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Green Mountain Coffee Roasters (GMCR) Q4-2008 Earnings Notes

Press Release
-Revenue $134.8M, up 45% y/y. EPS 28c
-273 million K-Cup were shipped, up 62% y/y
-Increased prices by 8-12% in May 2008
-Keurig sales $74.6M, up 75% y/y
-Inventories $85.3M, up 119%
-Kraft paid $17M for perpetual license on patents
-FY2009 Guidance: Sales growth 40-45%. K-cup up 50-60%. EPS $1.20-1.30

Conference Call
-Believe market opportunity is the 90 million U.S. households that own coffee makers
-13,800 retailers today and 2,600 supermarkets
-Introduced Keurig Mini for $79 in August
-October and early part of November are holding up at same rate of growth as Q3
-Keurig is 9% of total coffee maker dollars, up 100% y/y

Q&A
-70% of sales is someway related to single serve
-Trends in October and November show continued 90% dollar and 100% unit growth
-Started $6M national ad campaign
-$149 model is the #2 selling coffee maker of all coffee makers
-10% yearly obsolescence rate so far

Net-net
-Keurig seems like one of the only product cycles in this poor economy that is growing straight through without any weakness. To explain it, I bet a lot of people are switching from their Starbucks habit
-It seems some investors were caught short today as GMCR is up 24.6%


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