- 19th Consecutive Quarter of Positive U.S.
System Comparable Store Sales Growth -
- 23 New Store Openings in the U.S. -
Papa Murphy's Holdings, Inc. (NASDAQ:FRSH) today announced
financial results for its third quarter ended September 28,
2015.
Key financial highlights for the third quarter of 2015
include:
- Revenue of $28.13 million, an increase of 26.9% compared to the
third quarter of 2014.
- Domestic system comparable store sales growth of 1.4%,
including growth of 1.5% at domestic franchisee-owned stores and
flat comparable store sales at company-owned stores.
- Net income was $1.12 million, or $0.07 per diluted share,
compared to pro forma net income(1) of $1.32 million, or $0.08 per
diluted share, in the third quarter of 2014.
- Adjusted EBITDA(1) was $6.1 million, an increase of 9.1%
compared to the third quarter of 2014.
- Papa Murphy's opened 23 new domestic stores in the quarter,
compared to 13 domestic new store openings in the third quarter of
2014.
______________________
(1) Pro forma net income and Adjusted EBITDA are non-GAAP
measures. For reconciliations of Adjusted EBITDA and pro forma net
income to GAAP net income and discussions of why we consider
Adjusted EBITDA and pro forma net income to be useful measures, see
the financial tables accompanying this release and the paragraph
below entitled "Non-GAAP Financial Measures."
Ken Calwell, President and Chief Executive Officer of Papa
Murphy's Holdings, Inc., stated, "We are pleased to report positive
domestic comparable store sales growth for the 19th consecutive
quarter, demonstrating the strength and consistency of our
business. Comparable store sales growth at our portfolio of
company-owned stores was disproportionately affected in certain
markets where we have a large concentration of stores that were
lapping an early launch of our highly successful Gourmet DeLites
line. In some of our less developed markets where we are focused on
building stores and achieving scale, comparable store sales growth
was significantly higher than the overall system. In the quarter we
also opened 23 new stores in the U.S., including 16 franchise
stores and three stores opened under our pre-sale development
test."
Calwell added, "We're also excited about the progress we've made
with our digital strategy. We've recently launched our first
mobile app, allowing customers in select markets to order our
delicious products from the convenience of their
smartphone. POS and on-line ordering roll-outs are entering
the final phase and we are excited with the progress we've made in
partnership with Deloitte Digital to enhance our customer-facing
e-commerce platform, which will better reflect the Papa Murphy's
brand personality and include a state-of-the-art customer
experience. We now expect to be in a position to launch the
new site by the end of the first quarter of next year, a full
quarter ahead of our initial plan."
Key Operating Metrics |
|
|
|
Three
Months Ended |
|
September 28,
2015 |
September 29,
2014 |
Domestic comparable store sales growth |
|
|
Franchised stores |
1.5% |
4.4% |
Company-owned stores |
0.0% |
8.4% |
System-wide |
1.4% |
4.6% |
|
|
|
System-wide sales ($'s in 000s) |
$ 203,078 |
$ 194,033 |
|
|
|
Adjusted EBITDA ($'s in 000s) |
$ 6,144 |
$ 5,633 |
|
|
|
Store Count |
|
|
Franchised |
1,374 |
1,361 |
Company-owned |
126 |
76 |
System-wide |
1,500 |
1,437 |
We use a variety of operating and performance metrics to
evaluate the performance of our business. Below is a description of
our key operating metrics:
Comparable Store Sales represents the change in
year-over-year sales for domestic comparable stores. A comparable
store is a store that has been open for at least 52 full weeks from
the comparable date (the Tuesday following the opening date). As of
the end of the third quarter of 2015 and 2014, we had 1,366 and
1,315 domestic comparable stores, respectively.
System-wide Sales include net sales by all of
our company-owned and franchisee-owned stores.
Adjusted EBITDA is defined as net income (loss)
before interest expense, provision for (benefit from) income taxes
and depreciation and amortization, with further adjustments to
reflect the additions and eliminations of various income statement
items including non-cash charges, income and expenses that we
consider not indicative of ongoing operations and various other
adjustments. For a reconciliation of Adjusted EBITDA to net income,
the most directly comparable GAAP measure, see the financial tables
accompanying this release.
2015 Financial Outlook
Based on current information, Papa Murphy's Holdings, Inc. is
providing the following update to its full-year guidance for fiscal
year 2015, which ends on December 28, 2015:
- Domestic system-wide comparable store sales growth in the range
of 2.5% to 3.0% (compared to prior guidance of growth of at least
3.0%);
- Total system-wide sales of approximately $900 million (compared
to prior guidance of $900 million to $920 million);
- Domestic new store openings of approximately 110 stores
(compared to previous guidance of 110 to 115);
- Selling, general and administrative expenses of about $29
million, including a year-end deficit of approximately $580,000 in
the consolidated national advertising fund (compared to previous
guidance of $28 million to $30 million);
- Depreciation and Amortization expense of about $10 million
(compared to previous guidance of $10 million to $12 million);
and
- Capital expenditures totaling approximately $23 million
(compared to previous guidance of $23 million to $25 million).
Conference Call
Papa Murphy's Holdings, Inc. will host a conference call to
discuss the third quarter financial results on Wednesday, November
4, 2015 at 4:30 p.m. Eastern Time.
The conference call can be accessed live over the phone by
dialing 877-407-3982 or for international callers by dialing
201-493-6780. A replay will be available after the call and can be
accessed by dialing 877-870-5176 or for international callers by
dialing 858-384-5517; the passcode is 13621084. The replay will be
available until Wednesday, November 11, 2015. The conference call
will also be webcast live from the Company's corporate website at
investors.papamurphys.com, under the "Events & Presentations"
page. An archive of the webcast will be available at this
location shortly after the call has concluded.
About Papa Murphy's
Papa Murphy's Holdings, Inc. (Nasdaq:FRSH) is a franchisor and
operator of the largest Take 'N' Bake pizza chain in the United
States, selling fresh, hand-crafted pizzas ready for customers to
bake at home. The company was founded in 1981 and currently
operates over 1,500 franchised and corporate-owned fresh pizza
stores in 38 States, Canada and United Arab Emirates. Papa Murphy's
core purpose is to bring all families together through food people
love with a goal to create fun, convenient and fulfilling family
dinners. In addition to scratch-made pizzas, the company offers a
growing menu of grab 'n' go items, including salads, sides and
desserts. For more information, visit www.papamurphys.com. Find
Papa Murphy's on Facebook at www.facebook.com/papamurphyspizza.
Forward-looking Statements
This news release, as well as other information provided from
time to time by Papa Murphy's Holdings, Inc. or its employees, may
contain forward looking statements that involve risks and
uncertainties that could cause actual results to differ materially
from those anticipated in the forward looking statements.
Forward-looking statements give the Company's current expectations
and projections relating to the Company's financial condition,
results of operations, plans, objectives, future performance and
business. You can identify forward-looking statements by the fact
that they do not relate strictly to historical or current facts.
These statements may include words such as "guidance,"
"anticipate," "estimate," "expect," "forecast," "project," "plan,"
"intend," "believe," "confident," "may," "should," "can have,"
"likely," "future" and other words and terms of similar meaning in
connection with any discussion of the timing or nature of future
operating or financial performance or other events.
Forward-looking statements in this press release include
statements relating to the Company's projected sales growth,
projected system-wide sales, projected new store openings,
projected selling, general, and administrative expenses, the timing
of projected marketing expenses, projected pre-opening expenses,
projected depreciation expenses, projected capital expenditures,
projected increases in margins, projected diluted share count,
strategic, operational, and technological initiatives, future
financial or operational results, and speed of consumer
acceptance.
Any such forward-looking statements are not guarantees of
performance or results, and involve risks, uncertainties (some of
which are beyond the Company's control) and assumptions. Although
the Company believes any forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could
affect our actual financial results and cause them to differ
materially from those anticipated in any forward-looking
statements. Please refer to the risk factors discussed in the
Company's annual report on Form 10-K for the fiscal year ended
December 29, 2014 and the Company's current report on Form 10-Q for
the quarter ended June 29, 2015 (both of which can be found at the
SEC's website www.sec.gov); each such risk factor is specifically
incorporated into this press release. Should one or more of these
risks or uncertainties materialize, the Company's actual results
may vary in material respects from those projected in any
forward-looking statements.
Any forward-looking statement made by the Company in this press
release speaks only as of the date on which it is made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future developments or
otherwise.
Non-GAAP Financial Measures
To supplement its financial information presented in accordance
with generally accepted accounting principles (GAAP), the Company
is also providing with this press release the non-GAAP financial
measures of EBITDA, Adjusted EBITDA and pro forma net
income. EBITDA, Adjusted EBITDA and pro forma net income are
not derived in accordance with GAAP and should not be considered by
the reader as an alternative to net income (the most comparable
GAAP financial measure to each of EBITDA, Adjusted EBITDA and pro
forma net income). The Company's management believes that EBITDA
and Adjusted EBITDA are helpful as indicators of the current
financial performance of the Company because EBITDA and Adjusted
EBITDA reflect the additions and eliminations of various income
statement items that management does not consider indicative of
ongoing operating results. Management believes that pro forma
net income is also helpful as an indicator of the financial
performance of the Company during fiscal year 2015 and prior
periods because it adjusts net income to reflect the Company's
performance as if the Company's initial public offering and
secondary offering, repayment of a portion of its long-term debt,
write-down of its interest in Project Pie, LLC, and partial
expensing of market vesting stock compensation had occurred at the
beginning of the period and removes specific costs that are not
indicative of ongoing operations. We
have provided reconciliations of EBITDA, Adjusted EBITDA and pro
forma net income to GAAP net income in the financial tables
accompanying this release.
PAPA MURPHY'S HOLDINGS,
INC. AND SUBSIDIARIES |
Condensed Consolidated
Statements of Operations |
(In thousands of dollars,
except share and per share data) |
|
|
Three Months Ended |
|
September 28,
2015 |
September 29,
2014 |
|
Unaudited |
REVENUES |
|
|
Franchise royalties |
$ 9,124 |
$ 8,965 |
Franchise and development
fees |
1,123 |
1,088 |
Company-owned store sales |
17,604 |
11,626 |
Lease and other |
281 |
490 |
|
|
|
Total revenues |
28,132 |
22,169 |
|
|
|
COSTS AND EXPENSES |
|
|
Store operating costs: |
|
|
Cost of food and packaging |
6,409 |
4,667 |
Compensation and benefits |
4,918 |
3,000 |
Advertising |
1,806 |
1,286 |
Occupancy |
1,210 |
715 |
Other store operating
costs |
2,061 |
1,069 |
Total company-owned store
operating costs |
16,404 |
10,737 |
|
|
|
Selling, general, and
administrative |
6,038 |
5,915 |
Depreciation and
amortization |
2,641 |
2,007 |
Loss (gain) on disposal of
property and equipment |
4 |
(15) |
|
|
|
Total costs and expenses |
25,087 |
18,644 |
|
|
|
OPERATING INCOME |
3,045 |
3,525 |
|
|
|
Interest expense |
1,137 |
1,539 |
Interest income |
(4) |
(14) |
Loss on early retirement of
debt |
-- |
3,428 |
Other expense, net |
44 |
63 |
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
1,868 |
(1,491) |
|
|
|
Provision for (benefit from)
income taxes |
746 |
(703) |
|
|
|
NET INCOME (LOSS) |
1,122 |
(788) |
|
|
|
Earnings (Loss) per share of common
stock |
|
|
Basic |
$ 0.07 |
$ (0.05) |
Diluted |
$ 0.07 |
$ (0.05) |
Weighted average common stock
outstanding |
|
|
Basic |
16,672,327 |
16,584,724 |
Diluted |
16,919,504 |
16,584,724 |
|
PAPA MURPHY'S HOLDINGS,
INC. AND SUBSIDIARIES |
Selected Balance Sheet
Data |
(In thousands of dollars) |
(unaudited) |
|
September 28, |
December 29, |
|
2015 |
2014 |
Cash and cash equivalents |
$ 5,483 |
$ 5,056 |
Total current assets |
14,823 |
16,329 |
Total assets |
270,913 |
265,464 |
Total current liabilities |
23,473 |
18,558 |
Long-term debt, net of current portion |
108,156 |
110,715 |
Total Papa Murphy's Holdings, Inc.
shareholders' equity |
94,697 |
91,298 |
|
PAPA MURPHY'S HOLDINGS,
INC. AND SUBSIDIARIES |
Reconciliation of Net
Income (Loss) to EBITDA and Adjusted EBITDA |
(In thousands of dollars) |
|
Three months
ended |
|
September 28, |
September 29, |
|
2015 |
2014 |
Net income (loss) as
reported |
$ 1,122 |
$ (788) |
Depreciation and amortization |
2,641 |
2,007 |
Income tax provision (benefit) |
746 |
(703) |
Interest expense, net |
1,133 |
1,525 |
EBITDA |
5,642 |
2,041 |
Loss (gain) on disposal of property and
equipment (a) |
4 |
(15) |
Expenses not indicative of future
operations (b) |
-- |
(29) |
Transaction costs (c) |
1 |
10 |
New store pre-opening expenses (d) |
218 |
-- |
Non-cash expenses and non-income based state
taxes (e) |
279 |
198 |
Loss on early retirement of debt (f) |
-- |
3,428 |
Adjusted
EBITDA |
$ 6,144 |
$ 5,633 |
|
|
|
Adjusted EBITDA margin
(1) |
21.8% |
25.4% |
|
|
|
(1) Adjusted EBITDA margin is
calculated by dividing Adjusted EBITDA by total revenues. |
|
(a) Represents non-cash (gains)
and losses resulting from disposal of property and equipment,
including divested Company-owned stores |
|
(b) Represents adjustment to
non-recurring accrued management transition and restructuring
costs |
|
(c) Represents transaction costs
relating to the acquisition of franchised stores. |
|
(d) Represents expenses directly
associated with the opening of new stores and incurred primarily in
advance of the store opening, including wages, benefits, travel for
training of opening teams, grand opening marketing costs and other
store operating costs. |
|
(e) Represents (i) non-cash
expenses related to equity-based compensation; (ii) non-cash
expenses related to the difference between GAAP and cash rent
expense; and (iii) state revenue taxes levied in lieu of an income
tax. |
|
(f) Represents losses resulting
from refinancing of long-term debt. |
|
PAPA MURPHY'S HOLDINGS,
INC. AND SUBSIDIARIES |
Reconciliation of Net
Income (Loss) to Pro Forma Net Income |
(In thousands of dollars,
except share and per share data) |
|
Three Months Ended |
|
September 28, |
September 29, |
|
2015 |
2014 |
Net income (loss) as reported |
$ 1,122 |
$ (788) |
Loss on early retirement of
debt (1) |
-- |
3,428 |
Income tax expense on
adjustments (2) |
-- |
(1,320) |
Pro forma net income |
$ 1,122 |
$ 1,320 |
|
|
|
Earnings per share - pro forma: |
|
|
Basic |
$ 0.07 |
$ 0.08 |
Diluted |
$ 0.07 |
$ 0.08 |
|
|
|
Weighted-average shares outstanding - pro
forma: |
|
|
Basic |
16,672,327 |
16,584,724 |
Diluted |
16,919,504 |
16,712,234 |
|
|
|
(1) Represents losses resulting
from refinancing of long-term debt. |
|
(2) Reflects the tax expense
associated with adjustment 1 above at a normalized tax rate in line
with our estimated long-term effective tax rate. |
CONTACT: Investor Contact:
Fitzhugh Taylor, ICR
fitzhugh.taylor@icrinc.com
877-747-7272
Media Contact:
Christine Beggan, ICR
Christine.Beggan@icrinc.com
203-682-8329
Freshworks (NASDAQ:FRSH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Freshworks (NASDAQ:FRSH)
Historical Stock Chart
From Jul 2023 to Jul 2024