Green Mountain Coffee, Inc. (NASDAQ: GMCR) today reported record quarterly sales and earnings for the Company’s fiscal first quarter of 2001, the sixteen-week period ended January 20, 2001.
Net sales increased 24.9% to $30,905,000 for the sixteen weeks ended January 20, 2001, compared to $24,742,000 for the sixteen weeks ended January 15, 2000. The area of the highest growth was the office coffee service channel, where sales of single-serve K-cup® coffee packages for the Keurig® brewing system drove the Company’s year-over-year coffee pounds sold growth to 36.0% in the first quarter. Year-over-year coffee pounds sold in the supermarket and convenience store channels were also strong with quarterly growth rates of 18.4% and 15.9%, respectively.
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Total coffee pounds sold for the quarter increased 16.7% year-over-year to 3,784,000 pounds. The difference in growth between the year-over-year increase in net sales and the increase in coffee pounds sold was due primarily to the impact of sales of the single-cup Keurig line of coffees, whose sales price per coffee pound sold is greater than the Company’s traditional product line, and sales of non-coffee products such as branded cups, the Monte Verde(TM) line of powdered hot cappuccino products, and packaged food and other gift items in the consumer direct channel.
Green Mountain Coffee’s gross profit for the quarter was 40.5% of sales compared to 40.6% of sales in the year ago period, as the Company continued to benefit from brand strength and low green coffee commodity prices, offset by changes in sales mix. The Company continued to focus on achieving increased operating efficiencies and, as a result, improved overall operating expenses by 1.3 percentage points, to 30.0% of sales in the quarter ended January 20, 2001, compared to 31.3% in the year-ago first quarter. Operating margins improved to 10.5% of sales, compared to 9.3% of sales a year ago, and the Company achieved a 40.0% year-over-year increase in net income.
Earnings per share were $0.26 for the sixteen weeks ended January 20, 2001 compared to $0.18 for the sixteen weeks ended January 15, 2000. Green Mountain Coffee’s profitability was further enhanced, on a per share basis, by the Company’s stock repurchases in fiscal 1999 and 2000, which reduced outstanding stock by approximately 15%. All earnings per share numbers reported here are on a 2-for-1 split-adjusted basis, reflecting the 100% Common Stock dividend paid January 11, 2001.
Robert P. Stiller, Chairman, President, and Chief Executive Officer of Green Mountain Coffee said, “At Green Mountain Coffee we have an engaged, passionate organization seeking excellence in all that we do. We place a real emphasis on providing exceptional service and support to our customers. We also care about, and work hard to be, a responsible corporate citizen by doing the right thing for the environment, for coffee growers and for local communities as well as for our stockholders. I believe our strong financial performance is an affirmation of this approach to doing business and of our team of employees whose energy, enthusiasm, and many contributions make it possible.”
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By GlobalDataRobert D. Britt, Chief Financial Officer, said, “Our sales growth rate is even more impressive when you consider that Green Mountain Coffee was introduced into 84 new Exxon Mobil Corporation convenience stores during the first quarter, behind the planned implementation of closer to 200 stores by quarter-end.” Britt added that while implementation of the Company’s new agreement with ExxonMobil was delayed, it is now underway and coffee is being shipped to ExxonMobil’s third party distributor as previously planned. Green Mountain Coffee now expects its coffee to be featured in approximately 500 new ExxonMobil stores by year-end, including the 84 that were opened during the first quarter, for a grand total of approximately 1,700 stores by late September 2001.
Expanding further on the Company’s strong performance, Britt said, “It was an outstanding quarter for the Company from a cash flow perspective, as well as growth and profitability. Our earnings before interest, taxes, depreciation and amortization was $4.3 million, compared to $3.2 million for the year-ago first quarter.” The Company’s cash flow had the added benefit of approximately $546,000 in tax benefits due to non-qualifying dispositions of options and employee stock purchase plan shares which flow through the Company’s balance sheet as an increase directly to paid-in capital rather than being reflected as a reduction in the income tax expense line in the statement of operations.
Green Mountain Coffee, Inc. is a leader in the specialty coffee industry and has been recognized by Forbes Magazine as one of the “Best 200 Small Companies in America.” The Company roasts high-quality arabica coffees and offers over 60 varieties including single-origin, estate, certified organic, Fair Trade, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters® brand.
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 Web site (http://www.GreenMountainCoffee.com) with secure on-line ordering for customers from its Waterbury, Vermont headquarters. The Company seeks to make the world a better place for present and future generations by operating in an environmentally and socially conscientious manner.
Certain statements contained herein are not based on historical fact and are “forward-looking statements” within the meaning of the applicable securities laws and regulations. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those set forth in forward-looking statements. 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 green coffee, competition and other business conditions in the coffee industry and more generally in the food and beverage industry, the impact of the loss of one or more major customers, delays in the timing of adding new locations with existing customers, the Company’s level of success in continuing to attract new customers, economic conditions, variances from budgeted sales mix and growth rate, customer acceptance of the Company’s new products, the impact of a tighter job market, weather and special or unusual events, as well as other risk factors as described more fully in the Company’s filings with the Securities and Exchange Commission.
GREEN MOUNTAIN COFFEE, INC.
Consolidated Statement of Operations
(Dollars in thousands except per share data)
Unaudited
Sixteen Sixteen
weeks ended weeks ended
01/20/01 01/15/00
Net sales:
Wholesale $ 29,035 $ 23,214
Consumer Direct 1,870 1,528
Net sales 30,905 24,742
Cost of sales 18,385 14,696
Gross profit 12,520 10,046
Selling and operating expenses 7,395 6,049
General and administrative expenses 1,887 1,684
Operating income 3,238 2,313
Other income 13 (4)
Interest expense (198) (141)
Income before income taxes 3,053 2,168
Income tax expense (1,233) (868)
Net income $ 1,820 $ 1,300
Basic income per share:
Weighted average
shares outstanding 6,263,522 6,928,210
Net income $ 0.29 $ 0.19
Diluted income per share:
Weighted average
shares outstanding 7,104,337 7,085,336
Net income $ 0.26 $ 0.18
GREEN MOUNTAIN COFFEE, INC.
Consolidated Balance Sheet
(Dollars in thousands)
January 20, September 30,
2001 2000
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 383 $ 559
Receivables, less allowances
of $325 at January 20, 2001
and $320 at September 30, 2000 9,506 8,454
Inventories 5,168 5,350
Other current assets 786 510
Deferred income taxes, net 267 182
Total current assets 16,110 15,055
Fixed assets, net 11,585 11,274
Other long-term assets 345 348
Deferred income taxes, net 350 497
$ 28,390 $ 27,174
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt $ 129 $ 135
Accounts payable 5,552 6,125
Accrued compensation costs 1,305 1,381
Accrued expenses 535 614
Accrued losses and other
costs of discontinued
operations, net 119 119
Total current liabilities 7,640 8,374
Long-term debt 243 283
Long-term line of credit 7,705 8,500
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.10 par value:
Authorized – 10,000,000 shares;
Issued – 7,476,405 and 7,342,010
shares at January 20, 2001 and
September 30, 2000, respectively 747 734
Additional paid-in capital 14,573 13,534
Retained earnings 4,598 2,778
Other comprehensive (loss) (87) —
Treasury shares, at cost –
1,137,506 shares at
January 20, 2001 and
September 30, 2000 (7,029) (7,029)
Total stockholders’ equity 12,802 10,017
$ 28,390 $ 27,174
GREEN MOUNTAIN COFFEE, INC.
Total Company Coffee Pounds Sold by Sales Channel
(As a Percent of Total Coffee Pounds Sold)
Unaudited
Q1 16 wks. Q1 16 wks. Q1 Q1
Channel ended ended Y/Y lb. % Y/Y lb.
1/20/01 1/15/00 Increase Increase
Supermarkets 25.3% 24.9% 149,000 18.4%
Convenience Stores 26.6% 26.8% 138,000 15.9%
Other Retail 2.3% 2.6% 3,000 3.6%
Restaurants 9.8% 11.5% (2,000) -0.5%
Office Coffee Service
Distributors 24.7% 21.2% 247,000 36.0%
Other Food Service 8.5% 9.8% 4,000 1.3%
Consumer Direct 2.8% 3.2% 3,000 2.9%
Totals 3,784,000 3,242,000 542,000 16.7%
Note: Certain prior year customer channel classifications were
reclassified to conform to current year classifications.
Wholesale Coffee Pounds Sold by Geographic Region
(As a Percentage of Total Wholesale Coffee Pounds Sold)
Unaudited
Q1 16 wks. Q1 16 wks. Q1 Q1
Region ended ended Y/Y lb. %Y/Y lb.
01/20/01 01/15/00 Increase Increase
Northern New England 32.1% 34.7% 90,000 8.3%
Southern New England 25.2% 24.3% 164,000 21.5%
Mid-Atlantic (NY, NJ & PA) 22.3% 21.1% 159,000 24.1%
South Atlantic 7.4% 5.9% 86,000 46.5%
Midwest 2.6% 2.2% 27,000 38.6%
South Central & West 2.7% 2.0% 38,000 60.3%
Multi-Regional 6.5% 9.0% (43,000) 22.6%
International 1.2% 0.8% 18,000 69.2%
Totals 3,677,000 3,138,000 539,000 17.2%
Note: Excludes coffee pounds sold in the Consumer Direct channel.
