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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the period ended April 22, 2003
CoolBrands International Inc.
(formerly Yogen Fruz World-Wide Incorporated)
(Translation of registrant's name into English)
8300 Woodbine Avenue, Markham, Ontario Canada L3R 9Y7
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F x
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Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes_______ No ___x_
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-_________
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Materials relating to Registrant and filed pursuant to this Form 6-K
include CoolBrands' Second Quarterly Report for the period ending February 28,
2003, Consolidated Balance Sheets as at February 28, 2003 (unaudited) and August
31, 2002, Consolidated Statements of Earnings and Consolidated Statements of
Cash Flows (unaudited) each for the six months ended February 28, 2003 and 2002
and the three months ended February 28, 2003 and 2002 and the Unaudited
Consolidated Notes to Interim Financial Statements for period ended February 28,
2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
COOLBRANDS INTERNATIONAL INC.
Date April 24, 2003 By /s/ Aaron Serruya
________________ _____________________________________
Name: Aaron Serruya
Title: Executive Vice-President
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April 22, 2003
TO WHOM IT MAY CONCERN:
Dear Sirs:
RE: CoolBrands International Inc.
Trading Symbol (TSX: COB.A)
_____________________________________________
We enclose our Second Quarterly Report for the period ending February 28, 2003
for filing.
We declare that the above document was sent by prepaid mail to all shareholders
of the Company on April 22, 2003 and will be mailed out on April 23 and 24,
2003. However, we have not mailed to shareholders in cases where notices or
other documents have been returned undelivered by the Post Office.
Yours very truly,
COOLBRANDS INTERNATIONAL INC.
"Gabriel Merle"
Gabriel Merle
Public Relations
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Second Quarter 2003 Fiscal Year
To Our Shareholders . . .
CoolBrands International Inc. (TSX: COB.A) announced that net earnings for the
quarter ended February 28, 2003 were $5,188,000 ($0.10 net earnings per share
basic and diluted) as compared with net earnings of $3,646,000 ($0.08 net
earnings per share basic and diluted) for the same quarter last year, an
increase of $1,542,000 or 42.3% on a 38.9% increase in revenues.
Earnings before income taxes were $8,299,000 as compared with earnings before
income taxes of $5,295,000 for the same quarter last year. Earnings before
income tax for the second quarter of 2003 reflect an increase of $3,004,000, or
56.7%, over the same quarter of the prior year. EBITDA for the second quarter
increased to $10,077,000 from $6,927,000 during the same quarter last year, an
increase of $3,150,000, or 45.5%.
Revenues increased by $15,971,000, or 38.9%, to $57,052,000 as compared with
$41,081,000 for the same quarter of fiscal 2002. The increase in revenues was
primarily due to increased prepackaged consumer products sales.
Operating results for the quarter reflect an increase in gross profit dollars of
$7,010,000, primarily due to the increase in sales. Gross profit margin as a
percentage of sales was relatively unchanged at 41.5% as compared with 40.6% for
the same quarter last year. Selling, general and administrative expenses
increased by $4,121,000, due primarily to increased expenses associated with the
increased sales activity, but decreased to 27.8% as a percentage of revenues as
compared with 28.6% of revenues for the second quarter of 2002.
Commenting on the results, David J. Stein, President and Co-Chief Executive
Officer of CoolBrands International Inc. stated "During our second fiscal
quarter, CoolBrands continued to realize strong growth in revenues and earnings.
We are encouraged by initial results from our new product introductions, and
look forward to robust performance during the third and fourth quarters."
CoolBrands markets Eskimo Pie'r', Chipwich'r' and Fruit-A-Freeze'r' branded
frozen novelties and frozen dessert products. Eskimo Pie'r' created the frozen
novelty industry in 1921 when its founder, Christian K. Nelson, invented the
chocolate-coated ice cream bar. Today, more than 80 years later, Eskimo Pie'r'
remains one of the best-known and most widely distributed of all frozen novelty
brands. The Company also markets a broad range of frozen novelties and frozen
dessert products under the Tropicana'r', Welch's'r', Weight Watchers'r' Smart
Ones'r', Betty Crocker'r', Trix'r', Yoplait'r', Colombo'r' and Yoo Hoo'r' brand
names pursuant to long-term licensing agreements. In addition, CoolBrands
franchises and licenses frozen dessert outlets operated under a Family of Brands
including Yogen Fruz'r', I Can't Believe It's Yogurt'r', Bresler's'r',
Swensen's'r', Golden Swirl'r', Ice Cream Churn'r', and Java Coast'r' Fine
Coffees, with company-owned, franchised and non-traditional partnership
locations in approximately 80 countries around the world. CoolBrands'
Foodservice Division is a leading manufacturer and supplier of premium soft
serve ice cream, frozen yogurt, custard and smoothies to the foodservice
industry. The Company also manufactures and sells a full line of quality
flavors, chocolate coatings, fudge sauces, powders for chocolate milk, egg nog
bases and other ingredients and flexible packaging products for use in private
label dairy products in addition to the Company's brands.
Again, we thank all of our employees and franchisees for their hard work and
commitment and all of our shareholders for their continued faith in the Company.
On Behalf of the Board of Directors
"David J. Stein"
David J. Stein
President, Co-C.E.O.
CoolBrands International Inc.
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CoolBrands International Inc.
Consolidated Balance Sheets
as at February 28, 2003 and August 31, 2002
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(in thousands of dollars)
February 28, August 31,
2003 2002
(Unaudited)
$ $
Assets
Current assets:
Cash and short term investments 38,925 47,086
Receivables 37,372 43,001
Receivables - affiliates 3,070 3,792
Inventories 33,420 25,361
Prepaid expenses 8,100 6,752
Asset held for sale 3,274 3,432
Future income taxes 2,638 2,415
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Total current assets 126,799 131,839
Future income taxes 3,232 3,433
Property, plant and equipment 19,890 19,710
License agreements 12,299 13,438
Intangible and other assets 6,593 7,332
Goodwill 104,578 107,910
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273,391 283,662
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 26,539 24,399
Payables - affiliates 650 978
Accrued liabilities 31,092 32,880
Income taxes payable 607 7,347
Future income taxes 3,384 2,566
Current maturities of long-term debt 4,678 6,315
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Total current liabilities 66,950 74,485
Long-term debt 25,127 29,279
Other liabilities 4,743 5,240
Future income taxes 3,765 3,950
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Total liabilities 100,585 112,954
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Capital stock 122,298 122,378
Cumulative translation adjustment (48) 5,685
Retained earnings 50,556 42,645
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Total shareholders' equity 172,806 170,708
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273,391 283,662
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CoolBrands International Inc.
Consolidated Statements of Earnings
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(Unaudited)
(in thousands of dollars, except share data)
For the Six Months For the Three Months
Ended Ended
February 28 February 28
2003 2002 2003 2002
$ $ $ $
Revenues:
Sales 118,378 85,039 55,316 39,346
Franchising and licensing revenues:
Royalty income 1,313 1,389 617 740
Franchise and license fees 1,094 484 748 362
Consumer products 195 396 195 396
Net rental and other income 371 560 176 237
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121,351 87,868 57,052 41,081
Total revenues
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Operating expenses:
Cost of goods sold 71,902 51,868 32,339 23,379
Selling, general and administrative expenses 35,680 27,117 15,884 11,763
Interest expense 1,078 1,409 530 644
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Total operating expenses 108,660 80,394 48,753 35,786
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Earnings before income taxes 12,691 7,474 8,299 5,295
Provision for income taxes 4,780 2,417 3,111 1,649
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Net earnings 7,911 5,057 5,188 3,646
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Earnings per share:
Basic and diluted 0.15 0.11 0.10 0.08
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Weighted average shares outstanding:
Shares used in per share calculation - basic 51,731 45,906 51,749 45,924
Shares used in per share calculation - diluted 53,209 48,059 53,107 48,398
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CoolBrands International Inc.
Consolidated Statements of Cash Flows
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(Unaudited) (in thousands of dollars)
For the Six Months For the Three Months
Ended Ended
February 28 February 28
2003 2002 2003 2002
$ $ $ $
Cash and short term investments provided by (used in):
Operating activities:
Net earnings 7,911 5,057 5,188 3,646
Items not affecting cash -
Depreciation and amortization 2,530 1,994 1,248 988
Future income taxes 667 (228) 1,843 (203)
Changes in current assets and liabilities -
Receivables 6,198 5,716 (2,830) (2,188)
Receivables - affiliates 727 936 (472) 1,258
Allowance for doubtful accounts (552) (854) (643) (1,273)
Inventories (8,109) (5,728) (3,786) (4,219)
Prepaid income taxes 215
Prepaid expenses (1,198) (346) (3,846) (419)
Accounts payable 2,154 (6,049) 947 (1,889)
Payables - affiliates (330) (240) (203) (213)
Accrued liabilities (1,682) 1,595 1,797 1,167
Income taxes payable (6,781) 1,124 611 1,874
Other assets 37 (128) 38 (189)
Other liabilities (500) (150) (613) (25)
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Cash provided by (used in) operating activities 1,072 2,699 (506) (1,685)
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Investing activities:
Increase in notes receivable (20) (1)
Repayment of notes receivable 264 33 156 17
Purchase of leasehold improvements and equipment
(2,883) (1,807) (1,586) (911)
Purchase of intangible assets (122)
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Cash used in investing activities (2,639) (1,896) (1,431) (894)
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Financing activities:
Expenses for special warrants (144)
Proceeds from issuance of Class A and B shares 64 141 36 141
Repayment of long-term debt (4,150) (4,762) (2,572) (3,180)
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Cash used in financing activities (4,230) (4,621) (2,536) (3,039)
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(Decrease) increase in cash flow due to changes
in foreign exchange rates (2,364) 1,359 (2,553) 910
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(Decrease) in cash and short term investments (8,161) (2,459) (7,026) (4,708)
Cash and short-term investments - beginning of period 47,086 31,568 45,951 33,817
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Cash and short-term investments - end of period 38,925 29,109 38,925 29,109
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CoolBrands International Inc.
Consolidated Notes to Interim Financial Statements
(Unaudited)
February 28, 2003 and 2002
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(Tabular amounts are expressed in thousands)
1. Significant accounting policies
The financial statements of the Company have been prepared by
management in accordance with generally accepted accounting principles
in Canada for interim financial statements. The financial statements
have, in management's opinion, been properly prepared using judgment
within reasonable limits of materiality. These interim financial
statements do not include all the note disclosures required for annual
financial statements and therefore they should be read in conjunction
with the Company's audited financial statements for the year ended
August 31, 2002. The significant accounting policies follow those
disclosed in the most recently reported annual financial statements.
2. Accounting estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements. Actual results could differ from those estimated.
3. Segment information
Prepackaged Foodservice Dairy Franchising Corporate Consolidated
consumer components and
products licensing
$
$ $ $ $ $
- --------------------------- --------------- ----------------- ---------------- --------------- -------------- ---------------
For the six months ended February 28, 2003
Revenue,
external 80,778 11,086 20,298 9,168 21 121,351
Intersegment
revenue 39 453 1,369 97 1,958
Segment earnings
before income taxes 10,219 593 2,183 857 (1,161) 12,691
For the six months ended February 28, 2002
Revenue,
external 49,671 10,889 15,643 11,550 115 87,868
Intersegment
revenue 114 515 1,494 115 2,238
Segment earnings
before income taxes 4,438 523 963 1,773 (223) 7,474
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CoolBrands International Inc.
Consolidated Notes to Interim Financial Statements
(Unaudited)
February 28, 2003 and 2002
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(Tabular amounts are expressed in thousands)
3. Segment information (cont'd)
Prepackaged Foodservice Dairy Franchising Corporate Consolidated
consumer components and
products licensing
$
$ $ $ $ $
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For the three months ended February 28, 2003
Revenue,
external 37,662 5,291 9,462 4,628 9 57,052
Intersegment
revenue 37 221 752 45 1,055
Segment earnings
before income taxes 7,210 204 936 516 (567) 8,299
For the three months ended February 28, 2002
Revenue,
external 22,685 5,232 6,980 6,125 59 41,081
Intersegment
revenue 75 203 833 59 1,170
Segment - earnings
before income taxes 3,812 374 344 934 (169) 5,295
4. Capital stock
The Company had the following equity securities, warrants, and stock
options outstanding as of April 10, 2003:
Class A Subordinate Class B Multiple
Voting Shares Voting Shares Warrants Stock Options
- --------------------- -------------------- ------------------ ----------------------
45,555 6,203 100 4,351
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CORPORATE INFORMATION
Canadian Head Office:
CoolBrands International Inc.
8300 Woodbine Avenue, 5th Floor
Markham, Ontario, L3R 9Y7 Canada
Telephone: (905) 479-8762
Fax: (905) 479-5235
Internet: http://www.yogenfruz.com
E-mail: yogenfruz@yogenfruz.com
U.S.A. Head Office:
4175 Veterans Highway, 3rd Floor
Ronkonkoma, New York, 11779, U.S.A.
Telephone: (631) 737-9700
Fax: (631) 737-9792
International Head Office:
Kayla Foods Int'l (Barbados) Inc.
27 Pine Road, Belleville,
St. Michael, Barbados, W.I.
Telephone: (246) 228-9505
Fax: (246) 228-7321
E-mail: kfibarb@caribnet.net
Toronto Stock Exchange (Trading Symbol: COB.A)
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as........................'r'