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Bojangles’, Inc. Reports Financial Results for its Third Fiscal Quarter 2017

Revises Annual Guidance for its Fiscal Year 2017
Announces $50 Million Share Repurchase Authorization

CHARLOTTE, N.C., Nov. 01, 2017 (GLOBE NEWSWIRE) -- Bojangles’, Inc. (Bojangles’) (NASDAQ:BOJA) today announced financial results for the 13-week third fiscal quarter ended September 24, 2017. Bojangles’ also revised its annual guidance for the 53-week fiscal year 2017 ending on December 31, 2017 and announced that its Board of Directors has authorized a $50 million share repurchase program.

Highlights for the Third Fiscal Quarter of 2017

  • Total revenues increased 0.2% to $133.4 million from $133.2 million in the prior year fiscal quarter;
  • System-wide comparable restaurant sales decreased 2.2%, while company-operated comparable restaurant sales decreased 3.3% and franchised comparable restaurant sales decreased 1.5%;
  • 10 system-wide restaurants were opened – 4 company-operated restaurants and 6 franchised restaurants;
  • Net Income was $7.0 million as compared to $10.0 million in the prior year fiscal quarter;
  • Diluted Net Income per Share was $0.18 as compared to $0.27 in the prior year fiscal quarter;
  • Adjusted Net Income* was $6.6 million as compared to $9.3 million in the prior year fiscal quarter;
  • Adjusted Diluted Net Income per Share* was $0.17 as compared to $0.25 in the prior year fiscal quarter; and
  • Adjusted EBITDA* was $16.3 million as compared to $22.2 million in the prior year fiscal quarter.

* Descriptions of Adjusted Net Income, Adjusted Diluted Net Income per Share, Adjusted EBITDA and other non-GAAP financial measures are provided in “Use and Definition of Non-GAAP Measures,” and reconciliations to GAAP figures are provided in the tables at the end of this release.

“The prolonged competitive retail environment amidst aggressive discounting across the restaurant industry continued during our third fiscal quarter 2017, and consumers remain focused on value offerings,” said Bojangles’ President and CEO Clifton Rutledge.

“As a result, we are placing a renewed emphasis on accentuating value through our marketing efforts, such as our recent launch of ‘five hearty meal combos for just $5 each’ and ‘two buck breakfast’ focusing on breakfast biscuit sandwiches priced at less than $2, and we intend to continue to refine that message,” concluded Mr. Rutledge.

Third Fiscal Quarter 2017 Financial Review

System-wide comparable restaurant sales decreased 2.2%, consisting of a 3.3% decrease in company-operated comparable restaurant sales and a 1.5% decrease in franchised comparable restaurant sales. The comparable restaurant sales decrease at company-operated restaurants was composed of a decrease in transactions and mix, partially offset by increases in price.

Total revenues increased 0.2% to $133.4 million in the third fiscal quarter of 2017 from $133.2 million in the prior year fiscal quarter. The increase was primarily due to a net additional 50 system-wide restaurants at September 24, 2017 compared to September 25, 2016, partially offset by comparable restaurant sales declines at our company-operated and franchised restaurants.

Company restaurant revenues decreased 0.1% to $126.2 million in the third fiscal quarter of 2017 from $126.4 million in the prior year fiscal quarter. Franchise royalty revenues increased 4.1% to $7.0 million in the third fiscal quarter of 2017 from $6.7 million in the prior year fiscal quarter.

Restaurant contribution, a non-GAAP measure, decreased 24.5% to $17.6 million in the third fiscal quarter of 2017 from $23.3 million in the prior year fiscal quarter. As a percentage of company restaurant revenues, restaurant contribution margin, a non-GAAP measure, decreased to 13.9% in the third fiscal quarter of 2017 from 18.4% in the prior year fiscal quarter.

General and administrative expenses increased 5.8% to $9.8 million in the third fiscal quarter of 2017 from $9.3 million in the prior year fiscal quarter.

Net Income decreased 30.6% to $7.0 million in the third fiscal quarter of 2017 compared to $10.0 million in the prior year fiscal quarter. Diluted Net Income per Share decreased 33.3% to $0.18 in the third fiscal quarter of 2017 compared to $0.27 in the prior year fiscal quarter.

Adjusted Net Income, a non-GAAP measure, decreased 28.7% to $6.6 million in the third fiscal quarter of 2017 compared to $9.3 million in the prior year fiscal quarter. Adjusted Diluted Net Income per Share decreased 32.0% to $0.17 in the third fiscal quarter of 2017 compared to $0.25 in the prior year fiscal quarter.

Adjusted EBITDA, a non-GAAP measure, decreased 26.9% to $16.3 million in the third fiscal quarter of 2017 from $22.2 million in the prior year fiscal quarter.

Guidance

Bojangles’ is revising its annual outlook for the 53-week period ending on December 31, 2017:

  • Total revenues of $544.0 million to $547.0 million (previously $549.0 million to $553.0 million);
  • System-wide comparable restaurant sales of negative low-single digits (no change);
  • The opening of 50 to 52 system-wide restaurants (previously 53 to 56);
    • 25 to 26 company-operated restaurants (no change);
    • 25 to 26 franchised restaurants (previously 28 to 30);
  • Net increase of 43 to 45 system-wide restaurants (previously 45 to 48);
    • Net increase of 15 to 16 company-operated restaurants (previously 16 to 17), which includes the impact of our refranchising of six company-operated restaurants;
    • Net increase of 28 to 29 franchised restaurants (previously 29 to 31), which includes the impact of our refranchising of six company-operated restaurants;
  • Restaurant contribution margin of 15.0% to 15.5% (previously 16.0% to 16.3%);
  • General and administrative expenses of $39.5 million to $40.5 million (previously $40.0 million to $41.0 million);
  • Cash capital expenditures of $12.0 million to $13.0 million (previously $17.5 million to $18.0 million);
  • Adjusted Diluted Net Income per Share of $0.77 to $0.80 (previously $0.81 to $0.84); and
  • Adjusted EBITDA of $73.0 million to $75.0 million (previously $78.0 million to $80.0 million).

In addition, beginning in fiscal year 2018, we will be slowing the pace of system-wide unit expansion by reducing development of company-operated restaurants while shifting our focus towards enabling new and existing franchised partners to lead brand expansion on a go-forward basis.

We have not reconciled guidance for Adjusted Diluted Net Income per Share or Adjusted EBITDA to the corresponding GAAP financial measures because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

Share Repurchase Authorization

The Bojangles’ Board of Directors has approved a share repurchase program under which we may purchase up to $50 million of our outstanding common stock through April 30, 2019. Purchases under the program may be made in the open market (including, without limitation, the use of Rule 10b5-1 plans) in compliance with applicable federal securities laws, including the Securities and Exchange Commission (“SEC”) Rule 10b-18. We have no obligation to repurchase shares under this authorization, and the timing, number and purchase price of any shares repurchased will be based on a number of factors, including Bojangles’ evaluation of general market and economic conditions, the trading price of the common stock, regulatory requirements, and compliance with the terms of the Bojangles’ outstanding indebtedness.  The share repurchase program may be extended, modified, suspended or discontinued at any time.

Bojangles’ expects to fund the share repurchase program with either, or a combination of, existing cash on hand, cash generated from operations and borrowings under its revolving line of credit.

Conference Call and Webcast Today

Bojangles’ will host a conference call and webcast to discuss the third fiscal quarter 2017 results as well as fiscal year 2017 guidance today at 5:00 p.m. Eastern Time. The conference call dial-in number is 201-493-6725. A telephone replay will be available through Friday, December 1, 2017 and may be accessed by dialing 412-317-6671. The conference ID is 13669874.

The conference call will also be webcast live and later archived on the Investors section of our website at www.bojangles.com.

About Bojangles’, Inc.

Bojangles’, Inc. is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from our Southern recipes. Founded in 1977 in Charlotte, N.C., Bojangles’® serves menu items such as delicious, famous chicken, made-from-scratch buttermilk biscuits, flavorful fixin’s and Legendary Iced Tea®. At September 24, 2017, Bojangles’ had 749 system-wide restaurants, of which 316 were company-operated and 433 were franchised restaurants, primarily located in the Southeastern United States. For more information, visit www.bojangles.com or follow Bojangles’ on Facebook and Twitter.

Note Regarding Comparable Restaurant Sales

Comparable restaurant sales reflects the change in year-over-year sales for the comparable restaurant base (as applicable, system-wide, franchised or company-operated restaurants). A restaurant enters our comparable restaurant base the first full day of the month after being open for 15 months using a mid-month convention. Refranchised restaurants are excluded from our comparable restaurant base for the twelve-month period following the date of the refranchising. If a company-operated restaurant is temporarily closed for a full calendar week due to items such as a remodel, scrape and rebuild, casualty event, severe weather conditions or any other short-term closure, it is removed from the comparable restaurant sales calculations for such period it is temporarily closed. If a franchised restaurant is temporarily closed for a full calendar week due to items such as a remodel, scrape and rebuild, casualty event, severe weather conditions or any other short-term closure, it is removed from the comparable restaurant sales calculations for the entire month(s) impacted by the temporary closure.

Use and Definition of Non-GAAP Measures

We utilize certain non-GAAP measures when assessing the operational strength and the performance of our business. We believe these non-GAAP measures assist our board of directors, management and investors in comparing our operating performance, on a consistent basis from period to period, by isolating the effects of certain items that vary from period to period without any correlation to core operating performance or that vary significantly among similar companies. Bojangles’ cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, reported GAAP results.

Restaurant contribution is defined as company restaurant revenues less food and supplies costs, restaurant labor costs and operating costs, as identified by the reconciliation table below. Restaurant contribution margin is defined as restaurant contribution as a percentage of company restaurant revenues. Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of our company-operated restaurants and our calculations thereof may not be comparable to those reported by other companies. Restaurant contribution and restaurant contribution margin have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Included with the reconciliations to GAAP figures provided in the tables at the end of this release is a reconciliation of our restaurant contribution to the line item on the condensed consolidated statements of operations entitled “Company restaurant revenues,” which we believe is the most directly comparable GAAP measure on our condensed consolidated statements of operations.

Adjusted Net Income represents company net income before items that we do not consider representative of our ongoing operating performance as identified in the reconciliation table below. Adjusted Diluted Net Income per Share represents company diluted net income per share before items that we do not consider representative of our ongoing operating performance as identified in the reconciliation table below.

EBITDA represents company net income before interest expense (net of interest income), provision for income taxes and depreciation and amortization. Adjusted EBITDA represents company net income before interest expense (net of interest income), provision for income taxes, depreciation and amortization, items that we do not consider representative of our ongoing operating performance and certain non-cash items, as identified in the reconciliation table below.

Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as substitutes for analysis of our results as reported under GAAP. In addition, in evaluating Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses or charges such as those added back to calculate Adjusted Net Income, Adjusted Diluted Net Income per Share, EBITDA and Adjusted EBITDA.

Forward-Looking Statements

This release contains forward-looking statements. All statements other than statements of historical or current facts included in this release are forward-looking statements. Forward-looking statements discuss our current expectations, projections and guidance relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. Actual results may differ materially from these expectations due to risks relating to, among other risks, our vulnerability to changes in consumer preferences and economic conditions; our ability to open restaurants in new and existing markets and expand our franchise system; our ability to generate comparable restaurant sales growth; financial or other difficulties, which could cause our restaurants and our franchisees’ restaurants to close; our ability to generate increased sales or profits from new menu items, advertising campaigns, changes in discounting strategy, technology initiatives or restaurant designs and remodels; cancellation of or delay in anticipated future restaurant openings; our reliance on, limited degree of control over and potential responsibility for, our franchisees; increases in the cost of chicken, pork, dairy, wheat, corn and other products; our ability to compete successfully with other quick-service and fast-casual restaurants; our vulnerability to conditions in the Southeastern United States; negative publicity, whether or not valid; concerns about food safety and quality and about food-borne illnesses, including adverse public perception due to the occurrence of avian flu, swine flu or other food-borne illnesses, such as salmonella, E. coli, or others; changes in employment and labor laws; labor shortages and increases in labor costs; and our dependence upon frequent and timely deliveries of restaurant food and other supplies. For further details and discussion of these and other risks and uncertainties, see our Annual Report on Form 10-K for the fiscal year ended December 25, 2016, which was filed with the SEC on March 7, 2017, and which is available at www.sec.gov. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.

All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this earnings release. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Balance Sheets  
(in thousands)  
                       
Assets   September 24, 
2017
  December 25, 
2016
 
Current assets:            
  Cash and cash equivalents $ 17,722   13,898  
  Accounts and vendor receivables, net   3,819   5,421  
  Accounts receivable, related parties, net   352   386  
  Inventories, net   3,659   3,326  
  Other current assets   5,661   3,033  
          Total current assets   31,213   26,064  
  Property and equipment, net   56,455   52,275  
  Goodwill       161,140   161,140  
  Brand         290,500   290,500  
  Franchise rights, net   23,420   24,243  
  Favorable leases, net   757   981  
  Other noncurrent assets   4,128   4,569  
          Total assets $ 567,613   559,772  
Liabilities and Stockholders’ Equity          
Current liabilities:          
  Accounts payable $ 11,261   16,818  
  Accrued expenses   23,353   17,940  
  Current maturities of long-term debt     2,132  
  Current maturities of capital lease obligations   7,666   7,299  
  Other current liabilities   6,823   4,390  
          Total current liabilities   49,103   48,579  
  Long-term debt, less current maturities and deferred debt issuance costs, net   133,846   153,630  
  Deferred income taxes   110,262   111,312  
  Capital lease obligations, less current maturities   23,373   22,524  
  Other noncurrent liabilities   13,551   12,937  
          Total liabilities   330,135   348,982  
Stockholders’ equity:          
  Preferred stock      
  Common stock   370   365  
  Additional paid-in capital   128,222   124,802  
  Retained earnings   108,567   85,377  
  Accumulated other comprehensive income   319   246  
          Total stockholders’ equity   237,478   210,790  
          Total liabilities and stockholders’ equity $ 567,613   559,772  
                       

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Statements of Operations  
(in thousands, except per share amounts)  
                                 
                Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
    September 24, 
2017
  September 25, 
2016
 
Revenues:                        
  Company restaurant revenues $ 126,207     126,358       378,048     372,446    
  Franchise royalty revenues   7,018     6,739       20,509     19,532    
  Other franchise revenues   200     100       738     470    
          Total revenues   133,425     133,197       399,295     392,448    
Company restaurant operating expenses:                    
  Food and supplies costs   40,525     39,331       119,208     116,872    
  Restaurant labor costs   37,081     35,115       110,365     102,976    
  Operating costs   31,009     28,625       90,441     83,645    
  Depreciation and amortization   3,501     3,225       10,082     9,432    
          Total Company restaurant operating expenses   112,116     106,296       330,096     312,925    
          Operating income before other operating expenses   21,309     26,901       69,199     79,523    
Other operating expenses:                    
  General and administrative   9,814     9,276       28,584     28,189    
  Depreciation and amortization   747     745       2,225     2,178    
  Impairment     126     592       1,123     981    
  (Gain) loss on disposal of property and equipment and other   (135 )   138       (238 )   (51 )  
          Total other operating expenses   10,552     10,751       31,694     31,297    
          Operating income   10,757     16,150       37,505     48,226    
Amortization of deferred debt issuance costs   (147 )   (199 )     (440 )   (567 )  
Interest income     2           15     4    
Interest expense   (1,495 )   (1,819 )     (4,776 )   (5,782 )  
          Income before income taxes   9,117     14,132       32,304     41,881    
Income taxes     2,160     4,113       9,114     13,987    
          Net income $ 6,957     10,019       23,190     27,894    
                                 
                                 
Net income per share:                    
          Basic $ 0.19     0.28       0.63     0.77    
          Diluted $ 0.18     0.27       0.60     0.74    
                                 
                                 
Weighted average shares used in computing net income per share:                    
          Basic   37,012     36,355       36,760     36,195    
          Diluted   38,475     37,650       38,561     37,561    
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Condensed Consolidated Statements of Cash Flows  
(in thousands)  
                       
                Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
 
Cash flows from operating activities:          
  Net income   $ 23,190     27,894    
  Adjustments to reconcile net income to net cash provided by operating activities:          
      Deferred income tax benefit   (1,093 )   (2,244 )  
      Depreciation and amortization   12,307     11,610    
      Amortization of deferred debt issuance costs   440     567    
      Impairment   1,123     981    
      Gain on disposal of property and equipment and other   (238 )   (51 )  
      Provision (benefit) for doubtful accounts   3     (65 )  
      Provision for inventory spoilage   18     7    
      Benefit for closed stores       (51 )  
      Stock-based compensation   1,185     953    
      Excess tax benefit from stock-based compensation       (1,770 )  
      Changes in operating assets and liabilities   (117 )   4,950    
          Net cash provided by operating activities   36,818     42,781    
Cash flows from investing activities:          
  Purchases of franchisee's assets       (100 )  
  Purchases of property and equipment   (7,476 )   (5,950 )  
  Proceeds from disposition of property and equipment   148     49    
          Net cash used in investing activities   (7,328 )   (6,001 )  
Cash flows from financing activities:          
  Principal payments on long-term debt   (22,357 )   (29,736 )  
  Stock option exercises   2,343     857    
  Vesting of restricted stock units   (103 )      
  Excess tax benefit from stock-based compensation       1,770    
  Principal payments on capital lease obligations   (5,549 )   (4,455 )  
          Net cash used in financing activities   (25,666 )   (31,564 )  
          Net increase in cash and cash equivalents   3,824     5,216    
Cash and cash equivalents balance, beginning of fiscal period   13,898     14,263    
Cash and cash equivalents balance, end of fiscal period $ 17,722     19,479    
                       

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Net Income to Adjusted Net Income  
(in thousands)  
                                 
                Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
    September 24, 
2017
  September 25, 
2016
 
Net income     $ 6,957     10,019       23,190     27,894    
                                 
Certain professional, transaction and other costs (a)       24       3     66    
Payroll taxes associated with stock option exercises (b)   24     8       122     79    
Distributor transition costs (c)                 81    
Executive separation expenses (d)       197       551     197    
State income tax rate change (e)   (367 )   (908 )     (367 )   (908 )  
Tax impact of adjustments (f)   (9 )   (82 )     (253 )   (156 )  
Total adjustments   (352 )   (761 )     56     (641 )  
Adjusted Net Income $ 6,605     9,258       23,246     27,253    
                                 
                                 
                                 
BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Income Per Share  
                                 
                Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
    September 24, 
2017
  September 25, 
2016
 
Diluted net income per share $ 0.18     0.27       0.60     0.74    
                                 
Certain professional, transaction and other costs (a)                    
Payroll taxes associated with stock option exercises (b)                    
Distributor transition costs (c)                    
Executive separation expenses (d)             0.02     0.01    
State income tax rate change (e)   (0.01 )   (0.02 )     (0.01 )   (0.02 )  
Tax impact of adjustments (f)             (0.01 )      
Total adjustments   (0.01 )   (0.02 )         (0.01 )  
Adjusted Diluted Net Income per Share $ 0.17     0.25       0.60     0.73    
                                 
                                 
(a) Includes costs associated with third-party consultants for one-time projects, public offering expenses and certain professional fees and transaction costs related to financing transactions. We could incur similar expenses in future periods if we commence additional public offerings, financing transactions or other one-time projects.  
(b) Represents payroll taxes associated with stock option exercises related to stock options that were outstanding prior to our initial public offering. We expect to incur similar expenses in future periods when our directors or employees exercise stock options that were outstanding prior to our initial public offering.  
(c) Includes expenses incurred in connection with the transition to our new distributor.  
(d) Represents severance and legal fees associated with former executives departing the Company.   
(e) As a result of the enacted reductions to the North Carolina corporate income tax rate during both of the thirteen weeks ended September 24, 2017 and September 25, 2016, we adjusted our deferred income taxes by applying the lower rate, which resulted in a corresponding decrease to income tax expense.  
(f) Represents the income tax expense associated with the adjustments in (a) through (e) that are deductible for income tax purposes.  
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Net Income to EBITDA and Adjusted EBITDA  
(in thousands)  
                                 
                Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
    September 24, 
2017
  September 25, 
2016
 
Net income     $ 6,957   10,019     23,190   27,894  
Income taxes       2,160   4,113     9,114   13,987  
Interest expense, net   1,493   1,819     4,761   5,778  
Depreciation and amortization (a)   4,395   4,169     12,747   12,177  
EBITDA           15,005   20,120     49,812   59,836  
Non-cash rent (b)     321   414     1,090   1,185  
Stock-based compensation (c)   505   404     1,185   953  
Payroll taxes associated with stock option exercises (d)   24   8     122   79  
Preopening expenses (e)   302   346     1,026   942  
Certain professional, transaction and other costs (f)     24     3   66  
Distributor transition costs (g)           81  
Executive separation expenses (h)     197     551   197  
Impairment and dispositions (i)   99   730     1,033   979  
Adjusted EBITDA $ 16,256   22,243     54,822   64,318  
                                 
                                 
(a) Includes amortization of deferred debt issuance costs.  
(b) Includes deferred rent, which represents the extent to which our rent expense has been above or below our cash rent payments, amortization of favorable (unfavorable) leases and closed store reserves for rent net of cash payments. We expect to continue to incur similar expenses in future periods as we record rent expense in accordance with GAAP, as well as continue to amortize favorable (unfavorable) leases and record closed store reserves.  
(c) Represents non-cash, stock-based compensation. We expect to incur similar expenses in future periods as we record stock-based compensation related to existing grants (and any potential future grants) in accordance with GAAP.   
(d) Represents payroll taxes associated with stock option exercises related to stock options that were outstanding prior to our initial public offering. We expect to incur similar expenses in future periods when our directors or employees exercise stock options that were outstanding prior to our initial public offering.  
(e) Includes expenses directly associated with the opening of company-operated restaurants and incurred prior to the opening of a company-operated restaurant. We expect to continue to incur similar expenses as we open company-operated restaurants.   
(f) Includes costs associated with third-party consultants for one-time projects, public offering expenses and certain professional fees and transaction costs related to financing transactions. We could incur similar expenses in future periods if we commence additional public offerings, financing transactions or other one-time projects.   
(g) Includes expenses incurred in connection with the transition to our new distributor.  
(h) Represents severance and legal fees associated with former executives departing the Company.   
(i) Includes (gain) loss on disposal of property and equipment and other, impairment and cash proceeds on disposals from disposition of property and equipment. We could continue to record impairment expense in future periods if performance of company-operated restaurants is not sufficient to recover the carrying amount of the related long-lived assets. We may incur future (gains) losses and receive cash proceeds on disposal of property and equipment associated with retirement, replacement or write-off of fixed assets.  
                                 

 

BOJANGLES’, INC. AND SUBSIDIARIES  
Unaudited Reconciliation of Company Restaurant Revenues to Restaurant Contribution  
(in thousands)  
                                 
                Thirteen Weeks Ended     Thirty-Nine Weeks Ended  
                September 24, 
2017
  September 25, 
2016
    September 24, 
2017
  September 25, 
2016
 
Company restaurant revenues $ 126,207     126,358       378,048     372,446    
Food and supplies costs   (40,525 )   (39,331 )     (119,208 )   (116,872 )  
Restaurant labor costs   (37,081 )   (35,115 )     (110,365 )   (102,976 )  
Operating costs   (31,009 )   (28,625 )     (90,441 )   (83,645 )  
Restaurant contribution $ 17,592     23,287       58,034     68,953    
Restaurant contribution margin   13.9 %   18.4 %     15.4 %   18.5 %  


For Investor Relations Inquiries:
Raphael Gross of ICR
203.682.8253

For Media Inquiries:
Brian Little of Bojangles’ Restaurants, Inc.
704.519.2118

Bojangles', Inc.


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