BJ’s Restaurants, Inc. (NASDAQ: BJRI) today provided an update of
certain business and financial metrics given the current COVID-19
environment and reported financial results for its 2020 first
quarter ended Tuesday, March 31, 2020.
“I am extremely proud of the amazing dedication,
creativity and grit of our team members as they continue building
sales and taking care of our guests during these difficult times
for our country,” commented Greg Trojan, BJ’s Chief Executive
Officer. “As our country and the communities in which we operate
slowly re-open, we are ensuring that we have gold standard safety
and social distancing protocols in place to allow our guests to
return to our restaurants and safely enjoy BJ’s food and
beverages.
“Last week we re-opened the dining rooms in our
Texas, Oklahoma and Tennessee locations on a limited capacity basis
and this week opened additional dining rooms in Florida and Kansas.
Guests are now being served in dining rooms in more than a quarter
of our 205 open restaurants. We are encouraged by early dine-in
sales trends, as well as the continued elevated off-premise sales
levels at our recently opened locations. As more BJ’s dining rooms
begin to re-open with limited capacity, we believe that our large
restaurants and flexible seating layouts provide us a strong
advantage to take care of our guests’ needs and grow sales as we
transition back to more regular operations.”
Current Trends and Business Update
- Comparable restaurant sales are
down by 67.6% for the week ending May 5, 2020, which is a 1,410 bps
improvement since the week ending March 24, 2020, when sales
declines peaked at 81.7%. This recent improvement has been driven
by growth in the Company’s off-premise sales from both take-out and
delivery channels and more recently the re-opening of certain
dining rooms. For the week ending May 5, 2020, off-premise sales
continued to grow, improving to $31,688, or 4% over the prior week,
even with dining rooms beginning to re-open. Recent sales on a
weekly basis through May 5, 2020 were as follows:
|
Week Ended |
|
3/17/2020 |
|
3/24/2020 |
|
3/31/2020 |
|
4/7/2020 |
|
4/14/2020 |
|
4/21/2020 |
|
4/28/2020 |
|
5/5/2020 |
|
Comparable Restaurant Sales |
|
-34.3% |
|
|
-81.7% |
|
|
-81.0% |
|
|
-77.5% |
|
|
-74.8% |
|
|
-70.9% |
|
|
-72.9% |
|
|
-67.6% |
|
Weekly Sales Average |
$ |
78,361 |
|
$ |
21,343 |
|
$ |
21,563 |
|
$ |
24,667 |
|
$ |
27,981 |
|
$ |
31,716 |
|
$ |
30,582 |
|
$ |
34,921 |
|
Change from Prior Week |
|
-30.3% |
|
|
-72.8% |
|
|
1.0% |
|
|
14.4% |
|
|
13.4% |
|
|
13.3% |
|
|
-3.6% |
|
|
14.2% |
|
- Our ongoing focus on growing
off-premise sales, including our recent enhancements to our mobile
app and online ordering platform, as well as the expansion of our
large party menu and third party delivery partnerships, has enabled
us to seamlessly transition to higher off-premise volumes during
this pandemic. Higher off-premise volumes are driven by both
traffic and check growth resulting from more items per order and
growth in certain menu items, such as our Family Feast offerings
that feed 4 to 6 guests, our $6 take-home entrees and our to-go
beverage sales that include BJ’s award winning craft beer in six
packs and growlers, bottles of wine and 32 oz.
margaritas.
- Certain states where we operate
restaurants have recently allowed dining rooms to re-open,
including Texas, Florida, Oklahoma, Kansas and Tennessee. As
of today 55 locations, or 27%, of our 205 restaurants currently
operating, are now serving guests in dining rooms in a limited
capacity. Additionally, our six restaurants in Indiana, six
restaurants in Arizona and two restaurants in Arkansas are
scheduled to re-open their dining rooms, also in a limited
capacity, next week.
- The Company closed its previously
announced $70 million common stock sale to Act III Holdings, LLC,
and funds and accounts advised by T. Rowe Price Associates, Inc. on
May 5, 2020, and currently has $134 million of cash and cash
equivalents on hand.
As previously announced, the Company drew down
the remaining available balance on its revolving credit facility to
increase liquidity and enhance financial flexibility given the
uncertain market conditions as a result of the COVID-19 pandemic.
The Company is in compliance with its financial covenants for the
first quarter of 2020. Additionally, the Company amended its credit
agreement effective April 30, 2020, to modify certain financial
covenants. The amended credit agreement is secured by the Company’s
assets and suspends the testing of the lease adjusted leverage
ratio and the fixed charge coverage ratio until the fourth fiscal
quarter ending December 29, 2020, at which time a modified lease
adjusted leverage ratio and fixed charge ratio tests will resume.
Additionally, through December 29, 2020, a monthly liquidity
balance must be maintained, including cash and cash equivalents and
availability under the line of credit.
First Quarter 2020 Highlights Compared to First Quarter
2019
- Total revenues decreased 12.4% to
$254.6 million
- Total restaurant operating weeks
increased approximately 3.2%
- Comparable restaurant sales
declined 15.5%-- Prior to the COVID-19 pandemic and for the
first eight weeks of the quarter, revenues and expenses were in
line with management’s expectations as comparable restaurant sales
increased by 1.5%-- Comparable restaurant sales for the last
five weeks of the quarter declined by 40.4%
- Net loss of $4.3 million, inclusive of a pretax impairment
charge of $2.3 million, compared to net income of $12.9
million
- Diluted net loss per share of
$0.22, inclusive of an impairment charge of $0.12 per share,
compared to diluted net income per share of $0.60
In the first quarter of fiscal 2020, BJ’s opened
its first restaurant in the state of Massachusetts in North
Attleboro. While there were plans to open eight to ten restaurants
in 2020, the Company now anticipates opening one additional
restaurant later this year and has either canceled or delayed its
remaining new restaurant openings for fiscal 2020. “The current
environment has not changed our view of the long-term growth
potential for BJ’s. While we manage through these challenging times
with all other restaurant concepts, we are as optimistic as ever
that BJ’s will continue to grow and expand our market share. Once
we have resumed normal operations, as conditions permit, we expect
to resume our restaurant opening objectives as we continue our
national expansion to at least 425 BJ’s restaurants,” concluded
Trojan.
Investor Conference Call and
WebcastBJ’s Restaurants, Inc. will conduct a conference
call on its first quarter 2020 earnings release on Thursday, May 7,
2020, 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 where craft matters. BJ’s broad
menu with over 140 offerings 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 209 casual dining restaurants in 29
states: Alabama, Arizona, Arkansas, California, Colorado,
Connecticut, Florida, Indiana, Kansas, Kentucky, Louisiana,
Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico,
New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Carolina, Tennessee, Texas, Virginia and
Washington. All restaurants offer dine-in, take-out, delivery and
large party catering. Due to the COVID-19 crisis, dine-in service
is currently not available in a majority of our restaurants, menu
offerings and hours are limited, and four restaurants have
temporarily been closed. For more BJ’s information, visit
http://www.bjsrestaurants.com.
Forward-Looking Statements
DisclaimerCertain 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, on and off-premise sales trends, the timing of the
re-opening of our restaurants for on premise dining, 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) the effect of the COVID-19 pandemic on our
restaurant sales and operations, customer traffic, our supply chain
and the ability of our suppliers to continue to timely deliver food
and other supplies necessary for the operation of our restaurants,
the ability to manage costs and reduce expenditures and the
availability of additional financing, (ii) our ability to manage
new restaurant openings, (iii) construction delays, (iv) labor
shortages, (v) 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, (vi) the effect of credit and equity market disruptions on
our ability to finance our continued expansion on acceptable terms,
(vii) 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, (viii) factors that impact
California, Texas and Florida, where a substantial number of
our restaurants are located, (ix) restaurant and brewery
industry competition, (x) impact of certain brewing business
considerations, including without limitation, dependence upon
suppliers, third party contractors and distributors, and related
hazards, (xi) consumer spending trends in general for casual dining
occasions, (xii) potential uninsured losses and liabilities due to
limitations on insurance coverage, (xiii) fluctuating commodity
costs and availability of food in general and certain raw materials
related to the brewing of our craft beers and energy requirements,
(xiv) trademark and service-mark risks, (xv) government regulations
and licensing costs, (xvi) beer and liquor regulations, (xvii) loss
of key personnel, (xviii) inability to secure acceptable sites,
(xix) legal proceedings, (xx) other general economic and regulatory
conditions and requirements, (xxi) the success of our key
sales-building and related operational initiatives, (xxii) any
failure of our information technology or security breaches with
respect to our electronic systems and data, and (xxiii) 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 |
|
March 31, 2020(unaudited) |
April 2, 2019(unaudited) |
Revenues |
$254,595 |
|
100.0% |
|
$290,554 |
|
100.0% |
|
Restaurant
operating costs (excluding depreciation and amortization): |
|
|
|
|
Cost of sales |
|
63,806 |
|
25.1 |
|
|
73,326 |
|
25.2 |
|
Labor and benefits |
|
103,829 |
|
40.8 |
|
|
105,221 |
|
36.2 |
|
Occupancy and operating |
|
61,264 |
|
24.1 |
|
|
61,591 |
|
21.2 |
|
General and administrative |
|
11,608 |
|
4.6 |
|
|
16,896 |
|
5.8 |
|
Depreciation and amortization |
|
18,345 |
|
7.2 |
|
|
17,642 |
|
6.1 |
|
Restaurant opening |
|
543 |
|
0.2 |
|
|
448 |
|
0.2 |
|
Loss on disposal and impairment of assets |
|
2,905 |
|
1.1 |
|
|
1,645 |
|
0.6 |
|
Total costs
and expenses |
|
262,300 |
|
103.0 |
|
|
276,769 |
|
95.3 |
|
(Loss) income from operations |
|
(7,705) |
|
(3.0) |
|
|
13,785 |
|
4.7 |
|
|
|
|
|
|
Other
(expense) income: |
|
|
|
|
Interest expense, net |
|
(1,471) |
|
(0.6) |
|
|
(1,070) |
|
(0.4) |
|
Other (expense) income, net |
|
(1,705) |
|
(0.7) |
|
|
1,097 |
|
0.4 |
|
Total other
(expense) income |
|
(3,176) |
|
(1.2) |
|
|
27 |
|
- |
|
(Loss) income before income taxes |
|
(10,881) |
|
(4.3) |
|
|
13,812 |
|
4.8 |
|
|
|
|
|
|
Income tax
(benefit) expense |
|
(6,614) |
|
(2.6) |
|
|
948 |
|
0.3 |
|
|
|
|
|
|
Net (loss) income |
$(4,267) |
|
(1.7)% |
|
$12,864 |
|
4.4% |
|
|
|
|
|
|
Net (loss)
income per share: |
|
|
|
|
Basic |
$(0.22) |
|
|
$0.61 |
|
|
Diluted |
$(0.22) |
|
|
$0.60 |
|
|
|
|
|
|
|
Weighted
average number of shares outstanding: |
|
|
|
|
Basic |
|
19,101 |
|
|
|
21,056 |
|
|
Diluted |
|
19,101 |
|
|
|
21,448 |
|
|
Percentages reflected above may not reconcile due
to rounding.
BJ’s Restaurants, Inc. |
Selected Consolidated Balance Sheet
Information |
(Dollars in thousands) |
|
March 31, 2020(unaudited) |
|
December 31,2019 |
Cash and cash equivalents |
$ |
80,309 |
|
$ |
22,394 |
Total assets |
$ |
1,113,031 |
|
$ |
1,072,084 |
Total debt |
$ |
231,800 |
|
$ |
143,000 |
Shareholders’ equity |
$ |
271,904 |
|
$ |
290,287 |
BJ’s Restaurants, Inc. |
Unaudited Supplemental Information |
(Dollars in thousands) |
|
|
|
|
|
|
First Quarter Ended |
|
March 31, 2020 |
April 2, 2019 |
Stock-based
compensation (1) |
|
|
|
|
Labor and benefits |
$629 |
|
0.2 |
% |
$458 |
|
0.2 |
% |
General and administrative |
|
914 |
|
0.4 |
|
|
1,626 |
|
0.6 |
|
Total stock-based
compensation |
$1,543 |
|
0.6 |
% |
$2,084 |
|
0.7 |
% |
|
|
|
|
|
Operating
Data |
|
|
|
|
Comparable restaurant sales %
change |
|
(15.5)% |
|
|
|
2.0% |
|
|
Restaurants opened during
period |
|
1 |
|
|
|
1 |
|
|
Restaurants open at
period-end |
|
209 |
|
|
|
203 |
|
|
Restaurant operating
weeks |
|
2,710 |
|
|
|
2,626 |
|
|
(1) Percentages represent
percent of total revenues.
Note Regarding Non-GAAP Financial
MeasuresThe 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 March
31, 2020 and April 2, 2019 is set forth below:
Supplemental Financial Information – Restaurant Level
Operating Margin |
(Unaudited, dollars in thousands) |
|
|
|
First Quarter Ended |
|
March 31, 2020 |
April 2, 2019 |
(Loss) income from operations |
$(7,705) |
|
(3.0 |
)% |
$13,785 |
4.7 |
% |
General and administrative |
|
11,608 |
|
4.6 |
|
|
16,896 |
5.8 |
|
Depreciation and amortization |
|
18,345 |
|
7.2 |
|
|
17,642 |
6.1 |
|
Restaurant opening |
|
543 |
|
0.2 |
|
|
448 |
0.2 |
|
Loss on disposal and impairment of assets |
|
2,905 |
|
1.1 |
|
|
1,645 |
0.6 |
|
Restaurant level operating
margin |
$25,696 |
|
10.1 |
% |
$50,416 |
17.4 |
% |
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
(benefit) 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 |
|
March 31, 2020 |
April 2, 2019 |
Net (loss) income |
$(4,267) |
|
(1.7 |
)% |
$12,864 |
|
4.4 |
% |
Interest expense, net |
|
1,471 |
|
0.6 |
|
|
1,070 |
|
0.4 |
|
Income tax (benefit)
expense |
|
(6,614) |
|
(2.6 |
) |
|
948 |
|
0.3 |
|
Depreciation and
amortization |
|
18,345 |
|
7.2 |
|
|
17,642 |
|
6.1 |
|
Stock-based
compensation expense |
|
1,543 |
|
0.6 |
|
|
2,084 |
|
0.7 |
|
Other expense (income),
net |
|
1,705 |
|
0.7 |
|
|
(1,097) |
|
( 0.4 |
) |
Loss on disposal and
impairment of assets |
|
2,905 |
|
1.1 |
|
|
1,645 |
|
0.6 |
|
Adjusted EBITDA |
$15,088 |
|
5.9 |
% |
$35,156 |
|
12.1 |
% |
Percentages above represent percent of total
revenues and may not reconcile due to rounding.
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