Caribou Coffee Reports Fourth Quarter and Fiscal Year 2009 Results

Caribou Coffee Company, Inc. (NASDAQ:CBOU), the second largest company-owned gourmet coffeehouse operator in the United States based on the number of coffeehouses, today reported financial results for the fourth quarter and fiscal 2009 (period ended January 3, 2010). Fiscal year 2009 includes 53 weeks and the Company’s fourth quarter includes 14 weeks compared to 52 weeks and 13 weeks, respectively for 2008.

HIGHLIGHTS FOR THE FOURTH QUARTER OF 2009:

* Net sales increased 12.4% compared to the fourth quarter of 2008. On a comparative 13-week basis, net sales increased 4.8% compared to the fourth quarter of 2008.

* Comparable coffeehouse store sales for the quarter were up 0.2% compared to the same period in the prior year.

* Commercial sales for the quarter increased 76.6% compared to the fourth quarter of 2008. On a comparative 13-week basis, commercial sales increased 64.3% compared to the prior year quarter.

* Net income was $3.0 million in the quarter compared to $1.3 million in the fourth quarter of 2008.

* Earnings per diluted share were $0.15 for the fourth quarter compared to $0.07 per share in the fourth quarter of 2008.

HIGHLIGHTS FOR FISCAL 2009:

* Net sales increased 3.4% to $262.5 million in fiscal 2009 compared to $253.9 million in fiscal 2008.

* Net income was $5.1 million compared to a loss of $16.3 million in fiscal 2008.

* Earnings per diluted share were $0.26 compared to a loss of $0.84 in fiscal 2008.

Speaking on behalf of the Company, Michael Tattersfield, the Company’s President and CEO commented, “This quarter concludes a successful year of positive revenue and earnings growth for Caribou Coffee. These results highlight our strategy to diversify and strengthen our business model by expanding beyond our retail coffeehouse business into a multi-channel branded coffee company. With a successful growth strategy in place, strong cash flow and secure financial position, we are confident in our ability to deliver shareholder value for our investors and rewarding experiences for our team members and customers.”

FOURTH QUARTER 2009 RESULTS

Net sales increased $8.4 million, or 12.4%, to $76.5 million for the quarter ended January 3, 2010 from $68.0 million for the quarter ended December 28, 2008. When calculated on a comparative 13-week basis, consolidated sales increased 4.8% compared to the fourth quarter of 2008.

* Coffeehouse sales were $64.6 million in the fourth quarter 2009 compared to $60.5 million in the fourth quarter of 2008, an increase of 6.8%. Comparable coffeehouse sales in the fourth quarter of 2009 were up 0.2% compared to the same period in fiscal 2008.

* Commercial sales were $9.6 million in the fourth quarter of 2009 compared to $5.4 million in the fourth quarter of 2008, an increase of 76.6% as a result of higher sales to existing and new customers. When calculated on a comparative 13-week basis, commercial sales increased 64.3% compared to the fourth quarter of 2008.

* Franchise sales were $2.3 million in the fourth quarter of 2009 compared to $2.1 million in the fourth quarter of 2008. When calculated on a comparative 13-week basis, franchise sales were flat compared to the fourth quarter of 2008.

Cost of sales and related occupancy costs in the fourth quarter of 2009 was $34.4 million. As a percentage of sales, cost of sales and related occupancy costs were 45.1% in the fourth quarter of 2009 compared to 43.2% in the fourth quarter of 2008. This increase is due to an overall mix change with a higher percentage of sales coming from our commercial segment.

Operating expenses in the fourth quarter of 2009 were $28.0 million. As a percentage of revenue, operating costs were 36.6%, up from 36.0% in the same period of the prior year. This increase was the result of higher investments being made in product innovation, marketing and brand building initiatives.

General and administrative expenses were $7.4 million during the fourth quarter of 2009. As a percentage of sales, general and administrative expenses were 9.7% in the fourth quarter of 2009 compared to 11.7% in the fourth quarter of 2008. The decrease is the result of lowering the cost structure while leveraging across the higher sales volumes.

EBITDA was $6.8 million during the fourth quarter of 2009, compared to EBITDA of $6.1 million during the same period in 2008, an improvement of 10.8%. The year-over-year EBITDA increase was primarily due to improved performance within our retail coffeehouses and continued growth in the commercial and franchise segments. (EBITDA is a non-GAAP measure. See EBITDA reconciliation at the end of this release).

Depreciation and amortization decreased $0.8 million, or 20.0%, to $3.3 million during the fourth quarter of 2009, from $4.2 million during the same period in the prior year. This was due to a lower depreciable asset base resulting from reduced capital spending in the current year.

The net income attributable to Caribou Coffee Company for the fourth quarter of 2009 was $3.0 million or $0.15 per diluted share compared to a net income of $1.3 million or $0.07 per share for the same period in 2008. The additional week in the period accounted for approximately $0.02 per share in 2009. The company ended the quarter with $23.6 million in cash and cash equivalents and no long term debt. The company recently entered into a new $25 million credit facility, which includes a $15 million commitment with an option to increase the commitment by another $10 million under terms to be mutually agreed.


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