Caribou Coffee 8-K Caribou Coffee Reports Fourth Quarter and Fiscal Year 2009 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE Caribou Coffee Company, Inc. 3900 Lakebreeze Avenue North Minneapolis, MN 55429 (763) 592-2200
Investor Relations Contact: Idalia Rodriguez 203-682-8264 ir@cariboucoffee.com

CARIBOU COFFEE REPORTS FOURTH QUARTER
AND FISCAL YEAR 2009 RESULTS

MINNEAPOLIS, MINNESOTA, February 24, 2010.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.

STOCK BUYBACK PROGRAM

The Company’s Board of Directors has authorized a stock buyback program. The current authorization is to repurchase up to $10 million of its outstanding ordinary shares. Stock purchases can be made from time to time in open market transactions depending upon market conditions. The company anticipates funding the repurchase of shares with available cash on hand.

CONFERENCE CALL

Caribou Coffee will host a conference call on February 24, 2010 at 4:30 p.m. (Eastern Time) to discuss these results. Hosting the call will be Mike Tattersfield, Chief Executive Officer, and Tim Hennessy, Chief Financial Officer. The call will be webcast and can be accessed from the Company’s website at www.cariboucoffee.com. The webcast link is in the Investor Relations section. The dial in number is 1-877-795-3648 or 1-719-325-4921 for international calls. Confirmation number is 9044558. If you are unable to join the call, a replay will be available beginning at 7:30 p.m. (Eastern Time) on February 24, 2010 through 11:59 p.m. on March 3, 2010 and can be accessed by dialing 1-888-203-1112 or international callers 1-719-457-0820 and enter pin number 9044558. In addition, the webcast will be archived on the Company’s website.

About Caribou Coffee

Caribou Coffee Company, Inc., founded in 1992 and headquartered in Minneapolis, Minnesota, is the second largest company-owned gourmet coffeehouse operator in the United States based on the number of coffeehouses. As of January 3, 2010, Caribou Coffee had 535 coffeehouses, which includes 122 franchised and licensed locations. Caribou Coffee offers its customers high-quality gourmet coffee and espresso-based beverages, as well as specialty teas, baked goods, whole bean coffee, branded merchandise and related products. In addition, Caribou Coffee sells products to club stores, grocery stores, mass merchandisers, office coffee providers, airlines, hotels, sports and entertainment venues, college campuses and online customers. Caribou Coffee focuses on creating a unique experience for customers through a combination of high-

quality products, a comfortable and welcoming coffeehouse environment and a unique style of customer service. For more information, visit the Caribou Coffee web site at www.cariboucoffee.com.

FORWARD-LOOKING STATEMENTS

Certain statements in this release, and other written or oral statements made by or on behalf of Caribou Coffee are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s current expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Caribou Coffee brand and other factors disclosed in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	January 3,			December 28,			January 3,			December 28,
	2010 (14 weeks)			2008 (13 weeks)			2010 (53 weeks)			2008 (52 weeks)
	(In thousands, except for per share amounts)
	(Unaudited)
Coffeehouse sales	$	64,587		$	60,474		$	227,224		$	229,092
Commercial and franchise sales		11,879			7,575			35,315			24,807
Net sales		76,466			68,049			262,539			253,899
Cost of sales and related occupancy costs		34,448			29,423			115,886			109,632
Operating expenses		28,013			24,528			99,498			100,309
Opening expenses		4			32			24			230
Depreciation and amortization		3,326			4,154			14,102			24,928
General and administrative expenses		7,437			7,962			27,145			29,145
Closing expense and disposal of assets		164			589			343			5,113
Operating income (loss)		3,074			1,361			5,541			(15,458	)
Other income (expense):
Interest income		9			2			26			25
Interest expense		(72	)		(95	)		(261	)		(810	)
Income (loss) before provision for income taxes		3,011			1,268			5,306			(16,243	)
Provision (benefit) for income taxes		(64	)		22			(246	)		36
Net income (loss)		3,075			1,246			5,552			(16,279	)
Less: Net income attributable to noncontrolling interest		105			(16	)		414			63
Net Income (loss) attributable to Caribou Coffee Company, Inc.	$	2,970		$	1,262		$	5,138		$	(16,342	)
Basic net income (loss) attributable to Caribou Coffee Company, Inc. common shareholders per share	$	0.15		$	0.07		$	0.26		$	(0.84	)
Diluted net income (loss) attributable to Caribou Coffee Company, Inc. common shareholders per share	$	0.15		$	0.07		$	0.26		$	(0.84	)
Basic weighted average number of shares outstanding		19,513			19,371			19,443			19,371
Diluted weighted average number of shares outstanding		20,350			19,371			20,000			19,371

CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)

CONDENSED CONSOLIDATED BALANCE SHEETS

	January 3,			December 28,
	2010			2008
	In thousands, except per share amounts
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,578		$	11,060
Accounts receivable (net of allowance for doubtful accounts of $3 and $72 at January 3, 2010 and December 28, 2008, respectively)		5,887			5,311
Other receivables (net of allowance for doubtful accounts of $128 and $76 at January 3, 2010 and December 28, 2008, respectively)		1,268			916
Income tax receivable		193			60
Inventories		13,278			10,218
Prepaid expenses and other current assets		1,546			881
Total current assets		45,750			28,446
Property and equipment, net of accumulated depreciation and amortization		47,135			60,312
Restricted cash		605			327
Other assets		237			487
Total assets	$	93,727		$	89,572
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,042		$	8,229
Accrued compensation		6,296			6,241
Accrued expenses		7,563			8,317
Deferred revenue		8,747			9,473
Total current liabilities		31,648			32,260
Asset retirement liability		1,120			1,035
Deferred rent liability		7,955			9,245
Deferred revenue		2,072			2,538
Income tax liability		156			486
Total long term liabilities		11,303			13,304
Equity:
Caribou Coffee Company, Inc. Shareholders’ equity:
Preferred stock, par value $.01, 20,000 shares authorized; no shares issued and outstanding		—			—
Common stock, par value $.01, 200,000 shares authorized; 19,814 and 19,371 shares issued and outstanding at January 3, 2010 and December 28, 2008, respectively		198			194
Additional paid-in capital		126,770			125,222
Accumulated comprehensive loss		(7	)		—
Accumulated deficit		(76,341	)		(81,479	)
Total Caribou Coffee Company, Inc. shareholders’ equity		50,620			43,937
Noncontrolling interest		156			71
Total equity		50,776			44,008
Total liabilities and equity	$	93,727		$	89,572

Coffeehouse Openings and Closings

				December 28,			January 3,			December 28,
	January 3, 2010			2008 (13			2010 (53			2008 (52
	(14 weeks)			weeks)			weeks)			weeks)
Comparable Coffeehouse Sales (Company-Owned)(1)		0.2	%(2)		(5.1	%)		(2.3%	)(2)		(3.5	%)
COFFEEHOUSE COUNT
Company-Owned:
Coffeehouses open at beginning of period		413			415			414			434
Coffeehouses opened during the period		0			0			0			7
Coffeehouses closed during the period		0			(1	)		1			(27	)
Total Company-Owned at period end		413			414			413			414
Franchised:
Coffeehouses open at beginning of period		112			80			97			52
Coffeehouses opened during the period		10			17			28			45
Coffeehouses closed during the period		1			0			3			0
Total Franchised at period end		121			97			122			97
TOTAL COFFEEHOUSES AT PERIOD END		534			511			535			511

(1)

Percentage change in comparable coffeehouse net sales compares the net sales of coffeehouses during a fiscal period to the net sales from the same coffeehouses for the equivalent period in the prior year. A coffeehouse is included in this calculation beginning in its thirteenth full fiscal month of operations. A closed coffeehouse is included in the calculation for each full month that the coffeehouse was open in both fiscal periods. Franchised coffeehouses are not included in the comparable coffeehouse net sales calculations.

(2)

Percentage change in comparable coffeehouse sales is based on an equal week comparison for the 14 weeks and 53 weeks ended January 3, 2010.

NON-GAAP FINANCIAL INFORMATION
(Unaudited, in thousands, except per share data)

The following reconciliation and non-GAAP financial information are provided to assist the reader with understanding the financial impact of the previously discussed extra week during the year. Management believes this information is relevant because the nature and magnitude of the extra week which will not reflect our on-going operating performance.

	Quarter ended January 3, 2010						Year ended January 3, 2010
					Non-GAAP						Non-GAAP
			53rd week		excluding 53rd				53rd week		excluding 53rd
	As reported		impact		week		As reported		impact		week
Coffeehouse sales	$	64,587	$	4,300	$	60,287	$	227,224	$	4,300	$	222,924
Commercial and franchise sales		11,879		830		11,049		35,315		830		34,485
Net sales		76,466		5,130		71,336		262,539		5,130		257,409
Net income		2,970		450		2,520		5,138		450		4,688
Basic and Diluted EPS	$	0.15	$	0.02	$	0.13	$	0.26	$	0.02	$	0.24

EBITDA RECONCILIATION

The following is a reconciliation of the Company’s net income/(loss) to EBITDA.

	January 3, 2010			December 28,			January 3, 2010			December 28,
	(14 weeks)			2008 (13 weeks)			(53 weeks)			2008 (52 weeks)
	(In thousands)
Net Income (loss) attributable to Caribou Coffee Company, Inc.	$	2,970		$	1,262		$	5,138		$	(16,342	)
Interest expense		72			95			261			810
Interest income		(9	)		(2	)		(26	)		(25	)
Depreciation and amortization(1)		3,820			4,752			16,180			27,138
(Benefit) provision for income taxes		(64	)		21			(246	)		36
EBITDA	$	6,789		$	6,128		$	21,307		$	11,617

(1) Includes depreciation and amortization associated with the headquarters and roasting facility that are categorized as general and administrative expenses and cost of sales and related occupancy costs on the statement of operations.

EBITDA is equal to net income (loss) excluding: (a) interest expense; (b) interest income; (c) depreciation and amortization; and (d) income taxes.

Management believes EBITDA is useful to investors in evaluating the Company’s operating performance for the following reason:

• Coffeehouse leases are generally short-term (5-10 years) and Caribou must depreciate all of the cost associated with those leases on a straight-line basis over the initial lease term excluding renewal options (unless such renewal periods are reasonably assured at the inception of the lease). The Company opened a net 210 company-operated coffeehouses from the beginning of fiscal 2003 through the end of the fourth quarter of fiscal 2009. As a result, management believes depreciation expense is disproportionately large when compared to the sales from a significant percentage of the coffeehouses that are in their initial years of operations. Also, many of the assets being depreciated have actual useful lives that exceed the initial lease term excluding renewal options. Consequently, management believes that adjusting for depreciation and amortization is useful for evaluating the operating performance of the coffeehouses.

     Management uses EBITDA:

• As a measurement of operating performance because it assists management in comparing its operating performance on a consistent basis as it removes the impact of items not directly resulting from coffeehouse operations;

• For planning purposes, including the preparation of our internal annual operating budget;

• To establish targets for certain management compensation matters; and

• To evaluate the Company’s capacity to incur and service debt, fund capital expenditures and expand the business.

EBITDA as calculated by Caribou Coffee is not necessarily comparable to similarly titled measures used by other companies. In addition, EBITDA: (a) does not represent net income or cash flows from operating activities as defined by GAAP; (b) is not necessarily indicative of cash available to fund cash flow needs; and (c) should not be considered an alternative to net income, operating income, cash flows from operating activities or Caribou Coffee’s other financial information as determined under GAAP.

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