Einstein Bros 2009 Annual Report Download - page 8

Form 10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312510040721/d10k.htm[9/11/2014 10:09:50 AM]
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ITEM 1A. RISK FACTORS
Cautionary Note Regarding Forward-Looking Statements:
We wish to caution our readers that this report, including the Management’ s Discussion and Analysis of Financial Conditions and Results of
Operations (“MD&A”), contains forward-looking statements within the meaning of the federal securities laws. All such statements are qualified by
this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (“1933 Act”). The
following important factors, among others, could cause the actual results to differ materially from those indicated by forward-looking statements
made in this report and from time to time in news releases, reports, proxy statements, registration statements and other written communications, as
well as verbal forward-looking statements made from time to time by representatives of the Company. Such forward-looking statements involve
risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future performance or
achievements expressed or implied by these forward-looking statements. Our financial condition and results of operations are sensitive to, and may
be adversely affected by, a number of factors, many of which are largely outside the Company’ s control. Factors that might cause actual events or
results to differ materially from those indicated by these forward-looking statements may include matters such as future economic performance,
restaurant openings or closings, operating margins, the availability of acceptable real estate locations, the sufficiency of our cash balances and cash
generated from operating and financing activities for our future liquidity and capital resource needs, and other matters, and are generally
accompanied by words such as: believes, anticipates, plans, intends, estimates, predicts, targets, expects, contemplates and similar expressions that
convey the uncertainty of future events or outcomes. We do not undertake any obligation to update or revise any forward looking statements to
reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as may be required under
applicable law. An expanded discussion of some of these risk factors follows. The list of risk factors below is not exhaustive.
Risk Factors Relating to Our Business and Our Industry
General economic conditions have affected, and could continue to affect, discretionary consumer spending, particularly spending for meals
prepared away from home.
International, national and local economic conditions, including credit and mortgage markets, energy costs, lay-offs, foreclosure rates,
bankruptcies, and similar adverse economic news and factors affect discretionary consumer spending. These factors could reduce discretionary
consumer spending which in turn could reduce our guest traffic or average check. In 2008 and 2009, restaurants industry-wide were adversely
affected as a result of reduced consumer spending due to rising fuel and energy costs, lay-offs and general economic conditions. The conditions
experienced recently also include reduced consumer confidence, on-going concerns about down-sizing and lay-offs, the housing market, concerns
over the stability of financial institutions, and increased health care and energy costs. Adverse changes in consumer discretionary spending, which
could be affected by many different factors that are out of our control, including those listed above, could harm our business prospects, financial
condition, operating results and cash flows. Our success will depend in part upon our ability to anticipate, identify and respond to changing
economic and other conditions.
The economic turmoil that has arisen in the credit markets and in the housing markets as well as job losses throughout various sectors of the
economy during and following 2008 and 2009 may continue to suppress discretionary spending and other consumer purchasing habits and, as a
result, adversely affect our results of operations.
Failure to protect food supplies and adhere to food safety standards could result in food-borne illnesses.
Food safety and reputation for quality is the most significant risk to any company that operates in the restaurant industry. Food safety is the
focus of increased government regulatory initiatives at the local, state and federal levels.
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Failure to protect our food supply or enforce food safety policies, such as proper food temperatures and adherence to shelf life dates, could
result in food-borne illnesses and/or injuries to our guests. Also, our reputation of providing high quality food is an important factor in choosing
our restaurants. Instances of food borne illness, including listeriosis, salmonella and e-coli, whether or not traced to our restaurants, could reduce
demand for our menu offerings. If any of our guests become ill from consuming our products, the affected restaurants may be forced to close. An
instance of food contamination originating from one of our restaurants, our commissaries or suppliers, or our manufacturing plant could have far-
reaching effects, as the contamination, or the perception of contamination could affect substantially all of our restaurants. In addition, publicity