EX-99 2 ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

COOLBRANDS INTERNATIONAL INC.

 

 

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 at http://events.startcast.com/events/188/B0003 and subsequently archived at: www.coolbrandsinc.com and http://events.startcast.com/events/188/B0003


CoolBrands International Inc.
Consolidated Balance Sheets
as at February 28, 2006 and August 31, 2005

 

 

 

 

 

 

 

 

(Unaudited)
(Amounts expressed in thousands of dollars)

 

February 28, 2006 (Unaudited)

 

August 31, 2005

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

128,349

 

 

169,039

 

 

 

 

 

 

 

 

 

Deferred income taxes, net of valuation allowance

 

 

14,969

 

 

14,799

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

45,136

 

 

46,567

 

 

 

 

 

 

 

 

 

Intangible and other assets

 

 

21,597

 

 

21,204

 

 

 

 

 

 

 

 

 

Goodwill

 

 

43,382

 

 

43,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

253,433

 

$

294,991

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

26,098

 

$

51,518

 

Payables – affiliates

 

 

590

 

 

620

 

Accrued liabilities

 

 

35,654

 

 

29,417

 

Deferred income taxes

 

 

93

 

 

93

 

Short term borrowings

 

 

30,941

 

 

34,553

 

Current maturities of long-term debt

 

 

14,609

 

 

18,161

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

107,985

 

 

134,362

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

8,055

 

 

8,248

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

2,967

 

 

2,442

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

6,180

 

 

6,145

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

125,187

 

 

151,197

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

1,526

 

 

5,388

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital stock

 

 

97,727

 

 

97,578

 

 

 

 

 

 

 

 

 

Additional paid-in-capital

 

 

46,939

 

 

46,376

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive earnings

 

 

(1,738

)

 

(1,696

)

 

 

 

 

 

 

 

 

Retained earnings

 

 

(16,208

)

 

(3,852

)

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

126,720

 

 

138,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

253,433

 

$

294,991

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended

 

For the three months ended

 

 

 

 

February 28,
2006

 

February 28,
2005

 

February 28,
2006

 

February 28,
2005

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

164,129

 

$

146,401

 

$

77,309

 

$

63,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drayage and other income

 

 

3,781

 

 

9,151

 

 

1,887

 

 

5,715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

 

167,910

 

 

155,552

 

 

79,196

 

 

69,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

164,377

 

 

148,729

 

 

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

 

 

 

 

Loss from continuing operations before income tax and minority interest

 

 

(24,342

)

 

(9,974

)

 

(15,207

)

 

(13,945

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

3,660

 

 

1,457

 

 

1,890

 

 

815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain from operations of Franchising segment

 

 

(148

)

 

1,028

 

 

(235

)

 

297

 

Gain on sale of Franchising segment

 

 

406

 

 

 

 

 

406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculation – basic and diluted

 

 

56,022

 

 

55,907

 

 

56,033

 

 

55,921

 

CoolBrands International Inc.
Consolidated Statements of Cash Flows
for the six and three months ended February 28, 2006 and 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended

 

For the three months ended

 

(Unaudited)
(Amounts expressed in thousands of dollars)

 

February 28,
2006

 

February 28, 2005

 

February 28,
2006

 

February 28,
2005

 

 

Cash and short term investments provided by (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(12,356

)

$

(3,744

)

$

(7,952

)

$

(8,077

)

Adjustments to reconcile net earnings to net cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

 

Cash effect of changes

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Issuance of notes receivable

 

 

(251

)

 

 

 

 

(251

)

 

 

 

Collection of notes receivable

 

 

20

 

 

5

 

 

20

 

 

1

 

 

 

 

Cash provided by (used in) investing activities

 

 

5,514

 

 

(3,199

)

 

(1,310

)

 

(1,037

)

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

CoolBrands International Inc.
Summary Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands of dollars, except share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended

 

For the three months ended

 

 

 

February 28,
2006

 

February 28,
2005

 

February 28,
2006

 

February 28,
2005

 

 

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,075

 

 

1,211

 

 

1,781

 

 

956

 

Interest expense

 

 

2,464

 

 

690

 

 

1,167

 

 

337

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 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.