Diedrich Coffee Reports Fiscal 2004 Results Company Reports $0.05
Earnings Per Share IRVINE, Calif., Sept. 22 /PRNewswire-FirstCall/
-- Diedrich Coffee, Inc. (NASDAQ:DDRX) today announced operating
results for the fiscal year ended June 30, 2004. For the year, the
Company reported earnings of $266,000, or $0.05 per share, in
fiscal 2004 compared to a net loss of $1,223,000, or $0.24 per
share, in fiscal 2003. The prior year net loss was primarily the
result of a reduction in the net carrying value of the Company's
goodwill in a number of its northwestern coffeehouses. Net income
for the fourth quarter of fiscal 2004 was $92,000, or $0.02 per
share, compared to a net loss of $1,706,000, or $0.33 per share,
for the fourth quarter of fiscal 2003. "We're very pleased with the
results for the year, particularly in light of the costs of a
number of major improvement programs we carried out during fiscal
2004," stated Roger Laverty, Diedrich Coffee's Chief Executive
Officer. "We executed a major remodeling program for our company
operated Diedrich Coffee and Coffee People locations, increased
in-store staffing to better serve our coffeehouse guests,
experienced continued acceleration of franchise growth in
international markets and made a major investment in our franchise
development infrastructure to spur growth of the Gloria Jean's
domestic franchise system. All of these changes added costs in
fiscal 2004, but we regard them as important investments in the
Company's future profitability." Operating Results Operating income
improved by $1,525,000 during the current fiscal year, from an
operating loss of $913,000 in the prior year to operating income of
$612,000 in fiscal 2004. This was primarily the net result of the
prior year recording of $2,232,000 of asset impairment charges
partially offset by $868,000 in gains on asset disposals.
Impairment charges in fiscal 2004 amounted to $94,000 and there
were only $2,000 of gains on asset disposals. Cost of sales and
related occupancy costs declined on a margin basis from 48.0% in
fiscal 2003 to 45.9% in fiscal 2004. Wholesale costs declined as a
result of exiting the high cost grocery distribution channel, and
retail costs declined due to the closure during the year of retail
stores with high occupancy costs. Operating expenses for the year
declined on a margin basis from 30.8% in fiscal 2003 to 30.6% in
the current year despite the increased in-store staffing. General
and administrative expenses increased as a percentage of revenue
from 16.9% in fiscal 2003 to 18.0% in fiscal 2004 primarily due to
increases in our franchise development and construction areas to
accommodate planned growth in domestic franchise units. Operating
income for the fourth quarter improved by $1,861,000, from an
operating loss of $1,625,000 in fiscal 2003, which included a
$1,900,000 asset impairment charge, to operating income of $236,000
in the current year fourth quarter. This improvement was due to the
same factors as noted for the full year results. Revenue Total
revenue for the year ended June 30, 2004 was $54,625,000, a decline
of $154,000 from total revenue of $54,779,000 in fiscal 2003. The
small decline was a major improvement compared to the decline in
total revenue of $7,428,000 in fiscal 2003 and $10,005,000 in
fiscal 2002. Franchise revenue was $7,542,000 in fiscal 2004, an
increase of $1,133,000 or 17.7%, spurred by very strong
international growth of 76 new units and a $277,000 settlement of
the Malaysian franchise agreement. Wholesale revenue was
$15,466,000 in fiscal 2004, an increase of $130,000 or 0.8% from
fiscal 2003. Retail sales decreased by $1,417,000, or 4.3%, to
$31,617,000. This decrease was due to closure of five units,
partially offset by positive same store sales of 1.4% and an
increase of $185,000 in internet sales. For the fourth fiscal
quarter, total revenue was $15,408,000 in fiscal 2003, compared to
$16,562,000 in fiscal 2004, an increase of $1,154,000, or 7.5%.
Revenue increased in all segments in the fourth quarter of fiscal
2004. Comparable Store Sales System-wide comparable store sales at
Diedrich Coffee brand coffeehouses open at least one year increased
1.4% for the year, as compared with the prior year, while
comparable store sales at the Company's Coffee People coffeehouses
increased 2.7% year-to-year. System-wide comparable store sales at
Gloria Jean's units declined 1.0% during fiscal 2004 compared with
fiscal 2003. For the fourth quarter, Diedrich Coffee comparable
store sales increased 4.2% and Coffee People comparable store sales
increased 5.6% over the prior year quarter. System-wide comparable
store sales at Gloria Jean's stores open at least one year
decreased by 1.4%. Other Developments As previously announced in
May 2004, the Company entered into a Contingent Convertible Note
Purchase Agreement providing for issuance, at its option, of notes
up to an aggregate of $5,000,000. The issued notes will be
amortized on a monthly basis at a rate that will repay 60% of the
face amount by May 10, 2007, at which date the remaining 40% will
mature. The notes are unsecured. Interest is payable at LIBOR plus
3.30% and a 1.00% commitment fee is payable on the unused portion
of the facility. Notes are convertible into the Company's common
stock only upon certain changes of control. For notes that have
been repaid, warrants to purchase shares will be issued with terms
that are similar to the contingent convertibility rights and
restrictions for the notes. At June 30, 2004, $983,000 was
outstanding under the agreement. The Company also announced that it
had entered into an Amended and Restated Agreement with Bank of the
West. This agreement provides for a working capital facility of
$250,000 and a letter of credit facility of $750,000. At June 30,
2004, no debt was outstanding under the working capital facility
and $426,000 of letters of credit were outstanding under the letter
of credit facility. Mr. Laverty added, "I am extremely enthusiastic
about the state of the Company at this point. Our operations have
been strengthened with the measures we have put in place during
fiscal 2004. The build-up of a franchise development, real estate
and construction infrastructure gives us the ability to accelerate
store growth and, for the first time in years, the Company now has
the capital resources to fund this growth." Conference Call
Diedrich Coffee will be discussing these financial results with
analysts and investors in a conference call. The conference call,
hosted by Roger "Rocky" Laverty, CEO and Marty Lynch, CFO, will
take place on Thursday, September 23, 2004 at 10:00 a.m. Pacific
Time, 1:00 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 (888) 203-1112,
pass-code I.D. # 875453, from 1:00 p.m. PDT on September 23, 2004
through midnight on October 8, 2004. 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, Diedrich Coffee and
Coffee People. The Company's 482 retail outlets, the majority of
which are franchised, are located in 34 states and 13 foreign
countries. Diedrich Coffee also sells its coffees through more than
460 wholesale accounts, including office coffee service
distributors, restaurants and specialty retailers, and via mail
order and the Internet. For more information about Diedrich Coffee,
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 for the fiscal year ended July 2, 2003. Information
Contact: Martin Lynch, Chief Financial Officer (949) 260-6734
DIEDRICH COFFEE, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share amounts) OPERATIONS DATA: Sixteen
Sixteen Fifty-Two Fifty-Two Weeks Weeks Weeks Weeks Ended Ended
Ended Ended June 30, July 2, June 30, July 2, 2004 2003 2004 2003
Retail sales $9,892 $9,373 $31,617 $33,034 Wholesale and other
revenue 4,352 4,087 15,466 15,336 Franchise revenue 2,318 1,948
7,542 6,409 Total revenue $16,562 $15,408 $54,625 $54,779 Cost of
sales and related occupancy costs $7,510 $7,369 $25,112 $26,276
Operating expenses 5,154 4,777 16,707 16,871 Depreciation and
amortization 747 618 2,289 1,944 General & administrative
expenses 2,923 2,844 9,813 9,237 Asset impairment and restructuring
costs -- (749) 94 2,232 Gain on asset disposals (8) 2,174 (2) (868)
Total costs and expenses $16,326 $17,033 $54,013 $55,692 Operating
income (loss) $236 $(1,625) $612 $(913) Interest expense, net (136)
(71) (318) (256) Income (loss) before income taxes $100 $(1,696)
$294 $(1,169) Income tax provision 8 10 28 54 Net income (loss) $92
$(1,706) $266 $(1,223) Basic and Diluted net income (loss) per
share $0.02 $(0.33) $0.05 $(0.24) Weighted average shares
outstanding: Basic 5,161 5,161 5,161 5,161 Diluted 5,218 5,161
5,218 5,161 BALANCE SHEET AND RETAIL UNIT COUNT DATA: June 30, 2004
July 2, 2003 Cash $1,799 $2,625 Accounts receivable, net 2,337
2,454 Inventories 2,815 2,611 Other assets 18,691 18,852 Total
assets $25,642 $26,542 Accounts payable $2,144 $2,108 Current
portion of long-term debt 200 1,459 All other current liabilities
4,758 3,875 Long-term debt 783 1,491 Other liabilities 880 1,020
Stockholders' equity 16,877 16,589 Total liabilities and
stockholders' equity $25,642 $26,542 Domestic retail units 200 211
International retail units 282 206 Total retail units (company and
franchise, all brands) 482 417 DATASOURCE: Diedrich Coffee, Inc.
CONTACT: Martin Lynch, Chief Financial Officer of Diedrich Coffee,
Inc., +1-949-260-6734 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