4.8.2004: Meldung: Green Mountain Coffee Roasters: Third Quarter Results
Net income for the fiscal third quarter increased 40.4% to $1,906,000, or $0.26 per diluted share, compared to $1,358,000, or $0.19 per diluted share for the fiscal third quarter of 2003.
Robert P. Stiller, Chairman, President and Chief Executive Officer, said "Green Mountain Coffee delivered strong sales and even stronger earnings growth this quarter, in large part due to the Company"s superior infrastructure and the passion of our people, as we execute on our multi-channel cup to pound strategy to build the business."
Stiller continued, "I am particularly excited that we have been able to demonstrate, with our financial results, that sustainability and business success can go hand and hand. We recently have been honored with additional awards and recognition for our efforts in this regard. In June, the Society for Human Resource Management and the Great Place to Work(R) Institute ranked Green Mountain Coffee Number 9 on their list of the 25 "Best Medium Companies to Work for in America." In July, SustainableBusiness.com placed Green Mountain Coffee on its SB 20 list of The World"s Top Sustainable stocks, showcasing companies they believed demonstrated leadership in sustainable practices."
Stiller continued, "TransFair USA recently reported that U.S. Certified Fair Trade coffee imports increased 91% in 2003. This figure reveals the growing consumer appeal of Fair Trade and certified products, which we are consciously tapping into with our brand and product offerings. Our strategic alliance with Ben & Jerry"s, to open co-branded, franchised, ice cream and coffee shops around the country that will feature our certified organic and Fair Trade coffees, is another indication of the tremendous potential of our approach to market differentiation and growth."
Stiller concluded, "I also believe the Keurig Single-Cup Brewer, with its superior convenience and quality, is a major growth driver for us. We"ve benefited from its impact in our office coffee service channel for some time, and now we are leveraging the concept and technology to provide more and more consumers with an outstanding coffee experience in their homes as well, and in other venues including smaller offices. Taken altogether, I am very excited about our performance and about our growth plans for the rest of this fiscal year and beyond. We have the passion and the commitment to work to make a positive difference in the world, while servicing our customers in a superior manner and building stockholder value."
Third Quarter Financial Review
Channel and Other Sales Growth Highlights:
The Company"s year-over-year dollar sales growth in the third quarter was led by the office coffee service (OCS), supermarket and convenience store channels. The OCS channel contributed approximately half of the increase in net sales due to strong K-Cup sales driven by increased penetration of the Keurig(R) B-100 brewers in small offices and by continued success of teas in K-Cups.
The supermarket channel grew 16.7% in coffee pounds shipped due primarily to distribution to Publix Supermarkets which began in the first quarter of fiscal 2004.
In the convenience store channel, coffee pounds shipped increased 13.2%. This increase was due mainly to increased sales relating to inventory replenishment, which varies quarter-to-quarter, to McLane Company, the distributor to Exxon Mobil Corporation convenience stores.
The consumer direct channel grew 45% in dollar sales and 26.0% in coffee pounds shipped with the majority of growth related to the sales of Keurig Single-Cup Brewers for the home and the associated K-Cups.
Fair Trade and Organic coffee pound sales grew by 49% versus Q3 "03.
Margins, Expenses, and Analysis of After-Tax Income:
Green Mountain Coffee"s gross profit margin was 40.4% of sales compared to 42.8% in the year-ago quarter. The decrease was attributable to higher green coffee costs, variations in sales mix, and rising fuel costs.
Selling, general and administrative expenses decreased to 29.6% of sales from 31.6%. This improvement was the result of leveraging selling and organizational resources on a higher sales base.
Interest expenses decreased $80,000 due to capitalization of interest expenses associated with the construction of the new distribution center.
The Company"s tax rate in the third quarter of fiscal 2004 decreased to 37.2% from 41.5% in the prior year period due to the favorable impact of recently awarded state tax incentives under the Vermont Economic Advancement Tax Incentive Program.
The Company"s third quarter after-tax income before the recognition of a non-cash loss related to the Company"s equity investment in Keurig Incorporated ("Keurig") increased 25.3% to $2,099,000. The Company"s net income was $1,906,000 after recognition of a non-cash loss of $193,000 (or $0.03 per share), an increase of 40.4%.
For the forty weeks ended July 3, 2004, the Company experienced an 18.5% increase in net sales to $105,690,000 from $89,222,000 and a 14.5% increase in coffee pounds shipped compared to the same period last year.
Net income for the forty weeks ended July 3, 2004 was up 19.5% to $5,820,000 after recognition of a non-cash loss of $751,000 from its minority investment in Keurig as compared to $4,870,000 in 2003 including recognition of a non-cash loss of $690,000 from the investment in Keurig.
Diluted earnings per share increased to $0.79 from $0.67 as compared to the same period last year.
Business Outlook and Other Forward-Looking Information
Fiscal Fourth Quarter:
The Company expects net sales growth of 12% to 16% and coffee pounds growth of 7% to 10% in its fourth quarter of fiscal 2004.
The Company anticipates its gross margin will be in the range of 39.0% to 40.0% and that its operating margin will be in the range of 10.5% to 11.5%.
The Company expects that the recognition of its share of Keurig"s loss for the fourth quarter of 2004 will reduce diluted earnings per share by $0.02 to $0.04.
Based on all of these factors, the Company anticipates its fully diluted earnings per share for the fourth quarter will be in the range of $0.23 to $0.27 per share.
The Company anticipates for fiscal 2004 as a whole that net sales growth will be in the range of 16% to 18% with coffee pounds growth in the range of 11% to 13%.
The Company expects that its gross margin will be in the range of 39.0% to 39.7% and that its operating margin will be in the range of 10.0% to 10.6%.
The Company expects that the recognition of its share of Keurig"s loss for fiscal 2004 will reduce diluted earnings per share by $0.12 to $0.14.
The Company anticipates its fully diluted earnings per share for fiscal 2004 to be in the range of $1.02 to $1.06 per share.
Balance Sheet and Cash Flow:
The Company forecasts its capital expenditures for fiscal 2004 to be in the range of $17 to $19 million and depreciation expenses to be between $4.5 and $5.0 million.
The Company is building a new distribution and warehousing facility attached to its existing plant that will incorporate material-handling automation to improve distribution efficiencies. The Company anticipates it will result in lower overall distribution costs relative to sales over the long-term, as well as allow for increased packaging capacity in the current plant. The capital project is underway and is expected to cost approximately $9 million.
The Company expects its EBITDA in 2004 to be approximately $18 to $19 million.
There will be further discussion of the third quarter financial results and these future expectations on Company"s webcast conference call later this morning.
Green Mountain Coffee Roasters, Inc. is a leader in the specialty coffee industry, and has been recognized by Forbes Magazine for the past four years as one of the "200 Best Small Companies in America." The Company contributes at least five percent of its pre-tax profit annually to support socially responsible initiatives, many of which it has supported for over 10 years. In 2004 Business Ethics magazine recognized these efforts by ranking Green Mountain Coffee Roasters 5th overall on its list of "100 Best Corporate Citizens," and the Society of Human Resource Management rated the Company as one of the "Best Medium Companies To Work For in America."
Green Mountain Coffee Roasters roasts high-quality arabica coffees and offers over 100 coffee selections including single-origin, estate, certified organic, Fair Trade, signature blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters(R) and Newman"s Own(R) Organics brands. The majority of Green Mountain Coffee"s revenue is derived from its wholesale operation that serves supermarkets, convenience stores, offices, and other locations where fine coffees are sold. Green Mountain Coffee also operates a direct mail business and an e-commerce website (http://www.GreenMountainCoffee.com) from its Waterbury, Vermont headquarters.
Keurig, Incorporated ("Keurig") manufactures brewing equipment that allows users to brew high-quality specialty coffee one cup at a time. Green Mountain Coffee has 42% equity ownership of Keurig. In addition, Green Mountain Coffee is the largest of four roasters and distributors of the K-Cups(R) that are used with Keurig(R) Single-Cup Brewers. The Company sells K-Cups to businesses through its OCS channel, and to home users through its consumer direct channel.
Green Mountain Coffee Roasters will be discussing these financial results and future prospects with analysts and investors in a conference call available via the Internet. The call will take place today, August 3, 2004, at 10:30 a.m. ET and will be available via live webcast on the Company"s website at www.GreenMountainCoffee.com and on Street Events at www.StreetEvents.com, as well as AOL, Yahoo and other major portals.
The Company archives the latest conference call on the Investor Services section of its website for a period of time. A replay of the conference call also will be available by telephone at (719) 457-0820, confirmation number 783279, from 1:30 p.m. ET on August 3rd, through midnight on Saturday, August 7, 2004.
CONTACT: Green Mountain Coffee Roasters
Frances G. Rathke, 802-244-5621, x.1300
SOURCE: Green Mountain Coffee Roasters