- Non-GAAP EPS1 of $1.03 and GAAP EPS of
$0.97
- Net sales growth of 2%; 3% excluding
foreign currency
- Updated fiscal year 2015 outlook
includes revenue growth of flat to low-single digits, non-GAAP EPS
decline of mid-single-digits and free cash flow of $120-$170
million
- Repurchased $837 million of common
shares in the quarter
- Board of Directors declared $0.2875
quarterly dividend
Keurig Green Mountain, Inc. (NASDAQ: GMCR), a leader in
specialty coffee, coffee makers, teas and other beverages with its
innovative brewing technology, today announced its business results
for the 13 weeks ended March 28, 2015.
“We are pleased to report that our earnings per share in the
second quarter were in line with our guidance. Our top-line growth,
however, was below our expectations primarily due to the slower
than expected transition to the Keurig 2.0 system. We are taking
actions to reduce brewer inventories, enhance our 2.0 brewer
packaging to better communicate our extensive brand variety and
step up innovation on our owned brands,” said President and CEO,
Brian Kelley.
“Although we are lowering our guidance to reflect the impact of
near-term challenges related to this complex product transition, we
remain highly confident in our long term strategy for the Keurig
hot system and continue to believe there is a significant runway of
opportunity. Combined with the upcoming launch of our Keurig KOLD
system, we expect the Keurig brand to further expand and globalize
while continuing to transform the premium home beverage experience
for consumers," continued Kelley.
Second Quarter Fiscal 2015 Financial
Review
($ in millions except per share data)
Thirteen weeks ended
Twenty-six weeks ended March 28, 2015
March 29, 2014
%Change
March 28, 2015 March 29, 2014
%Change
Net sales $ 1,127.1 $ 1,103.1 2 % $ 2,513.5 $ 2,489.7 1 %
Operating income: GAAP $ 244.0 $ 260.5 (6 )% $ 459.9 $ 487.1 (6 )%
Non-GAAP $ 258.0 $ 271.8 (5 )% $ 487.7 $ 510.0 (4 )% Net income
attributable to Keurig: GAAP $ 155.5 $ 162.1 (4 )% $ 290.1 $ 300.3
(3 )% Non-GAAP $ 166.0 $ 169.8 (2 )% $ 309.9 $ 315.9 (2 )% Diluted
income per share (EPS): GAAP $ 0.97 $ 1.03 (6 )% $ 1.79 $ 1.94 (8
)% Non-GAAP $ 1.03 $ 1.08 (5 )% $ 1.91 $ 2.04 (6 )% Cash dividends
declared per common share $ 0.2875 $ 0.25 15 % $ 0.5750 $ 0.50 15 %
Note: See complete GAAP to Non-GAAP Reconciliation tables
attached to this release.
Net Sales by Product
Net sales of $1.1 billion increased 2% versus the prior year
period primarily driven by growth in sales of pods (previously
referred to as portion packs) partially offset by lower brewer and
accessory sales. Foreign currency exchange rates negatively
impacted sales by approximately 1 percentage point. Excluding the
impact of foreign currency exchange rates, total net sales grew 3%
and total Keurig beverage system sales grew 4% compared to the
prior year period.
Net sales for the domestic segment increased 3% in the quarter
while sales in the Canada segment declined 5% on a reported basis
and grew 6% excluding the impact of foreign currency exchange
rates.
Total pod net sales increased 7% in the quarter while brewers
and accessories net sales declined 23%. Other product net sales
declined 5% compared to the prior year period.
Net Sales by
Product Net sales (in millions) Thirteen weeks
ended March 28, 2015 March 29, 2014
$ Increase(Decrease)
% Increase(Decrease)
Pods $ 956.6 $ 898.2 $ 58.4 7 % Brewers and accessories
106.4 137.6 (31.2 ) (23 )% Subtotal 1,063.0 1,035.8
27.2 3 % Other products 64.1 67.3 (3.2 ) (5 )%
Total net sales $ 1,127.1 $ 1,103.1 $ 24.0 2 %
Pods
- The 7% increase in the quarter in pod
net sales compared to the prior year period was due to a 14%
increase in equivalent servings2 volume and a 1 percentage point
increase due to net price realization. This was partially offset by
a 7 percentage point decrease due to product mix and a roughly 1
percentage point negative impact from foreign currency exchange
rates.
Brewers and Accessories
- For the quarter, 1.4 million Keurig®
system brewers were sold including 1.3 million sold by Keurig and
0.1 million reported sold by Keurig’s licensed brewer partners.
This brewer shipment number does not account for consumer
returns.
- The 23% decline in Keurig’s brewer and
accessory net sales compared to the prior year period was primarily
due to a 22% decline in brewer sales volume, driven by high
inventory levels at retail which negatively impacted shipments in
the quarter and a difficult year ago comparison. Brewer net price
realization declined by 1 percentage point and foreign currency
exchange rates negatively impacted brewer net sales by roughly 1
percentage point. This was partially offset by 2 percentage points
of positive brewer mix.
- Additionally, accessory net sales
declined 31% compared to the prior year period.
Other Products
- Sales of other products declined 5%
during the quarter from the prior year period primarily due to the
continuing demand shift from traditional coffee package formats to
pods.
- For the quarter, gross margin declined
80 basis points versus prior year to 40.7% of net sales. The table
below quantifies the changes in gross margin period to period.
Obsolescence of finished goods includes a $10 million charge
related to the Rivo® brewer in the second quarter which negatively
impacted gross margin by 90 bps.
Change from Q2 2014 toQ2
2015
Shift in sales mix between pods, brewers and accessories and other
products +260 bps Higher obsolescence expense of finished goods
-220 bps Unfavorable green coffee costs -180 bps Decrease in pod
packaging material costs +100 bps Logistics productivity +100 bps
Mix associated with pods -80 bps Mix associated with brewers -60
bps
- GAAP SG&A increased 9%,
representing 19.1% of net sales for the quarter as compared to
17.9% in the prior year period. Non-GAAP SG&A increased 8%
representing 17.8% of sales for the quarter as compared to 16.8% in
the prior period. The increase in SG&A over the prior year
period was driven by higher expenses associated with information
technology and supporting our call centers and higher research and
development expenses which include significant investments in the
forthcoming Keurig® KOLD™ system.
- GAAP operating income declined 6%,
representing 21.6% of net sales for the quarter, compared to 23.6%
in the prior year period.
- Non-GAAP operating income declined 5%,
representing 22.9% of net sales in the quarter, compared to 24.6%
in the prior year period.
- The Company’s effective income tax rate
was 34.8% for the quarter as compared to 35.8% in the prior year
period.
- Diluted weighted average shares
outstanding for the second quarter were 160.6 million, up 2% from
157.5 million in the prior year period as a result of 16.7 million
shares and 1.4 million shares issued in connection with the
Coca-Cola and Lavazza Equity Transactions3, respectively. Such
transaction-related dilution was offset, in part, by the Company’s
share repurchases under its previously announced share repurchase
authorizations including a $700 million accelerated share
repurchase (ASR) program, open market purchases and 10(b)5-1 plans
and the previously announced repurchase of 5.2 million shares from
Luigi Lavazza S.p.A. on March 3, 2015.
- GAAP diluted EPS declined 6% from the
prior year period to $0.97.
- Non-GAAP diluted EPS declined 5% from
the prior year period to $1.03. Non-GAAP EPS was negatively
impacted by $0.08 per share dilution from the Coca-Cola and Lavazza
Equity Transactions net of the ASR program repurchases and March
2015 Lavazza repurchase, both as discussed below, and $0.05 per
share negative impact from foreign currency exchange. This compares
to last year’s second quarter non-GAAP EPS negative impact of $0.04
per share dilution from the Coca-Cola and Lavazza Equity
Transactions net of the ASR program repurchases. When excluding the
impact of dilution and foreign currency, non-GAAP diluted EPS
increased approximately 4% versus the prior year period.
Balance Sheet & Cash Flow Highlights
Balance Sheet
& Cash Flow Highlights ($ in millions) March 28,
2015 March 29, 2014 % Change Cash and cash
equivalents, including restricted cash $ 127.0 $ 1,112.6 (89 )%
Accounts receivables, net $ 524.3 $ 430.5 22 % Inventories $ 724.7
$ 451.1 61 % Raw material inventories $ 211.6 $ 146.3 45 % Finished
goods $ 513.1 $ 304.8 68 % Brewers & accessories $ 343.4 $
145.3 136 % Pods $ 156.8 $ 135.3 16 % Other $ 12.9 $ 24.2 (47 )%
Debt outstanding and capital lease and financing obligations $
534.1 $ 269.1 98 % Twenty-six weeks net cash provided by operating
activities $ 368.0 $ 593.6 (38 )% Twenty-six weeks free cash flow
(1) $ 133.1 $ 474.6 (72 )%
(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.
Share Repurchases
During the second quarter of fiscal 2015, the Company
repurchased a total of 7.0 million shares at a cost of $837
million. From the inception of its Board authorized share
repurchase program through the end of the second quarter, the
Company repurchased a total of 25.9 million shares at an average
price of $86.17 for a total cost of $2.2 billion. This was achieved
through a combination of the ASR program, open market purchases and
10(b)5-1 plans, and the previously announced repurchase of 5.2
million shares from Luigi Lavazza S.p.A.
Dividend Declaration
Keurig's Board has declared a regular quarterly cash dividend
of $0.2875 per share of the Company's common
stock. The quarterly cash dividend will be paid on July
30, 2015 to shareholders of record as of the close of business
on June 30, 2015.
Business Outlook and Other
Forward-Looking Information
The Company updated its outlook for fiscal year 2015 and
provided its outlook for the third quarter:
Fiscal Year 2015
- Net sales growth flat to up low-single
digits compared to fiscal year 2014
- An annual effective tax rate of
approximately 34.5% to 35%
- Non-GAAP EPS decline in the mid-single
digits. This outlook:
- Includes an estimated $0.14 headwind
from foreign currency exchange
- Excludes the amortization of
identifiable intangibles related to the Company’s acquisitions and
legal and accounting expenses related to the Company’s pending
securities and stockholder derivative class action litigation and
antitrust litigation
- Free cash flow in the range of $120
million to $170 million
- Capital investment in the range of $425
million to $475 million
Third Quarter 2015
- Net sales growth flat to up low-single
digits compared to the third quarter of fiscal year 2014
- An effective tax rate of approximately
32% to 32.5%
- Non-GAAP EPS in a range of $0.75 to
$0.80 which:
- Includes an estimated $0.02 headwind
from foreign currency exchange
- Excludes the amortization of
identifiable intangibles related to the Company’s acquisitions and
legal and accounting expenses related to the Company’s pending
securities and stockholder derivative class action litigation and
antitrust litigation
1 Certain items in this press release are designated as
“Non-GAAP” and represent non-GAAP financial measures that exclude
certain items. Please see the attached “GAAP to Non-GAAP
Reconciliation” to find disclosure and reconciliation of non-GAAP
financial measures, as well as a discussion in this release as to
why the Company is presenting such non-GAAP measures.
2 Equivalent servings translates our multiple pod sizes,
including K-Cup®, Vue® K-Carafe® and Bolt® pods, into a common
serving.
3 The Company issued 16.7 million shares as part of the
transaction with The Coca-Cola Company, which closed February 27,
2014 and another 1.4 million shares as part of the transaction with
Luigi Lavazza S.p.A, which closed April 7, 2014 (collectively the
Coca-Cola and Lavazza Equity Transactions).
Conference Call and Webcast
Keurig 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 6, 2015. 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 5171920 from 9:00 p.m. ET on May 6, 2015 through
9:00 p.m. ET on Monday, May 11, 2015.
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 pending securities and
stockholder derivative class action litigation, pending antitrust
litigation against the Company, and the now concluded SEC inquiry;
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. In each case 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 (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 press release 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, projections for future capital expenditures, our
expectations regarding purchasing shares of our common stock under
the existing authorizations, projections of payment of dividends,
the impact of pending shareholder litigation, and the impact of
antitrust litigation pending against the Company in the United
States and Canada. 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 historical experience and our present
expectations or projections. These risks and uncertainties include,
but are not limited to, those described in Part I, "Item 1A. Risk
Factors" and Part II "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
fiscal 2014 Annual Report filed on Form 10-K, elsewhere in that
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 28, 2015
September 27, 2014
Assets Current assets: Cash and cash equivalents $ 97,553 $
761,214 Restricted cash and cash equivalents 29,474 378 Short-term
investment — 100,000 Receivables, less uncollectible accounts and
return allowances of $48,581 and $66,120 at March 28, 2015 and
September 27, 2014, respectively 524,327 621,451 Inventories
724,727 835,167 Income taxes receivable 15,548 — Other current
assets 73,533 69,272 Deferred income taxes, net 60,888
58,038 Total current assets 1,526,050
2,445,520 Fixed assets, net 1,287,640 1,171,425 Intangibles,
net 457,719 365,444 Goodwill 764,352 755,895 Deferred income taxes,
net 206 131 Other long-term assets 18,718
58,892 Total assets $ 4,054,685 $ 4,797,307
Liabilities and Stockholders’ Equity Current
liabilities: Current portion of long-term debt $ 22,159 $ 19,077
Current portion of capital lease and financing obligations 2,900
2,226 Accounts payable 279,463 411,107 Accrued expenses 236,328
305,677 Income tax payable — 53,586 Dividend payable 44,258 40,580
Deferred income taxes, net 350 340 Other current liabilities
10,430 10,395 Total current liabilities
595,888 842,988 Long-term debt, less current portion 393,293
140,937 Capital lease and financing obligations, less current
portion 115,711 116,240 Deferred income taxes, net 200,004 202,936
Other long-term liabilities 52,123 23,085 Commitments and
contingencies Redeemable noncontrolling interests 4,349
12,440 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 - 153,941,018 and
162,318,246 shares at March 28, 2015 and September 27, 2014,
respectively 15,394 16,232 Additional paid-in capital 948,801
1,808,881 Retained earnings 1,894,731 1,687,619 Accumulated other
comprehensive loss (165,609 ) (54,051 ) Total
stockholders’ equity 2,693,317 3,458,681
Total liabilities and stockholders’ equity $
4,054,685 $ 4,797,307
KEURIG GREEN
MOUNTAIN, INC. Unaudited Consolidated Statements of
Operations (Dollars in thousands except per share data)
Thirteen weeks ended
Twenty-six weeks ended
March 28, 2015
March 29, 2014
March 28, 2015
March 29, 2014
Net sales $ 1,127,184 $ 1,103,072 $ 2,513,542 $ 2,489,742
Cost of sales 668,376 645,640
1,590,612 1,568,263 Gross profit 458,808
457,432 922,930 921,479 Selling and operating expenses
136,340 125,005 312,862 293,220 General and administrative expenses
78,491 71,941 150,164
141,147 Operating income 243,977 260,486 459,904
487,112 Other income, net 169 1,253 350 1,682 Gain on
financial instruments, net 3,579 2,900 6,924 7,461 Loss on foreign
currency, net (8,813 ) (8,722 ) (17,884 ) (19,272 ) Interest
expense (281 ) (2,995 ) (1,368 ) (5,615
) Income before income taxes 238,631 252,922 447,926 471,368
Income tax expense (83,050 ) (90,609 )
(157,666 ) (170,580 ) Net income 155,581 162,313 $ 290,260 $
300,788 Net income attributable to noncontrolling interests
102 229 202 477
Net income attributable to Keurig $ 155,479 $
162,084 $ 290,058 $ 300,311 Net income
attributable to Keurig per common share: Basic $ 0.98 $ 1.05 $ 1.81
$ 1.98 Diluted $ 0.97 $ 1.03 $ 1.79 $ 1.94 Cash dividends
declared per common share $ 0.2875 $ 0.25 $ 0.5750 $ 0.50
Weighted-average common shares outstanding: Basic 158,969,696
153,945,441 160,575,947 151,552,422 Diluted 160,633,437 157,463,096
162,362,574 154,525,749
KEURIG GREEN MOUNTAIN,
INC. Unaudited Consolidated Statements of Cash Flows
(Dollars in thousands)
Twenty-sixweeks ended
Twenty-sixweeks ended March 28, 2015 March
29, 2014 Cash flows from operating activities: Net income $
290,260 $ 300,788 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization of
fixed assets 101,721 104,222 Amortization of intangibles 23,168
21,942 Amortization of deferred financing fees 2,826 2,826
Unrealized loss on foreign currency, net 11,439 18,089 Loss (gain)
on disposal of fixed assets 469 (842 ) Provision for doubtful
accounts 4,473 1,575 Provision for sales returns 63,301 51,747 Gain
on derivatives, net (9,543 ) (9,954 ) Excess tax benefits from
equity-based compensation plans (20,489 ) (46,170 ) Deferred income
taxes (141 ) (80 ) Deferred compensation and stock compensation
21,890 15,882 Other 2,148 (196 ) Changes in assets and liabilities,
net of acquisition: Receivables 23,387 (20,697 ) Inventories 99,460
219,417 Income tax receivable/payable, net (49,177 ) 27,408 Other
current assets (4,131 ) 3,051 Other long-term assets, net 887 (498
) Accounts payable and accrued expenses (197,573 ) (83,137 ) Other
current liabilities 4,252 (9,133 ) Other long-term liabilities
(662 ) (2,620 ) Net cash provided by operating
activities 367,965 593,620 Cash flows from investing
activities: Change in restricted cash (272 ) 128 Maturity of
short-term investment 100,000 — Acquisition, net of cash acquired
(180,698 ) — Capital expenditures for fixed assets (234,842 )
(118,978 ) Purchase of long-term investment — (10,000 ) Other
investing activities (517 ) 1,207 Net cash
used in investing activities (316,329 ) (127,643 ) Cash
flows from financing activities: Net change in revolving line of
credit 265,000 — Proceeds from sale of common stock — 1,243,028
Proceeds from issuance of common stock under compensation plans
15,055 26,441 Repurchase of common stock (918,356 ) (880,816 )
Excess tax benefits from equity-based compensation plans 20,489
46,170 Payments on capital lease and financing obligations (1,545 )
(954 ) Repayment of long-term debt (9,381 ) (6,517 ) Dividends paid
(87,191 ) (37,220 ) Other financing activities (266 )
(180 ) Net cash used in financing activities (716,195 ) 389,952
Effect of exchange rate changes on cash and cash equivalents
898 (3,866 ) Net (decrease) increase in cash and cash
equivalents (663,661 ) 852,063 Cash and cash equivalents at
beginning of period 761,214 260,092
Cash and cash equivalents at end of period $ 97,553 $
1,112,155 Supplemental disclosures of cash flow
information: Fixed asset purchases included in accounts payable and
not disbursed at the end of each period $ 58,991 $ 43,431 Dividends
declared not paid at the end of each period $ 44,258 $ 40,483
Noncash investing and financing activities: Fixed assets acquired
under capital lease and financing obligations $ 375 $ 25,930
KEURIG GREEN MOUNTAIN, INC. GAAP to Non-GAAP
Reconciliation (Dollars in thousands, except per share
data) Thirteen weeks ended
March 28, 2015 March 29, 2014
Selling and operating expenses $ 136,340 $ 125,005 General and
administrative expenses 78,491 71,941
Total SG&A $ 214,831 $ 196,946 Expenses related
to SEC inquiry (1) (48 ) (546 ) Amortization of identifiable
intangibles (2) (13,058 ) (10,789 ) Expenses related to antitrust
litigation (3) (931 ) — Non-GAAP SG&A $
200,794 $ 185,611
Thirteen weeks ended
March 28, 2015 March 29, 2014 Operating income $
243,977 $ 260,486 Expenses related to SEC inquiry (1) 48 546
Amortization of identifiable intangibles (2) 13,058 10,789 Expenses
related to antitrust litigation (3) 931 —
Non-GAAP operating income $ 258,014 $ 271,821
Thirteen weeks ended March 28, 2015 March
29, 2014 Net income attributable to Keurig $ 155,479 $ 162,084
After tax: Expenses related to SEC inquiry (1) 31 348 Amortization
of identifiable intangibles (2) 9,884 7,334 Expenses related to
antitrust litigation (3) 607 — Non-GAAP
net income attributable to Keurig $ 166,001 $ 169,766
Thirteen weeks ended March 28, 2015 March
29, 2014 Diluted income per share (EPS) $ 0.97 $ 1.03 After
tax: Expenses related to SEC inquiry (1) 0.00 0.00 Amortization of
identifiable intangibles (2) 0.06 0.05 Expenses related to
antitrust litigation (3) 0.00 —
Non-GAAP EPS $ 1.03 $ 1.08
(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.
(3) Represents legal expenses related to antitrust litigation
classified as general and administrative expense.
Twenty-six weeks ended March 28,
2015 March 29, 2014 Selling and
operating expenses $ 312,862 $ 293,220 General and administrative
expenses 150,164 141,147 Total SG&A
$ 463,026 $ 434,367 Expenses related to SEC inquiry
(1) (1,442 ) (918 ) Amortization of identifiable intangibles (2)
(23,168 ) (21,941 ) Expenses related to antitrust litigation (3)
(3,232 ) — Non-GAAP SG&A $ 435,184
$ 411,508
Twenty-six weeks ended March 28,
2015 March 29, 2014 Operating income $ 459,904 $ 487,112
Expenses related to SEC inquiry (1) 1,442 918 Amortization of
identifiable intangibles (2) 23,168 21,941 Expenses related to
antitrust litigation (3) 3,232 —
Non-GAAP operating income $ 487,746 $ 509,971
Twenty-six weeks ended March 28, 2015
March 29, 2014 Net income attributable to Keurig $ 290,058 $
300,311 After tax: Expenses related to SEC inquiry (1) 927 584
Amortization of identifiable intangibles (2) 16,792 14,976 Expenses
related to antitrust litigation (3) 2,087 —
Non-GAAP net income attributable to Keurig $ 309,864
$ 315,871
Twenty-six weeks ended March 28,
2015 March 29, 2014 Diluted income per share (EPS) $
1.79 $ 1.94 After tax: Expenses related to SEC inquiry (1) 0.01
0.00 Amortization of identifiable intangibles (2) 0.10 0.10
Expenses related to antitrust litigation (3) 0.01
— Non-GAAP EPS $ 1.91 $ 2.04
(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.
(3) Represents legal expenses related to antitrust litigation
classified as general and administrative expense.
Keurig Green Mountain, Inc.For Media:Suzanne DuLong,
781-418-8075pr@keurig.comorFor Investors:Kristi Bonner,
646-762-8095Investor.Services@keurig.com
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