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Bojangles', Inc. Reports Financial Results for Its First Fiscal Quarter 2015

CHARLOTTE, N.C., June 11, 2015 (GLOBE NEWSWIRE) -- Bojangles', Inc. (Bojangles') (Nasdaq:BOJA) today announced financial results for the first fiscal quarter 2015, which was a 13-week period ending on March 29, 2015. Bojangles' also provided annual guidance for the fiscal year 2015, which is a 52-week period ending on December 27, 2015.

Financial Highlights for the First Fiscal Quarter 2015 Compared to the First Fiscal Quarter 2014

  • System-wide comparable restaurant sales increased 7.9%;
  • Total revenues increased 19.2% to $114.6 million from $96.2 million;
  • 16 new restaurants were opened -- four new company-operated restaurants and 12 new franchised restaurants. Three franchised restaurants were closed, all of which were relocations;
  • Net Income of $3.4 million compared to $5.0 million;
  • Adjusted Net Income* of $6.2 million compared to $5.0 million;
  • Adjusted Pro Forma Diluted Net Income per Share* of $0.17 compared to $0.14; and
  • Adjusted EBITDA* increased 16.0% to $16.9 million from $14.6 million.

* Adjusted Net Income, Adjusted Pro Forma Diluted Net Income per Share and Adjusted EBITDA are non-GAAP measures. Please see "Use and Definition of Non-GAAP Measures" and the reconciliation tables accompanying this release.

"We are delighted to have begun fiscal year 2015 with impressive growth in total revenues, adjusted EBITDA and adjusted net income for the first fiscal quarter. The 7.9% increase in system-wide comparable restaurant sales during the first fiscal quarter continues to demonstrate the broad appeal of our iconic brand and enabled us to extend our track record of comparable restaurant sales growth to 20 consecutive quarters. As always, Bojangles' success was driven by the collective hard work of the teams in our company-operated and franchised restaurants, the true heroes of our brand," said Bojangles' President and CEO Clifton Rutledge.

"Although we are new to the public markets, Bojangles' has a proud history spanning nearly four decades with significant scale, strong and consistent financial performance and attractive development potential. We are very excited about our future, the significant whitespace for growth within and outside of our core markets and our opportunity to create value for stockholders."

Initial Public Offering

On May 13, 2015, and subsequent to the end of the first fiscal quarter 2015, Bojangles' completed its underwritten initial public offering (IPO) of 8,912,500 shares of its common stock, which included 1,162,500 shares of common stock sold pursuant to the full exercise of the underwriters' option to purchase additional shares of common stock at the IPO price. The IPO consisted solely of common stock that was offered by certain Bojangles' stockholders. During the first fiscal quarter of 2015, we recorded $2.7 million of costs related to the IPO.

Fiscal First Quarter 2015 Financial Review

System-wide comparable restaurant sales increased 7.9%, consisting of company-operated comparable restaurant sales growth of 7.1% and franchised comparable restaurant sales growth of 8.4%. Comparable restaurant sales at company-operated restaurants were composed of increases in price, mix and transactions.

Total revenues increased 19.2% to $114.6 million in the first fiscal quarter of 2015 from $96.2 million in the prior year quarter. The increase was primarily due to new restaurant openings and comparable restaurant sales growth at our company-operated and franchised restaurants.

Company restaurant revenues increased 19.4% to $108.3 million in the first fiscal quarter of 2015 from $90.8 million in the prior year quarter. Franchise royalty revenues increased 14.2% to $5.9 million from $5.2 million in the prior year quarter.

Restaurant contribution, a non-GAAP measure, increased 19.0% to $17.4 million in the first fiscal quarter of 2015 from $14.6 million in the prior year quarter. As a percentage of Company restaurant revenues, restaurant contribution margin, a non-GAAP measure, held steady at 16.1% compared to the prior year quarter.

General and administrative expenses increased $3.9 million to $10.9 million in the first fiscal quarter of 2015 from $7.0 million in the prior year quarter. The increase was due primarily to $2.7 million in legal, accounting and other expenses directly related to the IPO, as well as additional positions added to support an increased number of restaurants in our system. As a percentage of total revenues, and excluding the aforementioned $2.7 million of expenses, general and administrative expenses were 7.1% during the first fiscal quarter of 2015 compared to 7.3% in the prior year quarter.

As a result of the above, operating income decreased 7.2% to $9.5 million in the first fiscal quarter of 2015 from $10.2 million in the prior year quarter. Adjusted for the $2.7 million in IPO related costs, operating income would have increased 19.3% to $12.2 million.

Adjusted EBITDA increased 16.0% to $16.9 million in the first fiscal quarter of 2015 from $14.6 million in the prior year quarter.

Net Income was $3.4 million in the first fiscal quarter of 2015 compared to $5.0 million in the prior year quarter. Pro Forma Diluted Net Income per Share was $0.09 (on a diluted share base of 37.4 million) compared to $0.13 (on a diluted share base of 37.0 million).

Adjusted Net Income was $6.2 million in the first fiscal quarter of 2015 compared to $5.0 million in the prior year quarter. Adjusted Pro Forma Diluted Net Income per Share was $0.17 (on a diluted share base of 37.4 million) compared to $0.14 (on a diluted share base of 37.0 million).

Fiscal Year 2015 Guidance

We anticipate the following for the 52-week period ending on December 27, 2015:

  • Total revenues to be between $480 million and $487 million;
  • System-wide comparable restaurant sales growth of low to mid-single digits; and
  • The opening of 50 to 57 system-wide restaurants consisting of 22 to 25 new company-operated restaurants and 28 to 32 new franchised restaurants.

Conference Call and Webcast Today

We will host a conference call and webcast to discuss the first fiscal quarter 2015 results and fiscal year 2015 guidance today at 5:00 p.m. Eastern Time. The conference call dial-in numbers are 1-877-705-6003 for domestic toll-free calls and 1-201-493-6725 for international calls. A telephone replay will be available through July 11, 2015 and may be accessed by dialing 1-877-870-5176 for domestic toll-free calls and 1-858-384-5517 for international. The conference ID is 13610581.

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

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, NC, Bojangles' serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin's and Legendary Iced Tea®. At March 29, 2015, Bojangles' had 635 system-wide restaurants of which 258 were company-operated and 377 were franchised restaurants, primarily located in the Southeastern United States.

Use and Definition of Non-GAAP Measures

We utilize certain non-GAAP measures when assessing the operational strength and the performance of our business. Bojangles' cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, reported GAAP results.

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.

Restaurant contribution is defined as company restaurant revenues less food and supplies costs, restaurant labor costs and operating costs. 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 identified in the reconciliation table below. Adjusted Pro Forma Diluted Net Income per Share represents company pro forma diluted net income per share before items that we do not consider representative of our ongoing operating performance, 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 Pro Forma 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 Pro Forma 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. In addition, in evaluating Adjusted Net Income, Adjusted Pro Forma 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 Pro Forma 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 fact included in this release are forward-looking statements. Forward-looking statements discuss our current expectations and projections 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. 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 obligations 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.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
Assets December 28, 2014 March 29, 2015
Current assets:
Cash and cash equivalents $ 13,201 14,117
Accounts and vendor receivables, net 4,285 3,599
Accounts receivable, related parties, net 736 441
Inventories, net 2,743 2,441
Other current assets 2,669 2,742
Total current assets 23,634 23,340
Property and equipment, net 42,478 44,453
Goodwill 161,140 161,140
Brand 290,500 290,500
Franchise rights, net 26,438 26,163
Favorable leases, net 1,908 1,799
Deferred debt issuance costs, net 2,726 2,542
Other noncurrent assets 3,819 3,031
Total assets $ 552,643 552,968
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 15,639 13,911
Accrued expenses 18,479 18,061
Current maturities of long-term debt
Current maturities of capital lease obligations 4,365 4,721
Other current liabilities 1,655 4,476
Total current liabilities 40,138 41,169
Long-term debt, less current maturities 228,249 224,597
Deferred income taxes 116,589 115,339
Capital lease obligations, less current maturities 20,144 20,119
Other noncurrent liabilities 9,771 10,562
Total liabilities 414,891 411,786
Stockholders' equity:
Preferred stock, $0.01 par value; 200,000 shares authorized, 100,000 issued and outstanding 172,691 172,691
Common stock, $0.01 par value; 200,000 shares authorized, no shares outstanding
Additional paid-in capital (56,220) (55,881)
Retained earnings 21,135 24,573
Accumulated other comprehensive income (loss) 146 (201)
Total stockholders' equity 137,752 141,182
Total liabilities and stockholders' equity $ 552,643 552,968
BOJANGLES', INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands)
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Revenues:
Company restaurant revenues $ 90,755 108,336
Franchise royalty revenues 5,198 5,936
Other franchise revenues 225 375
Total revenues 96,178 114,647
Company restaurant operating expenses:
Food and supplies costs 30,184 36,561
Restaurant labor costs 25,562 30,468
Operating costs 20,360 23,871
Depreciation and amortization 2,318 2,674
Total Company restaurant operating expenses 78,424 93,574
Operating income before other operating expenses 17,754 21,073
Other operating expenses:
General and administrative 6,983 10,913
Depreciation and amortization 544 659
Impairment 15
Gain on disposal of property and equipment (2)
Total other operating expenses 7,527 11,585
Operating income 10,227 9,488
Amortization of deferred debt issuance costs (186) (184)
Interest income 1 1
Interest expense (2,018) (2,222)
Income before income taxes 8,024 7,083
Income taxes 3,039 3,645
Net income $ 4,985 3,438
BOJANGLES', INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Cash flows from operating activities:
Net income $ 4,985 3,438
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax benefit (1,158)
Depreciation and amortization 2,862 3,333
Amortization of deferred debt issuance costs 186 184
Impairment 15
Gain on disposal of property and equipment (2)
Provision for doubtful accounts 5 24
(Benefit) provision for inventory spoilage (11) 6
Benefit for closed stores (50)
Stock-based compensation 399 339
Changes in operating assets and liabilities (3,369) 685
Net cash provided by operating activities 5,057 6,814
Cash flows from investing activities:
Purchases of property and equipment (712) (1,168)
Proceeds from disposition of property and equipment 17
Net cash used in investing activities (712) (1,151)
Cash flows from financing activities:
Principal payments on long-term debt (3,652)
Principal payments on capital lease obligations (977) (1,095)
Net cash used in financing activities (977) (4,747)
Net increase in cash and cash equivalents 3,368 916
Cash and cash equivalents balance, beginning of period 8,456 13,201
Cash and cash equivalents balance, end of period $ 11,824 14,117
BOJANGLES', INC.
Unaudited Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(in thousands)
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Net income $ 4,985 3,438
Income taxes 3,039 3,645
Interest expense, net 2,017 2,221
Depreciation and amortization 3,049 3,517
EBITDA 13,090 12,821
Non-cash rent 360 389
Stock-based compensation 399 339
Preopening expenses 143 300
Sponsor and board member fees and expenses 271 129
Certain professional, transaction and other costs 288 2,873
Impairment and dispositions -- 30
Adjusted EBITDA $ 14,551 16,881
BOJANGLES', INC.
Unaudited Reconciliation of Net Income to Adjusted Net Income
(in thousands)
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Net income $ 4,985 3,438
Certain professional and transaction costs 33 2,873
Tax impact of adjustments (13) (119)
Total adjustments 20 2,754
Adjusted Net Income $ 5,005 6,192
BOJANGLES', INC.
Unaudited Reconciliation of Pro Forma Diluted Net Income Per Share to
Adjusted Pro Forma Diluted Net Income Per Share
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Pro forma diluted net income per share $ 0.13 0.09
Certain professional and transaction costs 0.01 0.08
Tax impact of adjustments
Total adjustments 0.01 0.08
Adjusted Pro Forma Diluted Net Income per Share $ 0.14 0.17
BOJANGLES', INC.
Unaudited Company Restaurant Revenues to Restaurant Contribution
(in thousands)
Thirteen Weeks Ended
March 30, 2014 March 29, 2015
Company restaurant revenues $ 90,755 108,336
Food and supplies costs (30,184) (36,561)
Restaurant labor costs (25,562) (30,468)
Operating costs (20,360) (23,871)
Restaurant contribution $ 14,649 17,436
Restaurant contribution margin 16.1% 16.1%

CONTACT: For Investor Relations Inquiries: Raphael Gross of ICR 203.682.8253 For Media Inquiries: Brian Little of Bojangles', Inc. 704.519.2118

Source:Bojangles', Inc.