UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 7, 2014
KEURIG
GREEN MOUNTAIN, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(Jurisdiction
of Incorporation)
1-12340 |
03-0339228 |
|
(Commission File Number) |
(IRS Employer Identification Number) |
33 Coffee Lane, Waterbury, Vermont 05676 |
(Address of registrant's principal executive office) |
(802) 244-5621
(Registrant's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 7, 2014, Keurig Green Mountain, Inc. (the "Company") issued a press release announcing its second quarter results for the period ending March 29, 2014, and will hold a live audio webcast to discuss its second quarter results. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated herein by reference.
The information furnished in this Item 2.02, including the Exhibit attached hereto, shall not be deemed "filed" for any purpose, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release of Keurig Green Mountain, Inc. dated May 7, 2014 regarding Second Quarter 2014 Results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KEURIG GREEN MOUNTAIN, INC. |
|
By: /s/ Frances G. Rathke |
|
Frances G. Rathke |
|
Chief Financial Officer and Treasurer |
|
Date: May 7, 2014 |
EXHIBIT INDEX
99.1 |
Press Release of Keurig Green Mountain, Inc. dated May 7, 2014 regarding Second Quarter 2014 Results. |
Exhibit 99.1
Keurig Green Mountain Reports Second Quarter Fiscal Year 2014 Results; Updates 2014 Outlook; Board Authorizes Additional $1 Billion Share Repurchase
WATERBURY, Vt.--(BUSINESS WIRE)--May 7, 2014--Keurig Green Mountain, Inc., (Keurig) (NASDAQ: GMCR), a leader in specialty coffee, coffee makers, teas and other beverages with its innovative brewing technology, today announced its results for the 13 weeks ended March 29, 2014.
Performance Highlights
“Double digit sales and earnings growth on the heels of a strong holiday season demonstrates the continued opportunity to grow our Keurig system in North America in a very competitive environment,” said Brian Kelley, Keurig’s President and CEO. “During the quarter, we drove strong brewer and portion pack net sales and accelerated our installed base. In addition, disciplined cost controls drove operating profit and margin growth that translated into solid earnings and a significant increase in free cash flow.
“At the end of the quarter, our balance sheet was very strong, with $1.1 billion in cash, even after we returned nearly $800 million of cash to shareholders in the quarter in the form of dividends and share repurchases, including purchases made through an accelerated stock repurchase agreement,” continued Kelley. “We are very pleased with our performance and continue to be optimistic about the momentum in our business and the opportunities in front of us.”
The Company’s 10% net sales growth includes the unfavorable impact of foreign currency exchange rates which reduced net sales by approximately 1%.
Second Quarter Fiscal 2014 Financial Review
($ in millions except per share amounts) | Thirteen weeks ended | % | Twenty-six weeks ended | % | ||||||||||||||||||||||
March 29, 2014 | March 30, 2013 | Increase | March 29, 2014 | March 30, 2013 | Increase | |||||||||||||||||||||
Net sales | $ | 1,103.1 | $ | 1,004.8 | 10 | % | $ | 2,489.7 | $ | 2,343.9 | 6 | % | ||||||||||||||
Operating income: | ||||||||||||||||||||||||||
GAAP | $ | 260.5 | $ | 212.1 | 23 | % | $ | 487.1 | $ | 394.5 | 23 | % | ||||||||||||||
Non-GAAP | $ | 271.8 | $ | 224.6 | 21 | % | $ | 510.0 | $ | 419.2 | 22 | % | ||||||||||||||
Net income attributable to Keurig: | ||||||||||||||||||||||||||
GAAP | $ | 162.1 | $ | 132.4 | 22 | % | $ | 300.3 | $ | 240.0 | 25 | % | ||||||||||||||
Non-GAAP | $ | 169.8 | $ | 140.9 | 21 | % | $ | 315.9 | $ | 256.9 | 23 | % | ||||||||||||||
Diluted income per share: | ||||||||||||||||||||||||||
GAAP | $ | 1.03 | $ | 0.87 | 18 | % | $ | 1.94 | $ | 1.57 | 24 | % | ||||||||||||||
Non-GAAP | $ | 1.08 | $ | 0.93 | 16 | % | $ | 2.04 | $ | 1.68 | 21 | % | ||||||||||||||
Cash dividends declared per common share | $ | 0.25 | $ | — | N/A | $ | 0.50 | $ | — | N/A | ||||||||||||||||
Note: Complete GAAP to Non-GAAP reconciliation tables provided with this release.
Net Sales by Product
|
||||||||||||||||||
Net sales (in millions) | ||||||||||||||||||
Thirteen weeks ended | ||||||||||||||||||
March 29, 2014 | March 30, 2013 |
$ Increase |
% Increase |
|||||||||||||||
Portion packs | $ | 898.2 | $ | 794.0 | $ | 104.2 | 13 | % | ||||||||||
Brewers and accessories | 137.6 | 126.8 | 10.8 | 9 | % | |||||||||||||
Subtotal | 1,035.8 | 920.8 | 115.0 | 12 | % | |||||||||||||
Other products | 67.3 | 84.0 | (16.7 | ) | (20 | )% | ||||||||||||
Total net sales | $ | 1,103.1 | $ | 1,004.8 | $ | 98.3 | 10 | % | ||||||||||
Portion Packs
Brewers and Accessories
Other Products
Change from |
||||
Favorable green coffee costs | +440 bps | |||
Net price realization primarily associated with portion packs | -150 bps | |||
Charge associated with portion pack manufacturing lines that were disassembled |
-80 bps |
|||
Net price realization primarily associated with brewers | -100 bps | |||
Other Items |
-90 bps |
|||
Balance Sheet & Cash Flow Highlights
“Strong earnings
growth and a disciplined approach to working capital and capital
investment contributed to a 30% increase of free cash flow in the
quarter,” said Frances G. Rathke, Keurig’s Chief Financial Officer. “In
addition, the strength of our balance sheet allows us to fund continued
innovation and business growth while also returning significant cash to
shareholders through dividends and meaningful share repurchases.”
Balance Sheet & Cash Flow Highlights ($ in millions) | March 29, 2014 | March 30, 2013 | % Change | ||||||||||||
Cash and cash equivalents, including restricted cash | $ | 1,112.6 | $ | 221.7 | 402 | % | |||||||||
Accounts receivables, net | $ | 430.5 | $ | 312.9 | 38 | % | |||||||||
Inventories | $ | 451.1 | $ | 587.3 | (23 | )% | |||||||||
Raw materials & supplies | $ | 146.3 | $ | 176.8 | (17 | )% | |||||||||
Coffee | $ | 62.9 | $ | 105.0 | (40 | )% | |||||||||
Packaging & other raw materials | $ | 83.4 | $ | 71.8 | 16 | % | |||||||||
Finished goods | $ | 304.8 | $ | 410.5 | (26 | )% | |||||||||
Brewers & accessories | $ | 145.3 | $ | 233.9 | (38 | )% | |||||||||
Portion packs | $ | 135.3 | $ | 146.0 | (7 | )% | |||||||||
Other | $ | 24.2 | $ | 30.6 | (21 | )% | |||||||||
Debt outstanding and capital lease and financing obligations | $ | 269.1 | $ | 350.8 | (23 | )% | |||||||||
Twenty-six weeks net cash provided by operating activities | $ | 593.6 | $ | 604.7 | (2 | )% | |||||||||
Twenty-six weeks free cash flow (1) | $ | 474.6 | $ | 456.3 | 4 | % | |||||||||
(1) Free cash flow is calculated by subtracting capital expenditures for fixed assets from net cash provided by operating activities as reported in the unaudited statement of cash flows.
Stock Transactions
On February 27, 2014, the Company
sold 16,684,139 shares of its common stock to Atlantic Industries, an
indirect wholly-owned subsidiary of The Coca-Cola Company (Coca-Cola),
at $74.98 per share for an aggregate purchase price of $1.25 billion,
pursuant to a common stock purchase agreement dated February 5, 2014.
The sale was recorded to stockholders’ equity net of transaction-related
expenses of approximately $7.9 million.
In addition, the terms of a prior stock purchase agreement with Luigi Lavazza S.p.A (Lavazza) allow Lavazza to maintain its percentage ownership of the Company’s outstanding common stock. As a result of the February 27, 2014 issuance of common stock to Atlantic Industries, on March 28, 2014 the Company entered into a common stock purchase agreement with Lavazza to sell 1,407,000 shares of newly issued common stock to Lavazza at $74.98 per share for an aggregate purchase price of $105.5 million. The transaction closed on April 17, 2014.
Share Repurchases
On July 30, 2012, the Company’s Board
of Directors authorized a share repurchase program of up to $500 million
of the Company’s outstanding common shares over two years. On November
19, 2013, the Company's Board of Directors authorized an additional
share repurchase program of up to $1.0 billion of the Company's
outstanding common shares. The second share repurchase program became
effective upon completion of the first share repurchase program in March
2014.
During the second quarter of fiscal year 2014, as part of its Board repurchase authorization, the Company entered into an accelerated share repurchase (ASR) agreement with a major financial institution. The ASR allows the Company to buy a large number of shares immediately at a purchase price determined by an average market price over a period of time. Upon settlement of the ASR, the total shares repurchased by the Company will be determined based upon a share price equal to the daily volume weighted average price (“VWAP”) of the Company’s common stock during the term of the program, less a fixed per share discount.
Under the terms of the ASR, Keurig agreed to purchase $700 million of its common stock in total, with an initial delivery to the Company of 4.3 million shares during the quarter. The initial shares represent the number of shares at the current market price equal to 70% of the total fixed purchase price of $700 million. The repurchased shares were retired. Final settlement of the ASR will occur no sooner than November 24, 2014 and no later than February 27, 2015 at the financial institution’s discretion.
In addition, during the second quarter, the Company repurchased a total of 544,100 shares from the open market at a cost of $58.4 million. From the inception of its Board authorized share repurchases through the end of the Company’s second fiscal quarter of 2014, the Company has repurchased a total of 15.4 million shares at a total cost of $936 million and an average price of $60.86 through a combination of the ASR, open market and 10(b)5-1 plans, including $490 million of ASR repurchases subject to final price adjustment. From the end of the second quarter through May 6, 2014 the Company has repurchased an additional 661,900 shares at a total cost of $67 million through its 10(b)5-1 program.
Keurig today announced its Board of Directors has approved a new share repurchase authorization of up to $1 billion over the next two years. The new share repurchase program will take effect upon completion of the Company’s current program, which has $288 million remaining of its previously authorized $1 billion subject to final price adjustment of the ASR. As was the case with the prior authorizations, the new authorization will be implemented at such times and prices as determined appropriate by the Company's management.
Dividend Declaration
Keurig’s Board of Directors has
declared a regular quarterly cash dividend of $0.25 per share of the
Company’s common stock. The quarterly cash dividend will be paid on
August 1, 2014, to shareholders of record as of the close of business on
July 3, 2014.
Business Outlook and Other Forward-Looking Information
“Short
term, we are focused on successfully introducing our Keurig 2.0 hot
system; adding a number of additional brands as new Keurig partners;
and, preparing for the launch of our Keurig cold system in fiscal year
2015. Longer term, continued investment in innovation across all facets
of our business – from new product development to merchandising – will
power a robust pipeline of new products, drive financial performance and
fuel continued consumer passion for the Keurig brand,” said Kelley.
The Company’s outlook for fiscal year 2014 is as follows:
The Company also provided its outlook for its third quarter of fiscal year 2014 as follows:
Conference Call and Webcast
Keurig Green Mountain will be
discussing these financial results with analysts and investors in a
conference call and live webcast available via the Internet at 5:00 p.m.
ET today, May 7, 2014. The call is accessible via live webcast from the
events section of the Investor Relations portion of the Company’s
website at http://investor.keuriggreenmountain.com/events.cfm.
The Company archives the latest conference call for a period of time. A
replay of the conference call also will be available by telephone at
(719) 457-0820, passcode 7999693 from 9:00 p.m. ET on May 7, 2014
through 9:00 p.m. ET on Monday, May 12, 2014.
Use of Non-GAAP Financial Measures
In addition to reporting
financial results in accordance with generally accepted accounting
principles (GAAP), the Company provides non-GAAP operating results that
exclude legal and accounting expenses related to the SEC inquiry and
pending securities and stockholder derivative class action litigation;
and non-cash acquisition-related items such as amortization of
identifiable intangibles, each of which include adjustments to show the
tax impact of excluding these items. These amounts are not in accordance
with, or an alternative to, GAAP. The Company’s management believes that
these measures provide investors with transparency by helping illustrate
the underlying financial and business trends relating to the Company’s
results of operations and financial condition and comparability between
current and prior periods. Management uses the measures to establish and
monitor budgets and operational goals and to evaluate the performance of
the Company. Please see the “GAAP to Non-GAAP Reconciliation” table that
accompanies this document for a full reconciliation of the Company’s
GAAP to non-GAAP results.
About Keurig Green Mountain, Inc.
As a leader in
specialty coffee, coffee makers, teas and other beverages, Keurig Green
Mountain (Keurig) (NASDAQ: GMCR), is recognized for its award-winning
beverages, innovative brewing technology, and socially responsible
business practices. The Company has inspired consumer passion for its
products by revolutionizing beverage preparation at home and in the
workplace. Keurig supports local and global communities by investing in
sustainably-grown coffee and by its active involvement in a variety of
social and environmental projects. By helping consumers drink for
themselves, we believe we can brew a better world. For more information
visit: www.KeurigGreenMountain.com. To purchase
Keurig® products visit: www.Keurig.com or www.Keurig.ca.
Keurig routinely posts information that may be of importance to investors in the Investor Relations section of its website, www.KeurigGreenMountain.com, including news releases and its complete financial statements, as filed with the SEC. The Company encourages investors to consult this section of its website regularly for important information and news. Additionally, by subscribing to the Company's automatic email news release delivery, individuals can receive news directly from Keurig as it is released.
Forward-Looking Statements
Certain information in this filing
constitutes "forward-looking statements." Forward-looking statements can
be identified by the fact that they do not relate strictly to historical
or current facts. They often include words such as “believes,”
“expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or
words of similar meaning, or future or conditional verbs, such as
“will,” “should,” “could,” “may,” “aims,” “intends,” or “projects.”
However, the absence of these words or similar expressions does not mean
that a statement is not forward-looking. These statements may relate to:
the expected impact of raw material costs and our pricing actions on our
results of operations and gross margins, expected trends in net sales
and earnings performance and other financial measures, the expected
productivity and working capital improvements, the success of
introducing and producing new product offerings, the impact of foreign
exchange fluctuations, the adequacy of internally generated funds and
existing sources of liquidity, such as the availability of bank
financing, the expected results of operations of businesses acquired by
us, our ability to issue debt or additional equity securities, our
expectations regarding purchasing shares of our common stock under the
existing authorizations, projection of payment of dividends, and the
impact of the inquiry initiated by the SEC and any related litigation or
additional governmental inquiry or enforcement proceedings, as well as
litigation asserting claims against the Company under the federal
antitrust laws and various state laws. A forward-looking statement is
neither a prediction nor a guarantee of future events or circumstances,
and those future events or circumstances may not occur. Management
believes that these forward-looking statements are reasonable as and
when made. However, caution should be taken not to place undue reliance
on any such forward-looking statements because such statements speak
only as of the date when made. We expressly disclaim any obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. In addition,
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
our Company's historical experience and our present expectations or
projections. These risks and uncertainties include, but are not limited
to, those described in the Company’s Form 10-K Part I, "Item 1A. Risk
Factors," and Part II “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and elsewhere in this
report and those described from time to time in our future reports filed
with the Securities and Exchange Commission.
KGM-G
KEURIG GREEN MOUNTAIN, INC. | |||||||||||
Unaudited Consolidated Balance Sheets | |||||||||||
(Dollars in thousands, except per share data) | |||||||||||
March 29,
2014 |
September 28,
2013 |
||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,112,155 | $ | 260,092 | |||||||
Restricted cash and cash equivalents | 432 | 560 | |||||||||
Receivables, less uncollectible accounts and return allowances of $44,732 and $33,640 at March 29, 2014 and September 28, 2013, respectively | 430,547 | 467,976 | |||||||||
Inventories | 451,115 | 676,089 | |||||||||
Income taxes receivable | 30,302 | 11,747 | |||||||||
Other current assets | 70,603 | 46,891 | |||||||||
Deferred income taxes, net | 50,243 | 58,137 | |||||||||
Total current assets | 2,145,397 | 1,521,492 | |||||||||
Fixed assets, net | 1,029,551 | 985,563 | |||||||||
Intangibles, net | 389,542 | 435,216 | |||||||||
Goodwill | 759,531 | 788,184 | |||||||||
Deferred income taxes, net | 146 | 149 | |||||||||
Other long-term assets | 38,562 | 30,944 | |||||||||
Total assets | $ | 4,362,729 | $ | 3,761,548 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 16,099 | $ | 12,929 | |||||||
Current portion of capital lease and financing obligations | 1,833 | 1,760 | |||||||||
Accounts payable | 260,412 | 312,170 | |||||||||
Dividends payable | 40,483 | — | |||||||||
Accrued expenses | 219,744 | 242,427 | |||||||||
Deferred income taxes, net | 254 | 233 | |||||||||
Other current liabilities | 15,432 | 27,544 | |||||||||
Total current liabilities | 554,257 | 597,063 | |||||||||
Long-term debt, less current portion | 150,766 | 160,221 | |||||||||
Capital lease and financing obligations, less current portion | 100,424 | 76,061 | |||||||||
Deferred income taxes, net | 245,571 | 252,867 | |||||||||
Other long-term liabilities | 25,976 | 28,721 | |||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests | 10,865 | 11,045 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $0.10 par value: Authorized - 1,000,000 shares; No shares issued or outstanding | — | — | |||||||||
Common stock, $0.10 par value: Authorized - 500,000,000 shares; Issued and outstanding - 161,933,197 and 150,265,809 shares at March 29, 2014 and September 28, 2013, respectively | 16,193 | 15,026 | |||||||||
Additional paid-in capital | 1,836,860 | 1,387,322 | |||||||||
Retained earnings | 1,474,410 | 1,252,407 | |||||||||
Accumulated other comprehensive loss | (52,593 | ) | (19,185 | ) | |||||||
Total stockholders’ equity | 3,274,870 | 2,635,570 | |||||||||
Total liabilities and stockholders’ equity | $ | 4,362,729 | $ | 3,761,548 | |||||||
KEURIG GREEN MOUNTAIN, INC. | ||||||||||||||||||||||
Unaudited Consolidated Statements of Operations | ||||||||||||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||||||||
Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||||||||||
March 29,
2014 |
March 30,
2013 |
March 29,
2014 |
March 30,
2013 |
|||||||||||||||||||
Net sales | $ | 1,103,072 | $ | 1,004,792 | $ | 2,489,742 | $ | 2,343,851 | ||||||||||||||
Cost of sales | 645,640 | 589,646 | 1,568,263 | 1,509,542 | ||||||||||||||||||
Gross profit | 457,432 | 415,146 | 921,479 | 834,309 | ||||||||||||||||||
Selling and operating expenses | 125,005 | 124,781 | 293,220 | 296,626 | ||||||||||||||||||
General and administrative expenses | 71,941 | 78,261 | 141,147 | 143,138 | ||||||||||||||||||
Operating income | 260,486 | 212,104 | 487,112 | 394,545 | ||||||||||||||||||
Other income, net | 1,253 | 227 | 1,682 | 415 | ||||||||||||||||||
Gain on financial instruments, net | 2,900 | 3,471 | 7,461 | 4,575 | ||||||||||||||||||
Loss on foreign currency, net | (8,722 | ) | (6,115 | ) | (19,272 | ) | (8,794 | ) | ||||||||||||||
Interest expense | (2,995 | ) | (3,814 | ) | (5,615 | ) | (9,544 | ) | ||||||||||||||
Income before income taxes | 252,922 | 205,873 | 471,368 | 381,197 | ||||||||||||||||||
Income tax expense | (90,609 | ) | (73,302 | ) | (170,580 | ) | (140,681 | ) | ||||||||||||||
Net income | 162,313 | 132,571 | $ | 300,788 | $ | 240,516 | ||||||||||||||||
Net income attributable to noncontrolling interests | 229 | 150 | 477 | 512 | ||||||||||||||||||
Net income attributable to Keurig | $ | 162,084 | $ | 132,421 | $ | 300,311 | $ | 240,004 | ||||||||||||||
Net income attributable to Keurig per common share: | ||||||||||||||||||||||
Basic | $ | 1.05 | $ | 0.89 | $ | 1.98 | $ | 1.61 | ||||||||||||||
Diluted | $ | 1.03 | $ | 0.87 | $ | 1.94 | $ | 1.57 | ||||||||||||||
Cash dividends declared per common share | $ | 0.25 | $ | — | $ | 0.50 | $ | — | ||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||
Basic | 153,945,441 | 148,774,443 | 151,552,422 | 149,044,980 | ||||||||||||||||||
Diluted | 157,463,096 | 152,310,053 | 154,525,749 | 152,550,160 | ||||||||||||||||||
KEURIG GREEN MOUNTAIN, INC. | |||||||||||
Unaudited Consolidated Statements of Cash Flows | |||||||||||
(Dollars in thousands) | |||||||||||
Twenty-six | Twenty-six | ||||||||||
weeks ended | weeks ended | ||||||||||
March 29, 2014 | March 30, 2013 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 300,788 | $ | 240,516 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of fixed assets | 104,222 | 87,820 | |||||||||
Amortization of intangibles | 21,942 | 22,939 | |||||||||
Amortization of deferred financing fees | 2,826 | 3,025 | |||||||||
Unrealized loss on foreign currency, net | 18,089 | 7,178 | |||||||||
(Gain) loss on disposal of fixed assets | (842 | ) | 241 | ||||||||
Provision for doubtful accounts | 1,575 | (15 | ) | ||||||||
Provision for sales returns | 51,747 | 58,812 | |||||||||
Gain on derivatives, net | (9,954 | ) | (3,847 | ) | |||||||
Excess tax benefits from equity-based compensation plans | (46,170 | ) | (9,563 | ) | |||||||
Deferred income taxes | (80 | ) | 2,901 | ||||||||
Deferred compensation and stock compensation | 15,882 | 15,214 | |||||||||
Other | (196 | ) | 449 | ||||||||
Changes in assets and liabilities: | |||||||||||
Receivables | (20,697 | ) | (9,827 | ) | |||||||
Inventories | 219,417 | 177,665 | |||||||||
Income tax receivable/payable, net | 27,408 | 19,237 | |||||||||
Other current assets | 3,051 | (7,861 | ) | ||||||||
Other long-term assets, net | (498 | ) | 3,371 | ||||||||
Accounts payable and accrued expenses | (83,137 | ) | 3,721 | ||||||||
Other current liabilities | (9,133 | ) | (137 | ) | |||||||
Other long-term liabilities | (2,620 | ) | (7,154 | ) | |||||||
Net cash provided by operating activities | 593,620 | 604,685 | |||||||||
Cash flows from investing activities: | |||||||||||
Change in restricted cash | 128 | 3,013 | |||||||||
Capital expenditures for fixed assets | (118,978 | ) | (148,349 | ) | |||||||
Purchase of long-term investment | (10,000 | ) | — | ||||||||
Other investing activities | 1,207 | 231 | |||||||||
Net cash used in investing activities | (127,643 | ) | (145,105 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Net change in revolving line of credit | — | (184,949 | ) | ||||||||
Proceeds from sale of common stock | 1,243,028 | — | |||||||||
Proceeds from issuance of common stock under compensation plans | 26,441 | 9,334 | |||||||||
Repurchase of common stock | (880,816 | ) | (125,681 | ) | |||||||
Excess tax benefits from equity-based compensation plans | 46,170 | 9,563 | |||||||||
Payments on capital lease and financing obligations | (954 | ) | (1,547 | ) | |||||||
Repayment of long-term debt | (6,517 | ) | (3,391 | ) | |||||||
Dividends paid | (37,220 | ) | — | ||||||||
Other financing activities | (180 | ) | (549 | ) | |||||||
Net cash used in financing activities | 389,952 | (297,220 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (3,866 | ) | 521 | ||||||||
Net increase in cash and cash equivalents | 852,063 | 162,881 | |||||||||
Cash and cash equivalents at beginning of period | 260,092 | 58,289 | |||||||||
Cash and cash equivalents at end of period | $ | 1,112,155 | $ | 221,170 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Fixed asset purchases included in accounts payable and not disbursed at the end of each period | $ | 43,431 | $ | 21,437 | |||||||
Dividends declared not paid at the end of each period | $ | 40,483 | $ | — | |||||||
Noncash investing and financing activities: | |||||||||||
Fixed assets acquired under capital lease and financing obligations | $ | 25,390 | $ | 11,769 | |||||||
Settlement of acquisition related liabilities through release of restricted cash | $ | — | $ | 9,227 | |||||||
KEURIG GREEN MOUNTAIN, INC. | ||||||||
GAAP to Non-GAAP Reconciliation | ||||||||
(Dollars in thousands, except per share data) | ||||||||
Thirteen weeks ended | ||||||||
March 29, 2014 | March 30, 2013 | |||||||
Operating income | $ 260,486 | $ 212,104 | ||||||
Expenses related to SEC inquiry (1) | 546 | 1,043 | ||||||
Amortization of identifiable intangibles (2) | 10,789 | 11,404 | ||||||
Non-GAAP operating income | $ 271,821 | $ 224,551 | ||||||
Thirteen weeks ended | ||||||||
March 29, 2014 | March 30, 2013 | |||||||
Net income attributable to Keurig | $ 162,084 | $ 132,421 | ||||||
After tax: | ||||||||
Expenses related to SEC inquiry (1) | 348 | 672 | ||||||
Amortization of identifiable intangibles (2) | 7,334 | 7,826 | ||||||
Non-GAAP net income attributable to Keurig | $ 169,766 | $ 140,919 | ||||||
Thirteen weeks ended | ||||||||
March 29, 2014 | March 30, 2013 | |||||||
Diluted income per share | $ 1.03 | $ 0.87 | ||||||
After tax: | ||||||||
Expenses related to SEC inquiry (1) | 0.00 | 0.00 | ||||||
Amortization of identifiable intangibles (2) | 0.05 | 0.05 | ||||||
Non-GAAP net income per share | $ 1.08 | $ 0.93 | * | |||||
* Does not sum due to rounding. | ||||||||
|
(1) Represents legal and accounting expenses related to the SEC inquiry
and pending securities and stockholder derivative class action
litigation classified as general and administrative expense.
(2)
Represents the amortization of intangibles related to the Company’s
acquisitions classified as general and administrative expense.
|
|||||||||
KEURIG GREEN MOUNTAIN, INC. | |||||||||
GAAP to Non-GAAP Reconciliation | |||||||||
(Dollars in thousands, except per share data) | |||||||||
Twenty-six weeks ended | |||||||||
March 29, 2014 | March 30, 2013 | ||||||||
Operating income | $ | 487,112 | $ | 394,545 | |||||
Expenses related to SEC inquiry (1) | 918 | 1,763 | |||||||
Amortization of identifiable intangibles (2) | 21,941 | 22,939 | |||||||
Non-GAAP operating income | $ | 509,971 | $ | 419,247 | |||||
Twenty-six weeks ended | |||||||||
March 29, 2014 | March 30, 2013 | ||||||||
Net income attributable to Keurig | $ | 300,311 | $ | 240,004 | |||||
After tax: | |||||||||
Expenses related to SEC inquiry (1) | 584 | 1,116 | |||||||
Amortization of identifiable intangibles (2) | 14,976 | 15,777 | |||||||
Non-GAAP net income attributable to Keurig | $ | 315,871 | $ | 256,897 | |||||
Twenty-six weeks ended | |||||||||
March 29, 2014 | March 30, 2013 | ||||||||
Diluted income per share | $ | 1.94 | $ | 1.57 | |||||
After tax: | |||||||||
Expenses related to SEC inquiry (1) | 0.00 | 0.01 | |||||||
Amortization of identifiable intangibles (2) | 0.10 | 0.10 | |||||||
Non-GAAP net income per share | $ | 2.04 | $ | 1.68 | |||||
(1) Represents legal and accounting expenses related to the SEC inquiry
and pending securities and stockholder derivative class action
litigation classified as general and administrative expense.
(2)
Represents the amortization of intangibles related to the Company’s
acquisitions classified as general and administrative expense.
CONTACT:
Keurig Green Mountain, Inc.
Suzanne DuLong, 802-488-2600
Investor.Services@keurig.com
or
Katie
Gilroy, 781-205-7345
Investor.Services@keurig.com