Selected Third Quarter Highlights:
-- 5.2% increase in comparable store sales at company-owned restaurants.
-- 12th consecutive quarter of positive comparable store sales growth.
-- Average unit volume for company-owned stores increased to $898,000 for
trailing 12 months.
-- 4.8% revenue growth to $100.4 million.
-- 557% net income growth to $4.9 million, or $.30 diluted EPS.
-- 8.7% increase in restaurant gross profit to $18.5 million.
-- Operating income up 24% to $6.8 million.
-- Opened 3 new company-owned restaurants and 7 new licensed locations.
Einstein Noah Restaurant Group, Inc. (
EINSTEIN NOAH RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRD QUARTER AND YEAR TO DATE PERIODS ENDED OCTOBER 3, 2006 AND
OCTOBER 2, 2007
(in thousands, except earnings per share and related share information)
(unaudited)
Third quarter ended: Year to date ended:
---------------------- ----------------------
October 3, October 2, October 3, October 2,
2006 2007 2006 2007
---------- ----------- ---------- -----------
Revenues:
Company-owned restaurant
sales $ 89,213 $ 93,026 $ 271,300 $ 276,283
Manufacturing and
commissary revenues 5,257 5,910 15,725 17,409
Franchise and license
related revenues 1,282 1,442 3,759 3,996
---------- ----------- ---------- -----------
Total revenues 95,752 100,378 290,784 297,688
Cost of sales:
Company-owned restaurant
costs 72,187 74,527 219,677 221,116
Manufacturing and
commissary costs 5,445 6,330 15,952 17,132
---------- ----------- ---------- -----------
Total cost of sales 77,632 80,857 235,629 238,248
---------- ----------- ---------- -----------
Gross profit 18,120 19,521 55,155 59,440
Operating expenses:
General and
administrative expenses 9,750 9,794 30,038 31,381
Depreciation and
amortization 2,640 2,868 14,238 7,910
Loss (gain) on sale,
disposal or abandonment
of assets, net 193 25 206 429
Impairment charges and
other related costs 51 28 134 213
---------- ----------- ---------- -----------
Income from operations 5,486 6,806 10,539 19,507
Other expense: -
Interest expense, net 4,749 1,752 14,670 10,685
Write-off of debt
discount upon redemption
of senior notes - - - 528
Prepayment penalty upon
redemption of senior
notes - - 4,800 240
Write-off of debt
issuance costs upon
redemption of
senior notes - - 3,956 2,071
Other (15) - (5) -
---------- ----------- ---------- -----------
Income (loss) before
income taxes 752 5,054 (12,882) 5,983
Provision for income taxes - 111 - 158
---------- ----------- ---------- -----------
Net income (loss) $ 752 $ 4,943 $ (12,882) $ 5,825
========== =========== ========== ===========
Net income (loss) per
common share - Basic $ 0.07 $ 0.31 $ (1.25) $ 0.46
========== =========== ========== ===========
Net income (loss) per
common share - Diluted $ 0.07 $ 0.30 $ (1.25) $ 0.43
========== =========== ========== ===========
Weighted average number of
common shares
outstanding:
Basic 10,593,085 15,772,931 10,276,464 12,718,051
========== =========== ========== ===========
Diluted 11,036,527 16,572,486 10,276,464 13,436,884
========== =========== ========== ===========
EINSTEIN NOAH RESTAURANT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 2, 2007 AND OCTOBER 2, 2007
(in thousands, except share information)
(unaudited)
January 2, October 2,
2007 2007
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,477 $ 11,991
Restricted cash 2,403 1,747
Franchise and other receivables, net of
allowance of $505 and $478, respectively 6,393 6,281
Inventories 4,948 5,210
Prepaid expenses and other current assets 4,529 5,029
Assets held for sale 1,144 -
------------- -------------
Total current assets 24,894 30,258
Restricted cash long-term 284 278
Property, plant and equipment, net 33,889 43,266
Trademarks and other intangibles, net 63,806 63,806
Goodwill 4,875 4,875
Debt issuance costs and other assets, net 5,406 3,788
------------- -------------
Total assets $ 133,154 $ 146,271
============= =============
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable $ 3,347 $ 6,555
Accrued expenses 25,855 22,780
Short term debt and current portion of
long-term debt 3,605 1,180
Current portion of obligations under
capital leases 76 78
------------- -------------
Total current liabilities 32,883 30,593
Senior notes and other long-term debt, net
of discount 166,556 89,155
Obligations under capital leases 124 64
Other liabilities 8,822 10,164
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 265,385 186,976
------------- -------------
Commitments and contingencies (see Note 10)
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; 10,596,419 and
15,812,879 shares issued and
outstanding 11 16
Additional paid-in capital 176,797 262,493
Accumulated deficit (309,039) (303,214)
------------- -------------
Total stockholders’ deficit (132,231) (40,705)
------------- -------------
Total liabilities and stockholders’
deficit $ 133,154 $ 146,271
============= =============
EINSTEIN NOAH RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR TO DATE PERIODS ENDED OCTOBER 3, 2006 AND OCTOBER 2, 2007
(in thousands)
(unaudited)
October 3, October 2,
2006 2007
------------- -------------
OPERATING ACTIVITIES:
Net income (loss) $ (12,882) $ 5,825
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 14,238 7,910
Stock based compensation expense 546 1,588
Loss, net of gains, on disposal of assets 206 429
Impairment charges and other related costs 134 213
Provision for losses on accounts
receivable, net 158 25
Amortization of debt issuance and debt
discount costs 620 545
Write-off of debt issuance costs 3,956 2,071
Write-off of debt discount - 528
Paid-in-kind interest 1,113 904
Changes in operating assets and
liabilities:
Franchise and other receivables (509) 87
Accounts payable and accrued expenses 1,832 1,973
Other assets and liabilities 9 (2,829)
------------- -------------
Net cash provided by operating activities 9,421 19,269
INVESTING ACTIVITIES:
Purchase of property and equipment (10,570) (18,255)
Proceeds from the sale of equipment 165 1,166
------------- -------------
Net cash used in investing activities (10,405) (17,089)
FINANCING ACTIVITIES:
Proceeds from secondary common stock
offering - 90,000
Costs incurred with offering of our common
stock - (6,666)
Proceeds from line of credit 24 -
Repayments of line of credit (24) -
Payments under capital lease obligations (34) (58)
Repayment of notes payable (160,000) -
Borrowings under First Lien 80,000 11,900
Repayments under First Lien (950) (700)
Borrowing under Second Lien 65,000 -
Repayments under Second Lien - (65,000)
Borrowings under Subordinated Note 24,375 -
Repayments under Subordinated Note - (25,000)
Debt issuance costs (4,916) (921)
Proceeds upon stock option and warrant
exercises 187 779
------------- -------------
Net cash provided by financing activities 3,662 4,334
Net increase in cash and cash equivalents 2,678 6,514
Cash and cash equivalents, beginning of
period 1,556 5,477
------------- -------------
Cash and cash equivalents, end of period $ 4,234 $ 11,991
============= =============
Contact Information: Contacts: Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303-393-7044 Rick Dutkiewicz Chief Financial Officer 303-568-8004