LAKEWOOD Colo. Einstein Noah Restaurant Group Inc. said fourth-quarter net income fell 51.3 percent from a year ago, on continuing softness in sales as well as a large deferred income tax expense.
Fourth-quarter earnings totaled $2.8 million, or 17 cents per share, compared with $5.8 million, or 36 cents a share, in the same 2008 quarter. In the latest quarter, Einstein Noah booked $3.4 million in deferred income tax expense. The company’s income from operations remained nearly flat year-to-year, at $7.6 million.
Latest-quarter revenue was virtually flat as well, dipping to $103.7 million from $103.9 million a year ago. The 1.7-percent decrease in corporate same-store sales was partially offset by the opening of a net two restaurants during the quarter. Systemwide same-store sales, which include results from company, franchised and licensed units, fell 1.4 percent.
For the full year ended Dec. 29, net income more than tripled to $72.0 million, or $4.36 per share, from $21.1 million, or $1.29 per share, in fiscal 2008, the Lakewood-based company said. A $53.4 million deferred income tax benefit accounted for virtually the entire gain in net income reported by the operator and franchisor of more than 680 Einstein Bros. Bagels, Noah’s New York Bagels and Manhattan Bagel stores.
Revenues fell 1.2 percent to $408.6 million, from $413.5 million, as corporate same-store sales fell 3.4 percent.
Einstein Noah Restaurant Group reported 17.1-percent growth in fiscal 2009 franchise and license related revenues to $7.5 million, citing a year-over-year net increase of 32 franchise and licensed locations, as well as a 1.1-percent gain in franchisee same-store sales. For the full year, systemwide same-store sales decreased 2.4 percent.
Rick Dutkiewicz, Einstein Noah chief financial officer noted that the company’s balance sheet “improved 2009” and “remains well-capitalized,” as “we paid down a total of $8.1 million of long-term debt and redeemed nearly $25.0 million of Series Z Preferred Stock throughout the year.” Einstein Noah’s deferred tax asset will minimize the company’s cash taxes paid for the next several years, freeing up funds to reduce indebtedness and provide capital for growth, he added.
For 2010, Einstein Noah intends to “to drive transaction growth by increasing brand trial through our core bagel/breakfast offerings, rebuild gross margins through our focus on supply chain, manufacturing and operational efficiency, and accelerate unit growth primarily through franchise and license expansion,” according to chief executive and president Jeff O’Neill.
The company said that for the current year it anticipates the opening of 10 to 12 new Einstein Bros. Bagels company-owned restaurants, 12 to 16 new Einstein Bros. Bagels franchised restaurants and 35 to 45 Einstein Bros. Bagels licensed restaurants.
Contact Alan Liddle at [email protected].
