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Crumbs Bake Shop Reports Third Quarter 2011 Financial Results

Non-GAAP Information

The Company is providing Adjusted EBITDA information, which is defined as net income of the combined company, including net income attributable to any non-controlling interest, determined in accordance with all applicable and effective GAAP pronouncements up to September 30, 2011, before interest income or expense, income taxes and any gains or losses resulting from the change in estimate relating to the Tax Receivable Agreement, depreciation, amortization, deferred rent expense, losses or gains resulting from adjustments to the fair value of the contingent consideration, stock-based compensation expense, extraordinary or non-recurring expenses and all other extraordinary non-cash items for the applicable period as a compliment to U.S. generally accepted accounting principles (GAAP) results. Adjusted EBITDA measures are commonly used by management and investors as a measure of leverage capacity, debt service ability and liquidity. Adjusted EBITDA is not considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or superior to, such GAAP measures as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in the accompanying tables. Since Adjusted EBITDA is not a measure determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

(Formerly Known As 57th Street General Acquisition Corp.)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 
  Three Months Ended September 30,   Nine Months Ended September 30,
2011   2010 2011   2010
 
 
Net sales $ 8,876 $ 7,506 $ 28,889 $ 22,546
 
Cost of sales   3,768     3,062     12,194     9,212  
 
Gross profit   5,108     4,444     16,695     13,334  
 
Operating expenses
Selling expenses 283 239 1,010 818
Staff expenses 3,101 2,082 9,209 5,982
Occupancy expenses 1,827 1,240 5,192 3,504
General and administrative 660 349 1,682 935
New store expenses 419 171 533 351
Depreciation and amortization   362     213     1,037     614  
 
  6,652     4,294     18,663     12,204  
 
Income (loss) from operations   (1,544 )   150     (1,968 )   1,130  
 
Other income (expense)
Interest and other income - - - -
Abandoned lease projects   (6 )   (190 )   (20 )   (198 )
 
  (6 )   (190 )   (20 )   (198 )
 
Income (loss) before income taxes (1,550 ) (40 ) (1,988 ) 932
 
Income taxes   11     -     11     -  
 

Net income (loss) attributable to the controlling and non-controlling interests

(1,561 ) (40 ) (1,999 ) 932
 

Less: Net (income) loss attributable to non-controlling interest

  647     -     829     -  
 
Net income (loss) attributable to stockholders $ (914 ) $ (40 ) $ (1,170 ) $ 932  
 

Net income (loss) per common share, basic and diluted

$ (0.17 ) $ (0.01 ) $ (0.21 ) $ 0.29  
 

Weighted average number of common shares outstanding, basic and diluted

  5,506     6,063  

*

 

  5,568     3,177   *
 
* The weighted average number of common shares outstanding is that of Crumbs Bake Shop, Inc.
 

CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

(Formerly Known As 57th Street General Acquisition Corp.)

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(in thousands, except per share data)

 
  September 30,   December 31,
2011 2010
(Unaudited) (Audited)
 
ASSETS
 
Current assets
Cash $ 8,628 $ 655
Trade receivables 331 248
Inventories 366 241
Prepaid rent 577 387
Deferred financing costs - 215
Other current assets   350     82
 
Total current assets   10,252     1,828
 
Property and equipment, net   11,287     8,784
 
Other Assets
Deferred tax asset 4,774 -
Restricted certificate of deposit 673 30
Intangible assets, net 383 429
Deposits 287 277
Other   93     36
 
Total other assets   6,210     772
 
$ 27,749   $ 11,384
 
LIABILITIES, MEMBERS' EQUITY AND STOCKHOLDERS' EQUITY
 
Current liabilities
Accounts payable and accrued expenses $ 1,726 $ 2,616
Payroll liabilities 391 141
Sales tax payable 70 48
Gift cards and certificates outstanding   124     120
 
Total current liabilities 2,311 2,925
 
Long-term liabilities
Deferred rent 2,666 1,863
Payable to related parties pursuant to tax receivable agreement   2,387     -
 
Total liabilities   7,364     4,788
 
Members' equity   -     6,596
 
Stockholders' equity
Preferred stock, $.0001 par value; 1,000 shares authorized;
390 shares issued and outstanding at September 30, 2011 - -
Common stock, $.0001 par value; 100,000 shares authorized;
7,100 shares issued, 5,506 outstanding at September 30, 2011 - -
Additional paid-in capital 30,255 -
Accumulated deficit (1,764 ) -
Treasury stock, at cost   (15,914 )   -
 
Total Crumbs Bake Shop, Inc. stockholders' equity 12,577 -
 
Non-controlling interest   7,808     -
 
Total stockholders' equity   20,385     -
 
$ 27,749   $ 11,384
 

CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

(Formerly Known As 57th Street General Acquisition Corp.)
ADJUSTED EBITDA AS DEFINED BY AMENDMENT NO. 3 TO THE
BUSINESS COMBINATION AGREEMENT DATED APRIL 7, 2011
(UNAUDITED AND IN THOUSANDS)
 
  Three Months Ended September 30     Nine Months Ended September 30
2011   2010 2011   2010
 
Net income (loss) attributed to the controlling
and non-controlling interest $ (1,560 ) $ (39 ) $ (1,988 ) $ 931
 
 
Depreciation 328 184 936 527
Amortization 34 29 101 87
Abandoned Lease Costs 6 189 20 198
Deferred Rent Expense 413 163 671 373
Non-recurring expenses   51     0     149     0
Adjusted EBITDA $ (728 ) $ 526   $ (111 ) $ 2,116




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