##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 27, 2009.
 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: 000-51535
 
 CARIBOU COFFEE COMPANY, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Minnesota
    
    41-1731219(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)3900 Lakebreeze Avenue North
    
    55429Brooklyn Center, Minnesota
    
    (Zip Code)(Address of principal executive offices)
 : (763) 592-2200
 þ o
 o o
  Large accelerated filer o
   
    Accelerated filer o
    Non-accelerated filer o
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



CARIBOU COFFEE COMPANY, INC.
 FORM 10-Q
 For the Thirteen Week Period Ended September 27, 2009
 Table of Contents
 PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statement of Changes in Equity
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and
Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4T.
    
    Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    33Item 1A.
    
    Risk Factors
    
    
    33Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3.
    
    Defaults Upon Senior Securities
    
    
    33Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    34Signature
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
   2




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except for per share amounts)(Unaudited)Coffeehouse sales
    
    $
    54,479
    
    
    $
    54,731
    
    
    $
    162,637
    
    
    $
    168,618Commercial and franchise sales
    
    
    8,260
    
    
    
    6,179
    
    
    
    23,436
    
    
    
    17,232Total net sales
    
    
    62,739
    
    
    
    60,910
    
    
    
    186,073
    
    
    
    185,850Cost of sales and related occupancy costs
    
    
    27,849
    
    
    
    26,992
    
    
    
    81,438
    
    
    
    80,209Operating expenses
    
    
    24,297
    
    
    
    24,571
    
    
    
    71,485
    
    
    
    75,785Opening expenses
    
    
    6
    
    
    
    62
    
    
    
    20
    
    
    
    198Depreciation and amortization
    
    
    3,465
    
    
    
    10,208
    
    
    
    10,776
    
    
    
    20,771General and administrative expenses
    
    
    6,313
    
    
    
    7,115
    
    
    
    19,708
    
    
    
    21,183Closing expense and disposal of assets
    
    
    123
    
    
    
    646
    
    
    
    179
    
    
    
    4,524Operating income (loss)
    
    
    686
    
    
    
    (8,684
    )
    
    
    2,467
    
    
    
    (16,820
    )Other income (expense):Interest income
    
    
    10
    
    
    
    2
    
    
    
    17
    
    
    
    23Interest expense
    
    
    (68
    )
    
    
    (81
    )
    
    
    (189
    )
    
    
    (714
    )Income (loss) before provision for income taxes
    
    
    628
    
    
    
    (8,763
    )
    
    
    2,295
    
    
    
    (17,511
    )(Benefit from) provision for income taxes
    
    
    (140
    )
    
    
    (36
    )
    
    
    (182
    )
    
    
    14Net income (loss)
    
    
    768
    
    
    
    (8,727
    )
    
    
    2,477
    
    
    
    (17,525
    )Less: Net income attributable to
noncontrolling interest
    
    
    114
    
    
    
    39
    
    
    
    309
    
    
    
    79Net Income (loss) attributable to Caribou
Coffee Company, Inc.
    
    $
    654
    
    
    $
    (8,766
    )
    
    $
    2,168
    
    
    $
    (17,604
    )Basic net income (loss) attributable to
Caribou Coffee Company, Inc. common
shareholders per share
    
    $
    0.03
    
    
    $
    (0.45
    )
    
    $
    0.11
    
    
    $
    (0.91
    )Diluted net income (loss) attributable to
Caribou Coffee Company, Inc. common
shareholders per share
    
    $
    0.03
    
    
    $
    (0.45
    )
    
    $
    0.11
    
    
    $
    (0.91
    )Basic weighted average number of shares
outstanding
    
    
    19,470
    
    
    
    19,371
    
    
    
    19,418
    
    
    
    19,371Diluted weighted average number of shares
outstanding
    
    
    20,169
    
    
    
    19,371
    
    
    
    19,830
    
    
    
    19,371
  3




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 27,
    
    
    December 28,2009
    
    
    2008In thousands, except per share amounts(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,086
    
    
    $
    11,060Accounts receivable (net of allowance for doubtful accounts of $27 and
$72 at September 27, 2009 and December 28, 2008, respectively)
    
    
    5,381
    
    
    
    5,311Other receivables (net of allowance for doubtful accounts of $81 and
$76 at September 27, 2009 and December 28, 2008, respectively)
    
    
    1,297
    
    
    
    916Income tax receivable
    
    
    78
    
    
    
    60Inventories
    
    
    12,458
    
    
    
    10,218Prepaid expenses and other current assets
    
    
    714
    
    
    
    881Total current assets
    
    
    39,014
    
    
    
    28,446Property and equipment, net of accumulated depreciation and amortization
    
    
    48,944
    
    
    
    60,312Restricted cash
    
    
    327
    
    
    
    327Other assets
    
    
    345
    
    
    
    487Total assets
    
    $
    88,630
    
    
    $
    89,572LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    9,774
    
    
    $
    8,229Accrued compensation
    
    
    6,057
    
    
    
    6,241Accrued expenses
    
    
    7,344
    
    
    
    8,317Deferred revenue
    
    
    5,763
    
    
    
    9,473Total current liabilities
    
    
    28,938
    
    
    
    32,260Asset retirement liability
    
    
    1,099
    
    
    
    1,035Deferred rent liability
    
    
    8,653
    
    
    
    9,245Deferred revenue
    
    
    2,330
    
    
    
    2,538Income tax liability
    
    
    213
    
    
    
    486Total long term liabilities
    
    
    12,295
    
    
    
    13,304Equity:Caribou Coffee Company, Inc. Shareholders equity:Preferred stock, par value $.01, 20,000 shares authorized; no shares
issued and outstanding
    
    
    
    
    
    
    Common stock, par value $.01, 200,000 shares authorized; 19,813 and
19,371 shares issued and outstanding at September 27, 2009 and
December 28, 2008, respectively
    
    
    198
    
    
    
    194Additional paid-in capital
    
    
    126,381
    
    
    
    125,222Accumulated comprehensive loss
    
    
    (36
    )
    
    
    Accumulated deficit
    
    
    (79,311
    )
    
    
    (81,479
    )Total Caribou Coffee Company, Inc. shareholders equity
    
    
    47,232
    
    
    
    43,937Noncontrolling interest
    
    
    165
    
    
    
    71Total equity
    
    
    47,397
    
    
    
    44,008Total liabilities and equity
    
    $
    88,630
    
    
    $
    89,572
  4




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)
(in thousands)
 Common Stock
    
    
    Additional
    
    
    
    
    
    
    AccumulatedNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Noncontrolling
    
    
    Other
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Interest
    
    
    Comprehensive Loss
    
    
    Deficit
    
    
    EquityBalance, December 28, 2008
    
    $
    19,371
    
    
    
    194
    
    
    $
    125,222
    
    
    $
    71
    
    
    $
    
    
    
    $
    (81,479
    )
    
    $
    44,008Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    309
    
    
    
    
    
    
    
    2,168
    
    
    
    2,477Changes in fair value of
derivative financial
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    (36
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,441Share based compensation
    
    
    
    
    
    
    
    
    
    
    664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    664Options exercised
    
    
    104
    
    
    
    1
    
    
    
    583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    584Restricted shares issued
    
    
    338
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distribution of noncontrolling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (195
    )
    
    
    
    
    
    
    
    
    
    
    (195
    )Purchase of noncontrolling
interest
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (105
    )Balance, September 27, 2009
    
    
    19,813
    
    
    $
    198
    
    
    $
    126,381
    
    
    $
    165
    
    
    $
    (36
    )
    
    $
    (79,311
    )
    
    $
    47,397
  5




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,2009
    
    
    2008(In thousands)(Unaudited)Operating activitiesNet income (loss) attributable to Caribou Coffee Company, Inc.
    
    $
    2,168
    
    
    $
    (17,604
    )Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:Depreciation and amortization
    
    
    12,360
    
    
    
    22,387Amortization of deferred financing fees
    
    
    99
    
    
    
    431Noncontrolling interest
    
    
    309
    
    
    
    79Provision for closing expense and asset disposals
    
    
    9
    
    
    
    553Share-based compensation
    
    
    664
    
    
    
    420Non cash accretion expense
    
    
    64
    
    
    
    28Shareholder contribution
    
    
    
    
    
    
    237Changes in operating assets and liabilities:Restricted cash
    
    
    
    
    
    
    399Accounts receivable and other receivables
    
    
    (469
    )
    
    
    (240
    )Inventories
    
    
    (2,240
    )
    
    
    (1,133
    )Prepaid expenses and other assets
    
    
    241
    
    
    
    908Accounts payable
    
    
    1,545
    
    
    
    2,716Accrued expenses and other liabilities
    
    
    (2,250
    )
    
    
    (5,644
    )Deferred revenue
    
    
    (3,918
    )
    
    
    (3,909
    )Net cash provided (used) by operating activities
    
    
    8,582
    
    
    
    (372
    )Investing activitiesPayments for property and equipment
    
    
    (845
    )
    
    
    (5,461
    )Proceeds from the disposal of property
    
    
    36
    
    
    
    Net cash used in investing activities
    
    
    (809
    )
    
    
    (5,461
    )Financing activitiesBorrowings under revolving credit facility
    
    
    
    
    
    
    3,000Payment of debt financing fees
    
    
    (31
    )
    
    
    Issuance of common stock
    
    
    584
    
    
    
    Purchase of noncontrolling interest
    
    
    (105
    )
    
    
    Distribution of noncontrolling interest
    
    
    (195
    )
    
    
    (115
    )Net cash provided by financing activities
    
    
    253
    
    
    
    2,885Increase (decrease) in cash and cash equivalents
    
    
    8,026
    
    
    
    (2,948
    )Cash and cash equivalents at beginning of period
    
    
    11,060
    
    
    
    9,886Cash and cash equivalents at end of period
    
    $
    19,086
    
    
    $
    6,938
  6




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
 (A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation
   Principles of Consolidation
  Use of Estimates
  Fiscal Year End
  7




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2. Summary of Significant Accounting Policies
 Revenue Recognition
     Operating Leases and Rent Expense
  3. Recent Accounting Pronouncements
  8




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4. Impairments, Coffeehouse Closings, Asset Disposals and Severance
  9




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Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Coffeehouse closures
    
    
    1
    
    
    
    2
    
    
    
    1
    
    
    
    24Amount charged to
operations for closed
coffeehouses:Lease reserve non-cash
    
    $
    40
    
    
    $
    (857
    )
    
    $
    (52
    )
    
    $
    (272
    )Lease costs associated
with lease
termination-cash
    
    
    73
    
    
    
    1,286
    
    
    
    220
    
    
    
    3,971Net book value of closed
coffeehouse property and
equipment
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    825Amount charged to
operations for other
property and equipment
write-offs
    
    
    10
    
    
    
    
    
    
    
    11
    
    
    
    Coffeehouse closing
expense and disposal of
assets
    
    $
    123
    
    
    $
    646
    
    
    $
    179
    
    
    $
    4,524
  Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Quarter
    
    
    Expense
    
    
    reserves
    
    
    End of  QuarterSeptember 27, 2009Exit costs
    
    $
    212
    
    
    $
    83
    
    
    $
    73
    
    
    $
    222Severance
    
    
    234
    
    
    
    
    
    
    
    141
    
    
    
    93Total
    
    $
    446
    
    
    $
    83
    
    
    $
    214
    
    
    $
    315
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Quarter
    
    
    Expense
    
    
    reserves
    
    
    End of  QuarterSeptember 28, 2008Exit costs
    
    $
    1,069
    
    
    $
    441
    
    
    $
    1,286
    
    
    $
    224Severance
    
    
    1,928
    
    
    
    586
    
    
    
    1,895
    
    
    
    619Total
    
    $
    2,997
    
    
    $
    1,027
    
    
    $
    3,181
    
    
    $
    843
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirty-Nine Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of  QuarterSeptember 27, 2009Exit costs
    
    $
    222
    
    
    $
    220
    
    
    $
    220
    
    
    $
    222Severance
    
    
    716
    
    
    
    63
    
    
    
    686
    
    
    
    93Total
    
    $
    938
    
    
    $
    283
    
    
    $
    906
    
    
    $
    315
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirty-Nine Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of  QuarterSeptember 28, 2008Exit costs
    
    $
    467
    
    
    $
    3,728
    
    
    $
    3,971
    
    
    $
    224Severance
    
    
    1,353
    
    
    
    1,341
    
    
    
    2,075
    
    
    
    619Total
    
    $
    1,820
    
    
    $
    5,069
    
    
    $
    6,046
    
    
    $
    843
 10




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th
 5. Derivative Financial Instruments
     Fair ValueFair Value
    
    
    December 28,Contract Type
    
    Balance sheet Location
    
    September 27, 2009
    
    
    2008Derivatives designated as hedging instrumentsCash flow commodity hedges
    
    Accrued expenses
    
    $
    36
    
    
    $
    Derivatives not designated as hedging instrumentsCash flow commodity hedges
    
    Accrued expenses
    
    
    30
    
    
    
    303Total derivatives
    
    
    
    $
    66
    
    
    $
    303
  Gain/ (Loss) recognized in OCIThirteen Weeks Ended
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    September 28,
    
    September 27,
    
    September 28,Contract type
    
    2009
    
    2008
    
    2009
    
    2008Cash flow commodity hedges(1)
    
    $
    56
    
    
    $ 
    
    $
    (36
    )
    
    $ 
 
 (1)
    
    There was no material ineffectiveness during the periods presented  11




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6. 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.
  TotalSeptember 27,2009
    
    Level 1
    
    Level 2
    
    Level 3Assets:Cash and cash equivalents
    
    $
    19,086
    
    
    $
    19,086
    
    
    $
    
    
    
    $
    Liabilities:Derivatives
    
    $
    66
    
    
    $
    66
    
    
    $
    
    
    
    $
    
   7. Inventories
  September 27,
    
    
    December 28,2009
    
    
    2008Coffee
    
    $
    5,914
    
    
    $
    4,652Other merchandise held for sale
    
    
    3,317
    
    
    
    2,843Supplies
    
    
    3,227
    
    
    
    2,723$
    12,458
    
    
    $
    10,218
  12




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8. Share-Based Compensation and Equity
 Stock-based Compensation
   WeightedWeighted
    
    AverageNumber of
    
    Average
    
    ContractShares
    
    Exercise Price
    
    LifeOutstanding, December 28, 2008
    
    
    2,452
    
    
    $
    5.16
    
    
    7.89 YrsGranted
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    Forfeited
    
    
    (402
    )
    
    $
    6.93Outstanding, March 29, 2009
    
    
    2,050
    
    
    $
    4.82
    
    
    7.65 YrsGranted
    
    
    10
    
    
    $
    2.22Exercised
    
    
    
    
    
    $
    Forfeited
    
    
    (213
    )
    
    $
    8.51Outstanding, June 28, 2009
    
    
    1,847
    
    
    $
    4.37
    
    
    7.32 YrsGranted
    
    
    
    
    
    $
    Exercised
    
    
    (104
    )
    
    $
    5.60Forfeited
    
    
    (13
    )
    
    $
    6.75Outstanding, September 27, 2009
    
    
    1,730
    
    
    $
    4.28
    
    
    7.80 YrsOptions vested at September 27, 2009
    
    
    724
    
    
    $
    6.18
    
    
    6.53 Yrs
  Weighted
    
    
    WeightedAverage Grant
    
    
    AverageNumber of
    
    
    Date
    
    
    ContractShares
    
    
    Fair Value
    
    
    LifeOutstanding, December 28, 2008
    
    
    
    
    
    $
    Granted
    
    
    338
    
    
    $
    5.50Vested
    
    
    (38
    )
    
    $
    2.86Forfeited
    
    
    
    
    
    $
    Outstanding, September 27, 2009
    
    
    300
    
    
    $
    5.83
    
    
    3.49 Yrs
 13




---



##### Table of Contents



Comprehensive Income
  Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember
    
    
    September
    
    
    September
    
    
    September27, 2009
    
    
    28, 2008
    
    
    27, 2009
    
    
    28, 2008Net income (loss)
    
    $
    768
    
    
    $
    (8,727
    )
    
    $
    2,477
    
    
    $
    (17,525
    )Unrealized holding gains
(losses) on cash flow hedging
instruments
    
    
    56
    
    
    
    
    
    
    
    (36
    )
    
    
    Total comprehensive income (loss)
    
    $
    824
    
    
    $
    (8,727
    )
    
    $
    2,441
    
    
    $
    (17,525
    )
 9. Income Taxes
  10. Net Income (Loss) Per Share
  Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    654
    
    
    $
    (8,766
    )
    
    $
    2,168
    
    
    $
    (17,604
    )Weighted average common shares outstanding
 basic
    
    
    19,470
    
    
    
    19,371
    
    
    
    19,418
    
    
    
    19,371Dilutive impact of stock-based compensation
    
    
    699
    
    
    
    
    
    
    
    412
    
    
    
    Weighted average common shares outstanding
 dilutive
    
    
    20,169
    
    
    
    19,371
    
    
    
    19,830
    
    
    
    19,371Basic net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.45
    )
    
    $
    0.11
    
    
    $
    (0.91
    )Diluted net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.45
    )
    
    $
    0.11
    
    
    $
    (0.91
    )
  11. Master Franchise Agreement
   14




---



##### Table of Contents



12. Revolving Credit Facility
   13. Commitments and Contingencies
  15




---



##### Table of Contents



14. Segment Reporting
  Retail Coffeehouses
  Commercial
  Franchise
   Thirteen weeks ended September 27, 2009
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    54,479
    
    
    $
    6,557
    
    
    $
    1,703
    
    
    $
    
    
    
    $
    62,739Costs of sales and related occupancy costs
    
    
    22,644
    
    
    
    4,232
    
    
    
    973
    
    
    
    
    
    
    
    27,849Operating expenses
    
    
    23,004
    
    
    
    1,010
    
    
    
    283
    
    
    
    
    
    
    
    24,297Opening expenses
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Depreciation and amortization
    
    
    3,454
    
    
    
    10
    
    
    
    1
    
    
    
    
    
    
    
    3,465General and administrative expenses
    
    
    1,742
    
    
    
    
    
    
    
    
    
    
    
    4,571
    
    
    
    6,313Closing expense and disposal of assets
    
    
    123
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    123Operating income (loss)
    
    $
    3,512
    
    
    $
    1,305
    
    
    $
    440
    
    
    $
    (4,571
    )
    
    $
    686Identifiable assets
    
    $
    40,896
    
    
    $
    107
    
    
    $
    9
    
    
    $
    7,932
    
    
    $
    48,944
 16




---



##### Table of Contents



Thirteen weeks ended September 28, 2008
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    54,731
    
    
    $
    4,467
    
    
    $
    1,712
    
    
    $
    
    
    
    $
    60,910Costs of sales and related occupancy costs
    
    
    23,080
    
    
    
    2,858
    
    
    
    1,054
    
    
    
    
    
    
    
    26,992Operating expenses
    
    
    23,727
    
    
    
    568
    
    
    
    276
    
    
    
    
    
    
    
    24,571Opening expenses
    
    
    56
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    62Depreciation and amortization
    
    
    10,199
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    10,208General and administrative expenses
    
    
    2,195
    
    
    
    
    
    
    
    
    
    
    
    4,920
    
    
    
    7,115Closing expense and disposal of assets
    
    
    646
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    646Operating (loss) income
    
    $
    (5,172
    )
    
    $
    1,032
    
    
    $
    376
    
    
    $
    (4,920
    )
    
    $
    (8,684
    )Identifiable assets
    
    $
    55,097
    
    
    $
    141
    
    
    $
    13
    
    
    $
    9,551
    
    
    $
    64,802Net impairment
    
    $
    5,743
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,743
 Thirty-nine weeks ended September 27, 2009
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    162,637
    
    
    $
    17,996
    
    
    $
    5,440
    
    
    $
    
    
    
    $
    186,073Costs of sales and related occupancy costs
    
    
    66,827
    
    
    
    11,529
    
    
    
    3,082
    
    
    
    
    
    
    
    81,438Operating expenses
    
    
    68,023
    
    
    
    2,582
    
    
    
    880
    
    
    
    
    
    
    
    71,485Opening expenses
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    20Depreciation and amortization
    
    
    10,741
    
    
    
    32
    
    
    
    3
    
    
    
    
    
    
    
    10,776General and administrative expenses
    
    
    5,591
    
    
    
    
    
    
    
    
    
    
    
    14,117
    
    
    
    19,708Closing expense and disposal of assets
    
    
    196
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    179Operating (loss) income
    
    $
    11,259
    
    
    $
    3,853
    
    
    $
    1,455
    
    
    $
    (14,100
    )
    
    $
    2,467Identifiable assets
    
    $
    40,896
    
    
    $
    107
    
    
    $
    9
    
    
    $
    7,932
    
    
    $
    48,944
 Thirty-nine weeks ended September 28, 2008
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    168,618
    
    
    $
    12,502
    
    
    $
    4,730
    
    
    $
    
    
    
    $
    185,850Costs of sales and related occupancy costs
    
    
    69,799
    
    
    
    7,771
    
    
    
    2,639
    
    
    
    
    
    
    
    80,209Operating expenses
    
    
    73,149
    
    
    
    1,548
    
    
    
    1,088
    
    
    
    
    
    
    
    75,785Opening expenses
    
    
    167
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    198Depreciation and amortization
    
    
    20,749
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    20,771General and administrative expenses
    
    
    6,976
    
    
    
    
    
    
    
    
    
    
    
    14,207
    
    
    
    21,183Closing expense and disposal of assets
    
    
    4,412
    
    
    
    
    
    
    
    
    
    
    
    112
    
    
    
    4,524Operating (loss) income
    
    $
    (6,634
    )
    
    $
    3,161
    
    
    $
    972
    
    
    $
    (14,319
    )
    
    $
    (16,820
    )Identifiable assets
    
    $
    55,097
    
    
    $
    141
    
    
    $
    13
    
    
    $
    9,551
    
    
    $
    64,802Net impairment
    
    $
    7,460
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,460
  17




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  FORWARD-LOOKING STATEMENTS
  Overview
     Critical Accounting Policies
  18




---



##### Table of Contents



Fiscal Periods
   Thirteen Weeks Ended September 27, 2009 vs. Thirteen Weeks Ended September 28, 2008
 Results of Operations
 :
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesStatement of Operations Data:Net sales:Coffeehouse
    
    $
    54,479
    
    
    $
    54,731
    
    
    
    (0.5
    )%
    
    
    86.8
    %
    
    
    89.9
    %Commercial and franchise
    
    
    8,260
    
    
    
    6,179
    
    
    
    33.7
    %
    
    
    13.2
    %
    
    
    10.1
    %Total net sales
    
    
    62,739
    
    
    
    60,910
    
    
    
    3.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    27,849
    
    
    
    26,992
    
    
    
    3.2
    %
    
    
    44.4
    %
    
    
    44.3
    %Operating expenses
    
    
    24,297
    
    
    
    24,571
    
    
    
    (1.1
    )%
    
    
    38.7
    %
    
    
    40.3
    %Opening expenses
    
    
    6
    
    
    
    62
    
    
    
    (90.3
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,465
    
    
    
    10,208
    
    
    
    (66.1
    )%
    
    
    5.5
    %
    
    
    16.8
    %General and administrative expenses
    
    
    6,313
    
    
    
    7,115
    
    
    
    (11.3
    )%
    
    
    10.1
    %
    
    
    11.7
    %Closing expense and disposal of assets
    
    
    123
    
    
    
    646
    
    
    
    (81.0
    )%
    
    
    0.2
    %
    
    
    1.1
    %Operating income (loss)
    
    
    686
    
    
    
    (8,684
    )
    
    
    (107.9
    )%
    
    
    1.1
    %
    
    
    (14.3
    )%Other income (expense):Interest income
    
    
    10
    
    
    
    2
    
    
    
    400.0
    %
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (68
    )
    
    
    (81
    )
    
    
    (16.0
    )%
    
    
    (0.1
    )%
    
    
    (0.1
    )%Income (loss) before provision for
income taxes and noncontrolling interest
    
    
    628
    
    
    
    (8,763
    )
    
    
    (107.2
    )%
    
    
    1.0
    %
    
    
    (14.4
    )%Benefit from income taxes
    
    
    (140
    )
    
    
    (36
    )
    
    
    288.9
    %
    
    
    (0.2
    )%
    
    
    (0.1
    )%Net income (loss)
    
    
    768
    
    
    
    (8,727
    )
    
    
    (108.8
    )%
    
    
    1.2
    %
    
    
    (14.3
    )%Less: Net income attributable to
noncontrolling interest
    
    
    114
    
    
    
    39
    
    
    
    192.3
    %
    
    
    0.2
    %
    
    
    0.1
    %Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    654
    
    
    $
    (8,766
    )
    
    
    (107.5
    )%
    
    
    1.0
    %
    
    
    (14.4
    )%
 Net Sales
  19




---



##### Table of Contents



Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Opening expenses.
 Depreciation and amortization.
 General and administrative expenses.
 Closing expense and disposal of assets.
 Interest income.
 Interest expense.
 Operating Segments
  20




---



##### Table of Contents



Retail
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    54,479
    
    
    $
    54,731
    
    
    
    (0.5
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    22,644
    
    
    
    23,080
    
    
    
    (1.9
    )%
    
    
    41.6
    %
    
    
    42.2
    %Operating expenses
    
    
    23,004
    
    
    
    23,727
    
    
    
    (3.0
    )%
    
    
    42.2
    %
    
    
    43.3
    %Opening expenses
    
    
    
    
    
    
    56
    
    
    
    (100.0
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,454
    
    
    
    10,199
    
    
    
    (66.1
    )%
    
    
    6.3
    %
    
    
    18.6
    %General and administrative expenses
    
    
    1,742
    
    
    
    2,195
    
    
    
    (20.6
    )%
    
    
    3.2
    %
    
    
    4.0
    %Closing expense and disposal of assets
    
    
    123
    
    
    
    646
    
    
    
    (81.0
    )%
    
    
    0.2
    %
    
    
    1.2
    %Operating income (loss)
    
    $
    3,512
    
    
    $
    (5,172
    )
    
    
    (167.9
    )%
    
    
    6.4
    %
    
    
    (9.4
    )%
  Coffeehouse sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 General and administrative expenses.
 21




---



##### Table of Contents



Closing expense and disposal of assets.
 Commercial
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    6,557
    
    
    $
    4,467
    
    
    
    46.8
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    4,232
    
    
    
    2,858
    
    
    
    48.1
    %
    
    
    64.5
    %
    
    
    64.0
    %Operating expenses
    
    
    1,010
    
    
    
    568
    
    
    
    77.8
    %
    
    
    15.4
    %
    
    
    12.7
    %Depreciation and amortization
    
    
    10
    
    
    
    9
    
    
    
    11.1
    %
    
    
    0.2
    %
    
    
    0.2
    %Operating income
    
    $
    1,305
    
    
    $
    1,032
    
    
    
    26.5
    %
    
    
    19.9
    %
    
    
    23.1
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 22




---



##### Table of Contents



Franchise
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    1,703
    
    
    $
    1,712
    
    
    
    (0.5
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    973
    
    
    
    1,054
    
    
    
    (7.7
    )%
    
    
    57.1
    %
    
    
    61.6
    %Operating expenses
    
    
    283
    
    
    
    276
    
    
    
    2.5
    %
    
    
    16.6
    %
    
    
    16.1
    %Opening expenses
    
    
    6
    
    
    
    6
    
    
    
    
    %
    
    
    0.4
    %
    
    
    0.3
    %Depreciation and amortization
    
    
    1
    
    
    
    
    
    
    
    
    %
    
    
    0.1
    %
    
    
    
    %Operating income
    
    $
    440
    
    
    $
    376
    
    
    
    17.0
    %
    
    
    25.8
    %
    
    
    22.0
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Opening expenses.
 Unallocated Corporate
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    $
    4,571
    
    
    $
    4,920
    
    
    
    (7.1
    )%
    
    
    7.3
    %
    
    
    8.1
    %Operating (loss)
    
    $
    (4,571
    )
    
    $
    (4,920
    )
    
    
    (7.1
    )%
    
    
    7.3
    %
    
    
    (8.1
    )%
 General and administrative expenses.
 23




---



##### Table of Contents



Thirty-Nine Weeks Ended September 27, 2009 vs. Thirty-Nine Weeks Ended September 28, 2008
 Results of Operations
 :
 Thirty-Nine Weeks Ended
    
    
    
    
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesStatement of Operations Data:Net sales:Coffeehouse
    
    $
    162,637
    
    
    $
    168,618
    
    
    
    (3.5
    )%
    
    
    87.4
    %
    
    
    90.7
    %Commercial and franchise
    
    
    23,436
    
    
    
    17,232
    
    
    
    36.0
    %
    
    
    12.6
    %
    
    
    9.3
    %Total net sales
    
    
    186,073
    
    
    
    185,850
    
    
    
    0.1
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    81,438
    
    
    
    80,209
    
    
    
    1.5
    %
    
    
    43.8
    %
    
    
    43.1
    %Operating expenses
    
    
    71,485
    
    
    
    75,785
    
    
    
    (5.7
    )%
    
    
    38.4
    %
    
    
    40.8
    %Opening expenses
    
    
    20
    
    
    
    198
    
    
    
    (89.9
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    10,776
    
    
    
    20,771
    
    
    
    (48.1
    )%
    
    
    5.8
    %
    
    
    11.2
    %General and administrative expenses
    
    
    19,708
    
    
    
    21,183
    
    
    
    (7.0
    )%
    
    
    10.6
    %
    
    
    11.4
    %Closing expense and disposal of assets
    
    
    179
    
    
    
    4,524
    
    
    
    (96.0
    )%
    
    
    0.1
    %
    
    
    2.4
    %Operating income (loss)
    
    
    2,467
    
    
    

    (16,820
    )
    
    
    (114.7
    )%
    
    
    1.3
    %
    
    
    (9.0
    )%Other income (expense):Interest income
    
    
    17
    
    
    
    23
    
    
    
    (26.1
    )%
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (189
    )
    
    
    (714
    )
    
    
    (73.5
    )%
    
    
    (0.1
    )%
    
    
    (0.4
    )%Income (loss) before provision for
income taxes and noncontrolling interest
    
    
    2,295
    
    
    
    (17,511
    )
    
    
    (113.1
    )%
    
    
    1.2
    %
    
    
    (9.4
    )%(Benefit from) provision for income taxes
    
    
    (182
    )
    
    
    14
    
    
    
    (1,400.0
    )%
    
    
    (0.1
    )%
    
    
    0.0
    %Net income (loss)
    
    
    2,477
    
    
    
    (17,525
    )
    
    
    (114.1
    )%
    
    
    1.3
    %
    
    
    (9.4
    )%Less: Net income attributable to
noncontrolling interest
    
    
    309
    
    
    
    79
    
    
    
    291.1
    %
    
    
    0.2
    %
    
    
    0.0
    %Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    2,168
    
    
    $
    (17,604
    )
    
    
    (112.3
    )%
    
    
    1.2
    %
    
    
    (9.4
    )%
 Net Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 24




---



##### Table of Contents



Operating expenses.
 Opening expenses.
 Depreciation and amortization.
 General and administrative expenses.
 Closing expenses and disposal of assets.
 Interest income.
 Interest expense.
 Operating Segments
  25




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##### Table of Contents



Retail
 Thirty-Nine Weeks Ended
    
    
    
    
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    162,637
    
    
    $
    168,618
    
    
    
    (3.5
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    66,827
    
    
    
    69,799
    
    
    
    (4.3
    )%
    
    
    41.1
    %
    
    
    41.4
    %Operating expenses
    
    
    68,023
    
    
    
    73,149
    
    
    
    (7.0
    )%
    
    
    41.8
    %
    
    
    43.4
    %Opening expenses
    
    
    
    
    
    
    167
    
    
    
    (100.0
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    10,741
    
    
    
    20,749
    
    
    
    (48.2
    )%
    
    
    6.6
    %
    
    
    12.3
    %General and administrative expenses
    
    
    5,591
    
    
    
    6,976
    
    
    
    (19.9
    )%
    
    
    3.4
    %
    
    
    4.1
    %Closing expense and disposal of assets
    
    
    196
    
    
    
    4,412
    
    
    
    (95.6
    )%
    
    
    0.1
    %
    
    
    2.6
    %Operating income (loss)
    
    $
    11,259
    
    
    $
    (6,634
    )
    
    
    (269.7
    )%
    
    
    6.9
    %
    
    
    (3.9
    )%
  Coffeehouse sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 General and administrative expenses.
 Closing expense and disposal of assets.
 26




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##### Table of Contents



Commercial
 Thirty-Nine Weeks Ended
    
    
    
    
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    17,996
    
    
    $
    12,502
    
    
    
    43.9
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    11,529
    
    
    
    7,771
    
    
    
    48.4
    %
    
    
    64.1
    %
    
    
    62.1
    %Operating expenses
    
    
    2,582
    
    
    
    1,548
    
    
    
    66.8
    %
    
    
    14.3
    %
    
    
    12.4
    %Depreciation and amortization
    
    
    32
    
    
    
    22
    
    
    
    45.5
    %
    
    
    0.2
    %
    
    
    0.2
    %Operating income
    
    $
    3,853
    
    
    $
    3,161
    
    
    
    21.9
    %
    
    
    21.4
    %
    
    
    25.3
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 27




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##### Table of Contents



Franchise
 Thirty-Nine Weeks Ended
    
    
    
    
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    5,440
    
    
    $
    4,730
    
    
    
    15.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    3,082
    
    
    
    2,639
    
    
    
    16.8
    %
    
    
    56.7
    %
    
    
    55.8
    %Operating expenses
    
    
    880
    
    
    
    1,088
    
    
    
    (19.1
    )%
    
    
    16.2
    %
    
    
    23.0
    %Opening expenses
    
    
    20
    
    
    
    31
    
    
    
    (35.5
    )%
    
    
    0.4
    %
    
    
    0.7
    %Depreciation and amortization
    
    
    3
    
    
    
    
    
    
    
    
    %
    
    
    0.1
    %
    
    
    
    %Operating income
    
    $
    1,455
    
    
    $
    972
    
    
    
    49.7
    %
    
    
    26.7
    %
    
    
    20.5
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Unallocated Corporate
 Thirty-Nine Weeks Ended
    
    
    
    
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    %
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    $
    14,117
    
    
    $
    14,207
    
    
    
    (0.6
    )%
    
    
    7.6
    %
    
    
    7.6
    %Closing expense and disposal of assets
    
    
    (17
    )
    
    
    112
    
    
    
    (115.2
    )%
    
    
    0.0
    %
    
    
    0.1
    %Operating (loss)
    
    $
    (14,100
    )
    
    $
    (14,319
    )
    
    
    1.5
    %
    
    
    (7.6
    )%
    
    
    (7.7
    )%
 General and administrative expenses.
 28




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##### Table of Contents



Liquidity and Capital Resources
  Thirty-Nine Weeks EndedSeptember 27,
    
    September 28,
    
    Increase /2009
    
    2008
    
    (Decrease)(In thousands)Net cash provided (used) by operating activities
    
    $
    8,582
    
    
    $
    (372
    )
    
    $
    8,954Net cash used in investing activities
    
    
    (809
    )
    
    
    (5,461
    )
    
    
    4,652Net cash provided by financing activities
    
    
    253
    
    
    
    2,885
    
    
    
    (2,632
    )Net change in cash and cash equivalents
    
    $
    8,026
    
    
    $
    (2,948
    )
    
    $
    10,974
      29




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##### Table of Contents



Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
       30




---



##### Table of Contents



Key Financial Metrics
   Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except operating data)Non-GAAP Metrics:EBITDA(1)
    
    $
    4,536
    
    
    $
    2,037
    
    
    $
    14,518
    
    
    $
    5,488Operating Data:Percentage change in comparable coffeehouse
net sales(2)
    
    
    (0.5
    %)
    
    
    (4.7
    %)
    
    
    (3.0
    %)
    
    
    (2.9
    %)Company-Owned:Coffeehouses open at beginning of period
    
    
    414
    
    
    
    415
    
    
    
    414
    
    
    
    432Coffeehouses opened during the period
    
    
    0
    
    
    
    2
    
    
    
    0
    
    
    
    7Coffeehouses closed during the period
    
    
    (1
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (24
    )Coffeehouses open at end of period:Total Company-Owned
    
    
    413
    
    
    
    415
    
    
    
    413
    
    
    
    415Franchised:Coffeehouses open at beginning of period
    
    
    108
    
    
    
    75
    
    
    
    97
    
    
    
    52Coffeehouses opened during the period
    
    
    4
    
    
    
    5
    
    
    
    18
    
    
    
    28Coffeehouses closed during the period
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    Coffeehouses open at end of period:Total Franchised
    
    
    112
    
    
    
    80
    
    
    
    112
    
    
    
    80Total coffeehouses open at end of period
    
    
    525
    
    
    
    495
    
    
    
    525
    
    
    
    495
 
 (1)
    
    See reconciliation and discussion of non-GAAP measures which follow at the end of this
section.(2)
    
    Percentage change in comparable coffeehouse net 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 net sales calculations.   
    
    Our coffeehouse leases are generally short-term (5-10 years), and we must depreciate
all of the cost associated with those leases on a straight-line basis over the initial
lease term, excluding renewal options (unless such renewal periods are reasonably assured
at the inception of the lease). We opened a net 210 company-owned coffeehouses from the
beginning of fiscal 2003 through the end of the first thirty-nine weeks of 2009. As a
result, we believe depreciation expense is disproportionately large when compared to the
sales from a significant percentage of our coffeehouses that are in their initial years of
operations. Also, many of the assets being depreciated have actual useful lives that exceed
the initial lease term, excluding
 31




---



##### Table of Contents



renewal options. Consequently, we believe that adjusting for depreciation and amortization is
useful for evaluating the operating performance of our coffeehouses.
  
    
    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;
    
    To establish targets for certain management compensation matters; and
    
    To evaluate our capacity to incur and service debt, fund capital expenditures and
expand our business.
  Thirteen Weeks Ended
    
    
    Thirty-Nine Weeks EndedSeptember 27,
    
    
    September 28,
    
    
    September 27,
    
    
    September 28,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Net income (loss)
    
    $
    654
    
    
    $
    (8,766
    )
    
    $
    2,168
    
    
    $
    (17,604
    )Interest expense
    
    
    68
    
    
    
    81
    
    
    
    189
    
    
    
    714Interest income
    
    
    (10
    )
    
    
    (2
    )
    
    
    (17
    )
    
    
    (23
    )Depreciation and
amortization(1)
    
    
    3,964
    
    
    
    10,760
    
    
    
    12,360
    
    
    
    22,387(Benefit)
provision for income
taxes
    
    
    (140
    )
    
    
    (36
    )
    
    
    (182
    )
    
    
    14EBITDA
    
    $
    4,536
    
    
    $
    2,037
    
    
    $
    14,518
    
    
    $
    5,488
 
 (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 3.
    
    Quantitative and Qualitative Disclosures about Market Risks.
  
 Item 4T.
    
    Controls and Procedures.
  32




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
    
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Unregistered Sales of Equity Securities
  Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  33




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##### Table of Contents



Item 6. Exhibits.
 3.1*
    
    Form of Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Companys
Registration Statement of Form S-1/A filed August 25, 2005).3.2*
    
    Form of Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.2 to the Companys Registration Statement of
Form S-1/A filed August 25, 2005).4.1*
    
    Form of Registrants Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Companys Registration Statement of
Form S-1/A filed September 6, 2005).31.1
    
    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.
 
 Asterisk (*) indicates exhibit previously filed with the Securities and Exchange Commission as
indicated in parentheses. 34




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##### Table of Contents



SIGNATURE
  CARIBOU COFFEE COMPANY, INC.By:
    /s/ Michael TattersfieldMichael TattersfieldChief Executive Officer and President  35