Einstein Bros 2007 Annual Report Download - page 28

http://www.sec.gov/Archives/edgar/data/949373/000104746908002111/a2183061z10-k.htm[9/11/2014 10:12:02 AM]
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As of:
Dec 30, 2003 Dec 28, 2004 Jan 3, 2006 Jan 2, 2007 Jan 1, 2008
(in thousands of dollars, except per share data and as otherwise indicated)
Selected Balance Sheet Data:
Cash and cash equivalents $ 9,575 $ 9,752 $ 1,556 $ 5,477 $ 9,436
Property, plant and equipment, net 54,513 41,855 33,359 33,889 47,714
Total assets 181,738 158,456 130,924 133,154 148,562
Short-term debt, capital leases and current portion of long-
term debt 2,285 311 299 3,681 1,035
Mandatorily redeemable Series Z preferred stock, $.001 par
value, $1,000 per share liquidation value(3) 57,000 57,000 57,000 57,000 57,000
Senior notes, capital leases and other long-term debt, net of
discount 161,149 160,871 160,589 166,680 88,942
$1,000 per share liquidation value (temporary equity) — — — — —
Total stockholders' deficit (95,153) (112,483) (126,211) (132,231) (33,607)
Other Data:
Capital expenditures(4) $ 6,921 $ 9,393 $ 10,264 $ 13,172 $ 25,869
Number of locations at end of period 736 690 626 598 612
Franchised and licensed 272 237 191 182 196
Company-owned and operated 464 453 435 416 416
Percent Increase (decrease) in comparable store sales for
company-owned restaurants(5) (3.5)% (1.9)% 5.2% 4.5% 3.7%
(1) We have a 52/53-week fiscal year ending on the Tuesday closest to December 31. Fiscal years 2003, 2004, 2006 and 2007 which ended on December 30, 2003, December 28,
2004, January 2, 2007 and January 1, 2008, respectively, contained 52 weeks, while fiscal year 2005, which ended on January 3, 2006, contained 53 weeks.
(2) Net interest expense is comprised of interest paid or payable in cash and non-cash interest expense resulting from the amortization of debt discount, notes paid-in-kind, debt
issuance costs and the amortization of warrants issued in connection with debt financings, and interest income from our money market cash accounts.
(3) The adoption of Statement of Financial Accounting Standard No. 150 Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity resulted
in the Series Z Preferred Stock being presented as a liability rather than the historical mezzanine presentation of the Series F.
(4) Excludes fixed asset purchases for which payment had not occurred as of each year end.
(5) Comparable store sales represent sales at restaurants open for one full year that have not been relocated or closed during the current year. Comparable store sales include
company-owned restaurants only and represent the change in period-over-period sales for the comparable restaurant base. A restaurant becomes comparable in its 13th full
month of operation.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Overview
We are a leading fast-casual restaurant chain, specializing in high-quality foods for breakfast and lunch in a café atmosphere with a
neighborhood emphasis. As of January 1, 2008, we owned and operated, franchised or licensed 612 restaurants in 35 states and in the District of
Columbia, primarily under the Einstein Bros., Noah's and Manhattan Bagel brands. Einstein Bros. is a national fast-casual restaurant chain. Noah's
is a regional fast-casual restaurant chain operated exclusively on the West Coast and Manhattan Bagel is a regional fast casual chain operated
predominantly in the Northeast. Our product offerings include fresh bagels and other goods baked on-site, made-to-order sandwiches on a variety
of bagels and breads, gourmet soups and salads, decadent desserts, premium coffees and other café beverages. Our manufacturing and commissary
operations prepare and assemble consistent, high-quality ingredients and we deliver them to our restaurants quickly and efficiently through our
network of independent distributors. These operations support our main business focus, restaurant operations, by exposing our brands to new
product channels as well as enabling sales of our products to third parties.
We commenced operations as an operator and franchisor of coffee cafes in 1993. Substantial growth in our restaurant counts occurred through
a series of acquisitions. In 1998, we acquired the stock of Manhattan Bagel Company. In 1999, we acquired the assets of Chesapeake Bagel
Bakery. Our largest acquisition was in 2001 when we acquired substantially all the assets of Einstein/Noah Bagel Corp. in an auction conducted by
the bankruptcy court. To consummate this acquisition, we engaged in several rounds of financing that included the issuance of $165.0 million of