The Company will conduct a conference call and Webcast today at 3 p.m. Mountain Time (5 p.m. Eastern Time).
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 May 21, 2008, and may be accessed by calling 1-800-406-7325 for domestic toll free or 1-303-590-3030 for international. The conference access code is 3872303.
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.
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 District of Columbia. It also operates a dough production facility. The company's stock is traded under the symbol BAGL. Visit http://www.einsteinnoah.com for additional information.
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.
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
Einstein Noah Restaurant Group, Inc. is a leader in the quick casual segment of the restaurant industry.