Einstein Bros 2012 Annual Report Download - page 34

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10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312513085036/d445565d10k.htm[9/11/2014 10:07:50 AM]
restaurants and the relocation of seven to ten company-owned restaurants. We also intend to deploy capital into areas such as remodeling, installing
drive-thru lanes and adding new exterior signage.
The following is information on our restaurant economics as of January 1, 2013 and represents the average company-owned restaurant that
has been open longer than one year:
Unit Economics
January 1,
2013
(in thousands)
A) Last 12 months average restaurant sales $ 883
B) Restaurant operating profit $ 174
C) Margin (B/A) 19.7%
D) Cash investment cost $ 516
E) Cash on cash return (B/D) 34%
F) Restaurant-level earnings before interest, taxes, depreciation,
amortization and rent $ 244
G) Fully capitalized investment $ 1,076
H) Fully capitalized cash on cash return (F/G) 23%
Amount excludes pre-opening expenses.
Restaurant operating profit $174,000 plus 2012 average restaurant rent expense of $70,000 per year.
Average rent expense capitalized at 8 times plus cash investment cost of $516,000.
41
Table of Contents
Cash Flow Through On A Per Store Basis
Fiscal Year Ended
January 1, 2013
Company Owned Licensed Franchised
(in thousands)
Average unit volume $ 883 $ 450 $ 859
Contribution margin %(1)(2) 19.7% 6.6% 5.0%
Contribution margin $ 174 $ 30 $ 43
Cash investment $ 516 $- $-
Upfront fee $- $ 12.5 $ 35
(1) Reflects contribution margin for company-owned restaurants open for greater than one year and weighted average royalty rate of system.
(2) Franchisees also contribute 4.0% of sales for marketing activities which equates to an average of $40,000 per location.
(3) Only reflects Einsteins Bros.
Senior Credit Facility
In December 2010, we entered into a senior credit facility with Bank of America and a syndicate of institutional lenders, which was amended
and restated in December 2012 (the “Senior Credit Facility”).
The Senior Credit Facility consists of a:
• $75.0 million revolving credit facility maturing on December 6, 2017 (“revolver”); and
• $100.0 million first lien term loan maturing December 6, 2017.
We may prepay amounts outstanding under the credit facility and may terminate commitments in whole at any time without penalty or
premium upon prior written notice.
In addition, the Senior Credit Facility provides for (i) an incremental term loan (the “Incremental Term Loan”) and (ii) an increase in the
revolver (the “Revolving Facility Increase” and together with the Incremental Term Loan, the “Incremental Facilities”) of up to $50 million to be
used by us, if needed, solely for the purpose of making acquisitions permitted under the Senior Credit Facility. If we choose to draw down the
Incremental Facilities, the outstanding amount of the Incremental Facilities must be repaid in equal quarterly installments on the last day of each
calendar quarter, with any remaining amounts due and payable on December 6, 2017. Availability of the Incremental Facilities is subject to
customary borrowing conditions, including the absence of any default or material adverse change, and to a requirement of advanced successful
syndication of the Incremental Facilities.
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