EX-99 2 ex99-1.txt EXHIBIT 99.1 COOLBRANDS INTERNATIONAL INC. REPORTS FINANCIAL RESULTS; ENTERS INTO COMMITMENT LETTERS WITH JPMORGAN CHASE Toronto, Canada, January 12, 2006 - CoolBrands International Inc. ("CoolBrands") (TSX: COB.SV.A) today announced financial results for the first quarter of fiscal 2006 and also announced that it has entered into commitment letters with JPMorgan Chase for new senior secured credit facilities. Financial Results Revenues for the first quarter of fiscal 2006 increased to $91,528,000 from $89,292,000 for the same quarter last year. Net loss for the quarter was $(4,404,000) (($0.08) basic and diluted loss per share) as compared with net earnings of $4,333,000 ($0.08 basic and diluted earnings per share) for the same quarter last year. Commenting on the results, David J. Stein, President and Chief Executive Officer of CoolBrands International Inc. stated, "As we expected, our revenues and net earnings in this first quarter continued to reflect the trends that impacted our results during fiscal 2005, in particular the lower sales in our prepackaged frozen dessert business. Our strategy to respond - described several weeks ago - is well underway: we are implementing an aggressive program of new brand introductions and product innovation in the frozen dessert segment under the Godiva, Yoplait and Disney brands and, with the Breyers Yogurt brand, expanding the categories in which we compete and enhancing the Company's positioning as a marketer of dairy based snack foods." Commitment Letters CoolBrands has signed binding commitment letters with J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. in respect of new credit facilities. The facilities will be structured as follows: (a) a US$48 million senior secured revolving credit facility for CoolBrands and its subsidiaries (other than Americana Foods Limited Partnership), (b) a US$8 million senior secured revolving credit facility in respect of which Americana Foods Limited Partnership will be the borrower, and (c) a US$15 million term loan in respect of which Americana Foods Limited Partnership will be the borrower. The facilities are for a term of three years and provide for interest at LIBOR plus 2% for revolving debt and LIBOR plus 2.5% for term debt. J.P. Morgan Securities Inc. has agreed to use its commercially reasonable efforts to syndicate the new credit facilities to a group of lenders including JPMorgan Chase Bank, N.A., which has committed to provide up to half of the new credit facilities. The CoolBrands credit facility will be secured by all of the assets of CoolBrands and its subsidiaries other than Americana Foods Limited Partnership. The Americana Foods Limited Partnership credit facilities will be secured by all of the assets of Americana Foods Limited Partnership. All of the credit facilities will be unconditionally guaranteed by CoolBrands and certain of its subsidiaries. The Company's existing credit facility with JPMorgan Chase Bank, N.A. expires on April 3, 2006. The Company further announced today that the term of the existing credit facility of Americana Foods Limited Partnership with Regions Bank has been extended to March 10, 2006. CoolBrands currently has approximately US$35.6 million of short term debt owing to JPMorgan Chase Bank, N.A. and CoolBrands' 50.1% owned subsidiary, Americana Foods Limited Partnership, has approximately US$10.1 million of short term debt owing to Regions Bank. These liabilities will be repaid upon the closing of the new facilities. 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 change and other customary conditions. Conference Call and Webcast The Company will hold a conference call to discuss its first quarter 2006 results on January 18, 2006 at 5:00 PM Eastern time. Persons wishing to participate in the call should telephone 1-866-898-9626 in North America; International participants should call (416) 340-2216. The call will also be webcast live on the following Internet site at: http://events.startcast.com/events/188/B0002 and subsequently archived at: www.coolbrandsinc.com and http://events.startcast.com/events/188/B0002 About CoolBrands International: CoolBrands International is a leading marketer of dairy based snacks in the refrigerated and frozen snack foods categories. In the frozen snack foods category, CoolBrands manufactures and distributes such well known brands as Godiva Ice Cream, Whole Fruit Sorbet, Eskimo Pie frozen snacks, Tropicana Fruit Bars, Chipwich Ice Cream Cookie Sandwiches and many others. In the refrigerated dairy category, CoolBrands manufactures and distributes Breyer's Yogurt and Creme Savers Yogurt. CoolBrands operates a "direct store delivery" (DSD) ice cream distribution system in selected markets in the U.S., serving CoolBrands products and a growing family of Partner Brands to supermarkets, convenience stores and other retail customers. CoolBrands' 50.1% owned subsidiary, Americana Foods, is a leading U.S. manufacturer and supplier of soft serve mixes, packaged ice cream, frozen yogurt and sorbet products, frozen snacks and other food products to 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. CoolBrands' Dairy Components Division 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. For more information about CoolBrands, visit www.coolbrandsinc.com. Forward Looking Statements: 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. - 30 - For more information, please contact: David J. Stein Co-Chairman, President and Chief Executive Officer (631) 737-9700 CoolBrands International Inc. Consolidated Balance Sheets as at November 30, and August 31, 2005
--------------------------------------------------------------------------------------------------------------------------- (Unaudited) (Amounts expressed in thousands of dollars) November 30, August 31, 2005 2005 (Unaudited) Assets Current assets: Cash $ 20,745 $ 24,062 Investments 7,500 Restricted cash 10,000 10,000 Receivables, net 39,196 54,526 Receivables - affiliates 1,745 1,840 Inventories 45,683 49,955 Income taxes recoverable 9,279 9,767 Prepaid expenses 1,693 2,413 Deferred income taxes 6,475 5,148 -------------------------------------------------- Total current assets 134,816 165,211 Deferred income taxes, net of valuation allowance 14,839 14,799 Property, plant and equipment 46,852 47,639 Intangible and other assets 22,578 22,369 Goodwill 47,827 47,827 -------------------------------------------------- $266,912 $297,845 ================================================== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 33,665 $ 53,300 Payables - affiliates 555 620 Accrued liabilities 26,500 30,015 Deferred income taxes 93 93 Short term borrowings 34,553 34,553 Current maturities of long-term debt 16,621 18,161 -------------------------------------------------- Total current liabilities 111,987 136,742 Long-term debt 8,111 8,248 Other liabilities 2,687 2,881 Deferred income taxes 6,244 6,180 -------------------------------------------------- Total liabilities 129,029 154,051 -------------------------------------------------- Minority interest 3,618 5,388 -------------------------------------------------- Commitments and contingencies Shareholders' equity: Capital stock 97,727 97,578 Additional paid-in-capital 46,582 46,376 Accumulated other comprehensive earnings (1,788) (1,696) Retained earnings (8,256) (3,852) -------------------------------------------------- Total shareholders' equity 134,265 138,406 -------------------------------------------------- $266,912 $297,845 ==================================================
CoolBrands International Inc. Consolidated Statements of Operations for the three months ended November 30, 2005 and 2004
----------------------------------------------------------------------------------------------------------------------- (Unaudited) (Amounts expressed thousands of dollars, except for per share data) For the three months ended November 30, 2005 November 30, 2004 Net revenues: Net sales $89,103 $85,128 Royalties, licensing, and consumer products license revenue 1,208 1,699 Drayage and other income 1,217 2,465 ------------------------------------------------- Total net revenues 91,528 89,292 ------------------------------------------------- Cost of goods sold 85,294 75,824 Selling, general and administrative expenses 13,722 8,226 Stock-based compensation expense 263 80 Interest expense 1,297 355 ------------------------------------------------- (Loss) earnings before income taxes and minority interest (9,048) 4,807 Minority interest (1,770) (642) ------------------------------------------------- (Loss) earnings before income taxes (7,278) 5,449 (Recovery of) provision for income taxes (2,874) 1,116 ------------------------------------------------- Net (loss) earnings $(4,404) $ 4,333 ================================================= Per share data: (Loss) earnings per share: Basic and diluted $ (0.08) $ 0.08 ================================================= Weighted average shares outstanding: Shares used in per share calculation - basic 56,012 55,893 Shares used in per share calculation - diluted 56,012 56,109
CoolBrands International Inc. Consolidated Statements of Operations for the three months ended November 30, 2005 and 2004
-------------------------------------------------------------------------------------------------------------------------- (Unaudited) (Amounts expressed thousands of dollars, except for per share data) For the three months ended November 30, November 30, 2005 2004 Cash and short term investments provided by (used in): Operating activities: Net (loss) earnings $ (4,404) $ 4,333 Adjustments to reconcile net earnings to net cash flows from operating activities Depreciation and amortization 1,617 1,194 Stock-based compensation expense 263 80 Excess tax benefits from stock-based compensation (104) Deferred income taxes (1,303) (143) Minority interest (1,770) (642) Cash effect of changes Receivables 15,432 711 Receivables - affiliates 96 949 Allowance for doubtful accounts (160) 25 Inventories 4,271 (1,414) Income taxes recoverable 488 Prepaid expenses 720 (1,306) Accounts payable (19,632) 4,768 Payables - affiliates (65) (451) Accrued liabilities (3,514) 3,768 Income taxes payable (2,284) Other assets (338) (146) Other liabilities (194) 42 ------------------------------------------------------- Cash (used in) provided by operating activities (8,597) 9,484 ------------------------------------------------------- Investing activities: Purchase of property, plant and equipment (705) (2,152) Purchase of license agreements (14) Redemption of investments 7,500 Increase in notes receivable (8) Collection of notes receivable 66 4 ------------------------------------------------------- Cash provided by (used in) investing activities 6,853 (2,162) ------------------------------------------------------- Financing activities: Proceeds from issuance of Class A and B shares 92 Change in revolving line of credit, secured (770) 2,223 Repayment of long-term debt (907) (969) Excess tax benefits from stock-based compensation 104 ------------------------------------------------------- Cash (used in) provided by financing activities (1,481) 1,254 ------------------------------------------------------- (Decrease) in cash flow due to changes in foreign exchange (92) (2,100) rates ------------------------------------------------------- (Decrease) increase in cash and cash equivalents (3,317) 6,476 Cash and cash equivalents - beginning of period 24,062 36,277 ------------------------------------------------------- Cash and cash equivalents -end of period $ 20,745 $ 42,753 =======================================================
CoolBrands International Inc. Summary Financial Data
---------------------------------------------------------------------------------------------------------------------- (in thousands of dollars, except share data): For the three months ended November 30, November 30, 2005 2004 $ $ ------------------------------------------------------------- ---------------------------- --------------------------- Net revenues 91,528 89,292 (Loss) earnings before income taxes (7,278) 5,449 (Recovery of) provision for income taxes: (2,874) 1,116 Net (loss) earnings (4,404) 4,333 Basic (loss) earnings per share: Basic and diluted: $ (0.08) $ 0.08 Depreciation and amortization 1,617 1,194 Interest expense 1,297 355 Weighted average number of shares outstanding: Shares used in per share calculation - basic 56,012 55,893 Shares used in per share calculation - diluted 56,012 56,109
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, visit www.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. For further information, contact: David J. Stein, President and Chief Executive Officer Telephone: (631) 737-9700 (ext. 216)