Krispy Kreme Grows up!

[stubeeef]

KK finally got rid of their cancer, Scott Livengood their X CEO/President/ and COB got canned (http://biz.yahoo.com/ap/050118/krispy_kreme_livengood_20.html) !

I used to work for the company, I left in 2001 because it was intolerable, and Mr Scotty boy was high on the list of ego maniacs. It also turns out there has been lots of hanky panky in the top offices.

Anyway now that he has all but bankrupted the company, he can leave with his millions while the common hardworking good local types at KK hope to keep their jobs to pay the mortgage!

The incoming "cleanup" crew is also the group "cleaning up" the likes of Enron, and federated. When this group comes in it all but guarantees a bankruptcy filing. So the ole golden barge (20million dollar Falcon 900) to fly scotty boy about is on the sales floor as well as the common mans lear 60 (7-8 million dollar jet). Some or all pilots can expect to lose their jobs soon, unless they get lucky.

Mr livengoods riegn was like a mini enron, worldcom, money for his friends and family and screw the investor. Piece of work! Good riddens!

[jsw]

I'm glad to see him go, sorry to see the probable effects on the regular workers there. KK was hot, hot, hot and just blew it. KK donuts in the grocery store? Insane. Their appeal - their only strong appeal - was the ability to get them fresh off the conveyor (and man, they are still tasty then). Branching out killed them. Honestly, they weren't that good at all two days later after buying them at a fundraiser or at the store - or probably even 20 minutes after being made.

[stubeeef]

It was funny, when they went public (yes I got the stock at $21/share before the 2 splits) I was like a celebrity as one of the pilots. It was fun. But the success of things had these guys duped in to thinking they had invented business, franchising, and doughnuts. Their heads blew off. Livengood dumped his wife and kids for one of the executives/officers of the company, she gave up her daughter and paid her x $1 million to say goodbye.

Then these guys/gals would drive a 2 tenths of a mile just to park in front of the airplane! Now I was not just a luggage monkey, but also a valet parker. I would be running like crazy on each stop to wash out the wine glasses!!!!! It was unbelievable. After I left they got a huge falcon 900 to fly to asia with at 3k per hour ++, had a nearly 5 million dollar a year flight department, but profits weren't 20mil a yr! DUHH!

The shame is the local hard working stiffs that have gotten jobs there while being laid off from the textile and furniture industry here, and are now asking themselves what can happen next. It is a real shame.

KK was similar to Apple, they had awesome branding, a unique hard to find product that you paid a premium for. Now they are cold sugar dough at the gas station. It will be a classic study at every good biz and marketing school.

[Sun Baked]

Lesson of the old Boston Market, Rally's, Enron, etc.

When the stock is rocket ship hot, don't stick around too long.

Especially if the revenue growth is fueled soley by expansion.

It cannot be sustained, and the only bet you can make on the stock is whether they will file bankruptcy or land the thing before the debt catches up to them.

---

People told me the thing was like Harley, and I kept telling them is smelled like chicken/burgers (Boston Market/Rally's.)

There used to be cleanup crews that specialized in reducing debt and bringing companies back to health, but these days it seems like they just part the corpse out.

Boston Market was saved by McDonald's, in the Phoenix valley only one Rally's remains open.

KK may file bankruptcy and get rid of all the stockholders and be taken over by the bondholders -- all depends on what type of rat's nest the previous management was hiding.

Hopefully they didn't play shell games with the debt load.

[Chip NoVaMac]

I'm glad to see him go, sorry to see the probable effects on the regular workers there. KK was hot, hot, hot and just blew it. KK donuts in the grocery store? Insane. Their appeal - their only strong appeal - was the ability to get them fresh off the conveyor (and man, they are still tasty then). Branching out killed them. Honestly, they weren't that good at all two days later after buying them at a fundraiser or at the store - or probably even 20 minutes after being made.

Amen to warm KK's.

Though it brings back bitter sweet memories for me. Haven't had much opportunity (and sad to say the desire) after 9-11. For a few months or so before 9-11 I sat in my suite at the Millennium Hilton looking down on the workers going to work with warm KK's by my side. Sure I bought some at the grocery store, but not the same when they are warm.

[Chip NoVaMac]

It was funny, when they went public (yes I got the stock at $21/share before the 2 splits) I was like a celebrity as one of the pilots. It was fun. But the success of things had these guys duped in to thinking they had invented business, franchising, and doughnuts. Their heads blew off. Livengood dumped his wife and kids for one of the board members, she gave up her daughter and paid her x $1 million to say goodbye.

Then these guys/gals would drive a 2 tenths of a mile just to park in front of the airplane! Now I was not just a luggage monkey, but also a valet parker. I would be running like crazy on each stop to wash out the wine glasses!!!!! It was unbelievable. After I left they got a huge falcon 900 to fly to asia with at 3k per hour ++, had a nearly 5 million dollar a year flight department, but profits weren't 20mil a yr! DUHH!

The shame is the local hard working stiffs that have gotten jobs there while being laid off from the textile and furniture industry here, and are now asking themselves what can happen next. It is a real shame.

KK was similar to Apple, they had awesome branding, a unique hard to find product that you paid a premium for. Now they are cold sugar dough at the gas station. It will be a classic study at every good biz and marketing school.

Thanks for the insight. It shows the lack of responsibility of shareholders to hold the execs to the fire for real results.

[virividox]

all i care about is whether or not i can still get my kk

[Lyle]

Well, fine then. I'm now going to have to stop by Krispy Kreme on the way to work and pick up a dozen glazed. ;)

Our funny (to us) Krispy Kreme story is that when they started selling them at Harrod's Department Store (in London), it received some news coverage here in the U.S. So we were sitting there, watching the evening news of the crowd gathered at Harrod's to buy the first Krispy Kremes and there, right in the middle of things, was our sister-in-law with donut in hand. We called her up the next day to let her know she was an international celebrity. ;)

[evoluzione]

Krispy Kremes are awesome, so much better than Dunkin Donuts.

soundslike a good thing that's happened, and i only hope they'll bounce back bigger and better than before.

[gwuMACaddict]

company was in a tough spot though, with all the low-carb diet crap... donuts dont do well in those type of diets.

they just opened a KK in dupont circle here in dc about a month ago. sooooooooo ymmy :D

[wdlove]

Krispy Kremes are awesome, so much better than Dunkin Donuts.

soundslike a good thing that's happened, and i only hope they'll bounce back bigger and better than before.

Yes, they are delicious. My wife and I visited several months ago. When we walked into the store we got to sample a donut fresh and hot wright off the assembly line. We bought a sampler box, they were still good after warmed up in the microwave. It's nice to have a treat once in a while.

I just don't understand why a CEO that ruins a company gets a large severance package. Certainly no incentive fro a CEO to do well.

[xsedrinam]

A family, close friends of ours, has a son who suffered an Aneurism in the brain and a near fatal stroke about 3 years ago. We all thought he was not going to make it. About two weeks after the crisis, their son, still in the hospital, head bandaged after two surgeries, only able to move his right hand, was conscious but that was about it. He couldn't speak but could nod his head that he could understand them. So they placed a writing pad in front of him, gave him a pen, and asked him to write down anything they could get him. They were still not certain if there had been severe brain damage along with motor damage, but held their breath as he grasped the pen in his right hand and slowly but deliberately penned two words on the pad. "Krispy Kreme". That was a happy moment for the whole family.

The son is finishing up his Sophomore year in HS this Spring and is once again, an Honor Student.
X

[Lyle]

A family, close friends of ours, has a son who suffered an Aneurism in the brain and a near fatal stroke about 3 years ago. We all thought he was not going to make it. About two weeks after the crisis, their son, still in the hospital, head bandaged after two surgeries, only able to move his right hand, was conscious but that was about it. He couldn't speak but could nod his head that he could understand them. So they placed a writing pad in front of him, gave him a pen, and asked him to write down anything they could get him. They were still not certain if there had been severe brain damage along with motor damage, but held their breath as he grasped the pen in his right hand and slowly but deliberately penned two words on the pad. "Krispy Kreme". That was a happy moment for the whole family.

The son is finishing up his Sophomore year in HS this Spring and is once again, an Honor Student.Good grief. Don't you imagine that this family could get, like, a lifetime supply of Krispy Kreme donuts if that kid would make a commercial for them or something? ;)

P.S. All kidding aside, I'm glad to hear that he is doing so well now.

[m-dogg]

Krispy Kremes are awesome, so much better than Dunkin Donuts.


Maybe, but KK has got nothin' on D&D coffee!!!

[stubeeef]

A family, close friends of ours, has a son who suffered an Aneurism in the brain and a near fatal stroke about 3 years ago. We all thought he was not going to make it. About two weeks after the crisis, their son, still in the hospital, head bandaged after two surgeries, only able to move his right hand, was conscious but that was about it. He couldn't speak but could nod his head that he could understand them. So they placed a writing pad in front of him, gave him a pen, and asked him to write down anything they could get him. They were still not certain if there had been severe brain damage along with motor damage, but held their breath as he grasped the pen in his right hand and slowly but deliberately penned two words on the pad. "Krispy Kreme". That was a happy moment for the whole family.

The son is finishing up his Sophomore year in HS this Spring and is once again, an Honor Student.
X

You ought to send that to KK!

[xsedrinam]

You ought to send that to KK!

Didn't occur to me, but since there have been a couple of suggestions to do so, I sent it in to KK. I'll post any reply they might make.
X

[Koodauw]

It doesnt surprise me that Livengood is now gone. I never got caught up in the whole KK frenzy though. We have a family run Kosher doughnut shop by house. I much prefer to eat there. AND I DO!


mmmmmmmmmmmmmm......... doughnuts.

[cb911]

so KK isn't going out of business is it? :eek:

i haven't even had a chance to try one yet... they're only just making their way over to Australia, with only one store in Sydney now (with more planned). i did hear that they're going to be opening one in Brisbane, i really hope that still goes ahead. they sound like some damn tasty doughnuts, judging from all the hype i've heard. :D

[stubeeef]

so KK isn't going out of business is it? :eek:

i haven't even had a chance to try one yet... they're only just making their way over to Australia, with only one store in Sydney now (with more planned). i did hear that they're going to be opening one in Brisbane, i really hope that still goes ahead. they sound like some damn tasty doughnuts, judging from all the hype i've heard. :D

They won't go out of business, even Enron didn't, but expect Bankruptcy and scandal.

[stubeeef]

Well it turns out that ole scotty boy (X ceo) got a sweetheart golden parachute to the tune of 6 million. and the stock is falling again to day. The company once had a market cap near 3 billion, is now in the 550 million range-a loss of 2.5 billion, at $4 per dozen that is 625 million dozen or 7.5 billion doughnuts.

I just read an article about the new acting ceo, and it turns out enron my be being dissolved afterall? This guy, cooper profited about 60mil on junking enron, so kk maybe out of one pot just to fall in the fire. I hope not for the employees sake.

[Sun Baked]

I just read an article about the new acting ceo, and it turns out enron my be being dissolved afterall? This guy, cooper profited about 60mil on junking enron, so kk maybe out of one pot just to fall in the fire. I hope not for the employees sake.The true turn around crews are few and far between...

They used to come in and pay down debt, and right the ship by slashing the bleeding units. All based on a lower revenue target before handing them off to somebody else. Of course this destroys the stock price for an extended period, especially the old rocket stocks.

Apple is a good example of this type of repair, and it's stock sucked for a long time.

But that doesn't goose the stock as much as fixing them just enough to sell them off to somebody else.

Not as profitable as parting them out.

Not as profitable "personally" as tossing a company into BK, and handing it over to the bondholder while ejecting all the shareholders. Some of these crews that do that get paid quite well.

Most of the "turn around crews" come in not to maximize the profit to the shareholders, but to maximize the return to the bondholders.

[relimw]

company was in a tough spot though, with all the low-carb diet crap... donuts dont do well in those type of diets.


You've just got to get them before they go thru the glazer :)
Since finding out that I was diabetic, missing my weekly dose of KK has been horrible. At least by grapping them before they go thru the glazer, I shave off 70% of the sugar :)

[stubeeef]

Well here is a little update on the cleanup.

Remember the ceo "retired" <read-booted> as he prepares for court battles (enron, worldcom, ....).

Well the cleanup crew that was lauding the cash flow is saying they are short of cash and has sold 1 company jet for $30million ( a loss ) and now they are slashing the good ole folks jobs. I hope Livengood fries for this greed and deception.

glazed over link (http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=10&u=/nm/20050208/bs_nm/leisure_krispykreme_dc)

Last month, Krispy Kreme averted defaulting on a $150 million credit facility after its lenders agreed to give it until March 25 to prepare its financial statements.

By that time, Krispy Kreme will need additional credit, the company said in a statement. But it said there can be no assurance it will reach an agreement with its banks or that it will secure such funding.

The Winston-Salem, North Carolina company is in the process of restating its 2004 financials due to errors in the way it accounted for repurchases of franchises. It therefore has been unable to file its most recent results with the U.S. Securities and Exchange Commission (news - web sites).

Krispy Kreme, suffering from sluggish sales of its signature doughnuts, also said it is cutting 25 percent of the jobs in its corporate, mix plant, equipment manufacturing and distribution facilities to save $7.4 million a year.

[Sun Baked]

Low on cash, and has a rather amazingly low amount on-balance sheet amount of debt for a company that grew so quickly.

Should be interesting to see how responsible is for the debt of the franchisees, that get closed/go belly up.

Those off-balance sheet deals could end up being rather messy if KK is forced to recognize them -- they did keep a chunk of interest in some of these partnerships. All it will take is a bankruptcy or two of multi-store franchisees to make things interesting.

Remember Taco Hell and a couple other major chains ended up getting slammed because they were forced to taking back a huge number of franchises when their franchisees went belly-up. All because they oversaturated the number of stores in given cities (like KK eventually did).

[stubeeef]

Low on cash, and has a rather amazingly low amount on-balance sheet amount of debt for a company that grew so quickly.

Should be interesting to see how responsible is for the debt of the franchisees, that get closed/go belly up.

Those off-balance sheet deals could end up being rather messy if KK is forced to recognize them -- they did keep a chunk of interest in some of these partnerships. All it will take is a bankruptcy or two of multi-store franchisees to make things interesting.

Remember Taco Hell and a couple other major chains ended up getting slammed because they were forced to taking back a huge number of franchises when their franchisees went belly-up. All because they oversaturated the number of stores in given cities (like KK eventually did).


Good point! It just hurts to see so many good locals take it on the chin because of the greed of a few at the top. what makes it harder is that livengood will probably not even get a pimpslap over this.

[Sun Baked]

Good point! It just hurts to see so many good locals take it on the chin because of the greed of a few at the top. what makes it harder is that livengood will probably not even get a pimpslap over this.It will get ugly, KK owns big stakes in many franchises...

Officers have owned big stakes in new stores, and self-dealed...

They have run buy-backs through off-sheet financing (aka Enron)

No telling what liability they have to any franchise that goes belly up, since they are after all active partners (along with some of the KK officers sticking themsleves into the equation at one point) in the operations which generally opens up some financial liability. (aka, the deepest pocket syndrome)...Said BB&T analyst Wolf: "Dallas seemed to be within the parameters that Krispy Kreme laid out as to what they'll pay" for franchises. "It's probably toward the high end, yet the risk was toward the low end because (the market) was already running well."

Krispy Kreme has stumbled on occasion as a public company, unwittingly stepping into shareholder criticism for actions that it took for granted as a private firm. In 2002, a magazine questioned its use of a $30 million off-book synthetic lease, leading to a wave of negative media coverage.

Seeking to avoid future conflicts of interest, the company in 2002 moved to separate its current roster of officers from potentially profitable relationships with franchises. In March of that year, the company acquired for nearly $1 million from its officers the so-called Krispy Kreme Equity Group, which allowed senior executives to invest in new franchise operations...

[xsedrinam]

Didn't occur to me, but since there have been a couple of suggestions to do so, I sent it in to KK. I'll post any reply they might make.
X Whelp, here it is. No free donuts, but they're "appreciative". ;)

"Thank you for your email with your touching story. We appreciate the
opportunity
to hear touching stories such as yours. We appreciate that you were willing
to
share your story and we find comfort in knowing that we can provide that we
can
provide comfort to people even in times such as the one you just shared with
us.

We appreciate your interest in our company and invite you to join other
loyal
customers by enrolling in Friends of Krispy Kreme. Simply visit our website
at
www.krispykreme.com, select the 'Friends of Krispy Kreme' link and complete
the
enrollment form.

Best regards,
Renee Rousseau
Krispy Kreme Customer Experience
www.krispykreme.com"
X

[wrldwzrd89]

It doesnt surprise me that Livengood is now gone. I never got caught up in the whole KK frenzy though. We have a family run Kosher doughnut shop by house. I much prefer to eat there. AND I DO!


mmmmmmmmmmmmmm......... doughnuts.
I totally missed out on the whole KK phenomenon too...in fact, I've STILL never been to one of their stores. I guess I should be glad I skipped it now.

[stubeeef]

Whelp, here it is. No free donuts, but they're "appreciative". ;)

"Thank you for your email with your touching story. We appreciate the
opportunity
to hear touching stories such as yours. We appreciate that you were willing
to
share your story and we find comfort in knowing that we can provide that we
can
provide comfort to people even in times such as the one you just shared with
us.

We appreciate your interest in our company and invite you to join other
loyal
customers by enrolling in Friends of Krispy Kreme. Simply visit our website
at
www.krispykreme.com, select the 'Friends of Krispy Kreme' link and complete
the
enrollment form.

Best regards,
Renee Rousseau
Krispy Kreme Customer Experience
www.krispykreme.com"
X

Well your story was a gold mine, but that just shows how stupid most of them are over at the corp offices. But take some solice, she may have lost her job to day.

[stubeeef]

remember me talking about the golden barge jet they had, here is an article in the paper about it.
link (http://www.journalnow.com/servlet/Satellite?pagename=WSJ%2FMGArticle%2FWSJ_BasicArticle&c=MGArticle&cid=1031780785691&path=!business&s=1037645507703)
Corporate jet was 'nutty,' new Krispy Kreme chief says
Company 'just hasn't been managed,' Cooper says

PHILADELPHIA

Stephen Cooper, a corporate-turnaround specialist, has found that top executives at troubled companies don't like to give up their perks.

A case in point: the head of a doughnut- maker flying around in a corporate jet.

One of Cooper's first moves since being named chief executive of Krispy Kreme Doughnuts Inc. in Winston-Salem last month was to get rid of the company's Dassault Falcon 900EX. The jet was used primarily by Scott Livengood, the former chief executive, who was pushed out on the heels of weakened sales and accounting troubles.

[jywv8]

I totally missed out on the whole KK phenomenon too...in fact, I've STILL never been to one of their stores. I guess I should be glad I skipped it now.

My friend from Atlanta was always raving about KK. We never had any in Chicago. When they finally opened one near Midway Airport, I drove down to see what all the hoopla was about.

I was totally underwhelmed. Yes, the donuts were tasty. About as tasty as any other donut I had ever gotten at Dunkin Donuts. I don't see what the big deal is.

[stubeeef]

Either that or a big chunk. The stock is up big the last 2 days and volume today is more than two and half times the avg vol. The price is up about 35% over the last 2 days! Very interesting.

Sunbaked-got any insight?

[MongoTheGeek]

Either that or a big chunk. The stock is up big the last 2 days and volume today is more than two and half times the avg vol. The price is up about 35% over the last 2 days! Very interesting.

Sunbaked-got any insight?

Sounds like a take-over

[stubeeef]

Sounds like a take-over

It looks like it, there is too much risk with outstanding litigation to have individuals speculate on this level.

I'm not sure, but maybe short covering, a significant number of shorters on this stock. Haven't heard a word today on CNBC so I am very curious.

Would hate to see it bought and carved up.

[Sun Baked]

It looks like it, there is too much risk with outstanding litigation to have individuals speculate on this level.

I'm not sure, but maybe short covering, a significant number of shorters on this stock. Haven't heard a word today on CNBC so I am very curious.

Would hate to see it bought and carved up.The last couple of weeks there was a lot of speculation that the problems are bad enough to force the company into bankruptcy.

No telling what the current word on the street is, since it hasn't hit publication in Forbes and the rest yet.

However they could have secured a loan that'll relax the cash constipation.

[stubeeef]

The last couple of weeks there was a lot of speculation that the problems are bad enough to force the company into bankruptcy.

No telling what the current word on the street is, since it hasn't hit publication in Forbes and the rest yet.

However they could have secured a loan that'll relax the cash constipation.

This guy that is taking over for the turnaround has always (100%) either comein during bankrptcy or put the company there. Could this be a short thing? Where alot of contracts due today?

[Sun Baked]

This guy that is taking over for the turnaround has always (100%) either comein during bankrptcy or put the company there. Could this be a short thing? Where alot of contracts due today?For a company with a float of 57M and about half that shorted, they will be a short squeeze sometime -- especially since it's been shorted heavily for quite awhile.

The company is also on the NYSE Regulation SHO Threshold list...

http://www.nyse.com/threshold/

[stubeeef]

rum-int (rumor intelligence)

Shares of Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) added to session gains after the bell, rising 9 percent to $8.18, from their $7.50 close on the New York Stock Exchange. Shares rose more than 20 percent during the regular trading session.

Traders said there was market talk that legendary value investor Warren Buffett may take a stake in the struggling doughnut chain.

LOS ANGELES, March 4 (Reuters) - Shares of Krispy Kreme Doughnuts Inc. (KKD.N: Quote, Profile, Research) soared more than 20 percent on Friday on market talk that legendary value investor Warren Buffett may take a stake in the struggling doughnut chain, traders said.
"The stock is up on market talk that Warren Buffett might be taking a position in the company," said Paul Foster, chief options strategist at theflyonthewall.com.

"There are a lot of rumors," said another options analyst who declined to be named.
Buffett's Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) did not immediately return calls seeking comment. A Krispy Kreme spokeswoman said she would not respond to rumors or speculation.

"Buffett has a long history of financing needy companies willing to pay a high interest rate with convertible debt. Buffet already owns Dairy Queen and this could be a nice combination," Foster said.

Shares of Krispy Kreme, a one-time darling of Wall Street have been slammed in the wake of a U.S. Securities and Exchange Commission probe into its accounting and a sharp fall-off in sales of its signature doughnuts.

In recent weeks, the Winston-Salem, North Carolina company's stock has also been hard-hit by speculation that the chain may be forced into bankruptcy if it is unable to cover bad loans made to struggling franchisees. It has dropped over 40 percent since the beginning of the year.

Krispy Kreme is also in danger of defaulting on a $150 million credit facility if it does not meet a March 25 deadline to file its most recent financial statements or reach a deal with its lenders.

Krispy Kreme shares closed up $1.38 or 22.5 percent, at $7.50 on the New York Stock Exchange. The stock hit a high of $7.60 earlier in the session

The market talk spilled over into the options market where volume in both Krispy Kreme calls and puts shot up as investors bet on a further rally in the stock or hedged to protect their stock positions.

[Sun Baked]

Krispy Kreme is also in danger of defaulting on a $150 million credit facility if it does not meet a March 25 deadline to file its most recent financial statements or reach a deal with its lenders. The accounting problems must be quite bad, if the group coming in revised their contract and is now looking at December as the date for making their financial filing.

[stubeeef]

The accounting problems must be quite bad, if the group coming in revised their contract and is now looking at December as the date for making their financial filing.

How the hell they got financing I'll never know! Must be a bank with a lot of stock or has loans out with KKD as colateral.

Either way, it was a miracle, all the company has is brand, and a great doughnut. No profits mind ya.

[Sun Baked]

How the hell they got financing I'll never know! Must be a bank with a lot of stock or has loans out with KKD as colateral.

Either way, it was a miracle, all the company has is brand, and a great doughnut. No profits mind ya.If you think the stock price sucks now, wait until you see it after a year with no new financials -- may be a 50¢ stock in October.

Good chance it'll also get bounced to the Pink Sheets.

Of course somebody will probably make a play for it when it drops to $50-100 million.

[stubeeef]

If you think the stock price sucks now, wait until you see it after a year with no new financials -- may be a 50¢ stock in October.

Good chance it'll also get bounced to the Pink Sheets.

Of course somebody will probably make a play for it when it drops to $50-100 million.

A lot of folks here are waiting for just that. Many are worried of the reprocusions of such a thing.

When the news came out that KK sold their jet, I would email the reporters and correct them, telling them KK sold A jet, and still have another and would give the particulars for them to look up.
I think it would humorous for one of the the larger franchisese to buy it.

[Sun Baked]

Not too positive, and the Dec 15 date is 1 year after the year-end 2004 results were originally due... cutting delisting quite fine on financials alone, but stock price could get them delisted quicker.Krispy Kreme Posts Loss, Sales Drop (http://www.latimes.com/business/la-fi-krispy19apr19,1,1229093.story?coll=la-headlines-business)
from Bloomberg News

Krispy Kreme Doughnuts Inc., the No. 2 U.S. doughnut maker, said Monday that it had a net loss in the fourth quarter as sales declined 16%.

Sales in the quarter ended Jan. 30 fell to about $153 million, Krispy Kreme said in a preliminary statement in a regulatory filing.

The Winston-Salem, N.C.-based company also said restatements would lower fiscal 2004 earnings more than it previously estimated.

The Securities and Exchange Commission filing Monday acknowledged that Krispy Kreme missed the deadline for its annual financial report. The company, which is under investigation for accounting fraud, hasn't filed third-quarter results either and might not issue any reports until it restates the prior year's earnings.

Krispy Kreme probably had losses in three of last year's quarters as sales slid and investigations into its accounting began. The company, which has a new agreement with lenders to submit audited results by Dec. 15, said it couldn't predict when it would be able to file its annual report.

Average weekly sales for the quarter declined 20% systemwide, the company said.

Krispy Kreme said restatements of fiscal 2004 earnings would cut net income by 9 cents to 10 cents a share. The company's earlier estimate was as much as 8 cents.

Krispy Kreme also expects additional restatements for fiscal 2004 and earlier years and possibly for interim financial information for fiscal 2005.

...

The NYSE can consider delisting a company that hasn't filed its annual report nine months after the required date. The company can also receive an additional 90-day extension.

[stubeeef]

what happens to short sellers if they get delisted?

Ya, KKD will be a case study at many a MBA program for years to come.

[Sun Baked]

what happens to short sellers if they get delisted?

Ya, KKD will be a case study at many a MBA program for years to come.If they get delisted, they'll probably fall to the OTC.BB before landing on the Pink Sheets.

You can still trade them, but it won't be a NYSE stock any longer.

Looks like it's getting worse, since they still haven't finalized the $400k/month consulting agreement.

And articles like this are showing up...

Inside a Krispy Kreme franchisee (http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B29CE9B9B%2DA21F%2D4E83%2DB87F%2DADCE5E3EA7FE%7D) which is a 40% KKD owned Canadian franchisee that KKD may have to save, and is a money sucking leech.

[StarbucksSam]

This may be off-topic but did you know that I have NEVER had a Krispy Kreme doughnut? I HAVE to try one.

[stubeeef]

If they get delisted, they'll probably fall to the OTC.BB before landing on the Pink Sheets.

You can still trade them, but it won't be a NYSE stock any longer.

Looks like it's getting worse, since they still haven't finalized the $400k/month consulting agreement.

And articles like this are showing up...

Inside a Krispy Kreme franchisee (http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B29CE9B9B%2DA21F%2D4E83%2DB87F%2DADCE5E3EA7FE%7D) which is a 40% KKD owned Canadian franchisee that KKD may have to save, and is a money sucking leech.

Ya, read that, and still mystified why the stock was up this week.

[Sun Baked]

Ya, read that, and still mystified why the stock was up this week.Don't know, there are always those that see value in a cheap stock that used to be a high flyer.

Even Enron may have bounced a couple times.

When a company is headed towards BK, it's a good buy once they decide what will happen to the shareholders (whether to keep them or dump them and give the company to the lienholders.)

Some people are willing to take the risk, even Coleman (a Al Dunlop fiasco) had a buttload of activity when it was in BK -- and they terminated all the stockholders and gave the company to the bondholders.

Since they got rid of the 5 year superlong holding period, there is no reason right now to jump and take the chance so early on stocks like this -- or even try to average down your holdings.

Buy right when you get word it's turning the corner, or a little later when it's going back up.

[iGary]

company was in a tough spot though, with all the low-carb diet crap... donuts dont do well in those type of diets.

they just opened a KK in dupont circle here in dc about a month ago. sooooooooo ymmy :D

I walked past there one night and watched the glaze machine working. Hypnotizing. :eek:

As I understand it, that location does not freshly make the doughnuts. The come in, and then they flash heat them before glazing them. No less tasty, mind you.

[Blue Velvet]

This may be off-topic but did you know that I have NEVER had a Krispy Kreme doughnut? I HAVE to try one.

They're still kinda newish to the UK but the supermarket down the road from the office has just got a little stand with a range of about 10 flavours and some mixed boxes.

They're incredibly sweet and melt-in-the-mouthish. They're reputed to have over 400 calories in each one which is about 20% of your recommended daily calorific intake.

But the novelty soon wears off and if you're not particularly inclined to sweet foods, then you might find them a little too much. There's no way I could eat one every day... more like once per month.

[stubeeef]

Can't wait to see these names, remember I used to fly their jet.

http://news.yahoo.com/news?tmpl=story&cid=580&e=3&u=/nm/20050621/bs_nm/leisure_krispykreme_dc

Seems they let some top folks go.........heck what took so long?

[MongoTheGeek]

Can't wait to see these names, remember I used to fly their jet.

http://news.yahoo.com/news?tmpl=story&cid=580&e=3&u=/nm/20050621/bs_nm/leisure_krispykreme_dc

Seems they let some top folks go.........heck what took so long?

The turn around firm just finished the audit.

[stubeeef]

Man what a mess.

KK told to downward revise earnings 25 million (http://news.yahoo.com/s/ap/20050810/ap_on_bi_ge/krispy_kreme;_ylt=AvmTioEugmM29rjya9NPlxayBhIF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl)
CHARLOTTE, N.C. - Krispy Kreme Doughnuts Inc. needs to restate its past earnings downward by $25.6 million over the past several years, according to a report issued Wednesday by a special committee examining the finances of the troubled snack maker.

Former Chief Executive Scott Livengood and his aide, John Tate, bear most of the responsibility for the once high-flying company's problems, said the report by the special committee of independent directors that has been examining the company's finances since last fall.

[michaelrjohnson]

Man what a mess.

KK told to downward revise earnings 25 million (http://news.yahoo.com/s/ap/20050810/ap_on_bi_ge/krispy_kreme;_ylt=AvmTioEugmM29rjya9NPlxayBhIF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl)
That seems to be an understatement.

Unfortunately, that brand was poorly managed. Now, the market is super-saturated and the orignial novelty has long worn off. If their business model would have been proportional to their real growth (potential), I doubt it would have ever gotten to this point.

Besides... who wants 2 day old Krispy Kremes from Target, Wal-Mart, Shopko, etc.?

[Sun Baked]

Here is the panel's report...

SUMMARY OF INDEPENDENT INVESTIGATION (text of) (http://www.sec.gov/Archives/edgar/data/1100270/000095016205000793/krispyex991new.htm)

[Sun Baked]

With all the franchisee bankruptcy applications and the recent announcement that they can't even meet the extended deadline to file financials, it's not looking too good at the moment.

They are a year late now with audited financials, and the lenders extension to Dec. 15 looks like it will come and go with no financials released.

[2nyRiggz]

what....kracky kreams is out! damn......


Bless

[calyxman]

Good or bad management, they put out a product that is pure binge for the unscrupulous american diet.

[MacCoaster]

Yeah, Scott's out. Funny thing he used to go to my church back in North Carolina, but after the fiasco of getting in trouble and blah blah he left. :-\

Crazy. I'll never deny I enjoyed being able to wake up to hot, fresh doughnuts. :) Damn glad I live 5 minutes from one in Rochester, New York now. :)

[rosalindavenue]

KK donuts in the grocery store? Insane.

Actually, here in Virginia, they've been on the grocery store shelves since I was a kid; we usually had a box in the bread drawer. The fresh and hot experience was then unknown; they were trucked in and the glaze was already crackly. They were not very good, but they were the only donuts to be purchased. Seeing the rise of KK was very odd to me; it was a familiar (and unspectacular) brand-- kind of like seeing Manhattan and DC sophisticates lining up to eat twinkies.

[Sun Baked]

Can Krispy Kreme Make a Doughnut Turnaround? (http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1135332307468)

The good news seems to be that the turnaround guys seems to be taking a big chunk of their "fee" in stock options.

Looked ugly when they decide to go about renegotiating their "success fee."

[AP_piano295]

The one in my town closed down a couple of months ago... I was very sad, dont love donuts but watching the automatic Donut machine was fun... what is this life thing you speak of?