Revises Annual Guidance
for its Fiscal Year
2017Announces $50 Million Share
Repurchase Authorization
Bojangles’, Inc. (Bojangles’) (NASDAQ:BOJA) today announced
financial results for the 13-week third fiscal quarter ended
September 24, 2017. Bojangles’ also revised its annual guidance for
the 53-week fiscal year 2017 ending on December 31, 2017 and
announced that its Board of Directors has authorized a $50 million
share repurchase program.
Highlights for the Third Fiscal Quarter
of 2017
- Total revenues increased 0.2% to $133.4 million from $133.2
million in the prior year fiscal quarter;
- System-wide comparable restaurant sales decreased 2.2%, while
company-operated comparable restaurant sales decreased 3.3% and
franchised comparable restaurant sales decreased 1.5%;
- 10 system-wide restaurants were opened – 4 company-operated
restaurants and 6 franchised restaurants;
- Net Income was $7.0 million as compared to $10.0 million in the
prior year fiscal quarter;
- Diluted Net Income per Share was $0.18 as compared to $0.27 in
the prior year fiscal quarter;
- Adjusted Net Income* was $6.6 million as compared to $9.3
million in the prior year fiscal quarter;
- Adjusted Diluted Net Income per Share* was $0.17 as compared to
$0.25 in the prior year fiscal quarter; and
- Adjusted EBITDA* was $16.3 million as compared to $22.2 million
in the prior year fiscal quarter.
* Descriptions of Adjusted Net Income, Adjusted
Diluted Net Income per Share, Adjusted EBITDA and other non-GAAP
financial measures are provided in “Use and Definition of Non-GAAP
Measures,” and reconciliations to GAAP figures are provided in the
tables at the end of this release.
“The prolonged competitive retail environment
amidst aggressive discounting across the restaurant industry
continued during our third fiscal quarter 2017, and consumers
remain focused on value offerings,” said Bojangles’ President and
CEO Clifton Rutledge.
“As a result, we are placing a renewed emphasis
on accentuating value through our marketing efforts, such as our
recent launch of ‘five hearty meal combos for just $5 each’ and
‘two buck breakfast’ focusing on breakfast biscuit sandwiches
priced at less than $2, and we intend to continue to refine that
message,” concluded Mr. Rutledge.
Third Fiscal Quarter 2017 Financial
Review
System-wide comparable restaurant sales
decreased 2.2%, consisting of a 3.3% decrease in company-operated
comparable restaurant sales and a 1.5% decrease in franchised
comparable restaurant sales. The comparable restaurant sales
decrease at company-operated restaurants was composed of a decrease
in transactions and mix, partially offset by increases in
price.
Total revenues increased 0.2% to $133.4 million
in the third fiscal quarter of 2017 from $133.2 million in the
prior year fiscal quarter. The increase was primarily due to a net
additional 50 system-wide restaurants at September 24, 2017
compared to September 25, 2016, partially offset by comparable
restaurant sales declines at our company-operated and franchised
restaurants.
Company restaurant revenues decreased 0.1% to
$126.2 million in the third fiscal quarter of 2017 from $126.4
million in the prior year fiscal quarter. Franchise royalty
revenues increased 4.1% to $7.0 million in the third fiscal quarter
of 2017 from $6.7 million in the prior year fiscal quarter.
Restaurant contribution, a non-GAAP measure,
decreased 24.5% to $17.6 million in the third fiscal quarter of
2017 from $23.3 million in the prior year fiscal quarter. As a
percentage of company restaurant revenues, restaurant contribution
margin, a non-GAAP measure, decreased to 13.9% in the third fiscal
quarter of 2017 from 18.4% in the prior year fiscal quarter.
General and administrative expenses increased
5.8% to $9.8 million in the third fiscal quarter of 2017 from $9.3
million in the prior year fiscal quarter.
Net Income decreased 30.6% to $7.0 million in
the third fiscal quarter of 2017 compared to $10.0 million in the
prior year fiscal quarter. Diluted Net Income per Share decreased
33.3% to $0.18 in the third fiscal quarter of 2017 compared to
$0.27 in the prior year fiscal quarter.
Adjusted Net Income, a non-GAAP measure,
decreased 28.7% to $6.6 million in the third fiscal quarter of 2017
compared to $9.3 million in the prior year fiscal quarter. Adjusted
Diluted Net Income per Share decreased 32.0% to $0.17 in the third
fiscal quarter of 2017 compared to $0.25 in the prior year fiscal
quarter.
Adjusted EBITDA, a non-GAAP measure, decreased
26.9% to $16.3 million in the third fiscal quarter of 2017 from
$22.2 million in the prior year fiscal quarter.
Guidance
Bojangles’ is revising its annual outlook for
the 53-week period ending on December 31, 2017:
- Total revenues of $544.0 million to $547.0 million (previously
$549.0 million to $553.0 million);
- System-wide comparable restaurant sales of negative low-single
digits (no change);
- The opening of 50 to 52 system-wide restaurants (previously 53
to 56);
- 25 to 26 company-operated restaurants (no change);
- 25 to 26 franchised restaurants (previously 28 to 30);
- Net increase of 43 to 45 system-wide restaurants (previously 45
to 48);
- Net increase of 15 to 16 company-operated restaurants
(previously 16 to 17), which includes the impact of our
refranchising of six company-operated restaurants;
- Net increase of 28 to 29 franchised restaurants (previously 29
to 31), which includes the impact of our refranchising of six
company-operated restaurants;
- Restaurant contribution margin of 15.0% to 15.5% (previously
16.0% to 16.3%);
- General and administrative expenses of $39.5 million to $40.5
million (previously $40.0 million to $41.0 million);
- Cash capital expenditures of $12.0 million to $13.0 million
(previously $17.5 million to $18.0 million);
- Adjusted Diluted Net Income per Share of $0.77 to $0.80
(previously $0.81 to $0.84); and
- Adjusted EBITDA of $73.0 million to $75.0 million (previously
$78.0 million to $80.0 million).
In addition, beginning in fiscal year 2018, we
will be slowing the pace of system-wide unit expansion by reducing
development of company-operated restaurants while shifting our
focus towards enabling new and existing franchised partners to lead
brand expansion on a go-forward basis.
We have not reconciled guidance for Adjusted
Diluted Net Income per Share or Adjusted EBITDA to the
corresponding GAAP financial measures because we do not provide
guidance for the various reconciling items. We are unable to
provide guidance for these reconciling items because we cannot
determine their probable significance, as certain items are outside
of our control and cannot be reasonably predicted due to the fact
that these items could vary significantly from period to period.
Accordingly, reconciliations to the corresponding GAAP financial
measures are not available without unreasonable effort.
Share Repurchase
Authorization
The Bojangles’ Board of Directors has approved a
share repurchase program under which we may purchase up to $50
million of our outstanding common stock through April 30, 2019.
Purchases under the program may be made in the open market
(including, without limitation, the use of Rule 10b5-1 plans) in
compliance with applicable federal securities laws, including the
Securities and Exchange Commission (“SEC”) Rule 10b-18. We have no
obligation to repurchase shares under this authorization, and the
timing, number and purchase price of any shares repurchased will be
based on a number of factors, including Bojangles’ evaluation of
general market and economic conditions, the trading price of the
common stock, regulatory requirements, and compliance with the
terms of the Bojangles’ outstanding indebtedness. The share
repurchase program may be extended, modified, suspended or
discontinued at any time.
Bojangles’ expects to fund the share repurchase
program with either, or a combination of, existing cash on hand,
cash generated from operations and borrowings under its revolving
line of credit.
Conference Call and Webcast
Today
Bojangles’ will host a conference call and
webcast to discuss the third fiscal quarter 2017 results as well as
fiscal year 2017 guidance today at 5:00 p.m. Eastern Time. The
conference call dial-in number is 201-493-6725. A telephone replay
will be available through Friday, December 1, 2017 and may be
accessed by dialing 412-317-6671. The conference ID is
13669874.
The conference call will also be webcast live
and later archived on the Investors 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, N.C., Bojangles’® serves
menu items such as delicious, famous chicken, made-from-scratch
buttermilk biscuits, flavorful fixin’s and Legendary Iced Tea®. At
September 24, 2017, Bojangles’ had 749 system-wide restaurants, of
which 316 were company-operated and 433 were franchised
restaurants, primarily located in the Southeastern United States.
For more information, visit www.bojangles.com or follow Bojangles’
on Facebook and Twitter.
Note Regarding Comparable Restaurant
Sales
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. Refranchised restaurants are excluded
from our comparable restaurant base for the twelve-month period
following the date of the refranchising. If a company-operated
restaurant is temporarily closed for a full calendar week due to
items such as a remodel, scrape and rebuild, casualty event, severe
weather conditions or any other short-term closure, it is removed
from the comparable restaurant sales calculations for such period
it is temporarily closed. If a franchised restaurant is temporarily
closed for a full calendar week due to items such as a remodel,
scrape and rebuild, casualty event, severe weather conditions or
any other short-term closure, it is removed from the comparable
restaurant sales calculations for the entire month(s) impacted by
the temporary closure.
Use and Definition of Non-GAAP
Measures
We utilize certain non-GAAP measures when
assessing the operational strength and the performance of our
business. We believe these non-GAAP measures assist our board of
directors, management and investors in comparing our operating
performance, on a consistent basis from period to period, by
isolating the effects of certain items that vary from period to
period without any correlation to core operating performance or
that vary significantly among similar companies. Bojangles’
cautions that non-GAAP measures should be considered in addition
to, but not as a substitute for, reported GAAP results.
Restaurant contribution is defined as company
restaurant revenues less food and supplies costs, restaurant labor
costs and operating costs, as identified by the reconciliation
table below. 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.
Included with the reconciliations to GAAP figures provided in the
tables at the end of this release is a reconciliation of our
restaurant contribution to the line item on the condensed
consolidated statements of operations entitled “Company restaurant
revenues,” which we believe is the most directly comparable GAAP
measure on our condensed consolidated statements of operations.
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 Diluted Net Income per Share represents
company 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 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 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. Adjusted Net Income, Adjusted Diluted Net Income per
Share, EBITDA and Adjusted EBITDA have limitations as analytical
tools, and should not be considered in isolation, or as substitutes
for analysis of our results as reported under GAAP. In addition, in
evaluating Adjusted Net Income, Adjusted 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 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 or
current facts included in this release are forward-looking
statements. Forward-looking statements discuss our current
expectations, projections and guidance 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. Actual results may differ materially
from these expectations due to risks relating to, among other
risks, our vulnerability to changes in consumer preferences and
economic conditions; our ability to open restaurants in new and
existing markets and expand our franchise system; our ability to
generate comparable restaurant sales growth; financial or other
difficulties, which could cause our restaurants and our
franchisees’ restaurants to close; our ability to generate
increased sales or profits from new menu items, advertising
campaigns, changes in discounting strategy, technology initiatives
or restaurant designs and remodels; cancellation of or delay in
anticipated future restaurant openings; our reliance on, limited
degree of control over and potential responsibility for, our
franchisees; increases in the cost of chicken, pork, dairy, wheat,
corn and other products; our ability to compete successfully with
other quick-service and fast-casual restaurants; our vulnerability
to conditions in the Southeastern United States; negative
publicity, whether or not valid; concerns about food safety and
quality and about food-borne illnesses, including adverse public
perception due to the occurrence of avian flu, swine flu or other
food-borne illnesses, such as salmonella, E. coli, or others;
changes in employment and labor laws; labor shortages and increases
in labor costs; and our dependence upon frequent and timely
deliveries of restaurant food and other supplies. For further
details and discussion of these and other risks and uncertainties,
see our Annual Report on Form 10-K for the fiscal year ended
December 25, 2016, which was filed with the SEC on March 7, 2017,
and which is available at www.sec.gov. 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 obligation 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. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Balance
Sheets |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
September
24, 2017 |
|
December
25, 2016 |
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
17,722 |
|
13,898 |
|
|
Accounts and vendor receivables, net |
|
3,819 |
|
5,421 |
|
|
Accounts receivable, related parties, net |
|
352 |
|
386 |
|
|
Inventories, net |
|
3,659 |
|
3,326 |
|
|
Other current assets |
|
5,661 |
|
3,033 |
|
|
|
|
|
|
Total
current assets |
|
31,213 |
|
26,064 |
|
|
Property and equipment, net |
|
56,455 |
|
52,275 |
|
|
Goodwill |
|
|
|
161,140 |
|
161,140 |
|
|
Brand |
|
|
|
|
290,500 |
|
290,500 |
|
|
Franchise rights, net |
|
23,420 |
|
24,243 |
|
|
Favorable leases, net |
|
757 |
|
981 |
|
|
Other noncurrent assets |
|
4,128 |
|
4,569 |
|
|
|
|
|
|
Total
assets |
$ |
567,613 |
|
559,772 |
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
11,261 |
|
16,818 |
|
|
Accrued expenses |
|
23,353 |
|
17,940 |
|
|
Current maturities of long-term debt |
|
— |
|
2,132 |
|
|
Current maturities of capital lease obligations |
|
7,666 |
|
7,299 |
|
|
Other current liabilities |
|
6,823 |
|
4,390 |
|
|
|
|
|
|
Total
current liabilities |
|
49,103 |
|
48,579 |
|
|
Long-term debt, less current maturities and deferred debt
issuance costs, net |
|
133,846 |
|
153,630 |
|
|
Deferred income taxes |
|
110,262 |
|
111,312 |
|
|
Capital lease obligations, less current maturities |
|
23,373 |
|
22,524 |
|
|
Other noncurrent liabilities |
|
13,551 |
|
12,937 |
|
|
|
|
|
|
Total
liabilities |
|
330,135 |
|
348,982 |
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock |
|
— |
|
— |
|
|
Common stock |
|
370 |
|
365 |
|
|
Additional paid-in capital |
|
128,222 |
|
124,802 |
|
|
Retained earnings |
|
108,567 |
|
85,377 |
|
|
Accumulated other comprehensive income |
|
319 |
|
246 |
|
|
|
|
|
|
Total
stockholders’ equity |
|
237,478 |
|
210,790 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
567,613 |
|
559,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Statements of
Operations |
|
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurant revenues |
$ |
126,207 |
|
|
126,358 |
|
|
|
378,048 |
|
|
372,446 |
|
|
|
Franchise
royalty revenues |
|
7,018 |
|
|
6,739 |
|
|
|
20,509 |
|
|
19,532 |
|
|
|
Other
franchise revenues |
|
200 |
|
|
100 |
|
|
|
738 |
|
|
470 |
|
|
|
|
|
|
|
Total
revenues |
|
133,425 |
|
|
133,197 |
|
|
|
399,295 |
|
|
392,448 |
|
|
Company
restaurant operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Food and
supplies costs |
|
40,525 |
|
|
39,331 |
|
|
|
119,208 |
|
|
116,872 |
|
|
|
Restaurant
labor costs |
|
37,081 |
|
|
35,115 |
|
|
|
110,365 |
|
|
102,976 |
|
|
|
Operating
costs |
|
31,009 |
|
|
28,625 |
|
|
|
90,441 |
|
|
83,645 |
|
|
|
Depreciation and amortization |
|
3,501 |
|
|
3,225 |
|
|
|
10,082 |
|
|
9,432 |
|
|
|
|
|
|
|
Total
Company restaurant operating expenses |
|
112,116 |
|
|
106,296 |
|
|
|
330,096 |
|
|
312,925 |
|
|
|
|
|
|
|
Operating
income before other operating expenses |
|
21,309 |
|
|
26,901 |
|
|
|
69,199 |
|
|
79,523 |
|
|
Other
operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
9,814 |
|
|
9,276 |
|
|
|
28,584 |
|
|
28,189 |
|
|
|
Depreciation and amortization |
|
747 |
|
|
745 |
|
|
|
2,225 |
|
|
2,178 |
|
|
|
Impairment |
|
|
126 |
|
|
592 |
|
|
|
1,123 |
|
|
981 |
|
|
|
(Gain) loss
on disposal of property and equipment and other |
|
(135 |
) |
|
138 |
|
|
|
(238 |
) |
|
(51 |
) |
|
|
|
|
|
|
Total other
operating expenses |
|
10,552 |
|
|
10,751 |
|
|
|
31,694 |
|
|
31,297 |
|
|
|
|
|
|
|
Operating
income |
|
10,757 |
|
|
16,150 |
|
|
|
37,505 |
|
|
48,226 |
|
|
Amortization of deferred debt issuance costs |
|
(147 |
) |
|
(199 |
) |
|
|
(440 |
) |
|
(567 |
) |
|
Interest
income |
|
|
2 |
|
|
— |
|
|
|
15 |
|
|
4 |
|
|
Interest
expense |
|
(1,495 |
) |
|
(1,819 |
) |
|
|
(4,776 |
) |
|
(5,782 |
) |
|
|
|
|
|
|
Income
before income taxes |
|
9,117 |
|
|
14,132 |
|
|
|
32,304 |
|
|
41,881 |
|
|
Income
taxes |
|
|
2,160 |
|
|
4,113 |
|
|
|
9,114 |
|
|
13,987 |
|
|
|
|
|
|
|
Net
income |
$ |
6,957 |
|
|
10,019 |
|
|
|
23,190 |
|
|
27,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.19 |
|
|
0.28 |
|
|
|
0.63 |
|
|
0.77 |
|
|
|
|
|
|
|
Diluted |
$ |
0.18 |
|
|
0.27 |
|
|
|
0.60 |
|
|
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computing net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
37,012 |
|
|
36,355 |
|
|
|
36,760 |
|
|
36,195 |
|
|
|
|
|
|
|
Diluted |
|
38,475 |
|
|
37,650 |
|
|
|
38,561 |
|
|
37,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Cash flows
from operating activities: |
|
|
|
|
|
|
Net
income |
|
$ |
23,190 |
|
|
27,894 |
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Deferred
income tax benefit |
|
(1,093 |
) |
|
(2,244 |
) |
|
|
|
|
Depreciation and amortization |
|
12,307 |
|
|
11,610 |
|
|
|
|
|
Amortization of deferred debt issuance costs |
|
440 |
|
|
567 |
|
|
|
|
|
Impairment |
|
1,123 |
|
|
981 |
|
|
|
|
|
Gain on
disposal of property and equipment and other |
|
(238 |
) |
|
(51 |
) |
|
|
|
|
Provision
(benefit) for doubtful accounts |
|
3 |
|
|
(65 |
) |
|
|
|
|
Provision
for inventory spoilage |
|
18 |
|
|
7 |
|
|
|
|
|
Benefit for
closed stores |
|
— |
|
|
(51 |
) |
|
|
|
|
Stock-based
compensation |
|
1,185 |
|
|
953 |
|
|
|
|
|
Excess tax
benefit from stock-based compensation |
|
— |
|
|
(1,770 |
) |
|
|
|
|
Changes in
operating assets and liabilities |
|
(117 |
) |
|
4,950 |
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
36,818 |
|
|
42,781 |
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
Purchases
of franchisee's assets |
|
— |
|
|
(100 |
) |
|
|
Purchases
of property and equipment |
|
(7,476 |
) |
|
(5,950 |
) |
|
|
Proceeds
from disposition of property and equipment |
|
148 |
|
|
49 |
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
(7,328 |
) |
|
(6,001 |
) |
|
Cash flows
from financing activities: |
|
|
|
|
|
|
Principal
payments on long-term debt |
|
(22,357 |
) |
|
(29,736 |
) |
|
|
Stock
option exercises |
|
2,343 |
|
|
857 |
|
|
|
Vesting of
restricted stock units |
|
(103 |
) |
|
— |
|
|
|
Excess tax
benefit from stock-based compensation |
|
— |
|
|
1,770 |
|
|
|
Principal
payments on capital lease obligations |
|
(5,549 |
) |
|
(4,455 |
) |
|
|
|
|
|
|
Net cash
used in financing activities |
|
(25,666 |
) |
|
(31,564 |
) |
|
|
|
|
|
|
Net
increase in cash and cash equivalents |
|
3,824 |
|
|
5,216 |
|
|
Cash and
cash equivalents balance, beginning of fiscal period |
|
13,898 |
|
|
14,263 |
|
|
Cash and
cash equivalents balance, end of fiscal period |
$ |
17,722 |
|
|
19,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Net Income to
Adjusted Net Income |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Net
income |
|
|
$ |
6,957 |
|
|
10,019 |
|
|
|
23,190 |
|
|
27,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
professional, transaction and other costs (a) |
|
— |
|
|
24 |
|
|
|
3 |
|
|
66 |
|
|
Payroll
taxes associated with stock option exercises (b) |
|
24 |
|
|
8 |
|
|
|
122 |
|
|
79 |
|
|
Distributor
transition costs (c) |
|
— |
|
|
— |
|
|
|
— |
|
|
81 |
|
|
Executive
separation expenses (d) |
|
— |
|
|
197 |
|
|
|
551 |
|
|
197 |
|
|
State
income tax rate change (e) |
|
(367 |
) |
|
(908 |
) |
|
|
(367 |
) |
|
(908 |
) |
|
Tax impact
of adjustments (f) |
|
(9 |
) |
|
(82 |
) |
|
|
(253 |
) |
|
(156 |
) |
|
Total adjustments |
|
(352 |
) |
|
(761 |
) |
|
|
56 |
|
|
(641 |
) |
|
Adjusted Net Income |
$ |
6,605 |
|
|
9,258 |
|
|
|
23,246 |
|
|
27,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Diluted Net Income
Per Share to Adjusted Diluted Net Income Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Diluted net income per share |
$ |
0.18 |
|
|
0.27 |
|
|
|
0.60 |
|
|
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
professional, transaction and other costs (a) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
Payroll
taxes associated with stock option exercises (b) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
Distributor
transition costs (c) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
Executive
separation expenses (d) |
|
— |
|
|
— |
|
|
|
0.02 |
|
|
0.01 |
|
|
State
income tax rate change (e) |
|
(0.01 |
) |
|
(0.02 |
) |
|
|
(0.01 |
) |
|
(0.02 |
) |
|
Tax impact
of adjustments (f) |
|
— |
|
|
— |
|
|
|
(0.01 |
) |
|
— |
|
|
Total adjustments |
|
(0.01 |
) |
|
(0.02 |
) |
|
|
— |
|
|
(0.01 |
) |
|
Adjusted Diluted Net Income per Share |
$ |
0.17 |
|
|
0.25 |
|
|
|
0.60 |
|
|
0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
costs associated with third-party consultants for one-time
projects, public offering expenses and certain professional fees
and transaction costs related to financing transactions. We could
incur similar expenses in future periods if we commence additional
public offerings, financing transactions or other one-time
projects. |
|
(b)
Represents payroll taxes associated with stock option exercises
related to stock options that were outstanding prior to our initial
public offering. We expect to incur similar expenses in future
periods when our directors or employees exercise stock options that
were outstanding prior to our initial public offering. |
|
(c) Includes
expenses incurred in connection with the transition to our new
distributor. |
|
(d)
Represents severance and legal fees associated with former
executives departing the Company. |
|
(e) As a
result of the enacted reductions to the North Carolina corporate
income tax rate during both of the thirteen weeks ended September
24, 2017 and September 25, 2016, we adjusted our deferred income
taxes by applying the lower rate, which resulted in a corresponding
decrease to income tax expense. |
|
(f)
Represents the income tax expense associated with the adjustments
in (a) through (e) that are deductible for income tax
purposes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Net Income to
EBITDA and Adjusted EBITDA |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Net
income |
|
|
$ |
6,957 |
|
10,019 |
|
|
23,190 |
|
27,894 |
|
Income
taxes |
|
|
|
2,160 |
|
4,113 |
|
|
9,114 |
|
13,987 |
|
Interest
expense, net |
|
1,493 |
|
1,819 |
|
|
4,761 |
|
5,778 |
|
Depreciation and amortization (a) |
|
4,395 |
|
4,169 |
|
|
12,747 |
|
12,177 |
|
EBITDA |
|
|
|
|
|
15,005 |
|
20,120 |
|
|
49,812 |
|
59,836 |
|
Non-cash
rent (b) |
|
|
321 |
|
414 |
|
|
1,090 |
|
1,185 |
|
Stock-based
compensation (c) |
|
505 |
|
404 |
|
|
1,185 |
|
953 |
|
Payroll
taxes associated with stock option exercises (d) |
|
24 |
|
8 |
|
|
122 |
|
79 |
|
Preopening
expenses (e) |
|
302 |
|
346 |
|
|
1,026 |
|
942 |
|
Certain
professional, transaction and other costs (f) |
|
— |
|
24 |
|
|
3 |
|
66 |
|
Distributor
transition costs (g) |
|
— |
|
— |
|
|
— |
|
81 |
|
Executive
separation expenses (h) |
|
— |
|
197 |
|
|
551 |
|
197 |
|
Impairment
and dispositions (i) |
|
99 |
|
730 |
|
|
1,033 |
|
979 |
|
Adjusted EBITDA |
$ |
16,256 |
|
22,243 |
|
|
54,822 |
|
64,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
amortization of deferred debt issuance costs. |
|
(b) Includes
deferred rent, which represents the extent to which our rent
expense has been above or below our cash rent payments,
amortization of favorable (unfavorable) leases and closed store
reserves for rent net of cash payments. We expect to continue to
incur similar expenses in future periods as we record rent expense
in accordance with GAAP, as well as continue to amortize favorable
(unfavorable) leases and record closed store reserves. |
|
(c)
Represents non-cash, stock-based compensation. We expect to incur
similar expenses in future periods as we record stock-based
compensation related to existing grants (and any potential future
grants) in accordance with GAAP. |
|
(d)
Represents payroll taxes associated with stock option exercises
related to stock options that were outstanding prior to our initial
public offering. We expect to incur similar expenses in future
periods when our directors or employees exercise stock options that
were outstanding prior to our initial public offering. |
|
(e) Includes
expenses directly associated with the opening of company-operated
restaurants and incurred prior to the opening of a company-operated
restaurant. We expect to continue to incur similar expenses as we
open company-operated restaurants. |
|
(f) Includes
costs associated with third-party consultants for one-time
projects, public offering expenses and certain professional fees
and transaction costs related to financing transactions. We could
incur similar expenses in future periods if we commence additional
public offerings, financing transactions or other one-time
projects. |
|
(g) Includes
expenses incurred in connection with the transition to our new
distributor. |
|
(h)
Represents severance and legal fees associated with former
executives departing the Company. |
|
(i) Includes
(gain) loss on disposal of property and equipment and other,
impairment and cash proceeds on disposals from disposition of
property and equipment. We could continue to record impairment
expense in future periods if performance of company-operated
restaurants is not sufficient to recover the carrying amount of the
related long-lived assets. We may incur future (gains) losses and
receive cash proceeds on disposal of property and equipment
associated with retirement, replacement or write-off of fixed
assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOJANGLES’, INC. AND
SUBSIDIARIES |
|
Unaudited Reconciliation of Company Restaurant
Revenues to Restaurant Contribution |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
September
24, 2017 |
|
September
25, 2016 |
|
|
September
24, 2017 |
|
September
25, 2016 |
|
Company
restaurant revenues |
$ |
126,207 |
|
|
126,358 |
|
|
|
378,048 |
|
|
372,446 |
|
|
Food and
supplies costs |
|
(40,525 |
) |
|
(39,331 |
) |
|
|
(119,208 |
) |
|
(116,872 |
) |
|
Restaurant
labor costs |
|
(37,081 |
) |
|
(35,115 |
) |
|
|
(110,365 |
) |
|
(102,976 |
) |
|
Operating
costs |
|
(31,009 |
) |
|
(28,625 |
) |
|
|
(90,441 |
) |
|
(83,645 |
) |
|
Restaurant contribution |
$ |
17,592 |
|
|
23,287 |
|
|
|
58,034 |
|
|
68,953 |
|
|
Restaurant contribution margin |
|
13.9 |
% |
|
18.4 |
% |
|
|
15.4 |
% |
|
18.5 |
% |
|
For Investor Relations Inquiries:
Raphael Gross of ICR
203.682.8253
For Media Inquiries:
Brian Little of Bojangles’ Restaurants, Inc.
704.519.2118
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