##### 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 March 29, 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
 Not Applicable
 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
  Title
    
    Shares Outstanding as of April 24, 2009Common Stock, par value $0.01 per share
    
    19,370,590




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##### 



CARIBOU COFFEE COMPANY, INC.
 FORM 10-Q
 For the Thirteen Week Period Ended March 29, 2009
 Table of Contents
 pgPART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statement of Changes in Shareholders 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
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T. Controls and Procedures
    
    
    23PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults Upon Senior Securities
    
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 5. Other Information
    
    
    24Item 6. Exhibits
    
    
    25Signature
    
    
    26EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



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 EndedMarch 29
    
    
    March 30,2009
    
    
    2008(In thousands, except for per share amounts)(Unaudited)Coffeehouse sales
    
    $
    52,864
    
    
    $
    56,620Commercial and franchise sales
    
    
    7,516
    
    
    
    5,137Total net sales
    
    
    60,380
    
    
    
    61,757Cost of sales and related occupancy costs
    
    
    26,272
    
    
    
    26,213Operating expenses
    
    
    23,322
    
    
    
    25,395Opening expenses
    
    
    10
    
    
    
    85Depreciation and amortization
    
    
    3,741
    
    
    
    5,921General and administrative expenses
    
    
    6,606
    
    
    
    7,450Closing expense and disposal of assets
    
    
    53
    
    
    
    2,546Operating income (loss)
    
    
    376
    
    
    
    (5,853
    )Other income (expense):Interest income
    
    
    
    
    
    
    18Interest expense
    
    
    (58
    )
    
    
    (512
    )Income (loss) before provision for income taxes
    
    
    318
    
    
    
    (6,347
    )(Benefit from) provision for income taxes
    
    
    (101
    )
    
    
    6Net income (loss)
    
    
    419
    
    
    
    (6,353
    )Less: Net income attributable to noncontrolling interest
    
    
    73
    
    
    
    53Net Income (loss) attributable to Caribou Coffee Company, Inc.
    
    $
    346
    
    
    $
    (6,406
    )Basic net income (loss) attributable to Caribou Coffee
Company, Inc. common shareholders per share
    
    $
    0.02
    
    
    $
    (0.33
    )Diluted net income (loss) attributable to Caribou Coffee
Company, Inc. common shareholders per share
    
    $
    0.02
    
    
    $
    (0.33
    )Basic weighted average number of shares outstanding
    
    
    19,371
    
    
    
    19,371Diluted weighted average number of shares outstanding
    
    
    19,526
    
    
    
    19,371
  3




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##### Table of Contents



CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 29,
    
    
    December 28,2009
    
    
    2008In thousands, except per share amounts(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    10,751
    
    
    $
    11,060Accounts receivable (net of allowance for doubtful accounts of $76 and
$72 at March 29, 2009 and December 28, 2008, respectively)
    
    
    4,330
    
    
    
    5,311Other receivables
    
    
    1,399
    
    
    
    916Income tax receivable
    
    
    41
    
    
    
    60Inventories
    
    
    9,832
    
    
    
    10,218Prepaid expenses and other current assets
    
    
    870
    
    
    
    881Total current assets
    
    
    27,223
    
    
    
    28,446Property and equipment, net of accumulated depreciation and amortization
    
    
    56,203
    
    
    
    60,312Notes receivable
    
    
    12
    
    
    
    16Restricted cash
    
    
    327
    
    
    
    327Other assets
    
    
    426
    
    
    
    471Total assets
    
    $
    84,191
    
    
    $
    89,572LIABILITIES AND EQUITYCurrent liabilities:Accounts payable
    
    $
    8,604
    
    
    $
    8,229Accrued compensation
    
    
    4,291
    
    
    
    6,241Accrued expenses
    
    
    6,885
    
    
    
    8,317Deferred revenue
    
    
    6,889
    
    
    
    9,473Total current liabilities
    
    
    26,669
    
    
    
    32,260Asset retirement liability
    
    
    1,056
    
    
    
    1,035Deferred rent liability
    
    
    9,104
    
    
    
    9,245Deferred revenue
    
    
    2,408
    
    
    
    2,538Income tax liability
    
    
    367
    
    
    
    486Total long term liabilities
    
    
    12,935
    
    
    
    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; 19,371
shares issued and outstanding at March 29, 2009 and December 28,
2008
    
    
    194
    
    
    
    194Additional paid-in capital
    
    
    125,402
    
    
    
    125,222Accumulated deficit
    
    
    (81,133
    )
    
    
    (81,479
    )Total Caribou Coffee Company, Inc. shareholders equity
    
    
    44,463
    
    
    
    43,937Noncontrolling interest
    
    
    124
    
    
    
    71Total equity
    
    
    44,587
    
    
    
    44,008Total liabilities and equity
    
    $
    84,191
    
    
    $
    89,572
  4




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##### Table of Contents



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
    
    
    AdditionalNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Noncontrolling
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Interest
    
    
    Deficit
    
    
    EquityBalance, December 30, 2007
    
    
    19,371
    
    
    $
    194
    
    
    $
    124,232
    
    
    $
    144
    
    
    $
    (65,137
    )
    
    $
    59,433Share based compensation
    
    
    
    
    
    
    
    
    
    
    753
    
    
    
    
    
    
    
    
    
    
    
    753Distribution of noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136
    )
    
    
    
    
    
    
    (136
    )Shareholder contribution
    
    
    
    
    
    
    
    
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    237Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    (16,342
    )
    
    
    (16,279
    )Balance, December 28, 2008
    
    
    19,371
    
    
    
    194
    
    
    
    125,222
    
    
    
    71
    
    
    
    (81,479
    )
    
    
    44,008Share based compensation
    
    
    
    
    
    
    
    
    
    
    265
    
    
    
    
    
    
    
    
    
    
    
    265Purchase of noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (20
    )
    
    
    
    
    
    
    (105
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    346
    
    
    
    419Balance, March 29, 2009
    
    
    19,371
    
    
    $
    194
    
    
    $
    125,402
    
    
    $
    124
    
    
    $
    (81,133
    )
    
    $
    44,587
  5




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##### Table of Contents



CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
(A Majority Owned Subsidiary of Caribou Holding Company Limited)
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Thirteen Weeks EndedMarch 29,
    
    
    March 30,2009
    
    
    2008(In thousands)(Unaudited)Operating activitiesNet income (loss) attributable to Caribou Coffee Company, Inc.
    
    $
    346
    
    
    $
    (6,406
    )Adjustments to reconcile net income (loss) to net cash used by
operating activities:Depreciation and amortization
    
    
    4,294
    
    
    
    6,421Amortization of deferred financing fees
    
    
    29
    
    
    
    373Noncontrolling interest
    
    
    73
    
    
    
    53(Benefit from) provision for closing expense and asset disposals
    
    
    (30
    )
    
    
    474Share-based compensation
    
    
    265
    
    
    
    152Non cash accretion expense
    
    
    21
    
    
    
    21Shareholder contribution
    
    
    
    
    
    
    131Changes in operating assets and liabilities:Accounts receivable and other receivables
    
    
    502
    
    
    
    (1,197
    )Income tax receivable
    
    
    19
    
    
    
    29Inventories
    
    
    386
    
    
    
    819Prepaid expenses and other assets
    
    
    27
    
    
    
    522Accounts payable
    
    
    375
    
    
    
    (827
    )Accrued compensation
    
    
    (1,950
    )
    
    
    (1,895
    )Accrued expenses and income tax liability
    
    
    (1,669
    )
    
    
    915Deferred revenue
    
    
    (2,714
    )
    
    
    (2,860
    )Net cash used by operating activities
    
    
    (26
    )
    
    
    (3,275
    )Investing activitiesPayments for property and equipment
    
    
    (195
    )
    
    
    (2,483
    )Proceeds from the disposal of property
    
    
    17Net cash used in investing activities
    
    
    (178
    )
    
    
    (2,483
    )Financing activitiesDistribution of noncontrolling interest
    
    
    
    
    
    
    (45
    )Purchase of noncontrolling interest
    
    
    (105
    )
    
    
    Net cash used by financing activities
    
    
    (105
    )
    
    
    (45
    )Decrease in cash and cash equivalents
    
    
    (309
    )
    
    
    (5,803
    )Cash and cash equivalents at beginning of period
    
    
    11,060
    
    
    
    9,886Cash and cash equivalents at end of period
    
    $
    10,751
    
    
    $
    4,083Supplemental disclosure of cash flow informationNoncash financing and investing transactions:Accrual for leasehold improvements, furniture, and equipment
    
    $
    0
    
    
    $
    666
  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
 Accounting for Leases, Accounting for Operating Leases With Scheduled Rent
Increases.
 3. Recent Accounting Pronouncements
 Fair Value Measurement
 8




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##### Table of Contents



Noncontrolling Interests in Consolidated Financial
Statements
 4. Impairments, Coffeehouse Closing, Asset Disposals and Severance
   Thirteen Weeks EndedMarch 29,
    
    
    March 30,2009
    
    
    2008Coffeehouse closures
    
    
    
    
    
    
    16Amount charged to operations for closed coffeehouses:Lease reserve non-cash
    
    $
    (19
    )
    
    $
    530Lease costs associated with lease termination-cash
    
    
    83
    
    
    
    1,666Net book value of closed coffeehouse property and equipment
    
    
    
    
    
    
    350Amount charged to operations for other property and equipment write-offs
    
    
    (11
    )
    
    
    Coffeehouse closing expense and disposal of assets
    
    $
    53
    
    
    $
    2,546
  Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterMarch 29, 2009Exit costs
    
    $
    222
    
    
    $
    64
    
    
    $
    83
    
    
    $
    203Severance
    
    
    716
    
    
    
    63
    
    
    
    431
    
    
    
    348Total
    
    $
    938
    
    
    $
    64
    
    
    $
    451
    
    
    $
    551
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterMarch 30, 2008Exit costs
    
    $
    467
    
    
    $
    2,196
    
    
    $
    1,679
    
    
    $
    984Severance
    
    
    1,353
    
    
    
    755
    
    
    
    
    
    
    
    2,108Total
    
    $
    1,820
    
    
    $
    2,951
    
    
    $
    1,679
    
    
    $
    3,092
  9




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##### Table of Contents



5. Inventories
  March 29,
    
    
    December 28,2009
    
    
    2008Coffee
    
    $
    4,630
    
    
    $
    4,652Other merchandise held for sale
    
    
    2,852
    
    
    
    2,843Supplies
    
    
    2,350
    
    
    
    2,723$
    9,832
    
    
    $
    10,218
  6. Equity and Stock Based Compensation
   Weighted
    
    
    WeightedAverage
    
    
    AverageNumber of
    
    
    Exercise
    
    
    ContractShares
    
    
    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 YrsOptions vested at March 29, 2009
    
    
    728
    
    
    $
    7.72
    
    
    5.11 Yrs
 7. Income Taxes
  10




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##### Table of Contents



8. Net Income (loss) Per Share
  Thirteen Weeks EndedMarch 29,
    
    
    March 30,2009
    
    
    2008Net income (loss) attributable to Caribou Coffee Company, Inc.
    
    $
    346
    
    
    $
    (6,406
    )Weighted average common shares outstanding  basic
    
    
    19,371
    
    
    
    19,371Dilutive impact of stock-based compensation
    
    
    155
    
    
    
    Weighted average common shares outstanding  dilutive
    
    
    19,526
    
    
    
    19,371Basic net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.33
    )Diluted net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.33
    )
  9. Master Franchise Agreement
    10. Revolving Credit Facility
  11




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11. Commitments and Contingencies
    12. Segment Reporting
  Retail Coffeehouses
  12




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##### Table of Contents



Commercial
  Franchise
   Thirteen weeks ended March 29, 2009
 UnallocatedRetail
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalSales
    
    $
    52,864
    
    
    $
    5,704
    
    
    $
    1,812
    
    
    $
    
    
    
    $
    60,380Costs of sales and related occupancy costs
    
    
    21,720
    
    
    
    3,513
    
    
    
    1,039
    
    
    
    
    
    
    
    26,272Operating expenses
    
    
    22,307
    
    
    
    700
    
    
    
    315
    
    
    
    
    
    
    
    23,322Opening expenses
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Depreciation and amortization
    
    
    3,730
    
    
    
    10
    
    
    
    1
    
    
    
    
    
    
    
    3,741General and administrative expenses
    
    
    1,965
    
    
    
    
    
    
    
    
    
    
    
    4,641
    
    
    
    6,606Closing expense and disposal of assets
    
    
    70
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    53Operating income (loss)
    
    $
    3,072
    
    
    $
    1,481
    
    
    $
    447
    
    
    $
    (4,624
    )
    
    $
    376Identifiable assets
    
    $
    47,158
    
    
    $
    120
    
    
    $
    11
    
    
    $
    8,914
    
    
    $
    56,203Net impairment
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net capital expenditures
    
    $
    67
    
    
    $
    
    
    
    $
    
    
    
    $
    124
    
    
    $
    191
 Thirteen weeks ended March 30, 2008
 UnallocatedRetail
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalSales
    
    $
    56,620
    
    
    $
    3,551
    
    
    $
    1,586
    
    
    $
    
    
    
    $
    61,757Costs of sales and related occupancy costs
    
    
    23,301
    
    
    
    2,030
    
    
    
    882
    
    
    
    
    
    
    
    26,213Operating expenses
    
    
    24,487
    
    
    
    500
    
    
    
    408
    
    
    
    
    
    
    
    25,395Opening expenses
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Depreciation and amortization
    
    
    5,913
    
    
    
    6
    
    
    
    2
    
    
    
    
    
    
    
    5,921General and administrative expenses
    
    
    2,509
    
    
    
    
    
    
    
    
    
    
    
    4,941
    
    
    
    7,450Closing expense and disposal of assets
    
    
    2,537
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    2,546Operating (loss) income
    
    $
    (2,212
    )
    
    $
    1,015
    
    
    $
    294
    
    
    $
    (4,950
    )
    
    $
    (5,853
    )Identifiable assets
    
    $
    68,817
    
    
    $
    62
    
    
    $
    16
    
    
    $
    9,913
    
    
    $
    78,808Net impairment
    
    $
    1,479
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,479Net capital expenditures
    
    $
    1,794
    
    
    $
    1
    
    
    $
    1
    
    
    $
    688
    
    
    $
    2,484
  13




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  FORWARD-LOOKING STATEMENTS
  Overview
     Critical Accounting Policies
  14




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Fiscal Periods
   Thirteen Weeks Ended March 29, 2009 vs. Thirteen Weeks Ended March 30, 2008
 Results of Operations
 :
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedMarch 29,
    
    
    March 30,
    
    
    %
    
    
    March 29,
    
    
    March 30,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesStatement of Operations Data:Net sales:Coffeehouse
    
    $
    52,864
    
    
    $
    56,620
    
    
    
    (6.6
    )%
    
    
    87.6
    %
    
    
    91.7
    %Commercial and franchise
    
    
    7,516
    
    
    
    5,137
    
    
    
    46.3
    %
    
    
    12.4
    %
    
    
    8.3
    %Total net sales
    
    
    60,380
    
    
    
    61,757
    
    
    
    (2.2
    )%
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    26,272
    
    
    
    26,213
    
    
    
    0.2
    %
    
    
    43.5
    %
    
    
    42.4
    %Operating expenses
    
    
    23,322
    
    
    
    25,395
    
    
    
    (8.2
    )%
    
    
    38.6
    %
    
    
    41.1
    %Opening expenses
    
    
    10
    
    
    
    85
    
    
    
    (88.2
    )%
    
    
    0.0
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,741
    
    
    
    5,921
    
    
    
    (36.8
    )%
    
    
    6.2
    %
    
    
    9.6
    %General and administrative expenses
    
    
    6,606
    
    
    
    7,450
    
    
    
    (11.3
    )%
    
    
    10.9
    %
    
    
    12.1
    %Closing expense and disposal of assets
    
    
    53
    
    
    
    2,546
    
    
    
    (97.9
    )%
    
    
    0.1
    %
    
    
    4.1
    %Operating income (loss)
    
    
    376
    
    
    
    (5,853
    )
    
    
    (106.4
    )%
    
    
    0.6
    %
    
    
    (9.5
    )%Other income (expense):Interest income
    
    
    
    
    
    
    18
    
    
    
    (100.0
    )%
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (58
    )
    
    
    (512
    )
    
    
    (88.7
    )%
    
    
    (0.1
    )%
    
    
    (0.8
    )%Income (loss) before provision for
income taxes and noncontrolling interest
    
    
    318
    
    
    
    (6,347
    )
    
    
    (105.0
    )%
    
    
    0.5
    %
    
    
    (10.3
    )%(Benefit from) Provision for income taxes
    
    
    (101
    )
    
    
    6
    
    
    
    (1,783.3
    )%
    
    
    (0.2
    )%
    
    
    
    %Net income (loss)
    
    
    419
    
    
    
    (6,353
    )
    
    
    (106.6
    )%
    
    
    0.7
    %
    
    
    (10.3
    )%Less: Net income attributable to
noncontrolling interest
    
    
    73
    
    
    
    53
    
    
    
    37.7
    %
    
    
    0.1
    %
    
    
    0.1
    %Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    346
    
    
    $
    (6,406
    )
    
    
    (105.4
    )%
    
    
    0.6
    %
    
    
    (10.4
    )%
 Net Sales
  15




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##### 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 expenses and disposal of assets.
 Interest income.
 Interest expense.
 16




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##### Table of Contents



Operating Segments
  Retail
 13 Weeks Ended
    
    
    13 Weeks EndedMarch 29,
    
    
    March 30,
    
    
    %
    
    
    March 29,
    
    
    March 30,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In Thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    52,864
    
    
    $
    56,620
    
    
    
    (6.6
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    21,720
    
    
    
    23,301
    
    
    
    (6.8
    )%
    
    
    41.1
    %
    
    
    41.2
    %Operating expenses
    
    
    22,307
    
    
    
    24,487
    
    
    
    (8.9
    )%
    
    
    42.2
    %
    
    
    43.2
    %Opening expenses
    
    
    
    
    
    
    85
    
    
    
    (100.0
    )%
    
    
    0.0
    %
    
    
    0.2
    %Depreciation and amortization
    
    
    3,730
    
    
    
    5,913
    
    
    
    (36.9
    )%
    
    
    7.1
    %
    
    
    10.4
    %General and administrative expenses
    
    
    1,965
    
    
    
    2,509
    
    
    
    (21.7
    )%
    
    
    3.7
    %
    
    
    4.4
    %Closing expense and disposal of assets
    
    
    70
    
    
    
    2,537
    
    
    
    (97.2
    )%
    
    
    0.1
    %
    
    
    4.5
    %Operating income (loss)
    
    $
    3,072
    
    
    $
    (2,212
    )
    
    
    (238.9)
    %
    
    
    5.8
    %
    
    
    (3.9
    )%
  Coffeehouse sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 General and administrative expenses.
 17




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##### Table of Contents



Closing expense and disposal of assets.
 Commercial
 13 Weeks Ended
    
    
    13 Weeks EndedMarch 29,
    
    
    March 30,
    
    
    %
    
    
    March 29,
    
    
    March 30,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In Thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    5,704
    
    
    $
    3,551
    
    
    
    60.6
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    3,513
    
    
    
    2,030
    
    
    
    73.1
    %
    
    
    61.6
    %
    
    
    57.2
    %Operating expenses
    
    
    700
    
    
    
    500
    
    
    
    40.0
    %
    
    
    12.3
    %
    
    
    14.1
    %Depreciation and amortization
    
    
    10
    
    
    
    6
    
    
    
    66.7
    %
    
    
    0.2
    %
    
    
    0.2
    %Operating income
    
    $
    1,481
    
    
    $
    1,015
    
    
    
    45.9
    %
    
    
    26.0
    %
    
    
    28.6
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 18




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##### Table of Contents



Franchise
 13 Weeks Ended
    
    
    13 Weeks EndedMarch 29,
    
    
    March 30,
    
    
    %
    
    
    March 29,
    
    
    March 30,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In Thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    1,812
    
    
    $
    1,586
    
    
    
    14.2
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    1,039
    
    
    
    882
    
    
    
    17.8
    %
    
    
    57.3
    %
    
    
    55.6
    %Operating expenses
    
    
    315
    
    
    
    408
    
    
    
    (22.8
    )%
    
    
    17.4
    %
    
    
    25.7
    %Opening expenses
    
    
    10
    
    
    
    
    
    
    
    
    %
    
    
    0.6
    %
    
    
    
    %Depreciation and amortization
    
    
    1
    
    
    
    2
    
    
    
    (50.0
    )%
    
    
    0.1
    %
    
    
    0.1
    %Operating income
    
    $
    447
    
    
    $
    294
    
    
    
    52.0
    %
    
    
    24.7
    %
    
    
    18.5
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Unallocated Corporate
 13 Weeks Ended
    
    
    13 Weeks EndedMarch 29,
    
    
    March 30,
    
    
    %
    
    
    March 29,
    
    
    March 30,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In Thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    $
    4,641
    
    
    $
    4,941
    
    
    
    (6.1
    )%
    
    
    7.7
    %
    
    
    8.0
    %Closing expense and disposal of assets
    
    
    (17
    )
    
    
    9
    
    
    
    (288.9
    )%
    
    
    (0.1
    )%
    
    
    
    %Operating (loss)
    
    $
    (4,624
    )
    
    $
    (4,950
    )
    
    
    (4.1
    )%
    
    
    (7.7
    )%
    
    
    (8.0
    )%
 General and administrative expenses.
 19




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##### Table of Contents



Liquidity and Capital Resources
  Thirteen Weeks EndedMarch 29,
    
    March 30,
    
    Increase /2009
    
    2008
    
    (Decrease)(In thousands)Net cash used in operating activities
    
    $
    (26
    )
    
    $
    (3,275
    )
    
    $
    (3,248
    )Net cash used in investing activities
    
    
    (178
    )
    
    
    (2,483
    )
    
    
    (2,306
    )Net cash used in financing activities
    
    
    (105
    )
    
    
    (45
    )
    
    
    60Net change in cash and cash equivalents
    
    $
    (309
    )
    
    $
    (5,803
    )
    
    $
    (5,494
    )
      20




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##### Table of Contents



Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Fair Value Measurement
 Noncontrolling Interests in Consolidated Financial
Statements
 Key Financial Metrics
   Thirteen Weeks EndedMarch 29, 2009
    
    March 30, 2008(In thousands, except operating data)Non-GAAP Metrics:EBITDA(1)
    
    $
    4,597
    
    
    $
    515Operating Data:Percentage change in comparable
coffeehouse net sales(2)
    
    
    (5.0
    )%
    
    
    (2.3
    )%Company-Owned:Coffeehouses open at beginning of period
    
    
    414
    
    
    
    432Coffeehouses opened during the period
    
    
    
    
    
    
    5Coffeehouses closed during the period
    
    
    
    
    
    
    16Coffeehouses open at end of period:Total Company-Owned
    
    
    414
    
    
    
    421Franchised:Coffeehouses opened at beginning of period
    
    
    97
    
    
    
    52Coffeehouses opened during the period
    
    
    6
    
    
    
    11Coffeehouses closed during the period
    
    
    2
    
    
    
    Coffeehouses open at end of period:Total Franchised
    
    
    101
    
    
    
    63Total coffeehouses open at end of period
    
    
    515
    
    
    
    484
 21




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##### Table of Contents



(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 212 company-owned coffeehouses from the
beginning of fiscal 2003 through the end of the first thirteen weeks of fiscal 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 renewal options. Consequently, we believe that adjusting
for depreciation and amortization is useful for evaluating the operating performance of our
coffeehouses.
 Our management uses EBITDA:
 
    
    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 EndedMarch 29, 2009
    
    
    March 30, 2008(Thousands)Net income (loss)
    
    $
    346
    
    
    $
    (6,406
    )Interest expense
    
    
    58
    
    
    
    512Interest income
    
    
    
    
    
    
    (18
    )Depreciation and amortization(1)
    
    
    4,294
    
    
    
    6,421(Benefit from)Provision for income taxes
    
    
    (101
    )
    
    
    6EBITDA
    
    $
    4,597
    
    
    $
    515
 22




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##### Table of Contents



(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.
  
 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
  23




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##### Table of Contents



Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  24




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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. 25




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##### Table of Contents



SIGNATURE
  CARIBOU COFFEE COMPANY, INC.By:
    /s/ Michael TattersfieldMichael TattersfieldPresident and Chief Executive Officer  26