Wells Fargo 2013 Restaurant Summit

Transcription

1 Wells Fargo 2013 Restaurant Summit

2 Safe Harbor Statement Certain statements made in this presentation constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the transaction, the financing and the company's future plans, objectives and expected performance. Statements that are not historical facts, including statements accompanied by words such as "believe," "expect," "estimate," "intend," or "plan," are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. The Company cautions that any such forward-looking statements are based on assumptions that are subject to a wide range of risks, and actual results may differ materially.

3 Investment Merits BRAVO! and BRIO are two unique and complementary brands Benefit from favorable trends in the upscale affordable restaurant segment Synergies from operating two brands Capital efficient unit economics Industry-leading 30-40% cash-on-cash target returns for new restaurants Average net investment of $1.8 to $2.2 million Significant new unit growth opportunity medium-term new store opening opportunities Additional density benefit from growth in existing markets Multiple initiatives driving organic revenue and profitability growth New Lighter Side menu enhances profitability Promotions and loyalty programs increase restaurant traffic 3

4 Two Unique and Complementary Brands Bravo! Cucina Italiana Full-service, upscale affordable Italian restaurant serving broad menu of freshly-prepared classic Italian food Warm, inviting atmosphere with sophisticated design 47 company-owned BRAVO! restaurants across 21 states Average unit volume of $3.4 million Average check of $20.07 Alcohol accounts for 18% of sales Brio Tuscan Grille Upscale affordable Italian chophouse restaurant serving authentic northern Italian food Tuscan Villa atmosphere with upscale décor Typically located in high-traffic, high-visibility locations with-in affluent suburban and urban markets 56 company-owned Brio restaurants across 20 states Average unit volume of $4.8 million Average check of $24.75 Alcohol accounts for 23% of sales 4

5 What Makes BBRG Unique HIGH-QUALITY FOOD GREAT SERVICE FLEXIBLE REAL ESTATE MODEL ATTRACTIVE AMBIANCE AFFORDABILITY BROAD APPEAL 5

6 High-Quality Food Experienced, trained chefs BRAVO! Made-to-order and freshly prepared Traditional, Italian culinary techniques Attention to detail and focused execution BRIO 6

7 Great Service Consistent and attentive service High wait staff-totable ratio Experienced management teams 7

8 Attractive Ambiance Lively, high-energy environment Dramatic design elements and inviting atmosphere Exhibition kitchens, high ceilings, white tablecloths Centerpiece lively and relaxing patios day or night 8

9 Affordability Reasonable menu prices drive broad concept appeal and attractive guest base Ability to drive traffic benefits BBRG appeal to mall landlords Average Check Across Restaurant Industry $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Upscale Affordable $24.75 $14.00 $15.00 $16.50 $18.00 $19.30 $20.07 $21.50 $36.00 $39.00 $43.79 $

10 Broad Appeal with Attractive Guest Base Day Part Mix Type of Guest Dinner, 70% Lunch, 30% Social Travelers, 10% Business, 12% Personal/ Social, 78% Gender Mix Age Breakdown 100% 100% 80% 60% 62% 65% 80% 60% 50% 44% 40% 20% 0% 38% 35% BRAVO! BRIO Male Female 40% 20% 0% 37% 41% 13% 15% BRAVO! BRIO < >50 10

11 Flexible Real Estate Model Nationally recognized restaurant anchor, resulting in: Prime location within a retail center Tenant allowances and favorable lease terms Attracts approximately 3,000 5,000 guests each week Co tenants benefit from BBRG s strong velocity of guest traffic and attractive guest demographics Retailers seek out locations in BBRG occupied developments 11

12 Flexible Real Estate Model Omaha, NE Miami, FL Wayne, NJ Austin, TX 12

13 Unique Competitive Positioning BRAVO! and BRIO are clear leaders in upscale affordable segment Menu consistently focused on upscale Italian cuisine and ranking high in quality Targeted promotion efforts, rather than broad, aggressive pricing strategies used by other restaurants Mix of quality and affordable prices creates broad customer appeal across day-part and customer profile (age, gender, etc.) 13

14 GROWTH OUTLOOK & STRATEGY

15 Significant New Unit Growth Opportunity Significant opportunity to expand in new and existing markets Growth in existing markets builds density that drives operating leverage and brand recognition New markets in Northeast and West largely untapped Proven portability and ability to grow Flexible real estate model creates appeal with landlords Expect to open new restaurants over the next five years Includes 8 new restaurants in 2013, following 10 in BRAVO! Restaurants 57 BRIO Restaurants Future Pipeline

16 Significant Underpenetration Significantly less penetrated than comparable upscale affordable and Italian restaurants Expect to open additional locations in the next five years Long-term potential for ~400 locations across both concepts Number of Restaurant Locations Bravo! Brio BJ's Cheesecake Factory PF Chang's Romano's Macaroni Grill 16

17 Organic Growth Strategy Drive traffic at existing locations through targeted marketing and product strategy Lighter Side menu showing strong results since initial launch Marketing through traditional and electronic media to promote customer loyalty Additional strategies to drive traffic include a Wine Night and Chef s Daily Specials 17

18 Lighter Side Menu Direct response to out guests desire to lead a healthier lifestyle All items under 550 calories Menus include appetizers, side and entrée salads and a selection of entrées 18

19 Loyalty Program Surprise and Delight program to reward our most loyal guests Data driven program provides insight on our guest preferences allowing us to design targeted award incentives Goal to deepen emotional bond with out most loyal guests 19

20 Wine Night Offering 10 select wines for $5 a glass on Thursdays Available in bar and dining room Promoting internally, on our website, social media, e-advertising and public relations 20

21 Chef s Daily Features Offering three select items, rotating weekly for $7.95 (BRAVO!) & $8.95 (BRIO) Offered Monday- Friday until 3pm Includes selection of pasta, flatbreads, entrée salads and house specialties 21

22 Marketing Strategy 22

23 Marketing Strategy NRN Social 200: Bravo! leads index with No Kid Hungry tie-in Regional chain s cause-marketing focus results in week s biggest increase 23

24 DEMONSTRATED PERFORMANCE

25 Track Record of Growth Total Restaurant Base New Units Plan

26 Proven Financial Performance Revenue Restaurant Operating Profit $500.0 $400.0 $300.0 $200.0 $300.8 $311.7 $343.0 $369.2 $409.1 $201.2 $208.7 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $47.4 $54.2 $63.0 $66.7 $74.3 $35.8 $34.5 $100.0 $20.0 $10.0 $ YTD 2012 YTD 2013 $ YTD 2012 YTD 2013 Operating Cash Flow Operating Margin $60.0 $50.0 $40.0 $30.0 $20.0 $32.5 $33.8 $37.7 $51.6 $52.3 $20.5 $ % 18.0% 17.0% 16.0% 15.8% 17.4% 18.4% 18.1% 18.2% 17.8% 16.5% $ % $ YTD 2012 YTD % YTD 2012 YTD

27 Industry-leading New Unit Economics Target cash-on-cash return of 30-40% Four wall economics leads upscale affordable restaurant segment ($ in millions) Bravo! Brio PFCB BJ s DRI / O.G. CAKE Target Cash Return 30.0% 40.0% 34.8% 27.5% 24.0% 21.5% Sales to Investment Ratio 1.9x 2.0x 2.0x 1.3x 1.1x 1.2x Annualized Sales $3.4 $4.8 $4.6 $6.0 $4.4 $9.9 Target Net Cash Investment $1.8 $2.2 $2.3 $4.5 $4.1 $8.6 27

28 Industry-leading New Unit Growth 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% BBRG Maggiano s Cheesecake Factory 10.8% 5.0% 4.8% 6.0% 9.3% 9.3% 4.9% 4.0% 5.0% 4.7% 6.2% 4.0% 3.0% 2.3% 3.0% 2.0% 2.0% 1.3% 1.2% 1.0% 1.0% 0.0% 0.0% 0.0% 0.0% PF Chang s BJ s Olive Garden 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 4.2% 2.0% 1.5% NA % 15.0% 10.0% 5.0% 0.0% 17.1% 12.0% 12.7% 13.9% % 5.0% 4.8% 4.6% 4.4% 4.2% 4.0% 3.8% 4.6% 4.3% 5.0% 4.5%

29 Same-store Sales and Profitability Both BRAVO! and BRIO concepts achieve stable same-store sales and profitability growth in normalized environments Traffic for both brands continue to be broadly in-line with Knapp Track. Current same store sales impacted by growth of Lighter Side menu and effect of new restaurant openings Currently evaluating a variety of initiatives to enhance organic growth, as discussed further in this presentation 29

30 Balance Sheet Strength Balance sheet is strong with low debt and ample liquidity, including cash and revolver availability Total debt of approximately $16.2 million as of Q Reduced outstanding debt by $25 million since 2010 Leverage at approximately 0.4x Liquidity of ~$43 million, including cash of approximately $6 million and unfunded revolver of $37 million Expect continued strong free cash flow Optimize use of free cash flow between development, stock repurchase and reduction of term debt 30

31 ($ in millions) Share Repurchase Program Share Repurchase Program approved by our Board of Directors in October, 2012 Authorized to repurchase up to $20 million of common shares through the end of fiscal 2013 Since the inception of the plan in October 2012, through the second quarter of 2013 we have repurchased approximately 291,000 shares at an average price of $13.60 per share Will remain disciplined in repurchasing our shares at favorable prices Generated approximately $16 million of operating cash flow, after gross capital expenditures, in 2012 $60.0 $40.0 $20.0 $0.0 ($20.0) $31.3 BBRG Uses of Operating Cash Flow $32.5 $33.8 $37.7 $51.6 $52.3 $16.1 $15.9 $35.3 $42.5 $8.1 $19.0 $25.7 $18.7 $35.5 $36.4 ($4.0) ($10.0) Capital Expenditures Remaining Cash From Operations 31

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