first_img152,869,392 ($ in millions except earnings per share) 34,234 Thirty-nine June 29, 2013 +370 bpsLower labor and overhead manufacturing costs (10,391) Total liabilities and stockholders’ equity June 23, 2012 $581.8 245Other current liabilities Thirteen weeks ended $9,789 ‘ $82,931 GREEN MOUNTAIN COFFEE ROASTERS, INC.Unaudited Consolidated Balance Sheets(Dollars in thousands, except per share data) 15,268Additional paid-in capital $193.3 $271,465 59% 25%Inventories 92.1 Non-GAAP net income per share (22)%Thirty-nine weeks net cash provided by operating activities $967,072 Thirty-nine weeks ended Cash and cash equivalents at end of period 159,364,440 13,811 GAAP (4)%Brewers & accessories 75,801 (47,845) $356.3 $270.7 $2.33 $464.5 (292,524) (214)(Loss) gain on foreign currency, net $1.70 174 270,348Other long-term liabilities 686 1,240 $352,205 4,419 Net cash provided by operating activities $0.52 June 29, 2013 77,532 $280,603 Adjustments to reconcile net income to net cash provided by operating activities: $2.33 21,393 145,999 229 59,209 Change in restricted cash 129,728 $587.9 June 29, 2013 Amortization of identifiable intangibles (2) $3,310,923 $0.78 Income tax expense $265.9 June 29, 2013 237 Cash flows from financing activities: 1,322,956 (6.0) 2,996 Amortization of identifiable intangibles (2) 777.1 32,544 $270,741 Fixed asset purchases included in accounts payable and not disbursed at the end of each period (5,068) 973,246 228,296 (9.8) Amortization of deferred financing fees June 23, 2012Cash flows from operating activities: 363,771Inventories (12)%Raw materials & supplies 2,084 5,593 580 11,475 152,647,767 Source: Green Mountain Coffee Roasters, Inc. 8.7.2013 36%Diluted income per share: 0.01 $116.3 155,459,690 June 29, 2013 (7,872) 137%Accounts receivables, net Net income per common share – diluted Preferred stock, $0.10 par value: Authorized – 1,000,000 shares; No shares issued or outstanding 952,953 Repurchase of common stock $356,962 GAAP 38%Non-GAAP 4,538 $424.0 657 $243.0 Cash and cash equivalents (190,388) * Does not sum due to rounding.(1) Commitments and contingencies June 23, 2012 132,992Income tax payable (15)%Finished goods 881 +100 bpsShift in sales mix between Keurig® Single Cup Brewers and single serve packs Non-GAAP net income attributable to GMCR Thirty-nine weeks ended 1,430,104 10,200Total stockholders’ equity 13,198 $95.6 2,540,601 ‘ 137,734 $2,912,462 Gain on sale of subsidiary $113.7 Excess tax benefits from equity-based compensation plans ‘Other long-term assets $2.33 (3,937) June 23, 2012 $124.7 $1.75 (1) Free cash flow is calculated by subtracting capital expenditures for fixed assets from net cash provided by operating activities as reported in the unaudited statement of cash flows.Business Outlook and Other Forward-Looking InformationCompany Estimates for Fourth Quarter and Fiscal Year 2013Please note that the Company’s fourth quarter and fiscal year 2012 included an additional week (53rd week). This unique calendar shift last occurred in fiscal year 2006 and is not scheduled to occur again until fiscal year 2017. The 53rd week added approximately $90.0 million in net sales; approximately $11.0 million (net of income taxes of $5.8 million) in net income; and, approximately $0.07 in diluted earnings per share in the fourth quarter and fiscal year 2012.The Company provided its outlook for its fourth quarter of fiscal year 2013, which excludes the impact of the 53rd week, as follows:Net sales growth in the range of 11% to 15% over the fourth quarter of fiscal year 2012.Non-GAAP earnings per diluted share in a range of $0.69 to $0.74, an increase of 21% to 30% over the prior year period (excluding the amortization of identifiable intangibles related to the Company’s acquisitions; and, legal and accounting expenses related to the SEC inquiry and the Company’s pending securities and stockholder derivative class action litigation).The Company revised its outlook for its fiscal year 2013, which excludes the impact of the 53rd week, as follows:Net sales growth in the range of 13% to 14% over fiscal year 2012.Non-GAAP earnings per diluted share of $3.19 to $3.24, representing a growth rate of 37% to 39% over the $2.33 earnings per diluted share in fiscal year 2012 (excluding the amortization of identifiable intangibles related to the Company’s acquisitions; any acquisition-related transaction expenses; and legal and accounting expenses related to the SEC inquiry and the Company’s pending securities and stockholder derivative class action litigation).Free cash flow in the range of $350 million to $425 million up from $76 million in fiscal year 2012.Capital investment in the range of $275 million to $325 million versus $401 million in fiscal year 2012.Over the long term, the Company expects double digit annual revenue growth, and annual earnings growth in the mid-teens.Use of Non-GAAP Financial MeasuresIn addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP operating results that exclude any gain from sale of the Filterfresh U.S.-based coffee services business; legal and accounting expenses related to the SEC inquiry and pending securities and stockholder derivative class action litigation; and non-cash acquisition-related items such as amortization of identifiable intangibles, each of which include adjustments to show the tax impact of excluding these items. These amounts are not in accordance with, or an alternative to, GAAP. The Company’s management believes that these measures provide investors with transparency by helping illustrate the underlying financial and business trends relating to the Company’s results of operations and financial condition and comparability between current and prior periods. Management uses the measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company. Please see the “GAAP to Non-GAAP Reconciliation” table that accompanies this document for a full reconciliation the Company’s GAAP to non-GAAP results.Conference Call and WebcastGreen Mountain Coffee Roasters, Inc. will be discussing these financial results with analysts and investors in a conference call and live webcast available via the Internet at 5:00 p.m. ET today, August 7, 2013. The call, along with accompanying slides, is accessible via live webcast from the events section of the Investor Relations portion of the Company’s website at http://investor.gmcr.com/events.cfm(link is external). The Company archives the latest conference call for a period of time. A replay of the conference call also will be available by telephone at (719) 457-0820, passcode 8261198 from 9:00 p.m. ET on August 7, 2013 through 9:00 p.m. ET on Monday, August 12, 2013.About Green Mountain Coffee Roasters, Inc.As a leader in specialty coffee and coffee makers, Green Mountain Coffee Roasters, Inc. (GMCR) (NASDAQ: GMCR), is recognized for its award-winning coffees, innovative Keurig® Single Cup brewing technology, and socially responsible business practices. GMCR supports local and global communities by investing in sustainably-grown coffee, and donating a portion of its pre-tax profits to social and environmental projects.GMCR routinely posts information that may be of importance to investors in the Investor Relations section of its website, www.GMCR.com(link is external), including news releases and its complete financial statements, as filed with the SEC. The Company encourages investors to consult this section of its website regularly for important information and news. Additionally, by subscribing to the Company’s automatic email news release delivery, individuals can receive news directly from GMCR as it is released.Forward-Looking StatementsCertain information contained in this filing, including statements concerning expected performance such as those relating to net sales, earnings, cost savings, acquisitions and brand marketing support, are “forward-looking statements”. Generally, these statements may be identified by the use of words such as “may,” “will,” “would,” “expect,” “should,” “anticipate,” “estimate,” “believe,” “forecast,” “intend,” “plan” and similar expressions intended to identify forward-looking statements. These statements may relate to: the expected impact of raw material costs and our pricing actions on our results of operations and gross margins, expected trends in net sales and earnings performance and other financial measures, the expected productivity and working capital improvements, the ability to maximize or successfully assert our intellectual property rights, the success of introducing and producing new product offerings, ability to attract and retain senior management, the impact of foreign exchange fluctuations, the adequacy of internally generated funds and existing sources of liquidity, such as the availability of bank financing, the expected results of operations of businesses acquired by us, our ability to issue debt or additional equity securities, our expectations regarding purchasing shares of our common stock under the existing authorizations, organizational efficiencies, and the impact of the inquiry initiated by the SEC and any related litigation or additional governmental inquiry or enforcement proceedings.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 acquisition and integration of new businesses, fluctuations in the cost and availability of raw and packaging materials, successful execution of internal changes to the organizational and leadership structures, 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 SEC.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 32,943Other current assets (208,678)Proceeds from issuance of common stock under compensation plans 0.05 Current assets: Represents the amortization of intangibles related to the Company’s acquisitions classified as general and administrative expense.(3) 21,764 GAAP 137,733 425,159 % Increase (Decrease)Single serve packs Gain on sale of subsidiary (3) 6,464 $0.46 $667.0 Net income per common share – basic $124,675 35,019Deferred income taxes, net $3,623,383 Diluted income per share: 1,396,969 11,295 Gain on sale of subsidiary, excluding transaction costs Expenses related to SEC inquiry (1) 4,538 435,414 498,352Goodwill $0.76 June 29, 2013 439,035 51,613Total current assets 15,053 $ Increase (Decrease) ‘ $3,623,383 $3,615,789 $2,912.5 Current liabilities: June 23, 2012 116,446 (19,185) 10,238 7,876 175,532 * Does not sum due to rounding. (30,720) 12,884Receivables, less uncollectible accounts and return allowances of $27,649 and $34,517 at June 29, 2013 and September 29, 2012, respectively $317.3 586,263 (2,596) 3,380 229 Thirteen weeks ended $0.46 $193,344 Thirteen weeks ended 501 Long-term debt, less current portion Liabilities and Stockholders’ Equity 466,984Capital lease and financing obligations, less current portion Capital expenditures for fixed assets 54,794Deferred income taxes, net 271,765 4 23,858 $751.7 +90 bpsChange in estimate for a charge related to a non-coffee purchase commitment 139.1 $869.2 $356,276 +130 bpsNet price realization primarily associated with single serve packs 2,852 26,311 $101.7 587,889 June 29, 2013 $17,998 June 29, 2013 $967.1 As shown in the table above, approximately 91% of consolidated third quarter fiscal year 2013 net sales were sales of Keurig® Single Cup Brewers, single serve packs, and Keurig®-related accessories, with the remainder of net sales consisting primarily of bagged coffee, fractional packs and the Canadian office coffee services business.Single Serve PacksThe 18% increase in single serve pack revenue over the prior year period was driven by a 21 percentage point increase in unit volume offset by a 2 percentage point decrease due to net price realization and a 1 percentage point decrease due to single serve pack product mix.Brewers and AccessoriesFor the quarter, 1.50 million Keurig® system brewers were sold.Of the total, GMCR sold 1.38 million Keurig® Single Cup Brewers. This number does not account for consumer returns.GMCR’s licensed brewer partners reported 118,000 brewers sold during the period.According to Company estimates, which include NPD data and retail customer reported information, the number of Keurig® system brewers purchased by U.S. consumers through retail and consumer direct channels, increased by 6% in the third fiscal quarter over the prior year period and increased 8% year-to-date.Other Products and RoyaltiesRevenues of other products and royalties declined 11% year-over-year primarily due to the continuing demand shift from traditional coffee package formats to single serve packs.RegionallySales from the U.S. (domestic) segment totaled $822.6 million in the third fiscal quarter, representing 85% of total sales for the period.U.S. business segment revenue grew by 14% driven by a 21% unit growth in single serve packs.Canada business segment revenue declined 3% primarily as a result of a 21% decrease in brewer and accessory revenue.In the third quarter of fiscal year 2013, gross margin improved 720 basis points to 42.1% from 34.9% in the prior year period. The following table quantifies the changes in gross margin period to period: 1,959,509 32%Non-GAAP 55,601 2,261,228 $2.39 $301.5 Net income attributable to GMCR Thirty-nine June 23, 2012Net sales $869,194 559,454 $0.46 Operating income June 23, 2012 $0.47 (1,006) $381.6 June 29, 2013 June 29, 2013 8,392 $869.2 $1.70 $0.76 Gross profit 83,170 303,311 Cash flows from investing activities: $144,199 Selling and operating expenses 7,746 Redeemable noncontrolling interests 12,449 GREEN MOUNTAIN COFFEE ROASTERS, INC.GAAP to Non-GAAP Reconciliation(Dollars in thousands, except per share data) General and administrative expenses Net income Thirty-nine weeks ended -120 bpsLower sales returns primarily related to Keurig® Single Cup Brewers June 23, 2012 Operating income Gain on sale of subsidiary (3) Changes in assets and liabilities: Net income attributable to noncontrolling interests 49% $2.50* 35%Net income: 4,811 58% (6,157) 47,845 Total assets $182.7 $967.1 $97.9 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) $352,205 Green Mountain Coffee Roasters, Inc, (NASDAQ: GMCR), based in Waterbury, Vermont, Wednesdayannounced its third quarter fiscal year 2013 results for the 13 weeks and 39 weeks ended June 29, 2013. The results were released after the close of business. The $0.82 per share earnings were ahead of GMCR’s own guidance ($0.71-0.78). Following a day of greater than average trading, shares were down from its opening of $81.02 and continued a downward trend in after-hours trading, to $75 shortly after the close. They fell further over-night and opened Thursday at $73.50. But extremely heavy trading first thing Thursday pushed shares back over $78. Shares have been trading near their 52-week high in recent days ($21.33 – $82.95).Third Quarter 2013 Performance Highlights QUOTESRevenue increases 11% over the prior year period with U.S. revenue up 14%GAAP EPS of $0.76 and non-GAAP EPS of $0.82 represent growth of 65% and 58%, respectively, over the prior year periodGross margin increases 720 basis points to 42.1% from 34.9% in the prior year periodFree cash flow of $126 million in the quarter, $582 million for the first nine months of fiscal year 2013″We continue to drive leverage in our business and were very pleased to deliver earnings per share growth in the quarter that exceeded our revenue growth by more than five-fold,” said Brian P. Kelley, GMCR’s President and CEO. “Free cash flow generation was also strong, bringing our fiscal year-to-date total to $582 million.””Our total revenue growth of 11% was at the low end of our expectations, driven primarily by a sales decline in Canada. Importantly, our U.S. business is very healthy, growing 14% in the period,” continued Kelley. “Ongoing consumer adoption and continued use of installed Keurig® brewers drove 21% unit growth of our Keurig Brewed® portion pack business during our third fiscal quarter.” 1,231 (2,469) Net increase in cash and cash equivalents 14%Other products and royalties Thirteen weeks ended 34,496 1,773 (32,732) 18%Brewers and accessories Change from Q3 2012 to Q3 2013Favorable green coffee costs (198,836) $1.76 June 29, 2013 564,869center_img 519,987 1,126,164 June 23, 2012 Stockholders’ equity: Non-GAAP operating income (608)Accounts payable, accrued expenses and accrued compensation costs After tax: 73,520 $356,962 $128.5 (535)Loss on disposal of fixed assets $28.8 $624.9 8,794 724 Fixed assets acquired under capital lease and financing obligations Thirteen weeks ended $73,296 Change in cash balances included in current assets held for sale $149.1 Basic income per share: $138,988 ($ in millions) 133.1 29,645Total current liabilities Amortization of identifiable intangibles (2) $251.1 $409.1 $624,922 2,103 65% 43% (513)Net cash used in financing activities 713 149,825,581 771,200Accumulated other comprehensive (loss) income 9,904 $352.9 $0.76 (167,680) Effect of exchange rate changes on cash and cash equivalents 1,589 GREEN MOUNTAIN COFFEE ROASTERS, INC.Unaudited Consolidated Statements of Cash Flows(Dollars in thousands) 51,628 293,916 224 Cash and cash equivalents at beginning of period 472,824 34,222 $3,310.9 279,577Accrued compensation costs June 23, 2012 ‘ Depreciation and amortization of fixed assets 12,989 89,221 $177.9 ‘ 34,496 Current portion of long-term debt ($ in millions) September 29, 2012Assets 3,057Accounts payable % IncreaseNet sales 1,464,560Retained earnings 222 193,344 Fixed assets, net Net change in revolving line of credit 2,799 $425,159 Expenses related to SEC inquiry (1) Provision for sales returns (6,640) 407,618 (Gain) loss on derivatives, net $3,615,789 7%Debt outstanding and capital lease and financing obligations $129.7 (34)%Packaging & other raw materials (12,449)Deferred income taxes Expenses related to SEC inquiry (1) (18,662)Income before income taxes 11% Amortization of identifiable intangibles (2) $1.70 ‘ (226,210) Receivables 136,742 227,036 0.02 $34,293 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) $90.0 565,883 34%Other 91,032 Other current assets (28,914)Provision for doubtful accounts 4,014 Other long-term assets, net $73,296 (0.10) 8,994 (48,813)Other current liabilities 107.7 (3,909)Other long-term liabilities (8,633) weeks ended $488.2 (207,907) 23,658 14%Operating income: June 23, 2012 $116,272 Amortization of intangibles $280.6 Expenses related to SEC inquiry (1) $73.3 808,076Deferred income taxes, net Interest expense 82.3 % ChangeCash and cash equivalents, including restricted cash Cost of sales 220,670 $408.4 * 34,234 (37,895)Inventories (17)%Single serve packs 183,672 58,289 $333.6 (125,681) $638.0 ‘ 12,960 Expenses related to SEC inquiry (1) Payments on capital lease and financing obligations 333,593 (4,255)Repayment of long-term debt 884.8 3,311 Thirty-nine weeks ended 121,764 $144.2 weeks ended June 29, 2013 Gain (loss) on financial instruments, net $205.7 $356,276 $425.2 (827) 39,082 768,437Income taxes receivable 125,999 70,410 $270,741 June 29, 2013 (163,949)Net income Amortization of identifiable intangibles (2) 1,759 Supplemental disclosures of cash flow information: Diluted weighted average shares outstanding $2.50 488,182 Noncash investing and financing activities: Operating income $23,461 (34,634) Note: Complete GAAP to Non-GAAP reconciliation tables provided with this release. Other $18,788 155,071,117 (187,035) (1) (67,226) Deferred compensation and stock compensation $586.3 $129,728 $0.82 1,036 Income tax receivable/payable, net Thirteen weeks ended $58,289Restricted cash and cash equivalents $44,174 73,431 11% June 23, 2012 772,235 2,068,996 GAAP operating income of 20.0% of net sales in the third quarter of fiscal year 2013 increased from 14.9% in the prior year period.Primarily due to the exclusion of the amortization of identifiable intangibles in both periods, non-GAAP operating income was 21.3% of net sales in the third quarter of fiscal year 2013 compared to 16.6% in the prior year period.The Company’s effective income tax rate was 36.6% for the third quarter of fiscal year 2013 as compared to 39.6% for the prior year period. GMCR expects its fiscal year 2013 annual effective tax rate to be approximately 37%.Diluted weighted average shares outstanding as of the end of the third quarter of fiscal year 2013 decreased to 152.9 million from 159.3 million in the prior year period in part as a result of shares repurchased over the first nine months under the Company’s previously announced share repurchase program. As of the end of the third quarter fiscal year 2013, there was $298 million remaining of the Company’s originally authorized $500 million share repurchase program.Balance Sheet & Cash Flow Highlights Net income attributable to GMCR 2,157 0.15 After tax: Unrealized loss (gain) on foreign currency, net $772.2 $82.9 5,160 (4)%Subtotal After tax: 3,032 42% $0.52 48,905 Non-GAAP net income attributable to GMCR Net cash used in investing activities (13,481) % Increase $6,691Current portion of capital lease and financing obligations $205,675 0.15 ‘ 0.01 370,445 0.05 $26.9 37%Non-GAAP 15,555 $9,227 $76.2 $271,465 Represents the amortization of intangibles related to the Company’s acquisitions classified as general and administrative expense. Thirty-nine weeks ended June 29, 2013 $464,466 Amortization of identifiable intangibles (2) $587,889 68 $116,272 GREEN MOUNTAIN COFFEE ROASTERS, INC.Unaudited Consolidated Statements of Operations(Dollars in thousands except per share data) 157,349 779,639 1,241,927 433,368 42,109 112 (11)%Total net sales 159,299,578 Diluted income per share 652 ‘ 218% (48,244) Non-GAAP operating income ‘Common stock, $0.10 par value: Authorized – 500,000,000 shares; Issued and outstanding – 150,526,269 and 152,680,855 shares at June 29, 2013 and September 29, 2012, respectively $381,572 2,889 Expenses related to SEC inquiry (1) 23,523 $0.82* 50% $153.0 (16,685) 38,458Accrued expenses ‘ 117,982 (461)Proceeds from sale of subsidiary, net of cash transferred Net income attributable to GMCR June 23, 2012 Diluted income per share Basic weighted average shares outstanding 58%Thirty-nine weeks free cash flow (1) After tax: 29,322Deferred income taxes, net +70 bps Third Quarter 2013 Financial Review (6,231)Other financing activities 944,296Intangibles, net Net Sales by Product Non-GAAP net income per share Settlement of acquisition related liabilities through release of restricted cash (27)%Coffee ‘ Other income, net $1.76 272 ‘ Excess tax benefits from equity-based compensation plans 149,307,144 +80 bpsOther items Represents the gain on the sale of Filterfresh, net of income taxes of $9.6 million. (305,532)Other investing activitieslast_img