Ice cream maker CoolBrands International has announced a fall in sales and earnings for the year ended 31 August 2005, following the loss of two brands.
For the year, net revenues declined to US$385m, compared with US$450m for the previous year. The net loss for was US$74m compared with net earnings of US$24m the year before.
Net revenues for the fourth quarter fell to US$124m from US$129m for the same quarter last year. Net loss for the fourth quarter was US$64m compared with net earnings of US$12m for the same quarter last year.
The 2005 results for the fiscal year and fourth quarter were adversely affected by a non-cash pre-tax asset impairment charge of US$56m (nil in 2004), which resulted from the impairment of goodwill and intangible assets related to the company’s frozen dessert and franchising segments.
“Our financial performance for the quarter and full year 2005 reflected the loss of two significant brands, as well as unfavourable industry dynamics throughout the year,” said David J. Stein, president, CEO and co-chairman of CoolBrands International Inc. “Our strategy is to aggressively rebuild and refocus our brand portfolio, including through further development of Breyers Yogurt, in which we acquired both an established brand in a high growth category, and a platform for further refrigerated products brand introductions.”
“Our strategy is being implemented in 2006 in the refrigerated category with an all natural reformulation of Breyers Yogurt, and in the frozen category through the introduction of a broad range of new Godiva Ice Cream offerings, a national rollout of Yoplait Frozen Yogurt and Cereal Bars and the launch of an exciting new line of “better for you” frozen snacks for kids featuring popular Disney characters under license from Disney Consumer Products, our newest licensing partner,” Stein added. “The Disney products will be in innovative forms featuring vitamin fortification and will be introduced in early 2006 at retail outlets nationwide in the US.”
“As part of these rebuilding efforts, CoolBrands is evaluating the potential disposition of various non-core business assets, including its franchising business,” he said. “While the corporation is currently in late-stage discussions on certain such transactions, there can be no assurance that any particular transaction will be effected.”