Krispy Kreme Grows up!

[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

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]

Is someone buying Krispy Kreme

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
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 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 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

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

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.