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http://www.sec.gov/Archives/edgar/data/949373/000104746905006202/a2153240z10-k.htm[9/11/2014 10:13:29 AM]
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
2
PART I
ITEM 1. BUSINESS
Business Overview
We are a leader in the quick casual segment of the restaurant industry. With 690 locations in 34 states and in the District of Columbia as of
December 28, 2004, we operate and license locations primarily under the Einstein Bros. and Noah's brand names, and franchise locations primarily
under the Manhattan and Chesapeake brand names. We also operate a dough production facility. We view our business as a single segment with a
focus on our company-operated restaurants. Our manufacturing and franchise operations are either supportive or ancillary to our main business
focus.
We are a Delaware corporation organized in November 1992, and our principal executive offices are located at 1687 Cole Boulevard, Golden,
CO 80401. The telephone number of our principal executive offices is (303) 568-8000. Our Internet address is www.nwrgi.com. The information
on our website is not incorporated by reference into this Form 10-K.
We have a 52/53-week fiscal year ending on the Tuesday closest to December 31. Fiscal year 2004, 2003 and 2002 each contained 52 weeks
and ended on December 28, 2004, December 30, 2003, and December 31, 2002, respectively.
The restaurant industry, in which we compete, is intensely competitive. The industry is often affected by changes in demographics, consumers'
eating habits and preferences, local and national economic conditions affecting consumer spending habits, population trends and local traffic
patterns. Key elements of competition in the industry are price, quality and value of products offered, quality and speed of service, advertising
effectiveness, brand name identification, restaurant locations and attractiveness of facilities.
Our financial focus is on long term, sustainable growth in free cash flow. Free cash flow represents net cash provided by operations less the
investment in our facilities and fixed assets. By achieving free cash flow, we will be more capable of paying down debt, saving cash for future use
and building shareholder equity. We also believe free cash flow may give us the ability to pursue new opportunities and/or acquire other
businesses. Increasing our operating profit and efficiently managing working capital and capital expenditures primarily drive free cash flow.
In measuring our overall growth and progress, we focus on various key performance indicators. Such key performance indicators include:
•same-store sales growth,
•number of company-owned restaurant openings and closings,
•number of franchise and licensed restaurant openings and closings,
•restaurant level and concept level margins,
•cash generated from operations,
•free cash flow, and
•EBITDA (which we define as earnings before: (1) interest, (2) taxes, (3) depreciation and amortization, (4) integration and