The Habit Restaurants, Inc. (NASDAQ: HABT) (“The Habit” or the
“Company”), today announced financial results for its third quarter
ended September 24, 2019.
Highlights for the third quarter ended September 24, 2019
include:
- Total revenue increased 12.1% to $117.3 million, compared to
$104.6 million in the third quarter of 2018.
- Company-operated comparable restaurant sales increased 3.1%,
compared to the third quarter of 2018.
- Net income was $1.0 million, or $0.05 per diluted weighted
average share, compared to net loss of $0.6 million, or $(0.03) per
diluted weighted average share, in the third quarter of 2018.
- Adjusted fully distributed pro forma net income(1)
was $1.6 million, or $0.06 per fully distributed
weighted average share, compared to net income of $1.4 million, or
$0.05 per fully distributed weighted average share, for the third
quarter of 2018.
- Adjusted EBITDA(1) was $10.6 million, compared to $9.6
million for the third quarter of 2018.
- The Company opened six company-operated restaurants and closed
three company-operated restaurants in the Orlando, Florida market
during the third quarter of 2019. As of September 24, 2019, the
Company had 237 company-operated locations and 28
franchised/licensed locations (excluding eight licensed locations
in Santa Barbara County, California from which the Company is not
entitled to royalties) for a system-wide total of 265
locations.
(1) Adjusted fully distributed pro forma net income and adjusted
EBITDA are non-GAAP measures. A reconciliation of GAAP net income
to each of these measures is included in the accompanying financial
data. See also “Non-GAAP Financial Measures,” included herein.
“We’re pleased to report strong results this quarter, which
included our sixth consecutive quarter of company-operated
comparable restaurant sales growth, at 3.1%. We also
continued to make progress on our mission to be a total access
brand to our customers. Our total number of drive-thrus reached 51
during the quarter, we also installed self-ordering kiosks in our
20th restaurant, and saw our mobile app downloads and usage
increase dramatically in the third quarter,” said Russ Bendel,
President and Chief Executive Officer of The Habit. “During the
quarter we opened six new company-operated locations, including
four drive-thru locations and continue to look to open 21
company-operated locations in 2019. For 2020 we expect to
open a total of 29 to 35 locations, which would include 12 to 15
franchise locations, more than doubling our expected franchise
openings in 2019.”
Third Quarter 2019 Financial Results Compared to Third
Quarter 2018
Total revenue was $117.3 million in the third quarter of 2019,
compared to $104.6 million in the third quarter of 2018.
Company-operated comparable restaurant sales increased 3.1% for
the quarter ended September 24, 2019. The increase in
company-operated comparable restaurant sales was driven primarily
by a 5.8% increase in average transaction amount, partially offset
by a 2.7% decrease in transactions.
Net income for the third quarter of 2019 was $1.0 million,
or $0.05 per diluted weighted average share, compared to net loss
of $0.6 million, or $(0.03) per diluted weighted average share, in
the third quarter of 2018.
Adjusted fully distributed pro forma net income in the third
quarter of 2019 was $1.6 million, or $0.06 per fully distributed
weighted average share, compared to net income of $1.4 million, or
$0.05 per fully distributed weighted average share, in the third
quarter of 2018. A reconciliation between GAAP net income and
adjusted fully distributed pro forma net income is included in the
accompanying financial data.
2019 Outlook
The Company currently anticipates the following for its fiscal
year 2019:
- Total revenue between $463.0 million to $465.0 million;
- Company-operated comparable restaurant sales growth of
approximately 3.0% to 3.5%;
- The opening of 21 company-operated restaurants and six
franchised/licensed restaurants;
- Restaurant contribution margin of 16.5% to 16.8%, which
includes a (0.3)% unfavorable impact related to the change in lease
accounting;
- General and administrative expenses of $43.5 million to $44.0
million;
- Depreciation and amortization expense of approximately $28.5
million;
- Capital expenditures of $33.0 million to $35.0 million;
and
- An effective pro forma tax rate of approximately 28.5% to
29.0%, which assumes the conversion of all common units of The
Habit Restaurants, LLC for shares of the Company’s Class A
common stock (and cancellation of corresponding shares of Class B
common stock), which would eliminate the non-controlling
interests.
Conference Call
The Company will host a conference call to discuss financial
results for the third quarter 2019 today at 4:30 PM Eastern Time.
Russ Bendel, President and Chief Executive Officer, and Ira Fils,
Chief Financial Officer, will host the call.
The conference call can be accessed live over the phone by
dialing (855) 327-6837 or for international callers by dialing
(631) 891-4304. 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 10007795.
The replay will be available until Wednesday, November 6, 2019. The
conference call will also be webcast live from the Company’s
corporate website at ir.habitburger.com under the “Events” page. An
archive of the webcast will be available at the same location on
the corporate website shortly after the call has concluded.
The following definitions apply to these terms as used
in this release:
Comparable restaurant sales reflect the change
in year-over-year sales in our comparable restaurant base. A
restaurant enters our comparable restaurant base in the accounting
period following its 18th full period of operations. We operate on
a 4-4-5 calendar, each accounting period will consist of either
four or five weeks with the exception of a 53-week year, where the
last period contains six weeks.
Average Unit Volumes (AUVs) are calculated by
dividing revenue for the trailing 52-week period for all
company-operated restaurants that have operated for 12 full
accounting periods by the total number of restaurants open for such
period.
Adjusted fully distributed pro forma net income
includes net income attributable to The Habit (i) excluding
income tax expense, (ii) excluding the effect of non-recurring
items, (iii) assuming the exchange of all common units of The
Habit Restaurants, LLC into shares of our Class A common stock
(and cancellation of corresponding shares of our Class B common
stock), which results in the elimination of non-controlling
interests in The Habit Restaurants, LLC, and (iv) reflecting
an adjustment for income tax expense on fully distributed pro forma
net income before income taxes at our estimated long term effective
income tax rate. Adjusted fully distributed pro forma net income is
a non-GAAP financial measure because it represents net income
attributable to The Habit, before non-recurring items and the
effects of non-controlling interests in The Habit Restaurants, LLC.
We use adjusted fully distributed pro forma net income to
facilitate a comparison of our operating performance on a
consistent basis from period to period that, when viewed in
combination with our results prepared in accordance with GAAP, we
believe provides a more complete understanding of factors and
trends affecting our business than GAAP measures alone and
eliminates the variability of non-controlling interests as a result
of member owner exchanges of common units of The Habit Restaurants,
LLC into shares of our Class A common stock (and cancellation
of corresponding shares of our Class B common stock).
Adjusted fully distributed pro forma net income per
fully distributed weighted average share is calculated
using adjusted fully distributed pro forma net income as defined
above and assumes the exchange of all common units of The Habit
Restaurants, LLC into shares of our Class A common stock (and
cancellation of corresponding shares of our Class B common
stock).
EBITDA, a non-GAAP measure, represents net
income before interest expense, net, provision for income taxes,
and depreciation and amortization.
Adjusted EBITDA, a non-GAAP measure, represents
EBITDA plus pre-opening costs, stock-based compensation, loss on
disposal of assets, Tax Receivable Agreement liability adjustment,
and other non-recurring items.
About The Habit Restaurants, Inc.
The Habit Burger Grill is a burger-centric, fast casual
restaurant concept that specializes in preparing fresh,
made-to-order chargrilled burgers and sandwiches featuring USDA
choice tri-tip steak, grilled chicken and sushi-grade tuna cooked
over an open flame. In addition, it features fresh made-to-order
salads and an appealing selection of sides, shakes and malts. The
Habit was recently named Best Regional Fast Food in USA Today’s
2019 Best Readers’ Choice Awards. The first Habit opened in Santa
Barbara, California in 1969. The Habit has since grown to over 265
restaurants, including locations in 13 states throughout
California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia,
Nevada, Washington, Maryland, Pennsylvania, North Carolina and
South Carolina, as well as six international locations.
Contacts
Investors:(949) 943-8692 HabitIR@habitburger.com
Media:(949) 943-8691 Media@habitburger.com
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact included in this press 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. You can identify forward-looking
statements because they do not relate strictly to historical or
current facts. These statements may include words such as “aim,”
“anticipate,” “believe,” “estimate,” “expect,” “forecast,”
“outlook,” “potential,” “project,” “projection,” “plan,” “intend,”
“seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can
have,” “likely,” the negatives thereof 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. They appear in a number of places throughout this press
release and include statements regarding our intentions, beliefs or
current expectations concerning, among other things, our results of
operations, financial condition, liquidity, prospects, growth,
strategies and the industry in which we operate. All
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those that
we expected.
While we believe that our assumptions are reasonable, we caution
that it is very difficult to predict the impact of known factors,
and it is impossible for us to anticipate all factors that could
affect our actual results. All forward-looking statements are
expressly qualified in their entirety by these cautionary
statements. You should evaluate all forward-looking statements made
in this press release in the context of the risks and uncertainties
disclosed in our annual report on Form 10-K for the year ended
December 25, 2018, including the sections thereof captioned
“Cautionary Note Regarding Forward-Looking Statements” and “Risk
Factors.” These filings and others are available online at
www.sec.gov, ir.habitburger.com or upon request from The Habit.
We caution you that the important factors referenced above may
not contain all of the factors that are important to you. In
addition, we cannot assure you that we will realize the results or
developments we expect or anticipate or, even if substantially
realized, that they will result in the consequences we anticipate
or affect us or our operations in the ways that we expect. The
forward-looking statements included in this press release are made
only as of the date hereof. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as required by law.
If we do update one or more forward-looking statements, no
inference should be made that we will make additional updates with
respect to those or other forward-looking statements. We qualify
all of our forward-looking statements by these cautionary
statements.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use non-GAAP
financial measures, including those discussed above. These measures
are not intended to be considered in isolation or as substitutes
for, or superior to, financial measures prepared and presented in
accordance with GAAP. We use non-GAAP financial measures for
financial and operational decision-making and as a means to
evaluate period-to-period comparisons. We believe that they provide
useful information about operating results, enhance understanding
of past performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. However, when analyzing
the Company’s operating performance, investors should not consider
adjusted earnings per fully distributed weighted average share or
adjusted fully distributed pro forma net income in isolation or as
substitutes for net income (loss), cash flows from operating
activities or other operation statement or cash flow statement data
prepared in accordance with GAAP. The non-GAAP measures used in
this press release may be different from the measures used by other
companies.
Consolidated Statement of Operations Data
(unaudited):
Our operating results are presented as a percentage of total
revenue, with the exception of restaurant operating costs,
depreciation and amortization expense, pre-opening costs, asset
impairment and restaurant closure charges and loss on disposal of
assets, which are presented as a percentage of restaurant
revenue.
|
|
13 Weeks Ended |
|
|
39 Weeks Ended |
|
(amounts in thousands
except share and per share
data) |
|
September 24, 2019 |
|
|
September 25, 2018 |
|
|
September 24, 2019 |
|
|
September 25, 2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
116,756 |
|
|
|
99.5 |
% |
|
$ |
104,124 |
|
|
|
99.5 |
% |
|
$ |
341,498 |
|
|
|
99.4 |
% |
|
$ |
297,574 |
|
|
|
99.4 |
% |
Franchise/license revenue |
|
|
547 |
|
|
|
0.5 |
% |
|
|
515 |
|
|
|
0.5 |
% |
|
|
1,907 |
|
|
|
0.6 |
% |
|
|
1,865 |
|
|
|
0.6 |
% |
Total revenue |
|
|
117,303 |
|
|
|
100.0 |
% |
|
|
104,639 |
|
|
|
100.0 |
% |
|
|
343,405 |
|
|
|
100.0 |
% |
|
|
299,439 |
|
|
|
100.0 |
% |
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating costs (excluding depreciation and
amortization) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper costs |
|
|
35,098 |
|
|
|
30.1 |
% |
|
|
30,992 |
|
|
|
29.8 |
% |
|
|
102,491 |
|
|
|
30.0 |
% |
|
|
89,524 |
|
|
|
30.1 |
% |
Labor and related expenses |
|
|
38,572 |
|
|
|
33.0 |
% |
|
|
35,133 |
|
|
|
33.7 |
% |
|
|
114,873 |
|
|
|
33.6 |
% |
|
|
101,122 |
|
|
|
34.0 |
% |
Occupancy and other operating expenses |
|
|
23,400 |
|
|
|
20.0 |
% |
|
|
19,436 |
|
|
|
18.7 |
% |
|
|
67,107 |
|
|
|
19.7 |
% |
|
|
53,174 |
|
|
|
17.9 |
% |
General and administrative expenses |
|
|
10,462 |
|
|
|
8.9 |
% |
|
|
9,843 |
|
|
|
9.4 |
% |
|
|
31,130 |
|
|
|
9.1 |
% |
|
|
28,590 |
|
|
|
9.5 |
% |
Exchange related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
130 |
|
|
|
0.0 |
% |
Depreciation and amortization expense |
|
|
7,082 |
|
|
|
6.1 |
% |
|
|
6,348 |
|
|
|
6.1 |
% |
|
|
20,546 |
|
|
|
6.0 |
% |
|
|
17,952 |
|
|
|
6.0 |
% |
Pre-opening costs |
|
|
465 |
|
|
|
0.4 |
% |
|
|
658 |
|
|
|
0.6 |
% |
|
|
1,777 |
|
|
|
0.5 |
% |
|
|
2,384 |
|
|
|
0.8 |
% |
Asset impairment and restaurant closure charges |
|
|
606 |
|
|
|
0.5 |
% |
|
|
3,082 |
|
|
|
3.0 |
% |
|
|
606 |
|
|
|
0.2 |
% |
|
|
3,082 |
|
|
|
1.0 |
% |
Loss on disposal of assets |
|
|
65 |
|
|
|
0.1 |
% |
|
|
46 |
|
|
|
0.0 |
% |
|
|
161 |
|
|
|
0.0 |
% |
|
|
59 |
|
|
|
0.0 |
% |
Total operating expenses |
|
|
115,750 |
|
|
|
98.7 |
% |
|
|
105,538 |
|
|
|
100.9 |
% |
|
|
338,691 |
|
|
|
98.6 |
% |
|
|
296,017 |
|
|
|
98.9 |
% |
Income (loss) from
operations |
|
|
1,553 |
|
|
|
1.3 |
% |
|
|
(899 |
) |
|
|
(0.9 |
)% |
|
|
4,714 |
|
|
|
1.4 |
% |
|
|
3,422 |
|
|
|
1.1 |
% |
Other (income)
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Receivable Agreement liability adjustment |
|
|
394 |
|
|
|
0.3 |
% |
|
|
— |
|
|
|
— |
|
|
|
394 |
|
|
|
0.1 |
% |
|
|
1,473 |
|
|
|
0.5 |
% |
Interest (income) expense, net |
|
|
(79 |
) |
|
|
(0.1 |
)% |
|
|
272 |
|
|
|
0.3 |
% |
|
|
(178 |
) |
|
|
(0.1 |
)% |
|
|
749 |
|
|
|
0.3 |
% |
Income (loss) before income
taxes |
|
|
1,238 |
|
|
|
1.1 |
% |
|
|
(1,171 |
) |
|
|
(1.1 |
)% |
|
|
4,498 |
|
|
|
1.3 |
% |
|
|
1,200 |
|
|
|
0.4 |
% |
Provision (benefit) for income taxes |
|
|
(127 |
) |
|
|
(0.1 |
)% |
|
|
(307 |
) |
|
|
(0.3 |
)% |
|
|
684 |
|
|
|
0.2 |
% |
|
|
(1,454 |
) |
|
|
(0.5 |
)% |
Net income (loss) |
|
|
1,365 |
|
|
|
1.2 |
% |
|
|
(864 |
) |
|
|
(0.8 |
)% |
|
|
3,814 |
|
|
|
1.1 |
% |
|
|
2,654 |
|
|
|
0.9 |
% |
Less: (net income) loss
attributable to non-controlling interests |
|
|
(327 |
) |
|
|
(0.3 |
)% |
|
|
244 |
|
|
|
0.2 |
% |
|
|
(980 |
) |
|
|
(0.3 |
)% |
|
|
(563 |
) |
|
|
(0.2 |
)% |
Net income (loss) attributable to
The Habit Restaurants, Inc. |
|
$ |
1,038 |
|
|
|
0.9 |
% |
|
$ |
(620 |
) |
|
|
(0.6 |
)% |
|
$ |
2,834 |
|
|
|
0.8 |
% |
|
$ |
2,091 |
|
|
|
0.7 |
% |
Net income (loss) attributable to
The Habit Restaurants, Inc. per share Class A common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
|
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
0.14 |
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
Diluted |
|
$ |
0.05 |
|
|
|
|
|
|
$ |
(0.03 |
) |
|
|
|
|
|
$ |
0.14 |
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
Weighted average shares of Class
A common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,756,782 |
|
|
|
|
|
|
|
20,552,532 |
|
|
|
|
|
|
|
20,724,105 |
|
|
|
|
|
|
|
20,498,945 |
|
|
|
|
|
Diluted |
|
|
20,772,041 |
|
|
|
|
|
|
|
20,552,532 |
|
|
|
|
|
|
|
20,769,178 |
|
|
|
|
|
|
|
20,577,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet and Selected Operating Data
(unaudited):
|
|
|
|
|
|
|
|
|
Balance Sheet
Data |
|
September 24, 2019 |
|
|
December 25, 2018 |
|
(dollar amounts in
thousands) |
|
|
|
|
|
|
|
|
Balance Sheet
Data-Consolidated (at period end): |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
37,011 |
|
|
$ |
24,519 |
|
Restricted cash |
|
|
270 |
|
|
|
375 |
|
Property and equipment,
net(a) |
|
|
149,856 |
|
|
|
160,746 |
|
Total assets |
|
|
471,416 |
|
|
|
312,606 |
|
Total debt(b) |
|
|
— |
|
|
|
19,804 |
|
Total stockholders' equity |
|
|
156,049 |
|
|
|
149,994 |
|
|
|
|
|
|
|
|
|
|
(a) Property and equipment, net consists of property owned or
leased, net of accumulated depreciation and amortization. With the
adoption of ASC 842 Leases in the beginning of the first quarter of
fiscal year 2019, the company derecognized $18.6 million for
buildings that the company previously deemed itself to be the owner
of under build to suit accounting guidance in ASC 840 Leases.
(b) Total debt consists of deemed landlord financing. This debt
was derecognized with the adoption of ASC 842 Leases in the
beginning of the first quarter of fiscal year 2019.
|
|
13 Weeks Ended |
|
Selected Operating
Data |
|
September 24, 2019 |
|
|
September 25, 2018 |
|
Other Operating Data: |
|
|
|
|
|
|
|
|
Total restaurants at end of
period |
|
|
265 |
|
|
|
242 |
|
Company-operated restaurants at
end of period |
|
|
237 |
|
|
|
219 |
|
Company-operated comparable
restaurant sales(a) |
|
|
3.1 |
% |
|
|
3.6 |
% |
Company-operated average unit
volumes |
|
$ |
1,890 |
|
|
$ |
1,876 |
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended |
|
Selected Operating
Data |
|
September 24, 2019 |
|
|
September 25, 2018 |
|
Other Operating
Data: |
|
|
|
|
|
|
|
|
Company-operated comparable
restaurant sales(a) |
|
|
3.4 |
% |
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
(a) Company-operated comparable restaurant sales reflect the
change in year-over-year sales for the company-operated comparable
restaurant base. A restaurant enters our comparable restaurant base
in the accounting period following its 18th full period of
operations.
The following table includes a reconciliation of net income to
adjusted EBITDA:
|
|
13 Weeks Ended |
|
|
39 Weeks Ended |
|
Adjusted EBITDA
Reconciliation |
|
September 24,2019 |
|
|
September 25,2018 |
|
|
September 24,2019 |
|
|
September 25,2018 |
|
(amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
1,365 |
|
|
$ |
(864 |
) |
|
$ |
3,814 |
|
|
$ |
2,654 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
(127 |
) |
|
|
(307 |
) |
|
|
684 |
|
|
|
(1,454 |
) |
Interest (income) expense, net |
|
|
(79 |
) |
|
|
272 |
|
|
|
(178 |
) |
|
|
749 |
|
Depreciation and amortization |
|
|
7,082 |
|
|
|
6,348 |
|
|
|
20,546 |
|
|
|
17,952 |
|
EBITDA |
|
|
8,241 |
|
|
|
5,449 |
|
|
|
24,866 |
|
|
|
19,901 |
|
Stock-based compensation expense(a) |
|
|
795 |
|
|
|
687 |
|
|
|
2,440 |
|
|
|
2,025 |
|
Loss on disposal of assets(b) |
|
|
65 |
|
|
|
46 |
|
|
|
161 |
|
|
|
59 |
|
Pre-opening costs(c) |
|
|
465 |
|
|
|
658 |
|
|
|
1,777 |
|
|
|
2,384 |
|
Asset impairment and restaurant closure charges(d) |
|
|
606 |
|
|
|
3,082 |
|
|
|
606 |
|
|
|
3,082 |
|
Tax Receivable Agreement liability adjustment(e) |
|
|
394 |
|
|
|
— |
|
|
|
394 |
|
|
|
1,473 |
|
Exchange related expenses(f) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
130 |
|
Build to suit accounting under ASC 840(g) |
|
|
— |
|
|
|
(307 |
) |
|
|
— |
|
|
|
(841 |
) |
Franchise revenue for terminated agreements(h) |
|
|
— |
|
|
|
— |
|
|
|
(90 |
) |
|
|
(501 |
) |
Adjusted
EBITDA |
|
$ |
10,566 |
|
|
$ |
9,615 |
|
|
$ |
30,154 |
|
|
$ |
27,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes non-cash, stock-based compensation.
(b) Loss on disposal of assets includes the loss on disposal of
assets related to retirements and replacements or write-off of
leasehold improvements or equipment.
(c) Pre-opening costs consist of costs directly associated with
the opening of new restaurants and incurred prior to opening,
including management labor costs, staff labor costs during
training, food and supplies used during training, marketing costs
and other related pre-opening costs. These are generally incurred
over the three to five months prior to opening. Pre-opening costs
also include net occupancy costs incurred between the date of
possession and opening date of our restaurants.
(d) Includes costs related to impairment of long-lived assets at
the restaurant level and costs related to closed restaurants.
During the 13 weeks ended September 24, 2019, the Company closed
three restaurants in the Orlando, Florida market and also decided
not to move forward with the development of a restaurant in the
same market. The Company recorded restaurant closure charges of
$0.6 million during the quarter ended September 24, 2019,
consisting primarily of lease termination costs, rent expense
related to the closed restaurants, severance and other direct costs
related to the closed restaurants. The three closed restaurants had
previously been impaired during the 13 weeks ended September 25,
2018, as the Company determined that the carrying value of the
three restaurants in the Orlando, Florida market were not
recoverable, and as a result, recorded impairment expense of $3.1
million.
(e) In connection with our initial public offering (“IPO”) of
shares of Class A common stock that occurred in fiscal year 2014,
we entered into a tax receivable agreement (“TRA”). This agreement
calls for us to pay to our pre-IPO stockholders 85% of the savings
in cash that we realize in our taxes as a result of utilizing our
net operating losses and other tax attributes attributable to
preceding periods. This category includes adjustments associated
with revisions to the expected TRA liability as a result of updated
estimated future tax savings at the federal, state and local
level.
(f) This category includes costs associated with the
exchanges of common units of The Habit Restaurants, LLC (“LLC
Units”) for shares of Class A common stock by members of The Habit
Restaurants, LLC (the “Continuing LLC Owners”) pursuant to its
Amended and Restated Limited Liability Company Agreement (as
amended, the “LLC Agreement”).
(g) Represents amounts associated with leases where the Company
had previously determined that it was the accounting owner of under
build to suit lease guidance contained in ASC 840. With the
adoption of ASC 842 Leases in the beginning of the first quarter of
fiscal year 2019, these leases are now being accounted for as
operating leases which results in an increase in occupancy and
other operating expenses and a decrease in depreciation and
amortization expense and interest expense, net. The prior period
amount was adjusted to exclude the impact of build to suit
leases.
(h) This category includes franchise revenue that was recognized
for terminated franchise agreements.
The following is a reconciliation of GAAP net income and net
income per share to adjusted fully distributed pro forma net income
and adjusted fully distributed pro forma net income per share:
|
|
13 Weeks Ended |
|
|
39 Weeks Ended |
|
(dollar amounts in
thousands) |
|
September 24,2019 |
|
|
September 25,2018 |
|
|
September 24,2019 |
|
|
September 25,2018 |
|
Net income (loss) |
|
$ |
1,365 |
|
|
$ |
(864 |
) |
|
$ |
3,814 |
|
|
$ |
2,654 |
|
Exchange related expenses(a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
130 |
|
Tax Receivable Agreement liability adjustment(b) |
|
|
394 |
|
|
|
— |
|
|
|
394 |
|
|
|
1,473 |
|
Franchise revenue for terminated agreements(c) |
|
|
— |
|
|
|
— |
|
|
|
(90 |
) |
|
|
(501 |
) |
Asset impairment and restaurant closure charges(d) |
|
|
606 |
|
|
|
3,082 |
|
|
|
606 |
|
|
|
3,082 |
|
Income tax (benefit) as reported |
|
|
(127 |
) |
|
|
(307 |
) |
|
|
684 |
|
|
|
(1,454 |
) |
Fully distributed pro forma net income before income taxes |
|
|
2,238 |
|
|
|
1,911 |
|
|
|
5,408 |
|
|
|
5,384 |
|
Income tax expense on fully distributed pro forma income
before income taxes(e) |
|
|
645 |
|
|
|
503 |
|
|
|
1,549 |
|
|
|
1,614 |
|
Adjusted fully distributed pro forma net income |
|
$ |
1,593 |
|
|
$ |
1,408 |
|
|
$ |
3,859 |
|
|
$ |
3,770 |
|
Adjusted fully distributed pro
forma net income per share of Class A common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
0.14 |
|
Diluted |
|
$ |
0.06 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
0.14 |
|
Weighted average shares of Class
A common stock outstanding used in computing adjusted fully
distributed pro forma net income per share(f): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
26,109,215 |
|
|
|
26,048,281 |
|
|
|
26,088,668 |
|
|
|
26,041,437 |
|
Diluted |
|
|
26,124,474 |
|
|
|
26,267,327 |
|
|
|
26,133,741 |
|
|
|
26,120,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) This category includes costs associated with the exchanges
of LLC Units for Class A common stock by the Continuing LLC Owners
pursuant to the LLC Agreement.
(b) In connection with our IPO, we entered into the TRA. This
agreement calls for us to pay to our pre-IPO stockholders 85% of
the savings in cash that we realize in our taxes as a result of
utilizing our net operating losses and other tax attributes
attributable to preceding periods. This category includes
adjustments associated with revisions to the expected TRA liability
as a result of updated estimated future tax savings at the federal,
state and local level.
(c) This category includes franchise revenue that was recognized
for terminated franchise agreements.
(d) Includes costs related to impairment of long-lived assets at
the restaurant level and costs related to closed restaurants.
During the 13 weeks ended September 24, 2019, the Company closed
three restaurants in the Orlando, Florida market and also decided
not to move forward with the development of a restaurant in the
same market. The Company recorded restaurant closure charges of
$0.6 million during the quarter ended September 24, 2019,
consisting primarily of lease termination costs, rent expense
related to the closed restaurants, severance and other direct costs
related to the closed restaurants. The three closed restaurants had
previously been impaired during the 13 weeks ended September 25,
2018, as the Company determined that the carrying value of the
three restaurants in the Orlando, Florida market were not
recoverable, and as a result, recorded impairment expense of $3.1
million.
(e) Reflects income tax expense at an effective rate of 28.6%
and 30.0% for the 39 weeks ended September 24, 2019 and September
25, 2018, respectively, on income before income taxes assuming the
conversion of all outstanding LLC Units for shares of Class A
common stock (with a corresponding cancellation of shares of our
Class B common stock). The effective rate also excludes the impact
of non-recurring and discrete items. The estimated tax rate
includes provisions for U.S. federal income taxes and assumes the
highest statutory rates apportioned to each state and local
jurisdiction.
(f) For all periods presented, represents the total number of
shares of Class A common stock outstanding including all
outstanding LLC Units of The Habit Restaurants, LLC as if they were
exchanged on a one-for-one basis for Class A common stock
(with a corresponding cancellation of shares of our Class B common
stock). Diluted earnings per share gives effect during the
reporting period to all dilutive potential shares outstanding
resulting from employee stock-based awards using the treasury
method.
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