Potbelly Corporation Reports Results for Fourth Fiscal Quarter and Full Fiscal Year 2013
Key highlights for the thirteen weeks ended
- Thirteen new shops opened, including nine company-operated shops and four franchised shops, during the fourth fiscal quarter of 2013.
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Total revenues increased 1.7% to
$74.8 million from$73.5 million , which includes the additional operating week in the fourth fiscal quarter of 2012. Total revenues increased approximately 9.9%, excluding the extra operating week in the fourth fiscal quarter of 2012. - Company-operated comparable store sales increased 0.7%, excluding the extra operating week in the fourth fiscal quarter of 2012.
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GAAP net loss attributable to
Potbelly Corporation was$3.7 million , compared to net income of$18.5 million during the same fiscal period of 2012, which includes the additional operating week in the fourth fiscal quarter of 2012.1 -
Adjusted net income attributable to
Potbelly Corporation was$1.9 million , or$0.06 per diluted share, compared to adjusted net income of$2.4 million , or$0.12 per diluted share during the same fiscal period of 2012, which includes the additional operating week in the fourth fiscal quarter of 2012. The extra operating week in fiscal 2012 contributed approximately$0.3 million of adjusted net income. -
Adjusted EBITDA increased 6.0% to
$9.0 million , compared to$8.5 million during the same fiscal period of 2012, which includes the additional operating week in the fourth fiscal quarter of 2012. Adjusted EBITDA increased approximately 16.9%, excluding the extra operating week in the fourth fiscal quarter of 2012.
Key highlights for the fifty-two weeks ended
- Forty-two new shops opened, including thirty-four company-operated shops and eight franchised shops, during the fiscal year 2013.
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Total revenues increased 9.0% to
$299.7 million from$274.9 million , which includes the additional operating week in fiscal 2012. Total revenues increased approximately 11.2%, excluding the extra operating week in fiscal 2012. - Company-operated comparable store sales increased 1.5%, excluding the extra operating week in fiscal 2012.
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GAAP net income attributable to
Potbelly Corporation was$1.3 million compared to net income of$24.0 million during the same fiscal period of 2012, which includes the additional operating week in fiscal 2012.1 -
Adjusted net income attributable to
Potbelly Corporation was$8.0 million , or$0.34 per diluted share, compared to$8.3 million , or$0.40 per diluted share during the same fiscal period of 2012, which includes the additional operating week in fiscal 2012. The extra operating week in fiscal 2012 contributed approximately$0.3 million of adjusted net income. -
Adjusted EBITDA increased 12.0% to
$35.2 million , compared to$31.5 million during the same fiscal period of 2012, which includes the additional operating week in fiscal 2012. Adjusted EBITDA increased approximately 14.9%, excluding the extra operating week in fiscal 2012.
1 The Company's GAAP-reported results included certain income tax benefits as a result of releasing a
"We are pleased with our fourth quarter results. We delivered adjusted net income of
2014 Outlook
For the full fiscal year of 2014, management currently expects annual adjusted net income growth to range between 25% and 35%. This guidance is based, in part, on the following assumptions for fiscal year 2014:
- 40 - 48 total new shop openings, including 35 - 40 company-operated shop openings and 5 - 8 franchise openings;
- Low single-digit company-operated comparable store sales growth;
- An effective tax rate that is not expected to exceed approximately 39.5%; and
- Comparable adjustments to net income as discussed in the "Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures."
Conference Call
A conference call and audio webcast has been scheduled for
Date: |
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Time: |
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Dial-In #: |
855-599-4644 U.S. & |
678-304-6836 International | |
Confirmation code: | 36749928 |
Alternatively, the conference call will be available via webcast at www.potbelly.com on the "Investor Relations" webpage. For those unable to participate, an audio replay will be available from
About Potbelly
Definitions
The following definitions apply to these terms as used throughout this press release:
- Revenues - represent net company-operated sandwich shop sales and our franchise operations. Net company-operated shop sales consist of food and beverage sales, net of promotional allowances and employee meals. Franchise royalties and fees consist of royalty income from the franchisee and a one-time shop opening fee.
- Company-operated comparable store sales growth - represents the change in year-over-year sales for the comparable company-operated store base open for 15 months or longer.
- Adjusted EBITDA - represents net income (loss) before depreciation and amortization expense, interest expense, provision for income taxes and pre-opening costs, adjusted to eliminate the impact of other items, including certain non-cash as well as certain other items that we do not consider representative of our on-going operating performance.
- Adjusted net income - represents net income (loss), excluding one-time costs related to the initial public offering ("IPO") as well as impairment, gain or loss on disposal of property and equipment and store closure expense.
- Shop-level profit - represents income (loss) from operations less franchise royalties and fees, general and administrative expenses, depreciation expense, pre-opening costs and impairment and loss on disposal of property and equipment.
- Shop-level profit margin - represents shop-level profit expressed as a percentage of net company-operated sandwich shop sales.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally Accepted Accounting Principles ("GAAP"). Within this press release, we make reference to adjusted EBITDA, adjusted net income, shop-level profit and shop-level profit margin, which are non-GAAP financial measures. The Company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.
Management uses adjusted EBITDA and adjusted net income to convey supplemental information to investors regarding the Company's performance excluding the impact of certain non-cash charges, costs associated with our IPO and other special items that affect the comparability of results in past quarters, expected in future quarters and in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. Management uses shop-level profit and shop-level profit margin as key metrics to evaluate the profitability of incremental sales at our shops, to evaluate our shop performance across periods and to evaluate our shop financial performance against our competitors.
Accordingly, the Company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the Company's operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the Company's financial statements and footnotes contained in the documents that the Company files with the
Forward-Looking Statements
Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, written, oral or otherwise made, represent the Company's expectation or belief concerning future events. Without limiting the foregoing, the words "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "strives," "goal," "estimates," "forecasts," "projects" or "anticipates" and similar expressions are intended to identify forward-looking statements. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on
current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included in our final prospectus filed on
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Consolidated Statements of Operations and Margin Analysis - Unaudited | ||||||||
(Amounts in thousands, except share and per share data) | ||||||||
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
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2013 |
2012 |
2013 |
2012 |
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Revenues | ||||||||
Sandwich shop sales, net | $ 74,360 | 99.5% | $ 73,217 | 99.6% | $ 298,574 | 99.6% | $ 274,070 | 99.7% |
Franchise royalties and fees | 401 | 0.5% | 291 | 0.4% | 1,138 | 0.4% | 844 | 0.3% |
Total Revenues | 74,761 | 100.0% | 73,508 | 100.0% | 299,712 | 100.0% | 274,914 | 100.0% |
Expenses | ||||||||
Sandwich shop operating expenses | ||||||||
Cost of goods sold, excluding depreciation | 21,613 | 28.9% | 21,458 | 29.2% | 87,380 | 29.2% | 79,847 | 29.0% |
Labor and related expenses | 21,361 | 28.6% | 20,861 | 28.4% | 83,579 | 27.9% | 77,479 | 28.2% |
Occupancy expenses | 9,569 | 12.8% | 9,131 | 12.4% | 36,394 | 12.1% | 32,016 | 11.6% |
Other operating expenses | 7,723 | 10.3% | 7,352 | 10.0% | 30,781 | 10.3% | 28,119 | 10.2% |
General and administrative expenses | 15,357 | 20.5% | 7,082 | 9.6% | 39,656 | 13.2% | 29,624 | 10.8% |
Depreciation expense | 4,591 | 6.1% | 4,586 | 6.2% | 17,875 | 6.0% | 16,219 | 5.9% |
Pre-opening costs | 354 | 0.5% | 291 | 0.4% | 1,437 | 0.5% | 2,051 | 0.7% |
Impairment and loss on disposal of property and equipment | 806 | 1.1% | 916 | 1.2% | 1,135 | 0.4% | 994 | 0.4% |
Total Expenses | 81,374 | 108.8% | 71,677 | 97.5% | 298,237 | 99.5% | 266,349 | 96.9% |
(Loss) income from operations | (6,613) | -8.8% | 1,831 | 2.5% | 1,475 | 0.5% | 8,565 | 3.1% |
Interest expense | 58 | 0.1% | 114 | 0.2% | 387 | 0.1% | 541 | 0.2% |
Other expense | -- | 0.0% | -- | 0.0% | 2 | 0.0% | 6 | 0.0% |
(Loss) income before income taxes | (6,671) | -8.9% | 1,717 | 2.3% | 1,086 | 0.4% | 8,018 | 2.9% |
Income tax (benefit) | (2,996) | -4.0% | (16,759) | -22.8% | (204) | -0.1% | (15,994) | -5.8% |
Net (loss) income | (3,675) | -4.9% | 18,476 | 25.1% | 1,290 | 0.4% | 24,012 | 8.7% |
Net income (loss) attributable to non-controlling interest | 8 | 0.0% | 1 | 0.0% | 32 | 0.0% | (34) | 0.0% |
Net (loss) income attributable to |
(3,683) | -4.9% | 18,475 | 25.1% | 1,258 | 0.4% | 24,046 | 8.7% |
Dividend declared and paid to common and preferred stockholders | (49,854) | -66.7% | -- | 0.0% | (49,854) | -16.6% | -- | 0.0% |
Accretion of redeemable convertible preferred stock to maximum redemption value | -- | 0.0% | 3,392 | 4.6% | (15,097) | -5.0% | (10,495) | -3.8% |
Net (loss) income attributable to common stockholders | $ (53,537) | -71.6% | $ 21,867 | 29.7% | $ (63,693) | -21.3% | $ 13,551 | 4.9% |
Net (loss) income per common share attributable to common stockholders: | ||||||||
Basic | $ (1.93) | $ 1.15 | $ (6.29) | $ 0.72 | ||||
Diluted | $ (1.93) | $ 1.05 | $ (6.29) | $ 0.66 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 27,778,764 | 4,125,936 | 10,132,805 | 4,013,414 | ||||
Diluted | 27,778,764 | 4,506,580 | 10,132,805 | 4,388,822 |
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Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures - Unaudited | ||||
(Amounts in thousands, except per share data) | ||||
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
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2013 |
2012 |
2013 |
2012 |
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Net (loss) income attributable to |
$ (3,683) | $ 18,475 | $ 1,258 | $ 24,046 |
One-time costs associated with IPO (1) | 8,891 | -- | 10,589 | -- |
Tax benefit of one-time costs associated with IPO (2) | (3,286) | -- | (3,950) | -- |
Impairment and closures (3) | 796 | 916 | 1,132 | 1,181 |
Tax benefit of impairment and closures (4) | (311) | (76) | (443) | (98) |
Release of valuation allowance against deferred tax assets and increased federal statutory tax rate (5) | (556) | (16,870) | (556) | (16,870) |
Adjusted net income attributable to |
$ 1,851 | $ 2,445 | $ 8,030 | $ 8,259 |
Net (loss) income attributable to |
$ (0.13) | $ 4.48 | $ 0.12 | $ 5.99 |
Net (loss) income attributable to |
$ (0.13) | $ 0.89 | $ 0.05 | $ 1.16 |
Adjusted net income (loss) attributable to |
$ 0.07 | $ 0.59 | $ 0.79 | $ 2.06 |
Adjusted net income (loss) attributable to |
$ 0.06 | $ 0.12 | $ 0.34 | $ 0.40 |
Shares used in computing adjusted net income attributable to |
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Basic | 27,778,764 | 4,125,936 | 10,132,805 | 4,013,414 |
Diluted | 30,556,523 | 20,782,968 | 23,533,845 | 20,665,210 |
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
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2013 |
2012 |
2013 |
2012 |
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Net (loss) income attributable to |
$ (3,683) | $ 18,475 | $ 1,258 | $ 24,046 |
Depreciation expense | 4,591 | 4,586 | 17,875 | 16,219 |
Interest expense | 58 | 114 | 387 | 541 |
Income tax (benefit) | (2,996) | (16,759) | (204) | (15,994) |
Impairment and closures (3) | 796 | 916 | 1,132 | 1,181 |
Pre-opening costs (7) | 354 | 291 | 1,437 | 2,051 |
Stock-based compensation (8) | 9,239 | 506 | 11,610 | 2,825 |
One-time costs associated with IPO and on-going Company costs (9) | 666 | 383 | 1,727 | 582 |
Adjusted EBITDA | $ 9,025 | $ 8,512 | $ 35,222 | $ 31,451 |
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Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures - Unaudited | ||||
(Amounts in thousands) | ||||
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
|
2013 |
2012 |
2013 |
2012 |
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(Loss) income from operations | $ (6,613) | $ 1,831 | $ 1,475 | $ 8,565 |
Less: Franchise royalties and fees | 401 | 291 | 1,138 | 844 |
General and administrative expenses | 15,357 | 7,082 | 39,656 | 29,624 |
Depreciation expense | 4,591 | 4,586 | 17,875 | 16,219 |
Pre-opening costs | 354 | 291 | 1,437 | 2,051 |
Impairment and loss on disposal of property and equipment | 806 | 916 | 1,135 | 994 |
Shop - level profit [Y] | $ 14,094 | $ 14,415 | $ 60,440 | $ 56,609 |
Total Revenues | $ 74,761 | $ 73,508 | $ 299,712 | $ 274,914 |
Less: Franchise royalties and fees | 401 | 291 | 1,138 | 844 |
Sandwich shop sales, net [X] | $ 74,360 | $ 73,217 | $ 298,574 | $ 274,070 |
Shop - level profit margin [Y÷X] | 19.0% | 19.7% | 20.2% | 20.7% |
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Consolidated Selected Operating Data - Unaudited | ||||
13 Weeks Ended |
14 Weeks Ended |
52 Weeks Ended |
53 Weeks Ended |
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2013 |
2012 |
2013 |
2012 |
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Selected Operating Data | ||||
Shop Activity: | ||||
Company-operated shops, end of period | 296 | 264 | 296 | 264 |
Franchise shops, end of period | 23 | 15 | 23 | 15 |
Revenue Data: | ||||
Company-operated comparable store sales growth - adjusted (10) | 0.7% | 2.0% | 1.5% | 3.4% |
(1) Includes one-time costs associated with our IPO which closed on |
(2) The tax benefit of one-time costs associated with the IPO is based on an effective tax rate of 37.0% and 37.3%, for the thirteen and fifty-two weeks ended |
(3) Includes costs related to impairment of long-lived assets, gain or loss on disposal of property and equipment and shop closure expenses. |
(4) The tax benefit associated with impairment and closures is based on the Company's annual pro-forma effective tax rate of 39.1% for the thirteen and fifty-two weeks ended |
(5) During the fourth fiscal quarter of 2012, the Company recorded a |
(6) On |
(7) Pre-opening costs are expensed as incurred and primarily consist of manager salaries and training, travel, employee payroll, and related training costs incurred prior to the opening of a shop, as well as occupancy costs incurred from the date the Company takes site possession to shop opening. |
(8) The Company accounts for its stock-based employee compensation in accordance with ASC 718, Stock Based Compensation. Prior to the Company's IPO, stock options granted without performance conditions were recorded in stock-based compensation expense on a straight-line basis over the vesting period based on the grant-date fair value of the option, determined using the Black-Scholes option pricing valuation model. As a result of the consummation of the IPO, the Company recorded one-time charges of |
(9) Includes one-time costs associated with our public offering as well as on-going public company costs. Both these costs primarily consist of stock compensation expense, legal and accounting fees. |
(10) Company-operated comparable store sales growth figures for the thirteen and fifty-two week periods ending |
CONTACT: Investor Relations Investors@Potbelly.com 312-428-2950Source:
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