Bojangles’, Inc. (Bojangles’) (NASDAQ:BOJA) today announced
financial results for the 13-week third fiscal quarter ended
September 25, 2016. Bojangles’ also updated its annual
guidance for its fiscal year 2016, which is a 52-week period ending
on December 25, 2016.
Financial Highlights for Third Fiscal
Quarter 2016
- System-wide comparable restaurant sales increased 0.8% while
company-operated comparable restaurant sales decreased 0.2% and
franchised comparable restaurant sales increased 1.4%;
- Total revenues increased 7.2% to $133.2 million from $124.3
million;
- 10 system-wide restaurants were opened – 6 company-operated
restaurants and 4 franchised restaurants;
- Net Income increased 12.4% to $10.0 million from $8.9
million;
- Diluted Net Income per Share increased 12.5% to $0.27 from
$0.24;
- Adjusted Net Income* increased 9.0% to $9.3 million from $8.5
million;
- Adjusted Diluted Net Income per Share* increased 8.7% to $0.25
from $0.23; and
- Adjusted EBITDA* increased 8.4% to $22.2 million from $20.5
million.
* Descriptions of Adjusted Net Income, Adjusted
Diluted Net Income per Share, Adjusted EBITDA and other non-GAAP
financial measures are provided in “Use and Definition of Non-GAAP
Measures,” and reconciliations to GAAP figures are provided in the
tables at the end of this release.
“We were pleased with our overall performance
amid a challenging quarter for the industry as our total revenues
rose 7.2% while Adjusted EBITDA and Adjusted Net Income expanded at
slightly higher rates of 8.4% and 9.0%, respectively. The
Bojangles’® system has now generated 26 consecutive quarters of
positive comparable restaurant sales including a 0.8% increase
during the third fiscal quarter, 4.8% growth on a two-year stacked
basis and 10.1% growth on a three-year stacked basis,” said
Bojangles’ President and CEO Clifton Rutledge.
“We have completed the research phase of our
‘Bojangles’ of the Future’ project and have begun the testing phase
having already broken ground on our first location in Greenville,
South Carolina. This new prototype will set the direction and
standard for Bojangles’ restaurant design and remodels well into
the future, ensuring that our ambiance complements our
freshly-made, high quality food and restaurant hospitality.
Creating the best experience possible at all Bojangles’ restaurants
will also be accomplished through greater use of technology such as
implementing mobile payment, large online ordering, and a loyalty
program that can be leveraged across our system. We are
making the necessary investments now to build these capabilities
and expect to launch these initiatives over the next 18-24 months,”
he added.
“We are excited to be creating more Bo Fanatics
and loyal customers across the southeast who appreciate our unique
southern-inspired menu items and exceptional value. Our
Bojangles’ system net unit count is poised to expand by
approximately 8% during this fiscal year, making us among the
fastest growing brands in the limited service restaurant
category. Through balanced development between
company-operated and franchised restaurants, we are adding to our
presence in core North and South Carolina markets as well as in
adjacent states,” he concluded.
Third Fiscal Quarter 2016 Financial
ReviewSystem-wide comparable restaurant sales increased
0.8%, consisting of a 0.2% decrease in company-operated comparable
restaurant sales and a 1.4% increase in franchised comparable
restaurant sales. The comparable restaurant sales decline at
company-operated restaurants was composed of a decrease in
transactions, partially offset by increases in price.
Total revenues increased 7.2% to $133.2 million
in the third fiscal quarter of 2016 from $124.3 million in the
prior year fiscal quarter. The increase was primarily due to
a net additional 42 system-wide restaurants at September 25, 2016
compared to September 27, 2015.
Company restaurant revenues increased 7.5% to
$126.4 million in the third fiscal quarter of 2016 from $117.5
million in the prior year fiscal quarter. Franchise royalty
revenues increased 4.7% to $6.7 million in the third fiscal quarter
of 2016 from $6.4 million in the prior year fiscal quarter.
Restaurant contribution, a non-GAAP measure,
increased 6.1% to $23.3 million in the third fiscal quarter of 2016
from $21.9 million in the prior year fiscal quarter. As a
percentage of company restaurant revenues, restaurant contribution
margin, a non-GAAP measure, decreased to 18.4% in the third fiscal
quarter of 2016 from 18.7% in the prior year fiscal quarter.
General and administrative expenses decreased
7.8% to $9.3 million in the third fiscal quarter of 2016 from $10.1
million in the prior year fiscal quarter. The decline was
primarily due to lower incentive compensation and lower executive
separation expenses, partially offset by headcount added to support
our growing restaurant system.
Net Income increased 12.4% to $10.0 million in
the third fiscal quarter of 2016 compared to $8.9 million in the
prior year fiscal quarter. Diluted Net Income per Share
increased 12.5% to $0.27 in the third fiscal quarter of 2016
compared to $0.24 in the prior year fiscal quarter.
Adjusted EBITDA, a non-GAAP measure, increased
8.4% to $22.2 million in the third fiscal quarter of 2016 from
$20.5 million in the prior year fiscal quarter.
Adjusted Net Income, a non-GAAP measure,
increased 9.0% to $9.3 million in the third fiscal quarter of 2016
compared to $8.5 million in the prior year fiscal quarter.
Adjusted Diluted Net Income per Share increased 8.7% to $0.25 in
the third fiscal quarter of 2016 compared to $0.23 in the prior
year fiscal quarter.
Fiscal Year 2016
GuidanceBojangles’ has updated its annual outlook for the
52-week period ending on December 25, 2016:
- Total revenues of $530.5 million to $533.5 million (previously
$530.0 million to $533.0 million);
- System-wide comparable restaurant sales growth of flat to
low-single digits (unchanged);
- The opening of 56 to 59 system-wide restaurants (previously 60
to 65);
- 28 to 29 company-operated restaurants (unchanged);
- 28 to 30 franchised restaurants (previously 32 to 36);
- Net increase of 50 to 53 system-wide restaurants (previously 53
to 58);
- Net increase of 26 to 27 company-operated restaurants
(unchanged);
- Net increase of 24 to 26 franchised restaurants (previously 27
to 31);
- Restaurant contribution margin of 18.0% to 18.2% (previously
17.7% to 18.1%)
- General and administrative expenses of $38.5 million to $39.5
million (previously $39.0 million to $39.5 million);
- Adjusted Diluted Net Income per Share of $0.92 to $0.95
(previously $0.88 to $0.92); and
- Adjusted EBITDA of $84.5 million to $86.5 million (previously
$83.5 million to $85.5 million).
We have not reconciled guidance for Adjusted
Diluted Net Income per Share or Adjusted EBITDA to the
corresponding GAAP financial measures because we do not provide
guidance for the various reconciling items. We are unable to
provide guidance for these reconciling items because we cannot
determine their probable significance, as certain items are outside
of our control and cannot be reasonably predicted due to the fact
that these items could vary significantly from period to period.
Accordingly, reconciliations to the corresponding GAAP
financial measures are not available without unreasonable
effort.
Conference Call and Webcast
TodayBojangles’ will host a conference call and webcast to
discuss the third fiscal quarter 2016 results and fiscal year 2016
guidance today at 5:00 p.m. Eastern Daylight Time. The
conference call dial-in number is 1-201-493-6725. A telephone
replay will be available through Saturday, December 3, 2016 and may
be accessed by dialing 1-858-384-5517. The conference ID is
13645534.
The conference call will also be webcast live
and later archived on the Investors section of our website at
www.bojangles.com.
About Bojangles’,
Inc.Bojangles', Inc. is a highly differentiated and
growing restaurant operator and franchisor dedicated to serving
customers high-quality, craveable food made from our Southern
recipes. Founded in 1977 in Charlotte, N.C., Bojangles'
serves menu items such as delicious, famous chicken,
made-from-scratch buttermilk biscuits, flavorful fixin's and
Legendary Iced Tea®. At September 25, 2016, Bojangles' had
699 system-wide restaurants, of which 301 were company-operated and
398 were franchised restaurants, primarily located in the
Southeastern United States. For more information, visit
www.bojangles.com or follow Bojangles' on Facebook and Twitter.
Use and Definition of Non-GAAP
MeasuresWe utilize certain non-GAAP measures when
assessing the operational strength and the performance of our
business. We believe these non-GAAP measures assist our board
of directors, management and investors in comparing our operating
performance on a consistent basis from period to period by
isolating the effects of some items that vary from period to period
without any correlation to core operating performance or that vary
significantly among similar companies. Bojangles’ cautions that
non-GAAP measures should be considered in addition to, but not as a
substitute for, reported GAAP results.
Comparable restaurant sales reflects the change
in year-over-year sales for the comparable restaurant base (as
applicable, system-wide, franchised or company-operated
restaurants). A restaurant enters our comparable restaurant
base the first full day of the month after being open for 15 months
using a mid-month convention.
Restaurant contribution is defined as company
restaurant revenues less food and supplies costs, restaurant labor
costs and operating costs, as identified by the reconciliation
table below. Restaurant contribution margin is defined as
restaurant contribution as a percentage of company restaurant
revenues. Restaurant contribution and restaurant contribution
margin are supplemental measures of operating performance of our
company-operated restaurants and our calculations thereof may not
be comparable to those reported by other companies.
Restaurant contribution and restaurant contribution margin have
limitations as analytical tools and should not be considered in
isolation or as substitutes for analysis of our results as reported
under GAAP.
Adjusted Net Income represents company net
income before items that we do not consider representative of our
ongoing operating performance, as well as an estimate of recurring
incremental legal, accounting, insurance and other operating and
compliance costs we expect to incur as a public company for those
periods where they had not yet been incurred, both as identified in
the reconciliation table below. Adjusted Diluted Net Income
per Share represents company diluted net income per share before
items that we do not consider representative of our ongoing
operating performance, as well as an estimate of recurring
incremental legal, accounting, insurance and other operating and
compliance costs we expect to incur as a public company for those
periods where they had not yet been incurred, both as identified in
the reconciliation table below.
EBITDA represents company net income before
interest expense (net of interest income), provision for income
taxes and depreciation and amortization. Adjusted EBITDA represents
company net income before interest expense (net of interest
income), provision for income taxes, depreciation and amortization,
items that we do not consider representative of our ongoing
operating performance and certain non-cash items, as identified in
the reconciliation table below.
Adjusted Net Income, Adjusted Diluted Net Income
per Share, EBITDA and Adjusted EBITDA are supplemental measures of
our performance that are neither required by, nor presented in
accordance with, GAAP. Adjusted Net Income, Adjusted Diluted
Net Income per Share, EBITDA and Adjusted EBITDA are not
measurements of our financial performance under GAAP and should not
be considered as alternatives to net income, operating income or
any other performance measures derived in accordance with GAAP or
as alternatives to cash flow from operating activities as a measure
of our liquidity. In addition, in evaluating Adjusted Net
Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted
EBITDA, you should be aware that in the future we will incur
expenses or charges such as those added back to calculate Adjusted
Net Income, Adjusted Diluted Net Income per Share, EBITDA and
Adjusted EBITDA.
Forward-Looking StatementsThis
release contains forward-looking statements. All statements
other than statements of historical or current facts included in
this release are forward-looking statements. Forward-looking
statements discuss our current expectations, projections and
guidance relating to our financial condition, results of
operations, plans, objectives, future performance and business.
These statements may be preceded by, followed by or include
the words “aim,” “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “intend,” “outlook,” “plan,” “potential,” “project,”
“projection,” “seek,” “may,” “could,” “would,” “will,” “should,”
“can,” “can have,” “likely,” the negatives thereof and other words
and terms of similar meaning.
Forward-looking statements are inherently
subject to risks, uncertainties and assumptions; they are not
guarantees of performance. Actual results may differ
materially from these expectations due to risks relating to our
vulnerability to changes in consumer preferences and economic
conditions; our ability to open restaurants in new and existing
markets and expand our franchise system; our ability to generate
comparable restaurant sales growth; financial or other difficulties
which could cause our restaurants and our franchisees’ restaurants
to close; our ability to generate increased sales or profits from
new menu items, advertising campaigns, changes in discounting
strategy and restaurant designs and remodels; cancellation or delay
in anticipated future restaurant openings; our reliance on, limited
degree of control over and potential responsibility for, our
franchisees; increases in the cost of chicken, pork, dairy, wheat,
corn and other products; our ability to compete successfully with
other quick-service and fast-casual restaurants; our vulnerability
to conditions in the Southeastern United States; negative
publicity, whether or not valid; concerns about food safety and
quality and about food-borne illnesses, including adverse public
perception due to the occurrence of avian flu, swine flu or other
food-borne illnesses; changes in employment and labor laws; labor
shortages and increases in labor costs; and our dependence upon
frequent and timely deliveries of restaurant food and other
supplies. For further details and discussion of these and
other risks and uncertainties, see our Annual Report on Form 10-K
for the fiscal year ended December 27, 2015 filed with the
Securities and Exchange Commission on March 11, 2016, as updated by
our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 25, 2016 to be filed with the Securities and Exchange
Commission. Each of the documents referred to in the preceding
sentence are available at www.sec.gov. You should not place
undue reliance on these statements. We have based these
forward-looking statements on our current expectations and
projections about future events. Although we believe that our
assumptions made in connection with the forward-looking statements
are reasonable, we cannot assure you that the assumptions and
expectations will prove to be correct.
All forward-looking statements are expressly
qualified in their entirety by the foregoing cautionary statements.
In addition, all forward-looking statements speak only as of
the date of this earnings release. We undertake no
obligations to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise other than as required under the federal securities
laws.
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Balance
Sheets |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
September
25, 2016 |
|
December 27, 2015 |
|
Current
assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
|
19,479 |
|
|
14,263 |
|
|
Accounts
and vendor receivables, net |
|
|
3,889 |
|
|
4,736 |
|
|
Accounts
receivable, related parties, net |
|
|
428 |
|
|
403 |
|
|
Inventories, net |
|
|
3,080 |
|
|
3,080 |
|
|
Other
current assets |
|
|
3,504 |
|
|
5,639 |
|
|
|
|
|
|
Total
current assets |
|
|
30,380 |
|
|
28,121 |
|
|
Property
and equipment, net |
|
|
51,907 |
|
|
48,137 |
|
|
Goodwill |
|
|
|
|
161,140 |
|
|
161,140 |
|
|
Brand |
|
|
|
|
|
290,500 |
|
|
290,500 |
|
|
Franchise
rights, net |
|
|
24,518 |
|
|
25,341 |
|
|
Favorable
leases, net |
|
|
1,073 |
|
|
1,394 |
|
|
Other
noncurrent assets |
|
|
3,734 |
|
|
3,673 |
|
|
|
|
|
|
Total
assets |
$ |
|
563,252 |
|
|
558,306 |
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
$ |
|
14,058 |
|
|
17,893 |
|
|
Accrued
expenses |
|
|
23,850 |
|
|
19,086 |
|
|
Current
maturities of long-term debt |
|
— |
|
— |
|
|
Current
maturities of capital lease obligations |
|
|
6,568 |
|
|
5,968 |
|
|
Other
current liabilities |
|
|
5,795 |
|
|
2,155 |
|
|
|
|
|
|
Total
current liabilities |
|
|
50,271 |
|
|
45,102 |
|
|
Long-term
debt, less current maturities and deferred debt issuance costs,
net |
|
|
168,566 |
|
|
197,735 |
|
|
Deferred
income taxes |
|
|
110,818 |
|
|
115,028 |
|
|
Capital
lease obligations, less current maturities |
|
|
21,906 |
|
|
21,483 |
|
|
Other
noncurrent liabilities |
|
|
13,571 |
|
|
11,834 |
|
|
|
|
|
|
Total
liabilities |
|
|
365,132 |
|
|
391,182 |
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred
stock |
|
— |
|
— |
|
|
Common
stock |
|
|
364 |
|
|
360 |
|
|
Additional
paid-in capital |
|
|
122,660 |
|
|
119,084 |
|
|
Retained
earnings |
|
|
75,555 |
|
|
47,661 |
|
|
Accumulated
other comprehensive (loss) income |
|
|
(459 |
) |
|
19 |
|
|
|
|
|
|
Total
stockholders’ equity |
|
|
198,120 |
|
|
167,124 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
|
563,252 |
|
|
558,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Statements of
Operations |
|
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurant revenues |
$ |
|
126,358 |
|
|
|
117,536 |
|
|
|
|
372,446 |
|
|
|
339,914 |
|
|
|
Franchise
royalty revenues |
|
|
6,739 |
|
|
|
6,436 |
|
|
|
|
19,532 |
|
|
|
18,740 |
|
|
|
Other
franchise revenues |
|
|
100 |
|
|
|
287 |
|
|
|
|
470 |
|
|
|
768 |
|
|
|
|
|
|
|
Total
revenues |
|
|
133,197 |
|
|
|
124,259 |
|
|
|
|
392,448 |
|
|
|
359,422 |
|
|
Company
restaurant operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Food and
supplies costs |
|
|
39,331 |
|
|
|
37,223 |
|
|
|
|
116,872 |
|
|
|
110,508 |
|
|
|
Restaurant
labor costs |
|
|
35,115 |
|
|
|
32,429 |
|
|
|
|
102,976 |
|
|
|
94,075 |
|
|
|
Operating
costs |
|
|
28,625 |
|
|
|
25,936 |
|
|
|
|
83,645 |
|
|
|
74,120 |
|
|
|
Depreciation and amortization |
|
|
3,225 |
|
|
|
2,990 |
|
|
|
|
9,432 |
|
|
|
8,378 |
|
|
|
|
|
|
|
Total
Company restaurant operating expenses |
|
|
106,296 |
|
|
|
98,578 |
|
|
|
|
312,925 |
|
|
|
287,081 |
|
|
|
|
|
|
|
Operating
income before other operating expenses |
|
|
26,901 |
|
|
|
25,681 |
|
|
|
|
79,523 |
|
|
|
72,341 |
|
|
Other
operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
|
9,276 |
|
|
|
10,064 |
|
|
|
|
28,189 |
|
|
|
32,694 |
|
|
|
Depreciation and amortization |
|
|
745 |
|
|
|
725 |
|
|
|
|
2,178 |
|
|
|
2,075 |
|
|
|
Impairment |
|
|
|
592 |
|
|
|
193 |
|
|
|
|
981 |
|
|
|
208 |
|
|
|
Loss (gain)
on disposal of property and equipment |
|
|
138 |
|
|
|
220 |
|
|
|
|
(51 |
) |
|
|
232 |
|
|
|
|
|
|
|
Total other
operating expenses |
|
|
10,751 |
|
|
|
11,202 |
|
|
|
|
31,297 |
|
|
|
35,209 |
|
|
|
|
|
|
|
Operating
income |
|
|
16,150 |
|
|
|
14,479 |
|
|
|
|
48,226 |
|
|
|
37,132 |
|
|
Amortization of deferred debt issuance costs |
|
|
(199 |
) |
|
|
(208 |
) |
|
|
|
(567 |
) |
|
|
(622 |
) |
|
Interest
income |
|
|
— |
|
— |
|
|
|
4 |
|
|
|
6 |
|
|
Interest
expense |
|
|
(1,819 |
) |
|
|
(2,001 |
) |
|
|
|
(5,782 |
) |
|
|
(6,394 |
) |
|
|
|
|
|
|
Income
before income taxes |
|
|
14,132 |
|
|
|
12,270 |
|
|
|
|
41,881 |
|
|
|
30,122 |
|
|
Income
taxes |
|
|
|
4,113 |
|
|
|
3,360 |
|
|
|
|
13,987 |
|
|
|
11,440 |
|
|
|
|
|
|
|
Net
income |
$ |
|
10,019 |
|
|
|
8,910 |
|
|
|
|
27,894 |
|
|
|
18,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
|
0.28 |
|
|
|
0.25 |
|
|
|
|
0.77 |
|
|
|
0.99 |
|
|
|
|
|
|
|
Diluted |
$ |
|
0.27 |
|
|
|
0.24 |
|
|
|
|
0.74 |
|
|
|
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computing net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
36,355 |
|
|
|
35,951 |
|
|
|
|
36,195 |
|
|
|
18,830 |
|
|
|
|
|
|
|
Diluted |
|
|
37,650 |
|
|
|
37,526 |
|
|
|
|
37,561 |
|
|
|
37,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Cash flows
from operating activities: |
|
|
|
|
|
|
Net
income |
|
$ |
|
27,894 |
|
|
|
18,682 |
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Deferred
income tax benefit |
|
|
(2,244 |
) |
|
|
(3,356 |
) |
|
|
|
|
Depreciation and amortization |
|
|
11,610 |
|
|
|
10,453 |
|
|
|
|
|
Amortization of deferred debt issuance costs |
|
|
567 |
|
|
|
622 |
|
|
|
|
|
Impairment |
|
|
981 |
|
|
|
208 |
|
|
|
|
|
(Gain) loss
on disposal of property and equipment |
|
|
(51 |
) |
|
|
232 |
|
|
|
|
|
(Benefit)
provision for doubtful accounts |
|
|
(65 |
) |
|
|
53 |
|
|
|
|
|
Provision
for inventory spoilage |
|
|
7 |
|
|
|
9 |
|
|
|
|
|
Benefit for
closed stores |
|
|
(51 |
) |
|
|
(50 |
) |
|
|
|
|
Stock-based
compensation |
|
|
953 |
|
|
|
1,711 |
|
|
|
|
|
Excess tax
benefit from stock-based compensation |
|
|
(1,770 |
) |
|
|
(421 |
) |
|
|
|
|
Changes in
operating assets and liabilities |
|
|
4,950 |
|
|
|
4,945 |
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
|
42,781 |
|
|
|
33,088 |
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
Purchases
of franchisee's assets |
|
|
(100 |
) |
|
|
(186 |
) |
|
|
Purchases
of property and equipment |
|
|
(5,950 |
) |
|
|
(8,591 |
) |
|
|
Proceeds
from disposition of property and equipment |
|
|
49 |
|
|
|
36 |
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
|
(6,001 |
) |
|
|
(8,741 |
) |
|
Cash flows
from financing activities: |
|
|
|
|
|
|
Principal
payments on long-term debt |
|
|
(29,736 |
) |
|
|
(19,055 |
) |
|
|
Debt
issuance costs |
|
— |
|
|
(555 |
) |
|
|
Stock
option exercises |
|
|
857 |
|
|
|
96 |
|
|
|
Excess tax
benefit from stock-based compensation |
|
|
1,770 |
|
|
|
421 |
|
|
|
Principal
payments on capital lease obligations |
|
|
(4,455 |
) |
|
|
(3,405 |
) |
|
|
|
|
|
|
Net cash
used in financing activities |
|
|
(31,564 |
) |
|
|
(22,498 |
) |
|
|
|
|
|
|
Net
increase in cash and cash equivalents |
|
|
5,216 |
|
|
|
1,849 |
|
|
Cash and
cash equivalents balance, beginning of fiscal period |
|
|
14,263 |
|
|
|
13,201 |
|
|
Cash and
cash equivalents balance, end of fiscal period |
$ |
|
19,479 |
|
|
|
15,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Net Income to
EBITDA and Adjusted EBITDA |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Net
income |
|
|
$ |
10,019 |
|
8,910 |
|
|
27,894 |
|
18,682 |
|
Income
taxes |
|
|
|
4,113 |
|
3,360 |
|
|
13,987 |
|
11,440 |
|
Interest
expense, net |
|
1,819 |
|
2,001 |
|
|
5,778 |
|
6,388 |
|
Depreciation and amortization (a) |
|
4,169 |
|
3,923 |
|
|
12,177 |
|
11,075 |
|
EBITDA |
|
|
|
|
|
20,120 |
|
18,194 |
|
|
59,836 |
|
47,585 |
|
Non-cash
rent (b) |
|
|
414 |
|
389 |
|
|
1,185 |
|
1,168 |
|
Stock-based
compensation (c) |
|
404 |
|
309 |
|
|
953 |
|
1,711 |
|
Payroll
taxes associated with stock option exercises (d) |
|
8 |
|
— |
|
|
79 |
|
17 |
|
Preopening
expenses (e) |
|
346 |
|
326 |
|
|
942 |
|
1,064 |
|
Sponsor and
board member fees and expenses (f) |
|
— |
|
— |
|
|
— |
|
166 |
|
Certain
professional, transaction and other costs (g) |
|
24 |
|
160 |
|
|
66 |
|
5,041 |
|
Distributor
transition costs (h) |
|
— |
|
217 |
|
|
81 |
|
217 |
|
Executive
separation expenses (i) |
|
197 |
|
507 |
|
|
197 |
|
507 |
|
Impairment
and dispositions (j) |
|
730 |
|
421 |
|
|
979 |
|
476 |
|
Adjusted EBITDA |
$ |
22,243 |
|
20,523 |
|
|
64,318 |
|
57,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Includes amortization of deferred debt issuance costs. |
|
(b) |
Includes deferred rent, which represents the extent to which
our rent expense has been above or below our cash rent payments,
amortization of favorable (unfavorable) leases and closed store
reserves for rent net of cash payments. We expect to continue to
incur similar expenses in future periods as we record rent expense
in accordance with GAAP, as well as continue to amortize favorable
(unfavorable) leases and record closed store reserves. |
|
(c) |
Represents non-cash, stock-based compensation. We expect to
incur similar expenses in future periods as we record stock-based
compensation related to existing grants (and any potential future
grants) in accordance with GAAP. |
|
(d) |
Represents payroll taxes associated with stock option
exercises related to stock options that were outstanding prior to
our initial public offering. We expect to incur similar expenses in
future periods when our directors or employees exercise stock
options that were outstanding prior to our initial public
offering. |
|
(e) |
Includes expenses directly associated with the opening of
company-operated restaurants and incurred prior to the opening of a
company-operated restaurant. We expect to continue to incur similar
expenses as we open company-operated restaurants. |
|
(f) |
Includes reimbursement of expenses to our sponsor prior to our
initial public offering and compensation and expense reimbursement
to members of our board prior to our initial public
offering. |
|
(g) |
Includes costs associated with third-party consultants for
one-time projects, public offering expenses and certain
professional fees and transaction costs related to financing
transactions. We could incur similar expenses in future periods if
we commence additional public offerings, financing transactions or
other one-time projects. |
|
(h) |
Includes expenses incurred in connection with the transition
to our new distributor. |
|
(i) |
Represents severance and legal fees associated with a former
executive's departure from the Company. Subsequent to September 25,
2016, we finalized the separation agreement with this former
executive and incurred approximately $0.1 million of additional
legal fees and other related expenses during the thirteen weeks
ending December 25, 2016. |
|
(j) |
Includes loss (gain) on disposal of property and equipment,
impairment and cash proceeds on disposals from disposition of
property and equipment. We could continue to record impairment
expense in future periods if performance of company-operated
restaurants is not sufficient to recover the carrying amount of the
related long-lived assets. We expect to incur future losses (gains)
and to receive cash proceeds on disposal of property and equipment
associated with retirement, replacement or write-off of fixed
assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Net Income to
Adjusted Net Income |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Net
income |
|
|
$ |
|
10,019 |
|
|
|
8,910 |
|
|
|
|
27,894 |
|
|
|
18,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
professional and transaction costs (a) |
|
|
24 |
|
|
|
160 |
|
|
|
|
66 |
|
|
|
5,041 |
|
|
Incremental
public company costs (b) |
|
— |
|
|
(104 |
) |
|
|
— |
|
|
(898 |
) |
|
Vesting of
performance-based stock options (c) |
|
— |
|
— |
|
|
— |
|
|
707 |
|
|
Payroll
taxes associated with stock option exercises (d) |
|
|
8 |
|
|
— |
|
|
|
79 |
|
|
|
17 |
|
|
Distributor
transition costs (e) |
|
— |
|
|
217 |
|
|
|
|
81 |
|
|
|
217 |
|
|
Executive
separation expenses (f) |
|
|
197 |
|
|
|
507 |
|
|
|
|
197 |
|
|
|
507 |
|
|
State
income tax rate change (g) |
|
|
(908 |
) |
|
|
(903 |
) |
|
|
|
(908 |
) |
|
|
(903 |
) |
|
Tax impact
of adjustments (h) |
|
|
(82 |
) |
|
|
(296 |
) |
|
|
|
(156 |
) |
|
|
(469 |
) |
|
Total adjustments |
|
|
(761 |
) |
|
|
(419 |
) |
|
|
|
(641 |
) |
|
|
4,219 |
|
|
Adjusted Net Income |
$ |
|
9,258 |
|
|
|
8,491 |
|
|
|
|
27,253 |
|
|
|
22,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Diluted Net Income
Per Share to Adjusted Diluted Net Income Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Diluted net income per share |
$ |
|
0.27 |
|
|
|
0.24 |
|
|
|
|
0.74 |
|
|
|
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
professional and transaction costs (a) |
|
— |
|
— |
|
|
— |
|
|
0.13 |
|
|
Incremental
public company costs (b) |
|
— |
|
— |
|
|
— |
|
|
(0.02 |
) |
|
Vesting of
performance-based stock options (c) |
|
— |
|
— |
|
|
— |
|
|
0.02 |
|
|
Payroll
taxes associated with stock option exercises (d) |
|
— |
|
— |
|
|
— |
|
— |
|
Distributor
transition costs (e) |
|
— |
|
|
0.01 |
|
|
|
— |
|
|
0.01 |
|
|
Executive
separation expenses (f) |
|
— |
|
|
0.01 |
|
|
|
|
0.01 |
|
|
|
0.01 |
|
|
State
income tax rate change (g) |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
|
|
|
(0.02 |
) |
|
|
(0.02 |
) |
|
Tax impact
of adjustments (h) |
|
— |
|
|
(0.01 |
) |
|
|
— |
|
|
(0.02 |
) |
|
Total adjustments |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
|
(0.01 |
) |
|
|
0.11 |
|
|
Adjusted Diluted Net Income per Share |
$ |
|
0.25 |
|
|
|
0.23 |
|
|
|
|
0.73 |
|
|
|
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Includes costs associated with third-party consultants for
one-time projects, public offering expenses and certain
professional fees and transaction costs related to financing
transactions. We could incur similar expenses in future periods if
we commence additional public offerings, financing transactions or
other one-time projects. |
|
(b) |
Reflects an estimate of recurring incremental legal,
accounting, insurance and other operating and compliance costs we
expect to incur as a public company in addition to actual amounts
incurred. By its nature, this adjustment involves risks and
uncertainties, and the actual costs incurred could be different
than this adjustment. No adjustments will be made beyond the second
fiscal quarter 2016 since the one year anniversary of our initial
public offering occurred during the thirteen weeks ended June 26,
2016. |
|
(c) |
Includes non-cash, stock-based compensation related to the
vesting of certain performance based stock option awards. We could
incur similar expenses in future periods upon the achievement of
the performance metrics indicated in the stock option
grants. |
|
(d) |
Represents payroll taxes associated with stock option
exercises related to stock options that were outstanding prior to
our initial public offering. We expect to incur similar expenses in
future periods when our directors or employees exercise stock
options that were outstanding prior to our initial public
offering. |
|
(e) |
Includes expenses incurred in connection with the transition
to our new distributor. |
|
(f) |
Represents severance and legal fees associated with a former
executive's departure from the Company. Subsequent to September 25,
2016, we finalized the separation agreement with this former
executive and incurred approximately $0.1 million of additional
legal fees and other related expenses during the thirteen weeks
ending December 25, 2016. |
|
(g) |
As a result of the enacted reductions to the North Carolina
corporate income tax rate, we adjusted our deferred income taxes by
applying the lower rate, which resulted in a corresponding decrease
to income tax expense. |
|
(h) |
Represents the income tax expense associated with the
adjustments in (a) through (g) that are deductible for income tax
purposes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Company Restaurant
Revenues to Restaurant Contribution |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
25, 2016 |
|
September
27, 2015 |
|
|
September
25, 2016 |
|
September
27, 2015 |
|
Company
restaurant revenues |
$ |
|
126,358 |
|
|
|
117,536 |
|
|
|
|
372,446 |
|
|
|
339,914 |
|
|
Food and
supplies costs |
|
|
(39,331 |
) |
|
|
(37,223 |
) |
|
|
|
(116,872 |
) |
|
|
(110,508 |
) |
|
Restaurant
labor costs |
|
|
(35,115 |
) |
|
|
(32,429 |
) |
|
|
|
(102,976 |
) |
|
|
(94,075 |
) |
|
Operating
costs |
|
|
(28,625 |
) |
|
|
(25,936 |
) |
|
|
|
(83,645 |
) |
|
|
(74,120 |
) |
|
Restaurant contribution |
$ |
|
23,287 |
|
|
|
21,948 |
|
|
|
|
68,953 |
|
|
|
61,211 |
|
|
Restaurant contribution margin |
|
|
18.4 |
% |
|
|
18.7 |
% |
|
|
|
18.5 |
% |
|
|
18.0 |
% |
|
For Investor Relations Inquiries:
Raphael Gross of ICR
203.682.8253
For Media Inquiries:
Brian Little of Bojangles’ Restaurants, Inc.
704.519.2118
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