EXHIBIT 99.1
Fogo de Chao, Inc. Reports Third Quarter 2015 Results
DALLAS, Nov. 3, 2015 (GLOBE NEWSWIRE) -- Fogo de Chão, Inc. (NASDAQ:FOGO) today reported financial results for its fiscal third quarter ended September 27, 2015.
Key Highlights for the Third Quarter of 2015 include:
- Total revenue increased 7.4%, on a World Cup and constant currency(1) adjusted basis to $61.0 million.
- U.S. company-owned comparable restaurant sales increased 2.8%.
- Adjusted EBITDA(2) increased 6.8%(1) year-over-year to $13.3 million.
- Net income was $7.8 million, compared to $4.5 million in the third quarter of 2014.
- Adjusted net income(2) was $5.3 million, or $0.18 per diluted share.
(1) In order to assess how the business performed in the current period, we have adjusted the prior period to exclude the estimated non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil, as well as reporting on a constant currency basis. We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations.
(2) Adjusted EBITDA and adjusted net income are non-GAAP measures. A reconciliation of GAAP net income to each of these measures is included in the accompanying financial data. See also "Non-GAAP Financial Measures."
"We are pleased with our results this quarter and remain excited about the growth opportunities ahead," said Larry Johnson, Chief Executive Officer of Fogo de Chão, Inc. "Total sales growth was 7.4% for the quarter when adjusted for foreign currency and lapping the 2014 World Cup benefit in Brazil. U.S. comparable restaurant sales increased by 2.8%, successfully rolling over an impressive 5.3% for the same quarter last year.
"We are confident we can deliver long-term annual EPS growth of 18% to 20% driven by expansion in our restaurant base, increase in comparable restaurant sales, leverage on operating and G&A costs, and preserving our strong four wall restaurant margins as we grow," said Johnson.
Third Quarter 2015 Financial Results
Total revenue for the third quarter of fiscal 2015 was $61.0 million compared to $63.7 million in the third quarter of 2014. The $2.7 million decrease is primarily attributable to a $5.5 million negative foreign exchange impact, a $2.2 million decrease in sales in Brazil attributable to the 2014 World Cup, offset by increases in comparable restaurant sales in the U.S. and new restaurant locations opened since the prior quarter. On a World Cup and constant currency adjusted basis, total revenue increased 7.4%. On a World Cup adjusted basis, company-owned comparable restaurant sales increased 1.5%.
U.S. restaurant revenue increased 9.2% to $51.0 million in the third quarter of 2015 from $46.7 million in the third quarter of 2014 primarily due to a 2.8% increase in comparable restaurant sales combined with an increase in sales from new unit development. The increase in U.S. comparable restaurant sales included an increase in traffic offset by a decrease in average guest check.
Brazil restaurant revenue was $10.0 million in the third quarter of 2015 compared to $16.3 million in the third quarter of 2014. The change in revenue compared to last year was driven largely by a $5.5 million foreign exchange impact and the lapping of a $2.2 million World Cup sales benefit in the third quarter of 2014. Excluding the estimated sales benefit of the World Cup in last year's third quarter, comparable restaurant sales in Brazil would have decreased approximately 3.2%.
GAAP net income for the third quarter of 2015 was $7.8 million, compared to a net income of $4.5 million in the third quarter of 2014. Adjusted net income in the third quarter of 2015 was $5.3 million, or $0.18 per diluted share, compared to $5.4 million, or $0.18 per diluted share in the third quarter of 2014 on a World Cup and constant currency basis. A reconciliation between GAAP net income and adjusted net income is included in the accompanying financial data.
Development Update
This month, the Company expects to open its second Las Vegas area restaurant in Summerlin, Nevada and its second Houston area restaurant in The Woodlands, Texas. Additionally, there are three restaurants under construction in San Francisco, New Orleans, and a third Chicago area location in Naperville, Illinois.
"Given the status of these construction timelines, we are highly confident we will meet our previously stated goal of opening at least five company-owned restaurants and one joint venture restaurant in 2015. In terms of future growth, in addition to our previously mentioned restaurants under construction, we have four signed leases for 2016 and two in 2017, all in the U.S. We expect to open up to six restaurants in the U.S. during 2016," said Johnson. "The successful execution of our development goals demonstrates the momentum of the brand and our ability to grow the business in a sustainable manner for the long-term."
As of September 27, 2015, the Company has 36 company-owned restaurants, ten of which are in Brazil, and one joint venture restaurant in Mexico City.
Investors are reminded that the actual number and timing of new restaurant openings is subject to a number of factors outside of the Company's control including, but not limited to, weather conditions and factors under the control of landlords, contractors and regulatory/licensing authorities.
2015 Outlook
Based on current information, the Company is updating its guidance for the 53-week fiscal year 2015, which ends on January 3, 2016:
- Total revenue of $271.0 million, assuming an exchange rate of 3.31 Brazilian reais to 1 US dollar (previously $273.0 million, assuming an exchange rate of 3.14 Brazilian reais to 1 US dollar);
- Company-owned comparable restaurant sales growth of 1% to 2% on a World Cup adjusted basis (the one-time sales benefit of the World Cup in 2014 is estimated at $5.0 million), in line with our previous guidance;
- Restaurant contribution margin of 31.0% to 31.5%, in line with our previous guidance;
- Pre-opening expenses of $5.0 million to $5.7 million (previously a range of $3.8 million to $4.5 million) due to the timing of new store openings in 2016;
- Adjusted general and administrative expenses of $18.0 million to $18.5 million (previously a range of $19.0 million to $19.5 million);
- Opening of five Company-owned restaurants and one joint venture restaurant, in line with our previous guidance; and
- Capital expenditures of $24.0 million to $28.0 million; in line with our previous guidance.
Guidance Policy
The Company provides annual guidance as it relates to revenue, comparable restaurant sales growth, restaurant contribution margin, and development schedule and will only provide updates if there is a material change versus the original guidance. Management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.
Conference Call/ Webcast
The Company will host a conference call to discuss its third quarter 2015 financial results today at 5:00 PM Eastern Time. Hosting the call will be Larry Johnson, Chief Executive Officer, Barry McGowan, President, and Tony Laday, Chief Financial Officer.
The conference call can be accessed live over the phone by dialing (877) 407-0789 or for international callers by dialing (201) 689-8562. A replay will be available two hours after the call and can be accessed by dialing (877) 870-5176 or for international callers by dialing (858) 384-5517; the passcode is 13621257. The replay will be available through Tuesday, November 10, 2015. The conference call will also be webcast live and later archived on Fogo's corporate website at ir.fogodechao.com under the 'News & Events' section.
About Fogo de Chão
Fogo de Chão (fogo-dee-shoun) is a leading Brazilian steakhouse, or churrascaria, which has specialized for over 35 years in fire-roasting high-quality meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. Fogo delivers a distinctive and authentic Brazilian dining experience through the combination of high-quality Brazilian cuisine and a differentiated service model known as espeto corrido (Portuguese for "continuous service") delivered by gaucho chefs. Fogo offers its guests a tasting menu of meats featuring up to 20 cuts, a gourmet Market Table with seasonal salads and fresh vegetables, seafood, desserts, signature cocktails and an award-winning wine list. The first Fogo de Chão opened in Brazil in 1979. The Company currently operates 26 restaurants in the United States, 10 in Brazil and one joint venture restaurant in Mexico.
Safe Harbor Statement
This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, guidance, future plans, objectives and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. Forward-looking statements can also be identified by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "seeks," "intends," "targets" or the negative of these terms or other comparable terminology. Forward-looking statements are not guarantees of future performance and actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the section entitled "Risk Factors" in our final prospectus filed on June 19, 2015. Except as required by applicable securities law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Non-GAAP Financial Measures
The Company uses the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted net income (loss), and Adjusted weighted average shares (collectively the "non-GAAP financial measures"). 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 Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they 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 non-GAAP measures used by the Company in this press release may be different from the methods used by other companies.
| Key Financial Data | Thirteen Week Periods Ended | Constant Currency (a) |
| (in thousands, except restaurant and per share amounts) | September 27, | September 28, | | | September 28, | | | World Cup (b) |
| | 2015 | 2014 | Change | Change | 2014 | Change | Change | Change |
| Comparable Store Sales: | | | | | | | | |
| U.S. | 2.8% | 5.3% | | | | | | |
| Brazil | -15.8% | 18.5% | | | | | | |
| Brazil adjusted for World Cup | -3.2% | N/A | | | | | | |
| Consolidated | -1.7% | 8.1% | | | | | | |
| Consolidated adjusted for World Cup | 1.5% | N/A | | | | | | |
| | | | | | | | | |
| Restaurants opened during period | -- | -- | | | | | | |
| Restaurants open at period end | 37 | 33 | | | | | | |
| | | | | | | | | |
| Revenue(c): | | | | | | | | |
| U.S. | $ 50,953 | $ 46,670 | $ 4,283 | 9.2% | | | | |
| Brazil | $ 9,998 | $ 16,340 | $ (6,342) | -38.8% | $ 10,842 | $ (844) | -7.8% | 6.1% |
| Consolidated | $ 60,969 | $ 63,694 | $ (2,725) | -4.3% | $ 58,196 | $ 2,773 | 4.8% | 7.4% |
| | | | | | | | | |
| Adjusted EBITDA | $ 13,262 | $ 15,112 | $ (1,850) | -12.2% | $ 13,474 | $ (212) | -1.6% | 6.8% |
| | | | | | | | | |
| Net income attributable to Fogo de Chão, Inc. | $ 7,798 | $ 4,492 | $ 3,306 | 73.6% | $ 3,191 | $ 4,607 | 144.4% | |
| Adjusted Net Income | $ 5,284 | $ 7,092 | $ (1,808) | -25.5% | $ 6,059 | $ (775) | -12.8% | -1.3% |
| | | | | | | | | |
| Diluted Earnings Per Share | $ 0.27 | $ 0.20 | $ 0.07 | 35.0% | $ 0.14 | $ 0.13 | 92.9% | |
| Adjusted Diluted Earnings Per Share | $ 0.18 | $ 0.24 | $ (0.06) | -25.0% | $ 0.21 | $ (0.03) | -14.3% | 0.0% |
| | | | | | | | | |
| | Thirty-Nine Week Periods Ended | Constant Currency (a) |
| | September 27, | September 28, | | | September 28, | | | World Cup (b) |
| | 2015 | 2014 | Change | Change | 2014 | Change | Change | Change |
| Comparable Store Sales: | | | | | | | | |
| U.S. | 2.4% | 2.6% | | | | | | |
| Brazil | -12.5% | 15.6% | | | | | | |
| Brazil adjusted for World Cup | -1.6% | N/A | | | | | | |
| Consolidated | -0.8% | 5.0% | | | | | | |
| Consolidated adjusted for World Cup | 1.6% | N/A | | | | | | |
| | | | | | | | | |
| Restaurants opened during period | 3 | 2 | | | | | | |
| Restaurants open at period end | 37 | 33 | | | | | | |
| | | | | | | | | |
| Revenue(c): | | | | | | | | |
| U.S. | $ 161,745 | $ 146,251 | $ 15,494 | 10.6% | | | | |
| Brazil | $ 32,344 | $ 46,618 | $ (14,274) | -30.6% | $ 34,193 | $ (1,849) | -5.4% | 5.3% |
| Consolidated | $ 194,138 | $ 193,553 | $ 585 | 0.3% | $ 181,128 | $ 13,010 | 7.2% | 9.3% |
| | | | | | | | | |
| Adjusted EBITDA | $ 43,813 | $ 45,293 | $ (1,480) | -3.3% | $ 41,825 | $ 1,988 | 4.8% | 11.2% |
| | | | | | | | | |
| Net income attributable to Fogo de Chão, Inc. | $ 14,924 | $ 10,939 | $ 3,985 | 36.4% | $ 8,258 | $ 6,666 | 80.7% | |
| Adjusted Net Income | $ 18,855 | $ 20,585 | $ (1,730) | -8.4% | $ 18,447 | $ 408 | 2.2% | 12.2% |
| | | | | | | | | |
| Diluted Earnings Per Share | $ 0.59 | $ 0.48 | $ 0.11 | 22.9% | $ 0.36 | $ 0.23 | 63.9% | |
| Adjusted Diluted Earnings Per Share | $ 0.74 | $ 0.81 | $ (0.07) | -8.6% | $ 0.73 | $ 0.01 | 1.4% | 12.1% |
| | | | | | | | | |
| (a) We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations. |
| (b) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil. |
| (c) We have two operating segments: United States and Brazil. Our joint venture in Mexico is included in the United States for segment reporting purposes as the operations of the joint venture are monitored by the United States segment management. |
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| Fogo de Chão, Inc. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
| (in thousands, except share and per share amounts) |
| | | | | |
| | Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended |
| | September 27, | September 28, | September 27, | September 28, |
| | 2015 | 2014 | 2015 | 2014 |
| Revenue | $ 60,969 | $ 63,694 | $ 194,138 | $ 193,553 |
| Restaurant operating costs: | | | | |
| Food and beverage costs | 18,593 | 18,819 | 58,504 | 58,145 |
| Compensation and benefit costs | 13,176 | 13,047 | 43,202 | 40,719 |
Occupancy and other operating expenses (excluding
depreciation and amortization) | 11,117 | 11,056 | 33,678 | 33,041 |
| Total restaurant operating costs | 42,886 | 42,922 | 135,384 | 131,905 |
| Marketing and advertising costs | 1,338 | 1,431 | 4,609 | 4,280 |
| General and administrative costs | 4,082 | 5,730 | 26,968 | 15,534 |
| Pre-opening costs | 853 | 170 | 2,334 | 1,408 |
| Loss on extinguishment/modification of debt | -- | -- | 5,991 | 3,090 |
| Depreciation and amortization | 3,100 | 2,995 | 9,237 | 8,720 |
| Other operating (income) expense, net | 45 | 61 | (123) | (52) |
| Total costs and expenses | 52,304 | 53,309 | 184,400 | 164,885 |
| Income from operations | 8,665 | 10,385 | 9,738 | 28,668 |
| Other income (expense): | | | | |
| Interest expense, net | (916) | (3,962) | (8,336) | (13,343) |
| Other income (expense), net | (43) | (1) | (38) | (5) |
| Total other income (expense), net | (959) | (3,963) | (8,374) | (13,348) |
| Income before income taxes | 7,706 | 6,422 | 1,364 | 15,320 |
| Income tax expense (benefit) | (253) | 2,104 | (13,582) | 4,555 |
| Net income | 7,959 | 4,318 | 14,946 | 10,765 |
| Less: Net income (loss) attributable to noncontrolling interest | 161 | (174) | 22 | (174) |
| Net income attributable to Fogo de Chão, Inc. | $ 7,798 | $ 4,492 | $ 14,924 | $ 10,939 |
| Net income | $ 7,959 | $ 4,318 | $ 14,946 | $ 10,765 |
| Other comprehensive loss: | | | | |
| Currency translation adjustment | (17,447) | (11,127) | (30,034) | (4,615) |
| Total other comprehensive loss | $ (17,447) | $ (11,127) | $ (30,034) | $ (4,615) |
| Comprehensive income (loss) | (9,488) | (6,809) | (15,088) | 6,150 |
Less: Comprehensive loss attributable to noncontrolling
interest | (24) | (171) | (93) | (171) |
| Comprehensive income (loss) attributable to Fogo de Chão, Inc. | $ (9,464) | $ (6,638) | $ (14,995) | $ 6,321 |
| Earnings per common share attributable to Fogo de Chão, Inc.: | | | | |
| Basic | $ 0.28 | $ 0.20 | $ 0.61 | $ 0.48 |
| Diluted | $ 0.27 | $ 0.20 | $ 0.59 | $ 0.48 |
| Weighted average common shares outstanding: | | | | |
| Basic | 27,914,782 | 22,669,508 | 24,621,063 | 22,669,508 |
| Diluted | 29,223,549 | 23,022,215 | 25,389,825 | 22,999,454 |
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| Fogo de Chão, Inc. |
| UNAUDITED SELECTED CONSOLIDATED BALANCE SHEET DATA |
| (in thousands) |
| | | |
| | September 27, | December 28, |
| | 2015 | 2014 |
| | | |
| Cash and cash equivalents | $ 21,788 | $ 19,387 |
| Total assets | 457,713 | 476,180 |
| Long-term debt, including current portion | 162,260 | 242,056 |
| Deferred tax liabilities | 15,863 | 29,982 |
| Total liabilities | 218,724 | 320,721 |
| Total Fogo de Chão, Inc. shareholders' equity | 237,215 | 154,081 |
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| | | | | |
| Reconciliation to Adjusted Net Income: | Thirteen Week Periods Ended | Constant Currency (h) | World Cup (i) |
| (in thousands, except share and per share amounts) | September 27, | September 28, | September 28, | September 28, |
| | 2015 | 2014 | 2014 | 2014 |
| Net income attributable to Fogo de Chão, Inc. | $ 7,798 | $ 4,492 | $ 3,191 | $ 2,484 |
| Credit Facility Interest adjustment (a) | — | 3,046 | 3,046 | 3,046 |
| Management and consulting fees(b) | — | 205 | 205 | 205 |
| Retention agreement payments(c) | 312 | 312 | 312 | 312 |
| IPO related expenses(d) | — | 636 | 636 | 636 |
| Recurring public company costs (e) | — | (250) | (250) | (250) |
| Income tax expense (benefit) | (253) | 2,104 | 1,869 | 1,525 |
| Pre-tax adjusted net income | 7,857 | 10,545 | 9,009 | 7,958 |
| Estimated tax provision (f) | 2,573 | 3,453 | 2,950 | 2,606 |
| Adjusted Net income | $ 5,284 | $ 7,092 | $ 6,059 | $ 5,352 |
| | | | | |
| Adjusted net income per common share attributable to Fogo de Chão, Inc.: | | | | |
| Basic | $ 0.19 | $ 0.31 | $ 0.27 | $ 0.24 |
| Diluted | $ 0.18 | $ 0.24 | $ 0.21 | $ 0.18 |
| | | | | |
| Weighted average common shares outstanding: | | | | |
| Basic | 27,914,782 | 22,669,508 | 22,669,508 | 22,669,508 |
| Diluted | 29,223,549 | 23,022,215 | 23,022,215 | 23,022,215 |
| Adjusted diluted shares outstanding (g) | 29,223,549 | 29,223,549 | 29,223,549 | 29,223,549 |
| | | | | |
| (a) Credit facility interest represents the adjustment to interest expense that would have been recorded if the debt extinguishment had occurred at the beginning of 2014. |
| (b) Consists primarily of payments to an affiliate of THL and advisors engaged by an affiliate of THL for advisory and consulting services. |
| (c) Consists of cash payments to our regional managers pursuant to retention and non-compete agreements executed in 2012. The final payments under these agreements are due in October 2015. |
| (d) Represents external professional service costs incurred as we assessed and initiated the process of becoming a public company. These costs include accounting and legal fees for public readiness services, documentation of internal controls to comply with Section 404 of the Sarbanes-Oxley Act and external auditor fees incurred for review of all fiscal quarters included in the registration statement on form S-1. |
| (e) Recurring public company costs represent estimated costs that we would have incurred if the IPO had occurred at the beginning of 2014. |
| (f) Our estimated effective tax rate is 32.75% |
| (g) Adjusted diluted shares outstanding as of September 27, 2015 is used for both periods. |
| (h) We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations. |
| (i) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil and stated the results in constant currency. |
| | | | |
| | | | |
| Reconciliation to Adjusted Net Income: | Thirty-Nine Week Periods Ended | Constant Currency (i) | World Cup (j) |
| (in thousands, except share and per share amounts) | September 27, | September 28, | September 28, | September 28, |
| | 2015 | 2014 | 2014 | 2014 |
| Net income attributable to Fogo de Chão, Inc. | $ 14,924 | $ 10,939 | $ 8,258 | $ 6,623 |
| Credit Facility Interest adjustment(a) | 5,510 | 10,464 | 10,464 | 10,464 |
| Loss on extinguishment/modification of debt(b) | 5,991 | 3,090 | 3,090 | 3,090 |
| Management and consulting fees(c) | 8,136 | 661 | 661 | 661 |
| Retention agreement payments(d) | 936 | 938 | 938 | 938 |
| IPO related expenses(e) | 782 | 712 | 712 | 712 |
| Recurring public company costs(f) | (500) | (750) | (750) | (750) |
| One-time Stock Comp | 5,840 | — | — | — |
| Income tax expense (benefit) | (13,582) | 4,555 | 4,058 | 3,260 |
| Pre-tax adjusted net income | 28,037 | 30,609 | 27,431 | 24,998 |
| Estimated tax provision(g) | 9,182 | 10,024 | 8,984 | 8,187 |
| Adjusted Net Income | $ 18,855 | $ 20,585 | $ 18,447 | $ 16,811 |
| | | | | |
| Adjusted net income per common share attributable to Fogo de Chão, Inc.: | | | | |
| Basic | $ 0.77 | $ 0.91 | $ 0.80 | $ 0.73 |
| Diluted | $ 0.74 | $ 0.81 | $ 0.73 | $ 0.66 |
| | | | | |
| Weighted average common shares outstanding: | | | | |
| Basic | 24,621,063 | 22,669,508 | 22,669,508 | 22,669,508 |
| Diluted | 25,389,825 | 22,999,454 | 22,999,454 | 22,999,454 |
| Adjusted diluted shares outstanding(h) | 25,389,825 | 25,389,825 | 25,389,825 | 25,389,825 |
| | | | | |
| (a) Credit facility interest represents the adjustment to interest expense that would have been recorded if the debt extinguishment had occurred at the beginning of 2014. |
| (b) Consists primarily of non-cash charges resulting from the extinguishment/modification of our credit facilities. |
| (c) Consists primarily of payments to an affiliate of THL and advisors engaged by an affiliate of THL for advisory and consulting services. |
| (d) Consists of cash payments to our regional managers pursuant to retention and non-compete agreements executed in 2012. The final payments under these agreements are due in October 2015. |
| (e) Represents external professional service costs incurred as we assessed and initiated the process of becoming a public company. These costs include accounting and legal fees for public readiness services, documentation of internal controls to comply with Section 404 of the Sarbanes-Oxley Act and external auditor fees incurred for review of all fiscal quarters included in the registration statement on form S-1. |
| (f) Recurring public company costs represent estimated costs that we would have incurred if the IPO had occurred at the beginning of 2014. |
| (g) Our estimated effective tax rate is 32.75%. |
| (h) Adjusted diluted shares outstanding as of September 27, 2015 is used for both periods. |
| (i) We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations. |
| (j) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil and stated the results in constant currency. |
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| Reconciliation to Adjusted EBITDA: | Thirteen Week Periods Ended | Constant Currency (f) | World Cup (g) |
| (in thousands) | September 27, | September 28, | September 28, | September 28, |
| | 2015 | 2014 | 2014 | 2014 |
| Net income attributable to Fogo de Chão, Inc. | $ 7,798 | $ 4,492 | $ 3,191 | $ 2,484 |
| Depreciation and amortization expense(a) | 3,037 | 2,995 | 2,804 | 2,804 |
| Interest expense, net | 916 | 3,962 | 4,051 | 4,051 |
| Income tax expense (benefit) | (253) | 2,104 | 1,869 | 1,525 |
| EBITDA | 11,498 | 13,553 | 11,915 | 10,864 |
| Pre-opening costs | 853 | 44 | 44 | 44 |
| Share-based compensation | 417 | 189 | 189 | 189 |
| Management and consulting fees(b) | — | 205 | 205 | 205 |
| Retention agreement payments(c) | 312 | 312 | 312 | 312 |
| IPO related expenses(d) | — | 636 | 636 | 636 |
| Non-cash adjustments(e) | 182 | 173 | 173 | 173 |
| Adjusted EBITDA | $ 13,262 | $ 15,112 | $ 13,474 | $ 12,423 |
| | | | | |
| (a) For the thirteen weeks ended September 27, 2015, excludes $63 of depreciation expense attributable to our joint venture in Mexico. |
| (b) Consists primarily of payments to an affiliate of THL and advisors engaged by an affiliate of THL for advisory and consulting services. |
| (c) Consists of cash payments to our regional managers pursuant to retention and non-compete agreements executed in 2012. The final payments under these agreements are due in October 2015. |
| (d) Consists primarily of external professional service costs incurred as we assessed and initiated the process of becoming a public company. These costs include accounting and legal fees for public readiness services, documentation of internal controls to comply with Section 404 of the Sarbanes-Oxley Act and external auditor fees incurred for review of all fiscal quarters included in the registration statement. |
| (e) Consists of non-cash portion of straight line rent expense. |
| (f) We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations. |
| (g) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil and stated the results in constant currency. |
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| Reconciliation to Adjusted EBITDA: | Thirty-Nine Week Periods Ended | Constant Currency (h) | World Cup (i) |
| (in thousands) | September 27, | September 28, | September 28, | September 28, |
| | 2015 | 2014 | 2014 | 2014 |
| Net income attributable to Fogo de Chão, Inc. | $ 14,924 | $ 10,939 | $ 8,258 | $ 6,623 |
| Depreciation and amortization expense(a) | 9,130 | 8,720 | 8,266 | 8,266 |
| Interest expense, net | 8,336 | 13,343 | 13,507 | 13,507 |
| Income tax expense (benefit) | (13,582) | 4,555 | 4,058 | 3,260 |
| EBITDA | 18,808 | 37,557 | 34,089 | 31,656 |
| Loss on extinguishment/modification of debt(b) | 5,991 | 3,090 | 3,090 | 3,090 |
| Pre-opening costs | 2,036 | 1,282 | 1,282 | 1,282 |
| Share-based compensation(c) | 6,511 | 567 | 567 | 567 |
| Management and consulting fees(d) | 8,137 | 661 | 661 | 661 |
| Retention agreement payments(e) | 936 | 938 | 938 | 938 |
| IPO related expenses(f) | 782 | 712 | 712 | 712 |
| Non-cash adjustments(g) | 612 | 486 | 486 | 486 |
| Adjusted EBITDA | $ 43,813 | $ 45,293 | $ 41,825 | $ 39,392 |
| | | | | |
| (a) For the thirty nine weeks ended September 27, 2015, excludes $107 of depreciation expense attributable to our joint venture in Mexico. |
| (b) Consists primarily of non-cash charges resulting from the extinguishment/modification of our credit facilities. |
| (c) For the thirty nine weeks ended September 27, 2015, includes $5.7 million of compensation expense recognized upon the closing of the IPO attributable to the vesting of stock options. |
| (d) Consists primarily of payments to an affiliate of THL and advisors engaged by an affiliate of THL for advisory and consulting services. |
| (e) Consists of cash payments to our regional managers pursuant to retention and non-compete agreements executed in 2012. The final payments under these agreements are due in October 2015. |
| (f) Consists primarily of external professional service costs incurred as we assessed and initiated the process of becoming a public company. These costs include accounting and legal fees for public readiness services, documentation of internal controls to comply with Section 404 of the Sarbanes-Oxley Act and external auditor fees incurred for review of all fiscal quarters included in the registration statement. |
| (g) Consists of non-cash portion of straight line rent expense. |
| (h) We compare the percent change in the results from one period to another period using constant currency to exclude the effects of foreign currency fluctuations. |
| (i) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil and stated the results in constant currency. |
| |
| |
| Supplemental Selected Constant Currency and World Cup Adjustment Information |
| | | | | |
| | Thirteen Week Periods Ended | | World Cup (b) |
| Constant Currency reconciliation | September 27, | September 28, | | September 28, |
| | 2015 | 2014 | Adjustment | 2014 |
| | | | |
| Revenue as reported | $ 60,969 | $ 63,694 | $ 2,167 | $ 61,527 |
| Effect of foreign currency(a) | — | (5,498) | (751) | (4,747) |
| Revenue at constant currency | $ 60,969 | $ 58,196 | | $ 56,780 |
| | | | | |
| Adjusted EBITDA | $ 13,262 | $ 15,112 | $ 1,608 | $ 13,504 |
| Effect of foreign currency(a) | — | (1,638) | (557) | (1,081) |
| Adjusted EBITDA at constant currency | $ 13,262 | $ 13,474 | | $ 12,423 |
| Adjusted EBITDA margin at constant currency | 21.8% | 23.2% | | 21.9% |
| | | | | |
| Restaurant contribution | $ 18,083 | $ 20,772 | $ 1,608 | $ 19,164 |
| Effect of foreign currency(a) | — | (2,043) | (557) | (1,486) |
| Restaurant contribution at constant currency | $ 18,083 | $ 18,729 | | $ 17,678 |
| Restaurant contribution margin at constant currency | 29.7% | 32.2% | | 31.1% |
| | | | | |
| | | | | |
| | Thirty-Nine Week Periods Ended | | World Cup (b) |
| Constant Currency reconciliation | September 27, | September 28, | | September 28, |
| | 2015 | 2014 | Adjustment | 2014 |
| | | | |
| Revenue as reported | $ 194,138 | $ 193,553 | $ 5,004 | $ 188,549 |
| Effect of foreign currency(a) | — | (12,425) | (1,529) | (10,896) |
| Revenue at constant currency | $ 194,138 | $ 181,128 | | $ 177,653 |
| | | | | |
| Adjusted EBITDA | $ 43,813 | $ 45,293 | $ 3,513 | $ 41,780 |
| Effect of foreign currency(a) | — | (3,468) | (1,080) | (2,388) |
| Adjusted EBITDA at constant currency | $ 43,813 | $ 41,825 | | $ 39,392 |
| Adjusted EBITDA margin at constant currency | 22.6% | 23.1% | | 22.2% |
| | | | | |
| Restaurant contribution | $ 58,754 | $ 61,648 | $ 3,513 | $ 58,135 |
| Effect of foreign currency(a) | — | (4,354) | (1,080) | (3,274) |
| Restaurant contribution at constant currency | $ 58,754 | $ 57,294 | | $ 54,861 |
| Restaurant contribution margin at constant currency | 30.3% | 31.6% | | 30.9% |
| | | | | |
| (a) As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of certain results on a constant currency basis in addition to reported results helps improve investors' ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a constant currency basis as one measure to evaluate our performance. We calculate constant currency by retranslating results across periods presented using a derived exchange rate for the most current period presented based on actual results. The tables calculate constant currency at a foreign currency exchange rate of 3.4886 and 3.1314 Brazilian reais to 1 US dollar, which represents the derived exchange rates for the thirteen and thirty nine week periods ended September 27, 2015, respectively. These results should be considered in addition to, not as a substitute for, results reported in accordance with US GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with US GAAP. |
| (b) In order to assess how our business performed in the current period, we have adjusted the prior period to exclude the non-recurring benefit of business that was generated as a result of the 2014 World Cup held in Brazil and stated the results in constant currency. |
CONTACT: Investor Contact:
IR@fogodechao.com
(972) 361-6225
Media Contact:
Kristina Jorge, ICR
Kristina.Jorge@icrinc.com
(646) 277-1234