Krispy Kreme Doughnuts :: essays research papers

Krispy Kreme Donuts, Inc.Since Krispy Kreme was founded in 1937, it has grown into a leading brand specialty retailer, producing more than 5 trillion doughnuts a day and oer 1.8 billion a year. In addition to Krispy Kreme stores, their premium quality doughnuts are sold in supermarkets, convenience stores and other retail outlets throughout the country. scoop out known for their fresh, glazed, yeast-raised doughnuts, known as "Hot Original Glazed, Krispy Kreme withal make more than a dozen other varieties of yeast-raised and cake doughnuts. exclusively the society is currently going through financial turmoil along with possible earnings management.Krispy Kreme Doughnuts recently announced that they are slashing 125-130 jobs, the spacious studyity in Winston-Salem. The company is eliminating one-fourth of their staff in nine to cut costs. Also, they recently sold their corporate jet to a Wilmington company for $30.5 million. It is evident that the donut empire is sufferi ng from liquidity and property lead problems. Some investor argue that they didnt see this coming because the once passing profitable, ever expanding company, seemed incapable of fiscal failure. The layoff shows that they have experienced a major downturn in the past year. Less than two years ago, Krispy Kremes shares sold for $50 and are currently interchange for $7.21. The bottom distribution channel is that Krispy Kreme must revamp sales in order to increase cash flow or they leave alone not make it. Their board of directors tell that the downsizing would create an annual pretax savings of about $7.4 million they will take a restructuring direction in their fiscal first shadower to pay for the work force reduction. The company also stated that selling the jet will result in annual pretax savings of $3 million but it will have to take a $300,000 charge in its current fiscal first quarter because of the deal. Also in January, Krispy Kremes long-term debt lenders contracted to extend for two months to March 25, 2005, the date on which the company would be in default on its $150 million credit agreement. This agreement restricts the company from borrowing any money until repaid. Kripsy Kreme is witnessing the results of a low-carbohydrate phase combined with expanding too fast plunging profit, crumbling stock price, its accounting is to a lower place investigation by the Securities and Exchange Commission (because they have yet to cross-file quarterly reports that were due February 1,2 005), and it is the subject of various