Ignite Restaurant Group, Inc. - FORM 8-K - EX-99 - EXHIBIT 99.1

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8-K - FORM 8-K - Ignite Restaurant Group, Inc.	irg20140805_8k.htm

Exhibit 99.1

For Immediate Release

Ignite Restaurant Group Reports Second Quarter 2014 Financial Results

Houston, TX—(BUSINESS WIRE)—August 7, 2014—Ignite Restaurant Group (NASDAQ: IRG) today reported financial results for the second quarter ended June 30, 2014.

Highlights for the second quarter of 2014 were as follows:

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Total revenues were $229.8 million, compared to $228.1 million in the second quarter of 2013;

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Comparable restaurant sales increased 8.5% at Brick House Tavern + Tap, decreased 4.7% at Joe’s Crab Shack and decreased 2.6% at Macaroni Grill;

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Net income and net income per diluted share were $1.8 million and $0.07, respectively;

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Adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $2.0 million and $0.08, respectively.

Ray Blanchette, Chief Executive Officer of Ignite Restaurant Group, stated, “Our second quarter results were challenged as we faced what we believe were residual effects of 2014’s winter weather, combined with some cannibalization of Joe’s Crab Shack sales as we significantly increased the number of locations in the Northeast over the past three years. Results at Macaroni Grill were generally in line with our internal expectations, however our team continues to focus on a robust pipeline of initiatives to drive sales growth and improve profitability. We remain pleased with the ongoing sales success at Brick House Tavern + Tap and with the improvements in store level execution. Our near-term development strategy is expected to provide further opportunities to expand the Brick House concept as we continue to optimize our real estate portfolio through conversions.”

Review of Second Quarter 2014 Operating Results

Total revenues were $229.8 million in the second quarter of 2014, an increase of 0.8% compared to $228.1 million in the second quarter of last year. The increase was largely driven by the inclusion of Macaroni Grill for the full 13 weeks of the second quarter of 2014, versus 12 weeks for the comparable period of 2013 and new restaurant development, partially offset by a 3.1% decrease in comparable restaurant sales.

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Revenues at Joe’s Crab Shack were $125.5 million during the second quarter of 2014 versus $129.6 million in the prior year. Comparable restaurant sales at Joe’s Crab Shack decreased 4.7%.

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Revenues at Brick House Tavern + Tap were $17.8 million in the second quarter of 2014 compared to $12.5 million in the prior year. Comparable restaurant sales at Brick House Tavern + Tap increased 8.5%.

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Revenues at Macaroni Grill were $86.6 million in the second quarter of 2014 compared to $86.0 million in the prior year. Comparable restaurant sales at Macaroni Grill decreased 2.6%. Macaroni Grill was acquired on April 9, 2013.

Net income for the second quarter of 2014 was $1.8 million, or $0.07 per diluted share. The Company’s net income for the second quarter of 2014 included approximately $330,000 of costs related to three restaurant closures, losses on disposal of assets and transaction related costs. Excluding the impact of these items, adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $2.0 million and $0.08, respectively, in the second quarter of 2014. Net loss for the second quarter of 2013 was $2.5 million, or a loss of $0.10 per diluted share. The Company incurred approximately $5.3 million of primarily acquisition related and labor related transition costs in connection with the acquisition of Romano's Macaroni Grill in the second quarter of 2013. Excluding the impact of these items, adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $1.0 million and $0.04, respectively. A reconciliation between GAAP net income (loss) and adjusted net income is included in the accompanying financial data.

Development

During the second quarter of 2014, the Company closed three Macaroni Grill locations. Of these closures, one has been converted and re-opened as a Brick House Tavern + Tap and one is currently under construction and will re-open as a Brick House restaurant in the fourth quarter of 2014 or in early 2015. Subsequent to the end of the second quarter, three additional Macaroni Grill locations were closed in July for a total of eight Macaroni Grill closures year to date.

Liquidity

At June 30, 2014, the Company had approximately $20.4 million of available borrowing capacity under its current credit facility and was in compliance with the credit facility’s financial covenants. “In light of our desire to move quickly on new Brick House locations and the recent sales volatility in casual dining, we are currently reviewing refinancing alternatives of our existing credit facility,” stated Michael Dixon, President and Chief Financial Officer of Ignite Restaurant Group.

Conference Call

We will host a conference call to discuss our second quarter financial results today at 5:00 PM Eastern Standard Time. Hosting the call will be Ray Blanchette, Chief Executive Officer, and Michael Dixon, President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing 877-852-6579 or for international callers by dialing 719-325-4794. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for international callers; the password is 1127123. The replay will be available until August 14, 2014. The call will also be webcast live from the Company's website at www.igniterestaurants.com under the “Investors” section.

About Ignite Restaurant Group

Ignite Restaurant Group, Inc. (NASDAQ: IRG) owns and operates over 300 restaurants throughout the U.S. Headquartered in Houston, Ignite's portfolio of restaurant concepts includes Joe's Crab Shack, Romano's Macaroni Grill and Brick House Tavern + Tap. Each brand offers a variety of high-quality, chef-inspired food and beverages in a distinctive, casual, high-energy atmosphere. The Company is also a franchisor for Macaroni Grill in locations in the U.S., U.S. territories and internationally. For more information on Ignite and its distinctive brands visit www.igniterestaurantgroup.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events and results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology.

A number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking statements included in this press release, including the risk factors discussed in the Company’s Form 10-K for the year ended December 30, 2013 (which can be found at the SEC’s website www.sec.gov) and each such risk factor is specifically incorporated into this press release. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Results of Operations

The following tables present the consolidated statements of operations and selected other data for the thirteen and twenty-six weeks ended June 30, 2014 and July 1, 2013, and selected consolidated balance sheet information as of June 30, 2014 and December 30, 2013:

Consolidated Statements of Operations	Thirteen Weeks Ended June 30, 2014					Thirteen Weeks Ended July 1, 2013
	(In thousands, except percent and per share data)

Revenues	$	229,847		100.0	%	$	228,132		100.0	%
Costs and expenses
Restaurant operating costs and expenses
Cost of sales		70,722		30.8	%		66,765		29.3	%
Labor expenses		68,995		30.0	%		71,465		31.3	%
Occupancy expenses		19,577		8.5	%		18,896		8.3	%
Other operating expenses		47,454		20.6	%		48,039		21.1	%
General and administrative		11,202		4.9	%		16,611		7.3	%
Depreciation and amortization		7,945		3.5	%		7,356		3.2	%
Pre-opening costs		558		0.2	%		1,477		0.6	%
Asset impairments and closures		135		0.1	%		14		0.0	%
Loss on disposal of property and equipment		504		0.2	%		197		0.1	%
Total costs and expenses		227,092		98.8	%		230,820		101.2	%
Income (loss) from operations		2,755		1.2	%		(2,688	)	(1.2	)%
Interest expense, net		(1,765	)	(0.8	)%		(1,741	)	(0.8	)%
Income (loss) before income taxes		990		0.4	%		(4,429	)	(1.9	)%
Income tax benefit		(777	)	(0.3	)%		(1,967	)	(0.9	)%
Net income (loss)	$	1,767		0.8	%	$	(2,462	)	(1.1	)%

Basic and diluted net income (loss) per share data:
Net income (loss) per share
Basic and diluted	$	0.07				$	(0.10	)
Weighted average shares outstanding
Basic		25,651					25,624
Diluted		25,749					25,624

Consolidated Statements of Operations	Twenty-Six Weeks Ended June 30, 2014					Twenty-Six Weeks Ended July 1, 2013
	(In thousands, except percent and per share data)

Revenues	$	444,706		100.0	%	$	346,372		100.0	%
Costs and expenses
Restaurant operating costs and expenses
Cost of sales		134,140		30.2	%		103,086		29.8	%
Labor expenses		135,842		30.5	%		103,372		29.8	%
Occupancy expenses		39,035		8.8	%		27,450		7.9	%
Other operating expenses		91,455		20.6	%		69,843		20.2	%
General and administrative		23,476		5.3	%		26,902		7.8	%
Depreciation and amortization		16,081		3.6	%		12,169		3.5	%
Pre-opening costs		762		0.2	%		2,568		0.7	%
Asset impairments and closures		1,092		0.2	%		31		0.0	%
Loss on disposal of property and equipment		769		0.2	%		392		0.1	%
Total costs and expenses		442,652		99.5	%		345,813		99.8	%
Income from operations		2,054		0.5	%		559		0.2	%
Interest expense, net		(3,643	)	(0.8	)%		(2,136	)	(0.6	)%
Gain on insurance settlements		-		0.0	%		300		0.1	%
Loss before income taxes		(1,589	)	(0.4	)%		(1,277	)	(0.4	)%
Income tax benefit		(3,091	)	(0.7	)%		(1,000	)	(0.3	)%
Net income (loss)	$	1,502		0.3	%	$	(277	)	(0.1	)%

Basic and diluted net income (loss) per share data:
Net income (loss) per share
Basic and diluted	$	0.06				$	(0.01	)
Weighted average shares outstanding
Basic		25,645					25,624
Diluted		25,715					25,624

Selected Consolidated Balance Sheet Information	June 30, 2014		December 30, 2013
	(In thousands)
Cash and cash equivalents	$	999	$	972
Total assets		344,819		347,084
Long term debt (including current portion)		118,676		131,982
Total liabilities		240,452		245,477
Total stockholders' equity		104,367		101,607

	Thirteen Weeks Ended			Thirteen Weeks Ended			Twenty-Six Weeks Ended			Twenty-Six Weeks Ended
	June 30, 2014			July 1, 2013			June 30, 2014			July 1, 2013
	(dollars in thousands)
Selected Other Data(1):
Restaurants opened during the period		-			4			-			6
Number of restaurants open (end of period):
Joe's Crab Shack		136			134			136			134
Brick House Tavern + Tap		20			16			20			16
Romano's Macaroni Grill		174			186			174			186
Total restaurants		330			336			330			336
Restaurant operating weeks
Joe's Crab Shack		1,768			1,727			3,536			3,404
Brick House Tavern + Tap		260			201			520			396
Romano's Macaroni Grill		2,281			2,232			4,595			2,232
Average weekly sales
Joe's Crab Shack	$	71		$	75		$	65		$	69
Brick House Tavern + Tap	$	68		$	62		$	68		$	61
Romano's Macaroni Grill	$	37		$	38		$	38		$	38
Change in comparable restaurant sales
Joe's Crab Shack		(4.7	%)		0.7	%		(5.3	%)		(0.5	%)
Brick House Tavern + Tap		8.5	%		6.4	%		9.2	%		5.2	%
Romano's Macaroni Grill		(2.6	%)		(7.4	%)		(3.4	%)		(7.4	%)
Total		(3.1	%)		(2.5	%)		(3.6	%)		(2.2	%)

(1)

Activity for Romano's Macaroni Grill commenced from the acquisition date of April 9, 2013.

Reconciliation of Non-GAAP Results to GAAP Results

The Company provided detailed explanation of this non-GAAP financial measure, including a discussion of the usefulness and purpose of the measure, in its Form 8-K filed with the Securities and Exchange Commission on August 7, 2014.

	Thirteen Weeks Ended			Thirteen Weeks Ended			Twenty-Six Weeks Ended			Twenty-Six Weeks Ended
	June 30, 2014			July 1, 2013			June 30, 2014			July 1, 2013
	(In thousands, except per share data)
Net income (loss) - GAAP	$	1,767		$	(2,462	)	$	1,502		$	(277	)
Adjustments:
Transaction costs		89			4,185			89			5,203
Proposed secondary offering expenses		-			300			-			300
Costs related to conversions, remodels and closures		241			-			1,227			-
Write-off of debt issuance costs		-			483			-			483
Non-recurring recruitment and training expenses		-			327			-			327
Gain on insurance settlements		-			-			-			(300	)
Income tax effect of adjustments above		(130	)		(1,860	)		(518	)		(2,037	)
Adjusted net income - non-GAAP	$	1,967		$	973		$	2,300		$	3,699

Weighted average shares outstanding (GAAP)
Basic		25,651			25,624			25,645			25,624
Diluted		25,749			25,624			25,715			25,624
Net income (loss) per share (GAAP)
Basic and diluted	$	0.07		$	(0.10	)	$	0.06		$	(0.01	)
Adjusted net income per share (non-GAAP)
Basic and diluted	$	0.08		$	0.04		$	0.09		$	0.14

Ignite Restaurant Group, Inc. - FORM 8-K - EX-99 - EXHIBIT 99.1 - August 7, 2014

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Ignite Restaurant Group, Inc. Reports