Achieved mid-teen top-line and Adjusted
EBITDA growth. Delivered a strong increase in comparable sales,
with positive volume trends across key markets.
Arcos Dorados Holdings, Inc. (NYSE: ARCO) (“Arcos Dorados” or
the “Company”), Latin America’s largest restaurant chain and the
world’s largest McDonald’s franchisee, today reported unaudited
results for the second quarter ended June 30, 2017.
Second Quarter 2017 Key Results
- As reported consolidated revenues
increased 16.2% to $798.7 million versus the second quarter of
2016. On a constant currency basis1, consolidated revenues grew
18.3%, or 13.0% excluding Venezuela.
- Systemwide comparable sales1 rose 20.1%
year-over-year, or 13.6% excluding Venezuela.
- Adjusted EBITDA1 increased 38.7% to
$56.6 million compared with the prior-year quarter.
- Consolidated Adjusted EBITDA margin
expanded 120 basis points to 7.1%.
- As reported General and Administrative
(G&A) expenses decreased 10 basis points as a percentage of
revenues.
- As reported net loss was $4.1 million,
compared to net income of $43.4 million in the year-ago period,
which included $50.1 million from asset monetization
initiatives.
“We achieved mid-teen revenue and systemwide comparable sales
growth, excluding Venezuela, which drove a strong increase in our
Adjusted EBITDA in the second quarter. By continuing to deliver
value and an unmatched experience to our customers, we were able to
drive additional restaurant traffic in most of our markets. EBITDA
margin expansion totaling 120 basis points reflected operating
leverage, in keeping with a streamlined cost structure and more
efficient restaurant operations. Consistent with our long-term
strategic vision, we are focusing on our topline drivers as we
transition into our growth strategy,” said Sergio Alonso, Chief
Executive Officer of Arcos Dorados.
Second Quarter 2017
Results
Consolidated
Figure 1. AD Holdings Inc Consolidated:
Key Financial Results(In millions of U.S. dollars, except as
noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
% ConstantCurrency
Total Restaurants (Units) 2,135
2,160 1.2% Sales by
Company-operated Restaurants 659.1 (13.1) 116.2 762.2 15.6% 17.6%
Revenues from franchised restaurants 28.2 (1.3) 9.5 36.5 29.2%
33.8%
Total Revenues 687.3 (14.3) 125.7
798.7 16.2% 18.3% Systemwide Comparable Sales
20.1%
Adjusted EBITDA 40.8 -7.9 23.7
56.6 38.7% 58.2% Adjusted EBITDA Margin 5.9%
7.1%
Net income (loss) attributable to AD 43.4
(11.5) (36.0) (4.1) -109.5%
-83.0% No. of shares outstanding (thousands) 210,625 210,881
EPS (US$/Share) 0.21
(0.02) (2Q17 =
2Q16 + Currency Translation + Constant Currency Growth). Refer to
“Definitions” section for further detail.
Arcos Dorados’ second quarter as reported revenues increased
16.2%, driven by constant currency revenue growth of 18.3%, which
was partially offset by the negative impact of currency
translation. The currency translation impact mainly reflected the
year-over-year average depreciation of the Venezuelan bolivar and
the Argentine peso, which was partially offset by the appreciation
of the Brazilian real. Constant currency revenue growth reflected a
20.1% expansion in systemwide comparable sales, driven by average
check growth combined with positive traffic in most markets.
Consolidated average check growth was strongly impacted by
Venezuela’s high inflation rates.
Second quarter consolidated as reported Adjusted EBITDA
increased 38.7%, driven by constant currency growth of 58.2%, which
was supported by revenue growth and margin expansion. All four
divisions delivered strong Adjusted EBITDA growth in the quarter.
Brazil was the key contributor, followed by SLAD, the Caribbean
division and NOLAD.
The Adjusted EBITDA margin expanded by 120 basis points to 7.1%,
with margin improvements in Brazil and the Caribbean division
partially offset by margin declines in NOLAD and SLAD. Efficiencies
in Food and Paper (F&P) and Occupancy and Other Operating
Expenses as a percentage of revenues drove the consolidated margin
expansion.
As reported, consolidated G&A increased by 14.3%
year-over-year. However, as a percentage of revenues it decreased
10 basis points. Importantly, G&A grew by 16.1% year-over-year
on a constant currency basis versus the second quarter of 2016,
which was below the estimated blended rate of inflation for the
Company’s G&A.
Consolidated – excluding
Venezuela
Figure 2. AD Holdings Inc Consolidated - Excluding Venezuela:
Key Financial Results
(In millions of U.S. dollars, except as
noted)
2Q16
(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
% ConstantCurrency
Total Restaurants (Units) 2,002
2,030 1.4% Sales by
Company-operated Restaurants 650.1 12.0 82.2 744.3 14.5% 12.6%
Revenues from franchised restaurants 27.2 1.4 5.9 34.5 26.8% 21.7%
Total Revenues 677.3 13.4 88.1
778.8 15.0% 13.0% Systemwide Comparable Sales
13.6%
Adjusted EBITDA 43.4 3.3 12.1
58.9 35.6% 28.0% Adjusted EBITDA Margin 6.4%
7.6%
Net income (loss) attributable to AD 50.8
0.8 (48.6) 3.0 -94.2% -95.7% No.
of shares outstanding (thousands) 210,625 210,881
EPS
(US$/Share) 0.24
0.01
Excluding the Company’s Venezuelan operation, as reported
revenues increased 15.0% year-over-year. The result primarily
reflects constant currency revenue growth of 13.0%, coupled with a
positive impact from currency translation, as the appreciation of
the Brazilian real more than offset the depreciation of the
Argentine peso, as well as other currencies in the Company’s
territories. Constant currency revenue growth was supported by a
13.6% increase in systemwide comparable sales, driven by average
check growth and positive traffic in all divisions.
Adjusted EBITDA increased 35.6% on an as reported basis, or
28.0% in constant currency terms. The Adjusted EBITDA margin
expanded 120 basis points to 7.6%, mainly driven by efficiencies in
F&P and Occupancy and Other Operating expenses as a percentage
of revenues.
Non-operating Results
Non-operating results for the second quarter reflected a $15.6
million foreign currency exchange loss, versus a gain of $15.5
million last year. The depreciation of the Brazilian real and the
appreciation of the Mexican peso from the previous quarter-end
generated a loss related to intercompany balances. Net interest
expense increased $2.3 million year-over-year to $23.0 million in
the quarter, largely explained by the incurrence of certain
transaction costs in connection with the debt restructuring
completed in April of 2017.
The Company reported an income tax benefit of $6.0 million in
the quarter, compared to an income tax expense of $14.4 million in
the prior year period.
Second quarter net loss attributable to the Company totaled $4.1
million, compared to net income of $43.4 million in the same period
of 2016. The result reflects lower year-over-year operating
results, given that the second quarter of last year included $50.1
million from the Company’s asset monetization initiatives, combined
with the aforementioned negative variance in foreign exchange
results and higher net interest expenses. These factors were
partially offset by a positive variance in income tax expenses.
The Company reported a loss per share of $0.02 in the second
quarter of 2017, compared to earnings per share of $0.21 in the
previous corresponding period. Total weighted average shares for
the second quarter of 2017 were 210,881,194, as compared to
210,625,444 in the prior year quarter.
Analysis by
Division:
Brazil Division
Figure 3. Brazil Division: Key
Financial Results(In millions of U.S. dollars, except as
noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
% ConstantCurrency
Total Restaurants (Units) 884
910 2.9% Total
Revenues 309.4 29.3 16.2 354.9
14.7% 5.2% Systemwide Comparable Sales 8.3%
Adjusted EBITDA 30.5 3.9 11.5
45.9 50.5% 37.7% Adjusted EBITDA Margin
9.9% 12.9%
Brazil’s as reported revenues increased by 14.7%, supported by
the 8% year-over-year average appreciation of the Brazilian real.
Excluding the impact of currency translation, constant currency
revenues grew 5.2% year-over-year and were negatively impacted by
the refranchising of certain company-operated restaurants during
the last twelve months. The shift to a greater percentage of
franchised restaurants negatively impacts total revenue, as
company-operated restaurant sales are replaced by rental income
received from the Company’s sub-franchisees. In the quarter, total
systemwide sales grew 10.5% in constant currency, while systemwide
comparable sales increased 8.3%, driven by average check growth and
positive traffic, despite a still soft consumer environment in the
country.
Marketing activities in the quarter included the continuation of
the new affordability platform “Clássicos do Dia” or “Daily
Classics”, which continued to drive volume growth. Also in the
quarter, the Company included Smurfs and Transformers in the Happy
Meal and launched the McFlurry and McShake “Sonho de Valsa”, which
contributed to growth in the Dessert category.
As reported Adjusted EBITDA increased 50.5% year-over-year and
37.7% on a constant currency basis. The Adjusted EBITDA margin
expanded 300 basis points to 12.9%, mainly driven by lower F&P
costs as a percentage of revenues.
NOLAD
Figure 4. NOLAD Division: Key Financial
Results(In millions of U.S. dollars, except as noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
% ConstantCurrency
Total Restaurants (Units) 516
515 -0.2% Total
Revenues 88.2 (2.8) 10.8 96.1
9.0% 12.2% Systemwide Comparable Sales 11.1%
Adjusted EBITDA 7.8 (0.3) 0.9
8.4 7.0% 11.1% Adjusted EBITDA Margin
8.9% 8.7%
NOLAD’s as reported revenues increased 9.0% year-over-year as
constant currency growth of 12.2% more than offset negative
currency translation impacts. Systemwide comparable sales increased
11.1%, driven by average check growth combined with an increase in
traffic across all of the division’s markets.
Marketing activities in the quarter included the affordability
platform “Combo of the Day” in Panama. Also in the quarter, the
Company launched the McFlurry Hershey’s Cookies and Crème Bites in
the Dessert category, among others. In Mexico, the Company
continued to gain traction with the continuation of the
affordability platform “McTrío 3x3” and also benefitted from a
positive calendar effect with the shift of the Easter Holiday.
As reported Adjusted EBITDA increased by 7.0%, or 11.1% on a
constant currency basis. The Adjusted EBITDA margin contracted 20
basis points to 8.7% in the second quarter, mainly due to higher
F&P costs as a percentage of revenues, which resulted from cost
increases above price increases, in keeping with the Company’s
focus on protecting traffic.
SLAD
Figure 5. SLAD Division: Key Financial
Results(In millions of U.S. dollars, except as noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
% ConstantCurrency
Total Restaurants (Units) 382
386 1.0% Total
Revenues 191.0 (13.3) 54.7 232.3
21.6% 28.6% Systemwide Comparable Sales 29.0%
Adjusted EBITDA 15.6 (1.0) 3.3
17.9 14.7% 20.9% Adjusted EBITDA Margin
8.2% 7.7%
SLAD’s as reported revenues increased 21.6% as constant currency
growth of 28.6% more than offset negative currency translation
impacts resulting from the 11% year-over-year average depreciation
of the Argentine peso. Systemwide comparable sales increased 29.0%,
driven by the combination of average check growth and a solid
increase in traffic.
Marketing activities in the quarter included the continuation of
the new affordability platform “Combo del Día” and the “Antojos”
campaign, based on core menu items. Also in the quarter, the
Company introduced Smurfs and Transformers in the Happy Meal, and
the McFlurry Toblerone in the Dessert category, among others.
Adjusted EBITDA increased 14.7% on an as reported basis and rose
20.9% in constant currency terms. The Adjusted EBITDA margin
contracted 50 basis points to 7.7%, mainly driven by higher Payroll
expenses, which resulted from salary increases based on prior
period inflation which was above the prevailing rate in Argentina.
This was partially offset by efficiencies in F&P costs as a
percentage of revenues.
Caribbean Division
Figure 6. Caribbean Division: Key
Financial Results(In millions of U.S. dollars, except as
noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
%ConstantCurrency
Total Restaurants (Units) 353
349 -1.1% Total
Revenues 98.7 (27.5) 44.1 115.3
16.8% 44.7% Systemwide Comparable Sales 56.3%
Adjusted EBITDA 1.5 (11.3) 12.0
2.1 45.6% 822.5% Adjusted EBITDA Margin
1.5% 1.8%
The Caribbean division’s as reported revenues increased 16.8%,
as constant currency growth of 44.7% exceeded currency translation
impacts derived from the remeasurement of the results of the
Venezuelan operation at a weaker year-over-year average exchange
rate. Systemwide comparable sales increased 56.3%, with
inflation-driven average check growth more than offsetting a slight
decrease in total traffic in the division.
Marketing activities in the quarter included the continuation of
the Crispy Onion BBQ in the Signature Line and the launch of the
McFlurry Pirulin in the Dessert category. Also in the quarter, the
Company launched the “MyCombo” campaign in Puerto Rico and
introduced Smurfs and Super Mario in the Happy Meal, among
others.
As reported Adjusted EBITDA totaled $2.1 million in the second
quarter, compared with $1.5 million in the prior year quarter. The
Adjusted EBITDA margin expanded 30 basis points to 1.8%, mainly
driven by efficiencies in Payroll and G&A expenses, which were
partially offset by higher F&P costs and Occupancy and Other
Operating expenses as a percentage of revenues.
Caribbean Division – excluding
Venezuela
Figure 7. Caribbean Division -
Excluding Venezuela: Key Financial Results(In millions of U.S.
dollars, except as noted)
2Q16(a)
CurrencyTranslation(b)
ConstantCurrencyGrowth(c)
2Q17(a+b+c)
% AsReported
%ConstantCurrency
Total Restaurants (Units) 220
219 -0.5% Total
Revenues 88.7 0.2 6.5 95.4
7.5% 7.3% Systemwide Comparable Sales 5.5%
Adjusted EBITDA 4.1 (0.0) 0.4
4.4 8.5% 9.5% Adjusted EBITDA Margin
4.6% 4.7%
As reported revenues in the Caribbean division, excluding
Venezuela, increased 7.5%, driven by constant currency growth of
7.3% and broadly stable year-over-year average exchange rates. The
5.5% expansion in comparable sales resulted from higher average
check and positive traffic in the quarter.
Adjusted EBITDA totaled $4.4 million, compared to $4.1 million
in the same period of 2016. The Adjusted EBITDA margin expanded 10
basis points to 4.7%, mainly driven by efficiencies in G&A and
Payroll expenses, partially offset by higher Occupancy and Other
Operating expenses as a percentage of revenues.
New Unit Development
Figure 8. Total Restaurants (eop)*
June2017
March2017
December2016
September2016
June2016
Brazil 910 904 902 890 884 NOLAD
515 517 517 515 516 SLAD 386 385 384 383 382 Caribbean 349 350 353
352 353
TOTAL 2,160 2,156 2,156
2,140 2,135 LTM Net Openings 25 20
15 18 15 * Considers Company-operated and
franchised restaurants at period-end
The Company opened 42 new restaurants during the twelve-month
period ended June 30, 2017, resulting in a total of 2,160
restaurants. Also during the period, the Company added 166 Dessert
Centers, bringing the total to 2,748. McCafés totaled 316 as of
June 30, 2017.
Balance Sheet & Cash Flow Highlights
Cash and cash equivalents were $237.8 million at June 30, 2017.
The Company’s total financial debt (including derivative
instruments) was $627.0 million. Net debt (Total Financial Debt
minus Cash and cash equivalents) was $389.2 million and the Net
Debt/Adjusted EBITDA ratio was 1.4x at June 30, 2017.
Net cash provided by operating activities totaled $85.0 million
for the quarter, and cash provided by financing activities amounted
to $4.1 million. Cash used in net investing activities totaled
$24.2 million, which included $12.8 million from asset monetization
proceeds less total capital expenditures of $36.6 million.
Figure 9. Consolidated Financial
Ratios(In thousands of U.S. dollars, except ratios)
June 30 December 31
2017 2016 Cash & cash equivalents 237,797
194,803 Total Financial Debt (i) 626,953 610,170 Net Financial Debt
(ii) 389,156 415,367 Total Financial Debt / LTM Adjusted EBITDA
ratio 2.3 2.6 Net Financial Debt / LTM Adjusted EBITDA ratio
1.4 1.7
(i) Total financial debt includes
short-term debt, long-term debt and derivative instruments.
(ii) Total financial debt less cash and cash equivalents.
First Half 2017
For the six months ended June 30, 2017, the Company’s as
reported revenues increased by 17.4% to $1,580.2 million, largely
driven by constant currency growth of 17.7%. As reported Adjusted
EBITDA was $119.3 million, a 34.0% increase compared to the first
half of 2016. On a constant currency basis, Adjusted EBITDA
increased by 43.4%. The reported Adjusted EBITDA margin expanded by
90 basis points to 7.5%, driven by lower F&P costs, Occupancy
and Other Operating expenses, and G&A as a percentage of
revenues, partially offset by higher Payroll expenses.
Year-to-date consolidated net income amounted to $36.5 million,
compared with net income of $59.5 million in the first half of
2016. The result reflects higher operating results in the first
half of 2017, which were more than offset by a negative variance in
foreign currency exchange results ($56.3 million) and net interest
expenses. The Company reported an income tax expense of $16.4
million in the first half of 2017, compared to an income tax
expense of $22.7 million in the prior year period.
Excluding the Venezuelan operation, the Company’s as reported
revenues increased by 16.6%, and 11.2% on a constant currency
basis. As reported Adjusted EBITDA rose by 30.5%, and by 17.7%, on
a constant currency basis. The reported Adjusted EBITDA margin
expanded by 90 basis points to 7.8%, as efficiencies in F&P
costs, Occupancy and Other Operating expenses and G&A more than
offset higher Payroll expenses as a percentage of revenues.
During the first half of 2017, capital expenditures totaled
$65.2 million.
Quarter Highlights & Recent
Developments
Re-Development Initiative
Since inception and through June 30, 2017, the Company has
received cumulative cash proceeds of approximately $140 million
from the redevelopment of certain of its properties, primarily in
Mexico.
Definitions:
Systemwide comparable sales growth:
refers to the change, measured in constant currency, in our
Company-operated and franchised restaurant sales in one period from
a comparable period for restaurants that have been open for
thirteen months or longer. While sales by our franchisees are not
recorded as revenues by us, we believe the information is important
in understanding our financial performance because these sales are
the basis on which we calculate and record franchised revenues, and
are indicative of the financial health of our franchisee base.
Constant currency basis: refers to
amounts calculated using the same exchange rate over the periods
under comparison to remove the effects of currency fluctuations
from this trend analysis.
To better discern underlying business trends, this release uses
non-GAAP financial measures that segregate year-over-year growth
into two categories: (i) currency translation, (ii) constant
currency growth. (i) Currency translation reflects the impact on
growth of the appreciation or depreciation of the local currencies
in which we conduct our business against the US dollar (the
currency in which our financial statements are prepared). (ii)
Constant currency growth reflects the underlying growth of the
business excluding the effect from currency translation.
Adjusted EBITDA: In addition to
financial measures prepared in accordance with the general accepted
accounting principles (GAAP), within this press release and the
accompanying tables, we use a non-GAAP financial measure titled
‘Adjusted EBITDA’. We use Adjusted EBITDA to facilitate operating
performance comparisons from period to period.
Adjusted EBITDA is defined as our operating income plus
depreciation and amortization plus/minus the following losses/gains
included within other operating income (expenses), net, and within
general and administrative expenses in our statement of income:
gains from sale or insurance recovery of property and equipment;
write-offs and related contingencies of property and equipment;
impairment of long-lived assets and goodwill; reorganization and
optimization plan expenses; and incremental compensation related to
the modification of our 2008 long-term incentive plan.
We believe Adjusted EBITDA facilitates company-to-company
operating performance comparisons by backing out potential
differences caused by variations such as capital structures
(affecting net interest expense and other financial charges),
taxation (affecting income tax expense) and the age and book
depreciation of facilities and equipment (affecting relative
depreciation expense), which may vary for different companies for
reasons unrelated to operating performance. Figure 10 of this
earnings release include a reconciliation for Adjusted EBITDA. For
more information, please see Adjusted EBITDA reconciliation in Note
9 of our quarterly financial statements (6-K Form) filed today with
the S.E.C.
About Arcos Dorados
Arcos Dorados is the world’s largest McDonald’s franchisee in
terms of systemwide sales and number of restaurants, operating the
largest quick service restaurant chain in Latin America and the
Caribbean. It has the exclusive right to own, operate and grant
franchises of McDonald’s restaurants in 20 Latin American and
Caribbean countries and territories, including Argentina, Aruba,
Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French
Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico,
St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and
Venezuela. The Company operates or franchises over 2,100
McDonald’s-branded restaurants with over 90,000 employees and is
recognized as one of the best companies to work for in Latin
America. Arcos Dorados is traded on the New York Stock Exchange
(NYSE: ARCO). To learn more about the Company, please visit the
Investors section of our website: www.arcosdorados.com/ir
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements. The
forward-looking statements contained herein include statements
about the Company’s business prospects, its ability to attract
customers, its affordable platform, its expectation for revenue
generation and its outlook and guidance for 2017. These statements
are subject to the general risks inherent in Arcos Dorados'
business. These expectations may or may not be realized. Some of
these expectations may be based upon assumptions or judgments that
prove to be incorrect. In addition, Arcos Dorados' business and
operations involve numerous risks and uncertainties, many of which
are beyond the control of Arcos Dorados, which could result in
Arcos Dorados' expectations not being realized or otherwise
materially affect the financial condition, results of operations
and cash flows of Arcos Dorados. Additional information relating to
the uncertainties affecting Arcos Dorados' business is contained in
its filings with the Securities and Exchange Commission. The
forward-looking statements are made only as of the date hereof, and
Arcos Dorados does not undertake any obligation to (and expressly
disclaims any obligation to) update any forward-looking statements
to reflect events or circumstances after the date such statements
were made, or to reflect the occurrence of unanticipated
events.
Second Quarter 2017 Consolidated
Results(In thousands of U.S. dollars, except per share
data)
Figure 10. Second Quarter & First
Half 2017 Consolidated Results(In thousands of U.S. dollars,
except per share data)
For Three-Months ended For Six-Months
ended June 30, June 30, 2017
2016 2017 2016 REVENUES
Sales by Company-operated restaurants 762,221 659,076
1,507,630 1,290,089 Revenues from franchised restaurants
36,477 28,225 72,548
55,726
Total Revenues
798,698 687,301
1,580,178 1,345,815
OPERATING COSTS AND EXPENSES Company-operated restaurant
expenses: Food and paper (272,741 ) (242,698 ) (536,205 ) (470,716
) Payroll and employee benefits (168,617 ) (144,859 ) (334,893 )
(284,011 ) Occupancy and other operating expenses (206,944 )
(183,387 ) (409,747 ) (359,097 ) Royalty fees (38,845 ) (33,603 )
(77,357 ) (65,699 ) Franchised restaurants - occupancy expenses
(16,540 ) (13,194 ) (32,651 ) (25,790 ) General and administrative
expenses (60,844 ) (53,213 ) (115,747 ) (101,999 ) Other operating
income, net 1,417 47,404
51,336 47,423
Total operating
costs and expenses (763,114 )
(623,550 ) (1,455,264
) (1,259,889 ) Operating
income 35,584
63,751 124,914
85,926 Net interest expense (23,043 ) (20,778 )
(39,458 ) (35,037 ) Gain (Loss) from derivative instruments (6,589
) (37 ) (7,231 ) (30 ) Foreign currency exchange results (15,552 )
15,487 (24,111 ) 32,206 Other non-operating expense, net
(430 ) (592 ) (1,125 )
(766 )
Income (loss) before income taxes
(10,030 ) 57,831
52,989 82,299 Income tax
(expense) benefit 5,987 (14,387
) (16,351 ) (22,729 )
Net income (loss)
(4,043 ) 43,444
36,638 59,570
Less: Net income attributable to non-controlling interests
(71 ) (15 ) (148 )
(77 )
Net income (loss) attributable to Arcos Dorados Holdings
Inc. (4,114 )
43,429 36,490
59,493 Earnings (loss) per share information ($
per share): Basic net income per common share
$
(0.02 ) $ 0.21 $ 0.17
$ 0.28 Weighted-average number of common shares
outstanding-Basic 210,881,194
210,625,444 210,796,678
210,582,170
Adjusted EBITDA Reconciliation
Operating income 35,584
63,751 124,914 85,926 Depreciation and amortization 24,440 24,403
47,892 49,590 Operating charges excluded from EBITDA computation
(3,426 ) (47,350 )
(53,524 ) (46,505 )
Adjusted EBITDA
56,598 40,804
119,282 89,011
Adjusted EBITDA Margin as % of total revenues
7.1 % 5.9 %
7.5 % 6.6 %
Second Quarter 2017 Results by
Division(In thousands of U.S. dollars)
Figure 11. Second Quarter & First
Half 2017 Consolidated Results by Division(In thousands of U.S.
dollars)
2Q 1H Three-Months ended
% Incr. Constant Six-Months ended
% Incr. Constant June 30,
/ Currency June 30,
/ Currency
2017 2016 (Decr)
Incr/(Decr)% 2017 2016
(Decr) Incr/(Decr)%
Revenues
Brazil 354,939 309,436 14.7% 5.2% 714,934 598,028
19.5% 3.0% Caribbean 115,297 98,697 16.8% 44.7% 222,515 196,286
13.4% 50.4% NOLAD 96,126 88,171 9.0% 12.2% 180,468 173,460 4.0%
8.8% SLAD 232,336 190,997 21.6% 28.6% 462,261 378,041 22.3% 27.8%
TOTAL 798,698 687,301 16.2%
18.3% 1,580,178 1,345,815 17.4%
17.7%
Operating Income
(loss)
Brazil 32,652 18,904 72.7% 57.9% 63,959 44,360 44.2% 24.4%
Caribbean (4,039) (6,563) 38.5% 233.5% (4,305) (14,365) 70.0%
229.7% NOLAD 7,052 48,389 -85.4% -84.8% 58,208 50,359 15.6% 25.2%
SLAD 14,084 12,115 16.3% 23.6% 30,942 24,953 24.0% 29.4% Corporate
and Other (14,165) (9,094) -55.8% -65.8% (23,890) (19,381) -23.3%
-29.8%
TOTAL 35,584 63,751 -44.2%
-28.0% 124,914 85,926 45.4%
67.6%
Adjusted
EBITDA
Brazil 45,892 30,502 50.5% 37.7% 90,654 65,795 37.8% 18.9%
Caribbean 2,120 1,456 45.6% 822.5% 7,758 3,917 98.1% 613.2% NOLAD
8,369 7,824 7.0% 11.1% 13,575 15,465 -12.2% -10.8% SLAD 17,881
15,595 14.7% 20.9% 38,501 32,084 20.0% 24.5% Corporate and Other
(17,664) (14,573) -21.2% -26.6% (31,206) (28,250) -10.5% -14.1%
TOTAL 56,598 40,804
38.7% 58.2% 119,282
89,011 34.0% 43.4%
Figure 12. Average Exchange Rate per Quarter*
Brazil Mexico Argentina
Venezuela 2Q17 3.21 18.55 15.72
1,295.37 2Q16 3.50 18.10 14.22 453.93 *
Local $ per 1 US$
Summarized Consolidated Balance
Sheets(In thousands of U.S. dollars)
Figure 13. Summarized Consolidated
Balance Sheets(In thousands of U.S. dollars)
June 30 December 31
2017 2016 ASSETS
Current assets Cash
and cash equivalents 237,797 194,803 Accounts and notes receivable,
net 69,719 83,239 Other current assets (1) 150,589
167,148
Total current assets
458,105 445,190 Non-current
assets Property and equipment, net 872,675 847,966 Net
intangible assets and goodwill 42,032 43,044 Deferred income taxes
62,381 70,446 Other non-current assets (2) 130,550
98,407
Total non-current assets
1,107,638 1,059,863 Total
assets 1,565,743 1,505,053
LIABILITIES AND EQUITY
Current liabilities Accounts
payable 206,858 217,914 Taxes payable (3) 89,478 112,593 Accrued
payroll and other liabilities 127,500 144,442 Other current
liabilities (4) 24,327 24,620 Provision for contingencies 720 764
Financial debt (5) 16,983 47,975 Deferred income taxes 0
0
Total current liabilities
465,866 548,308 Non-current
liabilities Accrued payroll and other liabilities 26,954 23,760
Provision for contingencies 21,393 17,348 Financial debt (6)
637,446 562,195 Deferred income taxes 2,010
1,866
Total non-current liabilities
687,803 605,169 Total
liabilities 1,153,669
1,153,477 Equity Class A shares of common
stock 376,728 373,969 Class B shares of common stock 132,915
132,915 Additional paid-in capital 12,395 13,788 Retained earnings
308,458 271,968 Accumulated other comprehensive losses
(418,935 ) (441,649 )
Total Arcos Dorados Holdings Inc
shareholders’ equity 411,561
350,991 Non-controlling interest in subsidiaries
513 585
Total equity
412,074 351,576 Total
liabilities and equity 1,565,743
1,505,053 (1) Includes "Other receivables",
"Inventories", "Prepaid expenses and other current assets", and
"McDonald's Corporation's indemnification for contingencies". (2)
Includes "Miscellaneous", "Collateral deposits", "Derivative
Instrument", and "McDonald´s Corporation indemnification for
contingencies". (3) Includes "Income taxes payable" and "Other
taxes payable". (4) Includes "Royalties payable to McDonald´s
Corporation" and "Interest payable". (5) Includes "Short-term
debt", "Current portion of long-term debt" and "Derivative
instruments". (6) Includes "Long-term debt, excluding current
portion" and "Derivative instruments". 1
For definitions please refer to page 14 of this document.
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version on businesswire.com: http://www.businesswire.com/news/home/20170809005106/en/
Investor RelationsArcos DoradosDaniel Schleiniger, +54 11
4711 2675Vice President of Corporate Communications & Investor
Relationsdaniel.schleiniger@ar.mcd.comorMediaMBS Value
PartnersKatja Buhrer, +1 917 969
3438katja.buhrer@mbsvalue.comwww.arcosdorados.com/ir
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