Ignite Restaurant Group (NASDAQ:IRG) today reported financial results for the first quarter ended March 30, 2015.
On April 17, 2015, subsequent to the end of the first quarter, the Company completed the sale of its Macaroni Grill subsidiary. Consequently, the results of operations for Macaroni Grill are reflected in discontinued operations for all periods presented.
Highlights for the first quarter of 2015 were as follows:
- Total revenues were $122.2 million, compared to $123.1 million in the first quarter of 2014;
- Comparable restaurant sales increased 5.4% at Brick House Tavern + Tap and decreased 3.8% at Joe’s Crab Shack;
- Loss from continuing operations was $3.2 million, or $0.12 per diluted shares, compared to income from continuing operations of $0.1 million, or $0.01 per diluted shares in the first quarter of 2014; and
- Adjusted income (loss) from continuing operations (a non-GAAP measure) was a loss of $1.0 million, or $0.04 per diluted share, compared to income of $145,000, or $0.01 per diluted share in the first quarter of 2014.
Ray Blanchette, President and Chief Executive Officer of Ignite Restaurant Group, stated, “We’re pleased with the continued momentum at Brick House Tavern + Tap, led by another quarter of impressive comparable store sales growth. While sales challenges persisted at Joe’s Crab Shack, we have streamlined our organizational structure to allow us to refocus our management team, reduce costs, and position ourselves to create momentum heading into the summer.”
Review of First Quarter 2015 Operating Results
Total revenues were $122.2 million in the first quarter of 2015, a decrease of 0.7% compared to $123.1 million in the first quarter of last year.
- Revenues at Joe’s Crab Shack were $103.1 million during the first quarter of 2015 versus $105.3 million in the prior year first quarter. Comparable restaurant sales at Joe’s Crab Shack decreased 3.8%.
- Revenues at Brick House Tavern + Tap were $19.1 million in the first quarter of 2015 compared to $17.8 million in the prior year first quarter. Comparable restaurant sales at Brick House Tavern + Tap increased 5.4%.
For the first quarter of 2015, loss from continuing operations was $3.2 million, or $0.12 per diluted share compared to income from continuing operations of $0.1 million, or $0.01 per diluted share in the first quarter of 2014.
Development
During the first quarter of 2015, the Company opened two company-owned Brick House restaurants, one in Princeton, New Jersey and one in Grapevine, Texas.
Liquidity
At March 30, 2015, the Company had $32.1 million of cash and approximately $22.2 million of available borrowing capacity under its current credit facility. The Company was in compliance with the credit facility’s financial covenants.
Conference Call
Ignite will host a conference call to discuss first quarter financial results today at 4:30 PM Eastern Standard Time. Hosting the call will be Ray Blanchette, President and Chief Executive Officer and Brad Leist, Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 888-663-2254 or for international callers by dialing 913-312-1463. 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 7592396. The replay will be available until May 11, 2015. The call will also be webcast live from the Company's website at www.igniterestaurants.com under the “Investors” section.
About Ignite Restaurant Group
Ignite Restaurant Group, Inc. (NASDAQ: IRG) owns and operates restaurants throughout the U.S. Headquartered in Houston, Ignite's portfolio of restaurant concepts currently includes Joe's Crab Shack and Brick House Tavern + Tap. Each brand offers a variety of high-quality, chef-inspired food and beverages in a distinctive, casual, high-energy atmosphere. For more information on Ignite and its distinctive brands visit www.igniterestaurants.com.
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. Such statements include, but are not limited to, statements regarding the scheduled conversions of restaurants, the anticipated growth of Brick House Tavern + Tap and our effective tax rate.
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 Form 10-K for the year ended December 29, 2014 (which can be found at the SEC’s website www.sec.gov). 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
The following tables present the consolidated statements of operations and selected other data for the thirteen weeks ended March 30, 2015 and March 31, 2014, and selected consolidated balance sheet information as of March 30, 2015 and December 29, 2014:
| Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||||||||
| Consolidated Statements of Operations | March 30, 2015 | March 31, 2014 | ||||||||||||||||||
| (In thousands, except percent and per share data) | ||||||||||||||||||||
| Revenues | $ | 122,219 | 100.0 | % | $ | 123,095 | 100.0 | % | ||||||||||||
| Costs and expenses | ||||||||||||||||||||
| Restaurant operating costs and expenses | ||||||||||||||||||||
| Cost of sales | 38,601 | 31.6 | % | 39,035 | 31.7 | % | ||||||||||||||
| Labor expenses | 34,817 | 28.5 | % | 35,748 | 29.0 | % | ||||||||||||||
| Occupancy expenses | 10,222 | 8.4 | % | 9,500 | 7.7 | % | ||||||||||||||
| Other operating expenses | 22,099 | 18.1 | % | 21,000 | 17.1 | % | ||||||||||||||
| General and administrative | 8,395 | 6.9 | % | 10,643 | 8.6 | % | ||||||||||||||
| Depreciation and amortization | 6,229 | 5.1 | % | 5,822 | 4.7 | % | ||||||||||||||
| Pre-opening costs | 468 | 0.4 | % | 204 | 0.2 | % | ||||||||||||||
| Asset impairments and closures | 30 | 0.0 | % | 84 | 0.1 | % | ||||||||||||||
| Loss on disposal of assets | 158 | 0.1 | % | 172 | 0.1 | % | ||||||||||||||
| Total costs and expenses | 121,019 | 99.0 | % | 122,208 | 99.3 | % | ||||||||||||||
| Income from operations | 1,200 | 1.0 | % | 887 | 0.7 | % | ||||||||||||||
| Interest expense, net | (3,876 | ) | (3.2 | ) | % | (1,878 | ) | (1.5 | ) | % | ||||||||||
| Loss from continuing operations before income taxes | (2,676 | ) | (2.2 | ) | % | (991 | ) | (0.8 | ) | % | ||||||||||
| Income tax expense (benefit) | 520 | 0.4 | % | (1,136 | ) | (0.9 | ) | % | ||||||||||||
| Income (loss) from continuing operations | (3,196 | ) | (2.6 | ) | % | 145 | 0.1 | % | ||||||||||||
| Loss from discontinued operations, net | (19,039 | ) | (15.6 | ) | % | (410 | ) | (0.3 | ) | % | ||||||||||
| Net loss | $ | (22,235 | ) | (18.2 | ) | % | $ | (265 | ) | (0.2 | ) | % | ||||||||
| Basic and diluted net income (loss) per share data: | ||||||||||||||||||||
| Net loss per share | ||||||||||||||||||||
| Basic and diluted | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | (0.12 | ) | $ | 0.01 | |||||||||||||||
| Loss from discontinued operations, net | $ | (0.74 | ) | $ | (0.02 | ) | ||||||||||||||
| Net loss | $ | (0.87 | ) | $ | (0.01 | ) | ||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||
| Basic | 25,674 | 25,639 | ||||||||||||||||||
| Diluted | 25,674 | 25,680 | ||||||||||||||||||
| March 30, | December 29, | |||||||||
Selected Consolidated Balance Sheet Information | 2015 | 2014 | ||||||||
| (In thousands) | ||||||||||
| Cash and cash equivalents | $ | 32,100 | $ | 20,564 | ||||||
| Total assets | 308,968 | 327,720 | ||||||||
| Long term debt (including current portion) | 162,408 | 162,702 | ||||||||
| Total liabilities | 278,876 | 276,421 | ||||||||
| Total stockholders' equity | 30,092 | 51,299 | ||||||||
| Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||
| March 30, 2015 | March 31, 2014 | |||||||||
| (dollars in thousands) | ||||||||||
| Selected Other Data(1): | ||||||||||
| Restaurants opened during the period | 2 | - | ||||||||
| Number of restaurants open (end of period): | ||||||||||
| Joe's Crab Shack | 138 | 136 | ||||||||
| Brick House Tavern + Tap | 23 | 20 | ||||||||
| Total restaurants | 161 | 156 | ||||||||
| Restaurant operating weeks | ||||||||||
| Joe's Crab Shack | 1,805 | 1,768 | ||||||||
| Brick House Tavern + Tap | 279 | 260 | ||||||||
| Average weekly sales | ||||||||||
| Joe's Crab Shack | $ | 57 | $ | 60 | ||||||
| Brick House Tavern + Tap | $ | 68 | $ | 68 | ||||||
| Change in comparable restaurant sales | ||||||||||
| Joe's Crab Shack | (3.8 | %) | (6.0 | %) | ||||||
| Brick House Tavern + Tap | 5.4 | % | 10.0 | % | ||||||
| Total | (2.7 | %) | (4.3 | %) | ||||||
Reconciliation of Non-GAAP Results to GAAP Results
The Company provided detailed explanation of this non-GAAP financial measure, including a discussion of the usefulness and purpose of the measure, in its Form 8-K filed with the Securities and Exchange Commission on May 4, 2015.
| Thirteen Weeks Ended | Thirteen Weeks Ended | ||||||||||
| March 30, 2015 | March 31, 2014 | ||||||||||
| (In thousands, except per share data) | |||||||||||
| Income (loss) from continuing operations - GAAP | $ | (3,196 | ) | $ | 145 | ||||||
| Adjustments - continuing operations: | |||||||||||
| Costs related to conversions, remodels and closures | 49 | - | |||||||||
| Income tax effect of adjustments above | (19 | ) | - | ||||||||
| Deferred tax asset valuation allowance | 2,126 | - | |||||||||
| Adjusted income (loss) from continuing operations - non-GAAP | $ | (1,040 | ) | $ | 145 | ||||||
| Weighted average shares outstanding (GAAP) | |||||||||||
| Basic | 25,674 | 25,639 | |||||||||
| Diluted | 25,674 | 25,680 | |||||||||
| Income (loss) from continuing operations per share (GAAP) | |||||||||||
| Basic and diluted | $ | (0.12 | ) | $ | 0.01 | ||||||
| Adjusted income (loss) from continuing operations per share (non-GAAP) | |||||||||||
| Basic and diluted | $ | (0.04 | ) | $ | 0.01 | ||||||
Contacts:
Fitzhugh Taylor, 203-682-8261
fitzhugh.taylor@icrinc.com
