Einstein Bros 2003 Annual Report Download - page 47

http://www.sec.gov/Archives/edgar/data/949373/000104746904009609/a2132006z10-k.htm[9/11/2014 10:13:55 AM]
A reconciliation of net loss available to common stockholders and related net loss per share for goodwill and trademarks no longer subject to
amortization following SFAS 142 adoption is as follows:
December 30,
2003
December 31,
2002
January 1,
2002
(amounts in thousands, except for per share amounts)
Net loss available to common stockholders, as reported $ (82,131) $ (68,067) $ (77,220)
Add back: Goodwill amortization expense — — 379
Add back: Trademark amortization expense — — 1,430
Adjusted net loss $ (82,131) $ (68,067) $ (75,411)
Basic and diluted net loss available to common stockholders
Per common share:
As reported $ (21.20) $ (51.81) $ (128.36)
As adjusted N/A N/A $ (125.35)
Long-Lived Assets
Our policy is to record long-lived assets at cost, amortizing these costs over the expected useful lives of the related assets. In accordance with
Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), these
assets are reviewed on a periodic basis for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets
may not be realizable. Furthermore, assets held and used in operations are evaluated for continuing value and proper useful lives by comparison to
expected undiscounted future cash flows. If impairment has occurred, it is calculated based on the difference between the asset's carrying value and
the underlying discounted future cash flows it is expected to generate.
Prior to the adoption of SFAS 142, all intangible assets were evaluated for impairment using the methods described in the preceding
paragraph. After the adoption of SFAS 142, amortizable intangible assets continue to use these methods.
Revenue Recognition
Retail sales are recognized when payment is tendered at the point of sale.
Manufacturing revenues are recognized upon shipment to customers.
Pursuant to the franchise agreements, franchisees are generally required to pay an initial franchise fee and a monthly royalty payment equal to
a percentage of the franchisees' gross sales. Initial franchise fees are recognized as revenue when we perform substantially all of our initial services
as required by the franchise agreement. Royalty fees from franchisees are accrued each month pursuant to the franchise agreements. Royalty
income and initial franchise fees are included in franchise revenues.
Advertising Costs
We expense advertising costs as incurred. We expensed approximately $12,948,000, $13,983,000 and $6,592,000 in advertising costs for the
years ended December 30, 2003, December 31, 2002 and January 1, 2002.
F-14
Deferred Rent
Certain of our lease agreements provide for scheduled rent increases during the lease term or for rental payments commencing at a date other
than initial occupancy. Provision has been made for the excess of operating lease rental expense, computed on a straight-line basis over the lease
term, over cash rental payments.
Shipping and Handling Costs
We classify shipping and handling expenses related to product sales as a cost of goods sold.