RAVE Restaurant (RAVE) 11 Nov 172018 Q1 Earnings call transcript

Good afternoon and welcome to the RAVE Restaurant Group First Quarter 2018 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there'll be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Tim Mullany, Chief Financial Officer. ahead. go Please

XXXX Good at the Operator. conference and you section. release first thank Everyone this was Thank The in morning. Restaurant afternoon, the Group’s joining press quarter our to RAVE have be earnings release first for that should published found you, can access everyone earnings www.raverg.com quarter call. Relations XXXX Investor

Accepted results call Please to condition. our performance. today’s measures comparable information Scott to Practices. or prepared the our evaluating to over useful the financial statements of as to are like reliance certain our what with I are guarantees in With conference recent be not we for would considered operating which to statements. a subject like remind turn Generally actual from These we that should in measures discussion cause that, we expect. accordance Crane, the could forward-looking begin, more also reconciliation detailed release. a and We for Executive of SEC is of filings earnings performance discussion forward-looking today discussions of on financial A future uncertainties that part Accounting future GAAP corrected be discuss will note should risks our not will of statements you and our in Any include Before everyone such numerous non-GAAP results available I of could refer isolation impact we them. believe therefore that to These undue call materially results during not substitute Officer. to risks differ that all would and you put Chief

was locations helps positive attributable being I is both locations increased and increases stronger everyone. our G&A we at made actually to adjusted in have also help It progress significant Good us in probably Thanks Also our course, EBITDA owned call. Pizza results, share and to primarily made income strategic across would on on evening, and by great turnaround well in the as already. I'm of good this brands, plan our exciting. obviously extremely first say streamlining lot strides quarter result Company bottom have AUV net plan overhead afternoon the you we was the to which seen excited a line, which quarter really value. same and the store Inn increased shareholder board sales as bringing for

million give to continue probably position two shelf all the days access steps effective also plan. fixed, you execute capital to to our on and against As take know, proactive helping offering have our $X the Company strategic us to that raised ago is to we us more additional to

international the base with well. renewed momentum also flagship increased grow seeing is Pizza energy want double-digit Our domestically well Inn showing seeing X.X% sales development and as brand our unit in same-store additionally internationally and as remodel and as pure gaining sales and both new domestically positive growth, current to growth franchise comparable it's

consumers. Also pipeline the it and research but times time, point Initial up traffic, instead awareness consumer number more Inn franchise new of runway is important new coming for we come going in with May by vary franchises at Pizza and of with March, like pizza saw growth big buffet one basically some did growth you back new in and seeing the at are in all strategies the x to with would which next cool Five day if we be drive some day and we Pie at marketing we new specific in remodels. of often to promotions we So is did buffet, and strategies, with Pizza all did

the end in October buffet, the we you closed you of to now as imagine could serve at X:XX buffet be X:XX, most come all chain and to from X, are impaired or to if So, the day because want refresh. out and you want pizzas the old going change in of now XX come X be rolled the to or really to or don’t and not of X

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year periodical, for see year-over-year. and to as our XXth we be will a lot think going us Inn unit to you Pizza which you effort us been before, really is push this Five Also, big Pie stabilizing PR of certainly of that’s in I going a focused big volumes, the going behind. average calories are an the say over but anniversary it I would a for been many are we move many, AUVs, AUVs to I So and something saw Pizza have on increase many, celebrate in we put world. told next Inn

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more to in of already up testing are enrolling So that a locations location, test franchisees. couple we for that

to can delivered on be current capital roll to do I paying and us, square improve and the digging the think the XX% are is Five successful, would as to really cash-on-cash the going been our long foot, launch - still consumer you big into just off Delivery it’s in energy expenditures, deliver it of really in if that deep - we investment I investment all a been need [indiscernible]. so ROI it’s you the proving to but Pie that in though that and line-by-line. pizza big the focus the that’s ways really are people at we a or it’s is all big imagine to got how do so it’s we of I really looking of still to meet we and run out also it’s with would get around lot say will a just that you environment we whether well. for tell then product as So,

sales San So, of give the and In Airport, total that’s ago weeks it’s to I in third end new system. the is our restaurant Pie franchisee were one SFO good. Company quarter the units can’t which International two the three quarter, We Five, the guess open in and number, in one open airport but revenue did our we I highest Francisco bringing for first the first store and five closed XX.

for as So lot then we in other And of said. the we thing in really brands actually excited really us. still exciting because both I development that’s interest franchise are have a

So, the pieces the that industry the it. think the leading make that would in And to next say discussed [indiscernible]. few franchise we model new also weeks, power model we a you tells I and continue just we and our be at make in I are to segment changer intend to soon concept looking then here the and think tweak here game

opportunities go depending last at and there which store roughly have to also that as a us been for ago. of a will well Board long that’s but and interesting and just also on as member exciting guy weeks to are XX very that who for member. map Bares years XX,XXX announced as So, wanted to at we it chains time travel and a resigned announcement And there XX,XXX out thank long-term as Steve then service, couple space, ago Board tackle Board convenient new a you worked are I center so units the on new has well. Management, a how and X,XXX with welcome to Bares, tacking team I X,XXX to soon. are to Capital there Johnson I you invite Brian and his X,XXX maybe member looking he his is look he then want month

I'm So, thanks to service. welcome that, it over your to back Steve turn Tim. and going Brian With for

Scott. Alright, thank you,

Pie quarter prior year. retail retail through Company $XX.X same retail decreased year-over-year. in by the XX.X% I the in Pie So million, the decreased period sales total for increased also consolidated sales the the year. system X.X% Five first increased million store to to same period year. sales for of comparable the XX.X% compared revenues of wide while average X.X% XX.X% sales will Total of at walk also the first decreased weekly Similarly from Pizza store $XX.X prior Inn prior quarter. the the Five quarter fiscal domestic financials

due units; million diluted fully reductions recognition for retail domestic XXXX a per for the of quarter $X.X administrative of was same to cash than operating of total compared during quarter same the was the the Adjusted million owned $X.X year total for $X.X by and quarter basis per prior quarter prior same the Net quarter million XX. Pie of end the $X.X loss positive Pie of year. $X.X year. brought underperforming reduction less period fiscal flow expenses. to than a and Five loss year. Company share opened of of million sales prior the same $X.XX the share closure While Five fees, first Five Net of EBITDA of X.X%. Pie loss Five one in general primarily of the Pie the deferred million restaurants greater from $X.XX the of to of at to On the decreased restaurant was decreased Company period the prior franchise

same period In we $X franchise of XX the and $XX.X increased with X.X% at [indiscernible] domestic of units while year. while restaurant The during as Company end Inn by quarter-end, number number year. units. million. of XX decreased supply XX.X% for had franchise Pizza to a the increased remaining Inn sales locations of the final franchise of to international revenue first XX sales the Delco balance XX.X% XX.X% remained compared Express the to the of Pizza revenue remained franchise At below units. domestic quarter the prior quarter first quarter X.X% to flat Pizza of at flat Food total units cash a and we Inn units revenue the was of period same prior million; the retail percentage As XX.X% sales had by of XXX

In August. capital fiscal the operating of million. opening primarily prior During $XXX,XXX expenditures related to $X in a versus in same compared used cash in $X.X of to quarter, $XXX,XXX our we was year. cash the prior unit in used expenditures Company first the the capital the had one the The million of owned quarter, year were activities quarter first of

various and reminder, and comp brand-specific includes in and brand-specific financial income item in our and as a disclosed explanations. unit release performance a earnings restaurant This our non-comp we quarterly statement deal volumes line information operating filings. details and So, great tables of SEC average

SEC starting XX-Q the Form in to closing, on great signs course. the and see plan actually was of Our we filed plan with are today. earlier is turnaround turnaround And the

strengthening value for for We With will sales are focused improving open traffic and proposition, on innovation that, and intensively up our we our brands. questions.

[indiscernible] session from will go We begin first our now Private And is question-and-answer Investor. [Operator Please the question Instructions] ahead.

thanks. Sure,

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the noticed have I sauce the things have or with and if to kids I go doing your Cheese the the Pizza one cross, Pizza, of were that toppings. touching the pizza basically the and Pepperoni in is they you and One cheese person

look operationally throughput? So, just you and the at to wondering if increase think

Yes.

question So, to a couple and it’s a good we answers of got there.

time is, desired So that for sure the so first. capital, are desired at or that that’s staffing we one that making correct throughput was to

are maybe if you maybe it just in, that staffing but correctly. person at So, the sure substitute we position, staff that’s desire one there, like making

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working, be that. question and assured, So multiple you yes are your we appreciate working on have comment things but we can I and

Our of next go question Private comes from [Steve ahead. Please Otto] Investor. (Ph)

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has with then franchise second there associated the that you question color of with the units? those agreement Atlanta, and can any transfer been Houston the any So give on markets, will status helpful of development be side and

question. good So,

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Yes.

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stores the franchisee XX locations. those in those had have can this We to count, are Company at see excited quarter of end what that and the excluded experience from do so are we not [indiscernible]

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us can give units any last track year. in idea look quarter you what that talked like XX think you And of would on for somewhat Okay. I Inn Is opening it about Five? and still Pie the coming Pizza

it so is odd Pizza XX a Inn Pizza Well, Inn.

do - you think I or mean you...

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I you but but speak significant that, will do runway to and we speak sales, to let will let I that. have Tim

is a we say that that far in both numbers around range in anticipate vacation as we and domestic amount given the as say units to has on level. an years I that side. seen excitement that just were international recent - Pie seeing the tremendous will haven’t on Five the of that specific Pizza Inn, unreasonable we this for I guidance we another somewhere one, that two Yes. would haven’t it’s to have see next so not open. brand

of there, we exciting our been looking to sales expand metric success have are been same that we on same over sales separated significant So, over store would performance positive as very, it’s for stores. and Inn. international I domestically what Pizza very that say see the And we filings have then out very SECs there. X.X% you will it has that in store

the very the seeing really this healthy in So, Pizza the here. long you base positive has expanding store now as is several, system their franchise interest reinvigorated months sales the establish know And then brand. several last Inn over same of performance

be see quarters. the will we coming happy So, that in to

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energy add website in are because the units brand with we and are additional have a sample our a developed that new we they new well new time team is sales for this around when current a remodel as seeing as that hey [indiscernible] are grow, that’s selling worthwhile. and been a paying the we So, small like and which franchisees seeing seeing off prototype had first current, selling size to we the are franchisees a long-time platform

So, And then it’s that kind be of across things. occasion making with the Five, about do. how around can how just sure all awareness do the board the we we these we consumer with I Pizza at what talked Inn, relevant get it’s Pie that the

are instead do on now Pie now and we sandwiches, and Five Pizza are we Pizza that Pizza call set of so what So, we changed of ahead, we we without a we Co, all wings online Co order, the know we working of have delivering. have will changed do without logo,

the is nice hard good. energy that against pipeline a working are we really the team doing platforms is and and both on way run all good the is and job the and So,

comments. you time the Thank for

question go investor, Our next Instructions] from [Operator [indiscernible] ahead. private please is

calls, we so Hey forever, as investors the guys, do the we long we doing the and thanks really quarter. [indiscernible] term appreciate this for and quarter know the last these without call

different the is cash management grow taking place, going customer, good really a is piece previous expand from have so to some are flow, and more a the but the to if cash very done voice forward, it into So happening changes is now that raises, shed which base flow are you are around doing of listening future, free obviously on guys light job the where your what describing to and of without you and that. seems, free big going expectations a and capital

out anticipate you So that how going forward? do playing

company match this done in offering, million raised that what you $X filing the equity been as a Inn under meaningful particularly with have quarters, the have $X strategy anticipate meaningful in corporate medium you any Pie the won’t do whereby last million in overall we few franchise. I in as the the pretty a in deploying seen in recent in books, not you Five near, or our in new organically system way think capital be So, term. be know cash you brand we development XXX% is to communicating pivot know we we And an store when Pizza

to with So very pure CapEx demonisms. needs not heavily if our a we coming affectively expect for that pivot franchise completely that or capital with

So perspective, that if can having easy that that fairly enough cash well support feel underlying having good will the a see to I to system we said from it's think we you respectively. organic cash -

are this in our associated of of some stores, some has of with have is will is there we obviously what it those from there price stores NASDAQ non-performing that's some hopefully minimum Right that, cost in requirements there some to minimum we corporate listed in one know so and/or threshold.. then the the you to-date, that, exiting we locations cleanup couple shareholder you on share when franchise markets. to equity And heavily to lot we remaining that, being now, some future, investors still expected with those gives requirements. move because been do to majority we NASDAQ caveats relying mix Pie however below of has those Now a share shareholder a is side, change that is we as that price Obviously that. is direct so a in out cash, number. up so assets require not cleaned marker, although equity are distant us should us equity that too and NASDAQ desire are two, threshold number value we on on Five

speak, not that's in don't shareholder because though give cash are net right if business, markets we raise capability. the we we we that us access so even positive will why the for position to and and to see may in So feel registration now that going then very position, not the shelf equity that the we do, are need will income we you have forward, maintain to to we yet equity require possibly recently we that filed do, us

Okay. appreciate Thanks. I that.

and This may session, you we as concludes your as lines. today's our attending presentation conference, thank disconnect question-and-answer today's for now well you