Einstein Bros 2011 Annual Report Download - page 35

Form 10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312512092597/d260635d10k.htm[9/11/2014 10:08:30 AM]
Accounts receivable
5,841
7,774
1,933
Inventories 5,585 5,562 (23)
Current deferred income tax assets, net 11,149 9,013 (2,136)
Prepaid expenses 5,955 6,483 528
Other current assets 521 526 5
Total current assets 41,528 38,899 (2,629)
Current liabilities:
Accounts payable $ 7,445 $ 6,591 $ (854)
Accrued expenses and other current liabilities 20,488 24,611 4,123
Current portion of long-term debt 7,500 7,500 —
Total current liabilities 35,433 38,702 3,269
Working capital surplus $ 6,095 $ 197 $(5,898)
The decrease is primarily due to the increase in our accrued expenses and other current liabilities, which have increased due to an increase in
deferred revenue for gift card sales and for amounts still owed for our acquisitions of restaurant assets. The increase in accounts receivable was
the result of an increase in franchise and license billings for purchases from our commissaries as well as vendor rebates and credits. As of
January 3, 2012 we had unrestricted cash of $8.7 million, representing a decrease in unrestricted cash of $3.1 million during fiscal 2011. In
addition to changes in our unrestricted cash, other elements of working capital fluctuated in the normal course of business.
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Free Cash Flow
Free Cash Flow declined by $12.6 million in fiscal 2011, primarily due to a decline of $3.1 million in income from operations, $8.0 million
towards the installation of new coffee machines at our stores and $1.9 million towards the implementation of new POS systems at our stores.
Fiscal year ended
December 28,
2010
January 3,
2012
(in thousands)
Net cash provided by operating activities $ 43,769 $ 39,110
Net cash used in investing activities (15,737) (23,685)
Free cash flow 28,032 15,425
Net cash used in financing activities (26,149) (18,541)
Net increase (decrease) in cash and cash equivalents 1,883 (3,116)
Cash and cash equivalents, beginning of period 9,885 11,768
Cash and cash equivalents, end of period $ 11,768 $ 8,652
Based upon our projections for 2012, we believe our various sources of capital, including availability under our existing credit facility, and
cash flow provided by operating activities, are adequate to finance operations and capital expenditures as well as to satisfy the repayment of current
debt obligations.
Net Cash Provided by Operating Activities
Net cash generated by operating activities was $39.1 million for fiscal 2011 compared to $43.8 million for fiscal 2010, a 10.6% decrease.
The decrease can be attributed to timing differences within our accrued liabilities and accounts receivable. Our accrued expenses increased due to
an increase in deferred revenue for gift card sales and for amounts still owed for our acquisitions of restaurant assets. Our accounts receivable
increased due to an increase in franchise and license billings for purchases from our commissaries as well as vendor rebates and credits.
Cash Used in Investing Activities
During fiscal 2011, we spent $6.8 million, net of cash acquired, on the purchase of nine restaurants. We also used approximately $18.2
million of cash to purchase additional property and equipment as follows:
• $10.8 million for new restaurants and upgrades of existing restaurants, including the installation of new coffee equipment, exterior signs
and new menu boards;
• $6.4 million for replacement of equipment at our existing company-owned restaurants and at our manufacturing operations; and
• $1.0 million for general corporate purposes.