Einstein Bros 2012 Annual Report Download - page 56

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312513085036/d445565d10k.htm[9/11/2014 10:07:50 AM]
2014
3,750
2015 6,875
2016 11,875
2017 109,200
$136,700
Debt Issuance Costs
Debt issuance costs, which are reported as a component of other current assets and other assets, are summarized as follows:
January 3, January 1,
2012 2013
(in thousands)
Debt issuance costs-current $ 447 $ 570
Debt issuance costs-long-term 1,384 2,370
Total $ 1,831 $ 2,940
In connection with amending and restating the Senior Credit Facility on December 6, 2012, the Company capitalized an additional $1.6
million of debt issuance costs. Amortization expense relating to debt issuance costs was $0.5 million, $0.4 million and $0.5 million for the fiscal
years 2010, 2011 and 2012, respectively, and is included in interest expense in the accompanying consolidated statements of income and
comprehensive income. In fiscal 2010, the Company recorded a charge of approximately $1.0 million in unamortized debt issuance costs in
connection with the termination of its prior credit facility.
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Table of Contents
EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
9. DERIVATIVES
On March 3, 2011, the Company entered into two interest rate cap agreements relating to the Senior Credit Facility. Each agreement has a
two year term. The Company entered into the interest rate caps for a cap rate of 3.0% calculated on an initial notional amount of $18.75 million on
each cap for a total notional amount of $37.5 million based on the 3-month LIBOR. The effect of the interest rate caps is to cap the LIBOR portion
of the interest rate at 3.0%. The Company has determined that these agreements qualify as cash flow hedges. For fiscal 2012, unrealized losses of
approximately $51 thousand, net of taxes, were realized as interest expense on the Company’ s consolidated statements of income and
comprehensive income.
10. MANDATORILY REDEEMABLE SERIES Z PREFERRED STOCK
In September 2003, the Company completed an equity recapitalization with its preferred stockholders, who held a substantial portion of the
Company’ s common stock. Among other things, the Halpern Denny Fund III, L.P. interest in the Company’ s Mandatorily Redeemable Series F
Preferred Stock was converted into 57,000 shares of Series Z Mandatorily Redeemable Preferred Stock (“Series Z”).
The Series Z was recorded in the accompanying consolidated balance sheets at its full face value of $32.2 million as of December 29, 2009
which represented the total cash payable upon redemption. In a series of transactions throughout fiscal 2010, the Company redeemed $32.2 million
of Series Z shares and accrued additional redemption amount of approximately $2.6 million. There were no shares of Series Z outstanding as of the
end of fiscal 2010, nor have there been any other Series Z transactions since that time.
11. STOCKHOLDERS’ EQUITY
Common Stock
The Company intends to pay regular quarterly dividends at the discretion of its Board. The issuance of a dividend is dependent on a variety
of factors, including, but not limited to, available cash and the overall financial condition of the Company. The issuance of a dividend is also
subject to legal restrictions and the terms of the Company’ s Senior Credit Facility. The Company declared the following dividends during fiscal
years 2011 and 2012:
Date Declared Record Date
Dividend Per
Share Total Amount Payment Date
(in thousands)
May 3, 2011 June 1, 2011 $ 0.125 $ 2,094 July 15, 2011