Einstein Noah: Provides Update on Strategic Alternatives

Lakewood / CO. (enr) Einstein Noah Restaurant Group, a leader in the quick-casual segment of the restaurant industry operating under the Einstein Bros. Bagels, Noah´s New York Bagels and Manhattan Bagel brands, announced that, in addition to continuing to explore a possible business combination or sale of the Company, its Board of Directors is considering a possible recapitalization of the Company, which may include payment of a special dividend, as part of its continuing review of strategic alternatives to maximize value to all shareholders In anticipation of meetings with possible investors, the Company is providing a financial outlook for the third quarter of 2012, which ended on October 02, 2012.

The possible recapitalization of the Company may include a new Senior Credit Facility consisting of a Term Loan and a Revolver. Credit Suisse LLC has been engaged as the administrative agent for the Term Loan, joint-lead arranger, and joint-bookrunner. KeyBanc Capital Markets Inc. has been engaged as the administrative agent for the Revolver, will serve as the syndication agent, and will act as joint-lead arranger and joint-bookrunner.

Piper Jaffray continues to serve as the Company´s financial advisor and Bryan Cave HRO continues to serve as the Company´s legal advisor in connection with the strategic alternatives review.

Jeff O´Neill, President and Chief Executive Officer, said, «We are pleased with our achievements to date in executing our asset-light expansion strategy, extending our positive comparable sales momentum to six consecutive quarters, and cash flow improvements through our comprehensive cost savings initiatives. We believe that our financial discipline and cash flow generation capabilities support our ability to access the capital markets on favourable terms».

Third Quarter 2012 Financial Outlook

The Company also provided a financial outlook for the third quarter ended October 02, 2012. Although the Company is currently in the process of preparing its financial statements for the third quarter and completing its financial reporting process, it expects total revenues to be approximately 105,5 million USD, including system-wide comparable store sales of approximately plus 0,2 percent. Net income is expected to grow more than 20 percent when compared to the prior year, to approximately 3,4 million USD including approximately 250’000 USD of pre-tax expenses related to the strategic alternatives review process. This compares to total revenues of 103,5 million USD, including system-wide comparable store sales of plus 1,0 percent, and net income of 2,8 million USD, in the third quarter of 2011. Adjusted Ebitda is expected to be approximately 11,7 million USD for the third quarter of 2012; up 13,6 percent from 10,3 million USD for the third quarter of 2011.

About Einstein Noah Restaurant Group

Einstein Noah Restaurant Group is a leading company in the quick casual restaurant industry that operates and licenses locations primarily under the Einstein Bros. and Noah´s New York Bagels brands and primarily franchises locations under the Manhattan Bagel brand. The Company´s retail system consists of over 790 restaurants in 39 U.S. states and the District of Columbia. It also operates a dough production facility.