investor presentation september 2015...fy 2010 fy 2011 fy 2012 fy 2013 fy 2014 q2 2015 domestic...
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Investor PresentationSeptember 2015
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Forward-Looking InformationForward-Looking Information
This presentation contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which are subject to risks and
uncertainties. All statements other than statements of historical facts contained in this presentation are forward-looking statements. Forward-looking
statements discuss our current expectations and projections relating to our financial position, 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 similar expressions. All forward-looking statements are subject to known and
unknown risks, uncertainties and other important factors that may cause actual results to be materially different. All forward-looking statements are expressly
qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this presentation in the context of the
risks and uncertainties disclosed from time to time in the Company’s filings with the Securities and Exchange Commission, including its most recent annual
report on Form 10-K, subsequent quarterly reports on Form 10-Q and its final prospectus filed on August 13, 2015 pursuant to Rule 424(b)(4), all of which are
available online at www.sec.gov, www.shakeshake.com or upon request from Shake Shack Inc. The forward-looking statements included in this press release
are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information,
future events or otherwise, except as otherwise required by law.
Non-GAAP Financial Information
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
generally accepted accounting principles (GAAP). The non-GAAP financial measures used within this presentation are EBITDA, Adjusted EBITDA, Shack-level
operating profit and Shack-level operating profit margin. We believe that these non-GAAP financial measures, when used in conjunction with GAAP financial
measures, provide useful information about our operating results, enhance the overall understanding of past performance and future prospects, evaluate our
performance against our competitors and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. The non-GAAP financial measures are not necessarily comparable to similarly titled measures used by other
companies due to different methods of calculation. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures are
provided in the Appendix to this presentation.
Key Shack Leaders
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Randy GaruttiChief Executive Officer
Jeff UttzChief Financial Officer
Danny MeyerFounder & Chairman of the Board
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2015 Financial Accomplishments
Q1 increase
(year-over-year)
Q2 increase
(year-over-year)
Revenue 56% 75%
Same-Shack sales 11.7% 12.9%
Adjusted EBITDA margin 360 bps 600 bps
Shake-level operating
profit margin270 bps 470 bps
Operational accomplishments in 2015
Scottsdale, AZ 2016
opening announced
Second Chicago Shack
opened at the Chicago
Athletic Association
ChickenShack test
launch in Brooklyn
First Baltimore Shack opened
Japan expansion announced,
10 Shacks through 2020 with
Sazaby League
Two additional Boston
Shacks opened:
Legacy Place,
Dedham
Newbury Street ,
Downtown Boston
LA 2016 opening announced
4th Great American Shake
Sale raised $500K
Bridgewater, NJ Shack opened
First Texas Shack opened in
Austin
Madison Square Park flagship
reopened after 7 months of renovation
Second UK Shack opened in Stratford
Third Russia Shack opened in Moscow
JulyFebruary March JuneApril May
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Second Central Florida
Shack in Orlando inside
the I-Drive 360
Second Austin Shack
opened at The Domain
retail development
August
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Leaders training future leaders
What makes Shake Shack special
Fine Casual: Inspired food and drink
Beloved lifestyle brand
Versatile real estate model built for growth
Shack travels abroad
Shack-onomics
Our culture of Enlightened Hospitality: Taking care of each other
“Modern Roadside Burger Stand”
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Classic American menu of all-natural, hormone and antibiotic-free burgers,
hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine
Culinary innovation
ChickenShack
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ShackMeister Burger Roadside Shack
Lockhart Link Burger ParkBurger Surf n’ Shack
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Where in the world is Shake Shack?
74 Shacks worldwide (as of Sept 2015)
40 domestic company-operated
29 international licensed
5 domestic licensed
US (45)
West (1) Midwest (3)
NYC (13)
Mid-Atlantic (9)
Southeast (6)Texas (2)
Northeast (11)
Europe/Asia (9)
London (2) Moscow (3)
Istanbul (4)
Middle East (20)
Kuwait (6)
Qatar (1)
UAE (10)
Saudi Arabia (1)
Lebanon (2)
Authentic community focus
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Shack-wide events support brand awareness and commitment to social causes, integrating the local community along the way
Gaien Ginkgo Tree
Construction Wall
Annual Great American
Shake Sale
Center City Philly
Mural Dedication
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Strong growth trajectory
59
1321
3137
23
3
4
5
5
2
5
15
27
29
7
14
21
40
63
71
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q2 2015
Domestic company-operatedDomestic licensedInternational licensed
Total Shacks
$19
$39
$57
$82
$119
$153
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM(7/1/15)
Total revenue ($mm)
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Versatile real estate model built for growth
Tremendous whitespace opportunity
Potential for 450 domestic company-
operated Shacks over the long term
Currently 42 domestic locations, 37
of which are company-operated
locations
Increasing guidance to open at least
12 new domestic company-operated
Shacks in 2015, and at least 12
Shacks annually in 2016 & beyond
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450
FY 2013 FY 2014 Q2 2015 Target
Domestic company-operated Shacks
Boston, MA
Austin, TX
Domain Austin, TX
I-Drive Orlando, FL
Need pic of Skokie!
Scottsdale, AZ
West Hollywood, CA
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Licensing approach
29 Internationally licensed Shacks
Alshaya – UK, Middle East, Russia
The Sazaby League - Japan
Highly-respected and experienced retail
and restaurant teams that are aligned with
Shake Shack’s vision and brand
Tokyo, JapanLondon, United Kingdom
International 5 Domestic Licensed Shacks
Sporting venue locations operated by
Union Square Events: Citi Field, Nationals
Park, Saratoga Race track
JFK locations licensed to SSP
Approach and selection process
Locations target brand awareness
Opportunistic approach to new locations
Domestic
Citi Field
Stratford, UK
Tokyo, Japan
Total Shacks and system-wide sales
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1321
3137
23
3
4
5
5
2
5
15
27
29
7
14
21
40
63
71
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q2 2015
Domestic company-operated Domestic licensed International licensed
Total Shacks
$21
$53
$81
$140
$217
$257
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM(7/1/15)
System-wide Sales ($mm)
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$3
$6
$10
$14
$19
$29
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM(7/1/15)
Total revenue and adjusted EBITDA
Adjusted EBITDA ($mm)
$19
$39
$57
$82
$119
$153
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM(7/1/15)
Total revenue ($mm)
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Adjusted EBITDA margin
14.5% 16.0%
17.5% 17.5%
15.9%
18.8%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 LTM(7/1/15)
Adjusted EBITDA margins over time Commentary
1H 2015 adjusted
EBITDA margin
improved 500 bps over
the previous period
Positive increase in
Same Shack Sales
Operational efficiencies
Leverage over labor &
other operating
expenses
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5 7 8 8 9 10 12 13 13 16 # of Shacks
0.8%
5.9%
8.2%
6.8%
3.9%
4.5%
1.2%
7.2%
11.7%
12.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15
Line 1
Domestic company-operated Shacks open for 24 months or longer*
Same Shack Sales overview
Strong same-Shack sales
in 2Q 2015 driven by:
4.3% increase in traffic
8.6% increase in ticket
(price and mix)
1H 2015 same-Shack
sales of 12.4% driven by:
3.4% increase in traffic
9.0% increase in ticket
(price and mix)
Commentary
¹ Excludes 53rd week in fiscal 2014
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New market successes
Successfully entered two new markets—Maryland (Baltimore) and Texas (Austin) since the IPO
Strong volume and operating performance in new markets underscore the portability of the concept
Plans to enter Los Angeles, CA and Phoenix, AZ in 2016
Las Vegas, NV Chicago, IL Baltimore, MD Austin, TX
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$98,416
$138,247
1H '14 1H '15
$51,933
$86,258
1H' 14 1H '15
$ in thousands
Revenue System-wide sales
1H 2015 key metrics
Shack-level operating profit Adjusted EBITDA
$11,898
$23,395
1H '14 1H '15
$8,347
$18,207
1H '14 1H '15
21.1%16.1%28.3%24.4%
% Shack-level operating profit margin % adjusted EBITDA margin
¹ AUVs are calculated by dividing total sales from domestic company-operated Shacks by the number of domestic company-operated Shacks open during that period; for Shacks not open during the entire
period, fractional adjustments are made to the number of Shacks open such that it corresponds to the period of associated sales; 2 Defined as Shack sales less operating expenses, including food and paper
costs, labor and related expenses, other operating expenses and occupancy and related expenses as a percentage of Shack sales 3 Excludes pre-opening expenses; 4 Defined as third year operating profits
for domestic company-operated Shacks open for at least three full years, divided by their life-to-date associated build-out costs, excluding any pre-opening expenses
Domestic company-operated Shack count 12 annually
Average Shack volume ($mm) 1 $2.8 - $3.2
Shack-level operating profit margin 2 18% - 22%
Average Shack investment costs ($mm) 3 $1.5 - $2.5
Cash-on-cash return 4 30% - 33%
New Shack target
Domestic company-operated Shack-onomics
Target shack-onomics
Increased
from 10
annually
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Updated 2015 OutlookFor the fiscal year ending December 30, 2015, the Company provides the following
guidance:
Total revenue between $171 million and $174 million
Same-Shack sales growth in the mid to high single digits
At least 12 new domestic company-operated Shacks to be opened throughout the
year
At least 5 international licensed Shacks to be opened under the Company's
current license agreements in the U.K. and Middle East
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Investor PresentationSeptember 2015
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a Represents non-cash equity-based compensation expense. For the twenty-six weeks ended July 1, 2015, amount relates solely to stock options granted in connection with the IPO. b Represents amounts accrued under a bonus
agreement we entered into with an executive pursuant to which we agreed to a pay a bonus in a future. c Non-capital expenditures associated with opening new Shacks exclusive of deferred rent incurred prior to opening. d
Reflects the extent to which our rent expense is greater than or less than our cash rent payments. e Includes the loss on disposal of property and equipment in the ordinary course of business. f Non-recurring compensation
expense incurred in connection with the IPO, including expense recognized in settlement of outstanding awards under the Unit Appreciation Rights Plan, the related employer withholding taxes and the accelerated vesting of
outstanding restricted Class B units. g Costs incurred in connection with our initial public offering, including legal, accounting and other related expenses. 8 For periods presented, represents non-cash charges related to certain
employee benefits.