PEET Peets Coffee & Tea, Inc. (MM)

EMERYVILLE, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Peet's Coffee & Tea, Inc. (NASDAQ:PEET) today announced its third quarter 2009 results for the period ended September 27, 2009, which included 13 weeks. (Logo: http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO) In this release, the company: -- Reports third quarter diluted earnings per share of $0.19, an increase of 27% versus last year -- Reports net revenue of $73.9 million, an increase of 8% versus last year -- Raises guidance for diluted earnings per share expectations for the full year to $1.04 to $1.06, up from the previous range of $0.97 to $1.00 -- Gives guidance for 2010 of diluted earnings per share of $1.24 to $1.30. For the 13 weeks ended September 27, 2009, net revenue increased 8% to $73.9 million from $68.5 million for the corresponding period last year. Net income for the quarter was $2.5 million, or $0.19 per diluted share, compared to $2.0 million, or $0.15 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. "We are leveraging the significant past investments we've made in our people, direct store delivery (DSD) selling system, the new roasting facility and our store base to produce strong earnings growth. While continuing to grow the Peet's brand, we will add new growth initiatives, such as the current national launch of Godiva flavored coffees, that are consistent with our overall vision to be the leading premium specialty coffee company in all key consumer segments. This strategy should enable us to deliver strong profit growth into the future." Financial and Operating Summary Retail net revenue increased 4% to $47.9 million for the 13 weeks ended September 27, 2009 from $45.9 million for the corresponding period last year. The increase was attributed to new retail stores opened in the last 12 months. The company opened three new retail locations in the quarter for a total of seven year to date. The company expects to open one additional store this year. Specialty net revenue increased 15% to $26.0 million compared to $22.6 million for the corresponding period last year. Within the specialty business, grocery sales grew 24%, foodservice and office was up 13%, and home delivery sales were down 8% compared to the same period last year. Cost of sales and related occupancy costs decreased as a percentage of net revenue to 46.4%, compared to 47.1% for the corresponding period last year. The decrease from last year was due to lower shipping costs, lower milk costs, effective cost controls in retail stores, and higher prices in retail, partially offset by higher coffee costs. Operating expenses decreased as a percentage of net revenue to 35.3%, compared to 36.1% for the corresponding period last year. The decrease was primarily due to effective cost management in the retail business and the leveraging of both retail and grocery overhead costs. General and administrative expenses increased to $5.8 million compared to $5.2 million for the same period last year driven primarily by higher payroll-related costs and higher professional service fees. Depreciation and amortization expenses increased to $4.0 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 and the implementation of an enterprise resource planning (ERP) system during the quarter. Fiscal 2009 Full Year Outlook Looking ahead, Peet's raised its earnings guidance for the year based on current results: -- Diluted earnings per share are now expected to be in the $1.04 to $1.06 range for the 53 weeks ending January 3, 2010. This is an increase from prior guidance of $0.97 to $1.00 -- Fiscal 2009 net revenue growth is expected to be between 8% and 9% for the 53 weeks ending January 3, 2010. Fiscal 2010 Outlook Looking ahead, Peet's provided the following fiscal 2010 guidance: -- Total net revenue is expected to grow 8% to 12% on a comparable 52 week basis -- Diluted earnings per share are expected to be in the $1.24 to $1.30 range which would translate to 20% to 25% growth on a comparable 52 week basis. Peet's Coffee & Tea, Inc. Q3 2009 Conference Call The company will host a conference call beginning at 2:00 p.m. PT/5:00 p.m. ET on October 27, 2009, which can be accessed by calling 1-877-397-0272. 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 on October 27, 2009 through 8:59 p.m. PT/11:59 p.m. ET on November 3, 2009, at 1-888-203-1112 or 1-719-457-0820, using access code 7832405. It will also be archived at http://investor.peets.com/medialist.cfm through October 27, 2010, at 8:59 p.m. PT/11:59 p.m. 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 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 and 2010 forecasted net revenue and earnings per diluted share. 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) September 27, December 28, 2009 2008 ---- ---- ASSETS Current assets Cash and cash equivalents $16,966 $4,719 Short-term marketable securities 4,232 8,600 Accounts receivable, net 10,682 11,924 Inventories 30,564 26,124 Deferred income taxes - current 2,907 2,922 Prepaid expenses and other 8,029 7,193 ----- ----- Total current assets 73,380 61,482 Property, plant and equipment, net 106,900 107,914 Deferred income taxes - non current 3,146 3,059 Other assets, net 2,764 3,897 ----- ----- Total assets $186,190 $176,352 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and other accrued liabilities $8,811 $9,858 Accrued compensation and benefits 9,568 8,852 Deferred revenue 4,759 6,350 ----- ----- Total current liabilities 23,138 25,060 Deferred lease credits 7,264 6,645 Other long-term liabilities 950 740 --- --- Total liabilities 31,352 32,445 Shareholders' equity Common stock, no par value; authorized 50,000,000 shares; issued and outstanding: 12,983,000 and 13,174,000 shares 88,320 90,123 Accumulated other comprehensive income 3,838 34 Retained earnings 62,680 53,750 ------ ------ Total shareholders' equity 154,838 143,907 ------- ------- Total liabilities and shareholders' equity $186,190 $176,352 ======== ======== PEET'S COFFEE & TEA, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in thousands, except per share amounts) Thirteen weeks ended Thirty-nine weeks ended September 27, September 28, September 27, September 28, 2009 2008 2009 2008 ---- ---- ---- ---- Retail stores $47,863 $45,911 $144,686 $136,829 Specialty sales 26,042 22,575 74,889 68,847 ------ ------ ------ ------ Net revenue 73,905 68,486 219,575 205,676 Cost of sales and related occupancy expenses 34,291 32,249 99,812 96,478 Operating expenses 26,052 24,715 76,804 72,934 General and administrative expenses 5,770 5,237 17,782 16,233 Depreciation and amortization expenses 3,962 3,150 11,200 9,395 ----- ----- ------ ----- Total costs and expenses from operations 70,075 65,351 205,598 195,040 ------ ------ ------- ------- Income from operations 3,830 3,135 13,977 10,636 Interest (expense) income, net (15) 130 111 636 --- --- --- --- Income before income taxes 3,815 3,265 14,088 11,272 Income tax provision 1,346 1,247 5,158 4,127 ----- ----- ----- ----- Net income $2,469 $2,018 $8,930 $7,145 ====== ====== ====== ====== Net income per share: Basic $0.19 $0.15 $0.69 $0.52 Diluted $0.19 $0.15 $0.67 $0.51 Shares used in calculation of net income per share: Basic 12,976 13,603 12,977 13,825 Diluted 13,343 13,899 13,267 14,111 PEET'S COFFEE & TEA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Thirty-nine weeks ended September 27, September 28, ------------- ------------ 2009 2008 ---- ---- Cash flows from operating activities: Net income $8,930 $7,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,790 11,025 Amortization of interest purchased 36 157 Stock-based compensation 2,277 1,962 Excess tax benefit from exercise of stock options (275) (384) Tax benefit from exercise of stock options 119 246 Loss on disposition of assets and asset impairment 184 216 Deferred income taxes (72) 366 Changes in other assets and liabilities: Accounts receivable, net 1,242 (1,355) Inventories (4,440) (5,215) Prepaid expenses and other current assets (836) (5,521) Other assets 185 (81) Accounts payable, accrued liabilities and deferred revenue (1,904) 872 Deferred lease credits and other long-term liabilities 829 1,605 --- ----- Net cash provided by operating activities 19,065 11,038 ------ ------ Cash flows from investing activities: Purchases of property, plant and equipment (11,908) (20,430) Proceeds from sales of property, plant and equipment - 67 Changes in restricted investments 878 - Proceeds from sales and maturities of marketable securities 8,507 5,597 Purchases of marketable securities (371) (917) ---- ---- Net cash used in investing activities (2,894) (15,683) ------ ------- Cash flows from financing activities: Net proceeds from issuance of common stock 2,365 2,855 Purchase of common stock (6,564) (10,017) Excess tax benefit from exercise of stock options 275 384 --- --- Net cash used in financing activities (3,924) (6,778) ------ ------ Increase (decrease) in cash and cash equivalents 12,247 (11,423) Cash and cash equivalents, beginning of period 4,719 15,312 ----- ------ Cash and cash equivalents, end of period $16,966 $3,889 ======= ====== Non-cash investing activities: Capital expenditures incurred, but not yet paid $716 $1,135 Other cash flow information: Cash paid for income taxes 5,023 7,670 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 September 27, 2009 Net revenue $47,863 100.0% $26,042 100.0% $73,905 100.0% Cost of sales and occupancy 21,179 44.2% 13,112 50.3% 34,291 46.4% Operating expenses 20,488 42.8% 5,564 21.4% 26,052 35.3% Depreciation and amortization 2,907 6.1% 463 1.8% $592 3,962 5.4% Segment operating income 3,289 6.9% 6,903 26.5% (6,362) 3,830 5.2% For the thirteen weeks ended September 28, 2008 Net revenue $45,911 100.0% $22,575 00.0% $68,486 100.0% Cost of sales and occupancy 21,130 46.0% 11,119 49.3% 32,249 47.1% Operating expenses 19,940 43.4% 4,775 21.2% 24,715 36.1% Depreciation and amortization 2,357 5.1% 372 1.6% $421 3,150 4.6% Segment operating income 2,484 5.4% 6,309 27.9% (5,658) 3,135 4.6% For the thirty-nine weeks ended September 27, 2009 Net revenue $144,686 100.0% $74,889 100.0% $219,575 100.0% Cost of sales and occupancy 62,930 43.5% 36,882 49.2% 99,812 45.5% Operating expenses 60,417 41.8% 16,387 21.9% 76,804 35.0% Depreciation and amortization 8,449 5.8% 1,325 1.8% $1,426 11,200 5.1% Segment operating income 12,890 8.9% 20,295 27.1% (19,208) 13,977 6.4% For the thirty-nine weeks ended September 28, 2008 Net revenue $136,829 100.0% $68,847 100.0% $205,676 100.0% Cost of sales and occupancy 62,191 45.5% 34,287 49.8% 96,478 46.9% Operating expenses 58,791 43.0% 14,143 20.5% 72,934 35.5% Depreciation and amortization 7,244 5.3% 1,029 1.5% $1,122 9,395 4.6% Segment operating income 8,603 6.3% 19,388 28.2% (17,355) 10,636 5.2% http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO http://photoarchive.ap.org/ DATASOURCE: Peet's Coffee & Tea, Inc. CONTACT: Media, Lee Caraher of Double Forte, +1-415-848-8102, , 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/

Copyright