- Second Quarter Total Revenue Grew 37.2% -
- Same-Shack Sales Increased 4.5% -
NEW YORK--(BUSINESS WIRE)--
Shake Shack Inc. (“Shake Shack” or the “Company”) (NYSE: SHAK),
today reported financial results for the second quarter ended June 29,
2016, a period that included 13 weeks.
Financial Highlights for the Second Quarter 2016:
-
Total revenue increased 37.2% to $66.5 million.
-
Shack sales increased 38.3% to $64.4 million.
-
Same-Shack sales increased 4.5%.
-
Shack-level operating profit*, a non-GAAP measure, increased 40.6% to
$19.9 million, or 30.8% of Shack sales.
-
Adjusted EBITDA*, a non-GAAP measure, increased 39.3% to $15.6 million.
-
Net income was $3.3 million, or $0.14 per diluted share.
-
Adjusted pro forma net income*, a non-GAAP measure, increased 51.9% to
$5.2 million, or $0.14 per fully exchanged and diluted share, compared
to $3.4 million, or $0.09 per fully exchanged and diluted share in the
prior year period.
-
Seven system-wide Shack openings, including four domestic
company-operated Shacks and three licensed Shacks.
* Shack-level operating profit, adjusted EBITDA and adjusted pro
forma net income are non-GAAP measures. Reconciliations of Shack-level
operating profit to operating income (loss), adjusted EBITDA to net
income (loss), and adjusted pro forma net income to net income (loss),
the most directly comparable financial measures presented in accordance
with GAAP, are set forth in the schedules accompanying this release. See
“Non-GAAP Financial Measures.”
Randy Garutti, Chief Executive Officer of Shake Shack, stated, “For the
second quarter, we increased revenue over 2015 by 37.2%, opened four new
company-operated Shacks domestically, three licensed Shacks and grew
comps by 4.5%, on top of an impressive 12.9% increase last year. We
continue to execute on our growth strategy, while delivering
industry-leading AUVs and, in this past quarter, our 30.8% Shack-level
operating profit margin set a new record. Innovating around our core
menu continues to be a key driver of our success with the addition of
our Chick’n Shack, launched in January, and our most recent LTO, the
Bacon Cheddar Shack, launched in June.”
Garutti continued, “Domestically, given favorable development tailwinds
in our 2016 pipeline, we have increased guidance to open 18 domestic
company-operated Shacks this year. Next week we will reach a milestone
of our 100th Shack opening worldwide. We have never been more
excited about the opportunities ahead of us and are committed to
investing in our team as we envision and execute the next 100 great
Shacks."
Development Highlights
During the quarter, the Company opened four domestic company-operated
Shacks, including a Shack in the Fashion Centre at Pentagon City, two
Shacks in New York — a Shack in the iconic Herald Square and a second
Queens Shack located in Forest Hills —as well as the Company's first
Shack in Minnesota, located in the Mall of America. Additionally, the
Company opened one domestic licensed Shack in the Las Vegas market at
the T-Mobile Arena and two international licensed Shacks—a second Shack
in the Japan market in Ebisu and the Company's first Shack in Bahrain at
the Bahrain City Centre shopping center.
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Location
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Type
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Opening Date
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Muscat, Oman — City Centre Muscat
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International Licensed
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February 6
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Scottsdale, AZ — Fashion Square
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Domestic Company-Operated
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February 26
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Phoenix, AZ — Uptown Plaza
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Domestic Company-Operated
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March 9
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West Hollywood, CA — West Hollywood
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Domestic Company-Operated
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March 15
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Las Vegas, NV — T-Mobile Arena
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Domestic Licensed
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April 6
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Tokyo, Japan — Ebisu Atre West
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International Licensed
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April 15
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Manama, Bahrain — City Centre Bahrain
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International Licensed
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April 30
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Arlington, VA — Fashion Centre at Pentagon City
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Domestic Company-Operated
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May 4
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New York, NY — Herald Square
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Domestic Company-Operated
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May 18
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Forest Hills, NY — Forest HIlls
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Domestic Company-Operated
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May 26
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Bloomington, MN — Mall of America
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Domestic Company-Operated
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June 9
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Subsequent to the end of the quarter, the Company opened two domestic
company-operated Shacks in New York— a Manhattan Shack located at the
Fulton Transit Center and the Company's first Shack in Westchester at
the Cross County Shopping Center. Additionally, the Company opened two
international licensed Shacks including a Shack located at the Marina
Mall in Abu Dhabi as well as the Company's first Shack in South Korea.
Second Quarter 2016 Review
Total revenue, which includes Shack sales and licensing revenue,
increased 37.2% to $66.5 million in the second quarter of 2016, from
$48.5 million for the second quarter of 2015. Shack sales for the second
quarter of 2016 were $64.4 million, an increase of 38.3% from $46.6
million in the same quarter last year, due primarily to the opening of
new Shacks, as well as same-Shack sales growth. Licensing revenue for
the second quarter was $2.1 million, an increase of 10.7% from $1.9
million in the same quarter last year, due primarily to the opening of
new licensed Shacks, offset by lower revenue from Shacks located
primarily in the Middle East.
Same-Shack sales increased 4.5% for the second quarter of 2016 versus
12.9% growth in the second quarter last year. The comparable Shack base
includes those restaurants open for 24 months or longer. For the second
quarter of 2016, the comparable Shack base included 23 Shacks versus 16
Shacks for the second quarter of 2015.
Average weekly sales for domestic company-operated Shacks remained
constant at $102,000 for the second quarter of 2016 compared to the same
quarter last year.
Shack-level operating profit, a non-GAAP measure, increased 40.6% to
$19.9 million for the second quarter of 2016 from $14.1 million in the
same quarter last year. As a percentage of Shack sales, Shack-level
operating profit margins increased 50 basis points to 30.8% as we
experienced higher flow through from lower than anticipated food costs
and the leveraging of labor and related expenses on the increased Shack
sales. A reconciliation of Shack-level operating profit to operating
income (loss), the most directly comparable GAAP financial measure, is
set forth in the schedules accompanying this release. See “Non-GAAP
Financial Measures.”
General and administrative expenses increased to $7.5 million for the
second quarter of 2016 from $6.1 million in the same quarter last year.
As a percentage of total revenue, general and administrative expenses
decreased to 11.3% for the second quarter of 2016 from 12.5% in the
second quarter last year, primarily due to the benefit of higher Shack
sales, offset by higher consulting fees and incremental costs associated
with our first annual shareholders' meeting.
Adjusted EBITDA, a non-GAAP measure, increased 39.3% to $15.6 million.
As a percent of total revenue, adjusted EBITDA margins increased
approximately 40 basis points to 23.5% compared to 23.1% for the year
ago period. A reconciliation of adjusted EBITDA to net income (loss),
the most directly comparable GAAP financial measure, is set forth in the
schedules accompanying this release. See “Non-GAAP Financial Measures.”
Net income was $3.3 million, or $0.14 per diluted share, for the second
quarter of 2016, compared to net income of $1.1 million, or $0.08 per
diluted share, for the same period last year.
Adjusted pro forma net income, a non-GAAP measure, increased 51.9% to
$5.2 million, or $0.14 per fully exchanged and diluted share during the
second quarter of 2016, compared to $3.4 million, or $0.09 per diluted
share during the second quarter of 2015. A reconciliation between net
income (loss) and adjusted pro forma net income is included in the
accompanying financial data.
Updated 2016 Outlook
For the fiscal year ending December 28, 2016, the Company is revising
its financial outlook to the following:
-
Total revenue between $253 million and $256 million (vs. $245 million
to $249 million).
-
Same-Shack sales growth between 4% and 5%.
-
18 (vs. 16) total new domestic company-operated Shacks to be opened in
2016.
-
Seven licensed Shacks, net of a relocation (an increase of one Shack
from the previous guidance).
-
Approximately 50 basis points (vs. 75 to 100 basis points) of
deleverage in labor and related expenses as a percentage of Shack
sales, on a year-over-year basis.
-
Adjusted pro forma effective tax rate between 40% and 41%.
Earnings Conference Call
As previously announced, the Company will host a conference call to
discuss its second quarter 2016 financial results today at 5:00 p.m. ET.
The conference call can be accessed live over the phone by dialing (888)
461-2024 or for international callers by dialing (719) 325-2144. A
replay will be available after the call and can be accessed by dialing
(877) 870-5176 or for international callers by dialing (858) 384-5517;
the passcode is 7035546. The replay will be available until August 17,
2016.
The conference call will also be webcast live from the Company's
Investor Relations website at http://investor.shakeshack.com.
An archive of the webcast will be available at the same location on the
website shortly after the call has concluded.
Definitions
The following definitions apply to these terms as used in this release:
"Shack sales" is defined as the aggregate sales of food and beverages in
domestic company-operated Shacks and excludes sales from licensed Shacks.
"Same-Shack sales" represents Shack sales for the comparable Shack base,
which is defined as the number of domestic company-operated Shacks open
for 24 months or longer.
"Average weekly sales" is calculated by dividing total Shack sales by
the number of operating weeks for all Shacks in operation during the
period. For Shacks that are not open for the entire period, we make
fractional adjustments to the number of operating weeks such that it
corresponds to the period of associated sales.
"Shack-level operating profit margin" is defined as Shack sales less
certain operating expenses, including food and paper costs, labor and
related expenses, other operating expenses and occupancy and related
expenses as a percentage of Shack sales.
“EBITDA” means, for any reporting period, net income before interest,
taxes, depreciation and amortization.
“Adjusted EBITDA” is defined as net income before interest, taxes,
depreciation and amortization, adjusted for the impact of certain
non-cash and other items that the Company does not consider in their
evaluation of ongoing operating performance. These items include
equity-based compensation expense, non-cash deferred rent adjustments,
pre-opening costs, as well as certain non-recurring charges.
"Adjusted pro forma net income" represents net income attributable to
Shake Shack Inc. assuming the full exchange of all outstanding
membership interests of SSE Holdings, LLC for shares of Class A common
stock, adjusted for certain non-recurring items the Company does not
believe directly reflect their core operations.
About Shake Shack
Shake Shack® (NYSE: SHAK) is a modern day “roadside” burger
stand known for its 100% all-natural, antibiotic-free Angus beef
burgers, chicken (no hormones added ever), flat-top dogs, frozen
custard, crinkle cut fries, beer and wine (available at select
locations) and more. With its fresh, simple, high-quality food at a
great value, Shake Shack is a fun and lively community gathering place
with widespread appeal. From its premium ingredients and caring hiring
practices to its inspiring designs and deep community investment, Shake
Shack’s mission is to Stand For Something Good®. Since the
original Shack opened in 2004 in NYC’s Madison Square Park, the Company
has opened multiple locations in 15 states and the District of Columbia,
as well as international locations including London, Istanbul, Dubai,
Tokyo, Moscow, Seoul and more.
Forward-Looking Statements
This press release contains forward-looking statements, as defined in
the Private Securities Litigation Reform Act of 1995, which are subject
to risks and uncertainties. All statements other than statements of
historical fact included in this press release are forward-looking
statements, including, but not limited to, expected financial outlook
for fiscal year 2016, expected Shack openings, expected same-Shack sales
growth and trends in the Company’s operations. Forward-looking
statements discuss the Company's current expectations and projections
relating to their financial position, results of operations, plans,
objectives, future performance and business. You can identify
forward-looking statements by the fact that they do not relate strictly
to historical or current facts. These statements may include words such
as "aim," "anticipate," "believe," "estimate," "expect," "forecast,"
"outlook," "potential," "project," "projection," "plan," "intend,"
"seek," "may," "could," "would," "will," "should," "can," "can have,"
"likely," the negatives thereof and other similar expressions. All
forward-looking statements are subject to known and unknown risks,
uncertainties and other important factors that may cause actual results
to be materially different. All forward-looking statements are expressly
qualified in their entirety by these cautionary statements. You should
evaluate all forward-looking statements made in this press release in
the context of the risks and uncertainties disclosed in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 30, 2015
filed with the Securities and Exchange Commission ("SEC") on March 30,
2016. All of the Company's SEC filings are available online at www.sec.gov,
www.shakeshake.com
or upon request from Shake Shack Inc. The forward-looking statements
included in this press release are made only as of the date hereof. The
Company undertakes no obligation to publicly update or revise any
forward-looking statement as a result of new information, future events
or otherwise, except as otherwise required by law.
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SHAKE SHACK INC.
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CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
|
(UNAUDITED)
|
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
|
|
June 29, 2016
|
|
July 1, 2015
|
|
June 29, 2016
|
|
July 1, 2015
|
|
Shack sales
|
|
$
|
64,406
|
|
96.9
|
%
|
|
$
|
46,583
|
|
96.1
|
%
|
|
$
|
116,559
|
|
96.6
|
%
|
|
$
|
82,630
|
|
|
95.8
|
%
|
|
Licensing revenue
|
|
2,066
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|
3.1
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%
|
|
1,867
|
|
3.9
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%
|
|
4,078
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|
3.4
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%
|
|
3,628
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|
|
4.2
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%
|
|
TOTAL REVENUE
|
|
66,472
|
|
100.0
|
%
|
|
48,450
|
|
100.0
|
%
|
|
120,637
|
|
100.0
|
%
|
|
86,258
|
|
|
100.0
|
%
|
|
Shack-level operating expenses(1):
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper costs
|
|
18,104
|
|
28.1
|
%
|
|
13,717
|
|
29.4
|
%
|
|
33,136
|
|
28.4
|
%
|
|
24,721
|
|
|
29.9
|
%
|
|
Labor and related expenses
|
|
15,262
|
|
23.7
|
%
|
|
11,168
|
|
24.0
|
%
|
|
28,424
|
|
24.4
|
%
|
|
20,269
|
|
|
24.5
|
%
|
|
Other operating expenses
|
|
5,979
|
|
9.3
|
%
|
|
3,723
|
|
8.0
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%
|
|
10,898
|
|
9.3
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%
|
|
7,203
|
|
|
8.7
|
%
|
|
Occupancy and related expenses
|
|
5,209
|
|
8.1
|
%
|
|
3,859
|
|
8.3
|
%
|
|
9,532
|
|
8.2
|
%
|
|
7,042
|
|
|
8.5
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%
|
|
General and administrative expenses
|
|
7,496
|
|
11.3
|
%
|
|
6,052
|
|
12.5
|
%
|
|
14,380
|
|
11.9
|
%
|
|
24,437
|
|
|
28.3
|
%
|
|
Depreciation expense
|
|
3,404
|
|
5.1
|
%
|
|
2,447
|
|
5.1
|
%
|
|
6,510
|
|
5.4
|
%
|
|
4,638
|
|
|
5.4
|
%
|
|
Pre-opening costs
|
|
2,085
|
|
3.1
|
%
|
|
1,240
|
|
2.6
|
%
|
|
4,110
|
|
3.4
|
%
|
|
2,653
|
|
|
3.1
|
%
|
|
TOTAL EXPENSES
|
|
57,539
|
|
86.6
|
%
|
|
42,206
|
|
87.1
|
%
|
|
106,990
|
|
88.7
|
%
|
|
90,963
|
|
|
105.5
|
%
|
|
OPERATING INCOME (LOSS)
|
|
8,933
|
|
13.4
|
%
|
|
6,244
|
|
12.9
|
%
|
|
13,647
|
|
11.3
|
%
|
|
(4,705
|
)
|
|
(5.5
|
)%
|
|
Interest expense, net
|
|
68
|
|
0.1
|
%
|
|
84
|
|
0.2
|
%
|
|
132
|
|
0.1
|
%
|
|
162
|
|
|
0.2
|
%
|
|
INCOME (LOSS) BEFORE INCOME TAXES
|
|
8,865
|
|
13.3
|
%
|
|
6,160
|
|
12.7
|
%
|
|
13,515
|
|
11.2
|
%
|
|
(4,867
|
)
|
|
(5.6
|
)%
|
|
Income tax expense
|
|
2,316
|
|
3.5
|
%
|
|
1,015
|
|
2.1
|
%
|
|
3,615
|
|
3.0
|
%
|
|
1,248
|
|
|
1.4
|
%
|
|
NET INCOME (LOSS)
|
|
6,549
|
|
9.9
|
%
|
|
5,145
|
|
10.6
|
%
|
|
9,900
|
|
8.2
|
%
|
|
(6,115
|
)
|
|
(7.1
|
)%
|
|
Less: net income attributable to non-controlling interests
|
|
3,251
|
|
4.9
|
%
|
|
4,027
|
|
8.3
|
%
|
|
5,140
|
|
4.3
|
%
|
|
5,435
|
|
|
6.3
|
%
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.
|
|
$
|
3,298
|
|
5.0
|
%
|
|
$
|
1,118
|
|
2.3
|
%
|
|
$
|
4,760
|
|
3.9
|
%
|
|
$
|
(11,550
|
)
|
|
(13.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.15
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.22
|
|
|
|
$
|
(0.96
|
)
|
|
|
|
Diluted
|
|
$
|
0.14
|
|
|
|
$
|
0.08
|
|
|
|
$
|
0.22
|
|
|
|
$
|
(0.96
|
)
|
|
|
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
22,553
|
|
|
|
12,058
|
|
|
|
21,453
|
|
|
|
12,006
|
|
|
|
|
Diluted
|
|
23,050
|
|
|
|
13,339
|
|
|
|
21,931
|
|
|
|
12,006
|
|
|
|
|
_____________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As a percentage of Shack sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
|
|
SELECTED BALANCE SHEET DATA AND OPERATING DATA
|
|
(UNAUDITED)
|
|
(dollar amounts in thousands)
|
|
|
|
|
|
|
|
|
|
June 29,
2016
|
|
December 30,
2015
|
|
SELECTED BALANCE SHEET DATA:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
68,371
|
|
|
$
|
70,849
|
|
Total assets
|
|
$
|
467,367
|
|
|
$
|
379,547
|
|
Total liabilities
|
|
$
|
288,738
|
|
|
$
|
222,528
|
|
Total equity
|
|
$
|
178,629
|
|
|
$
|
157,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
June 29,
2016
|
|
July 1,
2015
|
|
|
June 29,
2016
|
|
July 1,
2015
|
|
SELECTED OPERATING DATA:
|
|
|
|
|
|
|
|
|
|
|
Same-Shack sales growth
|
|
4.5
|
%
|
|
12.9
|
%
|
|
|
6.9
|
%
|
|
12.4
|
%
|
|
Shacks in the comparable base
|
|
23
|
|
|
16
|
|
|
|
23
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shack system-wide sales
|
|
$
|
95,888
|
|
|
$
|
73,944
|
|
|
|
$
|
179,185
|
|
|
$
|
138,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average weekly sales
|
|
|
|
|
|
|
|
|
|
|
Domestic company-operated
|
|
$
|
102
|
|
|
$
|
102
|
|
|
|
$
|
96
|
|
|
$
|
96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shack-level operating profit
|
|
$
|
19,852
|
|
|
$
|
14,116
|
|
|
|
$
|
34,569
|
|
|
$
|
23,395
|
|
|
Shack-level operating profit margin
|
|
30.8
|
%
|
|
30.3
|
%
|
|
|
29.7
|
%
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
15,609
|
|
|
$
|
11,209
|
|
|
|
$
|
26,412
|
|
|
$
|
18,207
|
|
|
Adjusted EBITDA margin
|
|
23.5
|
%
|
|
23.1
|
%
|
|
|
21.9
|
%
|
|
21.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
12,420
|
|
|
$
|
8,371
|
|
|
|
$
|
26,548
|
|
|
$
|
16,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shack counts (at end of period):
|
|
|
|
|
|
|
|
|
|
|
System-wide
|
|
95
|
|
71
|
|
|
95
|
|
|
71
|
|
|
Domestic company-operated
|
|
51
|
|
37
|
|
|
51
|
|
|
37
|
|
|
Domestic licensed
|
|
6
|
|
5
|
|
|
6
|
|
|
5
|
|
|
International licensed
|
|
38
|
|
29
|
|
|
38
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
To supplement its consolidated financial statements, which are prepared
and presented in accordance with U.S. generally accepted accounting
principles (“GAAP”), the Company uses the following non-GAAP financial
measures: Shack-level operating profit, EBITDA, adjusted EBITDA,
adjusted pro forma net income and adjusted pro forma earnings per fully
exchanged and diluted share (collectively the "non-GAAP financial
measures"). The Company believes that these non-GAAP financial measures,
when used in conjunction with GAAP financial measures, provide useful
information about operating results, enhance the overall understanding
of past financial performance and future prospects, and allow for
greater transparency with respect to key metrics used by management in
its financial and operational decision making. The presentation of this
financial information is not intended to be considered in isolation or
as a substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. The non-GAAP measures used by the
Company are not necessarily comparable to similarly titled measures used
by other companies due to different methods of calculation.
Shack-Level Operating Profit
Shack-level operating profit and Shack-level operating profit margin are
supplemental measures of operating performance and are not required by,
nor presented in accordance with, GAAP. The Company believes that
Shack-level operating profit and Shack-level operating profit margin,
when used in conjunction with GAAP financial measures, are important
measures used to by management to evaluate the performance and
profitability of each Shack, individually and in the aggregate. A
reconciliation of Shack-level operating profit to operating income
(loss), the most directly comparable GAAP measure, is set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
(dollar amounts in thousands)
|
|
|
|
|
|
|
|
June 29,
2016
|
|
July 1,
2015
|
|
June 29,
2016
|
|
July 1,
2015
|
|
Shack-level operating profit
|
|
|
|
|
|
|
|
$
|
19,852
|
|
|
$
|
14,116
|
|
|
$
|
34,569
|
|
|
$
|
23,395
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing revenue
|
|
|
|
|
|
|
|
2,066
|
|
|
1,867
|
|
|
4,078
|
|
|
3,628
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
7,496
|
|
|
6,052
|
|
|
14,380
|
|
|
24,437
|
|
|
Depreciation expense
|
|
|
|
|
|
|
|
3,404
|
|
|
2,447
|
|
|
6,510
|
|
|
4,638
|
|
|
Pre-opening costs
|
|
|
|
|
|
|
|
2,085
|
|
|
1,240
|
|
|
4,110
|
|
|
2,653
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
$
|
8,933
|
|
|
$
|
6,244
|
|
|
$
|
13,647
|
|
|
$
|
(4,705
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
|
|
|
|
$
|
66,472
|
|
|
$
|
48,450
|
|
|
$
|
120,637
|
|
|
$
|
86,258
|
|
|
Less: licensing revenue
|
|
|
|
|
|
|
|
2,066
|
|
|
1,867
|
|
|
4,078
|
|
|
3,628
|
|
|
Shack sales
|
|
|
|
|
|
|
|
$
|
64,406
|
|
|
$
|
46,583
|
|
|
$
|
116,559
|
|
|
$
|
82,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shack-level operating profit margin
|
|
|
|
|
|
|
|
30.8
|
%
|
|
30.3
|
%
|
|
29.7
|
%
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP supplemental measures of
operating performance that do not represent and should not be considered
alternatives to net income (loss) or cash flow from operations, as
determined by GAAP. EBITDA and Adjusted EBITDA are used by management to
measure the operating performance of their business, excluding
specifically identified items that management believes do not directly
reflect their core operations. A reconciliation of EBITDA and Adjusted
EBITDA to net income (loss), the most directly comparable GAAP measure,
is set forth below.
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
(in thousands)
|
|
June 29,
2016
|
|
July 1,
2015
|
|
June 29,
2016
|
|
July 1,
2015
|
|
Net income (loss)
|
|
$
|
6,549
|
|
|
$
|
5,145
|
|
|
$
|
9,900
|
|
|
$
|
(6,115
|
)
|
|
Depreciation expense
|
|
3,404
|
|
|
2,447
|
|
|
6,510
|
|
|
4,638
|
|
|
Interest expense, net
|
|
68
|
|
|
84
|
|
|
132
|
|
|
162
|
|
|
Income tax expense
|
|
2,316
|
|
|
1,015
|
|
|
3,615
|
|
|
1,248
|
|
|
EBITDA
|
|
12,337
|
|
|
8,691
|
|
|
20,157
|
|
|
(67
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based compensation(1)
|
|
1,210
|
|
|
1,178
|
|
|
2,240
|
|
|
1,970
|
|
|
Pre-opening costs(2)
|
|
1,405
|
|
|
927
|
|
|
2,768
|
|
|
1,882
|
|
|
Deferred rent(3)
|
|
657
|
|
|
413
|
|
|
1,247
|
|
|
969
|
|
|
Non-recurring compensation expenses related to the IPO(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,818
|
|
|
IPO-related expenses(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
ADJUSTED EBITDA
|
|
$
|
15,609
|
|
|
$
|
11,209
|
|
|
$
|
26,412
|
|
|
$
|
18,207
|
|
|
________________
|
|
(1)
|
|
Represents non-cash equity-based compensation expense and relate
solely to stock options and performance stock units granted
subsequent to the Company's IPO.
|
|
(2)
|
|
Non-capital expenditures associated with opening new Shacks
exclusive of deferred rent expense incurred prior to opening.
|
|
(3)
|
|
Reflects the extent to which rent expense is greater than or less
than cash rent payments.
|
|
(4)
|
|
Non-recurring compensation expense incurred in connection with the
Company's IPO. Includes expense recognized upon settlement of
outstanding unit appreciation rights, the related employer
withholding taxes and the accelerated vesting of outstanding
restricted Class B units.
|
|
(5)
|
|
Costs incurred in connection with the Company's IPO, including
legal, accounting and other related expenses.
|
|
|
|
|
|
|
|
|
SHAKE SHACK INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per
Fully Exchanged and Diluted Share
Adjusted pro forma net income represents net income attributable to
Shake Shack Inc. assuming the full exchange of all outstanding SSE
Holdings, LLC membership interests ("LLC Interests") for shares of Class
A common stock, adjusted for certain non-recurring items that management
believes do not directly reflect their core operations. Adjusted pro
forma earnings per fully exchanged and diluted share is calculated by
dividing adjusted pro forma net income by the weighted-average shares of
Class A common stock outstanding, assuming the full exchange of all
outstanding LLC Interests, after giving effect to the dilutive effect of
outstanding stock options.
Adjusted pro forma net income and adjusted pro forma earnings per fully
exchanged and diluted share are supplemental measures of operating
performance that do not represent and should not be considered
alternatives to net income (loss) and earnings (loss) per share, as
determined by GAAP. Management believes adjusted pro forma net income
and adjusted pro forma earnings per fully exchanged and diluted share
supplement GAAP measures and enables them to more effectively evaluate
their performance period-over-period and relative to competitors. A
reconciliation of adjusted pro forma net income to net income (loss)
attributable to Shake Shack Inc., the most directly comparable GAAP
measure, and the computation of adjusted pro forma earnings per fully
exchanged and diluted share are set forth below.
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
|
(in thousands, except per share amounts)
|
|
June 29,
2016
|
|
July 1,
2015
|
|
June 29,
2016
|
|
July 1,
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Shake Shack Inc.
|
|
$
|
3,298
|
|
|
$
|
1,118
|
|
|
$
|
4,760
|
|
|
$
|
(11,550
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Reallocation of net income attributable to non-controlling
interests from the
assumed exchange of LLC Interests(1)
|
|
3,251
|
|
|
4,027
|
|
|
5,140
|
|
|
5,435
|
|
|
Non-recurring compensation expenses incurred in connection with the
IPO(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,818
|
|
|
IPO-related expenses(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
Income tax expense(4)
|
|
(1,310
|
)
|
|
(1,696
|
)
|
|
(1,853
|
)
|
|
(2,579
|
)
|
|
Adjusted pro forma net income
|
|
$
|
5,239
|
|
|
$
|
3,449
|
|
|
$
|
8,047
|
|
|
$
|
4,759
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of Class A common stock outstanding—diluted
|
|
23,050
|
|
|
13,339
|
|
|
21,931
|
|
|
12,006
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Assumed exchange of LLC Interests for shares of Class A common stock(1)
|
|
13,748
|
|
|
24,192
|
|
|
14,824
|
|
|
24,192
|
|
|
Dilutive effect of stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,093
|
|
|
Adjusted pro forma fully exchanged weighted-average shares of
Class A
common stock outstanding—diluted
|
|
36,798
|
|
|
37,531
|
|
|
36,755
|
|
|
37,291
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pro forma earnings per fully exchanged share—diluted
|
|
$
|
0.14
|
|
|
$
|
0.09
|
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_________________
|
|
(1)
|
|
Assumes the exchange of all outstanding LLC Interests for shares of
Class A common stock, resulting in the elimination of the
non-controlling interest and recognition of the net income
attributable to non-controlling interests.
|
|
(2)
|
|
Non-recurring compensation expense incurred in connection with the
Company's IPO. Includes expense recognized upon settlement of
outstanding unit appreciation rights, the related employer
withholding taxes and the accelerated vesting of outstanding
restricted Class B units.
|
|
(3)
|
|
Costs incurred in connection with the Company's IPO, including
legal, accounting and other related expenses.
|
|
(4)
|
|
Represents the tax effect of the aforementioned adjustments and pro
forma adjustments to reflect corporate income taxes at assumed
effective tax rates of 40.9% and 40.5% for the thirteen and
twenty-six weeks ended June 29, 2016, respectively, and 44.0% and
44.6% for the and thirteen and twenty-six weeks ended July 1, 2015,
respectively. Amounts include provisions for U.S. federal income
taxes, certain LLC entity-level taxes and foreign withholding taxes,
assuming the highest statutory rates apportioned to each applicable
state, local and foreign jurisdiction.
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160810006070/en/
Source: Shake Shack Inc.