##### 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 April 3, 2011.
 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 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)3900 Lakebreeze Avenue NorthBrooklyn Center, Minnesota
    
    55429(Address of principal executive offices)
    
    (Zip Code)
 : (763) 592-2200
 þ o
 o o
  Large Accelerated Filer oAccelerated Filer oNon-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 April 3, 2011
 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
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T.
    
    Controls and Procedures
    
    
    23PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010(In thousands, except for per share amounts)(Unaudited)Coffeehouse sales
    
    $
    57,611
    
    
    $
    55,597Commercial and franchise sales
    
    
    14,664
    
    
    
    11,454Total net sales
    
    
    72,275
    
    
    
    67,051Cost of sales and related occupancy costs
    
    
    33,236
    
    
    
    31,399Operating expenses
    
    
    25,406
    
    
    
    24,962Depreciation and amortization
    
    
    2,936
    
    
    
    3,145General and administrative expenses
    
    
    7,802
    
    
    
    6,509Operating income
    
    
    2,895
    
    
    
    1,036Other income (expense):Interest income
    
    
    5
    
    
    
    5Interest expense
    
    
    (56
    )
    
    
    (106
    )Income before benefit from income taxes
    
    
    2,844
    
    
    
    935Benefit from income taxes
    
    
    21,334
    
    
    
    157Net income
    
    
    24,178
    
    
    
    1,092Less: Net income attributable to noncontrolling interest
    
    
    107
    
    
    
    54Net Income attributable to Caribou Coffee Company, Inc.
    
    $
    24,071
    
    
    $
    1,038Basic net income attributable to Caribou Coffee Company,
Inc. common shareholders per share
    
    $
    1.21
    
    
    $
    0.05Diluted net income attributable to Caribou Coffee
Company, Inc. common shareholders per share
    
    $
    1.17
    
    
    $
    0.05Basic weighted average number of shares outstanding
    
    
    19,848
    
    
    
    19,509Diluted weighted average number of shares outstanding
    
    
    20,605
    
    
    
    20,313
  3




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
 April 3,
    
    
    January 2,2011
    
    
    2011In thousands, except per share amounts(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    25,055
    
    
    $
    23,092Accounts receivable, net
    
    
    8,567
    
    
    
    8,096Other receivables, net
    
    
    1,534
    
    
    
    1,227Income tax receivable
    
    
    35
    
    
    
    Inventories
    
    
    26,088
    
    
    
    25,931Deferred tax assets  current
    
    
    3,285
    
    
    
    Prepaid expenses and other current assets
    
    
    1,514
    
    
    
    1,122Total current assets
    
    
    66,078
    
    
    
    59,468Property and equipment, net of accumulated depreciation and amortization
    
    
    38,713
    
    
    
    41,075Restricted cash
    
    
    837
    
    
    
    837Deferred tax assets  non-current
    
    
    17,999
    
    
    
    Other assets
    
    
    344
    
    
    
    345Total assets
    
    $
    123,971
    
    
    $
    101,725LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,613
    
    
    $
    8,080Accrued compensation
    
    
    6,189
    
    
    
    5,954Accrued expenses
    
    
    7,409
    
    
    
    6,916Deferred revenue
    
    
    6,445
    
    
    
    8,726Total current liabilities
    
    
    27,656
    
    
    
    29,676Asset retirement liability
    
    
    1,212
    
    
    
    1,194Deferred rent liability
    
    
    5,883
    
    
    
    6,296Deferred revenue
    
    
    2,091
    
    
    
    2,091Income tax liability
    
    
    
    
    
    
    2Total long term liabilities
    
    
    9,186
    
    
    
    9,583Equity: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; 20,505 and
20,141 shares issued and outstanding at April 3, 2011 and January 2,
2011, respectively
    
    
    205
    
    
    
    202Additional paid-in capital
    
    
    129,536
    
    
    
    129,026Accumulated comprehensive income
    
    
    92
    
    
    
    12Accumulated deficit
    
    
    (42,870
    )
    
    
    (66,941
    )Total Caribou Coffee Company, Inc. shareholders equity
    
    
    86,963
    
    
    
    62,299Noncontrolling interest
    
    
    166
    
    
    
    167Total equity
    
    
    87,129
    
    
    
    62,466Total liabilities and equity
    
    $
    123,971
    
    
    $
    101,725
  4




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)
(in thousands)
 AccumulatedCommon Stock
    
    
    Additional
    
    
    
    
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Noncontrolling
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Interest
    
    
    Income
    
    
    Deficit
    
    
    EquityBalance, January 2, 2011
    
    
    20,141
    
    
    $
    202
    
    
    $
    129,026
    
    
    $
    167
    
    
    $
    12
    
    
    $
    (66,941
    )
    
    $
    62,466Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    24,071
    
    
    
    24,178Changes in fair value of
derivative financial
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    80Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    24,258Share based compensation
    
    
    
    
    
    
    
    
    
    
    366
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366Options exercised
    
    
    56
    
    
    
    
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    147Restricted shares issued,
net of cancellations
    
    
    308
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distribution of
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (108
    )
    
    
    
    
    
    
    
    
    
    
    (108
    )Balance, April 3, 2011
    
    
    20,505
    
    
    $
    205
    
    
    $
    129,536
    
    
    $
    166
    
    
    $
    92
    
    
    $
    (42,870
    )
    
    $
    87,129
  5




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010(In thousands)(Unaudited)Operating activitiesNet income attributable to Caribou Coffee Company, Inc.
    
    $
    24,071
    
    
    $
    1,038Adjustments to reconcile net income to net cash used by operating activities:Depreciation and amortization
    
    
    3,435
    
    
    
    3,628Amortization of deferred financing fees
    
    
    30
    
    
    
    71Noncontrolling interest
    
    
    107
    
    
    
    54Stock-based compensation
    
    
    366
    
    
    
    251Deferred income taxes
    
    
    (21,284
    )
    
    
    Other
    
    
    31
    
    
    
    22Changes in operating assets and liabilities:Accounts receivable and other receivables
    
    
    (813
    )
    
    
    (761
    )Inventories
    
    
    (157
    )
    
    
    (5,622
    )Prepaid expenses and other assets
    
    
    (421
    )
    
    
    73Accounts payable
    
    
    (148
    )
    
    
    1,286Accrued expenses and other liabilities
    
    
    416
    
    
    
    (2,598
    )Deferred revenue
    
    
    (2,281
    )
    
    
    (2,189
    )Net cash provided (used) by operating activities
    
    
    3,352
    
    
    
    (4,747
    )Investing activitiesPayments for property and equipment
    
    
    (1,428
    )
    
    
    (772
    )Proceeds from the disposal of property
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (1,428
    )
    
    
    (772
    )Financing activitiesDistribution of noncontrolling interest
    
    
    (108
    )
    
    
    (97
    )Purchase of noncontrolling interest
    
    
    
    
    
    
    Issuance of common stock
    
    
    147
    
    
    
    28Payment of debt financing fees
    
    
    
    
    
    
    (189
    )Stock repurchase
    
    
    
    
    
    
    (73
    )Net cash provided (used) by financing activities
    
    
    39
    
    
    
    (331
    )Increase (decrease) in cash and cash equivalents
    
    
    1,963
    
    
    
    (5,850
    )Cash and cash equivalents at beginning of period
    
    
    23,092
    
    
    
    23,578Cash and cash equivalents at end of period
    
    $
    25,055
    
    
    $
    17,728Supplemental disclosure of cash flow informationNoncash financing and investing transactions:Accrual for leasehold improvements, furniture and equipment
    
    $
    40
    
    
    $
    162
  6




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CARIBOU COFFEE COMPANY, INC. AND AFFILIATES
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
      Allowance for Doubtful Accounts
  April 3,
    
    January 2,2011
    
    2011Allowance for doubtful accounts  accounts receivable
    
    $
    1
    
    
    $
    20Allowance for doubtful accounts  other receivables
    
    
    201
    
    
    
    192
 Operating Leases and Rent Expense
  8




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3. Recent Accounting Pronouncements
  4. Derivative Financial Instruments
      Gain/(Loss)
    
    Gain/(Loss)Recognized in OCI
    
    Reclassified into EarningsContract Type
    
    April 3, 2011
    
    April 4, 2010
    
    April 3, 2011
    
    April 4, 2010Cash flow commodity hedges
    
    $
    87
    
    
    $
    (35
    )
    
    $
    7
    
    
    $
    (17
    )
 5. Fair Value Measurements
  
    
    Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets
or liabilities traded in active markets.
    
    Level 2: Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly.
    
    Level 3: Inputs that are generally unobservable. These inputs may be used with
internally developed methodologies that result in managements best estimate of fair
value.
 9




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Total
    
    Level 1
    
    Level 2
    
    Level 3Assets:Cash
    
    $
    4,261
    
    
    $
    4,261
    
    
    $
    
    
    
    $
    Money market funds
    
    $
    20,794
    
    
    $
    20,794
    
    
    $
    
    
    
    $
    Derivatives
    
    $
    92
    
    
    $
    92
    
    
    $
    
    
    
    $
    
  Total
    
    Level 1
    
    Level 2
    
    Level 3Assets:Cash
    
    $
    5,303
    
    
    $
    5,303
    
    
    $
    
    
    
    $
    Money market funds
    
    $
    17,789
    
    
    $
    17,789
    
    
    $
    
    
    
    $
    Derivatives
    
    $
    12
    
    
    $
    12
    
    
    $
    
    
    
    $
    
   6. Inventories
  April 3,
    
    
    January 2,2011
    
    
    2011Coffee
    
    $
    19,345
    
    
    $
    18,880Merchandise held for sale
    
    
    3,712
    
    
    
    4,015Supplies
    
    
    3,031
    
    
    
    3,036$
    26,088
    
    
    $
    25,931
  7. Equity and Stock Based Compensation
  10




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Weighted
    
    WeightedNumber of
    
    Average
    
    AverageShares
    
    Exercise Price
    
    Contract LifeOutstanding, January 2, 2011
    
    
    1,466
    
    
    $
    3.77
    
    
    6.88 YrsGranted
    
    
    
    
    
    $
    Exercised
    
    
    (57
    )
    
    $
    2.61Forfeited
    
    
    (8
    )
    
    $
    4.84Outstanding, April 3, 2011
    
    
    1,401
    
    
    $
    3.81
    
    
    6.60 YrsOptions vested at April 3, 2011
    
    
    860
    
    
    $
    4.77
    
    
    6.11 Yrs
  Weighted
    
    
    WeightedNumber of
    
    
    Average Grant Date
    
    
    AverageShares
    
    
    Fair Value
    
    
    Contract LifeOutstanding, January 2, 2011
    
    
    405
    
    
    $
    6.43Granted
    
    
    310
    
    
    $
    9.14Vested
    
    
    (82
    )
    
    $
    7.07Forfeited
    
    
    (2
    )
    
    $
    7.52Outstanding, April 3, 2011
    
    
    631
    
    
    $
    7.68
    
    
    3.25 Yrs
 8. Income Taxes
   9. Net Income (Loss) Per Share
  Thirteen Weeks EndedApril 3,
    
    
    April 4,2011
    
    
    2010Net income attributable to Caribou
Coffee Company, Inc.
    
    $
    23,071
    
    
    $
    1,038Weighted average common shares outstanding
 basic
    
    
    19,848
    
    
    
    19,509Dilutive impact of stock-based compensation
    
    
    757
    
    
    
    804Weighted average common shares outstanding
 dilutive
    
    
    20,605
    
    
    
    20,313Basic net income per share
    
    $
    1.21
    
    
    $
    0.05Diluted net income per share
    
    $
    1.17
    
    
    $
    0.05
 11




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10. Master Franchise Agreement
    11. Revolving Credit Facility
   12




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12. Commitments and Contingencies
  13. Segment Reporting
  Retail Coffeehouses
  Commercial
  Franchise
  13




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Thirteen weeks ended April 3, 2011
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    57,611
    
    
    $
    11,657
    
    
    $
    3,007
    
    
    $
    
    
    
    $
    72,275Costs of sales and related occupancy costs
    
    
    24,143
    
    
    
    7,313
    
    
    
    1,780
    
    
    
    
    
    
    
    33,236Operating expenses
    
    
    23,977
    
    
    
    1,300
    
    
    
    129
    
    
    
    
    
    
    
    25,406Depreciation and amortization
    
    
    2,903
    
    
    
    29
    
    
    
    4
    
    
    
    
    
    
    
    2,936General and administrative expenses
    
    
    2,257
    
    
    
    
    
    
    
    
    
    
    
    5,545
    
    
    
    7,802Operating income (loss)
    
    $
    4,331
    
    
    $
    3,015
    
    
    $
    1,094
    
    
    $
    (5,545
    )
    
    
    2,895Identifiable assets
    
    $
    30,913
    
    
    $
    295
    
    
    $
    45
    
    
    $
    7,460
    
    
    $
    38,713Capital expenditures
    
    $
    496
    
    
    $
    65
    
    
    $
    
    
    
    $
    530
    
    
    $
    1,091
 Thirteen weeks ended April 4, 2010
 Retail
    
    
    
    
    
    
    
    
    
    
    UnallocatedCoffeehouses
    
    
    Commercial
    
    
    Franchise
    
    
    Corporate
    
    
    TotalTotal net sales
    
    $
    55,597
    
    
    $
    8,987
    
    
    $
    2,467
    
    
    $
    
    
    
    $
    67,051Costs of sales and related occupancy costs
    
    
    23,575
    
    
    
    6,294
    
    
    
    1,530
    
    
    
    
    
    
    
    31,399Operating expenses
    
    
    23,681
    
    
    
    979
    
    
    
    302
    
    
    
    
    
    
    
    24,962Depreciation and amortization
    
    
    3,129
    
    
    
    13
    
    
    
    3
    
    
    
    
    
    
    
    3,145General and administrative expenses
    
    
    1,847
    
    
    
    
    
    
    
    
    
    
    
    4,662
    
    
    
    6,509Operating (loss) income
    
    $
    3,365
    
    
    $
    1,701
    
    
    $
    632
    
    
    $
    (4,662
    )
    
    
    1,036Identifiable assets
    
    $
    35,962
    
    
    $
    184
    
    
    $
    61
    
    
    $
    8,116
    
    
    $
    44,323Capital expenditures
    
    $
    576
    
    
    $
    
    
    
    $
    57
    
    
    $
    193
    
    
    $
    826
  14




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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
  15




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Fiscal Periods
   Thirteen Weeks Ended April 3, 2011 vs. Thirteen Weeks Ended April 4, 2010
 Results of Operations
 :
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    %
    
    
    April 3,
    
    
    April 4,2011
    
    
    2010
    
    
    Change
    
    
    2011
    
    
    2010(In thousands)
    
    
    
    
    
    
    As a % of total net salesStatement of Operations Data:Net sales:Coffeehouse
    
    $
    57,611
    
    
    $
    55,597
    
    
    
    3.6
    %
    
    
    79.7
    %
    
    
    82.9
    %Commercial and franchise
    
    
    14,664
    
    
    
    11,454
    
    
    
    28.0
    %
    
    
    20.3
    %
    
    
    17.1
    %Total net sales
    
    
    72,275
    
    
    
    67,051
    
    
    
    7.8
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales and related occupancy costs
    
    
    33,236
    
    
    
    31,399
    
    
    
    5.9
    %
    
    
    46.0
    %
    
    
    46.8
    %Operating expenses
    
    
    25,406
    
    
    
    24,962
    
    
    
    1.8
    %
    
    
    35.2
    %
    
    
    37.2
    %Depreciation and amortization
    
    
    2,936
    
    
    
    3,145
    
    
    
    (6.6
    )%
    
    
    4.1
    %
    
    
    4.7
    %General and administrative expenses
    
    
    7,802
    
    
    
    6,509
    
    
    
    19.9
    %
    
    
    10.8
    %
    
    
    9.7
    %Operating income
    
    
    2,895
    
    
    
    1,036
    
    
    
    179.4
    %
    
    
    4.0
    %
    
    
    1.5
    %Other income (expense):Interest income
    
    
    5
    
    
    
    5
    
    
    
    
    %
    
    
    
    %
    
    
    
    %Interest expense
    
    
    (56
    )
    
    
    (106
    )
    
    
    (47.2
    )%
    
    
    (0.1
    )%
    
    
    (0.2
    )%Income before benefit from income taxes
and noncontrolling interest
    
    
    2,844
    
    
    
    935
    
    
    
    204.2
    %
    
    
    3.9
    %
    
    
    1.4
    %Benefit from income taxes
    
    
    21,334
    
    
    
    157
    
    
    
    13,488.5
    %
    
    
    (29.8
    )%
    
    
    0.2
    %Net income
    
    
    24,178
    
    
    
    1,092
    
    
    
    2,114.1
    %
    
    
    33.7
    %
    
    
    1.6
    %Less: Net income attributable to
noncontrolling interest
    
    
    107
    
    
    
    54
    
    
    
    98.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Net income attributable to Caribou
Coffee Company, Inc.
    
    $
    24,071
    
    
    $
    1,038
    
    
    
    2,219.0
    %
    
    
    33.5
    %
    
    
    1.5
    %
 Net Sales
  16




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##### Table of Contents



Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 General and administrative expenses.
 Interest income.
 Interest expense.
 Tax benefit.
  Operating Segments
  17




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##### Table of Contents



Retail Coffeehouses
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    %
    
    
    April 3,
    
    
    April 4,2011
    
    
    2010
    
    
    Change
    
    
    2011
    
    
    2010(In thousands)
    
    
    
    
    
    
    As a % of coffeehouse salesCoffeehouse sales
    
    $
    57,611
    
    
    $
    55,597
    
    
    
    3.6
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    24,143
    
    
    
    23,575
    
    
    
    2.4
    %
    
    
    41.9
    %
    
    
    42.4
    %Operating expenses
    
    
    23,977
    
    
    
    23,681
    
    
    
    1.2
    %
    
    
    41.6
    %
    
    
    42.6
    %Depreciation and amortization
    
    
    2,903
    
    
    
    3,129
    
    
    
    (7.2
    )%
    
    
    5.0
    %
    
    
    5.6
    %General and administrative expenses
    
    
    2,257
    
    
    
    1,847
    
    
    
    22.2
    %
    
    
    3.9
    %
    
    
    3.3
    %Operating income
    
    $
    4,331
    
    
    $
    3,365
    
    
    
    28.7
    %
    
    
    7.5
    %
    
    
    6.1
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Depreciation and amortization.
 General and administrative expenses.
 18




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##### Table of Contents



Commercial
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    %
    
    
    April 3,
    
    
    April 4,2011
    
    
    2010
    
    
    Change
    
    
    2011
    
    
    2010(In thousands)
    
    
    
    
    
    
    As a % of commercial salesSales
    
    $
    11,657
    
    
    $
    8,987
    
    
    
    29.7
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    7,313
    
    
    
    6,294
    
    
    
    16.2
    %
    
    
    62.7
    %
    
    
    70.0
    %Operating expenses
    
    
    1,300
    
    
    
    979
    
    
    
    32.8
    %
    
    
    11.2
    %
    
    
    10.9
    %Depreciation and amortization
    
    
    29
    
    
    
    13
    
    
    
    123.1
    %
    
    
    0.2
    %
    
    
    0.1
    %Operating income
    
    $
    3,015
    
    
    $
    1,701
    
    
    
    77.1
    %
    
    
    25.9
    %
    
    
    18.9
    %
  Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Franchise
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    %
    
    
    April 3,
    
    
    April 4,2011
    
    
    2010
    
    
    Change
    
    
    2011
    
    
    2010(In thousands)
    
    
    
    
    
    
    As a % of franchise salesSales
    
    $
    3,007
    
    
    $
    2,467
    
    
    
    21.9
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs of sales and related occupancy costs
    
    
    1,780
    
    
    
    1,530
    
    
    
    16.3
    %
    
    
    59.2
    %
    
    
    62.0
    %Operating expenses
    
    
    129
    
    
    
    302
    
    
    
    (57.3
    )%
    
    
    4.3
    %
    
    
    12.2
    %Depreciation and amortization
    
    
    4
    
    
    
    3
    
    
    
    33.3
    %
    
    
    0.1
    %
    
    
    0.1
    %Operating income
    
    $
    1,094
    
    
    $
    632
    
    
    
    73.1
    %
    
    
    36.4
    %
    
    
    25.6
    %
 19




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##### Table of Contents



Sales
  Costs and Expenses
 Cost of sales and related occupancy costs.
 Operating expenses.
 Unallocated Corporate
 Thirteen Weeks Ended
    
    
    
    
    
    
    Thirteen Weeks EndedApril 3,
    
    
    April 4,
    
    
    %
    
    
    April 3,
    
    
    April 4,2011
    
    
    2010
    
    
    Change
    
    
    2011
    
    
    2010(In thousands)
    
    
    
    
    
    
    As a % of total net salesGeneral and administrative expenses
    
    
    5,545
    
    
    
    4,662
    
    
    
    18.9
    %
    
    
    7.7
    %
    
    
    7.0
    %Operating loss
    
    $
    (5,545
    )
    
    $
    (4,662
    )
    
    
    18.9
    %
    
    
    7.7
    %
    
    
    7.0
    %
 General and administrative expenses.
 20




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##### Table of Contents



Liquidity and Capital Resources
  Thirteen Weeks EndedApril 3,
    
    April 4,
    
    Increase /2011
    
    2010
    
    (Decrease)(In thousands)Net cash provided (used) by operating activities
    
    $
    3,352
    
    
    $
    (4,747
    )
    
    $
    8,099Net cash used in investing activities
    
    
    (1,428
    )
    
    
    (772
    )
    
    
    (656
    )Net cash provided (used) by financing activities
    
    
    39
    
    
    
    (331
    )
    
    
    370Net increase (decrease) in cash and cash equivalents
    
    $
    1,963
    
    
    $
    (5,850
    )
    
    $
    7,813
      Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
  Key Financial Metrics
  21




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##### Table of Contents



Thirteen Weeks EndedApril 3, 2011
    
    
    April 4, 2010(In thousands, except operating data)Non-GAAP Metrics:EBITDA(1)
    
    $
    6,223
    
    
    $
    4,610Operating Data:Percentage change in comparable coffeehouse net sales(2)
    
    
    4.3
    %
    
    
    5.2
    %Company-Owned:Coffeehouses open at beginning of period
    
    
    410
    
    
    
    413Coffeehouses opened during the period
    
    
    
    
    
    
    Coffeehouses closed during the period
    
    
    1
    
    
    
    Coffeehouses open at end of period:Total Company-Owned
    
    
    409
    
    
    
    413Franchised:Coffeehouses opened at beginning of period
    
    
    131
    
    
    
    121Coffeehouses opened during the period
    
    
    9
    
    
    
    2Coffeehouses closed during the period
    
    
    5
    
    
    
    Coffeehouses open at end of period:Total Franchised
    
    
    135
    
    
    
    123Total coffeehouses open at end of period
    
    
    544
    
    
    
    536
 
 (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.   
    
    Coffeehouse leases are generally short-term (5-10 years) and Caribou 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). The Company opened a net 206 company-operated coffeehouses
from the beginning of fiscal 2003 through the end of the first quarter of fiscal 2011. As a
result, management believes depreciation expense is disproportionately large when compared
to the sales from a significant percentage of the 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, management
believes that adjusting for depreciation and amortization is useful for evaluating the
operating performance of the coffeehouses. Furthermore, the Company recorded a significant
tax benefit in the first quarter of fiscal 2011 related to the reversal of a valuation
allowance against accumulated net operating losses and other deferred tax assets.
Consequently,
 22




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##### Table of Contents



management believes that adjusting for the impact of income taxes is useful
in evaluating the overall performance of the Company.
  
    
    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 evaluate our capacity to incur and service debt, fund capital expenditures and
expand our business.
  Thirteen Weeks EndedApril 3, 2011
    
    
    April 4, 2010(Thousands)Net income attributable to Caribou Coffee Company, Inc.
    
    $
    24,071
    
    
    $
    1,038Interest expense
    
    
    56
    
    
    
    106Interest income
    
    
    (5
    )
    
    
    (5
    )Depreciation and amortization(1)
    
    
    3,435
    
    
    
    3,628Benefit from income taxes
    
    
    (21,334
    )
    
    
    (157
    )EBITDA
    
    $
    6,223
    
    
    $
    4,610
 
 (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.
  23




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Unregistered Sales of Equity Securities
  Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Reserved.
  
 Item 5. Other Information.
  24




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##### Table of Contents



Item 6. Exhibits.
 3.1*
    
    Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to our Annual Report of
Form 10-K for the year ended January 2, 2011 (File No. 000-51535)).3.2*
    
    Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to our Annual Report of Form 10-K for the year ended
January 2, 2011 (File No. 000-51535)).4.1*
    
    Specimen Common Stock Certificate of the Resgistrant (incorporated by
reference to our Registration Statement on Form S-1/A filed September
6, 2005 (File No. 333-126691)).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.
  25




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##### Table of Contents



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