Kona Grill — Piper Jaffray 35th Annual Consumer Conference 2015
43 slides from Kona Grill's conference presentation, Jun 10, 2015
Slide 1: Kona Grill - Piper Jaffray Annual Consumer Conference
Kona GRILL kitchen * sushi * cocktails Piper Jaffray 35!" Annual Consumer Conference June 2015 . x =
Slide 2: Important Cautions Regarding Forward-Looking Statements
Important Cautions Regarding Kona Gru Forward-Looking Statements eter: 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 unknown risks
Slide 3: Who We Are...
Who We Are... 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 32 locations across 19 states and Puerto Rico Industry-leading unit economi
Slide 4: What Sets Us Apart?
What Sets Us Apart? Kona Grit kitchen * sushi * co« ice bar, indoor/outdoo = Broad menu offering appeals to a wide range of tastes, preferences and price points American Grill Desserts 4% 46% Entrees 14% Flatbreads, Pasta, & Sandwiches NASDAQ:KONA ee, ‘
Slide 5: What Sets Us Apart? (continued)
What Sets Us Apart? (continued) Kona Grit = Multitude of dining and social experiences for our guests leads to successful execution across 4 day-parts kitchen * sushi + cocktails Lunch: Open - 3PM Happy Hour: 3PM - 5PM Dinner: 5PM- 9PM Reverse Happy Hour: 9PM — Close NASDAQ:KONA
Slide 6: Sophisticated Polished Casual Dining Experience
Sophisticated Polished Casual Kona Grit oe Py 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
Slide 7: Exceptional Food Quality with Innovative Menu Selections
Exceptional Food Quality with Innovative Menu Selections Kona Grit kitchen * sushi fi Kitchen ms 46% of Sales Our sophisticated and diverse menu boasts a wide array of options for guests with all tastes Macadamia Nut Chicken - Freshly prepared, critically acclaimed sushi - Innovative American Grill
Slide 8: Affordable Dining Experience
Affordable Dining Experience Kona Grit kitchen * sushi « cocktails Average check compares favorably to competition so-- Average check with and without alcohol sora $40.75 b----4 $24.00 $24.93 $25.00 $25.06 $19.88 $20.20 $20.43 $14.50 f a . in BRIO WOUN TT = : i GRILLE ) LE) NASDAQ:KONA 8
Slide 9: Loyal User Base
Loyal User Base Exceptional Customer Loyalty = More than 50% of guests are categorized as medium to heavy users = 17% of guests dine with Kona atleast once every 10 days Casual Dining Guest KONA Industry Usage* GRILL Range ST Heavy 17% 10-15% Medium 37% 16-30% Light 46% 55-60% *Visits in last 90 day
Slide 10: Focused Marketing
Focused Marketing Loyalty Club K ¢230,000+ members «Drive traffic by keeping Kona top of mind NASDAQ:KONA Electronic Media *Social marketing (Yelp, Facebook, Twitter) *SEO/SEM *Loyalty club emails Promoting Our Brand Kona Grit Local Market Engagement *PR *Direct marketing Charity sponsorship ncierge
Slide 11: National Footprint with Significant Room to Grow
National Footprint with ceameines Kona Grit Significant Room to Grow SS = 32 restaurants across 19 states and Puerto Rico « Significant nationwide opportunity given demonstrated portability of the brand Boise Minneapolis (Oct 2013) Eden Prairie Troy ie 3 Stamford Lincolnshire ye exiles 1 Woodbridge
Slide 12: Significant Growth Opportunity
Significant Growth Opportunity Kona Grit kitchen * sushi * co« Substantial Runway vs. Leading Polished Casual Incumbents Current Domestic Units 57 42 16 ens 1 Fo 1 (Gif) Kou oan momma Bee UY Os one WY NASDAQ:KONA 12
Slide 13: Compelling Unit Level Economics
Compelling Unit Level A Kona Grit Economics Meo divlele Quality site selection & effective execution can lead to superior returns... ($ in thousands) Comparable Units! Restaurant sales $4,400 Net cash investment2 $2,500 Restaurant cash flow % margin 18.0% - 19.0% Sales to Cash Investment Ratio 1.7x
Slide 14: Flexible Real Estate Options
Flexible Real Estate Options Kona Grit = Target: Current Units [i Lifestyle/entertainment centers 14 High traffic, upscale retail centers and 8 shopping malls Mixed use commercial/retail centers 7 Freestanding 3 Significant commercial, residential and daytime population » Rigorous ROI review — targe
Slide 15: Flexible Real Estate Options — Lifestyle Center: Alpharetta, GA
Flexible Real Estate Options — Lifestyle Center: Alpharetta, GA ons Gini $600 million mixed use development with 570,000 sq. ft. of shopping/dining and 750,000 sq. ft. of Class A office space Strong retail co-tenants Attractive, affluent demographics — 63% HH’s 7-mile radius have income greater than
Slide 16: Flexible Real Estate Options — Outdoor Mall: Irvine Spectrum
Flexible Real Estate Options — Outdoor Mall: Irvine Spectrum ous Gas visitors, half the visits include dining 500,000 average daily traffic 11,000 homes and 14,000 apartments planned within 3-mile radius Household income 2.1x the national avg. NASDAQ:KONA 16
Slide 17: Flexible Real Estate Options — Mall: Las Vegas Strip
Flexible Real Estate Options — Kona Gri Mall: Las Vegas-Strip eens 40 million guests annually to the Las Vegas Strip; 22,000+ conventions per year Street-level locationin Fashion Show Mall, across from Wynn and Encore properties Fashion Show averages $1,100+ per sq. ft. 85% of Fashion Show visitors
Slide 18: Flexible Real Estate Options — Mall: Miami/Dolphin
Flexible Real Estate Options — Mall: Miami/Dolphin Kona Gnu 36 million guests in 2012; 1.4 million sq. ft. Significant trade area with 2 million residents and heavy tourist traf Average daily traffic count exceeds 275,000 Approximately 200,000 HHs with income greater than $75,000 NASDAQ:KONA
Slide 19: Flexible Real Estate Options — Mixed Use/Office: The Woodlands
Flexible Real Estate Options — Mixed Use/Office: The Woodlands Award-winning master planned community Trade area growing at 4 times the national average 9.3 million sq. ft. of retail and attractive co- tenants Approximately 125,000 HHs with income greater than $75,000 NASDAQ:KONA
Slide 20: Flexible Real Estate Options — Mixed Use/Retail: Fort Worth
Flexible Real Estate Option Mixed Use/Retail: Fort Worth ous Gas Destination center with attractive population density and target average age Wide variety of traffic in the heart of the city 5 million yearly guests visit nearby Cultural District Approximately 280,000 HHs within 10 miles with average
Slide 21: New Design Panoramic Tour
New Design Panoramic Tour Kona Grit El Paso — Entrance NA NASDAQ:KONA
Slide 22: New Design Panoramic Tour
New Design Panoramic Tour The Woodlands - Lounge & Patio ] iy Kona Grit NASDAQ:KONA
Slide 23: New Design Panoramic Tour
New Design Panoramic Tour Kona Gru Boise - Bar NASZRILE NASDAQ:KONA
Slide 24: New Design Panoramic Tour
New Design Panoramic Tour K. _ bas ONA Grit The Woodlands - Private Dining Room rs ae NASDAQ:KONA
Slide 25: New Design Panoramic Tour
New Design Panoramic Tour Fort Worth — Rooftop Patio ons Gini NASDAQ:KONA
Slide 26: New Design Panoramic Tour
New Design Panoramic Tour ; The Woodlands - Dining & Sushi Bar ous Gas NASDAQ:KONA
Slide 27: New Design Panoramic Tour
New Design Panoramic Tour Kona Gru El Paso - Sushi Bar NAS RIEL NASDAQ:KONA
Slide 28: New Design Panoramic Tour
New Design Panoramic Tour Kona Grit Boise - Patio esc pe NASDAQ:KONA
Slide 29: International Franchising Initiative
International Franchising Initiative = Growhth initiative 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 refine and enhance already proven peer roadmaps
Slide 30: Experienced Senior Leadership Team
Experienced Senior Leadership Team* Kona Grit kitchen * sushi + cocktails Name and Po: Berke Bakay President & 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 Internationa
Slide 31: Key Takeaways
Key Takeaways Kona Grit kitchen * sushi * co« 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 u
Slide 32: Financial Overview
Kona Grit Kona GriLL kitchen * sushi * cocktails FINANCIAL OVERVIEW
Slide 33: Restaurant Sales
Restaurant Sales Kona Grit kitchen is $ in millions $124.3 $119.1 \ 1 ! ! 98.3 ! $96.0 $ \ $93.7 l ! $82.7 f ! ! ! ! ! 1 1 é a SE 1 2010 2011 2012 2013 2014 iM” ! NASDAQ:KONA 33
Slide 34: Restaurant Operating Profit Margin
Restaurant Operating Profit Margin KonaGrut kitchen * sushi « cocktails ! 18.8% 18.9% 19.0% 1 1 18.4% 17.8% | al ! 1 %y Remodeled and new units had PSRs a : landlord ies ines lr Tt units had landlord = | 4 ~100 bps coring H meee ne hag ' bpsimpact || ! 1 ! ! 4 2010 2011 2012 2013 2014 STM ! NASDAQ:K
Slide 35: Adjusted G&A Expenses as % of Restaurant Sales
Adjusted G&A Expenses as % of Kona Gri Restaurant Sales See | 9.2% J 84% | 8.1% ; 7.8% f ate 5N aN jew jew 1 New Unit 7.0% Units Units Opened Opened Opened ! 1 ! 1 ! ! ts 4 Li 2010 2011 2012 2013 20147) aM ! NASDAQ:KONA 35
Slide 36: Adjusted EBITDA
Adjusted EBITDA Kona Grit kitchen * sushi « cocktails $ in millions 1 i) $11.4 $10.8 $11.5 1 $113 1 i) $8.8 i) 1 $5.6 ! ii i) “ora. 20% ' 1 enon ! a 1 > a 1 onl 4 Li 2010 2011 2012 2013 2014) | uM” J NASDAQ:KONA 36
Slide 37: Strong New Unit Sales Performance
Strong New Unit Sales Performance KonaGru kitchen * sushi * co« Comp Units -*-Non-Comp Units AWS Differential of $105,000 7 (aa fn eer Thi he Non-Comp Relative to Comp Base: $100,000 Ha) 4Q 13 128% $70,000 — 1Q14 94% 2Q14 97% $85,000 3Q14 111% $80,000 4Q14 104% ne wih ae J 1Q15 93% [57,0 O00 ii ‘i E
Slide 38: Two-Year Same-Store Sales Stack vs. Casual Dining Industry
Two-Year Same-Store Sales Ko Stack vs. Casual Dining Industry Continued Oufperformance vs. Peers* "AES } Kona Grill 7.0% HB knapp-track Casual Dining Index 5.0% 3.0% 1.0% -10% a -3.0% Q2-13 Q3-13 Q4-13 Ql-14 Q3-14 Q4-14 Ql-15 -5.0% NASDAQ:KONA 38
Slide 39: Unit Growth Rate vs. SSS
Unit Growth Rate vs. SSS Kona Grit kitchen * sushi + cocktails 25% 5 Kona Grit c 20% >| £ z 15% ay oO Det Frisco’s Ponte = iox BAD 5 WY jaw Ce Besecake N 0% | Frome -5% 4 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% ] 2014 SSS NASDAQ:KONA 29
Slide 40: LTM Restaurant Operating Profit Margin vs Peers
LTM Restaurant Operating Profit Margin. vs Peers 18.5% 18.4% 18.4% (2) 15.4% 15.0% 15.0% Denver landlord construction and new units had ~90 bps impact (esas NASDAQ:KONA 40
Slide 41: Capitalization
Capitalization Kona Grit kitchen * sushi Select Balance Sheet Items December 31, March 31, 2014 2015 Cash & cash equivalents $36.6 $32.0 Long-term debt $0.0 $0.0 = Upsized facility to $35.0M in November 2014 (LIBOR + 1.5%-2.5%) NASDAQ:KONA 4
Slide 42: Focused on Growth
Focused on Growth Kona Grit = 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 18 of last 19 quarters 2 units opened in
Slide 43: Investment Highlights
Investment Highlights Kona Grit kitchen ‘Substantial White ‘Space for Domestic and Distinctive International Atmosphere and Growth Strong Unit Diverse Menu Economics Mix Exceptional Food Quality Seasoned with Innovative Restaurant Menu Selections Operations Team Dedicated Sophisticated Management Po
Kona Grill — Piper Jaffray 35th Annual Consumer Conference 2015 on 6ix