2015 restaurant ipos where are they now?

2015 RESTAURANT IPOs:WHERE ARE THEY NOW?

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www.aaronallen.com© 2016 Aaron Allen

KEY TAKEAWAYS• Four (4) restaurant companies issued an IPO in 2015

• Shake Shack (SHAK), January 29• Bojangles’ (BOJA), May 17

• Wingstop (WING), June 12• Fogo de Chao (FOGO), June 19

• In what was touted one of the best years for restaurant IPOs, half of the new restaurants stocks delivered negative returns• SHAK, +77.6%• BOJA, -9.2%

• WING, +50.1%• FOGO, -31.2%

• If you had purchased $1,000 in each of the restaurant IPOs in 2015 at IPO Share Price ($4,000 total), and held through today, the investment would now be worth $4,873, for an ROI of 21.8%

• If the same $4,000 had been used to purchase Domino’s stock (NYSE: DPZ) on January 3, 2015, the investment would now be worth $5,814, for an ROI of 45.1% (more than double the IPO investments)

• BOJA, WING & FOGO are listed on the NASDAQ; SHAK – which is significantly outperforming the other three – is listed on the NSYE

• Shake Shack had the largest Day 1 performance, opening with an IPO Share Price of $21.00 and closing at $45.90 (+119%)

• Comparatively, after one day of trading, Wingstop had closed +61%, Fogo de Chao +29%, and Bojangles’ +25%

• The current combined market capitalization of these companies is $3.15 billion• At its peak, Shake Shack could have provided a return on investment of 342%• Wingstop, which franchises 97% of its locations, operates with the highest EBITDA % of 34.1%

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KEY STOCK & OPERATIONAL PERFORMANCE COMPARISONSWhile Bojangles is leading in overall revenue (with a 128.20% quarterly YOY revenue growth) and enterprise value, both Shake Shack and Wingstop are outperforming in critical investment ratios, including Enterprise Value/Revenue and Enterprise Value/EBITDA. The upper-scale Fogo de Chao outpaces the competition in regard to both AUV (almost four times greater than the average of the otherthree companies) and check average.

SHAK BOJA WING FOGO AVERAGETTM Revenue 206.95 M 501.21 M 81.02 M 275.53 M 266.17 M

Enterprise Value 777.7 M 834.18 M 819.81 M 523.72 M 566.12 MQuarterly Revenue Growth (YOY) 43.30% 128.20% 16.00% 6.00% 48.38%

EBITDA % 10.4% 14.5% 34.1% 17.9% 19.23%EBITDA $ 21.52 M 72.64 M 27.62 M 49.37 M 42.78 M

Enterprise Value/Revenue 3.76 1.66 10.12 1.9 4.36Enterprise Value/EBITDA 36.13 11.48 29.68 10.61 21.98

PEG Ratio (5 year expected) 3.39 1.35 2.67 1.4 2.20Price/Sales (ttm) 6.76 1.26 9.13 1.39 4.64

Trailing P/E 115.76 21.1 62.02 12.94 52.96Forward P/E 70.51 17.13 41.61 12.55 35.45Profit Margin 2.59% 6.17% 14.62% 10.59% 8.49%

Operating Margin (ttm) 5.02% 11.53% 30.72% 13.19% 15.12%Return on Assets (ttm) 2.26% 6.49% 13.49% 4.77% 6.75%Return on Equity (ttm) 5.02% 19.53% N/A 12.17% 12.24%

Short Ratio 4.7 4.45 11.45 12.19 8.20Total Unit Count 97 659 663 43 365.50

AUV $2,133,505 $1,838,717 $1,125,549 $6,407,674 $2,876,361Check Average $10.50 $6.68 $16.00 $59.00 $23.05

Franchised? (if yes, what % of system) No (Licensed for International) Yes, 57% Yes, 97% No

Analysis as of July 12, 2016

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IF YOU HAD INVESTED $1,000 FOR EACH IPO … What would an investment into these stocks be worth now, assuming they were purchased for the IPO share price and held until today?

Company Symbol Exchange Offfer Date IPO Value IPO Share Price

# of Shares Offered

# of Shares Purchased with $1,000

Current Share Price

Current Market Cap

Dividends Paid

Current Value of $1,000 of

Stock

Dividends Earned

Current Value of

InvestmentROI

Fogo de Chao FOGO NASDAQ 6/19/15 $88.23 M $20.00 4,411,764 50 $13.76 $386.54 M $0.00 $688 $0 $688 -31.2%Wingstop WING NASDAQ 6/12/15 $110.2 M $19.00 5,800,000 52 $25.97 $737.35 M $2.90 $1,350 $151 $1,501 50.1%Bojangles' BOJA NASDAQ 5/7/15 $147.30 M $19.00 7,752,632 52 $17.46 $636.61 M $0.00 $908 $0 $908 -9.2%Shake Shack SHAK NYSE 1/29/15 $105 M $21.00 5,000,000 47 $37.78 $1.3 B $0.00 $1,776 $0 $1,776 77.6%TOTAL/AVERAGE - - - $450.7 M $19.75 22,964,396 201 $23.75 $3.15 B $0.72 $4,772 $151 $4,873 21.8%

$0$10$20$30$40$50$60$70$80$90

$100

2015 Restaurant IPO Stock Performance

SHAK WING FOGO BOJA


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-40%

-20%

0%

20%

40%

60%

80%

100%

RETURN ON INVESTMENT FROM IPO SHARE PRICE

+50.1%

+77.6

-9.2%

-31.2%


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SHAKE SHACK IN OPERATION ONLY 11 YEARS BEFORE IPOFounded in 1977, Bojangles’ had been in operation for 38 years prior to going public in 2015. Shake Shack is on the other end of the spectrum, as it was only open for 11 years before its IPO.

1975 1980 1985 1990 1995 2000 2005 2010 2015

38 Years

36 Years 21 Years

11 YearsAVERAGE26.5 Years


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BOJANGLES’ TTM REVENUE ALMOST DOUBLE SET AVERAGECompany revenue for Bojangles’ on the trailing twelve month period is over $500 million. Factoring in the company’s franchised locations (which account for 43% of the operation), system-wide sales are an estimated $1.2 billion.

$501,210,000

$275,530,000

$206,950,000

$81,020,000

Average, $266,177,500

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

BOJA FOGO SHAK WING

Trailing Twelve Month Revenue Comparison


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WING EV/REVENUE MORE THAN DOUBLE COMPETITORSWingstop’s enterprise value is $819.81 million, second best to Bojangles’ $834.18 million. However, Wingstop’sEV/Revenue ratio leads the set at 10.12 – more than double the average. This performance can again be attributed to the majority of company units being franchised.

10.12

3.76

1.9 1.66

Average, 4.36

0

2

4

6

8

10

12

WING SHAK FOGO BOJA

Enterprise Value to Revenue Comparison


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WINGSTOP DOUBLES NEXT-BEST EBITDA % PERFORMANCE Wingstop is operating with a staggering 34.1% EBITDA margin, which can again be attributed to 97% of its 663 total units being franchised.

34.1%

17.9%14.5%

10.4%

Average, 19.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

WING FOGO BOJA SHAK

EBITDA % Comparisons


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AVERAGE EBITDA FOR SET IS $42.7 MILLIONBojangles’ leads the set for company EBITDA, largely attributed to its TTM sales figures being almost double that of its next competitor ($501.21 million for Bojangles’, versus $273.53 million for Fogo de Chao).

$72,640,000

$49,370,000

$27,620,000

$21,520,000

Average, $42,787,500

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

BOJA FOGO WING SHAK

Company EBITDA Comparisons


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SHAK & WING PERFORMING ABOVE AVERAGE ON EV/EBITDAShake Shack’s EV/EBITDA performance outpaces the competition – partially because the company EBITDA is the lowest of the set at $21.5 million (about half of the overall set average).

36.13

29.68

11.48 10.61

Average, 21.98

0

5

10

15

20

25

30

35

40

SHAK WING BOJA FOGO

Enterprise Value to EBITDA Comparison


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WINGSTOP ONLY COMPANY WITH A DIVIDEND PAYOUT YET

$0 $0 $0$2.90 per share

Wingstop declared a special cash dividend on June 30, 2016, to be paid July 15. This will be a

total dividend payout of $16.8 million.


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$386,540,000

$636,610,000

$737,350,000

$1,390,000,000

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

COMBINED MARKET CAPITALIZATION LEAD BY SHAKE SHACK

Collectively, the market capitalization of the four 2015 restaurant IPOs is $3.15 billion.

Shake Shack’s market capitalization reached over $3 billion alone at its peak in May, 2015. The company is now valued at $1.39 billion.


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$92.86, 5/22/15

Lockup Expiration, 7/29/15

$31.92, 1/13/16

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

Historical Stock Performance

SHAKE SHACK SOARS, THEN LEVELS OUT If investors had sold Shake Shack stock at its peak (May 2015), they would have been pocketing almost $72 per share for an ROI of 342% (in less than five months). Even at it’s lowest trading price, $31.92 per share on January 13 of this year, Shake Shack would have returned near ly $11 per share.

Highest Possible ROI: $71.86 per share, 342%

IPO Share Price

KEY STOCK PERFORMANCE & OPERATING METRICS

TTM Revenue $206.95 M

Enterprise Value $777.7M

EBITDA $21.52M, 10.4%

Enterprise Value/Revenue 3.76

Enterprise Value/EBITDA 36.13

PEG Ratio 3.39

Profit Margin 5.02%

Return on Assets (ttm) 2.26%

Return on Equity (ttm) 5.02%

Total Unit Count 97 (39 international)

Average Unit Volume $2,133,505

Check Average $10.50

Year Founded 2004

CEO Randy Garutti


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$28.01, 6/1/15

Lockup Expiration, 11/14/15 $13.61, 2/11/16

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00


BOJANGLES’ STILL RECOVERING AFTER DIPAfter going public on May 8 2015, Bojangles’ stock price peaked less than one month later on June 1 of last year at a share price of $28.01. Selling then would’ve earned investors just over $9 per share, for an ROI of 47%.

Highest Possible ROI: $9.01per share, 47%

IPO Share Price



Enterprise Value $832.18 M

EBITDA $72.64M, 14.5%



PEG Ratio 1.35

Profit Margin 6.17%



Total Unit Count 659 (57% franchised)


Check Average $6.69

Year Founded 1977

CEO Clifton Rutledge


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$35.24, 8/3/15

$20.46, 11/17/15


$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00


WINGSTOP RECENTLY EVENS OUTWingstop, one of the two 2015 restaurant IPOs with a positive ROI, issued its IPO June 12 of last year. The stock price bottomed out at $20.46 in November, which still would’ve earned investors $1.46 per share and an ROI of 7.7%.


IPO Share Price



Enterprise Value $819.81M

EBITDA $27.62 M, 34.1%



PEG Ratio 2.67

Profit Margin 14.62%


Return on Equity (ttm) N/A

Total Unit Count 663 (97% franchised)



Year Founded 1994

CEO Charles R. Morrison


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$26.19, 6/22/15


$12.22, 6/16/16

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00


FOGO DE CHAO IN A STEADY DECLINEFogo de Chao peaked just three days after its IPO on June 19 of last year, and has been falling ever since. The last time FOGO traded above its IPO Share Price of $20 was on August 14 of 2015. The stock price has been declining steadily since, bottoming out at just $12.22 per share almost exactly a year after the FOGO IPO.


IPO Share Price



Enterprise Value $523.72 M

EBITDA $49.37 M, 17.9%



PEG Ratio 1.4

Profit Margin 10.59%



Total Unit Count 43 (11 international)



Year Founded 1979

CEO Larry Johnson


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CEO COMPENSATION COMPARISONSAlthough Shake Shack CEO, Randy Garutti, takes home the lowest annual cash salary (at $400,000) of the four companies, he has a total calculated compensation of over $6.6 million annually. Comparatively, Clifton Rutledge (Bojangles’), Charles R. Morrison (Wingstop), and Larry Johnson (Fogo de Chao) have an average total compensation of about $964,000 each year.

SHAK BOJA WING FOGOTTM Revenue $206,950,000 $501,210,000 $81,020,000 $275,530,000

EBITDA $ $21,520,000 $72,640,000 $27,620,000 $49,370,000CEO Randy Garutti Clifton Rutledge Charles R. Morrison Larry JohnsonAge 40 51 48 63

CEO as of Date September 23, 2014 January 24, 2014 June 12, 2012 April 1, 2007CEO Annual Salary $400,000 $510,558 $442,308 $738,485

CEO Total Calculated Compensation* $6,679,150 $965,874 $941,490 $986,285CEO Salary (as % of Revenue) 0.2% 0.1% 0.5% 0.3%CEO Salary (as % of EBITDA) 1.9% 0.7% 1.6% 1.5%

CEO Compensation (% of Revenue) 3.2% 0.2% 1.2% 0.4%CEO Compensation (% of EBITDA) 31.0% 1.3% 3.4% 2.0%

*Total Calculated Compensation includes salary, bonus, stock options (exercisable & un-exercisable), and other long-term compensation.


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Aaron Allen & Associates provides strategic marketing, concept development andexecutive-level advisory services to leading foodservice and hospitality companiesworldwide. We identify and distill the latest restaurant and hospitality marketing trends. Weprepare tailored presentations for executive management of growth-minded companies,and then support the development and implementation of innovative restaurant marketinginitiatives within their system.

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2015 restaurant ipos where are they now?

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