News
Einstein Noah comps slightly fall, revenue flat
February 25, 2010
Einstein Noah Restaurant Group Inc. has reported its financial results for the fourth quarter and full-year ended Dec. 29, 2009.
For the fourth quarter 2009, systemwide comparable-store sales decreased 1.4 percent compared to the same period last year.
Company-owned restaurant sales decreased 0.7 percent to $93.7 million, down slightly from $94.3 million in the same quarter last year, mostly as a result of a 1.7 percent decrease in comparable store sales, partially offset by a net increase of two additional company-owned restaurants since Dec. 30, 2008.
Total revenues were virtually flat at $103.7 million for the quarter, compared to. $103.9 million reported in the fourth quarter 2008.
Net income was $2.8 million in the fourth quarter of 2009, or $0.17 per diluted share, compared to net income of $5.8 million, or $0.36 per diluted share, in the fourth quarter of 2008. The company attributes the loss to its reversal of the valuation allowance on its deferred tax asset in the third quarter.Accordingly, 2009 now includes a charge of $2.9 million for income taxes compared to $0.5 million in 2008.
The company also reported $0.7 million of accrued additional redemption costs on the unredeemed portion of the Series Z Preferred Stock. The 2008 results include minimal income tax expense and no charge for the Series Z Preferred Stock.
The company benefitted from a net increase of six additional franchise restaurants and 26 license restaurants since Dec. 30, 2008. The effect of the new locations helped drive franchise and license related revenues up 17.1 percent to $2.2 million in the fourth quarter of 2009, up from $1.9 million in the prior-year period.
Restaurant openings during the fourth quarter of 2009 consisted of 15 outlets, including four Einstein Bros. company-owned restaurants, two Manhattan Bagel franchise restaurants, and nine Einstein Bros. licensed restaurants. Three licensed outlets were also closed during the period.
For the year
Systemwide same-store sales for the year ended Dec. 30, 2009, decreased 2.4 percent.
Total revenues declined modestly to $408.6 million, down from $413.5 million last year in FY 2008.
Company-owned restaurant sales decreased 1.7 percent to $370.4 million, down from $376.7 million, and inclusive of a comps decline of 3.4 percent.
The company benefitted from a net increase of 32 franchise and license locations, along with a comparable store sales increase of 1.1 percent.
Net income was $72.0 million for 2009, or $4.36 per diluted share, compared to net income of $21.1 million, or $1.29 per diluted share for 2008.
The company anticipates the opening of 10-12 new Einstein Bros. Bagels company-owned restaurants, 12-16 new Einstein Bros. Bagels franchised restaurants, and 35-45 Einstein Bros. Bagels licensed restaurants in 2010.
The company has 14 signed development agreements for Einstein Bros. Bagels franchises. This, coupled with the efforts to sign additional development agreements in 2010, is expected to ultimately yield an ending pipeline of 90-100 additional franchise openings.
The company also has secured contract pricing on approximately 50 percent of all major agricultural commodities that will result in favorable prices compared to 2009, with an option to benefit from further reductions in the market.
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