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To: Bill Harmond who wrote (25060)	8/2/2005 1:59:26 PM
From: bob zagorin	Respond to of 57684

i'll be watching...

To: Bill Harmond who wrote (25060)	8/2/2005 5:36:25 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 57684

this is amazing to me. Russell Closes at Record High on Wall St. Tuesday August 2, 5:29 pm ET biz.yahoo.com

To: Bill Harmond who wrote (25060)	8/2/2005 6:11:40 PM
From: stockman_scott	Respond to of 57684

Atkins' diet loses bite _______________________________________________________ by Ashby Jones TheDeal.com 1 Aug 2005 The strong brand recognition that led two prominent private equity firms to invest as much as $500 million in Atkins Nutritionals Inc. nearly two years ago has led to the demise of the company whose name became synonymous with low-carbohydrate dieting. On Sunday, July 31, Atkins made a prepackaged Chapter 11 filing with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, stranding Parthenon Capital Inc. and Goldman Sachs Capital Partners and their 80.1% interest in the company alongside its other creditors. New York-based Goldman Sachs and Parthenon, a Boston-based private equity firm, appeared to be well-positioned to reap big returns when they got their stake in Atkins for between $400 million and $500 million in cash and assumed debt in October 2003. According to sources, Atkins' annual revenues were close to $500 million when the deal closed. But revenues started to slide shortly thereafter. By last September, Ronkonkoma, N.Y.-based Atkins had to lay off 40% of its work force and enlist AlixPartners, a turnaround firm that helped get Kmart Corp. and the U.S. affiliates of Parmalat Finanziaria SpA out of bankruptcy. The moves didn't work. Atkins reported a net loss of $340.9 million in 2004, according to court papers filed Sunday. Ken Harris, the managing director of Cannondale Associates, an Evanston, Ill.-based marketing and sales consultant, said Atkins grew too quickly without diversifying its product offerings. So by mid-2004, when the low-carb diet fad had begun to lose public support, the company had little else to hang its hat on, he explained. "Like Icarus, the company flew too close to the sun," Harris said. "It used the 'Atkins' name to build a marketable and recognizable brand. But when consumer tastes changed, it didn't have anything to fall back on." An Atkins spokesman said on Sunday that the company plans to emerge from Chapter 11 protection by the end of the year. Meanwhile, the company has lined up a $25 million debtor-in-possession financing from prepetition lender UBS Securities LLC priced at UBS' base rate plus 300 basis points. While details of the prepack have yet to be disclosed, the private equity firms will receive the equity of the reorganized company in exchange for a "substantial reduction" of its outstanding debt, according to a statement by Parthenon on Monday. "[Parthenon] is obviously disappointed by the current need to restructure the debt, but we feel this is critical for [Atkins] to continue to [remain operational]," said Parthenon's managing partner, John Rutherford, in the statement. In recent months, Atkins has changed its tune on carbs. It now uses a "net Atkins count" on its products instead of just listing the number of total carbs contained within a product. The "net Atkins count" is based upon a "glycemic index," or a dieter's blood sugar response to foods. Still, analysts are skeptical. "Atkins is still widely associated with a high-protein, high-fat diet," Harris said. "It's going to be very hard for them to break the perception that Atkins is an unhealthy and unappealing crash diet." He added that, by comparison, Kraft Foods Inc. has done a better job of fostering a "healthy lifestyle" perception with the South Beach Diet. Kraft handles the marketing for many of the South Beach diet products. Interim approval to tap into the DIP loan was requested by Atkins on Sunday. Judge Allan Gropper was to consider the request as part of the company's first-day motions. In papers filed on Sunday, the company reported $301 million in assets and $325.1 million in liabilities as of Dec. 31, 2004. Marcia Goldstein of Weil, Gotshal & Manges LLP is debtor counsel.