CoolBrands International Inc. reports financial results; enters into commitment letters with JPMorgan Chase
Thursday January 12, 7:22 pm ET
TORONTO, Jan. 12 /CNW/ - CoolBrands International Inc. ("CoolBrands") (TSX: COB.SV.A - News) 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: events.startcast.com and subsequently archived at: www.coolbrandsinc.com and events.startcast.com |
