The Habit Restaurants, Inc. (NASDAQ:HABT) (“The Habit” or the
“Company”), today announced financial results for its first quarter
ended March 28, 2017.
Highlights for the first quarter ended March 28, 2017:
- Total revenue increased 17.4% to $78.6 million compared to
$67.0 million in the first quarter of 2016.
- Company-operated comparable restaurant sales increased 0.9% as
compared to the first quarter of 2016.
- Net income was $1.8 million, or $0.09 per diluted weighted
average share, compared to $1.4 million, or $0.10 per diluted
weighted average share, in the first quarter of 2016.
- Adjusted fully distributed pro forma net income(1)
was $2.5 million, or $0.09 per fully distributed
weighted average share compared with $2.6 million, or $0.10 per
fully distributed weighted average share for the first quarter of
2016.
- Adjusted EBITDA(1) was $9.5 million compared to $8.7
million for the first quarter of 2016.
- The Company opened three new company-operated restaurants and
three franchised restaurants during the first quarter. As of March
28, 2017, the Company had 165 company-operated locations and 13
franchised/licensed locations (excluding six licensed locations in
Santa Barbara County, California) for a system-wide total of 178
locations.(1) Adjusted fully distributed pro forma net
income and adjusted EBITDA are non-GAAP measures. A reconciliation
of GAAP net income to each of these measures is included in the
accompanying financial data. See also “Non-GAAP Financial
Measures,” included herein.
“We are pleased with our results for the first quarter,
particularly in light of a challenging operating environment and
record rainfall in our core California market,” said Russ Bendel,
President and Chief Executive Officer of The Habit Restaurants,
Inc. “Our results included total revenue growth of over 17% as well
as our 53rd consecutive quarter of positive comparable restaurant
sales. Our comparable restaurant sales growth in the quarter was
driven by new product innovation – such as our Golden Chicken Salad
– as well as a focus on digital marketing campaigns around new and
existing products. We opened three new company-operated Habit
Burger Grills during the first quarter, all in the California
market. In addition, our franchise partners opened three franchise
locations, two in Washington and one in Las Vegas.”
First Quarter 2017 Financial Results Compared to First
Quarter 2016
Total revenue was $78.6 million in the first quarter of 2017,
compared to $67.0 million in the first quarter of 2016.
Company-operated comparable restaurant sales increased 0.9% for
the quarter ended March 28, 2017. The increase in company-operated
comparable restaurant sales was driven primarily by a 1.5% increase
in average transaction amount partially offset by a 0.6% decrease
in transactions.
Net income for the first quarter of 2016 was $1.8 million,
or $0.09 per diluted weighted average share compared to $1.4
million, or $0.10 per diluted weighted average share in the first
quarter of 2016.
Adjusted fully distributed pro forma net income in the first
quarter of 2017 was $2.5 million, or $0.09 per fully distributed
weighted average share, compared to $2.6 million, or $0.10 per
fully distributed weighted average share, in the first quarter of
2016. A reconciliation between GAAP net income and adjusted fully
distributed pro forma net income is included in the accompanying
financial data.
2017 Outlook
The Company currently anticipates the following for its fiscal
year 2017:
- Total revenue between $338 million to $342 million;
- Company-operated comparable restaurant sales growth of
approximately 2.0%;
- The opening of 31 to 33 company-operated restaurants and five
to seven franchised/licensed restaurants;
- Restaurant contribution margin of approximately 20.0%;
- General and administrative expenses of $33.5 million to $34.0
million;
- Depreciation and amortization expense slightly under $19.0
million;
- Capital expenditures of $44.0 million to $47.0 million;
and
- An effective pro forma tax rate of approximately 41.5%, which
assumes the conversion of all common units of The Habit
Restaurants, LLC for shares of our Class A common stock (and
cancellation of corresponding shares of our Class B common stock),
which would eliminate the non-controlling interests.
Conference Call
The Company will host a conference call to discuss financial
results for the first quarter 2017 today at 5:00 PM Eastern Time.
Russ Bendel, President and Chief Executive Officer, and Ira Fils,
Chief Financial Officer will host the call.
The conference call can be accessed live over the phone by
dialing (855) 327-6837 or for international callers by dialing
(778) 327-3988. A replay will be available after the call and
can be accessed by dialing (844) 512-2921 or for international
callers by dialing (412) 317-6671; the passcode is 10002793.
The replay will be available until Wednesday, May 10, 2017. The
conference call will also be webcast live from the Company’s
corporate website at ir.habitburger.com under the “Events” page. An
archive of the webcast will be available at the same location on
the corporate website shortly after the call has concluded.
The following definitions apply to these terms as used
in this release:
Comparable restaurant sales reflect the change
in year-over-year sales in our comparable restaurant base. A
restaurant enters our comparable restaurant base in the accounting
period following its 18th full period of operations. We operate on
a 4-4-5 calendar, each accounting period will consist of either
four or five weeks with the exception of a 53-week year, where the
last period contains six weeks.
Average Unit Volumes (AUVs) are calculated by
dividing revenue for the trailing 52-week period for all
company-operated restaurants that have operated for 12 full
accounting periods by the total number of restaurants open for such
period.
Adjusted fully distributed pro forma net income
includes net income attributable to The Habit (i) excluding
income tax expense, (ii) excluding the effect of non-recurring
items, (iii) assuming the exchange of all common units of The
Habit Restaurants, LLC into shares of our Class A common stock
(and cancellation of corresponding shares of our Class B common
stock), which results in the elimination of non-controlling
interests in The Habit Restaurants, LLC, and (iv) reflecting
an adjustment for income tax expense on fully distributed pro forma
net income before income taxes at our estimated long term effective
income tax rate. Adjusted fully distributed pro forma net income is
a non-GAAP financial measure because it represents net income
attributable to The Habit, before non-recurring items and the
effects of non-controlling interests in The Habit Restaurants, LLC.
We use adjusted fully distributed pro forma net income to
facilitate a comparison of our operating performance on a
consistent basis from period to period that, when viewed in
combination with our results prepared in accordance with GAAP,
provides a more complete understanding of factors and trends
affecting our business than GAAP measures alone and eliminates the
variability of non-controlling interests as a result of member
owner exchanges of common units of The Habit Restaurants, LLC into
shares of our Class A common stock (and cancellation of
corresponding shares of our Class B common stock).
Adjusted fully distributed pro forma net income per
fully distributed weighted average share is calculated
using adjusted fully distributed pro forma net income as defined
above and assumes the exchange of all common units of The Habit
Restaurants, LLC into shares of our Class A common stock (and
cancellation of corresponding shares of our Class B common
stock).
EBITDA, a non-GAAP measure, represents net
income before interest expense, net, provision for income taxes,
and depreciation and amortization.
Adjusted EBITDA, a non-GAAP measure, represents
EBITDA plus pre-opening costs, stock-based compensation, loss on
disposal of assets, and exchange related expenses.
About The Habit Restaurants, Inc.
The Habit Burger Grill is a burger-centric, fast casual
restaurant concept that specializes in preparing fresh,
made-to-order chargrilled burgers and sandwiches featuring USDA
choice tri-tip steak, grilled chicken and sushi-grade albacore tuna
cooked over an open flame. In addition, it features fresh
made-to-order salads and an appealing selection of sides, shakes
and malts. The Habit was named the “best tasting burger in America”
in July 2014 in a comprehensive survey conducted by one of
America’s leading consumer magazines. The first Habit opened in
Santa Barbara, California in 1969. The Habit has since grown to
over 175 restaurants in 10 states throughout California, Arizona,
Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington and
Maryland as well as two international locations.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact included in this press release are
forward-looking statements. Forward-looking statements discuss our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business. You can identify forward-looking
statements because they do not relate strictly to historical or
current facts. These statements may include words such as “aim,”
“anticipate,” “believe,” “estimate,” “expect,” “forecast,”
“outlook,” “potential,” “project,” “projection,” “plan,” “intend,”
“seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can
have,” “likely,” the negatives thereof and other words and terms of
similar meaning in connection with any discussion of the timing or
nature of future operating or financial performance or other
events. They appear in a number of places throughout this press
release and include statements regarding our intentions, beliefs or
current expectations concerning, among other things, our results of
operations, financial condition, liquidity, prospects, growth,
strategies and the industry in which we operate. All
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those that
we expected.
While we believe that our assumptions are reasonable, we caution
that it is very difficult to predict the impact of known factors,
and it is impossible for us to anticipate all factors that could
affect our actual results. All forward-looking statements are
expressly qualified in their entirety by these cautionary
statements. You should evaluate all forward-looking statements made
in this press release in the context of the risks and uncertainties
disclosed in our annual report on Form 10-K for the year ended
December 27, 2016, including the sections thereof captioned
“Cautionary Note Regarding Forward-Looking Statements” and “Risk
Factors.” These filings and others are available online at
www.sec.gov, ir.habitburger.com or upon request from The Habit.
We caution you that the important factors referenced above may
not contain all of the factors that are important to you. In
addition, we cannot assure you that we will realize the results or
developments we expect or anticipate or, even if substantially
realized, that they will result in the consequences we anticipate
or affect us or our operations in the ways that we expect. The
forward-looking statements included in this press release are made
only as of the date hereof. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as required by law.
If we do update one or more forward-looking statements, no
inference should be made that we will make additional updates with
respect to those or other forward-looking statements. We qualify
all of our forward-looking statements by these cautionary
statements.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use non-GAAP
financial measures, including those discussed above. These measures
are not intended to be considered in isolation or as substitutes
for, or superior to, financial measures prepared and presented in
accordance with GAAP. We use non-GAAP financial measures for
financial and operational decision-making and as a means to
evaluate period-to-period comparisons. We believe that they provide
useful information about operating results, enhance understanding
of past performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. However, when analyzing
the Company’s operating performance, investors should not consider
adjusted earnings per fully distributed weighted average share or
adjusted fully distributed pro forma net income in isolation or as
substitutes for net income (loss), cash flows from operating
activities or other operation statement or cash flow statement data
prepared in accordance with U.S. GAAP. The non-GAAP measures used
in this press release may be different from the measures used by
other companies.
Consolidated Statement of Operations Data
(unaudited):
Our operating results are presented as a percentage of total
revenue, with the exception of restaurant operating costs,
depreciation and amortization expense, pre-opening costs and loss
on disposal of assets, which are presented as a percentage of
restaurant revenue.
|
|
13 Weeks Ended |
|
(amounts in
thousands except share and per share
data) |
|
March 28, 2017 |
|
|
|
March 29, 2016 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
78,307 |
|
|
|
99.6 |
% |
|
|
$ |
66,813 |
|
|
|
99.8 |
% |
Franchise/license revenue |
|
|
329 |
|
|
|
0.4 |
% |
|
|
|
144 |
|
|
|
0.2 |
% |
Total revenue |
|
|
78,636 |
|
|
|
100.0 |
% |
|
|
|
66,957 |
|
|
|
100.0 |
% |
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating costs (excluding depreciation and
amortization) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper costs |
|
|
22,837 |
|
|
|
29.2 |
% |
|
|
|
20,101 |
|
|
|
30.1 |
% |
Labor and
related expenses |
|
|
25,983 |
|
|
|
33.2 |
% |
|
|
|
21,421 |
|
|
|
32.1 |
% |
Occupancy
and other operating expenses |
|
|
13,075 |
|
|
|
16.7 |
% |
|
|
|
10,488 |
|
|
|
15.7 |
% |
General
and administrative expenses |
|
|
7,763 |
|
|
|
9.9 |
% |
|
|
|
6,602 |
|
|
|
9.9 |
% |
Exchange
related expenses |
|
|
116 |
|
|
|
0.1 |
% |
|
|
|
107 |
|
|
|
0.2 |
% |
Depreciation and amortization expense |
|
|
4,249 |
|
|
|
5.4 |
% |
|
|
|
3,412 |
|
|
|
5.1 |
% |
Pre-opening costs |
|
|
395 |
|
|
|
0.5 |
% |
|
|
|
260 |
|
|
|
0.4 |
% |
Loss on
disposal of assets |
|
|
12 |
|
|
|
0.0 |
% |
|
|
|
39 |
|
|
|
0.1 |
% |
Total operating
expenses |
|
|
74,430 |
|
|
|
94.7 |
% |
|
|
|
62,430 |
|
|
|
93.2 |
% |
Income from
operations |
|
|
4,206 |
|
|
|
5.3 |
% |
|
|
|
4,527 |
|
|
|
6.8 |
% |
Other
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
159 |
|
|
|
0.2 |
% |
|
|
|
127 |
|
|
|
0.2 |
% |
Income before income
taxes |
|
|
4,047 |
|
|
|
5.1 |
% |
|
|
|
4,400 |
|
|
|
6.6 |
% |
Provision
for income taxes |
|
|
1,300 |
|
|
|
1.7 |
% |
|
|
|
1,005 |
|
|
|
1.5 |
% |
Net income |
|
|
2,747 |
|
|
|
3.5 |
% |
|
|
|
3,395 |
|
|
|
5.1 |
% |
Less: net income
attributable to non-controlling interests |
|
|
(904 |
) |
|
|
-1.1 |
% |
|
|
|
(2,014 |
) |
|
|
-3.0 |
% |
Net income attributable
to The Habit Restaurants, Inc. |
|
$ |
1,843 |
|
|
|
2.3 |
% |
|
|
$ |
1,381 |
|
|
|
2.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to The Habit Restaurants, Inc. per share Class A common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.09 |
|
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
Diluted |
|
$ |
0.09 |
|
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
Weighted average shares
of Class A common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,188,687 |
|
|
|
|
|
|
|
|
14,049,710 |
|
|
|
|
|
Diluted |
|
|
20,215,371 |
|
|
|
|
|
|
|
|
14,050,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet and Selected Operating Data
(unaudited):
|
|
|
|
|
|
|
|
|
Balance Sheet
Data |
|
March 28, 2017 |
|
|
December 27, 2016 |
|
(dollar amounts in
thousands) |
|
|
|
|
|
|
|
|
Balance Sheet
Data-Consolidated (at period end): |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
49,487 |
|
|
$ |
44,192 |
|
Property and equipment,
net(a) |
|
|
109,857 |
|
|
|
102,857 |
|
Total assets |
|
|
342,640 |
|
|
|
330,366 |
|
Total debt(b) |
|
|
9,760 |
|
|
|
6,036 |
|
Total stockholders'
equity |
|
|
147,259 |
|
|
|
143,887 |
|
(a) Property and equipment, net consists of property owned
or leased, net of accumulated depreciation and
amortization.(b) Total debt consists of deemed landlord
financing.
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
Selected
Operating Data |
|
March 28, 2017 |
|
|
March 29, 2016 |
|
Other Operating
Data: |
|
|
|
|
|
|
|
|
Total restaurants at
end of period |
|
|
178 |
|
|
|
145 |
|
Company-operated
restaurants at end of period |
|
|
165 |
|
|
|
140 |
|
Company-operated
comparable restaurant sales growth(a) |
|
|
0.9 |
% |
|
|
2.0 |
% |
Company-operated
average unit volumes |
|
$ |
1,911 |
|
|
$ |
1,938 |
|
|
|
|
|
|
|
|
|
|
(a) Company-operated comparable restaurant sales growth
reflects the change in year-over-year sales for the
company-operated comparable restaurant base. A restaurant enters
our comparable restaurant base in the accounting period following
its 18th full period of operations.
The following table includes a reconciliation of net income to
adjusted EBITDA:
|
|
13 Weeks Ended |
|
Adjusted EBITDA
Reconciliation |
|
March 28,2017 |
|
|
March 29,2016 |
|
(amounts in
thousands) |
|
|
|
|
|
|
|
|
Net
income |
|
$ |
2,747 |
|
|
$ |
3,395 |
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
|
1,300 |
|
|
|
1,005 |
|
Interest
expense, net |
|
|
159 |
|
|
|
127 |
|
Depreciation and amortization |
|
|
4,249 |
|
|
|
3,412 |
|
EBITDA |
|
|
8,455 |
|
|
|
7,939 |
|
Stock-based compensation expense(a) |
|
|
498 |
|
|
|
346 |
|
Loss on
disposal of assets(b) |
|
|
12 |
|
|
|
39 |
|
Pre-opening costs(c) |
|
|
395 |
|
|
|
260 |
|
Exchange
related expenses(d) |
|
|
116 |
|
|
|
107 |
|
Adjusted
EBITDA |
|
$ |
9,476 |
|
|
$ |
8,691 |
|
(a) Includes non-cash, stock-based
compensation.(b) Loss on disposal of assets includes the loss
on disposal of assets related to retirements and replacements or
write-off of leasehold improvements or
equipment.(c) Pre-opening costs consist of costs directly
associated with the opening of new restaurants and incurred prior
to opening, including management labor costs, staff labor costs
during training, food and supplies used during training, marketing
costs and other related pre-opening costs. These are generally
incurred over the three to five months prior to opening.
Pre-opening costs also include net occupancy costs incurred between
the date of possession and opening date of our
restaurants.(d) This category includes costs associated with
the exchange of LLC Units into shares of Class A common stock by
members of The Habit Restaurants, LLC (the “Continuing LLC Owners”)
pursuant to its Amended and Restated Limited Liability Company
Agreement, dated as of April 5, 2015, as amended on May 16, 2016,
and further amended on March 22, 2017 (as amended, the “LLC
Agreement”).
The following is a reconciliation of GAAP net income and net
income per share to adjusted fully distributed pro forma net income
and adjusted fully distributed pro forma net income per share:
|
|
13 Weeks Ended |
|
(dollar amounts
in thousands) |
|
March 28,2017 |
|
|
|
March 29,2016 |
|
Net income |
|
$ |
2,747 |
|
|
|
$ |
3,395 |
|
Exchange
related expenses(a) |
|
|
116 |
|
|
|
|
107 |
|
Income
tax expense as reported |
|
|
1,300 |
|
|
|
|
1,005 |
|
Fully
distributed pro forma net income before income taxes |
|
|
4,163 |
|
|
|
|
4,507 |
|
Income
tax expense on fully distributed pro forma income before
income taxes(b) |
|
|
1,707 |
|
|
|
|
1,885 |
|
Adjusted
fully distributed pro forma net income |
|
$ |
2,456 |
|
|
|
$ |
2,622 |
|
Adjusted fully
distributed pro forma net income per share of Class A common
stock: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.09 |
|
|
|
$ |
0.10 |
|
Diluted |
|
$ |
0.09 |
|
|
|
$ |
0.10 |
|
Weighted average shares
of Class A common stock outstanding used in computing
adjusted fully distributed pro forma net income(c): |
|
|
|
|
|
|
|
|
|
Basic |
|
|
26,001,035 |
|
|
|
|
26,001,069 |
|
Diluted |
|
|
26,027,719 |
|
|
|
|
26,002,349 |
|
(a) This category includes costs associated with the
exchange of common units of The Habit Restaurants, LLC (“LLC
Units”) to Class A common stock by the Continuing LLC Owners
pursuant to the LLC Agreement.(b) Reflects income tax expense
at an effective rate of 41.01% and 41.83% for the periods ended
March 28, 2017 and March 29, 2016, respectively, on income before
income taxes assuming the conversion of all outstanding LLC Units
for shares of Class A common stock (with a corresponding
cancellation of shares of our Class B common stock). The effective
rate also excludes the impact of discrete items. The estimated tax
rate includes provisions for U.S. federal income taxes and assumes
the highest statutory rates apportioned to each state and local
jurisdiction and excludes the impact to the rate of follow-on
offering costs.(c) For all periods presented, represents the
total number of shares of Class A common stock outstanding
including all outstanding LLC Units of The Habit Restaurants, LLC
as if they were exchanged on a one-for-one basis for the Company’s
Class A common stock (with a corresponding cancellation of
shares of our Class B common stock). Diluted earnings per share
gives effect during the reporting period to all dilutive potential
shares outstanding resulting from employee stock-based awards using
the treasury method.
Contacts
Investors:
(949) 943-8692
HabitIR@habitburger.com
Media:
(949) 943-8691
Media@habitburger.com
Habit Restaurants (NASDAQ:HABT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Habit Restaurants (NASDAQ:HABT)
Historical Stock Chart
From Apr 2023 to Apr 2024