Einstein Bros 2012 Annual Report Download - page 24

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312513085036/d445565d10k.htm[9/11/2014 10:07:50 AM]
Comparable store sales percentages are non-GAAP financial measures, which should not be considered in isolation or as a substitute for
other measures of performance prepared in accordance with GAAP, and may not be equivalent to comparable store sales as defined or used by
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.
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Results of Operations for Fiscal 2012 as compared to Fiscal 2011
Financial Highlights
• System-wide comparable store sales increased +1.0%.
• Total revenues increased $3.4 million, or 0.8%, which was driven by an increase in company-owned restaurant revenue of $6.1 million
and franchise and license related revenue of $0.9 million, partially offset by a decline in manufacturing and commissary revenue. The
extra 53 week in fiscal 2011 contributed an additional $7.3 million of revenue. Excluding the extra week in fiscal 2011, total revenues
increased 2.6% in 2012, with revenue growth offset by the closure of our commissaries.
• Manufacturing and commissary revenue decreased $3.5 million due to the closure of our commissaries and one less week in fiscal
2012. A decrease in commissary revenue of $4.9 million was partially offset by a 4.7% increase in manufacturing revenue of $1.4
million. We attribute this increase in manufacturing revenue to higher export sales. The extra 53 week in fiscal 2011 contributed an
additional $0.5 million of revenue.
• Franchise and license related revenues grew 8.3%, or $0.9 million, and was driven by an increase in comparable store sales of +1.3%
and unit growth. The extra 53 week in fiscal 2011 contributed an additional $0.1 million of revenue.
• Cost of goods sold decreased 180 basis points as a percentage of company-owned restaurant sales as a result of our cost savings
initiatives and the leveraged impact of price increases.
• Net income decreased 3.5% primarily due to the extra 53 week in fiscal 2011 and the above mentioned strategic alternative review
process, partially offset by our cost saving initiatives.
• Adjusted net income increased $3.3 million, or 25.2% to $16.4 million, or $0.95 adjusted earnings per diluted share, compared to
adjusted net income of $13.1 million, or $0.78 adjusted earnings per diluted share, on a comparable 52-week basis.
• Adjusted EBITDA increased 11.7% primarily due to improved revenue and cost saving initiatives.
• Our Board authorized a review of strategic alternatives to maximize value for all stockholders. This review was initiated in May and
culminated in December with a recapitalization of the Company, including the payment of a one-time special cash dividend of $4.00
per share of common stock totaling $68.1 million on December 27, 2012.
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Table of Contents
Consolidated Results – Fiscal 2012 vs Fiscal 2011
Fiscal year ended
(in thousands)
Increase/
(Decrease)
January 3,
2012
January 1,
2013
2012
vs. 2011
Revenues $423,595 $427,006 0.8%
Cost of sales 342,075 336,638 (1.6%)
Operating expenses 57,002 66,140 16.0%
Income from operations 24,518 24,228 (1.2%)
Interest expense, net 3,357 3,384 0.8%
Income before income taxes 21,161 20,844 (1.5%)
Total provision for income taxes 7,958 8,103 1.8%
Net income $ 13,203 $ 12,741 (3.5%)
Adjustments to net income:
Interest expense, net 3,357 3,384 0.8%
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