Chuy s Investor Presentation 2 nd Quarter 2017

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Transcription:

Chuy s Investor Presentation 2 nd Quarter 2017

Cautionary Statements Forward-Looking Statements This presentation may include forward-looking statements. These statements reflect the current views of the Company s senior management with respect to future events and financial performance. These statements include forward-looking statements with respect to the Company s business and industry in general. Statements that include the words expect, intend, plan, believe, project, forecast, estimate, may, should, anticipate and similar statements of a future or forward-looking nature identify forwardlooking statements for purposes of the federal securities laws or otherwise. Forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Company s actual results to differ materially from those indicated in these statements. The statements made herein speak only as of the date of this presentation. Non-GAAP Financial Measures This presentation contains certain non-gaap financial measures. A non-gaap financial measure is defined as a numerical measure of a company s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the Company. The Company has provided a reconciliation of non-gaap financial measures to the most directly comparable financial measure in the Appendix to this presentation. The non-gaap financial measures used within this presentation are Adjusted EBITDA and Restaurant-Level Operating Profit. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. For additional information about our non-gaap financial measures, see our earnings releases and filings with the Securities and Exchange Commission. 2

Senior Management Presenters Jon Howie Vice President and Chief Financial Officer Michael Hatcher Vice President of Real Estate and Development 3

If you ve seen one Chuy s, you ve seen one Chuy s! Chuy s is Tex-Mex Unchained! Leave the cookie cutters to the other guys. Each Chuy s has genuine character: a noisy, sprawling Tex-Mex hacienda full of feel-good drinks and home-cooked foods. 4

Chuy s Highlights Fresh, Authentic Mexican and Tex-Mex Inspired Cuisine Considerable Dining Value with Broad Customer Appeal Upbeat Atmosphere Coupled with Irreverent Brand Helps Differentiate Concept Flexible Business Model with Industry Leading Unit Economics Deep Rooted and Inspiring Company Culture Highly Experienced Management Team 5

Industry Leading Operating Metrics 7 consecutive years of comparable restaurant sales growth Comparable restaurant base generated LTM average unit volumes of $4.5 million Highest volume restaurant had LTM sales of $9.1 million Serve approximately 306,000 customers per location per year, on average Comparable restaurant base generated LTM restaurant-level operating margins of 21.1% Average Unit Volume ($Millions) $10.0 Full-Service Mexican Concepts Select Best-in-Class Concepts $8.0 $6.0 $4.0 $2.0 $6.7 $4.5 $3.7 $3.2 $2.5 $5.7 $4.8 $4.5 $4.1 $0.0 6 Source: Calculations based on Company Filings and 2017 Technomic Industry Report as of most recent available fiscal year and estimates. Chuy s based on latest filed LTM period.

Proven Concept with Over a 30-Year History 75 new restaurants opened and 16 new states entered during the last 111 months 1 1982 Founded in Austin Pre-2008 Restaurants Restaurants Opened Since 2008 8 8 2006 Acquired by Goode Partners (Nov ) 2007 Steve Hislop joined as President & CEO 12 2008 Onset of growth initiatives 17 2009 Opened first location outside of TX (Nashville) 23 2010 Opened in AL, KY and TN 31 2011 Opened in IN, KY, TN and GA 39 2012 Opened in FL, OK, TN and KY 48 2013 Opened in AR, FL, VA, NC, SC, MO and OH 59 2014 Opened in AR, IN, FL, NC, VA and GA 69 2015 Opened in AL, AR, FL, OH and OK 80 83 2016 Opened in VA, LA, NC, TN, FL and MD April 2017 Opened in GA & OH 7 Total Restaurants at End of Period

Fresh, Authentic Mexican Cuisine Offer authentic Mexican food using only the freshest ingredients Recipes and cooking techniques originated from friends and family of our founders, who are from Mexico, New Mexico and Texas Commitment to made-from-scratch, freshly prepared cooking Generous portions support value priced offering Customizable food offering is core to the Chuy s concept 8

We Take One Thing Seriously: Our Food! Tex-Mex Ranchero Hatch Green Chile Green Chile Tomatillo Deluxe Tomatillo Creamy Jalapeno Homemade Sauces Chicka-Chicka Boom-Boom Freshly-roasted, hand-pulled chicken & cheese with Boom- Boom sauce, made with cheese, roasted New Mexican green chiles, tomatillos, green onions, cilantro and lime juice. Served with choice of Mexican or green chile rice & refried or charro beans Price: $10.79 Big As Yo Face Burritos A homemade, 12 flour tortilla stuffed with refried beans, cheese and choice of beef or chicken. Served with choice of sauce & choice of Mexican or green chile rice Price: $8.79 - $10.59 Texas Martini Served shaken, not stirred, this south-of-the-border martini features tequila, Patrón Citrónge, fresh lime juice and a jalapeño-stuffed olive Three drinks for the price of one Price: $9.49 9 Note: Prices above represent menu prices in Texas and Oklahoma as of March 26, 2017 which may vary from prices in other states.

Exceptional Dining Value Significant value proposition to customers Only 13 out of 50 menu items priced over $10.00(1) Average check of $14.51 $30.0 Average Check $25.86 $25.0 $21.40 $20.0 $15.0 $14.50 $14.51 $16.68 $17.50 $26.36 $21.40 $17.63 $10.0 $5.0 $0.0 Source: Company filings as of most recent available fiscal year and equity research, and Piper Jaffray Restaurant Benchmark Analysis: 11th Annual Cookbook, Chuy s based on latest filed LTM period. (1) Applies to our tier 1 menu as of March 26, 2017 which is in place at 38 of our 83 restaurants as of that date. 10

Chipotle vs. Chuy s Fast Casual Dining 2,198 Total Restaurants in 47 U.S. States 11.5% 2016 Unit Growth ~$11.34 Average Check (~1.0% Alcohol Mix) Full Service Dining 83 Total Restaurants in 16 U.S. States 15.9% 2016 Unit Growth $14.51 Average Check (18.3% Alcohol Mix) Sample Offerings: Sample Offerings: Entrée: Chicken Burrito $6.50 Entrée: Big As Yo Face Burrito Oven-Roasted Chicken $9.99 Chips & Salsa: $1.95 Total: $8.45 + Includes a side of Rice & Beans Chips & Salsa: Unlimited & Complimentary Total: $9.99 11 Note: Chipotle and Chuy s sample offerings represent menu items and prices from restaurants in the same geographic region as of December 25, 2016. Source: Company data, public filings and equity research as of December 25, 2016. Chuy s average check and alcohol mix based on latest filed LTM period.

Upbeat Atmosphere and Appealing, Irreverent Brand 12

Growth Opportunities 13

Enhanced Restaurant Development Strategy Identify & pursue development in major markets Backfill smaller existing markets to build brand awareness Flexible real estate strategy Conversions and new prototype construction Enhancements to Real Estate Dept. Plan to double restaurant base in next 3 to 5 years. 12 new units opened in 2016 12 to 14 new units expected in 2017 Pre-2008 2008 2009 2010 2011 2012 2013 2014 2016 2017 14 Hub Locations 2015 Note: Map as of May 2017

Industry Leading New Unit Economics Targeted cash-on-cash return beginning in the third operating year of ~30.0% and a sales to investment ratio of 1.9x. Casual Dining Fast Casual New Unit Economics ($000s) LTM Comparable Restaurants Blended Target Actual (7) Target Actual (7) Target Target Target Actual (7) Average Unit Volume $4,542 $3,750 (1) $4,802 $4,500 $3,139 $1,800 $1,300 $1,500 $2,400 Restaurant-Level Operating Profit 958 897 855 556 342 234 225 542 % Margin 21.1% 15.0% - 16.5% 18.7% 19.0% 17.7% 19.0% 18.0% 15.0% 22.6% Average Cash Investment $2,000 (2) $2,000 (6) 3,125 $3,100 $2,400 $1,650 $750 $785 $1,800 Customers Served Per Year (3) ~306,000 -- -- -- -- -- -- -- Sales to Investment Ratio 1.9x (4) 1.5x 1.4x 1.4x 1.1x 1.7x 1.9x 1.3x Cash-on-Cash Return ~30% (5) 28.7% 27.5% 24.0% 20.0%+ 30.0%+ 30.0%+ 30.0%+ Source: Public filings and equity research estimates. Note: Cash-on-Cash Return defined as Restaurant-Level Operating Profit divided by Net Cash Investment excluding Pre-Opening Expense. (1) Represents targeted Normalized Average Unit Volume. (2) Represents Average cash investment based on historical new restaurant openings less land lord allowances and excludes preopening expenses. (3) Estimated as Average Unit Volume divided by LTM Average Check. (4) Represents targeted Year 3 Sales: Investment Ratio. (5) Represents targeted Year 3 Cash-on-Cash Return. (6) Represents targeted cash investment less land lord allowances and excludes preopening expenses. (7) Based on actual data per most recent filing. 15

Financial Summary 16

Seven Straight Years of Comparable Restaurant Sales Growth 4.0% Comparable Sales Growth 3.0% 2.0% 3.1% 3.3% 3.1% 1.0% 2.2% (1) 2.3% 0.0% 0.7% 0.8% -0.7% -1.0% 2010 2011 2012 2013 2014 2015 2016 Q1 2017 KNAPP-TRACK SSS (0.6%) 1.5% 0.6% (1.4%) (0.2%) 1.0% (1.5%) (1.1%) Number of Comparable Restaurants 13 18 24 32 41 51 61 62 17 Note: KNAPP-TRACK is a monthly sales and guest count tracking service for the full service restaurant market in the United States. Source: KNAPP-TRACK and Company data. (1) Adjusted to remove impact of the 53 rd week and extra 1.5 operating days in fiscal 2012.

Demonstrated Revenue and Unit Growth Revenue ($Millions) $350 $300 $250 $200 $150 $100 $50 $0 $330.6 $287.1 $245.1 $204.4 $172.6 $130.6 $78.1 $86.9 2011 2012 2013 2014 2015 2016 Q1 2016 Q1 2017 Total Restaurants 90 80 70 60 50 40 30 20 10 82 80 71 69 59 48 39 31 2011 2012 2013 2014 2015 2016 Q1 2016 Q1 2017 18

Consistent Cost of Sales Management Cost of Sales (% of Revenue) Commodity Basket % s 30.0% 27.5% 28.2% 27.7% 26.9% 27.4% 18.5% 24.4% 25.0% 26.4% 25.9% 25.6% 25.1% 11.0% 13.3% 15.6% 22.5% 17.2% 20.0% 2011 2012 2013 2014 2015 2016 YTD Q1 2016 YTD Q1 2017 Groceries Produce Beef Dairy Chicken Bar & Other 19

Increasing Restaurant-Level Operating Profit and Adjusted EBITDA $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 Total Restaurants: $25.0 Restaurant-Level EBITDA % Margin $34.8 Restaurant-Level Operating Profit ($Millions) $39.1 $42.5 $56.5 $63.8 $15.9 $16.6 19.2% 20.2% 19.1% 17.3% 19.7% 19.3% 20.4% 19.1% 2011 2012 2013 2014 2015 2016 YTD Q1 2016 YTD Q1 2017 31 39 48 59 69 80 71 82 75.0% 60.0% 45.0% 30.0% 15.0% 0.0% Adjusted EBITDA ($Millions) $55.0 $45.0 $35.0 $25.0 $15.0 $5.0 $46.3 $40.3 $30.8 $29.1 $25.5 $18.9 $11.4 $11.8 2011 2012 2013 2014 2015 2016 YTD Q1 2016 YTD Q1 2017 20 Note: Restaurant-Level Operating Profit represents income from operators plus the sum of general and administrative expenses, the advisory agreement termination fee, the settlement with our former director, offering costs, restaurant pre-opening costs, loss on asset impairment, closure costs, and depreciation and amortization. Note: Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization plus the sum of restaurant pre-opening costs, loss on asset impairment, closure costs, deferred compensation, the advisory agreement termination fee, the settlement with our former director, offering costs, management fees and expenses and special one-time bonus payment.

Balance Sheet December 27, December 25, March 26, 2015 2016 2017 Cash $ 8.5 $ 13.7 $ 14.2 Other Current Assets 8.7 14.8 14.2 Property & Equipment, Net 136.5 165.0 170.9 Other Long-Term Assets 47.7 47.9 48.0 Total Assets $ 201.4 $ 241.4 $ 247.3 Current Liabilities $ 25.0 $ 28.1 $ 27.1 Debt - - - Other Long-Term Liabilities 43.3 56.2 58.3 Total Liabilities 68.3 84.3 85.4 Total Equity 133.1 157.1 161.9 Total Liabilities and Equity $ 201.4 $ 241.4 $ 247.3 21

Fiscal Year 2017 Guidance Comparable restaurant sales growth of approx. 0.5% to 1.5% (on a 52-week comparable basis) Restaurant pre-opening expenses of approx. $5.8 million to $6.3 million General and administrative expense of approx. $20.6 million to $21.1 million An effective tax rate of approx. 29% to 31% 12 to 14 new restaurants to open during 2017 Total capital expenditures (net of tenant improvement allowances) of approx. $39.0 million to $44.0 million 22

Appendix 23

Restaurant-Level Operating Profit Restaurant-Level Operating Profit Reconciliation FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 YTD Q1 2016 YTD Q1 2017 Income from operations as reported $ 9.5 $ 13.3 $ 15.4 $ 15.9 $ 18.7 $ 24.3 $ 6.5 $ 6.5 General and administration 7.5 9.4 10.0 11.7 16.2 17.6 4.5 4.9 Advisory agreement termination - 2.0 - - - - - - Offering costs - 0.2 0.9 - - - - - Settlement with former director 0.2 - - - - - - - Loss on asset impairment - - - - 4.4 - - - Closure costs - - - - - 1.5 - - Restaurant pre-opening 3.4 3.4 3.9 4.6 4.4 5.3 1.4 1.1 Depreciation and amortization 4.4 6.5 8.9 10.3 12.8 15.1 3.5 4.1 Restaurant-Level Operating Profit $ 25.0 $ 34.8 $ 39.1 $ 42.5 $ 56.5 $ 63.8 $ 15.9 $ 16.6 24

Adjusted EBITDA Reconciliation Adjusted EBITDA Reconciliation FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 YTD Q1 2016 YTD Q1 2017 Net Income $ 3.5 $ 5.5 $ 11.1 $ 11.5 $ 12.9 $ 17.2 $ 4.5 $ 4.6 Income tax provision 1.6 2.2 4.2 4.3 5.7 7.1 1.9 1.9 Interest expense 4.4 5.6 0.1 0.1 0.1 0.1 - - Depreciation and amortization 4.4 6.5 8.9 10.3 12.8 15.1 3.5 4.2 EBITDA $ 13.9 $ 19.8 $ 24.3 $ 26.2 $ 31.5 $ 39.5 $ 9.9 $ 10.7 Deferred compensation - - - - - - - - Management fees & expenses 0.4 0.1 - - - - - - Advisory agreement termination - 2.0 - - - - - - Offering costs - 0.2 0.9 - - - - - Settlement with former director 0.2 - - - - - - - Loss on asset impairment - - - - 4.4 - - - Closure costs - - - - - 1.5 - - Restaurant pre-opening 3.4 3.4 3.9 4.6 4.4 5.3 1.5 1.1 Special one-time bonus payment 1.0 - - - - - - - Adjusted EBITDA $ 18.9 $ 25.5 $ 29.1 $ 30.8 $ 40.3 $ 46.3 $ 11.4 $ 11.8 25