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EMERYVILLE, Calif., Feb 12, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Peet's Coffee & Tea, Inc. (Nasdaq: PEET) today announced results for its fourth quarter and fiscal year 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO)
In this release, the Company:
- Reports net revenue of $79.1 million for the fourth quarter, an increase
of 12% versus last year,
- Reports fourth quarter diluted earnings per share of $0.29, an increase
of 26% versus last year,
- Reports fiscal year diluted earnings per share of $0.80, an increase of
36% versus last year, and
- Reaffirms guidance for 2009 of diluted earnings per share of $0.94 to
$1.00.
For the fourth quarter of 2008, consisting of the 13 weeks ended December 28, 2008, net revenue increased 12% to $79.1 million from $70.9 million for the corresponding period of fiscal 2007. For the 52 weeks ended December 28, 2008, net revenue increased 14% to $284.8 million from $249.4 million in fiscal 2007.
Net income for the quarter was $4.0 million or $0.29 per diluted share, compared to $3.3 million or $0.23 per diluted share for the corresponding period last year. For the fiscal year 2008, net income was $11.2 million or $0.80 per diluted share, compared to $8.4 million or $0.59 per diluted share last year. Fiscal 2007 results include approximately $0.9 million or $0.06 per diluted share related to stock option review professional fees.
"We are pleased with our results for the quarter and full year," said Patrick O'Dea, president and chief executive officer of Peet's Coffee & Tea. "Real productivity improvements resulting from past investments we've made are improving our margins as we move forward. It's a real tribute to the team we have in place at Peet's that we were able to achieve our earnings forecast for 2008 and be in a position to continue to significantly improve our earnings performance in 2009, despite the challenging environment."
2008 Fourth Quarter Financial Summary
Retail net revenue increased 8% to $50.9 million for the quarter from $47.0 million for the corresponding quarter last year. The increase was primarily attributed to new retail stores opened in the last 12 months. The Company opened seven new retail locations during the quarter.
Specialty net revenue increased 18% to $28.3 million for the quarter from $24.0 million for the corresponding quarter last year. Within the specialty business, grocery grew 23%, foodservice and office sales were up 33%, and the home delivery business declined 7% compared to the corresponding period last year.
Cost of sales and related occupancy costs decreased to 46.8% of total net revenue for the quarter compared to 47.5% for the corresponding period last year. The decrease from last year was due to procurement savings, increased prices in retail and grocery, and leverage of costs related to the roasting facility that opened last year, partially offset by higher green coffee costs.
Operating expenses as a percent of net revenue increased to 32.7% of total net revenue for the quarter compared to 32.5% for the corresponding period last year. The increase was due to higher costs associated with expanding the grocery business, higher incentive compensation and store impairment expense, partially offset by favorable workers' compensation insurance expense.
General and administrative expenses decreased to $6.3 million for the quarter from $6.5 million for the corresponding period last year primarily due to lower marketing spending in the retail segment, partially offset by professional fees and compensation costs to support our growth.
Depreciation and amortization expenses increased to $3.5 million for the quarter from $3.0 million for the corresponding quarter last year. The increase was primarily due to the opening of 23 new retail stores during the year.
The Company ended the quarter with cash and cash equivalents plus short- term marketable securities of $13.3 million.
Fiscal 2009 Outlook
Looking ahead, Peet's provided the following guidance for fiscal 2009, which includes 53 weeks:
-- Total net revenue is expected to grow 10 to 13%,
-- Diluted earnings per share is expected to be in the $0.94 to $1.00
range, and
-- The Company is planning to open about 10 new retail locations and 30 to
40 new licensed locations.
"Clearly, 2009 will be a challenging year for all businesses," said O'Dea. "I believe, however, we are better positioned than most to continue delivering strong earnings growth. We expect our margins to continue to improve as we leverage the past investments we've made in our people, the plant and infrastructure. In addition, we have a strong balance sheet with $13 million of cash and no debt. Most importantly, our commitment to truly distinctive quality coffees and teas has garnered us a highly loyal customer following, which is a real asset in times like these."
Peet's Coffee & Tea, Inc. Q4 2008 Conference Call
The Company will report its fourth quarter and 2008 year-end results on Thursday, February 12, 2009. The teleconference call will begin at 2:00 p.m. PT/5:00 p.m. ET.
The teleconference can be accessed by calling 1-877-545-1489. 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 through 8:59 p.m. PT/11:59 p.m. ET on Thursday, February 19, 2009, at 1-888-203-1112 or 1-719-457-0820, using access code 5341574. It will also be archived at http://investor.peets.com/medialist.cfm through February 12, 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. Peet's buys the highest quality beans in the world, artisan roasts every bean by hand to order, and delivers all of its coffee quickly for superior freshness no matter where it is sold. Founded in 1966 in Berkeley, California by Alfred Peet, who is widely recognized as the grandfather of specialty coffee in the U.S., Peet's has a rapidly growing, passionate customer following that seeks out Peet's coffees wherever they go. Peet's is committed to strategically growing its business through many channels without compromising the extraordinary quality of its coffee. 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 forecasted net revenue growth, earnings per diluted share and expected retail and license location growth for 2009. 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 impact of the Company's stock price volatility on the valuation of stock-based compensation under SFAS 123(R); the availability and cost of high quality Arabica coffee beans; consumers' tastes and preferences; 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 30, 2007. 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)
December 28, December 30,
2008 2007
ASSETS
Current assets
Cash and cash equivalents $4,719 $15,312
Short-term marketable securities 8,600 7,932
Accounts receivable, net 11,924 8,287
Inventories 26,124 24,483
Deferred income taxes - current 2,922 2,950
Prepaid expenses and other 7,193 4,285
Total current assets 61,482 63,249
Long-term marketable securities - 7,831
Property, plant and equipment, net 107,914 99,231
Deferred income taxes - non current 3,059 3,353
Other assets, net 3,897 3,883
Total assets $176,352 $177,547
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other accrued liabilities $9,858 $10,104
Accrued compensation and benefits 8,852 8,909
Deferred revenue 6,350 5,856
Total current liabilities 25,060 24,869
Deferred lease credits and other long-term
liabilities 7,385 5,425
Total liabilities 32,445 30,294
Shareholders' equity
Common stock, no par value; authorized
50,000,000 shares; issued and outstanding:
13,174,000 and 13,932,000 shares 90,123 104,616
Accumulated other comprehensive income 34 52
Retained earnings 53,750 42,585
Total shareholders' equity 143,907 147,253
Total liabilities and shareholders' equity $176,352 $177,547
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Thirteen weeks ended Fifty-two weeks ended
December 28, December 30, December 28, December 30,
2008 2007 2008 2007
Retail stores $50,890 $46,956 $187,719 $168,392
Specialty sales 28,256 23,957 97,103 80,997
Net revenue 79,146 70,913 284,822 249,389
Cost of sales and
related occupancy
expenses 37,059 33,683 133,537 118,389
Operating expenses 25,910 23,028 98,844 85,800
General and
administrative
expenses 6,286 6,454 22,519 22,682
Depreciation and
amortization expenses 3,526 2,977 12,921 10,912
Total costs and
expenses from
operations 72,781 66,142 267,821 237,783
Income from operations 6,365 4,771 17,001 11,606
Interest income 90 274 726 1,446
Income before income
taxes 6,455 5,045 17,727 13,052
Income tax provision 2,435 1,722 6,562 4,675
Net income $4,020 $3,323 $11,165 $8,377
Net income per share:
Basic $0.30 $0.24 $0.81 $0.61
Diluted $0.29 $0.23 $0.80 $0.59
Shares used in
calculation of net
income per share:
Basic 13,417 13,904 13,723 13,724
Diluted 13,655 14,310 13,997 14,120
PEET'S COFFEE & TEA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Fifty-two weeks ended
2008 2007 2006
Cash flows from operating
activities:
Net income $11,165 $8,377 $7,816
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 15,113 12,861 10,244
Amortization of interest
purchased 193 242 415
Stock-based compensation 2,711 2,814 4,022
Excess tax benefit from
exercise of stock options (462) (1,350) (724)
Tax benefit from exercise of
stock options 285 1,234 708
Loss on disposition of assets
and asset impairment 900 494 288
Deferred income taxes 322 (3,100) (3,495)
Changes in other assets and
liabilities:
Accounts receivable, net (3,637) (1,449) (1,686)
Inventories (1,641) (4,950) (2,532)
Prepaid expenses and other
current assets (2,908) (433) (480)
Other assets (21) (45) (244)
Accounts payable, accrued
liabilities and deferred
revenue 1,464 3,519 2,473
Deferred lease credits and
other long-term liabilities 1,960 1,919 969
Net cash provided by
operating activities 25,444 20,133 17,774
Cash flows from investing
activities:
Purchases of property,
plant and equipment (25,930) (30,824) (44,443)
Proceeds from sales of
property, plant and equipment 67 23 28
Changes in restricted
investments (87) - 1,500
Proceeds from sales and
maturities of marketable
securities 7,857 31,304 49,888
Purchases of marketable
securities (917) (21,688) (26,356)
Net cash used in
investing activities (19,010) (21,185) (19,383)
Cash flows from financing
activities:
Net proceeds from issuance
of common stock 3,138 7,322 3,888
Purchase of common stock (20,627) - (15,934)
Excess tax benefit from
exercise of stock options 462 1,350 724
Net cash (used in)/
provided by financing
activities (17,027) 8,672 (11,322)
(Decrease)/increase in cash
and cash equivalents (10,593) 7,620 (12,931)
Cash and cash equivalents,
beginning of period 15,312 7,692 20,623
Cash and cash equivalents,
end of period $4,719 $15,312 $7,692
Non-cash investing activities:
Capital expenditures
incurred, but not yet paid $734 $1,995 $2,751
Other cash flow information:
Cash paid for income taxes 8,293 6,761 7,890
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
December 28,
2008
Net revenue $50,890 100.0% $28,256 100.0% $79,146 100.0%
Cost of
sales and
occupancy 23,152 45.5% 13,907 49.2% 37,059 46.8%
Operating
expenses 20,796 40.9% 5,114 18.1% 25,910 32.7%
Depreciation
and
amortization 2,726 5.4% 382 1.4% $418 3,526 4.5%
Segment
operating
income 4,216 8.3% 8,853 31.3% (6,704) 6,365 8.0%
For the thirteen
weeks ended
December 30,
2007
Net
revenue $46,956 100.0% $23,957 100.0% $70,913 100.0%
Cost of
sales and
occupancy 21,728 46.3% 11,955 49.9% 33,683 47.5%
Operating
expenses 19,196 40.9% 3,832 16.0% 23,028 32.5%
Depreciation
and
amortization 2,298 4.9% 391 1.6% $288 2,977 4.2%
Segment
operating
income 3,734 8.0% 7,779 32.5% (6,742) 4,771 6.7%
For the fifty-two
weeks ended
December 28,
2008
Net
revenue $187,719 100.0% $97,103 100.0% $284,822 100.0%
Cost of
sales and
occupancy 85,343 45.5% 48,194 49.6% 133,537 46.9%
Operating
expenses 79,587 42.4% 19,257 19.8% 98,844 34.7%
Depreciation
and
amortization 9,970 5.3% 1,411 1.5% $1,540 12,921 4.5%
Segment
operating
income 12,819 6.8% 28,241 29.1% (24,059) 17,001 6.0%
For the fifty-two
weeks ended
December 30,
2007
Net
revenue $168,392 100.0% $80,997 100.0% $249,389 100.0%
Cost of
sales and
occupancy 78,412 46.6% 39,977 49.4% 118,389 47.5%
Operating
expenses 71,714 42.6% 14,086 17.4% 85,800 34.4%
Depreciation
and
amortization 8,516 5.1% 1,376 1.7% $1,020 10,912 4.4%
Segment
operating
income 9,750 5.8% 25,558 31.6% (23,702) 11,606 4.7%
SOURCE Peet's Coffee & Tea, Inc.
http://www.peets.com
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