Green Mountain Coffee Roasters, Inc., (NASDAQ: GMCR) reported its fiscal third quarter consolidated results for the twelve-week period ended July 1, 2006. Net sales increased 26.5% to $47.8 million from $37.8 million in the fiscal third quarter of 2005.
Robert P. Stiller, Chairman, President and CEO, said, “I am pleased with our performance this past quarter. We delivered good sales growth across channels and improved our operating efficiencies, bringing growth to the bottom line. One of the most exciting steps we took this past quarter was to acquire Keurig. We are thrilled to have successfully completed this acquisition, which combines two strong brands. I also believe that our balanced approach to social responsibility is contributing meaningfully to our success.”
Included in Green Mountain Coffee’s fiscal third quarter 2006 net sales is approximately $1.9 million of Keurig, Inc.’s (Keurig) net sales after the closing of the acquisition on June 15, 2006. Keurig markets premium single-cup (K-Cup) coffee brewing systems for the office and the home while the Company licenses, manufactures and sells Green Mountain coffee and tea K-Cups for offices, homes and other venues.
Gross profit for the consolidated entity in the fiscal third quarter of 2006 increased approximately 29.6%, to $17.7 million from $13.7 million. Net income for the fiscal third quarter of 2006 was $2.0 million or $0.25 per diluted share, compared to net income of $2.2 million, or $0.28 per diluted share, for the year ago period. Stock-based compensation charges associated with the Company’s adoption of FAS 123R at the beginning of fiscal year 2006 were $555,000 in the fiscal third quarter.
The Company’s net income includes recognition of a non-cash loss in the fiscal third quarter of 2006 of $629,000 or $0.08 per share as a result of its equity investment in Keurig prior to the closing of the acquisition of all of the remaining outstanding shares of Keurig on June 15, 2006. This loss compares to the Company’s recognition of a non-cash loss of $160,000 or $0.02 per share as a result of its equity investment in Keurig in the fiscal third quarter of 2005. In addition, as part of the purchase price accounting for the acquisition of Keurig, the fiscal third quarter 2006 includes amortization expense related to the identifiable intangibles and inventory step up adjustments of approximately $250,000 or $.02 per share.
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