content: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  
  
           Date of Report (Date of Earliest Event Reported) June 24, 2002
  --------------------------------------------------------------------------------
  
  
                          New World Restaurant Group, Inc.
  --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in its Charter)
  
  
  
  Delaware                             0-27148                      13-3690261
  --------------------------------------------------------------------------------
  (State or Other                   (Commission                   (I.R.S. Employer
  Jurisdiction of                   File Number)                    Identification
  Incorporation)                                                              No.)
  
  
  
  
                               246 Industrial Way West
                             Eatontown, New Jersey 07724
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
  
  
                                   (732) 544-0155
  --------------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
  
  
  --------------------------------------------------------------------------------
           (Former Name or Former Address, If Changed Since Last Report.)
  
  
  
  <PAGE>
  
  
  ITEM 5.  Other Events and Regulation FD Disclosure.
  
           Reference is made to the New World Restaurant Group, Inc. press release
  attached hereto as Exhibit 99.1, and incorporated by reference herein
  (including, without limitation, the information set forth in the cautionary
  statement contained in the press release), relating to the Company's
  announcement of its unaudited results for the quarter ended April 2, 2002.
  
  
  
  ITEM 7.  Financial Statements and Exhibits.
  
  (c)  Exhibits.
  
  Exhibit  Description
  -------  -----------
  
  99.1     Press Release issued June 24, 2002.
  
  
  
  <PAGE>
  
  
                                     SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
  
  
                                       NEW WORLD RESTAURANT GROUP, INC.
  
  
  
  
  
                                       BY:   /s/ Anthony Wedo
                                           ----------------------------------
                                           Name:  Anthony Wedo
                                           Title: Chief Executive Officer
  
  
  
  Date:  June 24, 2002
  
  
  
  
  
  
  <PAGE>
  
  
                                                                      Exhibit 99.1
  
                  NEW WORLD REPORTS RESULTS FOR 1ST QUARTER OF 2002
  
  o    Adjusted EBITDA before unusual charges and legal expenses rose to $11.1
  million, exceeding trailing and year-over-year quarters
  
       EATONTOWN, NJ (6/24/02)--New World Restaurant Group (Pink Sheets: NWCI)
  today announced unaudited results for the quarter ended April 2, 2002. Results
  for the first quarter of fiscal 2002 include the operations of company-owned and
  licensed Einstein Bros. and Noah's NY Bagels stores and related production and
  support facilities, which were acquired on June 19, 2001. The company also
  reported selected unaudited pro forma comparisons, which assume that New World
  and Einstein had been combined for the first quarter of fiscal 2001.
  
       On a reported basis, total revenues for the quarter ended April 2, 2002
  rose to $98.6 million from $10.5 million in the comparable fiscal 2001 period,
  with the increase driven by the June 2001 acquisition of Einstein. Comparable
  store sales in company-operated Einstein/Noah stores were essentially flat, as
  measured against a 2001 quarter during which the chain initiated an approximate
  6% price increase. Retail sales increased substantially as a result of the
  addition of 458 company-operated stores purchased in the Einstein acquisition,
  while manufacturing revenues were bolstered by the inclusion of revenues from
  manufacturing facilities added through the acquisition. Increases in those two
  revenue categories were partially offset by a decline in franchise related
  income, due to a lower franchise store base in comparison to the prior year.
  
       EBITDA (earnings before interest, taxes, depreciation and amortization,
  gain on the sale of investments, and minority interest) increased to $5.8
  million, or 5.9% of revenues, from $0.9 million, or 8.6% of revenues in the 2001
  quarter. The decline in EBITDA as a percent of revenues reflects the shift in
  the company's business to one in which 91.5% of the 2002 quarter's revenues were
  derived from retail sales, compared with 35.1% in the 2001 quarter, as well as
  the non-recurring charges detailed below.
  
       EBITDA for the first quarter of 2002 was adversely affected by
  non-recurring charges totaling $5.1 million that were included in general and
  administrative (G&A) expenses. These included charges of approximately $2.6
  million (including related payroll tax expenses) in connection with the
  previously disclosed unauthorized bonus payments to former officers and
  employees of the company. Such unauthorized bonus payments were offset against
  payments to be made in connection with the separation of certain officers and
  employees from the company. The 2002 period's G&A also reflected extraordinary
  legal expenses of approximately $1.7 million incurred in connection with the
  company's voluntary internal investigation of the unauthorized bonus payments.
  Also included in 2002 G&A expenses are $0.6 million in performance bonuses paid
  to the former officers and employees referenced above, which the company
  believes would not have been paid both based on its recently completed
  restatement of results and in light of the unauthorized bonuses. In the 2001
  period, these individuals received $0.2 million in performance bonuses.
  Additionally, G&A expenses in the 2002 and 2001 periods included $0.2 million of
  salary and direct expenses for several of the former officers and employees
  whose positions are duplicative with others. The company does not intend to
  replace these individuals.
  
       Excluding those non-recurring charges and approximately $0.2 million in
  EBITDA losses from company-owned Manhattan Bagel stores that are being closed,
  New World would have recorded adjusted EBITDA of $11.1 million, or 11.3% of
  revenues, for the first quarter of 2002.
  
       The company reported a $12.3 million net loss for the 2002 quarter,
  compared to a $1.0 million net loss in the 2001 period. In addition to the
  aforementioned charges and expenses, the loss for the 2002
  
  
  
  <PAGE>
  
  
  
  
  quarter reflected an increase in net interest expense to $13.6 million from $0.4
  million in the 2001 period. The increase was primarily the result of interest
  and related costs incurred on debt utilized to finance the Einstein acquisition.
  Interest expense for the 2002 quarter was comprised of approximately $8.0
  million of interest paid or payable in cash and non-cash interest expense of
  approximately $5.5 million resulting from the amortization of debt discount,
  debt issuance costs, the amortization of warrants issued in connection with debt
  financings, the accretion of warrants assigned to Greenlight New World, L.L.C.,
  and the related guaranteed investment return.
  
       Results for the 2002 quarter were also impacted by an increase in
  depreciation and amortization expense to $4.5 million from $0.8 million in the
  2001 period. The increase was attributed primarily to depreciation on assets
  purchased in the Einstein acquisition, partially offset by the implementation of
  FAS 142 under which intangible assets with indefinite lives are no longer
  required to be amortized.
  
       During the 2001 quarter, New World recorded a $0.2 million gain from sale
  of debt securities. This gain, however, was offset by a $0.7 million charge for
  minority interest, attributable to accretion of the value assigned to warrants
  and the guaranteed investment return to investors in Greenlight New World. No
  such gains or minority interest charges were recorded in the first quarter of
  2002.
  
       After deducting $6.4 million for dividends and accretion on preferred
  stock, both of which are non-cash accounting adjustments, the company reported a
  net loss attributable to common stockholders of $18.7 million, or $1.07 per
  common share, in the 2002 quarter. This compared to a net loss attributable to
  common shareholders of $4.3 million, or $0.27 per common share in 2000, which
  reflected $3.3 million in dividends and accretion on preferred stock.
  
                                  Pro forma results
  
       New World also reported pro forma comparative results for the quarter. The
  pro forma results have been prepared in order to assist in the evaluation of
  changes and trends in the company's business, are for comparative purposes only,
  do not purport to be indicative of what operating results would have been had
  the Einstein acquisition actually taken place at the beginning of the 2001
  period, and may not be indicative of future operating results.
  
       On this basis, reported revenues of $98.6 million declined from a pro forma
  $122.3 million in the 2001 quarter. The decrease is primarily attributable to
  differences in the fiscal calendar between the periods, as well as a decline in
  the store base. In the core Einstein segment, the 2001 period included 16 weeks
  (112 days) of operations, compared to 13 weeks (91 days) for the 2002 period. On
  a normalized equal-week basis, Einstein sales would have increased 0.8% from
  approximately $90.5 million in the 2001 quarter to $91.2 million the 2002
  period.
  
       Revenues in the New World segment (which includes the Manhattan Bagel,
  Chesapeake Bagel, New World Coffee and Willoughby's Coffee & Tea brands),
  declined to $7.4 million from $10.5 million, primarily reflecting a decrease in
  the number of company-owned stores as a result of closings or sales of the
  locations to franchisees. At the end of the 2002 quarter, the segment had 18
  company-owned units, down from 42 stores a year ago--accounting for
  approximately $2.0 million of the sales decline. The company has closed or
  intends to close the balance of these company-operated Manhattan Bagel
  restaurants by July 15, 2002. Revenues for this segment were also affected by a
  5% decline in the segment's franchise store base to 279 from 295 a year ago.
  
       EBITDA decreased to the reported $5.8 million from a pro forma $8.2 million
  in the fiscal 2001 quarter, reflecting the impact of the fiscal calendar change
  on revenues as well as the aforementioned charges and expenses that were
  included in G&A expenses in the 2002 period. Excluding the latter items,
  
  
  
  <PAGE>
  
  
  G&A expenses would have dropped 35.8% from pro forma levels in the 2001 period.
  After also excluding the aforementioned losses from the company-owned Manhattan
  Bagel stores being closed, EBITDA adjusted for one-time restructuring charges at
  Einstein/Noah and non-recurring items would have advanced 12.1% to $11.1 million
  from the pro forma $9.9 million in the 2001 quarter.
  
       "We are pleased with the ongoing improvement in adjusted EBITDA. Excluding
  non-recurring items, we continue to exceed consecutive quarterly performance as
  well as year-over-year pro forma results," said Anthony Wedo, New World Chairman
  and Chief Executive Officer. "We believe these results clearly indicate that our
  efforts to consolidate the New World and Einstein organizations are generating
  savings. Moreover, we are continuing our efforts to leverage increased revenues
  against lower G&A costs through programs designed to enhance lunch sales in
  existing locations and expand our store base primarily through franchising and
  licensing."
  
       Mr. Wedo added: "We are rapidly moving forward on efforts to rationalize
  our capital structure, including the refinancing of our increasing rate notes.
  These efforts are of a highest priority and we expect to report progress on this
  front within the next 60 days."
  
       The company forecast that adjusted EBITDA for the second quarter of 2002,
  ending July 2, will exceed pro forma levels for the corresponding 2001 quarter
  as well as the first quarter of 2002. For the fiscal 2002 year ending
  December31, the company forecasts adjusted EBITDA in the mid- $40 million range,
  significantly exceeding adjusted pro forma EBITDA for 2001. Comparable store
  sales in company-operated Einstein/Noah stores are projected to increase by
  approximately 1.5-2% during the second quarter and by approximately 2% for all
  of fiscal 2002.
  
       New World has scheduled a conference call for today at 4:15 p.m. (EST), to
  discuss its financial results and other recent developments,). To listen to the
  call, call 1-888-278-8831. A replay will be available from 7:00 p.m. (EST) today
  through 7:00 p.m. (EST on July 19th. Additionally, a live and archived webcast
  of the call is available on the company's website,
  www.newworldrestaurantgroup.com.
  
       New World is a leading company in the quick casual sandwich industry. The
  company operates stores primarily under the Einstein Bros and Noah's New York
  Bagels brands and primarily franchises stores under the Manhattan Bagel and
  Chesapeake Bagel Bakery brands. As of May 14, 2002, the company's retail system
  consisted of 468 company-owned stores and 293 franchised and licensed stores in
  34 states. The company also operates three dough production facilities and one
  coffee roasting plant.
  
                                        *****
  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,"
  "believe" 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.
  
                                        #####
  CONTACT:
  Media/investors: Bill Parness, Parness & Associates, (732) 290-0121;
  parnespr@optonline.net
  ----------------------
  
                                   (TABLES FOLLOW)
  
  <PAGE>
  
  
                           NEW WORLD RESTAURANT GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE FIRST QUARTER ENDED APRIL 2, 2002 AND APRIL 1, 2001
                                      UNAUDITED
  
  
  --------------------------------------------------------------------------------
                                                April 2, 2002      April 1, 2001
  --------------------------------------------------------------------------------
  Revenues:
  --------------------------------------------------------------------------------
  Retail sales...................
  ................................                 $    90,184        $     3,672
  --------------------------------------------------------------------------------
  Manufacturing revenues.........
  ................................                       6,861              5,150
  --------------------------------------------------------------------------------
  Franchise related revenues.....
  ................................                       1,540              1,653
  --------------------------------------------------------------------------------
  Total revenues.................
  ................................                      98,585             10,475
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Cost of sales..................
  ................................                      80,215              7,367
  --------------------------------------------------------------------------------
  General and administrative
  expenses.......................                      12,607              2,209
  --------------------------------------------------------------------------------
  Depreciation and
  amortization...................                       4,511                787
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Income from operations.........
  ................................                       1,252                112
  --------------------------------------------------------------------------------
  Interest expense, net..........
  ................................                      13,586                444
  --------------------------------------------------------------------------------
  Gain from sale of
  investments....................                      -                     241
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  (Loss) before income taxes and
  minority interest..............                     (12,334)               (91)
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Provision for income
  taxes..........................                      -                     166
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Minority interest..............
  ................................                      -                     723
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Net (loss).....................
  ................................                     (12,334)              (980)
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Dividends and accretion on
  preferred
  --------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
  --------------------------------------------------------------------------------
  stock..........................                       6,355              3,317
  --------------------------------------------------------------------------------
  Net (loss) available to
  common stockholders............                 $   (18,689)       $    (4,297)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Net (loss) per common
  share - Basic..................                      ($1.07)            ($0.27)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Net (loss) per common
  share - Diluted................                      ($1.07)            ($0.27)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Weighted average number of
  common shares outstanding:
  --------------------------------------------------------------------------------
  Basic..........................
  ................................                  17,481,394         15,896,836
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Diluted........................
  ................................                  17,481,394         15,896,836
  ---------------------------------------------===============----================
  
  
  
                                       (MORE)
  
  
  <PAGE>
  
  
  
       The following unaudited table includes pro forma financial data for the
  quarter ended April 1, 2001, which gives effect to the Einstein Acquisition as
  if it had occurred as of the beginning of that period. All of the following
  unaudited pro forma financial data gives effect to purchase accounting
  adjustments necessary to complete the acquisition. These pro forma results have
  been prepared for the purpose of supplementary analysis only and do not purport
  to be indicative of what operating results would have been had the acquisitions
  actually taken place as of the beginning of each period reported, and may not be
  indicative of future operating results.[OBJECT OMITTED]
  
  
  --------------------------------------------------------------------------------
                                                   Actual            Proforma
  --------------------------------------------------------------------------------
                                                   4/2/02             4/1/01
  --------------------------------------------------------------------------------
                                                   (Dollars in
                                                   thousands)
  --------------------------------------------------------------------------------
  Statement of Operations Data
  --------------------------------------------------------------------------------
  Revenues:
  --------------------------------------------------------------------------------
  Einstein....................
  .............................                    $ 91,208           $ 111,778
  --------------------------------------------------------------------------------
  New World...................
                                                     7,377              10,475
  --------------------------------------------------------------------------------
  Total
  revenues....................                      98,585             122,253
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Cost of
  sales.......................                      80,215             102,077
  --------------------------------------------------------------------------------
  General and administrative
  expense                                           12,607              11,986
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  EBITDA......................
  .............................                    $  5,763           $   8,190
  ---------------------------------------------==============-----================
  
  --------------------------------------------------------------------------------
  Other Information
  --------------------------------------------------------------------------------
  Number of operating days included in fiscal period:
  --------------------------------------------------------------------------------
  Einstein....................
  .............................                          91                 112
  --------------------------------------------------------------------------------
  New World...................
                                                        91                  91
  --------------------------------------------------------------------------------
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "e-73127.txt", "secsgml_size_bytes": 24068}]
metadata_filer: {"company-data": {"conformed-name": "NEW WORLD RESTAURANT GROUP INC", "cik": "0000949373", "assigned-sic": "5812", "irs-number": "133690261", "state-of-incorporation": "DE", "fiscal-year-end": "1228"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-27148", "film-number": "02685991"}, "business-address": {"street1": "246 INDUSTRIAL WAY WEST", "street2": "C/O NEW WORLD HOLDINGS", "city": "EATONTOWN", "state": "NJ", "zip": "07724", "phone": "7325440155"}, "mail-address": {"street1": "246 INDUSTRIAL WAY WEST", "street2": "C/O NEW WORLD HOLDINGS", "city": "EATONTOWN", "state": "NJ", "zip": "07724"}, "former-company": [{"former-conformed-name": "NEW WORLD COFFEE INC", "date-changed": "19950815"}, {"former-conformed-name": "NEW WORLD COFFEE & BAGELS INC /", "date-changed": "19981007"}, {"former-conformed-name": "NEW WORLD COFFEE MANHATTAN BAGEL INC", "date-changed": "19990413"}]}
text: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
           Date of Report (Date of Earliest Event Reported) June 24, 2002
  --------------------------------------------------------------------------------
  
                          New World Restaurant Group, Inc.
  --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in its Charter)
  
  Delaware                             0-27148                      13-3690261
  --------------------------------------------------------------------------------
  (State or Other                   (Commission                   (I.R.S. Employer
  Jurisdiction of                   File Number)                    Identification
  Incorporation)                                                              No.)
  
                               246 Industrial Way West
                             Eatontown, New Jersey 07724
  --------------------------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
                                   (732) 544-0155
  --------------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
  --------------------------------------------------------------------------------
           (Former Name or Former Address, If Changed Since Last Report.)
  ITEM 5.  Other Events and Regulation FD Disclosure.
  
           Reference is made to the New World Restaurant Group, Inc. press release
  attached hereto as Exhibit 99.1, and incorporated by reference herein
  (including, without limitation, the information set forth in the cautionary
  statement contained in the press release), relating to the Company's
  announcement of its unaudited results for the quarter ended April 2, 2002.
  
  ITEM 7.  Financial Statements and Exhibits.
  
  (c)  Exhibits.
  
  Exhibit  Description
  -------  -----------
  
  99.1     Press Release issued June 24, 2002.
  SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                                       NEW WORLD RESTAURANT GROUP, INC.
  
                                       BY:   /s/ Anthony Wedo
                                           ----------------------------------
                                           Name:  Anthony Wedo
                                           Title: Chief Executive Officer
  
  Date:  June 24, 2002
  Exhibit 99.1
  
                  NEW WORLD REPORTS RESULTS FOR 1ST QUARTER OF 2002
  
  o    Adjusted EBITDA before unusual charges and legal expenses rose to $11.1
  million, exceeding trailing and year-over-year quarters
  
       EATONTOWN, NJ (6/24/02)--New World Restaurant Group (Pink Sheets: NWCI)
  today announced unaudited results for the quarter ended April 2, 2002. Results
  for the first quarter of fiscal 2002 include the operations of company-owned and
  licensed Einstein Bros. and Noah's NY Bagels stores and related production and
  support facilities, which were acquired on June 19, 2001. The company also
  reported selected unaudited pro forma comparisons, which assume that New World
  and Einstein had been combined for the first quarter of fiscal 2001.
  
       On a reported basis, total revenues for the quarter ended April 2, 2002
  rose to $98.6 million from $10.5 million in the comparable fiscal 2001 period,
  with the increase driven by the June 2001 acquisition of Einstein. Comparable
  store sales in company-operated Einstein/Noah stores were essentially flat, as
  measured against a 2001 quarter during which the chain initiated an approximate
  6% price increase. Retail sales increased substantially as a result of the
  addition of 458 company-operated stores purchased in the Einstein acquisition,
  while manufacturing revenues were bolstered by the inclusion of revenues from
  manufacturing facilities added through the acquisition. Increases in those two
  revenue categories were partially offset by a decline in franchise related
  income, due to a lower franchise store base in comparison to the prior year.
  
       EBITDA (earnings before interest, taxes, depreciation and amortization,
  gain on the sale of investments, and minority interest) increased to $5.8
  million, or 5.9% of revenues, from $0.9 million, or 8.6% of revenues in the 2001
  quarter. The decline in EBITDA as a percent of revenues reflects the shift in
  the company's business to one in which 91.5% of the 2002 quarter's revenues were
  derived from retail sales, compared with 35.1% in the 2001 quarter, as well as
  the non-recurring charges detailed below.
  
       EBITDA for the first quarter of 2002 was adversely affected by
  non-recurring charges totaling $5.1 million that were included in general and
  administrative (G&A) expenses. These included charges of approximately $2.6
  million (including related payroll tax expenses) in connection with the
  previously disclosed unauthorized bonus payments to former officers and
  employees of the company. Such unauthorized bonus payments were offset against
  payments to be made in connection with the separation of certain officers and
  employees from the company. The 2002 period's G&A also reflected extraordinary
  legal expenses of approximately $1.7 million incurred in connection with the
  company's voluntary internal investigation of the unauthorized bonus payments.
  Also included in 2002 G&A expenses are $0.6 million in performance bonuses paid
  to the former officers and employees referenced above, which the company
  believes would not have been paid both based on its recently completed
  restatement of results and in light of the unauthorized bonuses. In the 2001
  period, these individuals received $0.2 million in performance bonuses.
  Additionally, G&A expenses in the 2002 and 2001 periods included $0.2 million of
  salary and direct expenses for several of the former officers and employees
  whose positions are duplicative with others. The company does not intend to
  replace these individuals.
  
       Excluding those non-recurring charges and approximately $0.2 million in
  EBITDA losses from company-owned Manhattan Bagel stores that are being closed,
  New World would have recorded adjusted EBITDA of $11.1 million, or 11.3% of
  revenues, for the first quarter of 2002.
  
       The company reported a $12.3 million net loss for the 2002 quarter,
  compared to a $1.0 million net loss in the 2001 period. In addition to the
  aforementioned charges and expenses, the loss for the 2002
  quarter reflected an increase in net interest expense to $13.6 million from $0.4
  million in the 2001 period. The increase was primarily the result of interest
  and related costs incurred on debt utilized to finance the Einstein acquisition.
  Interest expense for the 2002 quarter was comprised of approximately $8.0
  million of interest paid or payable in cash and non-cash interest expense of
  approximately $5.5 million resulting from the amortization of debt discount,
  debt issuance costs, the amortization of warrants issued in connection with debt
  financings, the accretion of warrants assigned to Greenlight New World, L.L.C.,
  and the related guaranteed investment return.
  
       Results for the 2002 quarter were also impacted by an increase in
  depreciation and amortization expense to $4.5 million from $0.8 million in the
  2001 period. The increase was attributed primarily to depreciation on assets
  purchased in the Einstein acquisition, partially offset by the implementation of
  FAS 142 under which intangible assets with indefinite lives are no longer
  required to be amortized.
  
       During the 2001 quarter, New World recorded a $0.2 million gain from sale
  of debt securities. This gain, however, was offset by a $0.7 million charge for
  minority interest, attributable to accretion of the value assigned to warrants
  and the guaranteed investment return to investors in Greenlight New World. No
  such gains or minority interest charges were recorded in the first quarter of
  2002.
  
       After deducting $6.4 million for dividends and accretion on preferred
  stock, both of which are non-cash accounting adjustments, the company reported a
  net loss attributable to common stockholders of $18.7 million, or $1.07 per
  common share, in the 2002 quarter. This compared to a net loss attributable to
  common shareholders of $4.3 million, or $0.27 per common share in 2000, which
  reflected $3.3 million in dividends and accretion on preferred stock.
  
                                  Pro forma results
  
       New World also reported pro forma comparative results for the quarter. The
  pro forma results have been prepared in order to assist in the evaluation of
  changes and trends in the company's business, are for comparative purposes only,
  do not purport to be indicative of what operating results would have been had
  the Einstein acquisition actually taken place at the beginning of the 2001
  period, and may not be indicative of future operating results.
  
       On this basis, reported revenues of $98.6 million declined from a pro forma
  $122.3 million in the 2001 quarter. The decrease is primarily attributable to
  differences in the fiscal calendar between the periods, as well as a decline in
  the store base. In the core Einstein segment, the 2001 period included 16 weeks
  (112 days) of operations, compared to 13 weeks (91 days) for the 2002 period. On
  a normalized equal-week basis, Einstein sales would have increased 0.8% from
  approximately $90.5 million in the 2001 quarter to $91.2 million the 2002
  period.
  
       Revenues in the New World segment (which includes the Manhattan Bagel,
  Chesapeake Bagel, New World Coffee and Willoughby's Coffee & Tea brands),
  declined to $7.4 million from $10.5 million, primarily reflecting a decrease in
  the number of company-owned stores as a result of closings or sales of the
  locations to franchisees. At the end of the 2002 quarter, the segment had 18
  company-owned units, down from 42 stores a year ago--accounting for
  approximately $2.0 million of the sales decline. The company has closed or
  intends to close the balance of these company-operated Manhattan Bagel
  restaurants by July 15, 2002. Revenues for this segment were also affected by a
  5% decline in the segment's franchise store base to 279 from 295 a year ago.
  
       EBITDA decreased to the reported $5.8 million from a pro forma $8.2 million
  in the fiscal 2001 quarter, reflecting the impact of the fiscal calendar change
  on revenues as well as the aforementioned charges and expenses that were
  included in G&A expenses in the 2002 period. Excluding the latter items,
  G&A expenses would have dropped 35.8% from pro forma levels in the 2001 period.
  After also excluding the aforementioned losses from the company-owned Manhattan
  Bagel stores being closed, EBITDA adjusted for one-time restructuring charges at
  Einstein/Noah and non-recurring items would have advanced 12.1% to $11.1 million
  from the pro forma $9.9 million in the 2001 quarter.
  
       "We are pleased with the ongoing improvement in adjusted EBITDA. Excluding
  non-recurring items, we continue to exceed consecutive quarterly performance as
  well as year-over-year pro forma results," said Anthony Wedo, New World Chairman
  and Chief Executive Officer. "We believe these results clearly indicate that our
  efforts to consolidate the New World and Einstein organizations are generating
  savings. Moreover, we are continuing our efforts to leverage increased revenues
  against lower G&A costs through programs designed to enhance lunch sales in
  existing locations and expand our store base primarily through franchising and
  licensing."
  
       Mr. Wedo added: "We are rapidly moving forward on efforts to rationalize
  our capital structure, including the refinancing of our increasing rate notes.
  These efforts are of a highest priority and we expect to report progress on this
  front within the next 60 days."
  
       The company forecast that adjusted EBITDA for the second quarter of 2002,
  ending July 2, will exceed pro forma levels for the corresponding 2001 quarter
  as well as the first quarter of 2002. For the fiscal 2002 year ending
  December31, the company forecasts adjusted EBITDA in the mid- $40 million range,
  significantly exceeding adjusted pro forma EBITDA for 2001. Comparable store
  sales in company-operated Einstein/Noah stores are projected to increase by
  approximately 1.5-2% during the second quarter and by approximately 2% for all
  of fiscal 2002.
  
       New World has scheduled a conference call for today at 4:15 p.m. (EST), to
  discuss its financial results and other recent developments,). To listen to the
  call, call 1-888-278-8831. A replay will be available from 7:00 p.m. (EST) today
  through 7:00 p.m. (EST on July 19th. Additionally, a live and archived webcast
  of the call is available on the company's website,
  www.newworldrestaurantgroup.com.
  
       New World is a leading company in the quick casual sandwich industry. The
  company operates stores primarily under the Einstein Bros and Noah's New York
  Bagels brands and primarily franchises stores under the Manhattan Bagel and
  Chesapeake Bagel Bakery brands. As of May 14, 2002, the company's retail system
  consisted of 468 company-owned stores and 293 franchised and licensed stores in
  34 states. The company also operates three dough production facilities and one
  coffee roasting plant.
  
                                        *****
  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,"
  "believe" 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.
  
                                        #####
  CONTACT:
  Media/investors: Bill Parness, Parness & Associates, (732) 290-0121;
  parnespr@optonline.net
  ----------------------
  
                                   (TABLES FOLLOW)
  NEW WORLD RESTAURANT GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE FIRST QUARTER ENDED APRIL 2, 2002 AND APRIL 1, 2001
                                      UNAUDITED
  
  --------------------------------------------------------------------------------
                                                April 2, 2002      April 1, 2001
  --------------------------------------------------------------------------------
  Revenues:
  --------------------------------------------------------------------------------
  Retail sales...................
  ................................                 $    90,184        $     3,672
  --------------------------------------------------------------------------------
  Manufacturing revenues.........
  ................................                       6,861              5,150
  --------------------------------------------------------------------------------
  Franchise related revenues.....
  ................................                       1,540              1,653
  --------------------------------------------------------------------------------
  Total revenues.................
  ................................                      98,585             10,475
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Cost of sales..................
  ................................                      80,215              7,367
  --------------------------------------------------------------------------------
  General and administrative
  expenses.......................                      12,607              2,209
  --------------------------------------------------------------------------------
  Depreciation and
  amortization...................                       4,511                787
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Income from operations.........
  ................................                       1,252                112
  --------------------------------------------------------------------------------
  Interest expense, net..........
  ................................                      13,586                444
  --------------------------------------------------------------------------------
  Gain from sale of
  investments....................                      -                     241
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  (Loss) before income taxes and
  minority interest..............                     (12,334)               (91)
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Provision for income
  taxes..........................                      -                     166
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Minority interest..............
  ................................                      -                     723
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Net (loss).....................
  ................................                     (12,334)              (980)
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Dividends and accretion on
  preferred
  --------------------------------------------------------------------------------
  --------------------------------------------------------------------------------
  stock..........................                       6,355              3,317
  --------------------------------------------------------------------------------
  Net (loss) available to
  common stockholders............                 $   (18,689)       $    (4,297)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Net (loss) per common
  share - Basic..................                      ($1.07)            ($0.27)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Net (loss) per common
  share - Diluted................                      ($1.07)            ($0.27)
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Weighted average number of
  common shares outstanding:
  --------------------------------------------------------------------------------
  Basic..........................
  ................................                  17,481,394         15,896,836
  ---------------------------------------------===============----================
  
  --------------------------------------------------------------------------------
  Diluted........................
  ................................                  17,481,394         15,896,836
  ---------------------------------------------===============----================
  
                                       (MORE)
  The following unaudited table includes pro forma financial data for the
  quarter ended April 1, 2001, which gives effect to the Einstein Acquisition as
  if it had occurred as of the beginning of that period. All of the following
  unaudited pro forma financial data gives effect to purchase accounting
  adjustments necessary to complete the acquisition. These pro forma results have
  been prepared for the purpose of supplementary analysis only and do not purport
  to be indicative of what operating results would have been had the acquisitions
  actually taken place as of the beginning of each period reported, and may not be
  indicative of future operating results.[OBJECT OMITTED]
  
  --------------------------------------------------------------------------------
                                                   Actual            Proforma
  --------------------------------------------------------------------------------
                                                   4/2/02             4/1/01
  --------------------------------------------------------------------------------
                                                   (Dollars in
                                                   thousands)
  --------------------------------------------------------------------------------
  Statement of Operations Data
  --------------------------------------------------------------------------------
  Revenues:
  --------------------------------------------------------------------------------
  Einstein....................
  .............................                    $ 91,208           $ 111,778
  --------------------------------------------------------------------------------
  New World...................
                                                     7,377              10,475
  --------------------------------------------------------------------------------
  Total
  revenues....................                      98,585             122,253
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  Cost of
  sales.......................                      80,215             102,077
  --------------------------------------------------------------------------------
  General and administrative
  expense                                           12,607              11,986
  --------------------------------------------------------------------------------
  
  --------------------------------------------------------------------------------
  EBITDA......................
  .............................                    $  5,763           $   8,190
  ---------------------------------------------==============-----================
  
  --------------------------------------------------------------------------------
  Other Information
  --------------------------------------------------------------------------------
  Number of operating days included in fiscal period:
  --------------------------------------------------------------------------------
  Einstein....................
  .............................                          91                 112
  --------------------------------------------------------------------------------
  New World...................
                                                        91                  91
  --------------------------------------------------------------------------------