Japanese Restaurant Chain
The Situation
- Well-known Japanese fusion style restaurant chain
- Weakened economy exposed the chain as more of a collection of restaurants rather than an integrated corporate restaurant chain and profits eroded; comparable restaurant sales declined up to 8%
- Over a one-year period adjusted EBITDA declined 22% from $35.3MM to $27.7MM; company reached lowest stock price of $3.08 with a market capitalization of $51MM
- Restaurant chain’s image declined and the value proposition suffered damage due to higher prices and lower quality products
- Management lost focused and a new CEO was hired
Role(s)
- Interim CFO
The Work
- CR3 professionals were engaged to validate principles of a “renewal program” launched by new CEO – program was geared at improving guest experience and financial results
- Engagement team was named Interim CFO to assist with renewal program implementation
- Participated in review of strategic alternatives for the Board of Directions including a sale process
- Assisted a robust sale process
The Results
- Comparable store sales increased six consecutive fiscal quarters
- Net income increased in one year to $1.3MM, up from a loss of $8.9MM prior year
- Adjusted EBITDA increased by 22% (from $27.7MM to $33.8MM
- Improved stock price to over $16.00 per share with a market capitalization of $175MM, an increase of $124MM from beginning of engagement
- Paid off senior secured debt of $35.2MM solely through operating cash flow enabling company to place a $30MM senior secured line of credit under favorable terms