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, reported financial results for the 14-week fourth quarter and 53-week fiscal year ended January 3, 2012.
Highlights for the 14-Week Q4/2011 Compared to the 13-Week Q4/2010:
- Total revenues increased 8,6 percent to 115,1 million USD from 106,1 million USD, including 7,3 million USD for the 14th week in the fourth quarter of 2011.
- System-wide comparable store sales increased 1,2 percent.
- Adjusted Ebitda of 16,8 million USD compared to 14,0 million USD.
- Net income available to common stockholders of 6,1 million USD; or 0,36 USD per diluted share, which included 0,03 USD per diluted share for restructuring expenses, compared to 3,6 million USD or 0,21 USD per diluted share, which included 0,01 USD per diluted share for restructuring expenses.
- The impact of the 14th week in the fourth quarter of 2011 was approximately 0,03 USD per diluted share.
Highlights for the 53-Week FY-2011 Compared to the 52-Week FY-2010:
- Total revenues increased 2,9 percent to 423,6 million USD from 411,7 million USD, including 7,3 million USD for the 53rd week in fiscal year 2011.
- System-wide comparable store sales increased 0,4 percent.
- Adjusted Ebitda of 44,5 million USD compared to 45,3 million USD.
- Net income available to common stockholders of 13,2 million USD; or 0,78 USD per diluted share, which included 0,04 USD per diluted share for restructuring expenses, compared to 11,3 million USD or 0,67 USD per diluted share, which included 0,01 USD per diluted share for restructuring expenses.
- The impact of the 53rd week in fiscal year 2011 was approximately 0,03 USD per diluted share.
- Paid 6,3 USD million in common dividends.
Jeff O´Neill, President and Chief Executive Officer: «We delivered strong results in the fourth quarter characterized by revenue growth and positive comparable store sales along with substantial improvements in our adjusted Ebitda and net income. Although higher commodity costs pressured store-level margins, we effectively controlled other expenses and completed phase one of our cost efficiency program, delivering 2,7 million USD in savings. We also expanded our system by 55 restaurants in 2011, primarily through franchising and licensing, reduced our debt and returned capital to our shareholders through our ongoing dividend program».
O´Neill concluded, «In 2012, we intend to solidify our leadership position in fresh baked goodness and healthy choices by introducing a new smart choices menu of bagel thin sandwiches, salads and soups and augmenting our specialty beverage platform with real fruit smoothies and new blended coffees and teas. We will also redesign our everyday value layer for breakfast and lunch and capitalize on our momentum in catering sales. Finally, we have started phase two of our cost efficiency program, which is anticipated to generate an additional 3,0 million USD in annualized savings. We are optimistic about the coming year and look forward to continued progress at Einstein Noah».
Fourth Quarter 2011 Financial Results
For the fourth quarter ended January 03, 2012, system-wide comparable store sales increased 1,2 percent, reflecting strong growth in check and strength in catering sales. This was partially offset by lower comparable transactions. Total revenues increased 8,6 percent to 115,1 million USD from 106,1 million USD.
Restaurant gross margin increased 40 basis points to 21,4 percent due largely to lower other operating costs that were offset by continued inflation.
Manufacturing and commissary gross margin decreased to 1,0 million USD from 1,3 million USD in the fourth quarter of 2010. The decline in gross margin was primarily due to higher commodity costs and an unfavourable shift in product mix to third party customers.
Overall, gross margin was 26,2 million USD in the fourth quarter of 2011 compared to 24,2 million USD in the fourth quarter of 2010, but held steady at 22,8 percent of total revenues in both periods.
General and administrative expenses decreased to 9,5 million USD from 10,2 million USD due to lower variable incentive compensation.
Adjusted Ebitda was 16,8 million USD in the fourth quarter of 2011 compared to 14,0 million USD in the fourth quarter of 2010.
The Company incurred restructuring expenses of 0,8 million USD or 0,03 USD per diluted share, in the fourth quarter of 2011 primarily related to its decision to close its five food commissaries to streamline its supply chain. The Columbus, Ohio commissary was closed in late 2011 and the remaining four commissaries are expected to close in the first quarter of 2012. The Company expects that the closing of the commissaries will result in savings of approximately 1,2 million USD in 2012.
Income from operations increased by 1,4 million USD to 10,3 million USD.
Restaurant Development
As of January 03, 2012, there were 773 system-wide Einstein Bros. Bagels, Noah´s New York Bagels and Manhattan Bagel branded restaurants in operation. During the fourth quarter of 2011, the Company added fifteen net restaurants to its operations including five locations in the Portland, Oregon area through its acquisition of Kettleman Bagel Company.
Fiscal Year 2012 Guidelines
The Company is providing the following guidelines for its fiscal year 2012, which is a 52-week period.
- 60 to 80 system-wide openings, including eight to twelve Company-owned restaurants, twelve to fourteen franchise restaurants and 40 to 54 license restaurants.
- Restructuring expenses of 0,5 million USD to 0,8 million USD related to the closing of the four remaining commissaries.
- Capital expenditures of 24 million USD to 26 million USD.
- Commodity inflation of two percent to three percent.
- To date, the Company has secured price protection on 88 percent and 93 percent of its wheat and coffee requirements, respectively.
- An annual effective tax rate of 39 percent; however, the Company will continue to only pay minimal cash-taxes for the next several years.
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