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: July 22, 2004
COOLBRANDS INTERNATIONAL INC. REPORTS
RECORD INCREASES IN REVENUES AND NET EARNINGS
FOR THIRD QUARTER OF FISCAL 2004
CoolBrands International Inc. (TSX: COB.A) announced today that revenues for the
three months ended May 31, 2004 increased by 128.5% to $187,170,000 from
$81,908,000 for the same period last year. Net earnings for the three months
ended May 31, 2004 increased by 113.5% to $19,126,000 ($0.34 basic and diluted
earnings per share) as compared with net earnings of $8,957,000 ($0.17 basic and
diluted earnings per share) for the same period last year.
The growth in revenues for the three months ended May 31, 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 months ended May 31, 2004 increased by 119.4% to
$173,247,000 as compared with $78,978,000 for the same period last year. Drayage
and other income increased to $12,854,000 for the three months ended May 31,
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 $44,204,000 for the three months ended May 31,
2004 from $33,864,000 for the period last year, a 30.5% increase. Gross profit
percentage for the three months ended May 31, 2004 decreased to 25.5% as
compared to 42.9% for the same period last year. Gross profit decreased for the
three months ended May 31, 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 May 31, 2004
declined as a percentage of revenues to 13.5% as compared to 27.1% for the same
period last year.
Cash and short-term investments increased to $97,486,000 at May 31, 2004 from
$30,140,000 at August 31, 2003. Working capital improved to $149,835,000 at May
31, 2004 from $85,734,000 at August 31, 2003. CoolBrands' current ratio improved
to 2.2 to 1 at May 31, 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 third
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 May 31, 2004 and August 31, 2003
- -------------------------------------------------------------------------------------------------------
(in thousands of dollars)
May 31, August 31,
2004 2003
(Unaudited)
$ $
- -------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash and short term investments 97,486 30,140
Receivables 88,401 60,807
Receivables - affiliates 4,768 3,185
Inventories 74,584 55,604
Prepaid expenses 8,393 9,722
Future income taxes 3,056 1,930
------------- -----------------------
Total current assets 276,688 161,388
Future income taxes 4,462 2,977
Property, plant and equipment 34,017 28,349
License agreements 11,771 12,357
Intangible and other assets 8,931 9,084
Goodwill 98,656 99,695
------------------------------------
434,525 313,850
====================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 67,842 27,339
Payables - affiliates 1,057 754
Accrued liabilities 32,425 33,530
Income taxes payable 7,248 5,204
Future income taxes 2,273 3,144
Revolving loan - secured 10,544
Current maturities of long-term debt 5,464 5,683
------------------------------------
Total current liabilities 126,853 75,654
Long-term debt 27,335 38,671
Other liabilities 3,769 3,984
Future income taxes 4,936 4,722
------------------------------------
Total liabilities 162,893 123,031
------------------------------------
Minority interest 13,121 2,968
------------------------------------
Shareholders' Equity:
Capital stock 138,883 122,406
Contributed surplus 15,720
Cumulative translation adjustment (9,929) (8,904)
Retained earnings 113,837 74,349
------------------------------------
Total shareholders' equity 258,511 187,851
------------------------------------
434,525 313,850
====================================
CoolBrands International Inc.
Consolidated Statements of Earnings
- ---------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(in thousands of dollars, except share data)
For the nine months ended For the three months ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
$ $ $ $
- ---------------------------------------------------------------------------------------------------------------------------
Revenues:
Sales 420,354 197,356 173,247 78,978
Franchising and licensing revenues:
Royalty income 1,916 2,034 716 721
Franchise and license fees 807 1,446 236 352
Consumer products license fee 350 436 117 241
Drayage and other income 40,700 1,987 12,854 1,616
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Total revenues 464,127 203,259 187,170 81,908
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Operating expenses:
Cost of goods sold 313,792 117,016 129,043 45,114
Selling, general and administrative expenses 82,296 57,843 25,194 22,163
Interest expense 1,638 1,451 540 373
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Total operating expenses 397,726 176,310 154,777 67,650
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Minority interest 765 577
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Earnings before income taxes 65,636 26,949 31,816 14,258
Provision for income taxes 26,148 10,081 12,690 5,301
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Net earnings 39,488 16,868 19,126 8,957
================================================================
Earnings per share:
Basic 0.71 0.33 0.34 0.17
================================================================
Diluted 0.70 0.32 0.34 0.17
================================================================
Weighted average shares outstanding:
Shares used in per share calculation - basic 55,291 51,740 55,777 51,757
Shares used in per share calculation - diluted 56,337 53,492 56,880 53,946
CoolBrands International Inc.
Consolidated Statements of Cash Flows
- ----------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
(in thousands of dollars)
- ----------------------------------------------------------------------------------------------------------------------------------
For the nine months ended For the three months ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
$ $ $ $
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and short term investments
provided by (used in):
Operating activities:
Net earnings 39,488 16,868 19,126 8,957
Items not affecting cash:
Depreciation and amortization 4,392 3,726 1,461 1,196
Future income taxes (1,673) 1,342 627 675
Loss of asset held for sale 403 403
Minority interest 765 577
Contributed surplus 15,720 4,333
Changes in current assets and liabilities:
Receivables (27,488) 2,554 (21,532) (3,644)
Receivables - affiliates (1,546) (2,155) (1,549) (2,882)
Allowance for doubtful accounts 514 (711) 106 (159)
Inventories (18,539) (9,839) (13,621) (1,730)
Prepaid income taxes 406
Prepaid expenses 1,299 399 (2,216) 1,597
Accounts payable 39,559 3,090 36,859 936
Payables - affiliates 296 1,458 392 1,788
Accrued liabilities (1,080) (3,456) (866) (1,774)
Income taxes payable 2,002 (7,081) 7,026 (300)
Other assets 128 659 (24) 622
Other liabilities (210) (929) (12) (429)
----------------------------------------------------------------------
Cash provided by operating activities 53,627 6,328 31,093 5,256
----------------------------------------------------------------------
Investing activities:
Increase in notes receivable (1)
Repayment of notes receivable 30 305 6 60
Purchase of intangible assets (70) (21)
Purchase of license agreements (393) 4
Purchase of leasehold improvements and
equipment (10,946) (3,853) (4,891) (970)
Proceeds from the sale of asset held for sale 3,396 3,396
----------------------------------------------------------------------
Cash (used in) provided by investing activities (11,379) (153) (4,902) 2,486
----------------------------------------------------------------------
Financing activities:
Expenses for special warrants (144)
Proceeds from issuance of Class A and B shares 16,477 64 199
Capital contributions from (repayment to)
Partnership's minority partner 8,891 (18)
Change in revolving loan - secured 6,344 2,742 3,006 2,742
Repayment of long-term debt (6,652) (7,543) (1,366) (3,393)
----------------------------------------------------------------------
Cash provided by (used in) financing activities 25,060 (4,881) 1,821 (651)
----------------------------------------------------------------------
Increase (decrease) in cash flow due to changes in
foreign exchange rates 38 (10,418) 2,776 (8,054)
----------------------------------------------------------------------
Increase (decrease) in cash and
short-term investments 67,346 (9,124) 30,788 (963)
Cash and short-term investments - beginning of period 30,140 47,086 66,698 38,925
----------------------------------------------------------------------
Cash and short-term investments - end of period 97,486 37,962 97,486 37,962
======================================================================
CoolBrands International Inc.
Summary Financial Data
- ----------------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars, except share data):
For the nine months ended For the three months ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
$ $ $ $
- -------------------------------------------------------------------------------------------------------------------------------
Revenues 464,127 203,259 187,170 81,908
Earnings before income taxes 65,636 26,949 31,816 14,258
Provision for income taxes 26,148 10,081 12,690 5,301
-------------------------------------------------------------------
Net earnings 39,488 16,868 19,126 8,957
===================================================================
Basic earnings per share: .71 .33 .34 .17
Diluted earnings per share: .70 .32 .34 .17
Depreciation and amortization 4,392 3,726 1,461 1,196
Interest expense 1,638 1,451 540 373
Weighted average number of shares outstanding:
Shares used in per share calculation - basic 55,291 51,740 55,777 51,757
Shares used in per share calculation - diluted 56,337 53,492 56,880 53,946
About CoolBrands International:
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.