Panera Bread Company (Nasdaq: PNRA) today reported that net income for the twelve weeks ended October 6, 2001 rose 82% to $2,984,000 or $0.20 per diluted share from $1,644,000 or $0.12 per diluted share for the twelve weeks ended September 30, 2000. For the forty weeks ended October 6, 2001 net income was $8,397,000 or $0.58 per diluted share. This represents an 85% increase compared to net income of $4,543,000 (excluding the one-time pre-tax gain of $900,000 related to the sale of the Au Bon Pain Business Unit) or $0.35 per diluted share for the forty weeks ended September 30, 2000.

System-wide sales increased 50% to $127.8 million for the twelve weeks ended October 6, 2001 compared to the twelve weeks ended September 30, 2000. For the forty weeks ended October 6, 2001, system-wide sales increased 54% to $382.6 million compared to the same period in the prior year.

System-wide comparable bakery-cafe sales increased 3.9% for the twelve weeks ended October 6, 2001 (3.4% for company-owned and 4.2% for franchised bakery-cafes). This marks the 23rd consecutive quarter that Panera Bread (on a stand-alone basis) has reported positive comparable company bakery-cafe sales. For the forty weeks ended October 6, 2001, system-wide comparable bakery-cafe sales increased 5.6% (5.6% for both company-owned and franchised bakery-cafes).

During the twelve weeks ended October 6, 2001, 21 new Panera Bread bakery-cafes were opened (five company-owned and 16 franchised bakery-cafes). For the forty weeks ended October 6, 2001, a total of 70 new bakery-cafes have opened (14 company-owned and 56 franchised bakery-cafes). These 70 bakery-cafes have averaged weekly sales of $36,775 for the forty weeks ended October 6, 2001. These weekly volume levels equate to an annualized sales volume of $1,912,000. This brings the total number of Panera Bread bakery-cafes operating at the end of the third quarter to 330 (103 company- owned and 227 franchised bakery-cafes). The total number of active additional franchise commitments in place as of October 6, 2001 was 525.

Average weekly system-wide sales for the twelve weeks ended October 6, 2001 were $33,877 per week (excluding the three specialty bakery-cafes). This equates to an annualized sales volume of $1,762,000. This is a 5.6% increase over the $32,078 average per week (excluding the three specialty bakery-cafes) for the twelve weeks ended September 30, 2000, which equates to an annualized average sales volume of $1,668,000. For the forty weeks ended October 6, 2001 average system-wide weekly sales were $32,918 ($1,712,000 annualized). This is an 8.3% increase over the $30,398 average weekly sales ($1,581,000 annualized) for the forty weeks ended September 30, 2000.

Ron Shaich, chairman and chief executive officer commented, “We are extremely pleased to be able to report that despite weakened consumer confidence and the aftershock of the tragic events of September 11th, our third quarter earnings per share of $0.20 exceeded our announced targets. It is particularly gratifying that the targets we exceeded had themselves been raised several times in the last year. Our better than expected earnings momentum continues to be fueled by the number and strength of bakery-cafe openings and increasing average sales volumes across the entire 330 unit system. This in turn is driving accelerated company and franchise bakery-cafe development.”

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He continued, “The 70 bakery-cafes opened so far this year have averaged annualized sales volumes of $1,912,000 across 23 states. This speaks to our broad appeal and the consumers’ strong response to our concept. Even in the face of the weakened economic environment, many consumers continue to demand quality food, real people and an environment that engages them. Panera continues to stay focused on delivering that experience, and consumers continue to reward us with their loyalty.”

Shaich concluded, “We are on track to meet or exceed our 2001 development target which was revised upward last quarter to 92 bakery-cafes (17 company- owned and 75 franchised bakery-cafes). Our margins continued to improve during the quarter. As a result we are confident in our ability to meet our fourth quarter earnings per share target of $0.29. If we accomplish that, it would bring our full year 2001 EPS to $0.87, which represents a 67% increase over 2000. Based on the strength of our sales and development momentum, we are, for the second time, raising our 2002 EPS target to $1.22 per share, representing a 40% increase over the 2001 target.”

Panera Bread Company owns and franchises bakery-cafes under the Panera Bread and Saint Louis Bread Co. names. The company is a leader in the emerging specialty bread/cafe category due to its unique bread combined with a quick, casual dining experience. Additional information is available on the company’s website,

Matters discussed in this news release, including any discussion or impact, express or implied, on the Company’s anticipated growth, operating results and future earnings per share contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (identified by the words “positioned”, “estimate”, “project”, “target”, “continue”, “will”, “intend”, “expect”, “future”, “anticipates”, and similar expressions) which express management’s present belief, expectations or intentions regarding the Company’s future performance. Moreover, the Company’s actual results could differ materially from those set forth in the forward-looking statements due to known and unknown risks and uncertainties and could be negatively impacted by a number of factors. These factors include but are not limited to the following: the ability of the Company to aggressively expand its business going forward is subject to the availability of sufficient capital to it and the developers party to franchise development agreements with the Company; and the Company’s operating results may be affected by many factors, including but not limited to variations in the number and timing of bakery-cafe openings and public acceptance of new bakery-cafes, competition and other factors that may affect retailers in general. These and other risks are detailed from time to time in the Company’s SEC reports, including its Form 10-K for the year ended December 30, 2000.

                             Panera Bread Company
Comparable Bakery-Cafe Sales

For the 16 For the 12 For the 12 For the 40
weeks ended weeks ended weeks ended weeks ended
April 21, 2001 July 14, 2001 Oct. 6, 2001 Oct. 6, 2001
Company-owned 7.3% 5.8% 3.4% 5.6%
Franchised 7.3% 5.6% 4.2% 5.6%
Total System 7.3% 5.7% 3.9% 5.6%

For the twelve weeks ended October 6, 2001
Period Period Period Q3
8 9 10 Total
Company-owned 2.9% 2.2% 5.1% 3.4%
Franchised 3.6% 3.2% 5.6% 4.2%
Total system 3.3% 2.8% 5.4% 3.9%

(in thousands, except per share amounts)

For the twelve weeks ended For the forty weeks ended
Oct. 6, Sept. 30, Oct. 6, Sept. 30,
2001 2000 2001 2000

Restaurant sales $38,486 $30,125 $115,045 $91,175
Franchise revenues 4,481 2,782 13,817 8,103
Commissary sales
to franchisees 5,520 3,186 16,581 9,535

Total revenue 48,487 36,093 145,443 108,813

Costs and expenses:
Restaurant expenses:
Cost of food and
paper products 12,025 9,988 36,074 30,308
Labor 11,104 8,709 33,774 26,740
Occupancy 2,716 2,158 8,278 6,694
Other operating
expenses 5,107 4,186 15,580 11,975
30,952 25,041 93,706 75,717

Commissary cost of sales 5,209 2,829 15,447 8,434
Depreciation and
amortization 2,613 1,953 7,872 6,126
General and
administrative expenses 4,720 3,795 14,479 11,174

Total costs and
expenses 43,494 33,618 131,504 101,451

Operating profit 4,993 2,475 13,939 7,362
Interest expense, net 16 32 77 180
Other expense (income) 85 (252) 107 (266)
Gain on sale of
Au Bon Pain Division – – – 900

Income before income
taxes 4,892 2,695 13,755 8,348
Income tax provision 1,908 1,051 5,358 3,256

Net income $2,984 $1,644 $8,397 $5,092

Net income per common share
– basic $.21 $.13 $.61 $.41

Net income per common share
– diluted $.20 $.12 $.58 $.40

Weighted average shares of
common and common equivalent
shares outstanding

Basic 13,984 12,628 13,815 12,358

Diluted 14,673 13,403 14,448 12,799


The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company’s consolidated statements of operations for the period indicated. Percentages may not add due to rounding:

                        For the twelve weeks ended   For the forty weeks ended
Oct. 6, Sept. 30, Oct. 6, Sept. 30,
2001 2000 2001 2000

Restaurant sales 79.4% 83.5% 79.1% 83.8%
Franchise revenues 9.2 7.7 9.5 7.4
Commissary sales
to franchisees 11.4 8.8 11.4 8.8

Total revenue 100.0% 100.0% 100.0% 100.0%

Costs and expenses:
Restaurant expenses(a):
Cost of food and
paper products 31.2 33.2 31.4 33.2

Labor 28.9 28.9 29.4 29.3
Occupancy 7.1 7.2 7.2 7.3
Other operating
expenses 13.3 13.8 13.5 13.2

Total restaurant
cost of sales 80.4 83.1 81.5 83.0

Commissary cost
of sales(b) 94.4 88.8 93.2 88.5
Depreciation and
amortization 5.4 5.4 5.4 5.6
General and
administrative expenses 9.7 10.5 10.0 10.3

Operating profit 10.3 6.9 9.6 6.8
Interest expense, net – .1 .1 .1
Other (income) expense .2 (.7) .1 (.2)
Gain on sale of
Au Bon Pain Division – – – .8

Income before income taxes 10.1 7.5 9.5 7.7
Income tax provision 3.9 2.9 3.7 3.0

Net income 6.2% 4.6% 5.8% 4.7%

(a) As a percentage of Company restaurant sales.
(b) As a percentage of commissary sales to franchisees.