Is Krispy Kreme financially healthy at year-end 2004 and why/why not?

b) Given your answer to part b), what accounts for the firm's recent share price decline?

and c) What is the source of intrinsic investment value in the company and does this source appear in the financial statements?

KRISPY KREME DOUGHNUTS, INC. Income Statements (SUS thousands, exce pt per-share amounts Months Ended Three Months Ended Jan. 30, Jan. 28, Feb. 3, Feb. 2, Feb. 1,May 5, May 2, Aug. 3, Aug.1, 2004 Income Statement 2000 2001 2002 2003 2003 2004 2003 2004 Total revenues Operating expenses General and administrative expenses Depreciation and amortization expenses Arbitration award Provision for restructuring Impairment charges and closing costs 220,243 300,715394,354 491,549 665,592 148,660 184,356 159,176 177,448 190,003 250,690 316,946 381,489 507,396 2,480 141,383 120,573 145,633 14,856 20,06127,562 28,897 36,9128,902 10,6649,060 11,845 4,5466,457 7,959 2,27 19,723 4,1016,130 4,5366,328 9,075 (525)(525) 7,543 1,802 Income from operations Interest income Interest expense Equity loss in joint ventures Minority interest Other expense, net 10,838 23,50741,88759,817 102,08623,702 18,636 25,007 11,840 226 (1,525) (607) (337) (1,781) (4,409)(866) (1,433) (997) (1,366) (706) (602) (2,008) (1,836)(694) (575) (802) (399) (716) (1,147) (2,287) (2,072) (616) (126) (616) 267 (20) (235) (934)(13)(25) (156) 343) 114 293 2,3252,9801,966 921 227 176 205 Income before income taxes Provision for income taxes Discontinued operations 9,606 23,783 42,54654,773 94,67721,728 16,522 22,454 10,682 3,650 9,05816,168 21,295 37,5908,588 6,6759,014 4,438 480 34,285 439 Net income 5,956 14,72526,378 33,478 57,087 13,140 (24,438) 13,001 5,764 Diluted earnings per share 0.15 0.27 0.45 0.56 0.92 0.22 (0.38) 0.2 0.09 16.22 39.85 30. 35.64 Share price (fiscal year close) Number of shares outstanding (milions 39.754.558.6 59.862.160.7 63.662.63.4 Resulting from divestiture of Montana Mills. Source of data: Company filings with the Securities and Exchange Commission (SEC)