U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
Date of Report (Date of Earliest event reported) May 29, 1998
Commission file number 1-12340
GREEN MOUNTAIN COFFEE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 03-0339228
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
33 Coffee Lane, Waterbury, Vermont 05676
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(Address of principal executive offices) (zip code)
(802) 244-5621
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed
since last report.)
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Item 5. Other Events
On May 29, 1998 Green Mountain Coffee, Inc. announced that it is
planning to sell or close its eleven remaining company-owned retail stores. The
Registrant's May 29, 1998 press release (Exhibit 20 to this Current Report) is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number Description
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20 Registrant's May 29, 1998 press release
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GREEN MOUNTAIN COFFEE, INC.
Date: 6/11/98 By: /s/ Robert P. Stiller
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Robert P. Stiller,
President and Chief Executive Officer
Date: 6/11/98 By: /s/ Robert D. Britt
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Robert D. Britt,
Chief Financial Officer, Treasurer and Secretary
GREEN MOUNTAIN COFFEE TO DISCONTINUE OPERATIONS OF COMPANY-OWNED RETAIL STORES
- Company To Focus On Its Rapidly Growing Specialty Wholesale Business -
WATERBURY, VT - May 29, 1998 - Green Mountain Coffee, Inc. (NASDAQ NM:
GMCR) announced today that, consistent with the Company's long-term growth
strategy, it is planning to sell or close its eleven remaining
company-owned retail stores, to focus its resources on developing its
rapidly growing specialty wholesale business. The Company's wholesale
operation has grown substantially, accounting for over 89% of Company sales
for the twenty-eight weeks ended April 11, 1998. As market areas
surrounding the Company's retail stores have become saturated with the
Company's wholesale customers, the Company's stores have played a less
significant role in the overall brand recognition and market share within
these market areas. The Company has found that working closely with its
wholesale customers, it has been able to improve market share and brand
visibility more efficiently, without depending upon a company-owned retail
presence.
Since 1981, the company-owned stores have been an important part of
the Company's strategy of getting consumers to sample Green Mountain Coffee
by the cup. Now, with over 5,000 wholesale customers, 65% of which serve
Green Mountain Coffee by the cup, the strategic value of the company-owned
stores is diminished. Green Mountain wholesale customers include
restaurants, convenience stores, office coffee distributors, and airlines,
all of which provide Green Mountain Coffee by the cup. This allows
consumers an opportunity to develop a taste for the Company's coffee, which
subsequently supports the demand for the Company's wholebean coffees in
supermarkets, specialty food stores, or through mail order.
As of September 28, 1997, the beginning of Green Mountain's current
fiscal year, the Company had twelve retail stores located in the Northeast
and in a suburb of Chicago. Green Mountain has not opened a new
company-owned store in a new retail market since 1994. In calendar 1998,
the Company closed its store in Plattsburgh, New York when the lease
expired. The Company expects to sell or close its remaining locations in
Connecticut, Vermont, New Hampshire, Maine, Massachusetts, New York, and
Illinois by the end of its current fiscal year. It is estimated the Company
will record a $1.2-$1.5 million charge, after related income tax benefits,
in its third fiscal quarter, to sell or close all of its remaining stores.
In the fiscal year ended September 27, 1997, company-owned stores
accounted for 10.3% of total company net sales. However, for the first
twenty-eight weeks ended April 11, 1998 of the current fiscal year,
company-owned store sales had fallen to 6.1% of total net sales, due to
sales growth in the Company's wholesale operation and an 18.3% decline in
company-owned store sales. The company-owned stores also do not contribute
positively to the Company's financial results, nor do they generate
positive cash flow from operations.
Robert Stiller, President and CEO of Green Mountain Coffee, Inc.
commented, "We are focusing our resources and energies on those things that
we do best, and on those businesses that will enhance our strategic
position and facilitate a return to profitability. The retail stores have
been losing in market share and exhibiting declining financial performance
over the past few years, as we have increasingly concentrated on our
wholesale business. The time has come to shift our resources accordingly.
It is our desire that our stores, under new ownership, will remain Green
Mountain Coffee Roasters wholesale customers."
Green Mountain Coffee, Inc., a leader in the specialty coffee
industry, roasts over 25 high quality arabica coffees to produce over 50
varieties of coffee that it sells under the Green Mountain Coffee Roasters
and Green Mountain Coffee brands. The majority of Green Mountain's revenue
is derived from its wholesale operation which serves fine dining,
supermarket, specialty food stores, convenience stores, food service,
hotel, university, travel and office coffee service customers. Green
Mountain also has a direct mail operation serving customers nationwide from
its Waterbury, Vermont headquarters.
Certain statements contained herein are not based on historical fact
and are "forward-looking statements" within the meaning of the applicable
securities laws and regulations. Owing to the uncertainties inherent in
forward-looking statements, actual results could differ materially from
those set forth in forward-looking statements. Forward-looking statements
which are based on various assumptions (some of which are beyond Green
Mountain's control), may be identified by reference to a future period, or
periods, or by the use of forward-looking terminology such as "is planning
to", "expects", "to sell", "close", "estimated", "will", or similar terms
or variations on those terms, or the negative of those terms. Factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, business
conditions in the coffee industry and food industry in general, the
Company's success in selling its stores, fluctuations in availability and
cost of green coffee, economic conditions, prevailing interest rates,
competition, the management challenges of rapid growth, variances from
budgeted sales mix and growth rate, consumer acceptance of the Company's
new products, weather and special or unusual events, as well as other risk
factors described from time to time in the Company's SEC filings.
