Pro forma net income represents our net income plus the sum of the net reduction in our interest expense and the reduction in our management fees and expenses as a result of our IPO and the application of the net proceeds of the IPO to repay $79.4 million of the Company’s debt, less the incremental costs of being a public company and the pro forma incremental income tax expense resulting from the adjustments.
The following table includes a reconciliation of net income to Restaurant-Level EBITDA:
|Thirteen Weeks Ended||Twenty-Six Weeks Ended|
|June 24,||June 26,||June 24,||June 26,|
|Net income as reported||$||1,731||$||674||$||2,111||$||1,938|
|Income tax provision||739||183||902||732|
|General and administrative||2,137||2,544||3,922||3,997|
|Advisory agreement termination fee||-||-||2,000||-|
|Settlement with former director||-||245||-||245|
|Restaurant pre-opening expenses||1,224||990||1,980||1,659|
|Depreciation and amortization||1,543||1,042||2,947||1,967|
|Restaurant-level EBITDA margin (1)||21.3||%||20.3||%||21.0||%||20.0||%|
Restaurant-level EBITDA margin is calculated by dividing restaurant-level EBITDA by revenue.
|Thirteen Weeks Ended||Twenty-Six Weeks Ended||Year Ended|
|June 24,||June 26,||June 24,||June 26,||December 25,|
|Net income as reported||$||1,731||$||674||$||2,111||$||1,938||$||3,464|
|Interest expense as reported (1)||1,884||1,031||3,166||1,920||4,362|
|Pro forma interest expense based upon|
|reduced debt balance (2)||(107||)||(107||)||(214||)||(214||)||(428||)|
|Management fees and expenses (3)||-||94||2,100||188||373|
|Settlement with former director|
|and one-time bonus to management (4)||-||1,264||-||1,264||1,264|
|Incremental public costs (5)||(338||)||(338||)||(676||)||(676||)||(1,350||)|
|Income tax expense on adjustments (6)||(432||)||(661||)||(1,313||)||(844||)||(1,435||)|
|Pro forma net income||$||2,738||$||1,957||$||5,175||$||3,576||$||6,250|
|Net income per share - pro forma:|
|Basic - pro forma||$||0.17||$||0.12||$||0.33||$||0.23||$||0.39|
|Diluted - pro forma||$||0.17||$||0.12||$||0.31||$||0.22||$||0.38|
|Weighted-average shares outstanding-pro forma:|
|Basic - pro forma (7)||15,918,426||15,883,376||15,918,427||15,886,031||15,901,086|
|Diluted - pro forma (7)||16,572,067||16,500,649||16,566,943||16,482,208||16,512,999|
Notes to reconciliation of GAAP net income to non-GAAP pro forma net income:
|1.||Reflects the adjustment to eliminate the historical interest expense for all periods presented that were based upon actual outstanding balances before the application of the net proceeds from our IPO.|
|2.||Reflects interest expense assuming our current post-IPO long-term debt balance of $5.0 million was outstanding as of the beginning of fiscal year 2011. This balance reflects $79.4 million repayment of long-term debt from the net proceeds from our IPO. This interest expense calculation assumes a change in interest rate from 8.5% to 7.0% due to the reduction in our total leverage ratio to below 2.0 to 1.0 upon application of the net proceeds from the IPO. The interest adjustment is also based on the following assumptions:|
an unused facility fee on the unfunded $10.5 million of our revolver and delayed Term B Loan at an annual rate of 0.5%; and
a lower annual amortization of deferred loan costs of approximately $25,000 after the write-off of approximately $1.6 million, which will occur in the third quarter of 2012 but is assumed to occur at the beginning of fiscal 2011.
Reflects the elimination of the management fees and expenses paid and reimbursed to Goode Partners, LLC, for the periods presented.
|4.||Reflects the elimination of one-time charges in 2011 for the settlement with former director of $245,000 and a special one-time cash bonus payment of approximately $1.0 million made to certain members of management in conjunction with the successful completion of the Company’s refinancing of its credit facility in the second quarter of 2011.|
|5.||Reflects an estimate of recurring incremental legal, accounting, insurance and other compliance costs we expect to incur as a public company.|
|6.||Reflects the tax expense associated with the adjustments in 1 through 5 above at the normalized tax rate of 30%, which reflects our estimated long-term effective tax rate.|
|7.||Reflects (i) 6,708,333 additional shares of common stock issue in the IPO, (ii) the repurchase by the Company of 1,655,662 shares of its common and preferred stock on April 6, 2012, and (iii) the conversion of all series of our outstanding preferred stock into common stock as if all of these transactions occurred at the beginning of fiscal year 2011.|
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