BJ’s(US:BJRI)2022-05-01 16:00Financial Performance - Total revenues increased by $75.4 million, or 33.8%, to $298.7 million for the thirteen weeks ended March 29, 2022, compared to $223.3 million for the same period in 2021[57]. - Comparable restaurant sales rose by 33.9%, or $74.0 million, driven by a 26.4% increase in guest traffic and a 7.5% increase in average check[57]. - Net income for the thirteen weeks ended March 29, 2022, was 0.5%, compared to a net loss of (1.4)% for the same period in 2021[56]. - Total costs and expenses decreased to 102.6% of revenues from 103.7% in the prior year[56]. Cost Management - Cost of sales increased by $25.3 million, or 45.1%, to $81.5 million, with cost of sales as a percentage of revenues rising to 27.3% from 25.1%[57]. - Labor and benefit costs increased by $34.6 million, or 42.4%, to $116.3 million during the same period[57]. - Labor and benefit costs increased to 38.9% of revenues for the thirteen weeks ended March 29, 2022, up from 36.6% in the prior year[59]. - Occupancy and operating expenses rose by $11.9 million, or 19.8%, to $71.7 million, while as a percentage of revenues, these expenses decreased to 24.0% from 26.8%[59]. - General and administrative expenses increased by $3.0 million, or 19.6%, to $18.3 million, with a decrease in percentage of revenues to 6.1% from 6.8%[59]. - Depreciation and amortization expenses decreased to 6.0% of total revenues from 8.2%[56]. Cash Flow and Investments - Net cash provided by operating activities was $0.6 million, a decrease of $13.6 million from $14.2 million in the prior year[63]. - Net cash used in investing activities increased by $4.7 million to $11.5 million, primarily due to new restaurant openings and remodels[64]. - Total capital expenditures for fiscal 2022 are anticipated to be approximately $90 million to $95 million, including costs for opening up to eight new restaurants[66]. - The company plans to open as many as eight new restaurants in fiscal 2022, with signed leases and agreements for all new locations[66]. Debt and Taxation - Interest expense, net, decreased by $0.8 million to $0.6 million due to a lower average debt balance[59]. - The effective income tax rate for the thirteen weeks ended March 29, 2022, reflected a 116.8% tax benefit compared to a 66.3% tax benefit in the prior year[59]. - The current ratio decreased to 0.4:1.0 from 0.5:1.0, indicating a decline in liquidity[61]. - The company has a $215 million Credit Facility, with $50 million currently outstanding, exposing it to interest rate risk; a hypothetical 1% change in interest rates would impact net income by approximately $0.4 million annually[75]. Operational Challenges - The company is experiencing distribution disruptions and commodity cost inflation due to the COVID-19 pandemic, which has led to food and supply shortages[76]. - The company attempts to manage commodity price risks by entering into fixed-price purchase commitments, typically up to one year, for some of its commodity requirements[76]. - The company is exposed to risks from shortages, delays, or interruptions in the supply chain due to various operational disruptions beyond its control[76]. - Many leases for the company's restaurants include contingent rent obligations based on a percentage of sales, meaning rent expenses will absorb a share of any menu price increases[71]. - The company's financial results are significantly impacted by seasonal factors and the timing of new restaurant openings, which may not be indicative of full fiscal year results[72]. - The company believes it has flexibility to increase certain menu prices in response to food commodity price increases[76]. Corporate Governance - The company has suspended its share repurchase program, which was funded through its Credit Facility[75]. - The company acknowledges that actual results may differ materially from forward-looking statements regarding market risks[74]. - The company has no significant changes in its critical accounting policies during the thirteen weeks ended March 29, 2022[73]. - The company operates 213 restaurants across 29 states as of May 2, 2022[52]. - The company’s proprietary craft beer is produced at several locations and by independent third-party brewers using proprietary recipes[52].