CoolBrands sustains $4.8 million loss in first quarter
March 15, 2007
by Eric Schroeder
TORONTO — CoolBrands International, Inc. sustained a loss of $4,845,000 in the first quarter ended Nov. 30, which compared with a loss of $4,404,000 for the same period last year.
Net sales for the quarter fell 65% to $7,755,000, down from $22,104,000 in the same period last year. The plunge in sales was attributed to the closing of the Americana Foods L.P. plant in October 2006, lack of promotion of existing products, and service and production issues that adversely impacted sales.
During the first quarter of fiscal 2007, CoolBrands completed the sale of its dairy component segment and substantially all of its direct-store door operations. The transactions generated approximately $12,636,000. CoolBrands also earlier this year sold its food service and yogurt segments to third parties, leaving the company only operating in the frozen dessert category.
"As a result of the proceeds from these sales, the company has sufficient liquidity to fund operations for the foreseeable future," CoolBrands said. "However, the company may not be able to reduce expenses to a level sufficient to make the company’s remaining operations profitable. The company is currently evaluating whether to sell its remaining assets or rebuild the business."