Einstein Noah Restaurant Group reports strong 2008

LAKEWOOD, Colo. — Einstein Noah Restaurant Group has reported financial results for the fourth quarter and full year ended Dec. 30.

For the fourth quarter of 2008, systemwide comparable store sales, which include company-owned, franchised and licensed locations, decreased 1 percent.

Total revenues decreased 1.3 percent to $103.9 million, down from $105.2 million reported in the fourth quarter of last year.

Company-owned restaurant sales fell 2.5 percent to $94.3 million and include a 3.3 percent decrease in comparable store sales, of which approximately 1.2 percent was due to management deliberately reducing the hours of operation. Company upgraded restaurants experienced stronger comparable store sales, and outperformed all other locations by 2.4 percent.

Franchise and license locations continued a trend of strong positive comparable store sales in the fourth quarter, posting an 8.5 percent increase compared with the same quarter in the prior year. The company also benefitted from a net increase of nine licensed locations in the quarter. The effect of the new locations and comparable store sales helped drive franchise and license related revenues up 11.1 percent to $1.9 million in the fourth quarter of 2008.

Manufacturing and commissary revenues increased 12.6 percent to $7.7 million in the fourth quarter of 2008.

Net income for the fourth quarter was $5.8 million, or 36 cents per diluted share, compared with net income of $6.8 million, or 41 cents per diluted share, in the same quarter last year. The fourth quarter of 2008 results included $1.3 million in senior management transition costs.

2008 Financial Results 

For the full year ended Dec., systemwide comparable store sales, which include company-owned, franchised, and licensed locations, increased 1.4 percent. Total revenues increased 2.6 percent to $413.5 million, up from $402.9 million last year.

Company-owned restaurant sales grew 1 percent to $376.7 million, up from $373 million the previous year.

Franchise and license related revenues increased 12.6 percent to $6.4 million in 2008, compared to $5.7 million last year. The company benefited from a net increase of 27 franchise and license locations, in addition to a strong comparable store sales increase of 8.6 percent.

Manufacturing and commissary revenues increased 25.5 percent to $30.4 million, compared with $24.2 million last year. Manufacturing and commissary gross profit was $1.8 million, compared with a $600,000 loss in 2007.

Net income for the year was $21.1 million, or $1.29 per diluted share, compared with net income of $12.6 million, or 88 cents per diluted share, in 2007. The 2008 results included a $1.9 million charge related to two California wage and hour settlements, along with $1.3 million of senior management transition costs, which in aggregate was approximately 20 cents per diluted share.

2009 Update 

The company said its focus in 2009 will be to drive organic growth through consumer promotions, product innovations and additional locations. Plans include the opening of six to eight company-owned, six to eight franchised, and 30 to 35 licensed stores in 2009. The company also intends to upgrade 45 company-owned stores.