Part IV. Other Information
(1) Name and telephone number of person to contact in regard to this
notification
Leonard Johnson (908) 544-0155
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(Name) (Area code) (Telephone number)
(2) Have all other periodic reports required under Seciton 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is
no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by
the earnings statements to be included in the subject report or portion
thereof?
See Copy of Press Release Attached [X] Yes [ ] No
If so attach an explanation of the anticipated change, both narratively
and quantitarively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
Manhattan Bagel Company, Inc.
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(Name of registrant as specified in charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date 11/15/96 By S/N Leonard Johnson
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INSTRUCTION. The form may be signed by an executive officer of the
registrant or by any other duly authroized representative. The name and
title of the person signing the form shall be typed or printed beneath the
signature. If the statement is signed on behalf of the registrant by an
authorized representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
ATTENTION
Intentional misstatements or omissions of fact constitute Federal
criminal violations (SEE 18 U.S.C. 1001).
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 of the General Rules and
Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and
amendments thereto must be completed and filed with the Securities and
Exchange Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of
the General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of the public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be
filed with each national securities exchange on which any class of securities
of the registrant is registered.
4. Amendments to the notifications must also be filed on Form 12b-25 but
need not restate information that has been correctly furnished. The form
shall be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers
unable to timely file a report solely due to electronic difficulties. Filers
unable to submit a report within the time period prescribed due to
difficulties in electronic filing should comply with either Rule 201 or Rule
202 of Regulation S-T or apply for an adjustment in filing date pursuant to
Rule 13(b) of Regulation S-T.
(Bulletin No. 161, 02-03-95) -C- 1995, BOWNE & CO., INC.
[MANHATTAN BAGEL LOGO]
FOR IMMEDIATE RELEASE
MANHATTAN BAGEL REPORTS THIRD QUARTER RESULTS
EATONTOWN, N.J. (11/14/96)--Manhattan Bagel Company, Inc. (NASDAQ NMS
BGLS) today reported income of $27,689 for the three months ended September 30,
1996, before a pre-tax non-recurring charge of $3,100,000, related primarily
to the writedown of the goodwill and other assets of the Company's eight
Holey Bagel stores in San Francisco. Including the charge, the Company's net
loss for the 1996 period was $2,421,911 ($.32 per share). Manhattan Bagel
reported net income of $654,048 ($.12 per share), in 1995's third quarter.
Revenues for the company advanced 47.9% to $9,414,418 from $6,365,156 a year
earlier.
Unaudited systemwide retail sales for the chain's franchised,
company-owned and licensed stores increased 115% during the third quarter
to $23.9 million from $11.1 million a year earlier. For the first nine months
of 1996, retail sales grew 127% to $59.6 million from $26.2 million a year ago.
Jason Gennusa, Manhattan Bagel president and CEO, said that operating
results for the 1996 period were impacted primarily by costs associated with
the continued growth of the Company, including the consolidation of businesses
acquired during the second quarter, commodity price increases that were not
passed on to franchisees until November 1, and expenses related to the
Company's decision to temporarily supply all locations from its East Coast
manufacturing facilities.
"Our review of the West Coast operations revealed that, in the wake of
escalating product demand from the growing store base, the quality of the
bagel dough being produced in the Los Angeles manufacturing plant was not up
to our current standards. Mr. Gennusa explained "Rather than compromise on
quality, we elected to shut down the plant and reopen our Meridian Road plant
in New Jersey. We will continue to ship the bagels from New Jersey until our
new West Coast facility equipped to our specifications is built. We are
currently evaluating various opportunities for the new plant. While
MANHATTAN BAGEL EARNINGS...2
detrimental to our short-term profitability, these measures are in keeping
with our previously stated goal of revitalizing the West Coast operation."
Approximately Five hundred thousand dollars ($500,000) of the non-recurring
charge taken in the third quarter reflects the writedown of machinery,
equipment and leasehold improvements at the Los Angeles plant.
Mr. Gennusa added that the review of the West Coast operations also led
to the determination that the Holey Bagel stores be either franchised, sold or
closed, by the end of the first-half of 1997. Accordingly, the Company has
written off the goodwill and written down the assets associated with the
stores to their net realizable value. "Irrespective of the fate of the Holey
Bagel locations, we intend to remain active in the San Francisco market
through the efforts of our Northern California master franchisee."
For the nine months ended September 30, 1996, after-tax income before
non-recurring charges was $1,283,445 ($.17 per share), up 41.0% from net
income of $910,390 ($.17 per share) a year earlier. Including charges taken in
the second and third quarters, net loss for the 1996 year-to-date period was
$1,586,855 ($.21 per share). Revenues increased 78.4% to $28,112,510 from
$15,759,846 in the comparable 1995 period.
On May 22, 1996 Manhattan Bagel acquired Specialty Bakeries, Inc. a
private company which owned and franchised 23 Bagel Builders stores, primarily
in the southern New Jersey and Philadelphia areas. With the transaction
accounted for as a "pooling of interests," all financial information
represents the pooled results of operations as if the acquisition had been
consummated at the beginning of 1996. Results for 1995 have been restated to
include the operations of Specialty Bakeries.
"Although the third quarter results were disappointing, we believe that a
number of recent developments bode well for the future of the company," Mr.
Gennusa noted. These include
- -- NEW ADVERTISING CAMPAIGN. In late September the company inaugurated a new
print and radio advertising campaign using the "America's Most Wanted Bagel"
theme. "Though the campaing is still in its early stages, our preliminary
feedback from consumers and franchisees has been very positive," said
Manhattan Bagel vice chairman David Goldsmith, "Strong sales increases were
generated during October in markets that participated in some aspect of the
program."
MANHATTAN BAGEL EARNINGS...3
- -- SUPERMARKET OPENINGS The first full-production Manhattan Bagel shop
within a Vons supermarket was opened in late October. The Simi Valley, Ca.
location is the first of seven initial Vons or Pavilions stores in southern
California that will house Manhattan Bagel franchises. Three more units are
scheduled to open before year end, followed by another three in the first
quarter of 1997. In other recent supermarket developments, a licensed unit
was opened in a Super Foodtown store in Manalapan, NJ in mid-September, and
a franchised location debuted in a Clemens Market in Quakertown, Pa. in
early November. "Results at these three latest units have been very strong"
said Gennusa. "By incorporating important self-service elements in the unit
design, we have fine-tuned our full-bake prototype to a format that, we
believe, works well in the supermarket environment."
- -- CO-BRANDING AGREEMENT In late October, the company signed a co-branding
agreement with Texaco Refining and Marketing Inc. for the Little Rock, Ark.
area. The pact calls for the development of seven full-production Manhattan
Bagel units within existing or new Star Mart convenience stores over a
24-month period.
- -- 'RE-IMAGING PROGRAM' In mid-November, the company introduced a colorful
retail design package for new and remodeled stores. Initially unveiled at a
remodeled store in Shrewsbury, N.J. and in the new Clemens supermarket unit,
the design is now being implemented in renovations of acquired locations in
the Los Angeles market. The California project is scheduled to be completed
during the first quarter of 1997. The design's color scheme and graphics
package are also featured on the chain's new employee uniforms and will be
utilized on revamped paper goods, cheese spread packaging and other items
scheduled to be rolled out over the next two quarters.
Through the first three quarters of this year, Manhattan Bagel added a
net of 119 franchised, licensed and company-owned stores, increasing its
total as of Sept. 30 to 271 units in 15 states, the District of Columbia and
Canada. This compared with 131 units in 13 states a year ago.
*******
The company wishes to caution the public that the foregoing discussion
contains forward-looking statements that involve risk and uncertainties that
could cause actual results to differ materially from those discussed.
The success of Manhattan Bagel company units in convenience store,
supermarket and other non-traditional locations will depend on, among other
things, the success of the locations in which they open, consumer taste,
local economic conditions, demographic trends, and the type, number and
location of competing businesses. Most of these same factors also apply to
the success of freestanding Manhattan Bagel stores.
MANHATTAN BAGEL EARNINGS...4
Openings and remodelings of freestanding stores, as well as openings of
units within convenience stores, supermarkets or other alternative locations,
may be subject to potential delays caused by, among other things, permitting
weather, the delivery of equipment and materials, and the availability of
labor.
The continued success of the new advertising and marketing campaign
cannot be assured.
####
MEDIA CONTACTS: At Manhattan Bagel, Jack Grumet, chairman, Jason Gennusa,
president, or Leo Johnson, CFO, (908) 544-0155; at Parness & Associates, PR
counsel to Manhattan Bagel, Bill Parness, (908) 290-0121
MANHATTAN BAGEL COMPANY, INC. AND SUBSIDIARY
COMBINED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
($000) except E.P.S.
THREE MONTHS ENDED SEPT. 30 NINE MONTHS ENDED SEPT. 30
1996 1995 % Change 1996 1995 % Change
-------------------------------------------------------------------------
Revenues(1) $9,414 $6,365 +47.9% $28,112 $15,760 +78.4%
Income before
non-recurring $ 28 $654 -95.7% $1,283 $ 910 +41.0%
charges
Net income(1)(2) ($2,422) $654 -- ($1,587) $ 910 --
(loss)
Per Share
before non-recurring $ .00 $.12 -100% $ .17 $ .17 +0.0%
charge
Per Share ($.32) $.12 -- ($.21) $ .17 --
Weighted average
number of shares 7,547 5,361 7,424 5,356
1. Results for 1995 have been restated.
2. The company recorded a $3,100,000 non-recurring charge ($2,449,600,
after-tax) during 1996's third quarter related primarily to the writedown
value of the company's Holey Bagel stores. In 1996's second quarter, the
company recorded a $713,000 non-recurring charge ($420,670, after-tax)
for professional fees associated with investigation of bookkeeping and
accounting practices at L&J subsidiary, as well as related settlements of
certain consulting agreements.