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) October 2, 2003
New World Restaurant Group, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-27148 13-3690261
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification
Incorporation) No.)
1687 Cole Boulevard
Golden, Colorado 80401
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(Address of Principal Executive Offices) (Zip Code)
(303) 568-8000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, If Changed Since Last Report.)
1
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
Reference is made to the New World Restaurant Group, Inc. (the
"Company") press release attached hereto as Exhibit 99.1, and incorporated by
reference herein (including, without limitation, the information set forth in
the cautionary statement contained in the press release), relating to the
completion of the Company's equity restructuring, the election of new directors,
a reverse stock split and the changes in management referred to therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT DESCRIPTION
99.1 Press Release issued October 2, 2003.
SIGNATURES
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.
NEW WORLD RESTAURANT GROUP, INC.
BY: /s/ PAUL J.B. MURPHY III
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Name: Paul J.B. Murphy III
Title: Chief Executive Officer
Date: October 2, 2003
Exhibit 99.1
NEW WORLD COMPLETES EQUITY RESTRUCTURING AND
ANNOUNCES NEW CEO, COO AND CFO
RESTRUCTURING TO BE FOLLOWED BY REVERSE SPLIT; TWO NEW DIRECTORS ELECTED
GOLDEN, Colo. (10/2/03)--New World Restaurant Group, Inc. (Pink Sheets:
NWCI.PK) announced today that it had completed its previously announced equity
restructuring and that it has named a new executive management team. The board
of directors has named Paul J.B. Murphy, III, 47, as CEO, Director and acting
Chairman; Susan Daggett, 41, as COO; and Richard P. Dutkiewicz, 48, as CFO.
Mr. Murphy, who previously served as COO, fills the positions held by
Anthony Wedo, 43, who resigned from his positions as Chairman, CEO and Director.
Ms. Daggett previously served as Chief Supply Officer. Mr. Dutkiewicz was hired
as CFO, a position that has been unfilled since October 2002.
"I am excited about the prospect of leading the company into a future
of strategic growth and value creation driven by the great people associated
with these fantastic brands," said Mr. Murphy. "I would also like to welcome
Rick Dutkiewicz to our company, and congratulate Susan Daggett on her new role.
Together, they bring strong experience and enthusiasm to our executive team. I
would personally like to thank Tony for his service and leadership over the last
two years. His knowledge of the restaurant industry and turnaround skills were
essential in getting us to where we are today. He will be greatly missed."
Mr. Murphy, CEO, served as COO since June 2002, and was responsible for
day-to-day operations of all company-owned, franchised and licensed stores
across New World's six brands. He joined Einstein/Noah in December 1997 as
Senior V.P., Operations, was promoted to Executive V.P. in March 1998 and
continued in that position following New World's acquisition of the assets of
Einstein/Noah in June 2001. His prior experience in the quick casual restaurant
arena includes serving as COO with an Einstein/Noah area developer and as
Director of Operations for R&A Foods, LLC, a Boston Chicken area developer. Mr.
Murphy also spent 11 years in operations with S&A Restaurants, the owner and
operator of Steak & Ale and Bennigans Restaurants. He holds a BA degree from
Washington and Lee University.
Ms. Daggett, COO, served as Chief Supply Officer since May 2002, where
she had complete responsibility for the manufacturing, distribution and supply
functions across all the New World brands. Ms. Daggett joined Einstein/Noah in
1995 and held several executive positions in finance and operations. Earlier in
her career, Ms. Daggett served as Director, Financial Planning & Reporting at
Arby's Inc., and as Director, Financial Planning & Analysis with Burger King.
She began her career at Ernst & Whinney (now Ernst & Young) after graduating
from the University of Northern Iowa with a BA degree in Business
Administration.
Mr. Dutkiewicz, CFO, has over 25 years of experience in finance and
accounting. He served as CFO for Vari-L Company, Inc., a publicly traded
telecommunications component supplier, and Coleman Natural Products, Inc., a
leading supplier of natural beef. Throughout his career, Mr. Dutkiewicz held
senior accounting positions with Tetrad Corporation, MicroLithics Corporation,
United Technologies, and KPMG. Since May of 2003, he was Vice President of
Information Technology for Sirenza Microdevices, which was acquired by Vari-L.
Mr. Dutkiewicz received a BBA degree from Loyola University of Chicago in 1977.
The equity restructuring agreement entered into on June 26 with holders
of Series F preferred stock was approved by shareholders at the company's annual
meeting last week. The equity restructuring is effective as of September 30,
successfully concluding a year-long effort to rationalize the company's capital
structure.
"The completion of our equity restructuring goes a long way towards
leveling our competitive playing field," said Mr. Murphy. "Completion of the
equity restructuring agreement stabilizes our capital structure and allows
management to move forward and focus on its plans to strengthen and build upon
the company's solid core business."
At New World's annual meeting last week, shareholders also elected two
new directors and approved seven other proposals, including authorizing an
increase in the number of shares of common stock from 150 million to 1.5 billion
and a 1.6610444-for-one forward stock split needed to effect the equity
restructuring, as detailed in the equity restructuring agreement.
Shareholders also approved a one-for-100 reverse stock split, which
became effective immediately following implementation of the forward stock split
and consummation of the transactions contemplated by the equity restructuring
agreement. Further, a proposal to reduce the number of authorized shares from
1.5 billion to 15.0 million following the reverse stock split also was approved.
Reducing the number of shares of common stock outstanding should raise the per
share price and, consequently, improve the trading liquidity of the common
stock.
Immediately following the completion of the equity restructuring, New
World had 984,182,839 shares of common stock, no shares of Series F preferred
stock, 57,000 shares of Series Z preferred stock, and 105,925,675 shares of
common stock reserved for issuance pursuant to outstanding options and warrants.
Upon completion of the 1:100 reverse stock split, the company had 9,841,828
outstanding shares of common stock and 1,059,257 shares of common stock reserved
for issuance pursuant to outstanding options and warrants. Taking into account
both the forward and reverse stock splits, shareholders now have 1 share of
common stock for every 60.20309 shares previously held.
The shareholders elected Lawrence Gelfond, 61, a director of the
Financial Advisory and Dispute Resolution Division of Gelfond Hochstadt
Pangburn, P.C.; and Mark Kline, 51, president and CEO of Madison Development
Group, LLC, a real estate development company, to the New World board of
directors. As a result, New World's board has increased in size from three
directors to five directors.
With the successful completion of the equity restructuring, New
York-based investment firm Greenlight Capital beneficially owns approximately 92
percent of the company's outstanding common stock.
Josh Clark, of Greenlight Capital and a Director of New World, said on
behalf of the Board, "We would like to thank Tony for his extraordinary efforts
in bringing the company through a critical time. His leadership was essential in
allowing us to complete the equity restructuring, and we wish him well in his
future endeavors."
"I am pleased to have led New World through a difficult time in its
history. I am proud of the many accomplishments we have had over the last two
years including the successful integration of the New World and Einstein
companies, an operational turnaround and the financial restructuring. I am now
confident that the company is poised to resume growth and increase shareholder
value," said Mr. Wedo. "Further, I would like to congratulate Paul, Susan and
Rick on their appointments and wish them well."
Additionally, at the annual meeting, the appointment of Grant Thornton
LLP as independent auditors was approved for the fiscal year ending December 30,
2003. Shareholders also approved proposals to eliminate the company's classified
board of directors and to permit shareholder action by written consent of
holders of at least 80% of the company's outstanding common stock.
New World is a leading company in the quick casual sandwich industry,
the fastest growing restaurant segment. 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 July 1, 2003, the company's retail system consisted of 462
company-operated locations, as well as 249 franchised, and 28 licensed locations
in 33 states. The company also operates dough production and coffee roasting
facilities.
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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," "intend," "expect," "should,"
"would," "believe" 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. The above factors are more fully
discussed in the company's SEC filings.
CONTACTS: Steven Bruce / Ed Rowley, The Abernathy MacGregor Group,
212.371.5999