The Habit Restaurants, Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results

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IRVINE, Calif., Feb. 28, 2019 (GLOBE NEWSWIRE) — The Habit Restaurants, Inc. (NASDAQ: HABT) (“The Habit” or the “Company”), today announced financial results for its fourth quarter and fiscal year ended December 25, 2018.
Highlights for the fourth quarter ended December 25, 2018 include:Total revenue increased 21.0% to $102.7 million compared to $84.8 million in the fourth quarter of 2017.Company-operated comparable restaurant sales increased 2.4% as compared to the fourth quarter of 2017.Net income was $0.7 million, or $0.03 per diluted weighted average share, compared to a net loss of $6.4 million, or $(0.31) per diluted weighted average share, in the fourth quarter of 2017.Adjusted fully distributed pro forma net income(1) was $0.7 million, or $0.03 per fully distributed weighted average share compared to a net loss of $0.2 million, or $(0.01) per fully distributed weighted average share for the fourth quarter of 2017.Adjusted EBITDA(1) was $8.9 million compared to $7.1 million for the fourth quarter of 2017.The Company opened four company-operated restaurants and three franchised/licensed restaurants and closed two franchised restaurants during the fourth quarter of 2018. As of December 25, 2018, the Company had 223 company-operated locations and 24 franchised/licensed locations (excluding eight licensed locations in Santa Barbara County, California from which the Company is not entitled to royalties) for a system-wide total of 247 locations.“We are pleased with our results in the fourth quarter, which included revenue growth of 21%, which was helped in part by a 2.4% increase in comparable restaurant sales.  We believe that our recent success has been driven by our renewed focus on being more convenient for our guests as well as our continued focus on providing the highest quality products and service at an affordable price,” said Russ Bendel, President and Chief Executive Officer of The Habit. “For 2019, we will continue these efforts and look to open between 21 and 23 company-operated locations and between 10 and 12 franchised/licensed locations.”Fourth Quarter 2018 Financial Results Compared to Fourth Quarter 2017Total revenue was $102.7 million in the fourth quarter of 2018, compared to $84.8 million in the fourth quarter of 2017.Company-operated comparable restaurant sales increased 2.4% for the quarter ended December 25, 2018. The increase in company-operated comparable restaurant sales was driven primarily by a 5.4% increase in average transaction amount partially offset by a 3.0% decrease in transactions.Net income for the fourth quarter of 2018 was $0.7 million, or $0.03 per diluted weighted average share, compared to a net loss of $6.4 million, or $(0.31) per diluted weighted average share in the fourth quarter of 2017.Adjusted fully distributed pro forma net income in the fourth quarter of 2018 was $0.7 million, or $0.03 per fully distributed weighted average share, compared to a net loss of $0.2 million, or $(0.01) per fully distributed weighted average share, in the fourth quarter of 2017. A reconciliation between GAAP net income and adjusted fully distributed pro forma net income is included in the accompanying financial data.Fiscal Year 2018 Financial Results Compared to Fiscal Year 2017Total revenue was $402.1 million in fiscal year 2018, compared to $331.4 million in fiscal year 2017.Company-operated comparable restaurant sales increased 1.5% for the year ended December 25, 2018. The increase in company-operated comparable restaurant sales was driven primarily by a 4.5% increase in average transaction amount partially offset by a 3.0% decrease in transactions.Net income for fiscal year 2018 was $2.8 million, or $0.13 per diluted weighted average share, compared to a net loss of $3.1 million, or $(0.15) per diluted weighted average share, in fiscal year 2017.Adjusted fully distributed pro forma net income in fiscal year 2018 was $4.5 million, or $0.17 per fully distributed weighted average share, compared to $4.1 million, or $0.16 per fully distributed weighted average share, in fiscal year 2017. A reconciliation between GAAP net income and adjusted fully distributed pro forma net income is included in the accompanying financial data.2019 OutlookThe Company currently anticipates the following for its fiscal year 2019:Total revenue between $458 million to $462 million;Company-operated comparable restaurant sales growth of approximately 2.0% to 3.0%;The opening of approximately 21 to 23 company-operated restaurants and 10 to 12 franchised/licensed restaurants;Restaurant contribution margin of 16.25% to 17.00%, which includes a (0.3)% unfavorable impact related to the change in lease accounting;General and administrative expenses of $44.5 million to $45.5 million;Depreciation and amortization expense of approximately $28.5 million;Capital expenditures of $35.0 million to $38.0 million; andAn effective pro forma tax rate of approximately 29.0% to 30.0%, which assumes the conversion of all common units of The Habit Restaurants, LLC for shares of the Company’s Class A common stock (and cancellation of corresponding shares of Class B common stock), which would eliminate the non-controlling interests.Conference CallThe Company will host a conference call to discuss financial results for the fourth quarter and fiscal year 2018 today at 4:30 PM Eastern Time. Russ Bendel, President and Chief Executive Officer, and Ira Fils, Chief Financial Officer, will host the call.The conference call can be accessed live over the phone by dialing (855) 327-6837 or for international callers by dialing (631) 891-4304. A replay will be available after the call and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 10006156. The replay will be available until Thursday, March 7, 2019. The conference call will also be webcast live from the Company’s corporate website at ir.habitburger.com under the “Events” page. An archive of the webcast will be available at the same location on the corporate website shortly after the call has concluded.The following definitions apply to these terms as used in this release:Comparable restaurant sales reflect the change in year-over-year sales in our comparable restaurant base. A restaurant enters our comparable restaurant base in the accounting period following its 18th full period of operations. We operate on a 4-4-5 calendar, each accounting period will consist of either four or five weeks with the exception of a 53-week year, where the last period contains six weeks.Average Unit Volumes (AUVs) are calculated by dividing revenue for the trailing 52-week period for all company-operated restaurants that have operated for 12 full accounting periods by the total number of restaurants open for such period.Adjusted fully distributed pro forma net income includes net income attributable to The Habit (i) excluding income tax expense, (ii) excluding the effect of non-recurring items, (iii) assuming the exchange of all common units of The Habit Restaurants, LLC into shares of our Class A common stock (and cancellation of corresponding shares of our Class B common stock), which results in the elimination of non-controlling interests in The Habit Restaurants, LLC, and (iv) reflecting an adjustment for income tax expense on fully distributed pro forma net income before income taxes at our estimated long term effective income tax rate. Adjusted fully distributed pro forma net income is a non-GAAP financial measure because it represents net income attributable to The Habit, before non-recurring items and the effects of non-controlling interests in The Habit Restaurants, LLC. We use adjusted fully distributed pro forma net income to facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting our business than GAAP measures alone and eliminates the variability of non-controlling interests as a result of member owner exchanges of common units of The Habit Restaurants, LLC into shares of our Class A common stock (and cancellation of corresponding shares of our Class B common stock).Adjusted fully distributed pro forma net income per fully distributed weighted average share is calculated using adjusted fully distributed pro forma net income as defined above and assumes the exchange of all common units of The Habit Restaurants, LLC into shares of our Class A common stock (and cancellation of corresponding shares of our Class B common stock).EBITDA, a non-GAAP measure, represents net income before interest expense, net, provision for income taxes, and depreciation and amortization.Adjusted EBITDA, a non-GAAP measure, represents EBITDA plus pre-opening costs, stock-based compensation, loss on disposal of assets, Tax Receivable Agreement liability adjustment, and other non-recurring items.About The Habit Restaurants, Inc.The Habit Burger Grill is a burger-centric, fast casual restaurant concept that specializes in preparing fresh, made-to-order chargrilled burgers and sandwiches featuring USDA choice tri-tip steak, grilled chicken and sushi-grade tuna cooked over an open flame. In addition, it features fresh made-to-order salads and an appealing selection of sides, shakes and malts. The Habit was named the “best tasting burger in America” in July 2014 in a comprehensive survey conducted by one of America’s leading consumer magazines. The first Habit opened in Santa Barbara, California in 1969. The Habit has since grown to over 250 restaurants in 11 states throughout California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland and Pennsylvania, as well as four international locations.ContactsInvestors:
(949) 943-8692
HabitIR@habitburger.com
Media:
(949) 943-8691
Media@habitburger.com
Forward-Looking StatementsThis press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press 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. You can identify forward-looking statements because 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 words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected.While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. 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 our soon to be filed annual report on Form 10-K for the year ended December 25, 2018, including the sections thereof captioned “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” These filings and others are available online at www.sec.gov, ir.habitburger.com or upon request from The Habit.We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the ways that we expect. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.Non-GAAP Financial MeasuresTo supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those discussed above. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. We use non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that they provide useful information about operating results, enhance understanding of past performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. However, when analyzing the Company’s operating performance, investors should not consider adjusted earnings per fully distributed weighted average share or adjusted fully distributed pro forma net income in isolation or as substitutes for net income (loss), cash flows from operating activities or other operation statement or cash flow statement data prepared in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies.Consolidated Statement of Operations Data (unaudited):Our operating results are presented as a percentage of total revenue, with the exception of restaurant operating costs, depreciation and amortization expense, pre-opening costs, asset impairment and loss on disposal of assets, which are presented as a percentage of restaurant revenue.
Selected Balance Sheet and Selected Operating Data (unaudited):


The following table includes a reconciliation of net income to adjusted EBITDA:
The following is a reconciliation of GAAP net income and net income per share to adjusted fully distributed pro forma net income and adjusted fully distributed pro forma net income per share:

 

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