Exhibit 99.1
COOLBRANDS INTERNATIONAL INC.
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|
8300 Woodbine Avenue, 5th Floor | Contact: David J. Stein |
Markham, Ontario, Canada, L3R 9Y7 | Telephone: (631) 737-9700(x216) |
COOLBRANDS REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER OF FISCAL 2006
Toronto, Canada, April 14, 2006 - CoolBrands International Inc. (TSX: COB.SV.A) today announced financial results for the second quarter of fiscal 2006.
Financial Results
Revenues for the second quarter of fiscal 2006 increased to $79,196,000 from $69,556,000 for the same quarter last year. Net loss for the quarter was $(7,952,000) (($0.14) basic and diluted loss per share) as compared with a net loss of $(8,077,000) (($0.14) basic and diluted earnings per share) for the same quarter last year.
Commenting on the results, David J. Stein, President, Chief Executive Officer and Co-Chairman of CoolBrands International Inc., stated, “During the second quarter, we successfully launched new and improved versions of two of our highest volume brands, Breyers Fruit On The Bottom Yogurt, now in an extra creamy all natural recipe, and Breyers Light Yogurt, now with Probiotics Plus benefits. Consumer response to these new introductions has been strongly positive. We also began distributing our new 2006 lineup of frozen dessert products, led by new Godiva Ice Cream, Yoplait Frozen Yogurt & Cereal and Disney frozen snack offerings. CoolBrands is entering its peak season during the third and fourth fiscal quarters with enhanced brand strength and product innovation as compared with last year.”
Refinancing of Corporate Debt
As stated in its press release of January 12, 2006, CoolBrands has signed binding commitment letters with JP Morgan Securities Inc. and JPMorgan Chase Bank, N.A. in respect of new credit facilities. CoolBrands has approximately US$35.1 million of short term debt owing to JPMorgan Chase Bank, N.A. under credit facilities expiring May 3, 2006 and Americana Foods Limited Partnership, CoolBrands’ 50.1% owned subsidiary, has approximately US$18.1 million of short term debt owing to Regions Bank under credit facilities expiring April 25, 2006. Closing of the new facilities is conditional upon syndication, the completion of due diligence by JP Morgan Securities Inc. and JPMorgan Chase Bank, N.A., the absence of any material adverse changes and other customary conditions.
Conference Call and Webcast
The Company will hold a conference call to discuss its second quarter 2006 results on April 19, 2006 at 9:00 AM Eastern time. Persons wishing to participate in the call should telephone 1-866-898-9626 in North America; local participants should call (416) 340-2216. The call will also be webcast live on the following Internet site athttp://events.startcast.com/events/188/B0003 and subsequently archived at:www.coolbrandsinc.com andhttp://events.startcast.com/events/188/B0003
Consolidated Balance Sheets
as at February 28, 2006 and August 31, 2005
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(Unaudited) |
| February 28, 2006 (Unaudited) |
| August 31, 2005 |
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Assets |
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|
|
|
|
|
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Current assets: |
|
|
|
|
|
|
|
Cash |
| $ | 13,651 |
| $ | 24,062 |
|
Investments |
|
|
|
|
| 7,500 |
|
Restricted cash |
|
| 10,000 |
|
| 10,000 |
|
Receivables, net |
|
| 38,405 |
|
| 51,575 |
|
Receivables – affiliates |
|
| 3,146 |
|
| 1,919 |
|
Inventories |
|
| 40,879 |
|
| 49,472 |
|
Franchising net assets held for sale |
|
|
|
|
| 7,203 |
|
Income taxes recoverable |
|
| 14,007 |
|
| 9,813 |
|
Prepaid expenses |
|
| 1,210 |
|
| 2,347 |
|
Deferred income taxes |
|
| 7,051 |
|
| 5,148 |
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|
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| |||||
|
|
|
|
|
|
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Total current assets |
|
| 128,349 |
|
| 169,039 |
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|
|
|
|
|
|
|
|
Deferred income taxes, net of valuation allowance |
|
| 14,969 |
|
| 14,799 |
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|
|
|
|
|
|
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Property, plant and equipment |
|
| 45,136 |
|
| 46,567 |
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|
|
|
|
|
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Intangible and other assets |
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| 21,597 |
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| 21,204 |
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Goodwill |
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| 43,382 |
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| 43,382 |
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| |||||
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| $ | 253,433 |
| $ | 294,991 |
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Liabilities and shareholders’ equity |
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Current liabilities: |
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Accounts payable |
| $ | 26,098 |
| $ | 51,518 |
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Payables – affiliates |
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| 590 |
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| 620 |
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Accrued liabilities |
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| 35,654 |
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| 29,417 |
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Deferred income taxes |
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| 93 |
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| 93 |
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Short term borrowings |
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| 30,941 |
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| 34,553 |
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Current maturities of long-term debt |
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| 14,609 |
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| 18,161 |
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Total current liabilities |
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| 107,985 |
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| 134,362 |
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Long-term debt |
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| 8,055 |
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| 8,248 |
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Other liabilities |
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| 2,967 |
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| 2,442 |
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Deferred income taxes |
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| 6,180 |
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| 6,145 |
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Total liabilities |
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| 125,187 |
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| 151,197 |
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Minority interest |
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| 1,526 |
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| 5,388 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Capital stock |
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| 97,727 |
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| 97,578 |
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Additional paid-in-capital |
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| 46,939 |
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| 46,376 |
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Accumulated other comprehensive earnings |
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| (1,738 | ) |
| (1,696 | ) |
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Retained earnings |
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| (16,208 | ) |
| (3,852 | ) |
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Total shareholders’ equity |
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| 126,720 |
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| 138,406 |
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| $ | 253,433 |
| $ | 294,991 |
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CoolBrands International Inc.
Consolidated Statements of Operations
for the six and three months ended February 28, 2006 and 2005
(Unaudited)
(Amounts expressed in thousands of dollars, except for per share data)
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| For the six months ended |
| For the three months ended |
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|
| February 28, |
| February 28, |
| February 28, |
| February 28, |
| |||
Net revenues: |
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Net sales |
| $ | 164,129 |
| $ | 146,401 |
| $ | 77,309 |
| $ | 63,841 |
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Drayage and other income |
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| 3,781 |
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| 9,151 |
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| 1,887 |
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| 5,715 |
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Total net revenues |
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| 167,910 |
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| 155,552 |
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| 79,196 |
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| 69,556 |
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Cost of goods sold |
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| 164,377 |
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| 148,729 |
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| 80,816 |
|
| 74,265 |
|
Selling, general and administrative expenses |
|
| 24,791 |
|
| 14,545 |
|
| 12,063 |
|
| 7,417 |
|
Stock-based compensation expense |
|
| 620 |
|
| 161 |
|
| 357 |
|
| 81 |
|
Interest expense |
|
| 2,464 |
|
| 690 |
|
| 1,167 |
|
| 337 |
|
Asset Impairment |
|
|
|
|
| 1,401 |
|
|
|
|
| 1,401 |
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|
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| |||||||||||
Loss from continuing operations before income tax and minority interest |
|
| (24,342 | ) |
| (9,974 | ) |
| (15,207 | ) |
| (13,945 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Minority interest |
|
| 3,660 |
|
| 1,457 |
|
| 1,890 |
|
| 815 |
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| |||||||||||
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|
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|
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|
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Loss from continuing operations before income taxes |
|
| (20,682 | ) |
| (8,517 | ) |
| (13,317 | ) |
| (13,130 | ) |
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|
|
|
|
|
|
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|
|
|
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Recovery of income taxes |
|
| (8,068 | ) |
| (3,745 | ) |
| (5,194 | ) |
| (4,756 | ) |
|
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| |||||||||||
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|
|
|
|
|
|
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Loss from continuing operations |
|
| (12,614 | ) |
| (4,772 | ) |
| (8,123 | ) |
| (8,374 | ) |
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|
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|
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|
|
|
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Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
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(Loss) gain from operations of Franchising segment |
|
| (148 | ) |
| 1,028 |
|
| (235 | ) |
| 297 |
|
Gain on sale of Franchising segment |
|
| 406 |
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|
|
|
| 406 |
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| |||||||||||
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Net loss |
| $ | (12,356 | ) | $ | (3,744 | ) | $ | (7,952 | ) | $ | (8,077 | ) |
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(Loss) earnings per share, basic and diluted: |
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|
|
|
|
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Continuing operations |
| $ | (0.23 | ) | $ | (0.09 | ) | $ | (0.15 | ) | $ | (0.15 | ) |
Discontinued operations |
|
| 0.01 |
|
| 0.02 |
|
| 0.01 |
|
| 0.01 |
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| |||||||||||
Net loss |
| $ | (0.22 | ) | $ | (0.07 | ) | $ | (0.14 | ) | $ | (0.14 | ) |
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Weighted average shares outstanding: |
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Shares used in per share calculation – basic and diluted |
|
| 56,022 |
|
| 55,907 |
|
| 56,033 |
|
| 55,921 |
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CoolBrands International Inc.
Consolidated Statements of Cash Flows
for the six and three months ended February 28, 2006 and 2005
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| For the six months ended |
| For the three months ended |
| ||||||||
(Unaudited) |
| February 28, |
| February 28, 2005 |
| February 28, |
| February 28, |
| ||||
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Cash and short term investments provided by (used in): |
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Operating activities: |
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Net loss |
| $ | (12,356 | ) | $ | (3,744 | ) | $ | (7,952 | ) | $ | (8,077 | ) |
Adjustments to reconcile net earnings to net cash flows from operating activities |
|
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|
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|
|
|
|
|
|
|
|
|
|
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Depreciation and amortization |
|
| 3,075 |
|
| 1,211 |
|
| 1,781 |
|
| 956 |
|
Stock-based compensation expense |
|
| 620 |
|
| 161 |
|
| 357 |
|
| 81 |
|
Excess tax benefit from stock-based compensation |
|
| (245 | ) |
|
|
|
| (141 | ) |
|
|
|
Asset impairment |
|
|
|
|
| 1,401 |
|
|
|
|
| 1,401 |
|
Deferred income taxes |
|
| (2,038 | ) |
| 197 |
|
| (745 | ) |
| (183 | ) |
Minority interest |
|
| (3,660 | ) |
| (1,454 | ) |
| (1,770 | ) |
| (812 | ) |
Allowance for doubtful accounts |
|
| 445 |
|
| (490 | ) |
| 389 |
|
| (12 | ) |
Net loss from discontinued operations |
|
| 148 |
|
| (1,028 | ) |
| 235 |
|
| (297 | ) |
Gain on sale on discontinued operations |
|
| (406 | ) |
|
|
|
| (406 | ) |
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|
|
Cash effect of changes |
|
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Receivables |
|
| 12,967 |
|
| 16,629 |
|
| (1,875 | ) |
| 17,069 |
|
Receivables - affiliates |
|
| (1,227 | ) |
| 561 |
|
| (1,460 | ) |
| (136 | ) |
Inventories |
|
| 8,592 |
|
| 1,124 |
|
| 4,356 |
|
| 2,565 |
|
Prepaid expenses |
|
| 735 |
|
| (2,148 | ) |
| (14 | ) |
| (827 | ) |
Other assets |
|
| (549 | ) |
| (74 | ) |
| (238 | ) |
| 85 |
|
Income taxes recoverable |
|
| (14,141 | ) |
|
|
|
| (4,728 | ) |
|
|
|
Accounts payable |
|
| (25,420 | ) |
| (11,366 | ) |
| (5,696 | ) |
| (16,693 | ) |
Payables - affiliates |
|
| (30 | ) |
| (660 | ) |
| 36 |
|
| (209 | ) |
Accrued liabilities |
|
| 6,189 |
|
| 11,027 |
|
| 9,626 |
|
| 7,221 |
|
Income taxes payable |
|
| 9,947 |
|
| (6,332 | ) |
| (1 | ) |
| (4,008 | ) |
Other liabilities |
|
| 525 |
|
| (247 | ) |
| 517 |
|
| 31 |
|
|
|
| |||||||||||
Cash (used in) provided by operating activities |
|
| (16,829 | ) |
| 4,768 |
|
| (7,729 | ) |
| (1,845 | ) |
|
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| |||||||||||
Investing activities: |
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Purchase of property, plant, and equipment |
|
| (1,755 | ) |
| (3,187 | ) |
| (1,079 | ) |
| (1,035 | ) |
Purchase of license agreements and other intangibles |
|
|
|
|
| (17 | ) |
|
|
|
| (3 | ) |
Redemption of investments |
|
| 7,500 |
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|
|
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|
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Issuance of notes receivable |
|
| (251 | ) |
|
|
|
| (251 | ) |
|
|
|
Collection of notes receivable |
|
| 20 |
|
| 5 |
|
| 20 |
|
| 1 |
|
|
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| |||||||||||
Cash provided by (used in) investing activities |
|
| 5,514 |
|
| (3,199 | ) |
| (1,310 | ) |
| (1,037 | ) |
|
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| |||||||||||
Financing activities: |
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|
|
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|
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|
|
Proceeds from issuance of Class A and B shares |
|
| 92 |
|
| 30 |
|
|
|
|
| 30 |
|
Proceeds from issuance of capital leases |
|
| 172 |
|
|
|
|
| 172 |
|
|
|
|
Change in revolving line of credit, secured |
|
| (3,612 | ) |
| (400 | ) |
| (3,612 | ) |
| (2,623 | ) |
Repayment of long-term debt |
|
| (3,917 | ) |
| (1,789 | ) |
| (2,240 | ) |
| (964 | ) |
Excess tax benefits from stock-based compensation |
|
| 245 |
|
|
|
|
| 141 |
|
|
|
|
|
|
| |||||||||||
Cash used in financing activities |
|
| (7,020 | ) |
| (2,159 | ) |
| (5,539 | ) |
| (3,557 | ) |
|
|
| |||||||||||
Decrease in cash flow due to changes in foreign exchange rates |
|
| (42 | ) |
| (1,084 | ) |
| (49 | ) |
| 1,016 |
|
|
|
| |||||||||||
Cash flows from discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) gain from Franchising Operations |
|
| (148 | ) |
| 1,028 |
|
| (235 | ) |
| 297 |
|
Operating |
|
| 81 |
|
| 2,565 |
|
| (236 | ) |
| 425 |
|
Investing |
|
| 8,033 |
|
| (222 | ) |
| 8,004 |
|
| (78 | ) |
|
|
| |||||||||||
Cash provided by discontinued operations |
|
| 7,966 |
|
| 3,371 |
|
| 7,533 |
|
| 644 |
|
|
|
| |||||||||||
(Decrease) increase in cash and cash equivalents |
|
| (10,411 | ) |
| 1,697 |
|
| (7,094 | ) |
| (4,779 | ) |
Cash and short-term investments – beginning of period |
|
| 24,062 |
|
| 36,277 |
|
| 20,745 |
|
| 42,753 |
|
|
|
| |||||||||||
Cash and cash equivalents – end of period |
| $ | 13,651 |
| $ | 37,974 |
| $ | 13,651 |
| $ | 37,974 |
|
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|
CoolBrands International Inc.
Summary Financial Data
|
|
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|
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|
|
|
|
(in thousands of dollars, except share data): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
| For the six months ended |
| For the three months ended |
| ||||||||
|
| February 28, |
| February 28, |
| February 28, |
| February 28, |
| ||||
|
| $ |
| $ |
| $ |
| $ |
| ||||
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
| 167,910 |
|
| 155,552 |
|
| 79,196 |
|
| 69,556 |
|
Loss from continuing operations before income taxes |
|
| (20,682 | ) |
| (8,517 | ) |
| (13,317 | ) |
| (13,130 | ) |
Recovery of income taxes |
|
| (8,068 | ) |
| (3,745 | ) |
| (5,194 | ) |
| (4,756 | ) |
Loss from continuing operations |
|
| (12,614 | ) |
| (4,772 | ) |
| (8,123 | ) |
| (8,374 | ) |
Discontinued operations |
|
| 258 |
|
| 1,028 |
|
| 171 |
|
| 297 |
|
Net loss |
|
| (12,356 | ) |
| (3,744 | ) |
| (7,952 | ) |
| (8,077 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share, basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
| $ | (0.23 | ) | $ | (0.09 | ) | $ | (0.15 | ) | $ | (0.15 | ) |
Discontinued operations |
|
| 0.01 |
|
| 0.02 |
|
| 0.01 |
|
| 0.01 |
|
|
|
| |||||||||||
Net loss |
| $ | (0.22 | ) | $ | (0.07 | ) | $ | (0.14 | ) | $ | (0.14 | ) |
|
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|
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Depreciation and amortization |
|
| 3,075 |
|
| 1,211 |
|
| 1,781 |
|
| 956 |
|
Interest expense |
|
| 2,464 |
|
| 690 |
|
| 1,167 |
|
| 337 |
|
Weighted average number of shares outstanding: |
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|
|
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Shares used in per share calculation – basic and diluted |
|
| 56,022 |
|
| 55,907 |
|
| 56,033 |
|
| 55,921 |
|
About CoolBrands International Inc.:
CoolBrands International Inc. markets a broad range of ice creams and frozen snacks under a family of brands, including Eskimo Pie, Godiva Ice Cream, Whole Fruit Sorbet, Snapple On Ice Pops, Tropicana Fruit Bars, No Pudge! Frozen Snacks, Crayola Color Pops, Yoplait Frozen Yogurt and many other well recognized brand names. CoolBrands also manufactures, markets and sells fresh yogurt products, including Breyers Fruit on the Bottom, Light and Creme Savers cup yogurt varieties. CoolBrands operates a “direct store door” (DSD) frozen distribution system in selected markets in the U.S. to deliver CoolBrands products and Partner Brands to supermarkets, convenience stores and other retail customers. CoolBrands’ subsidiary, Americana Foods, manufactures soft serve mixes, packaged ice cream, frozen snacks and other food products for CoolBrands and for well known national retailers, food companies and restaurant chains. CoolBrands’ Foodservice Division manufactures and sells premium soft serve ice cream and frozen yogurt to the foodservice industry.
For more information about CoolBrands, visitwww.coolbrandsinc.com.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the Company’s financial position and business strategy. These statements may be identified by the fact that they use such words as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, market factors, competitive product development and promotional activity, the level of consumer interest in the Company’s products, product costing, the weather, the performance of management, including management’s ability to implement its plans as contemplated, the Company’s relationship with its customers, franchisees, licensees and licensors, governmental regulations and legislation and litigation. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.