Highlights for the third quarter ended
-
Revenue increased 28.0% to
$44.9 million from$35.1 million . - Comparable restaurant sales increased 1.5%.
-
Net income decreased to
$790,000 from$1.2 million . Net income for the third quarter of 2012 included a$1.6 million write-off of deferred loan origination costs associated with a pay down of debt from the Company's IPO proceeds, or approximately$1.1 million , net of tax. Net income available to common stockholders increased to$533,000 from$17,000 . Diluted income per share was$0.05 compared to$0.08 in the prior year. Pro forma net income(1) increased 22.9% to$2.2 million , or$0.13 per diluted share from$1.8 million , or$0.11 per diluted share. -
Restaurant-level EBITDA(1) increased 29.1% to
$8.6 million from$6.6 million . As a percentage of revenue, restaurant-level EBITDA increased 20 basis points to 19.1%. - Three new restaurants opened during the third quarter of 2012, bringing the total restaurants opened to-date in 2012 to seven.
(1) Restaurant-level EBITDA and pro forma net income are non-GAAP measures. For reconciliations of restaurant-level EBITDA and pro forma net income to GAAP net income and discussions of why we consider them useful, see the "Reconciliation of Non-GAAP Measures" accompanying this release.
Third Quarter 2012 Financial Results
Revenue increased
Comparable restaurant sales increased 1.5% during the third quarter. The increase was driven by a 1.3% increase in average check and a 0.2% increase in average weekly customers. Our comparable restaurant base consisted of 23 restaurants during the third quarter ended
Total restaurant operating costs decreased as a percent of revenues to 80.9% in the third quarter of 2012 from 81.1% in the third quarter of 2011, driven largely by the impact of favorable food costs, particularly produce and dairy costs, as well as an improvement in restaurant operating costs, partially offset by increases in labor and occupancy costs at non-comparable restaurants.
Net income available to common stockholders for the third quarter of 2012 was
Pro forma net income increased 22.9% to
During the third quarter, three new Chuy's restaurants were opened —
2012 Outlook
The Company has updated its guidance and currently anticipates that its fiscal year 2012 pro forma diluted net income per share will range between
- Total comparable restaurant sales growth for the fourth quarter of 2012 of between 1.0% to 1.5% on a 52-week basis bringing the total for the year to approximately 1.5% to 2.0%;
-
Restaurant pre-opening expenses of approximately
$3.6 million ; -
Pro forma general and administrative expense of approximately
$9.5 million ; - An effective tax rate of approximately 29% to 31%;
- The opening of 8 new restaurants;
-
Net capital expenditures (net of tenant improvement allowances) of approximately
$20.0 million ; and - Annual weighted average pro forma diluted shares outstanding of 16.6 million to 16.7 million shares, including fourth quarter weighted average pro forma diluted shares outstanding of 16.7 to 16.8 million shares.
The following definitions apply to these terms as used in this release:
Comparable restaurant sales reflect changes in sales for the comparable group of restaurants over a specified period of time. We consider a restaurant to be comparable in the first full quarter following the 18th month of operations. Changes in comparable sales reflect changes in customer count trends as well as changes in average check.
Average check is calculated by dividing revenue by total entrees sold for a given time period. Average check reflects menu price influences as well as changes in menu mix.
Restaurant-level EBITDA, a non-GAAP measure, represents net income plus the sum of general and administrative expenses, the advisory agreement termination fee, the settlement with our former director, restaurant pre-opening costs, depreciation and amortization, interest and taxes.
Conference Call
The Company will host a conference call to discuss financial results for the third quarter of 2012 today at
The conference call can be accessed live over the phone by dialing 800-967-0627 or for international callers by dialing 913-312-0407. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for international callers; the passcode is 7774310. The replay will be available until
About Chuy's
Founded in
Forward-Looking Statements
Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurant openings, the sales at the Company's restaurants, changes in restaurant development or operating costs, such as food and labor, the Company's ability to leverage its existing management and infrastructure, changes in restaurant pre-opening expense, general and administrative expenses, capital expenditures, or our effective tax rate, changes in the number of diluted share outstanding,
strength of consumer spending, conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customers or food supplies, acts of war or terrorism and other factors disclosed from time to time in the Company's filings with the
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| Unaudited Condensed Consolidated Income Statements | ||||
| (In thousands, except share and per share data) | ||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||
| September 23, | September 25 | September 23, | September 25 | |
| 2012 | 2011 | 2012 | 2011 | |
| Revenue | $ 44,939 | $ 35,115 | $ 125,960 | $ 97,321 |
| Costs and expenses | ||||
| Cost of sales | 12,194 | 9,780 | 33,764 | 27,122 |
| Labor | 14,613 | 11,152 | 40,295 | 30,565 |
| Operating | 6,490 | 5,225 | 17,810 | 14,249 |
| Occupancy | 2,726 | 2,055 | 7,536 | 5,558 |
| General and administrative | 2,497 | 1,616 | 6,419 | 5,611 |
| Advisory agreement termination fee | -- | -- | 2,000 | -- |
| Settlement with former director | -- | -- | -- | 245 |
| Marketing | 344 | 264 | 954 | 733 |
| Restaurant pre-opening | 934 | 910 | 2,914 | 2,568 |
| Depreciation and amortization | 1,725 | 1,175 | 4,672 | 3,141 |
| Total costs and expenses | 41,523 | 32,177 | 116,364 | 89,792 |
| Income from operations | 3,416 | 2,938 | 9,596 | 7,529 |
| Interest expense | 2,285 | 1,214 | 5,451 | 3,134 |
| Income before income taxes | 1,131 | 1,724 | 4,145 | 4,395 |
| Income tax expense | 341 | 516 | 1,243 | 1,248 |
| Net Income | 790 | 1,208 | 2,902 | 3,147 |
| Undistributed earnings allocated to participating interests | 257 | 1,191 | 2,171 | 3,110 |
| Net income available to common stockholders | $ 533 | $ 17 | $ 731 | $ 37 |
| Net income per common share: | ||||
| Basic | $ 0.05 | $ 0.08 | $ 0.21 | $ 0.20 |
| Diluted | $ 0.05 | $ 0.08 | $ 0.19 | $ 0.20 |
| Weighted-average shares outstanding: | ||||
| Basic | 10,215,755 | 203,744 | 3,539,732 | 181,117 |
| Diluted | 14,033,234 | 10,879,773 | 11,501,870 | 10,845,694 |
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| Selected Balance Sheet Data | ||
| (In thousands) | ||
|
September 23, 2012 |
December 25, 2011 |
|
| (unaudited) | ||
| Cash and cash equivalents |
|
|
| Total assets | 121,586 | 105,938 |
| Long-term debt | 4,994 | 55,200 |
| Total stockholders' equity | 84,831 | 25,627 |
Reconciliation of Non-GAAP Measures
We prepare our financial statements in accordance with generally accepted accounting principles (GAAP). Within our press release, we make reference to non-
Pro forma net income represents our net income plus the sum of the net reduction in our interest expense and the reduction in our management fees and expenses as a result of our IPO and the application of the net proceeds of the IPO to repay
The following table includes a reconciliation of net income to Restaurant-level EBITDA:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||
|
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| 2012 | 2011 | 2012 | 2011 | |
| Net income as reported | $ 790 | $ 1,208 | $ 2,902 | $ 3,147 |
| Income tax provision | 341 | 516 | 1,243 | 1,248 |
| Interest expense | 2,285 | 1,214 | 5,451 | 3,134 |
| General and administrative | 2,497 | 1,616 | 6,419 | 5,611 |
| Advisory agreement termination fee | -- | -- | 2,000 | -- |
| Settlement with former director | -- | -- | -- | 245 |
| Restaurant pre-opening expenses | 934 | 910 | 2,914 | 2,568 |
| Depreciation and amortization | 1,725 | 1,175 | 4,672 | 3,141 |
| Restaurant-level EBITDA | $ 8,572 | $ 6,639 | $ 25,601 | $ 19,094 |
| Restaurant-level EBITDA margin (1) | 19.1% | 18.9% | 20.3% | 19.6% |
(1) Restaurant-level EBITDA margin is calculated by dividing Restaurant-level EBITDA by revenue.
The following is a reconciliation of GAAP net income and net income per share to pro forma net income and pro forma net income per share:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | Year Ended | |||
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| 2012 | 2011 | 2012 | 2011 | 2011 | |
| Net income as reported | $ 790 | $ 1,208 | $ 2,902 | $ 3,147 | $ 3,464 |
| Interest expense as reported (1) | 2,285 | 1,214 | 5,451 | 3,134 | 4,362 |
| Pro forma interest expense based upon reduced debt balance (2) | (107) | (107) | (321) | (321) | (642) |
| Management fees and expenses (3) | -- | 94 | 2,100 | 281 | 373 |
| Settlement with former director and one-time bonus to management (4) | -- | -- | -- | 1,264 | 1,264 |
| Incremental public costs (5) | (130) | (338) | (805) | (1,013) | (1,350) |
| Income tax expense on adjustments (6) | (613) | (260) | (1,928) | (1,075) | (1,098) |
| Pro forma net income | $ 2,225 | $ 1,811 | $ 7,399 | $ 5,418 | $ 6,373 |
| Net income per share - pro forma: | |||||
| Basic - pro forma | $ 0.14 | $ 0.11 | $ 0.46 | $ 0.34 | $ 0.40 |
| Diluted - pro forma | $ 0.13 | $ 0.11 | $ 0.45 | $ 0.33 | $ 0.39 |
| Weighted-average shares outstanding-pro forma: | |||||
| Basic - pro forma (7) | 15,918,427 | 15,913,664 | 15,918,427 | 15,891,037 | 15,901,086 |
| Diluted - pro forma (7) | 16,652,508 | 16,540,121 | 16,600,682 | 16,506,042 | 16,512,999 |
Notes to reconciliation of GAAP net income to non-GAAP pro forma net income:
1. Reflects the adjustment to eliminate the historical interest expense for all periods presented that were based upon actual outstanding balances before the application of the net proceeds from our IPO.
2. Reflects interest expense assuming our current post-IPO long-term debt balance of
a. an unused facility fee on the unfunded
$10.5 million of our revolver and delayed Term B Loan at an annual rate of 0.5%; and
b. a lower annual amortization of deferred loan costs of approximately
$25,000 after the write-off of approximately$1.6 million , which occurred in the third quarter of 2012 but is assumed to occur at the beginning of fiscal 2011.
3. Reflects the elimination of the management fees and expenses paid and reimbursed to
4. Reflects the elimination of one-time charges in 2011 for the settlement with former director of
5. Reflects an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company.
6. Reflects the tax expense associated with the adjustments in 1 through 5 above at the normalized tax rate of 30%, which reflects our estimated long-term effective tax rate.
7. Reflects (i) 6,708,332 additional shares of common stock issued in the IPO, (ii) the repurchase by the Company of 1,655,662 shares of its common and preferred stock on
CONTACT: Investor Relations
Fitzhugh Taylor
203-682-8261
investors@chuys.com
Source: Chuy's Holding
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