Bravo Brio Restaurant Group, Inc. (Nasdaq:BBRG) (the Company) owner
and operator of the BRAVO! Cucina Italiana (BRAVO!) and BRIO Tuscan
Grille (BRIO) restaurant concepts, today reported financial results
for the 13 and 39 week periods ended September 29, 2013. The
Company also updated its 2013 outlook and provided development
guidance for 2014.
Selected Third Quarter 2013 Highlights Compared to the
Third Quarter 2012:
- Revenues increased 0.4% to $96.3 million from $95.9
million.
- Total comparable restaurant sales decreased 4.5%.
- Comparable restaurant sales decreased 3.7% at BRAVO! and
decreased 5.1% at BRIO.
- Restaurant-level operating profit decreased 7.2% to $14.9
million from $16.0 million.
- Net income was $2.2 million, or $0.11 per diluted share,
compared to net income of $2.8 million, or $0.14 per diluted
share.
Selected Year-to-Date 2013 Highlights Compared to the
Year-Ago Period:
- Revenues increased 2.6% to $305.0 million from $297.1
million.
- Total comparable restaurant revenues decreased 3.3%.
- Comparable restaurant sales decreased 2.3% at BRAVO! and
decreased 4.1% at BRIO.
- Restaurant-level operating profit decreased 4.7% to $49.4
million from $51.8 million.
- Net income was $10.2 million, or $0.50 per diluted share,
compared to net income of $11.7 million, or $0.57 per diluted
share.
Saed Mohseni, Chief Executive Officer and President, said, "Our
quarterly revenues fell short of our expectations and this in turn
resulted in margin erosion and lower EPS compared to the year ago
period. We have also seen increased competitive activity in select
markets. While we have planned a number of marketing initiatives to
mitigate some of these headwinds, it is clear our guests have
shifted their spending priorities. Therefore, while we remain
enthusiastic about our long term growth objectives, we are taking a
more conservative view of our business outlook."
Mohseni continued, "We expect to maintain a disciplined capital
allocation strategy. Our near-term priorities are to moderate
development until the macro-economic environment and comparable
restaurant sales improve, while we continue to repurchase shares
when prudent. To that end, we will open a total of eight
restaurants this year, including four in the fourth quarter, and
currently plan to open six to seven restaurants in 2014. We
have now repurchased approximately $7.3 million of our $20 million
authorization, including $3.3 million during the third
quarter, and paid down $6.9 million of our outstanding debt so
far this year. Additionally, our Board of Directors has
established a new $20 million share repurchase program effective
through the end of Fiscal 2014. These tangible steps are
designed to enhance long-term shareholder value."
Third Quarter 2013 Financial Results
Revenues increased $0.4 million, or 0.4%, to $96.3 million in
the third quarter of 2013, from $95.9 million in the third quarter
of 2012. The increase in revenues was primarily due to an
additional 60 operating weeks provided by four new restaurants
opened in the first 39 weeks of 2013 and five new restaurants
opened in the last two quarters of 2012. Total comparable
restaurant sales decreased 4.5%, attributed to a 4.7% decrease in
guest counts partially offset by a 0.2% increase in average
check.
Total restaurant operating costs, which includes costs of sales,
labor costs, operating costs and occupancy costs, increased $1.5
million, or 1.9%, to $81.4 million in the third quarter of 2013,
from $79.9 million in the third quarter of 2012. Total
restaurant-level operating profit decreased $1.1 million, or 7.2%,
to $14.9 million from $16.0 million in the same period last
year. As a percentage of revenues, total restaurant-level
operating profit decreased to 15.4% in the third quarter of 2013
from 16.7% in the third quarter of 2012, which was primarily
attributable to the deleveraging resulting from the comparable
sales decrease in 2013 as compared to 2012.
Net income in the third quarter of 2013 was $2.2 million, or
$0.11 per diluted share, compared to net income of $2.8 million, or
$0.14 per diluted share, in the same period last year.
Third Quarter 2013 Brand Operating
Highlights
Comparable restaurant sales at BRAVO! decreased 3.7% and average
weekly sales were $62,000. Comparable restaurant sales at BRIO
decreased 5.1% and average weekly sales were $83,900.
During the third quarter of 2013, the Company opened a new
BRAVO! restaurant in Fort Worth, Texas.
As of September 29, 2013, the Company operated 47 BRAVO!,
56 BRIO, and one Bon Vie restaurant across 31 states. Included
in this total is one BRIO restaurant that is operated under a
management agreement.
2013 Outlook
Based upon financial results as of September 29, 2013 and
projections for the remainder of the year, the Company is updating
its 2013 outlook as follows:
- Revenues of $410 million to $413 million (versus $414 million
to $420 million previously).
- Total comparable restaurant sales of approximately minus 3.5%
to minus 3.0% (versus minus 3.0% to minus 1.0% previously).
- Development of eight restaurants.
- Pre-opening costs of approximately $4.0 million.
- Diluted earnings per share of $0.78 to $0.81 (versus $0.83 to
$0.89 previously).
- Capital expenditures of $23 million to $25 million.
- Diluted share count of approximately 20.5 million (versus 20.6
million previously).
- Estimated annual tax rate of approximately 27% (versus 29%
previously).
The Company is also providing preliminary guidance for the
development of six to seven restaurants in 2014.
Share Repurchase Program
On October 23, 2013, the Board of Directors approved the
terms of a new share repurchase plan, which replaces the plan
adopted in 2012, under which the Company is authorized to
repurchase up to $20 million of its common shares beginning
October 23, 2013 and ending on December 28, 2014, subject to
the Company's pre-existing blackout periods. The Company may
repurchase shares on the open market or through privately
negotiated transactions at times and prices considered appropriate
by the Company at the discretion of management and subject to its
assessment of market conditions and other economic factors.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss
third quarter 2013 financial results today at 5:00 PM ET. Hosting
the call will be Saed Mohseni, Chief Executive Officer, Jim
O'Connor, Chief Financial Officer, and Brian O'Malley, Chief
Operating Officer.
The conference call can be accessed live over the phone by
dialing (800) 499-7921, or for international callers (719)
325-2440. A replay will be available one hour after the call
and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for
international callers; the conference ID is 1103173. The
replay will be available until Tuesday, November 12, 2013.
The call will also be webcast live from the Company's investor
relations website at http://investors.bbrg.com in the Calendar
of Events section.
About Bravo Brio Restaurant Group, Inc.
Bravo Brio Restaurant Group, Inc. is a leading owner and
operator of two distinct Italian restaurant brands, BRAVO! Cucina
Italiana and BRIO Tuscan Grille. BBRG has positioned its brands as
multifaceted culinary destinations that deliver the ambiance,
design elements and food quality reminiscent of fine dining
restaurants at a value typically offered by casual dining
establishments, a combination known as the upscale affordable
dining segment. Each of BBRG's brands provides its guests with a
fine dining experience and value by serving affordable cuisine
prepared using fresh flavorful ingredients and authentic Italian
cooking methods, combined with attentive service in an attractive,
lively atmosphere. BBRG strives to be the best Italian restaurant
company in America and is focused on providing its guests an
excellent dining experience through consistency of execution.
Forward-Looking Statements
Some of the statements in this release contain forward-looking
statements, which involve risks and uncertainties. These
statements relate to future events or Bravo Brio Restaurant Group,
Inc.'s future financial performance. The Company has attempted
to identify forward-looking statements by terminology including
"anticipates," "believes," "can," "continue," "could," "estimates,"
"expects," "intends," "may," "plans," "potential," "predicts,"
"should" or "will" or the negative of these terms or other
comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors,
including those discussed under the heading "Risk Factors" in
the Annual Report on Form 10-K filed by the Company with the
Securities and Exchange Commission on March 5, 2013.
Although Bravo Brio Restaurant Group, Inc. believes that the
expectations reflected in the forward-looking statements are
reasonable based on its current knowledge of the business and
operations, it cannot guarantee future results, levels of activity,
performance or achievements. The Company assumes no obligation
to provide revisions to any forward-looking statements should
circumstances change.
BRAVO BRIO RESTAURANT
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
FOR THE THIRTEEN AND
THIRTY-NINE WEEKS ENDED SEPTEMBER 29, 2013
AND SEPTEMBER 23, 2012 |
(in thousands except per
share data) |
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks |
Thirteen Weeks |
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|
Ended |
Ended |
Ended |
Ended |
|
September 29, |
September 23, |
September 29, |
September 23, |
|
2013 |
2012 |
2013 |
2012 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Revenues |
$96,290 |
|
$95,921 |
|
$304,975 |
|
$297,105 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
Cost of sales |
24,620 |
25.6% |
25,045 |
26.1% |
78,635 |
25.8% |
77,164 |
26.0% |
Labor |
34,027 |
35.3% |
33,528 |
35.0% |
107,491 |
35.2% |
102,950 |
34.7% |
Operating |
15,796 |
16.4% |
15,089 |
15.7% |
48,504 |
15.9% |
45,752 |
15.4% |
Occupancy |
6,977 |
7.2% |
6,230 |
6.5% |
20,983 |
6.9% |
19,448 |
6.5% |
General and administrative
expenses |
5,471 |
5.7% |
5,700 |
5.9% |
17,166 |
5.6% |
17,085 |
5.8% |
Restaurant preopening
costs |
1,249 |
1.3% |
1,442 |
1.5% |
2,508 |
0.8% |
3,615 |
1.2% |
Depreciation and
amortization |
5,028 |
5.2% |
4,689 |
4.9% |
14,859 |
4.9% |
13,765 |
4.6% |
|
|
|
|
|
|
|
|
|
Total costs and
expenses |
93,168 |
96.8% |
91,723 |
95.6% |
290,146 |
95.1% |
279,779 |
94.2% |
Income from operations |
3,122 |
3.2% |
4,198 |
4.4% |
14,829 |
4.9% |
17,326 |
5.8% |
Interest expense, net |
269 |
0.3% |
322 |
0.3% |
870 |
0.3% |
1,008 |
0.3% |
Income before income taxes |
2,853 |
3.0% |
3,876 |
4.0% |
13,959 |
4.6% |
16,318 |
5.5% |
Income tax expense |
604 |
0.6% |
1,049 |
1.1% |
3,749 |
1.2% |
4,612 |
1.6% |
Net income |
$ 2,249 |
2.3% |
$ 2,827 |
2.9% |
$ 10,210 |
3.3% |
$ 11,706 |
3.9% |
|
|
|
|
|
|
|
|
|
Net income per basic share |
$ 0.12 |
|
$ 0.14 |
|
$ 0.52 |
|
$ 0.60 |
|
Net income per diluted share |
$ 0.11 |
|
$ 0.14 |
|
$ 0.50 |
|
$ 0.57 |
|
Weighted average shares
outstanding-basic |
19,525 |
|
19,618 |
|
19,574 |
|
19,558 |
|
Weighted average shares
outstanding-diluted |
20,439 |
|
20,649 |
|
20,469 |
|
20,617 |
|
|
|
|
|
|
|
|
|
|
Certain percentage amounts may not sum due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
BRAVO BRIO RESTAURANT
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
AS OF SEPTEMBER 29,
2013 AND DECEMBER 30, 2012 |
(Dollars in
thousands) |
|
|
|
|
September 29, |
December 30, |
|
2013 |
2012 |
|
(Unaudited) |
|
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 2,707 |
$ 13,717 |
Accounts receivable |
6,157 |
7,728 |
Tenant improvement allowance
receivable |
1,546 |
1,638 |
Inventories |
2,517 |
3,023 |
Deferred income taxes, net |
3,295 |
2,304 |
Prepaid expenses and other
current assets |
1,630 |
2,547 |
Total current
assets |
17,852 |
30,957 |
Property and equipment — net |
184,353 |
175,969 |
Deferred income taxes — net |
48,537 |
52,068 |
Other assets — net |
4,008 |
4,344 |
Total assets |
$ 254,750 |
$ 263,338 |
|
|
|
Liabilities and stockholders' equity |
|
|
Current liabilities |
|
|
Trade and construction payables |
$ 13,059 |
$ 10,695 |
Accrued expenses |
20,025 |
24,724 |
Current portion of long-term
debt |
2,082 |
2,704 |
Deferred lease incentives |
6,283 |
6,430 |
Deferred gift card revenue |
7,959 |
12,210 |
Total current liabilities |
49,408 |
56,763 |
Deferred lease incentives |
61,390 |
64,761 |
Long-term debt |
14,132 |
20,382 |
Other long-term liabilities |
21,621 |
21,149 |
Commitments and contingencies |
|
|
Stockholders' equity |
|
|
Common shares, no par value per
share— authorized 100,000,000 shares; 19,900,583 shares issued at
September 29, 2013 and 19,820,428 shares issued at December 30,
2012 |
197,543 |
195,512 |
Preferred shares, no par value
per share— authorized 5,000,000 shares; issued and outstanding, 0
shares at September 29, 2013 and December 30, 2012 |
-- |
-- |
Treasury shares, 499,890 shares
at September 29, 2013; and 224,172 shares at December 30, 2012 |
(7,252) |
(2,927) |
Retained deficit |
(82,092) |
(92,302) |
Total
stockholders' equity |
108,199 |
100,283 |
Total liabilities and stockholders'
equity |
$ 254,750 |
$ 263,338 |
CONTACT: Investor Relations
Don Duffy / Raphael Gross
(203) 682-8200
investors@bbrg.com
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