Green Mountain Coffee, Inc. Reports Fiscal 2002 First Quarter Results; Net Income Up 23.4%.Business EditorsWATERBURY, Vt.--(BUSINESS WIRE)--Feb. 14, 2002 Green Mountain Coffee, Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : GMCR GMCR Green Mountain Coffee Roasters, Inc GMCR Grants Management Common Rule ) today reported quarterly sales and earnings for the Company's fiscal first quarter of 2002, the sixteen-week period ended January 19, 2002. Total coffee pounds shipped for the quarter increased 12.4% to 4,255,000 pounds for the sixteen weeks ended January 19, 2002, compared to 3,784,000 pounds for the sixteen weeks ended January 20, 2001. 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 increased 4.7% year-over-year to $32,357,000 compared to $30,905,000 for the prior year quarter. The difference between coffee pounds growth and dollar sales growth was due primarily to changes in sales mix sales mix See product mix. , created largely by the successful expansion of the Company's business with Exxon Mobil Corporation Exxon Mobil Corporation U.S.-based oil and gas company formed in 1999 through the merger of Exxon Corp. and Mobil Corp. It has investments and operations in petroleum and natural gas, coal, nuclear fuels, chemicals, and ores. convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. (ExxonMobil.) A new agreement with ExxonMobil, effective since February 2001, involves lower coffee sales prices and a reduction in their direct purchases of accessories such as cups and lids, offset by lower delivery and ordering costs Ordering Costs Costs that occur when an order is placed regardless of the size of the order. for Green Mountain Coffee. The Company's strongest growth was in the convenience store and supermarket channels, where coffee pounds shipped increased 17.8% and 16.5%, respectively. In the convenience store channel, sales to ExxonMobil, and to its distributor, McLane Company McLane Company, Inc. is the nation's largest wholesale-distributor of consumer packaged goods to the convenience store trade and other retail channels. It is also a major foodservice distributor to the quickservice restaurant industry. , represented approximately 74% of the channel's growth. In the supermarket channel, approximately 64% of the pound growth stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from the addition of sales to two customers: Kings Super Markets, which was announced in October of 2001, and Fred Meyer Supermarkets, which became a customer as a result of last year's acquisition of Frontier(R) Organic Coffee. Sales growth with two existing customers, Shaw's and Hannaford Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) ., also contributed substantially to supermarket channel growth for the quarter. By contrast, overall growth in the office coffee service (OCS OCS - Object Compatibility Standard ) channel was more impacted by the softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. economy, and experienced a year-over-year increase of only 3.1% in coffee pounds shipped. Green Mountain Coffee's gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improved 4.2 percentage points to 44.7% of sales, compared to 40.5% of sales in the year ago period. The Company benefited from lower year-over-year green coffee commodity prices and from a higher percentage of its total sales being coffee compared to allied products, such as cups and lids. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of sales were 32.8%, compared to 30.0% in the prior year quarter, primarily due to higher marketing and sales expenses, offset, in part, by a reduction in certain discretionary personnel expenses. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved 1.4 percentage points to 11.9% of sales compared to 10.5% of sales a year ago, and the Company achieved a 23.4% year-over-year increase in net income. Earnings per share were $0.31 for the sixteen weeks ended January 19, 2002 compared to $0.26 for the sixteen weeks ended January 20, 2001. Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, "Today we are operating in a more difficult economy, where I believe Green Mountain Coffee's focus on superior execution - in terms of providing consistently outstanding customer service and support as well as the more operational facets of our business - is even more of a competitive advantage. In addition, our multi-channel business model gives us the flexibility to adapt to the changing opportunities created by an economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. or resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. . We have announced some major initiatives that reflect this long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. approach to continue profitably growing our business: our expansion with two supermarket chains, Kings Super Markets in October and, announced just last week, Price Chopper Price Chopper may refer to:
Robert D. Britt britt n. Variant of brit. Noun 1. britt - the young of a herring or sprat or similar fish brit young fish - a fish that is young 2. , Vice President of Finance and Treasurer, said, "This past quarter, Green Mountain Coffee once again delivered very good earnings growth to its stockholders. However, while our sales and coffee pounds shipped growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ramped up from the most recent previous quarter - our fiscal fourth quarter of 2001 - our top line growth is still considerably below what we are seeking to achieve. With the exception of one large office coffee distributor for which sales, we believe, were temporarily limited due to a number of issues, the OCS channel would have grown 7.8% and, in fact, showed several pockets of strong growth. That said, the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the office coffee service channel due to the economy has been greater than we had expected. In addition, so far this year our sales to the smaller, more regional and local businesses - such as non-national convenience stores, non-chain supermarkets, specialty retail stores, and restaurants - have not increased as much as we had anticipated. Taken together, these smaller businesses represent over a third of our sales, and they play an important role in our growth. We have taken steps to improve the leadership, training, incentives and customer programs for our geographic sales force who sell to these customers, and hope to see more growth from them by at least the latter part of this fiscal year. Britt continued, "Taking all these factors into account, we now anticipate full-year fiscal 2002 growth in coffee pounds shipped will be in a range of 11% to13%, and dollar sales growth in the range of 5% to 7%. We continue to expect growth to be stronger in the third and fourth quarters of this fiscal year, than in the first two quarters. In fact, we currently anticipate that our year-over-year growth in the second fiscal quarter in coffee pounds shipped will be in the range of 2% to 4%, and we believe our dollar sales growth could actually be down, year-over-year, by 3% to 5%. Our expectations reflect, in part, the initial ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of sales to McLane Distribution in last year's second and third fiscal quarters as part of our then new agreement with ExxonMobil convenience stores." Britt said, "Looking forward, the Company now expects full-year earnings per share to be in the range of $0.93 to $0.98 prior to the impact, if any, of any equity method income or loss it may need to record related to our anticipated purchase of additional Keurig, Inc., equity. This guidance compares to Green Mountain Coffee's previous statements that we expected earnings per share for fiscal 2002 to be in the range of $0.95 to $1.00." Mr. Britt added, "Green Mountain Coffee is taking steps to reduce certain discretionary expenses, where possible, in order to preserve earnings growth for the year. For instance, the Company has moved back the schedule for its production capacity expansion program." Britt concluded, "In addition to strong, reported earnings growth, the Company's cash flow and balance sheet continue to reflect the health of the business. Earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before interest, taxes, depreciation and amortization grew 17.3% to $5,054,000 from $4,310,000 in the first quarter of fiscal 2001. The Company's days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying also improved in the first quarter to 31.1 days down from 37.5 days at the end of the fourth quarter of fiscal 2001." Britt indicated there would be further discussion of first quarter financial results and the Company's fiscal year 2002 expectations on its conference call later this morning. Green Mountain Coffee, Inc. is a leader in the specialty coffee industry. The Company roasts high-quality arabica a·rab·i·ca n. 1. a. A species of coffee, Coffea arabica, originating in Ethiopia and widely cultivated for its high-quality, commercially valuable seeds. b. The beanlike seed of this plant. 2. coffees and offers over 75 coffee selections including single-origins, estates, certified See certification. organics, Fair Trade, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters Green Mountain Coffee Roasters is a publicly-traded brand of coffee based at Waterbury in the U.S. state of Vermont. The brand specializes in organic, fair-trade, and specialty gourmet coffees. Keurig is wholly owned subsidiary of Green Mountain Coffee Roasters, Inc. (R) and Frontier(R) Organic 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 operation and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. website (http://www.GreenMountainCoffee.com) with secure online ordering for customers from its Waterbury, Vermont Waterbury is a town in Washington County in central Vermont. It is also the name of a village within that town. Economy Industry Waterbury is the location of Ben & Jerry's Ice Cream, whose factory tours have become Vermont's most popular tourist attraction. headquarters. The Company seeks to make the world a better place for present and future generations by operating in an environmentally and socially conscientious con·sci·en·tious adj. 1. Guided by or in accordance with the dictates of conscience; principled: a conscientious decision to speak out about injustice. 2. manner. Certain statements contained herein are not based on historical fact and are "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. " within the meaning of the applicable securities laws and regulations. Owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the uncertainties inherent in forward-looking statements, actual results could differ materially. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, fluctuations in availability and cost of high-quality green coffee precipitated by the current world over supply and resulting historically low commodity prices, organizational changes, the impact of a weaker economy, competition, funding availability, business conditions in the coffee industry and food industry in general, the impact of the loss of one or more major customers, delays in the timing of adding new locations with existing customers, Green Mountain's level of success in continuing to attract new customers, Keurig Inc.'s ability to continue to grow in the office coffee service market and success in entering the home brewer market, variances from budgeted sales mix and growth rate, weather and special or unusual events, as well as other risks as described more fully in the Company's filings with the Securities and Exchange Commission. Green Mountain Coffee 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, February 14, 2002, at 10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy and will be available via live Web cast on the Company's website at www.GreenMountainCoffee.com and on Street Events at www.StreetEvents.com, as well as AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. , 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 444096, from 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on February 14th, through midnight on Wednesday February 27, 2002. Green Mountain Coffee urges coffee lovers, investors, and everyone else who is interested in the Company and its news to sign up for automatic e-mail receipt of its press releases. To take ad-vantage of this free service, go to the Company's website at http://www.GreenMountainCoffee.com, click onto the Investor Services page, then click on "Press Releases via E-Mail" to sign up.
GREEN MOUNTAIN COFFEE, INC.
Consolidated Statement of Operations
(Dollars in thousands except per share data)
Unaudited
Sixteen Sixteen
weeks ended weeks ended
01/19/2002 01/20/2001
Net sales $ 32,357 $ 30,905
Cost of sales 17,892 18,385
Gross profit 14,465 12,520
Selling and operating expenses 8,503 7,395
General and administrative expenses 2,100 1,887
Operating income 3,862 3,238
Other (expense) income (11) 13
Interest expense (77) (198)
Income before income taxes 3,774 3,053
Income tax expense (1,528) (1,233)
Net income $ 2,246 $ 1,820
Basic income per share:
Weighted average shares outstanding 6,634,397 6,263,522
Net income $ 0.34 $ 0.29
Diluted income per share:
Weighted average shares outstanding 7,282,797 7,073,712
Net income $ 0.31 $ 0.26
GREEN MOUNTAIN COFFEE, INC.
Consolidated Balance Sheet
(Dollars in thousands)
January 19, September 29,
2002 2001
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 881 $ 979
Receivables, less allowances of
$428 at January 19, 2002 and
$492 at September 29, 2001 8,994 9,142
Inventories 5,497 6,059
Other current assets 839 524
Income tax receivable - 743
Deferred income taxes, net 614 738
Total current assets 16,825 18,185
Fixed assets, net 15,875 14,397
Goodwill and other intangibles 1,521 1,546
Other long-term assets 2,123 295
Deferred income taxes, net 94 73
$ 36,438 $ 34,496
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt $ 196 $ 195
Accounts payable 5,852 6,099
Accrued compensation costs 1,229 1,682
Income tax payable 804 -
Accrued expenses 1,467 1,664
Total current liabilities 9,548 9,640
Long-term debt 192 256
Long-term line of credit 4,970 6,000
Commitments and contingencies
Stockholders' equity:
Common stock, $0.10 par value:
Authorized - 20,000,000 shares;
Issued - 7,863,012 and 7,804,647
shares at January 19, 2002 and
September 29, 2001, respectively 786 780
Additional paid-in capital 18,829 18,390
Retained earnings 10,924 8,678
Other comprehensive (loss) (223) (219)
ESOP unallocated shares, at cost -
56,746 and 73,800 shares at
January 19, 2002 and September 29,
2001, respectively (1,537) (2,000)
Treasury shares, at cost -
1,138,273 and 1,137,506 shares at
January 19, 2002 and September 29,
2001, respectively (7,051) (7,029)
Total stockholders' equity 21,728 18,600
$36,438 $ 34,496
GREEN MOUNTAIN COFFEE, INC.
Total Company Coffee Pounds Shipped by Sales Channel - Unaudited
(As a Percent of Total Coffee Pounds Shipped)
Q1 16 wks. Q1 16 wks. Q1 Q1
Channel ended ended Y/Y lb. % Y/Y lb.
1/19/02 1/20/01 Increase Increase
Supermarkets 26.3% 25.3% 158,000 16.5%
Convenience Stores 27.9% 26.6% 179,000 17.8%
Other Retail 3.7% 2.3% 75,000 87.2%
Restaurants 8.5% 9.8% (9,000) -2.4%
Office Coffee Service
Distributors 22.6% 24.7% 29,000 3.1%
Other Food Service 7.3% 8.5% (11,000) -3.4%
Consumer Direct 3.7% 2.8% 50,000 46.7%
Totals 4,255,000 3,784,000 471,000 12.4%
Note: Certain prior year customer channel classifications were
reclassified to conform to current year classifications.
Wholesale Coffee Pounds Shipped by Geographic Region - Unaudited
(As a Percentage of Total Wholesale Coffee Pounds Shipped)
Q1 16 wks. Q1 16 wks. Q1 Q1
Region ended ended Y/Y lb. %Y/Y lb.
01/19/02 01/20/01 Increase Increase
Northern New England 30.8% 32.1% 85,000 7.2%
Southern New England 22.1% 25.2% (22,000) -2.4%
Mid-Atlantic 22.7% 22.3% 111,000 13.5%
South Atlantic 7.1% 7.4% 22,000 8.1%
South Central 4.6% 1.0% 154,000 416.2%
Midwest 1.9% 2.6% (20,000) -20.6%
West 2.6% 1.7% 41,000 64.1%
Multi-Regional 7.4% 6.5% 63,000 26.4%
International 0.8% 1.2% (13,000) -29.5%
Totals 4,098,000 3,677,000 421,000 11.4%
Note 1: Excludes coffee pounds shipped in the Consumer Direct channel.
Note 2: The allocation by region of coffee pounds shipped to certain
McLane Company, Inc. warehouses for distribution to ExxonMobil
convenience stores has been estimated.
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