CHARLOTTE, N.C., June 11, 2015 (GLOBE NEWSWIRE) -- Bojangles', Inc. (Bojangles') (Nasdaq:BOJA) today announced financial results for the first fiscal quarter 2015, which was a 13-week period ending on March 29, 2015. Bojangles' also provided annual guidance for the fiscal year 2015, which is a 52-week period ending on December 27, 2015.
Financial Highlights for the First Fiscal Quarter 2015 Compared to the First Fiscal Quarter 2014
- System-wide comparable restaurant sales increased 7.9%;
- Total revenues increased 19.2% to $114.6 million from $96.2 million;
- 16 new restaurants were opened -- four new company-operated restaurants and 12 new franchised restaurants. Three franchised restaurants were closed, all of which were relocations;
- Net Income of $3.4 million compared to $5.0 million;
- Adjusted Net Income* of $6.2 million compared to $5.0 million;
- Adjusted Pro Forma Diluted Net Income per Share* of $0.17 compared to $0.14; and
- Adjusted EBITDA* increased 16.0% to $16.9 million from $14.6 million.
* Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share and Adjusted EBITDA are non-GAAP measures. Please see "Use and Definition of Non-GAAP Measures" and the reconciliation tables accompanying this release.
"We are delighted to have begun fiscal year 2015 with impressive growth in total revenues, adjusted EBITDA and adjusted net income for the first fiscal quarter. The 7.9% increase in system-wide comparable restaurant sales during the first fiscal quarter continues to demonstrate the broad appeal of our iconic brand and enabled us to extend our track record of comparable restaurant sales growth to 20 consecutive quarters. As always, Bojangles' success was driven by the collective hard work of the teams in our company-operated and franchised restaurants, the true heroes of our brand," said Bojangles' President and CEO Clifton Rutledge.
"Although we are new to the public markets, Bojangles' has a proud history spanning nearly four decades with significant scale, strong and consistent financial performance and attractive development potential. We are very excited about our future, the significant whitespace for growth within and outside of our core markets and our opportunity to create value for stockholders."
Initial Public Offering
On May 13, 2015, and subsequent to the end of the first fiscal quarter 2015, Bojangles' completed its underwritten initial public offering (IPO) of 8,912,500 shares of its common stock, which included 1,162,500 shares of common stock sold pursuant to the full exercise of the underwriters' option to purchase additional shares of common stock at the IPO price. The IPO consisted solely of common stock that was offered by certain Bojangles' stockholders. During the first fiscal quarter of 2015, we recorded $2.7 million of costs related to the IPO.
Fiscal First Quarter 2015 Financial Review
System-wide comparable restaurant sales increased 7.9%, consisting of company-operated comparable restaurant sales growth of 7.1% and franchised comparable restaurant sales growth of 8.4%. Comparable restaurant sales at company-operated restaurants were composed of increases in price, mix and transactions.
Total revenues increased 19.2% to $114.6 million in the first fiscal quarter of 2015 from $96.2 million in the prior year quarter. The increase was primarily due to new restaurant openings and comparable restaurant sales growth at our company-operated and franchised restaurants.
Company restaurant revenues increased 19.4% to $108.3 million in the first fiscal quarter of 2015 from $90.8 million in the prior year quarter. Franchise royalty revenues increased 14.2% to $5.9 million from $5.2 million in the prior year quarter.
Restaurant contribution, a non-GAAP measure, increased 19.0% to $17.4 million in the first fiscal quarter of 2015 from $14.6 million in the prior year quarter. As a percentage of Company restaurant revenues, restaurant contribution margin, a non-GAAP measure, held steady at 16.1% compared to the prior year quarter.
General and administrative expenses increased $3.9 million to $10.9 million in the first fiscal quarter of 2015 from $7.0 million in the prior year quarter. The increase was due primarily to $2.7 million in legal, accounting and other expenses directly related to the IPO, as well as additional positions added to support an increased number of restaurants in our system. As a percentage of total revenues, and excluding the aforementioned $2.7 million of expenses, general and administrative expenses were 7.1% during the first fiscal quarter of 2015 compared to 7.3% in the prior year quarter.
As a result of the above, operating income decreased 7.2% to $9.5 million in the first fiscal quarter of 2015 from $10.2 million in the prior year quarter. Adjusted for the $2.7 million in IPO related costs, operating income would have increased 19.3% to $12.2 million.
Adjusted EBITDA increased 16.0% to $16.9 million in the first fiscal quarter of 2015 from $14.6 million in the prior year quarter.
Net Income was $3.4 million in the first fiscal quarter of 2015 compared to $5.0 million in the prior year quarter. Pro Forma Diluted Net Income per Share was $0.09 (on a diluted share base of 37.4 million) compared to $0.13 (on a diluted share base of 37.0 million).
Adjusted Net Income was $6.2 million in the first fiscal quarter of 2015 compared to $5.0 million in the prior year quarter. Adjusted Pro Forma Diluted Net Income per Share was $0.17 (on a diluted share base of 37.4 million) compared to $0.14 (on a diluted share base of 37.0 million).
Fiscal Year 2015 Guidance
We anticipate the following for the 52-week period ending on December 27, 2015:
- Total revenues to be between $480 million and $487 million;
- System-wide comparable restaurant sales growth of low to mid-single digits; and
- The opening of 50 to 57 system-wide restaurants consisting of 22 to 25 new company-operated restaurants and 28 to 32 new franchised restaurants.
Conference Call and Webcast Today
We will host a conference call and webcast to discuss the first fiscal quarter 2015 results and fiscal year 2015 guidance today at 5:00 p.m. Eastern Time. The conference call dial-in numbers are 1-877-705-6003 for domestic toll-free calls and 1-201-493-6725 for international calls. A telephone replay will be available through July 11, 2015 and may be accessed by dialing 1-877-870-5176 for domestic toll-free calls and 1-858-384-5517 for international. The conference ID is 13610581.
The conference call will also be webcast live and later archived on the Investor Relations section of our website at www.bojangles.com.
About Bojangles', Inc.
Bojangles', Inc. is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from our Southern recipes. Founded in 1977 in Charlotte, NC, Bojangles' serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin's and Legendary Iced Tea®. At March 29, 2015, Bojangles' had 635 system-wide restaurants of which 258 were company-operated and 377 were franchised restaurants, primarily located in the Southeastern United States.
Use and Definition of Non-GAAP Measures
We utilize certain non-GAAP measures when assessing the operational strength and the performance of our business. Bojangles' cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, reported GAAP results.
Comparable restaurant sales reflects the change in year-over-year sales for the comparable restaurant base (as applicable, system-wide, franchised or company-operated restaurants). A restaurant enters our comparable restaurant base the first full day of the month after being open for 15 months using a mid-month convention.
Restaurant contribution is defined as company restaurant revenues less food and supplies costs, restaurant labor costs and operating costs. Restaurant contribution margin is defined as restaurant contribution as a percentage of company restaurant revenues. Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of our company-operated restaurants and our calculations thereof may not be comparable to those reported by other companies. Restaurant contribution and restaurant contribution margin have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.
Adjusted Net Income represents company net income before items that we do not consider representative of our ongoing operating performance, as identified in the reconciliation table below. Adjusted Pro Forma Diluted Net Income per Share represents company pro forma diluted net income per share before items that we do not consider representative of our ongoing operating performance, as identified in the reconciliation table below.
EBITDA represents company net income before interest expense (net of interest income), provision for income taxes and depreciation and amortization. Adjusted EBITDA represents company net income before interest expense (net of interest income), provision for income taxes, depreciation and amortization, items that we do not consider representative of our ongoing operating performance and certain non-cash items, as identified in the reconciliation table below.
Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share, EBITDA and Adjusted EBITDA are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share, EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. In addition, in evaluating Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share, EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses or charges such as those added back to calculate Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share, EBITDA and Adjusted EBITDA.
Forward-Looking Statements
This release contains forward-looking statements. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "intend," "outlook," "plan," "potential," "project," "projection," "seek," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other words and terms of similar meaning.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.
All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this earnings release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
| BOJANGLES', INC. | ||
| Unaudited Condensed Consolidated Balance Sheets | ||
| (in thousands, except per share amounts) | ||
| Assets | December 28, 2014 | March 29, 2015 |
| Current assets: | ||
| Cash and cash equivalents | $ 13,201 | 14,117 |
| Accounts and vendor receivables, net | 4,285 | 3,599 |
| Accounts receivable, related parties, net | 736 | 441 |
| Inventories, net | 2,743 | 2,441 |
| Other current assets | 2,669 | 2,742 |
| Total current assets | 23,634 | 23,340 |
| Property and equipment, net | 42,478 | 44,453 |
| Goodwill | 161,140 | 161,140 |
| Brand | 290,500 | 290,500 |
| Franchise rights, net | 26,438 | 26,163 |
| Favorable leases, net | 1,908 | 1,799 |
| Deferred debt issuance costs, net | 2,726 | 2,542 |
| Other noncurrent assets | 3,819 | 3,031 |
| Total assets | $ 552,643 | 552,968 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 15,639 | 13,911 |
| Accrued expenses | 18,479 | 18,061 |
| Current maturities of long-term debt | — | — |
| Current maturities of capital lease obligations | 4,365 | 4,721 |
| Other current liabilities | 1,655 | 4,476 |
| Total current liabilities | 40,138 | 41,169 |
| Long-term debt, less current maturities | 228,249 | 224,597 |
| Deferred income taxes | 116,589 | 115,339 |
| Capital lease obligations, less current maturities | 20,144 | 20,119 |
| Other noncurrent liabilities | 9,771 | 10,562 |
| Total liabilities | 414,891 | 411,786 |
| Stockholders' equity: | ||
| Preferred stock, $0.01 par value; 200,000 shares authorized, 100,000 issued and outstanding | 172,691 | 172,691 |
| Common stock, $0.01 par value; 200,000 shares authorized, no shares outstanding | — | — |
| Additional paid-in capital | (56,220) | (55,881) |
| Retained earnings | 21,135 | 24,573 |
| Accumulated other comprehensive income (loss) | 146 | (201) |
| Total stockholders' equity | 137,752 | 141,182 |
| Total liabilities and stockholders' equity | $ 552,643 | 552,968 |
| BOJANGLES', INC. | ||
| Unaudited Condensed Consolidated Statements of Operations | ||
| (in thousands) | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Revenues: | ||
| Company restaurant revenues | $ 90,755 | 108,336 |
| Franchise royalty revenues | 5,198 | 5,936 |
| Other franchise revenues | 225 | 375 |
| Total revenues | 96,178 | 114,647 |
| Company restaurant operating expenses: | ||
| Food and supplies costs | 30,184 | 36,561 |
| Restaurant labor costs | 25,562 | 30,468 |
| Operating costs | 20,360 | 23,871 |
| Depreciation and amortization | 2,318 | 2,674 |
| Total Company restaurant operating expenses | 78,424 | 93,574 |
| Operating income before other operating expenses | 17,754 | 21,073 |
| Other operating expenses: | ||
| General and administrative | 6,983 | 10,913 |
| Depreciation and amortization | 544 | 659 |
| Impairment | — | 15 |
| Gain on disposal of property and equipment | — | (2) |
| Total other operating expenses | 7,527 | 11,585 |
| Operating income | 10,227 | 9,488 |
| Amortization of deferred debt issuance costs | (186) | (184) |
| Interest income | 1 | 1 |
| Interest expense | (2,018) | (2,222) |
| Income before income taxes | 8,024 | 7,083 |
| Income taxes | 3,039 | 3,645 |
| Net income | $ 4,985 | 3,438 |
| BOJANGLES', INC. | ||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||
| (in thousands) | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Cash flows from operating activities: | ||
| Net income | $ 4,985 | 3,438 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Deferred income tax benefit | — | (1,158) |
| Depreciation and amortization | 2,862 | 3,333 |
| Amortization of deferred debt issuance costs | 186 | 184 |
| Impairment | — | 15 |
| Gain on disposal of property and equipment | — | (2) |
| Provision for doubtful accounts | 5 | 24 |
| (Benefit) provision for inventory spoilage | (11) | 6 |
| Benefit for closed stores | — | (50) |
| Stock-based compensation | 399 | 339 |
| Changes in operating assets and liabilities | (3,369) | 685 |
| Net cash provided by operating activities | 5,057 | 6,814 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (712) | (1,168) |
| Proceeds from disposition of property and equipment | — | 17 |
| Net cash used in investing activities | (712) | (1,151) |
| Cash flows from financing activities: | ||
| Principal payments on long-term debt | — | (3,652) |
| Principal payments on capital lease obligations | (977) | (1,095) |
| Net cash used in financing activities | (977) | (4,747) |
| Net increase in cash and cash equivalents | 3,368 | 916 |
| Cash and cash equivalents balance, beginning of period | 8,456 | 13,201 |
| Cash and cash equivalents balance, end of period | $ 11,824 | 14,117 |
| BOJANGLES', INC. | ||
| Unaudited Reconciliation of Net Income to EBITDA and Adjusted EBITDA | ||
| (in thousands) | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Net income | $ 4,985 | 3,438 |
| Income taxes | 3,039 | 3,645 |
| Interest expense, net | 2,017 | 2,221 |
| Depreciation and amortization | 3,049 | 3,517 |
| EBITDA | 13,090 | 12,821 |
| Non-cash rent | 360 | 389 |
| Stock-based compensation | 399 | 339 |
| Preopening expenses | 143 | 300 |
| Sponsor and board member fees and expenses | 271 | 129 |
| Certain professional, transaction and other costs | 288 | 2,873 |
| Impairment and dispositions | -- | 30 |
| Adjusted EBITDA | $ 14,551 | 16,881 |
| BOJANGLES', INC. | ||
| Unaudited Reconciliation of Net Income to Adjusted Net Income | ||
| (in thousands) | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Net income | $ 4,985 | 3,438 |
| Certain professional and transaction costs | 33 | 2,873 |
| Tax impact of adjustments | (13) | (119) |
| Total adjustments | 20 | 2,754 |
| Adjusted Net Income | $ 5,005 | 6,192 |
| BOJANGLES', INC. | ||
| Unaudited Reconciliation of Pro Forma Diluted Net Income Per Share to | ||
| Adjusted Pro Forma Diluted Net Income Per Share | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Pro forma diluted net income per share | $ 0.13 | 0.09 |
| Certain professional and transaction costs | 0.01 | 0.08 |
| Tax impact of adjustments | — | — |
| Total adjustments | 0.01 | 0.08 |
| Adjusted Pro Forma Diluted Net Income per Share | $ 0.14 | 0.17 |
| BOJANGLES', INC. | ||
| Unaudited Company Restaurant Revenues to Restaurant Contribution | ||
| (in thousands) | ||
| Thirteen Weeks Ended | ||
| March 30, 2014 | March 29, 2015 | |
| Company restaurant revenues | $ 90,755 | 108,336 |
| Food and supplies costs | (30,184) | (36,561) |
| Restaurant labor costs | (25,562) | (30,468) |
| Operating costs | (20,360) | (23,871) |
| Restaurant contribution | $ 14,649 | 17,436 |
| Restaurant contribution margin | 16.1% | 16.1% |