Irvine, Calif., Nov. 3 - Diedrich Coffee, Inc., a leading roaster and wholesaler of the world's finest coffees, reported financial results for the first quarter ended September 16, 2009.
Total revenue increased 52% to $15.8 million in the first quarter of fiscal 2010 from $10.4 million in the first quarter of fiscal 2009, led by a 66% or $5.8 million increase in Keurig K-Cup sales.
Gross margin in the first quarter of fiscal 2010 increased to 26% of total revenue as compared to 21% during the same period last year. In addition to price increases taken during fiscal 2009, the improvement was due primarily to higher machine utilization, lower temporary help and overtime, the reduction of scrap and waste due to improved inventory controls, lower outbound freight costs and the ability to leverage our fixed manufacturing costs over higher production volumes.
Net income totaled $571,000 or $0.07 per diluted share in the first quarter of fiscal 2010, an improvement from a net loss of $1.8 million or $(0.33) per basic and diluted share in the first quarter of fiscal 2009.
Adjusted net income (a non-GAAP financial measure) was $571,000 or $0.07 per diluted share in the first quarter of fiscal year 2010, an improvement from an adjusted net loss of $1.6 million or $(0.30) per basic and diluted share in the same quarter of the prior year. Adjusted net income represents net income or loss before the income contribution from discontinued operations and the timing of the fiscal 2009 accrual for management incentive compensation (see important discussion about the presentation of non-GAAP financial information below, including a reconciliation to the most directly comparable GAAP financial measure).
As announced yesterday, Diedrich entered into a definitive agreement under which Peet's Coffee & Tea, Inc. will acquire Diedrich in a cash-and-stock transaction valued at $26.00 per share or a total transaction value of approximately $213 million. For more information, please see Diedrich's Form 10-Q for the quarter ended September 16, 2009 filed on November 2, 2009 and other filings made by Diedrich with the Securities and Exchange Commission (the "SEC").
.
Reconciliation of Adjusted Income (Loss) to GAAP Income (Loss)
(in thousands, except per share amounts)
(unaudited)
For the For the
twelve twelve
weeks weeks
ended ended
------- -------
9/16/2009 9/17/2008
--------- ---------
Consolidated Statement of
Operations Reconciliation
--------------------------
Net income (loss) on a GAAP basis $571 $(1,783)
Accrued management incentive
compensation (1) - (157)
Loss from discontinued operations - 316
--- ---
Adjusted net income (loss) $571 $(1,624)
==== ========
Consolidated Statement of Operations Reconciliation
per Diluted or Basic Share
---------------------------------------------------
Net income (loss) per diluted or
basic share on a GAAP basis $0.07 $(0.33)
Accrued management incentive
compensation (1) - (0.03)
Loss from discontinued operations - 0.06
--- ----
Adjusted net income (loss) per
diluted or basic share $0.07 $(0.30)
===== ======
Diluted (FY10) and basic (FY09)
shares used in calculation 8,161 5,468
===== =====
(1) The full year expense for the bonus accrual was recorded in
the 4th quarter of fiscal 2009. This amount represents the
estimated expense that would have been booked in the 1st
Quarter of fiscal 2009 had the bonus accrual been expensed
throughout the year.
DIEDRICH COFFEE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Twelve Twelve
Weeks Ended Weeks Ended
September 16, September 17,
2009 2008
Net revenue:
Wholesale $15,642 $10,347
Retail and other 131 61
--- ---
Total revenue 15,773 10,408
------ ------
Costs and expenses:
Cost of sales (exclusive of depreciation
shown separately below) 11,712 8,274
Operating expenses 1,187 1,213
Depreciation and amortization 355 332
General and administrative expenses 1,797 1,819
Gain on asset disposals - (6)
--- ---
Total costs and expenses 15,051 11,632
------ ------
Operating income (loss) from continuing
operations 722 (1,224)
Interest expense (176 ) (310)
Interest and other income, net 87 67
--- ---
Income (loss) from continuing operations
before income tax 633 (1,467)
Income tax provision (62) -
--- ---
Income (loss) from continuing operations 571 (1,467)
Discontinued operations:
Loss from discontinued operations, net of
tax expense of $0 - (316)
--- ---
Net income (loss) $571 $(1,783)
=== =====
Basic net income (loss) per share:
Income (loss) from continuing operations $0.10 $(0.27)
Loss from discontinued operations, net - (0.06)
--- ----
Net income (loss) $0.10 $(0.33)
==== ====
Diluted net income (loss) per share:
Income (loss) from continuing operations $0.07 $(0.27)
Loss from discontinued operations, net - (0.06)
--- ----
Net Income (loss) $0.07 $(0.33)
==== ====
Weighted average and equivalent shares
outstanding:
Basic 5,727 5,468
----- -----
Diluted 8,161 5,468
----- -----
DIEDRICH COFFEE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 16, 2009 June 24, 2009
------------------ -------------
Cash $3,082 $3,572
Restricted cash 623 623
Accounts receivable, net 6,321 6,335
Inventories 5,601 5,510
Other assets 10,395 10,888
------ ------
Total assets $26,022 $26,928
======= =======
Accounts payable $4,635 $5,228
All other current
liabilities 5,191 5,921
Other liabilities 1,777 2,005
Total stockholders'
equity 14,419 13,774
------ ------
Total liabilities and
stockholders' equity $26,022 $26,928
======= =======