Bravo Brio Restaurant Group, Inc. Reports Third Quarter & Year-to-Date 2012
Updates Fiscal 2012 Outlook; Provides Preliminary View of Fiscal 2013; Board
of Directors Authorizes $20 Million Share Repurchase Program
COLUMBUS, Ohio, Oct. 23, 2012 (GLOBE NEWSWIRE) -- Bravo Brio Restaurant Group,
Inc. (Nasdaq:BBRG), owner and operator of the BRAVO! Cucina Italiana (BRAVO!)
and BRIO Tuscan Grille (BRIO) restaurant concepts, today reported financial
results for the thirteen and thirty-nine week periods ended September 23,
2012, updated its fiscal 2012 outlook, as well as provided a preliminary view
of fiscal 2013. The Company has also announced that its Board of Directors has
authorized a $20 million share repurchase program.
Selected Third Quarter of 2012 Highlights Compared to the Year-Ago Period
Include the Following:
*Revenues increased 8.1% to $95.9 million from $88.8 million.
*Total comparable restaurant sales decreased 0.9%.
*Comparable restaurant sales decreased 0.5% at BRAVO! and 1.1% at BRIO.
*Restaurant-level operating profit increased 7.7% to $16.0 million from
*GAAP net income was $2.8 million, or $0.14 per diluted share, compared to
GAAP net income of $3.6 million, or $0.18 per diluted share and modified
pro forma net income of $2.6 million, or $0.13 per diluted share, in 2011.
Please see the reconciliation from GAAP to modified pro forma (non-GAAP)
net income in the accompanying financial tables.
Selected Year-to-Date 2012 Highlights Compared to the Year-Ago Period Include
*Revenues increased 8.6% to $297.1 million from $273.6 million.
*Total comparable restaurant sales decreased 0.2%.
*Comparable restaurant sales decreased 0.1% at BRAVO! and 0.2% at BRIO.
*Restaurant-level operating profit increased 8.9% to $51.8 million from
*GAAP net income was $11.7 million, or $0.57 per diluted share, compared to
GAAP net income of $71.5 million, or $3.48 per diluted share and modified
pro forma net income of $10.7 million, or $0.52 per diluted share, in
2011.Please see the reconciliation from GAAP to modified pro forma
(non-GAAP) net income in the accompanying financial tables.
*The $59.8 million decrease in GAAP net income was primarily due to a $57.2
million income tax benefit recorded in the second quarter of 2011 related
to a reduction of a valuation allowance against net deferred tax assets.
"During the third quarter we improved earnings despite difficult
comparisonsandmodestsales deleveraging.While the macroeconomic environment
remains challenging, our focus continues to be on driving traffic by exceeding
our guests' expectations each and every day," said Saed Mohseni, Chief
Executive Officer and President.
Mohseni continued, "Our fourth quarterinitiativesinclude executing on
ourrecently launchedguest loyaltyprogram,rolling outnew menusfocused on
culinary excellenceandvalue driven price points, gearing up for the Holiday
season with an emphasisonourbanquet business,andpromoting gift cards
withinourrestaurants and through third party distributors."
"Our Board of Directorshas recently approved a $20 million share repurchase
programasa clear demonstration of our confidence in the future of this
Company. Our intention is to continue to allocate capital smartly and
efficiently, andweareexcitedtohave an additional lever at our disposal to
enhance longer term value," Mohseni concluded.
Third Quarter 2012 Financial Results
Revenues increased approximately $7.1 million, or 8.1%, to $95.9 million in
the third quarter of 2012, from $88.8 million in the third quarter of
2011.The increase in revenues was primarily due to an additional 116
operating weeks provided by seven restaurants, six BRIOs and one BRAVO!,
opened in the first thirty-nine weeks of 2012 and six restaurants opened in
the second half of 2011.Total comparable restaurant sales decreased 0.9%, as
a 3.4% decrease in guest counts was partially offset by a $0.59 increase in
Total restaurant operating costs increased $6.0 million, or 8.1%, to $79.9
million in the third quarter of 2012, from $73.9 million in the third quarter
of 2011.Total restaurant-level operating costs include costs of sales, labor
costs, operating costs and occupancy costs.Total restaurant-level operating
profit, which consists of revenues minus total restaurant-level operating
costs, increased $1.1 million, or 7.7%, to $16.0 million from $14.9 million in
the same period last year.As a percentage of revenues, total restaurant-level
operating profit decreased to 16.7% in the third quarter of 2012 from 16.8% in
the third quarter of 2011.This was primarily attributable to an increase in
labor costs that were partially offset by a decrease in cost of sales in 2012
as compared to 2011.
GAAP net income for the third quarter of 2012 was $2.8 million, or $0.14 per
diluted share, compared to GAAP net income of $3.6 million, or $0.18 per
diluted share, in the same period last year.
On a modified pro forma basis, a measure that management believes offers a
more useful year-over-year performance comparison, there were no adjustments
from GAAP net income for the third quarter of 2012 and net income was $2.8
million, or $0.14 per diluted share.This compared to modified pro forma net
income of $2.6 million, or $0.13 per diluted share, in the same period last
year.Please see the accompanying financial tables for a reconciliation from
GAAP net income to modified pro forma (non-GAAP) net income.
Third Quarter 2012 Brand Operating Highlights
Comparable restaurant sales at BRAVO! decreased 0.5% and average weekly sales
were $63,600.Comparable restaurant sales at BRIO decreased 1.1% in the third
quarter of 2012 and average weekly sales were $91,200.
As of September 23, 2012, the Company operated 48 BRAVO!, 52 BRIO, and one Bon
Vie restaurant across 31 states.Included in this total is one BRIO restaurant
that is operated under a management agreement.
Based upon the year-to-date results as of September 23, 2012, and projections
for the fourth quarter of 2012, the Company is updating its fiscal 2012
financial forecast as follows:
*Revenues of $410 million to $413 million.
*Flat total annual comparable restaurant sales.
*Development of ten restaurants, including one restaurant operated under a
*Pre-opening costs of $4.9 million to $5.3 million.
*Diluted earnings per share of $0.89 to $0.92.
*Capital expenditures of $25 million to $27 million.
*Diluted share count of approximately 20.7 million.
*Annual effective tax rate of approximately 29.0%.
The Company is also providing a preliminary view of fiscal 2013, which is a
52-week year. Revenues are expected in the $430 million to $440 million range
based on comparable restaurant sales of zero to positive 1.0%. The Company
also anticipates developing seven to eight new restaurants.
Stock Repurchase Program
On October 17, 2012, the Board of Directors approved the terms of a share
repurchase plan, under which the Company is authorized to repurchase up to $20
million of its common shares beginning October 26, 2012 and ending on December
29, 2013, subject to the Company's pre-existing blackout periods.The Company
may repurchase shares on the open market or through privately negotiated
transactions at times and prices considered appropriate by the Company at the
discretion of management and subject to its assessment of market conditions
and other economic factors.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss third quarter
2012 financial results today at 5:00 PM ET. Hosting the call will be Saed
Mohseni, Chief Executive Officer, Jim O'Connor, Chief Financial Officer and
Brian O'Malley, Chief Operating Officer.
The conference call can be accessed live over the phone by dialing (888)
401-4691, or for international callers (719) 325-2333. A replay will be
available one hour after the call and can be accessed by dialing (877)
870-5176 or (858) 384-5517 for international callers; the conference ID is
7349616. The replay will be available until Tuesday, October 30, 2012.
The call will be webcast live from the Company's investor relations website at
About Bravo Brio Restaurant Group, Inc.
Bravo Brio Restaurant Group, Inc. is a leading owner and operator of two
distinct Italian restaurant brands, BRAVO! Cucina Italiana and BRIO Tuscan
Grille. BBRG has positioned its brands as multifaceted culinary destinations
that deliver the ambiance, design elements and food quality reminiscent of
fine dining restaurants at a value typically offered by casual dining
establishments, a combination known as the upscale affordable dining segment.
Each of BBRG's brands provides its guests with a fine dining experience and
value by serving affordable cuisine prepared using fresh flavorful ingredients
and authentic Italian cooking methods, combined with attentive service in an
attractive, lively atmosphere. BBRG strives to be the best Italian restaurant
company in America and is focused on providing its guests an excellent dining
experience through consistency of execution.
Some of the statements in this release contain forward-looking statements,
which involve risks and uncertainties. These statements relate to future
events or our future financial performance. We have attempted to identify
forward-looking statements by terminology including "anticipates," "believes,"
"can," "continue," "could," "estimates," "expects," "intends," "may," "plans,"
"potential," "predicts," "should" or "will" or the negative of these terms or
other comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors, including
those discussed under the heading "Risk Factors" in our Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 6, 2012.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable based on our current knowledge of our business and
operations, we cannot guarantee future results, levels of activity,
performance or achievements. We assume no obligation to provide revisions to
any forward-looking statements should circumstances change.
BRAVO BRIO RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
GAAP Presentation with Reconciliation to Modified Pro Forma
Thirteen and Thirty-Nine Weeks Ended September 23, 2012 and September 25, 2011 (Unaudited)
(Dollars in thousands, except per share data)
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
September September September September
23, 25, 23, 25,
2012 2011 2012 2011
Revenues $95,921 $88,774 $297,105 $273,592
Costs and expenses
Cost of sales 25,045 26.1% 23,617 26.6% 77,164 26.0% 73,008 26.7%
Labor 33,528 35.0% 30,730 34.6% 102,950 34.7% 92,893 34.0%
Operating 15,089 15.7% 13,958 15.7% 45,752 15.4% 42,388 15.5%
Occupancy 6,230 6.5% 5,587 6.3% 19,448 6.5% 17,747 6.5%
administrative 5,700 5.9% 5,185 5.8% 17,085 5.8% 16,067 5.9%
Restaurant 1,442 1.5% 1,281 1.4% 3,615 1.2% 2,882 1.1%
Depreciation and 4,689 4.9% 4,303 4.8% 13,765 4.6% 12,555 4.6%
Total costs and 91,723 95.6% 84,661 95.4% 279,779 94.2% 257,540 94.1%
Income from 4,198 4.4% 4,113 4.6% 17,326 5.8% 16,052 5.9%
Net interest 322 0.3% 394 0.4% 1,008 0.3% 1,315 0.5%
Income before 3,876 4.0% 3,719 4.2% 16,318 5.5% 14,737 5.4%
Income tax 1,049 1.1% 121 0.1% 4,612 1.6% (56,806) -20.8%
Net income 2,827 2.9% 3,598 4.1% 11,706 3.9% 71,543 26.1%
Net income per $0.14 $0.19 $0.60 $3.71
Net income per $0.14 $0.18 $0.57 $3.48
shares 19,618 19,330 19,558 19,286
shares 20,649 20,551 20,617 20,545
Certain percentage amounts may not sum due to rounding.
ADJUSTMENTS TO RECONCILE GAAP TO MODIFIED PRO FORMA RESULTS
Income Tax Expense -- (995) -- (4,232)
Valuation Allowance -- -- -- (57,175)
Secondary Offering -- -- -- 600
Total Adjustments -- (995) -- (60,807)
Modified Pro Forma $2,827 $2,603 $11,706 $10,736
Net income per
basic share-pro $0.14 $0.13 $0.60 $0.56
Net income per
diluted share- pro $0.14 $0.13 $0.57 $0.52
shares 19,618 19,330 19,558 19,286
shares 20,649 20,551 20,617 20,545
1. This adjustment reflects a tax rate of 30.0%, which reflects our estimate of our
long-term effective tax rate.
2. This adjustment reflects the reduction of a significant portion of our valuation
allowance in the second quarter of 2011 as it was deemed more likely than not that
the Company would utilize its future net deferred tax assets.
3. Reflects the non-recurring costs, incurred by us, associated with the secondary
offering of our common shares by certain of the Company's existing shareholders,
completed on April 1, 2011.We did not receive any proceeds from the offering.
BRAVO BRIO RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of September 23, 2012 and December 25, 2011
(Dollars in thousands)
September 23, December 25,
Cash and cash equivalents $7,919 $10,093
Accounts receivable 5,829 6,403
Tenant improvement allowance receivable 3,003 1,219
Inventories 2,587 2,767
Deferred income taxes, net 3,354 2,328
Prepaid expenses and other current assets 1,694 2,367
Total current assets 24,386 25,177
Property and equipment, net 177,185 163,208
Deferred income taxes, net 51,825 55,811
Other assets, net 4,287 3,430
Total assets $257,683 $247,626
Liabilities and stockholders' equity
Trade and construction payables $13,498 $13,058
Accrued expenses 23,295 20,183
Current portion of long-term debt 2,366 1,714
Deferred lease incentives 6,122 5,639
Deferred gift card revenue 6,911 10,863
Total current liabilities 52,192 51,457
Deferred lease incentives 65,081 62,565
Long-term debt 21,058 30,857
Other long-term liabilities 20,774 18,163
Commitments and contingencies
Common shares, no par value per share -
authorized, 100,000,000 shares; issued and 195,322 193,034
outstanding, 19,684,284 atSeptember 23, 2012
and19,476,559 at December 25, 2011
Preferred shares, no par value, per share -
authorized, 5,000,000 shares; issued and -- --
outstanding, 0 shares at September 23, 2012 and
December 25, 2011
Retained deficit (96,744) (108,450)
Total stockholders' equity 98,578 84,584
Total liabilities and stockholders' equity $257,683 $247,626
CONTACT: Investor Relations
Don Duffy/Raphael Gross
(203) 682-8200/ (203) 682-8253
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