Investor Presentation JANUARY 2016 FORWARD-LOOKING STATEMENTS - - PowerPoint PPT Presentation

JANUARY 2016

Investor Presentation

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Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact

• r relating to present facts or current conditions included in this presentation are forward-looking statements. Forward-looking statements give

Wingstop Inc.’s (the “Company”) current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” and similar expressions and terms of similar meaning in connection with any discussion of the timing or nature of future operating

• r financial performance or other events.

The forward-looking statements contained in this presentation are based on assumptions that the Company has made in light of its industry experience and perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the

• circumstances. As you read and consider this presentation, you should understand that these statements are not guarantees of performance or results.

They involve risks, uncertainties (many of which are beyond our control) and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual operating and financial performance and cause its performance to differ materially from the performance anticipated in the forward-looking statements. The Company believes these factors include, but are not limited to, those described under the sections “Risk Factors” in the prospectus for the Company’s initial public offering and in its

• ther filings with the SEC, which can be found at the SEC’s website www.sec.gov. Further, the Company has not yet completed closing procedures for

fiscal fourth quarter or full year 2015, and our independent registered public accounting firm has not yet reviewed or audited the results. Accordingly, these preliminary results are subject to change pending finalization, and actual results could differ materially as we finalize such results. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, the Company’s actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Any forward-looking statement made by the Company in this presentation speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual operating and financial performance to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the company. The Company has provided reconciliations of each non-GAAP financial measure presented to the most directly comparable GAAP measure in the Appendix to this presentation. You should not consider it in isolation, or as a substitute for analysis of results as reported under GAAP. Our calculation of Adjusted EBITDA may not be comparable to that reported by other companies. For additional information about our non-GAAP financial measures, see our filings with the Securities and Exchange Commission.

FORWARD-LOOKING STATEMENTS

A CATEGORY OF ONE A CATEGORY OF ONE

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WHAT MAKES WINGSTOP UNIQUE?

• Pioneered Wings as center of the plate
• Fast Casual; 98% franchised
• 11 Flavors spanning spicy, savory, sweet
• 49% of guests are Millennials (1)
• 53% female skew; strong family appeal (2)
• Best in class social sentiment
• 15% of sales from online in Q4 2015
• Social at the core; engagement over 30% (3)
• Digital-first advertising strategy with high ROI
• $1.1M Average Unit Volume
• 35-40% Year 2 Cash-on-cash return
• 75% Take-Out

SIMPLE CONCEPT EFFICIENT OPERATING MODEL TECH FORWARD COVETED CONSUMER

(1) MRI Data (2) Burke Research (3) Forbes, November 2014 Sources:

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Bar Centric Pizza Delivery QSR Chicken Small Regional Fast Casual, National Footprint & Focused Menu Sets Wingstop Apart

NO DIRECT NATIONAL COMPETITORS

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2015 – ANOTHER TERRIFIC YEAR!

845 Locations 39 states 7 countries 133 New Openings (Net) 19% Unit Growth Rate 7.9% Domestic SSS Growth

12 Consecutive Years of SSS Growth

INSERT NEW PIC

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Source: Company filings

2014 2013 2012 Cumulative SSS

%

2012 – 2015 Q3 YTD Stacked Same Store Sales

INDUSTRY LEADING SSS

Notes:

(1) (2) (3) (2) (6) (1) (3) (3) (1) (3) (4) (5)

2015 Q3 YTD

(1)

(1) Domestic system-wide (2) Global company-owned (3) Domestic company-owned (4) Franchised (5) Dunkin U.S. segment only (6) System-wide

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Confidential Information - Do Not Distribute

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To Serve The World Flavor

We strive to deliver on

• ur commitments to our

guests, team members, franchisees & shareholders.

• Intensely loyal fan base
• Best in class franchisee returns
• High growth, asset light model;

best of both worlds for investors

Our brand knows no boundaries due to our unique product, complex flavors and commitment to quality.

• 59 int’l locations in 6 countries,

and we’re just getting started

• Portable concept; <1% domestic

closure rate in 2015

• Ubiquitous flavor profile works

just about everywhere

The Craft, the Crave and the Culture.

• Always cooked to order
• Scratch made sides and dips
• Hand-cut seasoned fries
• Menu appeal for individuals,

groups, families and events

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COVETED GUEST BASE

MILLENNIALS

• 18-24 year old Millennial

males

• African American and

Hispanic skew

• Group-centered
• ccasions
• 24-34 year old Millennial

females

• Hispanic mom skew
• Orders for the whole

family

• Broad, loyal and diverse

guest base attracted by unique flavor experience, product quality, brand personality and convivial nature of eating wings

FAMILIES FLAVOR CRAVERS

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PASSIONATE & ENGAGED FANS

Engagement Ratio – %

Followers—MM Source: Forbes, November 2014

Engagement Ratio: A weighted composite of the total number of engagements (likes, comments, favorites, retweets) that followers have with a brand relative to total engagements

McDonald’s Starbucks Coffee 7-Eleven Outback Steakhouse Hooters Applebee’s Wendy’s Dairy Queen Baskin-Robbins Whataburger Burger King Dunkin’ Donuts Olive Garden Chick-fil-A Hard Rock KFC Subway Krispy Kreme Red Lobster Buffalo Wild Wings Pizza Hut Domino’s Taco Bell Wingstop Morton’s Steakhouse

69% of positive social media comments are about theCRAVE!

(1) (1) Infegy Source:

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FUELING DEMAND THROUGH TECHNOLOGY

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Online % of Sales

QSR Fast Casual Wingstop ~ 1-3% ~ 3-6% ~ 15%

Average Ticket

~ $16 ~ $20 In-Restaurant Online Ordering

Conversion Rate (2)

10% 29% Food & Beverage Industry Wingstop

4.5 4.5 4.5 App Ratings (3) 4.5 3.0

Poised for Continued Growth

• Doubled Sales Mix

in 2015

• Millennial

customer base

• Simple menu
• 75% Take-Out
• 60% of orders still

come in over the phone

• Creates

efficiencies at store level

All Orders Online

(1) (1) (1) Olo (2) MarketingSherpa Ecommerce Benchmark Study 2014 (3) App Store Current Versions Jan 5, 2016 Sources:

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Scaling to National Media Current Potential for the Future

AMPLIFIED BY HIGH ROI DIGITAL-FIRST MARKETING APPROACH

Illustrative Ad Spend Growth (1)

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Local National

• 13 advertising cooperatives

and growing

• Future potential to expand

into traditional media and national sponsorships

• 1000 restaurants in US is

target for converting to national

• Transitioning first through

national digital buys

Illustrative National Ad Budget

Note: (1) Current reflects markets that have shared comprehensive media plans with Wingstop

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In $000s Franchisee Year 2 Target Unit Economics AUV (1) 890 Investment Cost (2) 370 Unlevered Year 2 COC Return 35% - 40%

Notes: (1) AUV based on 2013 vintage year 1 performance of approximately $820,000 and year 2 growth rate for all new stores since 2006 of approximately 8.5% (2) Investment cost based on last 2 fiscal years actual costs; excludes pre-opening and working capital

RESULT: COMPELLING UNIT ECONOMICS

• 78% of current commitments from existing

franchisees

• Whitespace opportunity to grow

“2015 Golden Chain Winner”

Franchise Awards

“Top 40, Best Franchises for African Americans” “The Best Franchise Deal in North America” “#24, Top Movers and Shakers List” “#1 in System Sales Growth” “Most Effective Use of Social Media” “2015 Franchisee Satisfaction - Best Franchise” “Top 10 Fastest Growing Chains”

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4.7 5.9 7.8 7.9 2012 2013 2014 LTM Sep. 2015 $MM $MM Margin ∆ ‘12–’14 +881 bps

Same Store Sales(1) Average Unit Volume(2) Restaurant Profit(2)(3)

VALIDATED BY STRONG COMPANY STORE PERFORMANCE

% Margin:

19 Company-Owned Restaurants in Dallas (12), Houston (2), and Las Vegas (5)

%

Notes: (1) For 19 company-owned restaurants as of 9/26/15; excludes re-franchised restaurants (2) Includes all company-owned restaurants. 1 was re-franchised in October of 2012 and 5 were re-franchised in February 2014 (3) Sales less Cost of Goods Sold, Labor and Other Operating Expenses

Total Units:

23 24 19 19 17.6% 20.4% 26.4% 25.8%

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PROVEN CONCEPT ACROSS A VARIETY OF MARKETS

39 State Footprint with Room to Grow in All Markets (1)

Note: (1) Restaurant count as of 09/26/15

Total Domestic Store Count – Q3: 756 Averaging 3 Domestic Closures Per Year Since 2013

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1 2012 2013 2014 2015

29 53 64 82 118 6 4 10 20 24 35 57 74 102 2011 2012 2013 2014 2015

Gross New Unit Openings by Year

Domestic International

Domestic Restaurant Opening Commitments

• 78% of current domestic pipeline is from existing

franchisees as of 12/26/15

• Mix of small and large franchisees

Healthy Franchisee Base

Development Commitments

ACCELERATING PACE OF DEVELOPMENT

Rapid Unit Development

142 274 363 503 530

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786 1,645 334 196 855 566 618 2014 (actual) Existing Market Potential New Market Potential Long-Term Domestic Potential 786 2,500

Domestic Bridge to Long-Term Goal

Existing Markets New Markets Remaining Opportunity Domestic Commitments 900 814

(1)

Note: (1) Includes 745 restaurants in existing markets and 41 restaurants in new markets as of 12/26/15.

LONG-TERM STORE POTENTIAL ROADMAP

2015 (actual) (1)

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Asia

A

North America Middle East South America

Current Units and Per Capita Poultry Consumption(1)

INTERNATIONAL POTENTIAL

U.S. Consumption: 44kg

Europe

Market Consumption European Union 21kg

Africa

Market Consumption South Africa 31kg

Americas

Market Consumption Latin America and Caribbean 30kg Brazil 39kg Canada 32kg Mexico 25kg

Middle East

Market Consumption Saudi Arabia 44kg

Asia

Market Consumption Asia and Pacific 8kg Malaysia 41kg Australia 39kg New Zealand 35kg China 12kg Indonesia 6kg India 2kg Note: (1) Unit data as of Q3’15; Poultry consumption in estimated average kilograms per capita from 2012 to 2014

Europe Africa Asia

Source: OECD-FAO Agricultural Outlook 2015

Existing Footprint (1)

Market Units Mexico 30 Philippines 8 Indonesia 7 Russia 3 Singapore 2 UAE 1 Total 51

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546 614 712 845 2012 2013 2014 2015

LONG TRACK RECORD OF DELIVERING OUTSTANDING RESULTS

Total Revenue

$MM

Total Units

Growth %: 9.4% 12.5% 16.0%

$MM 457 550 679 821 2012 2013 2014 2015 $MM

System-Wide Sales High Growth + Franchisor Cash Flow Adjusted EBITDA(1)

Notes: (1) Refer to Appendix for reconciliation (2) 2015 estimates represent updated guidance issued on 01/11/16. 18.7%

77.6 – 77.9

2015 est (2) ~ 821 2015 est (2) 2015 est (2)

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Robust Cash Conversion Rapid Expansion

% FY 2014 Cash Conversion and Unit Growth (1) LTM Q3 Gross Unit Openings

Notes: 1. Defined as (EBITDA – CapEx) / EBITDA 2. Calculations use Adj. EBITDA Source: Public company filings

THE BEST OF BOTH WORLDS

(2) (2) (2)

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3.9% 6.8% 3.0% 6.9% 2.4% 16.0% Unit Growth:

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($MM) Capitalization as of Q1 2015 (Inclusive of Recap) Capitalization as of Q2 2015 (Post-IPO) Capitalization as of Q3 2015

Cash 2.9 4.9 5.7 Revolving Credit Facility 0.0 0.0 0.0 Term Loan 132.5 100.5 95.5 Total Debt 132.5 100.5 95.5 Total Debt / LTM Adjusted EBITDA 5.3x 3.9x 3.6x Balance Sheet

SIMPLE AND STRONG BALANCE SHEET

(2) Notes: (1) Leverage = Gross Debt / LTM Adjusted EBITDA (2) Primary proceeds at IPO used to achieve leverage of ~3.9x LTM Adj. EBITDA

EBITDA Growth and Cash Generation Support Deleveraging(1)

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LONG-TERM FINANCIAL TARGETS*

• 10%+ annual unit growth
• ~2,500 domestic unit potential

Disciplined Unit Growth Attractive Business Model Long-Term Growth Targets

*These are not projections; they are goals and are forward-looking, subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to

• change. Actual results will vary and those variations may be material. For discussion of some of the important factors that could cause these variations, please consult the

“Risk Factors” section in the prospectus for the Company’s initial public offering and in it’s other filings with the SEC. Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals.

Strong Same Store Sales Growth Steady, Reliable Profit Growth

• Low single digit annual growth
• Consistent new store ramp

+ =

• 13% - 15% Adjusted EBITDA growth
• 18% - 20% Net Income / EPS growth
• Strong free cash flow and conversion

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#Appendix #Appendix

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YTD HISTORICAL ADJUSTED EBITDA RECONCILIATION

In $000s

Year Ended December 29, 2012 Year Ended December 28, 2013 Year Ended December 27, 2014 YTD September 27, 2014 YTD September 26, 2015 Net income 3,580 7,530 8,986 7,485 6,311 Interest expense, net 2,431 2,863 3,684 2,871 2,764 Income tax expense 3,000 4,493 5,312 4,426 3,753 Depreciation and amortization 2,930 3,030 2,904 2,232 1,944 EBITDA 11,941 17,916 20,886 17,014 14,772 Adjustments Management agreement termination fee(2) – – – – 3,297 Management fees(3) 422 436 449 338 237 Transaction costs(4) 308 395 2,169 976 2,186 Gains and losses on disposal of assets(5) (20) – (86) (86) – Stock-based compensation expense(6) 464 748 960 322 492 Earn-out obligation(7) 2,500 – – – – Adjusted EBITDA 15,615 19,495 24,378 18,564 20,984

Notes: 1. LTM Adjusted EBITDA calculated as “YTD September 26, 2015” + “Year Ended December 27, 2014” – “YTD September 27, 2014” 2. One-time fee of approx. $3.3 million paid in consideration of termination of management agreement with Roark Capital Management, LLC 3. Includes management fees and other out-of-pocket expenses paid to Roark Capital Management, LLC 4. Represents costs and expenses related to refinancings of our credit agreement and our initial public offering 5. Represents non-cash gains and losses resulting from the sale of company-owned restaurants to a franchisee and associated goodwill impairment 6. Includes non-cash, stock-based compensation 7. Represents an earn-out payment made to our prior owner based on us achieving revenue benchmarks specified in the acquisition agreement governing our purchase. There are no further obligations related to the earn-out remaining under the acquisition agreement

(1) (1)

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QUARTERLY HISTORICAL ADJUSTED EBITDA RECONCILIATION

In $000s

Year Ended December 29, 2012 Year Ended December 28, 2013 Year Ended December 27, 2014 Quarter Ended September 27, 2014 Quarter Ended September 26, 2015 Net income 3,580 7,530 8,986 1,993 3,173 Interest expense, net 2,431 2,863 3,684 876 800 Income tax expense 3,000 4,493 5,312 1,178 1,784 Depreciation and amortization 2,930 3,030 2,904 690 636 EBITDA 11,941 17,916 20,886 4,737 6,393 Adjustments Management agreement termination fee(1) – – – – – Management fees(2) 422 436 449 111 – Transaction costs(3) 308 395 2,169 776 – Gains and losses on disposal of assets(4) (20) – (86) – – Stock-based compensation expense(5) 464 748 960 112 150 Earn-out obligation(6) 2,500 – – – – Adjusted EBITDA 15,615 19,495 24,378 5,736 6,543

Notes: 1. One-time fee of approx. $3.3 million paid in consideration of termination of management agreement with Roark Capital Management, LLC 2. Includes management fees and other out-of-pocket expenses paid to Roark Capital Management, LLC 3. Represents costs and expenses related to refinancings of our credit agreement and our initial public offering 4. Represents non-cash gains and losses resulting from the sale of company-owned restaurants to a franchisee and associated goodwill impairment 5. Includes non-cash, stock-based compensation 6. Represents an earn-out payment made to our prior owner based on us achieving revenue benchmarks specified in the acquisition agreement governing our purchase. There are no further obligations related to the earn-out remaining under the acquisition agreement