Welcome 2016 Annual Meeting SAFE HARBOR STATEMENT Certain
Welcome 2016 Annual Meeting
SAFE HARBOR STATEMENT Certain information in this Meritage presentation, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. Factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company’s actual results and cause such results to differ materially from those expressed in forwardlooking statements. Please review the Company’s Safe Harbor Statement at http: //www. meritagehospitality. com 3/6/2021 2
The 5 Year Plan was 141 “ 150 by 2015” 166 119 Number of Restaurants 112 89 73 73 53 2008 2009 2010 2011 2012 2013 2014 2015
Our Growth Philosophy We don’t have to be smarter than the rest. We just have to be more disciplined than the rest.
SALES $210 5 Yr. CAGR 17. 9% $138 $79 $92 $160 $99 Financial Performance ($ in millions) 2010 2011 $17. 1 EBITDA $4. 6 2010 $5. 0 2011 2015 $7. 1 $8. 6 $2. 3 2014 5 Yr. CAGR 24. 9% $5. 3 2012 2013 NET INCOME 5 Yr. CAGR 27. 8% $8. 4 2012 2014 $2. 3 $2. 9 $3. 1 $2. 8 2015 2010 2011 2012 2013 2014 2015
Common Shares Outstanding January 3, 2016 Basic: 5, 651, 242 Fully Diluted: 8, 609, 242 2015 Full Year EPS Calculation Net Income ……………………$7, 026, 000 Less: Pref. Dividends <658, 000> _____________________ Net Income Attributable to Common $6, 368, 000 EPS (Basic) EPS (Fully Diluted) $1. 13 $0. 74
Dividend Growth Commensurate with Earnings Growth $17. 10 Dividends Per Common Share EBITDA $0. 06 ($ in millions) $0. 03 $ 008 $0. 02 $ 005 $0. 01 2012 $8. 60 2013 2014 2015 2012 2013 2014 2015
“If you are not willing to own a stock for 10 years, you shouldn’t think about owning it for 10 minutes. ” -Warren Buffett
Common Stock Performance Five Years % ea Y 5 r GR A C 59. 5 4 +554%
Gregg Dimkoff, Ph. D. , Department of Finance Seidman College of Business West Michigan Stock Returns (Top 5 Best Stock Performance)
Q 1 Financial Results (ended April 3) 3 Months 2015 3 Months 2016 Difference Sales $46. 5 M $54. 1 M +16. 3% Income from Operations $1. 8 M $1. 6 M -11. 2% Net Earnings $1. 1 M $. 541 M -50. 9% EBITDA $3. 3 M $2. 9 M -12. 2% Number of Restaurants 151 164 +8. 6% Q 1 2016 Income from Ops Increased $1. 1 M Before one-time charges Q 1 2016 1 new Closed 3 old
Our Structure is Unique Profitable Growth Asset Management In-house R/E Development IT Platform back-of-house Operating & Accounting systems Performance-Based (At-Risk) Compensation Structure Applied Expertise Systems People
Technology Platform Back-of-house Operating & Accounting Systems Meritage Hospitality Forward-Looking Investments Shaped Todays Innovative IT Platform Scalable Web-Based Operating Platform In Store Profit & Loss Labor Management Cash Management Food Cost Management Point of Sales Data
Wendy’s Restaurants 2016 Acceptable vs Exceptional
The Wendy’s Consolidation Story First Generation Franchisee Transition Meritage U. S. Market Runway • 6, 500 Total System Restaurants • Operated by 300+ Franchisees • Average Franchisee; ü 66 years old ü Owns 10 restaurants ü 1/3 of all Franchise Agreements expire next Three years – requiring a major remodeling
Meritage Applied Expertise Sales + 28% Start Demolition 7 Weeks Finish Demolition-to-Grand Opening Standale, MI Remove the Dining Room New footings Image Activation Opened August 2015
18 Image Activation’s Meritage Applied Expertise Scheduled for Completion In 2016 54 th Street Plainwell Standale- IA Nocatee- NEW Bartram-New Airport-New AIA-New Knapp's Corner-IA Spout Springs - NEW Michigan St-IA Rebuild Loganville-IA Mt. Zion- IA Lilburn-IA Argyle- NEW
Meritage Applied expertise Meritage Class of 2016 Sales + 26% (and growing) Centerville, GA Opened 3/1/2016
Two Major Earnings Catalysts IT Platform & Applied Expertise Lilburn, GA Image Activation EBITDA grew from $82, 000 to $197, 000 in 2015 $1, 100, 000 $952, 000 +7 8% $872, 000 $946, 000 Store-Level EBITDA margin expansion generally +2% to +4% of Sales higher than acquired operations creating a “Valuation Arbitrage” Atlanta $490, 000 7 Wendy’s Pre-Acquisition 2012 2013 2014 2015
Wendy’s Self-Order Kiosks
Casual Dining Restaurants • • Unique Experiences Chef Inspired Food-from-Scratch Craft Beers and Cocktails Service from Passionate People
Opening 165 th Restaurant Arena Place Grand Rapids, MI
88 Gateway ts Apartmen MHG’snt Restaura mpus a C g n i s r Valley Nu 0, 000 sf rand 0 M - 8 Future G Phase announced $3 t 2016 Firs GVSU Medical Mile
285 280 Road Map to the Future Roadmap to the Future 245 224 Number of Restaurants 203 185 16 7 141 112 119 89 73 73 53 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 5 Year Plan 2020 2021
Contributing over $3 Million to local Children's Causes.
Thank-You for joining us!
Uncommon We go above and beyond by Hospitality QUESTIONS? treating our guests, teammates and Thank-you for your interest today! communities like friends and family We Love What We do.
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