UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 10-Q

 

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended April 1, 2012

 

OR

 

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________to __________________

 

Commission file number: 000-32233

 

PEET’S COFFEE & TEA, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Washington		91-0863396
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

1400 Park Avenue

Emeryville, California 94608-3520

(Address of Principal Executive Offices)(Zip Code)

 

(510) 594-2100

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer o	Accelerated Filer x
Non-Accelerated Filer o	Smaller reporting company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No x  

 

As of April 30, 2012, 13,250,663 of registrant’s Common Stock were outstanding.

 

 

	INDEX	Page
PART I	FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	17
Item 4.	Controls and Procedures	18
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
	Signatures	21

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

PEET’S COFFEE & TEA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share amounts)

  

		April 1,				January 1,
		2012				2012
ASSETS
Current assets
Cash and cash equivalents		$	44,977			$	30,755
Short-term marketable securities			5,877				3,800
Accounts receivable, net			18,496				20,522
Inventories			48,832				54,265
Deferred income taxes - current			5,041				5,041
Prepaid expenses and other			9,068				9,368
Total current assets			132,291				123,751
Long-term marketable securities			1,108				888
Property, plant and equipment, net			87,047				89,304
Other assets, net			2,313				1,328
Total assets		$	222,759			$	215,271
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and other accrued liabilities		$	13,577			$	11,547
Accrued compensation and benefits			7,020				10,283
Deferred revenue			6,558				7,382
Total current liabilities			27,155				29,212
Deferred income taxes - non current			368				367
Deferred lease credits			6,517				6,668
Other long-term liabilities			2,376				1,068
Total liabilities			36,416				37,315
Shareholders' equity
Common stock, no par value; authorized 50,000,000 shares;
issued and outstanding: 13,236,000 and 13,136,000 shares			74,666				69,664
Accumulated other comprehensive income			3				2
Retained earnings			111,674				108,290
Total shareholders' equity			186,343				177,956
Total liabilities and shareholders' equity		$	222,759			$	215,271

 

 

See notes to condensed consolidated financial statements.  

 

 

PEET’S COFFEE & TEA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited, in thousands, except per share amounts)

 

		Thirteen weeks ended
		April 1,				April 3,
		2012				2011
Retail stores		$	54,115			$	52,089
Specialty sales			40,659				36,383
Net revenue			94,774				88,472
Cost of sales and related occupancy expenses			48,356				41,220
Operating expenses			29,826				27,884
Litigation related expenses			-				41
General and administrative expenses			7,382				6,768
Depreciation and amortization expenses			3,942				3,919
Total costs and expenses from operations			89,506				79,832
Income from operations			5,268				8,640
Interest income, net			6				11
Income before income taxes			5,274				8,651
Income tax provision			1,890				3,138
Net income		$	3,384			$	5,513
Unrealized gain on investments			1				5
Comprehensive income		$	3,385			$	5,518
Net income per share:
Basic		$	0.26			$	0.42
Diluted		$	0.25			$	0.41
Shares used in calculation of net income per share:
Basic			13,171				13,109
Diluted			13,482				13,520

 

 

See notes to condensed consolidated financial statements.

 

 

PEET’S COFFEE & TEA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

		Thirteen weeks ended
		April 1,				April 3,
		2012				2011
Cash flows from operating activities:
Net income		$	3,384			$	5,513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			4,478				4,501
Amortization of interest purchased			69				83
Stock-based compensation			990				906
Excess tax benefit from exercise of stock options			(1,121	)			(3,508	)
Tax benefit from exercise of stock options			1,088				3,221
Loss on disposition of assets and asset impairment			50				126
Deferred income taxes			1				68
Changes in other assets and liabilities:
Accounts receivable, net			2,026				(1,566	)
Inventories			5,433				2,281
Prepaid expenses and other current assets			300				(30	)
Other assets			(1,288	)			(1	)
Accounts payable, accrued liabilities and deferred revenue			(1,927	)			(5,273	)
Deferred lease credits and other long-term liabilities			1,157				(436	)
Net cash provided by operating activities			14,640				5,885
Cash flows from investing activities:
Purchases of property, plant and equipment			(2,398	)			(1,821	)
Changes in restricted investments			300				798
Proceeds from sales and maturities of marketable securities			1,080				703
Purchases of marketable securities			(3,445	)			(5,329	)
Net cash used in investing activities			(4,463	)			(5,649	)
Cash flows from financing activities:
Net proceeds from issuance of common stock			2,924				7,730
Purchase of common stock			-				(21,244	)
Excess tax benefit from exercise of stock options			1,121				3,508
Net cash provided by/(used in) financing activities			4,045				(10,006	)
Increase/(decrease) in cash and cash equivalents			14,222				(9,770	)
Cash and cash equivalents, beginning of period			30,755				44,629
Cash and cash equivalents, end of period		$	44,977			$	34,859
Non-cash investing activities:
Capital expenditures incurred, but not yet paid		$	115			$	187
Other cash flow information:
Cash paid for income taxes			67				181

 

 

See notes to condensed consolidated financial statements.

 

 

Peet’s Coffee & Tea, Inc.

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.	Basis of Presentation

 

The accompanying condensed consolidated financial statements of Peet’s Coffee & Tea, Inc. and its subsidiaries (collectively, the “Company” or “Peet’s”) as of April 1, 2012 and for the thirteen weeks ended April 1, 2012 and April 3, 2011 are unaudited and, in the opinion of management, contain all adjustments, consisting only of normal recurring items necessary to present fairly the financial position and results of operations for such periods. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) should be read in conjunction with the Company’s annual consolidated financial statements in Peet’s Annual Report on Form 10-K for the year ended January 1, 2012 (the “2011 Annual Report”).

 

The results of operations for the thirteen weeks ended April 1, 2012 are not necessarily indicative of the results expected for the full year. Litigation-related expenses have been presented separately from operating expense in the condensed consolidated statements of income and comprehensive income for all periods presented to conform to current period presentation. These reclassifications did not have an impact on income from operations, income before income taxes, net income, operating or total cash flows, or the financial position for any period presented.

 

Recent Accounting Pronouncements

 

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The ASU changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and IFRS. The ASU also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively beginning after December 15, 2011. We adopted the guidance in our first quarter of 2012 and there was no material impact on our condensed consolidated financial statements or related footnotes.

 

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.”  This ASU eliminates the option to report other comprehensive income and its components in the statement of changes in equity.  The ASU requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In December 2011, the FASB issued ASU 2011-12, “Comprehensive Income — Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05,” to defer the effective date of the specific requirement to present items that are reclassified out of accumulated other comprehensive income to net income alongside their respective components of net income and other comprehensive income. All other provisions of this update, which are to be applied retrospectively, are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We adopted the guidance in our first quarter of 2012 with no material impact on our condensed consolidated financial statements or related footnotes.

 

Net Income per Share

 

Basic net income per share is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that could occur from common shares issued through stock options. Anti-dilutive shares of 31,967 and 174,467 have been excluded from diluted weighted average shares outstanding for the thirteen-week periods ended April 1, 2012 and April 3, 2011, respectively.

 

 

The number of incremental shares from the assumed exercise of stock options was calculated by applying the treasury stock method. The following table summarizes the differences between basic weighted average shares outstanding and diluted weighted average shares outstanding used to compute diluted net income per share (in thousands):

 

		Thirteen weeks
		April 1,				April 3,
		2012				2011
Basic weighted average shares
outstanding			13,171				13,109
Incremental shares from assumed
exercise of stock options and awards			311				411
Diluted weighted average shares
outstanding			13,482				13,520

 

2.	Fair Value Measurements

 

ASU 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASU 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 

Level 1 - Quoted prices in active markets for identical assets or liabilities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.

 

Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

 

Recurring Fair Value Measurements

 

In accordance with accounting principles generally accepted in the United States, certain assets and liabilities are required to be recorded at fair value on a recurring basis. The Company has the following assets that are adjusted to fair value on a recurring basis.

 

						April 1,				January 1,
			Level			2012				2012
State and local government obligations - short-term (a)			1			$	5,877			$	3,800
State and local government obligations - long-term (a)			1				1,108				888
Deferred compensation plan assets (b)			1				1,283				-
Total						$	8,268			$	4,688

 

(a)

The fair values of our investments in our marketable securities were determined using quoted market prices from daily exchange traded markets. The fair values of these instruments were based on the closing price as of the balance sheet date and were classified as Level 1. The Company’s marketable securities consist of equity securities and interest-bearing, U.S. government, agency, and municipal securities.

 

Unrealized gains or losses on marketable securities are recorded in accumulated other comprehensive income at each measurement date.

 

(b)

Represents the fair value of plan assets invested in frequently-priced mutual funds established under a Rabbi Trust for the Company’s non-qualified deferred compensation plan and are classified as Level 1. The plan assets are recorded in other assets.

 

 

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

 

The Company measures certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis. As of April 1, 2012, the Company was not required to measure any non-financial assets and liabilities at fair value. For the period ended April 3, 2011, the Company recorded a charge of $97,000 related to the impairment of assets at an under-performing store. The fair market value of these assets was determined using the income approach and Level 3 inputs, which required management to make estimates about future cash flows. Management estimates the amount and timing of future cash flows based on its experience and knowledge of the retail market in which each store operates and other factors. This impairment charge was included in operating expenses in the accompanying condensed consolidated statements of income and comprehensive income.

 

The carrying value of cash and equivalents, restricted cash, receivables and accounts payable approximates fair value.

 

3.	Inventories

 

The Company’s inventories consist of the following (in thousands):

 

		April 1,				January 1,
		2012				2012
Green coffee		$	36,812			$	43,671
Other inventory			12,020				10,594
Total		$	48,832			$	54,265

 

4.	Stock Purchase Program

 

On September 2, 2010, the Board of Directors authorized the Company to purchase up to one million additional shares of the Company’s common stock.  During the thirteen weeks ended April 1, 2012 and April 3, 2011, the Company purchased 0 shares of common stock at an average price of $0 and 503,295 shares of common stock at an average price of $42.21, respectively, in accordance with this stock purchase program. No shares remain available for purchase under this stock purchase program.

 

On May 27, 2011, the Board of Directors authorized the Company to purchase up to one million additional shares of the Company’s common stock. No purchases were made during the thirteen weeks ended April 1, 2012 and 725,166 shares remain available for purchase under this stock purchase program.

 

Purchases under the Company’s stock purchase programs may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market.

 

5.	Stock-Based Compensation

 

On May 18, 2010, the Company’s shareholders approved the Peet’s Coffee & Tea, Inc. 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan is intended as the successor to and continuation of the Peet’s Coffee & Tea, Inc. 2000 Equity Incentive Plan (“Prior Plan”). Under the 2010 Plan, the Company may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSUs”), performance stock awards, performance cash awards, and other stock awards. No additional stock awards will be granted under the Prior Plan.

 

On May 27, 2011, the Company’s shareholders approved an amendment to the 2010 Plan (as amended, the “Amended 2010 Plan”). Under the Amended 2010 Plan, the aggregate number of shares of common stock that may be issued pursuant to stock awards from and after May 18, 2010 shall not exceed 1,450,000 shares plus shares underlying options under the Prior Plan that expire or terminate, less one share for each share of stock issued pursuant to an option or stock appreciation right granted under the Prior Plan after January 3, 2010 and 1.8 shares for each share of stock issued pursuant to a restricted stock award, restricted stock unit award, performance stock award, performance cash award, or other stock award granted under the Prior Plan after January 3, 2010. The Amended 2010 Plan provides that the number of shares available for issuance under the Amended 2010 Plan shall be reduced by one share for each share of common stock subject to a stock option or stock appreciation right with a strike price of at least 100% of the fair market value of the underlying common stock on the grant date and by two shares for each share of common stock subject to any other type of award issued pursuant to the Amended 2010 Plan.

 

 

Stock Option Activity

 

Changes in stock options were as follows:

 

		Options Outstanding				Weighted Average Exercise Price Per Share				Weighted Average Remaining Contractual Life (Years)				Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2012			1,028,361			$	31.84				6.76			$	31,714
Granted			50,000				66.70
Cancelled			(6,329	)			26.87
Exercised			(91,950	)			27.41
Outstanding at April 1, 2012			980,082			$	34.07				6.77			$	38,843
Vested or expected to vest, April 1, 2012			914,828			$	33.50				6.69			$	36,782
Exercisable at April 1, 2012			330,516			$	26.99				5.16			$	15,440

 

Restricted Stock Unit Awards

 

Changes in RSU’s were as follows:

 

			Number of Units Outstanding				Weighted Average Grant Date Fair Value
Outstanding at January 1, 2012				36,266			$	43.38
Granted				-			$	-
Released				-			$	-
Cancelled				(927	)		$	43.17
Outstanding at April 1, 2012				35,339			$	43.39

 

Employee Stock Purchase Plan

 

The Company has an Employee Stock Purchase Plan (“ESPP”) under which eligible employees can choose to have up to 15% of their annual earnings withheld to purchase the Company’s common stock. The price of stock purchased under the ESPP is 85% of the lower of the market prices at the beginning of the offering period and the end of the offering period. On May 27, 2011, the Board of Directors of the Company amended the ESPP to eliminate the automatic annual increases in the number of shares available for issuance under the ESPP.

 

During the thirteen-week period ended April 1, 2012, 7,606 shares of the Company’s common stock were purchased under the ESPP. At April 1, 2012, 1,410,839 shares remain available for future issuance under the ESPP.

 

 

Stock-Based Compensation

 

Stock-based compensation expense consists of and was recognized in the condensed consolidated statements of income and comprehensive income as follows (in thousands):

 

		Thirteen weeks ended
		April 1,				April 3,
		2012				2011
Stock-based compensation expense		$	893			$	810
Employee Stock Purchase Plan expense			97				96
Total		$	990			$	906
Cost of sales and related occupancy expenses		$	152			$	129
Operating expenses			332				303
General and administrative expenses			506				474
Total		$	990			$	906
Tax benefit		$	397			$	369

 

The fair value of each RSU is equal to the stock price on the date of grant. The fair value of each option grant and Employee Stock Purchase Plan award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following assumptions:

 

 

		April 1,				April 3,
		2012				2011
Expected term in years			5.6				6.0
Expected stock price volatility			35.8	%			36.0	%
Risk-free interest rate			0.9	%			2.3	%
Expected dividend yield			0.0	%			0.0	%
Estimated fair value per option granted		$	21.87			$	16.37
Estimated fair value per RSU awarded		$	-			$	-

 

6.	Line of Credit

 

On December 21, 2010, the Company entered into a credit agreement with Wells Fargo Bank, National Association (the “Bank”). The credit agreement provides for a $50 million revolving line of credit, the proceeds of which may be used for general corporate purposes, including funding working capital, capital expenditures, share repurchases and other needs. The line of credit has a maturity date of December 1, 2013. This credit agreement replaced the Company’s agreement with the Bank that matured on December 1, 2010 and under which there were no borrowings.

 

The Company’s obligations under the line of credit are unconditionally guaranteed by Peet’s Operating Company, Inc. in the principal amount up to $50 million. The line of credit has a maturity date of December 1, 2013.

 

During the thirteen weeks ended April 1, 2012 and as of April 1, 2012, there were no borrowings under this agreement. Total unused borrowing capacity under the credit agreement was $50 million as of April 1, 2012.  

 

 

7.	Legal Proceedings

 

The Company is party to the significant legal proceedings described below.

 

On February 23, 2010, a complaint was filed in Orange County Superior Court by two former employees, on behalf of themselves and all other non-exempt employees similarly situated in the state of California (the “class”) naming the Company as a defendant. One of the named plaintiffs was removed by an amended complaint and the remaining named plaintiff alleges claims for unpaid overtime, unpaid meal and rest period premiums, unpaid business expenses, unpaid minimum wages, untimely wages paid at time of termination, untimely payment of wages, failure to pay vacation wages, violation of California Business & Professions Code section 17200 and non-compliant wage statements and seeks injunctive relief, restitution, monetary damages, penalties under the California Labor Code Private Attorneys General Act, costs and attorneys’ fees, penalties, and prejudgment interest.  On September 14, 2011, the Company reached a tentative settlement pursuant to which the Company denies any liability but agrees to maximum payment to class participants of $2,875,000, including plaintiff’s attorney’s fees. On December 19, 2011, the California Superior Court granted preliminary approval of the settlement terms. At the time of the tentative settlement these costs, in addition to the Company’s attorney’s fees,  were recorded as litigation-related expenses. All related costs incurred in the prior period have been reflected in litigation-related expenses in the accompanying consolidated statements of income.

 

On August 7, 2010, the Council for Education and Research on Toxics (“CERT”), filed an enforcement action under California Health and Safety Code section 25249.6 (“Proposition 65”) against a number of companies, including the Company, for  not providing "clear and reasonable warnings" before allegedly exposing individuals in California to acrylamide in “ready to drink” coffee.   On May 9, 2011, CERT sued more than 40 companies that sell beans, grounds and other "coffee" products in California, including the Company, for not providing "clear and reasonable warnings" before allegedly exposing individuals in California to acrylamide in such coffee products.  The cases have been related and are pending in Los Angeles County Superior Court.  The Company has joined with the other defendants and is vigorously defending these actions.  As these matters are at a very early stage, at this time, the Company is not able to predict the probability of the outcome or estimate of loss, if any, related to these matters. 

 

On May 17, 2011, Aegis Retail Group, LLC and various affiliates (“Aegis”) filed a lawsuit against the Company in the Supreme Court of the State of New York, County of New York claiming that the Company breached an alleged agreement to permit Aegis to open licensed Peet's Coffee & Tea locations and participate in the Company’s “We Proudly Brew” program in the New York metropolitan area.  The Company is vigorously defending against this claim. At this time, the Company is not able to predict the probability of the outcome or estimate of loss, if any, related to this matter. On May 19, 2011, Aegis filed a motion for preliminary injunction that sought to compel the Company to reinstate and continue Aegis’s participation in our “We Proudly Brew” program at two locations and to continue to negotiate licenses for two locations. On December 21, 2011 the court denied Aegis’s request for preliminary injunction.

 

The Company is involved in various other litigation and governmental proceedings, not described above, that have arisen in the normal course of business. While it is not possible to determine with certainty the ultimate outcome or the duration of any such litigation or governmental proceedings, the Company believes, based on current knowledge and the advice of counsel, that such litigation and proceedings will not have a material impact on the Company’s consolidated financial position or results of operations.

 

8.	Segment Information

 

The Company operates in two reportable segments:  retail and specialty.  Retail store operations consist of sales of whole bean coffee, beverages, tea and related products through Company-operated retail stores.  Specialty consists of whole bean coffee sales through three operating segments: grocery, foodservice and office, and home delivery.

 

Management evaluates segment performance primarily based on revenue and segment operating income.  The following table presents certain financial information for each segment.  Segment income before taxes excludes unallocated marketing expenses and general and administrative expenses.  Unallocated assets include cash, coffee inventory in the warehouse, corporate headquarter assets and intangible and other assets (dollars in thousands).

 

 

		Retail								Specialty								Unallocated				Total
						Percent								Percent												Percent
						of Net								of Net												of Net
		Amount				Revenue				Amount				Revenue								Amount				Revenue
For the thirteen weeks ended April 1, 2012
Net revenue		$	54,115				100.0	%		$	40,659				100.0	%						$	94,774				100.0	%
Cost of sales and occupancy			24,517				45.3	%			23,839				58.6	%							48,356				51.0	%
Operating expenses			21,065				38.9	%			8,761				21.5	%							29,826				31.5	%
Depreciation and amortization			2,789				5.2	%			367				0.9	%		$	786				3,942				4.2	%
Segment operating income			5,744				10.6	%			7,692				18.9	%			(8,168	)			5,268				5.6	%
Total assets			45,907								23,813								153,039			$	222,759
Capital expenditures			1,397								297								704				2,398
For the thirteen weeks ended April 3, 2011
Net revenue		$	52,089				100.0	%		$	36,383				100.0	%						$	88,472				100.0	%
Cost of sales and occupancy			22,244				42.7	%			18,976				52.2	%							41,220				46.6	%
Operating expenses			20,479				39.3	%			7,405				20.4	%							27,884				31.5	%
Litigation related expenses			41				0.1	%			-				0.0	%							41				0.0	%
Depreciation and amortization			2,737				5.3	%			444				1.2	%		$	738				3,919				4.4	%
Segment operating income			6,588				12.6	%			9,558				26.3	%			(7,506	)			8,640				9.8	%
Total assets			49,206								21,247								128,603				199,056
Capital expenditures			672								688								461				1,821

 

 

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

You should read the following discussion and analysis in conjunction with the financial statements and related notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended January 1, 2012 (the “2011 Annual Report”). These historical financial statements may not be indicative of our future performance.

 

The following discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about our expected results of operations in fiscal 2012 (including the performance or other factors expected to drive those results), the coffee industry, the expected growth of specialty coffee, and related trends. These forward-looking statements are based on our beliefs, expectations, estimates and projections as of this date of this Quarterly Report and could be affected by risks, uncertainties and other important factors as described in “Part II, Item 1A. Risk Factors” in this Quarterly Report and in “Part I, Item 1A. Risk Factors” in our 2011 Annual Report. Such factors include, among others, our ability to successfully implement our business strategy, including our ability to market our products, increase our brand recognition, expand our distribution and otherwise effectively compete.

 

Our actual results may differ materially from these forward-looking statements and you should not place undue reliance on them. Except as required by law, we assume no obligation to update publicly any forward-looking statements, or to update publicly the reasons actual results could differ materially from any forward-looking statements, even if new information becomes available in the future.

 

Company Overview and Industry Outlook

 

Peet’s is a specialty coffee roaster and marketer of fresh-roasted whole bean coffee and tea. We sell our Peet’s brand coffee and tea through multiple channels of distribution, including grocery stores, home delivery, office, restaurant and foodservice accounts and, in six states, Company-owned and -operated stores. In addition, we sell Godiva^® Chocolatier brand coffees in our grocery channel. Founded in Berkeley, California in 1966, Peet's has established a loyal customer base with strong brand awareness in California. 

 

 

We expect the specialty coffee industry, fueled by continued consumer interest in high-quality coffee and related products, to continue to grow. We believe that growth opportunities exist in all of our distribution channels and that our specialty segment can expand to geographies where we do not have a retail presence. In retail, we expect to continue to open new retail stores in strategic west coast locations that meet our demographic profile. In grocery, we expect to continue to expand into new markets in addition to the western U.S., eastern seaboard and other selected markets, although the full extent of our penetration will depend upon the growth of the specialty coffee category in those markets. We will continue to work with distributors and companies to expand our presence in the foodservice and office environment.

 

In the past two years, we have experienced a dramatic increase in the price volatility of Arabica coffee traded on New York Board of Trade.  Since May 2010, commodity coffee prices have been extremely volatile ranging from a low of $1.32 per pound to a high of $3.05 per pound. We expect the coffee commodity market to continue to be challenging over time as the market continues to be influenced by worldwide supply and demand, the relative strength of the dollar, speculative trading and weather. While we do not purchase coffee on the commodity markets, price movements in the commodity trading of Arabica coffee beans impact the prices we pay. The price that we paid for our coffee in the first quarter of 2012 was 44% higher per pound than what we had paid during the corresponding period of 2011 and that increased cost negatively affected our profitability. In order to have visibility to our costs for the future, we typically fix the price of our coffee needs for the next six to 12 months by purchasing and holding large inventories of green coffee and utilizing future fixed price purchase commitments.  As of April 1, 2012, our inventory and fixed price commitments are sufficient for virtually all of our anticipated 2012 needs at a cost approximately 11% higher per pound than 2011. 

  

We have historically raised prices in each of our channels to offset the higher costs and we did increase prices in each channel in 2010 or 2011, which benefited us in the first quarter of 2012.  If we are unable to pass along these costs to our customers or find other means to offset coffee or other inflation, our profitability and margins will be negatively affected. We will continue to monitor these markets and take actions we feel are appropriate to minimize the impact on us in the short and long-term.

 

 

Results of Operations

 

The following discussion on results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes and the other financial data included elsewhere in this report.

 

		Thirteen weeks ended
		April 1,				April 3,
		2012				2011
Statement of income as a percent of net revenue:
Net revenue			100.0	%			100.0	%
Cost of sales and related occupancy expenses			51.0				46.6
Operating expenses			31.5				31.5
Litigation related expenses			-				-
General and administrative expenses			7.8				7.6
Depreciation and amortization expenses			4.2				4.4
Income from operations			5.6				9.8
Interest income, net			-				-
Income before income taxes			5.6				9.8
Income tax provision			2.0				3.5
Net income			3.6	%			6.2	%
Percent of net revenue by business segment:
Retail			57.1	%			58.9	%
Specialty			42.9				41.1
Percent of net revenue by business category:
Whole bean coffee and related products			58.2	%			57.3	%
Beverages and pastries			41.8				42.7
Cost of sales and related occupancy expenses as a percent of segment revenue:
Retail			45.3	%			42.7	%
Specialty			58.6				52.2
Operating expenses as a percent of segment revenue:
Retail			38.9	%			39.3	%
Specialty			21.5				20.4
Percent increase (decrease) from prior year:
Net revenue			7.1	%			9.0	%
Retail			3.9				4.0
Specialty			11.8				16.9
Cost of sales and related occupancy expenses			17.3				9.8
Operating expenses			7.0				0.2
Litigation related expenses			(100.0	)			100.0
General and administrative expenses			9.1				7.4
Depreciation and amortization expenses			0.6				1.1
Selected operating data:
Number of retail stores in operation
Beginning of the period			196				192
Store openings			1				1
Store closures			-				-
End of the period			197				193

 

 

Thirteen Weeks Ended April 1, 2012 Compared to Thirteen Weeks Ended April 3, 2011

 

Net revenue

 

Net revenue for the thirteen weeks ended April 1, 2012 increased as a result of our continued expansion of our retail and specialty segments. The table below sets forth net revenue for the thirteen weeks ended April 1, 2012 and April 3, 2011 by business segment as well as business category.

 

		Thirteen weeks ended
(dollars in thousands)		April 1, 2012				April 3, 2012				Increase
Retail:
Whole bean coffee, tea, and related products			14,540				14,343				197				1.4	%
Beverage and pastries			39,575				37,746				1,829				4.8	%
Total retail		$	54,115			$	52,089			$	2,026				3.9	%
Specialty:
Grocery		$	25,522			$	22,794			$	2,728				12.0	%
Foodservice and office			10,965				9,433				1,532				16.2	%
Home delivery			4,172				4,156				16				0.4	%
Total specialty		$	40,659			$	36,383			$	4,276				11.8	%
Total net revenue		$	94,774			$	88,472			$	6,302				7.1	%

 

In the retail segment, net revenue increased primarily as a result of growth in beverage and pastries sales and, to a lesser extent, an increase in whole bean sales. The beverage and pastries sales increase was due to a 6% increase in average transaction. The increase in whole bean coffee sales was due primarily to the addition of four new stores and an increase in average revenue per pound of 2%, partially offset by declines in whole bean sales in existing stores. In addition to the one store opened during the first quarter, we plan to open an additional three to five stores in 2012.

 

In the specialty segment, the increase in net revenue was driven by a 7% volume increase and a 5% increase in average price. The growth in net revenue in grocery was due primarily to increased volume in existing and new accounts as well as an increase in average price. The growth in net revenue in foodservice and office was due primarily to new accounts as well as an increase in average price. The growth in net revenue in home delivery remained flat compared to 2011 due to an increase in average price offset by a volume decline due to cannibalization by our grocery business.

 

Cost of sales and related occupancy expenses

 

Cost of sales and related occupancy expenses consist of product costs, including manufacturing costs, rent and other occupancy costs. As a percent of net revenue, cost of sales increased from 46.6% in the first quarter of 2011 to 51.0% in the first quarter of 2012. The increase was due primarily to 44% higher per pound green coffee costs and, to a lesser extent, higher milk costs, partially offset by the impact of price increases and lower shipping expenses.

 

In the retail segment, cost of sales and related occupancy expenses as a percent of net revenue increased 2.6% due primarily to the impact of higher coffee costs and, to a lesser extent, milk costs, partially offset by the impact of price increases.

 

In the specialty segment, cost of sales and related occupancy expenses as a percent of net revenue increased 6.4% due primarily to the impact of higher coffee costs, partially offset by the impact of price increases and lower shipping expenses.

  

Operating expenses

 

Operating expenses consist of both retail and specialty segment operating costs, such as employee labor and benefits, sales commissions, repairs and maintenance, supplies, training, travel, banking and payment card processing fees. Operating expenses as a percentage of net revenue for the first quarter of 2012 remained the same at 31.5% compared to the first quarter of 2011. The impact of price increases and the revenue mix shift from the retail segment towards the specialty segment, which has lower operating costs, were offset by higher payment card processing fees and investments in overhead expenses.

 

 

In the retail segment, operating expenses as a percent of net revenue decreased 0.4% primarily due to the impact of price increases, and, to a lesser extent, lower store repairs and maintenance, partially offset by higher payment card processing fees and investments in overhead expenses.

 

In the specialty segment, operating expenses as a percent of net revenue increased 1.1% due to a mix shift towards direct store delivery and investments in overhead expenses, partially offset by price increases.

 

Litigation-related expenses

 

Litigation-related expenses in connection with the class action lawsuit filed against the Company in the first quarter of 2010 were $0 and $41,000, for the periods ending April 1, 2012 and April 3, 2011, respectively.

 

General and administrative expenses

 

General and administrative expenses increased to $7.4 million compared to $6.8 million for the corresponding period last year primarily due to higher payroll and marketing costs.

 

Depreciation and amortization expense

 

Depreciation and amortization expense was consistent with the corresponding period last year.

 

Interest income, net

 

We invest in U.S. government, agency, municipal and equity securities. Interest income includes interest income and gains or losses from the sale of these instruments. We earned $6,000 in interest income for the first quarter of 2012, compared to $11,000 for the corresponding period last year, primarily due to lower interest rates on investments.

 

Income tax provision

 

The effective income tax rate for the first quarter of 2012 is 35.8% compared to 36.3% during the first quarter of 2011.

 

The Company does not expect unrecognized tax benefits to change materially within the next 12 months.

 

Liquidity and Capital Resources

 

At April 1, 2012 we had $45.0 million in cash and cash equivalents and $5.9 million in short-term marketable securities. Working capital was $105.1 million as of April 1, 2012.

 

Net cash provided by operating activities was $14.6 million for the thirteen weeks ended April 1, 2012 compared to $5.9 million for the same prior year period. Operating cash flows were higher than the prior year period primarily due to normal fluctuations in working capital.

 

Net cash used in investing activities was $4.5 million for the thirteen weeks ended April 1, 2012 compared to $5.6 million in the prior year period. Investing activities primarily relate to purchases of property, plant and equipment and maturities and purchases of marketable securities. During the thirteen-week period ended April 1, 2012, we purchased property, plant and equipment totaling $2.4 million consisting of improvements and equipment for existing stores, information technology software and hardware and equipment for our grocery, foodservice, and roasting plant operations. Purchases of marketable securities totaled $3.5 million and proceeds from maturities of marketable securities were $1.1 million. Proceeds from the release of restricted investments were $0.3 million.

 

 

Net cash provided by financing activities for the thirteen weeks ended April 1, 2012 was $4.0 million compared to $10.0 million net cash used for the same prior year period.  For the thirteen weeks ended April 1, 2012, financing activities include proceeds from stock option exercises of $2.9 million and the excess tax benefit from exercise of stock options of $1.1 million. For the same prior year period, net cash used in financing activities consisted of $21.2 million for the purchase of our common stock, offset by proceeds and the excess of tax benefit from stock options of $7.7 million and $3.5 million, respectively.

 

For the next twelve months, we expect our cash flows from operations and cash and marketable securities to be sufficient for our operating and capital requirements, our existing share purchase program and our contractual obligations as they come due.

 

The Company also has a credit agreement entered into on December 21, 2010 with Wells Fargo Bank, National Association (the “Bank”). The credit agreement provides for a $50 million revolving line of credit, the proceeds of which may be used in the general corporate purposes, including funding working capital, capital expenditures, share repurchases and other needs. The line of credit has a maturity date of December 1, 2013. This credit agreement replaces the Company’s agreement with the Bank that matured on December 1, 2010 and under which there were no borrowings.

 

The Company’s obligations under the line of credit are unconditionally guaranteed by Peet’s Operating Company, Inc. in the principal amount up to $50 million. Amounts drawn under the credit agreement will bear interest (computed on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate, determined on a daily basis, per annum of the Daily One-Month LIBOR Spread above the rate of interest equal to LIBOR then in effect for delivery for a 1 month period, or (ii) at a fixed rate per annum of the Fixed LIBOR spread above LIBOR in effect on the first day of the applicable period commencing on a business day and continuing for 1, 3, or 6 months, as designated by the Company. The Daily One-Month and Fixed LIBOR spreads are based upon the Company’s leverage ratio calculated for the most recent quarter as follows:

 

Leverage Ratio		Daily One-Month LIBOR or Fixed LIBOR Spread
Greater than 2.00 to 1.00			1.50
Less than or equal to 2.00 to 1.00			1.00

  

The credit agreement contains customary affirmative and negative covenants. The credit agreement also includes financial covenants that require the Company to maintain a specified leverage ratio and a minimum amount of net income. The credit agreement includes customary events of default that permit the Bank to accelerate the Company’s outstanding obligations, including nonpayment of principal, interest, fees or other amounts, violation of covenants, failure to make any payments when due with respect to certain other debt or certain failures to comply with the terms of such other debt, entry of certain judgments, inaccuracy of representations and warranties, occurrence of any event or condition that has a material adverse effect, and upon the occurrence of bankruptcy and other insolvency events and certain events relating to a dissolution or liquidation of the Company or Peet’s Operating Company, Inc.

 

During the thirteen weeks ended and as of April 1, 2012, there were no borrowings under this agreement. Total unused borrowing capacity under the credit agreement was $50.0 million as of April 1, 2012. As of April 1, 2012, we were in compliance with these financial covenants.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as at April 1, 2012.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

We invest excess cash in equity securities and interest-bearing, U.S. government, agency, and municipal securities. These financial instruments are subject to stock market volatility and fluctuations of daily interest rates. Therefore our investment portfolio is exposed to market risk from these changes.

 

The supply and price of coffee are subject to significant volatility and can be affected by multiple factors in the producing countries, including weather, political and economic conditions. In addition, green coffee bean prices have been affected in the past, and may be affected in the future, by the actions of certain organizations and associations that have historically attempted to influence commodity prices of green coffee beans through agreements establishing export quotas or restricting coffee supplies worldwide.

 

We currently use fixed-price purchase commitments, but in the past have used and may potentially in the future use coffee futures and coffee futures options to manage coffee supply and price risk.

 

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Fixed-Price and Not-Yet-Priced Purchase Commitments

 

We enter into fixed-price purchase commitments in order to secure an adequate supply of quality green coffee beans and fix our cost of green coffee beans. These commitments are made with established coffee brokers and are denominated in U.S. dollars. We also enter into “not-yet-priced” commitments based on a fixed premium over the New York “C” market with the option to fix the price at any time. As of April 1, 2012, we had approximately $76.0 million in open fixed-priced purchase commitments and approximately $2.4  million in not-yet-priced commitments for a total of approximately $78.4 million with delivery dates ranging from April 2012 through April 2014. We believe, based on relationships established with our suppliers, that the risk of non-delivery on such purchase commitments is low. 

 

Item 4. Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As of April 1, 2012, the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the quarter covered by this report at the reasonable-assurance level.

 

There have been no changes in our internal control over financial reporting during the fiscal quarter ended April 1, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Information set forth in Note 7, “Legal Proceedings,” of the Notes to Unaudited Condensed Consolidated Financial Statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.  

 

Item 1A. Risk Factors

 

This Quarterly Report on Form 10-Q, including the sections entitled “Item 1. Unaudited Condensed Consolidated Financial Statements”, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 3. Quantitative and Qualitative Disclosures about Market Risk,” contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should read this Quarterly Report in conjunction with our Annual Report on Form 10-K for the year ended January 1, 2012 (the “2011 Annual Report”) report and with the understanding that our actual future results may be materially different from what is expressed, implied or forecasted in the forward-looking statements included in this Quarterly Report.

 

In some cases, you can identify forward-looking statements by the words "may," "should," "could," "predict," "potential," "continue," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate" and similar expressions (or the negative of such expressions). Forward-looking statements in this Quarterly Report include, without limitation, statements about our expected results of operations in 2012 (including the performance or other factors expected to drive those results) as well as statements about the coffee industry, the expected growth of specialty coffee, and related trends. The forward-looking statements included in this Quarterly Report are based on management’s beliefs, expectations, estimates and projections as of the date of this Report.

 

These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other important factors, some of which are beyond our control or difficult to predict. Therefore, our actual results, performance, achievements or outcomes may differ materially from what is expressed, implied or forecasted by the forward-looking statements. Accordingly, you should not place undue reliance on the forward-looking statements included in this Quarterly Report, which speak only as of the date of this Quarterly Report. 

 

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Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are:

 

·

our ability to successfully implement our business strategy, including our ability to market our products, increase our brand recognition, expand our distribution and otherwise effectively compete;

·

a decrease in the demand for specialty coffee;

·

the cost and availability of high-quality Arabica coffee beans;

·

cost fluctuations of commodities other than coffee;

·

any interruption in the operation of our roasting and distribution facility;

·

a major earthquake or tsunami in the San Francisco Bay Area;

·

the recent recession or a worsening of the United States and global economies;

·

claims or litigation;

·

labor strikes in the grocery business;

·

mandatory healthcare requirements;

·

disruptions or cost increases relating to common carriers;

·

loss of key personnel, or the ability to hire or retain management or other personnel;

·

competitors duplicating our roasting methods;

·

adverse public or medical opinion about caffeine;

·

adverse publicity regarding product quality or food and beverage safety;

·

new laws and regulations or failure to comply with applicable laws and regulations;

·

failure to meet market expectations relating to our financial or strategic performance;

·

material failure, inadequacy, interruption or security failure of our information technology;

·

unpredictable workers’ compensation environment, particularly in California.

 

We discuss the factors listed above as well as other risks, uncertainties and important factors in greater detail in the section entitled "Risk Factors" in our 2011 Annual Report. The following risk factor from our 2011 Annual Report has been updated:

 

·

Coffee costs have been very volatile over the last two years and increases in the cost of high-quality Arabica coffee beans could impact the profitability of our business. In the past two years, we have experienced a dramatic increase in the price volatility of Arabica coffee traded on New York Board of Trade.  Since May 2010, commodity coffee prices have been extremely volatile ranging from a low of $1.32 per pound to a high of $3.05 per pound. We expect the coffee commodity market to continue to be challenging over time as the market continues to be influenced by worldwide supply and demand, the relative strength of the dollar, speculative trading and weather. While we do not purchase coffee on the commodity markets, price movements in the commodity trading of Arabica coffee beans impact the prices we pay. The price that we paid for our coffee in the first quarter of 2012 was 44% higher per pound than what we had paid during the corresponding period of 2011 and that increased cost negatively affected our profitability. In order to have visibility to our costs for the future, we typically fix the price of our coffee needs for the next six to 12 months by purchasing and holding large inventories of green coffee and utilizing future fixed price purchase commitments.  As of April 1, 2012, our inventory and fixed price commitments are sufficient for virtually all of our anticipated 2012 needs at a cost approximately 11% higher per pound than 2011.  Additionally, if prices of commodity coffee fall dramatically, we will be required to fulfill our commitments for our future contracts that may result in us purchasing coffee at prices substantially above the market price, which could negatively impact our competitiveness in the marketplace and our profitability.

 

The risks, uncertainties and factors discussed in our 2011 Annual Report, including as updated in this Item, may not be exhaustive and other unpredictable or unknown factors could also cause actual results to differ materially from those in forward-looking statements. Additionally, we operate in a continually changing business environment, and new risks and uncertainties emerge from time to time. Except as required by law, we assume no obligation to update publicly any forward-looking statements, or to update publicly the reasons actual results could differ materially from those expressed, implied or forecasted in any forward-looking statements, even if new information becomes available in the future.

 

19

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Not applicable

 

Item 3. Defaults Upon Senior Securities

 

Not applicable

 

Item 4. Mine Safety Disclosures

 

Not applicable

 

Item 5. Other Information

 

Not applicable

 

Item 6. Exhibits

 

Exhibit		Description
3.1		Amended and Restated Articles of Incorporation. Incorporated by reference to Exhibit 3.6 to the Company’s Amendment No. 2 to its Registration Statement on Form S-1 filed with the SEC on December 22, 2000 (File. No. 333-47976).
3.2		Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.8 to the Company’s Amendment No. 1 to its Registration Statement on Form S-1 filed with the SEC on December 1, 2000 (File. No. 333-47976).
4.1		Form of common stock certificate. Incorporated by reference to Exhibit 4.1 to the Company’s Amendment No. 2 to its Registration Statement on Form S-1 filed with the SEC on December 22, 2000 (File. No. 333-47976).
31.1		Certification of the Company’s Chief Executive Officer, Patrick O’Dea, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
31.2		Certification of the Company’s Chief Financial Officer, Thomas Cawley, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
32.1		Certification of the Company’s Chief Executive Officer, Patrick O’Dea, pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2		Certification of the Company’s Chief Financial Officer, Thomas Cawley, pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	PEET’S COFFEE & TEA, INC.
Date: May 4, 2012	By:	/s/ Thomas P. Cawley
		Thomas P. Cawley
		Vice President, Chief Financial Officer

 

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