Panera Bread 2005 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2005 Panera Bread annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

45
On January 9, 2003, the Company purchased from a franchisee substantially all of the assets of four operating bakery-cafes as well
as the area development rights for the Louisville and Lexington, Kentucky markets for a purchase price of $5.5 million. Of the
purchase price, $5.0 million was paid in cash at the acquisition date and $0.5 million was paid, with interest, in cash six months from
the acquisition date. The acquisition price was paid with cash on hand. The Consolidated Statements of Operations include the results
of operations of the four operating bakery-cafes from the date of acquisition. The pro forma impact of the acquisition on prior periods
is not presented as the impact is not material to reported results. The Company allocated the purchase price to the assets acquired in
the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $1.7 million to fixed
assets, $0.1 million to inventories, and $3.7 million to goodwill.
4. Inventories
Inventories consist of the following (in thousands):
December 27,
2005
December 25,
2004
Food:
Fresh dough facilities:
Raw materials ......................................................................................................................................... $ 1,941 $ 1,733
Finished goods ........................................................................................................................................ 331 362
Bakery-cafes:
Raw materials ......................................................................................................................................... 3,989 2,520
Paper goods.................................................................................................................................................. 881 595
Retail merchandise....................................................................................................................................... 216 188
$ 7,358 $ 5,398
5. Property and Equipment
Major classes of property and equipment consist of the following (in thousands):
December 27,
2005
December 25,
2004
Leasehold improvements ............................................................................................................................. $ 174,043 $ 131,059
Land and land improvements....................................................................................................................... 712 712
Machinery and equipment ........................................................................................................................... 120,099 90,034
Furniture and fixtures .................................................................................................................................. 28,897 21,514
Signage ........................................................................................................................................................ 7,708 5,282
Smallwares................................................................................................................................................... 6,657 4,536
Construction in progress .............................................................................................................................. 48,988 36,464
387,104 289,601
Less: accumulated depreciation ................................................................................................................... 118,295 87,876
Property and equipment, net ........................................................................................................................ $ 268,809 $ 201,725
The Company recorded depreciation expense related to these assets of $33.0 million, $25.3 million, and $18.3 million in 2005,
2004, and 2003, respectively.
6. Goodwill
The changes in the carrying amount of goodwill at December 27, 2005 and December 25, 2004 are as follows (in thousands):
Company Bakery-
Cafe Operations
Fresh Dough
Operations
Total
Balance December 27, 2003 ............................................................................................... $ 32,015 $ 728 $ 32,743
Dallas acquisition................................................................................................................ 23 23
Toledo/Michigan acquisition .............................................................................................. 116 116
Minority interest owner acquisition.................................................................................... 2,445 2,445
Balance December 25, 2004 ............................................................................................... 34,599 728 35,327
Minority interest owner acquisition.................................................................................... 224 226
Indiana acquisition.............................................................................................................. 12,989 12,987
Balance December 27, 2005 ............................................................................................... $ 47,812 $ 728 $ 48,540
Goodwill accumulated amortization was $7.9 million at December 27, 2005 and December 25, 2004.