S-1/A 1 a2205428zs-1a.htm S-1/A

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As filed with the Securities and Exchange Commission on April 30, 2012

No. 333-175878

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 6
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



IGNITE RESTAURANT GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  5812
(Primary Standard Industrial
Classification Code Number)
  94-3421359
(I.R.S. Employer Identification No.)

9900 Westpark Drive, Suite 300
Houston, Texas 77063
(713) 366-7500
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Raymond A. Blanchette, III
President and Chief Executive Officer
Ignite Restaurant Group, Inc.
9900 Westpark Drive, Suite 300
Houston, Texas 77063
(713) 366-7500
(Name, address, including zip code, and telephone number, including area code, of agent for service)



With copies to:

Christian O. Nagler
Jason K. Zachary
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212) 446-4800

 

Keith M. Townsend
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, Georgia 30309
(404) 572-4600



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.



         If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:    o

         If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of Securities
to be Registered

  Amount to be
Registered(1)

  Estimated Maximum
Offering Price
Per Share(2)

  Estimated Maximum
Aggregate Offering
Price(2)(3)

  Amount of Registration Fee(3)(4)
 

Common Stock, $0.01 par value per share

  6,634,615   $14.00   $92,884,610   $10,644.58

 

(1)
Includes 865,384 additional shares of common stock that the underwriters have the option to purchase.
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
(3)
Includes the offering price of any additional shares of common stock that the underwriters have the option to purchase.
(4)
Previously paid.



         The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 30, 2012

PROSPECTUS

5,769,231 Shares

GRAPHIC

Ignite Restaurant Group, Inc.

Common Stock



        This is an initial public offering of shares of common stock of Ignite Restaurant Group, Inc. We are offering 5,572,703 shares of our common stock, and the selling stockholder identified in this prospectus is offering an additional 196,528 shares of common stock. We will not receive any of the proceeds from the sale of the shares being sold by the selling stockholder in this offering.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price per share of the common stock is expected to be between $12.00 and $14.00. We intend to apply to list our common stock on The NASDAQ Global Select Market under the symbol "IRG."

        The underwriters have an option to purchase a maximum of 865,384 additional shares from us. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

        We are an "emerging growth company" under applicable Securities and Exchange Commission rules and will be subject to reduced public company reporting requirements.

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 16.

 
  Price to
Public
  Underwriting
Discounts and
Commissions
  Proceeds,
before expenses
to us
  Proceeds,
before expenses
to the selling
stockholder

Per share

  $                       $                       $                       $                    

Total

  $                       $                       $                       $                    

        Delivery of the shares of common stock will be made on or about                         , 2012.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse   Baird   Piper Jaffray

KeyBanc Capital Markets

 

Lazard Capital Markets

 

Raymond James

The date of this prospectus is                         , 2012.


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  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    16  

FORWARD-LOOKING STATEMENTS

    34  

USE OF PROCEEDS

    36  

DIVIDEND POLICY

    37  

CAPITALIZATION

    38  

DILUTION

    39  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

    41  

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    46  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    53  

BUSINESS

    77  

MANAGEMENT

    92  

EXECUTIVE COMPENSATION

    100  

PRINCIPAL AND SELLING STOCKHOLDER

    121  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    123  

DESCRIPTION OF CAPITAL STOCK

    125  

SHARES ELIGIBLE FOR FUTURE SALE

    131  

U.S. FEDERAL TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS

    133  

UNDERWRITING (CONFLICTS OF INTEREST)

    137  

LEGAL MATTERS

    141  

EXPERTS

    141  

WHERE YOU CAN FIND MORE INFORMATION

    142  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

    F-1  



        You should rely only on the information contained in this prospectus or in any free-writing prospectus we may specifically authorize to be delivered or made available to you. We have not, the selling stockholder has not and the underwriters have not authorized anyone to provide you with additional or different information. We and the selling stockholder are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus or any free-writing prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

        Until                        , 2012 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the dealers' obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

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MARKET DATA AND FORECASTS

        Unless otherwise indicated, information in this prospectus concerning economic conditions, our industry, our markets and our competitive position is based on a variety of sources, including information from independent industry analysts and publications such as KNAPP-TRACK™ and Technomic, Inc., as well as our own estimates and research. KNAPP-TRACK™ is a monthly sales and guest count tracking service for the chain dinner house/theme restaurant market in the United States. Each monthly KNAPP-TRACK™ report aggregates the change in comparable restaurant sales and guest counts compared to the same month in the preceding year from the competitive set of participants in the chain dinner house/theme restaurant market and provides an average to which we can compare our results. The competitive set of participants for each KNAPP-TRACK™ report is comprised of approximately 50 casual dining restaurant brands and typically includes restaurants such as Applebee's, T.G.I. Friday's, Outback Steakhouse and Red Lobster. We and other restaurants benchmark our performance against the data included in the monthly KNAPP-TRACK™ report. Technomic, Inc. is a leading restaurant industry consulting and researching firm.

        Our estimates are derived from publicly available information released by third-party sources, as well as data from our internal research, and are based on such data and our knowledge of our industry, which we believe to be reasonable. None of the independent industry publications used in this prospectus were prepared on our behalf, and none of the sources cited in this prospectus have consented to the inclusion of any data from its reports, nor have we sought consent from any of them.

TRADEMARKS AND TRADENAMES

        This prospectus includes our trademarks, such as Joe's Crab Shack® and the design, our stylized logos set forth on the cover and back pages of this prospectus and Brick House Tavern+Tap® and the design, which are protected under applicable intellectual property laws and are the property of Ignite Restaurant Group, Inc. or its subsidiaries. Solely for convenience, trademarks, service marks and tradenames referred to in this prospectus may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and tradenames. This prospectus may also contain trademarks, service marks, tradenames and copyrights of other companies, which are the property of their respective owners.

ABOUT THIS PROSPECTUS

        Except where the context otherwise requires or where otherwise indicated, the terms "Ignite," "we," "us," "our," "our company" and "our business" refer to Ignite Restaurant Group, Inc. and its consolidated subsidiaries. The term "Joe's" refers to Joe's Crab Shack and "Brick House" refers to Brick House Tavern+Tap. The term "crab house" refers to a restaurant at which the featured entrees are predominantly crab. The term "Queen Crab" refers to Opilio crab that meets our size specification for designation as Queen Crab.

        The term "selling stockholder" refers to JCS Holdings, LLC, our parent company. Immediately after completion of this public offering, JCS Holdings, LLC will distribute substantially all of the shares of our common stock then held by it and/or the cash proceeds received in this public offering to the holders of its Series A preferred units and its common units in accordance with the provisions then in effect of the Fourth Amended and Restated Limited Liability Company Agreement of JCS Holdings, LLC. JCS Holdings, LLC will thereafter continue to hold shares equal to less than one percent of our outstanding common stock for the benefit of certain of our officers and directors who will continue to hold unvested common units in JCS Holdings, LLC upon consummation of this offering. See "Prospectus Summary—Company History and Information" for more information on the liquidation

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and distribution of JCS Holdings, LLC and "Principal and Selling Stockholder" for more information on our beneficial ownership following the distribution.

        Throughout this prospectus, we provide a number of key performance indicators used by management and typically used by our competitors in the restaurant industry. These key performance indicators are discussed in more detail in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Indicators." In this prospectus we also reference Adjusted EBITDA and restaurant-level profit margin, which are both non-GAAP financial measures. See "Prospectus Summary—Summary Historical Consolidated Financial and Operating Data" for a discussion of Adjusted EBITDA and restaurant-level profit margin, as well as a reconciliation of those measures to the most directly comparable financial measure required by, or presented in accordance with, generally accepted accounting principles in the United States, or U.S. GAAP.

        Our fiscal year ends on the Monday closest to December 31 of each year. Our most recent fiscal year ended on January 2, 2012. Fiscal years 2011 and 2009 were 52-week years, while fiscal year 2010 was a 53-week year. The first three quarters of our fiscal year consist of 12 weeks and our fourth quarter consists of 16 weeks for 52-week fiscal years and 17 weeks for 53-week fiscal years.

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider in making your investment decision. You should read the following summary together with the entire prospectus, including the more detailed information regarding our company, the common stock being sold in this offering and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. You should also carefully consider, among other things, the matters discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus before deciding to invest in our common stock. Some of the statements in this prospectus constitute forward-looking statements. For more information, see "Forward-Looking Statements."

Our Company

        Ignite Restaurant Group, Inc. operates two restaurant businesses, Joe's Crab Shack and Brick House Tavern+Tap. Each of our restaurant businesses offers a variety of high-quality food in a distinctive, casual, high-energy atmosphere. Joe's Crab Shack and Brick House Tavern+Tap operate in a diverse set of markets across the United States.

        Our comparable restaurant sales have increased for 15 consecutive fiscal quarters and outperformed the KNAPP-TRACK™ report of casual dining restaurants, which is an average of approximately 50 casual dining restaurant brands, over the same period of time. We have grown our comparable restaurant sales by 25% on a cumulative basis over the last four years, which has outperformed the KNAPP-TRACK growth rate of (8%) by nearly 3,300 basis points on a cumulative basis over the same period of time. During the twelve weeks ended March 26, 2012, our comparable restaurant sales increased by 5.3% over the comparable period in our prior fiscal year.

        Our current management team was put in place in fiscal year 2007. This team developed and implemented many of the initiatives and strategies which serve as the foundation for what our company is today. The impact of these strategies began to be take effect in fiscal year 2008. From the fiscal year ended December 29, 2008 through the fiscal year ended January 2, 2012, total revenues and Adjusted EBITDA (a non-GAAP financial measure) have improved at compounded annual growth rates of 14.0% and 29.5%, respectively. Over the same period, our total revenues increased from $273.4 million to $405.2 million, net income increased from a net loss of $3.2 million to net income of $11.3 million and Adjusted EBITDA increased from $20.3 million to $44.1 million. We opened 24 new restaurants, rebuilt one restaurant, closed eight restaurants and converted four Joe's Crab Shack restaurants to Brick House restaurants, which resulted in a net total of 16 new restaurants over the same period of time. For the twelve weeks ended March 26, 2012, we opened three new restaurants.

        As of March 26, 2012, we owned and operated 138 restaurants in 31 states.

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Joe's Crab Shack

        Joe's Crab Shack, founded in 1991, is an established, national chain of casual seafood restaurants. Joe's serves a variety of high-quality seafood items, with an emphasis on crab. Joe's is a high-energy, family-friendly restaurant that encourages guests to "roll up your sleeves and crack into some crab."

        Joe's Crab Shack is America's only national crab house. Crab is deliberately placed center stage as a defining item to the Joe's experience. Joe's Steampot and Crab in a Bucket offerings allow guests to choose between four varieties of crabs (Queen, Snow, Dungeness and King) and Maine lobster. Our Steampots are overflowing with generous portions of crab, other seafood, red potatoes, a fresh ear of corn and sausage, combined with a complementary set of savory seasonings. Our Crab in a Bucket entrées allow guests to pair their favorite crab selection with several distinctive preparations ranging from BBQ to Chesapeake Style or Garlic Herb. Joe's also leverages its crab-forward menu with other craveable crab items, including Made-From-Scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip. In addition to our core crab-focused menu, Joe's also offers a broad range of entrées featuring a variety of seafood, including the Get Stuffed Snapper, Surf 'N Turf Burger and Shrimp Trio, as well as a wide range of traditional seafood entrées like the Fisherman's Platter. Joe's also offers several "out of water" options such as Pan Fried Cheesy Chicken and Ribeye Steak.

        Many Joe's Crab Shack restaurants are located on waterfront property, and most locations offer outdoor patio seating and a children's playground. Joe's Crab Shack restaurants perform well in targeted markets with high population density and a propensity for seafood, as well as "destination" markets with national and regional tourist attractions, both of which are key characteristics of our new site selection strategy. Joe's Crab Shack restaurants are largely free-standing and average 8,000 square feet with over 200 seats.

        We continuously seek to innovate our menu offerings. For example, we have dramatically shifted the menu mix at Joe's to focus on entrées featuring crab over the last four fiscal years. As a result of this strategy, the percentage of entrées at Joe's featuring crab increased from approximately 20% to 45% of total food revenues over the last four fiscal years. We believe this mix shift has contributed to increases in guest satisfaction, comparable restaurant sales and restaurant-level profit. For the fiscal year ended January 2, 2012, our average check was $23.07, lunch and dinner represented 27% and 73% of revenue, respectively, and our revenues were comprised of 84% food, 13% alcohol and 3% retail merchandise.

Brick House Tavern+Tap

        Brick House Tavern+Tap, founded in 2008, is a casual restaurant business that provides guests a differentiated "gastro pub" experience by offering a distinctive blend of menu items in a polished setting. Brick House seeks to strike a balance between providing guests with an elevated experience while also appealing to "every-man, every-day." In 2011, Brick House was listed as the #1 "up and comer" full-service, varied-menu restaurant business by Technomic, a leading restaurant industry consulting and research firm.

        Brick House offers guests a broad selection of high-quality, chef-inspired, contemporary tavern food and other American fare. Menu items include handcrafted appetizers such as Deviled Eggs, Meat and Cheese Board, Meatloaf Sliders and Fried Stuffed Olives. In addition, Brick House's Brick Burgers, including the Gun Show Burger and the Red Chili Burger, offer guests a distinct take on the traditional burger. Brick House further enhances its burger offerings through its most popular burger, The Kobe, which is hand-formed from high-quality American Wagyu beef. Guests can also choose from a broad selection of homemade entrées such as Drunken Chops, BBQ Baby Backs and Chicken & Waffles, which are among our most popular items. A Daily Special menu features classic tavern food with a twist including Prosciutto Wrapped Meatloaf, Steak Frites and Chicken Pot Pie. A New Brick Pizza section offers a Kobe Brick Pizza and Philly Cheese Steak Pizza. In addition, we consider Brick House

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to be a "Temple to Beer," with a diverse beverage selection highlighted by over 70 varieties of beer, including local microbrews and distinctive imports, a tap-at-your-table Beer Bong and a hand-pulled Cask Beer Engine. All Brick House restaurants have a full bar that supports a variety of liquor drinks, wine and beer cocktails like the Shandy and Bee Sting, as well as specialty cocktails like the Dark & Stormy, Moscow Mule and the Zombie.

        The interior design of Brick House Tavern+Tap consists of diverse seating and gathering areas where guests can select multiple ways to enjoy their experience. In addition to a traditional dining room and bar area, Brick House also offers large communal tables and a section of leather recliners positioned in front of large HD TVs, where guests receive their own TV tray for dining. Each restaurant has a state-of-the-art entertainment package and provides guests with a clear line of sight to at least two HD TVs from every seat, making Brick House restaurants an ideal gathering place for sports enthusiasts. Outdoor seating is also available on the patio or around an open fire pit at nearly all locations. Both food and beverages are served by personable and engaging service staff.

        For fiscal year ended January 2, 2012, the daypart mix at Brick House Tavern+Tap was 20% lunch, 25% afternoon, 38% dinner and 17% late night and our revenues were comprised of 53% food and 47% alcohol. Our entrées ranged in price from $8.00 to $20.00.

Our Business Strengths

        We are focused on developing brands that have category leading and defendable positions within the casual dining segment. As a result, our core business strengths include the following:

        Highly Differentiated Restaurant Brands.    Our restaurants strive to provide a unique guest experience in a "come-as-you-are," upbeat and inviting restaurant environment. Both Joe's Crab Shack and Brick House Tavern+Tap are distinctively positioned restaurant brands, designed to have unique guest appeal. Joe's Crab Shack is a leading casual seafood brand that offers more than just a meal—a visit to Joe's is an event for the whole family, a night out. We provide a memorable, shareable "crab-cracking experience" where guests can roll up their sleeves and "break out of their shell" in a vacation-themed environment that offers an escape from the everyday. Brick House Tavern+Tap offers a comfortable, trend-forward yet timeless setting where guests can gather and share their passion for elevated, chef-inspired comfort food, while enjoying their favorite local, national or imported brand of beer and cheering for their favorite team. Each brand features food offerings and an atmosphere that attracts a diverse group of guests.

        Authentic and Unique Menu Offerings.    We offer high-quality, authentic seafood at Joe's Crab Shack and trend-forward, chef-inspired, contemporary tavern food and other American fare at Brick House Tavern+Tap. Signature dishes at both brands feature craveable flavor profiles. Food menus are complemented by an assortment of beverages and distinctive cocktails, including Joe's Shark Bite and Brick House's tap-at-your-table Beer Bongs. Our culinary and beverage teams develop recipes and menu offerings for both Joe's and Brick House to ensure that all items feature distinctive twists on classic items, as well as items exclusive to each brand.

        Memorable Guest Service.    Our servers are friendly, attentive and responsive to the needs of our guests. In addition, our servers strive to provide guests an unforgettable dining experience. Joe's staff creates a fun-loving atmosphere through high-energy special occasion celebrations, while the staff at Brick House is focused on providing hospitable and personal service to guests. We achieve this through experienced restaurant management teams that implement training programs specific to the menu and culture of each brand. We believe our distinctive guest service models provide an additional layer of brand differentiation.

        Attractive Unit Economics.    We have successfully increased our restaurant average unit volumes at a compounded annual growth rate of 8.1%, from $2.4 million in fiscal year 2008 to $3.0 million in fiscal

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year 2011. Over the same period of time, we have increased our restaurant-level profit margin (a non-GAAP financial measure) by 340 basis points from 12.6% to 16.0%. We are targeting average unit volumes and restaurant-level profit margins for new locations to exceed system-wide fiscal year 2011 levels.

        Experienced Management Team.    Our experienced team of industry veterans has an average of 20 years of experience with restaurant companies such as T.G.I. Friday's, Darden, Applebee's, Yum! Brands, Landry's and Sbarro. Our management team is led by Raymond A. Blanchette, III, our President and Chief Executive Officer, who joined us in 2007. Mr. Blanchette was a former President for Pick Up Stix and Executive Director of International Business at T.G.I. Friday's, both are brands operated by Carlson Restaurants Worldwide. Within twelve months of his arrival, Mr. Blanchette transformed our leadership team by recruiting five highly experienced restaurant executives. Despite a difficult economic environment, we have achieved 15 consecutive fiscal quarters of comparable restaurant sales growth, expanded our geographic footprint and improved our financial performance. From fiscal year 2008 to fiscal year 2011, we increased net income from a net loss of $3.2 million to net income of $11.3 million and increased Adjusted EBITDA from $20.3 million to $44.1 million. The experience of our management team has allowed us to transform Joe's Crab Shack into a market leader while simultaneously developing and launching Brick House Tavern+Tap.

Our Strategy

        Our strategies include the following:

        Disciplined New Restaurant Growth.    We believe there are meaningful opportunities to grow the number of restaurants of both Joe's Crab Shack and Brick House Tavern+Tap. We seek to maximize free cash flow for reinvestment into new restaurants at attractive returns. For both brands, we target new restaurant cash-on-cash returns, which we define as restaurant-level profit per store divided by total build-out cost (excluding capitalized interest) and pre-opening costs, to exceed 25%.

    Joe's Crab Shack.  We target steady state new restaurant average unit volumes of approximately $3.9 million for Joe's Crab Shack. Joe's has a narrowly defined new restaurant development strategy that predominantly targets (i) specific geographies with high population density and a propensity for seafood and (ii) locations in close proximity to regional and national tourist attractions. Twenty one of our twenty five top performing Joe's Crab Shack restaurants meet one or both of these criteria and generated average unit volumes of $4.7 million in fiscal year 2011. In fiscal year 2010, we developed a new restaurant prototype for Joe's Crab Shack, which has given Joe's a polished look and feel while maintaining the authentic crab shack ambiance. As of March 26, 2012, we have successfully opened 12 new restaurants using this new prototype and development strategy.

    Brick House Tavern+Tap.  We target steady state new restaurant average unit volumes of approximately $3.2 million for Brick House Tavern+Tap. We believe Brick House has significant growth potential and intend to focus future development in the top 50 designated market areas across the country. We initially opened a limited number of Brick House restaurants across a broad range of geographies with the intent of optimizing the brand prior to a continued build out. We are currently in the process of integrating key insights into our future new restaurant rollout plans.

        For fiscal year 2012, we target opening 11 new restaurants, the vast majority of which will be new Joe's Crab Shack restaurants. We expect that our new restaurant growth will continue to be substantially weighted towards new Joe's Crab Shack restaurants for the foreseeable future.

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        Comparable Restaurant Sales Growth.    We believe the following strategies have contributed to our successful growth and will allow us to generate comparable restaurant sales growth in the future:

    Continuous Menu Innovation.  We believe menu innovation is a critical factor in building guest loyalty and frequency. Both Joe's Crab Shack and Brick House Tavern+Tap have signature food and beverage offerings and a tradition of consistent menu innovation. New menu items are typically introduced at both brands twice a year and we test new menu items in restaurants across several diverse geographies before they are introduced into the broader base of restaurants. We have successfully introduced new and innovative items at both brands with such additions as Queen Crab, Skillet Paella and Mason Jars at Joe's Crab Shack and Brick Pizza, Meat and Cheese Board, Fried Stuffed Olives and Chicken & Waffles at Brick House Tavern+Tap. We plan to continue our tradition of menu innovation in the future.

    Marketing our Restaurant Brands.  We believe that our marketing strategies will continue to increase brand awareness while driving new guest trial and repeat guest visits. In June 2007, we changed our marketing strategy for Joe's Crab Shack by developing a long-term marketing plan supported by quantitative analysis that is designed to increase comparable restaurant sales and guest count, as well as build the brand for the future. We also moved to a national cable platform, which provides television advertising reach to the Joe's Crab Shack restaurants that were previously outside of the spot/local television markets and previews the Joe's Crab Shack brand in new development markets. These national marketing efforts are complemented by a combination of local marketing programs and social media. Brick House Tavern+Tap is primarily marketed through local marketing, digital media and social media outlets. We also promote both brands using other in-restaurant sales initiatives, which are typically focused on products and are not price point promotions.

    Driving Guest Satisfaction.  We believe our focus on menu innovation and guest service has contributed to Joe's Crab Shack's overall guest satisfaction score improving by over 1,300 basis points since we began measuring guest satisfaction through a third party vendor in August 2008. At Joe's Crab Shack, we use this third party research consisting of feedback from more than 40,000 guests, to develop operational initiatives, which we expect will continue to deliver high levels of guest satisfaction. We implemented a similar program at Brick House Tavern+Tap during the fourth quarter of fiscal year 2011. We believe improving guest satisfaction will continue to build loyalty and lead to increased sales from our guests.

        Leverage our Scale to Enhance our Profitability.    We believe we have a scalable infrastructure and can continue to expand our margins as we execute our strategy. While both brands have independent field operations, we use our shared services platform to handle many of the administrative functions for both brands. This leverageable structure should further our ability to enhance our profitability as we grow.

Our Principal Stockholder

        Following completion of this offering, J.H. Whitney VI, L.P., or "J.H. Whitney VI," an affiliate of J.H. Whitney Capital Partners, LLC, or "J.H. Whitney," will own approximately 70% of our outstanding common stock, or approximately 68% if the underwriters' option to purchase additional shares is fully exercised. As a result, J.H. Whitney VI will be able to have a significant effect relating to votes over fundamental and significant corporate matters and transactions. See "Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock."

        J.H. Whitney is a Connecticut-based private equity firm whose affiliated investment funds have current investments and remaining committed capital totaling $1.4 billion. J.H. Whitney focuses on investing in small and middle market companies with strong growth prospects in a number of industries.

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Company History and Information

        The first Joe's Crab Shack was opened in Houston, Texas in 1991. Landry's Restaurants, Inc., or "Landry's," acquired Joe's Crab Shack in 1994. On October 13, 2006, in connection with the purchase by JCS Holdings, LLC, an entity controlled by J.H. Whitney VI, of 120 Joe's Crab Shack restaurants from Landry's, which we refer to as the "Landry Acquisition," we changed our name to Joe's Crab Shack Holdings, Inc. In 2008, we developed our second brand, Brick House Tavern+Tap. With the addition of the Brick House brand, on July 7, 2009, we changed our name to Ignite Restaurant Group, Inc.

        In connection with, and immediately prior to the completion of this public offering, Ignite Restaurant Group, Inc. will effect a 19,178.226-for-1 stock split of our common stock. The stock split will result in 19,178,226 shares of common stock outstanding immediately after the stock split, all of which will be held by JCS Holdings, LLC, our parent company. Immediately after completion of this public offering, JCS Holdings, LLC will distribute substantially all of the shares of our common stock then held by it and/or the cash proceeds received in this public offering to the holders of its Series A preferred units and its common units in accordance with the provisions then in effect of the Fourth Amended and Restated Limited Liability Company Agreement of JCS Holdings, LLC, which we refer to as the Parent LLC Agreement. JCS Holdings, LLC will thereafter continue to hold shares equal to less than one percent of our outstanding common stock for the benefit of certain of our officers and directors who will continue to hold unvested common units in JCS Holdings, LLC upon consummation of this offering.

        Immediately following completion of this public offering and the distribution described above shares of our common stock will be owned by (i) the entities and persons who purchase our common stock pursuant to this initial public offering and (ii) the entities and persons that owned or who were eligible to receive Series A preferred units and/or vested and unvested common units of JCS Holdings, LLC, which include J.H. Whitney VI and certain of our current and former officers, directors and employees.

        Our principal executive office is located at 9900 Westpark Drive, Suite 300, Houston, Texas 77063. Our telephone number is (713) 366-7500, and our website addresses are www.igniterestaurants.com, www.joescrabshack.com and www.brickhousetavernandtap.com. The information contained on our websites are not deemed to be, and you should not consider such information to be, part of this prospectus.

Risk Factors

        Investing in shares of our common stock involves a high degree of risk. You should consider the information under the caption "Risk Factors" beginning on page 16 of this prospectus in deciding whether to purchase the common stock in this offering. Risks relating to our business include, among others:

    our ability to successfully maintain increases in our comparable restaurant sales, average weekly sales and average unit volumes;

    our ability to successfully execute our growth strategy and open new restaurants that are profitable;

    macroeconomic conditions;

    our ability to compete with many other restaurants;

    changes in food and supply costs, including the cost of crab;

    our ability to expand Brick House;

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    concerns regarding food safety and food-borne illness;

    changes in consumer preferences; and

    our ability to develop and maintain our restaurant brands.

Conflicts of Interest

        KeyBank National Association, an affiliate of KeyBanc Capital Markets Inc., one of the underwriters in this offering, is expected to receive more than 5% of the net proceeds of this offering in connection with the prepayment of a portion of our senior secured credit facility. See "Use of Proceeds." Accordingly, this offering is being made in compliance with the requirements of Financial Industry Regulatory Authority, or "FINRA," Rule 5121. As required by FINRA Rule 5121, KeyBanc Capital Markets Inc. will not confirm sales to any account over which it exercises discretionary authority without the specific written approval of the accountholder. In addition, KeyBank National Association will receive a fee of approximately $25,000 for its portion of the restructuring fee related to the amendment of our senior secured credit facility. See "Underwriting—Conflicts of Interest."

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The Offering

Common stock offered by us   5,572,703 shares

Common stock offered by the selling stockholder

 

196,528 shares

Common stock outstanding immediately after this offering

 

24,750,929 shares or 25,616,313 shares, if the underwriters exercise their option to purchase additional shares from us.

Use of proceeds

 

We estimate that the proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, will be approximately $65.3 million, assuming the shares offered by us are sold for $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus.

 

 

We intend to use the net proceeds from the sale of common stock by us in this offering, together with cash on hand, (i) to prepay a portion of our senior secured credit facility, (ii) to pay J.H. Whitney a fee in connection with the termination of the management agreement, and (iii) for other general corporate purposes. For additional information, see "Use of Proceeds" and "Certain Relationships and Related Party Transactions."

 

 

We will not receive any of the proceeds from the sale of shares of common stock by the selling stockholder.

Principal stockholder

 

Upon completion of this offering, J.H. Whitney VI will own a controlling interest in us. We currently intend to avail ourselves of the "controlled company" exemption under the corporate governance rules of The NASDAQ Stock Market.

Dividend policy

 

We currently expect to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness; therefore, we do not anticipate paying any cash dividends in the foreseeable future. Our ability to pay dividends on our common stock is limited by our existing credit agreements and may be further restricted by the terms of any of our future debt or preferred securities. For additional information, see "Dividend Policy."

Proposed symbol for trading on The NASDAQ Global Select Market

 

"IRG"

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        Unless otherwise indicated, all information in this prospectus relating to the number of shares of common stock to be outstanding immediately after this offering:

    assumes the effectiveness of our amended and restated certificate of incorporation and amended and restated by-laws, which we will adopt prior to the completion of this offering;

    gives effect to the stock split;

    excludes 1,980,074 shares of our common stock reserved for future grants under our new equity compensation plan we intend to adopt in connection with this offering; and

    assumes (i) no exercise by the underwriters of their option to purchase up to 865,384 additional shares from us and (ii) an initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following table provides a summary of our historical and unaudited pro forma consolidated financial and operating data for the periods and as of the dates indicated. The summary historical consolidated financial and operating data presented below for the fiscal years ended December 28, 2009, January 3, 2011, and January 2, 2012 and selected balance sheet data presented below as of January 2, 2012 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The historical consolidated financial data for the twelve weeks ended March 28, 2011 and March 26, 2012 and the selected balance sheet data as of March 26, 2012 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of these data. The results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. The unaudited pro forma consolidated financial data for the year ended January 2, 2012 and as of and for the twelve weeks ended March 26, 2012 have been derived from our historical financial statements for such periods, which are included elsewhere in this prospectus, after giving effect to the transactions specified under "Unaudited Pro Forma Condensed Consolidated Financial Statements."

        Our fiscal year ends on the Monday nearest to December 31 of each year. Fiscal years 2009 and 2011 were 52-week years ended on December 28, 2009 and January 2, 2012, respectively, while fiscal year 2010 was a 53-week year ended on January 3, 2011. The first three quarters of our fiscal year consist of 12 weeks and our fourth quarter consists of 16 weeks for 52-week fiscal years and 17 weeks for 53-week fiscal years.

        The historical results presented below are not necessarily indicative of the results to be expected for any future period. This information should be read in conjunction with "Risk Factors," "Selected Historical Consolidated Financial and Operating Data," "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our audited consolidated financial statements and our unaudited condensed consolidated financial statements and each of their related notes included elsewhere in this prospectus.

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  Twelve Weeks Ended  
 
  Fiscal Year  
 
  March 28,
2011
  March 26,
2012
 
 
  2009   2010   2011  
 
  (in thousands)
 

Revenues

  $ 307,801   $ 351,327   $ 405,243   $ 87,431   $ 103,430  

Costs and expenses

                               
 

Restaurant operating costs

                               
   

Cost of sales

    89,845     103,981     127,607     27,519     32,915  
   

Labor and benefits

    87,920     98,162     111,721     24,450     28,047  
   

Occupancy expenses

    25,243     27,440     30,244     6,510     7,281  
   

Other operating expenses

    58,140     63,963     71,696     15,077     18,206  
 

General and administrative

    18,765     20,634     23,340     5,517     6,386  
 

Depreciation and amortization

    12,733     13,445     16,063     3,349     3,938  
 

Pre-opening costs

    1,323     3,844     3,989     805     1,242  
 

Restaurant impairments and closures

    15     909     333     28     49  
 

Loss (gain) on disposal of property and equipment

    1,017     2,797     821     (4 )    
                       
   

Total costs and expenses

    295,001     335,175     385,814     83,251     98,064  
                       

Income from operations

    12,800     16,152     19,429     4,180     5,366  

Interest expense, net

   
(3,867

)
 
(3,831

)
 
(9,215

)
 
(2,558

)
 
(1,997

)

Gain on insurance settlements

    1,192     944     1,126          
                       

Income before income taxes

    10,125     13,265     11,340     1,622     3,369  

Income tax expense

    255     1,417     87     464     878  
                       

Net income

  $ 9,870   $ 11,848   $ 11,253   $ 1,158   $ 2,491  
                       

 


 

Fiscal Year Ended

 

Twelve Weeks Ended

 
 
  December 28,
2009
  January 3,
2011
  January 2,
2012
  March 28,
2011
  March 26,
2012
 
 
  (dollars in thousands, except per share data)
 

Pro Forma Statement of Operations Data(1):

                               

Pro forma net income

              $ 13,913         $ 3,013  

Pro forma net income per share:

                               
 

Basic and diluted

              $ 0.61         $ 0.13  

Pro forma weighted average shares outstanding:

                               
 

Basic and diluted

                22,870,760           22,870,760  

Selected Other Data:

                               

Restaurants open at end of period

    119     126     135     129     138  

Change in comparable restaurant sales(2)

    9.5 %   4.9 %   6.9 %   9.4 %   5.3 %

Average weekly sales

  $ 51   $ 54   $ 59   $ 57   $ 63  

Average unit volumes

  $ 2,599   $ 2,810   $ 2,970   $ 673   $ 714  

Restaurant-level profit margin(3)

    15.5 %   16.7 %   16.0 %   16.1 %   16.6 %

EBITDA(4)

  $ 26,725   $ 30,541   $ 36,618   $ 7,529   $ 9,304  

Adjusted EBITDA(4)

  $ 30,276   $ 39,910   $ 44,105   $ 9,111   $ 11,116  

Adjusted EBITDA margin(5)

    9.8 %   11.4 %   10.9 %   10.4 %   10.7 %

Capital expenditures

  $ 18,348   $ 33,333   $ 40,102   $ 8,301   $ 6,737  

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  March 26, 2012  
 
  January 2,
2012
  Actual   Pro Forma
(6)(7)
 
 
  (in thousands)
 

Selected Balance Sheet Data:

                   

Cash and cash equivalents

  $ 3,725   $ 7,736   $ 31,178  

Working capital (deficit)

    (16,135 )   (22,396 )   5,757  

Total assets

    180,207     193,076     214,291  

Total debt

    117,757     117,000     76,431  

Total stockholder's equity

  $ 21,593   $ 24,093   $ 87,588  

(1)
Derived from our unaudited pro forma condensed consolidated statements of operations for the fiscal year ended January 2, 2012 and the twelve weeks ended March 26, 2012, which are included elsewhere in this prospectus. See "Unaudited Pro Forma Condensed Consolidated Financial Statements."

(2)
Our comparable restaurant base includes restaurants open for at least 104 weeks, or approximately 24 months. Change in comparable restaurant sales represents the change in period-over-period sales for the comparable restaurant base.

(3)
Restaurant-level profit margin represents revenues (x) less (i) licensing revenue not attributable to core restaurant operations, (ii) cost of sales, (iii) labor and benefits, (iv) occupancy expenses, and (v) other operating expenses (y) plus deferred rent (as described in footnote 4(a) below). Restaurant-level profit is a supplemental measure of operating performance of our restaurants that does not represent and should not be considered as an alternative to net income or revenues as determined by U.S. generally accepted accounting principles, or U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. Restaurant-level profit has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Management believes restaurant-level profit is an important component of financial results because it is a widely used metric within the restaurant industry to evaluate restaurant-level productivity, efficiency and performance. Management uses restaurant-level profit as a key metric to evaluate our financial performance compared with our competitors, to evaluate the profitability of incremental sales and to evaluate our performance across periods.

   
  Fiscal Year Ended   Twelve Weeks Ended  
   
  December 28,
2009
  January 3,
2011
  January 2,
2012
  March 28,
2011
  March 26,
2012
 
   
  (dollars in thousands)
 
 

Revenues

  $ 307,801   $ 351,327   $ 405,243   $ 87,431   $ 103,430  
 

Less: Licensing and other revenues

    (89 )   (373 )   (584 )   (108 )   (65 )
                         
 

Restaurant sales(A)

  $ 307,712   $ 350,954   $ 404,659   $ 87,323   $ 103,365  
                         
 

Restaurant operating costs

                               
   

Cost of sales

    89,845     103,981     127,607     27,519     32,915  
   

Labor and benefits

    87,920     98,162     111,721     24,450     28,047  
   

Occupancy expenses

    25,243     27,440     30,244     6,510     7,281  
   

Other operating expenses

    58,140     63,963     71,696     15,077     18,206  
   

Deferred rent

    (1,162 )   (1,322 )   (1,342 )   (296 )   (196 )
                         
 

Restaurant-level profit(B)

  $ 47,726   $ 58,730   $ 64,733   $ 14,063   $ 17,112  
                         
 

Restaurant-level profit margin(B÷A)

    15.5 %   16.7 %   16.0 %   16.1 %   16.6 %
(4)
EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA to reflect the additions and eliminations described in the table below. EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered as alternatives to net income or cash flow from operations, as determined by U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. EBITDA and Adjusted

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EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations are:

    EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

    EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

    EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

    EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

    other companies in the restaurant industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.


Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only supplementally. We further believe that our presentation of these U.S. GAAP and non-GAAP financial measurements provide information that is useful to analysts and investors because they are important indicators of the strength of our operations and the performance of our core business.


As noted in the table below, Adjusted EBITDA includes adjustments for restaurant impairments and closures, gains and losses on disposal of property and equipment, gains on insurance settlements and pre-opening costs, among other items. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. In addition, Adjusted EBITDA includes adjustments for other items that we do not expect to regularly record following this offering, such as sponsor management fees. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day restaurant-level operations.


Management and our principal stockholder use EBITDA and Adjusted EBITDA:

as a measurement of operating performance because they assist us in comparing the operating performance of our restaurants on a consistent basis, as both remove the impact of items not directly resulting from our core operations;

for planning purposes, including the preparation of our internal annual operating budget and financial projections;

to evaluate the performance and effectiveness of our operational strategies;

to evaluate our capacity to fund capital expenditures and expand our business; and

to calculate incentive compensation payments for our employees, including assessing performance under our annual incentive compensation plan.


In addition, this measurement is used by investors as a supplemental measure to evaluate the overall operating performance of companies in our industry. Management believes that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations from one period to the next and would

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ordinarily add back events that are not part of normal day-to-day operations of our business. By providing this non-GAAP financial measure, together with reconciliations, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives.


We also present Adjusted EBITDA because it is a measure which is used in calculating financial ratios in material debt covenants in our senior secured credit facility. Some of the adjustments included in Adjusted EBITDA are subject to certain limitations under our credit facility for purposes of calculating our debt covenants. For the fiscal quarter ended March 26, 2012, we are required to maintain a fixed charge coverage ratio (ratio of free cash flow to fixed charges) of 1.40:1 and an effective leverage ratio (ratio of adjusted debt to Adjusted EBITDA plus cash rent expense) of less than 5.40:1. As of March 26, 2012, we are in compliance with these covenants. As of March 26, 2012, we had $117.0 million of outstanding borrowings under the term loan and the ability to borrow up to an additional $23.2 million under the revolving credit facility. Failure to comply with our material debt covenants could cause an acceleration of outstanding amounts under the term loan and restrict us from borrowing amounts under the revolving credit facility to fund our future liquidity requirements. We believe that inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about how the covenants in those agreements operate. The material covenants in our senior secured credit facility are discussed further in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."


Adjusted EBITDA is calculated as follows:

   
  Fiscal Year Ended   Twelve Weeks Ended  
   
  December 28,
2009
  January 3,
2011
  January 2,
2012
  March 28,
2011
  March 26,
2012
 
   
  (in thousands)
 
 

Net income

  $ 9,870   $ 11,848   $ 11,253   $ 1,158   $ 2,491  
 

Income tax expense

    255     1,417     87     464     878  
 

Interest expense, net

    3,867     3,831     9,215     2,558     1,997  
 

Depreciation and amortization

    12,733     13,445     16,063     3,349     3,938  
                         
 

EBITDA

  $ 26,725   $ 30,541   $ 36,618   $ 7,529   $ 9,304  
                         
 

Adjustments:

                               
 

Deferred rent(a)

    1,162     1,322     1,342     296     196  
 

Restaurant impairments and closures(b)

    15     909     333     28     49  
 

Loss on disposal of property and equipment(c)

    1,017     2,797     821     (4 )    
 

Sponsor management fees(d)

    1,120     1,139     1,188     272     272  
 

Gain on insurance settlements(e)

    (1,192 )   (944 )   (1,126 )        
 

Pre-opening costs(f)

    1,323     3,844     3,989     805     1,242  
 

Other expenses(g)

    106     302     940     185     53  
                         
 

Adjusted EBITDA

  $ 30,276   $ 39,910   $ 44,105   $ 9,111   $ 11,116  
                         

    (a)
    Deferred rent represents the non-cash rent expense calculated as the difference in U.S. GAAP rent expense in any year and amounts payable in cash under the leases during the year. In measuring our operational performance, we focus on our cash rent payments. See Note 2 to our audited consolidated financial statements for additional details.

    (b)
    Impairment charges were recorded in connection with the determination that the carrying value of certain of our restaurants exceeded their estimated fair value. Also consists of expenses incurred following the closure of restaurants. See Notes 2 and 3 to our audited consolidated financial statements for additional details.

    (c)
    Loss (gain) on disposal of property and equipment represents the net book value of property and equipment less proceeds received, if applicable, on assets abandoned or sold.

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    (d)
    Sponsor management fees consist of fees and expenses paid to J.H. Whitney under the management services agreement, and compensation and expenses paid to certain members of the management committee of our parent company, JCS Holdings, LLC. We will terminate this agreement in connection with the completion of this offering. See "Certain Relationships and Related Party Transactions."

    (e)
    Gain on insurance settlements consists of proceeds in excess of the net book value of assets lost and related costs from property insurance claims at restaurants temporarily closed due to hurricane damage, flooding and/or foundational issues.

    (f)
    Pre-opening costs include expenses directly associated with the opening of new restaurants and are incurred prior to the opening of a new restaurant. See Note 2 to our audited consolidated financial statements for additional details.

    (g)
    Other expenses consists of costs related to abandoned new restaurant developments, fees payable to the agent under historic credit facilities, certain transitional general and administrative expenses, and expenses related to the modification of a sale-leaseback transaction.

(5)
Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to total revenues. We present Adjusted EBITDA margin because it is used by management as a performance measurement of Adjusted EBITDA generated from total revenues. See footnote 4 above for a discussion of Adjusted EBITDA as a non-GAAP measure and a reconciliation of net income to EBITDA and Adjusted EBITDA.

(6)
The data included in the pro forma column in the selected balance sheet data table above has been derived from our unaudited pro forma condensed consolidated balance sheet, which is included elsewhere in this prospectus. See "Unaudited Pro Forma Condensed Consolidated Financial Statements."

(7)
A $1.00 increase (decrease) in the assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, total assets and total stockholders' equity by approximately $5.2 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, if we change the number of shares offered by us, the net proceeds we receive will increase or decrease by the increase or decrease in the number of shares sold, multiplied by the offering price per share, less the incremental estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. Before you purchase our common stock, you should carefully consider the risks described below and the other information contained in this prospectus, including our consolidated financial statements and accompanying notes. If any of the following risks actually occurs, our business, financial condition, results of operation or cash flows could be materially adversely affected. In any such case, the trading price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business

You should not rely on past increases in our comparable restaurant sales or our average unit volumes as an indication of our future results of operations because they may fluctuate significantly.

        A number of factors have historically affected, and will continue to affect, our comparable restaurant sales and average unit volumes, including, among other factors:

    our ability to execute our business strategy effectively;

    unusually strong initial sales performance by new restaurants;

    competition;

    consumer trends and confidence;

    introduction of new menu items; and

    regional and national macroeconomic conditions.

        Our comparable restaurant sales and average unit volumes may not increase at rates achieved over the past several fiscal years. Changes in our comparable restaurant sales and average unit volumes could cause the price of our common stock to fluctuate substantially.

If we fail to execute our growth strategy, which largely depends on our ability to open new restaurants that are profitable, our business could suffer.

        One of the key means of achieving our growth strategies will be through opening new restaurants and operating those restaurants on a profitable basis. We expect this to be the case for the foreseeable future. For fiscal year 2012, we target opening 11 new restaurants, the vast majority of which will be new Joe's Crab Shack restaurants, and expect that our new restaurant growth will continue to be substantially weighted towards new Joe's Crab Shack restaurants for the foreseeable future. Because of the economic downturn, there are fewer new developments, such as shopping centers, being constructed, which reduces the supply of new restaurant locations. As a result, competition for prime locations is intense and the prices commanded for such locations have remained high. There is no guarantee that a sufficient number of locations will be available in desirable areas or on terms that are acceptable to us in order to achieve our growth plan. Delays or failures in opening new restaurants, or achieving lower than expected sales in new restaurants, could materially adversely affect our growth strategy. Once we have identified suitable restaurant sites, our ability to open new restaurants successfully and on the development schedule we anticipate will also depend on numerous other factors, some of which are beyond our control, including, among other items, the following:

    our ability to secure suitable new restaurant sites;

    consumer acceptance of our new restaurants;

    our ability to control construction and development costs of new restaurants;

    our ability to negotiate suitable lease terms;

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    our ability to secure required governmental approvals and permits in a timely manner and any changes in local, state or federal laws and regulations that adversely affect our costs or ability to open new restaurants;

    the cost and availability of capital to fund construction costs and pre-opening expenses; and

    limitations under our current and future credit facilities.

        Although we target specified new restaurant average unit volumes, cash on cash returns and capital investment for both Joe's and Brick House, new restaurants may not meet these targets. Any restaurant we open may not be profitable or achieve operating results similar to those of our existing restaurants. We may not be able to respond on a timely basis to all of the changing demands that our planned expansion will impose on management and on our existing infrastructure, or be able to hire or retain the necessary management and operating personnel. Our existing restaurant management systems, financial and management controls and information systems may not be adequate to support our planned expansion. Our ability to manage our growth effectively will require us to continue to enhance these systems, procedures and controls and to locate, hire, train and retain management and operating personnel.

        There is also the potential that some of our new restaurants will be located near areas where we have existing restaurants, thereby reducing the revenues of such existing restaurants.

Macroeconomic conditions could adversely affect our ability to increase the sales and profits of existing restaurants or to open new restaurants.

        The United States may continue to suffer from depressed economic activity. Recessionary economic cycles, higher fuel and other energy costs, lower housing values, low consumer confidence, inflation, increases in commodity prices, higher interest rates, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws or other economic factors that may affect discretionary consumer spending could adversely affect our revenues and profit margins and make opening new restaurants more difficult. Our guests may have lower disposable income and reduce the frequency with which they dine out. This could result in reduced guest traffic, reduced average checks or limitations on the prices we can charge for our menu items, any of which could reduce our sales and profit margins. In addition, many of our Joe's Crab Shack restaurants are located in areas that we consider tourist or vacation destinations. Therefore, in those locations, we depend in large part on vacation travelers to frequent our Joe's Crab Shack restaurants, and such destinations typically experience a reduction in visitors during economic downturns, thereby reducing the potential guests that could visit our restaurants. Also, businesses in the shopping vicinity in which some of our restaurants are located may experience difficulty as a result of macroeconomic trends or cease to operate, which could, in turn, further negatively affect guest traffic at our restaurants. All of these factors could have a material adverse impact on our results of operations and growth strategy.

Our success depends on our ability to compete with many other restaurants.

        The restaurant industry is intensely competitive, and we compete with many well-established restaurant companies on the basis of taste of our menu items, price of products offered, guest service, atmosphere, location and overall guest experience. Our competitors include a large and diverse group of restaurant chains and individual restaurants that range from independent local operators that have opened restaurants in various markets to well-capitalized national restaurant companies. Our Joe's Crab Shack restaurants compete against other casual seafood restaurants, including both national and regional chains and local seafood restaurants, as well as against casual dining restaurants that provide a different type of food. Our Brick House Tavern+Tap restaurants compete against casual restaurants in the bar and grill segment and restaurants in the casual dining segment.

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        Some of our competitors have substantially greater financial and other resources than we do, which may allow them to react to changes in the restaurant industry better than we can. Other competitors are local restaurants that in some cases have a loyal guest base and strong brand recognition within a particular market. As our competitors expand their operations or as new competitors enter the industry, we expect competition to intensify. Should our competitors increase their spending on advertising and promotions, we could experience a loss of guest traffic to our competitors. Also, if our advertising and promotions become less effective than those of our competitors, we could experience a material adverse effect on our results of operations. We also compete with other restaurant chains and other retail businesses for quality site locations, management and hourly employees.

Changes in food and supply costs, including the cost of crab, could adversely affect our results of operations.

        Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs. Operating margins for our restaurants are subject to changes in the price and availability of food commodities, including crab, shrimp, lobster and other seafood. In fiscal year 2011, Queen Crab, Snow Crab, Dungeness Crab, King Crab, lobster and shrimp accounted for approximately 49% of our total food purchases. Any increase in food prices, particularly for these food items, could adversely affect our operating results. We have experienced increases in crab pricing. We believe that the cost of crab will remain high through 2012 before moderating towards mean historical prices. In addition, we are susceptible to increases in food costs as a result of factors beyond our control, such as weather conditions (including hurricanes), oil spills, fisherman strikes, food safety concerns, costs of distribution, product recalls and government regulations. Furthermore, the introduction of or changes to tariffs on seafood, such as imported crab and shrimp or other food products, could increase our costs and possibly impact the supply of those products. We cannot predict whether we will be able to anticipate and react to changing food costs by adjusting our purchasing practices and menu items and prices, and a failure to do so could adversely affect our operating results. In addition, because our menu items are moderately priced, we may not seek to or be able to pass along price increases to our guests. If we adjust pricing there is no assurance that we will realize the full benefit of any adjustment due to changes in our guests' menu item selections and guest traffic.

Brick House is a newer and still evolving brand and our plans to expand Brick House may not be successful.

        While Joe's and Brick House are subject to the risks and uncertainties described herein, there is an enhanced level of risk and uncertainty related to the expansion of Brick House, our newer brand. While Brick House has grown to 16 locations since its founding in 2008, it is still evolving and has not yet proven its long-term growth potential. For example, only five Brick House restaurants have been open for more than eight full fiscal quarters, qualifying them for inclusion in our comparable restaurant base.

        Initially, we opened Brick House restaurants across a broad range of geographies with the intent of optimizing the brand prior to a continued build out. During the past three fiscal years, we have converted two Joe's Crab Shack restaurants to Brick House restaurants, and we are currently in the process of converting one Brick House restaurant to a Joe's Crab Shack restaurant. We are currently in the process of integrating key insights into our new restaurant rollout plans. There can be no assurance that the enhancements we intend to implement as part of the brand optimization process will be successful or that additional new restaurant growth will occur. Brick House will be subject to the risks and uncertainties that accompany any emerging restaurant brand. If Brick House fails to expand and/or continue generating profits, our operating results could suffer.

        Guests at all of our existing Brick House restaurants were initially served by an all-female service staff. As part of our brand optimization process, during the fourth quarter of 2011, we converted to a more traditional service model utilizing both male and female servers at all of our existing Brick House restaurant locations and intend to use a more traditional service model at any new Brick House restaurant locations. The conversion to a more traditional service model was made in combination with

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other modifications to the style and experience of our Brick House restaurants, including menu modifications and changes to appeal to a broader guest base. It is too soon to predict whether these changes will have a positive or negative impact on guest traffic. If guests and potential guests react unfavorably to our conversion to a more traditional service model and other modifications, our results of operations could be adversely affected.

Food safety and food-borne illness concerns may have an adverse effect on our business.

        Food safety is a top priority, and we dedicate substantial resources to ensure that our guests enjoy safe, quality food products. However, food-borne illnesses, such as salmonella, E. coli, hepatitis A, trichinosis or "mad cow disease," and food safety issues have occurred in the food industry in the past, and could occur in the future. In addition, publicity regarding certain illnesses and contaminations related to seafood, including high levels of mercury or other carcinogens, oil contaminations, vibrio vulnificus and the Norwalk virus could affect consumer preferences and the consumption of seafood. Any report or publicity linking us to instances of food-borne illness or other food safety issues, including food tampering or contamination, could adversely affect our brands and reputation as well as our revenues and profits. Even instances of food-borne illness, food tampering or food contamination occurring solely at restaurants of our competitors could result in negative publicity about the food service industry or seafood restaurants generally and adversely impact our sales.

        Furthermore, our reliance on third-party food suppliers and distributors increases the risk that food-borne illness incidents could be caused by factors outside of our control and that multiple locations would be affected rather than a single restaurant. Although we inspect food products when they are delivered to us, we cannot assure that all food items are properly maintained during transport throughout the supply chain and that our employees will identify all products that may be spoiled and should not be used in our restaurants. New illnesses resistant to any precautions may develop in the future, or diseases with long incubation periods could arise, such as "mad cow disease," which could give rise to claims or allegations on a retroactive basis. In addition, our industry has long been subject to the threat of food tampering by suppliers, employees or guests, such as the addition of foreign objects in the food that we sell. Reports, whether or not true, of injuries caused by food tampering have in the past severely injured the reputations and brands of restaurant chains in the quick service restaurant segment and could affect us in the future as well. If our guests become ill from food-borne illnesses, we could also be forced to temporarily close some restaurants. Furthermore, any instances of food contamination, whether or not at our restaurants, could subject us or our suppliers to a food recall pursuant to the recently enacted the Food and Drug Administration Food Safety Modernization Act.

Changes in consumer preferences could harm our performance.

        Consumer preferences often change rapidly and without warning, moving from one trend to another among many product or retail concepts. We also depend on trends regarding away-from-home dining. Consumer preferences towards away-from-home dining or certain food products might shift as a result of, among other things, health concerns or dietary trends related to cholesterol, carbohydrate, fat and salt content of certain food items, including crab or other seafood items, in favor of foods that are perceived as more healthy. Our menu is currently comprised of crab and other menu items and a change in consumer preferences away from these offerings would have a material adverse effect on our business. Negative publicity over the health aspects of such food items may adversely affect demand for our menu items and could result in lower guest traffic, sales and results of operations.

If we fail to continue to develop and maintain our restaurant brands, our business could suffer.

        We believe that maintaining and developing our restaurant brands are critical to our success and our growth strategy, and that the importance of brand recognition is significant as a result of competitors offering products similar to our products. We have made significant marketing expenditures

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to create and maintain brand loyalty as well as to increase awareness of our brands. If our brand-building strategy is unsuccessful, these expenses may never be recovered, and we may be unable to increase our future sales or implement our business strategy.

        Any incident that erodes consumer affinity for our brands could significantly reduce their respective values and damage our business. If guests perceive or experience a reduction in food quality, service or ambiance, or in any way believe we failed to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.

        In addition, in connection with our acquisition by JCS Holdings, LLC, we granted a license to Landry's that allows Landry's to use certain of our intellectual property, including the Joe's Crab Shack name, to operate two Joe's Crab Shack restaurants. Although Landry's is required to adhere to certain minimum quality standards under the license, including with respect to menu, promotional materials and the specification and preparation of food and beverage items, we do not have operational control over the two restaurants. As a result, such Joe's Crab Shack restaurants owned and operated by Landry's may not be operated in a manner consistent with the standards we uphold at our restaurants. If such restaurants do not maintain operational standards consistent with the standards we demand of our restaurants, the image and brand reputation of Joe's Crab Shack may suffer and our business may be materially affected.

The impact of new restaurant openings could result in fluctuations in our financial performance.

        As discussed above, for fiscal year 2012, we target opening 11 new restaurants, the vast majority of which will be new Joe's Crab Shack restaurants. We expect that our new restaurant growth will continue to be substantially weighted towards new Joe's Crab Shack restaurants for the foreseeable future. New restaurants typically experience an adjustment period before sales levels and operating margins normalize. When our new restaurants open, they typically encounter startup costs, but also significant guest traffic and, therefore, high sales in their initial months. However, over time, these new restaurants may experience a decrease in guest traffic and sales compared to their opening months. Accordingly, sales achieved by new restaurants may not be indicative of future operating results. Also, due to the foregoing factors, results for any one fiscal quarter are not necessarily indicative of results to be expected for any other fiscal quarter or for a full fiscal year.

We rely heavily on certain vendors, suppliers and distributors, which could adversely affect our business.

        Our ability to maintain consistent price and quality throughout our restaurants depends in part upon our ability to acquire specified food products and supplies in sufficient quantities, especially with respect to shellfish such as crab. While our seafood offerings are generally caught from government regulated fisheries, crab and other fish are caught in the wild, which could cause volatility in supply. In some cases, we may have only one supplier or a limited number of suppliers for a particular food product. We cannot make assurances regarding the continued supply of our food items since we do not have control over the businesses of our suppliers. Furthermore, such food items are perishable, and we cannot assure that such items will be delivered by such third parties in appropriate condition for sale in our restaurants. In addition, we rely on one primary distributor to deliver products to our restaurants. If any of these vendors, our other suppliers or our distributor is unable to fulfill their obligations, or if we are unable to find replacement providers in the event of a supply or service disruption, we could encounter supply shortages and incur higher costs to secure adequate supplies, which would materially harm our business.

        In addition, we use various third-party vendors to provide, support and maintain most of our management information systems. We also outsource certain accounting, payroll and human resources functions to business process service providers. Such third-party vendors may not be able to handle the volume of activity or perform the quality of service necessary for our operations. The failure of such vendors to fulfill their support and maintenance obligations or service obligations could disrupt our

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operations. Furthermore, the outsourcing of certain of our business processes could negatively impact our internal control processes.

Approximately 45% of our restaurants are located in California, Texas and Florida and, as a result, we are sensitive to economic and other trends and developments in those States.

        As of March 26, 2012, 62 of our 138 restaurants were spread across California (13), Texas (34) and Florida (15). As a result, we are particularly susceptible to adverse trends and economic conditions in those States, including their labor markets. In addition, given our geographic concentration in these States, negative publicity regarding any of our restaurants in these States could have a material adverse effect on our business and operations, as could other occurrences in these regions such as local competitive changes, changes in consumer preferences, local strikes, new or revised laws or regulations, energy shortages or increases in energy prices, droughts, hurricanes, fires, floods or other natural disasters.

        In addition, many of our restaurants in Florida and California are located in areas that we consider tourist or vacation destinations. Therefore, we depend in large part on vacation travelers to frequent our restaurants in these locations. Any change in consumer preferences away from Florida and California as their choice of destination could have a material adverse effect on our business and results of operation.

Allergy concerns relating to crab and other shellfish items could affect consumer preferences and could negatively impact our results of operations.

        Many of our food items contain crab or other shellfish items. In recent years, there has been negative publicity concerning, shellfish and other food allergies. This negative publicity, as well as any other negative publicity concerning food products we serve, may adversely impact demand for our food and could result in a decrease in guest traffic to our restaurants. Owing to the severe nature of certain shellfish allergies, shellfish have recently been identified by the U.S. Food and Drug Administration as a significant allergen. The introduction of seafood and shellfish labeling regulations to the restaurant industry could cause us to modify the operations or atmosphere of our restaurants, which could adversely affect our business and brand differentiation.

Health concerns arising from outbreaks of viruses may have a material adverse effect on our business.

        The United States and other countries have experienced, and may experience in the future, outbreaks of viruses, such as H1N1, avian influenza, SARS and various other forms of influenza. To the extent that a virus is transmitted by human-to-human contact, our employees or guests could become infected, or could choose to, or be advised to avoid gathering in public places and avoid eating in restaurant establishments, which could adversely affect our business.

Information technology system failures or breaches of our network security could interrupt our operations and adversely affect our business.

        We rely on our computer systems and network infrastructure across our operations, including point-of-sale processing at our restaurants. Our operations depend upon our ability to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, viruses, worms and other disruptive problems. Any damage or failure of our computer systems or network infrastructure that causes an interruption in our operations could have a material adverse effect on our business and subject us to litigation or actions by regulatory authorities. While we utilize our personnel, as well as a variety of hardware and software, to monitor our systems, controls, firewalls and encryption and intend to maintain and upgrade our security technology and operational

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procedures to prevent damage, breaches or other disruptive problems, there can be no assurance that these security measures will be successful.

We may incur costs resulting from breaches of security of confidential guest information related to our electronic processing of credit and debit card transactions.

        The majority of our restaurant sales are by credit or debit cards. Other retailers have experienced security breaches in which credit and debit card information has been stolen. Although we use secure private networks to transmit confidential information, third parties may have the technology or know-how to breach the security of the guest information transmitted in connection with credit and debit card sales, and our security measures and those of technology vendors may not effectively prohibit others from obtaining improper access to this information. If a person is able to circumvent these security measures, he or she could destroy or steal valuable information or disrupt our operations. We may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we may also be subject to lawsuits or other proceedings relating to these types of incidents. Any such claim or proceeding could cause us to incur significant unplanned expenses, which could have an adverse impact on our financial condition, results of operations and cash flows. Further, adverse publicity resulting from these allegations could significantly harm our reputation and may have a material adverse effect on us and our restaurants.

We depend upon our executive officers and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.

        We believe that we have benefited substantially from the leadership and experience of our executive officers, including our President and Chief Executive Officer, Raymond A. Blanchette, III, and our Senior Vice President and Chief Financial Officer, Jeffrey L. Rager. The loss of the services of any of our executive officers could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace such personnel on a timely basis. In addition, any such departure could be viewed in a negative light by investors and analysts, which could cause our common stock price to decline. As our business expands, our future success will depend greatly on our continued ability to attract and retain highly skilled and qualified executive-level personnel. Our inability to attract and retain qualified executive officers in the future could impair our growth and harm our business.

We are dependent on attracting and retaining qualified employees while also controlling labor costs.

        We are dependent upon the availability of qualified restaurant personnel. Our future performance will depend on our ability to attract, motivate and retain our chief operating officers, regional vice presidents, directors of operations and restaurant-level managers. Competition for these employees is intense. The loss of the services of members of our restaurant management team or the inability to attract additional qualified personnel as needed could materially harm our business.

        In addition, availability of staff varies widely from restaurant to restaurant. In fiscal year 2011, our turnover for restaurant managers at Joe's Crab Shack was 25% and 48% at Brick House. In fiscal year 2011, our hourly restaurant employee turnover at our comparable restaurants was 107%. If restaurant management and staff turnover trends increase, we could suffer higher direct costs associated with recruiting, training and retaining replacement personnel. Moreover, we could suffer from significant indirect costs, including restaurant disruptions due to management changeover and potential delays in new restaurant openings or adverse guest reactions to inadequate guest service levels due to staff shortages. Competition for qualified employees may exert upward pressure on wages paid to attract such personnel, resulting in higher labor costs, together with greater recruitment and training expense.

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        We must comply with the Fair Labor Standards Act and various federal and state laws governing employment matters, such as minimum wage, tip credit allowance, overtime pay practices, child labor laws and other working conditions and citizenship requirements. Federal, state and municipal laws may also require us to provide new or increased levels of employee benefits to our employees, many of whom are not currently eligible for such benefits. Many of our employees are hourly workers whose wages are likely to be affected by an increase in the federal or state minimum wage or changes to the tip credit allowance. Proposals have been made, and continue to be made, at federal and state levels to increase minimum wage levels, including changes to the tip credit allowance. An increase in the minimum wage or a change in the tip credit allowance may require an increase or create pressure to increase the pay scale for our employees. In addition, while we take certain measures to operate our restaurants in strict compliance with federal immigration regulations and the requirements of certain states, some of our employees, especially given the location of many of our restaurants, may fail to meet federal work authorization or residency requirements, which could result in disruptions in our work force, sanctions against us and adverse publicity. A shortage in the labor pool or other general inflationary pressures or changes could also increase our labor costs. A shortage in the labor pool could also cause our restaurants to be required to operate with reduced staff, which could negatively impact our ability to provide adequate service levels to our guests.

        Among the federal laws with which we must comply is the National Labor Relations Act that applies to the election by employees to be represented by a labor organization for purposes of collective bargaining over wages, hours, working conditions and terms and conditions of employment. Currently, none of our employees are represented by labor organizations for these purposes. However, potential union representation and collectively bargaining agreements may result in increased labor costs that can have an impact on competitiveness. Labor disputes, as well, may precipitate strikes and picketing that may have an impact on business, including guest patronage and supplier deliveries.

Our existing senior secured credit facilities contain financial covenants, negative covenants and other restrictions and failure to comply with these requirements could cause the related indebtedness to become due and payable and limit our ability to incur additional debt.

        The lenders' obligation to extend credit under our existing senior secured credit facilities depends upon our maintaining certain financial covenants. In particular, our senior secured credit facilities require us to maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated leverage ratio, and limit our capital expenditures to specified levels. Failure to maintain these ratios and comply with capital expenditure limitations could result in an acceleration of outstanding amounts under the term loan and restrict us from borrowing amounts under the revolving credit facility to fund our future liquidity requirements. In addition, our credit facilities contain certain negative covenants, which, among other things, limit our ability to:

    incur additional indebtedness;

    enter into new leases;

    pay dividends and make other restrictive payments beyond specified levels;

    create or permit liens;

    dispose of certain assets;

    make certain investments;

    engage in certain transactions with affiliates; and

    consolidate, merge or transfer all or substantially all of our assets.

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        Our ability to make scheduled payments and comply with financial covenants will depend on our operating and financial performance, which in turn, is subject to prevailing economic conditions and to other financial, business and other factors beyond our control described herein.

We may need additional capital in the future, and it may not be available on acceptable terms.

        The development of our business may require significant additional capital in the future to fund our operations and growth, among other activities. We have historically relied upon cash generated by our operations to fund our expansion. In the future, we intend to rely on funds from operations and, if necessary, our senior secured credit facility. We may also need to access the debt and equity capital markets. There can be no assurance, however, that these sources of financing will be available on acceptable terms, or at all. Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our operating performance, investor sentiment and our ability to incur additional debt in compliance with agreements governing our then-outstanding debt. These factors may make the timing, amount, terms or conditions of additional financings unattractive to us. If we are unable to generate sufficient funds from operations or raise additional capital, our growth could be impeded.

        Assuming that the amount of net proceeds that we receive from this offering is $65.3 million and after giving effect to our intended use of proceeds as described in "Use of Proceeds," as of March 26, 2012, we would have had approximately $78.2 million of total indebtedness outstanding, consisting of (i) a $76.4 million term loan facility due on March 24, 2016 and (ii) $1.8 million outstanding in letters of credit. We have no outstanding borrowings under our $25.0 million revolving credit facility, which matures on March 24, 2016. Our obligations and the guarantees under the senior secured credit facility are secured by all of our assets. We may not be able to refinance our indebtedness prior to or at its maturity on acceptable terms or at all.

Legal complaints or litigation may hurt us.

        Occasionally, restaurant guests and/or employees file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to our restaurants, or that we have problems with food quality or operations. We are also subject to a variety of other claims arising in the ordinary course of our business, including personal injury claims, contract claims and claims alleging violations of federal and state law regarding workplace and employment matters, discrimination and similar matters. We could also become subject to class action lawsuits related to these matters in the future. In recent years, a number of restaurant companies have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state law regarding workplace conditions, employment and similar matters. A number of these industry lawsuits have resulted in the payment of substantial damages by defendants. The restaurant industry has also been subject to a growing number of claims that the menus and actions of restaurant chains have led to the obesity of certain of their guests.

        Regardless, however, of whether any claim brought against us in the future is valid or whether we are liable, such a claim would be expensive to defend and may divert time, money and other valuable resources away from our operations and, thereby, hurt our business.

        We are subject to state and local "dram shop" statutes, which may subject us to uninsured liabilities. These statutes generally allow a person injured by an intoxicated person to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. In the past, after allegedly consuming alcoholic beverages at our restaurants, there have been isolated instances where certain individuals have been killed or injured or have killed or injured third parties. Because a plaintiff may seek punitive damages, which may not be fully covered by insurance, this type of action could have an adverse impact on our financial condition and results of operations. A judgment in such an action significantly in excess of our insurance coverage could adversely affect our financial condition,

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results of operations or cash flows. Further, adverse publicity resulting from any such allegations may adversely affect us and our restaurants taken as a whole.

Failure to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations could lead to the loss of our liquor and food service licenses and, thereby, harm our business.

        The restaurant industry is subject to various federal, state and local government regulations, including those relating to the sale of food and alcoholic beverages. Such regulations are subject to change from time to time. The failure to obtain and maintain these licenses, permits and approvals could adversely affect our operating results. Typically, licenses must be renewed annually and may be revoked, suspended or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations. Difficulties or failure to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants, which would adversely affect our business.

        In fiscal year 2011, approximately 13% of Joe's Crab Shack revenues and 47% of Brick House Tavern+Tap revenues were attributable to the sale of alcoholic beverages, and our alcoholic beverage sales may increase in the future. Alcoholic beverage control regulations require each of our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license or permit to sell alcoholic beverages on-premises and to provide service for extended hours and on Sundays. Alcoholic beverage control regulations relate to numerous aspects of daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, trade practices, wholesale purchasing, other relationships with alcohol manufacturers, wholesalers and distributors, inventory control and handling, storage and dispensing of alcoholic beverages. In the past, we have been subject to fines for violations of alcoholic beverage control regulations. Any future failure to comply with these regulations and obtain or retain liquor licenses could adversely affect our results of operations and overall financial condition.

We are subject to many federal, state and local laws with which compliance is both costly and complex.

        The restaurant industry is subject to extensive federal, state and local laws and regulations, including the recently enacted comprehensive health care reform legislation and those relating to building and zoning requirements and those relating to the preparation and sale of food. The development and operation of restaurants depend to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use, environmental, traffic and other regulations and requirements. We are also subject to licensing and regulation by state and local authorities relating to health, sanitation, safety and fire standards and liquor licenses, federal and state laws governing our relationships with employees (including the Fair Labor Standards Act of 1938, the Immigration Reform and Control Act of 1986 and applicable requirements concerning the minimum wage, overtime, family leave, tip credits, working conditions, safety standards, immigration status, unemployment tax rates, workers' compensation rates and state and local payroll taxes), federal and state laws which prohibit discrimination and other laws regulating the design and operation of facilities, such as the Americans With Disabilities Act of 1990, or the ADA.

        In March 2010, the United States federal government enacted comprehensive health care reform legislation which, among other things, includes guaranteed coverage requirements, eliminates pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded and imposes new and significant taxes on health insurers and health care benefits. The legislation imposes implementation effective dates that began in 2010 and extend through 2020, and many of the changes require additional guidance from government agencies or federal regulations. To date, we have not experienced material costs related to such legislation. However, due to the phased-in nature of the implementation and the lack of interpretive guidance, it is difficult to determine at this time what impact the health care reform legislation will have on our financial results.

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Possible adverse effects could include increased costs, exposure to expanded liability and requirements for us to revise the ways in which we provide healthcare and other benefits to our employees.

        The impact of current laws and regulations, the effect of future changes in laws or regulations that impose additional requirements and the consequences of litigation relating to current or future laws and regulations, or our inability to respond effectively to significant regulatory or public policy issues, could increase our compliance and other costs of doing business and therefore have an adverse effect on our results of operations. Failure to comply with the laws and regulatory requirements of federal, state and local authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability. In addition, certain laws, including the ADA, could require us to expend significant funds to make modifications to our restaurants if we failed to comply with applicable standards. Compliance with all of these laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings.

From the fourth quarter of 2008 to the fourth quarter of 2011, Brick House employed an all-female service staff, which could subject our business to litigation.

        Brick House guests were historically served by an all-female service staff. We converted to a more traditional service model utilizing male and female servers during the fourth quarter of fiscal year 2011 in combination with other modifications to the style and experience of our Brick House restaurants to appeal to a broader guest base. Although Title VII of the Civil Rights Act of 1964 would typically prohibit the employment of a female only service staff, we relied on an established exception to Title VII, known as the "bona fide occupational qualification" defense or "BFOQ" defense. The BFOQ defense permits the hiring of a female only service staff when it is reasonably necessary to the normal operation of the business. We believe that Brick House qualified for this defense throughout the period when we served our guests through an all-female service staff. However, in the past, courts have narrowly interpreted the BFOQ defense and there is no guarantee that we would be found to have qualified for the BFOQ defense if the matter was adjudicated. If a plaintiff brought a claim for discrimination under Title VII for actions during prior periods, our results of operations could be adversely affected.

New information or attitudes regarding diet and health could result in additional menu labeling laws and changes in regulations and consumer eating habits that could adversely affect our results of operations.

        Regulations and consumer eating habits may continue to change as a result of new information and attitudes regarding diet and health. These changes may include regulations that impact the ingredients and nutritional content of our menu items. The federal government as well as a number of states (including California), counties and cities have enacted menu labeling laws requiring multi-unit restaurant operators to make certain nutritional information available to guests (including caloric, sugar, sodium and fat content) or have enacted legislation prohibiting the sales of certain types of ingredients in restaurants. The success of our restaurant operations depends, in part, upon our ability to effectively respond to changes in consumer health and disclosure regulations and to adapt our menu offerings to fit the dietary needs and eating habits of our guests without sacrificing flavor. If consumer health regulations or consumer eating habits change significantly, we may be required to modify or discontinue certain menu items. To the extent we are unable to respond with appropriate changes to our menu offerings, it could materially affect guest traffic and our results of operations. Furthermore, a change in our menu could result in a decrease in guest traffic.

We have recorded impairment charges in past periods and may record additional impairment charges in future periods.

        We periodically evaluate possible impairment at the individual restaurant-level, and record an impairment loss whenever we determine impairment factors are present. We also periodically evaluate

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the criteria we use as an indication of restaurant impairment. We consider a history of restaurant operating losses to be a primary indicator of potential impairment for individual restaurant locations. A lack of improvement at restaurants we are monitoring, or deteriorating results at other restaurants, could result in additional impairment charges.

Our current insurance may not provide adequate levels of coverage against claims.

        We currently maintain insurance customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Such losses could have a material adverse effect on our business and results of operations. In addition, we self-insure a significant portion of expected losses under our workers' compensation, general liability and property insurance programs. Unanticipated changes in the actuarial assumptions and management estimates underlying our reserves for these losses could result in materially different amounts of expense under these programs, which could have a material adverse effect on our financial condition, results of operations and liquidity.

Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.

        Our registered trademarks and service marks include Joe's Crab Shack and the design, our stylized logos set forth on the cover and back pages of this prospectus and Brick House Tavern+Tap and the design, which are protected under applicable intellectual property laws. We believe that our trademarks and other proprietary rights are important to our success and our competitive position, and, therefore, we devote resources to the protection of our trademarks and proprietary rights. The protective actions that we take, however, may not be enough to prevent unauthorized use or imitation by others, which could harm our image, brand or competitive position. If we commence litigation to enforce our rights, we will incur significant legal fees.

        We cannot assure you that third parties will not claim infringement by us of their proprietary rights in the future. Any such claim, whether or not it has merit, could be time-consuming and distracting for executive management, result in costly litigation, cause changes to existing menu items or delays in introducing new menu items, or require us to enter into royalty or licensing agreements. As a result, any such claim could have a material adverse effect on our business, results of operations and financial condition.

Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.

        Our quarterly operating results may fluctuate significantly because of several factors, including:

    the timing of new restaurant openings and related expense;

    restaurant operating costs for our newly-opened restaurants, which are often materially greater during the first several months of operation than thereafter;

    labor availability and costs for hourly and management personnel;

    profitability of our restaurants, especially in new markets;

    changes in interest rates;

    increases and decreases in average unit volumes and comparable restaurant sales;

    impairment of long-lived assets and any loss on restaurant closures;

    macroeconomic conditions, both nationally and locally;

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    negative publicity relating to the consumption of seafood or other products we serve;

    changes in consumer preferences and competitive conditions;

    expansion to new markets;

    increases in infrastructure costs; and

    fluctuations in commodity prices.

        Our business is also subject to seasonal fluctuations. Our revenues are typically highest in the summer months (June, July and August) and lowest in the winter months (November, December and January) especially with respect to Joe's Crab Shack restaurants. As a result, our quarterly and annual operating results and comparable restaurant sales may fluctuate significantly as a result of seasonality and the factors discussed above. Accordingly, results for any one fiscal quarter are not necessarily indicative of results to be expected for any other fiscal quarter or for any fiscal year and comparable restaurant sales for any particular future period may decrease. In the future, operating results may fall below the expectations of securities analysts and investors. In that event, the price of our common stock would likely decrease.

Significant adverse weather conditions and other disasters could negatively impact our results of operations.

        Adverse weather conditions and acts of god, such as regional winter storms, fires, floods, hurricanes, tropical storms and earthquakes, and other disasters, such as oil spills and nuclear meltdowns, could negatively impact our results of operations. In particular, a number of our restaurants are located in states which are particularly susceptible to hurricanes, tropical storms, flooding and earthquakes.

Any strategic transactions or initiatives that we consider in the future may have unanticipated consequences that could harm our business and our financial condition.

        From time to time, we evaluate potential mergers, acquisitions of restaurants joint ventures or other strategic initiatives to acquire or develop additional restaurant brands. To successfully execute any acquisition or development strategy, we will need to identify suitable acquisition or development candidates, negotiate acceptable acquisition or development terms and obtain appropriate financing. Any acquisition or future development that we pursue, whether or not successfully completed, may involve risks, including:

    material adverse effects on our operating results, particularly in the fiscal quarters immediately following the acquisition or development as the restaurants are integrated into our operations;

    risks associated with entering into new domestic markets or conducting operations where we have no or limited prior experience, including international markets;

    risks inherent in accurately assessing the value, future growth potential, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates and newly developed restaurant brands, and our ability to achieve projected economic and operating synergies;

    negative impacts on the reputation of our current brands; and

    the diversion of management's attention from other business concerns.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to comply with the requirements applicable to public companies.

        Prior to this offering, we have not been subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, or the other rules and regulations of the Securities

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Exchange Commission, or the SEC, or any securities exchange relating to public companies. We are working with our legal and financial advisors and independent accountants to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas. However, the expenses that we will be required to incur in order to adequately prepare for being a public company could be material. Ongoing compliance with the various reporting and other requirements applicable to public companies will also require considerable time and attention of management, particularly after we are no longer an "emerging growth company." We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management's attention to these matters will have on our business. In addition, the changes we make may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis.

        In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial additional costs to maintain the same or similar coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

        Congress enacted the Jumpstart Our Business Startups Act of 2012, or the "JOBS Act," on April 5, 2012. Pursuant to the provisions of the JOBS Act, we qualify as an "emerging growth company." Section 102 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

        For as long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an "emerging growth company."

        We anticipate that will remain an "emerging growth company" until the earlier of the end of the fiscal year during which we have total annual gross revenues of $1.0 billion or more and the end of the fiscal year following the fifth anniversary of the completion of this public offering.

We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain temporary exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive if we will rely on these

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exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Risks Related to This Offering and Ownership of Our Common Stock

Concentration of ownership by J.H. Whitney VI may prevent new investors from influencing significant corporate decisions.

        Upon consummation of this offering, J.H. Whitney VI will own, in the aggregate, approximately 70% of our outstanding common stock. See "Principal and Selling Stockholder" for more information on our beneficial ownership. As a result, J.H. Whitney VI will be able to exercise control over all matters requiring stockholder approval, including the election of directors, amendment of our amended and restated certificate of incorporation and approval of significant corporate transactions and will have significant control over our management and policies. We currently expect that, following this offering, two of the six members of our board of directors will be principals of J.H. Whitney. J.H. Whitney VI can take actions that have the effect of delaying or preventing a change in control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. The concentration of voting power with J.H. Whitney VI may have an adverse effect on the price of our common stock. The interests of J.H. Whitney VI may not be consistent with your interests as a stockholder. After the lock-up period expires, J.H. Whitney VI will be able to transfer control of us to a third-party by transferring their common stock, which would not require the approval of our board of directors or our other stockholders.

        Our amended and restated certificate of incorporation will provide that the doctrine of corporate opportunity will not apply against J.H. Whitney, or any of our directors who are employees of or affiliated with J.H. Whitney, in a manner that would prohibit them from investing or participating in competing businesses. To the extent J.H. Whitney affiliated funds invest in such other businesses, they may have differing interests than our other stockholders. For example, J.H. Whitney affiliated funds may choose to own other restaurant brands through other investments, which may compete with our brands.

We will be a "controlled company" within the meaning of The NASDAQ Stock Market rules, and, as a result, we will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

        Upon completion of this offering, J.H. Whitney VI will own more than 50% of the total voting power of our common stock and we will be a "controlled company" under The NASDAQ Stock Market corporate governance listing standards. As a controlled company, we will be exempt under The NASDAQ Stock Market listing standards from the obligation to comply with certain of The NASDAQ Stock Market corporate governance requirements, including the requirements:

    that a majority of our board of directors consist of independent directors, as defined under the rules of The NASDAQ Stock Market;

    that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.

There may not be a viable public market for our common stock.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations between us and the

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representative of the underwriters and may not be indicative of the market price of our common stock after this offering. If you purchase shares of our common stock, you may not be able to resell those shares at or above the initial public offering price. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on The NASDAQ Global Select Market or otherwise or how liquid that market might become. An active public market for our common stock may not develop or be sustained after the offering. If an active public market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

        After this offering, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including those described under "—Risks Related to Our Business" and the following:

    potential fluctuation in our annual or quarterly operating results due to seasonality and other factors;

    changes in capital market conditions that could affect valuations of restaurant companies in general or our goodwill in particular or other adverse economic conditions;

    changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;

    downgrades by any securities analysts who follow our common stock;

    future sales of our common stock by our officers, directors and significant stockholders;

    global economic, legal and regulatory factors unrelated to our performance;

    investors' perceptions of our prospects;

    announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and

    investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives.

        In addition, the stock markets, and in particular The NASDAQ Global Select Market, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many food service companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

        Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have 24,750,929 shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, which we refer to as the Securities Act, except for any shares of our common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities

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Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

        After this offering, J.H. Whitney VI will have the right, subject to certain conditions, to require us to file registration statements registering additional shares of common stock, and J.H. Whitney VI and members of management will have the right to require us to include shares of common stock in registration statements that we may file for ourselves or J.H. Whitney VI. In order to exercise these registration rights, the holder must be permitted to sell shares of its common stock under applicable lock-up restrictions described below. Subject to compliance with applicable lock-up restrictions and restrictions under the registration rights agreement (both of which may be waived), shares of common stock sold under these registration statements can be freely sold in the public market. In the event such registration rights are exercised and a large number of shares of common stock are sold in the public market, such sales could reduce the trading price of our common stock. These sales also could impede our ability to raise future capital. See "Shares Eligible for Future Sale—Registration Rights Agreement". In addition, we will incur certain expenses in connection with the registration and sale of such shares.

        We, each of our officers and directors and the selling stockholder have agreed, subject to certain exceptions, with the underwriters not to dispose of or hedge any of the shares of common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except, in our case, for the issuance of common stock upon exercise of options under existing option plans. Credit Suisse Securities (USA) LLC may, in its sole discretion, release any of these shares from these restrictions at any time without notice. See "Underwriting."

        All of our shares of common stock outstanding as of the date of this prospectus may be sold in the public market by existing stockholders 180 days after the date of this prospectus, subject to applicable volume and other limitations imposed under federal securities laws. See "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares of our common stock after this offering.

        In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock.

        Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.

        Our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors. These provisions:

    establish a classified board of directors for a period of time after the consummation of the public offering, so that not all members of our board of directors are elected at one time;

    authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

    prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders, once J.H. Whitney VI owns less than 50% of our outstanding voting stock;

    provide that the board of directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; and

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    establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

        These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of our company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

If you purchase shares of common stock sold in this offering, you will incur immediate and substantial dilution.

        If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $9.55 per share assuming an initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, because such price is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our employees, consultants and directors under our stock option and equity incentive plans. See "Dilution."

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

        The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our common stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.

We do not expect to pay any cash dividends for the foreseeable future.

        The continued operation and expansion of our business will require substantial funding. Accordingly, we do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual restrictions, including our senior secured credit facility and other indebtedness we may incur, restrictions imposed by applicable law and other factors our board of directors deems relevant. Accordingly, if you purchase shares in this offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, the following:

    our ability to successfully maintain increases in our comparable restaurant sales, average weekly sales and average unit volumes;

    our ability to successfully execute our growth strategy and open new restaurants that are profitable;

    macroeconomic conditions;

    our ability to compete with many other restaurants;

    changes in food and supply costs, including the cost of crab;

    our ability to expand Brick House;

    concerns regarding food safety and food-borne illness;

    changes in consumer preferences;

    our ability to develop and maintain our restaurant brands;

    the impact of new restaurant openings on our financial performance;

    our reliance on vendors, suppliers and distributors;

    our geographic concentration in California, Texas and Florida;

    changes in consumer preferences caused by health and allergy concerns and government regulation relating to crab and other shellfish items;

    health concerns arising from outbreaks of viruses;

    the reliability of our information technology systems and network security;

    costs resulting from breaches of security of confidential guest information;

    the continued service of our executive officers;

    our ability to attract and retain qualified employees while also controlling labor costs;

    our ability to incur additional debt and other restrictions under the terms of our existing senior secured credit facilities;

    our ability to generate or raise capital in the future;

    legal complaints or litigation;

    our ability to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations;

    the cost of compliance with federal, state and local laws;

    adverse litigation relating to Brick House's historic policy of an all-female service staff;

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    the impact of additional menu labeling laws;

    impairment charges;

    our ability to maintain insurance that provides adequate levels of coverage against claims;

    our ability to protect our intellectual property;

    potential fluctuations in our annual or quarterly operating results due to seasonality and other factors;

    the impact of significant adverse weather conditions and other disasters;

    any potential strategic transactions or initiatives;

    the costs and time requirements as a result of operating as a public company;

    the concentration of ownership among our existing executive officers, directors and principal stockholders;

    "controlled company" exemptions under The NASDAQ Stock Market listing standards;

    the development and sustainability of an active trading market for our common stock;

    the volatility of our stock price;

    future sales of our common stock, or the perception in the public markets that sales may occur;

    future dilution of our common stock;

    inaccurate or unfavorable research about our business published by any securities or industry analysts who follow our common stock or the lack of analysts covering us; and

    the payment of dividends.

        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 are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors. Other risks, uncertainties and factors, including those discussed under "Risk Factors," could cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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USE OF PROCEEDS

        We estimate based upon an assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, we will receive proceeds from the offering of approximately $65.3 million, after deducting estimated underwriting discounts and commissions and offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder.

        We intend to use the net proceeds from this offering together with cash on hand:

    to prepay an aggregate amount of $40.6 million of our existing senior secured credit facility;

    to pay J.H. Whitney a fee in an aggregate amount of $1.0 million in connection with the termination of the management agreement; and

    for other general corporate purposes.

        In March 2011, we used borrowings under our senior secured credit facility to discharge all indebtedness under our prior senior secured credit facility, pay a termination fee in connection with our interest rate swap agreement and pay a dividend indirectly to J.H. Whitney VI through JCS Holdings, LLC, our parent company. As of March 26, 2012, we had $117.0 million of borrowings outstanding under our senior secured credit facility, which matures in March 2016. The weighted-average interest rate (including margin) under our senior secured credit facility was 6.25% at March 26, 2012. KeyBank National Association, an affiliate of one of the underwriters, will receive a portion of the proceeds from this offering. Accordingly, this offering is being made in compliance with FINRA Rule 5121. See "Underwriting—Conflicts of Interest."

        A $1.00 increase or decrease in the assumed initial public offering price of $13.00 per share, the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease the proceeds (after deducting estimated underwriting discounts and commissions and offering expenses payable by us) we receive from this offering by approximately $5.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

        Pending use of the net proceeds from this offering described above, we may invest the net proceeds in short- and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.

        By establishing a public market for our common stock, this offering is also intended to facilitate our future access to public markets.

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DIVIDEND POLICY

        On March 24, 2011, we paid a cash dividend in the aggregate amount of $80.0 million indirectly to J.H. Whitney VI through JCS Holdings, LLC, our parent company. The cash dividend was paid as a return of capital to J.H. Whitney VI for its 2006 investment in us. At no other time have we paid any dividends on our common stock since our incorporation. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, and therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries and us to pay dividends or make distributions to us under the terms of the agreements governing our indebtedness. Any future determination to pay dividends will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements and other factors that our board of directors deems relevant.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and our capitalization as of March 26, 2012 on:

    an actual basis;

    on a pro forma basis to give effect to (i) a 19,178.226-for-1 stock split of our common stock, (ii) the sale of 5,572,703 shares of our common stock in this offering by us at an assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, and (iii) the application of the net proceeds from this offering to us as described under "Use of Proceeds."

        You should read the following table in conjunction with the sections entitled "Use of Proceeds," "Selected Historical Consolidated Financial and Operating Data," "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

 
  As of March 26, 2012  
 
  (unaudited)
 
 
  Actual   Pro Forma(1)  
 
  (in thousands)
 
 

Cash and cash equivalents

  $ 7,736   $ 31,178  
           

Long-term debt, including current portion:

             
 

Senior secured credit facility(2)

  $ 117,000   $ 76,431  
           

Stockholder's equity:

             
 

Common stock, $1.00 par value, 1,000 shares authorized, 1,000 shares issued and outstanding (actual); $0.01 par value, 500,000,000 authorized (pro forma); 24,750,929 shares issued and outstanding (pro forma)

    1     248  
 

Additional paid-in capital

    11,729     76,227  
 

Accumulated earnings

    12,363     11,113  
           
   

Total stockholder's equity

    24,093     87,588  
           
     

Total capitalization

  $ 141,093   $ 164,019  
           

(1)
A $1.00 increase or decrease in the assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the amount of additional paid-in capital, total stockholders' equity and total capitalization by approximately $5.2 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
Our senior secured credit facility consists of (i) a $120.0 million term loan facility due on March 24, 2016 and (ii) a $25.0 million revolving credit facility due on March 24, 2016. As of March 26, 2012, we had no outstanding borrowings under our revolving credit facility. We intend to use a portion of the net proceeds from this offering to prepay $40.6 million of our existing senior secured credit facility.

        The table above:

    excludes, as of March 26, 2012, an aggregate of 1,980,074 shares of common stock reserved for issuance under our equity compensation plan, which we plan to adopt in connection with this offering; and

    assumes no exercise by the underwriters of their option to purchase up to an additional 865,384 shares from us.

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DILUTION

        Dilution represents the difference between the amount per share paid by investors in this offering and the pro forma net tangible book value per share of our common stock immediately after this offering. The net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of shares of common stock outstanding. Our net tangible book value as of March 26, 2012 was $21.4 million, or $1.12 per share of common stock after giving effect to the stock split and the termination of the management agreement but before giving effect to this offering.

        After giving effect to the sale of the 5,572,703 shares of common stock offered by us in this offering at a price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, and the application of the net proceeds from this offering to us as described under "Use of Proceeds," our pro forma net tangible book value as of March 26, 2012 would have been approximately $85.5 million, or $3.45 per share of common stock. This represents an immediate increase in net tangible book value to our existing stockholders of $2.33 per share and an immediate dilution to new investors in this offering of $9.55 per share.

        The following table illustrates this per share dilution in net tangible book value to new investors.

Assumed initial public offering price per share

        $ 13.00  
 

Net tangible book value per share as of March 26, 2012

  $ 1.12        
 

Increase per share attributable to new investors

    2.33        
             

Pro forma net tangible book value per share after this offering

          3.45  
             

Dilution per share to new investors

        $ 9.55  
             

        A $1.00 increase (or decrease) in the assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (or decrease) our pro forma as adjusted net tangible book value by $5.2 million, or $0.23 per share, assuming the number of shares offered by us remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

        The following table summarizes as of March 26, 2012, on an as adjusted basis, the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by the existing stockholders (including J.H. Whitney VI and the equity grant recipients) and to be paid by new investors, based upon an assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and before deducting estimated underwriting discounts and commissions and offering expenses payable by us:

 
  Shares Purchased   Total Consideration    
 
 
  Average Price
Per Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

    19,178,226     77.5 % $ 23,483,288     24.5 % $ 1.22 (1)

New investors

    5,572,703     22.5     72,445,139     75.5     13.00  
                         
 

Total

    24,750,929     100 % $ 95,928,427     100 %      
                         

(1)
Assuming the termination of the management agreement had occurred on March 26, 2012, this represents our net book value which is calculated by subtracting total liabilities from total assets as of March 26, 2012 divided by the number of shares owned by JCS Holdings, LLC after giving effect to the stock split.

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        A $1.00 increase (or decrease) in the assumed initial public offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (or decrease) the total consideration paid by new investors and the total average price per share by approximately $5.6 million and $1.00, respectively, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same.

        Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters' option to purchase additional shares. If the underwriters' option to purchase additional shares is exercised in full, our existing stockholders would own approximately 74.9% and our new investors would own approximately 25.1% of the total number of shares of our common stock outstanding after this offering.

        The discussion and tables above also exclude an aggregate of 1,980,074 shares of common stock reserved for issuance under our equity incentive plan that we intend to adopt in connection with this offering.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following table provides a summary of our historical and unaudited pro forma consolidated financial and operating data for the periods and as of the dates indicated. We derived the statement of operations data presented below for the fiscal years ended December 28, 2009, January 3, 2011 and January 2, 2012 and selected balance sheet data presented below as of January 3, 2011 and January 2, 2012 from our audited consolidated financial statements included elsewhere in this prospectus. The selected statement of operations data for the fiscal years ended December 31, 2007 and December 29, 2008 and the selected balance sheet data as of December 31, 2007, December 29, 2008 and December 28, 2009 have been derived from audited consolidated financial statements not included in this prospectus. We derived the statement of operations data for the twelve weeks ended March 28, 2011 and March 26, 2012 and the selected balance sheet data as of March 26, 2012 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of these data. The results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. The unaudited pro forma consolidated financial data for the year ended January 2, 2012 and as of and for the twelve weeks ended March 26, 2012 have been derived from our historical financial statements for such periods, which are included elsewhere in this prospectus, after giving effect to the transactions specified under "Unaudited Pro Forma Condensed Consolidated Financial Statements."

        Our fiscal year ends on the Monday nearest to December 31 of each year. Fiscal years 2007, 2008, 2009 and 2011 were 52-week years ended on December 31, 2007, December 29, 2008, December 28, 2009 and January 2, 2012, respectively, while fiscal year 2010 was a 53-week year ended on January 3, 2011. The first three quarters of our fiscal year consist of 12 weeks and our fourth quarter consists of 16 weeks for 52-week fiscal years and 17 weeks for 53-week fiscal years.

        The historical results presented below are not necessarily indicative of the results to be expected for any future period. This information should be read in conjunction with "Risk Factors," "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our audited consolidated financial statements and our unaudited condensed consolidated financial statements and each of their related notes included elsewhere in this prospectus.

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  Fiscal Year Ended   Twelve Weeks Ended  
 
  December 31,
2007
  December 29,
2008
  December 28,
2009
  January 3,
2011
  January 2,
2012
  March 28,
2011
  March 26,
2012
 
 
  (dollars in thousands, except per share data)
 

Statement of Operations Data:

                                           

Revenues

  $ 273,461   $ 273,359   $ 307,801   $ 351,327   $ 405,243   $ 87,431   $ 103,430  

Restaurant operating costs

                                           
 

Cost of sales

    75,711     80,573     89,845     103,981     127,607     27,519     32,915  
 

Labor and benefits

    87,290     80,604     87,920     98,162     111,721     24,450     28,047  
 

Occupancy expenses

    14,970     21,610     25,243     27,440     30,244     6,510     7,281  
 

Other operating expenses

    59,516     57,210     58,140     63,963     71,696     15,077     18,206  

General and administrative

    15,163     15,383     18,765     20,634     23,340     5,517     6,386  

Depreciation and amortization

    14,018     13,898     12,733     13,445     16,063     3,349     3,938  

Pre-opening costs

    25     779     1,323     3,844     3,989     805     1,242  

Restaurant impairments and closures

    148     680     15     909     333     28     49  

Loss on disposal of property and equipment

        84     1,017     2,797     821     (4 )    
                               
 

Total costs and expenses

    266,841     270,821     295,001     335,175     385,814     83,251     98,064  
                               

Income from operations

    6,620     2,538     12,800     16,152     19,429     4,180     5,366  

Interest expense, net

    (10,510 )   (5,659 )   (3,867 )   (3,831 )   (9,215 )   (2,558 )   (1,997 )

Gain on insurance settlements

            1,192     944     1,126          
                               

(Loss) income before income taxes

    (3,890 )   (3,121 )   10,125     13,265     11,340     1,622     3,369  

Income tax expense

    107     90     255     1,417     87     464     878  
                               

Net (loss) income

  $ (3,997 ) $ (3,211 ) $ 9,870   $ 11,848   $ 11,253   $ 1,158   $ 2,491  
                               

Per Share Data:

                                           

Net (loss) income per share:

                                           
 

Basic and diluted

  $ (3,997.00 ) $ (3,211.00 ) $ 9,870.00   $ 11,848.00   $ 11,253.00   $ 1,158.00   $ 2,491.00  

Weighted average shares outstanding:

                                           
 

Basic and diluted

    1,000     1,000     1,000     1,000     1,000     1,000     1,000  

Pro Forma Statement of Operations Data(1):

                                           

Pro forma net income

                    $ 13,913               $ 3,013  

Pro forma net income per share:

                                           
 

Basic and diluted

                    $ 0.61               $ 0.13  

Pro forma weighted average shares outstanding:

                                           
 

Basic and diluted

                      22,870,760                 22,870,760  

Selected Other Data:

                                           

Restaurants open at end of period

    119     116     119     126     135     129     138  

Change in comparable restaurant sales(2)

    (10.2 )%   1.9 %   9.5 %   4.9 %   6.9 %   9.4 %   5.3 %

Average weekly sales

  $ 44   $ 45   $ 51   $ 54   $ 59   $ 57   $ 63  

Average unit volumes

  $ 2,294   $ 2,354   $ 2,599   $ 2,810   $ 2,970   $ 673   $ 714  

Restaurant-level profit margin(3)

    13.0 %   12.6 %   15.5 %   16.7 %   16.0 %   16.1 %   16.6 %

EBITDA(4)

  $ 20,638   $ 16,436   $ 26,725   $ 30,541   $ 36,618   $ 7,529   $ 9,304  

Adjusted EBITDA(4)

  $ 23,325   $ 20,314   $ 30,276   $ 39,910   $ 44,105   $ 9,111   $ 11,116  

Adjusted EBITDA margin(5)

    8.5 %   7.4 %   9.8 %   11.4 %   10.9 %   10.4 %   10.7 %

Capital expenditures

  $ 6,073   $ 7,576   $ 18,348   $ 33,333   $ 40,102   $ 8,301   $ 6,737  

*
Not meaningful.

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  December 31,
2007
  December 29,
2008
  December 28,
2009
  January 3,
2011
  January 2,
2012
  March 26,
2012
 
 
  (in thousands)
 

Selected Balance Sheet Data:

                                     

Cash and cash equivalents

  $ 5,257   $ 5,110   $ 4,976   $ 12,572   $ 3,725   $ 7,736  

Working capital (deficit)

    (13,781 )   (2,739 )   3,837     (2,029 )   (16,135 )   (22,396 )

Total assets(6)

    206,587     126,318     130,854     157,163     180,207     193,076  

Total debt

    114,722     35,381     34,988     34,833     117,757     117,000  

Total stockholder's equity

  $ 67,069   $ 67,678   $ 77,696   $ 89,998   $ 21,593   $ 24,093  

(1)
Derived from our unaudited pro forma condensed consolidated statement of operations for the fiscal year ended January 2, 2012, which are included elsewhere in this prospectus. See "Unaudited Pro Forma Condensed Consolidated Financial Statements."

(2)
Our comparable restaurant base includes restaurants open for at least 104 weeks, or approximately 24 months. Change in comparable restaurant sales represents the change in period-over-period sales for the comparable restaurant base.

(3)
Restaurant-level profit margin represents revenues (x) less (i) licensing revenue not attributable to core restaurant operations, (ii) cost of sales, (iii) labor and benefits, (iv) occupancy expenses, and (v) other operating expenses (y) plus non-cash rent, as defined in 4(a) below. Restaurant-level profit is a supplemental measure of operating performance of our restaurants that does not represent and should not be considered as an alternative to net income or revenues as determined by U.S. generally accepted accounting principles, or U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. Restaurant-level profit has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Management believes restaurant-level profit is an important component of financial results because it is a widely used metric within the restaurant industry to evaluate restaurant-level productivity, efficiency and performance. Management uses restaurant-level profit as a key metric to evaluate our financial performance compared with our competitors, to evaluate the profitability of incremental sales and to evaluate our performance across periods.

   
  Fiscal Year Ended   Twelve Weeks Ended  
   
  December 31,
2007
  December 29,
2008
  December 28,
2009
  January 3,
2011
  January 2
2012
  March 28,
2011
  March 26,
2012
 
   
  (dollars in thousands)
 
 

Revenues

  $ 273,461   $ 273,359   $ 307,801   $ 351,327   $ 405,243   $ 87,431   $ 103,430  
 

Less: Licensing and other revenues

    (94 )   (64 )   (89 )   (373 )   (584 )   (108 )   (65 )
                                 
 

Restaurant sales(A)

  $ 273,367   $ 273,295   $ 307,712   $ 350,954   $ 404,659   $ 87,323   $ 103,365  
                                 
 

Restaurant operating costs

                                           
   

Cost of sales

    75,711     80,573     89,845     103,981     127,607     27,519     32,915  
   

Labor and benefits

    87,290     80,604     87,920     98,162     111,721     24,450     28,047  
   

Occupancy expenses

    14,970     21,610     25,243     27,440     30,244     6,510     7,281  
   

Other operating expenses

    59,516     57,210     58,140     63,963     71,696     15,077     18,206  
   

Deferred rent

    (300 )   (1,017 )   (1,162 )   (1,322 )   (1,342 )   (296 )   (196 )
                                 
 

Restaurant-level profit(B)

  $ 36,180   $ 34,315   $ 47,726   $ 58,730   $ 64,733   $ 14,063   $ 17,112  
                                 
 

Restaurant-level profit margin(B÷A)

    13.2 %   12.6 %   15.5 %   16.7 %   16.0 %   16.1 %   16.6 %
(4)
EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA to reflect the additions and eliminations described in the table below. EBITDA and Adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered as alternatives to net income or cash flow from operations, as determined by U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations are:

EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

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    EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

    EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

    other companies in the restaurant industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.


Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only supplementally. We further believe that our presentation of these U.S. GAAP and non-GAAP financial measurements provide information that is useful to analysts and investors because they are important indicators of the strength of our operations and the performance of our core business.


As noted in the table below, Adjusted EBITDA includes adjustments for restaurant impairments and closures, gains and losses on disposal of property and equipment, gains on insurance settlements and pre-opening costs, among other items. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. In addition, Adjusted EBITDA includes adjustments for other items that we do not expect to regularly record following this offering, such as sponsor management fees. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day restaurant-level operations.


Management and our principal stockholder use EBITDA and Adjusted EBITDA:

as a measurement of operating performance because they assist us in comparing the operating performance of our restaurants on a consistent basis, as both remove the impact of items not directly resulting from our core operations;

for planning purposes, including the preparation of our internal annual operating budget and financial projections;

to evaluate the performance and effectiveness of our operational strategies;

to evaluate our capacity to fund capital expenditures and expand our business; and

to calculate incentive compensation payments for our employees, including assessing performance under our annual incentive compensation plan.


In addition, this measurement is used by investors as a supplemental measure to evaluate the overall operating performance of companies in our industry. Management believes that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations from one period to the next and would ordinarily add back events that are not part of normal day-to-day operations of our business. By providing this non-GAAP financial measure, together with reconciliations, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives.


We also present Adjusted EBITDA because it is a measure which is used in calculating financial ratios in material debt covenants in our senior secured credit facility. Some of the adjustments included in Adjusted EBITDA are subject to certain limitations under our credit facility for purposes of calculating our debt covenants. For the fiscal quarter ended March 26, 2012, we are required to maintain a fixed charge coverage ratio (ratio of free cash flow to fixed charges) of 1.40:1 and an effective leverage ratio (ratio of adjusted debt to Adjusted EBITDA plus cash rent expense) of less than 5.40:1. As of March 26, 2012, we are in compliance with these covenants. As of March 26, 2012, we had $117.0 million of outstanding borrowings under the term loan and the ability to borrow up to an additional $23.2 million under the revolving credit facility. Failure to comply with our material debt covenants could cause an acceleration of outstanding amounts under the term loan and restrict us from borrowing amounts under the revolving credit facility to fund our future liquidity requirements. We believe that inclusion of supplementary

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    adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about how the covenants in those agreements operate. The material covenants in our senior secured credit facility are discussed further in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."


Adjusted EBITDA is calculated as follows:

   
  Fiscal Year Ended   Twelve Weeks Ended  
   
  December 31,
2007
  December 29,
2008
  December 28,
2009
  January 3,
2011
  Janaury 2,
2012
  March 28,
2011
  March 26,
2012
 
   
  (in thousands)
 
 

Net (loss) income

  $ (3,997 ) $ (3,211 ) $ 9,870   $ 11,848   $ 11,253   $ 1,158   $ 2,491  
 

Income tax expense (benefit)

    107     90     255     1,417     87     464     878  
 

Interest expense, net

    10,510     5,659     3,867     3,831     9,215     2,558     1,997  
 

Depreciation and amortization

    14,018     13,898     12,733     13,445     16,063     3,349     3,938  
                                 
 

EBITDA

  $ 20,638   $ 16,436   $ 26,725   $ 30,541   $ 36,618   $ 7,529   $ 9,304  
                                 
 

Adjustments:

                                           
 

Deferred rent(a)

    300     1,017     1,162     1,322     1,342     296     196  
 

Restaurant impairments and closures(b)

    148     680     15     909     333     28     49  
 

Loss on disposal of property and equipment(c)

        84     1,017     2,797     821     (4 )    
 

Sponsor management fees(d)

    529     1,112     1,120     1,139     1,188     272     272  
 

Gain on insurance settlements(e)

            (1,192 )   (944 )   (1,126 )        
 

Pre-opening costs(f)

    25     779     1,323     3,844     3,989     805     1,242  
 

Other expenses(g)

    1,685     206     106     302     940     185     53  
                                 
 

Adjusted EBITDA

  $ 23,325   $ 20,314   $ 30,276   $ 39,910   $ 44,105   $ 9,111   $ 11,116  
                                 

    (a)
    Deferred rent represents the non-cash rent expense calculated as the difference in U.S. GAAP rent expense in any year and amounts payable in cash under the leases during the year. In measuring our operational performance, we focus on our cash rent payments. See Note 2 to our audited consolidated financial statements for additional details.

    (b)
    Impairment charges were recorded in connection with the determination that the carrying value of certain of our restaurants exceeded their estimated fair value. Also consists of expenses incurred following the closure of restaurants. See Notes 2 and 3 to our audited consolidated financial statements for additional details.

    (c)
    Loss (gain) on disposal of property and equipment represents the net book value of property and equipment less proceeds received, if applicable, on assets abandoned or sold.

    (d)
    Sponsor management fees consist of fees and expenses paid to J.H. Whitney under the management services agreement, and compensation and expenses paid to certain members of the management committee of our parent company, JCS Holdings, LLC. We will terminate this agreement in connection with the completion of this offering. See "Certain Relationships and Related Party Transactions."

    (e)
    Gain on insurance settlements consists of proceeds in excess of the net book value of assets lost and related costs from property insurance claims at restaurants temporarily closed due to hurricane damage, flooding and/or foundational issues.

    (f)
    Pre-opening costs include expenses directly associated with the opening of new restaurants and are incurred prior to the opening of a new restaurant. See Note 2 to our audited consolidated financial statements for additional details.

    (g)
    Other expenses consists of costs related to abandoned new restaurant developments, fees payable to the agent under historic credit facilities, certain transitional general and administrative expenses, and expenses related to the modification of a sale-leaseback transaction.

(5)
Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to total revenues. We present Adjusted EBITDA margin because it is used by management as a performance measurement of Adjusted EBITDA generated from total revenues. See footnote 4 above for a discussion of Adjusted EBITDA as a non-GAAP measurement and a reconciliation of net income to EBITDA and Adjusted EBITDA.

(6)
In March 2007, property and improvements for 29 restaurants were sold in a sale-leaseback financing transaction accounted for as capital leases. In April 2008, all these leases were modified and were subsequently treated as operating leases. At that time $79.0 million in property and improvement and $78.2 million in capital lease obligations were removed from the consolidated balance sheet.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

        The unaudited pro forma condensed consolidated financial statements as of and for the twelve weeks ended March 26, 2012, and for the fiscal year ended January 2, 2012 have been derived from our historical consolidated financial statements included elsewhere in this prospectus.

        The unaudited pro forma condensed consolidated balance sheet as of March 26, 2012 gives effect to (i) the termination of our management agreement with J.H. Whitney in connection with this public offering, (ii) the 19,178.226-for-1 stock split of our common stock to take effect immediately prior to the completion of this public offering and (iii) the issuance of common stock in this public offering and the application of the net proceeds therefrom as described in "Use of Proceeds," as if each had occurred on March 26, 2012. No adjustments have been made related to the refinancing of our senior credit facility described below, as these transactions are already reflected in the March 26, 2012 unaudited condensed consolidated balance sheet.

        The unaudited pro forma condensed consolidated statements of operations for the fiscal year ended January 2, 2012 and the twelve weeks ended March 26, 2012 give effect to (i) the termination of our management agreement with J.H. Whitney in connection with this public offering, (ii) the 19,178.226-for-1 stock split of our common stock to take effect immediately prior to the completion of this public offering and (iii) the issuance of common stock in this public offering and the application of the net proceeds therefrom as described in "Use of Proceeds," as if each had occurred on the first day of fiscal year 2011. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended January 2, 2012 also gives effect to adjustments for the March 2011 refinancing of our senior secured credit facility, which proceeds were used to repay the prior credit facility and pay an $80.0 million dividend to our parent company, as if it occurred on the first day of fiscal year 2011.

        The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and do not purport to represent our actual financial condition or results of operations if such transactions had been completed as of the dates or for the periods indicated above or that may be achieved as of any future date or for any future period. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the accompanying notes, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our historical consolidated financial statements and accompanying notes included elsewhere in this prospectus.

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Unaudited Pro Forma Condensed Consolidated Balance Sheet
March 26, 2012
(in thousands)

 
  Historical
As Reported
March 26, 2012
  Termination of
Management
Agreement
  Pro Forma for
Other
Transactions March 26, 2012
  Adjustments
Related to
Offering
  Pro Forma
March 26, 2012
 

ASSETS

                               

Current assets

                               
 

Cash and cash equivalents

  $ 7,736     (1,000 )(1) $ 6,736     72,445 (5) $ 31,178  

                      (7,131 )(6)      

                      (40,569 )(7)      

                      (303 )(10)      
 

Accounts receivable

    6,948           6,948           6,948  
 

Inventories

    5,251           5,251           5,251  
 

Deferred tax assets

    1,053           1,053           1,053  
 

Prepaid rent and other current assets

    4,774           4,774           4,774  
                       
   

Total current assets

    25,762     (1,000 )   24,762     24,442     49,204  

Property and equipment, net

    157,067           157,067           157,067  

Intangible assets, net

    2,096           2,096           2,096  

Deferred charges, net

    4,364           4,364     (1,050 )(8)   3,617  

                      303 (10)      

Deferred tax assets

    664           664           664  

Other assets

    3,123           3,123     (1,480 )(6)   1,643  
                       
   

Total assets

  $ 193,076   $ (1,000 ) $ 192,076   $ 22,215   $ 214,291  
                       

LIABILITIES AND STOCKHOLDER'S EQUITY

                               

Current liabilities

                               
 

Accounts payable

  $ 21,887         $ 21,887     (911 )(6) $ 20,976  
 

Accrued liabilities

    23,271     (390 )(2)   22,881     (410 )(9)   22,471  
 

Current portion of debt obligations

    3,000           3,000     (3,000 )(7)    
                       
   

Total current liabilities

    48,158     (390 )   47,768     (4,321 )   43,447  

Long-term debt obligations

    114,000           114,000     (37,569 )(7)   76,431  

Deferred rent

    6,006           6,006           6,006  

Other long-term liabilities

    819           819           819  
                       
   

Total liabilities

    168,983     (390 )   168,593     (41,890 )   126,703  
                       

Stockholder's equity

                               
 

Common stock

    1           1     191 (4)   248  

                      56 (5)      
 

Additional paid-in capital

    11,729           11,729     (191 )(4)   76,227  

                      72,389 (5)      

                      (7,700 )(6)      
 

Accumulated earnings

    12,363     (610 )(3)   11,753     (1,050 )(8)   11,113  

                      410 (9)      
                       
   

Total stockholder's equity

    24,093     (610 )   23,483     64,105     87,588  
                       
   

Total liabilities and stockholder's equity

  $ 193,076   $ (1,000 ) $ 192,076   $ 22,215   $ 214,291  
                       

Termination of Management Agreement

(1)
To reflect cash that will be paid to terminate the management agreement between our parent, JCS Holdings, LLC, and J.H. Whitney of approximately $1.0 million in connection with this public offering.

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(2)
To adjust income taxes payable to reflect a tax benefit of $0.4 million related to the payment of the termination fees for the management agreement with J.H. Whitney, calculated at an estimated statutory tax rate of 39%.

(3)
To reflect the expense for the $1.0 million termination fee related to the management agreement with J.H. Whitney, net of a tax benefit of $0.4 million calculated using an estimated statutory tax rate of 39%.

Adjustments Related to Offering

(4)
To reflect a 19,178.226-for-1 stock split and reduction of par value of our common stock from $1.00 per share to $0.01 per share to take effect immediately prior to the completion of this public offering.

(5)
To reflect cash proceeds from the issuance of 5,572,703 shares related to this offering assuming an initial public offering price of $13.00 per share, the midpoint of the range of potential offering price per share. We will not receive any proceeds from the sale of 196,528 shares sold by the selling stockholder.

(6)
To reflect underwriting discounts, commissions and other expenses related to this offering. As of March 26, 2012, we had approximately $1.5 million of these costs capitalized in other assets of which $0.9 million are unpaid and included in accounts payable.

(7)
To reflect the prepayment of $40.6 million of our term loan as required by the amendment to our senior secured credit facility as discussed in Note 6 of the unaudited condensed consolidated financial statements included elsewhere in this prospectus.

(8)
To reflect the writeoff of a portion of the unamortized debt issuance costs in connection with the prepayment of debt.

(9)
To adjust income taxes payable to reflect the recording of a tax benefit related to the writeoff of unamortized debt issuance costs, as mentioned in note 7 above, calculated at an estimated statutory tax rate of 39%.

(10)
To reflect capitalized debt issuance costs associated with the amendment of our senior secured credit facility, as discussed in Note 6 of the unaudited condensed consolidated financial statements included elsewhere in this prospectus.

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Unaudited Pro Forma Condensed Consolidated Statements of Operations
Fiscal Year Ended January 2, 2012
(dollars in thousands, except per share amounts)

 
   
  Adjustments for Other Transactions    
   
   
 
 
  Historical
As Reported
Fiscal Year
Ended
January 2,
2012
  Debt
Refinancing
  Termination of
Management
Agreement
  Pro Forma
for Other
Transactions
Fiscal Year
Ended
January 2,
2012
  Adjustments
Related to
Offering
  Pro Forma
Fiscal Year
Ended
January 2,
2012
 

Revenues

  $ 405,243               $ 405,243         $ 405,243  

Cost and expenses

                                     
 

Restaurant operating costs

                                     
   

Cost of sales

    127,607                 127,607           127,607  
   

Labor and benefits

    111,721                 111,721           111,721  
   

Occupancy expenses

    30,244                 30,244           30,244  
   

Other operating expenses

    71,696                 71,696           71,696  
 

General and administrative

    23,340           (1,000 )(3)   22,340           22,340  
 

Depreciation and amortization

    16,063                 16,063           16,063  
 

Pre-opening costs

    3,989                 3,989           3,989  
 

Restaurant impairments and closures

    333                 333           333  
 

Loss on disposal of property and equipment

    821                 821           821  
                           
   

Total costs and expenses

    385,814         (1,000 )   384,814         384,814  
                           

Income from operations

    19,429         1,000     20,429         20,429  

Interest expense, net

    (9,215 )   584 (1)         (8,631 )   2,776 (4)   (5,855 )

Gain on insurance settlements

    1,126                 1,126           1,126  
                           

Income before income taxes

    11,340     584     1,000     12,924     2,776     15,700  

Income tax expense

    87     228 (2)   390 (2)   705     1,082 (2)   1,787  
                           

Net income

  $ 11,253   $ 356   $ 610   $ 12,219   $ 1,694   $ 13,913  
                           

Net income per share:

                                     
 

Basic and diluted

  $ 11,253.00                           $ 0.61 (5)

Weighted average shares outstanding:

                                     
 

Basic and diluted

    1,000                             22,870,760 (5)

Debt Refinancing

(1)
The adjustments related to the debt refinancing reflect the impact on interest expense as if the March 2011 transactions had occurred on the first day of fiscal year 2011 and carried forward through January 2, 2012. Proceeds of $120.0 million from the new senior credit facility were used to repay the prior credit facility and pay an $80.0 million dividend to our parent company. Pro forma adjustments were as follows (in thousands):

Increase in interest expense for new credit facility

  $ 1,665  

Elimination of historical interest expense on prior credit facility and interest rate swap

    (571 )

Elimination of historical expense for the termination of the interest rate swap

    (427 )

Elimination of historical writeoff of unamortized debt issuance costs on prior credit facility

    (1,378 )

Elimination of historical amortization on debt issuance costs on prior credit facility

    (126 )

Increase in amortization on debt issuance costs on new credit facility

    253  
       
 

Net pro forma adjustment to interest expense

  $ (584 )
       

The assumed interest rate on the interest expense of the new senior secured credit facility is 6.25% (LIBOR floor of 1.5% plus 4.75%), our weighted average interest rate in fiscal year 2011. The debt issuance costs related to the new senior secured credit facility are assumed to be amortized over the term of the debt agreement using the effective interest rate method.

(2)
To reflect the tax effect of the pro forma adjustments at an estimated statutory rate of 39%.

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Termination of Management Agreement

        

(3)
To reflect a reduction of $1.0 million of annual management fees paid to J.H. Whitney. The management agreement will terminate upon completion of the offering. We expect to incur a nonrecurring expense of approximately $1.0 million within general and administrative expenses and a corresponding tax benefit of $0.4 million related to the termination of the management agreement. As they are nonrecurring, the termination fee and related tax effects are not included in the pro forma condensed consolidated statement of operations.

Adjustments Related to the Offering

        

(4)
Had the offering occurred on the first day of fiscal year 2011, we would have used $40.6 million of the proceeds to prepay a portion of our term loan as required by the amendment to our senior secured credit facility, as discussed in Note 6 of the unaudited condensed consolidated financial statements included elsewhere in this prospectus. The adjustments related to the offering reflect the reduction of interest expense resulting from this pro forma prepayment and are as follows (in thousands):

Reduction in interest expense from lower balance outstanding

  $ 2,543  

Reduction in amortization of debt issuance costs due to prepayment amount

    233  
       
 

Net pro forma adjustment to interest expense

  $ 2,776  
       
(5)
Reflects adjustments to outstanding common stock as if the initial public offering was completed at the beginning of fiscal year 2011. Immediately after the completion of this public offering, JCS Holdings, LLC, our parent company, will distribute substantially all of the shares of our common stock then held by it and/or the cash proceeds received in this public offering to the holders of its Series A preferred units and its vested common units. JCS Holdings, LLC will thereafter continue to hold shares equal to less than one percent of our outstanding common stock for the benefit of certain of our officers and directors who will continue to hold unvested common units in JCS Holdings, LLC upon consummation of this offering.

Basic net income per share is computed on the basis of the weighted average number of common shares that were outstanding during the period. The pro forma basic and diluted net income per share calculations include 3,692,534 shares to be sold in the public offering as the proceeds received from the sale of these shares will be used to prepay a portion of our term loan and pay fees and expenses related to the offering. The remaining 1,880,169 shares to be sold in the public offering are not included in the pro forma basic and diluted net income per share calculations as the proceeds received from the sale of these shares will be used for general corporate purposes. The following table sets forth the computation of pro forma basic and diluted net income per share based on an offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus (in thousands, except per share amount):

Pro forma net income

  $ 13,913  

Pro forma weighted average number of shares—basic and diluted:

       
 

Weighted average number of existing shares

    19,178  
 

Shares issued in this offering

    3,693  
       
 

Pro forma weighted average number of common shares

    22,871  
       

Pro forma net income per share—basic and diluted

  $ 0.61  

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Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the Twelve Weeks Ended March 26, 2012
(dollars in thousands, except per share amounts)

 
  Historical
As Reported
Twelve Weeks
Ended
March 26,
2012
  Termination of
Management
Agreement
  Pro Forma
for Other
Transactions
Twelve Weeks
Ended
March 26,
2012
  Adjustments
Related to
Offering
  Pro Forma
Twelve Weeks
Ended
March 26,
2012
 

Revenues

  $ 103,430         $ 103,430         $ 103,430  

Cost and expenses

                               
 

Restaurant operating costs

                               
   

Cost of sales

    32,915           32,915           32,915  
   

Labor and benefits

    28,047           28,047           28,047  
   

Occupancy expenses

    7,281           7,281           7,281  
   

Other operating expenses

    18,206           18,206           18,206  
 

General and administrative

    6,386     (244 )(1)   6,142           6,142  
 

Depreciation and amortization

    3,938           3,938           3,938  
 

Pre-opening costs

    1,242           1,242           1,242  
 

Restaurant impairments and closures

    49           49           49  
                       
   

Total costs and expenses

    98,064     (244 )   97,820         97,820  
                       

Income from operations

    5,366     244     5,610         5,610  

Interest expense, net

    (1,997 )         (1,997 )   611 (3)   (1,386 )
                       

Income before income taxes

    3,369     244     3,613     611     4,224  

Income tax expense

    878     95 (2)   973     238 (2)   1,211  
                       

Net income

  $ 2,491   $ 149   $ 2,640   $ 373   $ 3,013  
                       

Net income per share:

                               
 

Basic and diluted

  $ 2,491.00                     $ 0.13 (4)

Weighted average shares outstanding:

                               
 

Basic and diluted

    1,000                       22,870,760 (4)

Termination of Management Agreement

(1)
To reflect a reduction of $0.2 million of annual management fees paid to J.H. Whitney. The management agreement will terminate upon completion of the offering. We expect to incur a nonrecurring expense of approximately $1.0 million within general and administrative expenses and a corresponding tax benefit of $0.4 million related to the termination of the management agreement. As they are nonrecurring, the termination fee and related tax effects are not included in the pro forma condensed consolidated statement of operations.

(2)
To reflect the tax effect of the pro forma adjustments at an estimated statutory rate of 39%.

Adjustments Related to the Offering

        

(3)
Had the offering occurred on the first day of fiscal year 2011, we would have used $40.6 million of the proceeds to prepay a portion of our term loan as required by the amendment to our senior secured credit facility, as discussed in Note 6 of the unaudited condensed consolidated financial statements included elsewhere in this prospectus. The adjustments related to the offering reflect the reduction of interest expense resulting from this pro forma prepayment and are as follows (in thousands):

Reduction in interest expense from lower balance outstanding

  $ 561  

Reduction in amortization of debt issuance costs due to prepayment amount

    50  
       
 

Net pro forma adjustment to interest expense

  $ 611  
       
(4)
Reflects adjustments to outstanding common stock as if the initial public offering was completed at the beginning of fiscal year 2011. Immediately after the completion of this public offering, JCS Holdings, LLC, our parent company, will distribute substantially all of the shares of our common stock then held by it and/or the cash proceeds received in this public offering to the holders of its Series A preferred units and its vested common units. JCS Holdings, LLC will thereafter continue to

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    hold shares equal to less than one percent of our outstanding common stock for the benefit of certain of our officers and directors who will continue to hold unvested common units in JCS Holdings, LLC upon consummation of this offering.


Basic net income per share is computed on the basis of the weighted average number of common shares that were outstanding during the period. The pro forma basic and diluted net income per share calculations include 3,692,534 shares to be sold in the public offering as the proceeds received from the sale of these shares will be used to prepay a portion of our term loan and pay fees and expenses related to the offering. The remaining 1,880,169 shares to be sold in the public offering are not included in the pro forma basic and diluted net income per share calculations as the proceeds received from the sale of these shares will be used for general corporate purposes. The following table sets forth the computation of pro forma basic and diluted net income per share based on an offering price of $13.00 per share, the midpoint of the price range set forth on the cover page of this prospectus (in thousands, except per share amount):

Pro forma net income

  $ 3,013  

Pro forma weighted average number of shares—basic and diluted:

       
 

Weighted average number of existing shares

    19,178  
 

Shares issued in this offering

    3,693  
       
 

Pro forma weighted average number of common shares

    22,871  
       

Pro forma net income per share—basic and diluted

  $ 0.13  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        You should read the following discussion together with "Selected Historical Consolidated Financial and Operating Data," and the historical financial statements and related notes included elsewhere in this prospectus. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Risk Factors" and "Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by any forward-looking statements.

        Our fiscal year ends on the Monday nearest to December 31 of each year. Fiscal years 2011 and 2009 were 52-week years, while fiscal year 2010 was a 53-week year. References to fiscal years 2011, 2010 and 2009 are references to fiscal years ended January 2, 2012, January 3, 2011 and December 28, 2009 respectively. The first three quarters of our fiscal year consist of 12 weeks and our fourth quarter consists of 16 weeks for 52-week fiscal years and 17 weeks for 53-week fiscal years.

Overview

        Ignite Restaurant Group, Inc. operates two restaurant businesses, Joe's Crab Shack and Brick House Tavern+Tap. Each of our restaurant businesses offers a variety of high-quality food in a distinctive, casual, high-energy atmosphere. Joe's Crab Shack and Brick House Tavern+Tap operate in a diverse set of markets across the United States. As of March 26, 2012, we owned and operated 122 Joe's Crab Shack and 16 Brick House restaurants in 31 states.

        Joe's Crab Shack is an established, national chain of casual seafood restaurants. Joe's serves a variety of high-quality seafood items, with an emphasis on crab. Joe's is a high-energy, family-friendly restaurant that encourages guests to "roll up your sleeves and crack into some crab."

        Brick House Tavern+Tap is a casual restaurant business that provides guests a differentiated "gastro pub" experience by offering a distinctive blend of menu items in a polished setting. Brick House seeks to strike a balance between providing guests with an elevated experience while also appealing to "every-man, every-day."

        Since our acquisition from Landry's Restaurants, Inc. in 2006, we have implemented several initiatives that we believe have favorably impacted our performance at Joe's Crab Shack. These factors include improving our executive leadership team as well as management in our restaurants, expanding our marketing program from spot network to national cable advertising, innovating Joe's menu to increase our sales of crab related items and improving operational execution and efficiency. As a result of these initiatives, we have experienced 15 consecutive fiscal quarters of positive comparable restaurant sales growth and improved our financial results. We believe the initiatives undertaken at Joe's have also repositioned the brand as a market leading casual seafood restaurant.

        While executing these initiatives at Joe's, we also developed and successfully launched a new restaurant brand, Brick House Tavern+Tap. With the addition of the Brick House brand, on July 7, 2009, we officially changed our name to Ignite Restaurant Group, Inc. The first two Brick House locations were opened in 2008 by converting former Joe's locations into Brick House locations. Based on the results of these two locations, we began opening Brick House locations as new restaurants. Brick House has since grown to 16 restaurants operating in 9 states, but remains a relatively small part of our business when compared to our Joe's Crab Shack brand. As of March 26, 2012, only five Brick House restaurants were open for at least 104 weeks, qualifying them for inclusion in our comparable restaurant base. For fiscal year 2011 and for the twelve weeks ended March 26, 2012, revenues from our Brick House brand were only 12% and 10%, respectively, of our total revenues. We expect that our

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new restaurant growth will continue to be substantially weighted towards new Joe's Crab Shack restaurants for the foreseeable future, which will decrease the proportion of total revenues attributable to Brick House Tavern+Tap. We are currently in the process of integrating key insights into our Brick House concept and new restaurant rollout plans. As part of this brand optimization process, during the fourth quarter of 2011, we made certain modifications to the style and experience of our Brick House restaurants to appeal to a broader guest base, including menu modifications and the change from an all-female service staff to a more traditional service model.

Outlook

        We believe that a significant portion of the casual dining industry, particularly the traditional bar & grill segment, has become undifferentiated and the competitive landscape presents a significant growth opportunity for distinctive casual dining restaurants. Similar to the way the bar & grill segment emerged as an alternative to traditional family dining restaurants in the 1990's, we believe that distinctive casual dining restaurants like ours are now positioned to capture market share from conventional bar & grill restaurants. We intend to continue to position our restaurants to capitalize on that trend by constantly refining our brands, elevating food and service, and offering an aspirational experience to our guests. We expect that the casual dining segment will follow broader macroeconomic trends. However, over the past three fiscal years, we have substantially outperformed the rest of the casual dining segment in same store sales performance. We expect the factors above will continue to position our restaurant businesses favorably against our casual dining competitors.

        During fiscal year 2011, we opened seven new Joe's Crab Shack restaurants and four new Brick House Tavern+Tap restaurants. We have opened three additional Joe's Crab Shack restaurants during the twelve weeks ended March 26, 2012. In addition, we have closed one Joe's Crab Shack restaurant and are in the process of converting one Brick House restaurant to a Joe's Crab Shack restaurant.

        The financial results provided herein reflect the fact that, to this date, we have been a private company and as such have not incurred costs typically found in publicly traded companies. We expect that those costs will increase our general and administrative expenses annually, similarly to other companies who complete an initial public offering.

        In addition, we expect to recognize certain non-recurring costs as a result of our initial public offering, of which approximately $2.0 million consisting of a pro rata portion of our sponsor management fees up to the date of the transaction, the termination of the management agreement, and bonuses and other professional fees associated with the transaction, will be reflected in our general and administrative expenses for the twelve weeks ended June 18, 2012. Including an additional $0.4 million of non-recurring costs previously accrued, we expect to use approximately $2.4 million of cash during the twelve weeks ended June 18, 2012 to pay for these costs and other non-offering expenses, which are in addition to the estimated underwriting discounts, commissions, and offering expenses reflected in our pro forma cash and cash equivalents as of March 26, 2012 under "Capitalization."

Key Performance Indicators

        In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing are comparable restaurant sales growth, average weekly sales, restaurant operating weeks, average check, average unit volume and number of restaurant openings.

    Comparable Restaurant Sales Growth

        Comparable restaurant sales growth reflects the change in year-over-year sales for the comparable restaurant base. We define the comparable restaurant base to include those restaurants open for at least 104 weeks, or approximately 24 months. As of the fiscal years ended January 3, 2011 and

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January 2, 2012 and the twelve weeks ended March 26, 2012, there were 111, 114 and 118 restaurants, respectively, in our comparable restaurant base. Comparable restaurant sales growth can be generated by an increase in guest counts and/or by increases in the average check amount resulting from a shift in menu mix and/or increase in price. This measure highlights performance of existing restaurants as the impact of new restaurant openings is excluded.

        As a result of the 53-week fiscal year 2010, our fiscal year 2011 began one week later than our 2010 fiscal year. Due to the seasonality and holiday sensitivity of our sales, this one week lag can have a significant impact on comparable restaurant sales. Consistent with common industry practice, we present comparable restaurant sales on a calendar-adjusted basis that aligns current year sales weeks with comparable periods in the prior year, regardless of whether they belong to the same fiscal period or not. In order to provide useful information to investors, we have provided the change in comparable restaurant sales on both a calendar-adjusted basis and a fiscal period basis. Comparable restaurant sales for fiscal year ended January 2, 2012 presented on a calendar-adjusted basis compares the results for the period from January 4, 2011 through January 2, 2012 (weeks 1 through 52 of fiscal year 2011) to the results for the period from January 5, 2010 through January 3, 2011 (weeks 2 through 53 of fiscal year 2010). We believe that comparable restaurant sales calculated on a calendar-adjusted basis is more indicative of the health of our business. However, we also recognize that comparable restaurant sales calculated on a fiscal period basis is a useful measure when analyzing year-over-year changes in our consolidated financial statements. Unless noted otherwise, all references to comparable restaurant sales for the fiscal year ended January 2, 2012 in this prospectus refer to comparable restaurant sales calculated on a calendar-adjusted basis.

    Average Weekly Sales

        Average weekly sales is a key measure of individual restaurant economic performance of new and existing restaurants. Average weekly sales reflects total sales of all restaurants divided by restaurant operating weeks, which is the aggregate number of weeks that restaurants are in operation over a specified period of time. This measure is subject to seasonality for periods less than one year.

    Restaurant Operating Weeks

        Restaurant operating weeks is the aggregate number of weeks that our restaurants are in operation over a specific period of time.

    Average Check

        Average check is calculated for Joe's Crab Shack by dividing net sales by guest counts for a given time period. Management uses this indicator to analyze the dollars spent in our Joe's Crab Shack restaurants per guest. This measure aids management in identifying trends in guest preferences, as well as the effectiveness of menu price increases and other menu changes.

        Guest counts represent the estimated number of guests served in our Joe's Crab Shack restaurants. The count is estimated based on the number of entrées sold. Our estimates may vary from actual guest counts due to the variability in the level of sharing of certain entrée items on our menu. Given the significant level of alcohol sales and appetizer sales at Brick House, guest count is more difficult to quantify and therefore, we do not calculate average check as a key performance indicator for that brand.

    Average Unit Volume

        Average unit volume represents the average sales for restaurants included in the comparable restaurant base for a given time period, typically annually. Average unit volume reflects total sales for

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restaurants in our comparable restaurant base divided by the number of restaurants in our comparable restaurant base. This measure is subject to seasonality for periods less than one year.

    Number of Restaurant Openings

        Number of restaurant openings reflects the number of restaurants opened or converted during a particular reporting period. Before we open new restaurants or convert existing restaurants, we incur pre-opening costs, which are defined below. Typically, new restaurants open with an initial start-up period of higher than normalized sales volumes, which subsequently decrease to stabilized levels. While sales volumes are generally higher during the initial opening period, new restaurants typically experience normal inefficiencies in the form of higher cost of sales, labor and other direct operating expenses for several months and as a result, restaurant operating margins are generally lower during the start-up period of operation. The number and timing of restaurant openings has had, and is expected to continue to have, an impact on our results of operations.

Key Financial Definitions

    Revenues

        Revenues primarily consist of food and beverage sales, net of promotional allowances, discounts and employee meals. Revenues are influenced by new restaurant openings, comparable restaurant sales and total operating weeks.

    Cost of Sales

        Cost of sales consists primarily of food and beverage related costs. The components of cost of sales are variable in nature, change with sales volume, are influenced by menu mix and are subject to increases or decreases based on fluctuations in commodity costs.

    Labor and Benefits

        Labor and benefits include all restaurant-level management and hourly labor costs, including salaries, wages, benefits and performance incentives, payroll taxes and other indirect labor costs.

    Occupancy Expenses

        Occupancy expenses include fixed and variable portions of rent, common area maintenance and property taxes.

    Other Operating Expenses

        Other operating expenses include all other restaurant-level operating costs, the major components of which are operating supplies, utilities, repair and maintenance costs, marketing and advertising costs and credit card fees.

    General and Administrative Expense

        General and administrative expense is comprised of expenses associated with corporate and administrative functions that support the development and operations of restaurants, including multi-unit management and Restaurant Support Center staff compensation and benefits, travel expenses, Restaurant Support Center costs, stock compensation costs, legal and professional fees, costs related to abandoned new restaurant development sites and other related corporate costs.

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    Depreciation and Amortization

        Depreciation and amortization includes the depreciation of fixed assets, capitalized leasehold improvements and amortization of intangibles.

    Pre-Opening Costs

        Pre-opening costs consist of costs incurred prior to opening a new restaurant and are made up primarily of manager salaries, employee payroll and other costs related to training and preparing new restaurants for opening.

    Restaurant Impairments and Closures

        We review long-lived assets, such as property and equipment and intangibles, for impairment when events or circumstances indicate the carrying value of the assets may not be recoverable and record an impairment charge when appropriate. Expenses incurred following the closure of restaurants are also included.

    Loss on Disposal of Property and Equipment

        Loss on disposal of property and equipment represents the net book value of property and equipment less proceeds received, if applicable, on assets abandoned or sold. These losses are related to normal disposals in the ordinary course of business, along with disposals related to restaurant closures and selected restaurant remodeling activities.

    Interest Expense, Net

        Interest expense, net consists primarily of interest expense related to our debt and amortization of debt issuance costs net of interest income.

    Gain on Insurance Settlements

        Gain on insurance settlements represents proceeds received from natural disaster insurance claims in excess of the net book value of assets lost and related costs.

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Results of Operations

        The following table presents the consolidated statement of operations for the past three fiscal years and the twelve weeks ended March 28, 2011 and March 26, 2012 expressed as a percentage of revenues.

 
   
   
   
  Twelve Weeks Ended  
 
  Fiscal Year*  
 
  March 28,
2011
  March 26,
2012
 
 
  2009   2010   2011  

Revenues

    100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
 

Restaurant operating costs

                               
   

Cost of sales

    29.2     29.6     31.5     31.5     31.8  
   

Labor and benefits

    28.6     27.9     27.6     28.0     27.1  
   

Occupancy expenses

    8.2     7.8     7.5     7.4     7.0  
   

Other operating expenses

    18.9     18.2     17.7     17.2     17.6  
 

General and administrative

    6.1     5.9     5.8     6.3     6.2  
 

Depreciation and amortization

    4.1     3.8     4.0     3.8     3.8  
 

Pre-opening costs

    0.4     1.1     1.0     0.9     1.2  
 

Restaurant impairments and closures

    0.0     0.3     0.1     0.0     0.0  
 

Loss on disposal of property and equipment

    0.3     0.8     0.2     (0.0 )   0.0  
                       
   

Total costs and expenses

    95.8 %   95.4 %   95.2 %   95.2 %   94.8 %
                       

Income from operations

    4.2     4.6     4.8     4.8     5.2  

Interest expense, net

    (1.3 )   (1.1 )   (2.3 )   (2.9 )   (1.9 )

Gain on insurance settlements

    0.4     0.3     0.3     0.0     0.0  
                       

Income before income taxes

    3.3 %   3.8 %   2.8 %   1.9 %   3.3 %

Income tax expense

    0.1     0.4     0.0 (1)   0.5     0.8  
                       

Net income

    3.2 %   3.4 %   2.8 %   1.3 %   2.4 %
                       

*
The percentages reflected have been subject to rounding adjustments. Accordingly, figures expressed as percentages when aggregated may not be the arithmetic aggregation of the percentages that precede them.

(1)
Amount is less than 0.1%.

        The following table sets forth additional operating information that we use in assessing our performance as of the periods indicated:

 
   
   
   
  Twelve Weeks Ended  
 
  Fiscal Year  
 
  March 28,
2011
  March 26,
2012
 
 
  2009   2010   2011  

Selected Other Data (1)(2):

                               

Number of restaurants open (end of period):

                               
 

Joe's Crab Shack

    114     113     119     113     122  
 

Brick House Tavern+Tap

    5     13     16     16     16  
                       
 

Total restaurants

    119     126     135     129     138  

Average weekly sales (in thousands)

  $ 51   $ 54   $ 59   $ 57   $ 63  

Restaurant operating weeks

    6,060     6,499     6,871     1,534     1,638  

Comparable Restaurant Data (1)(2):

                               

Comparable restaurant base (end of period)

    112     111     114     111     118  

Average unit volume (in thousands)

  $ 2,599   $ 2,810   $ 2,970   $ 673   $ 714  

Change in comparable restaurant sales

    9.5 %   4.9 %   6.9 %   9.4 %   5.3 %

Average check (Joe's only)

  $ 20.80   $ 22.00   $ 23.07   $ 23.10   $ 23.79  

(1)
Includes both restaurant brands, unless otherwise noted.

(2)
See the definitions of key performance indicators beginning on page 53.

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Twelve Weeks Ended March 26, 2012 Compared to Twelve Weeks Ended March 28, 2011

    Financial Performance Overview

        The following are highlights of our performance for the twelve weeks ended March 26, 2012 compared to the twelve weeks ended March 28, 2011:

    revenues increased 18.3% to $103.4 million;

    comparable restaurant sales increased 5.3%;

    three new restaurants were opened during the twelve weeks ended March 26, 2012, bringing our total number of restaurants to 138 as of March 26, 2012, compared to three new restaurants opened during the twelve weeks ended March 28, 2011, bringing our total number of restaurants to 129 as of March 28, 2011;

    income from operations increased 28.4% to $5.4 million;

    effective income tax rate decreased to 26.1% for the twelve weeks ended March 26, 2012 from 28.6% for the twelve weeks ended March 28, 2011; and

    net income increased 115.1% to $2.5 million.

        The following table sets forth information comparing the components of net income for the twelve weeks ended March 28, 2011 and March 26, 2012.

 
  Twelve Weeks Ended    
   
 
 
  March 28,
2011
  March 26,
2012
  Increase
(Decrease)
  Percent
Change
 
 
  (dollars in thousands)
 

Revenues

  $ 87,431   $ 103,430   $ 15,999     18.3 %

Cost and expenses

                         
 

Restaurant operating costs

                         
   

Cost of sales

    27,519     32,915     5,396     19.6  
   

Labor and benefits

    24,450     28,047     3,597     14.7  
   

Occupancy expenses

    6,510     7,281     771     11.8  
   

Other operating expenses

    15,077     18,206     3,129     20.8  
 

General and administrative

    5,517     6,386     869     15.8  
 

Depreciation and amortization

    3,349     3,938     589     17.6  
 

Pre-opening costs

    805     1,242     437     54.3  
 

Restaurant impairments and closures

    28     49     21     75.0  
 

Loss (gain) on disposal of property and equipment

    (4 )       4     (100.0 )
                       
   

Total costs and expenses

    83,251     98,064     14,813     17.8 %
                       

Income from operations

    4,180     5,366     1,186     28.4  

Interest expense, net

    (2,558 )   (1,997 )   561     (21.9 )
                       

Income before income taxes

    1,622     3,369     1,747     107.7 %

Income tax expense

    464     878     414     89.2  
                       

Net income

  $ 1,158   $ 2,491   $ 1,333     115.1 %
                       

Other data:

                         
 

Restaurant operating weeks

    1,534     1,638     104     6.8 %
 

Number of restaurants open (end of period)

    129     138     9     7.0 %

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    Revenues

        Revenues were $103.4 million during the twelve weeks ended March 26, 2012, an increase of $16.0 million, or 18.3%, compared to revenues of $87.4 million during the twelve weeks ended March 28, 2011. Comparable restaurant sales contributed $4.1 million, or 4.7%, of the total revenue increase, while non-comparable restaurants contributed $11.9, or 13.6%, of the total revenue increase. Comparable restaurant sales increased 5.3% as a result of 2.2% in pricing and 3.1% in guest count and mix impacts.

    Cost of Sales

        Cost of sales increased by $5.4 million, or 19.6%, from $27.5 million during the twelve weeks ended March 28, 2011 to $32.9 million during the twelve weeks ended March 26, 2012 primarily due to increase in revenues. As a percentage of revenues, cost of sales increased to 31.8% from 31.5%. The increase in cost of sales as a percentage of revenues was primarily driven by a higher cost of crab along with menu mix changes which were partially offset by pricing. While the menu mix shift contributed to a higher cost of sales as a percentage of revenues, the shift yielded higher gross profit dollars.

    Labor and Benefits

        Cost of labor and benefits increased by $3.6 million, or 14.7%, from $24.4 million during the twelve weeks ended March 28, 2011 to $28.0 million during the twelve weeks ended March 26, 2012 primarily due to new restaurants. As a percentage of revenues, labor and benefits decreased from 28.0% to 27.1% primarily due to leverage relative to comparable restaurant sales growth.

    Occupancy Expenses

        Occupancy expenses increased by $0.8 million, or 11.8%, from $6.5 million during the twelve weeks ended March 28, 2011 to $7.3 million during the twelve weeks ended March 26, 2012 primarily due to new restaurant openings and increase in contingent rent. As a percentage of revenues, occupancy expenses decreased from 7.4% to 7.0% due to improved leverage.

    Other Operating Expenses

        Other operating expenses increased by $3.1 million, or 20.8%, from $15.1 million during the twelve weeks ended March 28, 2011 to $18.2 million during the twelve weeks ended March 26, 2012 mainly due to new restaurant openings. As a percentage of revenues, other operating expenses increased from 17.2% to 17.6% mainly due to increases in marketing and advertising costs in line with the timing and ramp up of marketing campaigns, and workers compensation costs, partially offset by a decrease in credit card fees caused by recent changes in legislation, and sales leverage.

    General and Administrative

        General and administrative expenses increased by $0.9 million, or 15.8%, from $5.5 million during the twelve weeks ended March 28, 2011 to $6.4 million during the twelve weeks ended March 26, 2012. As a percentage of revenues, general and administrative expenses decreased from 6.3% to 6.2% due to a combination of sales leverage and reduced abandoned restaurant development costs partially offset by higher legal expenses and increased professional and consulting fees in support of our initial public offering.

    Depreciation and Amortization

        Depreciation and amortization expense increased by $0.6 million, or 17.6%, to $3.9 million for the twelve weeks ended March 26, 2012 from $3.3 million for the twelve weeks ended March 28, 2011

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primarily due to a higher depreciable base from newly opened restaurants. As a percentage of revenue, depreciation and amortization was flat from last year at 3.8%.

    Pre-Opening Costs

        Pre-opening costs increased by $0.4 million, or 54.3%, to $1.2 million for the twelve weeks ended March 26, 2012 from $0.8 million for the twelve weeks ended March 28, 2011 mainly due to more restaurants in the pipeline that are scheduled to open in the immediately succeeding quarter that had already incurred expenses in the current quarter. Both twelve weeks ended March 28, 2011 and March 26, 2012 had three new restaurant openings.

    Interest Expense, Net

        Interest expense, net decreased by $0.6 million, or 21.9%, primarily due to the prior year write-off of debt issuance costs related to the refinancing of our debt prior to the end of March 2011 and $0.4 million of expense related to the termination of our interest rate swap. This decrease was partially offset by a $1.2 million increase in interest due to a higher average outstanding debt balance.

    Income Tax Expense

        Income tax expense increased by $0.4 million, or 89.2%, from $0.5 million during the twelve weeks ended March 28, 2011 to $0.9 million during the twelve weeks ended March 26, 2012 mainly due to a higher income before income taxes. The effective income tax rate decreased from 28.6% to 26.1% primarily due to an increase in federal tax credits related to FICA and Medicare tax paid on tips.

    Net Income

        As a result of the foregoing, net income increased by $1.3 million, or 115.1%, to $2.5 million for the twelve weeks ended March 26, 2012 from $1.2 million for the twelve weeks ended March 28, 2011.

Fiscal Year 2011 (52 Weeks) Compared to Fiscal Year 2010 (53 Weeks)

    Financial Performance Overview

        The following are highlights of our performance for fiscal year 2011 compared to fiscal year 2010:

    revenues increased 15.3% to $405.2 million;

    comparable restaurant sales increased 6.9% (7.2% increase on a fiscal period basis);

    new restaurants, net of closures, increased by nine during fiscal year 2011, bringing our total number of restaurants to 135 compared to 126 restaurants for fiscal year 2010;

    as a percentage of revenues, cost of sales increased to 31.5% from 29.6%, primarily due to the higher cost of crab and other commodities. While menu mix shift contributed to the higher percentage, the shift yielded higher gross profit dollars;

    income from operations increased 20.3% to $19.4 million;

    interest expense, net increased $5.4 million, primarily due to the write-off of debt issuance costs, the early termination of an interest rate swap agreement when we refinanced our debt, and the higher average balance of total debt outstanding during fiscal year 2011; and

    net income decreased 5.0%, to $11.3 million.

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        The following table sets forth information comparing the components of net income for fiscal year 2010 and fiscal year 2011.

 
  Fiscal Year    
   
 
 
  Increase
(Decrease)
  Percent
Change
 
 
  2010   2011  
 
  (dollars in thousands)
 

Revenues

  $ 351,327   $ 405,243   $ 53,916     15.3 %
 

Restaurant operating costs

                         
   

Cost of sales

    103,981     127,607     23,626     22.7  
   

Labor and benefits

    98,162     111,721     13,559     13.8  
   

Occupancy expenses

    27,440     30,244     2,804     10.2  
   

Other operating expenses

    63,963     71,696     7,733     12.1  
 

General and administrative

    20,634     23,340     2,706     13.1  
 

Depreciation and amortization

    13,445     16,063     2,618     19.5  
 

Pre-opening costs

    3,844     3,989     145     3.8  
 

Restaurant impairments and closures

    909     333     (576 )   (63.4 )
 

Loss on disposal of property and equipment

    2,797     821     (1,976 )   (70.6 )
                   
   

Total costs and expenses

    335,175     385,814     50,639     15.1 %
                   

Income from operations

    16,152     19,429     3,277     20.3  

Interest expense, net

    (3,831 )   (9,215 )   (5,384 )   140.5  

Gain on insurance settlements

    944     1,126     182     19.3  
                   

Income before income taxes

    13,265     11,340     (1,925 )   (14.5 )%

Income tax expense (benefit)

    1,417     87     (1,330 )   (93.9 )
                   

Net income

  $ 11,848   $ 11,253   $ (595 )   (5.0 )%
                   

Other data:

                         
 

Restaurant operating weeks

    6,499     6,871     372     5.7 %
 

Number of restaurants open (end of period)

    126     135     9     7.1 %

    Revenues

        Revenues were $405.2 million for fiscal year 2011, an increase of $53.9 million, or 15.3%, as compared to revenues of $351.3 million for fiscal year 2010. The revenue increase was driven by an increase in comparable restaurant sales and sales from non-comparable restaurants. Comparable restaurant sales and non-comparable restaurant sales contributed 4.9% and 10.4% of the total revenue increase, respectively. Comparable restaurant sales increased 6.9% for fiscal year 2011 compared to an increase of 4.9% for fiscal year 2010.

    Cost of Sales

        Cost of sales increased $23.6 million, or 22.7%, to $127.6 million for fiscal year 2011, as compared to $104.0 million for fiscal year 2010 due to the growth in revenues from new restaurants and existing restaurants. As a percentage of revenues, cost of sales increased to 31.5% for fiscal year 2011 from 29.6% for fiscal year 2010. The increase in cost of sales as a percentage of revenues was primarily driven by the higher cost of crab and certain other commodities along with menu mix changes, which were partially offset by pricing and operating efficiency improvements. While the menu mix shift contributed to a higher cost of sales as a percentage of revenues, the shift yielded higher gross profit dollars.

        While we provide our guests a large variety of menu items, crab and shrimp generally account for 43% of our total food purchases. We have experienced increases in crab pricing and believe the cost will remain high through 2012 before moderating towards mean historical prices.

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    Labor and Benefits

        Labor and benefits increased by $13.6 million, or 13.8%, to $111.7 million for fiscal year 2011 from $98.2 million for fiscal year 2010, primarily due to new restaurant openings and higher sales from the comparable restaurant base. As a percentage of revenues, labor and benefits decreased to 27.6% for fiscal year 2011 from 27.9% for fiscal year 2010. The improvement was primarily due to better leveraging of restaurant management personnel and efficiencies gained from implementing a new labor scheduling software system, partially offset by higher incentive payouts.

    Occupancy Expenses

        Occupancy expenses increased by $2.8 million, or 10.2%, to $30.2 million for fiscal year 2011 from $27.4 million for fiscal year 2010, primarily due to new restaurant openings. As a percentage of revenues, occupancy expenses decreased to 7.5% for fiscal year 2011 from 7.8% for fiscal year 2010 primarily due to improved leverage relative to comparable restaurant sales growth.

    Other Operating Expenses

        Other operating expenses increased by $7.7 million, or 12.1%, to $71.7 million for fiscal year 2011 from $64.0 million for fiscal year 2010 primarily due to new restaurant openings. As a percentage of revenues, other operating expenses decreased to 17.7% for fiscal year 2011 from 18.2% for fiscal year 2010, primarily due to improved leverage relative to comparable restaurant sales growth. As a percentage of revenue, restaurant supplies, repair and maintenance costs, utility costs, and marketing and advertising costs all decreased as a result of the improved leverage and were the main drivers of the decrease in operating costs relative to revenues. As a percentage of revenues, marketing and advertising costs were lower due to greater leverage with the growth in comparable restaurant sales and the increase in the number of Brick House restaurants, which have lower marketing and advertising expenditures.

    General and Administrative

        General and administrative expenses increased by $2.7 million, or 13.1%, to $23.3 million for fiscal year 2011 from $20.6 million for fiscal year 2010 primarily driven by higher personnel costs from increased Restaurant Support Center headcount to manage and support the increase in new restaurants, higher incentive expenses due to improved operating performance, and higher travel expenses due to restaurant development activity. As a percentage of revenues, general and administrative expenses decreased slightly to 5.8% for fiscal year 2011 from 5.9% for fiscal year 2010.

    Depreciation and Amortization

        Depreciation and amortization expense increased by $2.6 million, or 19.5%, to $16.1 million for fiscal year 2011 from $13.4 million for fiscal year 2010 primarily due to a higher depreciable base from new restaurants opened. As a percentage of revenues, depreciation and amortization increased to 4.0% for fiscal year 2011 from 3.8% for fiscal year 2010.

    Pre-Opening Costs

        Pre-opening costs increased by $0.1 million, or 3.8%, to $4.0 million for fiscal year 2011 from $3.8 million for fiscal year 2010. The increase was due to the timing of restaurant openings during 2011 and 2010. Eleven restaurants were opened during 2011 (including one conversion), and eleven restaurants were opened during 2010 (including one rebuild of an existing restaurant).

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    Restaurant Impairments and Closures

        There were no impairments in fiscal year 2011. Year-over-year impairment expense for fiscal year 2011 decreased by $0.3 million. Fiscal year 2011 restaurant closure expense of $0.3 million is a $0.3 million reduction on a year-over-year basis.

    Loss on Disposal of Property and Equipment

        Loss on disposal of property and equipment decreased by $2.0 million to $0.8 million for fiscal year 2011 from $2.8 million for fiscal year 2010. The loss in fiscal year 2011 was primarily due to a $0.6 million writeoff of property and equipment for a Brick House location to be converted to a Joe's in 2012, a closure of one Joe's Crab Shack restaurant, and writeoffs for abandoned remodel projects. The loss in fiscal year 2010 was primarily due to the writeoff of property and equipment for two Joe's Crab Shack restaurant locations; one was razed and rebuilt due to the condition of the facility, while the other underwent construction to re-brand it as a Brick House restaurant.

    Interest Expense, Net

        Interest expense, net increased by $5.4 million to $9.2 million for fiscal year 2011 from $3.8 million for fiscal year 2010 primarily due to the write-off of debt issuance costs related to the refinancing of our debt prior to the end of March 2011, the cost to terminate an interest rate swap agreement associated with that debt and the higher average outstanding debt balance.

    Gain on Insurance Settlements

        Gain on insurance settlements increased by $0.2 million due to an insurance claim for one restaurant that was severely flooded and rebuilt in 2010 and an additional $1.1 million gain recognized in fiscal year 2011 related to a restaurant damaged by hurricane in late 2008.

    Income Tax Expense

        Income tax expense decreased by $1.3 million from $1.4 million in fiscal year 2010 to $0.1 million in fiscal year 2011. The decrease is primarily due to the release of a $2.1 million deferred tax asset valuation allowance caused by our current and expected future taxable position. Our assessment of the valuation allowance indicated that it is more likely than not that our deferred tax assets, which are primarily established for FICA credit carryforwards, would be realized, hence, the reversal of the valuation allowance and the consequent reduction in income tax expense. Our effective tax rate decreased from 10.7% in fiscal year 2010 to 0.8% in fiscal year 2011 due mainly to FICA and Medicare tax paid on tips allowable as federal tax credit.

    Net Income

        As a result of the foregoing, net income decreased $0.6 million, or 5.0%, in fiscal year 2011 compared to fiscal year 2010.

Fiscal Year 2010 (53 Weeks) Compared to Fiscal Year 2009 (52 Weeks)

    Financial Performance Overview

        The following are highlights of our performance for fiscal year 2010 compared to fiscal year 2009:

    revenues increased 14.1% to $351.3 million;

    comparable restaurant sales increased 4.9%;

    new restaurants, net of closures, increased by seven;

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    as a percentage of revenues, labor decreased to 27.9% from 28.6%, primarily due to the efficiencies gained in hourly labor from implementing a new labor scheduling software system and better leveraging of restaurant management through increases in comparable restaurant sales;

    income from operations increased 26.2% to $16.2 million; and

    net income increased 20.0%, to $11.8 million.

        The following table sets forth information comparing the components of net income for fiscal year 2009 and fiscal year 2010.

 
  Fiscal Year    
   
 
 
  Increase
(Decrease)
  Percent
Change
 
 
  2009   2010  
 
  (dollars in thousands)
 

Revenues

  $ 307,801   $ 351,327   $ 43,526     14.1 %
 

Restaurant operating costs

                         
   

Cost of sales

    89,845     103,981     14,136     15.7  
   

Labor and benefits

    87,920     98,162     10,242     11.6  
   

Occupancy expenses

    25,243     27,440     2,197     8.7  
   

Other operating expenses

    58,140     63,963     5,823     10.0  
 

General and administrative

    18,765     20,634     1,869     10.0  
 

Depreciation and amortization

    12,733     13,445     712     5.6  
 

Pre-opening costs

    1,323     3,844     2,521     190.6  
 

Restaurant impairments and closures

    15     909     894     5,960.0  
 

Loss on disposal of property and equipment

    1,017     2,797     1,780     175.0  
                   
   

Total costs and expenses

    295,001     335,175     40,174     13.6 %
                   

Income from operations

    12,800     16,152     3,352     26.2  

Interest expense, net

    (3,867 )   (3,831 )   36     (0.9 )

Gain on insurance settlements

    1,192     944     (248 )   (20.8 )
                   

Income before income taxes

    10,125     13,265     3,140     31.0 %

Income tax expense

    255     1,417     1,162     455.7  
                   

Net income

  $ 9,870   $ 11,848   $ 1,978     20.0 %
                   

Other data:

                         
 

Restaurant operating weeks

    6,060     6,499     439     7.2 %
 

Number of restaurants open (end of period)

    119     126     7     5.9 %

    Revenues

        Revenues were $351.3 million for fiscal year 2010, an increase of $43.5 million, or 14.1%, as compared to revenues of $307.8 million for fiscal year 2009. The revenue increase was driven by sales from non-comparable restaurants and comparable restaurant sales and one additional operating week in fiscal year 2010, contributing 7.7%, 4.6% and 1.9% of the total revenue increase, respectively. Year-over-year comparable restaurant sales increased 4.9% for fiscal year 2010.

    Cost of Sales

        Cost of sales increased $14.1 million, or 15.7%, to $104.0 million for fiscal year 2010, as compared to $89.8 million for fiscal year 2009, primarily due to the growth in revenues from new restaurants and existing restaurants. As a percentage of revenues, cost of sales increased to 29.6% for fiscal year 2010 from 29.2% for fiscal year 2009. The increase in cost of sales as a percentage of revenues was primarily driven by the impact from menu mix changes, which were partially offset by pricing and operating efficiency improvements. While the menu mix shift contributed to a higher cost of sales as a percentage of revenues, the shift also yielded higher gross profit dollars.

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    Labor and Benefits

        Labor and benefits increased by $10.2 million, or 11.6%, to $98.2 million for fiscal year 2010 from $87.9 million for fiscal year 2009, primarily due to new restaurant openings and higher sales from the comparable restaurant base. As a percentage of revenues, labor and benefits decreased to 27.9% for fiscal year 2010 from 28.6% for fiscal year 2009. The improvement was primarily due to efficiencies gained in hourly labor from implementing a new labor scheduling software system and better leveraging of restaurant management personnel through increases in comparable restaurant sales.

    Occupancy Expenses

        Occupancy expenses increased by $2.2 million, or 8.7%, to $27.4 million for fiscal year 2010 from $25.2 million for fiscal year 2009, primarily due to new restaurant openings. As a percentage of revenues, occupancy expenses decreased to 7.8% for fiscal year 2010 from 8.2% for fiscal year 2009, primarily due to improved leverage relative to comparable restaurant sales growth.

    Other Operating Expenses

        Other operating expenses increased by $5.8 million, or 10.0%, to $64.0 million for fiscal year 2010 from $58.1 million for fiscal year 2009 primarily due to new restaurant openings. As a percentage of revenues, other operating expenses decreased to 18.2% for fiscal year 2010 from 18.9% for fiscal year 2009, primarily due to improved leverage relative to comparable restaurant sales growth. Lower marketing and advertising expenses as a percentage of revenues were the main drivers of the decrease in other operating costs relative to revenues. As a percentage of revenues, marketing and advertising costs are lower due to greater leverage with the growth in comparable restaurant sales and the increase in the number of Brick House restaurants, which have lower marketing and advertising expenditures.

    General and Administrative

        General and administrative expenses increased by $1.9 million, or 10.0%, to $20.6 million for fiscal year 2010 from $18.8 million for fiscal year 2009, primarily due to higher personnel costs from increased multi-unit manager and Restaurant Support Center headcount to manage and support the increase in new restaurants, higher travel expenses due to restaurant development activity, partially offset by lower legal expenses due to improved experience in resolving specific claims against the Company. As a percentage of revenues, general and administrative expenses decreased to 5.9% for fiscal year 2010 from 6.1% for fiscal year 2009, primarily due to improved leverage relative to the growth in revenues.

    Depreciation and Amortization

        Depreciation and amortization expense increased by $0.7 million, or 5.6%, to $13.4 million for fiscal year 2010 from $12.7 million for fiscal year 2009, primarily due to a higher depreciable base from new restaurants opened. As a percentage of revenues, depreciation and amortization declined to 3.8% for fiscal year 2010 from 4.1% for fiscal year 2009.

    Pre-Opening Costs

        Pre-opening costs increased by $2.5 million, or 190.6%, to $3.8 million for fiscal year 2010 from $1.3 million for fiscal year 2009. The increase was due to the number of restaurant openings. Eleven restaurants were opened in fiscal year 2010 (including one that reopened after being rebuilt) compared to five restaurants opened in fiscal year 2009, one of which was a conversion.

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    Restaurant Impairments and Closures

        We performed a long-lived asset impairment analysis during fiscal year 2010 and determined that two restaurants had carrying amounts in excess of their fair value. Impairment charges of $0.3 million were recorded as a result. No impairment charges were recorded in fiscal year 2009. Three restaurants were also closed in fiscal year 2010 accounting for the additional $0.6 million in expense.

    Loss on Disposal of Property and Equipment

        Loss on disposal of property and equipment increased by $1.8 million to $2.8 million for fiscal year 2010 from $1.0 million for fiscal year 2009. The loss in fiscal year 2010 was primarily due to the writeoff of property and equipment for two Joe's Crab Shack restaurant locations; one was razed and rebuilt due to the condition of the facility while the other underwent construction to re-brand it as a Brick House restaurant. The loss in fiscal year 2009 was due to the closure of two restaurants and the writeoff of other assets no longer used in the business.

    Interest Expense, Net

        Interest expense, net decreased slightly to $3.8 million for fiscal year 2010, primarily due to capitalization of interest cost offset by an extra week of interest on our outstanding debt from our bank credit facility.

    Gain on Insurance Settlements

        The gain on insurance settlements of $0.9 million for fiscal year 2010 related to the settlement of an insurance claim for one restaurant severely flooded and rebuilt in fiscal year 2010. The gain on insurance settlements of $1.2 million in fiscal year 2009 related to an insurance claim for hurricane damage to several Texas restaurants incurred late in fiscal year 2008.

    Income Tax Expense

        Income tax expense increased by $1.2 million to $1.4 million for fiscal year 2010 from $0.3 million for fiscal year 2009. The effective tax rates were 10.7% and 2.5% for fiscal year 2010 and fiscal year 2009, respectively. The tax rate for fiscal year 2010, relative to pretax income of $13.3 million, was impacted by significant permanent differences, primarily FICA & Medicare tax paid on tips allowable as a federal tax credit, and a $1.9 million partial release of the reserve against deferred tax assets. The impact of these items is less profound in 2010 and results in a higher effective tax rate due to the increase in pretax income. The tax rate for fiscal year 2009, relative to pretax income of $10.1 million, was also predominantly impacted by permanent differences and related federal tax credits.

        Net deferred tax assets consist primarily of temporary differences and net operating loss and credit carry-forwards. The valuation allowance was established primarily on FICA credit carry-forwards that begin to expire in 2027, as we believed that it was more likely than not that these deferred tax assets would not be realized. We will analyze the need for this reserve periodically. The tax benefits relating to any reversal of the valuation allowance will be recognized as a reduction of income tax expense.

    Net Income

        As a result of the foregoing, net income increased 20.0%, or $2.0 million, to $11.8 million for fiscal year 2010 from $9.9 million for fiscal year 2009.

Quarterly Results and Seasonality

        The following table sets forth certain unaudited financial and operating data in each fiscal quarter during fiscal years 2010 and 2011. The unaudited quarterly information includes all normal recurring

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adjustments that we consider necessary for a fair presentation of the information shown. This information should be read in conjunction with the audited consolidated and unaudited condensed consolidated financial statements and related notes thereto appearing elsewhere in this prospectus. There is a seasonal component to Joe's Crab Shack's business which typically peaks in the summer months (June, July and August) and slows in the winter months (November, December, January). Because of the seasonality of our business, results for any fiscal quarter are not necessarily indicative of the results that may be achieved for future fiscal quarters or for the full fiscal year. All quarterly periods presented below include 12 weeks, except for the fourth quarter of fiscal years 2009 and 2011, which included 16 weeks and the fourth quarter of fiscal year 2010, which included 17 weeks.

 
  Fiscal Year 2009   Fiscal Year 2010   Fiscal Year 2011   Fiscal Year 2012  
 
  First
Quarter
  Second
Quarter
  Third
Quarter
  Fourth
Quarter
  First
Quarter
  Second
Quarter
  Third
Quarter
  Fourth
Quarter
  First
Quarter
  Second
Quarter
  Third
Quarter
  Fourth
Quarter
  First
Quarter
 

Number of restaurants open at end of period

    116     115     117     119     122     123     123     126     129     133     135     135     138  

Total revenues (in millions)

  $ 65.8   $ 78.5   $ 90.3   $ 73.2   $ 71.9   $ 88.5   $ 102.6   $ 88.3   $ 87.4   $ 103.2   $ 113.2   $ 101.4   $ 103.4  

Change in total comparable restaurant sales

    8.4 %   13.3 %   11.1 %   4.3 %   5.1 %   3.4 %   4.9 %   6.5 %   9.4 %   6.0 %   5.5 %   7.3 %   5.3 %
                                                       

Average weekly sales (in thousands)

  $ 47   $ 57   $ 65   $ 39   $ 50   $ 60   $ 69   $ 42   $ 57   $ 66   $ 70   $ 47   $ 63  

Average unit volumes (in thousands)

  $ 555   $ 674   $ 775   $ 589   $ 585   $ 695   $ 822   $ 682   $ 673   $ 774   $ 831   $ 700   $ 714  

Liquidity and Capital Resources

    General

        Our primary sources of liquidity and capital resources have been cash provided from operating activities, cash and cash equivalents, and the senior secured credit facility. Our primary requirements for liquidity and capital are new restaurant development, working capital and general corporate needs. Our operations have not required significant working capital and, like many restaurant companies, we have been able to operate, and will continue to operate with negative working capital. Our requirement for working capital is not significant since our restaurant guests pay for their food and beverage purchases in cash or payment cards (credit or debit) at the time of sale. Thus, we are able to sell many of our inventory items before we have to pay our suppliers for such items. Our restaurants do not require significant inventories or receivables.

        We believe that these sources of liquidity and capital will be sufficient to finance our continued operations and expansion plans for at least the next twelve months.

        The following table shows summary cash flows information for fiscal years 2009, 2010 and 2011, and the twelve weeks ended March 28, 2011 and March 26, 2012:

 
   
   
   
  Twelve Weeks Ended  
 
  Fiscal Years  
 
  March 28,
2011
  March 26,
2012
 
 
  2009   2010   2011  
 
  (in thousands)
 

Net cash provided by (used in):

                               
 

Operating activities

  $ 14,953   $ 38,237   $ 32,717   $ 9,897   $ 10,380  
 

Investing activities

    (14,745 )   (30,486 )   (39,817 )   (8,297 )   (5,612 )
 

Financing activities

    (342 )   (155 )   (1,747 )