Wingstop Inc. Reports Fiscal Fourth Quarter and Full Year 2020 Financial Results
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Wingstop Inc. Reports Fiscal Fourth Quarter and Full Year 2020 Financial Results

Opens 153 Net New Restaurants in 2020

Records 17th Consecutive Year of Positive Same-Store Sales Growth

DALLAS, Feb. 17, 2021 // PRNewswire // - Wingstop Inc. ("Wingstop" or the "Company") (NASDAQ: WING) today announced financial results for the fiscal fourth quarter and fiscal year ended December 26, 2020.

Highlights for the fiscal fourth quarter 2020 compared to the fiscal fourth quarter 2019:

  • System-wide sales increased 26.5% to $502.5 million
  • 59 net new openings in the fiscal fourth quarter 2020
  • Domestic same-store sales increased 18.2%
  • Domestic restaurant AUV increased to approximately $1.49 million, compared to $1.25 million in the prior fiscal fourth quarter
  • Digital sales increased to 62.5% of sales, compared to 38.2% in the prior fiscal fourth quarter
  • Total revenue increased 19.0% to $63.3 million
  • As a result of the $13.7 million of expenses associated with the refinancing of our debt and payment of special dividend, net loss was $6.4 million, or loss of $0.21 per diluted share, compared to net income of $3.0 million, or $0.10 per diluted share, in the prior fiscal fourth quarter. Adjusted net income* and adjusted diluted earnings per share*, both non-GAAP measures, were $5.3 million and $0.18 per diluted share, compared to $4.3 million and $0.14 per diluted share in the prior fiscal fourth quarter
  • Adjusted EBITDA*, a non-GAAP measure, increased 14.7% to $16.2 million

Highlights for the fiscal year 2020 compared to the fiscal year 2019:

  • System-wide restaurant count increased 11.0% to 1,538 worldwide locations with 153 net openings
  • System-wide sales increased 28.8% to $2.0 billion
  • Domestic same-store sales increased 21.4%, marking the 17th consecutive year of same store sales growth
  • Total revenue increased 24.6% to $248.8 million
  • Net income increased to $23.3 million, or $0.78 per diluted share, compared to $20.5 million, or $0.69 per diluted share, in the prior fiscal year. Adjusted net income* and adjusted diluted earnings per share*, both non-GAAP measures, were $32.5 million and $1.09 per diluted share, compared to $21.7 million and $0.73 per diluted share in the prior fiscal year
  • Adjusted EBITDA*, a non-GAAP measure, increased 26.1% to $71.9 million

* Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States ("GAAP") are set forth in the schedule accompanying this release. See "Non-GAAP Financial Measures."

"I am extremely proud of the tremendous efforts of our brand partners, supplier partners, and thousands of team members in the face of unprecedented circumstances to deliver our industry leading 17th consecutive year of positive same-store sales growth in 2020. The domestic same-store sales growth of 21.4% drove our domestic average unit volumes to almost $1.5 million, advancing our best-in-class unit economics. We opened 153 net new restaurants in 2020, and as we enter into 2021, our pipeline of domestic restaurant commitments exceeds 700, up from 610 in the prior year," commented Charlie Morrison, Chairman and Chief Executive Officer of Wingstop. "2020 further proved the resiliency of our model and we're truly humbled by our results. We remain focused on our strategic long-term growth drivers and driving shareholder value as we work toward our vision of becoming a top 10 global restaurant brand."

Key operating metrics for the fiscal fourth quarter 2020 compared to the fiscal fourth quarter 2019

 

Thirteen Weeks Ended

 

December 26, 2020

 

December 28, 2019

Number of system-wide restaurants open at end of period

1,538

   

1,385

 

Number of domestic franchise restaurants open at end of period

1,327

   

1,200

 

Number of international franchise restaurants open at end of period

179

   

154

 

System-wide sales (in thousands)

$

502,472

   

$

397,243

 

Domestic restaurant AUV (in thousands)

$

1,489

   

$

1,246

 

Domestic same-store sales growth

18.2

%

 

12.2

%

Company-owned domestic same store sales growth

10.4

%

 

8.9

%

Net (loss) income (in thousands)

$

(6,410)

   

$

3,047

 

Adjusted net income (in thousands)

$

5,256

   

$

4,287

 

Adjusted EBITDA (in thousands) 

$

16,228

   

$

14,154

 

Fiscal fourth quarter 2020 financial results

Total revenue for the fiscal fourth quarter 2020 increased to $63.3 million from $53.2 million in the fiscal fourth quarter last year. 

  • Royalty revenue, franchise fees and other increased $4.1 million to $28.0 million from $23.9 million in the fiscal fourth quarter of the prior year. The increase was primarily due to domestic same-store sales growth of 18.2% as well as 152 net franchise restaurant openings since December 28, 2019, partially offset by a decrease in contributions received for our franchisee convention, which occurred in the fourth quarter of 2019. There was no franchisee convention held in fiscal year 2020.
  • Advertising fees increased $4.2 million to $19.3 million from $15.2 million in the fiscal fourth quarter of the prior year. The increase was primarily due to domestic system-wide sales growth in the fiscal quarter ended December 26, 2020 compared to the fiscal quarter ended December 28, 2019.
  • Company-owned restaurant sales increased $1.8 million to $15.9 million from $14.1 million in the fiscal fourth quarter of the prior year. The increase was due to company-owned same-store sales growth of 10.4%, which was primarily driven by an increase in transaction size, as well as an increase in the number of company-owned restaurants. Since the beginning of the prior fiscal year period, we acquired six company-owned restaurants from franchisees, opened three new company-owned restaurants, and refranchised seven company-owned restaurants to franchisees.

Cost of sales increased to $12.2 million from $10.5 million in the fiscal fourth quarter of the prior year. As a percentage of company-owned restaurant sales, cost of sales increased to 76.7% from 74.2% in the prior year comparable period. The increase was primarily due to a 17.7% increase in the cost of bone-in chicken wings as compared to the prior year period. This increase was partially offset by sales leverage achieved as a result of the increase in company-owned same-store sales of 10.4%.

Advertising expenses were $17.6 million compared to $14.5 million in the fiscal fourth quarter of the prior year primarily due to domestic system-wide sales growth. Advertising expenses are recognized at the same time as the related revenue, which does not necessarily correlate to the actual timing of the related advertising spend.

Selling, general & administrative expense ("SG&A") increased $3.1 million to $21.0 million from $17.8 million in the fiscal fourth quarter of the prior year. The increase in SG&A expense was primarily due to $1.4 million in higher professional fees primarily related to investments in technology, $1.3 million of expenses related to COVID-19 and support provided to international franchisees, $1.1 million in higher variable-based compensation expense, and approximately $1.0 million in headcount related expenses to support the growth in our business. These increases were partially offset by a decrease of $1.8 million related to the franchisee convention held in the fourth quarter of 2019. There was no franchisee convention held in fiscal year 2020.

Interest expense, net was $4.0 million in the fiscal fourth quarter of 2020, a decrease of $0.2 million, or 4.0%, compared to $4.2 million in the prior fiscal period. The decrease was due to the refinancing of our securitized financing facility on October 30, 2020, which increased our outstanding debt by $162.4 million and reduced our interest rate from 4.97% to 2.84%.

Loss on debt extinguishment and refinancing transactions was $13.7 million in the fiscal fourth quarter of 2020 due to costs and fees associated with the refinancing of our securitized financing facility during the fiscal fourth quarter of 2020.

Net loss was $6.4 million, or $0.21 per diluted share, compared to net income of $3.0 million, or $0.10 per diluted share, in the fiscal fourth quarter of the prior year.

Adjusted net income was $5.3 million, or $0.18 per diluted share, compared to $4.3 million, or $0.14 per diluted share, in the prior year period. Reconciliations between net income and adjusted net income and between earnings per diluted share and adjusted earnings per diluted share are included in the accompanying financial schedules.

Key operating metrics for the fiscal year 2020 compared to the fiscal year 2019

 

Fiscal Year Ended

 

December 26, 2020

 

December 28, 2019

Number of system-wide restaurants open at end of period

1,538

   

1,385

 

Number of domestic franchise restaurants open at end of period

1,327

   

1,200

 

Number of international franchise restaurants open at end of period

179

   

154

 

System-wide sales (in millions)

$

1,951

   

$

1,515

 

Domestic restaurant AUV (in thousands)

$

1,489

   

$

1,246

 

Domestic same-store sales growth

21.4

%

 

11.1

%

Company-owned domestic same store sales growth

14.2

%

 

9.8

%

Net income (in thousands)

$

23,306

   

$

20,476

 

Adjusted net income (in thousands)

$

32,500

   

$

21,716

 

Adjusted EBITDA (in thousands) 

$

71,882

   

$

56,989

 

Fiscal year 2020 financial results

Total revenue for fiscal year 2020 increased 24.6% to $248.8 million from $199.7 million in the prior fiscal year. The increase was primarily due to increases in royalty revenue and advertising fees resulting from 152 net franchise restaurant openings since December 28, 2019 and domestic same-store sales growth of 21.4%.

Company-owned restaurant sales increased $9.5 million to $65.0 million from $55.5 million in the prior fiscal year. The increase was primarily due an increase in company-owned same-store sales of 14.2%, which was driven by both an increase in transaction size and transactions.

Net income was $23.3 million, or $0.78 per diluted share, compared to net income of $20.5 million, or $0.69 per diluted share in the prior fiscal year.

Adjusted net income was $32.5 million, or $1.09 per diluted share, compared to $21.7 million, or $0.73 per diluted share, in the prior fiscal year. The increase in adjusted net income is primarily driven by the increases in total revenues and a lower effective tax rate due to excess tax benefits associated with stock options exercised in fiscal year 2020. The increases in revenue were offset by increased expenses related to national advertising and additional SG&A expenses primarily related to increased headcount-related expenses to support the growth in our business and higher variable performance-based compensation expense. Reconciliations between net income and adjusted net income and earnings per diluted share and adjusted earnings per diluted share are included in the accompanying financial schedules.

Financial Outlook

The Company is reaffirming its three- to five-year outlook, consisting of the following:

  • 10%+ system-wide annual unit growth
  • Mid-single digit domestic same store sales growth

Additionally, the Company expects SG&A for fiscal year 2021 of between $76.0 - $78.5 million, and Adjusted SG&A, a non-GAAP measure, of between $55.1 - $56.6 million.

A reconciliation of Adjusted SG&A to SG&A, the nearest applicable GAAP measure, is provided below:

   

2021 Outlook

 

Fiscal Year

   

Low

 

High

 

2020

SG&A, reported

 

$

76.0

   

$

78.5

   

$

69.0

 

Convention costs (a)

 

Approximately 2.0

 

 

Expenses related to national advertising (a)

 

9.2

   

9.7

   

7.9

 

Stock compensation expense

 

9.7

   

10.2

   

8.6

 

Loss on debt extinguishment and refinancing transactions

 

   

   

0.2

 

Consulting fees associated with strategic initiatives

 

   

   

1.4

 

Adjusted SG&A (b)

 

$

55.1

   

$

56.6

   

$

50.9

 
             

(a) Convention costs and expenses related to national advertising both have equal and offsetting contributions included in revenue
and do not impact operating income.

(b) Adjusted SG&A is a non-GAAP measure.

   

Restaurant Development

As of December 26, 2020, there were 1,538 Wingstop restaurants system-wide. This included 1,359 restaurants in the United States, of which 1,327 were franchised restaurants and 32 were company-owned, and 179 franchised restaurants in international markets. There were 59 net system-wide Wingstop restaurant openings during the fiscal fourth quarter 2020, and 153 net system-wide restaurants were opened during the fiscal year ended December 26, 2020.

Quarterly Dividend

In recognition of the Company's strong cash flow generation, confidence in the business, and commitment to returning value to stockholders, our board of directors authorized and declared a quarterly dividend of $0.14 per share of common stock, resulting in a total dividend of approximately $4.2 million. This dividend will be paid on March 26, 2021 to stockholders of record as of March 5, 2021.

The following definitions apply to these terms as used in this release:

Domestic average unit volume ("AUV") consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our company-owned and franchised restaurant economics. Changes in domestic AUV are primarily driven by increases in same-store sales and are also influenced by opening new restaurants.

Domestic Same-store sales reflect the change in year-over-year sales for the comparable restaurant base. We define the comparable restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures.

System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees.

Adjusted EBITDA is defined as net income before interest expense, net, income tax expense, and depreciation and amortization (EBITDA) further adjusted for losses on debt extinguishment and refinancing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, gains and losses on the disposal of assets, and stock-based compensation expense. We caution investors that amounts presented in accordance with our definitions of EBITDA and Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA and Adjusted EBITDA in the same manner.

Adjusted net income is defined as net income adjusted for losses on debt extinguishment and refinancing transactions, costs and fees associated with investments in our strategic initiatives, gains and losses on the disposal of assets, and related tax adjustments.

Adjusted earnings per diluted share is defined as adjusted net income divided by weighted average diluted share count.

Adjusted SG&A is defined as selling, general and administrative expenses adjusted for losses on debt extinguishment and refinancing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense. Additionally, SG&A is further adjusted for items which have offsetting contributions that are included in revenue, such as convention costs and expenses associated with national advertising.

Conference Call and Webcast

Chairman and Chief Executive Officer, Charlie Morrison, and Chief Financial Officer, Michael Skipworth, will host a conference call today to discuss the fiscal fourth quarter 2020 financial results at 10:00 AM Eastern Time.

The conference call will also be webcast live and later archived on the investor relations section of Wingstop's corporate website under the 'News & Events' section.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those indicated above. By providing non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Forward-looking Information

Certain statements contained in this news release, as well as other information provided from time to time by Wingstop Inc. or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "guidance," "anticipate," "estimate," "expect," "forecast," "outlook," "target," "project," "plan," "intend," "believe," "confident," "may," "should," "can," "have," "will," "likely," "future" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Examples of forward-looking statements in this news release include our 2021 fiscal year outlook for system-wide unit growth, domestic same store sales growth, SG&A expenses, Adjusted SG&A and statements regarding our progress toward our goal of becoming a top 10 global restaurant brand. Any such forward-looking statements are not guarantees of performance or results and involve risks, uncertainties (some of which are beyond the Company's control), and assumptions. Although we believe any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to differ materially from those anticipated in any forward-looking statements.

Our ability to achieve or maintain sales and earnings may be affected by COVID-19 related factors, including, among others: the length of time that the pandemic continues; the inability of workers, including third party delivery drivers, to work due to illness, quarantine, or government mandates; temporary store closures due to reduced workforces or government mandates; the unemployment rate; the extent and effectiveness of any COVID-19 stimulus packages; the ability of our franchisees to operate their restaurants during the pandemic and pay royalties; and trends in consumer spending during and after the end of the pandemic. Please refer to the risk factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which can be found at the SEC's website. The discussion of these risks is specifically incorporated by reference into this news release.

Any forward-looking statement made by Wingstop Inc. in this press release speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

 
 

December 26,

2020

 

December 28,

2019

Assets

     

Current assets

     

Cash and cash equivalents

$

40,858

   

$

12,849

 

Restricted cash

4,815

   

4,790

 

Accounts receivable, net

4,929

   

5,175

 

Prepaid expenses and other current assets

5,532

   

2,449

 

Advertising fund assets, restricted

16,486

   

4,927

 

Total current assets

72,620

   

30,190

 

Property and equipment, net

27,948

   

27,842

 

Goodwill

53,690

   

50,188

 

Trademarks

32,700

   

32,700

 

Customer relationships, net

11,600

   

12,910

 

Other non-current assets

13,007

   

12,283

 

Total assets

$

211,565

   

$

166,113

 

Liabilities and stockholders' deficit

     

Current liabilities

     

Accounts payable

$

3,658

   

$

3,348

 

Other current liabilities

26,729

   

21,454

 

Current portion of debt

3,600

   

3,200

 

Advertising fund liabilities

16,486

   

4,927

 

Total current liabilities

50,473

   

32,929

 

Long-term debt, net

466,933

   

307,669

 

Deferred revenues, net of current

24,962

   

22,343

 

Deferred income tax liabilities, net

4,480

   

4,485

 

Other non-current liabilities

6,027

   

8,115

 

Total liabilities

552,875

   

375,541

 

Commitments and contingencies

     

Stockholders' deficit

     

Common stock, $0.01 par value; 100,000,000 shares authorized; 29,687,123
and 29,457,228 shares issued and outstanding as of December 26, 2020 and
December 28, 2019, respectively

297

   

295

 

Additional paid-in-capital

421

   

552

 

Accumulated deficit

(342,028)

   

(210,275)

 

Total stockholders' deficit

(341,310)

   

(209,428)

 

Total liabilities and stockholders' deficit

$

211,565

   

$

166,113

 

 

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(amounts in thousands, except per share data)

 
 

Thirteen Weeks Ended

 

Year Ended

 

December 26,

2020

 

December 28,

2019

 

December 26,

2020

 

December 28,

2019

 

(Unaudited)

 

(Unaudited)

       

Revenue:

             

Royalty revenue, franchise fees and other

$

28,020

   

$

23,900

   

$

108,883

   

$

88,291

 

Advertising fees

19,340

   

15,179

   

74,930

   

55,932

 

Company-owned restaurant sales

15,922

   

14,107

   

64,998

   

55,453

 

Total revenue

63,282

   

53,186

   

248,811

   

199,676

 

Costs and expenses:

             

Cost of sales (1)

12,216

   

10,463

   

48,583

   

41,105

 

Advertising expenses

17,648

   

14,532

   

69,428

   

52,891

 

Selling, general and administrative

20,950

   

17,832

   

68,985

   

57,295

 

Depreciation and amortization

2,231

   

1,465

   

7,518

   

5,484

 

Gain on sale of restaurants and other expenses,
net

156

   

   

(3,093)

   

 

Total costs and expenses

53,201

   

44,292

   

191,421

   

156,775

 

Operating income

10,081

   

8,894

   

57,390

   

42,901

 

Interest expense, net

4,018

   

4,184

   

16,782

   

17,136

 

Loss on debt extinguishment and refinancing
transactions

13,665

   

   

13,665

   

 

Income (loss) before income tax expense

(7,602)

   

4,710

   

26,943

   

25,765

 

Income tax expense (benefit)

(1,192)

   

1,663

   

3,637

   

5,289

 

Net income (loss)

$

(6,410)

   

$

3,047

   

$

23,306

   

$

20,476

 
               

Earnings (loss) per share

             

Basic

$

(0.22)

   

$

0.10

   

$

0.79

   

$

0.70

 

Diluted

$

(0.21)

   

$

0.10

   

$

0.78

   

$

0.69

 
               

Weighted average shares outstanding

             

Basic

29,686

   

29,454

   

29,601

   

29,415

 

Diluted

29,845

   

29,709

   

29,804

   

29,670

 
               

Dividends per share

$

5.14

   

$

0.11

   

$

5.50

   

$

0.40

 
 

(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, and excludes
depreciation and amortization, which are presented separately.

 

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Cost of Sales Margin Analysis

(amounts in thousands)

 
 

Thirteen Weeks Ended

 

December 26, 2020

 

December 28, 2019

 

In dollars

 

As a % of
company-
owned
restaurant sales

 

In dollars

 

As a % of
company-
owned
restaurant sales

Cost of sales:

             

Food, beverage and packaging costs

$

6,218

   

39.1

%

 

$

5,133

   

36.4

%

Labor costs

3,645

   

22.9

%

 

3,267

   

23.2

%

Other restaurant operating expenses

2,657

   

16.7

%

 

2,505

   

17.8

%

Vendor rebates

(304)

   

(1.9)

%

 

(442)

   

(3.1)

%

Total cost of sales

$

12,216

   

76.7

%

 

$

10,463

   

74.2

%

 

 
 
 

Fiscal Year Ended

 

December 26, 2020

 

December 28, 2019

 

In dollars

 

As a % of
company-
owned
restaurant sales

 

In dollars

 

As a % of
company-
owned
restaurant sales

Cost of sales:

             

Food, beverage and packaging costs

$

23,303

   

35.9

%

 

$

20,317

   

36.6

%

Labor costs

15,801

   

24.3

%

 

12,582

   

22.7

%

Other restaurant operating expenses

10,821

   

16.6

%

 

9,794

   

17.7

%

Vendor rebates

(1,342)

   

(2.1)

%

 

(1,588)

   

(2.9)

%

Total cost of sales

$

48,583

   

74.7

%

 

$

41,105

   

74.1

%

 

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Restaurant Count

 
 

Thirteen Weeks Ended

 

Fiscal Year Ended

 

December 26,

2020

 

December 28,

2019

 

December 26,

2020

 

December 28,

2019

Domestic Franchised Activity:

             

Beginning of period

1,277

   

1,169

   

1,200

   

1,095

 

Openings

52

   

34

   

131

   

114

 

Closures

(1)

   

(3)

   

(5)

   

(8)

 

Acquired by Company

(1)

   

   

(6)

   

(1)

 

Re-franchised by Company

   

   

7

   

 

Restaurants end of period

1,327

   

1,200

   

1,327

   

1,200

 
               

Domestic Company-Owned Activity:

             

Beginning of period

31

   

30

   

31

   

29

 

Openings

   

1

   

2

   

1

 

Closures

   

   

   

 

Acquired by Company

1

   

   

6

   

1

 

Re-franchised to franchisees

   

   

(7)

   

 

Restaurants end of period

32

   

31

   

32

   

31

 
               

Total Domestic Restaurants

1,359

   

1,231

   

1,359

   

1,231

 
               

International Franchised Activity:

             

Beginning of period

171

   

141

   

154

   

128

 

Openings

8

   

13

   

26

   

31

 

Closures

   

   

(1)

   

(5)

 

Restaurants end of period

179

   

154

   

179

   

154

 
               

Total System-wide Restaurants

1,538

   

1,385

   

1,538

   

1,385

 

 

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures - EBITDA and Adjusted EBITDA

(Unaudited)

(amounts in thousands)

 
 

Thirteen Weeks Ended

 

Fiscal Year Ended

 

December 26,

2020

 

December 28,

2019

 

December 26,

2020

 

December 28,

2019

Net income (loss)

$

(6,410)

   

$

3,047

   

$

23,306

   

$

20,476

 

Interest expense, net

4,018

   

4,184

   

16,782

   

17,136

 

Income tax expense (benefit)

(1,192)

   

1,663

   

3,637

   

5,289

 

Depreciation and amortization

2,231

   

1,465

   

7,518

   

5,484

 

EBITDA

$

(1,353)

   

$

10,359

   

$

51,243

   

$

48,385

 

Additional adjustments:

             

Loss on debt extinguishment and refinancing
transactions (a)

13,816

   

   

13,816

   

 

Gain on disposal of assets, net (b)

156

   

   

(3,093)

   

 

Consulting fees (c)

1,358

   

1,630

   

1,358

   

1,630

 

Stock-based compensation expense (d)

2,251

   

2,165

   

8,558

   

6,974

 

Adjusted EBITDA

$

16,228

   

$

14,154

   

$

71,882

   

$

56,989

 
 

(a)    

Represents costs and expenses related to the refinancing of our securitized financing facility and payment of a special
dividend; all transaction costs are included in Loss on debt extinguishment and refinancing transactions on the Consolidated
Statements of Operations, with the exception of $151,000 during the year ended December 26, 2020 that is included in
Selling, general and administrative expense on the Consolidated Statements of Operations.

 

(b)   

Represents a gain resulting from the re-franchise of company-owned restaurants to franchisees which is included in Gain on
sale of restaurants and other expenses, net on the Consolidated Statements of Operations.

 

(c)    

Represents costs and expenses related to a consulting project to support the Company's strategic initiatives, which are
included in Selling, general and administrative expense on the Consolidated Statements of Operations.

 

(d)   

Includes non-cash, stock-based compensation.

 

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures - Adjusted Net Income and Adjusted EPS

(Unaudited)

(amounts in thousands, except per share data)

 
 

Thirteen Weeks Ended

 

Fiscal Year Ended

 

December 26,

2020

 

December 28,

2019

 

December 26,

2020

 

December 28,

2019

Numerator:

             

Net income (loss)

$

(6,410)

   

$

3,047

   

$

23,306

   

$

20,476

 

Adjustments:

             

Loss on debt extinguishment and refinancing
transactions (a)

13,816

   

   

13,816

   

 

Gain on disposal of assets, net (b)

156

   

   

(3,093)

   

 

Consulting fees (c)

1,358

   

1,630

   

1,358

   

1,630

 

Tax effect of adjustments (d)

(3,664)

   

(390)

   

(2,887)

   

(390)

 

Adjusted net income

$

5,256

   

$

4,287

   

$

32,500

   

$

21,716

 
               

Denominator:

             

Weighted-average shares outstanding - diluted

29,845

   

29,709

   

29,804

   

29,670

 
               

Adjusted earnings per diluted share

$

0.18

   

$

0.14

   

$

1.09

   

$

0.73

 
 

(a)   

Represents costs and expenses related to the refinancing of our securitized financing facility and payment of a special
dividend; all transaction costs are included in Loss on debt extinguishment and refinancing transactions with the exception
of $151,000 during the year ended December 26, 2020 that is included in Selling, general and administrative expense on the
Consolidated Statements of Operations.

 

(b)    

Represents a gain resulting from the re-franchise of company-owned restaurants to franchisees which is included in Gain on
sale of restaurants and other expenses, net on the Consolidated Statements of Operations.

 

(c)  

Represents costs and expenses related to a consulting project to support the Company's strategic initiatives, which are
included in Selling, general and administrative expense on the Consolidated Statements of Operations.

 

(d)   

Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax
rate of 24% for the periods ended December 26, 2020 and December 28, 2019, which includes provisions for U.S. federal
income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.

SOURCE Wingstop

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