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Ignite Restaurant Group (IRG)
Q4 2012 Earnings Call
March 20, 2013 5:00 p.m. ET
Ray Blanchette - Chief Executive Officer
Michael Dixon - President and Chief Financial Officer
Matthew Difrisco - Lazard Capital Markets
David Tarantino - Robert W. Baird
Brian Elliott - Raymond James
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Before I turn the call over to management, I would like to note for you that portions of this call deal with forward-looking information. These statements reflect management’s expectations for the future. The company’s actual results may differ materially from these expectations. Management refers all of you to today’s press release and the company’s recent filings with the SEC for a more detailed discussion of the risks that could impact future operating results and financial conditions.
On the call today we have Ray Blanchette, Chief Executive Officer of the company and Michael Dixon, President and Chief Financial Officer.
At this time for opening remarks, I would like to turn the call over to Mr. Michael Dixon, President and Chief Financial Officer of Ignite Restaurant Group. Please go ahead, sir.
Thank you, operator. Good afternoon and thanks to everyone for joining us today. By now everyone should have access to our press release which we issued this afternoon. The release which covers our fourth quarter and full year 2012 results can also be found our website under the investor relations section. Additionally I would encourage everyone to review our related 8-K and 10-K filings with the SEC which were just filed this afternoon for greater detail on the information included in our press release and on today's conference call.
Our agenda for the call will be as follows. Ray will provide an overview of our business and then I will discuss the financial results for the quarter and give a little insight on Q1 and the year. We will have time at the end of the call for questions. We’d like to finish this up in about 45 minutes to an hour. So with that, I'll turn the call over to Ray Blanchette, our Chief Executive Officer.
Great. Thanks, Mike, and again thanks to everyone for being on the call today. The fourth quarter marks our 18th consecutive quarter of positive comparable restaurant sales growth on top of 7.3% in the fourth quarter of the prior year. For the full year 2012, our comparable restaurant sales increased 2.2% on top of 6.9% in 2011. Total revenue grew by 15% for the year and 11% for the quarter. I credit this growth to our focus on operational excellence, menu innovation, brand awareness, and providing a unique and authentic dining experience for our guests.
The consumer environment remains challenging but Ignites' history demonstrates our ability to execute despite headwinds. Looking ahead, I am very optimistic about Ignites' future with two and very soon to be three great brands, strong management team, and a robust development pipeline. Joe's continues to evolve in a way that positions us well in the growing college casual segment. I hope by now everyone has seen the new 100% Shore TV spot. And this campaign is driving the brand forward by focusing on our Gulf Coast roots. I mean we believe it showcases our elevated food quality and our unique dining experience.
I mean as a Gulf Coast based company, we have the opportunity to leverage the flavors and the spices that are unique to the region. And our new campaign not only plays off of that distinctiveness, it lays the foundation for our current and future menu innovation. We are also using new commercials to shift the guests perception of Joe's from a celebratory occasion use to everyday enjoyable moments which we believe will drive frequency over the longer term. We will be rolling out a new menu in April. This includes several of the strongest performers from both our current national campaign and our test markets.
Some of the items include, the new Joe's Stuffers, our Spicy Citrus Steampot, and a new golden breading process that we developed here in the not too distant past. It enhances the quality and flavor of all of our hand-breaded, fired seafood. We are also moving to a larger shrimp size which proved in the test markets to enhance overall satisfaction and very importantly the value of those items. So on the price side things we expect a modest 1% price increase. Shifting gears and moving to Brick House. The good news in the Brick House is ready to grow again. We expect two to three new units in 2013. We continue to be very pleased with the evolution of Brick House.
Our menu innovation and food quality are excellent. The service model has noticeably improved and the atmosphere which is unique and welcoming for a very broad range of guests. Based on this success of the current units, I believe that this next generation bar and grill concept will continue to market share from those more established brands. We expect the acquisition of Macaroni Grill to close early in the second quarter. We have begun work already on the menu and the marketing plan. In addition, our integration planning is well underway. We will be prepared to take over management of this business in April. I am confident in our ability to elevate the Mac Grill, achieve synergies and drive significant AUV and restaurant level profit growth over time.