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BJ’s Restaurants, Inc. Reports Fiscal 2019 Third Quarter Results
Third Quarter 2019 Highlights Compared to Third Quarter 2018
“Third quarter casual dining sales were soft across the industry,” commented
“During the quarter we continued making important investments in the business focused on building future sales and improving our already strong operations-based culture. For example, the recently completed investments in our Gold Standard Kitchen Systems are improving our daily operations as reflected by solid increases in our speed of service and food scores from our guest surveys, increased kitchen labor productivity and recently improved retention rates for our hourly kitchen team members. As expected, the addition of our popular slow roasted tri tip sirloin to our Daily Brewhouse Specials has been well received by guests and has proven effective in building sales and driving value as reflected in a 1.5% rise in our guest survey value scores in the quarter. These investments, coupled with our other ongoing sales and productivity initiatives, will enable us to continue expanding our industry leading guest traffic per square foot.”
During the third quarter, the Company opened its first
During the third quarter of 2019, the Company repurchased and retired approximately 1.1 million shares of its common stock at a cost of approximately
The Company’s Board of Directors increased the Company’s quarterly cash dividend by 8.3% to
Forward-Looking Statements Disclaimer
Certain statements in the preceding paragraphs and all other statements that are not purely historical constitute “forward-looking” statements for purposes of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. Such statements include, but are not limited to, those regarding expected comparable restaurant sales and margin growth in future periods, total potential domestic capacity, the success of various sales-building and productivity initiatives, future guest traffic trends, construction cost savings initiatives and the number and timing of new restaurants expected to be opened in future periods. These “forward-looking” statements involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those projected or anticipated. Factors that might cause such differences include, but are not limited to: (i) our ability to manage new restaurant openings, (ii) construction delays, (iii) labor shortages, (iv) increases in minimum wage and other employment related costs, including compliance with the Patient Protection and Affordable Care Act and minimum salary requirements for exempt team members, (v) the effect of credit and equity market disruptions on our ability to finance our continued expansion on acceptable terms, (vi) food quality and health concerns and the effect of negative publicity about us, our restaurants, other restaurants, or others across the food supply chain, due to food borne illness or other reasons, whether or not accurate, (vii) factors that impact
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Percentages reflected above may not reconcile due to rounding.
(1) Percentages represent percent of total revenues.
Note Regarding Non-GAAP Financial Measures
The Company is reporting below certain non-GAAP financial results and related reconciliations to the corresponding GAAP financial measures. These non-GAAP measures are not in accordance with, or a substitute for, measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. These measures should only be used to evaluate the Company's results of operations in conjunction with corresponding GAAP measures.
Restaurant Level Operating Margin
Restaurant level operating margin, a non-GAAP financial measure, is equal to the revenues generated by our restaurants less their direct operating costs which consist of cost of sales, labor and benefits, and occupancy and operating costs. This performance measure includes only the costs that restaurant level managers can directly control and excludes other operating costs that are essential to conduct the Company’s business, as detailed in the table below. Management uses restaurant level operating margin as a supplemental measure of restaurant performance. Management believes restaurant level operating margin is useful to investors in that it highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures. Because other companies may calculate restaurant level operating margin differently than we do, restaurant level operating margin as presented herein may not be comparable to similarly titled measures reported by other companies.
A reconciliation of income from operations to restaurant level operating margin for the third quarter and nine months ended
Percentages above represent percent of total revenues and may not reconcile due to rounding.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)
Adjusted EBITDA is a non-GAAP financial measure that represents the sum of net income, interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, other expense (income) and loss on disposal of assets detailed within the reconciliation below. Management uses Adjusted EBITDA as a supplemental measure of our performance. Management believes these measures are useful to investors in that they highlight cash flow and trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures. Because other companies may calculate these measures differently than we do, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies.
The following table illustrates the impact from the adoption of ASU 2016-02 on our results for the third quarter and nine months ended
Source: BJ's Restaurants, Inc.