Einstein Noah Restaurant Group News
Einstein Noah Restaurant Group Reports Solid Growth in Revenue, Comparable Store Sales and Net Income
"Thanks in large part to our increased same store sales and our efforts in 2007 and early 2008 to lock in the cost of wheat, implement a well-timed price increase and introduce a revamped menu, our results for the first quarter of 2008 reflect impressive financial performance. We are in a growth mode during a time when most companies are pulling back," said
During the quarter, and in spite of heavy cost pressure from agricultural commodities, increased compensation costs for bonuses in the quarter, and certain one-time charges equaling about
At the same time, revenues increased to
In addition, the company opened three new company-owned restaurants, four license locations and the first Einstein Bros. franchise restaurant in
"The entire organization has been focused on keeping costs down during difficult economic times, while at the same time investing in areas that are designed to continue to grow the business," said
During the first quarter of 2008, Einstein Noah Restaurant Group generated
"Our financial performance in the first quarter has prepared us to invest in our growth strategy for the remainder of 2008," Mr. Murphy said. "I look forward to the investments we plan on making in the right areas to continue to grow the business."
CONFERENCE CALL
The Company will conduct a conference call and Webcast today at
The call-in numbers for the conference call are 1-866-225-8754 for domestic toll free and 1-480-629-9562 for international. No conference ID is necessary to join the call. A telephone replay will be available through
To access a live Webcast of the call, please visit Einstein Noah's Website at http://www.einsteinnoah.com. A replay of the Webcast will be available on the Website for at least four weeks.
About Einstein Noah Restaurant Group
Einstein Noah Restaurant Group Inc. is a leading company in the quick casual restaurant industry that operates locations primarily under the Einstein Bros.(R) Bagels and Noah's New York Bagels(R) brands and primarily franchises locations under the Manhattan Bagel(R) brand. The company's retail system consists of more than 600 restaurants, including more than 100 license locations, in 35 states plus the
Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "estimate," "project," "plan to," "is designed to," "expectations," "prospects," "intend," "indications," "expect," "should," "would," "believe," "target," "trend," "contemplate," "set the foundation for" and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. These factors include but are not limited to (i) the results for period over period revenue, gross profit, operating income, net income, depreciation and amortization, comparable store sales and margin performance are not necessarily indicative of future results and are subject to shifting consumer preferences, economic conditions, weather, and competition, among other factors; (ii) the results for the 2008 first quarter are not necessarily indicative of future results, which are subject to a variety of factors, including consumer preferences and the economy and increasing utility and other costs, and other seasonal effects; (iii) the ability to develop and open new company-owned, licensed and franchise restaurants and continue our development program for company-owned restaurants and opportunities for franchise and licensed locations are dependent upon the availability of capital, the availability of desirable locations, reaching favorable lease terms, as well as the availability of contractors and materials, and ability to obtain necessary permits and licenses; (iv) our ability to grow is dependent on many factors including our ability to train personnel, the availability of products, our ability to develop new menu items and to produce those items in the restaurants, and the availability of capital and consumer acceptance; (v) our estimates of the impact of commodity prices are subject to the volume of purchases, among other factors; (vi) our ability to improve our margins and to manage costs is subject to a variety of factors mentioned herein including the cost of labor and raw materials and the results of our field reorganization; (vii) our ability to implement and maintain price increases, among other factors, is subject to consumer acceptance; (viii) our optimism about our prospects, including our belief that proactive measures to minimize our exposure to price fluctuations in commodities will allow us to deliver strong performance in 2008 and beyond is subject to all of the factors in this paragraph and the ability to execute our strategy and deliver exceptional food and service, the ability to continue expanding operations and improving the Company's revenue and profitability, and other performance factors. These and other risks are more fully discussed in the Company's SEC filings.
Contacts: Peter Jakel Communications Manager 303-568-8113 pjakel@einsteinnoah.com Rick Dutkiewicz Chief Financial Officer 303-568-8004 rdutkiewicz@einsteinnoah.com EINSTEIN NOAH RESTAURANT GROUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FIRST QUARTERS ENDED APRIL 3, 2007 AND APRIL 1, 2008 (In thousands, except earnings per share and related share information) (unaudited) First quarter ended: First quarter ended: Increase/ (percent of total (in thousands of dollars) (Decrease) revenue) ———————————— ————- —————————- April 3, April 1, 2008 April 3, April 1, 2007 2008 vs. 2007 2007 2008 ————- ————- ————- ————- ————- Revenues: Company-owned restaurant sales $89,115 $93,610 5.0% 92.6% 90.7% Manufacturing and commissary revenues 5,818 8,088 39.0% 6.0% 7.8% Franchise and license related revenues 1,322 1,566 18.5% 1.4% 1.5% ————- ————- ————- ————- ————- Total revenues 96,255 103,264 7.3% 100.0% 100.0% Cost of sales: Company-owned restaurant costs Cost of goods sold 26,274 27,985 6.5% 27.3% 27.1% Labor costs 26,606 28,950 8.8% 27.6% 28.0% Other operating costs 8,771 8,878 1.2% 9.1% 8.6% Rent and related, and marketing costs 9,681 10,012 3.4% 10.1% 9.7% ————- ————- ————- ————- ————- Total company-owned restaurant costs 71,332 75,825 6.3% 74.1% 73.4% Manufacturing and commissary costs 5,422 7,860 45.0% 5.6% 7.6% ————- ————- ————- ————- ————- Total cost of sales 76,754 83,685 9.0% 79.7% 81.0% Gross profit: Company-owned restaurant 17,783 17,785 0.0% 18.5% 17.2% Manufacturing and commissary 396 228 (42.4%) 0.4% 0.2% Franchise and license 1,322 1,566 18.5% 1.4% 1.5% ————- ————- ————- ————- ————- Total gross profit 19,501 19,579 0.4% 20.3% 18.9% Gross profit percentages: Company-owned restaurant 20.0% 19.0% (4.8%) * * Manufacturing and commissary 6.8% 2.8% (58.6%) * * Franchise and license 100.0% 100.0% * * * Operating expenses: General and administrative expenses 10,731 10,743 0.1% 11.1% 10.4% Depreciation and amortization 2,419 3,204 32.5% 2.5% 3.1% Loss on sale, disposal or abandonment of assets, net 374 69 (81.6%) 0.4% 0.1% Impairment charges and other related costs 19 - * 0.0% 0.0% ————- ————- ————- ————- ————- Income from operations 5,958 5,563 (6.6%) 6.2% 5.4% Other expense: Interest expense, net 4,789 1,579 (67.0%) 5.0% 1.5% ————- ————- ————- ————- ————- Income before taxes 1,169 3,984 240.8% 1.2% 3.9% Provision for income taxes 37 142 283.8% 0.0% 0.1% ————- ————- ————- ————- ————- Net income $1,132 $3,842 239.4% 1.2% 3.7% ========= ========= ========= ========= ========= Net income per common share - Basic $0.11 $0.24 118.2% * * Net income per common share - Diluted $0.10 $0.23 130.0% * * Weighted average number of common shares outstanding: Basic 10,605,626 15,890,879 49.8% * * Diluted 11,136,699 16,451,556 47.7% * * * not meaningful EINSTEIN NOAH RESTAURANT GROUP, INC. CONSOLIDATED BALANCE SHEETS AS OF JANUARY 1, 2008 AND APRIL 1, 2008 (in thousands, except share information) (Unaudited) January 1, April 1, 2008 2008 ————— ————— ASSETS Current assets: Cash and cash equivalents $9,436 $13,945 Restricted cash 1,203 1,170 Franchise and other receivables, net of allowance of $606 and $582, respectively 7,807 7,808 Inventories 5,313 5,042 Prepaid expenses and other current assets 5,281 4,791 ————— ————— Total current assets 29,040 32,756 Property, plant and equipment, net 47,714 49,599 Trademarks and other intangibles, net 63,831 63,831 Goodwill 4,981 4,981 Debt issuance costs and other assets, net 2,996 2,992 ————— ————— Total assets $148,562 $154,159 ========== ========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $5,072 $4,481 Accrued expenses and other current liabilities 19,279 22,068 Short term debt and current portion of long-term debt 955 1,180 Current portion of obligations under capital leases 80 79 ————— ————— Total current liabilities 25,386 27,808 Senior notes and other long-term debt 88,875 87,425 Long-term obligations under capital leases 67 48 Other liabilities 10,841 10,953 Mandatorily redeemable, Series Z Preferred Stock, $.001 par value, $1,000 per share liquidation value; 57,000 shares authorized; 57,000 shares issued and outstanding 57,000 57,000 ————— ————— Total liabilities 182,169 183,234 ————— ————— Commitments and contingencies Stockholders' deficit: Series A junior participating preferred stock, 700,000 shares authorized; no shares issued and outstanding Common stock, $.001 par value; 25,000,000 shares authorized; 15,878,811 and 15,923,227 shares issued and outstanding 16 16 Additional paid-in capital 262,830 263,520 Accumulated deficit (296,453) (292,611) ————— ————— Total stockholders' deficit (33,607) (29,075) ————— ————— Total liabilities and stockholders' deficit $148,562 $154,159 ========== ========== EINSTEIN NOAH RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FIRST QUARTERS ENDED APRIL 3, 2007 AND APRIL 1, 2008 (in thousands) (Unaudited) April 3, April 1, 2007 2008 ————— ————— OPERATING ACTIVITIES: Net income $1,132 $3,842 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,419 3,204 Stock based compensation expense 331 506 Loss, net of gains, on disposal of assets 374 69 Impairment charges and other related costs 19 - Provision for losses on accounts receivable, net 26 (24) Amortization of debt issuance and debt discount costs 201 113 Paid-in-kind interest 487 - Changes in operating assets and liabilities: Restricted cash - 33 Franchise and other receivables 540 23 Accounts payable and accrued expenses 2,358 2,890 Other assets and liabilities (1,450) 659 ————— ————— Net cash provided by operating activities 6,437 11,315 INVESTING ACTIVITIES: Purchase of property and equipment (6,228) (5,742) Proceeds from the sale of equipment 32 4 Acquisition of restaurant assets - (7) ————— ————— Net cash used in investing activities (6,196) (5,745) FINANCING ACTIVITIES: Costs incurred with offering of our common stock (166) - Payments under capital lease obligations (17) (20) Repayments under First Lien (475) (1,225) Proceeds upon stock option exercises 62 184 ————— ————— Net cash used in financing activities (596) (1,061) Net (decrease) increase in cash and cash equivalents (355) 4,509 Cash and cash equivalents, beginning of period 5,477 9,436 ————— ————— Cash and cash equivalents, end of period $5,122 $13,945 ========== ==========
SOURCE Einstein Noah Restaurant Group
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