Einstein Bros 2004 Annual Report Download - page 23

http://www.sec.gov/Archives/edgar/data/949373/000104746905006202/a2153240z10-k.htm[9/11/2014 10:13:29 AM]
reorganization charges, (5) cumulative change in fair value of derivatives, (6) gain/loss on the investment, sale, disposal or exchange of assets,
(7) impairment and other related charges and (8) other income) are a basis upon which we measure our financial performance, as well as our ability
to pay down debt, save cash for future use and build shareholder equity. We also use these measures for budget and planning purposes. If a prior
estimated charge subsequently has a non-cash adjustment, that amount is not included in our reconciliation to EBITDA. We provide data regarding
free cash flow and EBITDA as additional information for
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investors. We believe that the presentation of these calculations provides meaningful non-GAAP financial measures to help investors understand
and compare business trends among different reporting periods on a consistent basis. These measures are not in accordance with, or an alternative
to, generally accepted accounting principles (GAAP). Rather, these measures are intended to supplement GAAP financial information, and may be
different from the measures used by other companies.
A reconciliation of GAAP numbers adjusted for free cash flow and EBITDA is as follows (in thousands of dollars):
2004 2003 2002
Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow:
Net cash provided by (used in) operating activities $ 11,110 $ 2,015 $ (6,670)
Less: purchases of fixed assets (9,393) (6,921) (5,172)
Free Cash Flow $ 1,717 $ (4,906) $ (11,842)
2004 2003 2002
(restated) (restated)
Reconciliation of Net Loss to EBITDA
Net Loss (17,405) (73,521) (44,894)
Adjustments:
Interest expense, net 23,196 34,184 42,883
Cumulative change in the fair value of derivatives — (993) (233)
Gain on investment in debt securities — (374) (2,537)
Loss (gain) on sale, disposal or abandonment of assets, net 1,557 (558) —
Loss on exchange of Series F Preferred Stock — 23,007 —
Other income (284) (172) (322)
Provision (benefit) for income taxes (49) 812 366
Depreciation and amortization 27,848 34,013 35,047
Charges for integration and reorganization costs — 2,132 4,194
Impairment charges and other related costs 450 5,292 —
EBITDA $ 35,313 $ 23,822 $ 34,504
Recent Accounting Pronouncements
In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 151,
"Inventory Costs—an amendment of ARB No. 43, Chapter 4." SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage) and amends Paragraph 5 of ARB 43, Chapter 4, by requiring that those items be
recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that
allocation of fixed-production overhead be based on the normal capacity of the production facilities. This Statement is effective during fiscal years
beginning after June 15, 2005. We do not believe the adoption of this Statement will have a material impact on our financial position and results of
operations.
In December 2004, the FASB issued SFAS No. 123 (revised 2004) entitled "Share-Based Payment" that addresses the accounting for share-