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LOS ANGELES | SAN FRANCISCO | NEW YORK | BOSTON | SEATTLE | MINNEAPOLIS | MILWAUKEE
Panera Bread Company (PNRA)
October 17, 2013
Downgrading to NEUTRAL from OUTPERFORM on Softer
Checks and Risk of Disappointing Guidance; PT to $165
• We are downgrading PNRA to NEUTRAL from OUTPERFORM as we no longer
expect upward estimate revisions based on our most recent round of checks
that indicate a softer end to Q3, and Q4 QTD SSS growth below expectations.
• Our checks of 10% of company-owned locations indicated comp deceleration
as Q3 came to a close and Q4 QTD comps of ~2.5%. This is a reversal from our
August-end checks that indicated an accelerating trend line from July. We now
believe the short-lived comp acceleration may have been due to upped promotional
activity around loyalty designed to drive near-term visits, and that the comp
slowdown may be more structural in nature than we previously believed.
Consensus comp expectations are 2.8% for Q3 and 3.8% for Q4. We are lowering
our Q3 comp expectation to 2.7% from 3.1% and our Q4 expectation to 2.5% from
4%. Guidance is 2-4%. A conference call to discuss the results will be held at 5:30
rd
a.m. PT on Wednesday, October 23 . (Pages 2-4)
• 2014 guidance could prove disappointing. Given a slower comp trend line in
Q2, Q3 and potentially Q4, we believe 2014 comp and EPS guidance could be
below the 2014 consensus expectation of 4% and $7.82, respectively, even in the
context of share repurchases. (Page 4)
• Share repurchases limit downside, in our opinion. We believe past stepped-up
repurchases during periods of share price weakness have established a floor at
~20x forward P/E, and believe post-Q2 weakness could have resulted in another
acceleration in repurchases. These repurchases have contributed to $0.09-0.15 in
incremental EPS each year from 2010 through 2012, and account for $0.05 in EPS
in 2013. $560 million remains on the company’s existing authorization. (Pages 5-6)
• Continue to believe Panera is well positioned to make an eventual transition
to a mature business model. Even as PNRA’s unit growth likely slows over the
next 5 years, we believe that given its healthy franchise base, it is well positioned to
adjust its capital structure and operating model to suit a mature model. Given the
roadmaps of DNKN, BKW, and DPZ, we believe refranchising and leveraging
would justify a share price >$200 once near- to medium-term obstacles, such as
turnover in investor base, are overcome. (Pages 7-8)
• Lowering our 2013 estimate to $6.81 from $6.87 to reflect lowered comp
expectation. Also lowering our 2014 EPS estimate to $7.78 from $7.84.
• Lowering PT to $165 from $190. This is a 21x multiple on our 2014 EPS estimate,
a 30% discount to peers, based on risk to expectations.
FYE Dec
2012A
REV (M)
ACTUAL
CURR.
2013E
Q1 Mar
Q2 Jun
Q3 Sep
Q4 Dec
Year*
Change
$499A
531A
529A
572A
$2,130A
--
$562A
589A
587E
680E
$2,418E
13.5%
EPS
ACTUAL
CURR.
$1.40A
1.50A
1.24A
1.75A
$5.89A
27.3x
--
$1.64A
1.74A
1.35E
2.08E
$6.81E
23.6x
15.6%
Restaurants
2012A
Q1 Mar
Q2 Jun
Q3 Sep
Q4 Dec
Year*
P/E
Change
2014E
PREV.
CONS.
CURR.
PREV.
CONS.
590E
688E
$2,428E
--$584.8E
$682.4E
$2,417E
$631E
655E
649E
698E
$2,634E
8.9%
$633E
658E
654E
709E
$2,655E
----$2,657E
PREV.
CONS.
CURR.
PREV.
CONS.
1.37E
2.11E
$6.87E
--1.35E
2.09E
$6.81E
$1.91E
2.13E
1.59E
2.16E
$7.78E
20.6x
14.2%
$1.90E
2.14E
1.62E
2.18E
$7.84E
----$7.82E
2013E
Price
$160.58
Rating
NEUTRAL
(from OUTPERFORM)
12-Month Price Target
$165
(from $190)
Nick Setyan
(213) 688-4519
nick.setyan@wedbush.com
Colin Radke
(213) 688-6624
colin.radke@wedbush.com
Company Information
Shares Outst (M)
Market Cap (M)
52-Wk Range
Book Value/sh
Cash/sh
Enterprise Value (M)
LT Debt/Cap %
29.3
$4,702.9
$153.65 $194.77
$30.98
$11.65
$4,361.8
0.00
Company Description
Panera Bread Company, based in St. Louis,
owns, operates and franchises over 1,700
fast casual restaurants throughout the U.S.
and Canada. Throughout the U.S., Panera
and its franchisees also own and operate 22
and 4 fresh dough facilities, respectively.
2014E
Source: Thomson Reuters
Consensus estimates are from Thomson First Call.
* Numbers may not add up due to rounding.
Wedbush Securities does and seeks to do business with companies covered in its research reports. Thus, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors
should consider this report as only a single factor in making their investment decision. Please see page 14 of this
report for analyst certification and important disclosure information.
Risks
Risks to attainment of our share price target include unexpected adverse fluctuations in input costs, lower-than-expected sales from
openings in new markets, and a general deterioration in economic conditions.
Additional Analysis
Slowdown in SSS Growth May be More Structural in Nature than We Previously Believed
Our checks of 10% of company-owned locations indicated comp deceleration as Q3 came to a close and Q4 QTD comps of ~2.5%.
This is a reversal from our August-end checks that indicated an accelerating trend line from July. We now believe the short-lived comp
acceleration may have been due more to upped promotional activity around loyalty designed to drive near-term visits than the
unpopularity of seasonal offering centered around shrimp (Figure 1). Thus, the comp slowdown may be more structural in nature than
we previously believed, with an increasingly mature Panera’s competitive positioning at risk within both the breakfast daypart (Figure 2)
and the sandwich/bakery café quick casual subcategory. According to Technomic, the fast casual sandwich subcategory continues to
outgrow all other subcategories, consistently posting mid-teens annual growth rate year-after-year, with most of the growth contribution
from smaller, recently formed competitors with growth rates much higher than Panera.
2013
2012
2011
Figure 1: Seasonal Offerings and New Menu Items
Spring
Breakfast Power Sandwich
Chicken Noodle Soup
Easter Egg Cookie
Steak and Blue Cheese Salad
Steak and Egg Breakfast Sandwich
Steak and White Cheddar Panini
Thai Chopped Chicken Salad
Valentine Cookie
Wild Berry Smoothie
Summer
Flower Cookie
Frozen Lemonade & Strawberry Lemonade
Lemon Chicken Orzo Soup
Strawberry Poppyseed & Chicken Salad
Fall
Chocolate Pecan Babka
Cranberry Orange Smoothie with Ginseng
Pumpkin Cookie
Pumpkin Spice Latte
Roasted Turkey Artichoke Panini
Roasted Turkey Harvest Salad
Steak Chili with Cornbread
Jack-o-lantern Cookie
Winter
Cranberry Walnut Pannetone
Gingerbread Man Cookie
Holiday Bread
Mint Crinkle Cookie
Peppermint Mocha
Sonoma Chicken Stew
Steak Balsamic Panini
Spring
Acai Berry Iced Tea
Carrot Cake with Walnuts
Chicken Tortilla Soup
Cuban Chicken Panini
Easter Egg Cookie
Mediterranean Egg White Breakfast Sandwich
Mediterranean Salmon Salad
Peach Nectar Smoothie with Ginseng
Roasted Turkey Fuji Apple Salad
Steel Cut Oatmeal
Strawberry Hot Cross Buns
Toffee Nut Cookie
Valentine Cookie
Summer
Black Cherry Smoothie
Chopped Chicken Cobb Salad with Avocado
Corn Chowder
Flower Cookie
Fresh Fruit Pastry
Frozen Lemonade
Lemon Chicken Orzo Soup
Peanut Butter Dream Cookie
Roasted Turkey & Avocado BLT
Steel Cut Oatmeal with Blueberries & Granola
Strawberry Poppyseed & Chicken Salad
Fall
Chocolate Pecan Babka
Cranberry Orange Muffin
Jack-o-lantern Cookie
Pumpkin Cookie
Pumpkin Pie Bagel
Pumpkin Spice Latte
Roasted Turkey & Cranberry Panini
Roasted Turkey Harvest Salad
Sausage & Gouda Baked Egg Souffle
Sonoma Chicken Stew
Steel Cut Oatmeal with Dried Cherries
Winter
Big Kid Grilled Cheese
Christmas Tree Cookie
Dinner Rolls
Ham & Gruyere Breakfast Sandwich
Holiday Bread
Peppermint Mocha
Red Velvet Crinkle Cookie
Skinny Caffe Mocha
Spring
Cheese Babka
Chocolate Due with Walnuts
Flower Cookie
Pesto Sacchettini
Roasted Turkey & Sun-Dried Tomato Pesto
Breakfast Sandwich
Rustic Penne Bolognese
Tortellini Alfredo
Summer
Bacon Egg & Cheese Breakfast Sandwich
Chilled Shrimp & Soba Noodle Sandwich
Corn Chowder
Fresh Fruit Pastry
Frozen Cherry Limeade
Iced Coffee
Lemon Chicken Orzo Soup
Shrimp Salad Sandwich
Steel Cut Oatmeal with Blueberries & Granola
Strawberry Poppyseed & Chicken Salad
Tropical Hibiscus Iced Tea
Fall
Apple Chips and Pecan Oatmeal
Chocolate Truffle Babka
Chocolate, Vanilla and Red Velvet Cupcakes
Cranberry Orange Muffin
Jack-o-lantern Cookie
Pumpkin Pie Bagel
Pumpkin Spice Latte
Rigatoni San Marzano
Roasted Tomato and Feta Baked Egg Souffle
Roasted Turkey Harvest Wheatberry Salad
Vegeterian Squash Soup
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 2
Figure 2: Breakfast and Snack Competitor SSS Growth – CQ1:2012A-CQ4:2013E
12.0%
10.0%
8.0%
6.0%
4.0%
SBUX - Americas
DNKN - DD US
KKD - Domestic Co. Ow ned
CQ4:13E
CQ2:13A
CQ1:13A
CQ4:12A
CQ3:12A
CQ2:12A
CQ1:12A
0.0%
CQ3:13E
2.0%
PNRA - Co. Ow ned
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 3
Consensus comp expectations are 2.8% for Q3 and 3.8% for Q4. We are lowering our Q3 comp expectation to 2.7% from 3.1% and
our Q4 expectation to 2.5% from 4%. Guidance is 2-4%. Given a slower comp trend line in Q2, Q3 and potentially Q4, we believe
2014 comp and EPS guidance could be below the 2014 consensus expectation of 4% and $7.82, respectively, even in the context of
share repurchases (Figures 3-4).
Figure 3: SSS Growth Expectations
Wedbush - Previous
Wedbush - Current
Consensus
Q1:13A
3.3%
3.3%
--
Q2:13A
3.8%
3.8%
--
Q3:13E
3.2%
2.7%
3.0%
Q4:13E
4.0%
2.5%
4.0%
FY2014E
3.5%
3.0%
4.0%
Q2:13A
$1.74
$1.74
--
Q3:13E
$1.37
$1.35
$1.35
Q4:13E
$2.11
$2.08
$2.09
FY2014E
$7.84
$7.78
$7.82
Source: Company data, Wedbush Securities, Inc.
Figure 4: EPS Expectations
Wedbush - Previous
Wedbush - Current
Consensus
Q1:13A
$1.64
$1.64
--
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 4
Believe Share Repurchases Limit Downside
We believe past stepped-up repurchases during periods of share price weakness have established a floor at ~20x forward P/E, and
believe post-Q2 weakness could have resulted in another acceleration in repurchases. These repurchases have contributed to $0.090.15 in incremental EPS each year from 2010 through 2012, and account for $0.05 in EPS in 2013. $560 million remains on the
company’s existing authorization (Figures 5-7).
Figure 5: Incremental EPS from Share Buybacks
Incremental EPS from Share Buybacks
2010
$0.10
2011
$0.15
2012
$0.09
2013E
$0.05
Source: Company data, Wedbush Securities, Inc.
Figure 6: Share Repurchases, 2009-present
$100,000
$250
9.7% stock
decline post
Q2:11 results
$90,000
$80,000
$200
7.2% stock
decline post
Q1:10 results
$70,000
$60,000
$150
$50,000
$40,000
$100
$30,000
$20,000
$50
$10,000
$-
Q1:09
Q2:09
Q3:09
Q4:09
Q1:10
Q2:10
Q3:10
Q4:10
Q1:11
Q2:11
Repurchases ($000s)
Q3:11
Q4:11
Q1:12
Q2:12
Q3:12
Q4:12
Q1:13
Q2:13
$-
Stock Price ($)
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 5
Figure 7: Share Repurchases, 2009-present
$100,000
30.0x
$90,000
25.0x
$80,000
$70,000
20.0x
$60,000
Q3:11: $103.62
avg.
repurchase
price
$50,000
15.0x
$40,000
Q2:10: $78.95
avg.
repurchase
price
$30,000
$20,000
10.0x
Q3:10: $78.51
avg.
repurchase
price
5.0x
$10,000
$-
0.0x
Q1:09
Q2:09
Q3:09
Q4:09
Q1:10
Q2:10
Q3:10
Q4:10
Q1:11
Q2:11
Repurchases ($000s)
Q3:11
Q4:11
Q1:12
Q2:12
Q3:12
Q4:12
Q1:13
Q2:13
Fwd P/E
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 6
Valuation Assuming 100% Franchise Model and 5x Debt/EBITDA
We believe Panera’s unit growth could slow to the low- to mid-single digits as it approaches our estimate of its potential unit opportunity
of ~2,500 units over the next 5 years. However, we believe that given its healthy franchise base, it is well positioned to adjust its capital
structure and operating model to suit a mature model. Given the roadmaps of DNKN, BKW, and DPZ, we believe refranchising and
leveraging would justify a share price >$200 as early as 2014.
Assuming Panera refranchises all of its co-owned restaurants, we believe its operating margins would approach DNKN’s ~50%. We
also assume Panera would be able to refranchise at a multiple of 5x restaurant-level EBITDA. Our sensitivity analysis using 2-4% SSS
growth and 40-50% operating margins indicates a share price of $351-464 in 2018 and $221-292 in 2014 discounted back at a WACC
of 9.71% (Figures 8-11).
Figure 8: Share Price Assuming 100% Franchised Model and 5x Debt/EBITDA
Company Units
Franchised Units
System Total
YoY % Change
AUV
SSS Growth %
Assuming Refranchising of 1,260 Company Units
System Sales
Royalty %
Revenue
2019
1,260
1,295
2,555
5.4%
2.82
3%
$7,210
5%
$360
Operating Margin
Operating Profit
45%
$162
D&A (% of Sales)
D&A
4%
$14
EBITDA
Cash Proceeds
Sales
Sales ex. 5% Royalty
EBITDA
Multiple
Cash Proceeds
Debt at 5x Debt/EBITDA
Debt
$177
$3,556
$3,378
$678
5x
$3,391
$707
Total Cash
Shares Repurchased at Current Share Price
Shares Remaining
$4,097
23,960
4,827
Enterprise Value
Multiple on EBITDA
EV
Market Cap
15x
$2,650
$1,943
Share Price
$402.52
Source: Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 7
Figure 9: Comparable Valuations – Predominantly Franchised Restaurants
Company
Ticker
Price
10/17/13
Market
Cap
($ Mil.)
Ent
Value
($ Mil.)
P/E
2013
2014
EV/Sales
2013
2014
EV/EBITDA
2013
2014
Revenue
Growth
PF EPS
Growth
2014/13
2014/13
Predominantly Franchised Peers
Burger King Worldwide Inc
BKW
$19.26
$6,889
$9,280
23.7x
20.9x
8.1x
8.7x
14.2x
13.2x
-6%
13%
Dunkin' Brands Group, Inc.
DNKN
$47.12
$5,099
$6,724
30.7x
25.9x
9.6x
8.9x
19.3x
16.5x
8%
19%
DPZ
$66.61
$3,820
$5,213
27.3x
23.8x
2.9x
2.8x
15.2x
14.1x
5%
15%
27.2x
23.5x
6.9x
6.8x
16.2x
14.6x
2%
16%
Domino's Pizza Inc
Unweighted Average
Source: Company data, Wedbush Securities, Inc.
Operating Margin
Figure 10: 2018 Share Price Assuming Franchise Model
2.0%
2.5%
40.0%
$306
$319
42.5%
$336
45.0%
SSS Growth
3.0%
3.5%
4.0%
$332
$347
$362
$351
$366
$382
$400
$368
$385
$403
$421
$441
47.5%
$403
$422
$442
$464
$487
50.0%
$441
$463
$486
$511
$538
Source: Company data, Wedbush Securities, Inc.
Operating Margin
Figure 11: 2014 Share Price Assuming Franchise Model, 9.71% WACC
2.0%
2.5%
40.0%
$193
$201
42.5%
$211
45.0%
SSS Growth
3.0%
3.5%
4.0%
$209
$218
$227
$221
$230
$241
$251
$232
$242
$253
$265
$278
47.5%
$254
$266
$278
$292
$306
50.0%
$278
$291
$306
$321
$338
Source: Bloomberg, Company data, Wedbush Securities, Inc.
Nick Setyan (213) 688-4519
Panera Bread Company | 8
Quarterly Revenue Model
(in 000's, except per share data and ratios, FY ends December 31)
Mar-12
Q1:12A
2012A
Jun-12
Sep-12
Q2:12A
Q3:12A
Dec-12
Q4:12A
Mar-13
Q1:13A
2013E
Jun-13
Sep-13
Q2:13A
Q3:13E
Dec-13
Q4:13E
Mar-14
Q1:14E
2014E
Jun-14
Sep-14
Q2:14E
Q3:14E
Dec-14
Q4:14E
Revenue Analysis
Revenue
Bakery Café Sales, net
439,215
Franchise Royalties and Fees
24,822
Fresh Dough and Other Product Sales to Franchisees 34,542
Total Revenues
498,579
468,645
24,757
37,189
530,591
466,369
25,321
37,648
529,338
505,051
27,176
39,322
571,549
497,519
26,577
37,683
561,779
521,038
27,453
40,520
589,011
517,973
27,822
41,466
587,261
604,331
32,032
43,383
679,746
558,928
29,480
42,503
630,912
579,371
30,423
45,673
655,467
571,888
30,737
46,697
649,322
616,858
32,833
48,795
698,485
1,562
6.5%
1,591
6.6%
1,625
8.0%
1,652
7.2%
1,674
7.2%
1,708
7.4%
1,744
7.3%
1,776
7.5%
1,799
7.5%
1,837
7.6%
1,873
7.4%
1,905
7.3%
Company Units
BOP Restaurants
Restaurants Opened
Restaurants Closed or Relocated
Restaurants Acquired from Franchisees
Restaurants Sold to Franchisees
EOP Restaurants
740
7
(1)
746
746
17
(3)
16
776
776
17
(1)
792
792
18
(1)
809
809
10
819
819
18
(3)
1
835
835
17
852
852
18
870
870
11
881
881
19
900
900
17
917
917
18
935
Franchise Units
BOP Restaurants
Restaurants Opened
Restaurants Closed or Relocated
Restaurants Acquired from Company
Restaurants Sold to Company
EOP Restaurants
801
15
816
816
16
(1)
(16)
815
815
19
(1)
833
833
14
(4)
843
843
12
855
855
19
(1)
873
873
19
892
892
14
906
906
12
918
918
19
937
937
19
956
956
14
970
Same Store Sales
Company SSS (% Growth)
Franchise SSS (% Growth)
System-Wide SSS (% Growth)
7.5%
5.2%
6.3%
7.1%
4.8%
5.9%
6.2%
5.8%
6.0%
5.1%
4.7%
4.9%
3.3%
3.3%
3.3%
3.8%
3.5%
3.7%
2.7%
2.7%
2.7%
2.5%
2.5%
2.5%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
EOP System-Wide Units
YoY Growth %
Company AWS ($)
Franchise AWS ($)
45,426
45,714
47,113
46,289
45,894
45,692
48,811
48,360
47,144
46,800
48,700
47,750
Source: Company data and Wedbush Securities
Nick Setyan (213) 688-4519
Panera Bread Company | 9
Quarterly Income Statement
(in 000's, except per share data and ratios, FY ends December 31)
Mar-12
Q1:12A
Bakery Café Sales, net
Franchise Royalties and Fees
Fresh Dough and Other Product Sales to Franchisees
2012A
Jun-12
Q2:12A
Sep-12
Q3:12A
Dec-12
Q4:12A
Mar-13
Q1:13A
2013E
Jun-13
Q2:13A
Sep-13
Q3:13E
Dec-13
Q4:13E
Mar-14
Q1:14E
2014E
Jun-14
Q2:14E
Sep-14
Q3:14E
Dec-14
Q4:14E
439,215
24,822
34,542
468,645
24,757
37,189
466,369
25,321
37,648
505,051
27,176
39,322
497,519
26,577
37,683
521,038
27,453
40,520
517,973
27,822
41,466
604,331
32,032
43,383
558,928
29,480
42,503
579,371
30,423
45,673
571,888
30,737
46,697
616,858
32,833
48,795
Revenue
498,579
530,591
529,338
571,549
561,779
589,011
587,261
679,746
630,912
655,467
649,322
698,485
Restaurant Operating Costs
Food, Beverage, and Packaging
Labor
Occupancy
Other Operating Costs
129,028
133,827
31,108
57,516
136,498
136,947
32,253
64,183
139,250
140,113
33,230
65,856
147,804
148,559
34,202
68,474
146,417
148,598
36,153
67,945
156,171
149,869
35,701
72,145
155,811
156,023
37,003
75,460
182,332
175,520
39,617
80,108
168,503
163,021
39,273
75,271
173,207
164,604
38,442
80,015
173,188
171,407
39,855
83,713
186,642
178,792
41,542
82,401
Restaurant Level Operating Income
Fresh Dough and Other Product COS to Franchisees
Depreciation and Amortization
General and Administrative Expenses
Pre-Opening Costs
Non-Recurring (Gain) or Loss
Total Operating Expenses
Operating Income (Loss)
Interest Income
Interest Expense
Other (Income) Expense, net
Income Before Taxes
Provision for Income Taxes
Net Income
Net Loss Attributable to Noncontrolling Interest
Net Income Attributable to Panera Bread
Non-Recurring Items
87,736
98,764
87,920
106,012
98,406
107,152
93,677
126,755
112,860
123,102
103,727
127,480
30,145
21,321
26,667
1,611
431,223
33,046
22,141
30,844
2,476
458,388
34,041
23,828
30,891
2,130
469,339
33,774
23,649
29,530
2,245
488,237
32,598
24,365
28,307
1,091
485,474
34,599
25,267
29,743
2,081
505,576
36,664
25,642
33,900
2,078
522,581
37,045
27,816
36,941
2,225
581,604
36,980
26,250
29,837
2,170
541,305
39,227
26,497
31,386
2,208
555,587
41,523
27,553
35,782
2,198
575,218
41,910
28,389
36,155
2,273
598,104
67,356
72,203
59,999
83,312
76,305
83,435
64,680
98,142
89,607
99,881
74,104
100,381
210
438
202
288
263
692
407
(2,626)
302
(2,420)
181
-
184
-
256
-
261
-
265
-
269
-
178
(796)
66,708
71,713
59,044
85,531
78,423
84,053
64,499
97,958
89,351
99,620
73,839
100,112
(25,524)
(27,576)
(22,529)
(33,919)
(30,306)
(33,011)
(25,331)
(37,518)
(34,221)
(38,154)
(28,280)
(38,343)
41,184
44,137
36,515
51,612
48,117
51,042
39,168
60,440
55,130
61,465
45,559
61,769
-
-
-
-
-
-
-
-
-
-
-
-
41,184
44,137
36,515
51,612
48,117
51,042
39,168
60,440
55,130
61,465
45,559
61,769
-
-
-
-
-
-
-
-
-
-
-
-
41,184
44,137
36,515
51,612
48,117
51,042
39,168
60,440
55,130
61,465
45,559
61,769
Earnings (Loss) Per Share:
Pro Forma
1.40
1.50
1.24
1.75
1.64
1.74
1.35
2.08
1.91
2.13
1.59
2.16
GAAP
Basic Shares Outstanding
Diluted Shares Outstanding
1.40
29,183
29,458
1.50
29,201
29,466
1.24
29,242
29,455
1.75
29,240
29,421
1.64
29,150
29,326
1.74
29,092
29,287
1.35
28,892
29,087
2.08
28,842
29,037
1.91
28,742
28,937
2.13
28,642
28,837
1.59
28,542
28,737
2.16
28,442
28,637
21,321
88,677
22,141
94,344
23,828
83,827
23,649
106,961
24,365
100,670
25,267
108,702
25,642
90,323
27,816
125,959
26,250
115,857
26,497
126,377
27,553
101,657
28,389
128,770
Adjusted Net Income
EBITDA
Depreciation & Amortization
EBITDA
Margin Analysis
Food, Beverage, and Packaging/Sales
Labor/Sales
Occupancy/Sales
Other Operating Costs/Sales
Restaurant Level Operating Margin
Fresh Dough and Other Product COS/FD Sales
G&A/Sales
D&A/Sales
Pre-Opening/Sales
Operating Margin
Pre Tax Margin
Tax Rate
Net Income
EBITDA Margin
29.4%
30.5%
7.1%
13.1%
20.0%
87.3%
5.3%
4.3%
0.4%
13.5%
13.4%
38.3%
8.3%
17.8%
29.1%
29.2%
6.9%
13.7%
21.1%
88.9%
5.8%
4.2%
0.5%
13.6%
13.5%
38.5%
8.3%
17.8%
29.9%
30.0%
7.1%
14.1%
18.9%
90.4%
5.8%
4.5%
0.5%
11.3%
11.2%
38.2%
6.9%
15.8%
29.3%
29.4%
6.8%
13.6%
21.0%
85.9%
5.2%
4.1%
0.4%
14.6%
15.0%
39.7%
9.0%
18.7%
29.4%
29.9%
7.3%
13.7%
19.8%
86.5%
5.0%
4.3%
0.2%
13.6%
14.0%
38.6%
8.6%
17.9%
30.0%
28.8%
6.9%
13.8%
20.6%
85.4%
5.0%
4.3%
0.4%
14.2%
14.3%
39.3%
8.7%
18.5%
30.1%
30.1%
7.1%
14.6%
18.1%
88.4%
5.8%
4.4%
0.4%
11.0%
11.0%
39.3%
6.7%
15.4%
30.2%
29.0%
6.6%
13.3%
21.0%
85.4%
5.4%
4.1%
0.4%
14.4%
14.4%
38.3%
8.9%
18.5%
30.1%
29.2%
7.0%
13.5%
20.2%
87.0%
4.7%
4.2%
0.4%
14.2%
14.2%
38.3%
8.7%
18.4%
29.9%
28.4%
6.6%
13.8%
21.2%
85.9%
4.8%
4.0%
0.4%
15.2%
15.2%
38.3%
9.4%
19.3%
30.3%
30.0%
7.0%
14.6%
18.1%
88.9%
5.5%
4.2%
0.4%
11.4%
11.4%
38.3%
7.0%
15.7%
30.3%
29.0%
6.7%
13.4%
20.7%
85.9%
5.2%
4.1%
0.4%
14.4%
14.3%
38.3%
8.8%
18.4%
20.1%
9.9%
1.8%
18.1%
21.5%
17.3%
16.2%
21.5%
23.2%
0.0%
11.7%
64.7%
27.1%
24.6%
25.7%
23.0%
18.8%
7.5%
10.9%
17.6%
16.4%
15.2%
14.6%
17.2%
30.9%
23.4%
12.4%
59.2%
26.4%
25.6%
23.6%
22.8%
17.4%
11.7%
13.6%
16.8%
16.5%
15.4%
11.6%
19.1%
23.4%
7.1%
18.7%
66.0%
26.0%
26.8%
26.6%
23.9%
16.0%
10.9%
10.2%
15.3%
16.0%
14.6%
11.7%
16.3%
19.0%
-9.3%
12.5%
-18.9%
33.2%
36.5%
33.6%
28.0%
13.3%
7.1%
9.1%
12.7%
13.5%
11.0%
16.2%
18.1%
12.2%
6.1%
14.3%
-32.3%
13.3%
17.6%
16.8%
13.5%
11.2%
10.9%
9.0%
11.0%
14.4%
9.4%
10.7%
12.4%
8.5%
-3.6%
14.1%
-16.0%
15.6%
17.2%
15.6%
15.2%
11.1%
9.9%
10.1%
10.9%
11.9%
11.4%
11.4%
14.6%
6.5%
9.7%
7.6%
-2.4%
7.8%
9.2%
7.3%
7.7%
19.7%
17.9%
10.3%
18.9%
23.4%
18.1%
15.8%
17.0%
19.6%
25.1%
17.6%
-0.9%
17.8%
14.5%
17.1%
17.8%
12.3%
10.9%
12.8%
12.3%
15.1%
9.7%
8.6%
10.8%
14.7%
5.4%
7.7%
98.9%
17.4%
13.9%
14.6%
15.1%
11.2%
10.8%
12.7%
11.3%
10.9%
9.8%
7.7%
10.9%
14.9%
5.5%
4.9%
6.1%
19.7%
18.5%
20.4%
16.3%
10.4%
10.5%
12.6%
10.6%
11.2%
9.9%
7.7%
10.9%
10.7%
5.6%
7.5%
5.8%
14.6%
14.5%
16.3%
12.5%
2.1%
2.5%
12.5%
2.8%
2.4%
1.9%
4.9%
2.9%
0.6%
-2.1%
2.1%
2.1%
2.3%
2.2%
2.2%
2.2%
0.8%
1.3%
-3.2%
0.6%
1.3%
3.2%
1.6%
-2.3%
-1.5%
-18.1%
1.4%
-41.8%
7.7%
6.5%
6.6%
6.1%
6.7%
-0.3%
7.7%
6.4%
5.8%
2.3%
3.7%
11.6%
12.6%
15.7%
3.8%
53.7%
7.2%
7.5%
7.2%
6.4%
-0.5%
2.3%
1.2%
-0.2%
2.0%
2.3%
3.0%
2.6%
-11.0%
0.2%
7.6%
-14.0%
-16.9%
-17.7%
-17.3%
-11.1%
8.3%
7.3%
4.4%
8.0%
6.1%
6.0%
2.9%
4.0%
20.6%
-4.4%
-0.8%
5.4%
38.9%
44.9%
41.3%
27.6%
-1.5%
-2.2%
-4.2%
-1.7%
-0.9%
0.0%
5.7%
-0.8%
-7.2%
-4.1%
3.0%
-51.4%
-8.4%
-8.3%
-6.8%
-5.9%
4.7%
3.3%
7.5%
4.8%
6.7%
0.9%
-1.3%
6.2%
8.9%
5.1%
3.7%
90.7%
9.3%
7.2%
6.1%
8.0%
-0.6%
1.3%
2.3%
-0.3%
-0.2%
4.1%
3.6%
4.6%
-12.6%
14.0%
1.5%
-0.1%
-22.5%
-23.3%
-23.3%
-16.9%
16.7%
15.1%
4.6%
15.7%
17.0%
12.5%
7.1%
6.2%
35.3%
9.0%
8.5%
7.1%
51.7%
51.9%
54.3%
39.5%
-7.5%
-8.0%
-2.0%
-7.2%
-7.6%
-7.1%
-0.9%
-6.0%
-11.0%
-19.2%
-5.6%
-2.5%
-8.7%
-8.8%
-8.8%
-8.0%
3.7%
3.2%
7.5%
3.9%
2.8%
1.0%
-2.1%
6.3%
9.1%
5.2%
0.9%
1.8%
11.5%
11.5%
11.5%
9.1%
-1.3%
1.0%
2.2%
-0.9%
0.0%
4.1%
3.7%
4.6%
-15.7%
14.0%
4.0%
-0.4%
-25.8%
-25.9%
-25.9%
-19.6%
7.9%
6.8%
4.5%
7.6%
7.8%
4.3%
4.2%
-1.6%
22.9%
1.0%
3.0%
3.4%
35.5%
35.6%
35.6%
26.7%
Year/Year Growth
Bakery Café Sales, net
Franchise Royalties and Fees
Fresh Dough and Other Product Sales to Franchisees
Revenues
Food, Beverage, and Packaging
Labor
Occupancy
Other Operating Costs
Restaurant Level Operating Profit
G&A
D&A
Pre-Opening Expenses
Operating Income
Pre Tax Profit
Net Income
EBITDA
Quarter/Quarter Growth
Bakery Café Sales, net
Franchise Royalties and Fees
Fresh Dough and Other Product Sales to Franchisees
Revenues
Food, Beverage, and Packaging
Labor
Occupancy
Other Operating Costs
Restaurant Level Operating Profit
G&A
D&A
Pre-Opening Expenses
Operating Income
Pre Tax Profit
Net Income
EBITDA
Source: Company reports and Wedbush estimates.
Nick Setyan (213) 688-4519
Panera Bread Company | 10
Annual Income Statement
(in 000's, except per share data and ratios, FY ends December 31)
2005A
2006A
2007A
2008A
2009A
2010A
2011A
2012A
2013E
2014E
Bakery Café Sales, net
499,422
Franchise Royalties and Fees
54,309
Fresh Dough and Other Product Sales to Franchisees 86,544
Revenue:
640,275
666,140
61,532
101,300
828,972
894,902
67,187
104,602
1,066,691
1,106,295
74,799
117,759
1,298,853
1,153,255
78,366
121,872
1,353,493
1,321,162
86,195
135,132
1,542,489
1,592,951
92,793
136,288
1,822,032
1,879,280
102,076
148,701
2,130,057
2,140,861
113,884
163,052
2,417,797
2,327,046
123,473
183,668
2,634,186
Operating Expenses:
Food, Beverage, and Packaging
Labor
Occupancy
Other Operating Costs
Restaurant Level Operating Income
142,675
151,524
35,996
70,003
99,224
197,183
204,955
48,602
92,176
123,224
271,442
286,237
70,398
121,325
145,500
332,697
352,461
90,390
147,033
183,714
337,599
370,595
95,996
155,396
193,669
374,816
419,140
100,970
177,059
249,177
470,398
484,014
115,290
216,237
307,012
552,580
559,446
130,793
256,029
380,432
640,731
630,009
148,474
295,657
425,991
701,540
677,825
159,113
321,400
467,169
Fresh Dough and Other Product COS to Franchisees75,036
Depreciation and Amortization
33,011
General and Administrative Expenses
46,301
Pre-Opening Costs
4,634
Non-Recurring (Gain) or Loss
Total Operating Expenses
559,180
85,619
44,166
59,306
6,173
738,180
92,853
57,903
68,966
8,288
977,412
108,574
67,225
84,392
3,374
1,186,146
100,229
67,162
83,169
2,450
1,212,596
110,986
68,673
101,494
4,282
1,357,420
116,267
79,899
113,083
6,585
1,601,773
131,006
90,939
117,932
8,462
1,847,187
140,906
103,091
128,892
7,476
2,095,235
159,640
108,688
133,160
8,848
2,270,213
81,095
90,792
89,279
112,707
140,897
185,069
220,259
282,870
322,563
363,973
-
-
50
(1,133)
82,178
93
(1,977)
483
333
1,607
883
701
272
675
4,232
92,676
88,463
110,217
139,924
180,162
219,903
282,996
324,933
362,922
(29,995)
(33,826)
(31,435)
(41,272)
(53,072)
(68,563)
(83,951)
(109,548)
(126,166)
(138,999)
52,183
58,850
57,028
68,945
86,852
111,599
135,952
173,448
198,767
223,923
Operating Income (Loss)
Interest Income
Interest Expense
Other (Income) Expense, net
Income Before Taxes
Provision for Income Taxes
Net Income
Net Loss Attributable to Noncontrolling Interest
Net Income Attributable to Panera Bread
Non-Recurring Items
-
-
52,183
58,850
(427)
57,455
1,510
801
67,435
86,051
(267)
111,866
135,952
3,082
1,082
(1,208)
173,448
-
845
(3,216)
198,767
-
1,051
-
223,923
-
-
-
917
2,481
52,183
58,850
57,455
68,352
88,532
111,866
139,034
173,448
198,767
223,923
Earnings (Loss) Per Share:
Pro Forma
1.64
1.83
1.79
2.25
2.86
3.62
4.65
5.89
6.81
7.78
GAAP
Basic Shares Outstanding
Diluted Shares Outstanding
1.64
31,098
31,873
1.83
31,426
32,114
1.79
31,792
32,098
2.22
30,069
30,412
2.78
30,667
31,002
3.62
30,614
30,915
4.55
29,600
29,897
5.89
29,217
29,450
6.81
28,994
29,184
7.78
28,592
28,787
33,011
114,106
44,166
134,958
57,903
147,182
69,135
181,842
65,823
206,720
68,673
253,742
79,899
300,158
90,939
373,809
103,091
425,653
108,688
472,661
Adjusted Net Income
-
822
(466)
-
EBITDA
Depreciation & Amortization
EBITDA
Margin Analysis
Food, Beverage, and Packaging/Sales
Labor/Sales
Occupancy/Sales
Other Operating Costs/Sales
Restaurant Level Operating Margin
Fresh Dough and Other Product COS/FD Sales
G&A/Sales
D&A/Sales
Pre-Opening/Sales
Operating Margin
Pre Tax Margin
Tax Rate
Net Income
EBITDA Margin
28.6%
30.3%
7.2%
14.0%
19.9%
86.7%
7.2%
5.2%
0.7%
12.7%
12.8%
36.5%
8.2%
17.8%
29.6%
30.8%
7.3%
13.8%
18.5%
84.5%
7.2%
5.3%
0.7%
11.0%
11.2%
36.5%
7.1%
16.3%
30.3%
32.0%
7.9%
13.6%
16.3%
88.8%
6.5%
5.4%
0.8%
8.4%
8.3%
35.5%
5.3%
13.8%
30.1%
31.9%
8.2%
13.3%
16.6%
92.2%
6.5%
5.2%
0.3%
8.7%
8.5%
37.4%
5.3%
14.0%
29.3%
32.1%
8.3%
13.5%
16.8%
82.2%
6.1%
5.0%
0.2%
10.4%
10.3%
37.9%
6.4%
15.3%
28.4%
31.7%
7.6%
13.4%
18.9%
82.1%
6.6%
4.5%
0.3%
12.0%
11.7%
38.1%
7.2%
16.5%
29.5%
30.4%
7.2%
13.6%
19.3%
85.3%
6.2%
4.4%
0.4%
12.1%
12.1%
38.2%
7.5%
16.5%
29.4%
29.8%
7.0%
13.6%
20.2%
88.1%
5.5%
4.3%
0.4%
13.3%
13.3%
38.7%
8.1%
17.5%
29.9%
29.4%
6.9%
13.8%
19.9%
86.4%
5.3%
4.3%
0.3%
13.3%
13.4%
38.8%
8.2%
17.6%
30.1%
29.1%
6.8%
13.8%
20.1%
86.9%
5.1%
4.1%
0.3%
13.8%
13.8%
38.3%
8.5%
17.9%
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
29.5%
38.2%
35.3%
35.0%
31.7%
24.2%
28.1%
33.8%
33.2%
12.0%
12.8%
11.9%
28.7%
37.7%
39.7%
44.8%
31.6%
18.1%
16.3%
31.1%
34.3%
-1.7%
-3.1%
-2.3%
21.8%
22.6%
23.1%
28.4%
21.2%
26.3%
22.4%
16.1%
-59.3%
26.2%
20.9%
23.9%
4.2%
1.5%
5.1%
6.2%
5.7%
5.4%
-1.4%
-0.1%
-27.4%
25.0%
26.0%
25.2%
14.0%
11.0%
13.1%
5.2%
13.9%
28.7%
22.0%
2.2%
74.8%
31.4%
28.5%
30.4%
18.1%
25.5%
15.5%
14.2%
22.1%
23.2%
11.4%
16.3%
53.8%
19.0%
21.8%
25.7%
16.9%
17.5%
15.6%
13.4%
18.4%
23.9%
4.3%
13.8%
28.5%
28.4%
27.6%
29.5%
13.5%
16.0%
12.6%
13.5%
15.5%
12.0%
9.3%
13.4%
-11.7%
14.0%
14.6%
15.6%
8.9%
9.5%
7.6%
7.2%
8.7%
9.7%
3.3%
5.4%
18.4%
12.8%
12.7%
14.2%
Year/Year Growth
Revenues
Food, Beverage, and Packaging
Labor
Occupancy
Other Operating Costs
Restaurant Level Operating Income
General and Administrative Expenses
Depreciation and Amortization
Pre-Opening Costs
Operating Income (Loss)
Net Income
EPS
Source: Company reports and Wedbush Securities estimates
Nick Setyan (213) 688-4519
Panera Bread Company | 11
Annual Balance Sheet Statement
(in 000's, except per share data and ratios, FY ends December 31)
2007A
2008A
2009A
2010A
2011A
2012A
2013E
2014E
Assets:
Cash and cash equivalents
Trade Accounts Receivable
Other Accounts Receivable
Inventory
Prepaid expenses and other current assets
Deferred Income Taxes
Investments
Other
Total Current Assets
68,242
25,152
11,640
11,394
5,299
7,199
23,198
152,124
74,710
15,198
9,944
11,959
14,265
9,937
2,400
138,413
246,400
17,317
11,176
12,295
16,211
18,685
322,084
229,299
20,378
17,962
14,345
23,905
24,796
330,685
222,640
30,700
24,009
17,016
31,228
27,526
353,119
297,141
43,843
42,419
19,714
42,223
33,502
478,842
324,934
36,938
42,379
24,732
46,884
26,841
97,919
600,626
477,520
37,956
42,379
25,316
47,647
26,841
97,919
755,578
Property and Equipment, net
Other Assets
Goodwill
Other Intangible assets, net
Deposits and Other
429,992
87,092
21,827
7,717
417,006
1,726
87,334
20,475
8,963
403,784
87,481
19,195
4,621
444,094
94,442
48,402
6,958
492,022
108,071
67,269
6,841
571,754
121,903
88,073
7,591
656,239
123,066
84,649
6,828
732,911
123,066
84,649
6,828
Total Assets
698,752
673,917
837,165
924,581
1,027,322
1,268,163
1,471,408
1,703,032
Accounts payable
Accrued Expenses
Current portion of long-term debt
Total Current Liabilities
6,326
121,440
127,766
4,036
109,978
114,014
6,417
135,842
142,259
7,346
204,170
211,516
15,884
222,450
238,334
9,371
268,169
277,540
24,052
257,935
281,987
24,621
251,076
275,697
Long-term debt
Deferred Rent
Deferred tax liabilities, net
Other long-term liabilities
Total Liabilities
75,000
33,569
14,238
250,573
39,780
21,437
175,231
43,371
28,813
25,686
240,129
47,974
30,264
39,219
328,973
54,055
34,345
45,512
372,246
59,822
60,655
48,227
446,244
64,075
69,524
44,055
459,641
68,399
69,524
44,055
457,675
Noncontrolling Interest
Common stock, $0.01 par value
Additional paid-in capital
Retained Earnings
Accumulated Other Comprehensive Income
Treasury stock (at cost)
Total Shareholders' Equity
3
168,386
278,963
(1,188)
446,164
3
151,358
346,399
(394)
(2,204)
495,162
3
168,288
432,449
224
(3,928)
597,036
3
130,005
544,315
275
(78,990)
595,608
3
150,093
680,267
308
(175,595)
655,076
3
174,690
853,715
672
(207,161)
821,919
3
182,028
1,052,482
4,778
(227,524)
1,011,767
3
182,028
1,276,404
14,446
(227,524)
1,245,357
Total Liabilities and Shareholders' Equity
696,737
670,393
837,165
924,581
1,471,408
1,703,032
Liabilities:
1,027,322
1,268,163
Return Ratios
Return on Sales
Total Asset Turnover
Financial Leverage
Return on Equity
Return on Assets
Sustainable Growth
35.5%
1.53
0.64
34.6%
54.2%
34.6%
37.4%
1.93
0.73
53.0%
72.2%
53.0%
37.9%
1.62
0.71
43.7%
61.3%
43.7%
38.1%
1.67
0.64
40.9%
63.5%
40.9%
38.2%
1.77
0.64
43.2%
67.7%
43.2%
38.7%
1.68
0.65
42.1%
65.0%
42.1%
38.8%
1.64
0.69
43.9%
63.8%
43.9%
38.3%
1.55
0.73
43.3%
59.2%
43.3%
42.4
8.5
42.9
8.4
85.5
4.2
82.4
4.4
78.2
4.6
52.6
6.8
75.7
4.8
51.0
7.1
59.3
6.1
29.6
12.2
48.6
7.4
59.0
6.1
65.5
5.5
26.6
13.5
69.4
5.2
28.5
12.6
Activity Ratios
Receivables Turnover
Days Receivable
Payables Turnover
Days Payable
Liquidity/Leverage
Current Ratio
Quick Ratio
Debt to Equity
Debt to Capital
Net Working Capital
Book Value per Share
Tangible Book Value per Share
Cash & Investments per Share, Net
1.2
0.9
16.8%
14.4%
24,358
$13.90
$10.51
$0.51
1.2
1.0
0.0%
0.0%
24,399
$16.28
$12.74
$2.54
2.3
2.0
0.0%
0.0%
179,825
$19.26
$15.82
$7.95
1.6
1.3
0.0%
0.0%
119,169
$19.27
$14.65
$7.42
1.5
1.2
0.0%
0.0%
114,785
$21.91
$16.05
$7.45
1.7
1.5
0.0%
0.0%
201,302
$27.91
$20.78
$10.09
2.1
1.5
0.0%
0.0%
318,639
$34.67
$27.55
$14.49
2.7
2.1
0.0%
0.0%
479,881
$43.26
$36.05
$19.99
Source: Company reports, Wedbush Securities estimates.
Nick Setyan (213) 688-4519
Panera Bread Company | 12
Annual Cash Flow Statement
(in 000's, except per share data and ratios, FY ends December 31)
2008A
2009A
2010A
2011A
2012A
2013E
2014E
Cash Flow from Operating Acitivities:
Net income
Depreciation and amortization
Stock Based Compensation
Tax Benefit from Exercise of Stock Options
Deferred income taxes
(Gain) Loss from Short-Term Investments
Other
Accounts Receivable
Inventory
Prepaid Expenses and Other Current Assets
Deposits and Other Assets
Accounts Payable
Accrued Expenses
Deferred Rent
Other Long-Term Liabilities
Changes in operating assets and liabilities, net
Net Cash Provided by Operating Activities
68,945
67,225
7,954
(3,376)
(4,107)
1,910
228
11,650
(565)
(8,966)
1,042
(2,290)
5,450
6,211
6,013
157,324
86,851
67,162
8,661
(5,095)
22,950
(1,339)
2,799
(3,554)
(336)
(2,224)
100
2,381
28,901
3,591
4,056
214,904
111,599
68,673
9,558
(3,603)
(4,660)
1,114
(13,180)
(1,540)
(7,694)
(2,337)
929
61,891
4,603
12,281
237,634
135,952
79,899
9,861
(4,994)
1,351
2,423
(16,369)
(2,183)
(7,323)
117
8,538
19,630
6,081
3,906
236,889
173,448
90,939
9,094
(8,587)
20,334
4,470
(31,414)
(2,440)
(10,995)
161
(6,513)
49,246
5,718
(4,005)
289,456
198,767
103,091
9,979
(496)
15,530
824
7,775
(5,002)
(4,661)
763
14,681
(14,039)
4,253
(4,468)
326,998
223,923
108,688
9,668
(1,018)
(585)
(763)
569
(6,859)
4,324
337,946
Cash Flow from Investing Activities:
Purchase of property, plant and equipment
Net increase in restricted cash
Cash paid for acquisitions, net of cash acquired
Purchase of investments
Proceeds from the sale or maturity of investments
Net Cash Used in Investing Activities
(63,163)
(2,704)
17,162
(48,705)
(54,684)
5,465
(49,219)
(82,226)
2,204
(52,177)
(132,199)
(107,932)
115
(44,377)
(152,194)
(152,328)
4,538
(47,951)
(195,741)
(180,670)
(2,446)
(97,919)
(281,035)
(185,360)
(185,360)
Cash Flow from Financing Activities:
Repurchase of Common Stock
(48,893)
(3,453)
Exercise of Employee Stock Options
17,621
22,818
Tax Benefit from Exercise of Stock Options
3,376
5,095
Proceeds from issuance of common stock
1,898
1,626
Proceeds from or (repayments) of bank notes payable and other debt (76,153)
instruments
Purchase of Noncontrolling Interest
(20,081)
Net Cash Provided by Financing Activities
(102,151)
6,005
(153,492)
25,551
3,603
1,802
(122,536)
(96,605)
3,193
4,994
2,040
(86,378)
(31,566)
4,455
8,587
2,462
(1,097)
(17,159)
(20,363)
1,414
(18,949)
(17,101)
(1,683)
76,556
27,014
-
-
-
-
(1,683)
76,556
27,014
152,586
Effect of exchange rate changes on cash
Net increase (decrease) in cash flows from continuing ops.
Net cash provided by operating activities - discontinued ops.
Net cash provided by investing activities - discontinued ops.
Net Increase (Decrease) in Cash an Cash Equivalents
6,468
-
171,690
-
152,586
-
6,468
171,690
(17,101)
Cash and Equivalents, beginning of period
68,242
74,710
246,400
229,299
222,640
297,141
324,155
Cash and Equivalents, end of period
74,710
246,400
229,299
227,616
299,196
324,155
476,741
FCF
94,161
160,220
155,408
128,957
137,128
146,328
152,586
Source: Company reports and Wedbush Securities estimates.
Nick Setyan (213) 688-4519
Panera Bread Company | 13
Analyst Biography
Mr. Setyan is an Equity Analyst covering restaurant stocks. During his six years in equity research, Mr. Setyan has also served as a
Senior Associate on the Consumer Services: Financial Technology team and as an Associate on the Restaurant team at Wedbush.
Mr. Setyan received his B.A. degrees in Economics and in Government from Cornell University.
Nick's Edge: Mr. Setyan's coverage focuses on companies where his Southern California base and his industry relationships,
developed while helping cover restaurant technology stocks for four years, can give him a differentiated understanding of important
trends. He adds value through in depth original fundamental analysis and detailed models.
Public Companies Mentioned in this Report (as of close 10/17/13)
Company
Ticker
Rating
DNKN
NEUTRAL
Price Target
Current Price
Dunkin’ Brands Group
$47.34
$41.00
Analyst Certification
I, Nick Setyan, Colin Radke, certify that the views expressed in this report accurately reflect my personal opinion and that I have not and will
not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this
report.
Disclosure information regarding historical ratings and price targets is available at http://www.wedbush.com/ResearchDisclosure/DisclosureQ313.pdf
Investment Rating System:
Outperform: Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage
universe over the next 6-12 months.
Neutral: Expect the total return of the stock to perform in-line with the median total return of the analyst’s (or the analyst’s team) coverage
universe over the next 6-12 months.
Underperform: Expect the total return of the stock to underperform relative to the median total return of the analyst’s (or the analyst’s team)
coverage universe over the next 6-12 months.
The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the
other stocks in the analyst’s coverage universe (or the analyst’s team coverage).*
Rating Distribution
(as of September 30, 2013)
Outperform:55%
Neutral: 41%
Underperform: 4%
Investment Banking Relationships
(as of September 30, 2013)
Outperform:14%
Neutral: 2%
Underperform: 0%
The Distribution of Ratings is required by FINRA rules; however, WS’ stock ratings of Outperform, Neutral, and Underperform most closely
conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS’ stock ratings are on a relative
basis.
The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The
analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’
investment banking activities.
Wedbush Equity Research Disclosures as of October 17, 2013
Company
Disclosure
Panera Bread Company
Dunkin' Brands Group
1
1
Research Disclosure Legend
1.
WS makes a market in the securities of the subject company.
2.
WS managed a public offering of securities within the last 12 months.
3.
WS co-managed a public offering of securities within the last 12 months.
4.
WS has received compensation for investment banking services within the last 12 months.
Nick Setyan (213) 688-4519
Panera Bread Company | 14
5.
6.
7.
8.
9.
10.
11.
12.
WS provided investment banking services within the last 12 months.
WS is acting as financial advisor.
WS expects to receive compensation for investment banking services within the next 3 months.
WS provided non-investment banking securities-related services within the past 12 months.
WS has received compensation for products and services other than investment banking services within the past 12 months.
The research analyst, a member of the research analyst’s household, any associate of the research analyst, or any individual
directly involved in the preparation of this report has a long position in the common stocks.
WS or one of its affiliates beneficially own 1% or more of the common equity securities.
The analyst maintains Contingent Value Rights that enables him/her to receive payments of cash upon the company’s meeting
certain clinical and regulatory milestones.
Price Charts
Wedbush disclosure price charts are updated within the first fifteen days of each new calendar quarter per FINRA regulations. Price charts for
companies initiated upon in the current quarter, and rating and target price changes occurring in the current quarter, will not be displayed until
the following quarter. Additional information on recommended securities is available on request.
* WS changed its rating system from (Strong Buy/Buy/Hold/Sell) to (Outperform/ Neutral/Underperform) on July 14, 2009.
Please access the attached hyperlink for WS’ Coverage Universe: http://www.wedbush.com/services/cmg/equities-division/research/equityresearch Applicable disclosure information is also available upon request by contacting Ellen Kang in the Research Department at (213) 6884529, by email to ellen.kang@wedbush.com, or the Business Conduct Department at (213) 688-8090. You may also submit a written request
to the following: Business Conduct Department, 1000 Wilshire Blvd., Los Angeles, CA 90017.
OTHER DISCLOSURES
RESEARCH DEPT. * (213) 688-4505 * www.wedbush.com
Nick Setyan (213) 688-4519
Panera Bread Company | 15
EQUITY TRADING Los Angeles (213) 688-4470 / (800) 421-0178 * EQUITY SALES Los Angeles (800) 444-8076
CORPORATE HEADQUARTERS (213) 688-8000
The information herein is based on sources that we consider reliable, but its accuracy is not guaranteed. The information contained herein is not a
representation by this corporation, nor is any recommendation made herein based on any privileged information. This information is not intended to be
nor should it be relied upon as a complete record or analysis; neither is it an offer nor a solicitation of an offer to sell or buy any security mentioned
herein. This firm, Wedbush Securities, its officers, employees, and members of their families, or any one or more of them, and its discretionary and
advisory accounts, may have a position in any security discussed herein or in related securities and may make, from time to time, purchases or sales
thereof in the open market or otherwise. The information and expressions of opinion contained herein are subject to change without further notice. The
herein mentioned securities may be sold to or bought from customers on a principal basis by this firm. Additional information with respect to the
information contained herein may be obtained upon request.
Nick Setyan (213) 688-4519
Panera Bread Company | 16
EQUITY RESEARCH DEPARTMENT
(213) 688-4529
DIRECTOR OF RESEARCH
Mark D. Benson (213) 688-4435
MANAGER, RESEARCH OPERATIONS
Ellen Kang (213) 688-4529
RETAIL AND CONSUMER
Consum er Products
Rommel T. Dionisio
Kurt M. Frederick, CFA CPA
(212) 938-9934
(415) 274-6822
Footw ear, Apparel and Accessories
Corinna Freedman
(212) 668-9876
Alicia Reese
(212) 938-9927
Healthy Lifestyles
Kurt M. Frederick, CFA CPA
Restaurants
Nick Setyan
Colin Radke
(415) 274-6822
(213) 688-4519
(213) 688-6624
Specialty Retail: Hardlines
Joan L. Storms, CFA
John Garrett, CFA
(213) 688-4537
(213) 688-4523
Seth Basham, CFA
(212) 938-9954
RETAIL/CONSUMER MARKET RESEARCH
Gabriella Santaniello
(213) 688-4557
TECHNOLOGY, INTERNET, MEDIA & SOCIAL MEDIA
LIFE SCIENCES
Com m unications and Application Softw are / Internet
Shyam Patil, CFA
(213) 688-8062
Biotechnology/Biopharm aceuticals/BioDefense
Gregory R. Wade, Ph.D.
(415) 274-6863
David M. Nierengarten, Ph.D.
(415) 274-6862
Christopher N. Marai, Ph.D.
(415) 274-6861
Com m unications Equipm ent
Rohit Chopra
Sanjit Singh
Ryan Flanagan
(212) 668-9871
(212) 938-9922
(212) 938-9942
Com puter Services: Financial Technology
Gil B. Luria
(213) 688-4501
Aaron Turner
(213) 688-4429
Enterprise Softw are
Steve Koenig
Kevin Ikeda
(415) 274-6801
(213) 688-4423
Entertainm ent: Retail
Michael Pachter
Nick McKay
Nick Citrin
(213) 688-4474
(213) 688-4343
(213) 688-4495
Entertainm ent: Softw are
Michael Pachter
Nick McKay
Nick Citrin
(213) 688-4474
(213) 688-4343
(213) 688-4495
Em erging Pharm aceuticals
Liana Moussatos, Ph.D.
Richard Lau
Christopher N. Marai, Ph.D.
Healthcare Services - Managed Care
Sarah James
(213) 688-4503
Medical Devices
Tao Levy
(212) 938-9926
(212) 938-9925
Environmental Services / Building Products
Al Kaschalk
(213) 688-4539
Taryn Kuida
(213) 688-4505
Industrial Biotechnology
Liana Moussatos, Ph.D.
Christopher N. Marai, Ph.D.
(415) 263-6626
(415) 274-6861
Water and Renew able Energy Solutions
David Rose, CFA
(213) 688-4319
EQUITY SALES
Los Angeles
San Francisco
New York
Boston
Social Internet and E-Com m erce
Michael Pachter
(213) 688-4474
Nick McKay
(213) 688-4343
Nick Citrin
(213) 688-4495
Media
James Dix, CFA
(213) 688-4315
Movies and Entertainm ent
Michael Pachter
Nick McKay
Nick Citrin
(213) 688-4474
(213) 688-4343
(213) 688-4495
Sem iconductors
Betsy Van Hees
Ryan Jue, CFA
(415) 274-6869
(415) 263-6669
(213) 688-4470 / (800) 444-8076
(415) 274-6800
(212) 938-9931
(617) 832-3700
EQUITY TRADING
Los Angeles
San Francisco
New York
Boston
CORPORATE HEADQUARTERS
1000 Wilshire Blvd., Los Angeles, CA 90017-2465
Tel: (213) 688-8000 www.wedbush.com
(212) 938-9948
Medical Diagnostics and Life Sciences Tools
Zarak Khurshid
(415) 274-6823
INDUSTRIAL GROWTH TECHNOLOGY
Clean Technology
Craig Irw in
Min Xu
(415) 263-6626
(415) 274-6851
(415) 274-6861
(213) 688-4470 / (800) 421-0178
(415) 274-6811
(212) 344-2382
(617) 832-3700