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During the IPO season Francis Gaskins, editor of IPOdesktop.com & director of research for Equities.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has been quoted over 500 times by such financial media as the Wall Street Journal, Bloomberg, Reuters, Associated Press, USA Today among others. Those quotes are available at IPOdesktop.com. His varied personal interests include violin playing. For example, he is concertmaster of the Palisades Symphony. He also holds an MBA from Harvard Business School (finance) and an AB from Princeton University (economics).

IPO Preview: Bojangles’ Restaurants, Inc. (BOJA)

Based in Charlotte, NC, Bojangles’ Restaurants, Inc. (Pending:BOJA) scheduled a $100 million IPO on Nasdaq with a market capitalization of $574 million at a price range midpoint of $16 for Friday, May 8, 2015. Price range raised to $18019. No change in conclusiion.

The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: BofA Merrill Lynch, Wells Fargo Securities, Jefferies
Co-managers: Barclays, Goldman Sachs, Piper Jaffray, William Blair, KeyBanc Capital Markets, RBC Capital Markets, Stephens, SunTrust Robinson Humphrey

End of lockup (180 days): Wednesday, November 4, 2015
End of 25-day quiet period: Tuesday, June 2, 2015

Summary
Bojangles’ is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from its Southern recipes.

In fiscal 2014, BOJA’s 254 company-operated and 368 franchised restaurants (628 total), primarily located in the Southeastern United States, generated over $1 billion in system-wide sales, representing $406.8 million in company restaurant revenues and $628.6 million in franchise sales which contributed $23.7 million in franchise royalty and other franchise revenues in fiscal 2014.

Valuation
Glossary

Valuation Ratios Mrkt Cap ($mm) Price /Sls Price /Erngs Price /BkVlue Price /TanBV % offered in IPO
Bojangles $574 1.3 22.1 5.1 -0.6 18%

Conclusion
Fast casual restaurant

Neutral plus

P/E of 22.1. price to sales of 1.3

Expects 7-8% system-wide annual growth

628 total stores, 59% franchised

Sees 1400 potential in 10 states, 3500 nationally

Price to book of 5.1, Rev +15%, income +7.4%

Operating income 12% of rev

Price to tangible book of -.6, indicates weak balance sheet

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business
Bojangles’ is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from its Southern recipes.

Over the last 38 years, BOJA believes Bojangles’ has become an iconic brand with a cult-like following due to its famous, made-from-scratch biscuits baked every 20 minutes, its fresh, never-frozen bone-in fried chicken, its unique fixin’s and its Legendary Iced Tea.

BOJA believes it offers fast-casual quality food combined with quick-service speed, convenience and value. While BOJA serves its full menu of craveable food across all dayparts, BOJA is especially known by customers for its breakfast offerings and generate, on average, over $650,000 annually per company-operated restaurant before 11:00 a.m.

In fiscal 2014, BOJA’s 254 company-operated and 368 franchised restaurants (628 total), primarily located in the Southeastern United States, generated over $1 billion in system-wide sales, representing $406.8 million in company restaurant revenues and $628.6 million in franchise sales which contributed $23.7 million in franchise royalty and other franchise revenues in fiscal 2014.

Over this same period, BOJA’s restaurants generated a system-wide AUV (annual unit volume) of $1.8 million, which BOJA believes is among the highest in the QSR and fast-casual segments.

Growth plan
BOJA believes it is in the early stages of its growth story.

In fiscal 2014, BOJA opened 24 company-operated restaurants and 28 franchised restaurants, contributing to annual system-wide unit growth of 7.8%.

In fiscal 2015, BOJA expects to open 22 to 25 new company-operated restaurants and 28 to 32 new franchised restaurants.

Over the long-term, BOJA plans to continue growing the number of Bojangles’ system-wide restaurants by approximately 7% to 8% annually, while maintaining a similar proportion of company-operated and franchised units.

Restaurant potential (628 current locations)
Based on experience and research conducted for BOJA by Buxton, a customer analytics research firm, BOJA believes the total restaurant potential in the current footprint of ten states is more than 1,400 locations, and across the United States BOJA believes the total restaurant potential is more than 3,500 locations

Background
Since its founding in Charlotte, North Carolina in 1977, BOJA’s core menu centered on “chicken ‘n biscuits” has remained largely unchanged.

BOJA believes its variety of fresh, flavorful and Southern-inspired items appeals to a broad customer demographic across its five day parts: breakfast, lunch, snack, dinner and after dinner.

Bojangles’ is known for its breakfast menu, which is served all day, every day, and includes its top selling Cajun Filet Biscuit. BOJA also offers hand-breaded, bone-in chicken marinated for at least 12 hours, Chicken Supremes, Homestyle Chicken Tenders, sandwiches and wraps, as well as unique fixin’s including its Seasoned Fries, Bo-Tato Rounds, Cajun Pintos and Dirty Rice.

BOJA’s Bo-Smart menu features items such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans.

In addition to its individual menu items, BOJA offers combos and family meals that appeal to large parties, as well as its Big Bo Box, which is perfect for tailgating events. BOJA’s food is complemented by its Legendary Iced Tea that is steeped the old-fashioned way, providing a rich flavor that its customers crave.

BOJA’s high-quality, handcrafted food also represents a great value with an average check of only $6.68 for company-operated restaurants in fiscal 2014.

BOJA believes its distinct menu with fresh, made-from-scratch offerings combined with a compelling average check creates an attractive value proposition for its customers.

BOJA’s mission is to win the hearts of its customers by delivering quality and service all day, every day, and BOJA believes its passionate team members and culture are fundamental to its success. The excitement for BOJA’s brand and enthusiasm of its customers can be best summarized by its famous tagline…”It’s Bo Time!”

Intellectual property
BOJA has registered Bojangles® and certain other names used by its restaurants as trademarks or service marks with the United States Patent and Trademark Office.

The Bojangles® trademark is also registered in some form in approximately 25 foreign countries. BOJA’s current brand campaign tag line, It’s Bo Time®, has also been registered with the United States Patent and Trademark Office.

BOJA also has registered the configuration of its Big Bo Box as a trademark, and BOJA continues to expand the family of Bojangles’ related trademarks, often using some derivation of “Bo” in the trademark. In addition, the Bojangles’ logo, website name and address and Facebook and Twitter accounts are BOJA’s intellectual property.

Competition
BOJA competes with fast-casual restaurants, such as Chipotle and Panera Bread Company, quick-service restaurants that serve breakfast, such as McDonald’s and Hardee’s, and chicken-specialty and Cajun quick-service restaurants, such as Chick-fil-A, Popeyes Louisiana Kitchen and Zaxby’s.

5% shareholders pre-IPO
Advent International Corporation and affiliates 94.33%

Steven J. Collins 94.33%

Christopher J. Doubrava 94.33%

Steven M. Tadler 94.33%

Dividends
No dividends are planned.

Use of proceeds
BOJA will not receive any proceeds from the sale of shares in this offering, including the sale of any shares by the selling stockholders if the underwriters exercise their option to purchase additional shares.

Disclaimer: This BOJA IPO report is based on a reading and analysis of BOJA’s S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.