Einstein Bros 2006 Annual Report Download - page 67

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http://www.sec.gov/Archives/edgar/data/949373/000104746907001622/a2176540z10-k.htm[9/11/2014 10:12:36 AM]
Change in valuation allowance 2,545 4,591 7,140
Total benefit (provision) for taxes $ — $ — $ (49)
80
The income tax effects of temporary differences that give rise to significant portions of deferred tax assets as of January 2, 2007, January 3,
2006, and December 28, 2004 are as follows:
2006
2005
2004
Deferred tax assets
Operating loss carryforwards $ 59,990 $ 59,958 $ 57,412
Capital loss carryforwards 1,237 1,237 1,237
Accrued expenses 2,003 1,317 2,424
Allowances for doubtful accounts 193 183 893
Other assets — 58 32
Property, plant and equipment 17,727 15,852 12,016
Total gross deferred tax asset 81,150 78,605 74,014
Less valuation allowance (81,150) (78,605) (74,014)
Total deferred tax asset $ — $ — $ —
22. SUPPLEMENTAL CASH FLOW INFORMATION
2006
2005
2004
(in thousands of dollars)
Cash paid during the period for:
Interest $ 16,135 $ 32,084 $ 21,166
Prepayment penalty upon redemption of $160 Million
Notes 4,800 — —
Non-cash investing and financing activities:
Non-cash option issuance — — 205
Non-cash purchase of equipment through capital leasing 205 33 51
23. RELATED PARTY TRANSACTIONS
E. Nelson Heumann is the chairman of our board of directors and is a current employee of Greenlight Capital, Inc. Greenlight and its affiliates
beneficially own approximately 94 percent of our common stock on a fully diluted basis. As a result, Greenlight has sufficient voting power
without the vote of any other stockholders to determine what matters will be submitted for approval by our stockholders, to approve actions by
written consent without the approval of any other stockholders, to elect all of our board of directors, and among other things, to determine whether
a change in control of our company occurs.
Greenlight owned $35.0 million of our $160 Million Notes when we called the Notes for redemption in January 2006. The Notes were
redeemed from the proceeds of our refinancing in February 2006 as further described in Note 11.
We entered into the Subordinated Note with Greenlight in February 2006 as further described in Note 11. The Subordinated Note has a
maturity date of February 28, 2013, carries a fixed interest rate of 13.75% per annum and requires a quarterly cash interest payment in arrears at
6.5% and quarterly paid-in kind interest that is added to the principal balance outstanding at 7.25%. Total interest expense related to the
Subordinated Note with Greenlight was $3.0 million for the year ended January 2, 2007.