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Bojangles’, Inc. Reports Financial Results for its Fourth Fiscal Quarter and Fiscal Year 2016
Provides Annual Guidance for its Fiscal Year 2017

CHARLOTTE, N.C., March 07, 2017 (GLOBE NEWSWIRE) -- Bojangles’, Inc. (Bojangles’) (NASDAQ:BOJA) today announced financial results for the 13-week fourth fiscal quarter and 52-week fiscal year ended December 25, 2016.  Bojangles’ also provided annual guidance for the 53-week fiscal year 2017 ending on December 31, 2017.

Highlights for the Fourth Fiscal Quarter 2016 Compared to the Fourth Fiscal Quarter 2015

  • System-wide comparable restaurant sales increased 2.4%, while company-operated comparable restaurant sales increased 1.1% and franchised comparable restaurant sales increased 3.2%;
  • Total revenues increased 8.3% to $139.4 million from $128.8 million;
  • 21 system-wide restaurants were opened – 9 company-operated restaurants and 12 franchised restaurants;
  • Net Income increased 25.2% to $9.8 million from $7.8 million;
  • Diluted Net Income per Share increased 23.8% to $0.26 from $0.21;
  • Adjusted Net Income* increased 28.9% to $10.6 million from $8.2 million;
  • Adjusted Diluted Net Income per Share* increased 27.3% to $0.28 from $0.22; and
  • Adjusted EBITDA* increased 15.3% to $24.6 million from $21.3 million.

Highlights for Fiscal Year 2016 Compared to Fiscal Year 2015

  • System-wide comparable restaurant sales increased 1.3%, while company-operated comparable restaurant sales increased 1.1% and franchised comparable restaurant sales increased 1.5%;
  • Total revenues increased 8.9% to $531.9 million from $488.2 million;
  • 58 system-wide restaurants were opened – 29 company-operated restaurants and 29 franchised restaurants;
  • Net Income increased 42.2% to $37.7 million from $26.5 million;
  • Diluted Net Income per Share increased 40.8% to $1.00 from $0.71;
  • Adjusted Net Income* increased 21.6% to $37.9 million from $31.1 million;
  • Adjusted Diluted Net Income per Share* increased 20.5% to $1.00 from $0.83; and
  • Adjusted EBITDA* increased 12.1% to $88.9 million from $79.3 million.

* Descriptions of Adjusted Net Income, Adjusted Diluted Net Income per Share, Adjusted EBITDA and other non-GAAP financial measures are provided in “Use and Definition of Non-GAAP Measures,” and reconciliations to GAAP figures are provided in the tables at the end of this release.

“We are pleased the Bojangles’® system has now achieved 27 consecutive quarters of comparable restaurant sales growth through the fourth fiscal quarter of 2016 and that Adjusted Diluted Net Income per Share growth for fiscal year 2016 exceeded our annual guidance despite widespread softness affecting the limited service restaurant category,” said Bojangles’ President and CEO Clifton Rutledge.

“Ahead of Bojangles’ 40th anniversary celebration in July, we are as focused as ever on executing our strategic plans and building the brand in a measured and sustainable way.  We will continue developing restaurants in core and adjacent markets through our company-operated and franchised model, with our long-term goal of franchising leading our expansion efforts over time.  We are striving to offer the best dining experience possible through exceptional service, menu innovation, and compelling limited time offers that solidify our reputation for unique, great tasting, freshly-made food, at an exceptional value.  Together with our franchisees, we are also exploring technology solutions such as mobile payment, apps and loyalty programs that will elevate our customer interactions,” he added.

“Our first ‘Bojangles’ of the Future’ restaurant in Greenville, South Carolina is getting rave reviews and it will be followed by the opening of a second location in Charlotte, North Carolina later this year.  We expect this exciting new restaurant prototype to set the standard for Bojangles' restaurants as we continue testing the various elements of this new design.  Although we recognize and are addressing near-term headwinds affecting our business, we have also never been more energized about the future of this Company,” he concluded.

Fourth Fiscal Quarter 2016 Financial Review
System-wide comparable restaurant sales increased 2.4%, consisting of a 1.1% increase in company-operated comparable restaurant sales and a 3.2% increase in franchised comparable restaurant sales.  The comparable restaurant sales increase at company-operated restaurants was composed of increases in price, partially offset by a decrease in transactions and mix.

Total revenues increased 8.3% to $139.4 million in the fourth fiscal quarter of 2016 from $128.8 million in the prior year fiscal quarter.  The increase was primarily due to a net additional 54 system-wide restaurants at December 25, 2016 compared to December 27, 2015, and comparable restaurant sales growth at our company-operated and franchised restaurants.

Company restaurant revenues increased 8.2% to $132.2 million in the fourth fiscal quarter of 2016 from $122.2 million in the prior year fiscal quarter.  Franchise royalty revenues increased 7.4% to $6.8 million in the fourth fiscal quarter of 2016 from $6.4 million in the prior year fiscal quarter.

Restaurant contribution, a non-GAAP measure, increased 12.6% to $26.0 million in the fourth fiscal quarter of 2016 from $23.1 million in the prior year fiscal quarter.  As a percentage of company restaurant revenues, restaurant contribution margin, a non-GAAP measure, increased to 19.6% in the fourth fiscal quarter of 2016 from 18.9% in the prior year fiscal quarter.

General and administrative expenses increased 6.9% to $10.9 million in the fourth fiscal quarter of 2016 from $10.2 million in the prior year fiscal quarter.  The increase was primarily due to higher stock-based compensation expense as a result of the vesting of certain performance awards, legal, accounting, and other expenses directly related to public offerings and headcount added to support our growing restaurant system.  These increases were partially offset by expenses incurred in connection with the transition to a new distributor in the prior year fiscal quarter.

Net Income increased 25.2% to $9.8 million in the fourth fiscal quarter of 2016 compared to $7.8 million in the prior year fiscal quarter.  Diluted Net Income per Share increased 23.8% to $0.26 in the fourth fiscal quarter of 2016 compared to $0.21 in the prior year fiscal quarter.

Adjusted Net Income, a non-GAAP measure, increased 28.9% to $10.6 million in the fourth fiscal quarter of 2016 compared to $8.2 million in the prior year fiscal quarter.  Adjusted Diluted Net Income per Share increased 27.3% to $0.28 in the fourth fiscal quarter of 2016 compared to $0.22 in the prior year fiscal quarter.

Adjusted EBITDA, a non-GAAP measure, increased 15.3% to $24.6 million in the fourth fiscal quarter of 2016 from $21.3 million in the prior year fiscal quarter.  

Fiscal Year 2017 Guidance
Bojangles’ is providing an annual outlook for the 53-week period ending on December 31, 2017:

  • Total revenues of $560.0 million to $569.0 million, which includes the impact of our planned refranchising of five company-operated restaurants;
  • System-wide comparable restaurant sales of negative low-single digits to flat;
  • The opening of 57 to 62 system-wide restaurants;
    • 27 to 28 company-operated restaurants;
    • 30 to 34 franchised restaurants;
  • Net increase of 49 to 54 system-wide restaurants;
    • Net increase of 19 to 20 company-operated restaurants, which includes the impact of our planned refranchising of five company-operated restaurants;
    • Net increase of 30 to 34 franchised restaurants, which includes the impact of our planned refranchising of five company-operated restaurants;
  • Restaurant contribution margin of 17.0% to 17.5%;
  • General and administrative expenses of $40.5 million to $41.5 million;
  • Adjusted Diluted Net Income per Share of $0.87 to $0.93; and
  • Adjusted EBITDA of $84.0 million to $89.0 million.

We have not reconciled guidance for Adjusted Diluted Net Income per Share or Adjusted EBITDA to the corresponding GAAP financial measures because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period.  Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

Conference Call and Webcast Today
Bojangles’ will host a conference call and webcast to discuss the fourth fiscal quarter 2016 results and fiscal year 2016 results, as well as fiscal year 2017 guidance today at 5:00 p.m. Eastern Time.  The conference call dial-in number is 201-493-6725.  A telephone replay will be available through Friday, April 7, 2017 and may be accessed by dialing 858-384-5517.  The conference ID is 13653614.

The conference call will also be webcast live and later archived on the Investors section of our website at www.bojangles.com.

Conference Participation
Bojangles’ will participate in the Bank of America Merrill Lynch 2017 Consumer & Retail Tech Conference on Tuesday, March 14, 2017 at the Lotte New York Palace hotel in New York City.  In addition to holding investor meetings, we will webcast our presentation live beginning at 2:40 p.m. Eastern Time on the Investors section of the Company's website at www.bojangles.com.  The presentation will later be archived.

About Bojangles’, Inc.
Bojangles', Inc. is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from our Southern recipes.  Founded in 1977 in Charlotte, N.C., Bojangles' serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin's and Legendary Iced Tea®.  At December 25, 2016, Bojangles' had 716 system-wide restaurants, of which 309 were company-operated and 407 were franchised restaurants, primarily located in the Southeastern United States.  For more information, visit www.bojangles.com or follow Bojangles' on Facebook and Twitter.

Note Regarding Comparable Restaurant Sales
Comparable restaurant sales reflects the change in year-over-year sales for the comparable restaurant base (as applicable, system-wide, franchised or company-operated restaurants). A restaurant enters our comparable restaurant base the first full day of the month after being open for 15 months using a mid-month convention. If a company-operated restaurant is temporarily closed for a full calendar week due to items such as a remodel, scrape and rebuild, casualty event, severe weather conditions or any other short-term closure, it is removed from the comparable restaurant sales calculations for such period it is temporarily closed. If a franchised restaurant is temporarily closed for a full calendar week due to items such as a remodel, scrape and rebuild, casualty event, severe weather conditions or any other short-term closure, it is removed from the comparable restaurant sales calculations for the entire month(s) impacted by the temporary closure.

Use and Definition of Non-GAAP Measures
We utilize certain non-GAAP measures when assessing the operational strength and the performance of our business.  We believe these non-GAAP measures assist our board of directors, management and investors in comparing our operating performance, on a consistent basis from period to period, by isolating the effects of certain items that vary from period to period without any correlation to core operating performance or that vary significantly among similar companies. Bojangles’ cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, reported GAAP results.  

Restaurant contribution is defined as company restaurant revenues less food and supplies costs, restaurant labor costs and operating costs, as identified by the reconciliation table below.  Restaurant contribution margin is defined as restaurant contribution as a percentage of company restaurant revenues.  Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of our company-operated restaurants and our calculations thereof may not be comparable to those reported by other companies.  Restaurant contribution and restaurant contribution margin have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. 

Adjusted Net Income represents company net income before items that we do not consider representative of our ongoing operating performance, as well as an estimate of recurring incremental legal, accounting, insurance and other operating and compliance costs we expect to incur as a public company for those periods where they had not yet been incurred, both as identified in the reconciliation table below.  Adjusted Diluted Net Income per Share represents company diluted net income per share before items that we do not consider representative of our ongoing operating performance, as well as an estimate of recurring incremental legal, accounting, insurance and other operating and compliance costs we expect to incur as a public company for those periods where they had not yet been incurred, both as identified in the reconciliation table below.

EBITDA represents company net income before interest expense (net of interest income), provision for income taxes and depreciation and amortization. Adjusted EBITDA represents company net income before interest expense (net of interest income), provision for income taxes, depreciation and amortization, items that we do not consider representative of our ongoing operating performance and certain non-cash items, as identified in the reconciliation table below.

Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP.  Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity.  Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as substitutes for analysis of our results as reported under GAAP.  In addition, in evaluating Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses or charges such as those added back to calculate Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA.

Forward-Looking Statements
This release contains forward-looking statements.  All statements other than statements of historical or current facts included in this release are forward-looking statements. Forward-looking statements discuss our current expectations, projections and guidance relating to our financial condition, results of operations, plans, objectives, future performance and business.  These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance.  Actual results may differ materially from these expectations due to risks relating to, among other risks, our vulnerability to changes in consumer preferences and economic conditions; our ability to open restaurants in new and existing markets and expand our franchise system; our ability to generate comparable restaurant sales growth; financial or other difficulties, which could cause our restaurants and our franchisees’ restaurants to close; our ability to generate increased sales or profits from new menu items, advertising campaigns, changes in discounting strategy or restaurant designs and remodels; cancellation of or delay in anticipated future restaurant openings; our reliance on, limited degree of control over and potential responsibility for, our franchisees; increases in the cost of chicken, pork, dairy, wheat, corn and other products; our ability to compete successfully with other quick-service and fast-casual restaurants; our vulnerability to conditions in the Southeastern United States; negative publicity, whether or not valid; concerns about food safety and quality and about food-borne illnesses, including adverse public perception due to the occurrence of avian flu, swine flu or other food-borne illnesses, such as salmonella, E. coli, or others; changes in employment and labor laws; labor shortages and increases in labor costs; and our dependence upon frequent and timely deliveries of restaurant food and other supplies.  For further details and discussion of these and other risks and uncertainties, see our Annual Report on Form 10-K for the fiscal year ended December 25, 2016, which we expect to file with the Securities and Exchange Commission on March 7, 2017, and which will be available at www.sec.gov.  You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events.  Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.

All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.  In addition, all forward-looking statements speak only as of the date of this earnings release.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Balance Sheets  
(in thousands)  
                       
Assets   December 25, 
2016
  December 27,
2015
 
Current assets:            
  Cash and cash equivalents $ 13,898   14,263  
  Accounts and vendor receivables, net   5,421   4,736  
  Accounts receivable, related parties, net   386   403  
  Inventories, net   3,326   3,080  
  Other current assets   3,033   5,639  
      Total current assets   26,064   28,121  
  Property and equipment, net   52,275   48,137  
  Goodwill       161,140   161,140  
  Brand         290,500   290,500  
  Franchise rights, net   24,243   25,341  
  Favorable leases, net   981   1,394  
  Other noncurrent assets   4,569   3,673  
      Total assets $ 559,772   558,306  
Liabilities and Stockholders’ Equity          
Current liabilities:          
  Accounts payable $ 16,818   17,893  
  Accrued expenses   17,940   19,086  
  Current maturities of long-term debt   2,132    
  Current maturities of capital lease obligations   7,299   5,968  
  Other current liabilities   4,390   2,155  
      Total current liabilities   48,579   45,102  
  Long-term debt, less current maturities and deferred debt issuance costs, net   153,630   197,735  
  Deferred income taxes   111,312   115,028  
  Capital lease obligations, less current maturities   22,524   21,483  
  Other noncurrent liabilities   12,937   11,834  
      Total liabilities   348,982   391,182  
Stockholders’ equity:          
  Preferred stock      
  Common stock   365   360  
  Additional paid-in capital   124,802   119,084  
  Retained earnings   85,377   47,661  
  Accumulated other comprehensive income   246   19  
      Total stockholders’ equity   210,790   167,124  
      Total liabilities and stockholders’ equity $ 559,772   558,306  
                       

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Statements of Operations  
(in thousands, except per share amounts)  
                                 
                Thirteen Weeks Ended     Fiscal Year Ended  
                December 25, 
2016
  December 27, 
2015
    December 25, 
2016
  December 27, 
2015
 
Revenues:                        
  Company restaurant revenues $ 132,219     122,223       504,664     462,138    
  Franchise royalty revenues   6,832     6,364       26,364     25,104    
  Other franchise revenues   383     193       853     960    
          Total revenues   139,434     128,780       531,881     488,202    
Company restaurant operating expenses:                    
  Food and supplies costs   41,772     40,055       158,644     150,563    
  Restaurant labor costs   35,862     32,305       138,839     126,380    
  Operating costs   28,611     26,796       112,256     100,916    
  Depreciation and amortization   3,278     3,078       12,709     11,456    
          Total Company restaurant operating expenses   109,523     102,234       422,448     389,315    
          Operating income before other operating expenses   29,911     26,546       109,433     98,887    
Other operating expenses:                    
  General and administrative   10,852     10,150       39,041     42,844    
  Depreciation and amortization   739     735       2,917     2,809    
  Impairment     947     1,002       1,927     1,210    
  Loss on disposal of property and equipment   98     104       47     336    
          Total other operating expenses   12,636     11,991       43,932     47,199    
          Operating income   17,275     14,555       65,501     51,688    
Amortization of deferred debt issuance costs   (196 )   (198 )     (763 )   (821 )  
Interest income     1     1       4     7    
Interest expense   (1,708 )   (1,920 )     (7,489 )   (8,314 )  
          Income before income taxes   15,372     12,438       57,253     42,560    
Income taxes     5,550     4,594       19,537     16,034    
          Net income $ 9,822     7,844       37,716     26,526    
                                 
                                 
Net income per share:                    
          Basic $ 0.27     0.22       1.04     1.15    
          Diluted $ 0.26     0.21       1.00     0.71    
                                 
                                 
Weighted average shares used in computing net income per share:                    
          Basic   36,448     35,979       36,258     23,118    
          Diluted   37,806     37,436       37,684     37,464    
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Statements of Cash Flows  
(in thousands)  
                       
                Fiscal Year Ended  
                December 25, 
2016
  December 27, 
2015
 
Cash flows from operating activities:          
  Net income
$ 37,716     26,526    
  Adjustments to reconcile net income to net cash provided by operating activities:          
      Deferred income tax benefit   (2,177 )   (1,992 )  
      Depreciation and amortization   15,626     14,265    
      Amortization of deferred debt issuance costs   763     821    
      Impairment   1,927     1,210    
      Loss on disposal of property and equipment   47     336    
      (Benefit) provision for doubtful accounts   (72 )   239    
      Provision for inventory spoilage   20     23    
      (Benefit) provision for closed stores   (51 )   36    
      Stock-based compensation   1,827     1,963    
      Excess tax benefit from stock-based compensation   (2,686 )   (680 )  
      Changes in operating assets and liabilities   1,360     2,779    
          Net cash provided by operating activities   54,300     45,526    
Cash flows from investing activities:          
  Purchases of franchisee's assets   (100 )   (186 )  
  Purchases of property and equipment   (9,695 )   (12,047 )  
  Proceeds from disposition of property and equipment   51     47    
          Net cash used in investing activities   (9,744 )   (12,186 )  
Cash flows from financing activities:          
  Principal payments on long-term debt   (42,736 )   (28,055 )  
  Debt issuance costs       (554 )  
  Stock option exercises   1,210     330    
  Excess tax benefit from stock-based compensation   2,686     680    
  Principal payments on capital lease obligations   (6,081 )   (4,679 )  
          Net cash used in financing activities   (44,921 )   (32,278 )  
          Net (decrease) increase in cash and cash equivalents   (365 )   1,062    
Cash and cash equivalents balance, beginning of fiscal year   14,263     13,201    
Cash and cash equivalents balance, end of fiscal year $ 13,898     14,263    
                       

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Net Income to Adjusted Net Income  
(in thousands)  
                     
    Thirteen Weeks Ended     Fiscal Year Ended  
    December 25, 
2016
  December 27, 
2015
    December 25, 
2016
  December 27, 
2015
 
Net income
$ 9,822     7,844       37,716     26,526    
                     
Certain professional and transaction costs (a)   398     213       464     5,254    
Incremental public company costs (b)       (41 )         (940 )  
Vesting of performance-based stock options (c)   495           495     708    
Payroll taxes associated with stock option exercises (d)   44     12       124     28    
Distributor transition costs (e)       377       81     594    
Executive separation expenses (f)   81     25       278     533    
State income tax rate change (g)             (908 )   (903 )  
Tax impact of adjustments (h)   (236 )   (204 )     (392 )   (673 )  
Total adjustments   782     382       142     4,601    
Adjusted Net Income $ 10,604     8,226       37,858     31,127    
                     
                     
                     
BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Income Per Share  
                     
    Thirteen Weeks Ended     Fiscal Year Ended  
    December 25, 
2016
  December 27, 
2015
    December 25, 
2016
  December 27, 
2015
 
Diluted net income per share $ 0.26     0.21       1.00     0.71    
                     
Certain professional and transaction costs (a)   0.01     0.01       0.01     0.14    
Incremental public company costs (b)                 (0.03 )  
Vesting of performance-based stock options (c)   0.01           0.01     0.02    
Payroll taxes associated with stock option exercises (d)                    
Distributor transition costs (e)       0.01           0.02    
Executive separation expenses (f)             0.01     0.01    
State income tax rate change (g)             (0.02 )   (0.02 )  
Tax impact of adjustments (h)       (0.01 )     (0.01 )   (0.02 )  
Total adjustments   0.02     0.01       0.00     0.12    
Adjusted Diluted Net Income per Share $ 0.28     0.22       1.00     0.83    
                     
                     
(a) Includes costs associated with third-party consultants for one-time projects, public offering expenses and certain professional fees and transaction costs related to financing transactions. We could incur similar expenses in future periods if we commence additional public offerings, financing transactions or other one-time projects.  
(b) Reflects an estimate of recurring incremental legal, accounting, insurance and other operating and compliance costs we expect to incur as a public company in addition to actual amounts incurred. By its nature, this adjustment involves risks and uncertainties, and the actual costs incurred could be different than this adjustment. No adjustments will be made beyond the second fiscal quarter 2016 since the one year anniversary of our initial public offering occurred during the thirteen weeks ended June 26, 2016.  
(c) Includes non-cash, stock-based compensation related to the vesting of certain performance based stock option awards. We could incur similar expenses in future periods upon the achievement of the performance metrics indicated in the stock option grants.  
(d) Represents payroll taxes associated with stock option exercises related to stock options that were outstanding prior to our initial public offering. We expect to incur similar expenses in future periods when our directors or employees exercise stock options that were outstanding prior to our initial public offering.  
(e) Includes expenses incurred in connection with the transition to our new distributor.  
(f) Represents severance and legal fees associated with a former executive's departure from the Company.  
(g) As a result of the enacted reductions to the North Carolina corporate income tax rate, we adjusted our deferred income taxes by applying the lower rate, which resulted in a corresponding decrease to income tax expense.  
(h) Represents the income tax expense associated with the adjustments in (a) through (g) that are deductible for income tax purposes.  
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Net Income to EBITDA and Adjusted EBITDA  
(in thousands)  
                                 
                Thirteen Weeks Ended     Fiscal Year Ended  
                December 25, 
2016
  December 27, 
2015
    December 25, 
2016
  December 27, 
2015
 
Net income     $ 9,822   7,844     37,716   26,526  
Income taxes       5,550   4,594     19,537   16,034  
Interest expense, net   1,707   1,919     7,485   8,307  
Depreciation and amortization (a)   4,213   4,011     16,389   15,086  
EBITDA           21,292   18,368     81,127   65,953  
Non-cash rent (b)     370   474     1,556   1,642  
Stock-based compensation (c)   874   252     1,827   1,963  
Payroll taxes associated with stock option exercises (d)   44   12     124   28  
Preopening expenses (e)   465   475     1,407   1,540  
Sponsor and board member fees and expenses (f)           166  
Certain professional, transaction and other costs (g)   398   213     464   5,254  
Distributor transition costs (h)     377     81   594  
Executive separation expenses (i)   81   25     278   533  
Impairment and dispositions (j)   1,047   1,117     2,025   1,592  
Adjusted EBITDA $ 24,571   21,313     88,889   79,265  
                                 
                                 
(a) Includes amortization of deferred debt issuance costs.  
(b) Includes deferred rent, which represents the extent to which our rent expense has been above or below our cash rent payments, amortization of favorable (unfavorable) leases and closed store reserves for rent net of cash payments. We expect to continue to incur similar expenses in future periods as we record rent expense in accordance with GAAP, as well as continue to amortize favorable (unfavorable) leases and record closed store reserves.  
(c) Represents non-cash, stock-based compensation. We expect to incur similar expenses in future periods as we record stock-based compensation related to existing grants (and any potential future grants) in accordance with GAAP.   
(d) Represents payroll taxes associated with stock option exercises related to stock options that were outstanding prior to our initial public offering. We expect to incur similar expenses in future periods when our directors or employees exercise stock options that were outstanding prior to our initial public offering.  
(e) Includes expenses directly associated with the opening of company-operated restaurants and incurred prior to the opening of a company-operated restaurant. We expect to continue to incur similar expenses as we open company-operated restaurants.   
(f) Includes reimbursement of expenses to our sponsor prior to our initial public offering and compensation and expense reimbursement to members of our board prior to our initial public offering.   
(g) Includes costs associated with third-party consultants for one-time projects, public offering expenses and certain professional fees and transaction costs related to financing transactions. We could incur similar expenses in future periods if we commence additional public offerings, financing transactions or other one-time projects.   
(h) Includes expenses incurred in connection with the transition to our new distributor.  
(i) Represents severance and legal fees associated with a former executive's departure from the Company.   
(j) Includes loss (gain) on disposal of property and equipment, impairment and cash proceeds on disposals from disposition of property and equipment. We could continue to record impairment expense in future periods if performance of company-operated restaurants is not sufficient to recover the carrying amount of the related long-lived assets. We may incur future losses (gains) and receive cash proceeds on disposal of property and equipment associated with retirement, replacement or write-off of fixed assets.  
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Company Restaurant Revenues to Restaurant Contribution  
(in thousands)  
                                 
                Thirteen Weeks Ended     Fiscal Year Ended  
                December 25, 
2016
  December 27, 
2015
    December 25, 
2016
  December 27, 
2015
 
Company restaurant revenues $ 132,219     122,223       504,664     462,138    
Food and supplies costs   (41,772 )   (40,055 )     (158,644 )   (150,563 )  
Restaurant labor costs   (35,862 )   (32,305 )     (138,839 )   (126,380 )  
Operating costs   (28,611 )   (26,796 )     (112,256 )   (100,916 )  
Restaurant contribution $ 25,974     23,067       94,925     84,279    
Restaurant contribution margin   19.6 %   18.9 %     18.8 %   18.2 %  

 


For Investor Relations Inquiries:
Raphael Gross of ICR
203.682.8253

For Media Inquiries:
Brian Little of Bojangles’ Restaurants, Inc.
704.519.2118

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Bojangles', Inc.


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