During the three-month reporting period, KKD opened 28 new locations, including 12 factory stores and 16 "satellite" branches. Meanwhile, 14 stores were closed, bringing the company's total number of stores to 395, with 296 factory stores and 99 satellites.

In fiscal 2007, revenue dropped 15.1% to $461.2 million, down from $543.4 million the previous fiscal year. Company-store sales slumped 18.1% and revenue from franchise operations rose 14.6%. The net loss for the fiscal year reached $42.2 million, or 68 cents per diluted share, compared with the 2006 net loss of $135.8 million ($2.20 per share).

Douglas Muir, Chief Accounting Officer for KKD, said the company's balance sheet shows $36 million in cash and $108 million in debt. This compares with year-ago figures of $17 million in cash and $123 million in debt, primarily the settlement of class-action litigation. Looking forward, Muir noted that 1Q results would be positively impacted by various items; the company's annual meeting is currently scheduled for June 4.

Company President and CEO Daryl G. Brewster boasted that KKD "began a turnaround" in fiscal year 2007 and asserted that it is "great to be current with Krispy Kreme." The company continues to address "key challenges," Brewster asserted, working on introducing healthier choices (including a whole-wheat product), running more convenient stores, and contending with competitive pressures. In the firm's first earnings call in nearly three years, the KKD chief opined that "much of the cleanup [is] behind us."

In after-hours action, KKD has dropped almost 4%. In regular trading today, the stock was riding high on some optimism, as it closed up 3.2%.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.