Kona Grill — Investor Presentation (December 2015)
41 slides from Kona Grill's investor presentation, Dec 9, 2015
Slide 1: Kona Grill
Kona Grit kitchen * sushi * cocktails
Slide 2: Important Cautions Regarding Forward-Looking Statements
Important Cautions Regarding Kona Grit Forward-Looking Statements Meron nny neseian This presentation contains forward-looking statements. These statements relate to future events or expectations regarding our future financial performance. These statements are only predictions and involve known and
Slide 3: Who We Are
Who We Are... Kona Grut Emerging polished casual growth concept Flavorful new American cuisine, award-winning sushi, significant bar business Moderately priced $25 avg. check with $4.4M avg. unit volumes and $625 sales per square foot 36 locations across 19 states and Puerto Rico industry-leading un
Slide 4: What Sets Us Apart
What Sets Us Apa Kona Grit Diverse Menu Mix ice bar, indoor/outdoor = Broad menu offering appealsto a wide range of achoice of tastes, preferences and price points + Main dining area, full: 10 and sushi bar pro eres and American Grill Desserts 4% 48%, Entrees + 30% Alcohol mix has remained consisten
Slide 5: Multiple dining and social experiences across 4 day-parts
Kona Grit = Multitude of dining and social experiences for our guests leadsto successful execution across 4 day-parts Lunch: Open- 3PM Happy Hour: 3PM - 5PM. Dinner: 5PM - 9PM. Reverse Happy Hour: 9PM — Close NASDAQ:KONA 5 Botte, Idaho.
Slide 6: Sophisticated Polished Casual Dining Experience
Sophisticated Polished Casual Dining Experience Our freshly prepared food, attentive service and upscale contemporary ambiance create an exceptional yet affordable dining experience Scratch kitchen delivers exceptional flavors 40+ signature sauces & dressings Awarded “Best Sushi” in multiple markets
Slide 7: Exceptional Food Quality with Kona Grill
Exceptional Food Quality with Kona Grit Innovative Menu Selections oa American Grill Bar (Our sophisticated and 46% of Sales 30% of Sales diverse menu boasts a wide array of options for guests with all tastes 3 Macadamia Nut chicken Raspberry crush - Freshly prepared, critically acclaimed sushi = In
Slide 8: Affordable Dining Experience
Affordable Dining Experience Average check without alcohol compares favorably to competition $51.00 nan= Average check with and without alcohol $40.75 $24.00 $24.93 $25.00 $25.06 $19.88 $20.20 $20.43 NASDAQ:KONA 5
Slide 9: Loyal User Base
Loyal User Base Kona Grut Exceptional Customer Loyalty = More than 50% of guests are categorized as mediumto heavy users * 17% of guests dine with Kona at least once every 10 days Casual Dining Guest KONA Industry Usage* _ GRILL Range Heavy 17% 10-15% Medium 37% 16-30% light 46% 55-60% “Visits in la
Slide 10: Focused Marketing
Focused Marketing Kona Grit Electronic Media Social marketing (Yelp, Instagram, Facebook, Twitt Loyalty Club *SEO/SEM Local Market [Konavors] sLoyallty cl a Engagement 45,000+ members *Drive traffic by keeping Kona top of mind Promoting Our Brand Kona Grit NASDAQ:KONA 10
Slide 11: National Footprint with Significant Room to Grow
National Footprint with MonaGnnc Significant Room to Grow bet = 36 restaurants across 19 states and Puerto Rico « Significant nationwide opportunity given demonstrated portability of the brand Boise Minneapolis, Eden Pai Toye stamford Lincolnshire K Woodbridge ‘Carmel Aecolumbus omehe k oakteak Ca!
Slide 12: Significant Growth Opportunity
Significant Growth Opportunity Kona Grit Substantial Runway vs. Leading Polished Casual Incumbents Current Domestic Units 62 43 NASDAQ:KONA Fry
Slide 13: Compelling Unit Level Economics
Compelling Unit Level Economics Kona Grut Quality site selection & effective execution can lead to superior returns... ($ in thousands} Comparable Units! Restaurant sales $4,400 Net cash investment? $2,500 Restaurant cash flow % margin 18% - 19% Sales to Cash Investment Ratio 1.7x Cash Return on Cas
Slide 14: Flexible Real Estate Options
Flexible Real Estate Options Kona Grit = Real Estate Type: Current Units Lifestyle/entertainment centers 15 High traffic, upscale retail centersand 19 shopping malls Mixed use commercial/retail centers 8 Freestanding 3 Significant commercial, residential and daytime population ElPoto, Texot » Rigoro
Slide 15: Flexible Real Estate Options — Lifestyle Center: Alpharetta, GA
Flexible Real Estate Options — Lifestyle Center: Alpharetta, GA $600 million mixed use development with 570,0005q. ft. of shopping/dining and 750,000sq. ft. of Class A office space Strong retail co-tenants fluent demographics - 63% in 7-mile radius have income greaterthan $75,000/yr. NASDAQ:KONA
Slide 16: Flexible Real Estate Options — Outdoor Mall: Irvine Spectrum
Flexible Real Estate Options -— Outdoor Mall: Irvine Spectrum Moms Gnas and 14,000 apartments in 3-mile radius Household income 2.1x the national avg. NASDAQ:KONA
Slide 17: Flexible Real Estate Options — Mall: Las Vegas Strip
Flexible Real Estate Optio Mall: Las Vegas-Strip Kona Grut 40 million guests annually to the Las Vegas Strip; 22,000+ conventions per year Street-level location in Fashion Show Mall, across from Wynn and Encore properties Fashion Show averages $1,100+ per sq. ft. 85% of Fashion Show visitors are fro
Slide 18: Flexible Real Estate Options — Mall: Miami/Dolphin
Flexible Real Estate Options — Mall: Miami/Dolphin Kona Grit residents and heavy tourist traffic Average daily traffic count exceeds 275,000 Approximately 200,000 HHs with income greaterthan $75,000 NASDAQ:
Slide 19: Flexible Real Estate Options — Mixed Use/Retail: Fort Worth
Flexible Real Estate Op Mixed Use/Retail: Fort Wo! Destination center with attractive population density and target average age Wide variety of traffic in the heart of the city 5 million yearly guests visitnearby Cultural District Approximately 280,000 HHs within 10 miles with average income ~ $65,0
Slide 20: New Design Panoramic Tour
New Design Panoramic Tour Alpharetta — Exterior View NASDAQ:KONA
Slide 21: New Design Panoramic Tour
New Design Panoramic Tour San Juan - Bar & Patio Moms Gnas NASDAQ:KONA
Slide 22: New Design Panoramic Tour
New Design Panoramic Tour San Juan — Outdoor Patio
Slide 23: New Design Panoramic Tour
New Design Panoramic Tour Fort Worth — Rooftop Patio Moms Gai NASDAQ:KONA
Slide 24: New Design Panoramic Tour
New Design Panoramic Tour- Arlington - Dining Room Kona Grit NASDAQ:KONA
Slide 25: New Design Panoramic Tour
New Design Panoramic Tour Arlington - Private Dining Room Kous Gains NASDAQ:KONA
Slide 26: New Design Panoramic Tour
New Design Panoramic Tour Plano — Sushi Bar Kona Gru NASDAQ:KONA
Slide 27: International Franchising Initiative
International Franchising Initiative KonaGru = Growth i jative a result of: Significant unsolicited interest from well-capitalized and experienced hospitality franchise operators Opportunity to leverage a proven and portable Kona Grill brand Opportunity to put minimal capital at risk relative to US
Slide 28: Experienced Senior Leadership Team
Experienced Senior Leadership Team* Kona Gru Name and Pos! Berke Bakay President 8 Chief Executive Officer Christi Hing Chief Financial Officer Marci Rude VP of Development Jenny Elkins VP of Operations Chris Moran VP of Food and Beverage Carlos de Leén VP of International Development NASDAQ:KONA jo
Slide 29: Key Takeaways
Key Takeaways Kona Grut = Unique growth concept; differentiated upscale, polished casual » 50%+ of sales from sushi and bar « Successful executionin 4 dayparts & 3 distinct businesses = National portability, flexible real estate options, international opportunity « Industry-leading unit economics St
Slide 30: Financial Overview
Kona Griz Kona Grit kitchen « sushi * cocktails FINANCIAL OVERVIEW
Slide 31: Restaurant Sales
Restaurant Sales Kona Grit $ in millions 1 ' Ss Siku | 4 \ 98.3 H $93.7 76.0) es H ' $82.7 ' \ ' 1 ' 1 ' 1 2010 2011 2012 2013 2014 | LM NASDAQ:KONA BL
Slide 32: Operating Profit Margin
Operating Profit Ma 1 18.8% 18.9% 19.0% 1 1 18.3% 17.8% ' 1 ee D units had a 14.7% Led cin cnitshed = ~100 bps remodel and impact ‘new units: ned=t60 bps impact 7 1 1 1 2010 2011 2012 2013 2014 TMG 1 NASDAQ:KONA
Slide 33: G&A Expenses as % of Restaurant Sales
ted G&A Expenses a: Restaurant Sales 8.4% B57 8.1% 7.4% 7.0% 2010 2011 2012 2013 2014” um? NASDAQ:KONA
Slide 34: Adjusted EBITDA
Adjusted EBITDA $ in millions $11.4 $10.8 $11.5 $8.8 $5.6 y, 207% — caer 20\e es a el va 2010 2011 2012 2013 2014” NASDAQ:KONA $11.5 uM)
Slide 35: Strong New Unit Sales Performance
Strong New Unit Sales Performance KonaGru Comp Units -*-Non-Comp Units $105,000 $100,000 $75,000 $70,000 $85,000 $80,000 $75,000 $70,000 365,000 $0,000 4Q13 1014 2014 -3Q14 4Q14--1Q15_-2Q15 315 Period Restaurant Opened HB New Retail Development evelopment/Mixed Use/Commercial z a z g AWS Differentia
Slide 36: Two-Year Same-Store Sales Stack vs. Casual Dining Industry
Two-Year Same-Store Sales KonaG Stack vs. Casual Dining Industry Continued Outperformance vs. Peers* hae D Kore cai IB Knopp-track Casual Dining Index -3.0% | 413 Ql-14 Q3-14 Q4140 0 QI-IS = Q2-15 3-15 NASDAQ:KONA &
Slide 37: 2015E Unit Growth
2015E Unit Growth g 0.0% 2.0% 4.0% 6.0% 2015 YTD SSS NASDAQ:KONA sh
Slide 38: LTM Restaurant Operating Profit Margin vs Peers
LTM Restaurant Operating Profit KonaG Margin. vs Peers AW8z 19.2% 18.3% 15. an” " 15.0% 14.4% Denver remodel and. new units had ~150 bpsimpact NASDAQ:KONA
Slide 39: Capitalization
Capitalizati Select Balance Sheet Items December 31, September 30, 2014 2015 Cash & cash equivalents $36.6 $15.8 Long-term debt $0.0 $0.0 = $35.0M credit facility with interest rates at LIBOR + 1.5%-2.5% NASDAQ:KONA 5
Slide 40: Focused on Growth
Focused on Growth = Build a premier polished casual concept » Take brand to the next phase of growth — Planned unit growth of 23% in 2015 and 20% for next several years Top quartile restaurant operating margins Strong SSS momentum: positive growth in 19 of last 20 quarters 2 units opened in 2013; 5
Slide 41: Investment Highlights
nvestment Highlights Kona Grut Substantial White Space for Domestic and. Distinctive International ‘Atmosphere and trong Unit Exceptional feed Gualy Seasoned innovative | estauran Menu Selections J Operations Team Dedicated Sophisticated Management Polished Casual ‘Team with ing Significant Experien