Caribou Coffee Weathers Downturn

The number two coffee chain in the US is outperforming number 1,  Starbux (NASDAQ:SBUX) .

Caribou Coffee Company, Inc. (Nasdaq:CBOU), the second largest U.S.-based company-owned gourmet coffeehouse operator based on the number of coffeehouses, today reported financial results for fourth quarter and fiscal 2008 (period ended December 28, 2008).

FOURTH QUARTER 2008 HIGHLIGHTS

- Net income of $1.3 million compared to a net loss of $15.1 million in the fourth quarter of 2007

- Commercial and franchise sales increased 37.6% compared to the fourth quarter of 2007

- Opened 17 franchise coffeehouses

Michael Tattersfield, President and CEO commented, “We are managing our business during unprecedented economic times. We are executing on our strategy and I am pleased to report that we are making progress in our multi-year turnaround plan. This is evidenced by our improving EBITDA.” Mr. Tattersfield added, “As we continue to focus on improving the existing store base, we intend to limit company-owned coffeehouse expansion in 2009. However, given the success we are having with our commercial and franchise business we are moving forward with an additional 35 to 40 franchise units in 2009 that will bolster our brand equity.

FOURTH QUARTER 2008 RESULTS

Consolidated net sales were $68.0 million for the quarter, a 3.0% decrease from the same period in the prior year. Within the retail segment, coffeehouse sales were $60.5 million in the fourth quarter 2008, a decrease of 6.5% from the same period in the prior year. The decrease primarily reflects a 5.1% decline in comparable coffeehouse net sales and 230 fewer operating coffeehouse weeks in the fourth quarter 2008 as compared to the same period in the prior year. The Company had fewer coffeehouse weeks from closing 25 coffeehouses while opening 7 during the year. In the commercial and franchise segments, sales were $7.6 million in the fourth quarter 2008, an increase of 37.6% over the fourth quarter 2007. The increase was due to higher sales from new and existing commercial customers, as well as royalties and product sales from 45 new franchise coffeehouses opened during the last 12 months, including 17 coffeehouse openings during the fourth quarter 2008.

The Company’s net income for the fourth quarter 2008 was $1.3 million or $0.07 per share compared to a net loss of $15.1 million or ($0.78) per share for the same period in 2007.