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Green Mountain Coffee Roasters Inc. Reports Operating Results (10-K)

November 28, 2012 | About:
10qk

10qk

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Green Mountain Coffee Roasters Inc. (GMCR) filed Annual Report for the period ended 2012-09-29.

Green Mountain Coffee Roasters, Inc. has a market cap of $4.38 billion; its shares were traded at around $36.86 with a P/E ratio of 12.6 and P/S ratio of 1.7. Green Mountain Coffee Roasters, Inc. had an annual average earning growth of 32.9% over the past 10 years. GuruFocus rated Green Mountain Coffee Roasters, Inc. the business predictability rank of 2.5-star.

Highlight of Business Operations:

We rely on a single order fulfillment entity, M.Block & Sons, Inc. (MBlock), to process the majority of orders for our AH single cup business sold through to retailers, department stores and mass merchants in the United States. Our sales processed through MBlock represented 38%, 38% and 43% of the Companys consolidated net sales for fiscal years 2012, 2011 and 2010, respectively. We are also reliant on certain customers for a substantial portion of our revenues, whether the related orders are processed through fulfillment entities or by us. Sales to customers that represented more than 10% of our sales included Wal-Mart Stores, Inc. and affiliates (Wal-Mart), representing approximately 12% of our consolidated net sales for fiscal 2012, and Bed Bath & Beyond, Inc., representing approximately 11% and 14% of our consolidated net sales for fiscal years 2011 and 2010, respectively.

For fiscal 2012, the Companys net sales of $3,859.2 million represented growth of 46% over fiscal 2011. Approximately 90% of our fiscal 2012 consolidated net sales were attributed to the combination of single serve packs and Keurig® Single Cup Brewers and related accessories. Gross profit for fiscal 2012 was $1,269.4 million, or 32.9% of net sales, as compared to $904.6 million, or 34.1% of net sales, in fiscal 2011. Fiscal 2012, selling, operating, and general and administrative expenses (SG&A) increased 31% to $700.5 million from $535.7 million in fiscal 2011. As a percentage of sales, SG&A expenses improved to 18.2% in fiscal 2012 from 20.2% in fiscal 2011. Our operating margin improved to 14.7% in fiscal 2012 from 13.9% in fiscal 2011.

KBU segment net sales to unaffiliated customers increased by $494.6 million, or 42%, to $1,683.3 million in fiscal 2012 as compared to $1,188.7 million in fiscal 2011. The increase is due primarily to a $312.9 million, or 44%, increase related to sales of K-Cup® and Vue® packs and a $185.8 million, or 40%, increase related to sales of Keurig® Single Cup Brewers and accessories.

For fiscal 2012, CBU segment net sales to unaffiliated customers were $625.5 million as compared to $498.5 million in fiscal 2011. The increase is due to a $98.6 million, or 57%, increase related to the sale of single serve packs, a $47.6 million, or 103%, increase related to sales of Keurig® Single Cup Brewers and accessories, and a $71.7 million, or 38%, increase related to other products, partially offset by a $90.9 million decrease due to the sale of Filterfresh on October 3, 2011.

Net cash provided by operating activities was $477.8 million in fiscal 2012 as compared to $0.8 million in fiscal 2011. Operations generated $363.5 million in net income in fiscal 2012. Significant non-cash items consisted of $181.6 million in depreciation and amortization, $107.4 million provision for sales returns, an increase in our net deferred tax liabilities of $60.9 million, offset by a $28.9 million gain, excluding transaction costs, from the sale of Filterfresh. Significant changes in assets and liabilities affecting net cash provided by operating activities were an increase in accounts receivable of $159.3 million and an increase in inventories of $92.9 million, offset by an increase in accrued liabilities of $39.7 million. The increase in accounts receivable was a result of the increase in sales in fiscal 2012 over fiscal 2011. The increase in inventories was primarily attributable to increases in brewer and accessories inventory of $105.0 million and green coffee inventory of $33.4 million, partially offset by a decrease in single serve pack inventory of $52.6 million. The increase in brewer and accessory inventory is reflective of the increase in brewer and accessory sales for fiscal 2012 over fiscal 2011. The increase in accrued expenses is reflective of our sales growth and was primarily attributable to increases in accruals for product warranty, customer sales incentives and allowances, third-party fulfillment charges, and Corporate Social Responsibility initiatives.

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