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Così, Inc. Reports 2015 First Quarter Results

System-wide comparable restaurant sales for the 2015 first quarter, as measured for restaurants in operation for more than 15 months, recorded an aggregate 1.2% increase compared to the 2014 first quarter. The breakdown in comparable sales between Company-owned and franchise-operated restaurants is as follows:

 

	For the 13 weeks ended
	March 30, 2015
Company-owned	4.4%
Franchise-operated	-2.7%
Total System	1.2%

 

Così's total revenues for the 2015 first quarter decreased by $0.5 million to $17.9 million from $18.4 million in the 2014 first quarter. Company-owned net restaurant sales decreased by $0.5 million to $17.2 million from $17.7 million for the 2014 first quarter.   Franchise Fees and royalty revenues for the 2015 first quarter contributed $0.7 million compared to $0.6 million in the 2014 first quarter.  The decline in revenues in the 2015 first quarter compared to the 2014 first quarter was primarily driven by the closed stores subsequent to the first quarter of 2014, offset by the increase in comparable Company-owned restaurant sales, the opening of one new Company-owned location and transfer of three locations from franchise-operated to Company-owned.

"With the Hearthstone merger complete, the technology base in place and the refreshes underway, we are moving forward as planned for 2015," stated RJ Dourney, Cosi President and CEO.  "Miguel Rossy joining us as CFO fills out the executive team, and I am more confident than ever in our ability to make Cosi a strong financial performer," Dourney went on to say.

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Così's aforementioned $0.5 million decrease in Company-owned net sales represented a 2.9% decrease in the 2015 first quarter to $17.2 million, compared to $17.7 million in the 2014 first quarter, due to a sales decline of $1.7 million resulting from restaurants closed subsequent to the 2014 first quarter which was offset by $0.7 million or 4.4% increase in comparable restaurant net sales.  Additionally, approximately $0.6 million of sales are from the opening of one new Company-owned location and transfer of three locations from franchise-operated to Company-owned.

Così reported that, as of the three-month period ended March 30, 2015, it had cash balances of $13.9 million.

The results disclosed in this press release are unaudited.

About Così, Inc.

Così^® (http://www.getcosi.com) is a national fast casual restaurant chain that has developed featured foods built around a secret, generations-old recipe for crackly crust flatbread. This artisan bread is freshly baked in front of customers throughout the day in open-flame stone-hearth ovens prominently located in each of the restaurants. Così's warm and urbane atmosphere is geared towards its sophisticated, upscale, urban and suburban guests. There are currently 78 Company-owned and 34 franchise restaurants operating in sixteen states, the District of Columbia, Costa Rica and the United Arab Emirates. The Così^® vision is to become America's favorite fast casual restaurant by providing customers authentic, innovative, savory food while remaining an affordable luxury.

The Così^® menu features Così^® sandwiches, freshly-tossed salads, bowls, breakfast wraps, melts, soups, Così^® Squagels^®, flatbread pizzas, S'mores, snacks and other desserts, and a wide range of coffee and coffee-based drinks and other specialty beverages. Così^® restaurants are designed to be welcoming and comfortable with an eclectic environment. Così's sights, sounds, and spaces create a tasteful, relaxed ambience that provides a fresh and new dining experience.

"Così," "(Sun & Moon Design)" and related marks are registered trademarks of Così, Inc. in the U.S.A. and certain other countries. Copyright © 2014 Così, Inc. All rights reserved.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains statements that constitute forward- looking statements under the federal securities laws.  Forward-looking statements are statements about future events and expectations and not statements of historical fact. The words "believe," "may," "will," "should," "anticipate," "estimate," "expect," "intend," "objective," "seek," "plan," "strive," or similar words, or negatives of these words, identify forward- looking statements. We qualify any forward-looking statements entirely by these cautionary factors. Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to management. Forward-looking statements involve risks and uncertainties that may cause our actual results,

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performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the results being reported in this release are unaudited and subject to change; the cost of our principal food products and supply and delivery shortages and interruptions; labor shortages or increased labor costs; changes in demographic trends and consumer tastes and preferences, including changes resulting from concerns over nutritional or safety aspects of beef, poultry, produce, or other foods or the effects of food-borne illnesses, such as E. coli, "mad cow disease" and avian influenza or "bird flu"; competition in our markets, both in our business and in locating suitable restaurant sites; our operation and execution in new and existing markets; expansion into new markets including foreign markets; our ability to attract and retain qualified franchisees and our franchisees' ability to open restaurants on a timely basis; our ability to locate suitable restaurant sites in new and existing markets and negotiate acceptable lease terms; the rate of our internal growth and our ability to generate increased revenue from our existing restaurants; our ability to generate positive cash flow from existing and new restaurants; fluctuations in our quarterly results due to seasonality; increased government regulation and our ability to secure required government approvals and permits; our ability to create customer awareness of our restaurants in new markets; the reliability of our customer and market studies; cost effective and timely planning, design and build out of restaurants; our ability to recruit, train and retain qualified corporate and restaurant personnel and management; market saturation due to new restaurant openings; inadequate protection of our intellectual property; our ability to obtain additional capital and financing; adverse weather conditions which impact customer traffic at our restaurants; and adverse economic conditions. Further information regarding factors that could affect our results and the statements made herein are included in our filings with the Securities and Exchange Commission.

Additional information is available on Così's website at

http://www.getcosi.com in the investor relations section.

 

 

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Cosi, Inc.
Consolidated Balance Sheets
(dollars in thousands)
		March 30,				December 29,
Assets		2015				2014
Current assets:
Cash and cash equivalents		$	13,878			$	21,053
Credit card receivable			1,424				507
Accounts receivable, net			792				581
Inventories			733				825
Prepaid expenses and other current assets			1,028				1,279
Total Current Assets			17,855				24,245
Notes receivable			551				551
Furniture and fixtures, equipment and leasehold improvements, net			7,935				7,308
Other assets			1,294				1,327
Total Assets			27,635				33,431
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable		$	1,934			$	1,519
Accrued expenses			7,318				9,336
Deferred franchise revenue			18				18
Current portion of other long-term liabilities			124				177
Total current liabilities			9,394				11,050
Long-term debt, net			6,831				6,623
Deferred franchise revenue			1,708				1,724
Other liabilities, net of current portion			1,538				1,663
Total Liabilities			19,471				21,060
Stockholder's equity:
Common stock - $0.01 par value, 100,000,000 shares authorized,			383				383
38,415,925 and 38,410,196 shares issued and outstanding, respectively
Additional paid-in capital			323,364				323,256
Treasury stock, 59,886 shares at cost			(1,198	)			(1,198	)
Accumulated deficit			(314,385	)			(310,070	)
Total stockholder's equity			8,164				12,371
Total liabilities and stockholder's equity			27,635				33,431
The accompanying notes are an intergral part of these consolidated financial statements.

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Consolidated Statements of Operations and Comprehensive Loss