Einstein Bros 2012 Annual Report Download - page 30

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312513085036/d445565d10k.htm[9/11/2014 10:07:50 AM]
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
increase in average check of +3.7% that was partially offset by a decline in system-wide transactions of -3.3%. Our comparable transactions
decreased from 2010 primarily due to the transaction impact of our 2011 promotion not generating as many transactions as our 2010 free bagel
Friday promotion. Our catering sales increased by 16.3% over fiscal 2010. In addition, we maintained
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our focus on delivering product innovation focused on health and quality, under the theme of “Club Favorites”, a new menu program we introduced
in 2011.
Net income increased for fiscal 2011 due to decreases in our overall interest expense, a lower effective tax rate, partially offset by a decline
in income from operations. Interest expense, net decreased by $1.8 million primarily due to realizing the impacts of decreasing our overall debt
balance during the second half of 2010. The refinancing of our debt combined with the expiration of our interest rate swap, the pay down of our
credit facility and the full redemption of our Series Z lowered our average debt balance from $101.6 million for fiscal 2010 to $78.9 million for
fiscal 2011. These efforts also decreased our weighted average interest rates on our overall debt from 4.6% for fiscal 2010 to 3.1% for fiscal 2011.
Our effective tax rate decreased from 48.3% from fiscal 2010 to 37.6% for fiscal 2011. This decrease relates to the elimination of several items
that were non-deductible in 2010, including the $0.9 million adjustment on the modification of the Series Z, the additional redemption amount of
the Series Z and the remaining deferred tax associated with our interest rate swap which expired in 2010. Also, the realization of higher federal
employment tax credits in 2011 lowered our effective tax rate.
Company-Owned Restaurant Operations
Fiscal year ended
Increase/ Percentage of company-owned
(in thousands) (Decrease) restaurant sales
December 28, January 3, 2011 December 28, January 3,
2010 2012 vs. 2010 2010 2012
Company-owned restaurant sales $ 372,191 $378,723 1.8%
Percent of total revenues 90.4% 89.4%
Cost of sales:
Cost of goods sold $ 106,011 $112,002 5.7% 28.5% 29.6%
Labor costs 108,813 110,467 1.5% 29.2% 29.2%
Rent and related expenses 39,691 40,277 1.5% 10.7% 10.6%
Other operating costs 37,696 39,092 3.7% 10.1% 10.3%
Marketing costs 9,794 9,796 0.0% 2.6% 2.6%
Total company-owned restaurant costs $ 302,005 $311,634 3.2% 81.1% 82.3%
Total company-owned restaurant gross
margin $ 70,186 $ 67,089 (4.4%) 18.9% 17.7%
Comparable store sales for our company-owned restaurants for each quarter in 2010 and 2011 were as follows:
Fiscal 2010 Fiscal 2011 Change
First Quarter -0.2% -1.4% -1.2%
Second Quarter -2.2% -0.3% +1.9%
Third Quarter -0.2% +0.7% +0.9%
Fourth Quarter +1.0% +0.8% -0.2%
Annual -0.4% 0.0% +0.4%
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