Chuy's Holdings reports Q3 net earnings of US$2.8M on revenue of US$53.5M, compared with year-ago earnings of US$790,000 on revenue of US$44.9M
October 30, 2013
– Chuy’s Holdings, Inc. (CHUY) today announced financial results for the third quarter ended September 29, 2013.
Highlights for the third quarter ended September 29, 2013 were as follows:
Revenue increased 19.0% to $53.5 million from $44.9 million in the third quarter of 2012.
On a calendar basis, comparable restaurant sales increased 3.1% for the thirteen-week period ended September 29, 2013 compared to the thirteen-week period ended September 30, 2012. On a fiscal quarter basis, which includes a one-week calendar shift in the comparison due to the 53rd week in fiscal 2012, sales for the same restaurants increased 1.9%.
Net income increased to $2.8 million from $790,000 during the same period in 2012. Net income for the third quarter of 2012 included a $1.6 million write-off of deferred loan origination costs associated with a pay down of debt from the Company’s IPO proceeds, or approximately $1.1 million, net of tax. Net income available to common stockholders increased to $2.8 million from $533,000. Diluted income per share was $0.17 compared to $0.05 in the prior year period.
Pro forma net income(1) increased 26.6% to $2.8 million, or $0.17 per diluted share, from $2.2 million, or $0.13 per diluted share in the third quarter of 2012.
Restaurant-level EBITDA(1) increased 14.0% to $9.8 million from $8.6 million in last year’s third quarter.
Two new restaurants opened during the third quarter of 2013.
(1) Pro forma net income and restaurant-level EBITDA are non-GAAP measures. For reconciliations of restaurant-level EBITDA and pro forma net income to GAAP net income and discussions of why we consider them useful, see the “Reconciliation of Non-GAAP Measures” accompanying this release.
“Our third quarter results maintained our streak of healthy revenue, comparable restaurant sales and earnings growth,” said Steve Hislop, President and Chief Executive Officer of Chuy’s Holdings, Inc. “Our made-from-scratch Tex Mex inspired menu, commitment to value and upbeat, irreverent atmosphere continue to resonate with our guests and drive our business forward. We remain excited about the performance of our newer units, which we believe reinforces the long-term growth opportunity we have to grow the Chuy’s brand, especially in light of the fact that 6 out of our last 8 restaurant openings in 2013 have occurred in new markets. Our ninth and final new unit of 2013 is scheduled to open in the fourth quarter, marking a 23% increase in units for the year, and we are pleased with the progress of our development pipeline, which will include ten to eleven new Chuy’s in 2014.”
Third Quarter 2013 Financial Results
Revenue increased $8.5 million, or 19.0%, to $53.5 million in the third quarter of 2013 compared to the third quarter of 2012. The increase was primarily driven by $9.2 million in incremental revenue from an additional 110 operating weeks provided by 11 new restaurants opened during and subsequent to the third quarter of 2012.
Due to a 53rd week in fiscal 2012, there is a one-week calendar shift in the comparison of the fiscal third quarter of 2013 to the fiscal third quarter of 2012. As a result of this shift, the fiscal third quarter of 2013 included a lower-volume fall week in place of a typically higher volume summer week compared to last year. This shift reduced revenue by approximately $690,000 during the third quarter of 2013.
On a calendar basis, the Company’s comparable restaurant sales increased 3.1% for the 13-week period ended September 29, 2013 compared to the 13-week period ended September 30, 2012. The increase in comparable sales was driven by a 2.0% increase in average check and a 1.1% increase in average weekly customers. Due to the 53rd week in fiscal 2012, and the one week calendar shift previously noted, the comparable restaurant sales calculation above is based on comparing sales in the third fiscal quarter of 2013 to sales in the corresponding calendar period of 2012, as mentioned previously. On a fiscal basis, sales for the same restaurants in the comparable restaurant base in the third fiscal quarter ended September 29, 2013 increased 1.9% compared to the third fiscal quarter ended September 23, 2012. The comparable restaurant base consisted of 31 restaurants during the third quarter of 2013.
Total restaurant operating costs as a percentage of revenue increased to 81.7% in the third quarter of 2013 from 80.9% in the third quarter of 2012, driven primarily by the impact of higher food costs, particularly produce and chicken costs, and higher labor costs as a percentage of revenue driven by increased training and staffing levels at our new restaurants.
Net income available to common stockholders for the third quarter of 2013 was $2.8 million, or $0.17 per diluted share, compared to $533,000, or $0.05 per diluted share, in the third quarter of 2012. Net income for the third quarter of 2012 included a $1.6 million write-off of deferred loan origination costs associated with a pay down of debt from the Company’s IPO proceeds, or approximately $1.1 million, net of tax.
Pro forma net income was $2.8 million or $0.17 per diluted share in the third quarter of 2013, as compared to $2.2 million or $0.13 per diluted share in the third quarter of 2012. A reconciliation between GAAP net income and pro forma net income is included in the accompanying financial data.
During the third quarter, two new Chuy’s restaurants were opened — Greenville, South Carolina; and Madeira, Ohio. Subsequent to the end of the third quarter, an additional Chuy’s restaurant was opened in Kansas City, Missouri. We expect to open our ninth and final restaurant for 2013 in Raleigh, North Carolina.
The Company reaffirms its fiscal year 2013 guidance with pro forma diluted net income per share ranging from $0.68 to $0.70. This compares to pro forma diluted net income per share of $0.60 in 2012. The Company’s 2012 pro forma results included an estimated $0.04 to $0.05 per share positive impact due to a 53rd week during the fiscal year. The pro forma net income guidance for fiscal year 2013 is based, in part, on the following annual assumptions:
Comparable restaurant sales growth of approximately 2.2%, which implies an increase of approximately 1.5% in the fourth quarter (on a comparable calendar week basis);
Restaurant pre-opening expenses of approximately $3.3 million to $3.9 million;
General and administrative expense of approximately $10.3 million to $10.8 million;
A pro forma effective tax rate of approximately 29% to 31%;
The opening of nine new restaurants;
Net capital expenditures (net of tenant improvement allowances) of approximately $19.1 million to $21.2 million; and
Annual weighted average diluted shares outstanding of 16.7 million to 16.8 million shares.
The following definitions apply to these terms as used in this release:
Comparable restaurant sales reflect changes in sales for the comparable group of restaurants over a specified period of time. We consider a restaurant to be comparable in the first full quarter following the 18th month of operations. Changes in comparable sales reflect changes in customer count trends as well as changes in average check.
Average check is calculated by dividing revenue by total entrées sold for a given time period. Average check reflects menu price influences as well as changes in menu mix.
The Company will host a conference call to discuss financial results for the third quarter of 2013 today at 5:00 Eastern Standard Time. Steve Hislop, President and Chief Executive Officer, and Jon Howie, Vice President and Chief Financial Officer will host the call.
The conference call can be accessed live over the phone by dialing 888-820-9416 or for international callers by dialing 913-312-0943. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for international callers; the passcode is 9879838. The replay will be available until November 6, 2013. The conference call will also be webcast live from the Company’s website at www.chuys.com under the investor relations section. An archive of the webcast will also be available through the corporate website shortly after the call has concluded.
Founded in Austin, Texas in 1982, Chuy’s owns and operates 47 full-service restaurants across fourteen states serving a distinct menu of authentic, made from scratch Tex Mex inspired dishes. Chuy’s highly flavorful and freshly prepared fare is served in a fun, eclectic and irreverent atmosphere, while each location offers a unique, “unchained” look and feel, as expressed by the concept’s motto “If you’ve seen one Chuy’s, you’ve seen one Chuy’s!”. For further information about Chuy’s, including the nearest location, visit the Chuy’s website at www.chuys.com.
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