Green Mountain Coffee Roasters, Inc. Reports 67 Percent First Quarter Net Sales Gain, Driven By Keurig

Green Mountain Coffee Roasters, Inc., announced its fiscal 2011 first quarter results for the 13 weeks ended Dec. 25, 2010.

Net sales for the first quarter of fiscal 2011 increased 67 percent to $575.0 million as compared to $345.2 million for the first quarter of fiscal 2010. Under Generally Accepted Accounting Principles (GAAP), net income for the first quarter of fiscal 2011 totaled $2.2 million, or $0.02 per diluted share, representing a decrease of 78 percent as compared to GAAP net income of $10.1 million, or $0.07 per diluted share, for the first quarter of fiscal 2010.

The company's non-GAAP net income for the first quarter of fiscal 2011 increased 73 percent to $26.1 million, from non-GAAP net income of $15.1 million in the first quarter of fiscal 2010. Fiscal first quarter 2011 non-GAAP net income excludes pre-tax items of: $11.2 million in Van Houtte transaction-related expenses including the write-off of $2.6 million of deferred financing fees associated with the former credit facility; $6.0 million in legal and accounting-related expenses associated with the SEC inquiry, the company's internal investigation and pending litigation; $6.2 million in amortization of identifiable intangibles related to the company's acquisitions; and, $5.3 million in realized and unrealized loss on foreign exchange transactions associated with hedging the risk associated with the Canadian dollar purchase price of the Van Houtte acquisition. First quarter 2010 non-GAAP net income excludes pre-tax items of: $5.1 million in transaction-related expenses for the Timothy's and Diedrich acquisitions and $2.1 million in amortization of identifiable intangibles related to the Company's prior acquisitions.

On the same basis of presentation, GMCR's non-GAAP earnings per diluted share increased 62 percent to $0.18 in the first quarter of fiscal 2011 from $0.11 in the first quarter of fiscal 2010.

"With sales growth driven by the strong sales of Keurig Single-Cup brewers and K-Cup portion packs during the holiday season, we are off to a very strong start for fiscal year 2011," said Lawrence J. Blanford, GMCR's president and CEO in a prepared statement. "With increasing consumer adoption, the Keurig Single-Cup Brewing System, our growing family of brands, and K-Cup portion pack products are changing the way North America prepares and enjoys its coffee and other beverages."

"Looking forward, we are committed to continuing to represent the best of business in terms of our growth and profitability and our ability to make a positive difference in the world. With our continued growth our ability to make a positive difference continues to increase. We appreciate and thank our enthusiastic consumers, as well as our employees, business partners and other stakeholders, all of whom make our accomplishments possible."

Consistent with GMCR's announcement on Aug. 10, 2010 of its entering into a stock purchase agreement with Luigi Lavazza S.p.A (Lavazza), on Jan. 28, 2011, GMCR and its Keurig business unit entered into a multi-year development and distribution agreement with Lavazza. Under the terms of the agreement, Keurig will be the exclusive distributor of new co-developed, Lavazza-manufactured single-serve espresso machines and capsules marketed to home consumers in the U.S. and Canada. While there is much work to do, GMCR and Lavazza are working towards having the new machines and/or capsules available for the 2012 holiday season.

On Dec. 17, 2010, the company completed its acquisition of LJVH Holdings, Inc. for an aggregate cash purchase price of CAD $915 million, or USD $908 million, subject to future adjustment based on Van Houtte's working capital, net indebtedness and pre-closing taxes as of immediately prior to the acquisition's closing. GMCR financed the Van Houtte acquisition through a combination of cash on hand and new debt financing.