Diedrich Coffee Reports First Quarter Results IRVINE, Calif., Nov.
4 /PRNewswire-FirstCall/ -- Diedrich Coffee, Inc. today announced
operating results for its first fiscal quarter of 2004, which ended
September 24, 2003. For the quarter, the Company reported a net
loss of $301,000, or $0.06 per share, compared to a nominal loss of
$10,000 or $0.00 per share reported during the first quarter of the
prior fiscal year. Roger Laverty, Diedrich's Chief Executive
Officer stated, "The Company's business is highly seasonal, with
the first quarter being the weakest quarter of our fiscal year and
the second quarter being the strongest. The first quarter includes
the slow summer season while the second quarter includes the
holiday season, a peak business period for our shopping mall based
Gloria Jean's coffeehouses. We've taken advantage of our slower
first quarter to implement programs that we believe will produce
future benefits although they have somewhat increased short-term
costs." Laverty went on to say, "The program initiatives allocate
additional financial and human resources to our core operations. We
began a major improvement program for our Southern California
company operated Diedrich Coffee stores, installed new in-store
operating systems, and also significantly increased our in-store
staffing and supervisory personnel. These changes are designed to
provide our customers with an even more pleasurable experience in
our coffeehouses and reverse the recent trend in same store sales.
At the same time we have dedicated senior management to the Gloria
Jean's franchise operation, by far our greatest growth opportunity.
Cost of the new initiatives affected first quarter results but
represent an important investment in the Company's future." Revenue
Revenue declined in the first quarter versus the prior year, as
expected. During the past year, we closed several units, including
our remaining units in the Arizona market, and sold several company
owned Gloria Jean's locations to new franchisees. Same store sales
declined for the quarter, but improved versus the trend experienced
in the last quarter of fiscal 2003. Total revenue for the twelve
weeks ended September 24, 2003, was $11,311,000, a decrease of
$1,035,000 (8.4%) compared with revenue of $12,346,000 for the
prior year period. This decrease consists of a $984,000 (12.5%)
decline in retail sales and a $161,000 (5.3%) decline in wholesale
revenue, partially offset by an increase in franchise revenue of
$110,000 (7.6%). The decline in retail sales for the first quarter
versus the prior year quarter was primarily the result of the
planned closure of six stores and the sale of six Company operated
units to franchisees. The divestiture of the 12 units resulted in a
$741,000 reduction in retail sales. The decline in retail sales was
also due to negative comparable store sales of 3.3% for Company
operated stores during the quarter. An increase of $22,000 in
e-commerce sales slightly offset the other decreases. The decline
in wholesale revenue primarily reflects $200,000 (15.0%) lower
sales of roasted coffee to franchisees, as a result of 19 fewer
domestic franchise stores in the current year quarter, and a slight
decrease in wholesale revenue from chain restaurants and specialty
retailers. These reductions were partially offset by an increase of
$62,000 (4.6%) in office coffee service sales. Franchise revenue
increased $110,000 (7.6%) primarily due to a dissolution settlement
of the Malaysia franchise agreement. A $44,000 (3.6%) decline in
franchise royalties was the net impact of a decrease in domestic
royalties, partially offset by an increase in international
royalties. The Company had 19 fewer domestic franchise stores at
quarter end versus the prior year, but 52 more international
franchised outlets, for a 33 unit net increase in worldwide
franchise locations. Although royalty fees from international
franchises are lower than those from domestic franchises, the
international market offers great promise for growth. System-wide
comparable store sales at Gloria Jean's units open at least one
year increased 0.6% during the first fiscal quarter, compared to
the prior year quarter. System-wide comparable store sales at
Diedrich Coffee brand coffeehouses declined 5.7% for the quarter,
as compared with the prior year, while comparable store sales at
the Company's Coffee People locations declined 0.4% during this
same period. Costs and Expenses Cost of sales and related occupancy
costs decreased from 46.3% of revenue in the prior year quarter to
45.2% in the current quarter. While occupancy costs as a percentage
of revenue showed little change, cost of sales showed improvement
in both the retail and wholesale segments. The retail improvement
resulted primarily from our investment in new in-store operating
systems to help us better control costs. The wholesale improvement
resulted from our decision in the fourth quarter of fiscal 2003 to
purchase equipment used to package our Keurig products; the royalty
we previously paid had been included in cost of sales. Overall,
operating expenses remained constant year to year, at 32.7% of
total revenue. Retail operating expenses as a percentage of revenue
increased as a result of our decision to improve customer service
by increasing staff at the stores. However, the retail percentage
increase was offset by a reduction in operating expenses in our
wholesale and franchise segments. For the current quarter, general
and administrative expense increased 2.0% as a percentage of
revenue, primarily due to the decline in revenue discussed above
and also due to the addition of a Director of Store Operations as
well as other store supervisory staff. The purpose of the staff
additions is to improve future operating performance. Conference
Call Diedrich Coffee will be discussing these financial results and
future prospects with analysts and investors in a conference call.
The conference call, hosted by Roger Laverty, CEO, Marty Lynch,
CFO, and Matt McGuinness, EVP-Corporate Development, will take
place on November 5, 2003 at 2:00 p.m. Pacific Time, 5:00 p.m.
Eastern Time. The conference call is simultaneously being webcast
by CCBN and can be accessed at Diedrich Coffee's website at
http://www.diedrich.com/ . A replay of the conference call will
also be available by telephone at (800) 428-6051, pass code I.D.
311862, from 7:00 p.m. EST on November 5, 2003 through midnight on
November 19, 2003. 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 Gloria Jean's Coffees, Diedrich Coffee,
and Coffee People. The Company's 430 retail outlets, the majority
of which are franchised, are located in 35 states and 10 foreign
countries. Diedrich Coffee also sells its coffees through more than
230 wholesale accounts including office coffee service
distributors, restaurants and specialty retailers, via mail order
and the Internet. 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/ , or
http://www.coffeepeople.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 ability to properly manage the repayment of the Company's
indebtedness, the successful management of Diedrich Coffee's growth
strategy, 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/A for the
fiscal year ended July 2, 2003. For further information, please
contact: Marty Lynch, Chief Financial Officer of Diedrich Coffee,
Inc., +1-949-260-6788. DIEDRICH COFFEE, INC. SELECTED CONSOLIDATED
FINANCIAL INFORMATION (UNAUDITED) (in thousands, except per share
amounts) OPERATIONS DATA: Twelve Weeks Ended Twelve Weeks Ended
September 24, 2003 September 25, 2002 Retail sales $6,873 $7,857
Wholesale and other revenue 2,874 3,035 Franchise revenue 1,564
1,454 Total revenue 11,311 12,346 Cost of sales and related
occupancy costs 5,111 5,712 Operating expenses 3,700 4,031
Depreciation and amortization 587 445 General & administrative
expenses 2,144 2,093 (Gain) loss on asset disposals -- (20)
Provision for asset impairment & restructuring 4 -- Total costs
and expenses 11,546 12,261 Operating income (loss) (235) 85
Interest expense and other income, net (63) (82) Income (loss)
before income tax provision 6 3 Income tax provision 9 13 Net loss
$(301) $(10) Basic and diluted net loss per share: $(0.06) $(0.00)
Basic and diluted weighted average shares outstanding 5,161 5,161
BALANCE SHEET AND RETAIL UNIT COUNT DATA: September 24, 2003 July
2, 2003 Cash $1,763 $2,625 Accounts receivable, net 2,517 2,454
Inventories 3,251 2,611 Other assets 18,350 18,852 Total assets
$25,881 $26,542 Accounts payable $2,072 $2,108 Current portion of
long-term debt 1,517 1,459 All other current liabilities 3,929
3,875 Long-term debt, excluding current portion 1,107 1,491 Other
non-current liabilities 968 1,020 Total stockholders' equity 16,288
16,589 Total liabilities and stockholders' equity $25,881 $26,542
Domestic retail stores 207 211 International retail stores 223 206
Total retail stores (Company and franchise, all brands) 430 417
DATASOURCE: Diedrich Coffee, Inc. CONTACT: Marty Lynch, Chief
Financial Officer of Diedrich Coffee, Inc., +1-949-260-6788 Web
site: http://www.coffeepeople.com/ Web site:
http://www.gloriajeans.com/ Web site: http://www.diedrich.com/
Copyright
Diedrich Coffee (MM) (NASDAQ:DDRX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Diedrich Coffee (MM) (NASDAQ:DDRX)
Historical Stock Chart
From Jul 2023 to Jul 2024