Exhibit 99.1
NEWS FROM:
COOLBRANDS INTERNATIONAL, INC.
8300 Woodbine Avenue, 5th Floor Contact: Michael Serruya
Markham, Ontario, Canada, L3R 9Y7 Telephone: (905) 479-8762
FOR IMMEDIATE RELEASE: April 20, 2004
COOLBRANDS INTERNATIONAL INC. REPORTS
RECORD INCREASES IN REVENUES AND NET EARNINGS
FOR SECOND QUARTER OF FISCAL 2004
CoolBrands International Inc. (TSX: COB.A) announced today that revenues for the
three months ended February 29, 2004 increased by 142.8% to $138,507,000 from
$57,052,000 for the same period last year. Net earnings for the three months
ended February 29, 2004 increased by 146.2% to $12,771,000 ($0.23 basic and
diluted earnings per share) as compared with net earnings of $5,188,000 ($0.10
basic and diluted earnings per share) for the same period last year.
The growth in revenues for the three months ended February 29, 2004 reflected
increased sales of prepackaged consumer products, including incremental sales
from Americana Foods, Eskimo Pie Frozen Distribution and from the Dreamery'r'
and Whole Fruit'TM' brands and the Godiva'r' brand license that were acquired in
July 2003 and drayage income.
Sales for the three month ended February 29, 2004 increased by 125.9% to
$124,986,000 as compared with $55,316,000 for the same period last year. Drayage
and other income increased to $12,481,000 for the three months ended February
29,2004. Drayage income represents the fees paid to CoolBrands by
Dreyer's/Nestle to deliver products invoiced to customers by Dreyer's/Nestle.
Gross profit dollars increased to $31,949,000 for the three months ended
February 29, 2004 from $22,977,000 for the period last year, a 39% increase.
Gross profit percentage for the three months ended February 29, 2004 decreased
to 25.6% as compared to 41.5% for the same period last year. Gross profit
decreased for the three months ended February 29, 2004 due to the impact of
lower margins generated by Americana Foods' manufacturing operations and Eskimo
Pie Frozen Distribution's distribution operations and due to the impact of
increased cost of butterfat. Selling, general and administrative expenses for
three months ended February 29, 2004 declined as a percentage of revenues to
17.1% as compared to 27.8% for the same period last year.
Cash and short-term investments increased to $66,698,000 at February 29, 2004
from $30,140,000 at August 31, 2003. Working capital improved to $127,821,000 at
February 29, 2004 from $85,734,000 at August 31, 2003. CoolBrands' current ratio
improved to 2.6 to 1 at February 29, 2004 from 2.1 to 1 at August 31, 2003.
Commenting on the results, David J. Stein, President and Co-Chief Executive
Officer of CoolBrands International Inc. stated, "Our results for the second
quarter continue to reflect the successful integration of the assets and
businesses we acquired in 2003 and the ongoing growth of our base business. Our
expanded portfolio of brands, as well as our new distribution and manufacturing
operations, all contributed to the dramatic increase in the size and
profitability of CoolBrands during the quarter."
CoolBrands International Inc.
Consolidated Balance Sheets
as at February 29, 2004 and August 31, 2003
- --------------------------------------------------------------------------------
(in thousands of dollars)
February 29, August 31,
2004 2003
(Unaudited)
$ $
------------ ----------
Assets
Current assets:
Cash and short term investments 66,698 30,140
Receivables 66,404 60,807
Receivables - affiliates 3,182 3,185
Inventories 60,586 55,604
Prepaid expenses 6,162 9,722
Prepaid taxes 411
Future income taxes 3,142 1,930
------- -------
Total current assets 206,585 161,388
Future income taxes 4,418 2,977
Property, plant and equipment 29,672 28,349
License agreements 11,863 12,357
Intangible and other assets 8,912 9,084
Goodwill 97,541 99,695
------- -------
358,991 313,850
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 30,074 27,339
Payables - affiliates 657 754
Accrued liabilities 33,313 33,530
Income taxes payable 110 5,204
Future income taxes 1,842 3,144
Revolving loan - secured 7,361
Current maturities of long-term debt 5,407 5,683
------- -------
Total current liabilities 78,764 75,654
Long-term debt 28,170 38,671
Other liabilities 3,784 3,984
Future income taxes 4,768 4,722
------- -------
Total liabilities 115,486 123,031
------- -------
Minority interest 12,317 2,968
------- -------
Shareholders' Equity:
Capital stock 138,684 122,406
Contributed surplus 11,387
Cumulative translation adjustment (13,594) (8,904)
Retained earnings 94,711 74,349
------- -------
Total shareholders' equity 231,188 187,851
------- -------
358,991 313,850
======= =======
CoolBrands International Inc.
Consolidated Statements of Earnings
- --------------------------------------------------------------------------------
(Unaudited)
(in thousands of dollars, except share data)
For the six months ended For the three months ended
--------------------------- ---------------------------
February 29, February 28, February 29, February 28,
2004 2003 2004 2003
$ $ $ $
------------ ------------ ------------ ------------
Revenues:
Sales 247,107 118,378 124,986 55,316
Franchising and licensing revenues:
Royalty income 1,200 1,313 603 617
Franchise and license fees 571 1,094 287 748
Consumer products license fee 233 195 150 195
Drayage and other income 27,846 371 12,481 176
------- ------- ------- ------
Total revenues 276,957 121,351 138,507 57,052
------- ------- ------- ------
Operating expenses:
Cost of goods sold 184,749 71,902 93,037 32,339
Selling, general and administrative expenses 57,102 35,680 23,717 15,884
Interest expense 1,098 1,078 521 530
------- ------- ------- ------
Total operating expenses 242,949 108,660 117,275 48,753
------- ------- ------- ------
Minority interest 188 (100)
------- ------- ------- ------
Earnings before income taxes 33,820 12,691 21,332 8,299
Provision for income taxes 13,458 4,780 8,561 3,111
------- ------- ------- ------
Net earnings 20,362 7,911 12,771 5,188
======= ======= ======= ======
Earnings per share:
Basic 0.37 0.15 0.23 0.10
======= ======= ======= ======
Diluted 0.36 0.15 0.23 0.10
======= ======= ======= ======
Weighted average shares outstanding:
Shares used in per share calculation - basic 55,045 51,731 55,677 51,749
Shares used in per share calculation - diluted 56,198 53,209 56,445 53,107
CoolBrands International Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of dollars)
For the six months ended For the three months ended
--------------------------- ---------------------------
February 29, February 28, February 29, February 28,
2004 2003 2004 2003
$ $ $ $
------------ ------------ ------------ ------------
Cash and short term investments
provided by (used in):
Operating activities:
Net earnings 20,362 7,911 12,771 5,188
Items not affecting cash:
Depreciation and amortization 2,931 2,530 1,471 1,248
Future income taxes (2,300) 667 (414) 1,843
Minority interest 188 (100)
Contributed surplus 11,387 11,387
Changes in current assets and liabilities:
Receivables (5,956) 6,198 (5,634) (2,830)
Receivables - affiliates 3 727 384 (472)
Allowance for doubtful accounts 408 (552) 59 (643)
Inventories (4,918) (8,109) (7,289) (3,786)
Prepaid income taxes (406) (406) 215
Prepaid expenses 3,515 (1,198) 318 (3,846)
Accounts payable 2,700 2,154 10,423 947
Payables - affiliates (96) (330) 40 (203)
Accrued liabilities (214) (1,682) (6,094) 1,797
Income taxes payable (5,024) (6,781) (1,428) 611
Other assets 152 37 225 38
Other liabilities (198) (500) 161 (613)
------ ------ ------ ------
Cash provided by (used in) operating activities 22,534 1,072 15,874 (506)
------ ------ ------ ------
Investing activities:
Increase in notes receivable (20) (1)
Repayment of notes receivable 24 264 21 156
Purchase of intangible assets (49) (49)
Purchase of license agreements (397) (397)
Purchase of leasehold improvements and equipment (6,055) (2,883) (3,050) (1,586)
------ ------ ------ ------
Cash used in investing activities (6,477) (2,639) (3,475) (1,431)
------ ------ ------ ------
Financing activities:
Expenses for special warrants (144)
Proceeds from issuance of Class A and B shares 16,279 64 582 36
Capital contributions from (repayment to)
Partnership's minority partner 8,909 (2,645)
Change in revolving loan - secured 3,338 4,344
Repayment of long-term debt (5,286) (4,150) (1,292) (2,572)
------ ------ ------ ------
Cash provided by (used in) financing activities 23,240 (4,230) 989 (2,536)
------ ------ ------ ------
(Decrease) increase in cash flow due to changes
in foreign exchange rates (2,739) (2,364) 3,842 (2,553)
------ ------ ------ ------
Increase (decrease) in cash and
short term investments 36,558 (8,161) 17,230 (7,026)
Cash and short-term investments - beginning of period 30,140 47,086 49,468 45,951
------ ------ ------ ------
Cash and short-term investments -
end of period 66,698 38,925 66,698 38,925
====== ====== ====== ======
CoolBrands International Inc.
Summary Financial Data
- --------------------------------------------------------------------------------
(in thousands of dollars, except share data):
For the six months ended For the three months ended
--------------------------- ---------------------------
February 29, February 28, February 29, February 28,
2004 2003 2004 2003
$ $ $ $
------------ ------------ ------------ ------------
Revenues 276,957 121,351 138,507 57,052
Earnings before income taxes 33,820 12,691 21,332 8,299
Provision for income taxes 13,458 4,780 8,561 3,111
------- ------- ------- ------
Net earnings 20,362 7,911 12,771 5,188
======= ======= ======= ======
Basic earnings per share: .37 .15 .23 .10
Diluted earnings per share: .36 .15 .23 .10
Depreciation and amortization 2,931 2,530 1,471 1,248
Interest expense 1,098 1,078 521 530
Weighted average number of shares outstanding:
Shares used in per share calculation - basic 55,045 51,731 55,677 51,749
Shares used in per share calculation - diluted 56,198 53,209 56,445 53,107
About CoolBrands International Inc.:
CoolBrands International is a leader in the consumer products and franchising
segments of the frozen dessert industry, marketing a diverse range of frozen
dessert products under nationally and internationally recognized brand names.
CoolBrands is the pre-eminent company in the fast-growing "better-for-you" ice
cream category with offerings such as fat free, non-dairy Whole Fruit'TM'
Sorbet, Weight Watchers'r' Smart Ones'r' low-fat and fat-free frozen desserts
and new Atkins'r' Endulge'TM' controlled carbohydrate super premium ice cream.
CoolBrands also competes in the super premium ice cream category with the
Dreamery'r' Ice Cream and Godiva'r' Ice Cream brands. In addition, CoolBrands
markets a wide variety of "all family" premium ice creams, frozen novelties and
frozen desserts under the Eskimo Pie'r', Chipwich'r', Tropicana'r', Welch's'r',
Yoplait'r', Betty Crocker'r' and Trix'r' brand names.
CoolBrands' subsidiary, Eskimo Pie Frozen Distribution, operates the second
largest "direct store delivery" (DSD) ice cream distribution system in the U.S.,
serving these CoolBrands products and a growing family of Partner Brands to
supermarkets, convenience stores and other retail customers.
CoolBrands' subsidiary, Americana Foods, is a leading U.S. manufacturer and
supplier of soft serve mixes, packaged ice cream, frozen yogurt and sorbet
products and frozen novelties to well known national retailers, food companies
and restaurant chains. Americana Foods also manufactures and sells products for
the foodservice channel, which are extensively used to standardize quality and
reduce labor costs in on-site food preparation.
Coolbrands' Foodservice Division manufactures and sells premium soft serve ice
cream and frozen yogurt to the foodservice industry. CoolBrands also
manufactures and sells a full line of quality flavours, 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.
CoolBrands also franchises and licenses frozen dessert outlets operated under a
Family of Brands including Tropicana'r' Smoothies, Juices & More, Swensen's'r'
Ice Cream, I Can't Believe It's Yogurt'r', Yogen Fruz'r', Bresler's'r' Premium
Ice Cream, Golden Swirl'r' and Ice Cream Churn'r', with company-owned,
franchised and non-traditional partnership locations around the world.
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.