##### 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 June 28, 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(State or other jurisdiction of 
incorporation or organization)
    
    41-1731219(I.R.S. Employer
Identification No.)3900 Lakebreeze Avenue North 
Brooklyn Center, Minnesota(Address of principal executive offices)
    
    55429(Zip Code)
 : (763) 592-2200
 þ o
 o o
  Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer o(Do not check if a smaller reporting company)
Smaller Reporting Company þ o þ




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##### 



CARIBOU COFFEE COMPANY, INC.
 FORM 10-Q
 For the Thirteen Week Period Ended June 28, 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
    
    
    32Item 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
    
    
    34Item 6.
    
    Exhibits
    
    
    35Signature
    
    
    36EX-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 Ended
    
    
    Twenty-Six Weeks EndedJune 28,
    
    
    June 29,
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except for per share amounts)(Unaudited)Coffeehouse sales
    
    $
    55,294
    
    
    $
    57,267
    
    
    $
    108,158
    
    
    $
    113,887Commercial and franchise sales
    
    
    7,660
    
    
    
    5,916
    
    
    
    15,176
    
    
    
    11,053Total net sales
    
    
    62,954
    
    
    
    63,183
    
    
    
    123,334
    
    
    
    124,940Cost of sales and related occupancy costs
    
    
    27,317
    
    
    
    27,004
    
    
    
    53,589
    
    
    
    53,217Operating expenses
    
    
    23,866
    
    
    
    25,815
    
    
    
    47,188
    
    
    
    51,210Opening expenses
    
    
    4
    
    
    
    51
    
    
    
    14
    
    
    
    135Depreciation and amortization
    
    
    3,570
    
    
    
    4,645
    
    
    
    7,311
    
    
    
    10,566General and administrative expenses
    
    
    6,789
    
    
    
    6,618
    
    
    
    13,395
    
    
    
    14,067Closing expense and disposal of assets
    
    
    3
    
    
    
    1,332
    
    
    
    56
    
    
    
    3,879Operating income (loss)
    
    
    1,405
    
    
    
    (2,282
    )
    
    
    1,781
    
    
    
    (8,134
    )Other income (expense):Interest income
    
    
    7
    
    
    
    3
    
    
    
    7
    
    
    
    20Interest expense
    
    
    (63
    )
    
    
    (122
    )
    
    
    (121
    )
    
    
    (634
    )Income (loss) before provision for income taxes
    
    
    1,349
    
    
    
    (2,401
    )
    
    
    1,667
    
    
    
    (8,748
    )Provision for (benefit from) income taxes
    
    
    59
    
    
    
    44
    
    
    
    (42
    )
    
    
    50Net income (loss)
    
    
    1,290
    
    
    
    (2,445
    )
    
    
    1,709
    
    
    
    (8,798
    )Less: Net income (loss) attributable to
noncontrolling interest
    
    
    122
    
    
    
    (13
    )
    
    
    195
    
    
    
    40Net Income (loss) attributable to Caribou
Coffee Company, Inc.
    
    $
    1,168
    
    
    $
    (2,432
    )
    
    $
    1,514
    
    
    $
    (8,838
    )Basic net income (loss) attributable to
Caribou Coffee Company, Inc. common
shareholders per share
    
    $
    0.06
    
    
    $
    (0.13
    )
    
    $
    0.08
    
    
    $
    (0.46
    )Diluted net income (loss) attributable to
Caribou Coffee Company, Inc. common
shareholders per share
    
    $
    0.06
    
    
    $
    (0.13
    )
    
    $
    0.08
    
    
    $
    (0.46
    )Basic weighted average number of shares
outstanding
    
    
    19,371
    
    
    
    19,371
    
    
    
    19,371
    
    
    
    19,371Diluted weighted average number of shares
outstanding
    
    
    20,118
    
    
    
    19,371
    
    
    
    19,865
    
    
    
    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
 June 28,
    
    
    December 28,2009
    
    
    2008In thousands, except per share amounts(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    17,951
    
    
    $
    11,060Accounts receivable (net of allowance for doubtful accounts of $60 and
$72 at June 28, 2009 and December 28, 2008, respectively)
    
    
    3,759
    
    
    
    5,311Other receivables (net of allowance for doubtful accounts of $127 and
$76 at June 28, 2009 and December 28, 2008, respectively)
    
    
    1,308
    
    
    
    916Income tax receivable
    
    
    
    
    
    
    60Inventories
    
    
    10,658
    
    
    
    10,218Prepaid expenses and other current assets
    
    
    754
    
    
    
    881Total current assets
    
    
    34,430
    
    
    
    28,446Property and equipment, net of accumulated depreciation and amortization
    
    
    52,341
    
    
    
    60,312Notes receivable
    
    
    8
    
    
    
    16Restricted cash
    
    
    327
    
    
    
    327Other assets
    
    
    385
    
    
    
    471Total assets
    
    $
    87,491
    
    
    $
    89,572LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    9,242
    
    
    $
    8,229Accrued compensation
    
    
    6,859
    
    
    
    6,241Accrued expenses
    
    
    6,564
    
    
    
    8,317Deferred revenue
    
    
    6,291
    
    
    
    9,473Total current liabilities
    
    
    28,956
    
    
    
    32,260Asset retirement liability
    
    
    1,078
    
    
    
    1,035Deferred rent liability
    
    
    8,855
    
    
    
    9,245Deferred revenue
    
    
    2,343
    
    
    
    2,538Income tax liability
    
    
    356
    
    
    
    486Total long term liabilities
    
    
    12,632
    
    
    
    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 June 28, 2009 and December 28, 2008
    
    
    194
    
    
    
    194Additional paid-in capital
    
    
    125,593
    
    
    
    125,222Accumulated comprehensive loss
    
    
    (92
    )
    
    
    Accumulated deficit
    
    
    (79,965
    )
    
    
    (81,479
    )Total Caribou Coffee Company, Inc. shareholders equity
    
    
    45,730
    
    
    
    43,937Noncontrolling interest
    
    
    173
    
    
    
    71Total equity
    
    
    45,903
    
    
    
    44,008Total liabilities and equity
    
    $
    87,491
    
    
    $
    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)
 ComprehensiveCommon Stock
    
    
    Additional
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Income AttributableNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Noncontrolling
    
    
    Other
    
    
    Accumulated
    
    
    
    
    
    
    To Caribou Coffee,Shares
    
    
    Amount
    
    
    Capital
    
    
    Interest
    
    
    Comprehensive Loss
    
    
    Deficit
    
    
    Equity
    
    
    Inc.Balance, December 28, 2008
    
    $
    19,371
    
    
    
    194
    
    
    $
    125,222
    
    
    $
    71
    
    
    $
    
    
    
    $
    (81,479
    )
    
    $
    44,008Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    
    
    
    
    1,514
    
    
    
    1,709
    
    
    $
    1,709Changes in market value
of derivative financial
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )
    
    
    
    
    
    
    (92
    )
    
    
    (92
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,617Share based compensation
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456Distribution of
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    
    
    
    
    (73
    )Purchase of
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (105
    )Balance, June 28, 2009
    
    
    19,371
    
    
    $
    194
    
    
    $
    125,593
    
    
    $
    173
    
    
    $
    (92
    )
    
    $
    (79,965
    )
    
    $
    45,903
  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
 Twenty-Six Weeks EndedJune 28,
    
    
    June 29,2009
    
    
    2008(In thousands)(Unaudited)Operating activitiesNet income (loss) attributable to Caribou Coffee Company, Inc.
    
    $
    1,514
    
    
    $
    (8,838
    )Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:Depreciation and amortization
    
    
    8,396
    
    
    
    11,627Amortization of deferred financing fees
    
    
    78
    
    
    
    402Noncontrolling interest
    
    
    195
    
    
    
    40Provision for closing expense and asset disposals
    
    
    9
    
    
    
    1,143Share-based compensation
    
    
    456
    
    
    
    303Non cash accretion expense
    
    
    43
    
    
    
    20Shareholder contribution
    
    
    
    
    
    
    131Changes in operating assets and liabilities:Restricted cash
    
    
    
    
    
    
    399Accounts receivable and other receivables
    
    
    1,228
    
    
    
    356Inventories
    
    
    (440
    )
    
    
    (32
    )Prepaid expenses and other assets
    
    
    166
    
    
    
    897Accounts payable
    
    
    1,013
    
    
    
    (1,885
    )Accrued expenses and income tax liability
    
    
    (1,752
    )
    
    
    (2,984
    )Deferred revenue
    
    
    (3,377
    )
    
    
    (3,569
    )Net cash provided (used) by operating activities
    
    
    7,529
    
    
    
    (1,990
    )Investing activitiesPayments for property and equipment
    
    
    (453
    )
    
    
    (4,035
    )Proceeds from the disposal of property
    
    
    24
    
    
    
    Net cash used in investing activities
    
    
    (429
    )
    
    
    (4,035
    )Financing activitiesBorrowings under revolving credit facility
    
    
    
    
    
    
    3,000Payment of debt financing fees
    
    
    (31
    )Purchase of noncontrolling interest
    
    
    (105
    )Distribution of noncontrolling interest
    
    
    (73
    )
    
    
    (111
    )Net cash (used) provided by financing activities
    
    
    (209
    )
    
    
    2,889Increase (decrease) in cash and cash equivalents
    
    
    6,891
    
    
    
    (3,136
    )Cash and cash equivalents at beginning of period
    
    
    11,060
    
    
    
    9,886Cash and cash equivalents at end of period
    
    $
    17,951
    
    
    $
    6,750
  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
 Fair Value Measurement
 8




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Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 Subsequent Events
 4. Impairments, Coffeehouse Closings, Asset Disposals and Severance
   Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedJune 28,
    
    
    June 29,
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008Coffeehouse closures
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    22Amount charged to
operations for closed
coffeehouses:Lease reserve non-cash
    
    $
    (73
    )
    
    $
    100
    
    
    $
    (92
    )
    
    $
    585Lease costs
associated with lease
termination-cash
    
    
    64
    
    
    
    1,070
    
    
    
    147
    
    
    
    2,736Net book value of
closed coffeehouse
property and
equipment
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    556Amount charged to
operations for other
property and
equipment write-offs
    
    
    12
    
    
    
    
    
    
    
    1
    
    
    
    Coffeehouse closing
expense and disposal
of assets
    
    $
    3
    
    
    $
    1,332
    
    
    $
    56
    
    
    $
    3,879
 9




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Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Quarter
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterJune 28, 2009Exit costs
    
    $
    203
    
    
    $
    73
    
    
    $
    64
    
    
    $
    212Severance
    
    
    348
    
    
    
    
    
    
    
    114
    
    
    
    234Total
    
    $
    551
    
    
    $
    73
    
    
    $
    178
    
    
    $
    446
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atThirteen Weeks Ended:
    
    Quarter
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterJune 29, 2008Exit costs
    
    $
    984
    
    
    $
    1,155
    
    
    $
    1,070
    
    
    $
    1,069Severance
    
    
    2,108
    
    
    
    
    
    
    
    180
    
    
    
    1,928Total
    
    $
    3,092
    
    
    $
    1,155
    
    
    $
    1,250
    
    
    $
    2,997
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atTwenty-Six Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterJune 28, 2009Exit costs
    
    $
    222
    
    
    $
    137
    
    
    $
    147
    
    
    $
    212Severance
    
    
    716
    
    
    
    63
    
    
    
    545
    
    
    
    234Total
    
    $
    938
    
    
    $
    200
    
    
    $
    692
    
    
    $
    446
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of
    
    
    Charged to
    
    
    from
    
    
    Balance atTwenty-Six Weeks Ended:
    
    Year
    
    
    Expense
    
    
    reserves
    
    
    End of QuarterJune 29, 2008Exit costs
    
    $
    467
    
    
    $
    3,338
    
    
    $
    2,736
    
    
    $
    1,069Severance
    
    
    1,353
    
    
    
    755
    
    
    
    180
    
    
    
    1,928Total
    
    $
    1,820
    
    
    $
    4,093
    
    
    $
    2,916
    
    
    $
    2,997
   5. Derivative Financial Instruments
   10




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Fair ValueFair Value June 28,
    
    
    DecemberContract Type
    
    Balance sheet Location
    
    
    2009
    
    
    28, 2008Derivatives designated as hedging instrumentsCash flow commodity
hedges
    
    Accrued expenses
    
    $
    92
    
    
    $
    Derivatives not designated as hedging instrumentsCash flow commodity
hedges
    
    Accrued expenses
    
    
    99
    
    
    
    303Total derivatives
    
    
    
    
    
    $
    191
    
    
    $
    303
  Gain/ (Loss) recognized in OCIThirteen Weeks Ended
    
    Twenty-six Weeks EndedJune 28,
    
    June 29,
    
    June 28
    
    June 29,Contract type
    
    2009
    
    2008
    
    2009
    
    2008Cash flow commodity hedges(1)
    
    $
    (92
    )
    
    $
    
    
    
    $
    (92
    )
    
    $
    
 
 (1)
    
    There was no material ineffectiveness during the periods presented  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.
 11




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TotalJune 28, 2009
    
    Level 1
    
    Level 2
    
    Level 3Assets:Cash and cash equivalents
    
    $
    17,591
    
    
    $
    17,591
    
    
    $
    
    
    
    $
    Liabilities:Derivatives
    
    $
    191
    
    
    $
    191
    
    
    $
    
    
    
    $
    
   7. Inventories
  June 28,
    
    
    December 28,2009
    
    
    2008Coffee
    
    $
    5,221
    
    
    $
    4,652Other merchandise held for sale
    
    
    2,436
    
    
    
    2,843Supplies
    
    
    3,001
    
    
    
    2,723$
    10,658
    
    
    $
    10,218
  8. Share-Based Compensation and Equity
 Stock-based Compensation
  12




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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 YrsOptions vested at June 28, 2009
    
    
    601,420
    
    
    $
    7.32
    
    
    5.07 Yrs
 Comprehensive Income
  Thirteen Weeks Ended
    
    
    Twenty-six Weeks EndedJune 28,
    
    
    June 29,
    
    
    June 28
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    1,290
    
    
    $
    (2,445
    )
    
    $
    1,709
    
    
    $
    (8,798
    )Unrealized holding losses on
cash flow hedging instruments
    
    
    (92
    )
    
    
    
    
    
    
    (92
    )
    
    
    Total comprehensive income (loss)
    
    $
    1,198
    
    
    $
    (2,445
    )
    
    $
    1,617
    
    
    $
    (8,798
    )
 9. Income Taxes
  10. Net Income (Loss) Per Share
  Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedJune 28,
    
    
    June 29,
    
    
    June 28
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss) attributable to Caribou
Coffee Company, Inc.
    
    $
    1,168
    
    
    $
    (2,432
    )
    
    $
    1,514
    
    
    $
    (8,838
    )Weighted average common shares outstanding
 basic
    
    
    19,371
    
    
    
    19,371
    
    
    
    19,371
    
    
    
    19,371Dilutive impact of stock-based compensation
    
    
    747
    
    
    
    
    
    
    
    494
    
    
    
    Weighted average common shares outstanding
 dilutive
    
    
    20,118
    
    
    
    19,371
    
    
    
    19,865
    
    
    
    19,371Basic net income (loss) per share
    
    $
    0.06
    
    
    $
    (0.13
    )
    
    $
    0.08
    
    
    $
    (0.46
    )Diluted net income (loss) per share
    
    $
    0.06
    
    
    $
    (0.13
    )
    
    $
    0.08
    
    
    $
    (0.46
    )
  13




---



##### Table of Contents



11. Master Franchise Agreement
    12. Revolving Credit Facility
   14




---



##### Table of Contents



13. Commitments and Contingencies
    14. Segment Reporting
  Retail Coffeehouses
  Commercial
  Franchise
  15




---



##### Table of Contents



Thirteen weeks ended June 28, 2009
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    55,294
    
    
    $
    5,735
    
    
    $
    1,925
    
    
    $
    
    
    
    $
    62,954Costs of sales and related occupancy costs
    
    
    22,463
    
    
    
    3,784
    
    
    
    1,070
    
    
    
    
    
    
    
    27,317Operating expenses
    
    
    22,712
    
    
    
    872
    
    
    
    282
    
    
    
    
    
    
    
    23,866Opening expenses
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Depreciation and amortization
    
    
    3,557
    
    
    
    12
    
    
    
    1
    
    
    
    
    
    
    
    3,570General and administrative expenses
    
    
    1,884
    
    
    
    
    
    
    
    
    
    
    
    4,905
    
    
    
    6,789Closing expense and disposal of assets
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Operating income (loss)
    
    $
    4,675
    
    
    $
    1,067
    
    
    $
    568
    
    
    $
    (4,905
    )
    
    $
    1,405Identifiable assets
    
    $
    43,727
    
    
    $
    113
    
    
    $
    10
    
    
    $
    8,491
    
    
    $
    52,341
 Thirteen weeks ended June 29, 2008
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    57,267
    
    
    $
    4,484
    
    
    $
    1,432
    
    
    $
    
    
    
    $
    63,183Costs of sales and related occupancy costs
    
    
    23,419
    
    
    
    2,882
    
    
    
    703
    
    
    
    
    
    
    
    27,004Operating expenses
    
    
    24,935
    
    
    
    480
    
    
    
    400
    
    
    
    
    
    
    
    25,815Opening expenses
    
    
    25
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    51Depreciation and amortization
    
    
    4,637
    
    
    
    7
    
    
    
    1
    
    
    
    
    
    
    
    4,645General and administrative expenses
    
    
    2,272
    
    
    
    
    
    
    
    
    
    
    
    4,346
    
    
    
    6,618Closing expense and disposal of assets
    
    
    1,229
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    1,332Operating income (loss)
    
    $
    750
    
    
    $
    1,115
    
    
    $
    302
    
    
    $
    (4,449
    )
    
    $
    (2,282
    )Identifiable assets
    
    $
    64,669
    
    
    $
    75
    
    
    $
    15
    
    
    $
    9,645
    
    
    $
    74,404Net impairment
    
    $
    238
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    238
 Twenty-six weeks ended June 28, 2009
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    108,158
    
    
    $
    11,439
    
    
    $
    3,737
    
    
    $
    
    
    
    $
    123,334Costs of sales and related occupancy costs
    
    
    44,183
    
    
    
    7,297
    
    
    
    2,109
    
    
    
    
    
    
    
    53,589Operating expenses
    
    
    45,019
    
    
    
    1,572
    
    
    
    597
    
    
    
    
    
    
    
    47,188Opening expenses
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    14Depreciation and amortization
    
    
    7,287
    
    
    
    22
    
    
    
    2
    
    
    
    
    
    
    
    7,311General and administrative expenses
    
    
    3,849
    
    
    
    
    
    
    
    
    
    
    
    9,546
    
    
    
    13,395Closing expense and disposal of assets
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    56Operating (loss) income
    
    $
    7,747
    
    
    $
    2,548
    
    
    $
    1,015
    
    
    $
    (9,529
    )
    
    $
    1,781Identifiable assets
    
    $
    43,727
    
    
    $
    113
    
    
    $
    10
    
    
    $
    8,491
    
    
    $
    52,341
 16




---



##### Table of Contents



Twenty-six weeks ended June 29, 2008
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    113,887
    
    
    $
    8,034
    
    
    $
    3,019
    
    
    $
    
    
    
    $
    124,940Costs of sales and related occupancy costs
    
    
    46,719
    
    
    
    4,913
    
    
    
    1,585
    
    
    
    
    
    
    
    53,217Operating expenses
    
    
    49,423
    
    
    
    979
    
    
    
    808
    
    
    
    
    
    
    
    51,210Opening expenses
    
    
    110
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    135Depreciation and amortization
    
    
    10,550
    
    
    
    13
    
    
    
    3
    
    
    
    
    
    
    
    10,566General and administrative expenses
    
    
    4,780
    
    
    
    
    
    
    
    
    
    
    
    9,287
    
    
    
    14,067Closing expense and disposal of assets
    
    
    3,767
    
    
    
    
    
    
    
    
    
    
    
    112
    
    
    
    3,879Operating (loss) income
    
    $
    (1,462
    )
    
    $
    2,129
    
    
    $
    598
    
    
    $
    (9,399
    )
    
    $
    (8,134
    )Identifiable assets
    
    $
    64,669
    
    
    $
    75
    
    
    $
    15
    
    
    $
    9,645
    
    
    $
    74,404Net impairment
    
    $
    1,717
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,717
  17




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##### 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 June 28, 2009 vs. Thirteen Weeks Ended June 29, 2008
 Results of Operations
  Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008Statement of Operations Data:
    
    (In thousands)
    
    
    
    
    
    
    As a % of total net salesNet sales:Coffeehouse
    
    $
    55,294
    
    
    $
    57,267
    
    
    
    (3.4
    )%
    
    
    87.8
    %
    
    
    90.6
    %Commercial and franchise
    
    
    7,660
    
    
    
    5,916
    
    
    
    29.5
    %
    
    
    12.2
    %
    
    
    9.4
    %Total net sales
    
    
    62,954
    
    
    
    63,183
    
    
    
    (0.4
    )%
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    27,317
    
    
    
    27,004
    
    
    
    1.2
    %
    
    
    43.4
    %
    
    
    42.7
    %Operating expenses
    
    
    23,866
    
    
    
    25,815
    
    
    
    (7.5
    )%
    
    
    37.9
    %
    
    
    40.8
    %Opening expenses
    
    
    4
    
    
    
    51
    
    
    
    (92.2
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,570
    
    
    
    4,645
    
    
    
    (23.1
    )%
    
    
    5.7
    %
    
    
    7.4
    %General and administrative expenses
    
    
    6,789
    
    
    
    6,618
    
    
    
    2.6
    %
    
    
    10.8
    %
    
    
    10.5
    %Closing expense and disposal of assets
    
    
    3
    
    
    
    1,332
    
    
    
    (99.8
    )%
    
    
    
    %
    
    
    2.1
    %Operating income (loss)
    
    
    1,405
    
    
    
    (2,282
    )
    
    
    (161.6
    )%
    
    
    2.2
    %
    
    
    (3.6
    )%Other income (expense):Interest income
    
    
    7
    
    
    
    3
    
    
    
    133.3
    %
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (63
    )
    
    
    (122
    )
    
    
    (48.4
    )%
    
    
    (0.1
    )%
    
    
    (0.2
    )%Income (loss) before provision for
income taxes and noncontrolling interest
    
    
    1,349
    
    
    
    (2,401
    )
    
    
    (156.2
    )%
    
    
    2.1
    %
    
    
    (3.8
    )%Provision for income taxes
    
    
    59
    
    
    
    44
    
    
    
    34.1
    %
    
    
    0.1
    %
    
    
    
    %Net income (loss)
    
    
    1,290
    
    
    
    (2,445
    )
    
    
    (152.8
    )%
    
    
    2.0
    %
    
    
    (3.8
    )%Less: Net income (loss) attributable
to noncontrolling interest
    
    
    122
    
    
    
    (13
    )
    
    
    (1,038.5
    )%
    
    
    0.2
    %
    
    
    
    %Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    1,168
    
    
    $
    (2,432
    )
    
    
    (148.0
    )%
    
    
    1.9
    %
    
    
    (3.8
    )%
 Net Sales
  19




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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 expense and disposal of assets.
 Interest income.
 Interest expense.
 Operating Segments
  20




---



##### Table of Contents



Retail
 Thirteen Weeks Ended
    
    
    Thirteen Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    55,294
    
    
    $
    57,267
    
    
    
    (3.4
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    22,463
    
    
    
    23,419
    
    
    
    (4.1
    )%
    
    
    40.6
    %
    
    
    40.9
    %Operating expenses
    
    
    22,712
    
    
    
    24,935
    
    
    
    (8.9
    )%
    
    
    41.1
    %
    
    
    43.5
    %Opening expenses
    
    
    
    
    
    
    25
    
    
    
    (100.0
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,557
    
    
    
    4,637
    
    
    
    (23.3
    )%
    
    
    6.4
    %
    
    
    8.1
    %General and administrative expenses
    
    
    1,884
    
    
    
    2,272
    
    
    
    (17.1
    )%
    
    
    3.4
    %
    
    
    4.0
    %Closing expense and disposal of assets
    
    
    3
    
    
    
    1,229
    
    
    
    (99.8
    )%
    
    
    
    %
    
    
    2.1
    %Operating income
    
    $
    4,675
    
    
    $
    750
    
    
    
    523.3
    %
    
    
    8.5
    %
    
    
    1.3
    %
  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 EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    5,735
    
    
    $
    4,484
    
    
    
    27.9
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    3,784
    
    
    
    2,882
    
    
    
    31.3
    %
    
    
    66.0
    %
    
    
    64.3
    %Operating expenses
    
    
    872
    
    
    
    480
    
    
    
    81.7
    %
    
    
    15.2
    %
    
    
    10.7
    %Depreciation and amortization
    
    
    12
    
    
    
    7
    
    
    
    71.4
    %
    
    
    0.2
    %
    
    
    0.1
    %Operating income
    
    $
    1,067
    
    
    $
    1,115
    
    
    
    (4.3
    )%
    
    
    18.6
    %
    
    
    24.9
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 22




---



##### Table of Contents



Franchise
 Thirteen Weeks Ended
    
    
    Thirteen Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    1,925
    
    
    $
    1,432
    
    
    
    34.4
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    1,070
    
    
    
    703
    
    
    
    52.2
    %
    
    
    55.6
    %
    
    
    49.1
    %Operating expenses
    
    
    282
    
    
    
    400
    
    
    
    (29.5)
    %
    
    
    14.6
    %
    
    
    27.9
    %Opening expenses
    
    
    4
    
    
    
    26
    
    
    
    (84.6
    )%
    
    
    0.2
    %
    
    
    1.8
    %Depreciation and amortization
    
    
    1
    
    
    
    1
    
    
    
    
    %
    
    
    0.1
    %
    
    
    0.1
    %Operating income
    
    $
    568
    
    
    $
    302
    
    
    
    88.1
    %
    
    
    29.5
    %
    
    
    21.1
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Opening expenses.
 23




---



##### Table of Contents



Unallocated Corporate
 Thirteen Weeks Ended
    
    
    Thirteen Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    $
    4,905
    
    
    $
    4,346
    
    
    
    (12.9
    )%
    
    
    7.8
    %
    
    
    6.9
    %Closing expense and disposal of assets
    
    
    
    
    
    
    103
    
    
    
    100.0
    %
    
    
    
    %
    
    
    0.1
    %Operating (loss)
    
    $
    (4,905
    )
    
    $
    (4,449
    )
    
    
    10.2
    %
    
    
    (7.8)
    %
    
    
    (7.0)
    %
 General and administrative expenses.
 Twenty-Six Weeks Ended June 28, 2009 vs. Twenty-Six Weeks Ended June 29, 2008
 Results of Operations
 :
 Twenty-Six Weeks Ended
    
    
    
    
    
    
    Twenty-Six Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 29,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2008
    
    
    2008Statement of Operations Data:
    
    (In thousands)
    
    
    
    
    
    
    As a % of total net salesNet sales:Coffeehouse
    
    $
    108,158
    
    
    $
    113,887
    
    
    
    (5.0)
    %
    
    
    87.7
    %
    
    
    91.2
    %Commercial and franchise
    
    
    15,176
    
    
    
    11,053
    
    
    
    37.3
    %
    
    
    12.3
    %
    
    
    8.8
    %Total net sales
    
    
    123,334
    
    
    
    124,940
    
    
    
    (1.3)
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    53,589
    
    
    
    53,217
    
    
    
    0.7
    %
    
    
    43.5
    %
    
    
    42.6
    %Operating expenses
    
    
    47,188
    
    
    
    51,210
    
    
    
    (7.9)
    %
    
    
    38.3
    %
    
    
    41.0
    %Opening expenses
    
    
    14
    
    
    
    135
    
    
    
    (89.6)
    %
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    7,311
    
    
    
    10,566
    
    
    
    (30.8)
    %
    
    
    5.9
    %
    
    
    8.4
    %General and administrative expenses
    
    
    13,395
    
    
    
    14,067
    
    
    
    (4.8)
    %
    
    
    10.9
    %
    
    
    11.3
    %Closing expense and disposal of assets
    
    
    56
    
    
    
    3,879
    
    
    
    (98.6)
    %
    
    
    
    %
    
    
    3.1
    %Operating income (loss)
    
    
    1,781
    
    
    
    (8,134
    )
    
    
    (121.9)
    %
    
    
    1.4
    %
    
    
    (6.5
    )%Other income (expense):Interest income
    
    
    7
    
    
    
    20
    
    
    
    (65.0)
    %
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (121
    )
    
    
    (634
    )
    
    
    (80.9)
    %
    
    
    (0.1
    )%
    
    
    (0.5
    )%Income (loss) before provision for
income taxes and noncontrolling interest
    
    
    1,667
    
    
    
    (8,748
    )
    
    
    (119.1)
    %
    
    
    1.4
    %
    
    
    (7.0
    )%(Benefit from) provision for income taxes
    
    
    (42
    )
    
    
    50
    
    
    
    (184.0)
    %
    
    
    0.0
    %
    
    
    0.0
    %Net income (loss)
    
    
    1,709
    
    
    
    (8,798
    )
    
    
    (119.4)
    %
    
    
    1.4
    %
    
    
    (7.0
    )%Less: Net income attributable to
noncontrolling interest
    
    
    195
    
    
    
    40
    
    
    
    387.5
    %
    
    
    0.2
    %
    
    
    0.0
    %Net income (loss) attributable to
Caribou Coffee Company, Inc.
    
    $
    1,514
    
    
    $
    (8,838
    )
    
    
    (117.1)
    %
    
    
    1.2
    %
    
    
    (7.0
    )%
 Net Sales
  24




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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.
 25




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##### Table of Contents



Operating Segments
  Retail
 Twenty-six Weeks Ended
    
    
    Twenty-six Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    108,158
    
    
    $
    113,887
    
    
    
    (5.0
    )%
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    44,183
    
    
    
    46,719
    
    
    
    (5.4
    )%
    
    
    40.9
    %
    
    
    41.0
    %Operating expenses
    
    
    45,019
    
    
    
    49,423
    
    
    
    (8.9
    )%
    
    
    41.6
    %
    
    
    43.4
    %Opening expenses
    
    
    
    
    
    
    110
    
    
    
    (100.0
    )%
    
    
    
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    7,287
    
    
    
    10,550
    
    
    
    (30.9
    )%
    
    
    6.7
    %
    
    
    9.3
    %General and administrative expenses
    
    
    3,849
    
    
    
    4,780
    
    
    
    (19.5
    )%
    
    
    3.6
    %
    
    
    4.2
    %Closing expense and disposal of assets
    
    
    73
    
    
    
    3,767
    
    
    
    (98.1
    )%
    
    
    0.1
    %
    
    
    3.3
    %Operating income (loss)
    
    $
    7,747
    
    
    $
    (1,462
    )
    
    
    (629.9
    )%
    
    
    7.2
    %
    
    
    (1.3)
    %
  Coffeehouse sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 26




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##### Table of Contents



General and administrative expenses.
 Closing expense and disposal of assets.
 Commercial
 Twenty-six Weeks Ended
    
    
    Twenty-six Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    11,439
    
    
    $
    8,034
    
    
    
    42.4
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    7,297
    
    
    
    4,913
    
    
    
    48.5
    %
    
    
    63.8
    %
    
    
    61.1
    %Operating expenses
    
    
    1,572
    
    
    
    979
    
    
    
    60.6
    %
    
    
    13.7
    %
    
    
    12.2
    %Depreciation and amortization
    
    
    22
    
    
    
    13
    
    
    
    69.2
    %
    
    
    0.2
    %
    
    
    0.2
    %Operating income
    
    $
    2,548
    
    
    $
    2,129
    
    
    
    19.7
    %
    
    
    22.3
    %
    
    
    26.5
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 27




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##### Table of Contents



Franchise
 Twenty-six Weeks Ended
    
    
    Twenty-six Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    3,737
    
    
    $
    3,019
    
    
    
    23.8
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    2,109
    
    
    
    1,585
    
    
    
    33.1
    %
    
    
    56.4
    %
    
    
    52.5
    %Operating expenses
    
    
    597
    
    
    
    808
    
    
    
    (26.1
    )%
    
    
    16.0
    %
    
    
    26.8
    %Opening expenses
    
    
    14
    
    
    
    25
    
    
    
    (44.0
    )%
    
    
    0.4
    %
    
    
    0.8
    %Depreciation and amortization
    
    
    2
    
    
    
    3
    
    
    
    (33.3
    )%
    
    
    0.1
    %
    
    
    0.1
    %Operating income
    
    $
    1,015
    
    
    $
    598
    
    
    
    69.7
    %
    
    
    27.2
    %
    
    
    19.8
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Unallocated Corporate
 Twenty-six Weeks Ended
    
    
    Twenty-six Weeks EndedJune 28,
    
    
    June 29,
    
    
    %
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008(In thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    $
    9,546
    
    
    $
    9,287
    
    
    
    2.8
    %
    
    
    7.7
    %
    
    
    7.4
    %Closing expense and disposal of assets
    
    
    (17
    )
    
    
    112
    
    
    
    (115.2)
    %
    
    
    0.0
    %
    
    
    0.1
    %Operating (loss)
    
    $
    (9,529
    )
    
    $
    (9,399
    )
    
    
    1.4
    %
    
    
    (7.7)
    %
    
    
    (7.5)
    %
 General and administrative expenses.
 28




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##### Table of Contents



Liquidity and Capital Resources
  Twenty-Six Weeks EndedJune 28,
    
    June 29,
    
    Increase /2009
    
    2008
    
    (Decrease)(In thousands)Net cash provided (used) by operating activities
    
    $
    7,529
    
    
    $
    (1,990
    )
    
    $
    9,519Net cash used in investing activities
    
    
    (429
    )
    
    
    (4,035
    )
    
    
    3,606Net cash (used) provided by financing activities
    
    
    (209
    )
    
    
    2,889
    
    
    
    (3,098
    )Net change in cash and cash equivalents
    
    $
    6,891
    
    
    $
    (3,136
    )
    
    $
    10,027
      29




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##### Table of Contents



Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Fair Value Measurement
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 Subsequent Events
 Key Financial Metrics
  30




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##### Table of Contents



Thirteen Weeks Ended
    
    
    Twenty-Six Weeks EndedJune 28, 2009
    
    
    June 29, 2008
    
    
    June 28, 2009
    
    
    June 29, 2008(In thousands, except operating data)Non-GAAP Metrics:EBITDA(1)
    
    $
    5,385
    
    
    $
    2,938
    
    
    $
    9,982
    
    
    $
    3,453Operating Data:Percentage change in comparable
coffeehouse net sales(2)
    
    
    (3.3
    %)
    
    
    (1.7
    %)
    
    
    (4.2
    %)
    
    
    (2.0
    %)Company-Owned:Coffeehouses open at beginning of period
    
    
    414
    
    
    
    421
    
    
    
    414
    
    
    
    432Coffeehouses opened during the period
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    5Coffeehouses closed during the period
    
    
    0
    
    
    
    6
    
    
    
    0
    
    
    
    22Coffeehouses open at end of period:Total Company-Owned
    
    
    414
    
    
    
    415
    
    
    
    414
    
    
    
    415Franchised:Coffeehouses open at beginning of period
    
    
    101
    
    
    
    63
    
    
    
    97
    
    
    
    52Coffeehouses opened during the period
    
    
    8
    
    
    
    12
    
    
    
    14
    
    
    
    23Coffeehouses closed during the period
    
    
    1
    
    
    
    
    
    
    
    3
    
    
    
    Coffeehouses open at end of period:Total Franchised
    
    
    108
    
    
    
    75
    
    
    
    108
    
    
    
    75Total coffeehouses open at end of period
    
    
    522
    
    
    
    490
    
    
    
    522
    
    
    
    490
 
 (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 211 company-owned coffeehouses from the
beginning of fiscal 2003 through the end of the first twenty-six 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 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;
 31




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##### Table of Contents




    
    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
    
    
    Twenty-Six Weeks EndedJune 28, 2009
    
    
    June 29, 2008
    
    
    June 28, 2009
    
    
    June 29, 2008(In thousands)Net income (loss)
    
    $
    1,168
    
    
    $
    (2,432
    )
    
    $
    1,514
    
    
    $
    (8,838
    )Interest expense
    
    
    63
    
    
    
    122
    
    
    
    121
    
    
    
    634Interest income
    
    
    (7
    )
    
    
    (3
    )
    
    
    (7
    )
    
    
    (20
    )Depreciation and amortization(1)
    
    
    4,102
    
    
    
    5,207
    
    
    
    8,396
    
    
    
    11,627Provision (benefit) for income taxes
    
    
    59
    
    
    
    44
    
    
    
    (42
    )
    
    
    50EBITDA
    
    $
    5,385
    
    
    $
    2,938
    
    
    $
    9,982
    
    
    $
    3,453
 
 (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.
  32




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##### Table of Contents



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.
   Votes
    
    Votes
    
    Vote
    
    BrokerVotes in favor
    
    against
    
    withheld
    
    abstentions
    
    non-votesElection of directors:Kip R. Caffey
    
    
    17,479,014
    
    
    
    
    
    
    
    921,831Michael J. Coles
    
    
    17,345,401
    
    
    
    
    
    
    
    1,055,444Wallace B. Doolin
    
    
    17,468,604
    
    
    
    
    
    
    
    932,241Gary A. Graves
    
    
    17,440,682
    
    
    
    
    
    
    
    960,163Charles L. Griffith
    
    
    16,885,524
    
    
    
    
    
    
    
    1,515,321Charles H. Ogburn
    
    
    17,432,786
    
    
    
    
    
    
    
    968,059Sarah Palisi Chapin
    
    
    17,339,573
    
    
    
    
    
    
    
    1,016,272Philip H. Sanford
    
    
    17,479,014
    
    
    
    
    
    
    
    921,831Michael J. Tattersfield
    
    
    17,654,578
    
    
    
    
    
    
    
    746,267Ratification of independent registered public accounting firm
    
    
    17,730,152
    
    
    
    649,892
    
    
    
    
    
    
    
    20,801Approval of Option Exchange Program
    
    
    16,487,395
    
    
    
    1,839,198
    
    
    
    
    
    
    
    74,252
 33




---



##### Table of Contents



Item 5. Other Information.
  34




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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. 35




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##### Table of Contents



SIGNATURE
  CARIBOU COFFEE COMPANY, INC.By:
    /s/ Michael TattersfieldMichael TattersfieldChief Executive Officer and President  36