Ignite Restaurant Group Reports Fourth Quarter 2012 Financial Results

  Ignite Restaurant Group Reports Fourth Quarter 2012 Financial Results

Business Wire

HOUSTON -- March 20, 2013

Ignite Restaurant Group (NASDAQ: IRG) today reported financial results for the
fourth quarter and full year ended December 31, 2012.

Highlights for the fourth quarter of 2012 compared to the fourth quarter of
2011 were as follows:

  *Total revenues rose 11.1% to $112.6 million compared to $101.4 million
  *Comparable restaurant sales increased 0.8%, excluding a 0.1% impact due to
    Hurricane Sandy, marking the Company’s 18^th consecutive quarter of
    positive comparable restaurant sales growth
  *Net loss and net loss per share were ($7.6) million and ($0.30),
    respectively
  *Adjusted net loss (which is a non-GAAP financial measure) increased $584k
    to ($3.9) million and adjusted net loss per share was ($0.15) per share
  *One new Joe’s Crab Shack restaurant opened during the fourth quarter of
    2012

Highlights for the full fiscal year 2012 compared to the full fiscal year 2011
were as follows:

  *Total revenues rose 14.8% to $465.1 million compared to $405.2 million
  *Comparable restaurant sales increased 2.2%
  *Net income decreased $3.4 million to $8.7 million, or $0.37 per share
  *Adjusted net income (which is a non-GAAP financial measure) increased $6.1
    million to $14.7 million and adjusted pro forma net income per share was
    $0.57 per share
  *A total of 11 new restaurants opened during 2012

“Our ongoing focus on menu innovation, brand awareness and providing a unique
and authentic dining experience for our guests drove our top line during the
quarter,” commented Ray Blanchette, Chief Executive Officer of Ignite
Restaurant Group. “As a result, we achieved our 18th consecutive quarter of
positive comparable sales, despite a challenging consumer environment.”

“Looking ahead, we believe the future of Ignite has never looked brighter,”
added Blanchette. “Our brands remain distinct and differentiated. We have a
strong development pipeline and we continue to be pleased with the performance
of our new units. Furthermore, our pending acquisition of Macaroni Grill will
transform Ignite into a company with almost one billion dollars in revenues
with the opportunity to elevate the business, achieve meaningful synergies and
drive significant growth over time. We continue to be very excited about our
brands, the growth in front of our Company, and the ongoing prospect to create
value for our shareholders.”

Review of Fourth Quarter 2012 Operating Results

Total revenues increased $11.2 million, or 11.1%, to $112.6 million in the
fourth quarter of 2012 from $101.4 million in the same quarter last year.
Non-comparable restaurants contributed $10.5 million of the total revenue
increase, while comparable restaurants contributed $0.7 million of the total
revenue increase.

Comparable restaurant sales increased 0.8% during the fourth quarter of 2012,
excluding a 0.1% impact due to Hurricane Sandy.

Net loss for the fourth quarter of 2012 was ($7.6) million, or ($0.30) per
diluted share compared to ($1.0) million, or ($0.05) per diluted share in the
fourth quarter of 2011. The Company incurred approximately $6.1 million of
charges in the fourth quarter of 2012 related primarily to its debt
refinancing, restatement related costs, a restaurant closure and losses
associated with damage caused by Hurricane Sandy. In the fourth quarter of
2011, the Company realized a benefit of approximately $2.3 million related
primarily to the reversal of a deferred tax valuation allowance and an
insurance gain, partially offset by transaction expenses and asset write-offs.
Excluding the impact of these items, adjusted net loss (which is a non-GAAP
financial measure) was ($3.9) million in the fourth quarter of 2012 compared
to ($3.3) million in the fourth quarter of 2011. A reconciliation between GAAP
net income (loss) and adjusted net income (loss) is included in the
accompanying financial data.

Development

During the fourth quarter of 2012, the Company opened one new Joe’s Crab Shack
restaurant in Hunt Valley, MD. 11 new Joe’s Crab Shack restaurants opened
during fiscal 2012, one Joe’s Crab Shack closed for a conversion to a Brick
House Tavern + Tap in 2013, and one Brick House Tavern + Tap closed for a
conversion to a Joe’s Crab Shack in 2013. There were 129 Joe’s Crab Shack
restaurants and 15 Brick House Tavern + Tap restaurants at the end of the
fourth quarter.

In 2013, the Company plans to open as many as 14 new restaurants and to
convert as many as four existing restaurants. Two Joe’s Crab Shack restaurants
have opened to-date during the first quarter of 2013.

Subsequent Event

On February 6, 2013 the Company announced that it agreed to acquire Romano’s
Macaroni Grill for approximately $55.0 million in an all-cash transaction from
private equity firm Golden Gate Capital, management and investors. The
acquisition will be funded through a $50 million upsizing of the Company’s
existing credit facility. The Company plans to close the acquisition in the
second quarter of 2013 and expects the transaction to be accretive to earnings
in 2014. Romano’s Macaroni Grill, which opened its first restaurant in 1988,
currently owns and operates 186 units and franchises five units across 36
states. Additionally, the brand franchises an additional 19 units throughout
nine U.S. territories and foreign countries.

Conference Call

We will host a conference call to discuss our fourth quarter and full year
2012 financial results today at 5:00 PM Eastern Standard Time. Hosting the
call will be Ray Blanchette, Chief Executive Officer, and Michael Dixon,
President and Chief Financial Officer.

The conference call can be accessed live over the phone by dialing
888-300-2342 or for international callers by dialing 719-325-4787. 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 password is
4058124. The replay will be available until March 27, 2013. The call will also
be webcast live from the Company's website at www.igniterestaurants.com under
the investor relations section.

About Ignite Restaurant Group

Ignite Restaurant Group, Inc. owns and operates 131 Joe's Crab Shacks and 15
Brick House Tavern + Taps. Each brand offers a variety of high-quality,
chef-inspired food and beverages in a distinctive, casual, high-energy
atmosphere. Joe's Crab Shack and Brick House Tavern + Tap operate in a diverse
set of markets across the United States.

Cautionary Note Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of
the federal securities laws. Forward-looking statements are subject to known
and unknown risks and uncertainties, many of which may be beyond the Company’s
control. The Company cautions you that the forward-looking information
presented in this press release is not a guarantee of future events, and that
actual events and results may differ materially from those made in or
suggested by the forward-looking information contained in this press release.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable
with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or
“continue” or the negative thereof or variations thereon or similar
terminology. Examples of forward-looking statements in this press release
include our planned new restaurant openings for fiscal 2013, the earnings
accretion in 2014 resulting from the Romano’s Macaroni Grill transaction, and
the opportunities to elevate the business, achieve synergies, and drive growth
over time through the Romano’s Macaroni Grill transaction.

A number of important factors could cause actual events and results to differ
materially from those contained in or implied by the forward-looking
statements included in this press release, including the risk factors
discussed in the Company’s Form10-K for the year-ended December 31, 2012
filed with the Securities and Exchange Commission (SEC) (which can both be
found at the SEC’s website www.sec.gov) and each such risk factor is
specifically incorporated into this press release. Any forward-looking
information presented herein is made only as of the date of this press
release, and the Company does not undertake any obligation to update or revise
any forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.

                Sixteen Weeks Ended       Sixteen Weeks Ended       Fifty-Two Weeks Ended     Fifty-Two Weeks Ended
                     December 31, 2012          January 2, 2012            December 31, 2012          January 2, 2012
Consolidated                       Percent of                 Percent of                 Percent of                Percent
Statements of       Amount       Revenue      Amount       Revenue      Amount       Revenue      Amount       of
Operations                                                                                                         Revenue
                     (In thousands, except percent and per share data)
                                                                                               
Revenues             $ 112,603     100.0   %    $ 101,391     100.0   %    $ 465,056     100.0   %    $ 405,243    100.0   %
Costs and
expenses
  Restaurant
  operating
  costs
     Cost of           35,001      31.1    %      32,041      31.6    %      145,451     31.3    %      127,607    31.5    %
     sales
     Labor and         33,903      30.1    %      29,950      29.5    %      127,331     27.4    %      111,721    27.6    %
     benefits
     Occupancy         10,401      9.2     %      9,168       9.0     %      33,846      7.3     %      30,708     7.6     %
     expenses
     Other
     operating         21,000      18.6    %      18,920      18.7    %      81,219      17.5    %      72,296     17.8    %
     expenses
  General and          10,084      9.0     %      7,159       7.1     %      31,725      6.8     %      23,556     5.8     %
  administrative
  Depreciation
  and                  6,019       5.3     %      5,274       5.2     %      18,572      4.0     %      16,011     4.0     %
  amortization
  Pre-opening          362         0.3     %      1,407       1.4     %      3,871       0.8     %      4,855      1.2     %
  costs
  Restaurant
  impairments          (18     )   (0.0  ) %      281         0.3     %      115         0.0     %      333        0.1     %
  and closures
  Loss on
  disposal of         1,856      1.6    %     941        0.9    %     2,296      0.5    %     1,295     0.3    %
  property and
  equipment
     Total costs
     and              118,608    105.3  %     105,141    103.7  %     444,426    95.6   %     388,382   95.8   %
     expenses
Income (loss)          (6,005  )   (5.3  ) %      (3,750  )   (3.7  ) %      20,630      4.4     %      16,861     4.2     %
from operations
Interest               (3,372  )   (3.0  ) %      (2,731  )   (2.7  ) %      (9,366  )   (2.0  ) %      (9,215  )  (2.3  ) %
expense, net
Gain (loss) on
insurance             (1,016  )   (0.9  ) %     1,125      1.1    %     (799    )   (0.2  ) %     1,126     0.3    %
settlements
Income (loss)
before income          (10,393 )   (9.2  ) %      (5,356  )   (5.3  ) %      10,465      2.3     %      8,772      2.2     %
taxes
Income tax
expense               (2,811  )   (2.5  ) %     (4,349  )   (4.3  ) %     1,751      0.4    %     (3,291  )  (0.8  ) %
(benefit)
Net income           $ (7,582  )   (6.7  ) %    $ (1,007  )   (1.0  ) %    $ 8,714      1.9    %    $ 12,063    3.0    %
(loss)
                                                                                                                           
Basic and
diluted net
income (loss)
per share data:
  Net income
  (loss) per
  share
     Basic and       $ (0.30   )                $ (0.05   )                $ 0.37                     $ 0.63
     diluted
  Weighted
  average shares
  outstanding
     Basic             25,624                     19,178                     23,328                     19,178
     Diluted           25,624                     19,178                     23,329                     19,178

Selected Consolidated Balance Sheet     December 31,           January 2,
Information                              2012                    2012
                                       (In thousands)
Cash and cash equivalents                $     6,929             $   3,725
Total assets                                   201,438               177,835
Long term debt (1)                             45,000                114,750
Total liabilities                              95,221                162,036
Stockholders' equity (1)                       106,217               15,799
(1) Change from fiscal 2011 to fiscal 2012 reflects the impacts of the initial
public offering in May 2012

                        Sixteen Weeks Ended        Fifty-Two Weeks Ended
                           December 31,  January 2,   December 31, January 2,
                           2012           2012         2012         2012
                                                                    
Selected Other Data:
Restaurants opened during     1             2             11           11
the period
Number of restaurants open
(end of period):
     Joe's Crab Shack         129           119           129          119
     Brick House Tavern +    15          16          15         16    
     Tap
     Total restaurants        144           135           144          135
Average weekly sales (in   $  49          $ 47         $  63        $  59
thousands)
Restaurant operating weeks    2,319         2,162         7,367        6,871
Comparable Restaurant
Data:
Comparable restaurant base    123           114           123          114
(end of period)
Average unit volume (in    $  717         $ 700        $  3,050     $  2,970
thousands)
Comparable restaurant         0.8    %      7.3   %       2.2    %     6.9   %
sales percentage change
Average check (Joe's only) $  23.78       $ 23.18      $  23.80     $  23.07

Reconciliation of Non-GAAP Results to GAAP Results

The Company provided detailed explanations of these non-GAAP financial
measures, including a discussion of the usefulness and purposes of each
measure, in its Form 8-K filed with the Securities and Exchange Commission on
March 20, 2013.

                Sixteen Weeks Ended               Fifty-Two Weeks Ended
                   December 31,      January 2,       December      January 2,
                   2012             2012             31,          2012
                                                      2012
                   (In thousands, except per share data)
Net income (loss)  $  (7,582  )      $  (1,007  )     $ 8,714       $ 12,063
- GAAP
Adjustments:
   IPO-related        -                 -               1,864         -
   expenses
   Write-off of
   debt issuance      2,227             -               3,281         1,378
   costs
   Non-cash loss
   on disposal of
   fixed assets
   related to
   conversion,        1,549             628             1,549         628
   remodels and
   closures
   Loss (gain) on
   insurance          1,016             (1,124  )       799           (1,126 )
   settlements
   Restatement        825               -               1,873         -
   expenses
   Hedge              -                 -               -             427
   termination
   Other expenses     448               319             448           579
   Income tax
   effect of          (2,381  )         70              (3,853 )      (698   )
   adjustments
   above
   Release of
   deferred tax      -               (2,200  )      -           (4,659 )
   asset valuation
   allowance
Adjusted net
income (loss) -    $  (3,898  )      $  (3,314  )     $ 14,675     $ 8,592  
non-GAAP
                                                                    
Weighted average
shares outstanding
(GAAP)
   Basic              25,624            19,178          23,328        19,178
   Diluted            25,624            19,178          23,329        19,178
Net income (loss)
per share (GAAP)
   Basic and       $  (0.30   )      $  (0.05   )     $ 0.37        $ 0.63
   diluted
Pro forma weighted
average shares
outstanding
(non-GAAP)
   Basic and                            25,624          25,624        25,624
   diluted (1)
Adjusted pro forma
net income (loss)
per share
(non-GAAP)
   Basic and                         $  (0.13   )     $ 0.57        $ 0.34
   diluted(1)
Adjusted net loss
per share
(non-GAAP)
   Basic and       $  (0.15   )
   diluted
                                                                    
(1) Reflects 6.4 million shares of common stock issued in the IPO as if it
occurred at the beginning of fiscal year 2011. Not presented for the fourth
quarter of fiscal 2012 since these shares were oustanding for the entire
period.

Contact:

ICR
Investor Relations
Fitzhugh Taylor, 203-682-8261
fitzhugh.taylor@icrinc.com
or
Media Relations
Liz Brady DiTrapano, 646-277-1226
liz.brady@icrinc.com
 
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