BRAVO/BRIO – (BBRG) @ $2.20 ==>  With the Hurricanes behind them.. The Worst is Over

Why BBRG Management should announce a =>  Large “STOCK BUY-BACK” PROGRAM 

Overall BBRG restaurant level operating profit increased to +$8.8 million and restaurant level profit margins rose +160 basis points to 10.00% in Q3.

That compared to restaurant level operating profit of +$7.9 million and profit margins of 08.4% in the same period last year.

BBRG Management has recently given guidance for the balance of Fiscal 2017

Net capital expenditures are now estimated the be ….  Between +$8 million -to- $9 million

Earnings – (EPS) is expected to be in a range to be between….. (EPS) of:  +$0.19 cents  -to-  +$0.24 cents

Earnings estimates were reduced by an estimated -$0.03 cents / per share …
Due to the impact from the hurricanes and has already been factored into recently announced 3rd-quarter results

Piper Jaffray -&- Jeffries & Co analysts both estimate 2017 EBITDA at ==> $25MM EBITDA

The Case for a => Sizeable: “STOCK BUYBACK”

If BBRG were to “Buy Back”  2 million shares at $2.50 a share…  It would cost the company =>  $5 million

If that were successful…. A  2 million share “BUY BACK” at $2.50 a share .. Reduces BBRG’s shares outstanding
from:  15.20 million shares -to- 13.2 million shares

So a 2 million share re-purchase..  Would shrink BBRG’s shares outstanding by roughly => 13.15%

Analysts expect $25MM / EBITDA for 2018

Current Debt stands at $37MM

We setimate : $4mil Capex

We then believe BBRG’s $25MM EBITDA could easily self-finance a stock buyback…. To be paid for 100.00% out of “FCF”
within 1 years Time

The implications of such a “BUY BACK” would have a dramatic impact on BBRG’s => FREE CASH FLOW / RATIOS

EBITDA                        $25 MM            $30 MM
=====                      =======        ======

DEBT / Interest                $4                   $4

Capex                              $4                   $4

Free CF                           $17MM             $22MM

Before – Buy Back         $1.12/sh            $1.44/sh
(FCF/share)

After – Buy Back          $1.29/share      $1.67/share
(FCF/share)


IMPORTANT TO NOTE:

This “FCF” model “Does Not” assume the use of increased FCF in 2018 …
Used to remodel 20 BBRG restaurant units at a cost of +$200,000 / per restaurant

We estimate the remodel of => 20 “COASTAL BARS” => Could add an additional $4MM of “FCF” per yr.
At a total cost of => $4 MM of total CAPEX

If the company is able to achieve this… 20 “COASTAL BARS” re-development schedule

We believe 20 “COASTAL BARS” would add an Additional => +.30 cents to (FCF/share)

Therefore …

With a 2MM Share Buy Back implemented -&- The re-development of => 20 “COASTAL BARS”

We don’t think it would be un-reasonable for BBRG to generate approximately ==>  +$2.00 in (FCF/share)