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Einstein Noah Restaurant Group Reports First Quarter 2012 Financial Results

Comparable store sales percentages are non-GAAP financial measures, which should not be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP, and may not be equivalent to comparable store sales as defined or used by other companies. The Company does not record franchise or license restaurant sales as revenues. However, royalty revenues are calculated based on a percentage of franchise and license restaurant sales, as reported by the franchisees or licensees.

           
EINSTEIN NOAH RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings per share and related share information)
 
 
13 weeks ended Increase/
(in thousands) (Decrease)
March 29, April 3, 2012
2011 2012 vs. 2011  
 
Revenues:
Company-owned restaurant sales $ 89,799 $ 93,447 4.1 %
Manufacturing and commissary revenues 8,977 8,450 (5.9 %)
Franchise and license related revenues   2,469   2,976 20.5 %
Total revenues 101,245 104,873 3.6 %
 
Cost of sales (exclusive of depreciation and amortization shown separately below):
Company-owned restaurant costs
Cost of goods sold 26,113 26,369 1.0 %
Labor costs 27,030 26,868 (0.6 %)
Rent and related expenses 10,256 10,277 0.2 %
Other operating costs 9,114 9,327 2.3 %
Marketing costs   3,302   2,504 (24.2 %)
Total company-owned restaurant costs 75,815 75,345 (0.6 %)
 
Manufacturing and commissary costs   7,584   6,896 (9.1 %)
Total cost of sales 83,399 82,241 (1.4 %)
 
Gross margin:
Company-owned restaurant 13,984 18,102 29.4 %
Manufacturing and commissary 1,393 1,554 11.6 %
Franchise and license   2,469   2,976 20.5 %
Total gross margin 17,846 22,632 26.8 %
 
Operating expenses:
General and administrative expenses 10,091 11,083 9.8 %
Depreciation and amortization 4,540 4,767 5.0 %
Restructuring expenses 213 554 160.1 %
Other operating expenses, net   113   184 62.8 %
Income from operations 2,889 6,044 109.2 %
 
Interest expense, net   910   800 (12.1 %)
Income before income taxes 1,979 5,244 165.0 %
Provision for income taxes   811   2,040 151.5 %
Net income $ 1,168 $ 3,204 174.3 %
 
Net income – Basic $ 0.07 $ 0.19 171.4 %
Net income – Diluted $ 0.07 $ 0.19 171.4 %
Cash dividend declared per common share $ - $ 0.125 **
 
Weighted average number of common shares outstanding:
Basic 16,678,607 16,850,776 1.0 %
Diluted 16,981,144 17,125,409 0.8 %
 
** Not meaningful
 
       
EINSTEIN NOAH RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
PERCENTAGE RELATIONSHIP TO TOTAL REVENUES
(unaudited)
 
13 weeks ended
(percent of total revenue)
March 29, April 3,
2011 2012
 
Revenues:
Company-owned restaurant sales 88.7 % 89.1 %
Manufacturing and commissary revenues 8.9 % 8.1 %
Franchise and license related revenues 2.4 % 2.8 %
Total revenues 100.0 % 100.0 %
 
Cost of sales (exclusive of depreciation and amortization shown separately below):
Company-owned restaurant costs (1)
Cost of goods sold 29.1 % 28.2 %
Labor costs 30.1 % 28.8 %
Rent and related expenses 11.4 % 10.9 %
Other operating costs 10.1 % 10.0 %
Marketing costs 3.7 % 2.7 %
Total company-owned restaurant costs 84.4 % 80.6 %
 
Manufacturing and commissary costs (2) 84.5 % 81.6 %
Total cost of sales 82.4 % 78.4 %
 
Gross margin:
Company-owned restaurant (1) 15.6 % 19.4 %
Manufacturing and commissary (2) 15.5 % 18.4 %
Franchise and license 100.0 % 100.0 %
Total gross margin 17.6 % 21.6 %
 
Operating expenses:
General and administrative expenses 10.0 % 10.6 %
Depreciation and amortization 4.4 % 4.5 %
Restructuring expenses 0.2 % 0.5 %
Other operating expenses, net 0.1 % 0.2 %
Income from operations 2.9 % 5.8 %
 
Interest expense, net 0.9 % 0.8 %
Income before income taxes 2.0 % 5.0 %
Provision for income taxes 0.8 % 1.9 %
Net income 1.2 % 3.1 %
 
 
(1) As a percentage of company-owned restaurant sales
(2) As a percentage of manufacturing and commissary revenues
       
EINSTEIN NOAH RESTAURANT GROUP, INC.
SELECTED FINANCIAL INFORMATION
(in thousands)
 
 

Selected Consolidated Balance Sheet Information:

December 28, 2010 April 3, 2012
Cash and cash equivalents, end of period $ 8,652 $ 9,601
Property, plant and equipment, net 59,017 57,926
Total assets 204,732 202,986
Total debt 74,200 72,325
Total liabilities 116,919 113,193
 
 
 
13 weeks ended

Selected Consolidated Cash Flow Information:

March 29, 2011 April 3, 2012
Net cash provided by operating activities $ 7,758 $ 11,382
Net cash used in investing activities (3,879 ) (6,760 )
Net cash used in financing activities (4,856 ) (3,673 )
Free cash flow (cash provided by operating

activities less cash used in investing activities)

3,879 4,622
 
   

Reconciliation of GAAP to Non-GAAP Measures:

13 weeks ended
  March 29,   April 3,
2011 2012
 
 
Net income $ 1,168 $ 3,204
Adjustments to net income:
Interest expense, net 910

 

800
Provision for income taxes 811

 

2,040
Depreciation and amortization 4,540

 

4,767
Restructuring expenses 213

 

554
Other operating expenses, net   113   184
 
Adjusted EBITDA $ 7,755 $ 11,549
       
EINSTEIN NOAH RESTAURANT GROUP, INC.
SELECTED FINANCIAL INFORMATION
       
13 weeks ended April 3, 2012
Company
Owned Franchised Licensed Total
Consolidated Total
Beginning balance, January 3, 2012 440 94 239 773
Opened restaurants 1 3 1 5
Closed restaurants - - (1 ) (1 )
Refranchising, Net 6 (6 ) -   -  
Ending balance, April 3, 2012 447 91   239   777  
 
     
Trailing 12 Months Activity
Company            
Owned Franchised Licensed Total
Consolidated Total
Beginning balance March 29, 2011 432 93 208 733
Opened restaurants 9 7 40 56
Closed restaurants (1 ) (2 ) (9 ) (12 )
Refranchising, Net 7   (7 ) -   -  
Ending balance April 3, 2012 447   91   239   777  




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