Einstein Bros 2013 Annual Report Download - page 29

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
increased 2.6% in 2012, with revenue growth offset by the closure of our commissaries.
• Manufacturing and commissary revenue decreased $3.5 million due to the closure of our commissaries and one less week in fiscal
2012. A decrease in commissary revenue of $4.9 million was partially offset by a 4.7% increase in manufacturing revenue of $1.4
million. We attribute this increase in manufacturing revenue to higher export sales. The extra 53 week in fiscal 2011 contributed an
additional $0.5 million of revenue.
• Franchise and license related revenues grew 8.3%, or $0.9 million, and was driven by an increase in comparable store sales of +1.3%
and unit growth. The extra 53 week in fiscal 2011 contributed an additional $0.1 million of revenue.
• Cost of goods sold decreased 180 basis points as a percentage of company-owned restaurant sales as a result of our cost savings
initiatives and the leveraged impact of price increases.
• Net income decreased 3.5% primarily due to the extra 53 week in fiscal 2011 and the above mentioned strategic alternative review
process, partially offset by our cost saving initiatives.
• Adjusted net income increased $3.1 million, or 23.9% to $16.3 million, or $0.94 adjusted earnings per diluted share, compared to
adjusted net income of $13.1 million, or $0.78 adjusted earnings per diluted share, on a comparable 52-week basis.
• Adjusted EBITDA increased 11.7% primarily due to improved revenue and cost saving initiatives.
• Our Board authorized a review of strategic alternatives to maximize value for all stockholders. This review was initiated in May and
culminated in December with a recapitalization of the Company, including the payment of a one-time special cash dividend of $4.00
per share of common stock totaling $68.1 million on December 27, 2012.
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Table of Contents
Consolidated Results – Fiscal 2012 vs Fiscal 2011
Fiscal Year Ended
(in thousands)
Increase/
(Decrease)
January 3,
2012
January 1,
2013
2012
vs. 2011
Revenues $423,595 $427,006 0.8%
Cost of sales 342,075 336,638 (1.6%)
Operating expenses 57,002 66,140 16.0%
Income from operations 24,518 24,228 (1.2%)
Interest expense, net 3,357 3,384 0.8%
Income before income taxes 21,161 20,844 (1.5%)
Total provision for income taxes 7,958 8,103 1.8%
Net income $ 13,203 $ 12,741 (3.5%)
Adjustments to net income:
Interest expense, net 3,357 3,384 0.8%
Provision for income taxes 7,958 8,103 1.8%
Depreciation and amortization 19,259 19,707 2.3%
Restructuring expenses 1,099 480 (56.3%)
Strategic alternatives expenses — 3,677 **
Other operating expenses (income), net (395) 1,592 **
Adjusted EBITDA $ 44,481 $ 49,684 11.7%
** Not meaningful
Our income from operations decreased by $0.3 million in 2012 to $24.2 million primarily as a result of the non-recurring strategic
alternatives review process we undertook in 2012 and an additional $0.8 million in income from operations resulting from the 53 week in fiscal
2011, primarily offset by improved margins in fiscal 2012.
Total revenues increased by $3.4 million to $427.0 million, primarily the result of increased revenue from our company-owned stores. The
extra 53 week in 2011 contributed an additional $7.3 million in revenue. System-wide comparable stores were +1.0% for fiscal 2012 which we
attribute to strong check growth of +4.2%, reflecting price and product mix favorability. Our catering business continues to be a strong revenue
generator, as evidenced by an increase in catering sales of 18.1% over fiscal 2011. To build same store sales, we focus on building traffic by
leveraging our strengths, growing average check and building brand awareness through various marketing initiatives.
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