Starbucks 1999 Annual Report Download
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STARBUCKS COFFEE COMPANY
{in millions}
COMPANY-OWNED STORES
LICENSED STORES
49
$26
628
77
938
677
{total}
1,015
{total}
1,412
{total}
1,886
{total}
111
1,301
198
2,498
{total}
363
1,688
2,135
FINANCIAL HIGHLIGHTS
938
{in millions}
{at fiscal year end}
$42
$55
$68
$102
$465
$698
$975
$1,309
$1,680
Table of contents
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Page 1
... fiscal year end} 2,498 {total} 1,886 {total} 363 1,412 {total} 198 1,688 2,135 1,015 677 {total} {total} 111 1,301 77 938 938 49 628   LICENSED STORES   COMPANY- OWNED STORES  STARBUCKS COFFEE COMPANY ï°.   -
Page 2
...new distribution channels. The Company's retail goal is to become the leading retailer and brand of coffee in each of its target markets by selling the finest quality coffee and related products and by providing superior customer service, thereby building a high degree of customer loyalty. Starbucks... -
Page 3
...52 weeks. (2) Specialty revenues include product sales to and royalties and fees from the Company's licensees. (3) Merger expenses relate to the business combination with Seattle Coffee Holdings Limited in fiscal 1998. (4) Gain on sale of investment relates to the sale of Noah's New York Bagels, Inc... -
Page 4
... Company's consolidated statements of earnings: Fiscal year ended Net revenues Retail Specialty Total net revenues Cost of sales and related occupancy costs Gross margin Store operating expenses(1) Other operating expenses(2) Depreciation and amortization General and administrative expenses Merger... -
Page 5
... accounted for under the purchase method of accounting. The results of operations for Tazo and Pasqua are included in the accompanying consolidated financial statements from the dates of acquisition. During the third quarter of fiscal 1998, Starbucks acquired the United Kingdom-based Seattle Coffee... -
Page 6
... information systems put into service in late fiscal 1998 and during fiscal 1999. General and administrative expenses were 5.3% of net revenues during fiscal 1999 compared to 5.9% for fiscal 1998, primarily due to proportionately lower payroll-related expenses The Company's effective tax rate for... -
Page 7
...minority investments in Living.com, Inc. and Talk City, Inc. The Company invested excess cash primarily in short-term, investment-grade marketable debt securities. The net activity in the Company's marketable securities portfolio during fiscal 1999 provided $34.1 million. STARBUCKS COFFEE COMPANY... -
Page 8
... Company's Management Information Systems ("MIS") department. These systems include all of the software applications generally available on the Company's computer network, as well as many applications used by particular departments or in connection with specific functions (for example, payroll and... -
Page 9
... existing inventory, is expected to provide an adequate supply of green coffee for the majority of fiscal 2000. The Company believes, based on relationships established with its suppliers in the past, that the risk of non-delivery on such purchase commitments is remote. STARBUCKS COFFEE COMPANY... -
Page 10
... to the carrying value of coffee inventory when purchased and recognized in results of operations as coffee products are sold. Gains and losses are calculated based on the difference between the cost basis and the market value of the coffee contracts.The market risk related to coffee futures is... -
Page 11
..., except share data Current assets Cash and cash equivalents Short-term investments Accounts receivable Inventories Prepaid expenses and other current assets Deferred income taxes, net Total current assets Joint ventures and other investments Property, plant and equipment, net Deposits... -
Page 12
...In thousands, except earnings per share Fiscal year ended Net revenues Cost of sales and related occupancy costs Gross margin Store operating expenses Other operating expenses Depreciation and amortization General and administrative expenses Merger expenses Operating income Interest and other income... -
Page 13
...760 Cash (used) provided by changes in operating assets and liabilities Accounts receivable 3,838 (19,790) (13,475) Inventories (36,405) (23,496) (36,382) Prepaid expenses and other current assets (7,552) (2,497) (2,236) Accounts payable 4,711 4,601 9,559 Accrued compensation and related costs 7,586... -
Page 14
...losses, net Translation adjustment Comprehensive income Conversion of convertible debt into common stock Common stock units issued under deferred stock plan, net of shares... Sale of common stock Balance, October 3, 1999 157,422,976 $ 364,020 2,763...Statements. ï°.   STARBUCKS COFFEE COMPANY -
Page 15
... and confections, coffee-related accessories and equipment and a line of premium teas, primarily through its Company-operated retail stores. In addition to sales through its Company-operated retail stores, Starbucks sells coffee and tea products through other channels of distribution (collectively... -
Page 16
...basis and the market value of the coffee contracts.The market risk related to coffee futures is substantially offset by changes in the costs of coffee purchased.The Company had no open futures contracts as of October 3, 1999, or September 27, 1998 The Company expenses costs of advertising the first... -
Page 17
... basis over the terms of the leases The Company's international operations use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date and income and expense accounts at the average exchange rates during the year... -
Page 18
... acquired the net assets of Tazo, L.L.C. ("Tazo"), a Portland, Oregon-based tea company that produces premium tea products, and the stock of Pasqua Inc. ("Pasqua"), a San Francisco, California-based roaster and retailer of specialty coffee. The combined purchase price for these two acquisitions... -
Page 19
... a cost basis for computing realized gains and losses. In fiscal 1999, 1998 and 1997, proceeds from the sale of investment securities were $3.6 million, $5.1 million and $9.3 million, respectively. Gross realized gains and losses were not material in 1999, 1998 and 1997. STARBUCKS COFFEE COMPANY... -
Page 20
... inventory purchase commitments for green coffee totaling approximately $84 million. The Company believes, based on relationships established with its suppliers in the past, that the risk of non-delivery on such purchase commitments is remote. NOTE 6: JOINT VENTURES AND OTHER INVESTMENTS Starbucks... -
Page 21
...roasting plant and distribution facility. The total purchase price was $12.9 million. In connection with this purchase, the Company assumed loans totaling $7.7 million from the York County Industrial Development Corporation. Maturities of these loans range from 9.5 to 10.5 years, with interest rates... -
Page 22
...: SHAREHOLDERS' EQUITY $ 98,515 99,459 99,133 95,827 90,405 321,941 $ 805,280 The Company has authorized 7,500,000 shares of its preferred stock, none of which was outstanding at October 3, 1999 The Company adopted SFAS No. 130, "Reporting Comprehensive Income," as of the first quarter of fiscal... -
Page 23
... Company may grant incentive stock options and non-qualified stock options to employees, consultants and non-employee directors. Stock options have been granted at prices at or above the fair market value on the date of grant. Options vest and expire according to terms established at the grant date... -
Page 24
.... The employee's purchase price is 85% of the lesser of the fair market value of the stock on the first business day or the last business day of the quarterly offering period. No compensation expense is recorded in connection with the plan.The total number of shares issuable under the plan is 8,000... -
Page 25
... average estimated fair values of options granted during fiscal 1999, 1998 and 1997 were $8.86, $7.20 and $5.42 per share, respectively. Had compensation costs for the Company's stock-based compensation plans been accounted for using the fair value method of accounting described by SFAS No. 123, the... -
Page 26
...through several other business units, each of which is managed and evaluated independently. These other business units are organized around the strategic relationships that govern the distribution of products to the customer. These relationships include domestic ï°.   STARBUCKS COFFEE COMPANY -
Page 27
... product sales and operating costs. The tables below present information by operating segment (in thousands): Fiscal year ended North American retail All other business units Intersegment revenues Total revenues North American retail All other business units Unallocated corporate expenses Merger... -
Page 28
...) Summarized quarterly financial information for fiscal years 1999 and 1998 is as follows (in thousands, except earnings per share): 1999 quarter Net revenues Gross margin Net earnings Net earnings per common share - diluted 1998 quarter Net revenues Gross margin Net earnings Net earnings... -
Page 29
... 3, 1999, and September 27, 1998, and the results of their operations and their cash flows for each of the three years in the period ended October 3, 1999, in conformity with generally accepted accounting principles. Seattle,Washington December 10, 1999 STARBUCKS COFFEE COMPANY ï°.   -
Page 30
... with generally accepted accounting principles and include amounts based on management's best judgment where necessary. Financial information included elsewhere in this Annual Report is consistent with these financial statements. Management maintains a system of internal controls and procedures... -
Page 31
...800) 239-0317 or through access on the Internet at www.businesswire.com/cnn/sbux.htm.To receive a copy by mail, please send your request to Investor Relations - M/S S-FP1 Starbucks Corporation P.O. Box 34067 Seattle,WA 98124-1067 (206) 447-1575, ext. 87118 STARBUCKS COFFEE COMPANY ï°.   -
Page 32
... senior vice president Deborah Gillotti senior vice president and general manager, Starbucks X Engle Saez senior vice president, Retail Marketing and Product Management Howard Wollner senior vice president,Administration and Strategic Alliance Management James Alling senior vice president, Business...