<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 1999
EINSTEIN/NOAH BAGEL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 0-21097 84-1294908
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
14103 Denver West Parkway, P.O. Box 4086, Golden, Colorado 80401
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(Address of principal executive offices)
(303) 215-9300
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changes since last report)
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Item 5. Other Events
On November 3, 1999, the Company reported its results for the third
quarter ended October 3, 1999. Attached to this Current Report on Form 8-K as
Exhibit 99 is a copy of the Company's related press release dated November 3,
1999.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Press release of the Company dated November 3, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 3, 1999
EINSTEIN/NOAH BAGEL CORP.
By: /s/ Paul A. Strasen
----------------------------------
Paul A. Strasen
Senior Vice President
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[EINSTEIN/NOAH BAGEL LETTERHEAD]
Exhibit 99.1
Analyst Contact: Nancy Shipp
303-216-3738
EINSTEIN/NOAH BAGEL CORP. REPORTS 3rd QUARTER RESULTS
GOLDEN, Colo., November 3, 1999 - Einstein/Noah Bagel Corp. (Nasdaq: ENBX) today
reported financial results for its third quarter ended October 3, 1999.
Highlights include:
. Systemwide net revenue was $88,363,000 versus $87,325,000 for the
third quarter of fiscal 1998.
. Sytemwide store level cash flow increased 13.0% to $13,963,000 from
$12,353,000 for the third quarter of fiscal 1998.
. Earnings before interest, taxes, depreciation and amortization (EBITDA) was
$6,118,000 versus $5,204,000 for the third quarter of fiscal 1998. EBITDA for
the third quarter includes a $406,000 charge for store and commissary
closures. For comparison purposes, reported EBITDA for the third quarter of
1998 did not have any unusual charges.
. Reported net loss for the quarter was $ 2,803,000 or $0.08 diluted loss per
share versus a net loss of $4,433,000 or $0.13 diluted loss per share for the
third quarter of fiscal 1998.
. Systemwide average net weekly per store sales for the quarter were $13,672
compared with $13,378 for the third quarter of fiscal 1998.
. At the end of the quarter, there were 539 stores open, 428 Einstein Bros.
Bagels and 111 Noah's New York Bagels stores.
"We continue to focus on building our lunch business as a primary driver of our
store-level revenue and cash flow. Our efforts have delivered a 13.0% increase,
versus a year ago, in our store-level cashflow to $13,963,000. We believe our
lunch focus will enable us to capitalize on our already strong breakfast
business and provide better utilization of our store throughout the day," said
Bob Hartnett, Chairman, CEO and President.
"Over the last 18 months, we have been very quiet on the marketing front so that
we could focus on evolving our concepts and improving our store operations and
customer experience. We now feel that we are ready and well positioned to cater
to the lunch crowd. In early October, we began an advertising test in six
markets designed to drive lunch trial and awareness. The campaign contains
various marketing components including outdoor signage, radio and direct mail.
Initially, the campaign has been well-received and we are hopeful that this
marketing strategy will drive our lunch business," added Hartnett.
The Company also announced it has engaged Donaldson, Lufkin & Jenrette as its
financial advisor to assist the Company in analyzing and evaluating possible
transactions to restructure its balance sheet.
14103 Denver West Parkway
Golden, CO 80401
303-215-9300
Fax 303-216-3403
<PAGE>
Einstein/Noah Bagel Corp.
Page 2
"It is becoming evident that restructuring our balance sheet is necessary to
allow us to capitalize on the potential of our brands, Einstein Bros. Bagels and
Noah's New York Bagels, as well as to ensure that we have adequate working
capital to operate the business. We believe that the engagement of Donaldson,
Lufkin & Jenrette is a critical step toward achieving such a restructuring and
thereby positioning ourselves for growth in the future," said Hartnett.
Currently, there are 539 ENBC retail bagel stores in 29 states and the District
of Columbia operating under the Einstein Bros. Bagels and Noah's New York Bagels
brand names. Einstein Bros. and Noah's stores are unique bagel cafes and
bakeries featuring fresh-baked bagels, a variety of cream cheese spreads,
specialty coffee drinks, soups, sandwiches and salads.
Certain statements in this release constitute "forward-looking statements" and
involve known and unknown risks, uncertainties, and other factors which may
cause the actual results, performance or achievements of the Company,
Einstein/Noah Bagel Partners, L.P., Einstein Bros. Bagels stores and Noah's New
York Bagels stores to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements. Such factors include, among others, the following: competition;
success of operating initiatives; successful restructuring of the Company's
balance sheet; availability and terms of capital; development and operating
costs; advertising and promotional efforts; brand awareness; adverse publicity;
acceptance of new product offerings; the company's relationship with Boston
Chicken, Inc. ("Boston Chicken"), the Company's majority stockholder; changes in
business strategy or development plans; achievement of development schedules;
food, labor and employee benefit costs; changes in government regulation;
regional weather conditions; availability, locations and terms of sites for
store development; the Company's ability to implement new information technology
systems; Year 2000 compliance of systems provided to the Company by Boston
Chicken or other third party vendors; Year 2000 compliance of systems used by
Company suppliers and other factors referenced in the Company's filings with the
Securities and Exchange Commission.
-MORE-
14103 Denver West Parkway
Golden, CO 80401
303-215-9300
Fax 303-216-3403
<PAGE>
EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Third Quarter Ended Three Quarters Ended
------------------------ ------------------------
October 4, October 3, October 4, October 3,
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Store revenue................................... $87,325 $88,363 $285,699 $288,012
Costs and Expenses:
Store:
Cost of products sold........................ 29,559 29,204 98,038 95,212
Salaries and benefits........................ 26,789 27,419 89,458 90,169
Other controllable costs..................... 6,829 7,295 23,086 23,235
Rent, occupancy and related costs............ 8,171 8,431 26,762 27,995
Marketing expenses........................... 3,625 2,051 11,082 7,640
Depreciation and amortization................ 4,553 2,775 15,601 9,044
------- ------- -------- --------
Total store costs and expenses............. 79,526 77,175 264,027 253,295
Non-Store:
Salaries, benefits, general and
administrative............................. 7,149 7,845 30,008 26,623
Depreciation and amortization
(excluding goodwill amortization).......... 823 653 2,644 2,223
Goodwill amortization........................ 2,463 2,735 8,172 8,881
------- ------- -------- --------
Total non-store costs and expenses......... 10,435 11,233 40,824 37,727
------- ------- -------- --------
Total costs and expenses................... 89,961 88,408 304,851 291,022
------- ------- -------- --------
Income (Loss) from Operations..................... (2,636) (45) (19,152) (3,010)
Other Income (Expense):
Interest income................................. 5 - 273 -
Interest expense................................ (2,694) (2,783) (9,162) (9,143)
Other........................................... (1) 9 (3,410) (6)
------- ------- -------- --------
Total other income (expense)................. (2,690) (2,774) (12,299) (9,149)
------- ------- -------- --------
Income (Loss) before Income Taxes and
Minority Interest............................... (5,326) (2,819) (31,451) (12,159)
Income Taxes...................................... - 105 - 105
Minority Interest in Income (Loss) of Subsidiary.. (893) (121) (4,652) (1,026)
------- ------- -------- --------
Net Income (Loss)................................. $(4,433) $(2,803) $(26,799) $(11,238)
======= ======= ======== ========
Basic Earnings (Loss) per Share................... $(.13) $(0.08) $(.81) $(0.34)
======= ======= ======== ========
Diluted Earnings (Loss) per Share................. $(.13) $(0.08) $(.81) $(0.34)
======= ======= ======== ========
Weighted Average Number of Common
Shares Outstanding:
Basic........................................ 33,271 33,271 32,930 33,271
======= ======= ======== ========
Diluted...................................... 33,271 33,271 32,930 33,271
======= ======= ======== ========
</TABLE>
14103 Denver West Parkway
Golden, CO 80401
303-215-9300
Fax 303-216-3403
<PAGE>
EINSTEIN/NOAH BAGEL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
July 11, October 3,
1999 1999
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<S> <C> <C>
ASSETS
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Current Assets:
Cash and cash equivalents........................................ $ 4,326 $ 5,619
Accounts receivable.............................................. 1,339 1,240
Inventories...................................................... 8,881 9,014
Prepaid expenses and other current assets........................ 1,550 1,559
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Total current assets.......................................... 16,096 17,432
Property and Equipment, net........................................ 121,768 122,156
Goodwill, net...................................................... 217,335 214,600
Trademarks, net.................................................... 2,063 2,058
Recipes, net....................................................... 2,502 2,430
Other Assets, net.................................................. 6,359 6,332
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Total assets.................................................. $ 366,123 $ 365,008
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
Accounts payable................................................. $ 13,255 $ 11,502
Accrued expenses................................................. 27,174 28,121
Current portion of senior term loan.............................. 6,000 6,000
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Total current liabilities..................................... 46,429 45,623
Revolving Credit Facility.......................................... 9,975 14,350
Long-Term Portion of Senior Term Loan.............................. 15,000 13,500
Convertible Subordinated Debentures................................ 125,000 125,000
Other Noncurrent Liabilities....................................... 15,770 15,510
Minority Interest.................................................. 33,026 32,905
Stockholders' Equity:
Preferred Stock - $.01 par value; 20,000,000 shares authorized;
no shares issued and outstanding.............................. - -
Common Stock - $.01 par value; 200,000,000 shares authorized;
issued: 34,083,681 shares in July and October 1999........... 341 341
Additional paid-in capital....................................... 377,616 377,616
Treasury stock, at cost (813,146 shares)......................... (5,261) (5,261)
Accumulated deficit.............................................. (251,773) (254,576)
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Total stockholders' equity.................................... 120,923 118,120
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Total liabilities and stockholders' equity.................. $ 366,123 $ 365,008
========= =========
</TABLE>
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14103 Denver West Parkway
Golden, CO 80401
303-215-9300
Fax 303-216-3403
