Einstein Bros 2012 Annual Report Download - page 25

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312513085036/d445565d10k.htm[9/11/2014 10:07:50 AM]
Provision for income taxes
7,958
8,103
1.8%
Depreciation and amortization 19,259 19,707 2.3%
Restructuring expenses 1,099 480 (56.3%)
Strategic alternatives expenses — 3,677 **
Other operating expenses (income), net (395) 1,592 **
Adjusted EBITDA $ 44,481 $ 49,684 11.7%
** Not meaningful
Our income from operations decreased by $0.3 million in 2012 to $24.2 million primarily as a result of the non-recurring strategic
alternatives review process we undertook in 2012 and an additional $0.8 million in income from operations resulting from the 53 week in fiscal
2011, primarily offset by improved margins in fiscal 2012.
Total revenues increased by $3.4 million to $427.0 million, primarily the result of increased revenue from our company-owned stores. The
extra 53 week in 2011 contributed an additional $7.3 million in revenue. System-wide comparable stores were +1.0% for fiscal 2012 which we
attribute to strong check growth of +4.2%, reflecting price and product mix favorability. Our catering business continues to be a strong revenue
generator, as evidenced by an increase in catering sales of 17.3% over fiscal 2011. To build same store sales, we focus on building traffic by
leveraging our strengths, growing average check and building brand awareness through various marketing initiatives.
Net income decreased for fiscal 2012 primarily due to the extra 53 week in 2011, which contributed net income of $0.5 million, and $3.7
million ($2.2 million, net of tax) in non-recurring strategic alternatives expenses, partially offset by improved margins.
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Table of Contents
Company-Owned Restaurant Operations
Fiscal year ended
Increase/ Percentage of company-owned
(in thousands) (Decrease) restaurant sales
January 3, January 1, 2012 January 3, January 1,
2012 2013 vs. 2011 2012 2013
Company-owned restaurant sales $378,723 $384,783 1.6%
Percent of total revenues 89.4% 90.1%
Cost of sales (exclusive of depreciation and
amortization):
Cost of goods sold $112,002 $106,925 (4.5%) 29.6% 27.8%
Labor costs 110,467 111,784 1.2% 29.2% 29.0%
Rent and related expenses 40,277 41,993 4.3% 10.6% 10.9%
Other operating costs 39,092 40,320 3.1% 10.3% 10.5%
Marketing costs 9,796 11,380 16.2% 2.6% 3.0%
Total company-owned restaurant costs $311,634 $312,402 0.2% 82.3% 81.2%
Total company-owned restaurant gross margin $ 67,089 $ 72,381 7.9% 17.7% 18.8%
Comparable store sales for our company-owned restaurants for each quarter in fiscal 2011 and 2012 were as follows:
Fiscal 2011 Fiscal 2012 Change
First Quarter -1.4% +1.1% +2.5%
Second Quarter -0.3% +1.2% +1.5%
Third Quarter +0.7% +0.2% -0.5%
Fourth Quarter +0.8% +1.1% +0.3%
Annual 0.0% +0.9% +0.9%
Company-owned restaurant sales for fiscal 2012 increased $6.1 million, which is attributable to favorable company-owned comparable store
sales, net incremental revenue of $1.7 million from new company-owned stores opened in 2012, $3.4 million from stores we acquired from
franchisees and income from gift card breakage of $1.0 million. Stores that we opened in the fourth quarter 2011 further contributed incremental
revenue of $5.3 million in fiscal 2012. Company-owned comparable store sales increased +0.9%, with average check increasing +4.9% partially
offset by a decline in transactions. In fiscal 2012, we opened fifteen restaurants, acquired eight restaurants and closed one restaurant. Restaurant
sales for 2011 benefited from $6.7 million in revenue resulting from the extra 53 week. We took two price increases in fiscal 2012, totaling
approximately 1.0%.
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