Wingstop (WING)

[Whos_Who]

Fiscal Second Quarter 2015 Financial Results
http://money.cnn.com/news/newsfeeds/articles/globenewswire/10145048.htm

DALLAS, Aug. 6, 2015 (GLOBE NEWSWIRE) -- Wingstop Inc. (NASDAQ:WING) today announced fiscal second quarter 2015 financial results for the period ended June 27, 2015 and also issued annual guidance for fiscal year 2015.

Highlights for the fiscal second quarter 2015 compared to the fiscal second quarter 2014:
• System-wide restaurant count increased 19.5% to 785, with 40 net franchised restaurant openings in the quarter
• Domestic same store sales increased 9.0%
• Total revenue increased 18.0% to $19.2 million
• Net income was $584,000, or $0.02 per diluted share, compared to $2.5 million, or $0.10 per diluted share
• Adjusted EBITDA*, a non-GAAP measure, increased 18.6% to $7.2 million
• Adjusted net income*, a non-GAAP measure, increased 19.6% to $3.2 million
• Adjusted earnings per pro-forma diluted shares*, a non-GAAP measure, was $0.11, an increase of 10.0% from the prior year

* Adjusted EBITDA, adjusted net income and adjusted earnings per pro-forma diluted shares are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income and adjusted pro-forma diluted EPS to the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See "Non-GAAP Financial Measures."

President and Chief Executive Officer Charlie Morrison stated, "Wingstop enjoyed a strong quarter characterized by robust top-line growth as well as strong increases in adjusted EBITDA and adjusted net income. We have had a great start to the year with 73 net franchised restaurant openings. We are on track to deliver our 12th consecutive year of domestic same store sales growth with a 9.0% increase for the quarter. This demonstrates our ability to broaden our consumer appeal while driving repeat business and loyalty from our core demographic of millennials and families. We appreciate our team and franchise partners for their contributions to these outstanding achievements."

Morrison continued, "We believe Wingstop is well positioned to deliver sustainable and profitable growth, and that our brand has a significant expansion opportunity. We believe there is opportunity to grow up to 2,500 domestic restaurants longer-term through development in our existing markets as well as in new markets."

Key Operating Metrics
Thirteen Weeks Ended
June 27,2015 June 28,2014

*Number of system-wide restaurants open at end of period 785 657
*Number of domestic franchise restaurants open at end of period 714 612
*Number of international franchise restaurants open at end of period 52 26
*System-wide sales (in thousands) $ 202,793 $ 165,563
*System-wide domestic same store sales growth 9.0% 15.3%
*Adjusted EBITDA (in thousands) $ 7,247 $ 6,113

Fiscal Second Quarter 2015 Financial Results

Total revenue for fiscal second quarter 2015 increased 18.0% to $19.2 million from $16.3 million in the fiscal second quarter last year.
• Royalty revenue and franchise fees increased 24.6% to $11.4 million from $9.2 million in the fiscal second quarter last year. This is primarily due to a 20.1% increase in the number of franchised restaurants and domestic same store sales growth of 9.0%.
• Company-owned restaurant sales increased $0.7 million to $7.8 million from $7.1 million in the fiscal second quarter last year. The increase is the result of company-owned domestic same store sales growth of 9.5%.

Cost of sales increased 11.0% to $5.5 million from $5.0 million in the prior fiscal year's second quarter. As a percentage of company-owned restaurant sales, cost of sales increased 100 basis points to 70.5% from 69.5%. The increase was primarily driven by a 26% increase in the commodity cost of bone-in chicken wings, which was partially offset by lower labor costs and other restaurant operating expenses as a percentage of restaurant sales.

Selling, general & administrative expenses (SG&A) increased to $10.7 million from $5.6 million in the prior fiscal year's second quarter. The increase in SG&A was primarily due to a one-time fee of $3.3 million paid in consideration for the termination of our management agreement with Roark Capital Management, other one-time IPO expenses of $0.7 million, and headcount additions to support our future growth.

Net income in the fiscal second quarter 2015 was $584,000, or $0.02 per diluted share, compared to net income of $2.5 million, or $0.10 per diluted share in the prior fiscal year's second quarter.

Adjusted net income increased 19.6% to $3.2 million, or $0.11 per pro-forma diluted share, compared to $2.7 million, or $0.10 per pro-forma diluted share, in the prior fiscal year's second quarter. A reconciliation between net income and adjusted net income as well as diluted shares to pro-forma diluted shares is included in the accompanying financial data.

Restaurant Development

At June 27, 2015, there were 785 Wingstop restaurants system-wide. This included 733 restaurants in the United States, of which 714 are franchised restaurants and 19 are company-owned. Our international footprint consisted of 52 franchised restaurants across six countries. During the second quarter, there were 41 system-wide Wingstop openings, including 34 domestic franchised and 7 international franchised locations.

Fiscal Year 2015 Financial Outlook

Based on current information, we are providing the following guidance for fiscal year 2015, which ends on December 26, 2015:
• 120-130 net system-wide franchise restaurant openings
• Domestic same store sales increase of 6.5% to 7.0%
• Total revenue between $75.5 million and $76.0 million
• SG&A expenses between $33.0 million and $34.0 million (includes $3.3 million in management agreement termination fee, $0.2 million in management fees and $2.0 million in transaction costs related to March 2015 refinancing our credit agreement and our initial public offering)
• Adjusted EBITDA, a non-GAAP measure, between $26.8 million and $27.3 million
• Adjusted net income, a non-GAAP measure, between $11.8 million and $12.1 million
• Pro-forma diluted share count, a non-GAAP measure, of approximately 28.8 million