NL2

YoCream 3rd Qtr.Sales Below GeoTeam's Expectations; Long-term Outlook Remains Intact

Maybe the $673 is just half of the charge? But then why is G&A up so much? And why would YOCM just recognize half the charge? YOCM gets a tax benefit from restricted stock issuance that does not hit the income statement. Wonder if YOCM passed the tax benefit along to the recipient to pay individual’s tax bills on award? Hmmm not clear.

BTW, thanks for the nice update!

YoCream 3rd Qtr.Sales Below GeoTeam's Expectations; Long-term Outlook Remains Intact

Would have to agree, the revenue growth was very disappointing. Did not fully understand the line:
>> our core frozen yogurt products are up 66% in the third quarter<<

Also, I believe the “one time” restricted stock expense was more like $1,343,000. Some of the charge appears to have been posted to G&A and possibly even selling, distribution and/or CGS as earned compensation. 281,000 shares times about $5 per share at 2005 date of issue would be close to the $1.34 million. Hope there are no more related restricted charges in Q4, but the information is not clear.

Not sure why they released the restrictions. Maybe tax advantage to the recipients? Maybe something else?

Note I to the Q2 financial statement included this paragraph:
Effective May 1, 2009, the Board of Directors approved modifications in the 2005 and 2006 restricted share awards, which resulted in the vesting of the remaining 281,938 shares. The related restricted stock compensation expense is $1,343,000 and will be recognized over the balance of the fiscal year. This expense is approximately $1,092,000 more than the amount that otherwise would have been recognized during fiscal 2009. The modifications took into consideration both past performance and the expected results for the fiscal year.

The fro-yo craze appears to still be intact. The new customer reference was encouraging. Have been reading a bit about companies like U-Swirl (hffi.ob). Milk prices are inching up which could hurt margins a bit.

Cal-Maine Foods: Buy This Golden Egg

>>>>As of third quarter ended in February net sales are at $715 millions and total sales for 2009 may exceed $1billion dollars and net income close to $100 million<<<

Actual was $929 million sales and $79.5 million net income, much lower than expected by author. Considering Q3 had been reported and egg and feed prices were know at the time the blog was written, author obviously did not put a lot of work into his numbers.



On Jun 22 08:53 PM NL2 wrote:

> The spread between U.S. human population and table laying hens has
> widened over the last two years, resulting in extremely high egg
> prices. Past hot egg markets have been followed with a rush by producers
> to expand, bringing supply back in line with demand and often oversupply.
> Currently there are a number of external factors that have slowed
> producer’s expansion plans, which may result in a more orderly return
> to supply - demand balance.
>
> The 2009 revenue and earnings quoted in the summary are very aggressive
> and not supported by the lower Q4 egg prices. CALM may have difficulty
> achieving 2010 EPS in excess of $4, considering current egg prices,
> hen numbers and recent hatch.

Cal-Maine Foods: Buy This Golden Egg

The spread between U.S. human population and table laying hens has widened over the last two years, resulting in extremely high egg prices. Past hot egg markets have been followed with a rush by producers to expand, bringing supply back in line with demand and often oversupply. Currently there are a number of external factors that have slowed producer’s expansion plans, which may result in a more orderly return to supply - demand balance.

The 2009 revenue and earnings quoted in the summary are very aggressive and not supported by the lower Q4 egg prices. CALM may have difficulty achieving 2010 EPS in excess of $4, considering current egg prices, hen numbers and recent hatch.

YoCream Benefiting from Strong Yogurt Demand

Very nice summary of YOCM operations. 2009 EPS of $3.10 should be achievable for YOCM.

Profit margins have expanded with YOCM’s increased volume. YOCM has been able to purchase ingredients in higher quantities at lower prices per unit. Distribution costs as a percent of sales have also decreased. In addition YOCM has benefited greatly from extremely low milk prices.