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These excerpts taken from the GMCR 10-Q filed May 7, 2009. Gross Profit Company gross profit for the second quarter of fiscal 2009 totaled $62.0 million, or 32.1% of net sales, as compared to $44.7 million, or 37.0% of net sales, in the prior year period. The margin decline is due primarily to the increase in sales of AH single-cup brewers, which are sold approximately at cost as part of the Company’s strategy to increase the installed base of Keurig brewers. Gross Profit Company gross profit for the 2009 YTD period totaled $115.3 million, or 29.5% of net sales, as compared to $88.0 million, or 35.6% of net sales, in the prior YTD period. The margin decline is due primarily to the increase in sales of AH single-cup brewers, which are sold approximately at cost as part of the Company’s strategy to increase the installed base of Keurig brewers. This excerpt taken from the GMCR 10-Q filed Feb 5, 2009. Gross Profit Company gross profit for the first quarter of fiscal 2009 totaled $53.4 million, or 27.1% of net sales, as compared to $43.3 million, or 34.2% of net sales, in the prior year period. The margin decline is due primarily to the increase in sales of AH single-cup brewers, which are sold approximately at cost as part of the Company’s strategy to increase the installed base of Keurig brewers. In addition, higher green coffee and other commodity costs contributed to the increase in cost of sales as compared to the prior year period. These excerpts taken from the GMCR 10-K filed Dec 11, 2008. Gross Profit Fiscal 2008 Company gross profit for fiscal 2008 totaled $176.9 million, or 35% of net sales, as compared to $131.1 million, or 38% of net sales, in fiscal 2007. The decline in gross margin is primarily attributable to increased sales of AH single-cup brewers which are sold approximately at cost as part of the Company’s strategy to increase the installed base of Keurig brewers. In addition, higher green coffee and other commodity costs contributed to the increase in cost of sales over the prior fiscal year.
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Table of ContentsFiscal 2007 Company gross profit for fiscal 2007 totaled $131.1 million, or 38% of net sales, as compared to $82.0 million, or 36% of net sales, in the prior period. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales. Gross Profit Company gross profit for fiscal 2008 22 Table of ContentsFiscal 2007 SIZE="2">Company gross profit for fiscal 2007 totaled $131.1 million, or 38% of net sales, as compared to $82.0 million, or 36% of net sales, in the prior period. This improvement in gross profit margin was primarily due to the impact of Fiscal 2008 As a percent of net sales, S,G&A improved from 30% during fiscal 2007 to 27% during fiscal 2008. The improvement in S,G&A is mainly due to leveraging selling and organizational resources on a higher sales base. (collectively “Kraft”) patent infringement suit, up from $0.5 million recorded in fiscal 2007. The Company announced on October 23, 2008 that it had entered into a settlement and license agreement to settle its patent litigation with Kraft. Pursuant to the terms of the agreement, the Company received $17 million (gross of tax) in October 2008, which will be recorded as a non-recurring item in operating income in the first fiscal quarter of 2009. Company selling, general and
This excerpt taken from the GMCR 10-Q filed Aug 7, 2008. Gross Profit Company gross profit for the 2008 YTD period totaled $ 130.5 million, or 35.7% of net sales, as compared to $98.3 million, or 39.5% of net sales, in the prior YTD period. The margin decline is due primarily to the significant increase in sales of Keurig At Home Single-Cup Brewers as a percentage of total net sales (which have lower gross margins than the Company’s other products). In addition, higher green coffee and other commodity costs, variations in sales mix, and higher manufacturing costs due to the continued capacity investment in our new Essex, Vermont packaging facility contributed to the increase in cost of sales as compared to the prior YTD period. This excerpt taken from the GMCR 10-Q filed May 8, 2008. Gross Profit Company gross profit for the 2008 YTD period totaled $88.0 million, or 35.6% of net sales, as compared to $64.2 million, or 38.6% of net sales, in the prior YTD period. The margin decline is due primarily to the significant increase in sales of Keurig At Home Single-Cup Brewers as a percentage of total net sales (which have lower gross margins than the Company’s other products). In addition, higher green coffee and other commodity costs, variations in sales mix, and higher manufacturing costs due to the continued capacity investment in our new Essex, Vermont packaging facility contributed to the increase in cost of sales as compared to the prior YTD period. This excerpt taken from the GMCR 10-Q filed Feb 7, 2008. Gross Profit Company gross profit for the first quarter of fiscal 2008 totaled $43.3 million, or 34.2% of net sales, as compared to $31.7 million, or 38.0% of net sales, in the prior year period. The margin decline is due
primarily to variations in sales mix (mostly related to the higher brewer sales which have very low margins, and the higher percentage of sales of K-Cups, which have a lower gross margin than other coffee products). Other factors include the higher green coffee costs and start-up costs of our new Essex, Vermont packaging facility. This excerpt taken from the GMCR 10-K filed Dec 13, 2007. Gross Profit Fiscal 2007 Company gross profit for fiscal 2007 totaled $131.1 million, or 38.4% of net sales, as compared to $82.0 million, or 36.4% of net sales, in fiscal 2006. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales. The GMC segment gross profit was 33.4% of net sales in fiscal 2007 as compared to 35.3% of net sales in fiscal 2006. The 2007 margin decline is due primarily to variations in sales mix (mostly related to the higher percentage of sales of K-Cups, which have a lower gross margin). The Keurig segment gross profit was 37.5% of net sales in fiscal 2007 compared to 36.7% in 2006.
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Table of ContentsFiscal 2006 Company gross profit increased by $25.0 million, or 43.9%, to $82.0 million in fiscal 2006 from $57.0 million in fiscal 2005. As a percentage of net sales, Company gross profit margin increased 1.1% to 36.4% in fiscal 2006. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales. GMC segment gross profit margin was 35.3% in fiscal 2006, which was the same as fiscal 2005. Keurig gross profit margin was 36.7% in fiscal 2006. This excerpt taken from the GMCR 10-Q filed Aug 9, 2007. Gross Profit Company gross profit for the 2007 YTD period totaled $98.3 million or 39.5% of net sales as compared to $56.9 million or 35.9% of net sales reported in the 2006 YTD period. The Company’s gross profit increased by $43.5 million, or 79.2%, from $54.8 million in the as-adjusted YTD prior period. As a percentage of net sales, Company gross profit margin increased 3.8% to 39.5% in the 2007 YTD period as compared to 35.7% in the as-adjusted YTD prior period. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales.
The GMCR segment gross profit was 34.0% of net sales in the 2007 YTD period as compared to the 2006 YTD period of 35.6%, with the 2007 decline in margin due primarily to variations in sales mix (mostly related to the higher percentage of sales of K-Cups, which have a lower gross margin). The Keurig segment gross profit was 40.0% of net sales in the 2007 YTD period. This excerpt taken from the GMCR 10-Q filed May 10, 2007. Gross Profit Company gross profit for the 2007 YTD period totaled $64.2 million or 38.6% of net sales as compared to $39.1 million or 35.4% of net sales reported in the 2006 YTD period. The Company’s gross profit increased by $27.6 million, or 75.6%, from $36.5 million in the as-adjusted YTD prior period. Included in the Company’s gross profit of the 2007 YTD period is approximately $23.0 million of Keurig’s gross profit, prior to the elimination of intercompany sales. As a percentage of net sales, Company gross profit margin increased 3.1% to 38.6% in the 2007 YTD period as compared to 35.5% in the as-adjusted YTD prior period. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of intercompany royalties for K-Cups from cost of sales.
The GMCR segment gross profit was 34.3% of net sales in the 2007 YTD period as compared to the 2006 YTD period of 35.4%. The as-adjusted gross profit margin was 35.5% in the as-adjusted YTD prior period with the 2007 decline in margin due primarily to variations in sales mix (mostly related to the higher percentage of sales of K-Cups, which have a lower gross margin). The Keurig segment gross profit was 37.3% of net sales and totaled $23.0 million in the 2007 YTD period. Keurig provides for the estimated cost of product warranties, primarily using historical information and repair or replacement costs, at the time product revenue is recognized. The Company offers a one-year warranty on all Keurig brewers it sells. During the second quarter of fiscal 2007, the Company experienced higher warranty returns associated with two brewer models. These returns were traced to the same component in each of these models. This component caused a false triggering of a redundant safety system related to the regulation of the water heating system in these brewers. As a result, the water heater in the affected brewers was permanently turned off, and the brewers were no longer able to brew K-Cups. This is not a safety issue, and the specific component was only used in brewers manufactured in calendar 2006. Starting in January 2007, all brewers have been manufactured with a new component designed to eliminate this problem. The Company is pursuing reimbursement related to this specific component failure. This excerpt taken from the GMCR 10-Q filed Feb 8, 2007. Gross Profit Company gross profit for the first quarter of fiscal 2007 totaled $31.7 million or 38.0% of net sales as compared to $22.3 million or 34.9% of net sales reported in the prior fiscal year’s first quarter, a sixteen-week period. Excluding the extra three weeks in the fiscal first quarter of 2006, the Company’s gross profit increased by $12.7 million, or 66.9%, from $19.0 million. Included in the Company’s gross profit of the fiscal first quarter of 2007 is approximately $10.3 million of Keurig's gross profit, after elimination of inter-company sales. As a percentage of net sales, Company gross profit margin increased 2.3% to 38.0% in the first quarter of fiscal 2007 as compared to 35.7% when excluding the extra three weeks in the first quarter of 2006. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales. The GMCR segment gross profit was 35.0% of net sales in the first quarter of fiscal 2007 as compared to the previously reported prior sixteen-week first quarter of fiscal 2006 of 34.9%. Excluding the extra three weeks in the first quarter of fiscal 2006, the as adjusted gross profit margin was 35.7% with the first quarter 2007 decline in margin due primarily to variations in sales mix (mostly related to the higher percentage of sales of K-Cups, which have a lower gross margin). The Keurig segment gross profit was 35.5% of net sales and totaled $10.5 million in the first quarter of fiscal 2007. Keurig provides for the estimated cost of product warranties, primarily using historical information and repair or replacement costs, at the time product revenue is recognized. The $939,000 increase in the carrying amount of product warranties for the first quarter of fiscal 2007 reflects both the increase in the experience rate of warranty usage of certain brewers noted during the quarter as well as the increase in the number of brewers sold during the quarter. This excerpt taken from the GMCR 10-K filed Dec 14, 2006. Gross Profit Company gross profit increased by $25.1 million, or 43.9%, to $82.0 million in fiscal 2006 and by $2.9 million, or 5.3%, to $57.0 million in fiscal 2005. As a percentage of net sales, Company gross profit margin increased 1.1% to 36.4% in fiscal 2006. This improvement in gross profit margin was primarily due to the impact of consolidating Keurig’s higher gross profit margin results into the Company’s financial results and the elimination of inter-company royalties for K-Cups from cost of sales. Partially offsetting this improvement in gross profit margin were higher green coffee costs, a $297,000 non-cash stock-based compensation charge associated with the Company’s adoption of FAS 123R at the beginning of fiscal year 2006, and the inclusion of a non-cash inventory step-up adjustment of approximately $362,000 in fiscal 2006 cost of sales as part of the purchase price accounting for the acquisition of Keurig.
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Table of ContentsAs a percentage of net sales, gross profit margin decreased 4.0% to 35.3% in fiscal 2005. The principal reasons for this decrease were higher green coffee costs, changes to the sales mix (mostly related to the higher percentage of sales of K-Cups, which had a lower gross margin), increased costs associated with a new distribution center, as well as higher delivery expenses and higher costs associated with bringing new K-Cup capacity on-line. GMCR gross profit margin was 35.3% in fiscal 2006, which was the same as fiscal 2005. Keurig gross profit margin was 36.7% in fiscal 2006. | EXCERPTS ON THIS PAGE:
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