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: November 30, 2004
COOLBRANDS INTERNATIONAL INC. REPORTS
FINANCIAL RESULTS
FOR FOURTH QUARTER OF FISCAL 2004
CoolBrands International Inc. (TSX: COB.SV.A) announced its operating results for the fourth quarter, and the fiscal year, ended August 31, 2004.
Operating results
For fiscal 2004, revenues increased to $642,820,000 as compared with $357,273,000 for fiscal 2003, an 80% increase. Net earnings for fiscal 2004 increased to $48,843,000 ($0.88 basic and $0.87 diluted earnings per share) as compared with net earnings of $31,704,000 ($0.61 basic and $0.59 diluted earnings per share) for fiscal 2003, a 54% increase.
Revenues for the forth quarter of fiscal 2004 increased to $178,693,000 from $154,014,000 for the same quarter last year, a 16% increase. Net earnings for the quarter were $14,704,000 ($0.26 basic and diluted earnings per share) as compared with net earnings of $14,836,000 ($0.29 basic and $0.27 diluted earnings per share) for the same quarter last year.
CoolBrands’ revenues consist mainly of sales made in U.S. dollars but reported in Canadian dollars. Thus, the exchange rates in effect from one reporting date to the same reporting date of the following fiscal year affect the variances between results actually reported. For purposes of comparison, assuming the same average exchange rate for the year ended August 31, 2004 as was in effect for the year ended August 31, 2003, CoolBrands would have reported revenues of $715,682,000 for fiscal 2004, or approximately 11% greater than actually reported and net earnings of $54,379,000
The growth in revenues for fiscal 2004 reflected increased revenues, primarily from the prepackaged consumer product segment attributable to Americana Foods LP (50.1% owned), Eskimo Pie Frozen Distribution and our Super Premium Dreamery, Godiva and Whole Fruit pints. In fiscal 2004, sales increased by 75% to $584,951,000 as compared with $335,034,000 for fiscal 2003. In fiscal 2004, drayage and other income increased by 213% to $53,083,000 as compared with $16,978,000 for fiscal 2003. In fiscal 2004, revenues from Americana Foods, Eskimo Pie Frozen Distribution and Super Premium pints represent a full year’s activity as compared with approximately two months in fiscal 2003.
The growth in revenues for the fourth quarter of fiscal 2004 reflected increased revenues, primarily from the prepackaged consumer product segment attributable to Americana Foods, Eskimo Pie Frozen Distribution and our Super Premium Dreamery, Godiva and Whole Fruit pints, offset by a marginal decline in sales from our base prepackaged consumer products. In the fourth quarter of fiscal 2004, sales increased by 20% to $164,597,000 from $137,678,000 for fiscal 2003. In the fourth quarter of fiscal 2004, drayage and other income declined by 17% to $12,383,000 as compared with $14,991,000 for fiscal 2003. In the fourth quarter of fiscal 2004, revenues from Americana Foods, Eskimo Pie Frozen Distribution and our Super Premium pints represent a full quarter’s activity as compared with approximately two months in fiscal 2003.
Drayage income represents the fees paid to CoolBrands by Dreyer’s/Nestlé to deliver products invoiced to customers by Dreyer’s/Nestlé. If products for which CoolBrands received a drayage fee were accounted for at the equivalent wholesale sales value, CoolBrands’ revenues would have been approximately $188,742,000 for the fourth quarter and $717,735,000 for fiscal 2004.
Gross profit percentage for fiscal 2004 declined to 25% as compared to 38% for fiscal 2003 and the gross profit percentage for the fourth quarter of fiscal 2004 declined to 24% as compared to 34% for the fourth quarter of fiscal 2003. Both percentage declines were due to the impact of normally lower margins generated by Americana Foods’ manufacturing operations and Eskimo Pie Frozen Distribution’s distribution operations. The fourth quarter and full year results of 2004 were additionally impacted by the pre-tax operating losses at Americana Foods LP (50.1% owned) of approximately $2,089,000 and $1,180,000, respectively. These losses were primarily due to plant production losses incurred during the installation of new production lines and the related start-up expenses which occurred in the fourth quarter of fiscal 2004.
Selling, general and administrative expenses for fiscal 2004 declined as a percentage of revenues to 18% as compared to 27% for fiscal 2003. Selling, general and administrative expenses for the fourth quarter of fiscal 2004 declined as a percentage of revenues to 18% from 24% for the fourth quarter of fiscal 2003. The fourth quarter and full year results of 2004 were adversely impacted by $3,684,000 for the pre-tax write-off of the Weight Watchers’ intangible license asset. This write-off was required when the Company was notified by Weight Watchers International on July 28,2004 that the license agreement would not be extended.
The 2004 fiscal year results were adversely impacted by a non-cash pre-tax compensation charge of $8,938,000 which represents the fair value of stock options granted to the Company’s Co-CEO and Co-Chairman during the year. Consistent with recent changes in Canadian GAAP, beginning in fiscal 2005 the Company will expense the fair value of all stock options granted.
Cash and working capital
Cash and short-term investments increased to $84,700 at August 31, 2004 from $30,140,000 at August 31, 2003. Working capital improved to $159,355,000 at August 31, 2004 from $85,734,000. Coolbrands’s current ratio improved to 2.6 to 1 at August 31, 2004 from 2.1 at August 31, 2003. |
