Shake Shack, Inc. · NYSE:SHAK
Shake Shack — William Blair 39th Annual Growth Stock Conference 2019
55 slides from Shake Shack's conference presentation, Jun 5, 2019
Slide 1: William Blair 39th Annual Growth Stock Conference
es SHAKE == SHACK WILLIAM BLAIR 39% ANNUAL GROWTH STOCK CONFERENCE JUNE 5, 2019
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), which are subject to known and unknown risks, uncertainties and other important factors that may cause actual res
Slide 3: Xintiandi, Shanghai Opening
Xintiandi, Shanghai Opening 3
Slide 4: 2019 Strategic Commitments
We are relentlessly focused on excellence, experience and hospitality 2019 Strategic Commitments 4
Slide 5: Consistent, strong performance
Consistent, strong performance Total Revenue ($M) Cash Flow from Operations ($M) CAGR 28% CAGR 34% $459 $493 $85 $84 $359 $71 $268 $54 $191 $41 '15 '16 '17 '18 Q1 '19 '15 '16 '17 '18 Q1 '19 TTM TTM Shack System-wide Sales1 ($M) System-wide Shack Count CAGR 32% CAGR 35% $672 $721 208 218 $532 159 $40
Slide 6: Q1 2019 highlights
Q1 2019 highlights +3.6% $133M $195M Growth in Total Revenue Shack System-wide Same-Shack +34% YoY Sales2 Sales1 +34% YoY $4.3M $17.8M 12 $27.0M Average Adjusted New Company- Shack-Level Unit Volume3 EBITDA4 Operated and Licensed Operating Profit4 +10% YoY Shacks opened in Q1 +13% YoY 1. "Same-Shack
Slide 7: Raised full-year 2019 revenue guidance after Q1
Raised full-year 2019 revenue guidance after Q1 Total Revenue ($M) Shack Count Domestic Company-operated Shacks Licensed Shacks CAGR 34% CAGR 35% $576 to $582; 124 increase from 260+ $570 to $576 Company-operated 36 to 40 Licensed 16 to 18, net 90 $459 $359 64 $268 44 $191 84 69 40 50 '15 '16 '17 '1
Slide 8: Fiscal year 2019 guidance
Fiscal year 2019 guidance These forward-looking projections are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different. Factors that might cause such differences include, but are not limited to, those discussed in Part I
Slide 9: Broadening of Shack format to suit our new and existing markets
Broadening of Shack format to suit our new and existing markets ROADSIDE URBAN EVENTS STADIUMS SHOPPING FREE STANDING PAD AIRPORTS FOOD CENTER TRUCK FOOD COURT 9
Slide 10: Commit to excellence in our people
Commit to excellence in our people ‘All-In’ ~60% Four-Day Workweek 100% Score Launched Shake Shack’s Promotions earned by women Testing in select markets to attract Human Rights Campaign 2019 Diversity & Inclusion Program across all Shacks in 2018 and retain talent Corporate Equality Index 1,151 2,0
Slide 11: Deliver a consistently great experience
Deliver a consistently great experience Domestic Company-Operated Shacks • 2019 targeted to deliver our largest class of NYC domestic openings at 36 to 40 Shacks, 2H Other 200+ back-weighted 160 - 164 • Opening restaurants with leading industry CAGR 43% AUV’s and returns 124 21 • Broadening of Shack
Slide 12: Growing domestic presence through existing and new markets in multi-formats
Growing domestic presence through existing and new markets in multi-formats Providence Columbus Salt Lake City Virginia Beach >80% Shacks outside of NYC Raleigh Shacks in Northeast New Orleans ~50% Corridor, significant nationwide whitespace Existing Markets Sarasota New Markets in 2019 80/20 existi
Slide 13: Hudson Yards, Manhattan, NY
Hudson Yards, Manhattan, NY 13
Slide 14: Atlanta, GA
Atlanta, GA 14
Slide 15: Atlanta, GA
Atlanta, GA 15
Slide 16: San Diego, CA
San Diego, CA 16
Slide 17: Columbus, OH
Columbus, OH 17
Slide 18: New Orleans, LA
New Orleans, LA 18
Slide 19: Salt Lake City, UT
Salt Lake City, UT 19
Slide 20: Chicago, IL
Chicago, IL 20
Slide 21: San Antonio, TX
San Antonio, TX 21
Slide 22: Kirkland, WA
Kirkland, WA —_— _
Slide 23: Shack Truck
Shack Truck Now serving The Tri-State Area & Atlanta 23
Slide 24: Global licensing expansion, a key part of our continued growth strategy
Global licensing expansion, a key part of our continued growth strategy Licensed Shacks • Entered 3 new markets in 1H 2019 with Middle East, Turkey, Russia openings in Shanghai, Singapore and Manila; UK Mexico to open in the third quarter Japan, Korea, Hong Kong 120+ US 100 - 102 • First internation
Slide 25: Dallas Fort Worth Airport, Terminal C
Dallas Fort Worth Airport, Terminal C 25
Slide 26: Phoenix Sky Harbor International Airport, Terminal 3
Phoenix Sky Harbor International Airport, Terminal 3 26
Slide 27: Citizens Bank Park, PA
Citizens Bank Park, PA 27
Slide 28: McCarran International Airport, Las Vegas, Nevada
McCarran International Airport, Las Vegas, Nevada 28
Slide 29: Louis Armstrong New Orleans International Airport
Louis Armstrong New Orleans International Airport 29
Slide 30: Monmouth Travel Plaza, NJ
Monmouth Travel Plaza, NJ 30
Slide 31: Kyoto, Japan
Kyoto, Japan 31
Slide 32: Xintiandi, Shanghai, China
Xintiandi, Shanghai, China 32
Slide 33: Jewel Changi Airport, Singapore
Jewel Changi Airport, Singapore 33
Slide 34: Manila, Philippines
Manila, Philippines 34
Slide 35: Mexico City, Mexico
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Slide 36: Your Shack, whenever, wherever.
YOUR SHACK, WHENEVER, WHEREVER. 36
Slide 37: Cultivate a loyal and connected community
Cultivate a loyal and connected community IN-SHACK DELIVERY • Continuously innovating the in-Shack experience • Testing through ongoing pilots with multiple partners since Q4 ‘17 • Partner selection considerations include long-term economics, APP retention of customer data and most importantly, main
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Slide 40: Innovate our business for growth: Chick'n Bites
Innovate our business for growth Chick’n Bites Nationwide LTO 40
Slide 41: Cherry Blossom Shake, Tiramisu Shake
Cherry Blossom Shake Tiramisu Shake 41
Slide 42: Innovation Kitchen
Innovation Kitchen 42
Slide 43: Investing for future growth: Project Concrete
Investing for future growth: Project Concrete Advance decision making Robust and standardized with improved data quality processes and controls Leverage operational Relieve Shacks from cost efficiency Foundation administrative and time for the future consuming tasks Minimize risk through Create an a
Slide 44: Jewel Changi Airport Opening
Jewel Changi Airport Opening 44
Slide 45: Looking ahead…
Looking ahead… Strength of culture and growth opportunities continue to attract and retain talent Record year of domestic Shack openings in multi-formats International expansion continues with entrance into 4 new countries Innovation through digital product development remains a key strategic priori
Slide 46: Appendix including GAAP & non-GAAP measures
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Slide 47: Impact of New Accounting Standard
Impact of New Accounting Standard Balance Sheet changes Balance Sheet impact from the adoption of the new Right-of-use asset & lease liabilities lease accounting standard • Net increase to total assets of $218 million Landlord funded assets & deemed landlord financing liabilities • Net increase to t
Slide 48: Definitions
Definitions “Adjusted EBITDA,” a non-GAAP measure, is defined as EBITDA (as defined above), excluding equity-based compensation expense, deferred lease costs, losses on the disposal of property and equipment, as well as certain non-recurring items that the Company does not believe directly reflect i
Slide 49: Income Statement
Income Statement Thirteen Weeks Ended (in thousands, except per share amounts) March 27, 2019 March 28, 2018 Shack sales $ 128,569 97.0% $ 96,089 96.9% Licensing revenue 4,040 3.0% 3,027 3.1% TOTAL REVENUE 132,609 100.0% 99,116 100.0% Shack-level operating expenses(1): Food and paper costs 37,991 29
Slide 50: Shack-Level Operating Profit Definitions
Shack-Level Operating Profit Definitions Shack-Level Operating Profit Shack-level operating profit is defined as Shack sales less Shack-level operating expenses, including food and paper costs, labor and related expenses, other operating expenses and occupancy and related expenses. How This Measure
Slide 51: Shack-Level Operating Profit
Shack-Level Operating Profit Thirteen Weeks Ended (dollar amounts in thousands) March 27, 2019 March 28, 2018 Operating income $ 5,162 $ 6,514 Less: Licensing revenue 4,040 3,027 Add: General and administrative expenses 13,937 11,809 Depreciation expense 8,966 6,498 Pre-opening costs 2,642 2,029 Los
Slide 52: Adjusted EBITDA Definitions
Adjusted EBITDA Definitions EBITDA and Adjusted EBITDA EBITDA is defined as net income before interest expense (net of interest income), income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense,
Slide 53: Adjusted EBITDA
Adjusted EBITDA Thirteen Weeks Ended (in thousands) March 27, 2019 March 28, 2018 Net income $ 3,607 $ 4,979 Depreciation expense 8,966 6,498 Interest expense, net 72 558 Income tax expense 2,047 1,198 EBITDA 14,692 13,233 Equity-based compensation 1,720 1,437 (1) Deferred lease costs 585 69 Loss on
Slide 54: Adjusted Pro Forma Effective Tax Rate
Adjusted Pro Forma Effective Tax Rate Thirteen Weeks Ended March 27, 2019 Income Tax Income Before Effective Tax (in thousands) Expense Income Taxes Rate As reported $ 2,047 $ 5,654 36.2% Non-GAAP adjustments (before tax): Executive transition costs 38 Project Concrete 472 Other income related to th
Slide 55: Investor Contact
Investor Contact: Melissa Calandruccio, ICR Michelle Michalski, ICR (844) Shack-04 (844-742-2504) investor@shakeshack.com Media Contact: Kristyn Clark, Shake Shack 646-747-8776 kclark@shakeshack.com
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