Milling & Baking News - March 2, 2004 - 14

F I N A N C I A L

R E S U L T S

Weston to build three bread,
roll plants in U.S. this year

Asked about the impact of low-carbohydrate diets on demand, Mr. Prince
said, "There's a lot of growth in the
whole grains area, whether it's low-carb
Continued from Page 1
commodity and people costs.
or whole grains. The issue is obesity, it
2003 with "increasing momentum across
"I would characterize our industry as is not necessarily low carb. Atkins is
our product platforms," Mr. Prince told simply in play - a changing consumer, another diet, just like South Beach and
analysts. "And while 2004 is off to a good a changing customer base and a changing many others out there. The issue is obestart, I see the overall momentum to our industry. At Weston Foods, much has been sity; we are moving to healthier products
top line building throughout the year.
done to position this business to compete. and frankly it's been positive."
"The year will be all about products We have the product platform that in my
Weston Foods, which includes the
- healthier products. Our bread business view is unparalleled and our asset base Canadian baking and dairy businesses
is strong in total and the mix change is fa- is strengthening, evidenced by the work as well as the U.S. baking operation, had
vorable. On this front
operating income
we are well positioned
of C$61 million
to lead in innovation."
($46 million) in
Mr. Prince said
the fourth quarter
that on the day of
ended Dec. 31,
(in millions of Canadian dollars)
the conference call,
including a reFirst quarter Second quarter
Third quarter
Fourth quarter
Weston was introducstructuring charge
Sales, 2003
C$1,129
C$1,077
C$1,275
C$1,042
ing six varieties of coof C$35 million.
Sales, 2002
C$1,147
C$1,111
C$1,455
C$1,079
branded Atkins-enForeign currency
dorsed Entenmann's
translation
also
Operating income, 2003
C$83
C$117
C$113
C$61
low-carbohydrate
affected
results.
Operating income, 2002
C$77
C$108
C$128
C$96
cakes and snacks. He
Fourth-quarter
also pointed to new
operating income
products in the Thomas breakfast line as completed in the last two years and our was down 36% from C$96 million in the
surpassing the company's projections.
aggressive capital investment plans across fourth quarter of fiscal 2002.
The U.S. retail market, Mr. Prince said, the business in 2004 and 2005."
Sales of Weston Foods in the quarter
remains "difficult" with a slight improveDuring a question and answer session, were C$1,042 million ($785 million),
ment seen in some geographic areas. Mr. Prince said some of the changes tak- down 3% from $1,079 million in the
"While weakness continues in the tradi- ing place in consumer demand are benefi- year-ago quarter.
tional retail space we are encouraged by cial. "There is an awful lot going on inside
For the full year, operating income of
our growth in alternate channels," he said.
the category," he said. "The value of new Weston Foods in 2003 was C$374 milHe added, "The customer is clearly products today - whole grains as an ex- lion, down 9% from fiscal 2002. Sales
showing interest in products that pro- ample - are helping to change the mix of totaled C$4.5 billion, down 6% from the
mote health, whole grains, no sugar and the category. And that's very positive.
previous year.
low carbs."
"There's a move away from white
Net income of parent George Weston
New products, Mr. Prince said, "have bread. We actually applaud that move. It's Ltd. in fiscal 2003 was C$792 million on
the potential of changing mix and pro- very positive for the industry. Even though sales of C$29,198 million, compared with
viding overall top-line growth well into white bread is large, there's a mix and a C$690 million and C$27,446 million, rethe future ... tempered by increasing margin enhancement opportunity here."
spectively, in fiscal 2002. MBN

Weston Foods, Inc.
sales, operating income

New World Restaurant vows to bring
change, better service to Einstein
GOLDEN, COLO. - New World Restaurant Group, Inc. last week unveiled
plans to implement operational initiatives for 2004. Among the initiatives announced was a new "brand renaissance"
program being introduced for Einstein
Bros, the company's largest restaurant
concept.
"Our brand renaissance program was
developed in response to survey data
from our customers as well as restaurant
consultants," said Paul Murphy, chief
executive officer and interim chairman. "It broadly addresses issues such
as brand position, service system and
customer experience. We are in the process of designing a new prototype store
as well as initial concept stores for our
existing store base that will reflect our
14 / Milling & Baking News, March 2, 2004

new direction.
"Brand Renaissance will bring change
to the look and feel of the Einstein Bros restaurants, coupled
with an improved service
system and menu redevelopment."
Mr. Murphy noted
that New World already has initiated
strategic pricing actions
for its Noah's New York
Bagel restaurants, with
similar pricing initiatives under consideration for the Einstein
Bros brand. Any price action undertaken would be done in conjunction
with certain menu modifications, he
added.

Rick Dutkiewicz, chief financial
officer, said New World's 2004 incentive compensation plan will tie into
the company's operational initiatives.
"This plan requires sufficient cash flow
to cover operating expenses, capital expenditures and interest payments," Mr.
Dutkiewicz said. "With payments
to
participating
employes
contingent on achieving the
positive cash flow goal, this
plan is clearly stakeholder
friendly."
New World operates restaurants under the Einstein
Bros and Noah's New York
Bagel brands and franchises locations under the Manhattan Bagel
and Chesapeake Bagel Bakery brands.
As of Dec. 30, the company operated
464 company-owned locations, 226 franchised units and 45 licensed locations in
33 states. MBN
bakingbusiness.com/world-grain.com

http://www.bakingbusiness.com/world-grain.com

Milling & Baking News - March 2, 2004

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