Green Mountain Coffee Roasters Inc. Reports 95 Percent Annual Revenue Growth, 91 Percent Fourth Quarter Revenue Growth

Green Mountain Coffee Roasters, Inc. announced its full year and fiscal 2011 fourth quarter results for the thirteen and 52 weeks ended Sept. 24, 2011.

"With 95 percent annual revenue growth over last year the business continues to demonstrate extraordinary momentum as a result of broad consumer adoption of the Keurig® Single Cup Brewing system," said Lawrence J. Blanford, president and CEO of GMCR in a prepared statement. "We are seeing continued evidence of strong consumer demand for both brewers and portion packs from our customers and from third party sources that track consumer purchases such as NPD Group and SymphonyIRI Group, Inc. For instance, NPD reports Keurig® Single Cup Brewer unit sales increased 56 percent in our fiscal 2011 fourth quarter from the same period last year. As an indication of what we believe will be strong holiday consumer demand, for the month of September alone, NPD reports Keurig brewer unit sales are up 73 percent from the same month in 2010."

"Our fiscal fourth quarter revenue growth of 91 percent was strong. This was off of our estimates as a result of a number of factors including changes in wholesale customer ordering patterns in our grocery and club channels despite steady consumer point-of-sale demand in those channels," continued Blanford.

Blanford concluded, "While like most consumer products companies we are watchful of broader consumer sentiment going into the holidays, we remain confident in the company's growth potential and comfortable reiterating our estimate for fiscal year 2012 non-GAAP earnings per diluted share in a range of $2.55 to $2.65."

Approximately 84 percent of consolidated net sales in fiscal 2011 were from the Keurig® single cup brewing system and its recurring portion pack sales, including Keurig-related accessory sales, with the remainder of total sales consisting primarily of sales of bagged coffee and revenue from the office coffee services business.

The increase in K-Cup® portion pack net sales is driven by a 76 percentage point increase in K-Cup® portion pack sales volume, an 18 percentage point increase in K-Cup® portion pack net price realization due to price increases implemented during fiscal 2011 to offset higher green coffee and other input costs, and a 10 percentage point increase in K-Cup® portion pack net sales due to the acquisition of Van Houtte.

Supporting continued growth in portion pack demand, GMCR sold 5.9 million Keurig® single cup brewers during fiscal 2011. This brewer shipment number does not account for consumer returns to retailers. We estimate that GMCR brewer shipments represented approximately 91 percent of total brewers shipped with Keurig technology in the year.

Royalty revenue declined from 2010 due to the acquisitions of Timothy's, Diedrich and Van Houtte, all of which previously paid royalties to GMCR as third party licensed roasters.

Revenue from the Canadian business unit segment, which includes the acquisition of Van Houtte completed on Dec. 17, 2010, contributed approximately $321.4 million to net sales for the year.

Gross profit for fiscal 2011 was $904.6 million, or 34.1 percent of net sales as compared to $425.8 million, or 31.4 percent of net sales, in fiscal 2010.

The impact of price increases on K-Cup® portion packs during fiscal 2011 improved gross margin by approximately 400 basis points.

The benefit from the K-Cup® portion pack price increases was offset by higher green coffee costs in fiscal 2011 as compared to fiscal 2010, which decreased the company's gross margin by approximately 330 basis points.

Gross margin also increased due to a shift in the company's sales mix.

Net sales from Keurig® single cup brewers and related accessories were lower as a percentage of total company net sales in fiscal 2011 as compared to fiscal 2010.

The company sells the majority of Keurig® single cup brewers approximately at cost, or sometimes at a loss when factoring in the incremental costs related to sales, including fulfillment charges, returns and warranty expense.