HABT ICR Conference Presentation_Prerelease 1-1-16

8/20/2019 HABT ICR Conference Presentation_Prerelease 1-1-16

http://slidepdf.com/reader/full/habt-icr-conference-presentationprerelease-1-1-16 1/23

January 2016

ICR Conference



Fast casual concept specializingin burgers, sandwiches, salads,sides, shakes and more

Our Concept

• Founded in Santa Barbara in 1969

• Distinctive menu built around made-to-order burgers char-grilled over an openflame

• Named the “best tasting burger in America” in July, 2014

• 142 units located in California (117), Utah(9), Arizona (7), New Jersey (3), Florida(2), Nevada (1), Idaho (1), Virginia (1),

Washington (1)Our Differentiation

• Quality

• Environment

• Hospitality

• Value

Welcome to The Habit

Note: Unit count as 12/29/15 4

Double Charburger

with Cheese

Sweet Potato Fries



$1.9$4.3

$6.6$10.3

$14.0

$21.0

2009 2010 2011 2012 2013 2014

$28.1 $41.8$59.2

$84.2 $120.4

$174.6

2009 2010 2011 2012 2013 2014

Units

Our Momentum• Proven history of unit, revenue

and adjusted EBITDA growth

• 47 consecutive quarters ofpositive SSS (thru Q3 2015)

• Attractive unit economics

Note: Revenue and Adjusted EBITDA $ in mm. 2013 financials include a 53 rd week throughout the presentation unless specifically noted otherwise.1) See page 22 for Adjusted EBITDA reconciliation.

Revenue

Adjusted EBITDA (1)

NewUnits 7 13 17 22 255

SSS 5.4% 8.7% 3.5% 3.6% 10.7%1.9%

% 10.3% 11.1% 12.2% 11.6%6.8% 12.0%

• Q3 2015 Company-operated AUV: $1,924

• Q3 2015 SSS: 2.9%

• Q3 YTD 2015 SSS: 7.6%

• FY 2014 SSS: 10.7%

• Q3 2015 Revenue Growth: 24.8%

• FY 2014 Revenue Growth: 45.0%

• Q3 2015 Adjusted EBITDA Growth: 16.6%

• FY 2014 Adjusted EBITDA Growth: 50.3%

6

32



Broad Appeal and Balanced Mix

Dinner 49%

Lunch51%

Day Part Mix

Male55%

Female45%

Gender Mix (1)

The Habit is more than just burgers1) Based on an external research report and a third-party customer satisfaction survey.

7

Burgers62%

Salads13%

Sandwiches25%

Entrée Mix $’s



Huge Market Share OpportunityThe Habit sits at the convergence of two large market opportunities

Source: Technomic, Inc.

Quick Service

“QSR”

$201.5B

Varied Menu

Full Service

$52.3B

Fast Casual

$39.0B

8



“The Habit Difference”Our Four Pillars

Quality Environment Hospitality Value

• Char-grilled preparation

• Made-to-order

• Distinctive menu• Commitment to

freshness

• Exceed customers’expectations

• Committed to

training anddevelopment

• Culture ofexcellence

• Strong value proposition

• Longstanding

commitment tovalue

• Broad customerappeal

• Comfortable andclean environment

• Inviting

destination• High-quality

accents

• Exhibition kitchen format

9



2,634 2,674 2,892 2,940

4,658 5,0585,604 5,737

PBPB NDLS ZOES WING HB PNRA CMG LOCO

$5.89$7.00 $7.30 $7.95 $8.25

$9.51 $9.98 $10.18

LOCO WING PBPB HB NDLS PNRA ZOES CMG

Traffic (Avg. Weekly Customers)

Tremendous Customer Value Proposition

Hospitality

Environment

Quality

+

+

Value= Avg. Check (Per Customer Spend)

Source: Company provided and Wall Street research.

Note: The Habit data represents the 52 weeks ended 9/29/15. All other data represents FY 2014. CMG and LOCO as of FY 2013.Note: Traffic (Avg. Weekly Customers) = AUV / Average Check / 52 weeks.1) References to HABT ‘per customer spend’ refer to the total restaurant revenue divided by the number of entrees sold.2) CMG traffic calculated by multiplying average check by 1.2x to reflect assumed per customer spend.

(1)

(2)

10



Burger, Fries & Drink Combo

Cheeseburger $3.85 $5.69 $5.49 $5.29 $2.75

Fries $2.00 $3.09 $2.29 $2.99 $1.84

Drink $1.90 $2.39 $2.09 $2.30 $1.67

Total $7.75 $11.17 $9.87 $10.58 $6.26

Delivering More Bang for Your Buck

Source: Shake Shack prices from company website on 1/04/16. All other prices from select Southern California locations.11



Significant White Space PotentialCompelling Potential Relative to Legacy QSR Burger Incumbents

Significant Expansion Opportunityin Fast Casual

Source: Wall Street research, company presentations, SEC filings and Technomic, Inc.Note: The Habit units as of 12/31/15. 137 company-operated units and 5 franchised/licensed locations.In-n-out, Five Guys, Wendy’s, Burger King, McDonalds as of FY 2014, all other data as of Q2 2015.Note: Domestic units shown.

2,000+ 1,600 2,500 2,300 4,000 3,500

Total Potential:

450

12



Proven Site Identification and Development New Unit Growth Strategy Key Drivers of Growth

• Penetrate Existing Markets

• Enter New Markets

• Selective Licensed / Franchised Locations

• Diversity of Site Demographics

• “Gender Neutral” Competitive Advantage

• Format Flexibility

Traffic Generators

• Office Buildings

• Hospitals

• Health Clubs

• High Schools

• Colleges

• Movie Theaters

• Industrial Parks

• High DensityResidential

• Recreational Parks

Select Preferred Co-Tenants

Grocery Stores Drug StoresTheaters

13



Strong Unit Level EconomicsExisting Units (1)

Traditional

Average Unit Volume $1.9mm

Restaurant ContributionMargin

21%+

Cash-on-Cash Return (2) 40%+

Restaurant model is designed to generate high sales volumes, strong

restaurant-level financial results and high cash-on-cash returns

New Unit Target

3rd Full Year

Square Footage 2,000 – 2,800

Average Unit Volume $1.5mm

Cash Build-Out Cost (2) $750k

Cash-on-Cash Return (2) 30%+

1) Figures are for the 52 weeks ended September 29, 2015 for restaurants that had been open for 12 periods or more.2) Excludes pre-opening expenses, net of tenant allowances.

14



0%

3%

6%

9%

12%

15%

18%

Q 1 ' 0 4

Q 2 ' 0 4

Q 3 ' 0 4

Q 4 ' 0 4

Q 1 ' 0 5

Q 2 ' 0 5

Q 3 ' 0 5

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Q 4 ' 0 6

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Q 2 ' 0 7

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Q 4 ' 0 7

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Q 2 ' 0 8

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Q 4 ' 0 8

Q 1 ' 0 9

Q 2 ' 0 9

Q 3 ' 0 9

Q 4 ' 0 9

Q 1 ' 1 0

Q 2 ' 1 0

Q 3 ' 1 0

Q 4 ' 1 0

Q 1 ' 1 1

Q 2 ' 1 1

Q 3 ' 1 1

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Q 1 ' 1 2

Q 2 ' 1 2

Q 3 ' 1 2

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Q 1 ' 1 3

Q 2 ' 1 3

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Q 4 ' 1 3

Q 1 ' 1 4

Q 2 ' 1 4

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Q 1 ' 1 5

Q 2 ' 1 5

Q 3 ' 1 5

Same Store Sales Momentum

Comparable Restaurant Sales History

15

47 Consecutive quarters of SSS growth (thru Q3 2015)

2009-2014 AUV growth of 45.9%

$1.2M in 2009 to $1.8M in 2014

$1.9M Q3 2015



$1.9 $4.3

$6.6

$10.3

$14.0

$21.0

$0.0

$8.0

$16.0

$24.0

2009 2010 2011 2012 2013 2014

$28.1$41.8

$59.2

$84.2

$120.4

$174.6

$0.0

$50.0

$100.0

$150.0

$200.0

2009 2010 2011 2012 2013 2014

21.6% 22.1% 21.9%22.9% 22.3%

21.3%

0.0%

15.0%

30.0%

2009 2010 2011 2012 2013 2014

Adjusted EBITDA(2)

Margin 6.8% 10.3% 11.1%

Exceptional Financial Performance

Revenue

Note: $ in mm. 2013 financials include a 53rd week throughout the presentation unless specifically noted otherwise.

1) Unit count as of 12/29/15. 137 company-operated units and 5 franchised/licensed locations.2) See page 22 for Adjusted EBITDA reconciliation.3) See page 23 for Restaurant Contribution reconciliation.

Units (1)

Restaurant Contribution (%) (3)

16

12.2% 11.6% 12.0%



$5.8$6.8

$0.0

$2.0

$4.0

$6.0

$8.0

Q3 '14 Q3 '15

$47.0

$58.6

$0.0

$20.0

$40.0

$60.0

$80.0

Q3 '14 Q3 '15

Continued Performance In Q3 2015

Revenue• 7 new company-operated units opened in Q32015 in three different states: California,Utah and Florida

• Q3 2015 comp store sales: 2.9%• Q3 2015 revenue growth: 24.8%

17 Note: $ in mm.1) See page 22 for Adjusted EBITDA reconciliation.2) See page 23 for Restaurant Contribution reconciliation.

Adjusted EBITDA (1) Restaurant Contribution (2)

Margin Margin12.3% 11.5% 21.8% 21.2%

$10.3$12.4

$0.0

$3.0

$6.0

$9.0

$12.0

$15.0

Q3 '14 Q3 '15



Consistent Same Store Sales Growth 2-Year Stacked Same Store Sales

3-Year Stacked Same Store Sales

Note: 2013 financials include a 53rd week throughout the presentation unless specifically noted otherwise.

20.1%18.6%

22.7% 22.0%

18.6%

15.2%

19.1%16.5%

18

21.7%22.5%

13.3%12.4%

19.8%

9.7%7.5%

18.7%

Preliminary

Preliminary



Preliminary 2015 Results and 2016 New Store Guidance

Preliminary 2015 Results

• Total Revenue of approximately $230.6M – up 32.1% from Prior Year Q4 Revenue of $60.6M up 25.4%

• Comp Store Sales of 6.4% for the Full Year 2015 Q4 2015 comp sales growth of 3.3%

• 28 new company-operated and 4 Franchise/License locations in 2015 13 company and 1 franchise opening in Q4 of 2015

• Q4 Pro-Forma EPS expected to be approximately $0.04 per fully distributedshare

2016 New Store Guidance

• Expect to open 30-32 Company operated locations for 2016• 3-5 new franchised / licensed locations for 2016

19



Investors Should “Make It a Habit”

Our Investment Highlights

Fresh, custom‐made food at a

great value

Differentiated brand and

culture – becoming

everyone’s favorite Habit

Disciplined execution driving

robust, profitable growth

Multi‐pronged growth

strategy with white space

opportunities

Strong, experienced senior

management team with a

deep

bench

Attractive unit growth and

financial metrics

20



Appendix



Adjusted EBITDA Reconciliation

($ in thousands)

22

39 Weeks Ended

Fiscal Year End Sept 30, Sept 29,

Adjusted EBITDA Reconciliation 2012 2013 2014 2014 2015

Net income 3,058$ 5,750$ 7,552$ 6,908$ 7,582$

Non-GAAP Adjustments

Provision for income taxes - - 299 - 2,089

Interest expense 548 735 909 756 342

Depreciation and amortization 3,923 6,008 8,472 5,991 8,163

EBITDA 7,529 12,492 17,232 13,655 18,176

Share-based compensation expense 301 260 515 304 852

Management fees 160 144 635 114 -

Loss on disposal of assets 3 15 141 115 58

Legal settlement 800 (9) - - -

Pre-opening costs 1,458 1,754 1,902 1,147 1,342 2013 additional operating week impact - (661) - - -

Offering Related Expenses - - 613 445 1,217

Adjusted EBITDA 10,251$ 13,996$ 21,038$ 15,780$ 21,645$

Margin 12.2% 11.6% 12.0% 12.5% 12.7%



Restaurant Contribution Reconciliation

($ in thousands)

23

39 Weeks Ended

Fiscal Year End Sept 30, Sept 29,

Restaurant Contribution Reconciliation 2012 2013 2014 2014 2015

Restaurant Revenue 84,158$ 120,373$ 174,544$ 126,210$ 169,796$

Food and paper costs 26,396 38,789 58,260 41,928 54,754

Labor and related expenses 25,831 35,782 51,898 37,362 51,666

Occupancy and other operating expenses 12,687 18,906 27,184 19,485 25,722

Restaurant Contribution 19,243$ 26,896$ 37,202$ 27,435$ 37,654$

Margin 22.9% 22.3% 21.3% 21.7% 22.2%

HABT ICR Conference Presentation_Prerelease 1-1-16

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