Caribou Coffee Reports Fourth Quarter 2007 Results.MINNEAPOLIS -- Caribou Coffee Caribou Coffee is a specialty coffee retailer, the second largest in the U.S.[2] Caribou concentrates on selling gourmet coffees, teas, and bakery goods in over 464 coffeehouses in 18 states. Company, Inc. (Nasdaq:CBOU), the second largest U.S.-based company-owned gourmet coffeehouse operator based on the number of coffeehouses, today reported financial results for fourth quarter 2007 (thirteen weeks ended December 30, 2007). HIGHLIGHTS FOR THE FOURTH QUARTER OF 2007 INCLUDE: * Comparable Coffeehouse Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were flat (0%) * "Other Sales" increased 84.4% compared to the fourth quarter of 2006 Rosalyn (Roz) Mallet mallet, n a hammering instrument. mallet, hard, n a small hammer with a leather-, rubber-, fiber-, or metal-faced head; used to supply force or to supplement hand force for the compaction of foil or amalgam and to seat cast , the Company's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented, "Continued progress was made on several key initiatives during the final quarter, when we delivered solid results despite widespread weakness in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. ." Added Ms. Mallet, "Growing our non-coffeehouse sales is also an important component of Caribou's long-term strategy and we are particularly pleased with the strong growth we experienced in non-coffeehouse sales." Ms. Mallet further commented, "We took some difficult but necessary actions in 2007 that will position Caribou Coffee for future growth and improve profitability." FOURTH QUARTER 2007 RESULTS Total net sales increased $3.5 million, or 5.2%, to $70.2 million for the quarter ended December 30, 2007, from $66.7 million for the quarter ended December 31, 2006. This increase is primarily attributable to the increase in other sales to existing and new commercial customers and franchise fees, royalties and product sales to franchisees which collectively increased $2.5 million or 84.4% to $5.5 million during the fourth quarter 2007 from $3.0 million during fourth quarter 2006. Comparable coffeehouse net sales were flat (0%) for the thirteen weeks ended December 30, 2007, when compared with the same period in the prior year. Franchised coffeehouses are not included in the comparable coffeehouse net sales calculations. General and administrative expenses increased $4.9 million, or 71.5%, to $11.7 million during the thirteen weeks ended December 30, 2007, from $6.8 million during the thirteen weeks ended December 31, 2006. The increase was driven by severance costs associated with the Company's former CEO, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement costs and management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects services. Store closing expense and disposal of assets increased $3.0 million to $3.1 million during fourth quarter 2007, from $0.1 million during fourth quarter 2006. The increase in closing expense and disposal of assets is primarily attributable to asset write-off and lease termination costs associated with the closing of 9 underperforming company-owned coffeehouses during the thirteen weeks ended December 30, 2007. One company-owned coffeehouse was closed during the thirteen weeks ended December 31, 2006. Reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss was ($1.4) million during the thirteen weeks ended December 30, 2007, compared to positive EBITDA of $4.9 million during the thirteen weeks ended December 31, 2006. Year on year EBITDA was impacted by closing expense and disposal of assets of $3.1 million and severance costs associated with the Company's former CEO and litigation settlement costs of $3.0. (EBITDA is a non-GAAP measure. See EBITDA reconciliation at the end of this release). Depreciation and amortization increased $6.9 million, or 111.7%, to $13.0 million during the thirteen weeks ended December 30, 2007, from $6.1 million during the thirteen weeks ended December 31, 2006. This increase was due to accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. associated with coffeehouse asset impairments during the thirteen weeks ended December 30, 2007, and a full year's depreciation on coffeehouses opened in 2006. Coffeehouse depreciation and amortization includes $7.9 million in accelerated depreciation associated with coffeehouse asset impairments during the thirteen weeks ended December 30, 2007 as compared to $0.6 million during the thirteen weeks ended December 31, 2006. The Company's net loss for fourth quarter 2007, was $15.1 million or ($0.78) per share compared to a net loss of $2.0 million or ($0.10) per share for the same period in 2006. The increase in the net loss is attributable to closing expense and disposal of assets costs associated with the closure of nine coffeehouses, higher depreciation from impaired company-owned coffeehouses, and higher G&A expense. 2008 OUTLOOK For fiscal 2008 Caribou Coffee is projecting the following: * 5 - 10 company-owned coffeehouse openings * 30 - 40 franchise coffeehouse openings * Coffeehouse closings and closing expenses consistent with fiscal 2007 * Capital Expenditures of $10 million - $12 million CONFERENCE CALL Caribou Coffee will host a conference call, Thursday, February 14, 2008, at 4:30 p.m. (Eastern Time) to discuss these results. Hosting the call will be Rosalyn (Roz) Mallet, Chief Executive Officer, and Kaye O'Leary, Chief Financial Officer. The call will be webcast and can be accessed from the Company's website at www.cariboucoffee.com. The webcast link is in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section accessed through the About Us section. The dial in number is 1-888-256-9128 or 1-913-981-5554 for international calls. Confirmation number is 3010841. If you are unable to join the call, a replay will be available beginning at 7:30 p.m. (Eastern Time) on February 14, 2008 through 11:59 p.m. on February 21, 2008 and can be accessed by dialing 1-888-203-1112 or international callers 1-719-457-0820 and enter pin number 3010841. In addition, the webcast will be archived on the Company's website. ABOUT THE COMPANY Caribou Coffee Company, Inc., founded in 1992 and headquartered in Minneapolis, Minnesota “Minneapolis” redirects here. For other uses, see Minneapolis (disambiguation). Minneapolis (pronounced IPA: /ˌmɪniˈæpəlɪs/) is the largest city in the U.S. , is the second largest company-owned gourmet coffeehouse operator in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. based on the number of coffeehouses. As of December 30, 2007, Caribou Coffee had 484 coffeehouses, including 52 franchised locations. Caribou Coffee offers its customers high-quality gourmet coffee and espresso-based beverages, as well as specialty teas, baked goods, whole bean coffee, branded merchandise and related products. In addition, Caribou Coffee sells products to club coffeehouses, grocery coffeehouses, mass merchandisers, office coffee providers, airlines, hotels, sports and entertainment venues, college campuses and other commercial customers. In addition, Caribou Coffee licenses third parties to use the Caribou Coffee brand on quality food and merchandise items. Caribou Coffee focuses on creating a unique experience for customers through a combination of high-quality products, a comfortable and welcoming coffeehouse environment and a unique style of customer service. For more information, visit the Caribou Coffee web site at www.cariboucoffee.com. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements in this release, and other written or oral statements made by or on behalf of Caribou Coffee are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's current expectations, beliefs, plans, estimates or projections relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the future, are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Caribou Coffee brand and other factors disclosed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (1) Includes depreciation and amortization associated with the headquarters and roasting roasting: see cooking. roasting In metallurgy, usually the first step in smelting ore to extract metal. The ore is heated in the presence of an abundant flow of air to drive off moisture and, if the metal-bearing mineral is a sulfide, convert it to facility that are categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as general and administrative expenses and cost of sales and related occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal on the statement of operations See Income statement. . EBITDA is equal to net income (loss) excluding: (a) interest expense; (b) interest income; (c) depreciation and amortization; and (d) income taxes. Management believes EBITDA is useful to investors in evaluating the Company's operating performance for the following reasons: * Coffeehouse leases are generally short-term (5-10 years) and the Company must depreciate depreciate v. in accounting, to reduce the value of an asset each year theoretically on the basis that the assets (such as equipment, vehicles or structures) will eventually become obsolete, worn out and of little value. (See: depreciation) all of the cost associated with those leases on a straight-line basis over the initial lease term excluding renewal options (unless such renewal periods are reasonably assured at the inception of the lease). Caribou Coffee has opened a net 247 Company-owned coffeehouses from the beginning of fiscal 2002 through fiscal year end 2007. As a result, management believes that the depreciation expense is disproportionately dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por large when compared to the
sales from a significant percentage of the coffeehouses that are in
their initial years of operations. Also, many of the assets being
depreciated Depreciated may refer to:
Management uses EBITDA: * As measurements of operating performance because it assists them in comparing the operating performance on a consistent basis as it removes the impact of items not directly resulting from the coffeehouse operations; * For planning purposes, including the preparation of an internal annual operating budget Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. ; * To establish targets for certain management compensation matters; and * To evaluate capacity to incur and service debt, fund capital expenditures and expand the business. EBITDA as calculated by Caribou Coffee is not necessarily comparable to similarly titled measures used by other companies. In addition, EBITDA: (a) does not represent net income or cash flows from operating activities as defined by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ; (b) is not necessarily indicative of cash available to fund the Company's cash flow needs; and (c) should not be considered alternative to net income, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , cash flows from operating activities or other financial information as determined under GAAP. |
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