COLUMBUS, Ohio, July 31, 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 twenty-six week periods ended June 24, 2012. The Company also updated its 2012 outlook.
Selected Second Quarter of 2012 Highlights Compared to the Year-Ago Period Include the Following:
- Revenues increased 8.9% to $102.8 million from $94.4 million.
- Total comparable restaurant sales increased 0.1%.
- Comparable restaurant sales increased 0.6% at BRAVO! and decreased 0.3% at BRIO.
- Restaurant-level operating profit increased 9.8% to $18.6 million from $16.9 million.
- GAAP net income was $5.1 million, or $0.25 per diluted share, compared to GAAP net income of $63.4 million, or $3.09 per diluted share and modified pro forma net income of $4.5 million, or $0.22 per diluted share for 2011. Please see the reconciliation from GAAP to modified pro forma (non-GAAP) net income in the accompanying financial tables.
- The $58.3 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.
Selected Year-to-Date 2012 Highlights Compared to the Year-Ago Period Include the Following:
- Revenues increased 8.9% to $201.2 million from $184.8 million.
- Total comparable restaurant revenues increased 0.1%.
- Comparable restaurant sales increased 0.1% at BRAVO! and 0.2% at BRIO.
- Restaurant-level operating profit increased 9.5% to $35.8 million from $32.7 million.
- GAAP net income was $8.9 million, or $0.43 per diluted share, compared to GAAP net income of $67.9 million, or $3.31 per diluted share and modified pro forma net income of $8.1 million, or $0.40 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 $59.0 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.
Saed Mohseni, Chief Executive Officer and President, said, "Our improved restaurant-level operating margins and diluted EPS growth reflects the underlying strength of our model as well as the team's ability to maintain a high-level of operational excellence. Our guests have responded favorably to our new menu rollouts resulting in an increase in our average check. We recently introduced online ordering at BRIO as well as catering capabilities at BRAVO!. Through our many 'guest-centric' initiatives, we believe that we can not only strengthen existing relationships but also broaden our appeal."
Mohseni continued, "We are pleased to have increased our development outlook by one restaurant, as we have been able to move forward what was originally a January 2013 opening into late 2012 to take advantage of the Holiday season. Additionally, we expect two restaurants to open earlier in the first quarter of 2013 than originally planned. As a result, we are increasing our estimate of annual pre-opening costs to between $4.9 and $5.3 million. Given the higher pre-opening costs as well as year-to-date sales trends, we are lowering our top-line and diluted earnings per share projections."
Second Quarter 2012 Financial Results
Revenues increased $8.4 million, or 8.9%, to $102.8 million in the second quarter of 2012, from $94.4 million in the second quarter of 2011. The increase in revenues was primarily due to an additional 119 operating weeks provided by four BRIO restaurants opened in the first half of 2012 and seven new restaurants opened in the last thirty-nine weeks of 2011. Total comparable restaurant sales increased 0.1%, as a 2.1% decrease in guest counts was offset by a 2.2% increase in average check. In addition to the aforementioned four 2012 restaurant openings, during the quarter the Company opened a BRIO at Harrah's Cherokee Casino and Hotel, which is being operated under a management agreement.
Total restaurant operating costs increased $6.7 million, or 8.7%, to $84.2 million in the second quarter of 2012, from $77.5 million in the second quarter of 2011. Total restaurant-level operating profit increased $1.7 million, or 9.8% to $18.6 million from $16.9 million in the same period last year. As a percentage of revenues, total restaurant-level operating profit increased to 18.1% in the second quarter of 2012 from 17.9% in the second quarter of 2011, which was primarily attributable to the decrease in cost of sales in 2012 as compared to 2011.
GAAP net income for the second quarter of 2012 was $5.1 million, or $0.25 per diluted share, compared to GAAP net income of $63.4 million, or $3.09 per diluted share, in the same period last year. The decrease was primarily due to a $57.2 million income tax benefit related to a reduction of a valuation allowance against net deferred tax assets.
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 second quarter of 2012 and net income was $5.1 million, or $0.25 per diluted share compared to modified pro forma net income of $4.5 million, or $0.22 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.
Second Quarter 2012 Brand Operating Highlights
Comparable restaurant sales at BRAVO! increased 0.6% and average weekly sales were $68,000. Comparable restaurant sales at BRIO decreased 0.3% in the second quarter of 2012 and average weekly sales were $101,000.
As of June 24, 2012, the Company operated 47 BRAVO!, 50 BRIO and one Bon Vie restaurant across 30 states. Included in this total is one BRIO restaurant that is operated under a management agreement.
Outlook
Based upon the results as of June 24, 2012, and projections for the remainder of the year, the Company is updating its fiscal 2012 financial forecast as follows:
- Revenues range of $412 million to $416 million.
- Total annual comparable restaurant sales range of 0.0% to 1.0%.
- Development of ten restaurants, including one restaurant operated under a management agreement.
- Pre-opening costs range of $4.9 million to $5.3 million.
- Diluted earnings per share range of $0.90 to $0.94.
- Capital expenditures range of $25 million to $27 million.
- Diluted share count of approximately 20.7 million.
- Estimated annual effective tax rate of approximately 30.0%.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss second 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) 490-2763, or for international callers, (719) 457-2631. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or for international callers, (858) 384-5517; the conference ID is 4226820. The replay will be available until Tuesday, August 14, 2012.
The call will be webcast live from the Company's investor relations website at http://investors.bbrg.com.
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.
Forward-Looking Statements
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 Twenty-Six Weeks Ended June 24, 2012 and June 26, 2011 (Unaudited) | |||||||||
| (Dollars in thousands, except per share data) | |||||||||
| Thirteen Weeks | Thirteen Weeks | Twenty-Six Weeks | Twenty-Six Weeks | ||||||
| Ended | Ended | Ended | Ended | ||||||
| June 24, | June 26, | June 24, | June 26, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||||
| Revenues | $ 102,807 | $ 94,400 | $ 201,184 | $ 184,818 | |||||
| Costs and expenses | |||||||||
| Cost of sales | 26,482 | 25.8% | 25,102 | 26.6% | 52,119 | 25.9% | 49,391 | 26.7% | |
| Labor | 35,267 | 34.3% | 31,679 | 33.6% | 69,422 | 34.5% | 62,163 | 33.6% | |
| Operating | 15,764 | 15.3% | 14,407 | 15.3% | 30,663 | 15.2% | 28,430 | 15.4% | |
| Occupancy | 6,728 | 6.5% | 6,310 | 6.7% | 13,218 | 6.6% | 12,160 | 6.6% | |
| General and administrative expenses | 5,688 | 5.5% | 4,869 | 5.2% | 11,385 | 5.7% | 10,882 | 5.9% | |
| Restaurant preopening costs | 811 | 0.8% | 1,058 | 1.1% | 2,173 | 1.1% | 1,601 | 0.9% | |
| Depreciation and amortization | 4,663 | 4.5% | 4,146 | 4.4% | 9,076 | 4.5% | 8,252 | 4.5% | |
| Total costs and expenses | 95,403 | 92.8% | 87,571 | 92.8% | 188,056 | 93.5% | 172,879 | 93.5% | |
| Income from operations | 7,404 | 7.2% | 6,829 | 7.2% | 13,128 | 6.5% | 11,939 | 6.5% | |
| Net interest expense | 332 | 0.3% | 441 | 0.5% | 686 | 0.3% | 921 | 0.5% | |
| Income before income taxes | 7,072 | 6.9% | 6,388 | 6.8% | 12,442 | 6.2% | 11,018 | 6.0% | |
| Income tax (benefit) expense | 1,952 | 1.9% | (57,010) | -60.4% | 3,563 | 1.8% | (56,927) | -30.8% | |
| Net income | 5,120 | 5.0% | 63,398 | 67.2% | 8,879 | 4.4% | 67,945 | 36.8% | |
| Net income per basic share | $ 0.26 | $ 3.29 | $ 0.45 | $ 3.53 | |||||
| Net income per diluted share | $ 0.25 | $ 3.09 | $ 0.43 | $ 3.31 | |||||
| Weighted average shares outstanding-basic | 19,555 | 19,277 | 19,528 | 19,264 | |||||
| Weighted average shares outstanding-diluted | 20,618 | 20,547 | 20,600 | 20,542 | |||||
| Certain percentage amounts may not sum due to rounding. | |||||||||
| ADJUSTMENTS TO RECONCILE GAAP TO MODIFIED PRO FORMA RESULTS | |||||||||
| Income Tax Expense (1) | -- | (1,751) | -- | (3,237) | |||||
| Reduction in Valuation Allowance (2) | -- | (57,175) | -- | (57,175) | |||||
| Secondary Offering Costs (3) | -- | -- | -- | 600 | |||||
| Total Adjustments | -- | (58,926) | -- | (59,812) | |||||
| Modified Pro Forma Net Income | $ 5,120 | $ 4,472 | $ 8,879 | $ 8,133 | |||||
| Net income per basic share-pro forma | $ 0.26 | $ 0.23 | $ 0.45 | $ 0.42 | |||||
| Net income per diluted share-pro forma | $ 0.25 | $ 0.22 | $ 0.43 | $ 0.40 | |||||
| Weighted average shares outstanding-basic | 19,555 | 19,277 | 19,528 | 19,264 | |||||
| Weighted average shares outstanding-diluted | 20,618 | 20,547 | 20,600 | 20,542 | |||||
| Notes to adjustments shown above: | |||||||||
| 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 June 24, 2012 and December 25, 2011 | ||
| (Dollars in thousands) | ||
| June 24, | December 25, | |
| 2012 | 2011 | |
| Assets | (Unaudited) | |
| Current assets | ||
| Cash and cash equivalents | $ 3,574 | $ 10,093 |
| Accounts receivable | 5,567 | 6,403 |
| Tenant improvement allowance receivable | 2,002 | 1,219 |
| Inventories | 2,629 | 2,767 |
| Deferred income taxes, net | 3,039 | 2,328 |
| Prepaid expenses and other current assets | 2,310 | 2,367 |
| Total current assets | 19,121 | 25,177 |
| Property and equipment, net | 172,163 | 163,208 |
| Deferred income taxes, net | 53,038 | 55,811 |
| Other assets, net | 4,363 | 3,430 |
| Total assets | $ 248,685 | $ 247,626 |
| Liabilities and stockholders' equity | ||
| Current liabilities | ||
| Trade and construction payables | $ 10,713 | $ 13,058 |
| Accrued expenses | 21,766 | 20,183 |
| Current portion of long-term debt | 2,028 | 1,714 |
| Deferred lease incentives | 6,086 | 5,639 |
| Deferred gift card revenue | 7,596 | 10,863 |
| Total current liabilities | 48,189 | 51,457 |
| Deferred lease incentives | 63,686 | 62,565 |
| Long-term debt | 21,734 | 30,857 |
| Other long-term liabilities | 20,188 | 18,163 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
| Common shares, no par value per share - authorized, 100,000,000 shares; issued and outstanding, 19,570,619 at June 24, 2012 and 19,476,559 at December 25, 2011 | 194,459 | 193,034 |
| Preferred shares, no par value, per share - authorized, 5,000,000 shares; issued and outstanding, 0 shares at June 24, 2012 and December 25, 2011 | -- | -- |
| Retained deficit | (99,571) | (108,450) |
| Total stockholders' equity | 94,888 | 84,584 |
| Total liabilities and stockholders' equity | $ 248,685 | $ 247,626 |