Diedrich Coffee Reports First Quarter Fiscal 2010 Financial Results
November 03 2009 - 7:50PM
PR Newswire (US)
IRVINE, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Diedrich Coffee,
Inc. (NASDAQ:DDRX), a leading roaster and wholesaler of the world's
finest coffees, reported financial results for the first quarter
ended September 16, 2009. Total revenue increased 52% to $15.8
million in the first quarter of fiscal 2010 from $10.4 million in
the first quarter of fiscal 2009, led by a 66% or $5.8 million
increase in Keurig K-Cup sales. Gross margin in the first quarter
of fiscal 2010 increased to 26% of total revenue as compared to 21%
during the same period last year. In addition to price increases
taken during fiscal 2009, the improvement was due primarily to
higher machine utilization, lower temporary help and overtime, the
reduction of scrap and waste due to improved inventory controls,
lower outbound freight costs and the ability to leverage our fixed
manufacturing costs over higher production volumes. Net income
totaled $571,000 or $0.07 per diluted share in the first quarter of
fiscal 2010, an improvement from a net loss of $1.8 million or
$(0.33) per basic and diluted share in the first quarter of fiscal
2009. Adjusted net income (a non-GAAP financial measure) was
$571,000 or $0.07 per diluted share in the first quarter of fiscal
year 2010, an improvement from an adjusted net loss of $1.6 million
or $(0.30) per basic and diluted share in the same quarter of the
prior year. Adjusted net income represents net income or loss
before the income contribution from discontinued operations and the
timing of the fiscal 2009 accrual for management incentive
compensation (see important discussion about the presentation of
non-GAAP financial information below, including a reconciliation to
the most directly comparable GAAP financial measure). As announced
yesterday, Diedrich entered into a definitive agreement under which
Peet's Coffee & Tea, Inc. will acquire Diedrich in a
cash-and-stock transaction valued at $26.00 per share or a total
transaction value of approximately $213 million. For more
information, please see Diedrich's Form 10-Q for the quarter ended
September 16, 2009 filed on November 2, 2009 and other filings made
by Diedrich with the Securities and Exchange Commission (the
"SEC"). About Adjusted Net Income (Loss) and the Use of Non-GAAP
Financial Information Adjusted net income (loss) is not a financial
measure calculated and presented in accordance with U.S. generally
accepted accounting principles ("GAAP") and should not be
considered as an alternative to net income, operating income or any
other financial measures calculated and presented in accordance
with GAAP. Diedrich Coffee defines adjusted net income as net
income/(loss) before the income contribution from discontinued
operations. The company presents adjusted net income because it
believes it to be a meaningful supplemental measure of performance
in the evaluation of the company's results of operations because it
excludes amounts that the company does not consider part of ongoing
operating results when assessing the performance of the company and
presents a measure of earnings that facilitates a comparison of
results from one period to results from another period on a more
consistent basis. Management also uses this information internally
for forecasting and budgeting. It may not be indicative of the
historical operating results of Diedrich Coffee nor is it intended
to be predictive of potential future results. Investors should not
consider adjusted net income in isolation or as a substitute for
analysis of results as reported under GAAP. The company strongly
encourages investors to review its financial statements in their
entirety and to not rely on any single financial measure. Because
non-GAAP financial measures are not standardized, it may not be
possible to compare these financial measures with other companies'
non-GAAP financial measures having the same or similar names. See
"Reconciliation of Adjusted Net Income (Loss) to GAAP Income
(Loss)" below for further information on this non-GAAP financial
measure and reconciliation of adjusted net income (loss) to GAAP
net income (loss) for the periods indicated. Reconciliation of
Adjusted Income (Loss) to GAAP Income (Loss) (in thousands, except
per share amounts) (unaudited) For the For the twelve twelve weeks
weeks ended ended ------- ------- 9/16/2009 9/17/2008 ---------
--------- Consolidated Statement of Operations Reconciliation
-------------------------- Net income (loss) on a GAAP basis $571
$(1,783) Accrued management incentive compensation (1) - (157) Loss
from discontinued operations - 316 --- --- Adjusted net income
(loss) $571 $(1,624) ==== ======== Consolidated Statement of
Operations Reconciliation per Diluted or Basic Share
--------------------------------------------------- Net income
(loss) per diluted or basic share on a GAAP basis $0.07 $(0.33)
Accrued management incentive compensation (1) - (0.03) Loss from
discontinued operations - 0.06 --- ---- Adjusted net income (loss)
per diluted or basic share $0.07 $(0.30) ===== ====== Diluted
(FY10) and basic (FY09) shares used in calculation 8,161 5,468
===== ===== (1) The full year expense for the bonus accrual was
recorded in the 4th quarter of fiscal 2009. This amount represents
the estimated expense that would have been booked in the 1st
Quarter of fiscal 2009 had the bonus accrual been expensed
throughout the year. Additional Information In connection with the
exchange offer (the "Offer") to be launched by Peet's, Peet's
intends to file a Registration Statement on Form S-4 and a Tender
Offer Statement on Schedule TO with the SEC, and Diedrich intends
to file a Solicitation/Recommendation Statement on Schedule 14D-9
with the SEC. Such documents are not currently available. When
these documents become available, Diedrich stockholders are urged
to read them carefully before making any decisions, as they will
contain important information about the transaction. Investors will
be able to obtain free copies of the Form S-4, the Schedule TO and
the Schedule 14D-9, as well as other filings containing information
about Diedrich and Peet's, without charge, at the SEC's website
(http://www.sec.gov/) once such documents are filed with the SEC. A
free copy of the Schedule 14D-9, when it becomes available, may
also be obtained from Diedrich's website at
http://www.diedrich.com/ under the heading "Investor Services" and
also by making a request to Investor Relations at Diedrich Coffee,
Inc., 28 Executive Park, Suite 200, Irvine, CA 92614.
Forward-Looking Statements We make forward-looking statements in
this earnings release that are subject to risks and uncertainties.
These forward-looking statements include information about the
proposed transaction with Peet's (the "Merger"). When we use the
words "believe," "expect," "anticipate," "estimate" or similar
expressions, we are making forward-looking statements. Many
possible events or factors could affect our future financial
results and performance. This could cause our results or
performance to differ materially from those expressed in our
forward-looking statements. You should consider these risks when
you review this earnings release, along with the following possible
events or factors: -- the risk that the Offer and the Merger will
not close; -- the risk that Peet's business and/or Diedrich's
business will be adversely impacted during the pendency of the
Offer and the Merger; -- the risk that the operations of Peet's and
Diedrich will not be integrated successfully; -- the financial and
operating performance of our wholesale operations; -- our ability
to achieve and/or maintain profitability over time; -- the
successful execution of our growth strategies; -- the impact of
competition; and -- the availability of working capital. Additional
risks and uncertainties are described in detail under the caption
"Risk Factors Relating to Diedrich Coffee and Its Business" in our
annual report on Form 10-K for the fiscal year ended June 24, 2009
and in other reports that we file with the Securities and Exchange
Commission. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis
only as of the date of this earnings release. There can be no
assurance that the proposed Merger will in fact be consummated.
Except where required by law, we do not undertake an obligation to
revise or update any forward-looking statements, whether as a
result of new information, future events or changed circumstances.
About Diedrich Coffee Diedrich Coffee specializes in sourcing,
roasting and selling the world's highest quality coffees. The
company markets its three leading brands of specialty coffees,
Diedrich Coffee, Coffee People and Gloria Jean's Coffees, through
office coffee service distributors, restaurants and specialty
retailers, and via the company's web stores. Diedrich Coffee is one
of only four roasters under license to produce K-Cups for Keurig
Incorporated's top-selling single-cup brewing system. For more
information about Diedrich Coffee, call 800-354-5282, or go to
http://www.diedrich.com/, http://www.coffeepeople.com/ or
http://www.coffeeteastore.com/. Trademarks are the property of
their respective owners. Diedrich Coffee Investor Relations: Scott
Liolios or Cody Slach Liolios Group, Inc. Tel 949-574-3860 DIEDRICH
COFFEE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) (unaudited) Twelve Twelve Weeks Ended
Weeks Ended September 16, September 17, 2009 2008 Net revenue:
Wholesale $15,642 $10,347 Retail and other 131 61 --- --- Total
revenue 15,773 10,408 ------ ------ Costs and expenses: Cost of
sales (exclusive of depreciation shown separately below) 11,712
8,274 Operating expenses 1,187 1,213 Depreciation and amortization
355 332 General and administrative expenses 1,797 1,819 Gain on
asset disposals - (6) --- --- Total costs and expenses 15,051
11,632 ------ ------ Operating income (loss) from continuing
operations 722 (1,224) Interest expense (176 ) (310) Interest and
other income, net 87 67 --- --- Income (loss) from continuing
operations before income tax 633 (1,467) Income tax provision (62)
- --- --- Income (loss) from continuing operations 571 (1,467)
Discontinued operations: Loss from discontinued operations, net of
tax expense of $0 - (316) --- --- Net income (loss) $571 $(1,783)
=== ===== Basic net income (loss) per share: Income (loss) from
continuing operations $0.10 $(0.27) Loss from discontinued
operations, net - (0.06) --- ---- Net income (loss) $0.10 $(0.33)
==== ==== Diluted net income (loss) per share: Income (loss) from
continuing operations $0.07 $(0.27) Loss from discontinued
operations, net - (0.06) --- ---- Net Income (loss) $0.07 $(0.33)
==== ==== Weighted average and equivalent shares outstanding: Basic
5,727 5,468 ----- ----- Diluted 8,161 5,468 ----- ----- DIEDRICH
COFFEE, INC. CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
September 16, 2009 June 24, 2009 ------------------ -------------
Cash $3,082 $3,572 Restricted cash 623 623 Accounts receivable, net
6,321 6,335 Inventories 5,601 5,510 Other assets 10,395 10,888
------ ------ Total assets $26,022 $26,928 ======= ======= Accounts
payable $4,635 $5,228 All other current liabilities 5,191 5,921
Other liabilities 1,777 2,005 Total stockholders' equity 14,419
13,774 ------ ------ Total liabilities and stockholders' equity
$26,022 $26,928 ======= ======= DATASOURCE: Diedrich Coffee, Inc.
CONTACT: Scott Liolios or Cody Slach, both of Liolios Group, Inc.,
+1-949-574-3860, , for Diedrich Coffee Investor Relations Web Site:
http://www.diedrich.com/
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