Einstein Bros 2007 Annual Report Download - page 62

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http://www.sec.gov/Archives/edgar/data/949373/000104746908002111/a2183061z10-k.htm[9/11/2014 10:12:02 AM]
3. RESTRICTED CASH (Continued)
(c) We had restricted cash held as collateral for a letter of credit issued to one of our distributors. Our distributor could access
the letter of credit in the event that we fail to pay them for products delivered to our company-owned restaurants. This
relationship was terminated and the letter of credit was subsequently cancelled.
(d) The lease for our Corporate office required us to set aside funds in a restricted cash account along with $100,000 deposit
that was held by the lessor. The deposit is included in other assets on our balance sheet as of January 1, 2008.
(e) We also have various restricted cash accounts for the benefit of taxing and other government authorities.
4. LICENSE, FRANCHISE AND OTHER RECEIVABLES
Franchise and other receivables consist of the following:
January 2,
2007
January 1,
2008
(in thousands of dollars)
Trade receivables $ 3,553 $ 3,838
Franchisee and licensee receivables 1,035 2,584
Vendor rebates(a) 1,197 203
Tenant improvement allowance receivable(b) 8 565
Stop loss receivables(c) 206 475
Tax refunds 549 511
Other 350 237
Total franchise and other receivables 6,898 8,413
Less allowance for doubtful accounts 505 606
Total franchise and other receivables, net $ 6,393 $ 7,807
(a) Vendor rebates represent a rebate earned at the time products are purchased and are not contingent upon any level of
purchases or period of time. Vendor rebates are recorded as a reduction to cost of sales when products are sold.
(b) Tenant improvement allowance receivables are payments to be received from lessors related to new leases that we have
signed. Pursuant to SFAS No. 13, we record these as deferred rent and amortize them over the life of the lease.
(c) Stop loss receivables are payments that we made for claims over our self-insured limits, which will be reimbursed to us by
our insurance carrier.
75
EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
5. INVENTORIES
Inventories, which consist of food, beverage, paper supplies and bagel ingredients, are stated at the lower of cost or market, with cost being
determined by the first-in, first-out method. Inventories consist of the following:
January 2,
2007
January 1,
2008
(in thousands of dollars)