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Gold/Mining/Energy : Yogen Fruz IT'S ALIVE, IT'S ALIVE -- Ignore unavailable to you. Want to Upgrade?

To: joao bilt who wrote (1664)	5/30/1999 9:05:00 PM
From: telecomguy	Read Replies (1) \| Respond to of 2453

The only issue (& I agree that it's not a small one) is whether the YF mgmt has the ability/experience to move "upstream" into mfg/distribution business as successfully as they were in retail/franchising. Time will tell but it is a bold strategy that they are embarking on. When you are sitting on $20M to $30M cash with no debt, franchising business that was spinning profits/cashflow (at least at the time if Integrated Brands acquisition) and limited growth opportunity in the franchising channel, what else were they going to do with all that cash? Suggestions that they should pay dividends, or buyback shares are ridiculous ideas since YF is not even close to being a mature company. As far as I can see, the only growth opportunity for them was to move upstream, buyout more yogurt distribution/retail outlets and get into the mfg game to leverage their margins. Remember that McCains (Harrison & Wallace McCain?) started out as a small East Coast frozen french fries retailer - they were so succesful selling french fries that they started to grow their own potatoes to increase their margin, and eventually got into all kinds of frozen ready-to-eat packaged foods.....and look where they are now a multi-billion dollar company. I bet if they stayed as a retailer of frozen french fries, they might be out of business right now but they kept on growing at break-neck pace and added products/distribution channels/mfg capacity and then started developing their own brands....This is the type of business model that I am hoping YF is following and if successful, you can guess what the rewards will be.