Papa Murphy’s Holdings, Inc. (NASDAQ:FRSH) today announced complete
financial results for the 14-week fourth quarter and 53-week fiscal
year ended January 2, 2017, having previously announced
preliminary results for those periods.
Key financial highlights for the 14-week fourth quarter
of 2016 ended January 2, 2017, compared to the
13-week fourth quarter ended December 28, 2015, were as
follows:
- Revenue increased 5% to $35.5 million from $33.8 million.
Revenue in the fourth quarter of 2016 included approximately $2.7
million attributed to the extra operating week.
- Domestic system comparable store sales decreased 7.8% on a
comparable 13-week basis, including a 7.5% decrease at domestic
franchise-owned stores and an 11.1% decrease at company-owned
stores.
- Net income was $1.5 million for the fourth quarter of 2016, or
$0.09 per diluted share, compared to net income of $2.6 million, or
$0.16 per diluted share, for the fourth quarter of 2015. Net Income
in the fourth quarter of 2016 included an approximate $0.1 million
benefit attributed to the extra operating week.
- Adjusted EBITDA(1) increased 3.4% to $7.8 million from $7.5
million. Adjusted EBITDA in the fourth quarter of 2016 included an
approximate $0.5 million benefit attributed to the extra operating
week.
- Papa Murphy’s opened 28 new stores in the quarter, including 27
in the U.S., compared to 46 new stores opened in the fourth quarter
of 2015, including 40 in the U.S.
Key financial highlights for the
53-week fiscal year ended January 2, 2017, compared to the
52-week fiscal year ended December 28, 2015, were as
follows:
- Revenue increased 5.6% to $126.9 million, from $120.2 million.
Fiscal 2016 results included approximately $2.7 million in revenue
attributed to the extra operating week.
- Domestic system comparable store sales decreased 5.2% on a
comparable 52-week basis, including a 5.0% decrease at domestic
franchise-owned stores and a 7.3% decrease at company-owned
stores.
- Net income attributable to Papa Murphy's was $2.6 million, or
$0.16 per diluted share, compared to $4.9 million, or $0.29 per
diluted share, in fiscal year 2015. Net Income in fiscal 2016
included an approximate $0.1 million benefit attributed to the
extra operating week.
- Adjusted EBITDA(1) was $24.8 million, compared to $28.1
million. Adjusted EBITDA in fiscal 2016 included an approximate
$0.5 million benefit attributed to the extra operating week.
- Papa Murphy’s opened 109 new stores in the year, including 104
in the U.S., compared to 111 new stores in fiscal year 2015,
including 99 in the U.S.
______________________
(1) Adjusted EBITDA is a non-GAAP measure. For a reconciliation
of Adjusted EBITDA to GAAP net income/(loss) and discussion of why
we consider Adjusted EBITDA to be a useful measure, see the
financial tables accompanying this release and the paragraph below
entitled “Non-GAAP Financial Measures.”
Jean Birch, Board Chair and interim Chief Executive Officer of
Papa Murphy’s Holdings, Inc., stated, “While top-line results
continued to be challenged, we are pleased that we were able to
maintain profitability in the quarter by focusing on cost controls
and company-store margins. As we look ahead, we believe we have
made progress in 2017 and are on the right track to return this
system to growth. So far, we have tested national cable television
advertising, generating brand awareness in many markets that have
never benefited from television. We announced our first strategic
refranchising transaction with an experienced operator committed to
grow the business. We right-sized SG&A expenses while better
focusing resources on our asset-light franchise business. And, just
this week, we launched a delivery test with Amazon’s Restaurant
Delivery Service, Prime Now. We have a long way to go in an
increasingly competitive environment, but believe we are on the
right track to ultimately reward all of our franchise owners,
employees, and shareholders.”
Key Operating Metrics
|
Three Months Ended |
|
Twelve Months Ended |
|
January 02, 2017 |
|
December 28, 2015 |
|
January 02, 2017 |
|
December 28, 2015 |
Domestic comparable
store sales: |
|
|
|
|
|
|
|
Franchised stores |
|
-7.5 |
% |
|
|
-3.2 |
% |
|
|
-5.0 |
% |
|
|
1.9 |
% |
Company-owned stores |
|
-11.1 |
% |
|
|
-2.7 |
% |
|
|
-7.3 |
% |
|
|
1.8 |
% |
Combined |
|
-7.8 |
% |
|
|
-3.1 |
% |
|
|
-5.2 |
% |
|
|
1.9 |
% |
|
|
|
|
|
|
|
|
System-wide sales ($'s
in 000s) |
$ |
247,287 |
|
|
$ |
238,787 |
|
|
$ |
898,709 |
|
|
$ |
892,249 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($'s in
000s) |
$ |
7,785 |
|
|
$ |
7,527 |
|
|
$ |
24,796 |
|
|
$ |
28,118 |
|
|
|
|
|
|
|
|
|
Store Count: |
|
|
|
|
|
|
|
Franchised |
|
1,369 |
|
|
|
1,369 |
|
|
|
1,369 |
|
|
|
1,369 |
|
Company-owned |
|
168 |
|
|
|
127 |
|
|
|
168 |
|
|
|
127 |
|
International |
|
40 |
|
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
System-wide |
|
1,577 |
|
|
|
1,536 |
|
|
|
1,577 |
|
|
|
1,536 |
|
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 store’s opening
date). As of the end of the fourth quarter of 2016 and 2015, we had
1,434 and 1,389 domestic comparable stores, respectively.
System-wide Sales include net sales by all of
our company-owned and franchise-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/(loss), the most directly comparable GAAP measure, see the
financial tables accompanying this release.
2017 Financial Outlook
Based on current information, Papa Murphy’s Holdings, Inc. is
providing the following full-year outlook for fiscal 2017, which
ends on January 1, 2018:
- Domestic system-wide comparable store sales in the range of
flat to +2%;
- Domestic franchise new store openings of approximately 75
units;
- Selling, general and administrative expenses of approximately
$30 million, including approximately $2.6 million related to
severance and CEO recruitment;
- EBITDA, exclusive of severance and CEO recruitment, of at least
$24 million;
- Capex, net of cash proceeds from refranchising, in the range of
$5.0 million to $7.0 million;
- Cash Flow from Operations less Capex, net of cash proceeds from
refranchising, of at least $13 million;
- Full-year effective tax rate of approximately 41.7%; and
- Diluted share-count of approximately 16.8 million.
Conference Call
Papa Murphy’s Holdings, Inc. will host a conference call to
discuss the fourth-quarter financial results on Wednesday,
March 15, 2017 at 5:00 p.m. Eastern Time.
The conference call can be accessed live 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
844-512-2921 or for international callers by dialing 412-317-6671;
the passcode is 13656328. The replay will be available until
Wednesday, March 22, 2017. 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 brand 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 more than 1,575 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.
Forward-looking Statements
This press 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 expected results of television
advertising campaign, projected comparable stores sales, projected
new store openings, projected selling, general, and administrative
expenses, including projected severance costs, projected EBITDA,
projected capital expenditures, projected cash proceeds from
refranchising, projected cash flow from operations, projected
effective tax rate, projected diluted share count, strategic,
future financial or operational results, and marketing
strategy.
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
January 2, 2017, (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 and Adjusted EBITDA. EBITDA and Adjusted EBITDA
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 EBITDA and Adjusted EBITDA).
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. We have provided reconciliations of EBITDA and Adjusted
EBITDA to GAAP net income in the financial tables accompanying this
release.
PAPA MURPHY’S HOLDINGS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Net Income (In thousands of dollars, except share and per
share data)(Unaudited)
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
|
|
|
|
January 02, 2017 |
|
December 28, 2015 |
|
January 02, 2017 |
|
December 28, 2015 |
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Franchise royalties |
$ |
10,983 |
|
|
$ |
10,687 |
|
|
$ |
39,851 |
|
$ |
40,243 |
|
|
|
|
Franchise and development fees |
|
739 |
|
|
|
1,129 |
|
|
|
2,912 |
|
|
4,222 |
|
|
|
|
Company-owned store sales |
|
23,231 |
|
|
|
21,373 |
|
|
|
82,080 |
|
|
74,300 |
|
|
|
|
Other |
|
532 |
|
|
|
599 |
|
|
|
2,040 |
|
|
1,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
35,485 |
|
|
|
33,788 |
|
|
|
126,883 |
|
|
120,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
Store operating costs: |
|
|
|
|
|
|
|
|
|
|
|
Cost of
food and packaging |
|
7,806 |
|
|
|
7,662 |
|
|
|
28,347 |
|
|
26,603 |
|
|
|
|
|
Compensation and benefits |
|
6,687 |
|
|
|
5,864 |
|
|
|
23,746 |
|
|
19,858 |
|
|
|
|
|
Advertising |
|
2,413 |
|
|
|
2,660 |
|
|
|
8,203 |
|
|
7,888 |
|
|
|
|
|
Occupancy |
|
1,740 |
|
|
|
1,363 |
|
|
|
6,226 |
|
|
4,750 |
|
|
|
|
|
Other store
operating costs |
|
2,660 |
|
|
|
2,155 |
|
|
|
10,268 |
|
|
7,517 |
|
|
|
|
Selling, general, and administrative |
|
6,943 |
|
|
|
7,125 |
|
|
|
28,108 |
|
|
28,207 |
|
|
|
|
Depreciation and amortization |
|
3,469 |
|
|
|
2,622 |
|
|
|
12,236 |
|
|
10,002 |
|
|
|
|
(Gain)/loss on disposal of property and equipment |
|
(54 |
) |
|
|
(317 |
) |
|
|
101 |
|
|
(251 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses |
|
31,664 |
|
|
|
29,134 |
|
|
|
117,235 |
|
|
104,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
3,821 |
|
|
|
4,654 |
|
|
|
9,648 |
|
|
15,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
1,280 |
|
|
|
1,117 |
|
|
|
4,868 |
|
|
4,523 |
|
|
|
|
Loss on impairment of investments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
4,500 |
|
|
|
|
Other expense, net |
|
62 |
|
|
|
43 |
|
|
|
188 |
|
|
133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
|
2,479 |
|
|
|
3,494 |
|
|
|
4,592 |
|
|
6,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
1,003 |
|
|
|
862 |
|
|
|
1,943 |
|
|
2,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
1,476 |
|
|
$ |
2,632 |
|
|
$ |
2,649 |
|
$ |
4,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share of common stock |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.09 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
$ |
0.29 |
|
|
|
|
Diluted |
$ |
0.09 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
$ |
0.29 |
|
|
|
Weighted
average common stock outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,757,586 |
|
|
|
16,706,308 |
|
|
|
16,743,285 |
|
|
16,653,127 |
|
|
|
|
Diluted |
|
16,775,488 |
|
|
|
16,805,559 |
|
|
|
16,773,493 |
|
|
16,870,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAPA MURPHY’S HOLDINGS, INC. AND
SUBSIDIARIESSelected Balance Sheet
Data(In thousands of dollars)(Unaudited)
|
January 02, 2017 |
|
December 28, 2015 |
Cash and cash
equivalents |
$ |
2,069 |
|
$ |
6,867 |
Total current
assets |
|
13,116 |
|
|
18,896 |
Total assets |
|
273,872 |
|
|
275,471 |
Total current
liabilities |
|
22,900 |
|
|
24,149 |
Long-term debt, net of
current portion |
|
100,965 |
|
|
108,237 |
Total stockholders'
equity |
|
101,496 |
|
|
97,656 |
|
|
|
|
|
|
PAPA MURPHY’S HOLDINGS, INC. AND
SUBSIDIARIES Reconciliation of Net Income to
EBITDA and Adjusted EBITDA (In thousands of
dollars)
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
January 02, 2017 |
|
December 28, 2015 |
|
January 02, 2017 |
|
December 28, 2015 |
|
Net Income As
Reported |
$ |
1,476 |
|
|
$ |
2,632 |
|
|
$ |
2,649 |
|
|
$ |
4,411 |
|
|
Net loss
attributable to noncontrolling interests |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
500 |
|
|
Net Income
Attributable To Papa Murphy's |
|
1,476 |
|
|
|
2,632 |
|
|
|
2,649 |
|
|
|
4,911 |
|
|
Depreciation and amortization |
|
3,469 |
|
|
|
2,622 |
|
|
|
12,236 |
|
|
|
10,002 |
|
|
Provision
for income taxes |
|
1,003 |
|
|
|
862 |
|
|
|
1,943 |
|
|
|
2,068 |
|
|
Interest
expense, net |
|
1,280 |
|
|
|
1,117 |
|
|
|
4,868 |
|
|
|
4,523 |
|
|
EBITDA |
|
7,228 |
|
|
|
7,233 |
|
|
|
21,696 |
|
|
|
21,504 |
|
|
(Gain)/loss on disposal of property and equipment (a) |
|
(54 |
) |
|
|
(317 |
) |
|
|
101 |
|
|
|
(251 |
) |
|
Transaction costs (b) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
65 |
|
|
New store
pre-opening expenses (c) |
|
115 |
|
|
|
232 |
|
|
|
1,331 |
|
|
|
696 |
|
|
Non-cash
expenses and non-income based state taxes (d) |
|
496 |
|
|
|
379 |
|
|
|
1,668 |
|
|
|
1,434 |
|
|
Expenses
not indicative of future operations (e) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,670 |
|
|
Adjusted
EBITDA |
$ |
7,785 |
|
|
$ |
7,527 |
|
|
$ |
24,796 |
|
|
$ |
28,118 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin (1) |
|
21.9 |
% |
|
|
22.3 |
% |
|
|
19.5 |
% |
|
|
23.4 |
% |
|
|
|
|
|
|
|
|
|
|
(a) Represents non-cash gains and losses resulting from disposal
of property and equipment, including divested company-owned stores.
(b) Represents transaction costs incurred in connection with the
acquisition of multiple franchised stores. (c) Represents expenses
directly associated with the opening of new stores and incurred
primarily in advance of the store opening, including grand opening
marketing costs, training wages and travel of opening teams and
other store operating costs. (d) 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.(e)
Represents (i) a $4 million loss recognized upon impairment of
Project Pie, LLC, a cost-method investment, and its subsequent
disposal, and the write-off as bad debt of receivables totaling
$325,000 and (ii) offering costs related to the 2015 secondary
offering.(1) Adjusted EBITDA margin is calculated by dividing
Adjusted EBITDA by total revenues.
Investor Contact:
Alexis Tessier, ICR
papamurphys-ir@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