New World Coffee-Manhattan Bagel, Inc. (Nasdaq: NWCI), today reported results for the first quarter of fiscal 2001.

The Company's revenues for the quarter ended April 1, 2001 increased 14.5% to $10.5 million from $9.1 million for the comparable period ended March 25, 2000. Retail sales advanced 200.9% to $3.7 million, or 35.1% of total revenues, from $1.2 million, or 13.3% of revenues, in the comparable 2000 period. Manufacturing revenues decreased 16.3% to $5.1 million, or 49.2% of total revenues, from $6.2 million, or 67.2% of revenues, a year earlier. Franchise related revenues declined 6.9% to $1.7 million, or 15.8% of total revenues, from $1.8 million, or 19.4% of revenues, in last year's first quarter.

Net income for the quarter ended April 1 2001 was $250,000, a decrease of 61.6% from $651,000 in the period ended March 25, 2000. With the 2001 quarter including a $166,000 provision for income taxes, versus none in the 2000 quarter, income before taxes declined 36.1% to $416,000 from $651,000. Earnings before interest, taxes, depreciation and amortization (EBITDA) declined 3.2% to $1.6 million, or 15.7% of revenues, from $1.7 million, or 18.6% of revenues, in the 2000 quarter.

The Company attributed the figures to inclement weather conditions experienced in its core markets during this year's first quarter which negatively impacted segment revenues, the outsourcing of its low-margin distribution business which was previously included in the manufacturing revenue line, a temporary shift in revenue mix towards retail sales which have lower margins than manufacturing, an associated temporary increase in depreciation and general and administrative expenses to support the increase in retail stores, and the inclusion of an income tax provision against its earnings for the first time. The Company expects that as it continues to franchise existing company owned stores, its revenues will shift favorably towards higher margin manufacturing revenues, and it will be able to reduce the depreciation and general and administrative expenses associated with company stores. The Company has several transactions pending for the sale of company owned stores at this time.

After deducting dividends and accretion on preferred stock, both of which are non-cash accounting adjustments, of $3.6 million, the Company reported a net loss available to common stockholders of ($3.3 million), or ($0.22) per common share, in the 2001 quarter, compared to income of $651,000, or $0.06 per share, in the prior year.

New World Coffee-Manhattan Bagel, Inc. currently franchises, licenses or owns stores under its four brands in 26 states and Washington, D.C. The Company is vertically integrated in bagel dough manufacturing and coffee roasting, with plants in New Jersey, California and Connecticut.

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. The words "forecast," "estimate," "project," "intend," "expect," "should," "would" and similar expressions and 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 from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the Company's SEC filings.




                                                   April 1       March 26,
                                                     2001           2000

    Manufacturing revenues                        $5,149,755     $6,150,638
    Franchise related revenues                     1,653,352      1,774,944
    Retail sales                                   3,672,075      1,220,500
    Total revenues                                10,475,182      9,146,082

     EBITDA                                        1,646,844      1,700,858
    Income before income taxes                       416,096        650,765

    Provision for income taxes                       166,438             --

    Net income                                       249,658        650,765

    Non-cash Dividends and
     accretion on preferred stock                  3,566,621             --

    Net (loss) income available
     to common stockholders                     ($3,316,963)       $650,765

    Net (loss) income per common share - Basic        ($.22)           $.06

    Net (loss) income per common share - Diluted      ($.22)           $.06

    Weighted average number of common shares outstanding:
      Basic                                       15,404,828     11,386,777
      Diluted                                     15,404,828     11,684,286