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Investor Presentation
June 2015
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements
This presentation contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of
historical fact included in this presentation are forward-looking statements. Forward-looking statements discuss our current expectations
and projections relating to the Company’s financial condition, results of operations, plans, objectives, future performance and business.
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 ‘‘aim,’’ ‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘forecast,’’ ‘‘outlook,’’ ‘‘potential,’’ ‘‘project,’’ ‘‘projection,’’
‘‘plan,’’ ‘‘intend,’’ ‘‘seek,’’ ‘‘may,’’ ‘‘could,’’ ‘‘would,’’ ‘‘will,’’ ‘‘should,’’ ‘‘can,’’ ‘‘can have,’’ ‘‘likely,’’ the negatives thereof 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. They appear in a number of places throughout this presentation and include statements regarding the Company’s intentions,
beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity,
prospects, growth, strategies and the industry in which the Company operates. All forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those that the Company expected including such risk and uncertainties
disclosed in the Company’s public filings with the SEC at www.sec.gov or www.zoeskitchen.com. The forward-looking statements included
in this presentation are made only as of the date hereof.
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 EBITDA and Adjusted EBITDA.
The Company believes that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing
operating results and trends and in comparing the Company’s financial measures with other fast casual restaurants, which may present
similar non-GAAP financial measures to investors. For additional information about our non-GAAP financial measures, see our filings with
the Securities and Exchange Commission.
1
SENIOR MANAGEMENT PRESENTERS
Kevin Miles
President & Chief Executive Officer
Jason Morgan
Chief Financial Officer
2
MEET
Zoës Kitchen
Zoës Kitchen is a fast-casual restaurant concept
serving wholesome Mediterranean-inspired
dishes delivered with Southern hospitality
Our Concept:
Y
Y
Born in the Mediterranean, Raised in the South
Our customer - educated, affluent women and their families –
represent ~70% of our customer visits
Our Culture:
Y
Delivering Goodness in the Communities We Serve
Positioned for Growth:
Y
Y
Y
Attractive Unit Economics
Leading Comparable Restaurant Sales
Significant White Space
3
COMPANY SNAPSHOT
Total Restaurants
Key Statistics:
Y
Y
Y
Y
132
102
2014 AUV(1): Approx. $1.5 million
2014 Average Per Customer Spend: $9.98
21
2008
2014 Lunch / Dinner: ~60% / 40% (excl.
catering)
31
2009
43
2010
75
57
2011
2012
2013
2014
Total Revenue ($ millions)
$171.7
$116.4
2014 Catering is ~16% of Revenue
$50.2
$79.7
$46.3
$63.0
$20.8
$32.3
2009
2010
2011
2012
2013
2014
Q1 '14
Q1 '15
11.9%
11.8%
13.4%
6.9%
6.7%
5.7%
7.7%
Comp. Restaurant
Sales Growth (2)
(2.5%)
(1) AUVs consist of the average sales of all Company-owned restaurants that have been open for a trailing 52-week period or longer.
(2) Comparable restaurant sales for Company-owned restaurants open for 18 periods or longer. Periods refer to a four week reporting period, except for the thirteenth period of a 53-week year, which would contain five weeks; fifth week of
the thirteenth period of a 53-week year not included in comparable restaurant sales calculation.
4
PROVEN PORTABILITY AND
SIGNIFICANT GROWTH OPPORTUNITY
Y
Y
Y
Y
Current Restaurant Footprint
149 restaurants in 16 states as
of June 2015
For 2014, our top 20
performing restaurants were
spread across seven different
states
98% Company-owned
Opened 30 Company-owned
restaurants and acquired 5
franchise restaurants during
2014
5
GROWING BRAND EQUITY
Twenty one consecutive fiscal quarters of positive comparable restaurant sales growth
Two-Year Stacked Quarterly Comparable Restaurant Sales Growth
Most Recent Quarter
Prior Year's Quarter
12.1%
16.8%
11.9%
8.1%
10.4%
12.5%
14.1%
5.5%
15.0%
7.7%
3.8%
10.7%
13.0% 14.1% 13.5%
8.0%
16.8%
10.7%
11.9%
(1)
5.7%
7.5%
14.1% 15.0%
12.5% 12.1%
8.1%
10.4%
5.5%
5.9%
7.7%
7.8%
7.7%
3.8%
5.7%
Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4' 14 Q1' 15
# of Comp.
Restaurants 22
(Most Recent
Quarter)
24
25
27
32
34
35
40
43
50
52
55
63
70
78
81
94
Note: Comparable restaurant sales for Company-owned restaurants open for 18 periods or longer. Periods refer to a four week reporting period, except for the thirteenth period of a 53-week year, which would contain five weeks; fifth week of the
thirteenth period of a 53-week year not included in comparable restaurant sales calculation.
(1)
Adjusting for a calendar shift related to the 53rd week in 2012, comparable restaurant sales would increase in the fourth quarter of 2013 from 3.8% to 7.0%.
6
INVESTMENT HIGHLIGHTS
Y Desirable Loyal Lifestyle Brand
Y
Simple. Tasty. Fresh!
Y SouthernContemporary
Mediterranean
Hospitality
Y
Multiple Levers
Differentiated Fast Casual
and
Customer Base
with a
Our Food –
Delivering a
with
Experience
Diverse Revenue Mix Provides
Y Industry Leading
Y
for Growth
Comparable Restaurant Sales Growth
Attractive Unit Economic Model with Proven Portability
and Significant White Space
Y Experienced
Management Team
7
FAST CASUAL LIFESTYLE BRAND
Aspirational brand with broad appeal
Customers see Zoës as a reflection of self. By rooting culture in delivering goodness we appeal to their attitudes and emotions.
Cosmopolitan Casual Chic
Y
Y
“ There’s a positive vibe every
time I come here!”
Inspired by high fashion and
other relevant trends to create
a high-energy atmosphere
Mediterranean Cuisine
Y
Y
Southern Hospitality with Personality
“I feel good when I eat here because
I’m fueling my body the right way”
Multiple ways to use the brand with
dine-in, to-go and catering social
occasions
Eat what you love.
Y
Y
Y
Team is a reflection of our customers
Passion for life
Delivering goodness naturally
Love how you feel!
8
SIMPLE. TASTY. FRESH!
Bringing Mediterranean mainstream
Traditional Mediterranean preparation
methods such as grilling and baking
(no microwaves or fryers)
Cooking philosophy rooted in rich
traditions that celebrate food
Fresh, high-quality ingredients
that are predominantly
preservative- and additive-free
Menu offers an abundance of fresh
fruits, vegetables and herbs, grains,
olive oil and lean proteins
Cater to dietary needs by
offering vegetarian, vegan,
gluten-free and calorie
conscious menu selections
Flavorful new menu
additions with
seasonal ingredients
9
LOYAL CUSTOMER BASE
Concept designed to appeal to educated and affluent women
Y
Y
Y
Y
Y
Women along with their families,
represent ~70% of customer visits
Avg. Household Income >$100K
Majority are college educated
Strong influence on family mealtime
decision-making
Strong brand advocates: ~94% of
surveyed customers intend to
recommend Zoës Kitchen
Our customers appreciate the extra time
Zoës allows them to spend with family and
friends to fuel a balanced and active lifestyle
10
OUR TEAM MEMBERS
The heart and soul of Zoës Kitchen
Y
Y
Y
Y
We invest in great talent to enable
the growth of our brand
People with high desire to serve and
please
Train through interactive online
training ecosystem, LifeWORKS
Prepared for growth: proactively
training managers at one of our 21
training restaurants
11
EXPERIENCED MANAGEMENT TEAM
Name
Position
Total Years of Experience
Kevin Miles
President & Chief Executive Officer
22 Years
Jason Morgan
Chief Financial Officer
19 Years
Jeremy Hartley
Chief Operating Officer
31 Years
Allyn Taylor
Vice President of Development
29 Years
Rachel Phillips-Luther
Vice President of Marketing
16 Years
James Besch
Vice President of Accounting & Controller
19 Years
Michael Todd
General Counsel
24 Years
Prior Experience
12
Growing Zoës
LEADING GROWTH IN FOOD RETAIL…
Two-Year Stacked Unit Growth
FY 2014
FY 2013
29.4%
22.0%
36.0%
20.8%
15.5%
14.4%
12.8%
23.1%
22.0%
16.2%
11.9%
17.1%
12.8%
11.8%
14.3%
13.1%
7.5%
9.0%
12.3%
11.4%
21.6%
10.2%
8.1%
10.7%
9.4%
11.9%
5.8%
7.6%
2.4%
2.4%
Two-Year Stacked Comparable Store Sales Growth
FY 2014
5.6%
9.9%
3.7%
10.8%
10.7%
FY 2013
16.8%
6.9%
4.3%
6.9%
6.0%
7.0%
6.6%
5.9%
5.6%
1.1%
4.5%
6.5%
3.9%
0.3%
4.3%
2.9%
3.2%
3.3%
0.5%
3.3%
2.3%
1.3%
1.5%
1.1%
(0.8%)
Source: Public company filings.
Note: Company-owned comparable store growth only.
14
…
AND
STRONG
GROWTH
IN
UNIT
VOLUMES
($ thousands)
vs. Fast Casual Peers
Average Unit Volumes
$1,421
$1,470
$1,501
$2,502 $2,472
Early Stages
Of Growth
FY 2014
$1,299
$1,209
$1,106
$1,501
$1,147
$1,000+
2009
2010
2011
2012
2013
$1,274
$1,056
(1)
2014
Number of
Restaurants
1,777
1,595
132
380
319
113
(1)
227
Source: Public company filings.
Note: For Company-owned stores only. ZOES AUVs consist of the average sales of all Company-owned restaurants that have been open for a trailing 52-week period or longer.
(1) Represents AUV at time of early growth stage: PNRA AUV of $1,274 represents 1998 AUV when it had 113 bakery-cafés and CMG AUV of $1,056 represents 2002 AUV when it had 227 restaurants.
15
INCREASE COMPARABLE RESTAURANT SALES
Heighten Brand Awareness
Y
Y
Continue to expand footprint
Inspiring brand advocacy
Increase Customer Frequency
Grow our Off-Premise Business
Flexible dining options and
home meal replacement
Offerings conducive to travel
Y
Y
New menu additions
Y
Y
Consumer trial through
catering
16
SIGNIFICANT EXPANSION OPPORTUNITY
Current Units
% Unit Potential Remaining
100%
75%
50%
91%
0%
Domestic Unit
Potential
1,600+
53%
1,755
1,880
82%
25%
149
56%
439
2,500
(1)
~4,000
(2)
~4,000
Source: Public company filings and Wall Street research.
Note: Restaurant count of 149 as of June 2015 for Zoës Kitchen; as of end 2014 for CMG, NDLS and PNRA.
(1) Based on June 2014 management estimate of 4,000 units in the U.S.
(2) Based on December 2013 Wall Street research.
17
THE SCIENCE OF OUR EXPANSION STRATEGY
Targeted site evaluation and acquisition process
Y
Y
Y
In-house real estate team has over 50 years of combined experience with brands such
as Chipotle, Panera, Potbelly, Pei Wei, Starbucks and P.F. Chang’s
Sophisticated analytical tools and flexible new restaurant model
Target demographic makes Zoës a desirable tenant for landlords and developers;
~2,500 weekly customers drives traffic to complementary retail businesses
End-Cap
Free-Standing
In-Line
18
ATTRACTIVE UNIT ECONOMIC MODEL
YEAR 3 Target
($ thousands)
Average Unit Volume
% of 2013 Company Average
$1,300
~88%
Restaurant Contribution (1) Margin
~18%
Buildout Cost (2)
$750
Cash-on-Cash Return
30%+
On average, new restaurants opened since the
beginning of 2009 have exceeded these AUV and cashon-cash return targets within the third year of operations
(1) Restaurant Contribution is defined as restaurant sales less restaurant operating costs, which are costs of sales, labor and store operating expenses.
(2) Net of tenant allowances.
19
Financial Performance
HISTORICAL FINANCIAL PERFORMANCE
($ Mil ions)
Total Restaurants
Total Revenue
132
$171.7
102
$116.4
75
$79.7
57
43
$50.2
31
$20.8
2009
2010
2011
2012
2013
2014
2009
$32.3
2010
2011
2012
2013
2014
21
HISTORICAL
FINANCIAL
PERFORMANCE
($ Mil ions)
Adjusted EBITDA (2)
Restaurant Contribution (1)
$34.2
% Margin
$16.0
$23.1
$10.9
$9.2
$16.9
$5.4
$10.4
$4.5
$6.5
$2.4
22.1% 20.7%
21.2% 21.5%
20.0% 20.0%
2009
2011
2013
2010
2012
2014
$0.9
2009
2010
2011
2012
2013
2014
(1) Restaurant Contribution defined as restaurant sales less restaurant operating costs, which are cost of sales, labor and store operating expenses.
(2) See Adjusted EBITDA reconciliation on page 28.
22
STRONG
MOMENTUM
IN
1Q
2015
YTD
($ Mil ions)
Total Revenue
Total Restaurants
144
$46.3
115
Q1 '14
Q1 '15
Restaurant Contribution(2)
$9.4
Q1 '14
Comp. Restaurant
Sales Growth (1)
$63.0
Q1 '14
Q1 '15
5.7%
7.7%
Adjusted EBITDA(3)
$13.7
$6.8
$3.8
Q1 '15
Q1 '14
Q1 '15
(1) Comparable restaurant sales for Company-owned restaurants open for 18 periods or longer. Periods refer to a four week reporting period, except for the thirteenth period of a 53-week year, which would contain five weeks; fifth week of the
thirteenth period of a 53-week year not included in comparable restaurant sales calculation.
(2) Restaurant Contribution defined as restaurant sales less restaurant operating costs, which are cost of sales, labor and store operating expenses.
(3) See Adjusted EBITDA reconciliation on page 28.
23
FY 2015 Guidance
Y
Y
Y
Y
Y
Y
Restaurant sales between $218 million and $223 million
Royalty and franchise fees of approximately $0.2 million
Comparable restaurant sales growth of 4.0% - 6.0%
31-33 Company-owned restaurant openings
Restaurant contribution margin between 20.0% - 20.5%
G&A expenses of $24.7 million (inclusive of $1.3 million of
equity-based compensation expense)
24
LONG-TERM FINANCIAL TARGETS
Double Restaurant Base over Next 4 Years
2% – 4% Annual Comparable Restaurant Sales Growth
G&A and Operating Leverage
20%+ EBITDA GROWTH
Note: These targets are forward-looking, are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and
its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and these variations may be material. For discussion of some of the
important factors that could cause these variations, please consult the “Risk Factors” in the Company’s public filing with the SEC at www.sec.gov or www.zoeskitchen.com. Nothing in this presentation should
be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals.
25
INVESTMENT HIGHLIGHTS
Y
Lifestyle Brand Desirable Loyal
Y Simple. Tasty. Fresh!
Y Contemporary Mediterranean
Southern Hospitality
Y
Multiple Levers
Y Industry Leading
Y
Proven Portability Significant White Space
Y Experienced
Differentiated Fast Casual
with a
and
Customer Base
Our Food –
Delivering a
Experience with
Diverse Revenue Mix Provides
for Growth
Comparable Restaurant Sales Growth
Attractive Unit Economic Model with
and
Management Team
26
Appendix
ADJUSTED
EBITDA
RECONCILIATION
($ thousands)
Fiscal Year Ended,
December 29, December 30, December 31, December 26, December 27, December 28,
2014
2013
2012
2011
2010
2009
$
(10,017) $
(3,715) $
(253) $
(27) $
(2,472) $
(2,815)
10,473
7,462
4,870
3,426
2,362
1,622
3,535
4,019
2,337
1,248
720
556
699
656
622
110
554
546
$
4,690
$
8,422
$
7,576
$
4,757
$
1,163 $
(91)
Net Loss, as reported
Depreciation and amortization
Interest expense, net
Provision for income taxes
EBITDA
Asset disposals, closure costs, loss on interest
cap and restaurant impairment (1)
Management and consulting fees (2)
Equity-based compensation expense
Loss on extinguishment of debt
Pre-opening costs (3)
IPO and follow-on related expenses (4)
Bargain purchase gain from acquisitions
Executive relocation expenses (6)
Adjusted EBITDA
(1)
(2)
(3)
(4)
(5)
(6)
(5)
$
Sixteen Weeks Ended,
April 20,
April 21,
2015
2014
$
692 $
(9,988)
3,704
2,881
971
1,659
234
865
$
5,601 $
(4,583)
150
200
240
(4)
289
147
47
19
113
6,332
978
2,109
265
73
1,938
294
126
917
232
190
806
123
293
544
142
201
551
305
848
113
6,120
978
816
1,463
-
-
-
(541)
-
-
-
384
-
170
16,005
$
10,899
$
9,153
$
5,440
$
2,411
$
949
$
6,801
$
3,847
Represents costs related to impairment of long-lived assets, gain or loss on disposal of property and equipment and restaurant closure expenses, loss on interest rate cap and restaurant closure expenses.
Represents fees payable to Brentwood pursuant to the Corporate Development and Administrative Services Agreement and fees paid to Greg Dollarhyde pursuant to the Consulting Agreement.
Represents expenses directly associated with the opening of new restaurants that are incurred prior to opening, including pre-opening rent.
Represents fees and expenses that were incurred, but not capitalized, in relation to our IPO completed on April 16, 2014 and a follow-on offering completed on August 19, 2014.
Represents the excess of the fair value of net assets acquired over the purchase price related to our acquisitions of the Houston franchise restaurants.
Represents costs associated with the relocation packages of an executive.
28