Caribou Coffee — Investor Presentation (January 2006)
32 slides from Caribou Coffee's investor presentation, Jan 11, 2006
Slide 1: Caribou Coffee, January 2006
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Slide 2: Safe Harbor
We make forward-looking statements in this presentation which represent our expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar express
Slide 3: Michael J. Coles, Chairman, President & CEO
Michael J. Coles Chairman, President & CEO
Slide 4: Investment Highlights
Second largest company-owned gourmet coffeehouse operator (based on number of coffeehouses) providing a unique customer experience Gourmet coffee among the fastest growing segments in the restaurant industry Significant growth opportunities Comparable coffeehouse sales Coffeehouse openings Commercia
Slide 5: Who We Are - Second Largest Company-Owned Coffeehouse Operator
Who We Are - Second Largest Company-Owned Coffeehouse Operator 395 coffeehouses 2000 2001 2002 2003 2004 2005 Co. Owned 152 185 203 251 306 396 License 2 7 152 185 203 251 306 395
Slide 6: Coffee Industry - Large and Growing Market
$22 billion market in the U.S. 16% of adults consume gourmet coffee daily; 56% consume occasionally 85% of coffee is still consumed at home Source: Specialty Coffee Association of America, National Coffee Association. Coffee Industry - Large and Growing Market Specialty Coffee Experiencing High Sing
Slide 7: Coffeehouses are the Pub of the 21st Century
1990 1992 1994 1996 1998 2000 2002 2003 2004 Starbucks 84 165 425 1004 1755 2976 4574 5517 6504 Other U.S. Specialty Coffeehouses 1066 2085 3175 5696 8245 9624 10826 11883 12096 Source: Specialty Coffee Association of America and SEC filings. (1) Reflects Starbucks locations in U.S. and Canada. Coff
Slide 8: Accelerating New Coffeehouse Openings
Accelerating New Coffeehouse Openings New Company-Owned Coffeehouses 2000 22 2001 38 2002 24 2003 50 2004 57 2005A 86 2006E 95* *Mid-point of Guidance Issued January 11, 2006
Slide 9: Limited Footprint Provides Significant Growth Opportunity
386 company-owned coffeehouses in 15 states and the District of Columbia (171) (59) (26) (34) (17) (21) (10) 1992 1994 1995 1996 2001 2004 2005 Market Expansion (5) (3) (5) Markets Minnesota Illinois Ohio Michigan North Carolina Georgia Maryland Wisconsin Virginia Washington, D.C. Pennsylvania Iowa
Slide 10: Compelling Commercial Business Opportunity
Grocery Stores & Mass Merchandisers Office Coffee Providers Airlines Hotels Sports & Entertainment Venues College Campuses St. Lawrence College Compelling Commercial Business Opportunity
Slide 11: Strategic Partners
Strategic Partners
Slide 12: Experienced Management Team Driving Improving Performance
Experienced Management Team Driving Improving Performance Name Position Years of Experience Years at Caribou Michael Coles CEO 40+ 2 George Mileusnic CFO 27 4 Amy O'Neil SVP, Store Operations 12 12 Janet Astor VP, Real Estate & Store Development 17 1 Henry Stein VP, Business Development & Commercial
Slide 13: Caribou is Preferred over Starbucks
Caribou is Preferred over Starbucks Taste / Flavor 30% 24% Service / Atmosphere 29% 14% Selection / Variety 20% 20% Convenience 19% 40% Source: 2004 AAU Study for all markets in which both have coffeehouses. Preference of customers who have visited both in last twelve months
Slide 14: Tremendous Potential to Enhance Brand Awareness
Tremendous Potential to Enhance Brand Awareness 44% unaided awareness 78% aided awareness 52% have tried Caribou 99% unaided awareness 100% aided awareness 93% have tried Starbucks Source: Strohmaier Consumer Insights, Attitude and Usage study, June 2004 AAU Study. Note: Study conducted in all marke
Slide 15: The "True" Battlefield
The "True" Battlefield
Slide 16: The Caribou Equation
The Caribou Equation Product Environment Service Experience Factor
Slide 17: Product: Selection and Preparation
Sourcing Only the highest grade of arabica coffee beans Rainforest Alliance Fair Trade Blending Roastmasters create custom blends Roasting and Packaging Craft roasting in small batches to optimize flavor profile Valve technology ensures freshness Brewing High standards for in-store brewing Strict fr
Slide 18: Signature beverage offerings
Caramel drizzle Whipped cream 2 parts steamed milk 1 part espresso Caramel syrup Caramel High Rise(tm) Sweet. Gooey. Not recommended by 4 out of 5 dentists. Secret ingredient from the frozen tundra Ice Coffee or espresso Coffee or Espresso Cooler Stay cool with our version of central air conditionin
Slide 19: Product: Selected 'Bou Gourmet Offerings
Product: Selected 'Bou Gourmet Offerings 'Bou Gourmet rolled-out nationally on August 1, 2005 High quality food that complements store image & premium quality beverages Proprietary recipes and a more diversified food product offering is driving increased coffeehouse sales Cinnamon Roll Popover Frenc
Slide 20: Environment
Environment Mountain lodge environment: fireplaces, wood beams and earth tones Comfortable for in-store relaxation or high-level meetings and efficient for fast take-away Wireless Internet access and kids' corner in many locations
Slide 21: Meeting Our Customers' Expectations: Service
Meeting Our Customers' Expectations Exceeding Our Customers' Expectations Service: "BAMA" "An experience that makes the day better" Be Excellent, Not Average Act with Urgency Make a Connection Anticipate Needs
Slide 22: The Tipping Point
The Tipping Point 2000 2005 2004 2003 2002 2001 Annual Comparable Coffeehouse Sales Trends
Slide 23: George Mileusnic, Chief Financial Officer
George Mileusnic Chief Financial Officer
Slide 24: Financial Overview
Financial Overview 24
Slide 25: Financial Highlights
Accelerated growth reflected in financial performance Strong momentum in comparable coffeehouse sales growth Accelerating new coffeehouse openings Margin improvement Financial Highlights Balance sheet to support growth (with significant liquidity)
Slide 26: Margin Improvement
Margin Improvement Key Drivers Positive Comps Purchasing Leverage Supply Chain efficiencies Includes dilutive impact of new stores (1) Before depreciation, G&A, opening expenses, closing expenses and minority interest. ($ millions)
Slide 27: Net Sales and EBITDA Growth
2000 2001 2002 2003 2004 2005 Est* $ 9.1 11.3 11.8 11.6 14.4 16.8 Net Sales Adjusted EBITDA* 2000 2001 2002 2003 2004 2005 Est* $ 87.9 100.9 108 123.7 160.9 191.3 ($ in millions) ($ in millions) Net Sales and EBITDA Growth CAGR: +12% +27% 2000 - 2003 2003 - 2005E +8% +20% 2000 - 2003 2003 - 2005E **
Slide 28: Net Income Impacted by Accelerated Growth
Net Income Impacted by Accelerated Growth ($ millions) 9M 2000 2001 2002 2003 2004 10/2/2005 General & Administrative Expense ($12.6) ($9.6) ($10.3) ($12.3) ($15.5) ($17.2) Adjusted EBITDA $9.1 $11.3 $11.8 $11.6 $14.4 $11.2 Depreciation & Amortization / Other (2) (9.6) (7.0) (8.1) (11.8) (15.3) (13.
Slide 29: Unit Level Economics
($ in 000s) Unit Level Economics Year 1 (Months 13th -24th) 17% Year 2 (Months 25th - 36th) 7% Year 3 2 - 4% Capital Expenditures (Net of Tenant Improvements) $340 - $415 Initial Inventory $10 Total $350 - $425 Year 3 Cash-on-Cash ROI ~30% Year 3 Store Performance Investment Average Store Payback 4
Slide 30: Balance Sheet to Support Growth
Balance Sheet to Support Growth Cash - approximately $40 million Credit Facility - $60 million available Balance Sheet as of October 2, 2005
Slide 31: 2006 Annual Guidance
2006 Annual Guidance Coffeehouse Openings Company-Owned 90 - 100 Licensed 15 - 20 Comparable Coffeehouse Sales 3 - 7% Adjusted EBITDA* $20 - $22 million Earnings per Share ($0.10) - ($0.20) *Net loss for the full fiscal year is estimated to be in the range of ($2.0) million to ($3.8) million. Intere
Slide 32: Investment Highlights
Second largest company-owned gourmet coffeehouse operator (based on number of coffeehouses) providing a unique customer experience Gourmet coffee among the fastest growing segments in the restaurant industry Significant growth opportunities Comparable coffeehouse sales Coffeehouse openings Commercia
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