BJ’s Restaurants, Inc. (NASDAQ: BJRI) today reported financial
results for its fiscal 2019 first quarter ended Tuesday, April
2, 2019.
First Quarter 2019 Highlights Compared
to First Quarter 2018
- Total revenues grew 4.3% to $290.6 million
- Total restaurant operating weeks increased approximately
2.5%
- Comparable restaurant sales increased 2.0%
- Net income of $12.9 million compared to $14.7 million (first
quarter 2019 net income includes a $0.4 million expense related to
the adoption of ASU 2016-02)
- Diluted net income per share of $0.60 compared to $0.70 (first
quarter 2019 diluted net income per share includes a $0.02 expense
related to the adoption of ASU 2016-02)
“BJ’s strong sales momentum in the latter part
of the quarter offset challenging weather conditions throughout the
country and drove another quarter of solid top and bottom line
results,” commented Greg Trojan, Chief Executive Officer. “Our
comparable restaurant sales were driven by positive guest traffic
growth of 0.7%, marking the sixth consecutive quarter of positive
traffic, as we successfully hurdled last year’s first quarter
comparable restaurant sales growth of 4.2%. We remain focused on
driving sales and shareholder value through our continued sales
building, hospitality and service initiatives coupled with our
balanced approach to returning capital to our shareholders through
our share repurchases and dividends.
“Our new zucchini noodles and slow roast tri-tip
sirloin are quickly becoming guest favorites and reasons to visit
BJ’s,” Trojan continued. “In addition to our new menu items and
other sales building initiatives, we are beginning to roll out our
new Gold Standard Kitchen Systems to all of our restaurants in the
second quarter. These new systems will focus on our kitchen
organization, food prep and line cook speed to further enhance our
already high quality positioning in the casual dining space.”
In the first quarter of fiscal 2019, BJ’s opened
one new restaurant in Toledo, Ohio. To date in the second quarter,
the Company opened its second new restaurant of the year and its
204th restaurant in Sterling Heights, Michigan. “Our excitement
about the ongoing benefits from our sales and efficiency
initiatives is matched by the enthusiasm we have for the continued
opportunity to expand BJ’s nationally. We expect to open an
additional restaurant in the second quarter and four to six
restaurants in the second half of this year for a total of seven to
nine new restaurants in fiscal 2019,” Trojan continued. “While our
2019 development pipeline is in excellent shape and the opportunity
for continued national expansion remains significant, we will
maintain a balanced approach to new restaurant growth to ensure new
restaurant quality and execution takes precedence over new
restaurant quantity.”
During the first quarter of 2019, the Company
repurchased and retired approximately 249,000 shares of its common
stock at a cost of approximately $11.9 million. Since the Company’s
first share repurchase authorization was approved in April 2014,
BJ’s has repurchased and retired approximately 10.0 million shares
at a cost of approximately $389.7 million and has reduced its
outstanding share count by approximately 32%. In March 2019, the
Company’s Board of Directors approved an expansion of the share
repurchase program by $100 million. As a result, the Company
currently has approximately $110.3 million available under its
authorized $500 million share repurchase program.
The Company’s Board of Directors declared a cash
dividend of $0.12 per share of common stock payable May 27, 2019,
to shareholders of record at the close of business on May 13, 2019.
While the Company intends to pay quarterly cash dividends for the
foreseeable future, dividends will be reviewed quarterly and
declared by the Board of Directors at its discretion.
Trojan concluded, “BJ’s sales and operating
initiatives, combined with our long-term strategy of opening high
quality new restaurants, strong cash flow from operations and a
healthy balance sheet, continue to provide us the financial
flexibility to simultaneously execute on multiple initiatives and
enhance shareholder value.”
Investor Conference Call and
Webcast
BJ’s Restaurants, Inc. will conduct a conference
call on its first quarter 2019 earnings release today, April 25,
2019, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Senior
management will discuss the financial results and host a question
and answer session. In addition, a live audio webcast of the call
will be accessible to the public on the “Investors” page of the
Company’s website located at http://www.bjsrestaurants.com, and a
recording of the webcast will be archived on the site for 30 days
following the live event. Please allow 15 minutes to register and
download and install any necessary software.
About BJ’s Restaurants,
Inc.
BJ’s Restaurants, Inc. (“BJ’s”) is a national
brand with brewhouse roots and a menu with over 140 offerings where
craft matters. BJ’s broad menu has something for everyone:
slow-roasted entrees like prime rib, BJ’s EnLIGHTened Entrees®
including Cherry Chipotle Glazed Salmon, signature deep dish pizza
and the often imitated, but never replicated world-famous Pizookie®
dessert. BJ’s has been a pioneer in the craft brewing world since
1996, and takes pride in serving BJ’s award-winning proprietary
handcrafted beers, brewed at its brewing operations in five states
and by independent third-party craft brewers. The BJ’s experience
offers high-quality ingredients, bold flavors, moderate prices,
sincere service and a cool, contemporary atmosphere. Founded in
1978, BJ’s owns and operates 204 casual dining restaurants. All
restaurants offer dine-in, take-out, delivery and large party
catering. BJ’s restaurants are located in 27 states: Alabama,
Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas,
Kentucky, Louisiana, Maryland, Michigan, Nevada, New Jersey, New
Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas,
Virginia and Washington. For more BJ’s information, visit
http://www.bjsrestaurants.com.
Forward-Looking Statements
Disclaimer
Certain statements in the preceding paragraphs
and all other statements that are not purely historical constitute
“forward-looking” statements for purposes of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended, and are
intended to be covered by the safe harbors created thereby. Such
statements include, but are not limited to, those regarding
expected comparable restaurant sales and margin growth in future
periods, total potential domestic capacity, the success of various
sales-building and productivity initiatives, future guest traffic
trends, construction cost savings initiatives and the number and
timing of new restaurants expected to be opened in future periods.
These “forward-looking” statements involve known and unknown risks,
uncertainties and other factors which may cause actual results to
be materially different from those projected or anticipated.
Factors that might cause such differences include, but are not
limited to: (i) our ability to manage new restaurant openings,
(ii) construction delays, (iii) labor shortages, (iv)
increases in minimum wage and other employment related costs,
including compliance with the Patient Protection and Affordable
Care Act and minimum salary requirements for exempt team members,
(v) the effect of credit and equity market disruptions on our
ability to finance our continued expansion on acceptable terms,
(vi) food quality and health concerns and the effect of negative
publicity about us, our restaurants, other restaurants, or others
across the food supply chain, due to food borne illness or other
reasons, whether or not accurate, (vii) factors that impact
California, Texas and Florida, where a substantial number of
our restaurants are located, (viii) restaurant and brewery
industry competition, (ix) impact of certain brewing business
considerations, including without limitation, dependence upon
suppliers, third party contractors and distributors, and related
hazards, (x) consumer spending trends in general for casual dining
occasions, (xi) potential uninsured losses and liabilities due to
limitations on insurance coverage, (xii) fluctuating commodity
costs and availability of food in general and certain raw materials
related to the brewing of our craft beers and energy requirements,
(xiii) trademark and service-mark risks, (xiv) government
regulations and licensing costs, (xv) beer and liquor regulations,
(xvi) loss of key personnel, (xvii) inability to secure acceptable
sites, (xviii) legal proceedings, (xix) other general economic and
regulatory conditions and requirements, (xx) the success of our key
sales-building and related operational initiatives, (xxi) any
failure of our information technology or security breaches with
respect to our electronic systems and data, and (xxii) numerous
other matters discussed in the Company’s filings with the
Securities and Exchange Commission, including its recent reports on
Forms 10-K, 10-Q and 8-K. The “forward-looking” statements
contained in this press release are based on current assumptions
and expectations, and BJ’s Restaurants, Inc. undertakes no
obligation to update or alter its “forward-looking” statements
whether as a result of new information, future events or
otherwise.
For further information, please contact Greg
Levin of BJ’s Restaurants, Inc. at (714) 500-2400 or JCIR at (212)
835-8500 or at bjri@jcir.com.
BJ’s Restaurants, Inc. |
Consolidated Statements of
Income |
(Dollars in thousands except for per share
data) |
|
|
|
First Quarter Ended |
|
April 2,
2019(unaudited) |
April 3,
2018(unaudited) |
Revenues |
$290,554 |
|
100.0 |
% |
$278,523 |
|
100.0 |
% |
Restaurant operating
costs (excluding depreciation and amortization): |
|
|
|
|
Cost of
sales |
|
73,326 |
|
25.2 |
|
|
69,971 |
|
25.1 |
|
Labor and
benefits |
|
105,221 |
|
36.2 |
|
|
100,433 |
|
36.1 |
|
Occupancy
and operating |
|
61,591 |
|
21.2 |
|
|
57,503 |
|
20.6 |
|
General
and administrative |
|
16,896 |
|
5.8 |
|
|
15,131 |
|
5.4 |
|
Depreciation and amortization |
|
17,642 |
|
6.1 |
|
|
17,454 |
|
6.3 |
|
Restaurant opening |
|
448 |
|
0.2 |
|
|
597 |
|
0.2 |
|
Loss on
disposal and impairment of assets |
|
1,645 |
|
0.6 |
|
|
1,061 |
|
0.4 |
|
Total costs and
expenses |
|
276,769 |
|
95.3 |
|
|
262,150 |
|
94.1 |
|
Income
from operations |
|
13,785 |
|
4.7 |
|
|
16,373 |
|
5.9 |
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
Interest
expense, net |
|
(1,070 |
) |
(0.4 |
) |
|
(1,387 |
) |
(0.5 |
) |
Other
income (expense), net |
|
1,097 |
|
0.4 |
|
|
(100 |
) |
- |
|
Total other income
(expense) |
|
27 |
|
- |
|
|
(1,487 |
) |
(0.5 |
) |
Income
before income taxes |
|
13,812 |
|
4.8 |
|
|
14,886 |
|
5.3 |
|
|
|
|
|
|
Income tax expense |
|
948 |
|
0.3 |
|
|
222 |
|
0.1 |
|
|
|
|
|
|
Net
income |
$12,864 |
|
4.4 |
% |
$14,664 |
|
5.3 |
% |
|
|
|
|
|
Net income per
share: |
|
|
|
|
Basic |
$0.61 |
|
|
$0.71 |
|
|
Diluted |
$0.60 |
|
|
$0.70 |
|
|
|
|
|
|
|
Weighted average number
of shares outstanding: |
|
|
|
|
Basic |
|
21,056 |
|
|
|
20,586 |
|
|
Diluted |
|
21,448 |
|
|
|
21,063 |
|
|
|
|
|
|
|
|
|
|
|
Percentages reflected above may not reconcile due
to rounding.
|
|
|
|
BJ’s Restaurants, Inc. |
|
Selected Consolidated Balance Sheet
Information |
|
(Dollars in thousands) |
|
|
|
|
April 2,
2019(unaudited) |
|
January 1, 2019 |
|
Cash and cash
equivalents |
$ |
25,673 |
|
$ |
29,224 |
|
Total assets (1) |
$ |
1,058,248 |
|
$ |
695,107 |
|
Total debt |
$ |
102,000 |
|
$ |
95,000 |
|
Shareholders’ equity |
$ |
329,268 |
|
$ |
309,221 |
|
|
|
|
|
|
|
|
(1) Total
assets includes $374.4 million of lease right of use assets for the
first quarter ended April 2, 2019, related to the adoption of ASU
2016-02. |
BJ’s Restaurants, Inc. |
Unaudited Supplemental
Information |
(Dollars in thousands) |
|
|
|
|
|
|
|
First Quarter Ended |
|
|
April 2, 2019 |
April 3, 2018 |
|
Stock-based
compensation (1) |
|
|
|
|
|
Labor and benefits |
$458 |
|
0.2% |
|
$578 |
|
0.2% |
|
|
General and
administrative |
|
1,626 |
|
0.6 |
|
|
1,705 |
|
0.6 |
|
|
Total stock-based
compensation |
$2,084 |
|
0.7% |
|
$2,283 |
|
0.8% |
|
|
|
|
|
|
|
|
Operating
Data |
|
|
|
|
|
Comparable restaurant
sales % change |
|
2.0% |
|
|
|
4.2% |
|
|
|
Restaurants opened
during period |
|
1 |
|
|
|
1 |
|
|
|
Restaurants open at
period-end |
|
203 |
|
|
|
198 |
|
|
|
Restaurant operating
weeks |
|
2,626 |
|
|
|
2,563 |
|
|
|
(1) Percentages represent percent of total revenues.
Note Regarding Non-GAAP Financial Measures
The Company is reporting below certain non-GAAP financial
results and related reconciliations to the corresponding GAAP
financial measures. These non-GAAP measures are not in accordance
with, or a substitute for, measures prepared in accordance with
GAAP, and may be different from non-GAAP measures used by other
companies. These measures should only be used to evaluate the
Company's results of operations in conjunction with corresponding
GAAP measures.
Restaurant Level Operating Margin
Restaurant level operating margin, a non-GAAP
financial measure, is equal to the revenues generated by our
restaurants less their direct operating costs which consist of cost
of sales, labor and benefits, and occupancy and operating costs.
This performance measure includes only the costs that restaurant
level managers can directly control and excludes other operating
costs that are essential to conduct the Company’s business, as
detailed in the table below. Management uses restaurant level
operating margin as a supplemental measure of restaurant
performance. Management believes restaurant level operating margin
is useful to investors in that it highlights trends in our core
business that may not otherwise be apparent to investors when
relying solely on GAAP financial measures. Because other companies
may calculate restaurant level operating margin differently than we
do, restaurant level operating margin as presented herein may not
be comparable to similarly titled measures reported by other
companies.
A reconciliation of income from operations to
restaurant level operating margin for the first quarter ended April
2, 2019 and April 3, 2018 is set forth below:
Supplemental Financial Information – Restaurant
Level Operating Margin |
|
(Unaudited, dollars in thousands) |
|
|
|
|
|
|
|
First Quarter Ended |
|
|
April 2, 2019 |
April 3, 2018 |
|
Income from
operations |
$13,785 |
4.7 |
% |
$16,373 |
5.9 |
% |
|
General
and administrative |
|
16,896 |
5.8 |
|
|
15,131 |
5.4 |
|
|
Depreciation and amortization |
|
17,642 |
6.1 |
|
|
17,454 |
6.3 |
|
|
Restaurant opening |
|
448 |
0.2 |
|
|
597 |
0.2 |
|
|
Loss on
disposal and impairment of assets |
|
1,645 |
0.6 |
|
|
1,061 |
0.4 |
|
|
Restaurant level
operating margin |
$50,416 |
17.4 |
% |
$50,616 |
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Percentages above represent percent of total
revenues and may not reconcile due to rounding.
Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (“Adjusted EBITDA”)
Adjusted EBITDA is a non-GAAP financial measure that represents
the sum of net income, interest expense, income tax expense,
depreciation and amortization, stock-based compensation expense,
other expense (income) and loss on disposal and impairment of
assets detailed within the reconciliation below. Management uses
Adjusted EBITDA as a supplemental measure of our performance.
Management believes these measures are useful to investors in that
they highlight cash flow and trends in our core business that may
not otherwise be apparent to investors when relying solely on GAAP
financial measures. Because other companies may calculate these
measures differently than we do, Adjusted EBITDA as presented
herein may not be comparable to similarly titled measures reported
by other companies.
Supplemental Financial Information – Net
Income to Adjusted EBITDA |
(Unaudited, dollars in
thousands) |
|
|
|
First Quarter Ended |
|
April 2, 2019 |
April 3, 2018 |
Net income |
$12,864 |
|
4.4 |
% |
$14,664 |
5.3 |
% |
Interest expense,
net |
|
1,070 |
|
0.4 |
|
|
1,387 |
0.5 |
|
Income
tax expense |
|
948 |
|
0.3 |
|
|
222 |
0.1 |
|
Depreciation and amortization |
|
17,642 |
|
6.1 |
|
|
17,454 |
6.3 |
|
Stock-based compensation expense |
|
2,084 |
|
0.7 |
|
|
2,283 |
0.8 |
|
Other
expense (income), net |
|
(1,097) |
|
( 0.4) |
|
|
100 |
- |
|
Loss on
disposal and impairment of assets |
|
1,645 |
|
0.6 |
|
|
1,061 |
0.4 |
|
Adjusted EBITDA |
$35,156 |
|
12.1 |
% |
$37,171 |
13.3 |
% |
|
|
|
|
|
|
|
|
ASU 2016-02 Reconciliation
The following table illustrates the impact from
the adoption of ASU 2016-02 on our results for the first quarter
ended April 2, 2019. The Company believes the non-GAAP financial
measure and reconciliation below provides analysts and others in
the investment community a way to analyze and compare the Company’s
results to prior period results in which ASU 2016-02 was not
applied.
BJ’s Restaurants,
Inc. |
Supplemental Financial
Information – ASU 2016-02, Leases, Reconciliation |
(Dollars in thousands except
for per share data) |
|
|
|
|
First Quarter Ended |
|
April 2, 2019 |
April 3, 2018 |
|
New Standard |
Total Adjustments |
|
Previous Standard |
Previous Standard |
Revenues |
$290,554 |
|
|
$ - |
|
|
$290,554 |
|
$278,523 |
|
Restaurant
operating costs (excluding depreciation and amortization): |
|
|
|
|
|
Cost of sales |
|
73,326 |
|
|
93 |
|
(1) |
|
|
73,419 |
|
|
69,971 |
|
Labor and benefits |
|
105,221 |
|
|
- |
|
|
|
105,221 |
|
|
100,433 |
|
Occupancy and operating |
|
61,591 |
|
|
(471) |
|
(2) |
|
|
61,120 |
|
|
57,503 |
|
General and administrative |
|
16,896 |
|
|
- |
|
|
|
16,896 |
|
|
15,131 |
|
Depreciation and amortization |
|
17,642 |
|
|
- |
|
|
|
17,642 |
|
|
17,454 |
|
Restaurant opening |
|
448 |
|
|
- |
|
|
|
448 |
|
|
597 |
|
Loss on disposal and impairment of assets |
|
1,645 |
|
|
- |
|
|
|
1,645 |
|
|
1,061 |
|
Total costs
and expenses |
|
276,769 |
|
|
(378) |
|
|
|
276,391 |
|
|
262,150 |
|
Income from operations |
|
13,785 |
|
|
378 |
|
|
|
14,163 |
|
|
16,373 |
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
Interest expense, net |
|
(1,070) |
|
|
- |
|
|
|
(1,070) |
|
|
(1,387) |
|
Other income (expense), net |
|
1,097 |
|
|
- |
|
|
|
1,097 |
|
|
(100) |
|
Total other
income (expense) |
|
27 |
|
|
- |
|
|
|
27 |
|
|
(1,487) |
|
Income before income taxes |
|
13,812 |
|
|
378 |
|
|
|
14,190 |
|
|
14,886 |
|
|
|
|
|
|
|
Income tax expense |
|
948 |
|
|
- |
|
|
|
948 |
|
|
222 |
|
|
|
|
|
|
|
Net income |
$12,864 |
|
$ 378 |
|
|
$13,242 |
|
$14,664 |
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
Basic |
$0.61 |
|
$0.02 |
|
|
$0.63 |
|
$0.71 |
|
Diluted |
$0.60 |
|
$0.02 |
|
|
$0.62 |
|
$0.70 |
|
Weighted
average number of shares outstanding: |
|
|
|
|
|
Basic |
|
21,056 |
|
|
21,056 |
|
|
|
21,056 |
|
|
20,586 |
|
Diluted |
|
21,448 |
|
|
21,448 |
|
|
|
21,448 |
|
|
21,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior to the adoption of ASU 2016-02, this amount was
recorded as “Cost of sales” expenses. Amount represents contract
considerations, which is now required to be allocated to the lease
and non-lease components and recorded as “Occupancy and operating”
expenses. (2) Amount primarily represents the amortization of
deferred sales-leaseback gain coupled with the contract
consideration noted in footnote (1). Prior to the adoption of ASU
2016-02, sales-leaseback gains were deferred and amortized over the
life of the lease as a credit to “Occupancy and operating”
expenses.
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