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Green Mountain Coffee Roasters, Inc.’s First Quarter Fiscal 2013 Revenue Grows 16% Over Prior Year With Free Cash Flow Of $254 Million

These and other forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by external factors such as damage to our reputation or brand name, business interruptions due to natural disasters or similar unexpected events, actions of competitors, customer relationships and financial condition, the ability to achieve expected cost savings and margin improvements, the successful acquisition and integration of new businesses, fluctuations in the cost and availability of raw and packaging materials, changes in regulatory requirements, and global economic conditions generally which would include the availability of financing, interest, inflation rates and investment return on retirement plan assets, as well as foreign currency fluctuations, risks associated with our information technology systems, the threat of data breaches or cyber-attacks, and other risks described in our filings with the Securities and Exchange Commission.

Actual results could differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise publicly, any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

GMCR-C

 
GREEN MOUNTAIN COFFEE ROASTERS, INC.
Unaudited Consolidated Balance Sheets
(Dollars in thousands)
   

December 29, 2012

September 29, 2012

Assets
Current assets:
Cash and cash equivalents $ 98,525 $ 58,289
Restricted cash and cash equivalents 5 12,884
Receivables, less uncollectible accounts and return allowances of $59,225 and $34,517 at December 29, 2012 and September 29, 2012, respectively 432,692 363,771
Inventories 587,321 768,437
Income taxes receivable 11,916 32,943
Other current assets 44,534 35,019
Deferred income taxes, net   51,417   51,613
Total current assets 1,226,410 1,322,956
 
Fixed assets, net 969,297 944,296
Intangibles, net 481,600 498,352
Goodwill 802,337 808,076
Deferred income taxes, net 35
Other long-term assets   39,361   42,109
 
Total assets $ 3,519,040 $ 3,615,789
 
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt $ 8,247 $ 6,691
Current portion of capital lease and financing obligations 3,167 3,057
Accounts payable 282,342 279,577
Accrued compensation costs 38,893 38,458
Accrued expenses 161,414 132,992
Income tax payable 16,438 29,322
Deferred income taxes, net 241 245
Other current liabilities   24,123   29,645
Total current liabilities 534,865 519,987
 
Long-term debt, less current portion 342,385 466,984
Capital lease and financing obligations, less current portion 60,536 54,794
Deferred income taxes, net 271,775 270,348
Other long-term liabilities 26,987 32,544
 
Commitments and contingencies
 
Redeemable noncontrolling interests 9,855 9,904
 
Stockholders’ equity:
Preferred stock, $0.10 par value: Authorized - 1,000,000 shares; No shares issued or outstanding
Common stock, $0.10 par value: Authorized - 500,000,000 shares; Issued and outstanding - 148,675,810 and 152,680,855 shares at December 29, 2012 and September 29, 2012, respectively 14,867 15,268
Additional paid-in capital 1,376,699 1,464,560
Retained earnings 878,703 771,200
Accumulated other comprehensive income   2,368   10,200
Total stockholders’ equity   2,272,637   2,261,228
 
Total liabilities and stockholders’ equity $ 3,519,040 $ 3,615,789
 

 
GREEN MOUNTAIN COFFEE ROASTERS, INC.
Unaudited Consolidated Statements of Operations
(Dollars in thousands except per share data)
   
Thirteen Thirteen
weeks ended weeks ended

December 29, 2012

December 24, 2011

Net sales $ 1,339,059 $ 1,158,216
Cost of sales   919,896     821,612  
Gross profit 419,163 336,604
 
 
Selling and operating expenses 171,845 141,358
General and administrative expenses   64,877     49,408  
Operating income 182,441 145,838
 
Other income, net 188 691
Gain (loss) on financial instruments, net 1,104 (1,134 )
(Loss) gain on foreign currency, net (2,679 ) 2,686
Gain on sale of subsidiary 26,311
Interest expense   (5,730 )   (6,463 )
Income before income taxes 175,324 167,929
 
Income tax expense   (67,379 )   (63,247 )
Net income 107,945 104,682
 
Net income attributable to noncontrolling interests   362     268  
 
Net income attributable to GMCR $ 107,583   $ 104,414  
 
Basic income per share:
Basic weighted average shares outstanding 149,317,597 154,704,471
Net income per common share - basic $ 0.72 $ 0.67
 
Diluted income per share:
Diluted weighted average shares outstanding 152,708,807 159,367,829
Net income per common share - diluted $ 0.70 $ 0.66
 

 
GREEN MOUNTAIN COFFEE ROASTERS, INC.
Unaudited Consolidated Statements of Cash Flows
(Dollars in thousands)
   
Thirteen Thirteen
weeks ended weeks ended
December 29, 2012 December 24, 2011
Cash flows from operating activities:
Net income $ 107,945 $ 104,682
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 43,810 25,611
Amortization of intangibles 11,535 11,453
Amortization of deferred financing fees 1,513 1,513
Unrealized loss (gain) on foreign currency, net 2,640 (2,050 )
Loss on disposal of fixed assets 16 232
Gain on sale of subsidiary, excluding transaction costs (28,914 )
Provision for doubtful accounts 668 1,422
Provision for sales returns 44,809 54,630
(Gain) loss on derivatives, net (755 ) 1,383
Excess tax benefits from equity-based compensation plans (2,975 ) (3,908 )
Deferred income taxes 2,934 5,636
Deferred compensation and stock compensation 6,165 3,606
Other 363
Changes in assets and liabilities:
Receivables (115,282 ) (155,553 )
Inventories 179,767 67,048
Income tax receivable/payable, net 11,475 49,953
Other current assets (9,635 ) (5,952 )
Other long-term assets, net 1,205 (365 )
Accounts payable, accrued expenses and accrued compensation costs 53,389 2,038
Other current liabilities 3,514 (144 )
Other long-term liabilities   (5,959 )   (225 )
Net cash provided by operating activities 337,142 132,096
 
Cash flows from investing activities:
Change in restricted cash 3,561 581
Proceeds from sale of subsidiary, net of cash transferred 145,169
Capital expenditures for fixed assets (83,458 ) (101,848 )
Other investing activities   100     368  
Net cash (used in) provided by investing activities (79,797 ) 44,270
 
Cash flows from financing activities:
Net change in revolving line of credit (120,000 ) (113,074 )
Proceeds from issuance of common stock under compensation plans 1,127 811
Repurchase of common stock (98,530 )
Excess tax benefits from equity-based compensation plans 2,975 3,908
Payments on capital lease and financing obligations (755 ) (622 )
Repayment of long-term debt (1,584 ) (1,616 )
Other financing activities   (244 )   (49 )
Net cash used in financing activities (217,011 ) (110,642 )
 
Change in cash balances included in current assets held for sale 5,160
 
Effect of exchange rate changes on cash and cash equivalents (98 ) 238
 
Net increase in cash and cash equivalents 40,236 71,122
Cash and cash equivalents at beginning of period   58,289     12,989  
Cash and cash equivalents at end of period $ 98,525   $ 84,111  
 
Supplemental disclosures of cash flow information:
Fixed asset purchases included in accounts payable and not disbursed at the end of each period $ 36,770 $ 33,463
Noncash investing and financing activities:
Fixed assets acquired under capital lease and financing obligations $ 6,607 $ 10,974
Settlement of acquisition related liabilities through release of restricted cash $ 9,227 $ 18,788
 

 
GREEN MOUNTAIN COFFEE ROASTERS, INC.
GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share data)
   
Thirteen weeks ended
December 29, 2012 December 24, 2011
Operating income $ 182,441 $ 145,838
Expenses related to SEC inquiry (1) 720 669
Amortization of identifiable intangibles (2)   11,535   11,453  
Non-GAAP operating income $ 194,696 $ 157,960  
 
 
 
Thirteen weeks ended
December 29, 2012 December 24, 2011
Net income attributable to GMCR $ 107,583 $ 104,414
After tax:
Expenses related to SEC inquiry (1) 444 417
Amortization of identifiable intangibles (2) 7,951 7,849
Gain on sale of subsidiary (3)     (16,685 )
Non-GAAP net income $ 115,978 $ 95,995  
 
 
 
Thirteen weeks ended
December 29, 2012 December 24, 2011
Diluted income per share $ 0.70 $ 0.66
After tax:
Expenses related to SEC inquiry (1) 0.00 0.00
Amortization of identifiable intangibles (2) 0.05 0.05
Gain on sale of subsidiary (3)     (0.10 )
Non-GAAP net income per share $ 0.76 * $ 0.60   *
 
* Does not sum due to rounding.

(1) Represents legal and accounting expenses related to the SEC inquiry and pending securities and stockholder derivative class action litigation classified as general and administrative expense.(2) Represents the amortization of intangibles related to the Company’s acquisitions classified as general and administrative expense.(3) Represents the gain on the sale of Filterfresh, net of income taxes of $9.6 million.

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