Einstein Bros 2003 Annual Report Download - page 67

http://www.sec.gov/Archives/edgar/data/949373/000104746904009609/a2132006z10-k.htm[9/11/2014 10:13:55 AM]
(amounts in thousands)
Series F preferred stock $ 266 $ (677)
Greenlight obligation 1,599 1,544
Bridge Loan 502 643
$140 Million Facility 480 (1,277)
Total $ 2,847 $ 233
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For the Year Ended
January 1, 2002
Instrument
Cumulative Change
in Fair Value of
Derivatives
(amounts in thousands)
Series F preferred stock $ 41,654
Greenlight obligation 11,374
Bridge Loan 4,220
$140 Million Facility 432
Total $ 57,680
The amounts listed in the above table are affected by the market price of the underlying common stock and other factors described in Note 1—
Derivative Instruments. As of December 31, 2000, the closing price of the common stock was $1.125, which price had decreased to $0.26 by
January 1, 2002 and was $0.09 on December 31, 2002. Additionally, as disclosed in Notes 6 and 9, significant issuances of warrants (previously
contingently-issuable) under the $140 Million Facility and Series F agreements occurred during the year ended December 31, 2002. As a result of
applying the classification methodology described in Note 1—Derivative Instruments, the fair value of the issued warrants was reclassified to
permanent equity, as denoted on the consolidated statement of changes in stockholders' equity for the years ended December 30, 2003 and
December 31, 2002.
13. Assets Held for Resale
In prior years, assets held for resale included company-owned stores that we intended to sell to our franchisees within the next fiscal year. We
evaluated the realization of the carrying amount of such assets based on the estimated fair value of such assets, which is determined based on the
stores' estimated selling price, less costs to sell. In 2001, we recorded an impairment charge of approximately $3.3 million in accordance with
Statement of Financial Accounting Standards No. 121. ("SFAS 121") as a result of our continued inability to sell the stores, and a shift in brand
focus given the Einstein Acquisition (Note 3). During 2001, we sold four stores in New York, and closed ten locations classified as assets held for
resale. During 2002, we sold seven stores for an aggregate sales price of $1.4 million, and closed 15 stores classified as assets held for resale.
14. Reorganization and Integration
During the quarter ended October 1, 2002, we implemented a plan to shut down our dough manufacturing facilities on the East Coast. During
the quarter ended December 31, 2002, we implemented a plan to terminate the lease obligation for the Eatontown location. We vacated the
Eatontown location in the last week of 2002. When initiated, the restructuring plans were expected to take approximately one year to complete,
subject to our ability to sublease the Eatontown facility. In the fourth quarter of fiscal 2003, we became aware that the Eatontown facility was in
the process of being sold and that the landlord had engaged a valuation expert to determine the total cost associated with our vacating the facility.
Based upon the results of this study, we adjusted our initial charge to our estimate of the ultimate liability on the Eatontown facility. We ultimately
recorded a $4.8 million charge associated with all these restructuring plans in 2002. Approximately $2.2 million of this charge represented a write-
off of equipment and leasehold improvements that were either abandoned or deemed unusable by us.
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The following table presents the activity and balances of the 2002 restructuring accrual for fiscal 2003: