Attached files
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8-K - FORM 8-K - Crumbs Bake Shop, Inc. | c24828e8vk.htm |
EX-3.1 - EXHIBIT 3.1 - Crumbs Bake Shop, Inc. | c24828exv3w1.htm |
EX-3.2 - EXHIBIT 3.2 - Crumbs Bake Shop, Inc. | c24828exv3w2.htm |
EX-10.7 - EXHIBIT 10.7 - Crumbs Bake Shop, Inc. | c24828exv10w7.htm |
EX-10.5 - EXHIBIT 10.5 - Crumbs Bake Shop, Inc. | c24828exv10w5.htm |
EX-99.2 - EXHIBIT 99.2 - Crumbs Bake Shop, Inc. | c24828exv99w2.htm |
EX-10.6 - EXHIBIT 10.6 - Crumbs Bake Shop, Inc. | c24828exv10w6.htm |
EX-10.1 - EXHIBIT 10.1 - Crumbs Bake Shop, Inc. | c24828exv10w1.htm |
EX-10.4 - EXHIBIT 10.4 - Crumbs Bake Shop, Inc. | c24828exv10w4.htm |
EX-10.3 - EXHIBIT 10.3 - Crumbs Bake Shop, Inc. | c24828exv10w3.htm |
EX-10.2 - EXHIBIT 10.2 - Crumbs Bake Shop, Inc. | c24828exv10w2.htm |
Exhibit 99.1
For Immediate Release
CRUMBS BAKE SHOP REPORTS THIRD QUARTER 2011 FINANCIAL RESULTS
JULIAN R. GEIGER TO BECOME PRESIDENT AND CHIEF EXECUTIVE OFFICER
New York, New York. November 14, 2011 Crumbs Bake Shop, Inc. (Crumbs) (NASDAQ: CRMB) (formerly
known as 57th Street General Acquisition Corp.), a national neighborhood bakery and the
largest U.S.-based cupcake specialty store chain, today reported financial results for the third
quarter ended September 30, 2011.
In a separate press release issued today, the Company also announced naming Julian R. Geiger as the
Companys new President and Chief Executive Officer, effective today. Jason Bauer, who co-founded
the Companys operating subsidiary, Crumbs Holdings, LLC (Crumbs) and served as its President and
Chief Executive Officer since 2003, will become Senior Vice President of Business Development.
Third Quarter Highlights as Compared to Year Ago Period Include:
| Net sales increased 18.3% to $8.9 million; gross profit increased 14.9% to $5.1 million. |
| Store operating weeks increased 41% to 468 from 332. |
| GAAP net loss attributable to stockholders was $(0.9) million or $(0.17) per diluted
share. |
| Adjusted EBITDA1, a non GAAP measure, of $(0.7) million compared to $0.5
million. |
| 2 new stores opened in both Illinois and New York. |
1. | See financial tables for a reconciliation of adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results. |
Jason Bauer, Co-Founder of Crumbs stated, Although we were disappointed with our third quarter
results, we are taking definitive action to improve performance. To that point, I am very excited
that Julian R. Geiger has agreed to become our new President and Chief Executive Officer, given his
extensive experience building brands and fostering growth. I believe that his leadership will be
an important ingredient in Crumbs development and I look forward to working closely with him in
building the business over time.
Third Quarter Financial Results
Net sales for the third quarter of 2011 increased 18.3% to $8.9 million from $7.5 million in the
same period last year. Store operating weeks increased 41% to 468 from 332.
Cost of sales increased 23.1% to $3.8 million from $3.1 million, and as a percentage of net sales,
increased 1.7 percentage points to 42.5%. Gross profit increased 14.9% to $5.1 million from $4.4
million compared to the third quarter of 2010 due to higher net sales.
General and administrative expenses were $0.7 million, or 7.4% of net sales, compared to $0.3
million in the same period last year, or 4.7% of net sales as the Company incurred higher
professional fees and public company costs.
Adjusted EBITDA was negative $(0.7) million compared to $0.5 million in the same period last year.
See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization), a non-GAAP measure, to GAAP results.
GAAP net loss attributable to stockholders was $(0.9) million or $(0.17) per diluted share,
compared to a net loss of ($39,000) or ($0.01) per diluted share in the same period last year.
Store Development
During the third quarter of 2011, the Company opened four stores in New York and Illinois and ended
the three-month period with a total of 39 stores opened across six states and the District of
Columbia.
Outlook
Management is suspending its previously announced guidance for 2011 net sales and adjusted EBITDA
but is reaffirming its new store development outlook of 16-18 store openings within existing
markets. For 2012, the Company will continue to open stores in both existing markets and new
markets such as Boston and Philadelphia and intends to address its overall outlook development and
financial outlook when it reports year-end results early next year.
The process to identify and install a new independent director on the Companys Board of Directors
has begun. As required by the NASDAQ Corporate Governance Rules, the Company has notified NASDAQ
of Mr. Geigers appointment and provided it with a plan for compliance with the requirements of
Rule 5605 that the Board of Directors be comprised of a majority of independent directors by letter
dated November 14, 2011. The plan for compliance includes increasing the size of the board to 9
persons, the identification and review of several potential nominees being considered by the
Companys Nominating and Governance Committee and the Boards plan to add such additional
independent director as soon as possible but expected to be within the next 60 days.
Conference Call
As previously announced, the Company will host a conference call to discuss third quarter 2011
financial results today at 4:30 PM Eastern Time. The conference call can be accessed live over the
phone by dialing 888-490-2763 or for international callers by dialing 719-325-2339. A replay will
be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517
for international callers; the password is 8454427. The replay will be available until December 4,
2011.
The call will be webcast live from the Companys Web site at www.crumbs.com under the Investor
Relations section. An archived webcast will be available beginning approximately one hour after
the end of the call.
About Crumbs Bake Shop, Inc.
The first Crumbs Bake Shop opened its doors in March 2003 on the Upper West Side of Manhattan, New
York, by co-founders Mia and Jason Bauer. The design of Crumbs Bake Shops is inspired by old-time
neighborhood bakeries, creating a warm and friendly environment with wall-to-wall treats. Ranked
the largest retailer of cupcakes nationwide and one of Inc. Magazines 10 Breakout Companies of
2010, Crumbs currently has 45 locations, including 31 locations in the New York Metro area, 6
locations on the West Coast, 3 locations in Washington, D.C., 1 location in Virginia and 4
locations in Illinois. The specialty of the house is cupcakes; however, the menu also includes an
irresistible blend of comfort-oriented classics and elegant baked goods. There are more than 60
varieties of cupcakes baked fresh daily with a new cupcake of the week debuting each Monday.
Forward Looking Statements
Some of the statements in this press release may constitute forward-looking statements within the
meaning of the federal securities laws. Words such as anticipate, expect, project, intend,
plan, believe, target, aim, will and words and terms of similar substance and any
financial projections used in connection with any discussion of future plans, strategies,
objectives, actions, or events identify forward-looking statements. Such statements include, among
others, those concerning our expected financial performance and strategic and operational plans, as
well as all assumptions, expectations, predictions, intentions or beliefs about future events.
These statements are based on the beliefs of our management as well as assumptions made by and
information currently available to us and reflect our current view concerning future events. As
such, they are subject to risks and uncertainties that could cause our results to differ materially
from those expressed or implied by such forward-looking statements. Such risks and uncertainties
include, among many others: the risk that the businesses of Crumbs Bake Shop, Inc. and Crumbs
Holdings LLC and its wholly-owned subsidiaries will not be integrated successfully; the risk that
the benefits anticipated from the business transaction may not be fully realized or may take
longer to realize than expected; the risk that any projections, including earnings, revenues,
expenses, synergies, margins or any other financial items are not realized, the risk of disruption
from the business transaction making it more difficult to maintain relationships with customers,
employees or suppliers ; a reduction in industry profit margin; the inability to continue the
development of the Crumbs brand; the timing of and ability to achieve profitability of new stores;
changing interpretations of generally accepted accounting principles; continued compliance with
government regulations; changing legislation and regulatory environments; the ability to meet the
NASDAQ Stock Market continued listing standards; a lower return on investment; the inability to
manage rapid growth; requirements or changes affecting the business in which Crumbs Bake Shop, Inc.
and Crumbs Holdings LLC and its wholly-owned subsidiaries are engaged; the general volatility of
the market prices of our securities and general economic conditions; our ability to successfully
implement new strategies; operating hazards; competition and the loss of key personnel and any of
the factors in the Risk Factors section Item 1A of our Quarterly Report on Form 10-Q; and any
statements of assumptions underlying any of the foregoing. You should also carefully review other
reports that we file with the Securities and Exchange Commission. We assume no obligation to
update these forward-looking statements except as required by law.
Non-GAAP Information
The Company is providing Adjusted EBITDA information, which is defined as net income of the
combined company, including net income attributable to any non-controlling interest, determined in
accordance with all applicable and effective GAAP pronouncements up to September 30, 2011, before
interest income or expense, income taxes and any gains or losses resulting from the change in
estimate relating to the Tax Receivable Agreement, depreciation, amortization, deferred rent
expense, losses or gains resulting from adjustments to the fair value of the contingent
consideration, stock-based compensation expense, extraordinary or non-recurring expenses and all
other extraordinary non-cash items for the applicable period as a compliment to U.S. generally
accepted accounting principles (GAAP) results. Adjusted EBITDA measures are commonly used by
management and investors as a measure of leverage capacity, debt service ability and liquidity.
Adjusted EBITDA is not considered a measure of financial performance under GAAP, and the items
excluded from Adjusted EBITDA are significant components in understanding and assessing our
financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative
to, or superior to, such GAAP measures as net income, cash flows provided by or used in operating,
investing or financing activities or other financial statement data presented in our consolidated
financial statements as an indicator of financial performance or liquidity. Reconciliations of
non-GAAP financial measures are provided in the accompanying tables. Since Adjusted EBITDA is not a
measure determined in accordance with GAAP and is susceptible to varying calculations, Adjusted
EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.
Investor Relations Contact:
Tom Ryan/Raphael Gross of ICR
IR@crumbs.com / 646-545-4702
Tom Ryan/Raphael Gross of ICR
IR@crumbs.com / 646-545-4702
CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES
(Formerly Known As 57th Street General Acquisition Corp.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
(Formerly Known As 57th Street General Acquisition Corp.)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales |
$ | 8,876 | $ | 7,506 | $ | 28,889 | $ | 22,546 | ||||||||
Cost of sales |
3,768 | 3,062 | 12,194 | 9,212 | ||||||||||||
Gross profit |
5,108 | 4,444 | 16,695 | 13,334 | ||||||||||||
Operating expenses |
||||||||||||||||
Selling expenses |
283 | 239 | 1,010 | 818 | ||||||||||||
Staff expenses |
3,101 | 2,082 | 9,209 | 5,982 | ||||||||||||
Occupancy expenses |
1,827 | 1,240 | 5,192 | 3,504 | ||||||||||||
General and administrative |
660 | 349 | 1,682 | 935 | ||||||||||||
New store expenses |
419 | 171 | 533 | 351 | ||||||||||||
Depreciation and amortization |
362 | 213 | 1,037 | 614 | ||||||||||||
6,652 | 4,294 | 18,663 | 12,204 | |||||||||||||
Income (loss) from operations |
(1,544 | ) | 150 | (1,968 | ) | 1,130 | ||||||||||
Other income (expense) |
||||||||||||||||
Interest and other income |
| | | | ||||||||||||
Abandoned lease projects |
(6 | ) | (190 | ) | (20 | ) | (198 | ) | ||||||||
(6 | ) | (190 | ) | (20 | ) | (198 | ) | |||||||||
Income (loss) before income taxes |
(1,550 | ) | (40 | ) | (1,988 | ) | 932 | |||||||||
Income taxes |
11 | | 11 | | ||||||||||||
Net income (loss) attributable to the
controlling and non-controlling interests |
(1,561 | ) | (40 | ) | (1,999 | ) | 932 | |||||||||
Less: Net (income) loss attributable to
non-controlling interest |
647 | | 829 | | ||||||||||||
Net income (loss) attributable to stockholders |
$ | (914 | ) | $ | (40 | ) | $ | (1,170 | ) | $ | 932 | |||||
Net income (loss) per common share, basic
and diluted |
$ | (0.17 | ) | $ | (0.01 | ) | $ | (0.21 | ) | $ | 0.29 | |||||
Weighted average number of common
shares outstanding, basic and diluted |
5,506 | 6,063 | * | 5,568 | 3,177 | * | ||||||||||
* | The weighted average number of common shares outstanding is that of Crumbs Bake Shop, Inc. |
CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES
(Formerly Known As 57th Street General Acquisition Corp.)
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(in thousands, except per share data)
(Formerly Known As 57th Street General Acquisition Corp.)
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(in thousands, except per share data)
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ | 8,628 | $ | 655 | ||||
Trade receivables |
331 | 248 | ||||||
Inventories |
366 | 241 | ||||||
Prepaid rent |
577 | 387 | ||||||
Deferred financing costs |
| 215 | ||||||
Other current assets |
350 | 82 | ||||||
Total current assets |
10,252 | 1,828 | ||||||
Property and equipment, net |
11,287 | 8,784 | ||||||
Other Assets |
||||||||
Deferred tax asset |
4,774 | | ||||||
Restricted certificate of deposit |
673 | 30 | ||||||
Intangible assets, net |
383 | 429 | ||||||
Deposits |
287 | 277 | ||||||
Other |
93 | 36 | ||||||
Total other assets |
6,210 | 772 | ||||||
$ | 27,749 | $ | 11,384 | |||||
LIABILITIES, MEMBERS EQUITY AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable and accrued expenses |
$ | 1,726 | $ | 2,616 | ||||
Payroll liabilities |
391 | 141 | ||||||
Sales tax payable |
70 | 48 | ||||||
Gift cards and certificates outstanding |
124 | 120 | ||||||
Total current liabilities |
2,311 | 2,925 | ||||||
Long-term liabilities |
||||||||
Deferred rent |
2,666 | 1,863 | ||||||
Payable to related parties pursuant to tax receivable agreement |
2,387 | | ||||||
Total liabilities |
7,364 | 4,788 | ||||||
Members equity |
| 6,596 | ||||||
Stockholders equity |
||||||||
Preferred stock, $.0001 par value; 1,000 shares authorized;
390 shares issued and outstanding at September 30, 2011 |
| | ||||||
Common stock, $.0001 par value; 100,000 shares authorized;
7,100 shares issued, 5,506 outstanding at September 30, 2011 |
| | ||||||
Additional paid-in capital |
30,255 | | ||||||
Accumulated deficit |
(1,764 | ) | | |||||
Treasury stock, at cost |
(15,914 | ) | | |||||
Total Crumbs Bake Shop, Inc. stockholders equity |
12,577 | | ||||||
Non-controlling interest |
7,808 | | ||||||
Total stockholders equity |
20,385 | | ||||||
$ | 27,749 | $ | 11,384 | |||||
CRUMBS BAKE SHOP, INC. AND SUSIDIARIES
(Formerly Known As 57th Street General Acquisition Corp.)
ADJUSTED EBITDA AS DEFINED BY AMENDMENT NO. 3 TO THE
BUSINESS COMBINATION AGREEMENT DATED APRIL 7, 2011
(UNAUDITED AND IN THOUSANDS)
(Formerly Known As 57th Street General Acquisition Corp.)
ADJUSTED EBITDA AS DEFINED BY AMENDMENT NO. 3 TO THE
BUSINESS COMBINATION AGREEMENT DATED APRIL 7, 2011
(UNAUDITED AND IN THOUSANDS)
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) attributed to the controlling
and non-controlling interest |
$ | (1,560 | ) | $ | (39 | ) | $ | (1,988 | ) | $ | 931 | |||||
Depreciation |
328 | 184 | 936 | 527 | ||||||||||||
Amortization |
34 | 29 | 101 | 87 | ||||||||||||
Abandoned Lease Costs |
6 | 189 | 20 | 198 | ||||||||||||
Deferred Rent Expense |
413 | 163 | 671 | 373 | ||||||||||||
Non-recurring expenses |
51 | 0 | 149 | 0 | ||||||||||||
Adjusted EBITDA |
$ | (728 | ) | $ | 526 | $ | (111 | ) | $ | 2,116 | ||||||