First Three Quarters 2013 Financial Results
Revenue Growth of 16.6%
Total revenue increased $37.0 million in the first three quarters of 2013, or 16.6%, to $259.5 million, compared with $222.5 million in the same period of 2012. This increase was the result of new restaurants opened system-wide since the beginning of the third quarter of 2012, in addition to an increase in sales at our comparable base restaurants. Comparable restaurant sales increased 3.1% for company-owned restaurants, increased 0.3% for franchise restaurants and increased 2.7% system-wide.
Adjusted Net Income (2) Growth of 21.4%Net income was $4.3 million for the first three quarters of 2013, compared to net income of $3.6 million in the same period of 2012. Adjusted net income increased 21.4% to $8.6 million. Restaurant contribution margin was 20.6% as a percentage of restaurant revenue in the first three quarters of 2013, compared with 21.2% in the same period of 2012, due primarily to increases in occupancy and restaurant operating costs as a percentage of revenue. Initial Public Offering On July 2, 2013, the Company successfully completed its initial public offering of Class A common stock at $18.00 per share. The Company issued 6,160,714 shares, including 803,571 shares sold to the underwriters pursuant to their over-allotment option. After underwriter discounts and commissions and offering expenses, the Company received net proceeds from the offering of $100.2 million. These proceeds were used to repay all but $0.2 million of the Company's outstanding debt as of July 2, 2013. (2) Adjusted net income is a non-GAAP measure. A reconciliation of US GAAP net income to adjusted net income is included in the accompanying financial data. See "Non-GAAP Financial Measures." 2013 Outlook Management is affirming their expectation of adjusted diluted net income per share between $0.39 and $0.41 for the full year of 2013. This compares to adjusted diluted net income per share of $0.31 in 2012. Mr. Reddy remarked "Our strong early performance in the fourth quarter has resulted in our increased guidance of company-owned comparable restaurant sales growth expected for the full year 2013. Also, our team's continued efforts in developing the brand through productive new unit growth leads us to anticipate an increase in new units expected to open this year compared with prior guidance." The Company's current guidance is based, in part, on the following assumptions for fiscal year 2013:
- 41 to 42 new company-owned restaurant openings, net of one closure in first quarter of 2013
- Nine to ten new franchise restaurant openings
- Net revenue of $348 million to $352 million
- Company-owned comparable restaurant sales growth of approximately 3.25% to 3.75% for the full year 2013, implying fourth quarter 2013 comparable restaurant sales growth of 3.75% to 4.25%
- An effective full year tax rate of 39.2%
- Capital expenditures of approximately $46 million to $50 million
- Annual weighted average adjusted diluted shares outstanding of 31.1 million to 31.3 million
- Comparable adjustments to net income as discussed in "Reconciliations of Non-GAAP Measurements to US GAAP Results"