EXHIBIT 99.1
NEW WORLD REPORTS RESULTS FOR 4TH QUARTER AND FISCAL 2004
—Company posts 2.6% increase in comparable-store sales, 43.2% increase in EBITDA and
generates $11.4 million in cash flow during the 4th quarter
GOLDEN, Colo. (3/2/05) – New World Restaurant Group, Inc. (Pink Sheets: NWRG.PK) today reported an increase in fourth quarter comparable store sales, as well as significant improvements in operating income and reduced net losses for both the quarter and year ended Dec. 28, 2004. The company’s operations generated $11.0 million in cash flow during fiscal 2004, a five-fold increase from 2003.
Comparable store sales increased by 2.6 % over the corresponding 2003 period during the fourth quarter, contributing to a 0.2% increase in total revenues for the 13-week period to $97.3 million from $97.1 million in the fourth quarter of 2003. Income from operations improved to $3.6 million, or 3.7 % of revenues, representing an $11.9 million improvement over the restated $8.3 million operating loss reported in the fourth quarter of 2003.
“We are very pleased to report a return to increased comparable store sales and total revenues during the fourth quarter and continuing improvements in operating income that began in the first quarter of 2004. Both revenues and income from operations reached their highest levels for the year during the fourth quarter,” said Paul Murphy, New World CEO. “The year-over-year increase in comparable store sales followed sequential improvements in this key measurement during the first three quarters of 2004. The improvements arose from continued enhancement in the operation of restaurants throughout the year, the introduction of new menu items, and supporting marketing and advertising campaigns initiated in the fourth quarter. These factors helped drive a 5.2% increase in the average check which was partially offset by a 2.5% decline in transactions during the quarter.”
Commenting on New World’s fiscal 2004 operating results, Mr. Murphy said that revenues were consistent with the company’s expectations. “Throughout 2004, we saw continued improvement in our company operated store performance. I am quite proud of the efforts our personnel put forward over the past year. Our back to basics approach to the business is now bearing fruit,” he explained. “We will continue to implement solutions to improve our margins, but expect this trend to level out during 2005, as many of the cost-level reduction initiatives will have been in place for approximately one year.”
In the fourth quarter, EBITDA increased 43.2% to $10.6 million, or 10.9% of revenues, from $7.4 million, or 7.6% of revenues, during the comparable fiscal 2003 period. Adjusted EBITDA for the 13 weeks improved 12.1% to $11.2 million, or 11.5% of revenues, from $9.9 million, or 10.2% of revenues, in the 2003 quarter. (See tables at end of this press release for explanation of EBITDA, adjusted EBITDA and corresponding reconciliations.) New World’s net loss for the fourth quarter declined to $2.1 million, or 21 cents per basic and diluted share, from a restated $14.0 million, or $1.43 per share, a year earlier. In addition to the improvements in revenues and income from operations, cash flow from operations was $11.4 million compared with $7.6 million in the fourth quarter of 2003. General and administrative expenses were $7.5 million in the fourth quarter of 2004, a 33.2% decrease from $11.2 million in the comparable 2003 quarter.
New World chief financial officer Richard P. Dutkiewicz also noted that while posting increases in EBITDA during 2004, New World continued to narrow the difference between EBITDA and adjusted EBITDA.
EBITDA is not intended to represent cash flow from operations in accordance with GAAP and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. Rather, EBITDA is a basis upon which to assess financial performance. While EBITDA is frequently used as a measure of operations and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the method of calculation. The company presents adjusted EBITDA information because it is relevant to the covenants in both the $160 million notes and the AmSouth Revolver.
For the year ended December 28, 2004, total revenues decreased by 2.5 % to $373.9 million from $383.3 million in 2003. The results primarily reflected a 2.3% decline in retail sales from the company-operated Einstein Bros. and Noah’s New York Bagels restaurants to $347.8 million from $356.2 million in fiscal 2003. Comparable store sales decreased by 1.9 %, reflecting a 5.4% drop in transactions partially offset by a 3.8% increase in average check size.
The company reported income from operations of $7.0 million for fiscal 2004, compared to a restated loss from operations of $17.6 million in fiscal 2003. Operating results for fiscal 2003 included $5.3 million in impairment charges and $2.1 million in integration and reorganization charges.
EBITDA for fiscal 2004 rose 48.3% to $35.3 million, or 9.4% of revenues, from $23.8 million, or 6.2% of revenues, during fiscal 2003, which included net unusual charges of $10.9 million. Adjusted EBITDA for 2004 was $36.7 million, or 9.8% of revenues, a 5.6% increase from $34.7 million, or 9.1% of revenues, in fiscal 2003. New World’s net loss for 2004 was $17.4 million, or $1.77 per basic and diluted share, compared with a restated net loss of $73.5 million in fiscal 2003. After including dividends and accretion on Preferred Stock of $14.4 million, the restated net loss to common stockholders for fiscal 2003 was $87.9 million, or $22.71 per share. An equity restructuring completed in September 2003 eliminated the Series F Preferred Stock and its related dividends and accretion on a going forward basis.
The company’s net loss for fiscal 2004 includes a $1.6 million loss on the abandonment of certain assets, partially offset by $0.3 million in other income. New World’s net loss for the prior year included a one-time, non-cash loss of $23.0 million on the exchange of Series F Preferred Stock in connection with the September 2003 equity restructuring, partially offset by a $1.0 million benefit for the cumulative change in the fair value of derivatives, a $0.6 million gain on the disposal of assets, a $0.4 million gain on investment in debt securities, and $0.2 million in other income.
In addition to the improvement in income from operations and the impact of the aforementioned items, the year-to-year reduction in New World’s net loss reflected a 32.2% decline in net interest expense to $23.2 million from $34.2 million in fiscal 2003, due to a debt refinancing completed during the third quarter of 2003.
While revenues decreased during fiscal 2004, gross profit increased by 2.4% to $67.2 million, or 18.0% of total revenues, from $65.6 million, or 17.1% of revenues, in 2003. This increase was primarily due to improvements in retail cost of sales, with retail margins rising by 1.3% over 2003. The company, which factors all store level expenses into its retail margins, realized approximately $8.2 million of the margin improvement from the decision to temporarily reduce marketing expenditures. Retail margins also benefited from improvements in labor utilization and an approximate $1.1 million reduction in group insurance and workman’s compensation claims, offset by commodity cost increases of approximately $2.4 million.
The year-over-year improvement in income from operations also reflected a 21.6% decrease in general and administrative (G&A) expenses to $32.8 million in fiscal 2004 from $41.8 million in 2003, when the company incurred $3.9 million in non-capitalizable legal and consulting expenses related to the debt refinancing and equity recapitalization and a re-audit of its fiscal 2000 and 2001 financial results. The year-over-year reduction in G&A expenses was also aided by a $1.8 million decrease in bad debt expense due to improved collection efforts and management of franchisee receivables.
During fiscal 2004, New World’s operations generated cash flow of $11.0 million compared with cash flow of $2.0 million in fiscal 2003. “With the significant improvement in cash flow, we were able to reinvest $9.3 million of cash in the business,” said Mr. Dutkiewicz. “We expect to continue to experience improvements in cash flow in 2005.” Reinvestments during 2004 included $1.2 million for new stores and $5.8 million for replacement and new equipment at existing company-operated stores, as well as $0.8 million for manufacturing operations and $1.5 million for general corporate purposes.
In the fourth quarter of 2004, New World unveiled five test concept Einstein Bros. Café (EB Café) restaurants in Colorado. The first new unit of this quick casual concept opened in Denver’s Stapleton area in October. Shortly thereafter, New World retrofitted four additional Einstein Bros. Bagel restaurants located in the Denver and Colorado Springs markets. In addition to Einstein Bros.’ traditional bagels and an expanded breakfast menu, the new concept offers an extensive lunch menu with a culinary focus on innovative items
using fresh and high quality ingredients. The restaurants also feature a more sophisticated, upgraded look inside and out, as well as improvements to customer service systems.
“To date, we are pleased with the results we have seen during the first few weeks of the operations, with gains shown in average check size and a higher proportion of sales being generated during the afternoon day-part compared to our traditional Einstein locations,” said Mr. Murphy. “We are closely analyzing the data from these restaurants to determine the need for modifications to the menu offerings, physical layout, operational and design elements before going forward with future retrofits or new locations.
“Our current plan is to convert the existing Einstein Bros. Bagel locations to the EB Café concept over an approximate three-year time frame on a market-by-market basis,” he continued. “By converting the restaurants on a market basis, as we did in Colorado Springs, we can develop a consistent marketing and advertising message to our customers, and minimize the impact that supporting multiple brands within the same market would have on our distribution partners.”
New World is currently in discussion with Bear Stearns regarding the refinancing of its $160 million notes and the AmSouth Revolver, which may reduce interest expense.
As disclosed in a separate press release issued today, New World determined that it was appropriate to adjust certain prior financial statements for leasehold amortization. These adjustments are all non-cash and have no impact on cash flows, cash position, revenues, same-store sales, and EBITDA. Tables providing the impact of these adjustments on results for the first three quarters of 2004, as well as the fiscal 2003 and 2002 years, appear at the end of this release.
Mr. Murphy and Mr. Dutkiewicz will discuss New World’s financial and operating results for the fourth quarter and fiscal 2004 during a conference call scheduled for 11:00 a.m. (EST) on March 2. To listen to the call, dial 877-445-2570 and give the operator the conference ID number, 4423144. A telephone replay of the call will be available through midnight (EST) on March 16, 2005. To access the replay, call 800-642-1687; international callers should dial (706) 645-9291 and give the conference ID number, 4423144. Investors and media are also invited to listen to a webcast of the call on the company’s website, www.newworldrestaurantgroup.com. The replay of the call will also be archived on the website.
New World is a leading company in the quick casual restaurant industry. The company operates locations primarily under the Einstein Bros. and Noah’s New York Bagels brands and primarily franchises locations under the Manhattan Bagel and Chesapeake Bagel Bakery brands. As of December 28, 2004, the company’s retail system consisted of 453 company-operated locations, as well as 180 franchised, and 57 licensed locations in 34 states, plus D.C. The company also operates a dough production facility.
****
Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “forecast,” “estimate,” “project,” “plan to,” “is designed to,” “expectations,” “intend,” “indications,” “expect,” “should,” “would,” “believe,” “trend” and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the company’s actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. These factors include but are not limited to (i) the availability of sufficient capital to the Company and the ability to reach favorable lease terms for the opening of company-operated restaurants (ii) the success of the company’s plan to revitalize its concepts is dependent upon various factors, including the availability of capital and opportunities to make modifications, (iii) the company’s ability to build the average check depends, in part, upon market conditions, competition, and customer acceptability, among other factors; (iv) the improvement in period over period comparable store sales is not necessarily indicative of future results and is subject to shifting consumer preferences, economic conditions, weather, and competition, among other factors; (v) the ability to improve margins may be affected by unexpected costs or expenses, among other factors; (vi) the conversions, the expenditure of capital, and the opening of new concept stores and advertising campaigns are subject to availability of capital, and other resources, raw materials, the availability of advertising media and the projected returns on investments in those conversions; (vii) the Company’s ability to generate sufficient cash flow is dependent upon economic, financial, competitive and legislative factors, among other factors; (viii) the Company’s ability to refinance is
dependent upon a variety of factors, including financial market conditions, company results, availability of favorable rates and terms. These and other risks are more fully discussed in the company’s SEC filings
CONTACTS: Media/Investors: Bill Parness, (732) 290-0121, or Marty Gitlin, (914) 528-7702; parnespr@optonline.net
Nw28/2004-q4earningsrelease
—TABLES ATTACHED—
NEW WORLD RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FOURTH QUARTER AND YEAR TO DATE PERIODS ENDED DECEMBER 28, 2004 AND
DECEMBER 30, 2003
(in thousands, except earnings per share and related share information)
| | Fourth quarter ended (unaudited): | | Year to date ended: | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | (restated) | | | | (restated) | |
Revenues: | | | | | | | | | |
Retail sales | | $ | 90,804 | | $ | 89,923 | | $ | 347,786 | | $ | 356,225 | |
Manufacturing revenues | | 4,852 | | 5,481 | | 20,122 | | 21,457 | |
Franchise and license related revenues | | 1,665 | | 1,715 | | 5,952 | | 5,624 | |
Total revenues | | 97,321 | | 97,119 | | 373,860 | | 383,306 | |
| | | | | | | | | |
Cost of sales: | | | | | | | | | |
Retail costs | | 74,931 | | 73,318 | | 288,736 | | 297,934 | |
Manufacturing costs | | 4,302 | | 5,197 | | 17,925 | | 19,756 | |
Total cost of sales | | 79,233 | | 78,515 | | 306,661 | | 317,690 | |
| | | | | | | | | |
Gross profit | | 18,088 | | 18,604 | | 67,199 | | 65,616 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
General and administrative expenses | | 7,495 | | 11,220 | | 32,755 | | 41,794 | |
Depreciation and amortization | | 6,966 | | 8,124 | | 27,848 | | 34,013 | |
Adjustment of integration and reorganization cost | | (26 | ) | 2,285 | | (869 | ) | 2,132 | |
Impairment charges and other related costs | | 48 | | 5,292 | | 450 | | 5,292 | |
Income (loss) from operations | | 3,605 | | (8,317 | ) | 7,015 | | (17,615 | ) |
| | | | | | | | | |
Other expense (income): | | | | | | | | | |
Interest expense, net | | 5,770 | | 5,726 | | 23,196 | | 34,184 | |
Cumulative change in the fair value of derivatives | | — | | — | | — | | (993 | ) |
Gain on investment from sale of debt securities | | — | | (374 | ) | — | | (374 | ) |
Loss (gain) on sale, disposal or abandonment of assets, net | | 162 | | 34 | | 1,557 | | (558 | ) |
Loss on exchange of Series F Preferred Stock due to Equity Recap | | — | | — | | — | | 23,007 | |
Other | | (87 | ) | (59 | ) | (284 | ) | (172 | ) |
| | | | | | | | | |
Loss before income taxes | | (2,240 | ) | (13,644 | ) | (17,454 | ) | (72,709 | ) |
| | | | | | | | | |
Benefit (provision) for state income taxes | | (141 | ) | 382 | | (49 | ) | 812 | |
| | | | | | | | | |
Net loss | | (2,099 | ) | (14,026 | ) | (17,405 | ) | (73,521 | ) |
Dividends and accretion on Preferred Stock | | — | | — | | — | | (14,423 | ) |
| | | | | | | | | |
Net loss available to common stockholders | | $ | (2,099 | ) | $ | (14,026 | ) | $ | (17,405 | ) | $ | (87,944 | ) |
| | | | | | | | | |
Net loss per common share – Basic and Diluted | | $ | (0.21 | ) | $ | (1.43 | ) | $ | (1.77 | ) | $ | (22.71 | ) |
| | | | | | | | | |
Weighted average number of common shares outstanding: Basic and Diluted | | 9,843,150 | | 9,841,828 | | 9,842,414 | | 3,873,284 | |
The accompanying notes are an integral part of these consolidated financial statements.
NEW WORLD RESTAURANT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 28, 2004 AND DECEMBER 30, 2003
(in thousands, except share information)
| | December 28,
2004 | | December 30,
2003 | |
| | | | (restated) | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 9,752 | | $ | 9,575 | |
Restricted cash | | 1,269 | | 1,815 | |
Franchise and other receivables, net of allowance of $2,475 and $3,310 | | 7,123 | | 5,842 | |
Inventories | | 4,941 | | 4,831 | |
Prepaid expenses and other current assets | | 1,643 | | 2,650 | |
Total current assets | | 24,728 | | 24,713 | |
| | | | | |
Restricted cash long-term | | 2,526 | | 3,036 | |
Property, plant and equipment, net | | 41,855 | | 54,513 | |
Trademarks and other intangibles, net | | 77,219 | | 85,431 | |
Goodwill | | 4,875 | | 4,875 | |
Debt issuance costs and other assets | | 7,253 | | 9,170 | |
Total assets | | $ | 158,456 | | $ | 181,738 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 8,243 | | $ | 8,189 | |
Accrued expenses | | 34,836 | | 37,871 | |
Short term debt and current portion of long-term debt | | 295 | | 2,105 | |
Current portion of obligations under capital leases | | 16 | | 180 | |
Total current liabilities | | 43,390 | | 48,345 | |
| | | | | |
Senior notes and other long-term debt | | 160,840 | | 161,120 | |
Obligations under capital leases | | 31 | | 29 | |
Other liabilities | | 9,678 | | 10,397 | |
Mandatorily redeemable, Series Z Preferred Stock, $.001 par value, $1,000 per share liquidation value; 2,000,000 shares authorized; 57,000 shares issued and outstanding | | 57,000 | | 57,000 | |
Total liabilities | | 270,939 | | 276,891 | |
| | | | | |
Stockholders’ deficit: | | | | | |
Common stock, $.001 par value; 15,000,000 shares authorized; 9,848,713 and 9,841,828 shares issued and outstanding | | 10 | | 10 | |
Additional paid-in capital | | 175,797 | | 175,585 | |
Unamortized stock compensation | | (137 | ) | — | |
Accumulated deficit | | (288,153 | ) | (270,748 | ) |
Total stockholders’ deficit | | (112,483 | ) | (95,153 | ) |
Total liabilities and stockholders’ deficit | | $ | 158,456 | | $ | 181,738 | |
The accompanying notes are an integral part of these consolidated financial statements.
NEW WORLD RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FOURTH QUARTER AND YEAR TO DATE PERIODS ENDED DECEMBER 28, 2004 AND
DECEMBER 30, 2003
(in thousands)
| | Fourth quarter ended (unaudited): | | Year to date ended: | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | (restated) | | | | (restated) | |
OPERATING ACTIVITIES: | | | | | | | | | |
Net loss | | $ | (2,099 | ) | $ | (14,026 | ) | $ | (17,405 | ) | $ | (73,521 | ) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | | | | | | | | | |
Depreciation and amortization | | 6,966 | | 8,124 | | 27,848 | | 34,013 | |
Stock based compensation expense | | 17 | | — | | 68 | | — | |
Loss, net of gains, on disposal of assets and impairment charges | | 424 | | 5,326 | | 1,872 | | 4,734 | |
Gain on investment in debt securities | | — | | (374 | ) | — | | (374 | ) |
Charges (adjustments) of integration and reorganization costs | | (26 | ) | 2,285 | | (869 | ) | 2,132 | |
Provision for (recovery of) losses on accounts receivable | | 234 | | 1,815 | | 177 | | 1,815 | |
Cumulative change in fair value of derivatives | | — | | — | | — | | (993 | ) |
Amortization of debt issuance and debt discount costs | | 462 | | 463 | | 1,849 | | 3,138 | |
Notes issued as paid in kind for interest on Bridge Loan | | — | | (115 | ) | — | | 395 | |
Issuance of standstill warrants | | — | | — | | — | | 3,132 | |
Greenlight interest | | — | | — | | — | | 1,025 | |
Loss on exchange of Series F Preferred Stock due to Equity Recap | | — | | — | | — | | 23,007 | |
Reduction in Bridge Loan due to Equity Recap | | — | | 115 | | — | | (500 | ) |
Changes in operating assets and liabilities: | | | | | | | | | |
Franchise and other receivables | | (1,301 | ) | (1,642 | ) | (1,597 | ) | (1,688 | ) |
Cash overdraft | | (1,978 | ) | — | | — | | — | |
Accounts payable and accrued expenses | | 8,125 | | 6,227 | | (2,154 | ) | 8,516 | |
Other assets and liabilities | | 574 | | (587 | ) | 1,191 | | (2,816 | ) |
Net cash provided by operating activities | | 11,398 | | 7,611 | | 10,980 | | 2,015 | |
| | | | | | | | | |
INVESTING ACTIVITIES: | | | | | | | | | |
Purchase of property and equipment | | (3,646 | ) | (1,083 | ) | (9,251 | ) | (6,921 | ) |
Proceeds from the sale of equipment | | 397 | | 12 | | 531 | | 558 | |
Proceeds from the sale of assets held for sale | | — | | — | | — | | — | |
Proceeds from investment in debt securities | | — | | 374 | | — | | 374 | |
Net cash used in investing activities | | (3,249 | ) | (697 | ) | (8,720 | ) | (5,989 | ) |
| | | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | | |
Proceeds (repayments) of line of credit, net | | 15 | | (3,500 | ) | (985 | ) | (5,000 | ) |
Repayment of notes payable | | (280 | ) | (330 | ) | (1,105 | ) | (1,131 | ) |
Proceeds from issuance of $160 Million Indenture | | — | | — | | — | | 160,000 | |
Repayment of $140 Million Facility | | — | | — | | — | | (140,000 | ) |
Advance funding of NJEDA (restricted cash) | | — | | 344 | | — | | (1,684 | ) |
Debt issuance costs | | — | | (33 | ) | — | | (8,571 | ) |
Common stock issued upon warrant exercise | | 6 | | — | | 7 | | — | |
Net cash provided by (used in) financing activities | | (259 | ) | (3,519 | ) | (2,083 | ) | 3,614 | |
| | | | | | | | | |
Net increase (decrease) in cash | | 7,890 | | 3,395 | | 177 | | (360 | ) |
Cash and cash equivalents, beginning of period | | 1,862 | | 6,180 | | 9,575 | | 9,935 | |
Cash and cash equivalents, end of period | | $ | 9,752 | | $ | 9,575 | | $ | 9,752 | | $ | 9,575 | |
The accompanying notes are an integral part of these consolidated financial statements.
NEW WORLD RESTAURANT GROUP, INC.
SUPPLEMENTAL INFORMATION
FOR THE FOURTH QUARTER AND YEAR TO DATE PERIODS ENDED DECEMBER 28, 2004 AND
DECEMBER 30, 2003
(in thousands)
Reconciliation of Net Loss to EBITDA | | Fourth quarter ended (unaudited): | | Year to date ended: | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | (restated) | | | | (restated) | |
Net Loss | | $ | (2,099 | ) | $ | (14,026 | ) | $ | (17,405 | ) | $ | (73,521 | ) |
Adjustments: | | | | | | | | | |
Interest expense, net | | 5,770 | | 5,726 | | 23,196 | | 34,184 | |
Cumulative change in the fair value of derivatives | | — | | — | | — | | (993 | ) |
Gain on investment from sale of debt securities | | — | | (374 | ) | | | (374 | ) |
Loss (gain) on sale, disposal or abandonment of assets, net | | 162 | | 34 | | 1,557 | | (558 | ) |
Loss on exchange of Series F Preferred Stock | | — | | — | | — | | 23,007 | |
Other income | | (87 | ) | (59 | ) | (284 | ) | (172 | ) |
Provision (benefit) for income taxes | | (141 | ) | 382 | | (49 | ) | 812 | |
Depreciation and amortization | | 6,966 | | 8,124 | | 27,848 | | 34,013 | |
Charges for integration and reorganiztion costs | | — | | 2,285 | | — | | 2,132 | |
Impairment charges and other related costs | | 48 | | 5,292 | | 450 | | 5,292 | |
| | | | | | | | | |
EBITDA | | $ | 10,619 | | $ | 7,384 | | $ | 35,313 | | $ | 23,822 | |
Reconciliation of EBITDA to Adjusted EBITDA (1) | | Fourth quarter ended (unaudited): | | Year to date ended: | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | (restated) | | | | (restated) | |
EBITDA | | $ | 10,619 | | $ | 7,384 | | $ | 35,313 | | $ | 23,822 | |
Adjustments: | | | | | | | | | |
Certain legal, financing and advisory fees | | 338 | | (177 | ) | 1,770 | | 4,536 | |
Acquisition and integration expenses | | — | | 1,116 | | — | | 1,888 | |
Adjustments of intergration and reorganization costs | | (26 | ) | — | | (869 | ) | — | |
Certain corporate expenses | | — | | (172 | ) | — | | 691 | |
Certain other charges | | 219 | | 1,795 | | 469 | | 3,798 | |
| | | | | | | | | |
Adjusted EBITDA | | $ | 11,150 | | $ | 9,946 | | $ | 36,683 | | $ | 34,735 | |
EBITDA is not intended to represent cash flow from operations in accordance with GAAP and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. Rather, EBITDA is a basis upon which to assess financial performance. While EBITDA is frequently used as a measure of operations and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the method of calculation. The company presents adjusted EBITDA information because it is relevant to the covenants in both the $160 million notes and the AmSouth Revolver.
NEW WORLD RESTAURANT GROUP, INC
SUMMARY OF FINANCIAL IMPACT OF RESTATEMENT ADJUSTMENTS
FOR THE FISCAL YEARS ENDED 2003 AND 2002
AND FOR THE FIRST, SECOND AND THIRD QUARTERS ENDED 2004
| | As reported | | Adjustments | | As restated | |
Fiscal Year ended 2002: | | | | | | | |
Net loss available to common shareholders | | $ | (68,067 | ) | $ | (4,421 | ) | $ | (72,488 | ) |
Loss per share | | $ | (51.81 | ) | $ | (3.37 | ) | $ | (55.18 | ) |
Accumulated deficit | | $ | (175,330 | ) | $ | (7,474 | ) | $ | (182,804 | ) |
| | | | | | | |
Fiscal Year ended 2003: | | | | | | | |
Net loss available to common shareholders | | $ | (82,131 | ) | $ | (5,813 | ) | $ | (87,944 | ) |
Loss per share | | $ | (21.20 | ) | $ | (1.51 | ) | $ | (22.71 | ) |
Accumulated deficit | | $ | (257,461 | ) | $ | (13,287 | ) | $ | (270,748 | ) |
| | | | | | | |
First Quarter ended March 30, 2004: | | | | | | | |
Net loss available to common shareholders | | $ | (2,556 | ) | $ | (1,574 | ) | $ | (4,130 | ) |
Loss per share | | $ | (0.26 | ) | $ | (0.16 | ) | $ | (0.42 | ) |
| | | | | | | |
Second Quarter ended June 29, 2004: | | | | | | | |
Net loss available to common shareholders | | $ | (4,750 | ) | $ | (1,474 | ) | $ | (6,224 | ) |
Loss per share | | $ | (0.48 | ) | $ | (0.15 | ) | $ | (0.63 | ) |
| | | | | | | |
Third Quarter ended September 28, 2004: | | | | | | | |
Net loss available to common shareholders | | $ | (3,472 | ) | $ | (1,480 | ) | $ | (4,952 | ) |
Loss per share | | $ | (0.35 | ) | $ | (0.15 | ) | $ | (0.50 | ) |
