Rave Restaurant Group, Inc. Debt surged on 257% and EBITDA jumped on 360%
09/28/2020 • About Rave Restaurant Group, Inc. (
$RAVE) • By InTwits
Rave Restaurant Group, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rave Restaurant Group, Inc. is a company in decline: FY2020 revenue growth was -18.6%, 5 years revenue CAGR was -26.9%
- Rave Restaurant Group, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -9.3%
- Rave Restaurant Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's in pair with industry average of 6.2%
- CAPEX is quite volatile: $0m in FY2020, $0m in FY2019, $1m in FY2018, $1m in FY2017, $8m in FY2016
- The company has unprofitable business model: ROIC is -0.9%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is 4.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 18.6%. Revenue decline showed acceleration in FY20Q4 - it was 47.2% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.9 pp from -1.9% to 6.0% in FY2020.
Gross Margin increased on 4.7 pp from 90.9% to 95.6% in FY2020. Gross Margin followed a growing trend at 22.3 pp per annum in the last 5 years. SG&A as a % of Revenue jumped on 12.1 pp from 42.8% to 54.9% in FY2020.
Net Income margin dropped on 36.1 pp from -6.1% to -42.2% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.56%. CAPEX/Revenue decreased slightly on 1.6 pp from 2.2% in FY2017 to 0.56% in FY2020. For the last three years the average CAPEX/Revenue was 2.8%.
Return on investment
The company operates at negative ROIC (-0.9%) and ROE (-171.5%). ROIC jumped on 12.0 pp from -12.9% to -0.90% in FY2020. ROE dropped on 158 pp from -14.0% to -171% in FY2020. During the last 5 years ROIC bottomed in FY2017 at -162% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.5x and Debt / EBITDA is 9.4x. Net Debt / EBITDA surged4.5x from to 4.5x in FY2020. Debt surged on 257% while cash jumped on 31.1%.
Rave Restaurant Group, Inc. has no short term refinancing risk: cash is higher than short term debt (469.8%).
Financial and operational results
FY ended 06/28/2020
Rave Restaurant Group, Inc. ($RAVE) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 60.811 | 26.077 | 15.120 | 12.319 | 10.028 | -18.6% |
| Gross Profit | 3.872 | 12.150 | 11.466 | 11.199 | 9.589 | -14.4% |
| SG&A | 7.247 | 10.801 | 7.597 | 5.274 | 5.503 | 4.3% |
| EBITDA | -3.335 | -8.628 | 0.009 | -0.231 | 0.601 | |
| Net Income | -8.886 | -12.491 | 1.912 | -0.750 | -4.233 | |
Balance Sheet
|
|---|
| Cash | 1.104 | 0.451 | 1.386 | 2.264 | 2.969 | 31.1% |
| Short Term Debt | 0.000 | 1.000 | 0.000 | 0.000 | 0.632 | |
| Long Term Debt | 0.000 | 2.749 | 1.562 | 1.584 | 5.020 | 216.9% |
Cash flow
|
|---|
| Capex | 8.110 | 0.573 | 1.081 | 0.081 | 0.056 | -30.9% |
Ratios
|
|---|
| Revenue growth | 26.2% | -57.1% | -42.0% | -18.5% | -18.6% | |
| EBITDA growth | 445.8% | 158.7% | -100.1% | -2,666.7% | -360.2% | |
|
|---|
| Gross Margin | 6.4% | 46.6% | 75.8% | 90.9% | 95.6% | 4.7% |
| EBITDA Margin | -5.5% | -33.1% | 0.1% | -1.9% | 6.0% | 7.9% |
| SG&A, % of revenue | 11.9% | 41.4% | 50.2% | 42.8% | 54.9% | 12.1% |
| Net Income Margin | -14.6% | -47.9% | 12.6% | -6.1% | -42.2% | -36.1% |
| CAPEX, % of revenue | 13.3% | 2.2% | 7.1% | 0.7% | 0.6% | -0.1% |
|
|---|
| ROIC | -43.0% | -162.4% | -26.8% | -12.9% | -0.9% | 12.0% |
| ROE | -66.8% | | | -14.0% | -171.5% | -157.5% |
| Net Debt/EBITDA | | | 19.6x | | 4.5x |
Rave Restaurant Group, Inc. ($RAVE) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 2 | | -3.8% | -11.4% | -11.9% | -47.2% |
| EBITDA | 0 | 0 | -0 | 0 | | 54.0% | -63.5% | - | - |
| Net Income | 0 | 0 | -5 | 0 | | 119.4% | -94.0% | - | - |
Balance Sheet
|
|---|
| Cash | 2 | 2 | 2 | 3 | | 20.7% | 3.4% | -20.5% | 31.1% |
| Short Term Debt | 1 | 0 | 1 | 1 | | - | - | - | - |
| Long Term Debt | 5 | 5 | 5 | 5 | | 203.3% | 196.7% | 227.5% | 216.9% |
Ratios
|
|---|
| Gross Margin | 95.3% | 95.9% | 96.2% | 94.7% | | 0.7% | 1.4% | 8.6% | 7.9% |
| EBITDA Margin | 17.2% | 6.6% | -11.9% | 14.9% | | 6.5% | -9.4% | -8.4% | 46.2% |
| Net Income Margin | 8.2% | 0.5% | -166.9% | 1.9% | | 4.6% | -6.8% | -158.3% | 28.9% |
Peers in Restaurants
Below you can find Rave Restaurant Group, Inc. benchmarking vs. other companies in Restaurants industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | - | 0.5% | 3.6% | 1.4% | -17.9% |
| |
|---|
| Median (1 company) | - | 0.5% | 3.6% | 1.4% | -17.9% |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | - | -57.1% | -42.0% | -18.5% | -18.6% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | 14.5% | 15.5% | 14.4% | 14.2% | 8.1% |
| |
|---|
| Median (1 company) | 14.5% | 15.5% | 14.4% | 14.2% | 8.1% |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | 6.4% | 46.6% | 75.8% | 90.9% | 95.6% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | 12.3% | 13.7% | 12.8% | 12.7% | 12.1% |
| |
|---|
| Median (1 company) | 12.3% | 13.7% | 12.8% | 12.7% | 12.1% |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | -5.5% | -33.1% | 0.1% | -1.9% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | 3.9% | 3.8% | 5.0% | 4.5% | 11.8% |
| |
|---|
| Median (1 company) | 3.9% | 3.8% | 5.0% | 4.5% | 11.8% |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | 13.3% | 2.2% | 7.1% | 0.7% | 0.6% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | 29.2% | 32.3% | 29.0% | 27.2% | 8.6% |
| |
|---|
| Median (1 company) | 29.2% | 32.3% | 29.0% | 27.2% | 8.6% |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | -43.0% | -162.4% | -26.8% | -12.9% | -0.9% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cracker Barrel Old Country Store, Inc. ($CBRL) | 0.7x | 0.6x | 0.7x | 0.9x | 3.9x |
| |
|---|
| Median (1 company) | 0.7x | 0.6x | 0.7x | 0.9x | 3.9x |
|---|
| Rave Restaurant Group, Inc. ($RAVE) | - | - | 19.6x | - | 4.5x |
