Così, Inc : Così, Inc. Reports 2012 Fourth Quarter and Full Year Results

   Così, Inc : Così, Inc. Reports 2012 Fourth Quarter and Full Year Results




CONTACT:    William Koziel
(847) 597-8800           

         Così, Inc. Reports 2012 Fourth Quarter and Full Year Results

DEERFIELD, IL - March 14,  2013 - Così, Inc.  (NASDAQ: COSI), the fast  casual 
restaurant company, today  reported a net  loss for the  fourth quarter  ended 
December 31, 2012  of $(2,036,000), or  $(0.03) per basic  and diluted  common 
share, compared with  a net  loss of $(2,274,000),  or $(0.04)  per basic  and 
diluted common share in the fourth quarter of 2011. 

Così's  total  revenues  for  the  2012  fourth  quarter  decreased  13.7%  to 
$22,612,000 from  $26,193,000 in  the 2011  fourth quarter.  The 2011  fourth 
quarter included  one  additional week  of  revenues versus  the  2012  fourth 
quarter. Company-owned restaurant net sales  decreased by 13.6% in the  fourth 
quarter to  $21,894,000,  compared  to  $25,334,000  in  the  previous  year's 
quarter, due to net sales of $1,375,000 from the one additional week of  sales 
in 2011, a sales  decline of $744,000 from  restaurants closed subsequent  to 
the fourth quarter of 2011, a decline  in sales of $580,000 during the  fourth 
quarter resulting from the  impact of Hurricane Sandy  and a 3.2% decrease  in 
comparable store net sales when measured on a thirteen-week comparable  basis. 
Franchise fees and royalty revenues  for the 2012 fourth quarter  contributed 
$718,000 compared to $859,000 in the 2011 fourth quarter. The year over  year 
fourth quarter decrease  in franchise fees  and royalties was  largely due  to 
royalties associated with  the additional  week of  sales in  the 2011  fourth 
quarter as well as  royalties associated with  locations closed subsequent  to 
the fourth quarter of 2011.

System-wide comparable  restaurant  sales,  assuming  a  13  week  quarter  as 
measured for restaurants in  operation for more than  15 months and  excluding 
the  impact  of  Hurricane  Sandy  on  Company-owned  locations,  recorded  an 
aggregate 3.9% decrease compared to the fourth quarter of 2011. The breakdown
in comparable sales between  Company-owned and franchise-operated  restaurants 
are as follows:

 For the 13 weeks ended
   December 31, 2012
Company-owned             (3.2%)
Franchise-operated             (4.9%)
Total System                 (3.9%)

For the  fiscal year  ended December  31, 2012  Così reported  a net  loss  of 
$(4,441,000) or $(0.07) per basic and diluted common share, compared to fiscal
2011, when Così's net loss was $(6,539,000), or $(0.13) per basic and  diluted 
common share.

Così's total  revenues for  fiscal  2012 decreased  4.1% to  $97,952,000  from 
$102,135,000 in  fiscal 2011.  Fiscal 2011  included one  additional week  of 
revenues versus fiscal 2012. Company-owned net restaurant sales declined  4.2% 
in fiscal 2012 to $94,757,000, compared to $98,920,000 in fiscal 2011 due to a
$2,000,000 decline  in net  sales  related to  restaurants closed  during  and 
subsequent to fiscal 2011, the additional  fifty-third week of sales in  2011, 
and a  comparable 52  week net  sales  decrease of  0.3% after  excluding  the 
$580,000 impact on sales from Hurricane  Sandy in the fourth quarter of  2012. 
Franchise fees and  royalty revenues for  fiscal 2012 contributed  $3,195,000 
compared to  $3,215,000  in fiscal  2011.  The  year over  year  decrease  in 
franchise fees and royalties  was largely the  result of royalties  associated 
with the additional week of sales in 2011.

System-wide comparable restaurant  sales for fiscal  2012, assuming a  52-week 
year as measured  for restaurants  in operation for  more than  15 months  and 
excluding the  sales impact  of Hurricane  Sandy on  Company-owned  locations, 
recorded an aggregate 0.5% increase compared to fiscal 2011. The breakdown in
comparable sales between Company-owned and franchise-operated restaurants  are 
as follows:

For the 52 weeks ended
  December 31, 2012
Company-owned            (0.3%)
Franchise-operated            1.8%
Total System0.5%

"Despite the  challenging results  of  the fourth  quarter which  include  the 
adverse impact  of  Hurricane  Sandy on  sales  and  margins at  many  of  our 
restaurants," Carin Stutz, Così's President and Chief Executive Officer, said,
"I want to assure you that we  are making good progress on our initiatives  to 
improve the freshness  and quality of  our menu  as well as  the ambience  and 
hospitality of the restaurants to  unlock the exciting long-term potential  of 
the Così brand."

2012 Fourth Quarter and Full Year Financial Performance Review
For the fourth quarter, Così reported a 230 basis point increase in costs  and 
expenses related to  Company-owned restaurant  operations as  a percentage  of 
restaurant net  sales compared  to  the fourth  quarter  of 2011.  The  change 
resulted from increases of  100, 70 and  60 basis points,  as a percentage  of 
restaurant net sales,  in occupancy and  other restaurant operating  expenses, 
cost of food and  beverage and labor and  related benefits, respectively.  The 
increase  in  occupancy  and  other  restaurant  operating  expenses  was  due 
primarily to the beneficial  impact on the fixed  portion of these costs  from 
the additional week of sales in  2011 partially offset by lower utility  costs 
in 2012 as compared to the prior  year quarter. The increase in cost of  food 
and beverage was largely due to higher costs on certain commodities, primarily
poultry, the impact of  a higher mix  of breakfast sales  which have a  higher 
cost as a percent to sales coupled with a decline in beverage sales which have
a lower  cost as  a  percent to  sales. The  increase  in labor  and  related 
benefits was largely due to the impact of the comparable sales decline on  the 
fixed portion of labor  costs, including the  impact resulting from  Hurricane 
Sandy. 

During  the   2012  fourth   quarter,  the   Company  reported   general   and 
administrative expense of $2,947,000 or 13.0% of total revenues as compared to
$4,065,000 or 15.5% for the 2011 fourth quarter. The decrease in expense  for 
2012 as compared to  2011 was due  primarily to lower  legal fees and  certain 
settlement-related  costs,  lower  professional   fees  and  lower   marketing 
production costs primarily outside agency fees. The 2011 fourth quarter  also 
included one-time expenses related to  the chief executive officer search  and 
certain other shareholder activities.

For the 2012 full year, Così reported  a 10 basis point increase in costs  and 
expenses related to  Company-owned restaurant  operations as  a percentage  of 
restaurant net sales compared to 2011.  The change resulted from increases  of 
30 and 20 basis points, as a percentage of restaurant net sales, in  occupancy 
and other  restaurant  operating  expenses  and cost  of  food  and  beverage, 
respectively, partially  offset by  a 40  basis point  decrease in  labor  and 
related benefits.

During  fiscal  2012,  general   and  administrative  expenses  decreased   by 
$2,183,000 to  $11,641,000  from $13,824,000  due  primarily to  lower  legal, 
professional and board  fees as compared  to 2011. Fiscal  2011 also  included 
certain one-time  fees  related to  the  chief executive  officer  search  and 
certain other  shareholder activities.  As a  percentage of  total  revenues, 
general and  administrative  expenses improved  to  11.9% in  fiscal  2012  as 
compared to 13.5% in 2011.

Così reported that as of December 31, 2012 it had cash and cash equivalents of
$15,417,000 and virtually no debt other than lease obligations.

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  74 Company-owned  and 50  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 © 2013  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, 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 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.

Financial Statements

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Source: Così, Inc via Thomson Reuters ONE
HUG#1685458
 
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