The leading coffee maker
Green Mountain Coffee Roasters Inc.
) will shed almost 2% of its workforce by May 11, 2013 across
nine North American K-Cup pack and Vue pack production locations.
K-Cups and Vue-Cups are portion packs used with Keurig and Keurig
Vue single-serve brewing systems to brew a cup of coffee, tea or
Green Mountain will cut down on personnel in an effort to
improve its manufacturing and logistic efficiency.
The owner of Keurig single-serve brewers will dismiss up to 74
full time workers in two production facilities: Castroville,
California and Toronto, Ontario. Apart from this, it will also
carry out some seasonal layoffs of workers that are recruited to
supplement regular workers during peak periods, in its Montreal,
Quebec and Toronto facilities.
Green Mountain revealed that it aims to increase the ratio of
flexible to full time workforce. Outplacement services and
severance for the workers retrenched from the company were also
arranged by Green Mountain.
Green Mountain will take a one-time pre-tax charge during its
second quarter fiscal 2013 in the range of $6.0 to $6.5 million
due to the layoff process. However, the company reiterated its
guidance for the second quarter, as it feels that the charge will
not affect its earnings during the period.
First Quarter Earnings Results
Green Mountain delivered robust first quarter 2013 adjusted
earnings of 76 cents per share that surpassed the year-ago
quarter earnings of 60 cents by 27%. It also beat the Zacks
Consensus Estimate of 65 cents by 17% on the back of solid
top-line growth and lower interest expense. Net sales surged 16%
to $1.3 billion, driven by the success of Keurig Single Cup
Brewers, single serve packs (K-cups) and Keurig-related
For fiscal 2013, Green Mountain expects its adjusted earnings
in the range of $2.72 to $2.82 per share, up from the prior
guidance range of $2.64 to $2.74 per share.
For the second quarter, the company expects adjusted earnings
per share in the range of 70 cents to 75 cents and sales growth
in the range of 14% to 18%. The guidance reflects the company's
continuous efforts to increase brand investments and product
The Zacks Consensus Estimates for the second quarter of fiscal
2013 and fiscal 2013 are 72 cents and $2.81 respectively.
Green Mountain Coffee aims at popularizing the single-cup
brewing system in America and has entered into several strategic
distribution agreements to rope in more and more popular brands
Dunkin' Brands Group Inc.
) into its portion pack systems.
Green Mountain is also focusing on competing with private
labels, as it has entered into an agreement with
Costco Wholesale Corp.
) under which it will produce private-label Costco Kirkland and
Signature brand K-Cup packs for the Keurig single-cup brewing
system. Green Mountain currently carries a Zacks Rank #1 (Strong
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