| To: redfish who wrote (949) | 5/28/2005 1:22:33 AM | | From: Jon Koplik | | | | 47% of KKD shares are now sold short (!) (according to WSJ article, which was not even about this massive short interest).
My own response to the 47% number : Now I know why KKD has been drifting up lately.
Maybe we will have a huge short squeeze (?)
Jon.
**************************************************************
May 27, 2005 3:18 p.m
Krispy Kreme Options Trading Becoming Less Of An Option
By MARY ELLEN LLOYD
Of DOW JONES NEWSWIRES
CHARLOTTE -- Krispy Kreme Doughnuts Inc. (KKD) investors are finding fewer options to hedge their bets on the stock as a result of the company's failure to file financial reports on time.
The Philadelphia Stock Exchange, one of five exchanges that trade options, has ceased trading Krispy Kreme's put and call options after the specialist making a market in the securities decided to delist them, an exchange representative said Friday.
Meanwhile, Philadelphia and three of the other four options exchanges said they won't issue new series of puts and calls because Krispy Kreme has fallen out of compliance with requirements to file timely reports with the Securities and Exchange Commission.
A put option gives an investor the right to sell a set number of shares at a future date for a fixed price, while a call option provides the right to buy shares in the future. The options are typically issued in series based on when the rights expire (in Krispy Kreme's case, for example, it has options that expire in August 2005, January 2006 and January 2007).
Representatives from the Chicago Board Options Exchange, the American Stock Exchange and the International Securities Exchange all said those exchanges are no longer issuing new series for Krispy Kreme. Representatives cited exchange rules that an issuer of the underlying security must file routine reports with the SEC. That means once current options expire, no options will be available for trading unless the company regains compliance and the exchanges issue new series.
A spokesman for the Boston Stock Exchange couldn't immediately comment on new listings but said current Krispy Kreme options are trading as usual, as they are at the other exchanges.
Krispy Kreme hasn't filed a quarterly report since September with the SEC, which is investigating the company's accounting and franchise repurchases. The Winston-Salem, N.C., doughnut maker has said that because of pending restatements, investors should not rely on the company's financial statements going back to its initial public offering in 2000. And it won't predict when it might file its report for the fiscal year ended Jan. 30, a report that was originally due April 15.
A Krispy Kreme representatives couldn't be reached immediately for comment Friday.
For investors, the new restrictions mean fewer choices for hedging any downside risk on Krispy Kreme shares, said Michael Schwartz, chief options strategist at Oppenheimer.
He said it's more common for options to be delisted due to lack of investor interest than due to lack of requirements to file financial reports.
Unless Krispy Kreme regains compliance, its options could disappear altogether eventually, said Chris Johnson, director of quantitative research for Schaeffer's Investment Research, which publishes an options newsletter.
"What's already out there is out there, it's just not going to trade as much," he said.
The restrictions are of particular interest considering Krispy Kreme's shares have always been volatile, and investors may be looking for ways to hedge their bets.
Krispy Kreme is also heavily shorted, with 29 million, or 47%, of Krispy Kreme shares sold short. Short sellers typically borrow shares from a broker and then sell them, hoping to repay the loan later with shares bought at a lower price.
Corporate web site: krispykreme.com
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-371-4033; maryellen.lloyd@dowjones.com
Copyright © 2005 Dow Jones & Company, Inc. All Rights Reserved. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: redfish | 6/14/2005 3:17:07 PM | | | | | | Still holding Jan 07 puts:
LOS ANGELES, June 14 (Reuters) - Shares of Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) slid almost 8 percent on Tuesday, a day after the struggling doughnut shop chain said it lost money in its most recent quarter as sales dropped 17 percent.
The company also said it would delay filing a full report of its financial results for the first quarter ended May 1 due to a pending restatement of results from 2004 and 2005.
"Business conditions remain very poor with no sign of improvement," J.P. Morgan analyst John Ivankoe said in a note to clients. "Continued financial viability of franchisees is a major issue."
Krispy Kreme -- the one-time high-flyer that has been hard-hit by probes into the way it accounted for franchise buybacks as well as by sagging sales of its signature doughnuts -- has not filed any financial statements with the U.S. Securities and Exchange Commission since September.
On Monday, Krispy Kreme said revenue for the quarter was about $153 million, a 17 percent drop from the year-earlier period. Average weekly sales at its doughnut shops fell about 21 percent.
Krispy Kreme also said costs for legal and regulatory matters were hurting its bottom line, and it expects to report a net loss for the first quarter.
The company's stock was down 68 cents at $7.88 in afternoon trade Tuesday on the New York Stock Exchange. Though the shares have climbed since hitting an all-time low of $5.05 in February, they are down 84 percent from their 2003 all-time high of $49.74.
yahoo.reuters.com
mtfh56834_2005-06-14_19-07-36_n14184944_newsml |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: redfish who wrote (951) | 7/29/2005 9:37:12 AM | | From: Jon Koplik | | | | Dow Jones News -- Wendy's Plans IPO to Sell A Stake in Tim Hortons Unit ...........................
July 29, 2005
Wendy's Plans IPO to Sell A Stake in Tim Hortons Unit
DOW JONES NEWSWIRES
Wendy's International Inc. plans to sell 15% to 18% of its Tim Hortons coffee and doughnut chain and sell some Wendy's restaurants and real estate as part of a broad restructuring plan aimed at slowing growth in favor of improving returns.
Shares of Wendy's surged ahead of the market open Friday, hitting about $51 in pre-market trading, according to Inet, up 13% from Thursday's close of $45.27.
The Dublin, Ohio, operator and franchisor of fast-food restaurants said it plans to hold an initial public offering for the stake in Tim Hortons within the next nine months and use the proceeds to repurchase its own shares. Wendy's, which is the third biggest fast food chain in the U.S. behind McDonald's Corp. and Burger King, didn't indicate how much it expects to make from the IPO.
In addition, Wendy's plans to reduce the percentage of company-operated Wendy's restaurants to 15% to 18% from 22%, selling stores to franchisees, in an effort to improve operating margins. The company also plans to close 40 to 60 money-losing restaurants and sell 217 properties it leases to franchisees.
Wendy's anticipates the net impact of the actions on earnings to be neutral or slightly positive.
Wendy's also plans to slow new-store development in the U.S., citing rising real-estate and building costs. Starting in 2006, the company will open 30 to 40 new stores a year after opening, on average, 71 a year over the past four years. The company anticipates saving $50 million to $60 million a year in capital expenditures.
Wendy's currently has 5,935 Wendy's restaurants, with the company operating about 22%, or roughly 1,306. Based on its plan to reduce the percentage of company-operated stores to 15% to 18%, the company must dispose of 237 to 415 stores.
In Canada, Wendy's plans to close "certain underperforming units" and limit development to the most profitable areas. There are 384 Wendy's in Canada, 154 of them company-operated.
Wendy's said any charges associated with store closings will be offset by gains from the planned real-estate sales.
A day earlier, Wendy's said its second-quarter profit declined slightly from last year, weighed down by higher beef costs and continued fallout from a false claim by a woman who alleged she found a finger in her chili in March.
Write to Dow Jones Newswires editors at asknewswires@dowjones.com
Copyright © 2005 Dow Jones & Company, Inc. All Rights Reserved. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (2) |
|
| To: Jon Koplik who wrote (952) | 7/31/2005 1:07:37 PM | | From: Jon Koplik | | | | NYT -- Wendy's Moving to Spin Off Its Canadian Doughnut Chain .........................
July 30, 2005
Wendy's Moving to Spin Off Its Canadian Doughnut Chain
By IAN AUSTEN
OTTAWA, July 29 - Ask Canadians about their national icons and many will name one very odd one: the Tim Hortons chain of doughnut and coffee shops.
So Friday's announcement that 10 years of control by an American company, Wendy's International, might be coming to a close was met in Canada with a great deal of interest.
"It's good to hear that Tim's will possibly be coming back to being a Canadian operation," said Ken Smith, a government employee, as he sat down for an apple fritter and an iced cappuccino at a Tim Hortons in central Ottawa.
Praise for the announcement that Wendy's, which is based in Dublin, Ohio, will offer 15 to 18 percent of Tim Hortons, which is formally known as the TDL Group, also came from investors in the United States. Several major shareholders have argued that Tim Hortons has been undervalued while it has been part of Wendy's, which acquired the company 10 years ago from one of its founders.
"We're very pleased with today's announcement," said William A. Ackman, managing member of Pershing Square, a hedge fund that owns 9.9 percent of Wendy's shares. "We look forward to seeing management's successful execution of its plan."
David Kolpak, an analyst with Victory Capital Management in Cleveland, said that Wendy's management had proven itself responsive to investors.
"This really reverses a strategy of building a portfolio of brands," said Mr. Kolpak, who is a Wendy's shareholder and whose employer holds about 300,000 Wendy's shares on behalf of clients. "That's not an easy thing for senior management to do."
Wendy's has considered spinning off Tim Hortons, which is based in Oakville, Ontario, on at least three occasions since 2000.
But John T. Schuessler, the chief executive of Wendy's, the third-largest fast food chain in the United States, said that several factors had come together recently to finally make it an opportune time for the partial divestment.
One factor, he said, is that the two brands are increasingly becoming competitors.
"We really believe that the two brands are moving apart," Mr. Schuessler said during a conference call with analysts and investors on Friday. "Tim's is growing faster; Wendy's is maturing. Tim's entered into the lunch space; Wendy's is entering into the cold sandwich space."
A changed investment environment in Canada, the most likely source of Tim Hortons investors, also played a role. Canadian laws that limited the ability of pension funds to invest in companies incorporated outside the United States, which will be the case with Tim Hortons, were lifted on July 1.
Mr. Schuessler said he hoped that the initial public offering would be completed by next March and that it was likely that Wendy's would completely divest itself of Tim Hortons over the next two years.
The company did not say how much money it expected to receive from the public offering. But an evaluation by the Blackstone Group, an investment bank, commissioned by Pershing Square, estimated that the Canadian chain was worth $3.9 billion to $4.6 billion.
Wendy's shares rose $6.43, or 14 percent, to $51.70 a share.
Tim Hortons customer loyalty and market domination is without a direct parallel in the United States. The chain holds about 70 percent of the country's coffee market and 26 percent of all fast food sales. There is one Tim Hortons outlet for every 12,800 Canadians. Mr. Kolpak estimates that is about four times the market penetration of McDonald's restaurants in the United States.
Riva D. Atlas contributed reporting from New York for this article.
Copyright 2005 The New York Times Company. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: Jon Koplik who wrote (890) | 8/1/2005 1:14:48 PM | | From: Jon Koplik | | | | Reuters -- Atkins Nutritionals files for bankruptcy ..................................
I am so happy !
What a bunch of douche bags !
Jon.
**************************************************************
Mon Aug 1, 2005 9:57 AM ET
UPDATE 2-Atkins Nutritionals files for bankruptcy
(Adds details from company's statement)
CHICAGO, Aug 1 (Reuters) - Atkins Nutritionals Inc., the company behind the low-carbohydrate Atkins Diet craze, has filed for Chapter 11 bankruptcy protection, blaming slumping demand and increased competition.
The company, which filed for bankruptcy on Sunday in the U.S. Bankruptcy Court in New York, said there was still a bright future in weight loss and nutrition and it would focus on nutrition bars and shakes.
The Atkins diet, based on the research of Dr. Robert Atkins, promotes eating protein over carbohydrates and was so popular from 2002 through early 2004 that it was blamed for the bankruptcies of several pasta and bakery companies.
In its heyday, the company listed Goldman Sachs among its backers and analysts predicted an initial public offering. Its trademark red "A" logo appeared on a range of packaged foods and was featured in advertising for Subway sandwich stores.
But Atkins Nutritionals said demand began to slump in the second half of 2004 and rival products flooded the marketplace, prompting the company to restructure and replace its management team.
The death of company founder Robert Atkins after a fall in April 2003 led to a spate of negative publicity when the public learned that he had been overweight.
Critics have argued that the high-protein diet encourages people to eat too much fatty food like bacon, and could pose health risks. One man sued the company last year claiming that the diet caused him severe heart disease. Atkins Nutritionals has maintained the claim is without merit.
For the 12-month period ended Dec. 31, 2004, Atkins said it had total assets of $301 million and liabilities of $325.1 million, according to court documents. For the same period, it recorded a loss of $340.9 million, including an asset impairment charge.
The company said it secured $25 million in debtor-in-possession financing arranged by UBS. Five other potential lenders refused to extend credit to the company, Atkins Nutritionals said in its filing.
Atkins said the "overwhelming majority" of its lenders had agreed to a prearranged plan to restructure its debt, and it would file a reorganization plan shortly for bankruptcy court consideration. Its lenders have agreed to receive equity in the company in exchange for reducing debt, the company said in a statement.
© Reuters 2005. All rights reserved. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: redfish who wrote (953) | 8/10/2005 10:11:00 AM | | From: Jon Koplik | | | | WSJ -- Krispy Kreme will likely incur charges of $25.6 million to restate earnings for the past few years.
[My own immediate reaction to that headline : "You mean ... that's all ???"]
**************************************************************
August 10, 2005 10:03 a.m.
Krispy Kreme to Restate Several Years of Earnings
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
A special committee formed by Krispy Kreme Doughnuts Inc. found the company "failed to meet its accounting and financial reporting obligations," with the former chief executive and chief operating officer culpable, ending an internal investigation into accounting irregularities that spurred two federal probes.
The committee also recommended that Krispy Kreme, Winston-Salem, N.C., restate earnings downward by $22.2 million for 2001 through 2004, and by $3.4 million for previous years.
"The Krispy Kreme story is one of a newly public company, experiencing rapid growth, that failed to meet its accounting and financial reporting obligations to its shareholders and the public," the panel said in its report. "While some may see the accounting errors discussed in our summary as relatively small in magnitude, they were critical in a corporate culture driven by a narrowly focused goal of exceeding projected earnings by a penny [per share] each quarter.''
Krispy Kreme isn't publicly releasing the committee's report, but has made copies available to the Securities and Exchange Commission and the U.S. Attorney of the Southern District of New York, both of which are actively investigating the company's accounting and disclosure practices.
In a news release Wednesday, the committee, deputized by the doughnut maker's board after the accounting problems surfaced, said former Chief Executive Scott Livengood and his aide, John Tate, bear most of the responsibility for accounting irregularities that "strongly suggest an intent to manage earnings."
Several lawsuits have been filed against Krispy Kreme, including one that alleges workers lost millions of dollars in retirement savings because executives at the company hid evidence of declining sales and profits.
The accounting probes have taken a toll on Krispy Kreme's once highflying stock, which hit $49.37 a share in August 2003. In Wednesday morning trading, shares were up 4.2% at $7.45 on the New York Stock Exchange.
Write to the Online Journal's editors at newseditors@wsj.com.
Copyright © 2005 Dow Jones & Company, Inc. All Rights Reserved. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: redfish who wrote (957) | 8/11/2005 1:49:22 AM | | From: Jon Koplik | | | | Long WSJ article on report on Krispy Kreme ...........................................
August 11, 2005
Report Shows How Krispy Kreme Sweetened Results
Panel Says Doughnut Maker Used 'Egregious' Practices, Blames Ex-CEO, Directors
By MARK MAREMONT and RICK BROOKS
Staff Reporters of THE WALL STREET JOURNAL
Former executives at Krispy Kreme Doughnuts Inc. who oversaw its rise from a regional chain to a highflying sensation used improper, even "egregious," accounting to satisfy Wall Street's hunger for growth, according to a sweeping internal report from the company.
The report, which followed a 10-month investigation of the doughnut maker by a special board committee, provided fresh details of how a team led by former Chief Executive Scott A. Livengood fudged financial results during the company's meteoric rise starting in the late 1990s. The report marked the company's clearest account yet of its financial and governance shortcomings, which first surfaced last year and led to the ouster of Mr. Livengood and other senior executives.
After going public in 2000, Krispy Kreme sought to capitalize on Wall Street's appetite for growth stocks at the end of the stock-market boom. But the doughnut maker wasn't ready for prime time. The report, a 24-page summary of which was made public in a regulatory filing yesterday, says it lacked internal controls, didn't employ a general counsel for a two-year period and hired three chief financial officers in four years -- including one who told the panel he wasn't comfortable in the job.
"The Krispy Kreme story is one of a newly public company, experiencing rapid growth, that failed to meet its accounting and financial reporting obligations to its shareholders and the public," the report said.
Though the report stopped short of accusing former executives of outright fraud, it included a strong condemnation of the former management team led by Mr. Livengood, as well as the company's outside directors, noting that senior managers "were profiting greatly" from questionable accounting.
Indeed, the panel said Krispy Kreme's woes stemmed in part from a common 1990s-era practice: Setting earnings-per-share targets for Wall Street analysts and then pushing to beat them by a penny. The panel noted that executive bonuses were tied to exceeding those growth targets.
"While some may see the accounting errors...as relatively small in magnitude, they were critical in a corporate culture driven by a narrowly focused goal of exceeding projected earnings by a penny each quarter," the report said.
Among other things, the panel slapped Mr. Livengood for what it said was his abuse of corporate aircraft, reporting that in two years he racked up at least $320,000 more in personal-flight costs than was permitted by the board, while company filings hid the true costs from shareholders.
It highlighted the company's decision to spend $500,000 to sponsor a "storytelling festival" in the hometown of Mr. Livengood's wife. Part of the money came from a "brand fund" paid for by franchisees, some of whom have criticized the spending as a waste of money for Mr. Livengood's personal benefit.
The panel also described several methods that it said were used to boost results. For instance, it said Krispy Kreme improperly boosted profits by shipping high-margin doughnut-making equipment to franchisees -- long before they wanted or needed it.
Though the company would book revenue, some of that equipment would then sit unused for months in trailers controlled by Krispy Kreme, and franchisees didn't have to pay until it was actually installed, said one person familiar with the probe's findings.
In another deal cited in the report, Krispy Kreme sold costly equipment to a franchisee and booked it as revenue -- immediately before it bought the same company for a price that was inflated by the cost of the equipment.
The committee said it has turned over its full report, for which it said it interviewed more than 100 people, to federal officials, who are conducting criminal and civil investigations of Krispy Kreme's accounting.
It also ordered a board shake-up, saying that a "substantial majority" of new directors are needed. The board, it said, approved big acquisitions based on little more than what it called "back-of-the-envelope" calculations by executives, failed to oversee management with "an appropriately skeptical eye," and was "distracted" by the company's apparent success and Mr. Livengood's charisma.
The panel didn't directly tie Mr. Livengood to any particular accounting maneuver, but criticized him for setting aggressive growth targets and being "too focused on meeting and exceeding" Wall Street expectations, while disregarding "essential requirements of public company stewardship." Mr. Livengood remained a consultant after being forced out in January, but yesterday the panel said it cut off the former CEO's monthly pay and medical benefits in May after he stopped cooperating with its probe.
Mr. Livengood declined to comment yesterday. An attorney who is representing him, F. Joseph Warin, said he and his client were "pleased" that the committee had finished its work and that "the report specifically stated that no employee said that they participated in or were directed to manage earnings."
He added, "We strongly disagree with the subjective speculation of the report. Mr. Livengood devoted his heart and soul to Krispy Kreme."
Besides blaming Mr. Livengood, the panel singled out John W. Tate, the company's former chief operating officer. The panel said Mr. Tate "appears to have been directly involved in inappropriate efforts to increase or accelerate the recognition of revenue."
Mr. Tate resigned in August 2004 and is now executive vice president and chief operating officer at Restoration Hardware Inc., a retailer in Corte Madera, Calif. David Siegel, a Los Angeles attorney who represents Mr. Tate, said the former chief operating officer "denies any wrongdoing."
The report marks an ugly postscript to the career of Mr. Livengood, who started at Krispy Kreme as a personnel trainee and became its CEO in 1998. As CEO, he recounted that while growing up not far from the company's Winston-Salem, N.C., headquarters, he was such a fan that he ordered a plate of chocolate-covered, cream-filled Krispy Kremes for his 16th birthday. At his 2002 wedding, he served a cake made of 720 doughnuts.
It is also a blow for Krispy Kreme itself. Founded in 1937, the chain had fewer than 100 stores in 1996 when it opened its first Manhattan store, which helped catapult its glazed doughnuts to cult status and fuel rapid growth. Today it has 420 stores in 45 U.S. states and five other countries and sells doughnuts in thousands of supermarkets, convenience stores, truck stops and other locations.
The panel's findings show that recent reforms intended to clean up business practices haven't penetrated all executive suites and boardrooms. The bulk of the accounting problems at Krispy Kreme occurred after passage of the 2002 Sarbanes-Oxley Act, which was intended to strengthen corporate governance.
But Charles Mulford, an accounting professor at Georgia Institute of Technology in Atlanta, said the special committee's sharp criticism of Messrs. Livengood and Tate and its move to reshape the board reflected a new push by companies "to build a wall between themselves and former officers" who allegedly use aggressive accounting.
"They're doing it to preserve as much shareholder value as possible, but also to try to mitigate possible penalties from regulators," Mr. Mulford said.
New management led by turnaround specialist Stephen F. Cooper has been struggling to fix Krispy Kreme amid tumbling sales and signs of franchisee financial distress. The company hasn't filed any financial reports in nearly a year, and is unlikely to file its restated financials for at least several more months.
As a result of the probe, Krispy Kreme said yesterday it would have to restate its results downward back to before it first went public in 2000, slicing an estimated $25.6 million from pretax profits over the years. Of that, $22.2 million would be backed out of pretax profits from fiscal year 2001 through fiscal 2005's third quarter, which ended last October, about 9% of the $241.9 million in pretax profits originally reported over that period.
Krispy Kreme shares, which hit a high of $49.37 in August 2003, rose 15 cents, or 2.1%, to close at $7.30 in 4 p.m. New York Stock Exchange trading.
The company faces numerous lawsuits, including a shareholder lawsuit claiming that it overpaid for franchises and misrepresented its sales slowdown. In an unusual move, the board's special committee said it "will not seek the dismissal of claims asserted" in shareholder suits against Messrs. Livengood, Tate and another former executive, citing "serious concerns about their discharge of their management duties."
Some shareholders burned by the problems at Krispy Kreme said they hope the boardroom changes pushed by the special committee will help the company turn itself around. "I think this will have a sobering effect on those who are left," said Don Hodges, co-manager of Hodges Fund, a mutual fund in Dallas, which took a loss on its stake in the doughnut maker but started buying shares again in March. "They've got a great name that's known all across the country. It's a shame they drug it through the mud."
The special committee probe was led by two outside directors who joined the board late last year, Michael Sutton and Lizanne Thomas. Mr. Sutton is a former chief accountant of the Securities and Exchange Commission. Ms. Thomas is a partner in the Atlanta office of law firm Jones Day. Attorneys from the law firm of Weil Gotshal & Manges LLP served as outside counsel to the committee.
Write to Mark Maremont at mark.maremont@wsj.com and Rick Brooks at rick.brooks@wsj.com
Copyright © 2005 Dow Jones & Company, Inc. All Rights Reserved. |
| | Krispy Kreme Doughnuts, Inc. (KKD) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| |
