Peet's Coffee & Tea Sees Q1 2009 Revenue Grow 7%
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Source: Peet's Coffee & Tea, Inc.
29/04/2009
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Emeryville, Calif., April 28 - Peet's Coffee & Tea, Inc. today announced its first quarter 2009 results for the period ended March 29, 2009, which included 13 weeks.
In this release, the Company:
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Reports first quarter diluted earnings per share of $0.23, an increase of 53% versus last year,
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Reports net revenue of $72.1 million, an increase of 7% versus last year, and
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Reaffirms guidance for 2009 of diluted earnings per share of $0.94 to $1.00.
For the 13 weeks ended March 29, 2009, net revenue increased 7% to $72.1 million from $67.1 million for the corresponding period last year.
Net income for the quarter was $3.1 million, or $0.23 per share, compared to $2.1 million, or $0.15 per diluted share, for the corresponding period last year.
"Our strong profit this quarter reflects the power of the Peet's brand and our ability to leverage the people, plant and systems infrastructure we've built to drive improved results," said Patrick O'Dea, president and CEO of Peet's Coffee & Tea. "The combination of focusing on our highly loyal customer base and executing with excellence across the Company is enabling us to grow quite profitably despite the challenging economic environment."
Financial and Operating Summary
Retail net revenue increased 8% to $48.0 million for the 13 weeks ended March 29, 2009 from $44.6 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 7% to $24.1 million, compared to $22.5 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 11%, foodservice and office was up 10%, and home delivery sales were down 8% compared to the same period last year.
Cost of sales and related occupancy costs increased to $32.6 million, compared to $32.0 million for the corresponding period last year, but decreased as a percentage of net revenue to 45.2%, compared to 47.6% for the corresponding period last year. The decrease from last year was due to effective cost controls in the plant and retail stores, higher prices in retail and grocery, favorable product mix in foodservice and office, and lower milk and shipping costs, partially offset by higher green coffee costs.
Operating expenses increased to $25.2 million, compared to $23.5 million for the corresponding period last year, but decreased slightly as a percentage of net revenue to 34.9%, compared to 35.0%, for the corresponding period last year. The decrease was primarily due to effective cost management in the retail business, including lower training, repairs and supplies spending, as well as leveraging of retail overhead costs. This was mostly offset by higher costs in grocery to support the expansion of the direct store delivery sales system into the eastern U.S.
General and administrative expenses increased to $5.9 million compared to $5.6 million for the same period last year driven by higher payroll related costs, partially offset by lower administration costs.
Depreciation and amortization expenses increased to $3.6 million, compared to $3.1 million for the corresponding period last year. The increase was primarily due to the opening of 16 new retail stores in the last 12 months.
The Company ended the quarter with cash and cash equivalents plus investments of $16.6 million.
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PEET'S COFFEE & TEA, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share amounts)
March 29, December 28,
ASSETS 2009 2008
Current assets
Cash and cash equivalents $12,003 $4,719
Short-term marketable securities 4,558 8,600
Accounts receivable, net 10,115 11,924
Inventories 22,572 26,124
Deferred income taxes - current 2,922 2,922
Prepaid expenses and other 5,499 7,193
Total current assets 57,669 61,482
Property, plant and equipment, net 108,391 107,914
Deferred income taxes - non current 3,068 3,059
Other assets, net 2,812 3,897
Total assets $171,940 $176,352
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other accrued
liabilities $9,366 $9,858
Accrued compensation and benefits 8,294 8,852
Deferred revenue 4,979 6,350
Total current liabilities 22,639 25,060
Deferred lease credits 7,030 6,645
Other long-term liabilities 808 740
Total liabilities 30,477 32,445
Shareholders' equity
Common stock, no par value; authorized
50,000,000 shares; issued and
outstanding: 12,880,000 and 13,174,000
shares 84,669 90,123
Accumulated other comprehensive
income (loss) (9) 34
Retained earnings 56,803 53,750
Total shareholders' equity 141,463 143,907
Total liabilities and shareholders'
equity $171,940 $176,352
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Thirteen weeks ended
March 29, March 30,
2009 2008
Retail stores $47,982 $44,609
Specialty sales 24,122 22,526
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Net revenue 72,104 67,135
Cost of sales and related
occupancy expenses 32,568 31,989
Operating expenses 25,171 23,529
General and administrative
expenses 5,938 5,562
Depreciation and
amortization expenses 3,607 3,070
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Total costs and expenses
from operations 67,284 64,150
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Income from operations 4,820 2,985
Interest income 78 304
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Income before income taxes 4,898 3,289
Income tax provision 1,845 1,198
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Net income $3,053 $2,091
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Net income per share:
Basic $0.23 $0.15
Diluted $0.23 $0.15
Shares used in calculation of net
income per share:
Basic 13,039 13,956
Diluted 13,241 14,236
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Thirteen weeks ended
March 29, March 30,
2009 2008
Cash flows from operating activities:
Net income $3,053 $ 2,091
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,141 3,605
Amortization of interest purchased 27 60
Stock-based compensation 643 668
Excess tax benefit from exercise of
stock options (28) (30)
Tax benefit from exercise of stock options 17 19
Loss on disposition of assets and asset
impairment 7 49
Deferred income taxes (9) -
Changes in other assets and liabilities:
Accounts receivable, net 1,809 (44)
Inventories 3,552 2,010
Prepaid expenses and other current
assets 1,694 (178)
Other assets 177 3
Accounts payable, accrued liabilities
and deferred revenue (3,235) 1,075
Deferred lease credits and other
long-term liabilities 453 529
Net cash provided by operating
activities 12,301 9,857
Cash flows from investing activities:
Purchases of property, plant and
equipment (3,787) (8,828)
Changes in restricted investments 884 -
Proceeds from sales and maturities of
marketable securities 3,972 1,765
Purchases of marketable securities - (917)
Net cash provided by/(used in)
investing activities 1,069 (7,980)
Cash flows from financing activities:
Net proceeds from issuance of common
stock 450 544
Purchase of common stock (6,564) -
Excess tax benefit from exercise of
stock options 28 30
Net cash provided by/(used in)
financing activities (6,086) 574
Increase in cash and cash equivalents 7,284 2,451
Cash and cash equivalents, beginning of
period 4,719 15,312
Cash and cash equivalents, end of period $12,003 $17,763
Non-cash investing activities:
Capital expenditures incurred,
but not yet paid $1,548 $ 2,772
Other cash flow information:
Cash paid for income taxes 21 119
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
March 29, 2009
Net revenue $47,982 100.0% $24,122 100.0% $72,104 100.0%
Cost of
sales and
occupancy 20,525 42.8% 12,043 49.9% 32,568 45.2%
Operating
expenses 19,756 41.2% 5,415 22.4% 25,171 34.9%
Depreciation and
amortization 2,762 5.8% 427 1.8% $418 3,607 5.0%
Segment
operating
income 4,939 10.3% 6,237 25.9% (6,356) 4,820 6.7%
For the thirteen
weeks ended
March 30, 2008
Net revenue $44,609 100.0% $22,526 100.0% $67,135 100.0%
Cost of sales
and occupancy 20,356 45.6% 11,633 51.6% 31,989 47.6%
Operating
expenses 19,026 42.7% 4,503 20.0% 23,529 35.0%
Depreciation and
Amortization 2,378 5.3% 340 1.5% $352 3,070 4.6%
Segment
Operating
income 2,849 6.4% 6,050 26.9% (5,914) 2,985 4.4%
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