The Habit Restaurants, Inc. (NASDAQ: HABT) (“The Habit” or the
“Company”), today announced financial results for its second
quarter ended June 26, 2018.
Highlights for the second quarter ended June 26, 2018
include:
- Total revenue increased 23.4% to $102.9 million compared to
$83.3 million in the second quarter of 2017.
- Company-operated comparable restaurant sales increased 1.2% as
compared to the second quarter of 2017.
- Net income was $2.1 million, or $0.10 per diluted weighted
average share, compared to $1.1 million, or $0.05 per diluted
weighted average share, in the second quarter of 2017.
- Adjusted fully distributed pro forma net income(1)
was $2.2 million, or $0.08 per fully distributed
weighted average share compared to $1.7 million, or $0.06 per fully
distributed weighted average share for the second quarter of
2017.
- Adjusted EBITDA(1) was $10.8 million compared to $8.8
million for the second quarter of 2017.
- The Company opened seven company-operated restaurants and two
franchised restaurants during the second quarter of 2018. As of
June 26, 2018, the Company had 211 company-operated locations and
20 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
231 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 are pleased with our second quarter results, which included
a return to positive same store sales growth. We believe our
results reflect progress on our key initiatives laid out earlier
this year around convenience, quality and innovation,” said Russ
Bendel, President and Chief Executive Officer of The Habit. “During
the quarter, we opened seven new company-operated Habit Burger
Grills of which three were drive-thrus. Our franchisee partners
also opened two new restaurants, one in Seattle and a second
location in China. This keeps us on track to open approximately 30
new company-operated locations in 2018, including approximately 15
drive-thrus, and seven to nine franchise locations.”
Second Quarter 2018 Financial Results Compared to Second
Quarter 2017
Total revenue was $102.9 million in the second quarter of 2018,
compared to $83.3 million in the second quarter of 2017.
Company-operated comparable restaurant sales increased 1.2% for
the quarter ended June 26, 2018. The increase in company-operated
comparable restaurant sales was driven primarily by a 4.5% increase
in average transaction amount partially offset by a 3.3% decrease
in transactions.
Net income for the second quarter of 2018 was $2.1 million,
or $0.10 per diluted weighted average share, compared to $1.1
million, or $0.05 per diluted weighted average share in the second
quarter of 2017.
Adjusted fully distributed pro forma net income in the second
quarter of 2018 was $2.2 million, or $0.08 per fully distributed
weighted average share, compared to $1.7 million, or $0.06 per
fully distributed weighted average share, in the second quarter of
2017. A reconciliation between GAAP net income and adjusted fully
distributed pro forma net income is included in the accompanying
financial data.
2018 Outlook
The Company currently anticipates the following for its fiscal
year 2018:
- Total revenue between $393 million to $396 million;
- Company-operated comparable restaurant sales growth of 0.5% to
1.0%;
- The opening of approximately 30 company-operated restaurants
and seven to nine franchised/licensed restaurants;
- Restaurant contribution margin of 16.5% to 17.0%;
- General and administrative expenses of $37.75 million to $38.25
million;
- Depreciation and amortization expense of approximately $24.4
million;
- Capital expenditures of $43.0 million to $46.0 million;
and
- An effective pro forma tax rate of approximately 31.5% to
32.5%, 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 second quarter 2018 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 10005242.
The replay will be available until Wednesday, August 8, 2018. 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,
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 named the “best tasting burger in America” in July 2014
in a comprehensive survey conducted by one of America’s leading
consumer magazines. The first Habit opened in Santa Barbara,
California in 1969. The Habit has since grown to over 235
restaurants in 11 states throughout California, Arizona, Utah, New
Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland and
Pennsylvania, as well as four 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 26, 2017, 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 U.S. 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 and loss
on disposal of assets, which are presented as a percentage of
restaurant revenue.
|
|
13 Weeks Ended |
|
|
26 Weeks Ended |
|
(amounts in thousands except share and
per share data) |
|
June 26, 2018 |
|
|
June 27, 2017(1) |
|
|
June 26, 2018 |
|
|
June 27, 2017(1) |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant revenue |
|
$ |
101,921 |
|
|
|
99.1 |
% |
|
$ |
83,050 |
|
|
|
99.7 |
% |
|
$ |
193,450 |
|
|
|
99.3 |
% |
|
$ |
161,357 |
|
|
|
99.6 |
% |
Franchise/license revenue |
|
|
931 |
|
|
|
0.9 |
% |
|
|
287 |
|
|
|
0.3 |
% |
|
|
1,350 |
|
|
|
0.7 |
% |
|
|
571 |
|
|
|
0.4 |
% |
Total
revenue |
|
|
102,852 |
|
|
|
100.0 |
% |
|
|
83,337 |
|
|
|
100.0 |
% |
|
|
194,800 |
|
|
|
100.0 |
% |
|
|
161,928 |
|
|
|
100.0 |
% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating costs (excluding depreciation and
amortization) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper costs |
|
|
30,597 |
|
|
|
30.0 |
% |
|
|
26,256 |
|
|
|
31.6 |
% |
|
|
58,532 |
|
|
|
30.3 |
% |
|
|
49,093 |
|
|
|
30.4 |
% |
Labor and related expenses |
|
|
34,038 |
|
|
|
33.4 |
% |
|
|
27,051 |
|
|
|
32.6 |
% |
|
|
65,990 |
|
|
|
34.1 |
% |
|
|
53,034 |
|
|
|
32.9 |
% |
Occupancy and other operating expenses |
|
|
17,801 |
|
|
|
17.5 |
% |
|
|
13,613 |
|
|
|
16.4 |
% |
|
|
33,737 |
|
|
|
17.4 |
% |
|
|
26,688 |
|
|
|
16.5 |
% |
General and administrative expenses |
|
|
9,835 |
|
|
|
9.6 |
% |
|
|
8,325 |
|
|
|
10.0 |
% |
|
|
18,748 |
|
|
|
9.6 |
% |
|
|
16,088 |
|
|
|
9.9 |
% |
Exchange related expenses |
|
|
— |
|
|
|
— |
|
|
|
120 |
|
|
|
0.1 |
% |
|
|
130 |
|
|
|
0.1 |
% |
|
|
236 |
|
|
|
0.1 |
% |
Depreciation and amortization expense |
|
|
6,021 |
|
|
|
5.9 |
% |
|
|
4,467 |
|
|
|
5.4 |
% |
|
|
11,604 |
|
|
|
6.0 |
% |
|
|
8,716 |
|
|
|
5.4 |
% |
Pre-opening costs |
|
|
646 |
|
|
|
0.6 |
% |
|
|
735 |
|
|
|
0.9 |
% |
|
|
1,726 |
|
|
|
0.9 |
% |
|
|
1,130 |
|
|
|
0.7 |
% |
Loss on disposal of assets |
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
0.0 |
% |
|
|
12 |
|
|
|
0.0 |
% |
|
|
24 |
|
|
|
0.0 |
% |
Total
operating expenses |
|
|
98,938 |
|
|
|
96.2 |
% |
|
|
80,579 |
|
|
|
96.7 |
% |
|
|
190,479 |
|
|
|
97.8 |
% |
|
|
155,009 |
|
|
|
95.7 |
% |
Income from
operations |
|
|
3,914 |
|
|
|
3.8 |
% |
|
|
2,758 |
|
|
|
3.3 |
% |
|
|
4,321 |
|
|
|
2.2 |
% |
|
|
6,919 |
|
|
|
4.3 |
% |
Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Receivable Agreement liability adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,473 |
|
|
|
0.8 |
% |
|
|
— |
|
|
|
— |
|
Interest expense, net |
|
|
251 |
|
|
|
0.2 |
% |
|
|
37 |
|
|
|
0.0 |
% |
|
|
477 |
|
|
|
0.2 |
% |
|
|
195 |
|
|
|
0.1 |
% |
Income
before income taxes |
|
|
3,663 |
|
|
|
3.6 |
% |
|
|
2,721 |
|
|
|
3.3 |
% |
|
|
2,371 |
|
|
|
1.2 |
% |
|
|
6,724 |
|
|
|
4.2 |
% |
Provision (benefit) for income taxes |
|
|
834 |
|
|
|
0.8 |
% |
|
|
1,003 |
|
|
|
1.2 |
% |
|
|
(1,148 |
) |
|
|
(0.6 |
)% |
|
|
2,303 |
|
|
|
1.4 |
% |
Net
income |
|
|
2,829 |
|
|
|
2.8 |
% |
|
|
1,718 |
|
|
|
2.1 |
% |
|
|
3,519 |
|
|
|
1.8 |
% |
|
|
4,421 |
|
|
|
2.7 |
% |
Less: net
income attributable to non-controlling interests |
|
|
(773 |
) |
|
|
(0.8 |
)% |
|
|
(601 |
) |
|
|
(0.7 |
)% |
|
|
(808 |
) |
|
|
(0.4 |
)% |
|
|
(1,506 |
) |
|
|
(0.9 |
)% |
Net income
attributable to The Habit Restaurants, Inc. |
|
$ |
2,056 |
|
|
|
2.0 |
% |
|
$ |
1,117 |
|
|
|
1.3 |
% |
|
$ |
2,711 |
|
|
|
1.4 |
% |
|
$ |
2,915 |
|
|
|
1.8 |
% |
Net income
attributable to The Habit Restaurants, Inc. per share Class A
common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
|
|
|
|
$ |
0.06 |
|
|
|
|
|
|
$ |
0.13 |
|
|
|
|
|
|
$ |
0.14 |
|
|
|
|
|
Diluted |
|
$ |
0.10 |
|
|
|
|
|
|
$ |
0.05 |
|
|
|
|
|
|
$ |
0.13 |
|
|
|
|
|
|
$ |
0.14 |
|
|
|
|
|
Weighted
average shares of Class A common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,505,049 |
|
|
|
|
|
|
|
20,259,140 |
|
|
|
|
|
|
|
20,472,151 |
|
|
|
|
|
|
|
20,223,913 |
|
|
|
|
|
Diluted |
|
|
20,592,768 |
|
|
|
|
|
|
|
20,325,493 |
|
|
|
|
|
|
|
20,543,412 |
|
|
|
|
|
|
|
20,269,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
As
previously reported, the Company recognized an increase in revenue
of $5,000 and a decrease in revenue of $40,000 for the 13 and 26
weeks ended June 27, 2017, respectively, as a result of the
adoption of Accounting Standards Update (“ASU”) No. 2014-09,
Revenue from Contracts with Customers. |
Selected Balance Sheet and Selected Operating Data
(unaudited):
|
|
|
|
|
|
|
|
|
Balance Sheet Data |
|
June 26, 2018 |
|
|
December 26, 2017 |
|
(dollar
amounts in thousands) |
|
|
|
|
|
|
|
|
Balance Sheet Data-Consolidated (at period
end): |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
23,896 |
|
|
$ |
28,277 |
|
Property
and equipment, net(a) |
|
|
157,358 |
|
|
|
139,956 |
|
Total
assets |
|
|
306,992 |
|
|
|
292,124 |
|
Total
debt(b) |
|
|
17,169 |
|
|
|
13,700 |
|
Total
stockholders' equity(c) |
|
|
148,866 |
|
|
|
144,149 |
|
(a) |
Property
and equipment, net consists of property owned or leased, net of
accumulated depreciation and amortization. |
|
|
(b) |
Total
debt consists of deemed landlord financing. |
|
|
(c) |
As
previously reported, the Company recognized a cumulative decrease
in retained earnings of $0.4 million for fiscal year ended December
26, 2017 as a result of the adoption of ASU No. 2014-09, Revenue
from Contracts with Customers. |
|
|
13 Weeks Ended |
|
Selected Operating Data |
|
June 26, 2018 |
|
|
June 27, 2017 |
|
Other Operating Data: |
|
|
|
|
|
|
|
|
Total
restaurants at end of period |
|
|
231 |
|
|
|
189 |
|
Company-operated restaurants at end of period |
|
|
211 |
|
|
|
175 |
|
Company-operated comparable restaurant sales(a) |
|
|
1.2 |
% |
|
|
0.1 |
% |
Company-operated average unit volumes |
|
$ |
1,858 |
|
|
$ |
1,902 |
|
|
|
|
|
|
|
|
|
|
|
|
26 Weeks Ended |
|
Selected Operating Data |
|
June 26, 2018 |
|
|
June 27, 2017 |
|
Other Operating Data: |
|
|
|
|
|
|
|
|
Company-operated comparable restaurant sales(a) |
|
|
0.0 |
% |
|
|
0.5 |
% |
(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 |
|
|
26 Weeks Ended |
|
Adjusted EBITDA Reconciliation |
|
June
26,2018 |
|
|
June
27,2017 |
|
|
June
26,2018 |
|
|
June
27,2017 |
|
(amounts in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income(a) |
|
$ |
2,829 |
|
|
$ |
1,718 |
|
|
$ |
3,519 |
|
|
$ |
4,421 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
834 |
|
|
|
1,003 |
|
|
|
(1,148 |
) |
|
|
2,303 |
|
Interest expense, net |
|
|
251 |
|
|
|
37 |
|
|
|
477 |
|
|
|
195 |
|
Depreciation and amortization |
|
|
6,021 |
|
|
|
4,467 |
|
|
|
11,604 |
|
|
|
8,716 |
|
EBITDA |
|
|
9,935 |
|
|
|
7,225 |
|
|
|
14,452 |
|
|
|
15,635 |
|
Stock-based compensation expense(b) |
|
|
672 |
|
|
|
673 |
|
|
|
1,339 |
|
|
|
1,171 |
|
Loss on disposal of assets(c) |
|
|
— |
|
|
|
12 |
|
|
|
12 |
|
|
|
24 |
|
Pre-opening costs(d) |
|
|
646 |
|
|
|
735 |
|
|
|
1,726 |
|
|
|
1,130 |
|
Tax Receivable Agreement liability adjustment(e) |
|
|
— |
|
|
|
— |
|
|
|
1,473 |
|
|
|
— |
|
Exchange related expenses(f) |
|
|
— |
|
|
|
120 |
|
|
|
130 |
|
|
|
236 |
|
Franchise revenue for terminated agreement(g) |
|
|
(501 |
) |
|
|
— |
|
|
|
(501 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
10,752 |
|
|
$ |
8,765 |
|
|
$ |
18,631 |
|
|
$ |
18,196 |
|
(a) |
As
previously reported, the Company recognized an increase in revenue
of $5,000 and a decrease in revenue of $40,000 for the 13 and 26
weeks ended June 27, 2017, respectively, as a result of the
adoption of ASU No. 2014-09, Revenue from Contracts with
Customers. |
|
|
(b) |
Includes
non-cash, stock-based compensation. |
|
|
(c) |
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. |
|
|
(d) |
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. |
|
|
(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”) into 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) |
This
category includes franchise revenue that was recognized for a
terminated franchise agreement. |
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 |
|
|
26 Weeks Ended |
|
(dollar amounts in thousands) |
|
June
26,2018 |
|
|
June
27,2017 |
|
|
June
26,2018 |
|
|
June
27,2017 |
|
Net
income(a) |
|
$ |
2,829 |
|
|
$ |
1,718 |
|
|
$ |
3,519 |
|
|
$ |
4,421 |
|
Exchange related expenses(b) |
|
|
— |
|
|
|
120 |
|
|
|
130 |
|
|
|
236 |
|
Tax Receivable Agreement liability adjustment(c) |
|
|
— |
|
|
|
— |
|
|
|
1,473 |
|
|
|
— |
|
Franchise revenue for terminated agreement(d) |
|
|
(501 |
) |
|
|
— |
|
|
|
(501 |
) |
|
|
— |
|
Income tax expense (benefit) as reported |
|
|
834 |
|
|
|
1,003 |
|
|
|
(1,148 |
) |
|
|
2,303 |
|
Fully distributed pro forma net income before income
taxes |
|
|
3,162 |
|
|
|
2,841 |
|
|
|
3,473 |
|
|
|
6,960 |
|
Income tax expense on fully distributed pro forma
income before income taxes(e) |
|
|
1,010 |
|
|
|
1,168 |
|
|
|
1,111 |
|
|
|
2,857 |
|
Adjusted fully distributed pro forma net income |
|
$ |
2,152 |
|
|
$ |
1,673 |
|
|
$ |
2,362 |
|
|
$ |
4,103 |
|
Adjusted
fully distributed pro forma net income per share of Class A
common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.08 |
|
|
$ |
0.06 |
|
|
$ |
0.09 |
|
|
$ |
0.16 |
|
Diluted |
|
$ |
0.08 |
|
|
$ |
0.06 |
|
|
$ |
0.09 |
|
|
$ |
0.16 |
|
Weighted
average shares of Class A common stock outstanding used in
computing adjusted fully distributed pro forma net
income(f): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
26,048,388 |
|
|
|
26,019,885 |
|
|
|
26,038,015 |
|
|
|
26,010,460 |
|
Diluted |
|
|
26,136,107 |
|
|
|
26,086,238 |
|
|
|
26,109,276 |
|
|
|
26,055,972 |
|
(a) |
As
previously reported, the Company recognized an increase in revenue
of $5,000 and a decrease in revenue of $40,000 for the 13 and 26
weeks ended June 27, 2017 as a result of the adoption of ASU No.
2014-09, Revenue from Contracts with Customers. |
|
|
(b) |
This
category includes costs associated with the exchanges of LLC Units
to Class A common stock by the Continuing LLC Owners pursuant to
the LLC Agreement. |
|
|
(c) |
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. |
|
|
(d) |
This
category includes franchise revenue that was recognized for a
terminated franchise agreement. |
|
|
(e) |
Reflects
income tax expense at an effective rate of 32.0% and 41.0% for the
periods ended June 26, 2018 and June 27, 2017, 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 discrete
items and reduced corporate tax rate due to tax law change. 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 the Company’s 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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