Why would Ed Kelley send this to TFRY investors?
Continuing our efforts to keep you informed, we are sending you this press release that appeared on June 22 concerning Tege SA, a Swiss company, without additional comment:
TEGE TO INSTALL 10 FRENCH-FRY MACHINES IN SWITZERLAND
Blonay, Switzerland, June 22 (Bloomberg) -- Tege SA, a Swiss maker of vending machines that dispense French fries, said it plans to double the number of machines in operation to 23 in August, after securing agreements with Swiss department-store chain EPA AG and Coca Cola Co.
Tege said the machines will operate in seven EPA stores and beside Coca Cola vending machines on a test basis. The company also said it plans to set up a machine at an unidentified gas station and to sell fries at the Jazz Festival in Montreux, Switzerland in July and at the Locarno Film Festival in August.
Blonay, Switzerland-based Tege has spent five years developing a French-fry vending machine capable of competing in the $12 billion French-fry market and the $31 billion vending- machine market. Tege's main rival is Tasty Fries Inc. of Blue Bell, Pennsylvania.
If the tests work and they can apply it to the Coca-Cola subsidiaries, it will be significant," said Pascal Moura, an analyst at SMS Securities in Zurich. Moura has a "buy" rating on the shares. He said that although technical problems are still to be overcome, he's confident the product will sell.
At Tege's annual general meeting Friday, Tege Chief Executive Patrick Bigger forecast the company would achieve its first "small profit" in 1999, adding that only between 50 and 70 machines will be in operation this year.
That compares with a Tege forecast in February that the company will post an operating profit of 1 million Swiss francs ($670,000) this year from 1,000 machines. Bigger forecast a net loss in 1998 as Tege writes off goodwill of 3.5 million francs per year for the next ten years. Earlier this month, Tege said its loss widened to 7.3 million francs in 1997 from 5.6 million francs a year earlier.
Tests 'Successful'
Guido Stoecklin, Tege's newly appointed director of marketing and sales, said in an interview that tests in the U.K. in the past few months involving 13 machines have been "successful." Stoecklin added Tege is in talks with unnamed supermarkets in the U.K.
Tege has a market capitalization of 321 million francs ($214 million), while Tasty Fries' market value is of $6.7 million. Tege markets its patented vending machine through ventures and partnerships. Its main source of income once the machines are operating will be sales of the potato powder its machines use to make fries.
Tege also said Friday that four board members resigned as it streamlined the board. They were Dugold Barr, Alastair Lawson, Pius Huber and Ralf Nadler, who all continue in their management positions with Tege, the company said. Charles Gebhard, the vice president of privately-held Klaus J. Jacobs Holding AG, was elected to the board.
The resignations are not important, what is more significant is that Gebhard has been appointed to the board," said Phurbu Darpoling, who manages 1.5 billion francs at Credit Suisse Asset Management.
Tege shares fell 4 francs to 144 francs on the Swiss Exchange. The shares have risen 71 percent this year as investors bet the company will post profits soon after accumulating losses of 22 million francs in the past four years.
Sincerely,
TASTY FRIES, INC.
Edward C. Kelly
President
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