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Ignite Restaurant Group Reports First Quarter 2013 Financial Results

  Ignite Restaurant Group Reports First Quarter 2013 Financial Results

Business Wire

HOUSTON -- May 07, 2013

Ignite Restaurant Group (NASDAQ: IRG) today reported financial results for the
first quarter ended April 1, 2013.

Highlights for the 13-week first quarter of 2013 were as follows:

  *Total revenues were $118.2 million
  *On a comparable 13-week basis, system-wide comparable restaurant sales for
    Ignite decreased 1.4%, with Joe’s Crab Shack decreasing 2.0% and Brick
    House Tavern + Tap increasing 3.9%
  *Net income and net income per share were $2.2 million and $0.09,
    respectively
  *Adjusted net income and adjusted net income per share (which are non-GAAP
    financial measures) were $2.7 million and $0.11 respectively
  *Two new Joe’s Crab Shack restaurants opened during the first quarter of
    2013

Beginning with the first quarter of fiscal 2013, the Company adjusted its
quarterly reporting calendar to four 13-week operating periods. Previously,
the first three quarters of the Company’s fiscal year consisted of 12 weeks
and the fourth quarter consisted of 16 weeks. As a result, financial results
for the 13-week quarter ended April 1, 2013 may not be directly comparable to
those of the corresponding 12-week quarter ended March 26, 2012. However, we
are able to recast revenues for the first quarter of 2012 on a 13-week basis.

“While our first quarter results reflect the economic headwinds that affected
the restaurant industry, we are pleased that our new units continue to perform
well above the system average”, commented Ray Blanchette, Chief Executive
Officer of Ignite Restaurant Group. “We are also pleased with the solid
results at Brick House, which is benefitting from the initiatives that we put
in place during the last year. The integration of Macaroni Grill continues
smoothly and we are moving rapidly on our efforts to improve the brand
messaging and increase awareness.”

Review of First Quarter 2013 Operating Results

Total revenues were $118.2 million in the 13-week first quarter of 2013. Total
revenues in the 12-week first quarter of 2012 were $103.4 million. Adjusting
2012 revenues to a comparable 13-week quarterly reporting period, total
revenues in the first quarter of 2013 increased approximately $5.1 million, or
4.5%. The increase was driven by new restaurant development partially offset
by a decrease in comparable restaurant sales. On a 13-week basis, Ignite’s
system-wide comparable restaurant sales decreased 1.4%. Comparable sales at
Joe’s Crab Shack decreased 2.0%, while Brick House Tavern + Tap’s comparable
sales increased 3.9%.

Net income for the 13-week first quarter of 2013 was $2.2 million, or $0.09
per diluted share. The Company incurred approximately $1.0 million of charges
in the first quarter of 2013 related to the acquisition of Romano’s Macaroni
Grill, partially offset by a gain on insurance settlements. Excluding the
impact of these items, adjusted net income and adjusted net income per diluted
share (which are non-GAAP financial measures) were $2.7 million and $0.11,
respectively, in the 13-week first quarter of 2013. Net income in the 12-week
first quarter of 2012 was $1.9 million, or $0.10 per diluted share. Adjusting
for IPO-related costs incurred in the first quarter of 2012 and for the
increase in weighted-average shares outstanding as a result of the IPO,
adjusted net income and adjusted net income per diluted share in the 12-week
first quarter of 2012 was $1.9 million and $0.07, respectively. A
reconciliation between GAAP net income and adjusted net income is included in
the accompanying financial data.

Development

During the first quarter of 2013, the company opened a new Joe’s Crab Shack
restaurant in Savannah, GA and converted a Brick House Tavern + Tap to a Joe’s
Crab Shack in Ft. Lauderdale, FL. There were 131 Joe’s Crab Shack restaurants
and 15 Brick House Tavern + Tap restaurants in operation at the end of the
first quarter. Subsequent to the end of the first quarter, two additional
Joe’s Crab Shack restaurants have opened. For the remainder of the fiscal
year, we expect to open as many as nine more new restaurants, a vast majority
of which will be new Joe’s Crab Shack restaurants, and converting as many as
three existing restaurants to either a Joe’s Crab Shack or a Brick House
Tavern + Tap.

Subsequent Event

On April 9, 2013, the company announced that it had completed the previously
announced acquisition of Romano’s Macaroni Grill for approximately $54 million
in an all-cash transaction, subject to final working capital and purchase
accounting adjustments. The acquisition includes 186 company-owned and twelve
franchised restaurants across 36 states and Puerto Rico, as well as twelve
additional franchised units throughout nine foreign countries and was funded
through a $50 million upsizing of the Company’s existing credit facility.

Conference Call

We will host a conference call to discuss our first quarter 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 888-801-6507 or for international callers by dialing 913-312-0839. 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 5918268. The replay will be available until May 14, 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 133 Joe's Crab Shacks,186
Romano’s Macaroni Grills and 15 Brick House Tavern + Taps. Ignite also
franchises twelve Romano’s Macaroni Grills in the United States and Puerto
Rico and twelve units throughout nine foreign countries. Each brand offers a
variety of high-quality, chef-inspired food and beverages in a distinctive,
casual, high-energy atmosphere.

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 and conversions for fiscal 2013,
our efforts to improve brand messaging and increase awareness in the Romano’s
Macaroni Grill concept.

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 Annual Report on Form 10-K for the fiscal year
ended December 31, 2012 filed with the Securities and Exchange Commission
(SEC) (which can 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.

Results of Operations

With the change in our fiscal quarters, as noted above, the first quarter of
2013 represents 13 weeks of activity and the first quarter of 2012 represents
only 12 weeks of activity. As such, the two quarters are not comparable. We
did not believe it was practicable to recast the prior year quarter to 13
weeks. The only financial information that we were able to recast on a 13-week
basis for the first quarter of 2012 was revenues.We are also able to report
restaurant operating weeks and change in comparable restaurant sales for the
comparable 13-week period of fiscal year 2012. We believe it is impracticable
to recast other financial information because we do not have weekly cutoff
procedures that would allow us to distribute expenses or cash flows to the
appropriate periods in order to report the prior year on a 13-week basis.

The following table presents the consolidated statement of operations for the
thirteen weeks ended April 1, 2013 and twelve weeks ended March 26, 2012.

                                                
Consolidated           Thirteen Weeks Ended          Twelve Weeks Ended
Statements of
Operations             April 1, 2013                 March 26, 2012
                      (In thousands, except percent and per share data)
                                                                
Revenues               $ 118,240       100.0   %     $ 103,430       100.0   %
Costs and expenses
Restaurant
operating costs
and expenses
Cost of sales            36,321        30.7    %       32,915        31.8    %
Labor expenses           31,907        27.0    %       28,047        27.1    %
Occupancy expenses       8,554         7.2     %       7,532         7.3     %
Other operating          21,804        18.4    %       18,568        18.0    %
expenses
General and              10,291        8.7     %       6,223         6.0     %
administrative
Depreciation and         4,813         4.1     %       3,949         3.8     %
amortization
Pre-opening costs        1,091         0.9     %       1,528         1.5     %
Restaurant
impairments and          17            0.0     %       49            0.0     %
closures
Loss on disposal
of property and         195          0.2    %      89           0.1    %
equipment
                                                                             
Total costs and         114,993      97.3   %      98,900       95.6   %
expenses
Income from              3,247         2.7     %       4,530         4.4     %
operations
Interest expense,        (395    )     (0.3  ) %       (1,997  )     (1.9  ) %
net
Gain on insurance       300          0.3    %      -            0.0    %
settlements
                                                                             
Income before            3,152         2.7     %       2,533         2.4     %
income taxes
Income tax expense      967          0.8    %      648          0.6    %
                                                                             
Net income             $ 2,185        1.8    %     $ 1,885        1.8    %
                                                                             
Basic and diluted
net income per
share data:
Net income per
share
Basic and diluted      $ 0.09                        $ 0.10
Weighted average
shares outstanding
Basic                    25,624                        19,178
Diluted                  25,630                        19,178
                                                                             

                                                  April 1,    December 31,
Selected Consolidated Balance Sheet Information     2013          2012
                                                  (In thousands)
Cash and cash equivalents                           $ 7,824       $   6,929
Total assets                                          209,931         201,438
Long term debt                                        45,000          45,000
Total liabilities                                     101,314         95,221
Stockholders' equity                                  108,617         106,217
                                                                      

                                                         
                                             Thirteen Weeks     Twelve Weeks
                                             Ended              Ended
                                             April 1, 2013      March 26, 2012
                                                                
Selected Other Data:
Restaurants opened during the period             2                   3
Number of restaurants open (end of
period):
Joe's Crab Shack                                 131                 122
Brick House Tavern + Tap                        15                16     
Total restaurants                                146                 138
Restaurant operating weeks(1)
Joe's Crab Shack                                 1,677               1,446
Brick House Tavern + Tap                         195                 192
Average weekly sales (in thousands)
Joe's Crab Shack                             $   64             $    64
Brick House Tavern + Tap                     $   60             $    55
Change in comparable restaurant sales(2)
Joe's Crab Shack                                 (2.0   %)           5.4    %
Brick House Tavern + Tap                         3.9    %            2.0    %
Total                                            (1.4   %)           5.3    %
                                                                            

      On a thirteen week comparable quarter for 2012, restaurant operating
(1)  weeks would have been 1,569 and 208 for Joe's Crab Shack and Brick House
      Tavern + Tap, respectively.
      
      Comparable restaurant sales for the first quarter of 2013 compares the
(2)   thirteen weeks ended April 1, 2013 to the comparable thirteen week
      period of 2012.
      

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 purpose of each
measure, in its Form 8-K filed with the Securities and Exchange Commission on
May 7, 2013.

                                                         
                                         Thirteen                Twelve Weeks
                                         Weeks Ended             Ended
                                         April 1, 2013           March 26,
                                                                 2012
                                         (In thousands, except per share data)
Net income - GAAP                        $     2,185             $   1,885
Adjustments:
Acquisition-related expenses                   1,018                 -
IPO-related expenses                           -                     40
Gain on insurance settlements                  (300     )            -
Income tax effect of adjustments              (177     )           (16     )
above
Adjusted net income - non-GAAP           $     2,726            $   1,909   
                                                                 
Weighted average shares outstanding
(GAAP)
Basic                                          25,624                19,178
Diluted                                        25,630                19,178
Net income per share (GAAP)
Basic and diluted                        $     0.09              $   0.10
Pro forma weighted average shares
outstanding (non-GAAP)
Basic and diluted (1)                                                25,624
Adjusted pro forma net income per
share (non-GAAP)
Basic and diluted(1)                                             $   0.07
Adjusted net income per share
(non-GAAP)
Basic and diluted                        $     0.11


(1) Reflects 6.4 million shares of common stock issued in the IPO as if it
occurred at the beginning of fiscal year 2012.

Contact:

for Ignite Restaurant Group, Inc.
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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