Company completes all five planned remodels
ahead of holiday blockbuster season
iPic® Entertainment Inc. (“iPic” or the “Company”) (NASDAQ: IPIC),
America’s premier luxury restaurant-and-theater brand, today
reported financial results for the third quarter ended September
30, 2018.
Hamid Hashemi, Founder & Chief Executive
Officer of iPic® Entertainment, commented, “We successfully
completed all five of our planned remodels in time for the holiday
blockbuster season, although lost screen capacity related to three
remodels executed during the third quarter had a negative impact on
our performance. Nevertheless, our strategy of remodeling
Generation I legacy locations into Generation III designs is
proving successful as the two conversions that were completed in
April are experiencing 15% relative sales lifts and we expect that
they will achieve annual returns in excess of our 20% ROIC
goal.”
Financial Results
The Company reported third quarter results,
ended September 30, 2018, including:
- Total revenue of $31.7
million.
- Comparable-store sales decrease of
0.6% compared to a decrease of 16.0% in prior year quarter,
including approximately 5.0% of lost capacity as a result of closed
auditoriums from the Company’s three remodels that were completed
in October.
- Net loss of $(12.1) million,
inclusive of $272,000 in stock-based compensation.
- Store-level EBITDA* of $1.5
million.
- EBITDA* loss of $(3.3)
million.
- Adjusted EBITDA* loss of $(2.8)
million.
* Store-level EBITDA, EBITDA, and Adjusted
EBITDA are non-GAAP measures. Reconciliations of store-level
EBITDA, EBITDA and adjusted EBITDA to net income (loss), the most
directly comparable financial measures presented in accordance with
GAAP, are set forth in the schedules accompanying this release. See
"Non-GAAP Financial Measures."
Comparable-store Sales Methodology
Change
iPic has changed the way in which it calculates
its comparable-store sales to now include 100% of its revenue. The
Company’s prior calculation method excluded most revenue that was
not directly associated with on-site theater box-office sales
and/or food-and-beverage sales; and thus, it excluded iPic’s
growing net revenue streams associated with membership fees and
sponsorship income. iPic believes including all of its revenues
within its comparable-store sales calculation provides better
insight into the overall health of the business. The below table
shows the Company’s comparable-store sales calculations for 2017
and 2018 year-to-date using the prior calculation method and new
calculation method.
|
Q12017 |
Q22017 |
Q32017 |
Q42017 |
FY2017 |
|
Q12018 |
Q22018 |
Q32018 |
Previous Method |
-1.8% |
-4.3% |
-16.5% |
-7.9% |
-7.7% |
|
-5.1% |
6.9% |
-4.1% |
New Method |
-1.4% |
-3.2% |
-16.0% |
-12.4% |
-8.5% |
|
-2.8% |
9.2% |
-0.6% |
Fourth Quarter and Full Year 2018
Financial Outlook
Fourth Quarter 2018
For the quarter ending December 31, 2018, the
Company is providing the following outlook:
- Total revenue of $34.5 million to
$36.5 million.
- Comparable-store sales decrease of
(5.0)% to 0.0%, inclusive of an estimated 150 basis points of
negative impact on screen capacity due to three remodels under
construction during October that have since been completed.
- Store-level EBITDA, a non-GAAP
measure, of $4.0 million to $6.0 million.
- General and administrative
expenses, excluding stock-based compensation, of $4.5 million to
$5.5 million.
- Adjusted EBITDA, a non-GAAP
measure, loss of $(1.0) million to $1.0 million.
Full Year 2018
For the year ending December 31, 2018, iPic
is updating its annual outlook to the following guided ranges. This
updated outlook reflects its performance through the third quarter
of 2018 along with the Company’s aforementioned expectations for
the fourth quarter of 2018, including an estimated 150 basis points
of negative impact on full-year screen capacity due to the impact
of a one deferred remodel plus two additional remodels (for a total
five remodels), compared to initial plans.
- Total revenue of $141 million to
$143 million.
- Comparable-store sales growth of
0.0% to 1.0%, inclusive of an approximate 150 basis points of
negative impact on screen capacity during the year due to a
combination of two additional remodels plus one deferred remodel
compared to initial plans.
- Store-level EBITDA, a non-GAAP
measure, of $13.5 million to $15.5 million.
- General and administrative
expenses, excluding stock-based compensation, of $18.0 million to
$19.0 million.
- Adjusted EBITDA, a non-GAAP
measure, loss of $(5.0) million to $(3.0) million.
- Five remodels of existing locations
with Generation I auditoriums, of which all have been completed to
date.
- Capital expenditures of $20.0
million to $25.0 million, net of tenant improvement dollars.
Key Strategic Initiatives
iPic is executing four key strategic initiatives
in order to meaningfully improve its top and bottom-line results
over time and create long-term value for stockholders.
- Improving Profitability from Existing Locations:• A key
revenue driver remains completing the remodeling of the Company’s
Generation I legacy locations into Generation III designs that,
among other things, will include the installation of predominately
Premium-Plus seating composed of iPic’s latest Patented Pod Seats.
Premium-Plus seating currently comprises approximately 35% of
seating at our two remaining Generation I auditorium locations that
are expected to be remodeled in 2019.• iPic completed
five remodels in 2018 starting with Scottsdale, AZ and Pasadena, CA
completed in April, followed by Austin and Dallas, TX; and Redmond,
WA in October.
- Opening New iPic Locations Domestically:• The
Company currently operates 115 screens at 15 locations in nine
states with the ultimate long-term goal of reaching 200 locations
across the US.• iPic plans to open at least two new
domestic locations in 2019.
- Pursuing International Growth Opportunities:• The
Company is actively exploring the potential to expand the iPic®
brand internationally through licensed and/or asset-light
partnerships.• On November 6, 2018, iPic announced that
it has been cleared to receive a license to operate theaters in The
Kingdom of Saudi Arabia and should receive it once required final
documents are processed. The Company also plans to open its first
one-of-a-kind, world-class luxurious iPic® theater-and-restaurant
location in Riyadh during 2019.• iPic believes the
market in Saudi Arabia is large enough to support 25 to 30 iPic®
locations within the next ten years and expects to expand to all
parts of the country starting in Riyadh and Jeddah.
- Increasing Alternative Revenue Streams:• The Company
plans to leverage its growing membership network as the brand
expands and increases its market presence. On a trailing
twelve-month basis, iPic’s members that have visited a location
over the past year accounted for approximately 48% of
revenue.• Other revenue rose 213% to $0.8 million from
$0.3 million during the third quarter of 2018 and rose 122% to $2.5
million from $1.1 million on a year-to-date basis. The Company
expects membership and sponsorship revenue to grow at a faster pace
than food-and-beverage and theater revenues for the foreseeable
future.
Conference
Call
iPic will host a conference call today at 4:30
p.m. ET. The conference call can be accessed live over the phone by
dialing (201) 389-0878. A replay will be available after the call
and can be accessed by dialing (412) 317-6671; the passcode is
13683397. The replay will be available until December 6, 2018.
The conference call will also be webcast live
from the Company's Investor Relations website at
investors.ipictheaters.com. An archive of the webcast will be
available at the same location on the website shortly after the
call has concluded.
Key Financial Definitions
New store openings – Our ability to expand our
business and reach new guests is influenced by the opening of
additional iPic locations in both new and existing markets. The
success of our new iPic locations is indicative of our brand appeal
and the efficacy of our site selection and operating models.
Comparable-store sales – Comparable-store sales
are a year-over-year comparison of sales at iPic locations open at
the end of the period which have been open for at least 12 months
prior to the start of such quarterly period. It is a key
performance indicator used within the industry and is indicative of
acceptance of our initiatives as well as local economic and
consumer trends. Our comparable iPics consisted of 13 and 15 iPics
as of the end of the third quarter of 2017 and 2018, respectively.
From period to period, comparable-store sales are generally
impacted by attendance and average spend per person. Spend per
person is, in turn, composed of pricing and sales-mix changes.
Store-level EBITDA – A non-GAAP measure,
store-level EBITDA consists of total revenues less store-level
expenses that include food-and beverage cost-of-goods sold,
box-office-and-other-income costs-of-goods-sold, labor costs,
occupancy expenses and other-operating expenses.
EBITDA – A non-GAAP measure, is defined as net
income before net interest, taxes, depreciation and
amortization.
Adjusted EBITDA – A non-GAAP measure, is defined
as net income before net interest, taxes, depreciation and
amortization, and which also excludes equity-based compensation
expense, losses on the disposal of property and equipment, as well
as certain non-recurring items that the Company does not believe
directly reflect its core operations.
About iPic® Entertainment Inc.
Established in 2010 and headquartered in
Boca Raton, FL, iPic® Entertainment is America’s premier
luxury restaurant-and-theater brand. A pioneer of the dine-in
theater concept, iPic® Entertainment’s mission is to provide
visionary entertainment escapes, presenting high-quality,
chef-driven culinary and mixology in architecturally unique
destinations that include premium movie theaters and restaurants.
iPic® Theaters offers guests two tiers of luxury leather seating,
Premium Chaise lounge and Premium Plus pod or reclining seating
options. iPic® Theaters currently operates 15 locations with
115 screens in Arizona, California, Florida, Illinois, Maryland,
New Jersey, New York, Texas, and Washington and new locations
planned for Florida, Georgia, Texas, California and Connecticut.
For more information, visit www.iPic.com.
Forward-Looking Statements
This press release includes ''forward-looking
statements'' within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
including statements regarding our financial outlook for the fourth
quarter and full year 2018; our expectations with respect to
the opening of new locations in the near and long term; our
expectations with respect to capital expenditures and improvements
to existing locations; our expectations with respect to
international growth; and our ability to grow our membership
network. Such forward-looking statements can be identified by the
use of words such as ''should,'' ''may,'' ''intends,''
''anticipates,'' ''believes,'' ''estimates,'' ''projects,''
''forecasts,'' ''expects,'' ''plans,'' and ''proposes'' or other
variation of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Such forward looking
statements are inherently subject to risks, uncertainties and
assumptions about us, including risks related to the following: our
inability to successfully identify and secure appropriate sites and
timely develop and expand our operations in existing and new
markets, including international markets; our inability to optimize
our theater circuit through new construction and transforming our
existing theaters; competition from other theater chains and
restaurants; our inability to operate profitably; our dependence on
a small number of suppliers for motion picture products; our
inability to manage fluctuations in attendance in the motion
picture exhibition industry; our inability to address the increased
use of alternative film delivery methods or other forms of
entertainment; our ability to serve menu items that appeal to our
guests and to avoid food safety problems; our inability to obtain
sufficient capital to open up new units, to renovate existing units
and to deploy strategic initiatives; our ability to address
issues associated with entering into long-term non-cancelable
leases; our inability to protect against security breaches of
confidential guest information; our inability to manage our growth;
our inability to maintain sufficient levels of cash flow, or access
to capital, to meet growth expectations; our inability to manage
our substantial level of outstanding debt; our ability to continue
as a going concern; our failure to meet any operational and
financial performance guidance we provide to the public; our
ability to compete and succeed in a highly competitive and evolving
industry; we have identified a material weakness in our internal
control over financial reporting which may result in our financial
statements containing material misstatements or cause us to fail to
meet our periodic reporting obligations and other factors described
in our Annual Report on Form 10-K, our Quarterly Reports on Form
10-Q and our Current Reports on Form 8-K, each as filed with the
Securities and Exchange Commission.
Although the forward-looking statements in this
press release are based on our beliefs, assumptions and
expectations, taking into account all information currently
available to us, we cannot guarantee future transactions, results,
performance, achievements or outcomes. No assurance can be made
that the expectations reflected in our forward-looking statements
will be attained. Should one or more of the risks or uncertainties
referred to above materialize, or should any of our assumptions
prove to be incorrect, our actual results may vary in material and
adverse respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as may be required under
applicable securities laws.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iPic Entertainment, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
3,182 |
|
|
$ |
10,505 |
|
|
|
|
Accounts
receivable |
|
3,421 |
|
|
|
5,313 |
|
|
|
|
Inventories |
|
1,109 |
|
|
|
1,198 |
|
|
|
|
Prepaid
expenses |
|
1,551 |
|
|
|
3,423 |
|
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
9,263 |
|
|
|
20,439 |
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
140,184 |
|
|
|
141,166 |
|
|
|
|
Deposits |
|
243 |
|
|
|
218 |
|
|
|
|
Convertible note receivable |
|
- |
|
|
|
250 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
149,690 |
|
|
$ |
162,073 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Members’ Deficit |
|
|
|
|
|
|
Accounts
payable |
$ |
9,837 |
|
|
$ |
11,759 |
|
|
|
|
Accrued
expenses |
|
2,158 |
|
|
|
2,709 |
|
|
|
|
Accrued
interest |
|
4,264 |
|
|
|
7,078 |
|
|
|
|
Accrued
payroll |
|
4,738 |
|
|
|
5,361 |
|
|
|
|
Accrued
insurance |
|
46 |
|
|
|
1,214 |
|
|
|
|
Taxes
payable |
|
1,233 |
|
|
|
1,232 |
|
|
|
|
Deferred
revenue |
|
4,335 |
|
|
|
8,144 |
|
|
|
|
Total
current liabilities |
|
26,611 |
|
|
|
37,497 |
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt – related party |
|
176,562 |
|
|
|
142,603 |
|
|
|
|
Notes
payable to related parties |
|
- |
|
|
|
50,242 |
|
|
|
|
Deferred
rent |
|
49,760 |
|
|
|
50,826 |
|
|
|
|
Accrued
interest – long-term |
|
710 |
|
|
|
5,130 |
|
|
|
|
Other
long-term liabilities |
|
1,325 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
254,968 |
|
|
|
286,298 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' / Members’ Equity (Deficit) |
|
|
|
|
|
|
Members’
deficit |
|
- |
|
|
|
( 124,225 |
) |
|
|
|
Class A
Common Stock; $0.0001 par value; 100,000,000 shares authorized;
7,112,974 issued and outstanding as of September 30,
2018 |
|
1 |
|
|
|
- |
|
|
|
|
Class B
Common Stock; $0.0001 par value; 25,000,000 shares authorized;
4,323,755 issued and outstanding as of September 30,
2018 |
|
- |
|
|
|
- |
|
|
|
|
Additional paid-in capital |
|
( 122,253 |
) |
|
|
- |
|
|
|
|
Accumulated deficit |
|
( 9,853 |
) |
|
|
- |
|
|
|
|
Total
stockholders’ / members’ deficit attributable to iPic Entertainment
Inc. |
|
( 132,105 |
) |
|
|
( 124,225 |
) |
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
26,827 |
|
|
|
|
|
|
Total stockholders' / members’ deficit |
|
( 105,278 |
) |
|
|
( 124,225 |
) |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' / members’
Deficit |
$ |
149,690 |
|
|
$ |
162,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iPic Entertainment,
Inc. Unaudited Condensed Consolidated Statements
of Operations (In thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
Three Months
Ended |
|
|
|
|
|
September
30, |
|
June
30, |
|
September
30, |
|
June
30, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Food and beverage |
$ |
57,045 |
|
|
$ |
55,270 |
|
|
$ |
16,793 |
|
|
$ |
17,569 |
|
|
|
|
|
Theater |
|
46,933 |
|
|
|
45,550 |
|
|
|
14,160 |
|
|
|
14,770 |
|
|
|
|
|
Other |
|
2,544 |
|
|
|
1,145 |
|
|
|
789 |
|
|
|
252 |
|
|
|
|
|
Total revenues |
|
106,522 |
|
|
|
101,965 |
|
|
|
31,742 |
|
|
|
32,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Cost of
food and beverage |
|
15,275 |
|
|
|
15,154 |
|
|
|
4,557 |
|
|
|
4,847 |
|
|
|
|
|
Cost of
theater |
|
17,719 |
|
|
|
17,522 |
|
|
|
4,998 |
|
|
|
5,238 |
|
|
|
|
|
Operating payroll and benefits |
|
29,254 |
|
|
|
28,480 |
|
|
|
9,657 |
|
|
|
9,574 |
|
|
|
|
|
Occupancy expenses |
|
13,967 |
|
|
|
13,443 |
|
|
|
4,659 |
|
|
|
4,677 |
|
|
|
|
|
Other
operating expenses |
|
21,666 |
|
|
|
18,759 |
|
|
|
6,615 |
|
|
|
6,228 |
|
|
|
|
|
General
and administrative expenses |
|
13,616 |
|
|
|
11,061 |
|
|
|
4,256 |
|
|
|
4,424 |
|
|
|
|
|
Equity-based compensation |
|
9,109 |
|
|
|
- |
|
|
|
272 |
|
|
|
- |
|
|
|
|
|
Depreciation and amortization expense |
|
13,732 |
|
|
|
14,552 |
|
|
|
4,614 |
|
|
|
4,974 |
|
|
|
|
|
Pre-opening expenses |
|
18 |
|
|
|
1,634 |
|
|
|
18 |
|
|
|
2 |
|
|
|
|
|
Impairment of property and equipment |
|
- |
|
|
|
3,332 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Loss on
abandonment of lease |
|
1,839 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Operating expenses |
|
136,195 |
|
|
|
123,937 |
|
|
|
39,646 |
|
|
|
39,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(29,673 |
) |
|
|
(21,972 |
) |
|
|
(7,904 |
) |
|
|
(7,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Expense |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(12,715 |
) |
|
|
(11,918 |
) |
|
|
(4,203 |
) |
|
|
(4,135 |
) |
|
|
|
|
Total other income (expense) |
|
(12,715 |
) |
|
|
(11,918 |
) |
|
|
(4,203 |
) |
|
|
(4,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income tax
expense |
$ |
(42,388 |
) |
|
$ |
(33,890 |
) |
|
$ |
(12,107 |
) |
|
$ |
(11,508 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
65 |
|
|
|
65 |
|
|
|
22 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
( 42,453 |
) |
|
|
( 33,955 |
) |
|
|
( 12,129 |
) |
|
|
( 11,530 |
) |
|
|
|
|
Less:
Net loss attributable to non-controlling interests |
|
( 28,158 |
) |
|
|
- |
|
|
|
( 5,294 |
) |
|
|
- |
|
|
|
|
|
Net loss attributable to iPic Entertainment,
Inc. |
$ |
(14,295 |
) |
|
$ |
(33,955 |
) |
|
$ |
(6,835 |
) |
|
$ |
(11,530 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per Class A common
share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(3.09 |
) |
|
|
|
$ |
(1.03 |
) |
|
|
|
|
|
|
Diluted |
$ |
(3.09 |
) |
|
|
|
$ |
(1.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of Class A common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
3,189,884 |
|
|
|
|
|
6,664,405 |
|
|
|
|
|
|
|
Diluted |
|
3,189,884 |
|
|
|
|
|
6,664,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iPic Entertainment, Inc.
Unaudited Condensed Consolidated
Statements of Cash Flows (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
Cash used in operating
activities |
$ |
(20,673 |
) |
|
$ |
(11,670 |
) |
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
Purchases
of property and equipment |
|
( 11,170 |
) |
|
|
( 13,141 |
) |
|
|
|
Repayment
of (investment in) convertible note receivable |
|
250 |
|
|
|
( 250 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
( 10,920 |
) |
|
|
( 13,391 |
) |
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
Members’
contributions |
|
2,500 |
|
|
|
12,394 |
|
|
|
|
Proceeds
from issuance of common stock sold in initial public offering, net
of offering costs |
|
12,325 |
|
|
|
- |
|
|
|
|
Repayment
of notes payable to related parties |
|
( 15,000 |
) |
|
|
(341 |
) |
|
|
|
Repayment
of short-term borrowings |
|
( 1,738 |
) |
|
|
( 1,327 |
) |
|
|
|
Borrowings on long-term debt – related party |
|
26,183 |
|
|
|
13,550 |
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by financing activities |
|
24,270 |
|
|
|
24,276 |
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease) in cash and cash equivalents |
|
( 7,323 |
) |
|
|
( 785 |
) |
|
|
|
Cash and
cash equivalents at the beginning of period |
|
10,505 |
|
|
|
4,653 |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at the end of period |
$ |
3,182 |
|
|
$ |
3,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures |
|
|
|
|
$ Thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
Three Months
Ended |
|
|
|
|
|
September
30, |
|
September
30, |
|
September
30, |
|
September
30, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(42,453 |
) |
|
$ |
(33,955 |
) |
|
$ |
(12,129 |
) |
|
$ |
(11,530 |
) |
|
|
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
12,715 |
|
|
|
11,918 |
|
|
|
4,203 |
|
|
|
4,135 |
|
|
|
|
|
Income
tax expense |
|
65 |
|
|
|
65 |
|
|
|
22 |
|
|
|
22 |
|
|
|
|
|
Depreciation and amortization expense |
|
13,732 |
|
|
|
14,552 |
|
|
|
4,614 |
|
|
|
4,974 |
|
|
|
|
|
EBITDA |
|
(15,941 |
) |
|
|
(7,420 |
) |
|
|
(3,290 |
) |
|
|
(2,399 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
Pre-opening expenses |
|
18 |
|
|
|
1,634 |
|
|
|
18 |
|
|
|
2 |
|
|
|
|
|
Equity-based compensation |
|
9,109 |
|
|
|
- |
|
|
|
272 |
|
|
|
- |
|
|
|
|
|
Impairment of property and equipment |
|
- |
|
|
|
3,332 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Loss on
abandonment of lease |
|
1,839 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Non-recurring charges |
|
1,136 |
|
|
|
1,069 |
|
|
|
202 |
|
|
|
696 |
|
|
|
|
|
Adjusted EBITDA |
|
(3,839 |
) |
|
|
(1,385 |
) |
|
|
(2,798 |
) |
|
|
(1,701 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expense |
|
13,616 |
|
|
|
11,061 |
|
|
|
4,256 |
|
|
|
4,424 |
|
|
|
|
|
Store-Level EBITDA |
|
9,777 |
|
|
|
9,676 |
|
|
|
1,458 |
|
|
|
2,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
Certain financial measures presented in this
press release, such as EBITDA, Adjusted EBITDA and Store-Level
EBITDA are not recognized under accounting principles generally
accepted in the United States, which we refer to as “GAAP.” We
define these terms as follows:
- “EBITDA” means, for any reporting
period, net loss before interest, taxes, depreciation, and
amortization.
- “Adjusted EBITDA” is a supplemental
measure of our performance and is also the basis for performance
evaluation under our executive compensation programs. Adjusted
EBITDA is defined as EBITDA adjusted for the impact of certain
non-cash and other items that we do not consider in our evaluation
of ongoing operating performance. These items include, among other
things, equity-based compensation expense, pre-opening expenses,
other income and loss on disposal of property and equipment,
impairment of property and equipment as well as certain
non-recurring charges. We believe that Adjusted EBITDA is an
appropriate measure of operating performance because it eliminates
the impact of expenses that do not relate to our ongoing business
performance.
- “Store-Level EBITDA” is a
supplemental measure of our performance which we believe provides
management and investors with additional information to measure the
performance of our locations, individually and as an entirety.
Store-Level EBITDA is defined by us as EBITDA adjusted for
pre-opening expenses, other income, loss on disposal of property
and equipment, impairment of property and equipment, non-recurring
charges, and general and administrative expense. We use Store-Level
EBITDA to measure operating performance and returns from opening
new stores. We believe that Store-Level EBITDA is another useful
measure in evaluating our operating performance because it removes
the impact of general and administrative expenses, which are not
incurred at the store level, and the costs of opening new stores,
which are non-recurring at the store-level, and thereby enables the
comparability of the operating performance of our stores for the
periods presented. We also believe that Store-Level EBITDA is a
useful measure in evaluating our operating performance within the
entertainment and dining industry because it permits the evaluation
of store-level productivity, efficiency and performance, and we use
Store-Level EBITDA as a means of evaluating store financial
performance compared with our competitors.
You are encouraged to evaluate the adjustments
we have made to GAAP financial measures and the reasons we consider
them appropriate for supplemental analysis. In evaluating Adjusted
EBITDA and Store-Level EBITDA, you should be aware that in the
future we may incur income and expenses that are the same as or
similar to some of the adjustments used to calculate the non-GAAP
financial measures contained in this press release.
EBITDA and Adjusted EBITDA are included in this
press release because they are key metrics used by management and
our board of directors to assess our financial performance. EBITDA
and Adjusted EBITDA are frequently used by analysts, investors and
other interested parties to evaluate companies in our industry.
Store-Level EBITDA is utilized to measure the performance of our
locations, both individually and in entirety.
EBITDA, Adjusted EBITDA and Store-Level EBITDA
are not GAAP measures of our financial performance or liquidity and
should not be considered as alternatives to net income (loss) as a
measure of financial performance or cash flows from operations as
measures of liquidity, or any other performance measure derived in
accordance with GAAP. Our presentation of Adjusted EBITDA and
Store-Level EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items. Additionally, EBITDA and Adjusted EBITDA are not intended to
be measures of free cash flow for management’s discretionary use,
as they do not reflect tax payments, debt service requirements,
capital expenditures, iPic openings and certain other cash costs
that may recur in the future, including, among other things, cash
requirements for working capital needs and cash costs to replace
assets being depreciated and amortized. Management compensates for
these limitations by relying on our GAAP results in addition to
using EBITDA and Adjusted EBITDA supplementally. Our measures of
EBITDA and Adjusted EBITDA are not necessarily comparable to
similarly titled captions of other companies due to different
methods of calculation.
Investor Relations:ICRRaphael
GrossMelissa Calandruccio, CFAiPicIR@icrinc.com646-277-1273
Media Relations:The Gab Group for iPic®
Entertainment Corporate Michelle Soudrymsoudry@thegabgroup.com
561-750-3500
JonesworksStephanie Jones/Michelle Boweripic@jonesworks.com
212-839-0111
iPic Entertainment (NASDAQ:IPIC)
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