Markham, Ontario-based CoolBrands International Inc, marketer of Eskimo Pie® branded frozen novelties and frozen dessert products, has posted revenues for the Q2 ended 28 February 2002 up 23% to US$41m from US$33.3m year on year.
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Net earnings for the Q2 of fiscal 2002 were US$3.6m (US$0.08 net earnings/share) as compared with net earnings of US$1.8m (US$0.04 net earnings/share) for the same period last year, an increase of 98%. Earnings before income taxes were US$5.29m, up 48% on earnings before income taxes of US$3.5m for the same period last year.
Revenues for the six months ended 28 February 2002 were US$87.86m, up 46% from US$60.26m for the same period last year. Net earnings for the H1 of fiscal 2002 were US$5m (US$0.11 net earnings/share) as compared with US$2.1m (US$0.05 net earnings/share) for the H1 of fiscal 2001, an increase of 140%. Earnings before taxes for the H1 in the current fiscal year were US$7.47m as compared with US$4m for the H1 last year, an increase of 84%.
Effective 1 September 2001, the company adopted the new recommendations of the Canadian Institute of Chartered Accountants in accounting for goodwill and other intangible assets. As a result of this change, beginning with the Q1 fiscal 2002, Coolbrands no longer amortizes goodwill. Due to the exclusion of such amortization of goodwill, net earnings last year would have increased by US$518,000 (US$0.01/share) for the Q2, and US$842,000 (US$0.02/share) for the H1. Net earnings in 2002 thus reflect an increase of US$1.3m or 55% for the Q2, and US$2.1m or 71% for the H1, as compared with adjusted net earnings for the same periods in 2001.
Excluding amortization of goodwill, earnings before income taxes last year would have increased by US$829,000 for the Q2, and US$1.3m for the H1, year on year. Earnings before income tax in 2002 thus reflect an increase of US$890,000, or 20%, for the Q2, and US$2m, or 38% for the H1, over the same periods of the prior year, after adjusting for the exclusion of amortization of goodwill.
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By GlobalDataRevenues increased due to an increase in sales of US$7.8m, or 26%, to US$38.3m as compared with US$30.5m for the same period last year. This increase was primarily due to increased prepackaged consumer products sales.
Q2 operating results reflect an increase in gross profit dollars of US$2.8m, primarily due to the increase in sales. Selling, general and administrative expenses increased by US$1.7m, due primarily to increased expenses associated with the increased sales activity, but declined to 30.7% in 2002 from 32.8% as a percentage of revenues as compared with the Q2 of 2002.
Commenting on the results, David J. Stein, president and Co-CEO of CoolBrands, stated: “Robust growth in revenues and earnings during the Q1 and Q2 reflects the fundamental strength of the company’s business model combined with increasing customer demand for the company’s products.
“Coolbrands is currently introducing a wide range of new products in the US, primarily under the Weight Watchers® Smart Ones® brand, which have gained virtually universal acceptance by the retail trade. Initial takeaway by consumers causes us to be extremely optimistic regarding continued growth prospects during the Q3 and Q4, which constitute our prime selling season.”
