Cosi Inc. (COSI, Financial) filed Quarterly Report for the period ended 2010-03-29.
Cosi Inc. has a market cap of $58.5 million; its shares were traded at around $1.14 with and P/S ratio of 0.5. COSI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
As a result of this sale, we will dispose of approximately $3.3 million in net furniture and fixtures, equipment and leasehold improvements, and recognize a gain on the sale of assets of approximately $5.0 million during the second quarter of fiscal 2010. In addition, our current accounts receivable and non-current note receivable will increase by $0.2 million and $1.75 million, respectively, due to the $1.35 million promissory note and the $0.6 million held in escrow.
Our 2009 net restaurant sales from the thirteen restaurants sold were approximately $18.7 million with related restaurant level operating costs and expenses of approximately $16.0 million. Additionally, there was $1.4 million of depreciation and amortization associated with these restaurants and $0.9 million of general and administrative costs. Had the sale of these restaurants occurred on the first day of our fiscal 2009, and assuming these restaurants generated the same level of sales when operated by Capitol C, the franchise royalty income recognized from these thirteen restaurants would have been approximately $0.9 million for fiscal 2009. This would have resulted in a reduction in our fiscal 2009 net loss of approximately $0.6 million.
On April 27, 2010 we received notice from the Listing Qualifications Department of The NASDAQ Stock Market that we have regained compliance with the NASDAQ Listing Standards by curing our bid price and stockholders equity deficiencies. As of April 21, 2010, the bid price of our common stock had closed above the $1.00 minimum requirement for a period of 10 consecutive trading days. Additionally, based on total shares outstanding of 51,551,201, our common stock has exceeded the alternative minimum $50 million market value of listed securities requirement as required by Listing Rule 5450(b)(2)(A). We now meet all continued listing standards for the NASDAQ Global Market. As a result, we were removed from the hearings process and the scheduled hearing before the NASDAQ Hearings Panel was cancelled.
Restaurant net sales. Restaurant net sales decreased 3.7%, or approximately $1.1 million, during the first quarter of fiscal 2010 as compared to the first quarter of fiscal 2009. This was due primarily to the decrease of 4.3%, or approximately $1.2 million, in net sales in our comparable restaurant base and $0.3 million in net sales related to Company-owned restaurants closed during and subsequent to the first quarter of fiscal 2009, partially offset by $0.5 million of net sales at new restaurants not yet in their sixteenth month of operation as of March 29, 2010. Comparable net sales for the quarter were adversely impacted in the month of February by severe winter weather across the mid-atlantic and northeast regions where we have a high concentration of Company-owned restaurants. For comparable restaurants, during the first quarter of fiscal 2010, our average guest check increased 1.3% and our transaction count decreased 5.6% compared to the first quarter of fiscal 2009. The increase in average check was largely due to higher catering sales in the quarter as compared to the prior year.
Franchise fees and royalties. Franchise fees and royalties decreased by 3.1%, or approximately $0.02 million, to approximately $0.5 million in the first quarter of fiscal 2010, as compared to the first quarter of fiscal 2009, due primarily to a $0.01 million decrease in franchise fees resulting from no franchise restaurant openings during the fiscal 2010 first quarter as compared to one franchise restaurant opening during the prior year quarter as well as approximately $0.01 million decrease in royalties resulting from lower franchise sales due in part to fewer franchise restaurants in operation during the first quarter of 2010 as compared to the prior year quarter.
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Cosi Inc. has a market cap of $58.5 million; its shares were traded at around $1.14 with and P/S ratio of 0.5. COSI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
On April 27, 2010, we completed the sale of thirteen restaurants and related assets in the Washington, D.C. market to Capitol C Restaurants LLC (Capitol C) for $8.35 million. The sale was made pursuant to an Asset Purchase and Sale Agreement dated April 27, 2010, by and among the Company, Cosi Sandwich Bar, Inc., a wholly-owned subsidiary of the Company, Capitol C and Capitol C Holdings LLC (Holdings), the parent company of Capitol C. Under the terms of the Asset Purchase and Sale Agreement, $6.4 million of the purchase price was paid in cash at closing, $1.35 million is to be paid pursuant to a three-year promissory note and the balance of $0.6 million is being held in escrow subject to the satisfaction of certain conditions. The restaurants will be operated under franchise agreements between the Company and Capitol C, and Holdings has entered into a development agreement to open six additional Cosi restaurants in the District of Columbia area.As a result of this sale, we will dispose of approximately $3.3 million in net furniture and fixtures, equipment and leasehold improvements, and recognize a gain on the sale of assets of approximately $5.0 million during the second quarter of fiscal 2010. In addition, our current accounts receivable and non-current note receivable will increase by $0.2 million and $1.75 million, respectively, due to the $1.35 million promissory note and the $0.6 million held in escrow.
Our 2009 net restaurant sales from the thirteen restaurants sold were approximately $18.7 million with related restaurant level operating costs and expenses of approximately $16.0 million. Additionally, there was $1.4 million of depreciation and amortization associated with these restaurants and $0.9 million of general and administrative costs. Had the sale of these restaurants occurred on the first day of our fiscal 2009, and assuming these restaurants generated the same level of sales when operated by Capitol C, the franchise royalty income recognized from these thirteen restaurants would have been approximately $0.9 million for fiscal 2009. This would have resulted in a reduction in our fiscal 2009 net loss of approximately $0.6 million.
On April 27, 2010 we received notice from the Listing Qualifications Department of The NASDAQ Stock Market that we have regained compliance with the NASDAQ Listing Standards by curing our bid price and stockholders equity deficiencies. As of April 21, 2010, the bid price of our common stock had closed above the $1.00 minimum requirement for a period of 10 consecutive trading days. Additionally, based on total shares outstanding of 51,551,201, our common stock has exceeded the alternative minimum $50 million market value of listed securities requirement as required by Listing Rule 5450(b)(2)(A). We now meet all continued listing standards for the NASDAQ Global Market. As a result, we were removed from the hearings process and the scheduled hearing before the NASDAQ Hearings Panel was cancelled.
Restaurant net sales. Restaurant net sales decreased 3.7%, or approximately $1.1 million, during the first quarter of fiscal 2010 as compared to the first quarter of fiscal 2009. This was due primarily to the decrease of 4.3%, or approximately $1.2 million, in net sales in our comparable restaurant base and $0.3 million in net sales related to Company-owned restaurants closed during and subsequent to the first quarter of fiscal 2009, partially offset by $0.5 million of net sales at new restaurants not yet in their sixteenth month of operation as of March 29, 2010. Comparable net sales for the quarter were adversely impacted in the month of February by severe winter weather across the mid-atlantic and northeast regions where we have a high concentration of Company-owned restaurants. For comparable restaurants, during the first quarter of fiscal 2010, our average guest check increased 1.3% and our transaction count decreased 5.6% compared to the first quarter of fiscal 2009. The increase in average check was largely due to higher catering sales in the quarter as compared to the prior year.
Franchise fees and royalties. Franchise fees and royalties decreased by 3.1%, or approximately $0.02 million, to approximately $0.5 million in the first quarter of fiscal 2010, as compared to the first quarter of fiscal 2009, due primarily to a $0.01 million decrease in franchise fees resulting from no franchise restaurant openings during the fiscal 2010 first quarter as compared to one franchise restaurant opening during the prior year quarter as well as approximately $0.01 million decrease in royalties resulting from lower franchise sales due in part to fewer franchise restaurants in operation during the first quarter of 2010 as compared to the prior year quarter.
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