New World Restaurant Group (Pink Sheets: NWCI.PK), operator and franchisor of Einstein Bros., Noah's New York Bagels, Manhattan Bagel, and Chesapeake Bagel Bakery, today announced a net loss of $13.1 million for the second quarter compared to an $84,000 net loss for the same period in 2002. After deducting dividends and accretion on preferred stock, both of which are non-cash charges, the net loss available to common shareholders was $22.9 million, or $0.21 per share, compared to a net loss of $6.9 million, or $0.09 per share, in 2002.
Total revenues decreased 3.8% to $97.7 million for the second quarter with an operating loss of $2.4 million. Retail sales from company-owned Einstein Bros and Noah's New York Bagel locations declined to $90.9 million from $94.4 million a year earlier, reflecting a 3.6% decrease in comparable store sales. The sales declines were attributed to a lack of advertising during the period.
"Our efforts to conserve cash prior to the completion of the refinancing led us to trim ad spending for the first six months of 2003 below our budgeted figure, as well as to shift the media mix away from our highly successful TV campaign of 2002," said Anthony Wedo, New World chairman and CEO. Wedo promises a return to ad spending for the second half of 2003.
In June the company completed the recapitalization of its equity structure and in early July completed an offering of $160 million of 13% senior secured notes due 2008. Proceeds from that offering, together with cash on hand, were used to refinance existing indebtedness, including senior secured increasing rate notes that had matured on June 15, 2003.
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