Einstein Bros 2011 Annual Report Download - page 24

Form 10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312512092597/d260635d10k.htm[9/11/2014 10:08:30 AM]
other companies. We do not record franchise or license restaurant sales as revenues. However, royalty revenues are calculated based on a
percentage of franchise and license restaurant sales, as reported by the franchisees or licensees.
Results of Operations for Fiscal 2011 as compared to Fiscal 2010
Financial Highlights
• Consolidated revenues increased $11.9 million, which was driven by strong increases in our franchise and license revenue, a strong
increase in manufacturing revenue and $7.3 million contributed by the extra 53 week in fiscal 2011.
• Manufacturing and commissary revenues increased $4.1 million, which was driven by higher frozen dough sales to third party resellers
and $0.5 million contributed by the extra 53 week in fiscal 2011.
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• Franchise and license revenue related revenues grew $1.2 million, which was driven by an increase in comparable store sales of +1.8%
and $0.1 million contributed by the extra 53 week in fiscal 2011.
• Net income increased 24.3% primarily due to interest savings, a lower effective tax rate and the extra 53 week.
• Adjusted EBITDA decreased 1.8% primarily due to inflationary pressures in our product costs.
• EPS increased to $0.78 per share on a dilutive basis in fiscal 2011 compared to $0.67 per share on a dilutive basis in fiscal 2010. This
increase was primarily due to $0.03 in additional EPS contributed by the extra 53 week, interest rate savings and a lower effective tax
rate on our earnings. Restructuring charges incurred in fiscal 2011 reduced our EPS by approximately $0.04 per diluted share.
Consolidated Results – Fiscal 2011 vs Fiscal 2010
Fiscal year ended
Increase/
(Decrease) (in thousands)
December 28,
2010
January 3,
2012
2011
vs. 2010
Revenues $ 411,711 $423,595 2.9%
Cost of sales 327,923 342,328 4.4%
Operating expenses 56,217 56,749 0.9%
Income from operations 27,571 24,518 (11.1%)
Interest expense, net 5,135 3,357 (34.6%)
Adjustment for Series Z modification* 929 — (100.0%)
Write-off of debt issuance costs upon redemption of term loan 966 — (100.0%)
Income before income taxes 20,541 21,161 3.0%
Total provision for income taxes 9,918 7,958 (19.8%)
Net income $ 10,623 $ 13,203 24.3%
Adjustments to net income:
Interest expense, net 5,135 3,357 (34.6%)
Provision for income taxes 9,918 7,958 (19.8%)
Depreciation and amortization 17,769 19,259 8.4%
Series Z modification 929 — (100.0%)
Write-off of debt issuance costs 966 — (100.0%)
Restructuring expenses 477 1,099 130.4%
Other operating income (531) (395) (25.6%)
Adjusted EBITDA $ 45,286 $ 44,481 (1.8%)
*As a result of the March 17, 2010 agreement modifying our Series Z, we recognized a non-cash loss of $0.9 million on the extinguishment of
debt, recorded additional redemption within stockholders’ equity and recorded a discount within interest expense.
Our income from operations declined by $3.1 million in 2011 to $24.5 million primarily as a result of inflationary pressures on our product
costs, partially offset by $0.8 million in income from operations resulting from the 53 week in fiscal 2011.
Total revenues increased by $11.9 million to $423.6 million, primarily the result of increased revenue from our manufacturing and
commissary segment and $7.3 million in revenue from the extra 53 week. System-wide comparable stores were +0.4% for fiscal 2011 due to an
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