BJS RESTAURANT AND BREWERY 2011 & 2013

A Financial Review Exercise

In partial fulfillment of the Requirements of Finance 11 Summer 2016

Submitted by: Submitted to:

John A. Alipio Ana Liza Romero Tan

Part I BJS Restaurant and Brewery

Product/Services offered: Beer, Pizza and other types of appetizers

Type of Industry: Restaurant

Address of Head Office: Huntington Beach, California

Part II

BJ's Restaurants was founded in 1978 and first opened in Orange County, California. By 1996,
seven restaurants had opened between San Diego and Los Angeles. Originally known as Chicago
Pizza, the company went public about 1996, raising $9.4 million.[2]The company then bought
26 Pietro's Pizza restaurants in March 1996 in a $2.8 million deal in cash and assumed debt, but
then sold off seven of the locations with plans to convert the remaining Pietro's to what was then
BJ's Pizza.[2] Between 2010 and 2011, the National Retail Federation named it as one of the 10
fastest growing restaurants in the U.S. based on year-over-year sales. The pizza was an
immediate hit and, as years went by, new BJs restaurants were opened in beach cities along
Southern Californias coastline. In 1996, with seven restaurants in operation from San Diego to
Los Angeles, the first BJs brewery began production in our new restaurant in Brea, California.
The introduction of fine handcrafted beer was welcomed by guests and the newly renamed BJs
Restaurant & Brewery concept was launched. New menu items and new beers have been added
through the years as the BJs brand has expanded across the U.S.

In 1996, the company made an IPO of 1.8 million shares at $5 per share, and 2.1 million
warrants at $0.25 each, raising more than $9 million. In January 2005, BJ's hired Jerry Deitchle,
formerly President (2002-2004) and CFO (1995-2002) at the Cheesecake Factory. In March
2005, the company announced the completion of a $42.6 million private placement of common
stock with three large institutional investors. The transaction involved the sale of 2.75 million
shares of common stock at a price of $15.50 per share.

Over the years we expanded the BJs concept from its beginnings as a small pizzeria to a full
service, high energy casual dining restaurant with over 100 menu items, including appetizers,
specialty salads, soups, pastas, sandwiches, entrees and desserts. In 1996, we introduced our
own handcrafted beers through our first BJs Restaurant & Brewery in Brea, California and
today our brewing team continues to passionately brew a variety of award-winning handcrafted
beers you can enjoy on tap every day.
Part III- Financial Statements
 Bjs Restaurant Statement of Retained Earnings

For the year ended December 31,2013

Retained Earnings balance (January 1, 2013) $152,082

Plus: Net Profits after taxes (for 2013) $21,022

Less: Cash dividends (paid during 2013)

Preferred Stock ----------

Common Stock ----------

Total Dividends Paid ______

Retained Earnings Balance (December 31, 2013) $173,104

Bjs Restaurant Statement of Retained Earnings

For the year ended December 31,2012

Retained Earnings balance (January 1, 2012) $120,673

Plus: Net Profits after taxes (for 2012) $31,409

Less: Cash dividends (paid during 2012)

Preferred Stock ----------

Common Stock ----------

Total Dividends Paid ______

Retained Earnings Balance (December 31, 2012) $ 152,082

 Bjs Restaurant Statement of Retained Earnings

For the year ended December 31,2011

Retained Earnings balance (January 1, 2011) $89,103

Plus: Net Profits after taxes (for 2011) $31,570

Less: Cash dividends (paid during 2011)

Preferred Stock ----------

Common Stock ----------

Total Dividends Paid ______

Retained Earnings Balance (December 31, 2011) $120,673

Part IV- Financial Statement Evaluation

Year
Ratio 2011 2012 2013
Liquidity
Current
Ratio 1.29 1.17 0.77
Quick Ratio 1.22 1.09 0.68
Activity
Inventory Turnover 35.3 29.5 25.8
7.5
Average Collection Period 5.9 days days 6.0 days
Average Payment Period 45.9 days 49.3 days 59.8 days
Total Assets Turnover 1.44 1.41 1.26
Debt
Debt Ratio 33.00% 33.80% 34.20%
Times Interest Earned Ratio 33.5 22.8 20.8
Fixed Payment Coverage Ratio -NA- -NA- -NA-
Profitability
Gross Profit Margin 75.40% 75.00% 75.20%
Operating Profit Margin 6.80% 5.76% 3.07%
Net Profit Margin 5.75% 3.78% 0.25%
Earnings Per Share $1.08 $1.09 $0.73
Return on total Assets(ROA) 1.96% 1.24% 0.08%
Return on Common
Equity(ROE) 10.19% 8.90% 5.41%
Market
Price/ Earnings Ratio(P/E)
Ratio 46.65 28.56 32.75
Market/Book (M/B) Ratio 2.52 2.18 2.06

Part V Conclusion
 Based on the financial statements mentioned above BJs Restaurant has gradually
increased their revenue by $87,382 from 2011 to 2012, and $66,800 from 2012 to 2013. So far
has been going in a slump from 2011-2013 its debt ratio has been gradually increasing by at least
0.40% even though it is good but the risk factor of the company is that eventually it may be hard
for them to borrow money in the future years to come. On the other hand the liquidity of Bjs
Restaurant from 2011 was a good sign for them because they are able to pay their obligations on
time but by the succeeding years 2012 and 2013 especially the current ratio based on the report it
has been gradually going down by at least 0.4 as a result it will be hard for the company to pay
its obligations on time. In the restaurant industry the Total Asset Turnover is one of the most
important parts in generating sales by using their assets to generate sales for the Bjs Restaurant
its Total Asset Turnover has been going down by 0.15 knowing that its assets arent being used
efficiently.

Therefore I conclude that it is not a good time for my friends and family to invest its
stock on Bjs Restaurant based on everything on the report its profitability ratios arent a good
thing for investors to invest upon. So that is why we should wait for the appropriate time to
invest our stock in BJs Restaurant.