Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) today announced its
second quarter results for the fiscal period ended July 1, 2012,
which included 13 weeks.
In this release, the Company:
• Reports diluted earnings per share of
$0.30
• Reports net revenue growth of 5%
Consolidated Financial and Operating Summary
For the 13 weeks ended July 1, 2012, net revenue increased 5% to
$95.4 million from $90.6 million for the corresponding period of
fiscal 2011. Diluted earnings per share was $0.30, compared to
$0.38 for the corresponding period of fiscal 2011.
Retail net revenue increased 4% to $55.4 million for the 13
weeks ended July 1, 2012, from $53.4 million for the corresponding
period last year. The increase was driven by a higher average
transaction and an $874,000 sales tax refund related to resolution
of a sales tax computation interpretation with the taxing
authorities. The Company did not open any stores in the quarter and
ended the quarter with 197 stores.
Specialty net revenue increased 7% to $40.0 million for the 13
weeks ended July 1, 2012, compared to $37.3 million for the
corresponding period last year. Within specialty, grocery sales
were up 5% compared to the corresponding period last year,
foodservice and office sales grew 15%, and home delivery sales grew
3%. Grocery revenue growth was impacted by an increase in
competitive pricing pressure during the period.
Cost of sales and related occupancy expenses increased as a
percent of total net revenue to 50.4% for the quarter, compared to
49.2% for the corresponding period last year. The increase was
caused by higher green coffee costs, which were 16% higher per
pound than the same quarter last year. This increase was partially
offset by price increases across all channels and lower shipping
expenses.
Operating expenses were 31.2% of net revenue, compared to 31.1%
for the corresponding period last year. A favorable mix shift
towards the specialty business and lower legal fees were
substantially offset by higher healthcare costs, payment card
processing fees, and investments in overhead expenses.
General and administrative expenses increased as a percent of
net revenue to 7.8%, compared to 6.6% for the corresponding period
last year. General and administrative expenses increased to $7.4
million from $6.0 million for the corresponding period last year,
primarily due to higher payroll and marketing costs.
Depreciation and amortization expenses decreased as a percent of
net revenue to 4.1%, compared to 4.3% for the corresponding period
last year. Depreciation and amortization expenses were $3.9 million
for the quarter, consistent with the corresponding period last
year.
Cash and cash equivalents plus short-term and long-term
marketable securities were $38.9 million at the end of the quarter,
compared to $35.4 million at the end of fiscal 2011.
About Peet’s Coffee & Tea, Inc.
Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) is the premier
specialty coffee and tea company in the United States. The company
was founded in 1966 in Berkeley, Calif. by Alfred Peet. Peet was an
early tea authority who later became widely recognized as the
grandfather of specialty coffee in the U.S. Today, Peet’s Coffee
& Tea offers superior quality coffees and teas in multiple
forms, by sourcing the best quality coffee beans and tea leaves in
the world, adhering to strict high-quality and taste standards, and
controlling product quality through its unique direct store
delivery selling and merchandising system. Peet’s is committed to
strategically growing its business through many channels while
maintaining the extraordinary quality of its coffees and teas. For
more information about Peet’s Coffee & Tea, Inc., visit
www.peets.com.
PEET’S COFFEE & TEA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in
thousands, except share amounts) July 1,
January 1,
2012
2012
ASSETS Current assets Cash and cash equivalents $ 32,428 $
30,755 Short-term marketable securities 5,791 3,800 Accounts
receivable, net 19,595 20,522 Inventories 68,417 54,265 Deferred
income taxes - current 5,041 5,041 Prepaid expenses and other
10,240 9,368 Total current
assets 141,512 123,751 Long-term marketable securities 634
888 Property, plant and equipment, net 85,458 89,304 Other assets,
net
2,261 1,328
Total assets
$ 229,865 $
215,271 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities Accounts payable and other accrued
liabilities $ 13,348 $ 11,547 Accrued compensation and benefits
9,132 10,283 Deferred revenue
7,524
7,382 Total current liabilities 30,004 29,212
Deferred income taxes - non current 372 367 Deferred lease credits
6,463 6,668 Other long-term liabilities
2,396
1,068 Total liabilities 39,235 37,315
Shareholders' equity
Common stock, no par value; authorized
50,000,000 shares; issued and outstanding: 13,245,000 and
13,136,000 shares
74,940 69,664 Accumulated other comprehensive income 3 2 Retained
earnings
115,687 108,290
Total shareholders' equity
190,630
177,956 Total liabilities and
shareholders' equity
$ 229,865
$ 215,271
PEET’S COFFEE & TEA, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in thousands,
except per share amounts) Thirteen weeks ended
Twenty-six weeks ended July 1, July 3, July
1, July 3,
2012
2011
2012
2011
Retail stores $ 55,424 $ 53,351 $ 109,539 $ 105,440
Specialty sales
39,968
37,265 80,627
73,648 Net revenue 95,392 90,616 190,166 179,088
Cost of sales and related occupancy expenses 48,064 44,558
96,420 85,778 Operating expenses 29,734 28,146 59,560 56,030
Litigation related expenses - 38 - 79 General and administrative
expenses 7,428 6,011 14,810 12,779 Depreciation and amortization
expenses
3,930 3,881
7,872 7,800 Total costs and
expenses from operations
89,156
82,634 178,662
162,466 Income from operations 6,236 7,982
11,504 16,622 Interest income, net
16
7 22 18
Income before income taxes 6,252 7,989 11,526 16,640
Income tax provision
2,239
2,878 4,129
6,016 Net income
$
4,013 $ 5,111 $
7,397 $ 10,624 Net
income per share: Basic $ 0.30 $ 0.40 $ 0.56 $ 0.82 Diluted $ 0.30
$ 0.38 $ 0.55 $ 0.79 Shares used in calculation of net
income per share: Basic 13,260 12,892 13,215 13,000 Diluted 13,547
13,309 13,515 13,414
PEET’S COFFEE & TEA,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited, in thousands) Twenty-six
weeks ended July 1, July 3,
2012
2011
Cash flows from operating activities: Net income $ 7,397 $
10,624
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,932 8,956 Amortization of interest
purchased 150 197 Stock-based compensation 2,303 2,035 Excess tax
benefit from exercise of stock options (1,696 ) (5,763 ) Tax
benefit from exercise of stock options 1,612 5,224 Loss on
disposition of assets and asset impairment 140 325 Deferred income
taxes 5 67 Changes in other assets and liabilities: Accounts
receivable, net 927 (197 ) Inventories (14,152 ) (13,946 ) Prepaid
expenses and other current assets (872 ) (1,147 ) Other assets
(1,238 ) (2 ) Accounts payable, accrued liabilities and deferred
revenue 593 (3,021 ) Deferred lease credits and other long-term
liabilities
1,123
(379 ) Net cash provided by operating
activities
5,224
2,973 Cash flows from investing
activities: Purchases of property, plant and equipment (5,021 )
(4,851 ) Proceeds from sales of property, plant and equipment
Changes in restricted investments 299 798 Proceeds from sales and
maturities of marketable securities 4,056 3,013 Purchases of
marketable securities
(5,942 )
(8,384 ) Net cash used in
investing activities
(6,608 )
(9,424 ) Cash flows from
financing activities: Net proceeds from issuance of common stock
4,060 15,023 Purchase of common stock (2,699 ) (39,529 ) Excess tax
benefit from exercise of stock options
1,696
5,763 Net cash provided by/(used
in) financing activities
3,057
(18,743 ) Increase/(decrease) in
cash and cash equivalents 1,673 (25,194 ) Cash and cash
equivalents, beginning of period
30,755
44,629 Cash and cash equivalents,
end of period
$ 32,428
$ 19,435 Non-cash investing
activities: Capital expenditures incurred, but not yet paid $ 444 $
449 Other cash flow information: Cash paid for income taxes 2,807
2,896
PEET’S COFFEE & TEA, INC.
SEGMENT REPORTING
(Unaudited, 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 July 1, 2012 Net revenue
$ 55,424 100.0 % $ 39,968 100.0 % $ 95,392 100.0 % Cost of sales
and occupancy 24,807 44.8 % 23,257 58.2 % 48,064 50.4 % Operating
expenses 21,663 39.1 % 8,071 20.2 % 29,734 31.2 % Depreciation and
amortization 2,782 5.0 % 354 0.9 % $ 794 3,930 4.1 % Segment
operating income 6,172 11.1 % 8,286 20.7 % (8,222 ) 6,236 6.5 %
For the thirteen weeks ended July 3, 2011 Net revenue
$ 53,351 100.0 % $ 37,265 100.0 % $ 90,616 100.0 % Cost of sales
and occupancy 23,692 44.4 % 20,866 56.0 % 44,558 49.2 % Operating
expenses 20,387 38.2 % 7,759 20.8 % 28,146 31.1 % Litigation
related expenses 38 0.1 % - 38 0.0 % Depreciation and amortization
2,731 5.1 % 433 1.2 % $ 717 3,881 4.3 % Segment operating income
6,503 12.2 % 8,207 22.0 % (6,728 ) 7,982 8.8 %
For the
twenty-six weeks ended July 1, 2012 Net revenue $ 109,539 100.0
% $ 80,627 100.0 % $ 190,166 100.0 % Cost of sales and occupancy
49,323 45.0 % 47,097 58.4 % 96,420 50.7 % Operating expenses 42,728
39.0 % 16,832 20.9 % 59,560 31.3 % Depreciation and amortization
5,571 5.1 % 721 0.9 % $ 1,580 7,872 4.1 % Segment operating income
11,917 10.9 % 15,977 19.8 % (16,390 ) 11,504 6.0 %
For
the twenty-six weeks ended July 3, 2011 Net revenue $ 105,440
100.0 % $ 73,648 100.0 % $ 179,088 100.0 % Cost of sales and
occupancy 45,936 43.6 % 39,842 54.1 % 85,778 47.9 % Operating
expenses 40,866 38.8 % 15,164 20.6 % 56,030 31.3 % Litigation
related expenses 79 0.1 % - 0.0 % 79 0.0 % Depreciation and
amortization 5,468 5.2 % 877 1.2 % $ 1,455 7,800 4.4 % Segment
operating income 13,091 12.4 % 17,765 24.1 % (14,234 ) 16,622 9.3 %
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