Einstein Noah Restaurant Group Inc. Completes Review of Strategic Alternatives

  Einstein Noah Restaurant Group Inc. Completes Review of Strategic
  Alternatives

  Board of Directors Recapitalizes the Company & Declares a One-Time Special
                         Dividend of $4.00 per Share

Business Wire

LAKEWOOD, Colo. -- December 06, 2012

Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), a leader in the
quick-casual segment of the restaurant industry operating under the Einstein
Bros.® Bagels, Noah's New York Bagels®, and Manhattan Bagel® brands, today
announced that its Board of Directors has completed its comprehensive
strategic alternatives review process to maximize shareholder value by
recapitalizing the Company and declaring a one-time special dividend to
shareholders of $4.00 per share. Piper Jaffray served as the Company’s
financial advisor and Bryan Cave HRO served as the Company’s legal advisor in
connection with the review of strategic alternatives.

The recapitalization includes the amendment and restatement of the Company’s
existing Senior Credit Facility, which consists of a Term Loan A and a
Revolver with a syndicate of banks (“Facility”). The amendment and restatement
of the Facility increases the Company’s Term Loan A from $75 million to $100
million, increases the Revolver from $50 million to $75 million, and extends
the maturity date from December 20, 2015 to December 6, 2017. The increase to
$175 million will be used to fund the one-time special dividend, the ongoing
quarterly dividend, working capital, capital expenditures, and other general
corporate purposes. The loans under the Facility will bear interest equal to
the Eurodollar Rate plus an applicable margin ranging from 2.5% to 4.0% or the
Base Rate plus an applicable margin ranging from 1.5% to 3.0%.

Bank of America, N.A. serves as the Administrative Agent. Wells Fargo Bank,
N.A. serves as the syndication agent, BBVA Compass served as the document
agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo
Securities, LLC and BBVA Compass acted as Joint Lead Arrangers and Joint
Bookrunners. Other participating lenders include GE Capital, Union Bank, Bank
of the West, and Regions Bank.

The one-time special dividend of $4.00 per share is payable on December 27,
2012 to shareholders of record at the close of business on December 17, 2012
and will have an ex-dividend date of December 28, 2012. This is in addition to
the previously disclosed Company’s regular quarterly dividend of $0.125 per
share. The total cash outlay for the one-time special dividend will be
approximately $68 million. Immediately following the payment of the special
dividend, the Company expects the outstanding principal balance under the
Facility to be approximately $140 million, comprised of $100 million under the
Term Loan A and approximately $40 million under the Revolver.

Nelson Heumann, Chairman of the Board, said, “Today’s announcement is the
culmination of a thorough examination of strategic alternatives and represents
an important milestone for Einstein Noah. We are pleased to have been able to
recapitalize the business through our existing bank facility on such favorable
terms and maintain modest leverage. We view this one-time special dividend as
a clear demonstration of our commitment to returning capital to shareholders,
as well as our confidence in the strong results and momentum of the business.
As always, we are determined to create and unlock value for the benefit of all
shareholders by further strengthening our business model and realizing our
substantial expansion opportunities.”

Pursuant to the rules of The NASDAQ Stock Market, when a dividend is declared
in a per share amount that is 25% or greater than a Company's stock price, the
date on which that company's shares will begin to trade without the right to
receive the dividend, or ex-dividend, is the first business day following the
payment date, rather than the second business day prior to the record date.

About Einstein Noah Restaurant Group

Einstein Noah Restaurant Group, Inc. is a leading company in the quick casual
restaurant industry that operates and licenses locations primarily under the
Einstein Bros.® and Noah's New York Bagels® brands and primarily franchises
locations under the Manhattan Bagel® brand. The Company's retail system
consists of over 800 restaurants in 39 states and the District of Columbia. It
also operates a dough production facility. The Company's stock is traded on
the NASDAQ under the symbol BAGL. Visit www.einsteinnoah.com for additional
information.

Forward Looking Statement Disclosure

Certain statements in this press release constitute forward-looking statements
or statements which may be deemed or construed to be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements which are not historical facts are intended to
identify forward-looking statements. These forward-looking statements involve
and are subject to known and unknown risks, uncertainties and other factors
which could cause the Company's actual results, performance (financial or
operating), or achievements to differ materially from the future results,
performance (financial or operating), or achievements expressed or implied by
such forward-looking statements. These and other risks are more fully
discussed in the Company's SEC filings.

Contact:

for Einstein Noah Restaurant Group, Inc.
Investor Relations:
Raphael Gross, 203-682-8253
rgross@icrinc.com
Media Relations:
Liz Brady DiTrapano, 646-277-1226
lbrady@icrinc.com
 
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