NEWPORT BEACH, Calf.,
Oct. 25, 2018 /PRNewswire/
-- Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported
financial results for its third quarter ended September 30, 2018.
Overview for the three months ended September 30, 2018 as compared to the three
months ended September 30,
2017:
- Revenue increased 8.6% to $1.2
billion
- Comparable restaurant sales increased 4.4%
- Digital sales grew 48.3% in the quarter and accounted for 11.2%
of sales
- Restaurant level operating margin was 18.7%, an increase from
16.1%
- Net income was $38.2 million,
including the after-tax impact of $22.4
million in expenses related to restaurant asset impairment,
corporate restructuring, and certain other costs, a 94.8% increase
from $19.6 million; excluding those
items, adjusted net income was $60.7
million, a 60.3% increase from $37.8
million.1
- Diluted earnings per share was $1.36, net of a $0.80 after-tax impact from expenses related to
restaurant asset impairment, corporate restructuring, and certain
other costs, a 97.1% increase from $0.69. Adjusted diluted earnings per share
excluding these charges was $2.16, a
62.4% increase from $1.33.1
- Opened 28 new restaurants and closed or relocated 32
Overview for the nine months ended September 30, 2018 as compared to the nine months
ended September 30, 2017:
- Revenue increased 8.1% to $3.6
billion
- Comparable restaurant sales increased 3.3%, which includes 20
basis points of deferred revenue.
- Digital sales grew 34.4% and accounted for 10.2% of sales
- Restaurant level operating margin was 19.3%, an increase from
17.6%
- Net income was $144.5 million,
including the after-tax impact of $60.8
million in expenses related to restaurant asset impairment,
corporate restructuring, and certain other costs, a 9.1% increase
from net income of $132.5 million;
excluding those items, adjusted net income was $205.4 million, a 36.3% increase from
$150.7 million.1
- Diluted earnings per share was $5.17, net of a $2.17 after-tax impact from expenses related to
restaurant asset impairment, corporate restructuring, and certain
other costs, a 11.9% increase from $4.62. Adjusted diluted earnings per share
excluding these charges was $7.34, a
39.8% increase from $5.25.
1
- Opened 97 new restaurants and closed or relocated 42
1 Adjusted
net income and adjusted diluted earnings per share are non-GAAP
financial measures. Reconciliations to GAAP measures and further
information are set forth in the table at the end of this press
release.
|
"Chipotle's strategy to win today and cultivate a better future
is taking hold and I'm pleased to report our third quarter results
with strong sales growth and restaurant margin expansion over last
year," said Brian Niccol, chief
executive officer. "We made important progress during the quarter
with the introduction of our 'For Real' marketing strategy and I'm
encouraged by the progress we are making in building a pipeline of
customer focused innovation, driving digital sales, elevating our
restaurant operations and effectively executing our
reorganization."
Results for the three months ended September 30, 2018
Revenue for the quarter was $1.2
billion, an increase of 8.6% from the third quarter of 2017.
The increase in revenue was driven by new restaurant openings and a
4.4% increase in comparable restaurant sales. Comparable restaurant
sales improved primarily as a result of an increase in average
check, including a 3.8% effective menu price increase, partially
offset by 1.1% fewer comparable restaurant transactions.
We opened 28 new restaurants during the quarter and closed or
relocated 32, bringing the total restaurant count to 2,463.
Food, beverage and packaging costs were 33.4% of revenue, a
decrease of 160 basis points compared to the third quarter of 2017.
The decrease was primarily due to the benefit of menu price
increases taken in almost all restaurants within the last 12 months
and relief in avocado prices, partially offset by elevated prices
of beef, paper and packaging items.
Restaurant level operating margin was 18.7% in the quarter, an
improvement from 16.1% in the third quarter of 2017. The
improvement was driven primarily by comparable restaurant sales
increases and lower marketing and promotional cost, partially
offset by increased repairs and maintenance.
General and administrative expenses were 8.9% of revenue for the
third quarter of 2018, an increase of 10 basis points over the
third quarter of 2017. In dollar terms, general and administrative
expenses increased compared to the third quarter of 2017 due to
$15.8 million in expense related to
corporate restructuring, including stock compensation modification
expense, severance, relocation, and outside services helping us
through the transition, $10.6 million
in expense associated with the biennial All Managers' Conference
that was held in September 2018,
$7.2 million related to increased
headcount and higher bonus expense, and $4.4
million in outside service expense related to company
initiatives to support restaurant growth, including digitizing our
restaurant experience and operational leadership changes. These
increases were partially offset by the benefit of comparing against
a nonrecurring charge of $30.0
million recorded in the third quarter of 2017 related to the
data security incident that occurred in the first six months of
2017.
The effective tax rate was 36.8% in the third quarter of 2018,
compared to 39% in the third quarter of 2017. The decrease
was primarily due to the impact of the 2017 Tax Cuts and Jobs Act
(the "TCJA"), which lowered the U.S. corporate income tax rate from
35% to 21% for tax years beginning after December 31,
2017. This was partially offset by an increase in the
effective state tax rate resulting from state tax deductions at the
lower federal tax rate and certain non-deductible items that were
added or expanded by the TCJA, including impacts of executive
stock-based compensation and non-deductible meals. The tax
rate was further impacted during the three months ended
September 30, 2018 due to a one-time tax expense on expired
vested options, offset by favorable federal tax credits.
Net income for the third quarter of 2018 was $38.2 million, or $1.36 per diluted share, compared to net income
of $19.6 million, or $0.69 per diluted share, in the third quarter of
2017. Excluding the impact of restaurant asset impairment,
corporate restructuring, and certain other costs, adjusted net
income was $60.7 million and adjusted
diluted earnings per share was $2.16.
Results for the nine months ended September 30, 2018
Revenue for the first nine months of 2018 was $3.6 billion, up 8.1% from the first nine months
of 2017. The increase in revenue was driven by new restaurant
openings and a 3.3% increase in comparable restaurant sales, which
includes 20 basis points of deferred revenue. Comparable restaurant
sales improved primarily as a result of an increase in average
check, including a 4.3% benefit from menu price increases that have
been implemented in all our restaurants, partially offset by 2.1%
fewer comparable restaurant transactions.
We opened 97 new restaurants during the year and closed or
relocated 42 (including the closure of five Pizzeria Locale
restaurants), bringing the total restaurant count to 2,463.
Food beverage and packaging costs were 32.8% of revenue, a
decrease of 150 basis points compared to the first nine months of
2017. The decrease was driven by the benefit of the menu price
increases and relief in avocado prices, partially offset by
elevated beef prices during the first nine months of 2018 compared
to the first nine months of 2017.
Restaurant level operating margin was 19.3% for the nine months
ended September 30, 2018, an
improvement from 17.6% in the first nine months of 2017. The
improvement was driven by comparable restaurant sales increases,
combined with lower marketing and promotional expenses, partially
offset by wage inflation at the crew level.
General and administrative expenses were 7.5% of revenue for the
first nine months of 2018, an increase of 40 basis points over the
first nine months of 2017. In dollar terms, general and
administrative expenses increased compared to the first nine months
of 2017 due to $21.8 million related
to increased headcount and higher bonus expense combined with
$13.3 million in expense related to
corporate restructuring, $12.0
million in expense associated with the biennial All
Managers' Conference that was held in September 2018, $9.3
million in outside service expense related to company
initiatives to support restaurant growth, including digitizing our
restaurant experience and operational leadership changes, and
increased litigation expense of $4.6
million. These increases were partially offset by the
benefit of comparing against the non-recurring charge of
$30.0 million recorded in the third
quarter of 2017 related to the data security incident.
Impairment, closure costs, and asset disposals increased
$46.6 million compared to the first
nine months of 2017 primarily due to the planned closures of
underperforming restaurants and the write down of a large portion
of the associated long-lived asset values, as well as lease
termination costs and impairment related to office closures.
The effective tax rate was 35.8% in the third quarter of 2018,
compared to 38.2% in the third quarter of 2017. The decrease
was primarily due to the impact of the TCJA, which lowered the U.S.
corporate income tax rate from 35% to 21% for tax years beginning
after December 31, 2017. This was partially offset by an
increase in the effective state tax rate resulting from state tax
deductions at the lower federal tax rate and certain non-deductible
items that were added or expanded by the TCJA, including impacts of
executive stock-based compensation and non-deductible meals.
The tax rate was further impacted during the nine months ended
September 30, 2018 due to a one-time tax expense on expired
vested options, offset by favorable federal tax credits.
Net income for the first nine months of 2018 was $144.5 million, or $5.17 per diluted share, compared to net income
of $132.5 million, or $4.62 per diluted share, for the nine months
ended September 30, 2017. Excluding
the impact of restaurant asset impairment, corporate restructuring,
and certain other costs, adjusted net income was $205.4 million and adjusted diluted earnings per
share was $7.34.
Outlook
For 2018, management is anticipating the following:
- Comparable restaurant sales increases for the full year in the
low to mid-single digits
- New restaurant openings at the lower end of the previously
announced range of 130 to 150 for the full year
For 2019, management is anticipating the following:
- 140 to 155 new restaurant openings
Definitions
The following definitions apply to these terms as used
throughout this release:
Comparable restaurant sales, or sales comps, and comparable
restaurant transactions, represent the change in
period-over-period sales or transactions for restaurants in
operation for at least 13 full calendar months.
Average restaurant sales refers to the average trailing
12-month sales for restaurants in operation for at least 12 full
calendar months.
Restaurant level operating margin represents total
revenue less restaurant operating costs, expressed as a percent of
total revenue.
Conference Call
Chipotle will host a conference call to discuss the third
quarter 2018 financial results on Thursday,
October 25, 2018 at 4:30 PM Eastern
time.
The conference call can be accessed live over the phone by
dialing 1-888-317-6003 or for international callers by dialing
1-412-317-6061. The call will be webcast live from the company's
website on the investor relations page at ir.chipotle.com/events.
An archived webcast will be available approximately one hour after
the end of the call.
About Chipotle
Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better
world by serving responsibly sourced, classically-cooked, real food
with wholesome ingredients without added colors, flavors or other
additives. Chipotle had more than 2,450 restaurants as
of September 30, 2018 in the United
States, Canada, the United
Kingdom, France and Germany and is the only
restaurant company of its size that owns and operates all its
restaurants. With more than 70,000 employees passionate about
providing a great guest experience, Chipotle is a longtime leader
and innovator in the food industry. Chipotle is committed to making
its food more accessible to everyone while continuing to be a brand
with a demonstrated purpose as it leads the way in digital,
technology and sustainable business practices. Steve Ells,
founder and executive chairman, first opened Chipotle starting with
a single restaurant in Denver, Colorado in 1993. For more
information or to place an order online,
visit WWW.CHIPOTLE.COM.
Forward-Looking Statements
Certain statements in this press release, including
statements under the heading "Outlook" of our expected comparable
restaurant sales in 2018, as well as our estimated number of new
restaurant openings in 2018 and 2019, are forward-looking
statements as defined in the Private Securities Litigation Reform
Act of 1995. We use words such as "anticipate", "believe", "could",
"should", "estimate", "expect", "intend", "may", "predict",
"project", "target", and similar terms and phrases, including
references to assumptions, to identify forward-looking statements.
The forward-looking statements in this press release are based on
information available to us as of the date any such statements are
made and we assume no obligation to update these forward-looking
statements. These statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
described in the statements. These risks and uncertainties include,
but are not limited to, the following: the uncertainty of our
ability to achieve expected levels of comparable restaurant sales
due to factors such as changes in consumers' perceptions of our
brand, including as a result of actual or rumored food-borne
illness incidents or other negative publicity, the impact of
competition, including from sources outside the restaurant
industry, decreased overall consumer spending, or our possible
inability to increase menu prices or realize the benefits of menu
price increases; the risk of food-borne illnesses and other health
concerns about our food or dining out generally; factors that could
affect our ability to achieve and manage our planned expansion,
such as the availability of a sufficient number of suitable new
restaurant sites and the availability of qualified employees; risks
related to recently-announced restructuring activities, including
increased expenses and substantial turnover in the ranks of our
corporate support teams; the performance of new restaurants and
their impact on existing restaurant sales; the potential for
increased labor costs or difficulty training and retaining
qualified employees, including as a result of market pressures,
enhanced food safety procedures in our restaurants, or new
regulatory requirements; increases in the cost of food ingredients
and other key supplies or higher food costs due to changes in
supply chain protocols; risks related to our marketing and
advertising strategies, which may not be successful and may expose
us to liabilities; supply chain risks; risks relating to our
expansion into new markets, including outside the U.S., or
non-traditional restaurant sites; the impact of federal, state or
local government regulations relating to our employees, our
restaurant design, or the sale of food or alcoholic beverages;
risks associated with our Food With Integrity philosophy, including
supply shortages and potential liabilities from advertising claims
and other marketing activities related to Food With Integrity;
security risks associated with the acceptance of electronic payment
cards or electronic storage and processing of confidential customer
or employee information; risks relating to litigation, including
possible governmental actions related to food-borne illness
incidents, as well as class action litigation regarding employment
laws, advertising claims or other matters; risks relating to our
insurance coverage and self-insurance; risks regarding our ability
to protect our brand and reputation; risks associated with our
reliance on certain information technology systems; risks related
to our ability to effectively manage our growth; risks associated
with our pending leadership change and our dependence on key
personnel; and other risk factors described from time to time in
our SEC reports, including our most recent annual report on Form
10-K and subsequent quarterly reports on Form 10-Q, all of which
are available on the investor relations page of our website at
ir.Chipotle.com.
Chipotle Mexican
Grill, Inc.
Condensed Consolidated Statement of Income
(unaudited)
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
2018
|
|
2017
|
Revenue
|
$
|
1,225,007
|
|
100.0
|
%
|
|
$
|
1,128,074
|
|
100.0
|
%
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
409,213
|
|
33.4
|
|
|
|
394,567
|
|
35.0
|
|
Labor
|
|
332,865
|
|
27.2
|
|
|
|
306,862
|
|
27.2
|
|
Occupancy
|
|
86,691
|
|
7.1
|
|
|
|
83,199
|
|
7.4
|
|
Other operating
costs
|
|
167,488
|
|
13.7
|
|
|
|
162,312
|
|
14.4
|
|
General and
administrative expenses
|
|
109,524
|
|
8.9
|
|
|
|
99,182
|
|
8.8
|
|
Depreciation and
amortization
|
|
52,654
|
|
4.3
|
|
|
|
41,546
|
|
3.7
|
|
Pre-opening
costs
|
|
2,127
|
|
0.2
|
|
|
|
2,792
|
|
0.2
|
|
Impairment, closure
costs, and asset disposals
|
|
6,454
|
|
0.5
|
|
|
|
6,747
|
|
0.6
|
|
Total operating
expenses
|
|
1,167,016
|
|
95.3
|
|
|
|
1,097,207
|
|
97.3
|
|
Income from
operations
|
|
57,991
|
|
4.7
|
|
|
|
30,867
|
|
2.7
|
|
Interest and other
income, net
|
|
2,493
|
|
0.2
|
|
|
|
1,275
|
|
0.1
|
|
Income before income
taxes
|
|
60,484
|
|
4.9
|
|
|
|
32,142
|
|
2.8
|
|
Provision for income
taxes
|
|
(22,280)
|
|
(1.8)
|
|
|
|
(12,532)
|
|
(1.1)
|
|
Net income
|
$
|
38,204
|
|
3.1
|
%
|
|
$
|
19,610
|
|
1.7
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.37
|
|
|
|
|
$
|
0.69
|
|
|
|
Diluted
|
$
|
1.36
|
|
|
|
|
$
|
0.69
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,802
|
|
|
|
|
|
28,415
|
|
|
|
Diluted
|
|
28,017
|
|
|
|
|
|
28,439
|
|
|
|
Chipotle Mexican
Grill, Inc. Condensed Consolidated Statement of
Income (unaudited) (in thousands, except per
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
2018
|
|
2017
|
Revenue
|
$
|
3,639,924
|
|
100.0
|
%
|
|
$
|
3,366,312
|
|
100.0
|
%
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
1,194,224
|
|
32.8
|
|
|
|
1,155,514
|
|
34.3
|
|
Labor
|
|
993,570
|
|
27.3
|
|
|
|
900,564
|
|
26.8
|
|
Occupancy
|
|
258,719
|
|
7.1
|
|
|
|
242,482
|
|
7.2
|
|
Other operating
costs
|
|
490,728
|
|
13.5
|
|
|
|
476,606
|
|
14.2
|
|
General and
administrative expenses
|
|
271,740
|
|
7.5
|
|
|
|
238,698
|
|
7.1
|
|
Depreciation and
amortization
|
|
148,762
|
|
4.1
|
|
|
|
121,906
|
|
3.6
|
|
Pre-opening
costs
|
|
6,790
|
|
0.2
|
|
|
|
9,764
|
|
0.3
|
|
Impairment, closure
costs, and asset disposals
|
|
56,635
|
|
1.6
|
|
|
|
10,013
|
|
0.3
|
|
Total operating
expenses
|
|
3,421,168
|
|
94.0
|
|
|
|
3,155,547
|
|
93.7
|
|
Income from
operations
|
|
218,756
|
|
6.0
|
|
|
|
210,765
|
|
6.3
|
|
Interest and other
income, net
|
|
6,210
|
|
0.2
|
|
|
|
3,512
|
|
0.1
|
|
Income before income
taxes
|
|
224,966
|
|
6.2
|
|
|
|
214,277
|
|
6.4
|
|
Provision for income
taxes
|
|
(80,432)
|
|
(2.2)
|
|
|
|
(81,817)
|
|
(2.4)
|
|
Net income
|
$
|
144,534
|
|
4.0
|
%
|
|
$
|
132,460
|
|
3.9
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
5.19
|
|
|
|
|
$
|
4.63
|
|
|
|
Diluted
|
$
|
5.17
|
|
|
|
|
$
|
4.62
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,844
|
|
|
|
|
|
28,604
|
|
|
|
Diluted
|
|
27,967
|
|
|
|
|
|
28,696
|
|
|
|
Chipotle Mexican
Grill, Inc.
Condensed
Consolidated Balance Sheet
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2018
|
|
2017
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
343,028
|
|
$
|
184,569
|
Accounts receivable,
net
|
|
26,868
|
|
|
40,453
|
Inventory
|
|
18,285
|
|
|
19,860
|
Prepaid expenses and
other current assets
|
|
55,406
|
|
|
50,918
|
Income tax
receivable
|
|
21,697
|
|
|
9,353
|
Investments
|
|
327,787
|
|
|
324,382
|
Total current
assets
|
|
793,071
|
|
|
629,535
|
Leasehold
improvements, property and equipment, net
|
|
1,361,440
|
|
|
1,338,366
|
Restricted
cash
|
|
29,580
|
|
|
29,601
|
Other
assets
|
|
24,842
|
|
|
26,251
|
Goodwill
|
|
21,939
|
|
|
21,939
|
Total
assets
|
$
|
2,230,872
|
|
$
|
2,045,692
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
103,486
|
|
$
|
82,028
|
Accrued payroll and
benefits
|
|
127,302
|
|
|
82,541
|
Accrued
liabilities
|
|
171,998
|
|
|
159,324
|
Total current
liabilities
|
|
402,786
|
|
|
323,893
|
Deferred
rent
|
|
327,804
|
|
|
316,498
|
Deferred income tax
liability
|
|
27,322
|
|
|
814
|
Other
liabilities
|
|
37,123
|
|
|
40,042
|
Total
liabilities
|
|
795,035
|
|
|
681,247
|
Shareholders'
equity:
|
|
|
|
|
|
Preferred stock, $0.01
par value, 600,000 shares authorized, no shares issued as of
September 30, 2018 and December 31, 2017, respectively
|
|
-
|
|
|
-
|
Common stock $0.01 par
value, 230,000 shares authorized, 35,966 and 35,852 shares issued
as of September 30, 2018 and December 31, 2017,
respectively
|
|
360
|
|
|
359
|
Additional paid-in
capital
|
|
1,353,071
|
|
|
1,305,090
|
Treasury stock, at
cost, 8,174 and 7,826 common shares at September 30, 2018 and
December 31, 2017, respectively
|
|
(2,454,337)
|
|
|
(2,334,409)
|
Accumulated other
comprehensive income (loss)
|
|
(4,855)
|
|
|
(3,659)
|
Retained
earnings
|
|
2,541,598
|
|
|
2,397,064
|
Total shareholders'
equity
|
|
1,435,837
|
|
|
1,364,445
|
Total liabilities and
shareholders' equity
|
$
|
2,230,872
|
|
$
|
2,045,692
|
Chipotle Mexican
Grill, Inc. Condensed Consolidated Statement of Cash
Flows (unaudited) (in thousands)
|
|
|
|
|
|
|
|
Nine months
ended
|
|
September
30,
|
|
2018
|
|
2017
|
|
|
|
|
(as
adjusted)(1)
|
Operating
activities
|
|
|
|
|
|
Net income
|
$
|
144,534
|
|
$
|
132,460
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
148,762
|
|
|
121,906
|
Deferred income tax
(benefit) provision
|
|
26,424
|
|
|
(11,323)
|
Impairment, closure
costs, and asset disposals
|
|
56,635
|
|
|
10,013
|
Bad debt
allowance
|
|
116
|
|
|
181
|
Stock-based
compensation expense
|
|
48,219
|
|
|
54,596
|
Other
|
|
(1,933)
|
|
|
(126)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
13,442
|
|
|
16,477
|
Inventory
|
|
1,562
|
|
|
(7,023)
|
Prepaid expenses and
other current assets
|
|
(5,041)
|
|
|
(4,890)
|
Other
assets
|
|
1,500
|
|
|
(909)
|
Accounts
payable
|
|
18,183
|
|
|
14,771
|
Accrued liabilities
and accrued payroll and benefits
|
|
38,092
|
|
|
35,514
|
Income tax
payable/receivable
|
|
(12,366)
|
|
|
(7,810)
|
Deferred
rent
|
|
17,096
|
|
|
22,410
|
Other long-term
liabilities
|
|
(2,728)
|
|
|
3,060
|
Net cash provided by
operating activities
|
|
492,497
|
|
|
379,307
|
Investing
activities
|
|
|
|
|
|
Purchases of
leasehold improvements, property and equipment
|
|
(209,999)
|
|
|
(165,506)
|
Purchases of
investments
|
|
(297,217)
|
|
|
(120,084)
|
Maturities of
investments
|
|
295,000
|
|
|
140,000
|
Net cash used in
investing activities
|
|
(212,216)
|
|
|
(145,590)
|
Financing
activities
|
|
|
|
|
|
Acquisition of
treasury stock
|
|
(116,401)
|
|
|
(208,959)
|
Tax withholding on
share-based compensation awards
|
|
(4,627)
|
|
|
(626)
|
Stock plan
transactions and other financing activities
|
|
(150)
|
|
|
10
|
Net cash used in
financing activities
|
|
(121,178)
|
|
|
(209,575)
|
Effect of exchange
rate changes on cash and cash equivalents and restricted
cash
|
|
(665)
|
|
|
1,931
|
Net change in cash,
cash equivalents, and restricted cash
|
|
158,438
|
|
|
26,073
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
|
214,170
|
|
|
116,370
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
372,608
|
|
$
|
142,443
|
|
|
|
|
|
|
(1)
Balances were adjusted due to the
adoption of Financial Accounting Standards Board Accounting
Standards Update No. 2016-18, "Statement of Cash Flows (Topic 230):
Restricted Cash" as discussed in further detail in Item 1.
"Financial Statements," in our Form 10-Q.
|
Chipotle Mexican
Grill, Inc. Supplemental Financial and Other
Data (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
Sep.
30,
|
|
|
Jun.
30,
|
|
|
Mar.
31,
|
|
|
Dec.
31,
|
|
|
Sep.
30
|
|
|
|
|
2018
|
|
|
2018
|
|
|
2018
|
|
|
2017
|
|
|
2017
|
|
Number of restaurants
opened
|
|
|
28
|
|
|
34
|
|
|
35
|
|
|
38
|
|
|
38
|
|
Restaurant
relocations/closures
|
|
|
(32)
|
|
|
(8)
|
|
|
(2)
|
|
|
(4)
|
|
|
(3)
|
|
Number of restaurants
at end of period
|
|
|
2,463
|
|
|
2,467
|
|
|
2,441
|
|
|
2,408
|
|
|
2,374
|
|
Average restaurant
sales
|
|
$
|
1,980
|
|
$
|
1,950
|
|
$
|
1,941
|
|
$
|
1,940
|
|
$
|
1,948
|
|
Comparable restaurant
sales increase
|
|
|
4.4%
|
|
|
3.3%
|
|
|
2.2%
|
|
|
0.9%
|
|
|
1.0%
|
|
Chipotle Mexican
Grill, Inc.
Reconciliation of Non-GAAP Financial
Measures
(in thousands, except per share amounts)
The following provides a reconciliation of
non-GAAP financial measures presented in the text above to the most
directly comparable financial measures calculated and presented in
accordance with GAAP.
Adjusted net income is net income excluding restaurant asset
impairment, corporate restructuring, and certain other costs.
Adjusted diluted earnings per share is adjusted net income divided
by diluted weighted-average common shares outstanding. We believe
that these measures enhance investors' ability to compare the past
financial performance of our underlying business with our current
business performance and reflect the performance of our underlying
restaurants separate from asset impairment, corporate restructuring
and certain other costs at the corporate level. Management uses
these non-GAAP measures for similar purposes. Our adjusted net
income and adjusted diluted earnings per share measure may not be
comparable to other companies' adjusted income measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
$
|
38,204
|
|
$
|
19,610
|
|
$
|
144,534
|
|
$
|
132,460
|
Percentage
increase/(decrease) from prior year period
|
|
94.8%
|
|
|
-
|
|
|
9.1%
|
|
|
-
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant closure
costs(1)
|
|
10,198
|
|
|
-
|
|
|
35,364
|
|
|
-
|
Corporate
Restructuring:
|
|
|
|
|
|
|
|
|
|
|
|
Lease termination and
other office closure costs(2)
|
|
314
|
|
|
-
|
|
|
16,613
|
|
|
-
|
Employee related
restructuring costs(3)
|
|
8,795
|
|
|
-
|
|
|
12,695
|
|
|
-
|
Stock-based
compensation(4)
|
|
6,087
|
|
|
-
|
|
|
(339)
|
|
|
-
|
Other
adjustments(5)
|
|
644
|
|
|
30,000
|
|
|
3,644
|
|
|
30,000
|
Total non-GAAP
adjustments
|
$
|
26,038
|
|
$
|
30,000
|
|
$
|
67,977
|
|
$
|
30,000
|
Tax effect of
non-GAAP adjustments(6)
|
|
(3,590)
|
|
|
(11,766)
|
|
|
(7,158)
|
|
|
(11,766)
|
After tax impact of
non-GAAP adjustments
|
$
|
22,448
|
|
$
|
18,234
|
|
$
|
60,819
|
|
$
|
18,234
|
Adjusted net
income
|
$
|
60,652
|
|
$
|
37,844
|
|
$
|
205,353
|
|
$
|
150,694
|
Percentage
increase from prior period
|
|
60.3%
|
|
|
-
|
|
|
36.3%
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average number of common shares outstanding
|
|
28,017
|
|
|
28,439
|
|
|
27,967
|
|
|
28,696
|
Diluted earnings per
share
|
$
|
1.36
|
|
$
|
0.69
|
|
$
|
5.17
|
|
$
|
4.62
|
Percentage
increase/(decrease) from prior period
|
|
97.1%
|
|
|
-
|
|
|
11.9%
|
|
|
-
|
Adjusted diluted
earnings per share
|
$
|
2.16
|
|
$
|
1.33
|
|
$
|
7.34
|
|
$
|
5.25
|
Percentage
increase from prior year period
|
|
62.4%
|
|
|
-
|
|
|
39.8%
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Restaurant asset
impairment costs and accelerated depreciation for planned
restaurant closures announced in June 2018 due to underperformance.
During the three months ended September 30, 2018, we closed 32
Chipotle restaurants in connection with this initiative. During the
nine months ended September 30, 2018, we closed 33 Chipotle
restaurants and five Pizzeria Locale restaurants in connection with
this initiative.
|
(2) Costs for office
lease termination, accelerated depreciation, impairment charges for
office-related assets, duplicate rent expense and other office
closure expenses.
|
(3) Costs for
employee severance and other transition expenses, recruitment and
relocation costs, and third party and other employee-related
costs.
|
(4) Costs for
modification of stock awards to extend or accelerate vesting for
employees severing from the company, offset by a reduction of
expense due to forfeiture of original awards for these
employees.
|
(5) For the three
months ended September 30, 2018, consists of costs for professional
services for an initiative undertaken as part of our ongoing
business transformation. For the nine months ended September 30,
2018, also includes the uninsured portion of a judgment in a single
legal proceeding, in an amount exceeding the range typically seen
in the ordinary-course, single-plaintiff litigation matters.
For the three and nine months ended September 30, 2017, consists of
a nonrecurring charge we recorded related to the data security
incident that occurred in the first six months of 2017.
|
(6) For the three and
nine months ended September 30, 2018, we have included a write-off
of deferred tax assets related to expired stock awards of $4,487
and $9,919, respectively.
|
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SOURCE Chipotle Mexican Grill