GREEN MOUNTAIN COFFEE ROASTERS INC FORM 10-K (Annual Report) Filed 11/28/12 for the Period Ending 09/29/12 Address 33 COFFEE LANE WATERBURY, VT 05676 Telephone 8022445621 CIK 0000909954 Symbol GMCR SIC Code 2090 - Miscellaneous Food Preparations And Kindred Industry Food Processing Sector Consumer/Non-Cyclical Fiscal Year 09/29 http://www.edgar-online.com © Copyright 2012, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended September 29, 2012 OR 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 1-12340 GREEN MOUNTAIN COFFEE ROASTERS, INC. (Exact name of registrant as specified in its charter) Delaware 03 -0339228 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 33 Coffee Lane, Waterbury, Vermont 05676 (Address of principal executive offices) (zip code) (802) 244-5621 (Registrants’ telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report.) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $0.10 par value per share The Nasdaq Global Select Market Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non -accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non -accelerated filer Smaller Reporting Company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant on March 24, 2012 was approximately $7,413,000,000 based upon the closing price of such stock on March 23, 2012. As of November 20, 2012, 148,451,513 shares of common stock of the registrant were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive Proxy Statement for the 2012 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K, are incorporated by reference in Part III, Items 10-14 of this Form 10-K. Table of Contents GREEN MOUNTAIN COFFEE ROASTERS, INC, Annual Report on Form 10-K For Fiscal Year Ended September 29, 2012 Table of Contents PART I 1 Item 1. Business 1 Item 1A. Risk Factors 8 Item 1B. Unresolved Staff Comments 17 Item 2. Properties 18 Item 3. Legal Proceedings and Executive Officers of Registrant 18 Item 4. Mine Safety Disclosures 22 PART II 23 Item 5. Market for the Registrant ’s Common Equity, Related Stockholder Matters and Issuer Purchases of Securities 23 Item 6. Selected Financial Data 24 Item 7. Management ’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 40 Item 8. Financial Statements and Supplementary Data 43 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 87 Item 9A. Controls and Procedures 87 Item 9B. Other Information 88 PART III 89 Item 10. Directors, Executive Officers and Corporate Governance 89 Item 11. Executive Compensation 89 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 89 Item 13. Certain Relationships and Related Transactions, and Director Independence 89 Item 14. Principal Accounting Fees and Services 89 PART IV 90 Item 15. Exhibits and Financial Statement Schedules 90 Table of Contents PART I Item 1. Business Overview Green Mountain Coffee Roasters, Inc. (together with its subsidiaries, “GMCR”, the “Company”, “we”, “our”, or “us”) is a leader in the specialty coffee and coffeemaker businesses. We sell Keurig ® Single Cup Brewers and roast high-quality Arabica bean coffees including single-origin, Fair Trade Certified ™ , certified organic, flavored, limited edition and proprietary blends offered in K-Cup ® and Vue ® packs (“single serve packs”) for use with our Keurig ® Single Cup Brewers. We also offer traditional whole bean and ground coffee in other package types including bags, fractional packages and cans. In addition, we produce and sell other specialty beverages in single serve packs including hot apple cider, hot and iced teas, iced coffees, iced fruit brews, hot cocoa and other dairy-based beverages. As of the end of our 2012 fiscal year, we had the top four best-selling coffeemakers by dollar volume in the United States according to the NPD Group for consumer market research data. Under the Keurig ® brand name, we offer a variety of brewers for commercial use in the Away From Home (“AFH”) channel and for home use in the At Home (“AH”) channel that are differentiated by features and size. Over the last several years the primary growth in the coffee industry has come from the specialty coffee category, including demand for single cup specialty coffee which can now be enjoyed in a wide variety of locations, including home, office, professional locations, restaurants, hospitality and specialty coffee shops. This growth has been driven by the emergence of specialty coffee shops throughout North America, the general level of consumer knowledge of, and appreciation for, coffee quality and variety, and the wider availability of high-quality coffee. The Company has been benefiting from this overall industry trend in addition to what we believe to be our carefully developed and distinctive advantages over our competitors. Our growth strategy involves developing and managing marketing programs to drive Keurig ® Single Cup Brewer adoption in North American households and offices in order to generate ongoing demand for single serve packs. As part of this strategy, we work to sell our AH brewers at attractive price points which are approximately at cost, or sometimes at a loss when factoring in the incremental costs related to sales, in order to drive the sales of profitable single serve packs. In addition, we have license agreements with Breville Group Limited, Jarden Inc., producer of Mr. Coffee ® brand coffeemakers, and Conair, Inc., producer of Cuisinart ® brand coffeemakers, under which each produce, market and sell coffeemakers co-branded with Keurig ® . In recent years, our growth has been driven predominantly by the growth and adoption of Keurig ® Single Cup Brewing systems which includes both the K-Cup ® and, since fiscal 2012, the Vue ® brewers and related single serve packs. In fiscal 2012, approximately 90% of our consolidated net sales were attributed to the combination of single serve packs and Keurig ® Single Cup Brewers and related accessories. We regularly conduct consumer surveys to better understand our consumers’ preferences and behaviors. In Company surveys, we have learned that consumers prefer our Keurig ® Single Cup Brewing systems for three main reasons (which we see as our competitive advantages): ® 1 Quality—expectations of the quality of coffee consumers drink has increased over the last several years and, we believe, with the Keurig system, consumers can be certain they will get a high-quality, consistently produced beverage every time. ® 2 Convenience—the Keurig system prepares beverages generally in less than a minute at the touch of a button with no mess, no fuss. 3 Choice—with many single serve beverage brands across multiple beverage categories, GMCR offers more than 225 individual varieties, allowing consumers to enjoy and explore a wide range of beverages. In addition to a variety of brands of coffee and tea, we also produce and sell hot apple cider, iced teas, iced coffees, iced fruit brews, hot cocoa and other dairy-based beverages, in single serve packs. We believe it’s the combination of these attributes that make the Keurig ® Single Cup Brewing systems so appealing to so many consumers. We are focused on building our brands and profitably growing our business.