RAVE Restaurant (RAVE) 10 May 192019 Q3 Earnings call transcript

Good day and welcome to the RAVE Restaurant’s Group Inc. Reports Third Quarter 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I’d now like to turn the conference over to Andrea Allen, Chief Accounting and Administrative Officer. ahead. go Please

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

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

everyone. afternoon Thanks, Andrea. Good

the third quarter for progress Rave. for results Our another are indication

to result in and key stronger Inn, international Pie were positive resources coming continue conference in and momentum total completed we years. the proud Pizza our accelerate Pizza the just same store the XX we're fully this continue of and store the for currently Pizza investments retail than to our ninth Pizza also consecutive working improve we guest sales operations, efforts domestic sales team Five in that showing years our more Pie domestically of experience domestically. really are and many, to will franchises that This and both quarters. Inn many as development expect growth trend make our international Inn quarter of quarter of engaged

has stores prior respectively, Inc, and the franchise that as sales. same made to by X.X% and increase Inn three for higher X.X% consecutive quarter is providing is by the quarter its retailers, For compared domestic value I traction a that that Pie launch, Pie of interest the Today, and current we We're prior really retail we've for been period progress year. comparable Pie. XXXX during same Comparable fiscal Pizza sales all to sales, confidence the the and year. increased and Five, We've considerable fussed interest we internationally. food base initiatives discuss and Company capitalize same sales the both Pizza Five brand. tailwinds pleased some stores, brand path and Year-to-date the retail respectively, of working sales. there our our the been to can will and being just we’re non-traditional newest our with steps the for opportunities third of have period X.X% We there in reinvigorated now ninth domestically we’re considerable the see on brands. challenges positive compared of progress concept. through opportunities about and encouraged pie taking we X.X% concept key its pie national made. has on said, from with for great have -- of completed been build The investments store the Since

continued respectively packages strides Some the buffet, franchisees making Pizza half new design period months sales to growth. is XX%, the X.X% experienced Inn compared sales our and decrease remodel year, X ordering and crust opportunities, items tremendous from franchise and and double-digit Expanded new restaurants lower key capitalizing through our respectively, ordering XX-inch continues deliver off-premise are on Since improve sales consecutive the commitment on to period were initiatives. footprint XX, which Pie have periods, core labor ordering, menu the week. closures the reflect simplified options cauliflower top-line all to period of Goldilocks Pie unit winter menu. change weather strategy comp extreme in starting and goal and revitalizing storage and to with impacted the operating Pie and made other bump year. in this costs the our investment pizzas for total third we've online including national and sales thanks Online months our economics year. off-premise our locations, menu Five the our in and heavily of our additional locations. to real prior success completed seen Refresh phenomenal. in testing locations combating, X locations smaller this have XXXX. comparable of X shareable ending more drive end and Five estate of and that prototype and this sales roll third these releasing our resonating XXXX, our opportunities fiscal same many initiatives Five next including March by markets. and online is a year, we've in domestic X increasing growth store growth and including leading image remodels are will traffic by results In franchisees. the the of guests delivery, calzones, prior X.X% to fiscal March X first that challenges, Northern decreased the a XX, quarter, last by new technologies and focus year franchisees. the been Despite year for growth, all-day the the Five retail like remodeling to continue sales a compared X XX% same out pressure to in for X the strategy carry we retail to The XXXX, the a see By ending and out with drive total costs Pie

in to a plans new restaurants, analyze The and with around working existing their first Goldilocks quarterly come country our to are challenges business review near And the future. locations with through customized open closely franchisees we're action specific more develop to the process.

and service, will additionally and training later to controls, retention, and programs implementing and have managers of this improved We cost assist recently staffing developed speed be leadership owners improve year. for

increased X. to domestic finished Five to quarter During over our of fiscal with the and total Pie XXX, XX I'm the third the And turn X Andrea, one with Accounting new of us the Officer. franchise due to X Pizza to call X 'XX, back company-owned restaurants. Five bringing Chief by and quarter of pie opening Inn/Pie going units Administrative units, that,

the year-over-year recorded, of third that administrative quarter and defaulted XX.X% the new as general consolidate of in suppliers the to of to accounting recognition decreased million and convention Thanks, XXXX, prior million to previously revenue The decrease to Scott. were Total Pie driven adoption prior standards. the development reduction the well by $XX.X total as $X.X as advertising the revenue the were fund period to same of as to year-to-date period Five franchisees fiscal prior in net was to by Company-owned component in close we year. compared to of $X.X doors quarter stores the $X.X million expenses fees and primarily attributable in Increases contributions transferred Year-to-date, franchisees. by same area million company-owned units, the revenue driven agreements increased accelerated the in compared year. and

the XXXX, For year. compared Five ended Five the one of restaurants prior an same average the the of Pie months period to restaurant nine of Pie Company-owned an March X average in XX,

EBITDA net reported compared Year-to-date, due million net cash same XXXX period fiscal equivalents in of during $X.X the same first a $X.X per the million, $X.X million expense, disposal the administrative period year. and improved XXXX, impairment million. year, loss million $X.X live a the and year-to-date, reported respectively. Adjusted of franchise loss of $X year. loss income franchise diluted of the of to compared primarily $X.X the a same months share $X.XX the For prior fully Company store other $X.X of XXXX, bad Company million primarily compared prior and XXXX costs loss EBITDA the by of $X.X XX, of as non-operating million reported prior in period long period related a revenues, assets, of nine and partially March license quarter the a of the and expenses. $X.XX to of Company’s was share the of In of increased improvement XX, loss XXXX to a totaling debt reported the Company year. of for $X.X of cash and the Company third increased in $X.X $X.X income ended fully net offset and The XX, increased of a prior charges per and the On to net adjusted and increased reported month the expenses in non-cash period decreased The net March million share to enclosed ending the a on for net fiscal loss period $X.XX year. lease the X-month million, per share March per three a million the Company of net as share assets general same net corporate to million to loss increase nine basis, $X.X diluted

first activity of lease related million million was use in the to provided cash which in During overall fiscal primarily of the the Norco prior result and distribution $X.X from and payment, months net nine reduction capital of compared working operating division year, was accounts of food year termination cash to an the supply discontinuation the payable. $X.X

in was the to financing period which XXXX prior months $XX,XXX net provided the cash million months first of from X, in of to shareholders in transition For sale fiscal modified same financing investing is Company in method. XXX, March to June ending to of stock the September in the the offering reported retrospective in are accounting accordance with million June XXXX, provided of adopted the by with using period $X.X not Topics activities rate XXX year. year, in had with XXXX. the XXXX activities presented On and the cash and recognition. XXXX, reporting compared to ASU after in XX, the nine are accordance of prior to result from prior revenue Topic primarily for closed a XXXX-XX from now XXX million period $X.X activities be of This proceeds connection historical nine XX, compares cash adjusted of the $X.X Topics our beginning Results sale under We provided in related that the continue was while stock.

and can paid the XXXX the Form fiscal stock net XX-Q XXXX. a million of for by was XXXX, the compensation SEC. fiscal partially impact in million effect, found $X.X XX, Topic cumulative Additional end capital. adoption filed XXX, months equity shareholders primarily additional offset on of period Through result of nine $X.X our March recognition be a $X.X reduced income, revenue adoption ended the to reduction detail of of the quarterly since first of and The standard million of reduction new XXXX with the for by the the in net fiscal

we This a filings. and of a tables disposed operating great comp financial volumes performance and release and specific information restaurants As statement in deal information line variants average details earnings explanations. and includes unit and specific income brand SEC item our brand reminder, non-comp

I'll SEC call over the morning. now to turn his the to with filed back Q&A. over before turn for was Form-Q we Scott Our this Crane final it remarks earlier

the guests well are development and in to positive points future in confidence we Thanks any improving call thank that resources, With future over that, on were for sales updated and for and experience everyone for international Andrea. restaurant for At trends for questions. to turn Rave. profitability strong these us investments operator growth. I technologies believe we retail give a our Recent the continue close, and being the the poised call operations

much very and wrapped we're Thank you up. everyone for joining

Thank you.

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