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Keurig Green Mountain: Q3 Results
Die bislang auf Biokaffee und Kaffeemaschinen spezialisierte Keurig Green Mountain hat weiter Probleme mit dem Einstieg in das Geschäft mit Kaltgetränken. Diese und eine verringerte Nachfrage für seine Einweg-Tabs mit Biokaffee haben dem Unternehmen aus dem US-Bundesstaat Vermont die Zwischenbilanz für das dritte Quartal des laufenden Geschäftsjahres verhagelt. Wir veröffentlichen die Mitteilung von Keurig Green Mountain hierzu im Wortlaut.
Die untenstehende Meldung ist eine Original-Meldung des Unternehmens. Sie ist nicht von der ECOreporter.de-Redaktion bearbeitet. Die presserechtliche Verantwortlichkeit liegt bei dem meldenden Unternehmen.
Non-GAAP EPS1 of $0.80 and GAAP EPS of $0.73
Net sales decline of 5%; 4% excluding foreign currency
Pod equivalent servings2 volume growth of 5% with 12% growth in U.S. At Home Channels
Announces multi-year productivity program expected to generate approximately $300 million in cost savings over 3 years
Approves $1 billion share repurchase authorization
Approves $0.2875 per share cash dividend
WATERBURY, Vermont - Keurig Green Mountain, Inc. (NASDAQ: GMCR), a leader in specialty coffee, coffee makers, teas and other beverages with its innovative brewing technology, announced its business results for the 13 weeks ended June 27, 2015.
"While we are not pleased with our revenue growth, we delivered earnings at the high end of our previous guidance," commented President and CEO, Brian Kelley. "We are taking decisive actions to adapt and compete more effectively in today's rapidly-evolving, dynamic marketplace. We are implementing a multi-year productivity program that we are confident will enhance our operational effectiveness and enable us to fund incremental investment in innovation and brand building. In addition, our new Keurig K200 brewer is off to a strong start with its introduction this past quarter. We believe this addition, as well as the enhancements we've made to our entire At Home brewer line up will allow for continued growth in our U.S. installed base. We continue to believe that our hot system has the potential to reach more than 50 million U.S. households over time --more than double its size today. In addition, the upcoming launch of our Keurig KOLD system creates an even larger opportunity for long-term growth and value creation."
Mr. Kelley continued, "Going forward, we will continue to maintain a strong, flexible capital structure and balance sheet to enable us to return significant value to our shareholders as we continue to invest in the business. Underscoring our commitment to delivering value to our shareholders, today we announced that our Board authorized an additional $1 billion share repurchase which adds to our existing plan. With innovative technology and a premier beverage brands portfolio, Keurig continues to be a recognized leader in the industry and we are confident we will continue our legacy of delivering disruptive and innovative products for the benefit of all Keurig constituents."
Net Sales by Product
Net sales of $970 million decreased 5% versus the prior year period with declines in brewer sales and pod sales. Foreign currency exchange rates negatively impacted sales by approximately 1.5 percentage points. Excluding the impact of foreign currency exchange rates, total net sales declined 4% and total Keurig beverage system sales declined 4% compared to the prior year period.
Net sales for the domestic segment declined 4% in the quarter while sales in the Canada segment declined 14% on a reported basis and declined 3% excluding the impact of foreign currency exchange rates.
Total pod net sales declined 1% in the quarter while brewers and accessories net sales declined 26%. Other product net sales declined 12% compared to the prior year period.
Pods
The 1% decrease in the quarter in pod net sales compared to the prior year period was due to a 5% increase in equivalent servings2 volume and a 3 percentage point increase due to net price realization. This was offset by an 8 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, 1.36 million Keurig® system brewers were sold including 1.3 million sold by Keurig and 0.05 million reported sold by Keurig's licensed brewer partners. This brewer shipment number does not account for consumer returns.
The 26% decline in Keurig's brewer and accessory net sales compared to the prior year period was primarily due to a 18% decline in brewer sales volume, driven by high levels of inventory at retail and timing of restocking the MINI Plus brewer. Brewer net price realization declined by 6 percentage points due to promotional efforts to reduce brewer inventory levels. Brewer mix negatively impacted brewer sales by 2 percentage points. Foreign currency exchange rates negatively impacted brewer net sales by roughly 1 percentage point.
Additionally, accessory net sales declined 22% compared to the prior year period.
Other Products
Sales of other products declined 12% during the quarter from the prior year period primarily due to the continuing demand shift from traditional coffee package formats to pods and the unfavorable impact of foreign currency exchange rates.
For the quarter, gross margin declined 750 basis points versus prior year to 36.0% of net sales. The table below quantifies the changes in gross margin period to period. Obsolescence of finished goods includes an $18 million charge related to Keurig 2.0 brewers in the third quarter which impacted gross margin by 190 bps.
GAAP SG&A declined 12%, representing 19.4% of net sales for the quarter as compared to 20.9% in the prior year period. Non-GAAP SG&A decreased 14% representing 17.8% of sales for the quarter as compared to 19.7% in the prior period. The decrease in SG&A over the prior year period was driven by lower incentive compensation expense, lower marketing expense and a reduction in professional fees.
GAAP operating income declined 30%, representing 16.6% of net sales for the quarter, compared to 22.6% in the prior year period.
Non-GAAP operating income declined 28%, representing 18.2% of net sales in the quarter, compared to 23.8% in the prior year period.
The Company's effective income tax rate was 30.2% for the quarter as compared to 33.9% in the prior year period.
Diluted weighted average shares outstanding for the third quarter were 155.6 million, down 6% from 164.7 million in the prior year period. The reduction in shares outstanding was driven 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 22% from the prior year period to $0.73.
Non-GAAP diluted EPS declined 19% from the prior year period to $0.80. Excluding the impact of foreign currency, non-GAAP diluted EPS decreased approximately 17% versus the prior year period.
Balance Sheet & Cash Flow Highlights
Share Repurchase
On July 31, 2015, the Board of Directors approved a new share repurchase authorization of up to an additional $1 billion over the next two years, at such times and prices as determined appropriate by the Company's management in collaboration with the Board of Directors. The shares will be purchased with cash on hand, cash from operations, and funds available through our existing credit facility.
Productivity Program
The Company announced a multi-year productivity program intended to reduce structural costs and streamline organization structures to drive efficiency. The program is expected to generate approximately $300 million in savings over the next three years with approximately $100 million of savings in fiscal 2016. The program is expected to reduce the company's workforce by approximately 5%.
Implementation of the productivity program is expected to result in cumulative pre-tax charges of $30-$35 million, beginning with an approximately $26 million charge in the fourth quarter of fiscal 2015. Of the total anticipated initial charge, approximately $20 million is expected to be cash expenditures.
Business Outlook and Other Forward-Looking Information
The Company updated its outlook for fiscal year 2015, provided its outlook for the fourth quarter and provided its preliminary outlook for fiscal year 2016.
Fiscal Year 2015 Outlook
Net sales decline of low-single to mid-single-digits compared to fiscal year 2014
An annual effective tax rate of approximately 34.5% to 35%
Non-GAAP EPS decline in the low-teens. This outlook:
Includes an estimated $0.13 headwind from foreign currency exchange
Excludes any restructuring or one-time charges related to the Company's productivity initiative
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 $150 million to $200 million
Capital investment in the range of $400 million to $450 million
Fourth Quarter 2015
Net sales growth decline of low-teens compared to the fourth quarter of fiscal year 2014
An effective tax rate of approximately 36% to 36.5%
Non-GAAP EPS in a range of $0.70 to $0.75 which:
Includes an estimated $0.03 headwind from foreign currency exchange
Excludes any restructuring or one-time charges related to the Company's productivity initiative
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
Fiscal Year 2016 Outlook
Based upon its preliminary estimates for fiscal 2016, the Company expects its hot business to deliver modest non-GAAP earnings per share growth over fiscal 2015 inclusive of the expected productivity savings. The Company expects that its investment in Keurig KOLD™ in 2016 will be at least $100 million and could be higher depending largely on pod manufacturing efficiencies and channel mix. Our fiscal year 2016 non-GAAP EPS excludes any restructuring or one-time charges related to the productivity program.
With regard to the first quarter of fiscal 2016, the Company expects non-GAAP earnings per share to decline versus the prior year quarter as the Company ships more hot appliances year over year, ships KOLD appliances, ramps production on KOLD pods and faces a significant coffee cost headwind in the first quarter of fiscal 2016.
The Company will update its outlook and provide more details related to fiscal 2016 on its fourth quarter earnings announcement.
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 October 29, 2015 to shareholders of record as of the close of business on September 29, 2015.
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.
Die untenstehende Meldung ist eine Original-Meldung des Unternehmens. Sie ist nicht von der ECOreporter.de-Redaktion bearbeitet. Die presserechtliche Verantwortlichkeit liegt bei dem meldenden Unternehmen.
Non-GAAP EPS1 of $0.80 and GAAP EPS of $0.73
Net sales decline of 5%; 4% excluding foreign currency
Pod equivalent servings2 volume growth of 5% with 12% growth in U.S. At Home Channels
Announces multi-year productivity program expected to generate approximately $300 million in cost savings over 3 years
Approves $1 billion share repurchase authorization
Approves $0.2875 per share cash dividend
WATERBURY, Vermont - Keurig Green Mountain, Inc. (NASDAQ: GMCR), a leader in specialty coffee, coffee makers, teas and other beverages with its innovative brewing technology, announced its business results for the 13 weeks ended June 27, 2015.
"While we are not pleased with our revenue growth, we delivered earnings at the high end of our previous guidance," commented President and CEO, Brian Kelley. "We are taking decisive actions to adapt and compete more effectively in today's rapidly-evolving, dynamic marketplace. We are implementing a multi-year productivity program that we are confident will enhance our operational effectiveness and enable us to fund incremental investment in innovation and brand building. In addition, our new Keurig K200 brewer is off to a strong start with its introduction this past quarter. We believe this addition, as well as the enhancements we've made to our entire At Home brewer line up will allow for continued growth in our U.S. installed base. We continue to believe that our hot system has the potential to reach more than 50 million U.S. households over time --more than double its size today. In addition, the upcoming launch of our Keurig KOLD system creates an even larger opportunity for long-term growth and value creation."
Mr. Kelley continued, "Going forward, we will continue to maintain a strong, flexible capital structure and balance sheet to enable us to return significant value to our shareholders as we continue to invest in the business. Underscoring our commitment to delivering value to our shareholders, today we announced that our Board authorized an additional $1 billion share repurchase which adds to our existing plan. With innovative technology and a premier beverage brands portfolio, Keurig continues to be a recognized leader in the industry and we are confident we will continue our legacy of delivering disruptive and innovative products for the benefit of all Keurig constituents."
Net Sales by Product
Net sales of $970 million decreased 5% versus the prior year period with declines in brewer sales and pod sales. Foreign currency exchange rates negatively impacted sales by approximately 1.5 percentage points. Excluding the impact of foreign currency exchange rates, total net sales declined 4% and total Keurig beverage system sales declined 4% compared to the prior year period.
Net sales for the domestic segment declined 4% in the quarter while sales in the Canada segment declined 14% on a reported basis and declined 3% excluding the impact of foreign currency exchange rates.
Total pod net sales declined 1% in the quarter while brewers and accessories net sales declined 26%. Other product net sales declined 12% compared to the prior year period.
Pods
The 1% decrease in the quarter in pod net sales compared to the prior year period was due to a 5% increase in equivalent servings2 volume and a 3 percentage point increase due to net price realization. This was offset by an 8 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, 1.36 million Keurig® system brewers were sold including 1.3 million sold by Keurig and 0.05 million reported sold by Keurig's licensed brewer partners. This brewer shipment number does not account for consumer returns.
The 26% decline in Keurig's brewer and accessory net sales compared to the prior year period was primarily due to a 18% decline in brewer sales volume, driven by high levels of inventory at retail and timing of restocking the MINI Plus brewer. Brewer net price realization declined by 6 percentage points due to promotional efforts to reduce brewer inventory levels. Brewer mix negatively impacted brewer sales by 2 percentage points. Foreign currency exchange rates negatively impacted brewer net sales by roughly 1 percentage point.
Additionally, accessory net sales declined 22% compared to the prior year period.
Other Products
Sales of other products declined 12% during the quarter from the prior year period primarily due to the continuing demand shift from traditional coffee package formats to pods and the unfavorable impact of foreign currency exchange rates.
For the quarter, gross margin declined 750 basis points versus prior year to 36.0% of net sales. The table below quantifies the changes in gross margin period to period. Obsolescence of finished goods includes an $18 million charge related to Keurig 2.0 brewers in the third quarter which impacted gross margin by 190 bps.
GAAP SG&A declined 12%, representing 19.4% of net sales for the quarter as compared to 20.9% in the prior year period. Non-GAAP SG&A decreased 14% representing 17.8% of sales for the quarter as compared to 19.7% in the prior period. The decrease in SG&A over the prior year period was driven by lower incentive compensation expense, lower marketing expense and a reduction in professional fees.
GAAP operating income declined 30%, representing 16.6% of net sales for the quarter, compared to 22.6% in the prior year period.
Non-GAAP operating income declined 28%, representing 18.2% of net sales in the quarter, compared to 23.8% in the prior year period.
The Company's effective income tax rate was 30.2% for the quarter as compared to 33.9% in the prior year period.
Diluted weighted average shares outstanding for the third quarter were 155.6 million, down 6% from 164.7 million in the prior year period. The reduction in shares outstanding was driven 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 22% from the prior year period to $0.73.
Non-GAAP diluted EPS declined 19% from the prior year period to $0.80. Excluding the impact of foreign currency, non-GAAP diluted EPS decreased approximately 17% versus the prior year period.
Balance Sheet & Cash Flow Highlights
Share Repurchase
On July 31, 2015, the Board of Directors approved a new share repurchase authorization of up to an additional $1 billion over the next two years, at such times and prices as determined appropriate by the Company's management in collaboration with the Board of Directors. The shares will be purchased with cash on hand, cash from operations, and funds available through our existing credit facility.
Productivity Program
The Company announced a multi-year productivity program intended to reduce structural costs and streamline organization structures to drive efficiency. The program is expected to generate approximately $300 million in savings over the next three years with approximately $100 million of savings in fiscal 2016. The program is expected to reduce the company's workforce by approximately 5%.
Implementation of the productivity program is expected to result in cumulative pre-tax charges of $30-$35 million, beginning with an approximately $26 million charge in the fourth quarter of fiscal 2015. Of the total anticipated initial charge, approximately $20 million is expected to be cash expenditures.
Business Outlook and Other Forward-Looking Information
The Company updated its outlook for fiscal year 2015, provided its outlook for the fourth quarter and provided its preliminary outlook for fiscal year 2016.
Fiscal Year 2015 Outlook
Net sales decline of low-single to mid-single-digits compared to fiscal year 2014
An annual effective tax rate of approximately 34.5% to 35%
Non-GAAP EPS decline in the low-teens. This outlook:
Includes an estimated $0.13 headwind from foreign currency exchange
Excludes any restructuring or one-time charges related to the Company's productivity initiative
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 $150 million to $200 million
Capital investment in the range of $400 million to $450 million
Fourth Quarter 2015
Net sales growth decline of low-teens compared to the fourth quarter of fiscal year 2014
An effective tax rate of approximately 36% to 36.5%
Non-GAAP EPS in a range of $0.70 to $0.75 which:
Includes an estimated $0.03 headwind from foreign currency exchange
Excludes any restructuring or one-time charges related to the Company's productivity initiative
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
Fiscal Year 2016 Outlook
Based upon its preliminary estimates for fiscal 2016, the Company expects its hot business to deliver modest non-GAAP earnings per share growth over fiscal 2015 inclusive of the expected productivity savings. The Company expects that its investment in Keurig KOLD™ in 2016 will be at least $100 million and could be higher depending largely on pod manufacturing efficiencies and channel mix. Our fiscal year 2016 non-GAAP EPS excludes any restructuring or one-time charges related to the productivity program.
With regard to the first quarter of fiscal 2016, the Company expects non-GAAP earnings per share to decline versus the prior year quarter as the Company ships more hot appliances year over year, ships KOLD appliances, ramps production on KOLD pods and faces a significant coffee cost headwind in the first quarter of fiscal 2016.
The Company will update its outlook and provide more details related to fiscal 2016 on its fourth quarter earnings announcement.
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 October 29, 2015 to shareholders of record as of the close of business on September 29, 2015.
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.