EMERYVILLE, Calif., Aug. 2 /PRNewswire-FirstCall/ -- Peet's Coffee
& Tea, Inc. (NASDAQ:PEET) today announced its second quarter
2007 results for the period ended July 1, 2007, which included 13
weeks. (Logo:
http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO) In this
release, the Company: -- Reports net revenue of $60.1 million, an
increase of 21.0% versus last year; -- Reports diluted earnings per
share of $0.13 and net income of $1.8 million; -- Announces that it
expects to add new distribution to at least 1,000 new grocery
customers through its direct store delivery sales system this year,
primarily in the eastern U.S.; -- Reports that eight new stores
opened in the quarter and the Company is on track to open 30 new
stores in the year; and -- Announces that its new roasting facility
in Alameda, Calif., is now fully operational and the transition
from its Emeryville plant to the new facility is complete. For the
13 weeks ended July 1, 2007, net revenue increased 21.0% to $60.1
million from $49.7 million for the corresponding period of fiscal
2006. Reported net income for the quarter was $1.8 million or $0.13
per share, compared to $1.9 million or $0.13 per share last year,
as restated. "We are pleased with our progress this quarter," said
Patrick O'Dea, president and chief executive officer of Peet's
Coffee & Tea, Inc. "Sales growth in all our businesses was in
line with our expectations, our grocery business is strengthening
across the board, with new distribution in the eastern U.S.
performing very well, and we are more than half way to our
objective of opening 30 new stores this year." Financial and
Operating Summary Retail net revenue increased 22.0% to $41.0
million for the 13 weeks ended July 1, 2007 from $33.6 million for
the corresponding period of fiscal 2006. The increase was primarily
attributable to new retail stores opened in the last 12 months and
growth in existing stores. The Company opened eight new retail
locations in the quarter. Specialty net revenue increased 18.8% to
$19.1 million, compared to $16.1 million for the corresponding
quarter last year. Within the specialty business, grocery grew
26.1%, food service and office sales were up 16.1% and the home
delivery business registered 7.3% growth compared to the same
period last year. Cost of sales and related occupancy costs
increased to 47.2% of total net revenue compared to 46.5% for the
corresponding quarter last year. The increase over last year is due
to higher milk and green coffee costs, higher grocery promotions
and new retail stores with higher costs on lower initial sales,
partially offset by a retail price increase in November 2006.
Operating expenses as a percent of net revenue increased slightly
to 35.5% of total net revenue compared to 35.4% for the
corresponding quarter last year. The favorable impact of retail
pricing increases and overhead leverage was offset by higher retail
operating expenses due to new stores and higher grocery promotions
and other start up costs as the Company expanded in the East.
General and administrative expenses increased to $5.4 million
compared to $4.6 million for the same period last year primarily
due to investments in additional headcount for growth, offset by
lower marketing spending. Depreciation and amortization expenses
increased to $2.6 million, compared to $2.1 million for the
corresponding quarter last year. The increase was primarily due to
the opening of 32 new retail stores in the last 12 months. The
impact of the financial statement restatement on the quarter ended
July 2, 2006 increased net income by $144,000 ($0.01 per diluted
share) as discussed in the 2006 Form 10-K. The Company ended the
quarter with cash and cash equivalents plus investments of $22.8
million. Looking ahead, the Company is forecasting sales growth in
the 20% range for the full year, with minor quarter-to-quarter
variations. Peet's Coffee & Tea, Inc. Q2 2007 Conference Call
The Company will report its second quarter 2007 earnings results
via conference call on Thursday, August 2, 2007. The teleconference
call will begin at 2:00 p.m. PT/5:00 p.m. ET. The teleconference
can be accessed by calling 1-800-395-0708, using access code
8870433. The call will be simultaneously webcast on Peet's website
at http://www.peets.com/. A replay of the teleconference will be
available today at 5:00 p.m. PT/ 8:00 p.m. ET through 8:59 p.m.
PT/11:59 p.m. ET on Sunday, August 12, 2007 at 1-888-203-1112 or
1-719-457-0820, using access code 8870433. It will also be archived
at http://investor.peets.com/Medialist.cfm through August 2, 2008.
ABOUT PEET'S COFFEE & TEA, INC. Peet's Coffee & Tea, Inc.,
(PEET), the leading super-premium coffee company, is dedicated to
artisan roasting, distributing and marketing the highest quality
coffee available to coffee lovers throughout the United States.
Founded in 1966 in Berkeley, Calif., Peet's is committed to
strategically growing its business while maintaining its unique
culture and focus on quality and customer satisfaction. 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 2007 sales growth and new retail store
opening estimates. 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, 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 January 1, 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 STATEMENTS OF
INCOME (Unaudited, in thousands, except per share amounts) Thirteen
weeks Twenty-six weeks ended ended July 1, July 2, July 1, July 2,
2007 2006 2007 2006 (As restated) (As restated) Retail stores
$40,963 $33,581 $79,986 $66,981 Specialty sales 19,140 16,108
37,630 32,415 Net revenue 60,103 49,689 117,616 99,396 Cost of
sales and related occupancy expenses 28,374 23,093 55,564 45,908
Operating expenses 21,366 17,581 41,179 34,687 General and
administrative expenses 5,357 4,575 11,300 9,412 Depreciation and
amortization expenses 2,586 2,095 5,316 4,077 Total costs and
expenses from operations 57,683 47,344 113,359 94,084 Income from
operations 2,420 2,345 4,257 5,312 Interest income 463 702 888
1,379 Income before income taxes 2,883 3,047 5,145 6,691 Income tax
provision 1,081 1,140 1,927 2,532 Net income $1,802 $1,907 $3,218
$4,159 Net income per share: Basic $0.13 $0.14 $0.24 $0.30 Diluted
$0.13 $0.13 $0.23 $0.29 Shares used in calculation of net income
per share: Basic 13,663 13,840 13,589 13,866 Diluted 14,077 14,549
14,003 14,579 PEET'S COFFEE & TEA, INC. CONSOLIDATED BALANCE
SHEETS (Unaudited, in thousands, except share amounts) July 1,
December 31, 2007 2006 ASSETS Current assets Cash and cash
equivalents $2,297 $7,692 Short-term marketable securities 14,103
19,511 Accounts receivable, net 6,757 6,838 Inventories 25,164
19,533 Deferred income taxes - current 1,888 1,888 Prepaid expenses
and other 5,972 3,852 Total current assets 56,181 59,314 Long-term
marketable securities 6,387 5,989 Property and equipment, net
93,234 82,447 Deferred income taxes - non current 1,315 1,315 Other
assets, net 3,824 3,940 Total assets $160,941 $153,005 LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and
other accrued liabilities $8,436 $11,046 Accrued compensation and
benefits 7,580 6,389 Deferred revenue 3,848 4,625 Total current
liabilities 19,864 22,060 Deferred lease credits and other
long-term liabilities 4,109 3,506 Total liabilities 23,973 25,566
Shareholders' equity Common stock, no par value; authorized
50,000,000 shares; issued and outstanding: 13,757,000 and
13,516,000 shares 99,566 93,246 Accumulated other comprehensive
loss, net of tax (24) (15) Retained earnings 37,426 34,208 Total
shareholders' equity 136,968 127,439 Total liabilities and
shareholders' equity $160,941 $153,005 Stock-based Compensation
Expense The following table illustrates the details of stock-based
compensation recognized under SFAS 123R reported in the
consolidated statements of income (in thousands, except per share
amounts.) 13 weeks ended 26 weeks ended Jul. 1, Jul. 2, Jul. 1,
Jul. 2, 2007 2006 2007 2006 (As (As restated) restated) Cost of
sales and related occupancy expenses $61 $160 $114 $297 Operating
expenses 241 373 479 738 General and administrative expenses 428
671 852 1,216 Total 730 1,204 1,445 2,251 Tax impact (298) (491)
(590) (918) Stock-based compensation, net of tax $432 $713 $855
$1,333 Impact on diluted net income per share $0.03 $0.05 $0.06
$0.09 Presentation and reconciliation of Non-GAAP Financial
Measures The following table reconciles non-GAAP net income per
share and net income, excluding the after tax costs associated with
the Company's stock option review and restatement, to GAAP net
income per share and net income. The Company is presenting these
non-GAAP financial measures to illustrate the effect on net income
and net income per share if the Company had not incurred the costs
of the review of its stock option granting practices. The Company
uses such non-GAAP financial measures to analyze and compare the
performance of its core business. Non-GAAP financial information is
not prepared under a comprehensive set of accounting rules and
should be considered supplemental to, and not a substitute for or
superior to, financial measures calculated in accordance with GAAP.
(In thousands) 13 weeks ended 26 weeks ended Jul. 1, Jul. 2, Jul.
1, Jul. 2, 2007 2006 2007 2006 Net income as reported $1,802 $1,907
$3,218 $4,159 Stock option review professional fees 64 - 1,040 -
Income tax benefit (24) - (389) - Net income, excluding fees $1,842
$1,907 $3,869 $4,159 After tax impact of review professional fees
$40 - $651 - Diluted net income per share: Net income, as reported
$0.13 $0.13 $0.23 $0.29 Stock option review professional fees - -
0.07 - Income tax benefit - - (0.03) - Diluted net income,
excluding fees $0.13 $0.13 $0.27 $0.29 After tax impact of review
professional fees* $- - $0.05 - * per share data may not sum due to
rounding http://www.newscom.com/cgi-bin/prnh/20070606/AQW139LOGO
http://photoarchive.ap.org/ DATASOURCE: Peet's Coffee & Tea,
Inc. CONTACT: media, Patsy Barich of Double-Forte, +1-415-848-8104,
, for Peet's Coffee & Tea, Inc.; or investors, Susie Phillips
of Peet's Coffee & Tea, Inc., +1-510-594-2196, Web site:
http://www.peets.com/
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