Einstein Noah profit slides in Q3

by Eric Schroeder
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LAKEWOOD, COLO. — Einstein Noah Restaurant Group recorded net income of $4,537,000, equal to 28c per share on the common stock, in the third quarter ended Sept. 30, down 8% from $4,943,000 in the previous year’s third quarter. The company said the most recent quarterly results included a $1.9 million charge related to two California legal settlements.

Net sales in the third quarter totaled $100,895,000, up narrowly from $100,378,000 in the same period a year ago.

"Quarterly results aside, we continue to focus on what’s best for the long-term health of the business," said Paul Murphy, president and chief executive officer. "This means terrific food and service and making our fast-casual, morning offering unique relative to our peers."

Looking ahead to 2009, Rich Dutkiewicz, chief financial officer, said the company is focused on cash generation and balance sheet strength.

"As of the end of the third quarter, we had generated more than $14 million in free cash flow for the year, and continue to add to our balance of $22.2 million in unrestricted cash," Mr. Dutkiewicz said. "If necessary, we also have levers at our disposal to adjust spending should that be necessary, although we are confident that our cost structure and price points will help protect margins."

For the first nine months ended Sept. 30, Einstein Noah posted net income of $15,293,000, or 96c per share, up from $5,825,000, or 46c per share, in the same period a year ago. Net sales were $309,573,000, up 4% from $297,688,000.

Einstein Noah Restaurant Group operates locations primarily under the Einstein Bros. Bagels and Noah’s New York Bagels brands and primarily franchises locations under the Manhattan Bagel brand.

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