Einstein Bros 2004 Annual Report Download - page 22

http://www.sec.gov/Archives/edgar/data/949373/000104746905006202/a2153240z10-k.htm[9/11/2014 10:13:29 AM]
During fiscal 2004, operations generated $11.1 million of cash. We believe we will continue to see improvements in our cash flow from
operations during 2005 and that such cash flow will be adequate to fund operating costs. Due to the timing of interest payments under our $160
Million Notes, which are due January 1 and July 1, we generally consume cash from operations during the first and third fiscal quarters of each
year. During the second and fourth fiscal quarters of each year, we generally generate cash from operations. Historically, our fourth quarter is our
strongest quarter for generating cash due to seasonality and gift card promotions.
Investing Activities
During fiscal 2004, we used $9.4 million of cash to purchase additional property and equipment which included $1.2 million for new stores,
$5.8 million for replacement and new equipment at our existing company-operated stores, $0.8 million for our manufacturing operations and
$1.6 million for general corporate purposes.
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Financing Activities
During fiscal 2004, we used $1.0 million of cash to reduce our debt outstanding on the AmSouth Revolver, approximately $0.8 million to
repay our obligations under the Chesapeake Bagel Bakery Note Payable and approximately $0.3 million to repay our obligations under the New
Jersey Economic Development Authority Note Payable. This is further described in Note 10 of our consolidated financial statements set forth in
Item 8 of this report.
Contractual Obligations
The following table summarizes the amounts of payments due under specified contractual obligations as of December 28, 2004 (in thousands):
Payments Due by Period
2005
2006 to
2008
2009 to
2010
2011 and
thereafter Total
Accounts payable and accrued expenses $ 43,079 $ — $ — $ — $ 43,079
Debt 295 160,840 — — 161,135
Interest expense on $160 Million Notes 20,800 62,400 — — 83,200
Manditorily Redeemable Series Z — — 57,000 — 57,000
Minimum lease payments under capital leases 16 31 — — 47
Minimum lease payments under operating leases 26,358 35,536 4,321 3,353 69,568
Purchase obligations(a) 7,612 10,856 — — 18,468
Other long-term obligations(b) — 915 348 6,934 8,197
Total $ 98,160 $ 270,578 $ 61,669 $ 10,287 $ 440,694
(a) Purchase obligations consist of non-cancelable minimum purchases of frozen dough from our supplier and certain other raw ingredients
that are used in our products.
(b) Other long-term obligations consist of the remaining liability related to minimum future purchase commitments with a supplier that
advanced us $10.0 million in 1996 and guaranteed franchise debt.
We also have $5 million in letters of credit outstanding. The letters of credit expire on various dates during 2005, are automatically renewable
for one additional year and are payable upon demand in the event that we fail to pay certain workers compensation claims.
Off-Balance Sheet Guarantees
As of December 28, 2004, we had outstanding guarantees of indebtedness under certain leases of approximately $1.6 million. Additionally we
had other outstanding guarantees of indebtedness of approximately $125,000.
Non-GAAP Financial Measures
Free cash flow and EBITDA (which we define as earnings before: (1) interest, (2) taxes, (3) depreciation and amortization, (4) integration and