Intellia Therapeutics Inc
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Health Care : Biotechnology | Small Cap Growth
Company profile

Intellia Therapeutics, Inc. is a clinical-stage genome editing company. The Company is focused on developing curative therapeutics using Clustered, Regularly Interspaced Short Palindromic Repeats/CRISPR associated 9 (CRISPR/Cas9) technology. CRISPR/Cas9 is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (DNA). It is focused on leveraging its modular platform to advance in vivo and ex vivo therapies for diseases with high unmet need. Its lead in vivo candidate, NTLA-2001, is for the treatment of transthyretin (ATTR) amyloidosis, as well as NTLA-2002 for the treatment of hereditary angioedema (HAE). The Company is developing ex vivo applications to address immuno-oncology and autoimmune diseases. Its advanced ex vivo programs include a wholly owned T cell receptor (TCR)-T cell candidate, NTLA-5001 for the treatment of acute myeloid leukemia (AML) and hematopoietic stem cells (HSCs) for the treatment of sickle cell disease.

Postmarket

Last Trade
Delayed
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Market Hours

Closing Price
$42.44
Day's Change
2.32 (5.78%)
Bid close
--
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Day's High
42.69
Day's Low
40.27
Volume
(Below Average)
Volume:
1,042,371

10-day average volume:
1,256,801
1,042,371

Shake Shack Announces Third Quarter 2022 Financial Results

7:00 am ET November 3, 2022 (BusinessWire) Print

Shake Shack Inc. ("Shake Shack" or the "Company") (NYSE: SHAK) has posted its results for the third quarter of 2022 in a Shareholder Letter in the Quarterly Results section of the Company's Investor Relations website, which can be found here: Q3 2022 Shake Shack Shareholder Letter.

Shake Shack will host a conference call at 8:00 a.m. ET. Hosting the call will be Randy Garutti, Chief Executive Officer, and Katherine Fogertey, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (877) 407-0792, or for international callers by dialing (201) 689-8263. A replay of the call will be available until November 10, 2022 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13732788.

The live audio webcast of the conference call will be accessible in the Events & Presentations section of the Company's Investor Relations website at investor.shakeshack.com. An archived replay of the webcast will also be available shortly after the live event has concluded.

(1)   Shack-level operating profit, Adjusted EBITDA and Adjusted pro forma net income (loss) are non-GAAP measures. A reconciliation to the most directly comparable financial measures presented in accordance with GAAP is set forth in the schedules accompanying this release. See "Non-GAAP Financial Measures" below.

About Shake Shack

Shake Shack serves elevated versions of American classics using only the best ingredients. It's known for its delicious made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more. With its high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack quickly became a cult-brand with widespread appeal. Shake Shack's purpose is to Stand For Something Good(R), from its premium ingredients and employee development, to its inspiring designs and deep community investment. Since the original Shack opened in 2004 in NYC's Madison Square Park, the Company has expanded to over 400 locations system-wide, including over 260 in 32 U.S. States and the District of Columbia, and over 140 international locations across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more.

Skip the line with the Shack App, a mobile ordering app that lets you save time by ordering ahead! Guests can select their location, pick their food, choose a pickup time and their meal will be cooked-to-order and timed to arrival. Available on iOS and Android.

Definitions

The following definitions apply to these terms as used in this release:

"Shack sales" is defined as the aggregate sales of food, beverages, gift card breakage income and Shake Shack branded merchandise at domestic Company-operated Shacks and excludes sales from licensed Shacks.

"System-wide sales" is an operating measure and consists of sales from the Company's domestic Company-operated Shacks, domestic licensed Shacks and international licensed Shacks. The Company does not recognize the sales from licensed Shacks as revenue. Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from domestic and international licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.

"Same-Shack sales" represents Shack sales for the comparable Shack base, which is defined as the number of domestic Company-operated Shacks open for 24 full fiscal months or longer. For consecutive days that Shacks were temporarily closed, the comparative period was also adjusted.

"Shack-level operating profit," a non-GAAP measure, 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.

"Shack-level operating profit margin," a non-GAAP measure, 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 as a percentage of Shack sales.

"EBITDA," a non-GAAP measure, is defined as Net income (loss) before interest expense (net of interest income), Income tax expense (benefit), and Depreciation and amortization expense.

"Adjusted EBITDA," a non-GAAP measure, is defined as EBITDA (as defined above), excluding equity-based compensation expense, deferred lease costs, Impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.

"Adjusted pro forma net income," a non-GAAP measure, represents Net income (loss) attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring and other items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.

                                                                                                                                        SHAKE SHACK INC.
                                                                                                                              CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                                                           (UNAUDITED)
                                                                                                                       (in thousands, except share and per share amounts)
                                                                                                                                                                                 
                                                                                                                                                                                    September 28                           December 29
                                                                                                                                                                                                                                  2022                                                     2021
                                                                                                                                                                              ------------------------------------------------------                        ----------------------------------
ASSETS                                                                                                                                                                                              
Current assets:                                                                                                                                                                                     
                                                                                                                                                                              $        256,998                        $        302,406
    Cash and cash equivalents
                                                                                                                                                                     80,015               80,000
    Marketable securities
                                                                                                                                                                     11,800               13,657
    Accounts receivable, net
                                                                                                                                                                      3,996                3,850
    Inventories
                                                                                                                                                                     14,246                9,763
    Prepaid expenses and other current assets
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
                                                                                                                                                                    367,055              409,676
    Total current assets
Property and equipment, net of accumulated depreciation of $271,938 and $222,768, respectively                                                                      441,870              389,386
Operating lease assets                                                                                                                                              370,536              347,277
Deferred income taxes, net                                                                                                                                          306,976              298,668
Other assets                                                                                                                                                         15,330               12,563
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
TOTAL ASSETS                                                                                                                                                                  $      1,501,767                        $      1,457,570
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                
Current liabilities:                                                                                                                                                                                
                                                                                                                                                                              $         17,210                        $         19,947
    Accounts payable
                                                                                                                                                                     49,387               36,892
    Accrued expenses
                                                                                                                                                                     17,758               14,638
    Accrued wages and related liabilities
                                                                                                                                                                     40,690               35,519
    Operating lease liabilities, current
                                                                                                                                                                     19,497               14,501
    Other current liabilities
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
                                                                                                                                                                    144,542              121,497
    Total current liabilities
Long-term debt                                                                                                                                                      244,328              243,542
Long-term operating lease liabilities                                                                                                                               429,165              400,113
Liabilities under tax receivable agreement, net of current portion                                                                                                  234,892              234,045
Other long-term liabilities                                                                                                                                          20,588               22,773
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
Total liabilities                                                                                                                                                 1,073,515            1,021,970
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
Commitments and contingencies                                                                                                                                                                       
Stockholders' equity:                                                                                                                                                                               
                                                                                                                                                             --       --
    Preferred stock, no par value--10,000,000 shares authorized; none issued and outstanding as of September 28, 2022 and December 29, 2021.
                                                                                                                                                                         39                   39
    Class A common stock, $0.001 par value--200,000,000 shares authorized; 39,279,699 and
    39,142,397 shares issued and outstanding as of September 28, 2022 and December 29, 2021, respectively.
                                                                                                                                                                          3                    3
    Class B common stock, $0.001 par value--35,000,000 shares authorized; 2,869,513 and
    2,921,587 shares issued and outstanding as of September 28, 2022 and December 29, 2021, respectively.
                                                                                                                                                                    413,274              405,940
    Additional paid-in capital
                                                                                                                                                                     (9,820 )                                 3,554
    Retained earnings (accumulated deficit)
                                                                                                                                                                         (1 )                                     1
    Accumulated other comprehensive income (loss)
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
                                                                                                                                                                    403,495              409,537
    Total stockholders' equity attributable to Shake Shack Inc.
Non-controlling interests                                                                                                                                            24,757               26,063
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
Total equity                                                                                                                                                        428,252              435,600
                                                                                                                                                                              -------------------- -------------- --------------------                      -------------------- --------------
                                                                                                                                                                                                                                     SHAKE SHACK INC.
                                                                                                                                                                                                                                     CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                                                                                                                                                                                                                     (UNAUDITED)
                                                                                                                                                                                                                                     (in thousands, except per share amounts)
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                    Thirteen Weeks Ended                                                                                                                                                                                        Thirty-Nine Weeks Ended
                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           September 28                                                                                  September 29                                                                                  September 28                                                                                  September 29
                                                                                                                                                                         2022                                                                                                             2021                                                                                                             2022                                                                                                             2021
                                                                                  --------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------------
Shack sales                                                                       $ 219,501           96.4 %                              $ 186,972               96.4 %                          $ 639,346           96.6 %                              $ 519,110               96.7 %
Licensing revenue                                                  8,313            3.6 %               6,923                3.6 %          22,611            3.4 %              17,527                3.3 %
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
TOTAL REVENUE                                                    227,814          100.0 %             193,895              100.0 %         661,957          100.0 %             536,637              100.0 %
Shack-level operating expenses(1):                                                                                                                                                                              
                                                                  67,774           30.9 %              57,925               31.0 %         193,645           30.3 %             157,472               30.3 %
    Food and paper costs
                                                                  64,638           29.4 %              58,208               31.1 %         190,954           29.9 %             157,221               30.3 %
    Labor and related expenses
                                                                  33,966           15.5 %              26,613               14.2 %          96,766           15.1 %              74,032               14.3 %
    Other operating expenses
                                                                  17,337            7.9 %              14,640                7.8 %          50,270            7.9 %              43,427                8.4 %
    Occupancy and related expenses
General and administrative expenses                               26,645           11.7 %              20,504               10.6 %          87,040           13.1 %              60,435               11.3 %
Depreciation and amortization expense                             18,647            8.2 %              15,183                7.8 %          53,589            8.1 %              43,381                8.1 %
Pre-opening costs                                                  3,041            1.3 %               2,933                1.5 %           8,576            1.3 %               8,767                1.6 %
Impairment and loss on disposal of assets                            592            0.3 %                 535                0.3 %           1,697            0.3 %               1,262                0.2 %
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
TOTAL EXPENSES                                                   232,640          102.1 %             196,541              101.4 %         682,537          103.1 %             545,997              101.7 %
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
LOSS FROM OPERATIONS                                              (4,826 )                            (2.1 )%             (2,646 )                                (1.4 )%        (20,580 )                            (3.1 )%             (9,360 )                                (1.7 )%
Other income, net                                                  1,482            0.7 %                  18     -- %           1,731            0.3 %                 157     -- %
Interest expense                                                    (475 )                            (0.2 )%               (350 )                                (0.2 )%         (1,145 )                            (0.2 )%             (1,224 )                                (0.2 )%
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
LOSS BEFORE INCOME TAXES                                          (3,819 )                            (1.7 )%             (2,978 )                                (1.5 )%        (19,994 )                            (3.0 )%            (10,427 )                                (1.9 )%
Benefit from income taxes                                         (1,508 )                            (0.7 )%               (576 )                                (0.3 )%         (5,098 )                            (0.8 )%            (10,665 )                                (2.0 )%
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
NET INCOME (LOSS)                                                 (2,311 )                            (1.0 )%             (2,402 )                                (1.2 )%        (14,896 )                            (2.3 )%                238     -- %
Less: Net loss attributable to non-controlling interests            (287 )                            (0.1 )%               (224 )                                (0.1 )%         (1,522 )                            (0.2 )%               (837 )                                (0.2 )%
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.                                $  (2,024 )                            (0.9 )%                             $  (2,178 )                                (1.1 )%                         $ (13,374 )                            (2.0 )%                             $   1,075                0.2 %
                                                                                  -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------                                                                -------------------- ------- --------------------
Earnings (loss) per share of Class A common stock:                                                                                                                                                              
                                                                                  $   (0.05 )                                             $   (0.06 )                                             $   (0.34 )                                             $    0.03      
    Basic
                                                                                  $   (0.05 )                                             $   (0.06 )                                             $   (0.34 )                                             $    0.01      
    Diluted
Weighted average shares of Class A common stock outstanding:                                                                                                                                                    
                                                                  39,274            39,137            39,221            39,066      
    Basic
___________________
                                                                                                               SHAKE SHACK INC.
                                                                                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                  (UNAUDITED)
                                                                                                                (in thousands)
                                                                        
                                                                                                                                                                                Thirty-Nine Weeks Ended
                                                                                                             --------------------------------------------------------------------------------------------------------------------------
                                                                                                                   September 28                                         September 29
                                                                                                                                                                 2022                                                                    2021
                                                                                                             ------------------------------------------------------                        ------------------------------------------------
OPERATING ACTIVITIES                                                                                                               
Net income (loss) (including amounts attributable to non-controlling interests)                              $        (14,896 )                                         $      238  
Adjustments to reconcile net income (loss) to net cash provided by operating activities                                            
                                                                                                    53,589         43,381  
    Depreciation and amortization expense
                                                                                                       786            605  
    Amortization of debt issuance costs
                                                                                                     1,080            935  
    Amortization of cloud computing asset
                                                                                                    43,159         37,213  
    Non-cash operating lease cost
                                                                                                    10,155          5,963  
    Equity-based compensation
                                                                                                    12,215          9,708  
    Deferred income taxes
                                                                                            --              5  
    Loss on sale of marketable securities
                                                                                                       181            348  
    Non-cash interest expense
                                                                                                     1,697          1,262  
    Impairment and loss on disposal of assets
                                                                                                       400            117  
    Unrealized loss on equity securities
                                                                                                        (2 )                              (2 )
    Other non-cash income
                                                                                                                                   
    Changes in operating assets and liabilities:
                                                                                                     1,840         (1,847 )
        Accounts receivable
                                                                                                      (146 )                            (637 )
        Inventories
                                                                                                    (4,767 )                           4,233  
        Prepaid expenses and other current assets
                                                                                                    (5,966 )                            (767 )
        Other assets
                                                                                                    (2,069 )                          (6,780 )
        Accounts payable
                                                                                                   (17,783 )                         (18,682 )
        Accrued expenses
                                                                                                     3,052          3,709  
        Accrued wages and related liabilities
                                                                                                     4,376         (2,202 )
        Other current liabilities
                                                                                                   (32,558 )                         (31,886 )
        Long-term operating lease liabilities
                                                                                                       (10 )                          (1,174 )
        Other long-term liabilities
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                           54,333         43,740  
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
INVESTING ACTIVITIES                                                                                                               
Purchases of property and equipment                                                                (94,797 )                         (68,852 )
Purchases of marketable securities                                                                    (415 )                         (47,321 )
Sales of marketable securities                                                              --          4,004  
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
NET CASH USED IN INVESTING ACTIVITIES                                                              (95,212 )                        (112,169 )
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
FINANCING ACTIVITIES                                                                                                               
Proceeds from issuance of convertible notes, net of discount                                --        243,750  
Deferred financing costs                                                                    --           (123 )
Payments on principal of finance leases                                                             (2,260 )                          (1,982 )
Distributions paid to non-controlling interest holders                                                (389 )                            (878 )
Debt issuance costs                                                                         --           (968 )
Proceeds from stock option exercises                                                                   334          6,688  
Employee withholding taxes related to net settled equity awards                                     (2,214 )                          (3,510 )
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                 (4,529 )                         242,977  
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                               (45,408 )                         174,548  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                   302,406        146,873  
                                                                                                             -------------------- -------------- --------------------                      -------------------- -------- --------------------

SHAKE SHACK INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED)

To supplement the consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses the following non-GAAP financial measures: Shack-level operating profit, Shack-level operating profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share (collectively the "non-GAAP financial measures").

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 Is Useful

When used in conjunction with GAAP financial measures, Shack-level operating profit and Shack-level operating profit margin are supplemental measures of operating performance that the Company believes are useful measures to evaluate the performance and profitability of its Shacks. Additionally, Shack-level operating profit and Shack-level operating profit margin are key metrics used internally by management to develop internal budgets and forecasts, as well as assess the performance of its Shacks relative to budget and against prior periods. It is also used to evaluate employee compensation as it serves as a metric in certain performance-based employee bonus arrangements. The Company believes presentation of Shack-level operating profit and Shack-level operating profit margin provides investors with a supplemental view of its operating performance that can provide meaningful insights to the underlying operating performance of the Shacks, as these measures depict the operating results that are directly impacted by the Shacks and exclude items that may not be indicative of, or are unrelated to, the ongoing operations of the Shacks. It may also assist investors to evaluate the Company's performance relative to peers of various sizes and maturities and provides greater transparency with respect to how management evaluates the business, as well as the financial and operational decision-making.

Limitations of the Usefulness of this Measure

Shack-level operating profit and Shack-level operating profit margin may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Shack-level operating profit and Shack-level operating profit margin is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Shack-level operating profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of the Company's Shacks. Therefore, this measure may not provide a complete understanding of the Company's operating results as a whole and Shack-level operating profit and Shack-level operating profit margin should be reviewed in conjunction with the Company's GAAP financial results. A reconciliation of Shack-level operating profit to Loss from Operations, the most directly comparable GAAP financial measure, is set forth below.

                                                                                                                                 Thirteen Weeks Ended                                                                                                    Thirty-Nine Weeks Ended
                                                                   ------------------------------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------------------------------
(dollar amounts in thousands)                                                        September 28                                        September 29                                        September 28                                        September 29
                                                                                                                2022                                                                   2021                                                                   2022                                                                   2021
                                                                   -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------
Loss from operations                                               $  (4,826 )                                         $  (2,646 )                                         $ (20,580 )                                         $  (9,360 )
Less:                                                                                                                                               
                                                    8,313         6,923        22,611        17,527  
    Licensing revenue
Add:                                                                                                                                                
                                                   26,645        20,504        87,040        60,435  
    General and administrative expenses
                                                   18,647        15,183        53,589        43,381  
    Depreciation and amortization expense
                                                    3,041         2,933         8,576         8,767  
    Pre-opening costs
                                                      592           535         1,697         1,262  
    Impairment and loss on disposal of assets
                                                                   -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Shack-level operating profit                                       $  35,786                        $  29,586                        $ 107,711                        $  86,958  
                                                                   -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                 
Total revenue                                                      $ 227,814                        $ 193,895                        $ 661,957                        $ 536,637  
Less: Licensing revenue                             8,313         6,923        22,611        17,527  
                                                                   -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Shack sales                                                        $ 219,501                        $ 186,972                        $ 639,346                        $ 519,110  
                                                                   -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                 
___________________
   (1)   As a percentage of Shack sales.

SHAKE SHACK INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED)

EBITDA and Adjusted EBITDA

EBITDA is defined as Net income (loss) before interest expense (net of interest income), Income tax expense (benefit) and Depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense, deferred lease costs, Impairment and loss on the disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, EBITDA and adjusted EBITDA are supplemental measures of operating performance that the Company believes are useful measures to facilitate comparisons to historical performance and competitors' operating results. Adjusted EBITDA is a key metric used internally by management to develop internal budgets and forecasts and also serves as a metric in its performance-based equity incentive programs and certain bonus arrangements. The Company believes presentation of EBITDA and adjusted EBITDA provides investors with a supplemental view of the Company's operating performance that facilitates analysis and comparisons of its ongoing business operations because they exclude items that may not be indicative of the Company's ongoing operating performance.

Limitations of the Usefulness of These Measures

EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA and adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA and adjusted EBITDA exclude certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income (loss) the most directly comparable GAAP measure, is as follows.

                                                                                                                                                           Thirteen Weeks Ended                                                                                                                  Thirty-Nine Weeks Ended
                                                                               --------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------------
(dollar amounts in thousands)                                                                           September 28                                               September 29                                               September 28                                               September 29
                                                                                                                                   2022                                                                          2021                                                                          2022                                                                          2021
                                                                               ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
Net income (loss)                                                              $         (2,311 )                                         $         (2,402 )                                         $        (14,896 )                                         $            238  
Depreciation and amortization expense                                 18,647               15,183               53,589               43,381  
Interest expense, net                                                    475                  350                1,145                1,224  
Benefit from income taxes                                             (1,508 )                                  (576 )                                (5,098 )                               (10,665 )
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
EBITDA                                                                15,303               12,555               34,740               34,178  
                                                                                                                                                                  
Equity-based compensation                                              3,515                2,324               10,155                5,963  
Amortization of cloud-based software implementation costs                397                  308                1,080                  935  
Deferred lease costs(1)                                                 (258 )                                   108               (1,908 )                                   237  
Impairment and loss on disposal of assets                                592                  535                1,697                1,262  
Legal matters                                                 --       --                6,750                  619  
Gift card breakage cumulative catch-up adjustment             --       --               (1,281 )                        --  
Debt offering related costs(2)                                --       --       --                  236  
Executive transition costs                                    --       --       --                  179  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Adjusted EBITDA                                                                $         19,549                        $         15,830                        $         51,233                        $         43,609  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                  
                                                                               ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
___________________
   (1)   Reflects the extent to which lease expense is greater than or less than contractual fixed base rent.
   (2)   Costs incurred in connection with the Company's Convertible Notes, issued in March 2021, including consulting and advisory fees.

Adjusted Pro Forma Net Income (Loss) and Adjusted Pro Forma Earnings (Loss) Per Fully Exchanged and Diluted Share

Adjusted pro forma net income (loss) represents Net income (loss) attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that the Company does not believe are directly related to its core operations and may not be indicative of recurring business operations. Adjusted pro forma earnings (loss) per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income (loss) by the weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share are supplemental measures of operating performance that the Company believes are useful measures to evaluate performance period over period and relative to its competitors. By assuming the full exchange of all outstanding LLC Interests, the Company believes these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income (loss) attributable to Shake Shack Inc. driven by increases in its ownership of SSE Holdings, which are unrelated to the Company's operating performance, and excludes items that are non-recurring or may not be indicative of ongoing operating performance.

Limitations of the Usefulness of These Measures

Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should not be considered alternatives to Net income (loss) and earnings (loss) per share, as determined under GAAP. While these measures are useful in evaluating the Company's performance, it does not account for the earnings attributable to the non-controlling interest holders and therefore does not provide a complete understanding of the Net income (loss) attributable to Shake Shack Inc. Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should be evaluated in conjunction with GAAP financial results. A reconciliation of adjusted pro forma net income (loss) to Net income (loss) attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings (loss) per fully exchanged and diluted share are set forth below.

                                                                                                                                                                                                                          Thirteen Weeks Ended                                                                                                                  Thirty-Nine Weeks Ended
                                                                                                                                              --------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)                                                                                                                               September 28                                               September 29                                               September 28                                               September 29
                                                                                                                                                                                                  2022                                                                          2021                                                                          2022                                                                          2021
                                                                                                                                              ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
Numerator:                                                                                                                                                                                                                                          
                                                                                                                                              $         (2,024 )                                         $         (2,178 )                                         $        (13,374 )                                         $          1,075  
    Net income (loss) attributable to Shake Shack Inc.
                                                                                                                                                                                                                                                    
    Adjustments:
                                                                                                                                       (287 )                                  (224 )                                (1,522 )                                  (837 )
        Reallocation of Net loss attributable to non-controlling interests from the assumed exchange of LLC Interests(1)
                                                                                                                             --       --                6,750                  619  
        Legal matters
                                                                                                                             --       --               (1,281 )                        --  
        Gift card breakage cumulative catch-up adjustment
                                                                                                                             --       --       --                  236  
        Debt offering related costs(2)
                                                                                                                             --       --       --                  179  
        Executive transition costs
                                                                                                                             --       --       --                  323  
        Revolving Credit Facility amendments related costs(3)
                                                                                                                                        (11 )                                   392                 (922 )                                   528  
        Impact to income tax expense (benefit)(4)
                                                                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                              $         (2,322 )                                         $         (2,010 )                                         $        (10,349 )                                         $          2,123  
    Adjusted pro forma net income (loss)
                                                                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                 
Denominator:                                                                                                                                                                                                                                        
                                                                                                                                     39,274               39,137               39,221               43,448  
    Weighted average shares of Class A common stock outstanding--diluted
                                                                                                                                                                                                                                                    
    Adjustments:
                                                                                                                                      2,871                2,922                2,899       --  
        Assumed exchange of LLC Interests for shares of Class A common stock(1)
                                                                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                     42,145               42,059               42,120               43,448  
    Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding--diluted
                                                                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                 
                                                                                                                                              ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
                                                                                                                                                                             Thirteen Weeks Ended                                                                                    Thirty-Nine Weeks Ended
                                                                                                 --------------------------------------------------------------------------------------------------------------------------------                            ---------------------------------------------------------------------------------------------------
                                                                                                       September 28                                               September 29                                      September 28                          September 29
                                                                                                                                                     2022                                                                          2021                                                                 2022                                                     2021
                                                                                                 ------------------------------------------------------                        ------------------------------------------------------                        ---------------------------------------------                        ----------------------------------
Earnings (loss) per share of Class A common stock--diluted                           $          (0.05 )                                         $          (0.06 )                                         $ (0.34 )                                         $           0.01
                                                                                --       --       (0.01 )                        --
    Assumed exchange of LLC Interests for shares of Class A common stock(1)
                                                                                         (0.01 )                                  0.01        0.10                 0.04
    Non-GAAP adjustments(5)
                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- ----- --------------------                      -------------------- --------------
___________________
   (1)   Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income (loss) attributable to non-controlling interests.
   (2)   Costs incurred in connection with the Company's Convertible Notes, issued in March 2021, including consulting and advisory fees.
   (3)   Expense incurred in connection with the Company's amendments on the Revolving Credit Facility, including the write-off of previously capitalized costs on the Revolving Credit Facility.
   (4)   Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 39.2% and 28.8% for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, and 32.5% and 123.4% for the thirteen and thirty-nine weeks ended September 29, 2021, respectively. Amounts include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221102006128/en/

SOURCE: Shake Shack Inc.

Media: 
Kristyn Clark, Shake Shack
(646) 747-8776
kclark@shakeshack.com

Investor Relations: 
Melissa Calandruccio, ICR
Michelle Michalski, ICR
(844) SHACK-04 (844-742-2504)
investor@shakeshack.com
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