Andrew McCreath
Coolbrands (A) Sold to Nestle
COB.A-T
DON'T BUY
Jan 17, 2005
Missed their numbers. Won't know by how much until after 5pm Jan 18. The generation of free cash flow will be much lower with the loss of their contracts. On a valuation basis, market would probably jump in at $6.
When they did their "Cash Flow on Enterprise Value" valuation, this one went through the roof. Had about $4 million loss in earnings, but about $6 million in write-offs. All that they lost from Weight Watchers will be re-established with other products and other product lines.
Has never owned this one. Not a favourite. Not sure that the long term earnings growth is there. A bit challenged now that they've lost the Weight Watchers brand.
This one has been a basket case. They know what they need to do, but have been reluctant to do it. There is an asset there so it won't go to zero, but there are better companies out there.
Came on tough times over the last couple of years. It seems they are selling off all of their non-core assets at this time to pay down their debt. Is almost now relatively debt free.
Are buying a company from the founder of Block Buster. They have 60 million in cash and are going to go on an acquisition spree. The company is ok. Have organic growth. This was brilliant.