Shake Shack 2016 Annual Report Download - page 60

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Table of Contents
NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles
(“GAAP”), we use the following non-GAAP financial measures: Shack-level operating profit, EBITDA, adjusted EBITDA, adjusted pro forma net income and
adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures"). We believe that these non-GAAP financial
measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past
financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision
making. The presentation of this financial information 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. The non-GAAP measures that we use are not necessarily comparable to similarly titled measures used by other
companies due to different methods of calculation.
Shack-Level Operating Profit
Shack-level operating profit and Shack-level operating profit margin are supplemental measures of operating performance and are not required by, nor presented in
accordance with, GAAP. We believe that Shack-level operating profit and Shack-level operating profit margin, when used in conjunction with GAAP financial
measures, are important measures we use to evaluate the performance and profitability of each Shack, individually and in the aggregate. A reconciliation of Shack-
level operating profit to operating income, the most directly comparable GAAP measure, is set forth below.
(dollar amounts in thousands) 2015
2014 (1)
2013
Shack-level operating profit $ 52,874
$ 26,861
$ 20,419
Add:
Licensing revenue 7,373
6,488
3,869
Less:
General and administrative expenses 37,825
18,187
12,453
Depreciation expense 10,222
5,809
3,541
Pre-opening costs 5,430
6,105
2,334
Loss on disposal of property and equipment 17
105
25
Operating income $ 6,753
$ 3,143
$ 5,935
Total revenue $ 190,592
$ 118,530
$ 82,456
Less: Licensing revenue 7,373
6,488
3,869
Shack sales $ 183,219
$ 112,042
$ 78,587
Shack-level operating profit margin 28.9%
24.0%
26.0%
(1) We operate on a 52/53 week fiscal year that ends on the last Wednesday of the calendar year. Fiscal 2014 was a 53-week year. Fiscal 2015 and 2013 each contained 52
weeks.
Shake Shack Inc. Form 10-K | 58