007 2008 2007 Wholesale revenue
$13,665 $10,370 $23,977 $16,834 Franchise revenue 564 803 1,069
1,432 Retail sales 1,373 1,275 2,288 2,342 Total net revenue 15,602
12,448 27,334 20,608 Cost of sales and related occupancy costs
12,430 9,362 21,635 15,334 Operating expenses 1,979 2,346 3,833
4,578 Depreciation and amortization 407 280 744 532 General and
administrative expenses 1,590 1,694 3,472 3,149 Gain on asset
disposals (4) (6) (10) (7) Total costs and expenses 16,402 13,676
29,674 23,586 Operating loss from continuing operations (800)
(1,228) (2,340) (2,978) Interest income (expense) and other income,
net (191) (69) (434) 242 Loss from continuing operations before
income tax provision (benefit) (991) (1,159) (2,774) (2,736) Income
tax provision (benefit) 4 -- 4 (540) Loss from continuing
operations (995) (1,159) (2,778) (2,196) Gain on sale of
discontinued operation, net of tax -- -- -- 767 Net loss $(995)
$(1,159) $(2,778) $(1,429) Basic net income (loss) per share: Loss
from continuing operations $(0.18) $(0.21) $(0.51) $(0.40) Income
from discontinued operations, net $----- $----- $----- $0.14 Net
loss per share-basic $(0.18) $(0.21) $(0.51) $(0.26) Weighted
average and equivalent shares outstanding: Basic and diluted 5,468
5,448 5,468 5,448 BALANCE SHEET AND RETAIL UNIT COUNT DATA: (in
thousands, except stores data) December 10, 2008 June 25, 2008
(unaudited) Cash $1,610 $670 Accounts receivable, net 4,449 5,015
Inventories 5,603 4,652 Other assets 12,301 12,399 Total assets
$23,963 $22,736 Accounts payable $6,382 $5,169 All other current
liabilities 7,516 7,148 Other liabilities 1,889 677 Total
stockholders' equity 8,176 9,742 Total liabilities and
stockholders' equity $23,963 $22,736 Total retail stores (Company
and franchise, all brands) 114 123 DATASOURCE: Diedrich Coffee,
Inc. CONTACT: Sean McCarthy, Chief Financial Officer of Diedrich
Coffee, Inc., +1-949-260-6734 Web Site: http://www.diedrich.com/
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