Einstein Bagels Sees Store Expansion

In addition to its corporate stores, the chain has opened 10 new licensed locations to date this year and expects to open an additional 30 licensed locations for the remainder of the year.

Murphy noted that with increased capital now available through the company's line of credit, it will be able to upgrade an additional 11 restaurants in fiscal 2007. With this number added, it now plans to upgrade a total of 37 restaurants in fiscal 2007.

The comments by Murphy came as Noah Restaurant Group reported comparable store sales growth at company-owned restaurants of 5.2% in the second quarter ended July 3, which marked the 11th consecutive quarter of positive comparable store sales growth. Total revenue in the second quarter was $101.1 million, up 3.2% from revenue of $98 million in the same quarter a year ago.

The company still reported a quarterly net loss of $250,000, or two cents per basic and diluted share, compared with a net loss of $1.5 million in the same quarter last year. However, it reported that it would have earned 31 cents per share if its stock offering and certain other events had occurred at the beginning of the second quarter. It also cited one-time debt restructuring costs as a factor in the quarterly loss.

Murphy cited a number of measures that the company has adopted to improve efficiencies, including the relocation of its corporate headquarters into "a more efficient, cost-effective facility with ample expansion potential." The company's public stock offering generated more than $83 million in new capital that will strengthen its balance sheet and "position us for continued growth," Murphy said.

In addition to these financial measures, the company is testing a new line of bagels that offer the prospect of higher profits. For the last few months, it have been testing a line of pizza bagels in the Denver market. The success of the new pizza bagels has led the company to commit to rolling out the product to the majority of the Einstein Bros. Bagel restaurants nationwide by the end of this fiscal year.