Announces Introduction of Godiva(R) Chocolatier Brand Flavored and Medium Roast Coffees Nationally
EMERYVILLE, Calif., July 28 /PRNewswire-FirstCall/ -- Peet's Coffee & Tea, Inc. (Nasdaq: PEET) today announced its second quarter 2009 results for the period ended June 28, 2009, which included 13 weeks.
In this release, the company:
- Reports second quarter diluted earnings per share of $0.26, an increase of 24% versus last year
- Reports net revenue of $73.6 million, an increase of 5% versus last year
- Narrows guidance for diluted earnings per share in 2009 to $0.97 to $1.00, the high end of the previous range
- Announces that it entered into a licensing agreement with privately held Godiva Chocolatier, Inc. to sell and distribute a premium line of Godiva brand medium roast and flavored coffees in supermarkets nationwide.
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For the 13 weeks ended June 28, 2009, net revenue increased 5% to $73.6 million from $70.1 million for the corresponding period last year.
Net income for the quarter was $3.4 million, or $0.26 per diluted share, compared to $3.0 million, or $0.21 per diluted share, for the corresponding period last year.
"I'm very pleased with our performance," said Patrick O'Dea, CEO and president of Peet's Coffee & Tea. "In a weak economy, we're delivering strong earnings per share growth, up 24% this quarter and 36% in the first half of this fiscal year. This is a testament to the strength of our brand, our people, and the infrastructure we've built. We will continue to leverage these strengths into the second half of this year as we gain some momentum on our base business and begin to drive new growth with the national launch of Godiva medium roast and flavored coffees."
Introduction of Godiva(R) Chocolatier Brand Coffees
Peet's Coffee & Tea, Inc. also announced today that it entered into a licensing agreement with privately held Godiva Chocolatier, Inc. to sell and distribute a premium line of Godiva brand coffees in supermarkets, mass merchandisers and related channels where coffee is purchased for the home. It will not be available in Peet's Coffee & Tea stores.
"This partnership is an important step towards our long-stated vision to be the gold standard specialty coffee and tea company," said O'Dea. "We've already established the Peet's brand as the quality leader at the high end of specialty coffee with its signature deep-roast profile. Godiva coffees will enable us to capture the leading position in the medium roast and flavored segments by offering a superior quality product backed by the strong flavor credentials of the Godiva brand name, expertly merchandised by our direct store delivery (DSD) selling system."
"We are pleased to partner with Peet's to launch an outstanding line of Godiva coffees," said Jim Goldman, CEO and president, Godiva Chocolatier. "By combining the world's leading premium chocolate brand with Peet's coffee expertise we are building on our respective strengths and will deliver an exceptional consumer experience."
Financial and Operating Summary
Retail net revenue increased 5% to $48.8 million for the 13 weeks ended June 28, 2009 from $46.3 million for the corresponding period last year. The increase was primarily attributed to new retail stores opened in the last 12 months. The company opened two new retail locations in the quarter.
Specialty net revenue increased 4% to $24.7 million compared to $23.7 million for the corresponding period last year. At the end of the quarter, approximately 8,400 grocery stores carried Peet's coffee. Within the specialty business, grocery sales grew 9%, foodservice and office was flat, and home delivery sales were down 5% compared to the same period last year.
Cost of sales and related occupancy costs decreased as a percentage of net revenue to 44.8%, compared to 46.0% for the corresponding period last year. The decrease from last year was due to lower shipping costs, effective cost controls in the plant and retail stores, higher prices in retail and grocery, and lower milk costs, partially offset by higher green coffee costs.
Operating expenses decreased as a percentage of net revenue to 34.8%, compared to 35.2% for the corresponding period last year. The decrease was primarily due to effective cost management in the retail business, leveraging of retail overhead costs, and lower workers compensation expense. This was partially offset by higher sales and distribution costs in grocery to support the expansion of the DSD selling system into the Eastern U.S.
General and administrative expenses increased to $6.1 million compared to $5.4 million for the same period last year driven primarily by higher payroll related costs and timing of marketing expenses.
Depreciation and amortization expenses increased to $3.6 million compared to $3.2 million for the corresponding period last year. The increase was primarily due to the opening of 14 new retail stores in the last 12 months.
The company ended the quarter with cash and cash equivalents plus investments of $20.7 million.
Peet's Coffee & Tea, Inc. Q2 2009 Conference Call
The company will host a conference call beginning at 2:00 p.m. PT / 5:00 p.m. ET on July 28, 2009,
which can be accessed by calling 1-877-419-6600. The call will be simultaneously webcast on Peet's Web site at www.peets.com.
A replay of the teleconference will be available from 5:00 p.m. PT / 8:00 p.m. ET on July 28, 2009 through 8:59 p.m. PT / 11:59 p.m. ET on August 4, 2009, at 1-888-203-1112 or 1-719-457-0820, using access code 4195045. It will also be archived at http://investor.peets.com/medialist.cfm through July 28, 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. Founded in 1966 in Berkeley, California by Alfred Peet, an early tea authority who became widely recognized as the grandfather of specialty coffee in the U.S., Peet's 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 though 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.
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 earnings per diluted share and relating to the expected benefits of the company's licensing agreement with Godiva Chocolatier. 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 availability and cost of high quality Arabica coffee beans; consumers' tastes and preferences; complaints or claims by current, former or prospective employees or government agencies; 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 28, 2008. 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)
June 28, December 28,
2009 2008
---- ----
ASSETS
Current assets
Cash and cash equivalents $15,148 $4,719
Short-term marketable securities 5,548 8,600
Accounts receivable, net 9,565 11,924
Inventories 29,473 26,124
Deferred income taxes - current 2,922 2,922
Prepaid expenses and other 4,998 7,193
----- -----
Total current assets 67,654 61,482
Property, plant and equipment, net 109,063 107,914
Deferred income taxes - non current 3,069 3,059
Other assets, net 2,801 3,897
----- -----
Total assets $182,587 $176,352
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other accrued
liabilities $10,242 $9,858
Accrued compensation and benefits 8,058 8,852
Deferred revenue 5,008 6,350
----- -----
Total current liabilities 23,308 25,060
Deferred lease credits 7,179 6,645
Other long-term liabilities 871 740
--- ---
Total liabilities 31,358 32,445
Shareholders' equity
Common stock, no par value; authorized
50,000,000 shares; issued and outstanding:
12,944,000 and 13,174,000 shares 86,763 90,123
Accumulated other comprehensive income 4,255 34
Retained earnings 60,211 53,750
------ ------
Total shareholders' equity 151,229 143,907
------- -------
Total liabilities and shareholders'
equity $182,587 $176,352
======== ========
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Thirteen weeks ended Twenty-six weeks ended
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
---- ---- ---- ----
Retail stores $48,840 $46,309 $96,823 $90,918
Specialty sales 24,725 23,746 48,847 46,272
------ ------ ------ ------
Net revenue 73,565 70,055 145,670 137,190
Cost of sales and related
occupancy expenses 32,953 32,240 65,521 64,229
Operating expenses 25,580 24,689 50,752 48,218
General and administrative
expenses 6,074 5,434 12,012 10,996
Depreciation and
amortization expenses 3,631 3,176 7,238 6,246
----- ----- ----- -----
Total costs and expenses
from operations 68,238 65,539 135,523 129,689
------ ------ ------- -------
Income from operations 5,327 4,516 10,147 7,501
Interest income 48 202 126 506
--- --- --- ---
Income before income taxes 5,375 4,718 10,273 8,007
Income tax provision 1,967 1,682 3,812 2,880
----- ----- ----- -----
Net income $3,408 $3,036 $6,461 $5,127
====== ====== ====== ======
Net income per share:
Basic $0.26 $0.22 $0.50 $0.37
Diluted $0.26 $0.21 $0.49 $0.36
Shares used in calculation
of net income per share:
Basic 12,915 13,916 12,977 13,936
Diluted 13,217 14,197 13,229 14,217
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Twenty-six weeks ended
June 28, June 29,
2009 2008
---- ----
Cash flows from operating activities:
Net income $6,461 $5,127
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 8,304 7,322
Amortization of interest
purchased 36 114
Stock-based compensation 1,508 1,297
Excess tax benefit from
exercise of stock options (249) (68)
Tax benefit from exercise of
stock options 124 52
Loss on disposition of assets
and asset impairment 18 136
Deferred income taxes (10) (10)
Changes in other assets and
liabilities:
Accounts receivable, net 2,359 (31)
Inventories (3,349) (2,884)
Prepaid expenses and other
current assets 2,195 (2,006)
Other assets 184 (72)
Accounts payable, accrued
liabilities and deferred
revenue (2,322) (449)
Deferred lease credits and
other long-term liabilities 665 1,091
--- -----
Net cash provided by operating
activities 15,924 9,619
------ -----
Cash flows from investing
activities:
Purchases of property, plant
and equipment (8,853) (14,943)
Proceeds from sales of
property, plant and equipment - 6
Changes in restricted
investments 864 -
Proceeds from sales and
maturities of marketable
securities 7,607 5,597
Purchases of marketable
securities (370) (917)
----- -----
Net cash used in investing
activities (752) (10,257)
----- --------
Cash flows from financing
activities:
Net proceeds from issuance of
common stock 1,572 634
Purchase of common stock (6,564) (8,277)
Excess tax benefit from
exercise of stock options 249 68
--- ---
Net cash used in financing
activities (4,743) (7,575)
------- -------
Increase (decrease) in cash and
cash equivalents 10,429 (8,213)
Cash and cash equivalents,
beginning of period 4,719 15,312
----- ------
Cash and cash equivalents, end
of period $15,148 $7,099
======= ======
Non-cash investing activities:
Capital expenditures incurred,
but not yet paid $1,304 $3,673
Other cash flow information:
Cash paid for income taxes 2,136 4,972
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 June 28, 2009
Net revenue $48,840 100.0% $24,725 100.0% $73,565 100.0%
Cost of
sales and
occupancy 21,226 43.5% 11,727 47.4% 32,953 44.8%
Operating
expenses 20,173 41.3% 5,407 21.9% 25,580 34.8%
Depreciation
and
amortization 2,780 5.7% 435 1.8% $416 3,631 4.9%
Segment
operating
income 4,661 9.5% 7,156 28.9% (6,490) 5,327 7.2%
For the thirteen weeks ended June 29, 2008
Net revenue $46,309 100.0% $23,746 100.0% $70,055 100.0%
Cost of
sales and
occupancy 20,706 44.7% 11,534 48.6% 32,240 46.0%
Operating
expenses 19,825 42.8% 4,864 20.5% 24,689 35.2%
Depreciation
and
amortization 2,509 5.4% 317 1.3% $350 3,176 4.5%
Segment
operating
income 3,269 7.1% 7,031 29.6% (5,784) 4,516 6.4%
For the twenty-six weeks ended June 28, 2009
Net revenue $96,823 100.0% $48,847 100.0% $145,670 100.0%
Cost of
sales and
occupancy 41,751 43.1% 23,770 48.7% 65,521 45.0%
Operating
expenses 39,929 41.2% 10,823 22.2% 50,752 34.8%
Depreciation
and
amortization 5,542 5.7% 862 1.8% $834 7,238 5.0%
Segment
operating
income 9,601 9.9% 13,392 27.4% (12,846) 10,147 7.0%
For the twenty-six weeks ended June 29, 2008
Net revenue $90,918 100.0% $46,272 100.0% $137,190 100.0%
Cost of
sales and
occupancy 41,062 45.2% 23,167 50.1% 64,229 46.8%
Operating
expenses 38,851 42.7% 9,367 20.2% 48,218 35.1%
Depreciation
and
amortization 4,887 5.4% 657 1.4% $702 6,246 4.6%
Segment
operating
income 6,118 6.7% 13,081 28.3% (11,698) 7,501 5.5%
SOURCE Peet's Coffee & Tea, Inc.
