EMERYVILLE, Calif.--(BUSINESS WIRE)--Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) today announced its second quarter results for the fiscal period ended July 1, 2012, which included 13 weeks.
In this release, the Company:
• Reports diluted earnings per share of $0.30
• Reports net revenue growth of 5%
Consolidated Financial and Operating Summary
For the 13 weeks ended July 1, 2012, net revenue increased 5% to $95.4 million from $90.6 million for the corresponding period of fiscal 2011. Diluted earnings per share was $0.30, compared to $0.38 for the corresponding period of fiscal 2011.
Retail net revenue increased 4% to $55.4 million for the 13 weeks ended July 1, 2012, from $53.4 million for the corresponding period last year. The increase was driven by a higher average transaction and an $874,000 sales tax refund related to resolution of a sales tax computation interpretation with the taxing authorities. The Company did not open any stores in the quarter and ended the quarter with 197 stores.
Specialty net revenue increased 7% to $40.0 million for the 13 weeks ended July 1, 2012, compared to $37.3 million for the corresponding period last year. Within specialty, grocery sales were up 5% compared to the corresponding period last year, foodservice and office sales grew 15%, and home delivery sales grew 3%. Grocery revenue growth was impacted by an increase in competitive pricing pressure during the period.
Cost of sales and related occupancy expenses increased as a percent of total net revenue to 50.4% for the quarter, compared to 49.2% for the corresponding period last year. The increase was caused by higher green coffee costs, which were 16% higher per pound than the same quarter last year. This increase was partially offset by price increases across all channels and lower shipping expenses.
Operating expenses were 31.2% of net revenue, compared to 31.1% for the corresponding period last year. A favorable mix shift towards the specialty business and lower legal fees were substantially offset by higher healthcare costs, payment card processing fees, and investments in overhead expenses.
General and administrative expenses increased as a percent of net revenue to 7.8%, compared to 6.6% for the corresponding period last year. General and administrative expenses increased to $7.4 million from $6.0 million for the corresponding period last year, primarily due to higher payroll and marketing costs.
Depreciation and amortization expenses decreased as a percent of net revenue to 4.1%, compared to 4.3% for the corresponding period last year. Depreciation and amortization expenses were $3.9 million for the quarter, consistent with the corresponding period last year.
Cash and cash equivalents plus short-term and long-term marketable securities were $38.9 million at the end of the quarter, compared to $35.4 million at the end of fiscal 2011.
About Peet’s Coffee & Tea, Inc.
Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) is the premier specialty coffee and tea company in the United States. The company was founded in 1966 in Berkeley, Calif. by Alfred Peet. Peet was an early tea authority who later became widely recognized as the grandfather of specialty coffee in the U.S. Today, Peet’s Coffee & Tea 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 through 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 www.peets.com.
| PEET’S COFFEE & TEA, INC. | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited, in thousands, except share amounts) | ||||||
| July 1, | January 1, | |||||
|
2012 |
2012 |
|||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 32,428 | $ | 30,755 | ||
| Short-term marketable securities | 5,791 | 3,800 | ||||
| Accounts receivable, net | 19,595 | 20,522 | ||||
| Inventories | 68,417 | 54,265 | ||||
| Deferred income taxes - current | 5,041 | 5,041 | ||||
| Prepaid expenses and other | 10,240 | 9,368 | ||||
| Total current assets | 141,512 | 123,751 | ||||
| Long-term marketable securities | 634 | 888 | ||||
| Property, plant and equipment, net | 85,458 | 89,304 | ||||
| Other assets, net | 2,261 | 1,328 | ||||
| Total assets | $ | 229,865 | $ | 215,271 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and other accrued liabilities | $ | 13,348 | $ | 11,547 | ||
| Accrued compensation and benefits | 9,132 | 10,283 | ||||
| Deferred revenue | 7,524 | 7,382 | ||||
| Total current liabilities | 30,004 | 29,212 | ||||
| Deferred income taxes - non current | 372 | 367 | ||||
| Deferred lease credits | 6,463 | 6,668 | ||||
| Other long-term liabilities | 2,396 | 1,068 | ||||
| Total liabilities | 39,235 | 37,315 | ||||
| Shareholders' equity | ||||||
|
Common stock, no par value; authorized 50,000,000 shares; issued and outstanding: 13,245,000 and 13,136,000 shares |
74,940 | 69,664 | ||||
| Accumulated other comprehensive income | 3 | 2 | ||||
| Retained earnings | 115,687 | 108,290 | ||||
| Total shareholders' equity | 190,630 | 177,956 | ||||
| Total liabilities and shareholders' equity | $ | 229,865 | $ | 215,271 | ||
| PEET’S COFFEE & TEA, INC. | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||
| July 1, | July 3, | July 1, | July 3, | |||||||||
|
2012 |
2011 |
2012 |
2011 |
|||||||||
| Retail stores | $ | 55,424 | $ | 53,351 | $ | 109,539 | $ | 105,440 | ||||
| Specialty sales | 39,968 | 37,265 | 80,627 | 73,648 | ||||||||
| Net revenue | 95,392 | 90,616 | 190,166 | 179,088 | ||||||||
| Cost of sales and related occupancy expenses | 48,064 | 44,558 | 96,420 | 85,778 | ||||||||
| Operating expenses | 29,734 | 28,146 | 59,560 | 56,030 | ||||||||
| Litigation related expenses | - | 38 | - | 79 | ||||||||
| General and administrative expenses | 7,428 | 6,011 | 14,810 | 12,779 | ||||||||
| Depreciation and amortization expenses | 3,930 | 3,881 | 7,872 | 7,800 | ||||||||
| Total costs and expenses from operations | 89,156 | 82,634 | 178,662 | 162,466 | ||||||||
| Income from operations | 6,236 | 7,982 | 11,504 | 16,622 | ||||||||
| Interest income, net | 16 | 7 | 22 | 18 | ||||||||
| Income before income taxes | 6,252 | 7,989 | 11,526 | 16,640 | ||||||||
| Income tax provision | 2,239 | 2,878 | 4,129 | 6,016 | ||||||||
| Net income | $ | 4,013 | $ | 5,111 | $ | 7,397 | $ | 10,624 | ||||
| Net income per share: | ||||||||||||
| Basic | $ | 0.30 | $ | 0.40 | $ | 0.56 | $ | 0.82 | ||||
| Diluted | $ | 0.30 | $ | 0.38 | $ | 0.55 | $ | 0.79 | ||||
| Shares used in calculation of net income per share: | ||||||||||||
| Basic | 13,260 | 12,892 | 13,215 | 13,000 | ||||||||
| Diluted | 13,547 | 13,309 | 13,515 | 13,414 | ||||||||
| PEET’S COFFEE & TEA, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited, in thousands) | ||||||||
| Twenty-six weeks ended | ||||||||
| July 1, | July 3, | |||||||
|
2012 |
2011 |
|||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 7,397 | $ | 10,624 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 8,932 | 8,956 | ||||||
| Amortization of interest purchased | 150 | 197 | ||||||
| Stock-based compensation | 2,303 | 2,035 | ||||||
| Excess tax benefit from exercise of stock options | (1,696 | ) | (5,763 | ) | ||||
| Tax benefit from exercise of stock options | 1,612 | 5,224 | ||||||
| Loss on disposition of assets and asset impairment | 140 | 325 | ||||||
| Deferred income taxes | 5 | 67 | ||||||
| Changes in other assets and liabilities: | ||||||||
| Accounts receivable, net | 927 | (197 | ) | |||||
| Inventories | (14,152 | ) | (13,946 | ) | ||||
| Prepaid expenses and other current assets | (872 | ) | (1,147 | ) | ||||
| Other assets | (1,238 | ) | (2 | ) | ||||
| Accounts payable, accrued liabilities and deferred revenue | 593 | (3,021 | ) | |||||
| Deferred lease credits and other long-term liabilities | 1,123 | (379 | ) | |||||
| Net cash provided by operating activities | 5,224 | 2,973 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (5,021 | ) | (4,851 | ) | ||||
| Proceeds from sales of property, plant and equipment | ||||||||
| Changes in restricted investments | 299 | 798 | ||||||
| Proceeds from sales and maturities of marketable securities | 4,056 | 3,013 | ||||||
| Purchases of marketable securities | (5,942 | ) | (8,384 | ) | ||||
| Net cash used in investing activities | (6,608 | ) | (9,424 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from issuance of common stock | 4,060 | 15,023 | ||||||
| Purchase of common stock | (2,699 | ) | (39,529 | ) | ||||
| Excess tax benefit from exercise of stock options | 1,696 | 5,763 | ||||||
| Net cash provided by/(used in) financing activities | 3,057 | (18,743 | ) | |||||
| Increase/(decrease) in cash and cash equivalents | 1,673 | (25,194 | ) | |||||
| Cash and cash equivalents, beginning of period | 30,755 | 44,629 | ||||||
| Cash and cash equivalents, end of period | $ | 32,428 | $ | 19,435 | ||||
| Non-cash investing activities: | ||||||||
| Capital expenditures incurred, but not yet paid | $ | 444 | $ | 449 | ||||
| Other cash flow information: | ||||||||
| Cash paid for income taxes | 2,807 | 2,896 | ||||||
| PEET’S COFFEE & TEA, INC. | ||||||||||||||||||||||
| SEGMENT REPORTING | ||||||||||||||||||||||
| (Unaudited, 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 July 1, 2012 | ||||||||||||||||||||||
| Net revenue | $ | 55,424 | 100.0 | % | $ | 39,968 | 100.0 | % | $ | 95,392 | 100.0 | % | ||||||||||
| Cost of sales and occupancy | 24,807 | 44.8 | % | 23,257 | 58.2 | % | 48,064 | 50.4 | % | |||||||||||||
| Operating expenses | 21,663 | 39.1 | % | 8,071 | 20.2 | % | 29,734 | 31.2 | % | |||||||||||||
| Depreciation and amortization | 2,782 | 5.0 | % | 354 | 0.9 | % | $ | 794 | 3,930 | 4.1 | % | |||||||||||
| Segment operating income | 6,172 | 11.1 | % | 8,286 | 20.7 | % | (8,222 | ) | 6,236 | 6.5 | % | |||||||||||
| For the thirteen weeks ended July 3, 2011 | ||||||||||||||||||||||
| Net revenue | $ | 53,351 | 100.0 | % | $ | 37,265 | 100.0 | % | $ | 90,616 | 100.0 | % | ||||||||||
| Cost of sales and occupancy | 23,692 | 44.4 | % | 20,866 | 56.0 | % | 44,558 | 49.2 | % | |||||||||||||
| Operating expenses | 20,387 | 38.2 | % | 7,759 | 20.8 | % | 28,146 | 31.1 | % | |||||||||||||
| Litigation related expenses | 38 | 0.1 | % | - | 38 | 0.0 | % | |||||||||||||||
| Depreciation and amortization | 2,731 | 5.1 | % | 433 | 1.2 | % | $ | 717 | 3,881 | 4.3 | % | |||||||||||
| Segment operating income | 6,503 | 12.2 | % | 8,207 | 22.0 | % | (6,728 | ) | 7,982 | 8.8 | % | |||||||||||
| For the twenty-six weeks ended July 1, 2012 | ||||||||||||||||||||||
| Net revenue | $ | 109,539 | 100.0 | % | $ | 80,627 | 100.0 | % | $ | 190,166 | 100.0 | % | ||||||||||
| Cost of sales and occupancy | 49,323 | 45.0 | % | 47,097 | 58.4 | % | 96,420 | 50.7 | % | |||||||||||||
| Operating expenses | 42,728 | 39.0 | % | 16,832 | 20.9 | % | 59,560 | 31.3 | % | |||||||||||||
| Depreciation and amortization | 5,571 | 5.1 | % | 721 | 0.9 | % | $ | 1,580 | 7,872 | 4.1 | % | |||||||||||
| Segment operating income | 11,917 | 10.9 | % | 15,977 | 19.8 | % | (16,390 | ) | 11,504 | 6.0 | % | |||||||||||
| For the twenty-six weeks ended July 3, 2011 | ||||||||||||||||||||||
| Net revenue | $ | 105,440 | 100.0 | % | $ | 73,648 | 100.0 | % | $ | 179,088 | 100.0 | % | ||||||||||
| Cost of sales and occupancy | 45,936 | 43.6 | % | 39,842 | 54.1 | % | 85,778 | 47.9 | % | |||||||||||||
| Operating expenses | 40,866 | 38.8 | % | 15,164 | 20.6 | % | 56,030 | 31.3 | % | |||||||||||||
| Litigation related expenses | 79 | 0.1 | % | - | 0.0 | % | 79 | 0.0 | % | |||||||||||||
| Depreciation and amortization | 5,468 | 5.2 | % | 877 | 1.2 | % | $ | 1,455 | 7,800 | 4.4 | % | |||||||||||
| Segment operating income | 13,091 | 12.4 | % | 17,765 | 24.1 | % | (14,234 | ) | 16,622 | 9.3 | % | |||||||||||