| To: GVTucker who wrote (968) | 10/17/2005 11:23:55 PM | | From: Lizzie Tudor | | | | | thanks. My thinking was that the brand was worth 300mm, assuming they could survive. Its not like this is a new business model or anything, there is no reason KKD cannot be a successful franchise, come on! Whats wrong with this mgmt. Well anyway today more bad news and as you say, no way to know whats up with the debt. I don't have enough experience to decipher these financials (or the remnants of info on the web as to how their franchisees are doing). You are watching it though, presumably you think there could be an entry at some point (or are you short?). |
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| From: redfish | 10/27/2005 2:26:53 PM | | | | | | | Closed out my 07 2 1/2, not much point in trying to squeeze any more out of them at this stage. |
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| From: redfish | 10/28/2005 9:03:32 AM | | | | | | KKD announced it is looking for a new CEO, hired a new operations manager.
Should get quite a pop when the new CEO is announced. |
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| To: Wowzer who wrote (926) | 11/7/2005 10:35:24 AM | | From: Jon Koplik | | | | 11/3/05 Dow Jones News -- Krispy Kreme Waivers Pave Way For Franchisee Transactions ................
November 3, 2005 2:29 p.m.
Krispy Kreme Waivers Pave Way For Franchisee Transactions
By MARY ELLEN LLOYD
DOW JONES NEWSWIRES
CHARLOTTE -- Krispy Kreme Doughnuts Inc. (KKD) disclosed Thursday that it's working on several transactions that could reduce its exposure to franchisee debt, which has grown in recent months as several operators have struggled.
In a filing with the Securities and Exchange Commission, Krispy Kreme said it has received waivers to its credit agreements, a necessary step to complete its next moves.
The waiver agreements say Krispy Kreme's creditors won't declare a default, which could accelerate repayment deadlines, as a result of several steps under consideration. It was not immediately clear what the creditors would receive in granting the waivers.
An outside spokesman for Krispy Kreme declined to comment on the filing, but company watchers said the agreements appear to give the troubled doughnut maker some financial flexibility.
"The big picture is they're looking to get out of some of these joint-venture agreements they made with franchisees, and especially the financial obligations that are associated with them," said Steven Clark, an assistant professor of finance at the University of North Carolina at Charlotte.
"Certainly all of these amendments they're making are going to reduce the probability that Krispy Kreme itself goes into default, because they're getting out from under some guarantees they made to franchisees," Clark said.
Krispy Kreme shares rose on the news, recently traded at $4.78, up 33 cents, or 7.4%.
In the filing, Krispy Kreme discussed intended deals involving franchises in Canada, Pennsylvania and Australia, all of which had received loans from Krispy Kreme or had loans guaranteed by the troubled doughnut maker. Krispy Kreme has been working nearly a year to restructure its finances amid weakening sales and investigations into its accounting and dealings with franchisees.
The Winston-Salem, N.C., company intends to acquire substantially all of the assets of Kremeko, the developer for eastern and central Canada that filed for protection from creditors earlier this year, according to the filing. In exchange, Krispy Kreme would transfer its indebtedness tied to the franchise to a new subsidiary created later.
Krispy Kreme had guaranteed $17 million in loans to Kremeko, which the Canadian franchisee's creditors tried to tap, and had offered $1.5 million in debtor-in-possession financing for the restructuring. Kremeko in August ended its search for buyers after turning down three bids considered unacceptable, according to filings with the Canadian court.
Krispy Kreme said in the filing Thursday that it intends to give up its equity stake in its Erie, Pa., and Pittsburgh franchises in exchange for the cancellation of $3.4 million in loan guarantees it made on behalf of the developers. The company will, however, make a $300,000 loan to Amazing Glazed LLC, the Pittsburgh area developer, according to the filing.
Krispy Kreme also wants to sell its stake in the Australian and New Zealand developer, KKA Holdings Pty Ltd, back to the developer for approximately A$3.5 million.
Krispy Kreme hasn't filed required quarterly and annual reports with the SEC in more than a year, but its last listing of joint ventures showed the company owned 35% of the Australian developer, 30% of Amazing Glazed and 33% of Amazing Hot Glazers, the Erie developer.
Krispy Kreme also disclosed that it had accounted for some motor fleet vehicle leases as operating leases but has now determined they should have been accounted for as capital leases.
In another part of the filing, lenders agreed to waive any defaults prompted by the failure of Krispy Kreme to disclose a loan of GBP1.2 million to its United Kingdom area developer in its original credit agreement.
Clark said such complicated moves are representative of a company trying to make a financial turnaround.
"In any turnaround situation, what you want to do is identify what is the core part of your business that can be successful," he said. "To some extent, they'd become almost a venture capital fund with all the joint ventures and elaborate financing. My guess is they're trying to get out of a lot of that and scale back to where they started, making doughnuts without all the elaborate financing and joint ventures that go along with it."
In April, Krispy Kreme secured some financial breathing room when it signed three new credit facilities arranged by Credit Suisse First Boston and Silver Point Finance LLC. Proceeds of a $120 million, second-lien senior secured term loan were used to repay Krispy Kreme's previous senior lenders, which included Wachovia Corp. (WB) and BB&T Corp. (BBT), and boost cash reserves.
At that time, Krispy Kreme also obtained a a $75 million first-lien senior secured revolver and a $30 million second-lien prefunded revolver and letter of credit facility for shorter term financing.
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. |
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| To: Jon Koplik who wrote (975) | 3/7/2006 10:12:22 AM | | From: Jon Koplik | | | | WSJ -- Krispy Kreme Names Brewster as New CEO .........................................
March 7, 2006
Krispy Kreme Names Brewster as New CEO
Doughnut Chain Is Trying to Rebound Following Accounting Problems
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
WINSTON-SALEM, N.C. – Krispy Kreme Doughnuts Inc. named Daryl G. Brewster to be its new president and chief executive, as the doughnut maker tries to recover from a spate of accounting problems.
Mr. Brewster joins Krispy Kreme after serving as president of Kraft Foods' North American snacks and cereals unit. He replaces Stephen F. Cooper, who has served as Krispy Kreme's chief executive on an interim basis since January 2005. The appointment is effective immediately, the company said.
Once a trendy and fast-growing doughnut chain, Krispy Kreme hit a rough patch after going public in 2000, as it revealed accounting problems and investigations by several regulators. Last year, its directors forced out longtime CEO Scott Livengood and hired Mr. Cooper to turn around its struggling operations.
"Krispy Kreme has made steady progress in its turnaround and I am confident that it has a solid future of growth and profitability," Mr. Brewster said in a statement.
The Winston-Salem, N.C.-based company said Mr. Cooper, chairman of Kroll Zolfo Cooper LLC, will remain with the company for a transition period, serving as chief restructuring officer. Steven G. Panagos, managing director of Kroll Zolfo, who has been serving as Krispy Kreme's president and chief operating officer, also will stay on in the post of director of restructuring during the transition, the company said.
Mr. Brewster is a 23-year veteran of the food business who has been with Kraft Foods/Nabisco since 1997, Krispy Kreme said. From 2000 to mid-2002, Mr. Brewster was president of Nabisco Biscuit Co., then he took on international responsibilities for Kraft, serving as president for Canada, Mexico and Puerto Rico before assuming his current role in late 2003.
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 company wasn't ready for prime time. An internal report last August found former executives at Krispy Kreme used improper, even "egregious," accounting to satisfy Wall Street's hunger for growth. The report, a 24-page summary of which was made public in a regulatory filing, says the company 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 report 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. 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.
The report, which followed a 10-month investigation of the doughnut maker by a special board committee, didn't directly tie Mr. Livengood to any particular accounting maneuver, but it 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 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.
Krispy Kreme, which was founded in 1937, 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 hundreds of stores across the U.S. and sells doughnuts in thousands of supermarkets, convenience stores, truck stops and other locations.
Write to the Online Journal's editors at newseditors@wsj.com
Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved. |
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| To: Jon Koplik who wrote (976) | 3/8/2006 11:43:12 PM | | From: chris | | | | | Call me when KKD files Ch. 11 will, i will be at Tim Hortons having a coffee and a bagle. Boy would i love to see a good ole fashioned 'squeeze' again. Good luck. |
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| To: Jon Koplik who wrote (976) | 4/14/2006 9:52:09 PM | | From: Jon Koplik | | | | WSJ -- Despite SEC Rules, a Small Amount Of Naked Shorting Appears to Persist .............................
April 13, 2006
Street Sleuth
Despite SEC Rules, a Small Amount Of Naked Shorting Appears to Persist
By AARON LUCCHETTI and KARA SCANNELL
A little more than a year ago, new federal rules changed the way short sellers go about the timeless but much-maligned business of betting on stock declines.
The Securities and Exchange Commission's primary goal with those rules, known collectively as Reg SHO (for short sales), was to clean up abusive practices by some short sellers who trade shares they never actually hold -- a tactic dubbed "naked shorting." Market watchers say the rules have helped combat the practice, but a small band of short sellers persist in flouting the rules in their trading of a few hundred or so stocks.
[Black List]
Shorts, as they are referred to colloquially, have continued to crop up in the news, often in a negative light: Several small companies are waging legal and public-relations battles against some of these bearish traders, and in at least one case the complaining has led to a SEC investigation. Regulators are considering more rules, and NYSE Group Inc.'s New York Stock Exchange plans to fine and censure several brokerage firms for their apparent mishandling of some short sales.
Rule makers are "making some good strides," says Bill Rhodes, who has studied heavily shorted stocks at the research firm he runs, Rhodes Analytics. "But they're still trying to get their hands around some of the issues."
Short sellers pay a fee to a brokerage or other trading firms to borrow shares, then sell them. The goal is to buy the same stock later in the open market once the price has dropped. At that point, short sellers would return the borrowed shares and pocket the difference between their buying and selling prices as profit.
The technique has been used for generations and is popular again amid market uncertainty: "Short interest" at the NYSE -- the number of shares accounted for by shorts who have yet to close out those trades -- stands at 8.2 billion, down 6% from the record last November but double the number in late 1999, near the stock market's peak.
Short sellers can keep overvalued stocks in check, and many professional short sellers, including hedge funds that specialize in the trade, are known for the quality of their research. Some have gotten credit for sounding early warnings on corporate disasters in the making, like Enron Corp.
Some executives at public companies, however, allege that shorts stretch the truth to crush a company's stock. Even more unscrupulous, critics contend, is naked shorting, or shorting a stock without actually borrowing it to deliver to the buyer, usually in violation of securities law.
The SEC's answer to the issue -- Reg SHO -- went into effect in January 2005. Rules from other regulators already in place at the time had not "fully addressed the problems of naked short selling," the SEC said.
Reg SHO holds brokerage firms responsible for locating shares for a short trader rather than just processing the trade on faith that the shares can be delivered to the buyer. The broker either takes the stock out of its own inventory or makes a reasonable assumption it can get the stock elsewhere for delivery to the brokerage firm acting on behalf of the stock buyer.
The SEC regulation also established "threshold" lists, published daily by stock-market operators like the Big Board and Nasdaq Stock Market Inc., to identify stocks that appear to have slipped through the initial safeguard. These stocks are the ones thought to be the target of naked shorts. If at least 10,000 shares and 0.5% of a company's shares outstanding fail to be delivered to buyers for five consecutive business days, that company's stock is added to a threshold list. At that point, any broker that has new short sales that have failed to deliver have to close out the failed trade after 13 business days.
The month Reg SHO was implemented, 371 securities were on the threshold list, according to data provided by Merrill Lynch. Since then, the number has fallen 16%. The decline indicates the rule is having an effect, but skeptics say the presence of more than 300 companies on the list shows more work needs to be done. There are more than 6,000 stocks listed on all the markets that publish threshold lists, many of them small.
At the NYSE, the number of companies on the list has decreased more sharply, to 49 from 78; many are the baskets of stocks or other securities known as exchange-traded funds, says Anand Ramtahal, a vice president at the NYSE's regulation unit.
While some companies come and go from the threshold list, others are "perpetually" on it, says James Angel, associate professor of finance at Georgetown University. "This raises serious questions," he says, about how trades are handled.
The SEC is weighing whether to expand Reg SHO rules to force brokers to cancel some trades on threshold-listed stocks that were made even before the stocks went on the list.
Such a change could affect several heavily shorted stocks like online retailer Overstock.com Inc., Martha Stewart Living Omnimedia Inc. and Krispy Kreme Doughnuts Inc. that have been on threshold lists for several months.
Authorities seem certain that at least some improper trading has continued, though many violations appear to be technical glitches. The National Association of Securities Dealers says it has more investigations of improper naked short sales than in the past, says Steve Luparello, head of the NASD's market regulation. The NYSE's cases against the brokerage firms, expected to be announced in coming weeks, concern firms that allegedly mislabeled short sales on regulatory forms or failed to monitor or verify whether short-selling customers were actually borrowing securities.
Not all the new rules on shorting make it harder to employ the trading strategy. For example, a year ago the SEC also put in place a pilot program eliminating "price tests" on some stocks. The commission soon will decide the fate of those tests, which include the NYSE's "up-tick rule." That stricture prevents a stock from being shorted in a down market, specifically if the current bid is below the stock's previously traded price. Proponents of such rules say they limit runaway market dives. Economists complain the price tests distort the market.
Write to Aaron Lucchetti at aaron.lucchetti@wsj.com and Kara Scannell at kara.scannell@wsj.com
Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved. |
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| To: Jon Koplik who wrote (978) | 5/9/2006 8:37:50 PM | | From: Jon Koplik | | | | Dow Jones News -- Krispy Kreme In Deal To Bring Stores To Middle East ...........................
May 9, 2006 5:43 p.m.
Krispy Kreme In Deal To Bring Stores To Middle East
DOW JONES NEWSWIRES
Krispy Kreme Doughnuts Inc. (KKD) has inked a deal with a Kuwait-based company that will bring approximately 100 of the doughnut chain's stores to the Middle East over the next five years.
The agreement, which gives Americana Group 100% ownership of the franchise in the region, calls for the first Krispy Kreme outlet to open in Kuwait by early fall.
Shares of Krispy Kreme ended the regular session up 2.4% at $10.34.
-William Spain; 415-439-6456; AskNewswires@dowjones.com
Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved. |
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