EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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MEDIA CONTACTS: INVESTOR CONTACT:
Julie Kim/ Roger Villareal Billie Anderson
Weber Shandwick Peet's Coffee & Tea, Inc.
415.248.3419/415.248.3425 510.594.2100
jkim@webershandwick.com banderson@peets.com
rvillareal@webershandwick.com
PEET'S COFFEE & TEA, INC. REPORTS FOURTH QUARTER
AND FULL-YEAR 2003 RESULTS; ANNOUNCES SHARE REPURCHASE PROGRAM
EMERYVILLE, Calif. - February 12, 2004 - Peet's Coffee & Tea, Inc. (NASDAQ:
PEET) today announced its fourth quarter and annual results for the period ended
December 28, 2003, which included 13-weeks and 52-weeks, respectively.
Total revenue for the quarter increased 17.5 percent to $34.5 million, compared
to $29.4 million for the same period last year. Total revenue for the year
increased 15.1 percent to $119.8 million compared to $104.1 million for the same
period last year.
Retail Store revenue for the quarter increased 12.4 percent to $24.0 million.
Three new stores opened during the quarter bringing the total openings for the
year to 10. The retail business also continued to benefit from the redesign of
the beverage menu late in the second quarter, which improved drink sales.
Retail Store revenue for the year increased 9.5 percent to $85.8 million,
primarily driven by the 15 new stores added in the last 17 months.
Specialty Sales revenue for the quarter increased 31.1 percent to $10.5 million.
Within Specialty Sales, the grocery business continues to grow rapidly, up 92
percent over last year. At the end of the quarter, Peet's was in more than
2,700 grocery stores, or approximately 1,000 more than the same period last
year. The foodservice business also registered a healthy 35 percent growth,
benefiting from new customers added earlier in the year and late last year.
Direct sales grew 7 percent, and the office business grew 8 percent during the
quarter. Year-to-date, Specialty Sales revenue increased 32.1 percent to $34.1
million, with grocery up 115 percent, foodservice up 55 percent, direct up 5
percent and office virtually flat.
Net income for the fourth quarter of 2003 was $2.7 million, or $0.20 per share,
compared to $2.2 million, or $0.17 per share for the fourth quarter of 2002.
Net income for the full year was $5.2 million, or $0.39 per share, compared to
$4.7 million, or $0.40 per share last year. These results include a charge of
$2.1 million, net of tax, recorded in the third quarter to settle an outstanding
lawsuit and severance costs. Excluding the charge, net income was $7.3 million,
up 56 percent over last year. Average diluted shares outstanding for the year
increased 13.8 percent to 13.2 million.
"We are very pleased with our fourth quarter performance. The execution of our
holiday programs and the success of our Holiday Blend coffee gave our business a
boost in all channels," said Patrick O'Dea, president and chief executive
officer of Peet's Coffee & Tea, Inc. "We are also proud of our accomplishments
during the year. Our strategies to grow our business were executed extremely
well. We successfully rolled out a direct store delivery system for grocery,
launched a significantly improved Web site and doubled the pace of
our retail expansion from last year to open a total of 10 stores. Additionally,
we continued to add the people and systems required for us to accelerate Peet's
growth successfully."
SHARE REPURCHASE
The Company also announced today that the Board of Directors has authorized the
Company to repurchase up to 1 million shares of Peet's common stock. O'Dea
added, "In the past 12 months the Company's cash and investments have increased
$11 million to $59 million. The repurchase of some of our shares is a good
investment of available funds and still provides us with ample resources to fund
our growth strategies in the future." The repurchases will be made from time to
time on the open market at prevailing market prices or in negotiated
transactions off the market. The repurchases are expected to continue through
the end of the current fiscal year unless extended or shortened by the Board of
Directors.
PEET'S COFFEE & TEA, INC. Q4 AND 2003 YEAR-END CONFERENCE CALL
The Company will report its fourth quarter 2003 and full-year earnings results
via conference call on Thursday, February 12, 2004. The teleconference call
will begin at 2 p.m. PT/5 p.m. ET. The call will be simultaneously webcast on
Peet's Web site at www.peets.com.
The teleconference can be accessed by calling 1-800-361-0912. A replay of the
teleconference will be available at 5 p.m. PT/8 p.m. ET at 1-888-203-1112, using
access code 536968. The recording will be archived through midnight EDT on
February 19, 2004. It will also be available at http://investor.peets.com
through February 12, 2005.
ABOUT PEET'S COFFEE & TEA, INC.
Founded in Berkeley, Calif. in 1966, Peet's Coffee & Tea, Inc. is a specialty
coffee roaster and marketer of fresh, deep-roasted whole bean coffee for home
and office enjoyment. Peet's fresh-roasted coffee, hand-selected tea and
related items are sold in several distribution channels including specialty
grocery and gourmet food stores, online and mail order, office and restaurant
accounts and 75 company-owned stores in seven states. Peet's is committed to
strategically growing its business and to maintaining a unique culture and focus
on customer satisfaction. For information about Peet's Coffee & Tea, Inc.,
visit www.peets.com or call 1-800-999-2132. Peet's Coffee & Tea, Inc. shares
are traded under the symbol PEET.
###
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, including those relating to the Company's
intention to repurchase its shares under a share repurchase program. Because of
the uncertainties inherent in these forward-looking statements, the Company's
actual results could differ materially from those set forth in forward-looking
statements. The Company's estimates relating to the amount and timing of stock
repurchases under its repurchase program are based on management's current
estimates of liquidity needs, financial results and growth plans. Actual future
liquidity needs, financial results and growth plans may differ materially
depending on a variety of factors including but not limited to, risks arising
from accounting adjustments; 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 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 December 29, 2002.
Peet's Coffee & Tea, Inc.
Condensed Consolidated Statements of Income Data
(Unaudited, in thousands)
Thirteen Thirteen Fifty-two Fifty-two
weeks ended weeks ended weeks ended weeks ended
12/28/2003 12/29/2002 12/28/2003 12/29/2002
Retail stores. . . . . . . . . . . . . . . . . . $ 23,971 $ 21,324 $ 85,765 $ 78,300
Specialty sales. . . . . . . . . . . . . . . . . 10,534 8,038 34,051 25,773
----------- ----------- ----------- -----------
NET REVENUE. . . . . . . . . . . . . . . . . . . 34,505 29,362 119,816 104,073
COGS & related occupancy expenses. . . . . . . . 15,664 13,427 54,961 48,146
Operating expenses . . . . . . . . . . . . . . . 10,568 9,121 38,751 33,221
Marketing & advertising expenses . . . . . . . . 1,168 1,123 4,525 4,554
General & administrative expenses. . . . . . . . 1,471 1,298 9,193 6,732
Depreciation & amortization expenses . . . . . . 1,343 1,178 4,890 4,568
----------- ----------- ----------- -----------
Total operating cost & expenses . . . . . . 30,214 26,147 112,320 97,221
OPERATING INCOME . . . . . . . . . . . . . . . . 4,291 3,215 7,496 6,852
Interest income, net . . . . . . . . . . . . . . 191 233 1,163 540
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAX . . . . . . . . . . . . 4,482 3,448 8,659 7,392
Income tax provision . . . . . . . . . . . . . . 1,802 1,276 3,481 2,735
----------- ----------- ----------- -----------
NET INCOME . . . . . . . . . . . . . . . . . . . $ 2,680 $ 2,172 $ 5,178 $ 4,657
=========== =========== =========== ===========
NET INCOME PER SHARE:
Basic. . . . . . . . . . . . . . . . . . . . . . $ 0.21 $ 0.18 $ 0.41 $ 0.43
Diluted. . . . . . . . . . . . . . . . . . . . . $ 0.20 $ 0.17 $ 0.39 $ 0.40
SHARES USED IN CALCULATING NET INCOME PER SHARE:
Basic. . . . . . . . . . . . . . . . . . . . . . 12,939 12,063 12,589 10,919
Diluted. . . . . . . . . . . . . . . . . . . . . 13,495 12,689 13,236 11,627
Peet's Coffee & Tea, Inc.
Condensed Consolidated Balance Sheet Data
(Unaudited, in thousands)
December 28, 2003 December 29, 2002
ASSETS
Current Assets
Cash & cash equivalents . . . . . . . . . . . $ 42,591 $ 19,672
Accounts receivable . . . . . . . . . . . . . 3,115 2,210
Income tax receivable . . . . . . . . . . . . 340 1,117
Inventories . . . . . . . . . . . . . . . . . 10,720 11,007
Prepaid expenses and other. . . . . . . . . . 2,111 1,803
------------------ ------------------
Total Current Assets . . . . . . . . . . 58,877 35,809
Property and equipment, net . . . . . . . . . 32,322 27,929
Intangibles and other assets, net . . . . . . 2,684 3,305
Long Term U.S. government securities. . . . . 16,572 28,102
------------------ ------------------
Total Assets . . . . . . . . . . . . . . $ 110,455 $ 95,145
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable. . . . . . . . . . . . . . . $ 4,770 $ 6,463
Accrued compensation and benefits . . . . . . 4,157 3,741
Other accrued liabilities . . . . . . . . . . 5,462 2,638
Current portion of long-term borrowings . . . 3 468
------------------ ------------------
Total Current Liabilities. . . . . . . . 14,392 13,310
Long-term borrowings, less current portion. . - 424
Deferred income taxes . . . . . . . . . . . . 10 181
Deferred lease credits. . . . . . . . . . . . 819 726
------------------ ------------------
Total Liabilities. . . . . . . . . . . . 15,221 14,641
------------------ ------------------
Shareholders' Equity
Common stock. . . . . . . . . . . . . . . . . 87,808 78,014
Other comprehensive income. . . . . . . . . . 23 265
Retained earnings . . . . . . . . . . . . . . 7,403 2,225
------------------ ------------------
Total Shareholders' Equity . . . . . . . 95,234 80,504
------------------ ------------------
Total Liabilities & Shareholders' Equity $ 110,455 $ 95,145
================== ==================
Peet's Coffee & Tea, Inc.
Reconciliation of Net Income excluding Special Charges
(Unaudited, in thousands, except per share data)
The following reconciliation of net income is provided to assist the reader with understanding the
financial impact of the litigation settlement and severance charges during the year. Management believes
this information is relevant because of the magnitude of the charges do not reflect our on-going operating
performance.
Thirteen weeks ended Fifty-two weeks ended
-------------------- ---------------------
Dec 28, 2003 Dec. 29, 2002 Dec 28, 2003 Dec. 29, 2002
------------- -------------- -------------- --------------
Net income as reported . . . . . . . . . . . $ 2,680 $ 2,172 $ 5,178 $ 4,657
Litigation settlement and severance charge . - - 3,367 -
Income tax benefit . . . . . . . . . . . . . - - (1,265) -
------------- -------------- -------------- --------------
Net income, excluding charges. . . . . . . . $ 2,680 $ 2,172 $ 7,280 $ 4,657
============= ============== ============== ==============
After tax impact of litigation and severance $ - - $ 2,102 -
Basic net income per share:
Net income, as reported. . . . . . . . . . . $ 0.21 $ 0.18 $ 0.41 $ 0.43
Litigation settlement and severance charge . - - 0.27 -
Income tax benefit . . . . . . . . . . . . . - - (0.10) -
------------- -------------- -------------- --------------
Basic net income, excluding charges. . . . . $ 0.21 $ 0.18 $ 0.58 $ 0.43
============= ============== ============== ==============
Diluted net income per share:
Net income, as reported. . . . . . . . . . . $ 0.20 $ 0.17 $ 0.39 $ 0.40
Litigation settlement and severance charge . - - 0.25 -
Income tax benefit . . . . . . . . . . . . . - - (0.10) -
------------- -------------- -------------- --------------
Diluted net income, excluding charges* . . . $ 0.20 $ 0.17 $ 0.55 $ 0.40
============= ============== ============== ==============
After tax impact of litigation and severance $ - - $ 0.16 -
* per share data may not sum due to rounding