##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    January 2, 2011.oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number: 000-51535
  CARIBOU COFFEE COMPANY,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Minnesota

41-1731219(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)3900 Lakebreeze Avenue North
    Brooklyn Center, Minnesota(Address of principal
    executive offices)

55429(Zip
    Code)   Registrants telephone number, including area code:
 (763) 592-2200
 Securities Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 Par value per share

Nasdaq Global Market  Securities Registered Pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Form 10-K Form 10-K. þ
  12b-2
  Large
    Accelerated
    Filer o
    Accelerated
    Filer o
    Non-accelerated
    Filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
   
 pgPART I.Item 1

Business


3Item 1A

Risk Factors


6Item 1B

Unresolved Staff Comments


8Item 2

Properties


9Item 3

Legal Proceedings


10Item 4

Removed and Reserved


10PART II.Item 5

Market for the Registrants Common Equity,
    Related Shareholder Matters and Issuer Purchases of Equity
    Securities


11Item 6

Selected Financial Data


12Item 7

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


15Item 8

Financial Statements and Supplementary Data


23Item 9

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


45Item 9A

Controls and Procedures


45Item 9B

Other Information


45PART III.Item 10

Directors, Executive Officers and Corporate
    Governance


45Item 11

Executive Compensation


46Item 12

Security Ownership of Certain Beneficial Owners
    and Management and Related Shareholder Matters


46Item 13

Certain Relationships and Related Transactions,
    and Director Independence


46Item 14

Principal Accountant Fees and Services


46PART IV.Item 15

Exhibits and Financial Statement Schedules


46Signatures


49EX-3.1EX-3.2EX-10.5EX-10.6EX-23EX-31.1EX-31.2EX-32.1EX-32.2   2




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##### Table of Contents



PART I  Item 1.
    Business  e-commerce
  Segment
    Financial Information
  Form 10-K.
  Retail Coffeehouses.
     3




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##### Table of Contents



Commercial.
    Franchise.
  Purchasing
      Competition
     4




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##### Table of Contents



Service
    Marks and Trademarks
      Employees
    Government
    Regulation
   5




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##### Table of Contents



Seasonality
    Available
    Information
  Form 10-K Home Investors
  Item 1A.
    Risk
    Factors    The
    United States economic crisis could adversely affect our
    business and financial results.
    The
    availability and price of high quality Arabica coffee beans
    could impact our profitability and growth of our
    business.
   6




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##### Table of Contents



A
    significant interruption in the operation of our roasting,
    warehousing and distribution facility could potentially disrupt
    our operations.
    We may
    not be able to renew leases or control rent increases at our
    retail locations or obtain leases for new
    coffeehouses.
    We are susceptible to adverse trends and economic
    conditions in Minnesota and the Upper Midwest.
    Complaints
    or claims by current, former or prospective employees could
    adversely affect us.
   7




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##### Table of Contents



Provisions
    in our articles of incorporation and bylaws and of Minnesota law
    have anti-takeover effects that could prevent a change in
    control that could be beneficial to our shareholders, which
    could depress the market price of shares of our common
    stock.
    
    authorize our board of directors to issue preferred stock and to
    determine the rights and preferences of those shares, which
    would be senior to our common stock, without prior shareholder
    approval;
    establish advance notice requirements for nominating directors
    and proposing matters to be voted on by shareholders at
    shareholder meetings;
    provide that directors may be removed by shareholders only for
    cause;
    limit the right of our shareholders to call a special meeting of
    shareholders; and
    impose procedural and other requirements that could make it
    difficult for shareholders to effect some corporate actions.  Item 1B.
    Unresolved
    Staff Comments   8




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##### Table of Contents



Item 2.
    Properties  Locations
    and Facilities
  Coffeehouse
    Locations
    Company





TotalState

Owned


Franchised


CoffeehousesMinnesota


211



4



215Illinois


53



6



59Ohio


36







36Michigan


19



5



24North Carolina


19



1



20Wisconsin


12



3



15Georgia


12



1



13Virginia


11



3



14Colorado


7



4



11Iowa


5



4



9Maryland


8







8Washington, D.C.


6







6North Dakota


3



3



6Nebraska






6



6Kansas


1



4



5Missouri


1



4



5Pennsylvania


4







4South Dakota


2



2



4Indiana






3



3Alabama






2



2Nevada






1



1International(1)






75



75410



131



541     (1)
    
    Represents 69 franchised locations in eight Middle Eastern
    countries and 6 in South Korea.    Headquarters
    and Roasting Facility
   9




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Removed
    and Reserved  Executive
    Officers of the Registrant
    Name

Age

PositionMichael Tattersfield


45


President and Chief Executive Officer, DirectorTimothy J. Hennessy


49


Chief Financial OfficerHenry J. Suerth


65


Senior Vice President of Commercial BusinessDaniel J. Hurdle


45


Senior Vice President of Retail OperationsAlfredo V. Martel


45


Senior Vice President of MarketingDan E. Lee


54


Senior Vice President, General Counsel and SecretaryKaren E. McBride-Raffel


45


Vice President of Human Resources   Michael Tattersfield
  Timothy J. Hennessy
  Henry J. Suerth
  Daniel J. Hurdle
 10




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Alfredo V. Martel
  Dan E. Lee
  Karen E. McBride-Raffel
 PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Shareholder
    Matters and Issuer Purchases of Equity Securities  Market
    for the Registrants Stock
    Market Price (Low/High)2010


2009For the Fiscal YearFirst Quarter

$
6.62  7.80


$
1.36  2.28Second Quarter

$
6.76  10.52


$
1.97  7.08Third Quarter

$
8.62  10.80


$
4.78  8.69Fourth Quarter

$
10.05  11.60


$
6.59  9.15     Dividend
    Policy
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
   11




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Sales of
    Unregistered Securities
    Stock
    Performance Graph
    Repurchase
    of Equity Securities
    Total Number of

Maximum ApproximateShares Purchased

Dollar Value of SharesTotal Number of

Average Price

as Part of Publicly

that May Yet be PurchasedPeriod

Shares Purchased

Paid per Share

Announced Programs

Under the Plan or ProgramsMarch 1, 2010 - April 4, 2010


10,000


$
7.30



10,000


$
9,927,000   Item 6.
    Selected
    Financial Data      Fiscal Year Ended(4)January 2,


January 3,


December 28,


December 30,


December 31,2011


2010


2008


2007


2006(In thousands, except per share and operating data)Statements of Operations Data:Net sales:Coffeehouses

$
232,108


$
227,224


$
229,092


$
240,267


$
225,649Commercial and franchise


51,889



35,315



24,807



16,567



10,580Total net sales


283,997



262,539



253,899



256,834



236,229Cost of sales and related occupancy costs


131,094



115,886



109,632



108,358



98,656Operating expenses


101,169



99,865



100,309



107,062



97,320Opening expenses










230



502



1,738Depreciation and amortization


12,284



14,102



24,928



32,150



21,548General and administrative expenses


29,343



27,145



29,145



32,324



25,943Closing expense and disposal of assets










5,113



6,839



510Operating income (loss)


10,107



5,541



(15,458
)


(30,401
)


(9,486
) 12




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Fiscal Year Ended(4)January 2,


January 3,


December 28,


December 30,


December 31,2011


2010


2008


2007


2006(In thousands, except per share and operating data)Other income (expense):Other income


















1,059Interest income


22



26



25



181



554Interest expense


(408
)


(261
)


(810
)


(576
)


(695
)Income (loss) before (benefit) provision for income taxes


9,721



5,306



(16,243
)


(30,796
)


(8,568
)(Benefit) provision for income taxes


(76
)


(246
)


36



(297
)


313Net income (loss)


9,797



5,552



(16,279
)


(30,499
)


(8,881
)Noncontrolling interest


397



414



63



164



178Net income (loss) attributable to Caribou Coffee Company,
    Inc.

$
9,400


$
5,138


$
(16,342
)

$
(30,663
)

$
(9,059
)Net income (loss) attributable to Caribou Coffee Company, Inc.
    common shareholders per share:Basic net income (loss) attributable to Caribou Coffee Company,
    Inc. common shareholders per share

$
0.48


$
0.26


$
(0.84
)

$
(1.59
)

$
(0.47
)Diluted net income (loss) attributable to Caribou Coffee
    Company, Inc. common shareholders per share

$
0.46


$
0.26


$
(0.84
)

$
(1.59
)

$
(0.47
)Basic shares used in calculation of net income (loss)
    attributable to Caribou Coffee Company, Inc. per share


19,639



19,443



19,371



19,333



19,282Diluted shares used in calculation of net income (loss)
    attributable to Caribou Coffee Company, Inc. per share


20,641



20,000



19,371



19,333



19,282Non-GAAP Financial Measures:EBITDA(1)

$
23,979


$
21,307


$
11,618


$
3,797


$
15,040Operating Data:Percentage change in comparable coffeehouse sales(2)


4.5
%


(2.3
)%


(3.5
)%


0.1
%


(0.9
)%Company-Operated coffeehouse operating weeks


21,393



21,918



21,810



22,814



21,110Company-Operated:Coffeehouses open at beginning of year


413



414



432



440



386Coffeehouses opened during the year










7



20



60Coffeehouses closed during the year


(3
)


(1
)


(25
)


(28
)


(6
)Coffeehouses open at end of year:Total Company-Operated


410



413



414



432



440 13




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##### Table of Contents



Fiscal Year Ended(4)January 2,


January 3,


December 28,


December 30,


December 31,2011


2010


2008


2007


2006(In thousands, except per share and operating data)Franchised:Coffeehouses open at beginning of year


121



97



52



24



9Coffeehouses opened during the year


20



28



45



28



20Coffeehouses closed during the year


(10
)


(4
)










(5
)Coffeehouses open at end of year:Total Franchised


131



121



97



52



24Total coffeehouses open at end of year


541



534



511



484



464   As ofJanuary 2,


January 3,


December 28,


December 30,


December 31,2011


2010


2008


2007


2006(In thousands)Balance Sheet Data:Cash and cash equivalents

$
23,092


$
23,578


$
11,060


$
9,886


$
14,752Total assets


101,725



93,727



89,572



111,840



136,308Total notes payable and revolving credit facility


















Accumulated deficit


(66,941
)


(76,341
)


(81,479
)


(65,137
)


(33,944
)Total equity(3)


62,466



50,776



44,008



59,433



88,561     (1)
    
    EBITDA is a supplemental non-GAAP financial measure. EBITDA is
    equal to net income (loss) attributable to Caribou Coffee
    Company, Inc. excluding: (a) interest expense;
    (b) interest income; (c) depreciation and
    amortization; and (d) income taxes. For a description of
    our use of EBITDA and a reconciliation of net income (loss)
    attributable to Caribou Coffee Company, Inc. to this non-GAAP
    financial measure, see the discussion and related table below.(2)
    
    Percentage change in comparable coffeehouse sales compares the
    net sales of coffeehouses during a fiscal period to the net
    sales from the same coffeehouses for the equivalent period in
    the prior year. A coffeehouse is included in this calculation
    beginning in its thirteenth full fiscal month of operations. A
    closed coffeehouse is included in the calculation for each full
    month that the coffeehouse was open in both fiscal periods.
    Franchised coffeehouses are not included in the comparable
    coffeehouse sales calculations.(3)
    
    In December 2007, the FASB issued guidance establishing new
    standards that govern the accounting for and reporting of
    noncontrolling interests in partially owned subsidiaries. The
    Company adopted these accounting rules on December 29, 2008
    and has accordingly retroactively applied the presentation and
    disclosure requirements for the existing noncontrolling interest
    for all periods presented by including noncontrolling interest
    as a component of total equity.(4)
    
    The Companys fiscal year ends on the Sunday closest to
    December 31. Fiscal year 2009 includes 53 weeks. All
    other fiscal years presented include 52 weeks.   14




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
    as a measurement of operating performance because it assists us
    in comparing our operating performance on a consistent basis as
    it removes the impact of items not directly resulting from our
    coffeehouse operations;
    for planning purposes, including the preparation of our internal
    annual operating budget; and
    to evaluate our capacity to incur and service debt, fund capital
    expenditures and expand our business.      Fiscal Year EndedJanuary 2,


January 3,


December 28,


December 30,


December 31,2011


2010


2008


2007


2006(In thousands)Statement of Operations Data:Net income (loss) attributable to Caribou Coffee Company,
    Inc.

$
9,400


$
5,138


$
(16,342
)

$
(30,663
)

$
(9,059
)Interest expense


408



261



810



576



695Interest income


(22
)


(26
)


(25
)


(181
)


(554
)Depreciation and amortization(1)


14,269



16,180



27,139



34,362



23,645(Benefit) provision for income taxes


(76
)


(246
)


36



(297
)


313EBITDA


23,979



21,307



11,618



3,797



15,040     (1)
    
    Includes depreciation and amortization associated with our
    headquarters and roasting facility that are categorized as
    general and administrative expenses and cost of sales and
    related occupancy costs on our statement of operations.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Overview
   15




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##### Table of Contents



Critical
    Accounting Policies
    Long-lived assets.
  Stock-based compensation.
  Lease accounting.
 16




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##### Table of Contents



Income taxes.
        Fiscal
    Periods
   17




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##### Table of Contents



Consolidated
    Results of Operations
    Fiscal
    Year 2010 Compared to Fiscal Year 2009
  Fiscal Year Ended





Fiscal Year EndedJanuary 2,


January 3,


%


January 2,


January 3,2011


2010


Change


2011


2010(In thousands)





As a % of total net salesStatement of Operations Data:Net sales:Coffeehouse

$
232,108


$
227,224



2.1
%


81.7
%


86.5
%Commercial and franchise


51,889



35,315



46.9
%


18.3
%


13.5
%Total net sales


283,997



262,539



8.2
%


100.0
%


100.0
%Cost of sales and related occupancy costs


131,094



115,886



13.1
%


46.2
%


44.1
%Operating expenses


101,169



99,865



1.3
%


35.6
%


38.0
%Depreciation and amortization


12,284



14,102



(12.9
)%


4.3
%


5.4
%General and administrative expenses


29,343



27,145



8.1
%


10.3
%


10.3
%Operating income


10,107



5,541



82.4
%


3.6
%


2.1
%Other income (expense):Interest income


22



26



(15.4
)%



%



%Interest expense


(408
)


(261
)


56.3
%


(0.1
)%


(0.1
)%Income before benefit from income taxes and noncontrolling
    interest


9,721



5,306



83.2
%


3.4
%


2.0
%Benefit from income taxes


(76
)


(246
)


(69.1
)%



%


(0.1
)%Net income


9,797



5,552



76.5
%


3.4
%


2.1
%Less: Net income attributable to noncontrolling interest


397



414



(4.1
)%


0.1
%


0.1
%Net income attributable to Caribou Coffee Company, Inc.

$
9,400


$
5,138



83.0
%


3.3
%


2.0
%   Net
    Sales
    Costs
    and Expenses
  Cost of sales and related occupancy
    costs.
 18




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##### Table of Contents



Operating expenses.
  Depreciation and amortization.
  General and administrative expenses.
  Interest expense.
  Secondary offering:
  Operating
    Segments
    Retail
    Coffeehouses
  Fiscal Year Ended





Fiscal Year EndedJanuary 2,


January 3,


%


January 2,


January 3,2011


2010


Change


2011


2010(In thousands)





As a % of coffeehouse salesCoffeehouse sales

$
232,108


$
227,224



2.1
%


100.0
%


100.0
%Costs of sales and related occupancy costs


96,634



93,027



3.9



41.6



40.9Operating expenses


95,343



94,926



0.4



41.1



41.8Depreciation and amortization


12,199



14,053



(13.2
)


5.3



6.2General and administrative expenses


8,380



7,994



4.8



3.6



3.5Segment operating income

$
19,552


$
17,224



13.5
%


8.4
%


7.6
%    19




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##### Table of Contents



Coffeehouse
    sales
    Costs
    and Expenses
  Cost of sales and related occupancy
    costs.
  Operating expenses.
  Depreciation and amortization.
  General and administrative expenses.
  Commercial
  Fiscal Year Ended





Fiscal Year EndedJanuary 2,


January 3,


%


January 2,


January 3,2011


2010


Change


2011


2010(In thousands)





As a % of commercial salesSales

$
42,007


$
27,577



52.3
%


100.0
%


100.0
%Costs of sales and related occupancy costs


28,768



18,515



55.4



68.5



67.1Operating expenses


4,602



3,819



20.5



11.0



13.8Depreciation and amortization


70



44



59.1



0.2



0.2Segment operating income

$
8,567


$
5,199



64.8
%


20.4
%


18.9
%    20




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##### Table of Contents



Sales
    Costs
    and Expenses
  Cost of sales and related occupancy
    costs.
  Operating expenses.
  Franchise
  Fiscal Year Ended





Fiscal Year EndedJanuary 2,


January 3,


%


January 2,


January 3,2011


2010


Change


2011


2010(In thousands)





As a % of franchise salesSales

$
9,882


$
7,738



27.7
%


100.0
%


100.0
%Costs of sales and related occupancy costs


5,692



4,344



31.0



57.6



56.1Operating expenses


1,224



1,134



7.9



12.4



14.7Depreciation and amortization


15



5



200.0



0.2



0.1Segment operating income

$
2,951


$
2,255



30.9
%


29.9
%


29.1
%     Sales
    Costs
    and Expenses
  Cost of sales and related occupancy
    costs.
 21




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##### Table of Contents



Operating expenses.
  Unallocated
    Corporate
  Fiscal Year Ended



Fiscal Year EndedJanuary 2,

January 3,

%

January 2,

January 3,2011

2010

Change

2011

2010(In thousands)



As a % of total net salesGeneral and administrative expenses

$
20,963


$
19,137



9.5
%


7.4
%


7.3
%Operating loss

$
(20,963
)

$
(19,137
)


(9.5
)%


(7.4
)%


(7.3
)%   General and administrative
    expenses.
  Liquidity
    and Capital Resources
           22




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##### Table of Contents



New
    Accounting Standards
      Off-Balance
    Sheet Arrangements
      Inflation
    Item 8.
    Financial
    Statements and Supplementary Data 23




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM          ERNST & YOUNG
    LLP
    24




---



##### Table of Contents



Caribou
    Coffee Company, Inc. and AffiliatesConsolidated Balance Sheets
  January 2,


January 3,2011


2010In thousands except per share dataCurrent assets:Cash and cash equivalents

$
23,092


$
23,578Accounts receivable, net


8,096



5,887Other receivables, net


1,227



1,461Inventories


25,931



13,278Prepaid expenses and other current assets


1,122



1,546Total current assets


59,468



45,750Property and equipment, net of accumulated depreciation and
    amortization


41,075



47,135Restricted cash


837



605Other assets


345



237Total assets

$
101,725


$
93,727Current liabilities:Accounts payable

$
8,080


$
9,042Accrued compensation


5,954



6,296Accrued expenses


6,916



7,563Deferred revenue


8,726



8,747Total current liabilities


29,676



31,648Asset retirement liability


1,194



1,120Deferred rent liability


6,296



7,955Deferred revenue


2,091



2,072Income tax liability


2



156Total long term liabilities


9,583



11,303Commitments and contingenciesEquity:Caribou Coffee Company, Inc. Shareholders equityPreferred stock, par value $.01, 20,000 shares authorized;
    no shares issued and outstanding






Common stock, par value $.01, 200,000 shares authorized;
    20,141 and 19,814 shares issued and outstanding at
    January 2, 2011 and January 3, 2010, respectively


202



198Additional paid-in capital


129,026



126,770Accumulated other comprehensive income (loss)


12



(7
)Accumulated deficit


(66,941
)


(76,341
)Total Caribou Coffee Company, Inc. shareholders equity


62,299



50,620Noncontrolling interest


167



156Total equity


62,466



50,776Total liabilities and equity

$
101,725


$
93,727    25




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##### Table of Contents



Caribou
    Coffee Company, Inc. and AffiliatesConsolidated Statements of Operations
  Years EndedJanuary 2,


January 3,2011


2010In thousands except per share dataCoffeehouse sales, net

$
232,108


$
227,224Commercial and franchise sales, net


51,889



35,315Net sales


283,997



262,539Cost of sales and related occupancy costs


131,094



115,886Operating expenses


101,169



99,865Depreciation and amortization


12,284



14,102General and administrative expenses


29,343



27,145Operating income


10,107



5,541Other income (expense):Interest income


22



26Interest expense


(408
)


(261
)Income before benefit from income taxes


9,721



5,306Benefit from income taxes


(76
)


(246
)Net income


9,797



5,552Less: Net income attributable to noncontrolling interest


397



414Net income attributable to Caribou Coffee Company, Inc.

$
9,400


$
5,138Net income per share:Basic net income attributable to Caribou Coffee Company, Inc.
    common shareholders per share

$
0.48


$
0.26Diluted net income attributable to Caribou Coffee Company, Inc.
    common shareholders per share

$
0.46


$
0.26Basic weighted average number of shares outstanding


19,639



19,443Diluted weighted average number of shares outstanding


20,641



20,000    26




---



##### Table of Contents



Caribou
    Coffee Company, Inc. and AffiliatesConsolidated Statements of Changes in Shareholders
    Equity
  Common Stock


Additional





AccumulatedNumber of





Paid-in


Noncontrolling


Other Comprehensive


AccumulatedShares


Amount


Capital


Interest


(Loss) Income


Deficit


EquityIn thousandsBalance, December 28, 2008


19,371


$
194


$
125,222


$
71


$



$
(81,479
)

$
44,008Net income














414







5,138



5,552Changes in fair value of derivative financial instruments


















(7
)






(7
)Comprehensive income

























$
5,545Share based compensation










1,049















1,049Options exercised


105



1



587















588Restricted shares issued


338



3



(3
)














Distribution of noncontrolling interest














(309
)










(309
)Purchase of noncontrolling interest










(85
)


(20
)










(105
)Balance, January 3, 2010


19,814



198



126,770



156



(7
)


(76,341
)


50,776Net income














397







9,400



9,797Changes in fair value of derivative financial instruments


















19







19Comprehensive income

























$
9,816Share based compensation










1,307















1,307Options exercised


151



2



1,024















1,026Restricted shares issued


186



2



(2
)














Share repurchase


(10
)






(73
)














(73
)Distribution of noncontrolling interest














(386
)










(386
)Balance, January 2, 2011


20,141


$
202


$
129,026


$
167


$
12


$
(66,941
)

$
62,466    27




---



##### Table of Contents



Caribou
    Coffee Company, Inc. and AffiliatesConsolidated Statements of Cash Flows
  Years EndedJanuary 2,


January 3,2011


2010In thousandsOperating activitiesNet income attributable to Caribou Coffee Company, Inc.

$
9,400


$
5,138Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


14,269



16,180Amortization of deferred financing fees


(270
)


141Noncontrolling interest


397



414Stock-based compensation


1,307



1,049Other


(165
)


303Changes in operating assets and liabilities:Accounts receivable and other receivables


(1,975
)


(1,061
)Inventories


(12,653
)


(3,060
)Prepaid expenses and other assets


909



(525
)Accounts payable


(1,294
)


813Accrued expenses and other liabilities


(2,406
)


(2,606
)Deferred revenue


(2
)


(1,192
)Net cash provided by operating activities


7,517



15,594Investing activitiesPayments for property and equipment


(8,037
)


(2,969
)Proceeds from the disposal of property


22



28Increase in restricted cash


(232
)


(278
)Net cash used in investing activities


(8,247
)


(3,219
)Financing activitiesDistribution of noncontrolling interest


(386
)


(309
)Purchase of noncontrolling interest






(105
)Issuance of common stock


1,026



588Payment of debt financing fees


(323
)


(31
)Stock buy back


(73
)


Net cash provided by financing activities


244



143(Decrease) increase in cash and cash equivalents


(486
)


12,518Cash and cash equivalents at beginning of year


23,578



11,060Cash and cash equivalents at end of year

$
23,092


$
23,578Supplemental disclosure of cash flow informationCash paid during the year for:Interest

$
138


$
130Income taxes


181



225Accrual for leasehold improvements, furniture, and equipment

$
377


$
81    28




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Business
    and Summary of Significant Accounting Policies  Description
    of Business
    Principles
    of Consolidation
    Use of
    Estimates
    Fiscal
    Year End
    Cash
    and Cash Equivalents
    Fair
    Value of Financial Instruments
   29




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allowance
    for Doubtful Accounts
    January 2, 2011

January 3, 2010Allowance for doubtful accounts  accounts receivable

$
20


$
3Allowance for doubtful accounts  other receivables

$
192


$
128   Inventories
    Property
    and Equipment
        Deferred
    Financing Fees
    Impairment
    of Long-Lived Assets and Long-Lived Assets to Be Disposed
    Of
   30




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Compensation
      Coffeehouse
    Preopening and Closing Expenses
  start-up
  Revenue
    Recognition
         31




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Advertising
    Operating
    Leases and Rent Expense
    Income
    Taxes
      Net
    Income Per Share
    2.
    Recent
    Accounting Pronouncements   32




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      3.
    Restricted
    Cash    4.
    Derivative
    Financial Instruments            Gain/(Loss)

Gain/(Loss)Recognized in OCI

Reclassified into EarningsContract Type

January 2, 2011

January 3, 2010

January 2, 2011

January 3, 2010Cash flow commodity hedges(1)

$
8


$
(72
)

$
(11
)

$
(65
)     (1)
    
    There was no material ineffectiveness during the periods
    presented 33




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     5.
    Fair
    Value Measurements    
    Level 1:  Observable inputs that reflect
    unadjusted quoted prices for identical assets or liabilities
    traded in active markets.
    Level 2:  Inputs other than quoted prices
    included within Level 1 that are observable for the asset
    or liability, either directly or indirectly.
    Level 3:  Inputs that are generally
    unobservable. These inputs may be used with internally developed
    methodologies that result in managements best estimate of
    fair value.    TotalJanuary 2, 2011


Level 1


Level 2


Level 3Assets:Cash deposits

$
5,303


$
5,303


$



$
Money market funds

$
17,789


$
17,789


$



$
Derivatives

$
12


$
12


$



$
     TotalJanuary 3, 2010


Level 1


Level 2


Level 3Assets:Cash deposits

$
1,557


$
1,557


$



$
Money market funds

$
22,021


$
22,021


$



$
Liabilities:Derivatives

$
7


$
7


$



$
      34




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Inventories    January 2,


January 3,2011


2010Coffee

$
18,880


$
5,615Merchandise held for sale


4,015



4,029Supplies


3,036



3,634$
25,931


$
13,278     7.
    Property
    and Equipment    January 2,


January 3,2011


2010Leasehold improvements

$
87,463


$
87,515Furniture, fixtures, and equipment


120,191



112,661207,654



200,176Less accumulated depreciation and amortization


(166,579
)


(153,041
)$
41,075


$
47,135     8.
    Revolving
    Credit Facility     35




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        9.
    Equity
    and Stock Based Compensation           36




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted


WeightedNumber of


Average


AverageOptions Outstanding

Shares


Exercise Price


Contract LifeOutstanding, December 28, 2008


2,451


$
5.16



7.89 YrsGranted


10


$
2.22Exercised


(105
)

$
5.59Forfeited


(660
)

$
7.67Outstanding, January 3, 2010


1,696


$
4.27



7.54 YrsGranted





$Exercised


(151
)

$
6.78Forfeited


(79
)

$
8.79Outstanding, January 2, 2011


1,466


$
3.77



6.88 YrsOptions vested and expected to vest at January 2, 2011


1,466


$
3.77



6.88 YrsOptions vested at January 2, 2011


899


$
4.61



6.43 Yrs       Options Outstanding


Options ExercisableWeighted AverageNumber of Options


Remaining


Weighted Average


Number of Options


Weighted AverageRange of Exercise Prices

Outstanding


Contractual Life


Exercise Price


Exercisable


Exercise Price$1.06   $4.08


1,075



7.64 years


$
2.22



533


$
2.22$4.09   $6.56


42



6.59 years


$
5.99



32


$
5.99$6.57  $9.04


264



4.51 years


$
7.47



249


$
7.46$9.05  $11.52


65



4.68 years


$
9.78



65


$
4.68$11.53  $14.00


20



4.75 years


$
14.00



20


$
14.00Total


1,466



6.88 years


$
3.77



899


$
4.61  37




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted AverageNon-Vested Shares Outstanding

Shares


Fair ValueBalance, January 3, 2010


300


$
5.83Granted


215


$
7.07Forfeited


(29
)

$
7.83Vested


(81
)

$
5.39Balance January 2, 2011


405


$
6.43     10.
    Leasing
    Arrangements and Commitments      Years EndedJanuary 2,


January 3,2011


2010Minimum rentals

$
19,770


$
19,678Contingent rentals


1,997



1,83721,767



21,515Less sublease rentals


(356
)


(546
)$
21,410


$
20,969     2011

$
20,0842012


18,1062013


15,5792014


12,6812015


9,628Thereafter


12,773$
88,851    38




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##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes    Years EndedJanuary 2


January 3,2011


2010U.S. Federal

$
(585
)

$
(286
)State


509



40$
(76
)

$
(246
)     Years EndedJanuary 2


January 3,2011


2010Tax at U.S. Federal statutory rate

$
3,170


$
1,663Tax at blended State statutory rate net of federal benefit


662



304Permanent differences


41



32Changes in valuation allowance


(3,222
)


(2,449
)Decrease to reserve for tax contingencies


(154
)


(330
)Deferred tax adjustment


(537
)


519Other, net


(36
)


15$
(76
)

$
(246
)      39




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    January 2,


January 3,2011


2010Depreciation

$
12,156


$
11,676Deferred rent on leases


(36
)


244Net operating loss carryforwards


7,617



11,871Accrued expenses


1,936



1,722Deferred revenue


1,779



1,232Other


582



764State deferred (excluding state loss carryforwards)


3,024



2,771Gross deferred income tax assets


27,058



30,280Less deferred income tax asset valuation allowance


(27,058
)


(30,280
)Net deferred income tax assets

$



$
     Year EndedJanuary 2,


January 3,2011


2010Beginning balance

$
2,861


$
3,238Current year positions






Settlements with taxing authorities


(2,593
)


Expiration of statute of limitations


(268
)


(377
)Ending balance

$



$
2,861       12.
    Employee
    Benefit Plan    13.
    Master
    Franchise Agreement   40




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14.
    Net
    Income Per Share    January 2,


January 3,2011


2010Net income attributable to Caribou Coffee Company, Inc.

$
9,400


$
5,138Weighted average common shares outstanding  basic


19,639



19,443Dilutive impact of stock-based compensation


1,002



557Weighted average common shares outstanding  dilutive


20,641



20,000Basic net income per share

$
0.48


$
0.26Diluted net income per share

$
0.46


$
0.26     15.
    Commitments
    and Contingencies    16.
    Segment
    Reporting   41




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Retail
    Coffeehouses
    Commercial
    Franchise
      Fiscal
    2010
  UnallocatedRetail


Commercial


Franchise


Corporate


TotalNet sales

$
232,108


$
42,007


$
9,882


$



$
283,997Costs of sales and related occupancy costs


96,634



28,768



5,692







131,094Operating expenses


95,343



4,602



1,224







101,169Depreciation and amortization


12,199



70



15







12,284General and administrative expenses


8,380











20,963



29,343Operating income (loss)

$
19,552


$
8,567


$
2,951


$
(20,963
)

$
10,107Identifiable assets

$
30,798


$
730


$
49


$
9,498


$
41,075Net capital expenditures

$
6,388


$
675


$
56


$
1,214


$
8,333  42




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fiscal
    2009
  UnallocatedRetail


Commercial


Franchise


Corporate


TotalNet sales

$
227,224


$
27,577


$
7,738


$



$
262,539Costs of sales and related occupancy costs


93,027



18,515



4,344







115,886Operating expenses


94,569



3,819



1,110







99,498Opening expenses










24







24Depreciation and amortization


14,053



44



5







14,102General and administrative expenses


7,994











19,151



27,145Closing expense and disposal of assets


357











(14
)


343Operating income (loss)

$
17,224


$
5,199


$
2,255


$
(19,137
)

$
5,541Identifiable assets

$
39,089


$
186


$
64


$
7,796


$
47,135Net capital expenditures

$
2,046


$
100


$
56


$
844


$
3,046     17.
    Selected
    Quarterly Financial Data  (Unaudited) (in
    thousands except per share data)  Fiscal QuartersYear Ended January 2, 2011

First


Second


Third


FourthNet sales

$
67,051


$
68,885


$
70,173


$
77,888Cost of sales and related occupancy costs


31,399



30,551



32,701



36,443Operating income


1,036



2,606



1,822



4,643Net income attributable to Caribou Coffee Company, Inc.


1,038



2,421



1,607



4,334Net income attributable to Caribou Coffee Company, Inc. per shareBasic


0.05



0.12



0.08



0.22Diluted


0.05



0.12



0.08



0.21   Fiscal QuartersYear Ended January 3, 2010

First

Second

Third

FourthNet sales

$
60,380


$
62,954


$
62,739


$
76,466Cost of sales and related occupancy costs


26,272



27,317



27,849



34,448Operating income


376



1,405



686



3,074Net income attributable to Caribou Coffee Company, Inc


346



1,168



654



2,970Net income attributable to Caribou Coffee Company, Inc. per shareBasic


0.02



0.06



0.03



0.15Diluted


0.02



0.06



0.03



0.15  43




---



##### Table of Contents



CARIBOU
    COFFEE COMPANY, INC. AND AFFILIATES



Schedule II 
    Valuation and Qualifying Accounts and Reserves  Balance at


AdditionsBeginning of


Charged to


Deductions from


Balance atYears Ended:

Year


Expense


Reserves


End of YearIn thousandsJanuary 2, 2011Allowance for doubtful accounts  accounts receivable

$
3


$
37


$
20
(1)

$
20Allowance for doubtful accounts  other receivables

$
128


$
114


$
50
(1)

$
192Deferred income tax asset valuation allowance

$
30,280


$



$
3,222


$
27,058January 3, 2010Allowance for doubtful accounts  accounts receivable

$
72


$
19


$
88
(1)

$
3Allowance for doubtful accounts  other receivables

$
76


$
91


$
39
(1)

$
128Deferred income tax asset valuation allowance

$
32,599


$



$
2,319


$
30,280     (1)
    
    Deductions represent the write-off of accounts deemed
    uncollectible. 44




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Conclusion
    regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Control over Financial Reporting
    Report of
    Management on Internal Control over Financial
    Reporting
    Internal Control 
    Integrated Framework
  Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance   45




---



##### Table of Contents



Corporate Governance Form 8-K
  Item 11.
    Executive
    Compensation  Form 10-K.
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters  Form 10-K.
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Form 10-K.
  Item 14.
    Principal
    Accountant Fees and Services  Form 10-K.
 PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K.
  Index to Consolidated Financial Statements.
 46




---



##### Table of Contents



Form 10-K:
  PageReport of Independent Registered Public
    Accounting Firm

24Consolidated Balance Sheets as of January 2, 2011
    and January 3, 2010

25Consolidated Statements of Operations for the
    Years Ended January 2, 2011 and January 3, 2010

26Consolidated Statements of Changes in
    Shareholders Equity for the Years Ended January 2, 2011
    and January 3, 2010

27Consolidated Statements of Cash Flows for the
    Years Ended January 2, 2011 and January 3, 2010

28Notes to Consolidated Financial Statements

29   Index to Financial Statement Schedules.
  Schedule II  Valuation and
    Qualifying Accounts and Reserves

44     Listing of Exhibits
  ExhibitNumber



Description of Exhibits3
.1



Amended and Restated Articles of Incorporation of the Registrant.3
.2



Amended and Restated Bylaws of the Registrant.4
.1



See exhibits 3.1 and 3.2.4
.2



Specimen Common Stock Certificate of the Registrant
    (incorporated by reference to our Registration Statement on Form
    S-1/A filed September 6, 2005 (File No. 333-126691)).10
.1*



2001 Stock Option Plan (incorporated by reference to our
    Registration Statement on Form S-1 filed July 19, 2005 (File No.
    333-126691)).10
.2*



Amendment No. 1 to the 2001 Stock Option Plan (incorporated by
    reference our Registration Statement on Form S-1 filed July 19,
    2005 (File No. 333-126691)).10
.3*



Form of Stock Option Grant and Agreement under 2001 Stock Option
    Plan (incorporated by reference to our Registration Statement on
    Form S-1 filed July 19, 2005 (File No. 333-126691)).10
.4*



2005 Equity Incentive Plan (incorporated by reference to our
    Registration Statement on Form S-1/A filed August 25, 2005 (File
    No. 333-126691)).10
.5*



Form of Stock Option Grant and Agreement under 2005 Equity
    Incentive Plan.10
.6*



Form of Restricted Stock Award and Agreement under 2005 Equity
    Incentive Plan.10
.7*



Form of Directors and Officers Indemnification Agreement
    (incorporated by reference to our Annual Report on  Form 10-K
    for the year ended January 1, 2006 (File No. 000-51535)).10
.8



Master Franchise Agreement between the Registrant and Al-Sayer
    Enterprises (incorporated by reference to our Registration
    Statement on Form S-1/A filed September 14, 2005 (File No.
    333-126691)).10
.9



Commercial Lease between the Registrant and Twin Lakes III
    LLC, dated September 5, 2003 (incorporated by reference to our
    Registration Statement on Form S-1/A filed August 25, 2005 (File
    No. 333-126691)).10
.10



Lease and License Financing and Purchase Option Agreement
    between the Registrant and Arabica Funding, Inc., dated February
    19, 2010 (incorporated by reference to our Quarterly Report on
    Form 10-Q filed May 7, 2010 (File No. 000-51535)).10
.11



First Amendment to Lease and License Financing and Purchase
    Option Agreement between the Registrant and Arabica Funding,
    Inc., dated November 30, 2010 (incorporated by reference to our
    Current Report on Form 8-K filed December 6, 2010 (File No.
    000-51535)). 47




---



##### Table of Contents



ExhibitNumber



Description of Exhibits10
.12



Credit Agreement among Arabica Funding, Inc., as Borrower, the
    several banks and other financial institutions or entities from
    time to time parties to this Agreement, and Wells Fargo Bank
    N.A., as Administrative Agent, dated as of February 19, 2010
    (incorporated by reference to our Quarterly Report on Form 10-Q
    filed May 7, 2010 (File No. 000-51535)).10
.13



First Amendment to the Credit Agreement among Arabica Funding,
    Inc., as Borrower, the several banks and other financial
    institutions or entities from time to time parties to this
    Agreement, and Wells Fargo Bank N.A., as Administrative Agent,
    dated as of November 30, 2010 (incorporated by reference to our
    Current Report on Form 8-k filed December 6, 2010 (File No.
    000-51535)).10
.14*



Employment Agreement with Michael J. Tattersfield, dated August
    1, 2008 (incorporated by reference to our Current Report on Form
    8-K filed August 4, 2008 (File No. 000-51535)).10
.15*



Employment Agreement with Timothy J. Hennessy, dated September
    9, 2008 (incorporated by reference to our Current Report on
    Form 8-K filed September 9, 2008 (File No. 000-51535)).21




List of Subsidiaries (incorporated by reference to our
    Registration Statement on Form S-1/A filed September 14, 2005
    (File No. 333-126691)).23




Consent of Independent Registered Public Accounting Firm31
.1



Certification Pursuant to Rule 13a - 14(a), as Adopted Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2



Certification Pursuant to Rule 13a - 14(a), as Adopted Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1



Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.32
.2



Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.     *
    
    Indicates management contracts and compensatory plans and
    arrangements required to be filed pursuant to Item 15(b) of
    this annual report.  Exhibits.
    Financial Statement Schedules.
   48




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##### Table of Contents



SIGNATURES    Caribou Coffee Company,
    Inc.
  By:
    /s/  MICHAEL
    TATTERSFIELD   Title:
    President and Chief Executive Officer      Signature

Title

Date/s/  MICHAEL
    TATTERSFIELDMichael
    Tattersfield

President and Chief Executive Officer (principal executive
    officer)

March 25, 2011/s/  TIMOTHY
    J. HENNESSEYTimothy
    J. Hennessey

Chief Financial Officer (principal financial officer)

March 25, 2011/s/  NATHAN
    G. HJELSETHNathan
    G. Hjelseth

Controller (principal accounting officer)

March 25, 2011/s/  GARY
    A. GRAVESGary
    A. Graves

Non-Executive Chairman of the Board of Directors

March 25, 2011/s/  CHARLES
    H. OGBURNCharles
    H. Ogburn

Director

March 25, 2011/s/  CHARLES
    L. GRIFFITHCharles
    L. Griffith

Director

March 25, 2011/s/  SARAH
    PALISI CHAPINSarah
    Palisi Chapin

Director

March 25, 2011/s/  KIP
    R. CAFFEYKip
    R. Caffey

Director

March 25, 2011/s/  WALLACE
    B. DOOLINWallace
    B. Doolin

Director

March 25, 2011/s/  MICHAEL
    J. COLESMichael
    J. Coles

Director

March 25, 2011/s/  PHILIP
    SANFORDPhilip
    Sanford

Director

March 25, 2011  49