Wells Fargo 2013
Safe Harbor Statement
Certain statements made in this presentation constitute
forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act of 1995, regarding
the transaction, the financing and the company's future
plans, objectives and expected performance. Statements
that are not historical facts, including statements
accompanied by words such as "believe," "expect,"
"estimate," "intend," or "plan," are intended to identify
forward-looking statements and convey the uncertainty of
future events or outcomes. The Company cautions that any
such
forward-looking
statements
are
based
on
assumptions that are subject to a wide range of risks, and
actual results may differ materially.
Investment Merits
• BRAVO! and BRIO are two unique and complementary brands
– Benefit from favorable trends in the upscale affordable restaurant segment
– Synergies from operating two brands
• Capital efficient unit economics
– Industry-leading 30-40% cash-on-cash target returns for new restaurants
– Average net investment of $1.8 to $2.2 million
• Significant new unit growth opportunity
– 40-50 medium-term new store opening opportunities
– Additional density benefit from growth in existing markets
• Multiple initiatives driving organic revenue and profitability growth
Two Unique and Complementary Brands
Bravo! Cucina Italiana
• Full-service, upscale affordable Italian restaurant serving broad menu of freshly-prepared classic Italian food
• Warm, inviting atmosphere with sophisticated design
• 47 company-owned BRAVO! restaurants across 21 states
• Average unit volume of $3.4 million
– Average check of $20.07
– Alcohol accounts for 18% of sales
Brio Tuscan Grille
• Upscale affordable Italian chophouse restaurant serving authentic northern Italian food
• Tuscan Villa atmosphere with upscale décor
• Typically located in high-traffic, high-visibility locations with-in affluent suburban and urban markets
– 56 company-owned Brio restaurants across 20 states
• Average unit volume of $4.8 million
– Average check of $24.75
– Alcohol accounts for 23% of sales
What Makes BBRG Unique
HIGH-QUALITY
FOOD
ATTRACTIVE
AMBIANCE
GREAT SERVICE
AFFORDABILITY
FLEXIBLE REAL ESTATE MODEL
High-Quality Food
•
Experienced,
trained chefs
•
Made-to-order and
freshly prepared
•
Traditional, Italian
culinary techniques
•
Attention to detail
and focused
execution
BRAVO!
BRIO
Great Service
•
Consistent and
attentive service
•
High wait
staff-to-table ratio
•
Experienced
Attractive Ambiance
•
Lively, high-energy
environment
•
Dramatic design elements and
inviting atmosphere
•
Exhibition kitchens, high
ceilings, white tablecloths
•
Centerpiece lively and relaxing
patios day or night
$14.00 $15.00 $16.50 $18.00 $19.30 $20.07
$21.50 $24.75
$36.00 $39.00
$43.79
$71.00
$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00
Affordability
•
Reasonable menu prices drive broad concept appeal
and attractive guest base
•
Ability to drive traffic benefits BBRG appeal to mall
landlords
Average Check Across Restaurant Industry
Broad Appeal with Attractive Guest Base
Day Part Mix Type of Guest
Gender Mix Age Breakdown
Lunch, 30% Dinner,
70% Personal/
Social, 78% Business, 12% Social Travelers, 10%
38% 35%
62% 65%
0% 20% 40% 60% 80% 100%
BRAVO! BRIO Male Female
13% 15%
37% 41%
50% 44%
0% 20% 40% 60% 80% 100%
BRAVO! BRIO
Flexible Real Estate Model
• Nationally recognized restaurant anchor,resulting in:
– Prime location within a retail center
– Tenant allowances and favorable lease terms
• Attracts approximately 3,000‐5,000 guests each week
• Co‐tenants benefit from BBRG’s strong velocity of guest traffic and attractive guest demographics
• Retailers seek out locations in BBRG occupied developments
Flexible Real Estate Model
Omaha, NE Miami, FL
Wayne, NJ Austin, TX
Unique Competitive Positioning
•
BRAVO! and BRIO are clear leaders in
upscale affordable segment
–
Menu consistently focused on upscale Italian cuisine
and ranking high in quality
–
Targeted promotion efforts, rather than broad,
aggressive pricing strategies used by other
restaurants
–
Mix of quality and affordable prices creates broad
customer appeal across day-part and customer
profile (age, gender, etc.)
Significant New Unit Growth Opportunity
• Significant opportunity to expand in new and existing markets
– Growth in existing markets builds density that drives operating leverage and brand recognition
– New markets in Northeast and West largely untapped
• Proven portability and ability to grow
– Flexible real estate model creates appeal with landlords
• Expect to open 40-50 new restaurants over the next five years 11 7 2 2 1 6 1 3 2 1 2 2 2 3 2 4
47 BRAVO! Restaurants 57 BRIO Restaurants
1 1 1 2 1 1 4 3 1 2 2 2 7 1 2 2 11 1 1 Future Pipeline 1 2 1 1 1 1
47 57
130
177
204 210
0 50 100 150 200 250
Bravo! Brio BJ's Cheesecake Factory
PF Chang's Romano's Macaroni Grill
Significant Underpenetration
• Significantly less penetrated than comparable upscale affordable and Italian restaurants
• Expect to open 40-50 additional locations in the next five years
– Long-term potential for ~400 locations across both concepts Number of Restaurant Locations
Organic Growth Strategy
•
Drive traffic at existing locations through targeted
marketing and product strategy
– Lighter Side menu showing strong results since initial launch
– Marketing through traditional and electronic media to promote customer loyalty
– Additional strategies to drive traffic include a Wine Night and Chef’s Daily Specials
Lighter Side Menu
•
Direct response
to out guests’
desire to lead a
healthier lifestyle
–
All items under
550 calories
–
Menus include
appetizers, side
and entrée
salads and a
selection of
entrées
Loyalty Program
•
“Surprise and
Delight” program
to reward our most
loyal guests
–
Data driven
program provides
insight on our
guest preferences
allowing us to
design targeted
award incentives
–
Goal to deepen
emotional bond
with out most
Wine Night
•
Offering 10 select
wines for $5 a glass
on Thursdays
•
Available in bar and
dining room
•
Promoting internally,
on our website, social
media, e-advertising
and public relations
Chef’s Daily Features
•
Offering three select
items, rotating weekly
for $7.95 (BRAVO!) &
$8.95 (BRIO)
•
Offered
Monday-Friday until 3pm
•
Includes selection of
pasta, flatbreads,
entrée salads and
house specialties
Marketing Strategy
Marketing Strategy
NRN Social 200: Bravo! leads index with No Kid Hungry tie-in
Track Record of Growth
Total Restaurant Base
1 1 2 4 5 6
8 12
14 17 23
32 40
49 57
63 75
81 86 93
103 107
0 20 40 60 80 100 120
Proven Financial Performance
Revenue Restaurant Operating Profit
Operating Cash Flow Operating Margin
26
$300.8 $311.7 $343.0
$369.2 $409.1
$201.2 $208.7
$0.0 $100.0 $200.0 $300.0 $400.0 $500.0
2008 2009 2010 2011 2012 YTD 2012 YTD 2013
$32.5 $33.8
$37.7
$51.6 $52.3
$20.5 $14.2 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0
2008 2009 2010 2011 2012 YTD 2012 YTD 2013
$47.4 $54.2
$63.0 $66.7
$74.3
$35.8 $34.5
$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0
2008 2009 2010 2011 2012 YTD 2012 YTD 2013
15.8%
17.4%
18.4%
18.1% 18.2%
17.8% 16.5% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0%
Industry-leading New Unit Economics
Target Cash Return 30.0% 40.0% 34.8% 27.5% 24.0% 21.5% Sales to Investment
Ratio 1.9x 2.0x 2.0x 1.3x 1.1x 1.2x
Annualized Sales $3.4 $4.8 $4.6 $6.0 $4.4 $9.9 Target Net Cash
Investment $1.8 $2.2 $2.3 $4.5 $4.1 $8.6
Bravo! Brio PFCB BJ’s
DRI /
O.G. CAKE
• Target cash-on-cash return of 30-40%
• Four wall economics leads upscale affordable restaurant segment
Industry-leading New Unit Growth
BBRG Maggiano’s Cheesecake Factory
PF Chang’s BJ’s Olive Garden
9.3% 6.2% 9.3% 10.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
2009 2010 2011 2012
4.8%
2.3%
0.0% 0.0%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
2009 2010 2011 2012
1.3% 1.2%
4.9% 4.7%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
2009 2010 2011 2012
4.2% 2.0% 1.5% NA 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
2009 2010 2011 2012
17.1%
12.0% 12.7%
13.9% 0.0% 5.0% 10.0% 15.0% 20.0%
2009 2010 2011 2012
4.6% 4.3% 5.0% 4.5% 3.8% 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% 5.2%
2010 2011 2012 2013
Same-store Sales and Profitability
• Both BRAVO! and BRIO concepts achieve stable same-store sales and
profitability growth in normalized environments
• Traffic for both brands continue to be broadly in-line with Knapp Track.
• Current same store sales impacted by growth of Lighter Side menu and effect of new restaurant openings
• Currently evaluating a variety of initiatives to enhance organic growth, as discussed further in this presentation
Balance Sheet Strength
• Balance sheet is strong with low debt and ample liquidity, including cash and revolver availability
• Total debt of approximately $16.2 million as of Q2 2013
– Reduced outstanding debt by $25 million since 2010
– Leverage at approximately 0.4x
• Liquidity of ~$43 million, including cash of approximately $6 million and unfunded revolver of $37 million
• Expect continued strong free cash flow
– Optimize use of free cash flow between development, stock repurchase and reduction of term debt
Share Repurchase Program
• Share Repurchase Program approved by our Board of Directors in October, 2012
– Authorized to repurchase up to $20 million of common shares through the end of fiscal 2013
– Since the inception of the plan in October 2012, through the second quarter of 2013 we have repurchased approximately 291,000 shares at an average price of $13.60 per share
• Will remain disciplined in repurchasing our shares at favorable prices
– Generated approximately $16 million of operating cash flow, after gross capital expenditures, in 2012
$35.3 $42.5 $25.7
$18.7 $35.5 $36.4 ($4.0)
$8.1 $19.0
$16.1 $15.9 $31.3 $32.5 $33.8 $37.7
$51.6 $52.3
$0.0 $20.0 $40.0 $60.0 ($ in mi llions )
