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http://www.sec.gov/Archives/edgar/data/949373/000110465906016136/a06-3178_110k.htm[9/11/2014 10:13:03 AM]
NEW WORLD RESTAURANT GROUP, INC.
FORM 10-K
TABLE OF CONTENTS
PART I
ITEM 1.
BUSINESS
2
ITEM 1A.
RISK FACTORS
9
ITEM 1B.
UNRESOLVED STAFF COMMENTS
14
ITEM 2.
PROPERTIES
15
ITEM 3.
LEGAL PROCEEDINGS
17
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
18
PART II
ITEM 5.
MARKET FOR REGISTRANT’ S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
18
ITEM 6.
SELECTED FINANCIAL DATA
19
ITEM 7.
MANAGEMENT’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
21
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
36
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
37
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES
73
ITEM 9A.
CONTROLS AND PROCEDURES
73
ITEM 9B.
OTHER INFORMATION
73
PART III
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
74
ITEM 11.
EXECUTIVE COMPENSATION
74
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
74
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
74
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
74
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
75
1
PART I
ITEM 1. BUSINESS
General
New World Restaurant Group, Inc. was organized as a Delaware corporation in November 1992. We are a leader in the quick casual segment
of the restaurant industry specializing in high-quality foods for breakfast and lunch in a café atmosphere with a neighborhood emphasis. We
operate and license locations primarily under the Einstein Bros. and Noah’ s brand names, and franchise locations primarily under the Manhattan
Bagel brand name. We also operate a dough production facility. We view our primary business as operating, franchising and licensing strong
restaurant brands in the marketplace. Our manufacturing operations are supportive to our main business focus but allow us to leverage our inherent
cost structure via third party business and enhancement of our brands through new product channels.
In our early years, we operated and franchised specialty coffee cafés in the northeastern United States under the brand names of New World
Coffee (New World) and Willoughby’ s Coffee and Tea (Willoughby’ s). In addition to coffee, we also served fresh, high quality gourmet foods and
pastries. Our business strategy in those years was to be a franchisor and grow through acquisitions. With the acquisition of Manhattan Bagel
Company, Inc. (Manhattan) in 1998 and Chesapeake Bagel Bakery (Chesapeake) in 1999, we became a significant franchisor of bagel restaurants
and, to a lesser extent, of coffee cafés.
In 2001, our strategy evolved to include company-operated restaurants as well as franchised and licensed locations as we completed the
acquisition of substantially all of the assets (the Einstein Acquisition) of Einstein/Noah Bagel Corp. (ENBC) and its majority-owned subsidiary,
Einstein/Noah Bagel Partners, L.P., which operated 2 brands: Einstein Bros. Bagels (Einstein Bros.) and Noah’ s New York Bagels (Noah’ s). The