Panera Bread Company Reports Q3 2013 Diluted EPS of $1.48, up 19% Versus Q3 2012

Marketwired

ST. LOUIS, MO--(Marketwired - Oct 22, 2013) - Panera Bread Company (NASDAQ: PNRA)

HIGHLIGHTS

  • Q3 2013 Favorable tax-related adjustments of $0.13 per diluted share
  • Q3 2013 Diluted EPS of $1.35, net of favorable tax-related adjustments
  • In excess of one million shares repurchased in Q3 2013 and subsequent period
  • Q4 2013 EPS target range lowered to $1.91 to $1.97, up 9% to 13% versus Q4 2012
  • FY 2013 EPS target range narrowed to $6.77 to $6.83, up 15% to 16% versus FY 2012

Panera Bread Company (NASDAQ: PNRA) today reported net income of $43 million, or $1.48 per diluted share, for the fiscal third quarter ended September 24, 2013. The third quarter fiscal 2013 results compare to net income of $37 million, or $1.24 per diluted share, for the fiscal third quarter ended September 25, 2012, and represent a 19% year-over-year increase in diluted earnings per share. The third quarter fiscal 2013 results include the impact of favorable tax-related adjustments of $3.8 million, or $0.13 per diluted share. Excluding these adjustments, diluted earnings per share was $1.35 for the thirteen weeks ended September 24, 2013, up 9% versus the comparable period in fiscal 2012. The reconciliation of GAAP and non-GAAP information is attached as Schedule IV.

For the thirty-nine weeks ended September 24, 2013, net income was $142 million, or $4.86 per diluted share. These results compare to net income of $122 million, or $4.14 per diluted share, for the thirty-nine weeks ended September 25, 2012, and represent a 17% year-over-year increase in diluted earnings per share. 

The Company's third quarter fiscal 2013 consolidated statements of comprehensive income and margin analyses are attached to this release as Schedule I. The following table sets forth, for the periods indicated, certain items included in the Company's consolidated statements of comprehensive income (in thousands, except per share data and percentages):

         
  For the 13 Weeks Ended      
  September 24, 2013   September 25, 2012   Percentage Change
                 
Total revenue $ 572,480   $ 529,338   8 %
Net income $ 42,762   $ 36,515   17 %
Diluted earnings per share $ 1.48   $ 1.24   19 %
Shares used in diluted EPS   28,899     29,455      
                 
                 
                 
  For the 39 Weeks Ended      
  September 24, 2013   September 25, 2012   Percentage Change
                 
Total revenue $ 1,723,270   $ 1,558,508   11 %
Net income $ 141,921   $ 121,836   16 %
Diluted earnings per share $ 4.86   $ 4.14   17 %
Shares used in diluted EPS   29,173     29,462      
                 

Third Quarter Fiscal 2013 Results and Business Review

Comparable Net Bakery-Cafe Sales Growth

In the third quarter fiscal 2013, Company-owned comparable net bakery-cafe sales increased 1.7%, franchise-operated comparable net bakery-cafe sales increased 0.9%, and system-wide comparable net bakery-cafe sales increased 1.3% compared to the comparable period in fiscal 2012. Two year Company-owned comparable net bakery-cafe sales increased 7.9%, two year franchise-operated comparable net bakery-cafe sales increased 6.4%, and two year system-wide comparable net bakery-cafe sales increased 7.1%.

The Company-owned comparable net bakery-cafe sales increase of 1.7% in the third quarter fiscal 2013 was comprised of year-over-year average check growth of 2.7% and transaction decline of 1.0%. Average check growth was comprised of retail price increases of approximately 1.7% and positive mix impact of approximately 1.0%. A schedule of comparable net bakery-cafe sales information is attached to this release as Schedule III.

Operating Margin

In the third quarter fiscal 2013, the operating margin was consistent with the operating margin for the same period of fiscal 2012. Lower general and administrative expenses as a percentage of total revenues offset the decline in bakery-cafe margins.

New Bakery-Cafe Development and AWS

During the third quarter fiscal 2013, the Company opened 17 new bakery-cafes and its franchisees opened 15 new bakery-cafes. As a result, there were 1,736 bakery-cafes open system-wide as of September 24, 2013. 

                   
    Company-owned     Franchise-operated     Total System  
Bakery-cafes as of June 25, 2013   835     873     1,708  
Bakery-cafes opened   17     15     32  
Bakery-cafes closed   (2 )   (2 )   (4 )
Bakery-cafes as of September 24, 2013   850     886     1,736  
                   

Excluding urban bakery-cafes, average weekly sales ("AWS") for Company-owned new bakery-cafes through the third quarter fiscal 2013 were $44,779 compared to $42,642 in the same period of fiscal 2012. Including urban bakery-cafes, AWS through the third quarter fiscal 2013 was $45,205 compared to $47,438 in the same period of fiscal 2012. AWS for franchise-operated new bakery-cafes through the third quarter fiscal 2013 was $48,432 compared to $47,680 in the same period of fiscal 2012. 

A schedule of the third quarter fiscal 2013 AWS is attached to this release as Schedule II.

Use of Capital

During the third quarter fiscal 2013, the Company repurchased 1,022,186 shares at an average price of $169.76 per share for an aggregate purchase price of approximately $174 million. The share repurchases had an approximate $0.02 per diluted share favorable impact on the Company's third quarter fiscal 2013 earnings per diluted share. The Company also repurchased 432,300 additional shares at an average price of $160.55 per share for an aggregate purchase price of approximately $69 million during the first 27 days of the fourth quarter fiscal 2013. The Company had approximately $317 million remaining under its existing $600 million repurchase authorization after these subsequent repurchases.

Fourth Quarter Fiscal 2013 Outlook

Diluted EPS Target

The Company is revising its target range for fourth quarter fiscal 2013 diluted earnings per share to $1.91 to $1.97 from its previous target of $2.05 to $2.11, which would represent an increase of 9% to 13% in the fourth quarter fiscal 2013 versus the comparable period in fiscal 2012. This diluted earnings per share target includes approximately 700 basis points of favorable impact for the 53rd week in fiscal 2013, but does not assume any additional share repurchases beyond those disclosed in this release under the Company's repurchase authorization.

The fourth quarter fiscal 2013 diluted earnings per share target includes the following key assumptions:

Comparable Net Bakery-Cafe Sales Growth

The Company is revising its target for Company-owned comparable net bakery-cafe sales for the fourth quarter fiscal 2013 to be flat to growth of 2.0% from its previous growth target of 3.0% to 5.0%. The Company announced today Company-owned comparable net bakery-cafe sales in the first 27 days of the fourth quarter fiscal 2013 were up approximately 1.6%.

Operating Margin Target

In the fourth quarter fiscal 2013, the Company anticipates its operating margin will be down 100 to 150 basis points on a year-over-year basis. This target reflects both previously disclosed incremental investments to provide greater access for customers and to improve the Company's core enterprise systems, as well as incremental investments to enhance our operational capabilities in our bakery-cafes.

Full Year Fiscal 2013 Outlook

Diluted EPS Target

The Company is narrowing its target range for fiscal 2013 earnings per diluted share to $6.77 to $6.83, which would represent an increase of 15% to 16% versus fiscal 2012. This diluted earnings per share target includes approximately 200 basis points of favorable impact for the 53rd week in fiscal 2013, but does not assume any additional share repurchases under the Company's repurchase authorization beyond those disclosed in this release.

This full year fiscal 2013 diluted earnings per share target is based on the following key assumptions:

Comparable Net Bakery-Cafe Sales Growth

The Company is revising its target for Company-owned comparable net bakery-cafe sales growth for fiscal 2013 to 2.0% to 2.75% from its previous target of 3.0% to 5.0%.

Operating Margin Target

For fiscal 2013, the Company expects operating margin will be flat to down 50 basis points when compared to fiscal 2012. This target reflects the anticipated initiatives discussed in the fourth quarter fiscal 2013 operating margin outlook.

New Bakery-Cafe Development and AWS

The Company now expects to be slightly above the high-end of its previous range of 115 to 125 system-wide new bakery-cafe openings in fiscal 2013. The average weekly net sales performance for new Company-owned bakery-cafes is now expected to be at or above the high-end of the previously provided targeted range of $40,000 to $42,000 for fiscal 2013.

Initial Full Year Fiscal 2014 Outlook

The Company intends to provide more detailed guidance for fiscal 2014 in February 2014 when it reports fiscal 2013 results. The Company is initially targeting fiscal 2014 earnings per diluted share below the low-end of the long-term growth target of 15% to 20%. The Company will provide further detail on its third quarter fiscal 2013 earnings conference call scheduled for October 23, 2013.

Concluding Comment

Ron Shaich, CEO, commented, "Panera generated the highest system wide year-to-date average weekly sales in its history. Indeed, average weekly sales at Panera through this quarter are up over 20% over the last 5 years. As well, new cafes in the class of 2013 generated sales volumes that are among the highest in our history. This speaks to the extraordinary affection customers have for Panera. However, it is also true that in the third quarter comparable store sales rose just 1.7%. While these comparable store sales continue to be above average for the industry, they are below our expectations. As one might expect, our recent comp performance has led to a great deal of self-examination and a thorough review of how we compete and how we operate our business."

Shaich continued, "Based on this review, we have now concluded that operational friction, including capacity and throughput constraints, along with a less differentiated experience not only limits our ability to grow transactions today but could also inhibit our ability to benefit from a number of potentially significant transaction-driving initiatives, including national advertising and enhanced access for customers, that are being readied to begin roll out in 2014. Thus, we are taking a number of deliberate steps to improve our operational capabilities and our competitive position and that we believe will allow us to best meet the demand that exists for the Panera experience today and in the future."

Notes:

The Company will host a conference call that will be broadcast on the Internet at 8:30 A.M. Eastern Time on Wednesday, October 23, 2013 to discuss the third quarter fiscal 2013 results, preliminary comparable net bakery-cafe sales results for the first 27 days of the fourth quarter fiscal 2013, earnings targets and business outlook for the fourth quarter and full year fiscal 2013, and full year targets for fiscal 2014. To access the call or view a copy of this release, go to http://www.panerabread.com/investor. Access to the call will be made available for 14 days, and the release will be archived for one year.

The Company includes in this release information on Company-owned, franchise-operated, and system-wide comparable net bakery-cafe sales percentages. Company-owned comparable net bakery-cafe sales percentages are based on net sales from Company-owned bakery-cafes included in base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchised bakery-cafes, as reported by franchisees, that are included in base store bakery-cafes. Acquired Company-owned and franchise-operated bakery-cafes and other restaurant or bakery-cafe concepts are included in the Company's comparable net bakery-cafe sales percentages after it has acquired a 100 percent ownership interest and if such acquisition occurred prior to the first day of the Company's prior fiscal year. Comparable net bakery-cafe sales exclude closed locations.

The Company does not record franchise-operated net bakery-cafe sales as revenues. However, royalty revenues are calculated based on a percentage of franchise-operated net bakery-cafe sales, as reported by franchisees. The Company uses franchise-operated and net system-wide sales information internally in connection with store development decisions, planning, and budgeting analyses. The Company believes franchise-operated and net system-wide sales information is useful in assessing consumer acceptance of its brand; facilitates an understanding of its financial performance and the overall direction and trends of sales and operating income; helps the Company appreciate the effectiveness of its advertising and marketing initiatives which its franchisees also contribute based on a percentage of their net sales; and provides information that is relevant for comparison within the industry.

About Panera Bread Company

Panera Bread Company owns and franchises 1,736 bakery-cafes as of September 24, 2013 under the Panera Bread®, Saint Louis Bread Co.®, and Paradise Bakery & Café® names. Our bakery-cafes are principally located in suburban, strip mall and regional mall locations. We feature high quality, reasonably priced food in a warm, inviting, and comfortable environment. With our identity rooted in handcrafted, fresh-baked, artisan bread, we are committed to providing great tasting, quality food that people can trust. Nearly all of our bakery-cafes have a menu highlighted by antibiotic-free chicken, whole grain bread, and select organic and all-natural ingredients, with zero grams of artificial trans fat per serving, which provide flavorful, wholesome offerings. Our menu includes a wide variety of year-round favorites complemented by new items introduced seasonally with the goal of creating new standards in everyday food choices. In neighborhoods across the United States and in Ontario, Canada, our customers enjoy our warm and welcoming environment featuring comfortable gathering areas, relaxing decor, and free internet access. Our bakery-cafes routinely donate bread and baked goods to community organizations in need. Additional information is available on our website, http://www.panerabread.com.

Matters discussed in this news release and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, express or implied, on our anticipated growth, operating results, plans, objectives, future earnings per share, and the impact of our investments in sales-building initiatives and operational capabilities on future sales and earnings, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are often identified by the words "believe," "positioned," "estimate," "project," "target," "plan," "goal," "assumption," "continue," "intend," "expect," "future," "anticipate," and other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict, and you should not place undue reliance on our forward-looking statements. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those discussed from time to time in our reports filed with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended December 25, 2012 and our quarterly reports on Form 10-Q. All forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this release are made only as of the date of this release and may change. While we may elect to update forward-looking statements at some point in the future, we expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 Schedule I
 
PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(In thousands, except per share amounts)
 
    For the 13 Weeks Ended
    September 24, 2013   September 25, 2012
Revenues:            
  Bakery-cafe sales, net   $ 505,428   $ 466,369
  Franchise royalties and fees     27,189     25,321
  Fresh dough and other product sales to franchisees     39,863     37,648
     Total revenues     572,480     529,338
Costs and expenses:            
  Bakery-cafe expenses:            
    Cost of food and paper products   $ 152,202   $ 139,250
    Labor     151,786     140,113
    Occupancy     36,860     33,230
    Other operating expenses     73,846     65,856
      Total bakery-cafe expenses     414,694     378,449
  Fresh dough and other product cost of sales to franchisees     35,886     34,041
  Depreciation and amortization     26,329     23,828
  General and administrative expenses     28,837     30,891
  Pre-opening expenses     2,165     2,130
    Total costs and expenses     507,911     469,339
Operating profit     64,569     59,999
Interest expense     75     263
Other (income) expense, net     324     692
Income before income taxes     64,170     59,044
Income taxes     21,408     22,529
    Net income   $ 42,762   $ 36,515
             
Earnings per common share:            
  Basic   $ 1.49   $ 1.25
  Diluted   $ 1.48   $ 1.24
Weighted average shares of common and common equivalent shares outstanding:            
  Basic     28,744     29,242
  Diluted     28,899     29,455
             
Other comprehensive (loss) income, net of tax:            
  Foreign currency translation adjustment   $ 206   $ 551
    Other comprehensive (loss) income     206     551
Comprehensive income   $ 42,968   $ 37,066
 
 
 
Schedule I (continued)
 
PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(In thousands, except per share amounts)
 
    For the 39 Weeks Ended
    September 24, 2013     September 25, 2012
Revenues:              
  Bakery-cafe sales, net   $ 1,523,985     $ 1,374,229
  Franchise royalties and fees     81,219       74,900
  Fresh dough and other product sales to franchisees     118,066       109,379
    Total revenues     1,723,270       1,558,508
Costs and expenses:              
  Bakery-cafe expenses:              
    Cost of food and paper products   $ 454,790     $ 404,776
    Labor     450,253       410,887
    Occupancy     108,714       96,591
    Other operating expenses     213,936       187,555
      Total bakery-cafe expenses     1,227,693       1,099,809
  Fresh dough and other product cost of sales to franchisees     103,083       97,232
  Depreciation and amortization     75,961       67,290
  General and administrative expenses     86,887       88,402
  Pre-opening expenses     5,337       6,217
    Total costs and expenses     1,498,961       1,358,950
Operating profit     224,309       199,558
Interest expense     555       675
Other (income) expense, net     (2,892 )     1,418
Income before income taxes     226,646       197,465
Income taxes     84,725       75,629
    Net income   $ 141,921     $ 121,836
               
Earnings per common share:              
  Basic   $ 4.89     $ 4.17
  Diluted   $ 4.86     $ 4.14
Weighted average shares of common and common equivalent shares outstanding:              
  Basic     28,995       29,209
  Diluted     29,173       29,462
               
Other comprehensive (loss) income, net of tax:              
  Foreign currency translation adjustment   $ (522 )   $ 579
    Other comprehensive (loss) income     (522 )     579
Comprehensive income   $ 141,399     $ 122,415
   
   
   
Schedule I (continued)  
   
PANERA BREAD COMPANY  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
MARGIN ANALYSIS  
(unaudited)  
   
The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company's consolidated statements of comprehensive income for the period indicated.Percentages may not add due to rounding:  
   
    For the 13 Weeks Ended  
    September 24, 2013     September 25, 2012  
Revenues:            
  Bakery-cafe sales, net   88.3 %   88.1 %
  Franchise royalties and fees   4.7     4.8  
  Fresh dough and other product sales to franchisees   7.0     7.1  
      Total revenues   100.0 %   100.0 %
Costs and expenses:            
  Bakery-cafe expenses (1):            
    Cost of food and paper products   30.1 %   29.9 %
    Labor   30.0     30.0  
    Occupancy   7.3     7.1  
    Other operating expenses   14.6     14.1  
      Total bakery-cafe expenses   82.0     81.1  
  Fresh dough and other product cost of sales to franchisees (2)   90.0     90.4  
  Depreciation and amortization   4.6     4.5  
  General and administrative expenses   5.0     5.8  
  Pre-opening expenses   0.4     0.4  
    Total costs and expenses   88.7     88.7  
Operating profit   11.3     11.3  
Interest expense   -     -  
Other (income) expense, net   0.1     0.1  
Income before income taxes   11.2     11.2  
Income taxes   3.7     4.3  
    Net income   7.5 %   6.9 %
             
Other comprehensive loss   -     0.1  
    Comprehensive income   7.5 %   7.0 %
   
(1) As a percentage of net bakery-cafe sales.
   
(2) As a percentage of fresh dough and other product sales to franchisees.
   
   
   
Schedule I (continued)  
   
PANERA BREAD COMPANY  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
MARGIN ANALYSIS  
(unaudited)  
   
The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company's consolidated statements of comprehensive income for the period indicated.Percentages may not add due to rounding:  
   
    For the 39 Weeks Ended  
    September 24, 2013     September 25, 2012  
Revenues:            
  Bakery-cafe sales, net   88.4 %   88.2 %
  Franchise royalties and fees   4.7     4.8  
  Fresh dough and other product sales to franchisees   6.9     7.0  
      Total revenues   100.0 %   100.0 %
Costs and expenses:            
  Bakery-cafe expenses (1):            
    Cost of food and paper products   29.8 %   29.5 %
    Labor   29.5     29.9  
    Occupancy   7.1     7.0  
    Other operating expenses   14.0     13.6  
      Total bakery-cafe expenses   80.6     80.0  
  Fresh dough and other product cost of sales to franchisees (2)   87.3     88.9  
  Depreciation and amortization   4.4     4.3  
  General and administrative expenses   5.0     5.7  
  Pre-opening expenses   0.3     0.4  
    Total costs and expenses   87.0     87.2  
Operating profit   13.0     12.8  
Interest expense   -     -  
Other (income) expense, net   (0.2 )   0.1  
Income before income taxes   13.2     12.7  
Income taxes   4.9     4.9  
    Net income   8.2 %   7.8 %
             
Other comprehensive loss   -     -  
    Comprehensive income   8.2 %   7.8 %
   
(1) As a percentage of net bakery-cafe sales.
   
(2) As a percentage of fresh dough and other product sales to franchisees.
 
 
 
Schedule II
 
PANERA BREAD COMPANY
Supplemental Sales and Bakery-Cafe Information
 
    System-Wide Average Weekly Sales ("AWS")
    2013[a]   2012   2011   2010   2009
AWS   $ 47,053   $ 46,676   $ 44,313   $ 42,852   $ 39,926
 
[a] Represents year-to-date system-wide AWS at the end of the third quarter fiscal 2013.
 
 
    2013 Company-Owned AWS By Year Opened   Year-Over-Year Change in Company-Owned AWS
    2013 Opens [b]   2012 Opens [b]   2011 Opens & Prior   2013 Acquisitions [d]   2012 Acquisitions [d]   Total   2012 Opens [c]   2011 Opens & Prior   AWS Total
Bakery-Cafes   45   59   729   1   16   850            
Q1 13   $61,912   $44,114   $47,068   -   $58,049   $47,144   -14.1%   3.7%   3.8%
Q2 13   $48,230   $44,458   $48,848   $41,923   $58,419   $48,700   -6.2%   4.2%   3.4%
Q3 13   $41,934   $42,482   $46,555   $43,346   $55,446   $46,239   -9.4%   2.0%   0.8%
2013 YTD   $45,205   $43,685   $47,491   $42,694   $57,305   $47,354   -7.9%   3.3%   2.6%
 
[b] 2013 and 2012 Company-owned AWS excludes acquisition data.
 
[c] Change in Company-owned AWS in 2013 from 2012 compares 59 bakery-cafes in 2013 against 41 bakery-cafes at the end of the third quarter fiscal 2012.
 
[d] Represents one Panera bakery-cafe in 2013 and 16 Panera bakery-cafes in 2012.
 
 
    2013 Franchise-Operated AWS By Year Opened   Year-Over-Year Change in Franchise-Operated AWS
    2013 Opens [e]   2012 Opens [e]   2011 Opens & Prior   Total   2012 Opens [f]   2011 Opens & Prior   AWS Total
Bakery-Cafes   46   64   776   886            
Q1 13   $51,543   $42,923   $47,084   $46,800   -10.5%   3.0%   2.4%
Q2 13   $49,405   $44,125   $47,999   $47,750   -5.8%   3.7%   3.2%
Q3 13   $47,468   $41,113   $46,062   $45,769   -14.5%   1.1%   0.2%
2013 YTD   $48,432   $42,718   $47,048   $46,766   -10.4%   2.6%   1.9%
 
[e] 2013 and 2012 Franchise-operated AWS excludes acquisition data.
 
[f] Change in Franchise-operated AWS in 2013 from 2012 compares 64 bakery-cafes in 2013 against 50 bakery-cafes at the end of the third quarter fiscal 2012.
 
    Bakery-Cafe Openings (excluding acquisitions)
    Company   Franchise   Total       Company   Franchise   Total
Q1 13   10   12   22   Q1 12   7   15   22
Q2 13   18   19   37   Q2 12   17   16   33
Q3 13   17   15   32   Q3 12   17   19   36
Q4 13               Q4 12   18   14   32
2013 YTD   45   46   91   2012 YTD   59   64   123
 
 
 
Schedule III
 
PANERA BREAD COMPANY
Comparable Net Bakery-Cafe Sales Information
 
    For the 4 Weeks Ended   For the 5 Weeks Ended   For the 4 Weeks Ended   For the 13 Weeks Ended   For the 39 Weeks Ended
    July 23, 2013   August 27, 2013   September 24, 2013   September 24, 2013   September 24, 2013
Company-owned   2.1%   2.2%   0.7%   1.7%   3.0%
Franchise-operated   0.9%   1.5%   0.1%   0.9%   2.6%
System-wide   1.4%   1.8%   0.4%   1.3%   2.8%
 
Company-owned comparable net bakery-cafe sales growth percentages are based on net sales from Company-owned bakery-cafes included in base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchised bakery-cafes, as reported by franchisees, that are included in base store bakery-cafes. Acquired Company-owned and franchise-operated bakery-cafes and other restaurant or bakery-cafe concepts are included in our comparable net bakery-cafe sales percentages after we have acquired a 100 percent ownership interest and if such acquisition date occurred prior to the first day of our prior fiscal year. Comparable net bakery-cafe sales exclude closed locations.
 
 
 
Schedule IV
 
PANERA BREAD COMPANY
Reconciliation of GAAP and Non-GAAP Information
(in thousands, except per share information)
 
    For the 13 Weeks Ended   For the 39 Weeks Ended
    September 24, 2013   September 24, 2013
Net Income, excluding tax-related adjustments   $ 38,928   $ 138,087
Tax-related adjustments (1)     3,834     3,834
Net Income   $ 42,762   $ 141,921
             
Weighted average diluted shares of common and common equivalent shares outstanding     28,899     29,173
             
Diluted earnings per share, excluding tax-related adjustments   $ 1.35   $ 4.73
Impact of tax-related adjustments on diluted earnings per share     0.13     0.13
Diluted earnings per share   $ 1.48   $ 4.86
 
(1) - During the thirteen weeks ended September 24, 2013, the Company recorded $3.8 million of adjustments to previously recorded tax expense to reflect the refinement of estimates of certain state tax attributes to amounts in filed returns, and the settlement of tax audits as well as other normal tax adjustments.
 
Contact:

Michele Harrison
Vice President, Investor Relations
(314-984-4966)
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