To All: Hopefully the following will provide a bit of clarification.
1. Earnings were not disappointing. 96 revenues were within $117,000 of my estimate and net income was within $49,000 and EPS were right on at .14. Companies don't get much closer than that.
2. I have raised my 1997 estimate from .18 to .19 and my 98 est from .24 to .25. These increases were driven primarily by expected incremental revenue from the 2 Snapple distributors that were added in New York.
3. Regarding OATs selling Snapple: There is no way to know at this time exactly how that will impact the Snapple/DRNK relationship, but DRNK has 5 year contracts with the 2 distributors so there is some protection on the possible negative side. The possible positives IMO greatly outweigh and outnumber the risk of a reduced relationship, but it is just to early to say. Stay tuned. The company did comment to me that Triarc was a much more desireable buyer of Snapple, from DRNK's point of view, than some others might have been in that Triarc doesn't have any softdrinks that compete head on with DRNK's. IE, if Cadbury, who owns IBC root beer, would have been the buyer it might have been a problem.
4. BTW, a friend sent me a gift catalog that Cracker Barrel is producing and it included Stewart's Root Beer and Orange and Cream drinks. Don't see it as a huge revenue producer, but the relationship must still be good.
regards, |
