EMERYVILLE, Calif., Feb. 12 /PRNewswire-FirstCall/ -- Peet's Coffee
& Tea, Inc. (NASDAQ:PEET) today announced results for its
fourth quarter and fiscal year 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO) In this
release, the Company: - Reports net revenue of $79.1 million for
the fourth quarter, an increase of 12% versus last year, - Reports
fourth quarter diluted earnings per share of $0.29, an increase of
26% versus last year, - Reports fiscal year diluted earnings per
share of $0.80, an increase of 36% versus last year, and -
Reaffirms guidance for 2009 of diluted earnings per share of $0.94
to $1.00. For the fourth quarter of 2008, consisting of the 13
weeks ended December 28, 2008, net revenue increased 12% to $79.1
million from $70.9 million for the corresponding period of fiscal
2007. For the 52 weeks ended December 28, 2008, net revenue
increased 14% to $284.8 million from $249.4 million in fiscal 2007.
Net income for the quarter was $4.0 million or $0.29 per diluted
share, compared to $3.3 million or $0.23 per diluted share for the
corresponding period last year. For the fiscal year 2008, net
income was $11.2 million or $0.80 per diluted share, compared to
$8.4 million or $0.59 per diluted share last year. Fiscal 2007
results include approximately $0.9 million or $0.06 per diluted
share related to stock option review professional fees. "We are
pleased with our results for the quarter and full year," said
Patrick O'Dea, president and chief executive officer of Peet's
Coffee & Tea. "Real productivity improvements resulting from
past investments we've made are improving our margins as we move
forward. It's a real tribute to the team we have in place at Peet's
that we were able to achieve our earnings forecast for 2008 and be
in a position to continue to significantly improve our earnings
performance in 2009, despite the challenging environment." 2008
Fourth Quarter Financial Summary Retail net revenue increased 8% to
$50.9 million for the quarter from $47.0 million for the
corresponding quarter last year. The increase was primarily
attributed to new retail stores opened in the last 12 months. The
Company opened seven new retail locations during the quarter.
Specialty net revenue increased 18% to $28.3 million for the
quarter from $24.0 million for the corresponding quarter last year.
Within the specialty business, grocery grew 23%, foodservice and
office sales were up 33%, and the home delivery business declined
7% compared to the corresponding period last year. Cost of sales
and related occupancy costs decreased to 46.8% of total net revenue
for the quarter compared to 47.5% for the corresponding period last
year. The decrease from last year was due to procurement savings,
increased prices in retail and grocery, and leverage of costs
related to the roasting facility that opened last year, partially
offset by higher green coffee costs. Operating expenses as a
percent of net revenue increased to 32.7% of total net revenue for
the quarter compared to 32.5% for the corresponding period last
year. The increase was due to higher costs associated with
expanding the grocery business, higher incentive compensation and
store impairment expense, partially offset by favorable workers'
compensation insurance expense. General and administrative expenses
decreased to $6.3 million for the quarter from $6.5 million for the
corresponding period last year primarily due to lower marketing
spending in the retail segment, partially offset by professional
fees and compensation costs to support our growth. Depreciation and
amortization expenses increased to $3.5 million for the quarter
from $3.0 million for the corresponding quarter last year. The
increase was primarily due to the opening of 23 new retail stores
during the year. The Company ended the quarter with cash and cash
equivalents plus short- term marketable securities of $13.3
million. Fiscal 2009 Outlook Looking ahead, Peet's provided the
following guidance for fiscal 2009, which includes 53 weeks: --
Total net revenue is expected to grow 10 to 13%, -- Diluted
earnings per share is expected to be in the $0.94 to $1.00 range,
and -- The Company is planning to open about 10 new retail
locations and 30 to 40 new licensed locations. "Clearly, 2009 will
be a challenging year for all businesses," said O'Dea. "I believe,
however, we are better positioned than most to continue delivering
strong earnings growth. We expect our margins to continue to
improve as we leverage the past investments we've made in our
people, the plant and infrastructure. In addition, we have a strong
balance sheet with $13 million of cash and no debt. Most
importantly, our commitment to truly distinctive quality coffees
and teas has garnered us a highly loyal customer following, which
is a real asset in times like these." Peet's Coffee & Tea, Inc.
Q4 2008 Conference Call The Company will report its fourth quarter
and 2008 year-end results on Thursday, February 12, 2009. The
teleconference call will begin at 2:00 p.m. PT/5:00 p.m. ET. The
teleconference can be accessed by calling 1-877-545-1489. The call
will be simultaneously webcast on Peet's Web site at
http://www.peets.com/. A replay of the teleconference will be
available from 5:00 p.m. PT/8:00 p.m. ET through 8:59 p.m. PT/11:59
p.m. ET on Thursday, February 19, 2009, at 1-888-203-1112 or
1-719-457-0820, using access code 5341574. It will also be archived
at http://investor.peets.com/medialist.cfm through February 12,
2010, at 8:59 p.m. PT/11:59 ET. ABOUT PEET'S COFFEE & TEA, INC.
Peet's Coffee & Tea, Inc., (PEET), is the premier specialty
coffee and tea company in the United States. Peet's buys the
highest quality beans in the world, artisan roasts every bean by
hand to order, and delivers all of its coffee quickly for superior
freshness no matter where it is sold. Founded in 1966 in Berkeley,
California by Alfred Peet, who is widely recognized as the
grandfather of specialty coffee in the U.S., Peet's has a rapidly
growing, passionate customer following that seeks out Peet's
coffees wherever they go. Peet's is committed to strategically
growing its business through many channels without compromising the
extraordinary quality of its coffee. For more information about
Peet's Coffee & Tea, Inc. visit http://www.peets.com/. This
press release contains statements that are not based on historical
fact and are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward
looking statements include statements relating to 2009 forecasted
net revenue growth, earnings per diluted share and expected retail
and license location growth for 2009. Forward-looking statements
are based on management's beliefs as well as assumptions made by
and information currently available to management, including
financial and operational information, the Company's stock price
volatility, and current competitive conditions. As a result, these
statements are subject to various risks and uncertainties. The
Company's actual results could differ materially from those set
forth in forward-looking statements depending on a variety of
factors including, but not limited to, general economic conditions,
including the current recession and its ongoing negative impact on
consumer spending, the Company's ability to implement its business
strategy, attract and retain customers, and obtain and expand its
market presence in new geographic regions; the impact of the
Company's stock price volatility on the valuation of stock-based
compensation under SFAS 123(R); the availability and cost of high
quality Arabica coffee beans; consumers' tastes and preferences;
and competition in its market as well as other risk factors as
described more fully in the Company's filings with the Securities
and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 30, 2007. These factors may not be
exhaustive. The Company operates in a continually changing business
environment, and new risks emerge from time to time. Any
forward-looking statements speak only as of the date of this press
release. PEET'S COFFEE & TEA, INC. CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share amounts) December 28,
December 30, 2008 2007 ASSETS Current assets Cash and cash
equivalents $4,719 $15,312 Short-term marketable securities 8,600
7,932 Accounts receivable, net 11,924 8,287 Inventories 26,124
24,483 Deferred income taxes - current 2,922 2,950 Prepaid expenses
and other 7,193 4,285 Total current assets 61,482 63,249 Long-term
marketable securities - 7,831 Property, plant and equipment, net
107,914 99,231 Deferred income taxes - non current 3,059 3,353
Other assets, net 3,897 3,883 Total assets $176,352 $177,547
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts
payable and other accrued liabilities $9,858 $10,104 Accrued
compensation and benefits 8,852 8,909 Deferred revenue 6,350 5,856
Total current liabilities 25,060 24,869 Deferred lease credits and
other long-term liabilities 7,385 5,425 Total liabilities 32,445
30,294 Shareholders' equity Common stock, no par value; authorized
50,000,000 shares; issued and outstanding: 13,174,000 and
13,932,000 shares 90,123 104,616 Accumulated other comprehensive
income 34 52 Retained earnings 53,750 42,585 Total shareholders'
equity 143,907 147,253 Total liabilities and shareholders' equity
$176,352 $177,547 PEET'S COFFEE & TEA, INC. CONSOLIDATED
STATEMENTS OF INCOME (Unaudited, in thousands, except per share
amounts) Thirteen weeks ended Fifty-two weeks ended December 28,
December 30, December 28, December 30, 2008 2007 2008 2007 Retail
stores $50,890 $46,956 $187,719 $168,392 Specialty sales 28,256
23,957 97,103 80,997 Net revenue 79,146 70,913 284,822 249,389 Cost
of sales and related occupancy expenses 37,059 33,683 133,537
118,389 Operating expenses 25,910 23,028 98,844 85,800 General and
administrative expenses 6,286 6,454 22,519 22,682 Depreciation and
amortization expenses 3,526 2,977 12,921 10,912 Total costs and
expenses from operations 72,781 66,142 267,821 237,783 Income from
operations 6,365 4,771 17,001 11,606 Interest income 90 274 726
1,446 Income before income taxes 6,455 5,045 17,727 13,052 Income
tax provision 2,435 1,722 6,562 4,675 Net income $4,020 $3,323
$11,165 $8,377 Net income per share: Basic $0.30 $0.24 $0.81 $0.61
Diluted $0.29 $0.23 $0.80 $0.59 Shares used in calculation of net
income per share: Basic 13,417 13,904 13,723 13,724 Diluted 13,655
14,310 13,997 14,120 PEET'S COFFEE & TEA, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Fifty-two weeks
ended 2008 2007 2006 Cash flows from operating activities: Net
income $11,165 $8,377 $7,816 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 15,113 12,861 10,244 Amortization of interest
purchased 193 242 415 Stock-based compensation 2,711 2,814 4,022
Excess tax benefit from exercise of stock options (462) (1,350)
(724) Tax benefit from exercise of stock options 285 1,234 708 Loss
on disposition of assets and asset impairment 900 494 288 Deferred
income taxes 322 (3,100) (3,495) Changes in other assets and
liabilities: Accounts receivable, net (3,637) (1,449) (1,686)
Inventories (1,641) (4,950) (2,532) Prepaid expenses and other
current assets (2,908) (433) (480) Other assets (21) (45) (244)
Accounts payable, accrued liabilities and deferred revenue 1,464
3,519 2,473 Deferred lease credits and other long-term liabilities
1,960 1,919 969 Net cash provided by operating activities 25,444
20,133 17,774 Cash flows from investing activities: Purchases of
property, plant and equipment (25,930) (30,824) (44,443) Proceeds
from sales of property, plant and equipment 67 23 28 Changes in
restricted investments (87) - 1,500 Proceeds from sales and
maturities of marketable securities 7,857 31,304 49,888 Purchases
of marketable securities (917) (21,688) (26,356) Net cash used in
investing activities (19,010) (21,185) (19,383) Cash flows from
financing activities: Net proceeds from issuance of common stock
3,138 7,322 3,888 Purchase of common stock (20,627) - (15,934)
Excess tax benefit from exercise of stock options 462 1,350 724 Net
cash (used in)/ provided by financing activities (17,027) 8,672
(11,322) (Decrease)/increase in cash and cash equivalents (10,593)
7,620 (12,931) Cash and cash equivalents, beginning of period
15,312 7,692 20,623 Cash and cash equivalents, end of period $4,719
$15,312 $7,692 Non-cash investing activities: Capital expenditures
incurred, but not yet paid $734 $1,995 $2,751 Other cash flow
information: Cash paid for income taxes 8,293 6,761 7,890 SEGMENT
REPORTING (Unaudited, dollars in thousands) Retail Specialty
Unallocated Total Percent Percent Percent of Net of Net of Net
Amount Revenue Amount Revenue Amount Revenue For the thirteen weeks
ended December 28, 2008 Net revenue $50,890 100.0% $28,256 100.0%
$79,146 100.0% Cost of sales and occupancy 23,152 45.5% 13,907
49.2% 37,059 46.8% Operating expenses 20,796 40.9% 5,114 18.1%
25,910 32.7% Depreciation and amortization 2,726 5.4% 382 1.4% $418
3,526 4.5% Segment operating income 4,216 8.3% 8,853 31.3% (6,704)
6,365 8.0% For the thirteen weeks ended December 30, 2007 Net
revenue $46,956 100.0% $23,957 100.0% $70,913 100.0% Cost of sales
and occupancy 21,728 46.3% 11,955 49.9% 33,683 47.5% Operating
expenses 19,196 40.9% 3,832 16.0% 23,028 32.5% Depreciation and
amortization 2,298 4.9% 391 1.6% $288 2,977 4.2% Segment operating
income 3,734 8.0% 7,779 32.5% (6,742) 4,771 6.7% For the fifty-two
weeks ended December 28, 2008 Net revenue $187,719 100.0% $97,103
100.0% $284,822 100.0% Cost of sales and occupancy 85,343 45.5%
48,194 49.6% 133,537 46.9% Operating expenses 79,587 42.4% 19,257
19.8% 98,844 34.7% Depreciation and amortization 9,970 5.3% 1,411
1.5% $1,540 12,921 4.5% Segment operating income 12,819 6.8% 28,241
29.1% (24,059) 17,001 6.0% For the fifty-two weeks ended December
30, 2007 Net revenue $168,392 100.0% $80,997 100.0% $249,389 100.0%
Cost of sales and occupancy 78,412 46.6% 39,977 49.4% 118,389 47.5%
Operating expenses 71,714 42.6% 14,086 17.4% 85,800 34.4%
Depreciation and amortization 8,516 5.1% 1,376 1.7% $1,020 10,912
4.4% Segment operating income 9,750 5.8% 25,558 31.6% (23,702)
11,606 4.7% http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO
http://photoarchive.ap.org/ DATASOURCE: Peet's Coffee & Tea,
Inc. CONTACT: Media, Melanie Vuynovich of Double Forte,
+1-415-848-8122, , for Peet's Coffee & Tea, Inc.; or Investors,
Seanna Allen of Peet's Coffee & Tea, Inc., +1-510-594-2196, Web
site: http://www.peets.com/
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