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SEC Filings

CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/05/2005
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our vision, demonstrating our commitment to cooking fresh food. Through this approach, we think we've made interesting and intelligent design available to the general public.

    Customers Who Sell For Us

        We believe the best and most recognizable brands aren't built through advertising or promotional campaigns alone, but rather through deeply held beliefs evident in how a company runs its business. All of the ways that we project ourselves—beginning with each customer's experience in our stores, the look and feel of our stores, our advertising and promotional programs, and the design items that carry our name or logo—influence how people think about us. By adhering to this principle, we believe that Chipotle is becoming a highly recognized brand. Although our marketing program has many components, we believe the single greatest contributor to our success has been word-of-mouth, with our customers learning about us and telling others. Our website generated about 290,000 visits in August 2005, and some of our customers have gone so far as to develop websites about Chipotle, providing a way for Chipotle customers to share their stories. This kind of support helps us grow without requiring additional advertising to drive our business.

        Our approach to food, service and atmosphere have captured the attention of some of the country's most renowned news media, including several well-regarded food critics, which we think is unusual in our segment of the restaurant industry. The Washington Post, Food and Wine magazine, the New York Times, Fast Company magazine, the Seattle Times, the Atlanta-Journal Constitution, the Washington Post, the Denver Post, and many other newspapers, magazines and media outlets have praised Chipotle. MTV's popular reality program, "The Osbournes," even had an entire episode devoted to rocker Ozzy Osbourne's love of Chipotle burritos. Chipotle has also appeared in MTV's "The Real World: Austin" series. When we open a new store, we plan a range of activities to introduce our food to the local community, including fundraising for local charities, "free days" when customers can sample our food for free, and outreach programs for local businesses, schools and other neighborhood institutions, to help create interest in the store from the start.

        Our advertising, which includes print, outdoor, transit and radio ads and most recently a sponsorship of a cooking show on the Public Broadcasting Service, has a low-key and irreverent voice that has been popular with customers. We've taken that approach because we believe that in a world where everyone is shouting for your attention, it's sometimes "the whisper" that's heard.

    Rapidly Improving Financial Performance

        Our business model is simple. We start by giving our employees fun and meaningful work, and treating them with respect. We think this makes them happier, and we believe happier employees help make customers happier. Happier customers come back more frequently and are more likely to tell their friends and families about their experience at our stores. This simple but effective approach has helped us build a sizeable and loyal customer base and resulted in rapidly improving financial performance over the last decade. Our revenue was $470.7 million in 2004, a 130% increase from 2002, driven by new store openings and increased average store sales. During 2002, 2003 and 2004, we opened 237 stores in total. Increases in average store sales have occurred partly because the time it takes for our new stores to ramp up has consistently shortened as we've grown and customers have learned about our brand, enabling new stores to open with higher average sales. Average sales for new stores in the first 90 trading days increased 29.4% to $303,390 for stores opened in 2004 from $234,450 for stores opened in 2002. We've also had strong growth in comp store sales, due mainly to an increase in the number of transactions. Our net income reached $6.1 million in 2004 and $33.4 million (inclusive of a non-recurring $20.3 million tax benefit) in the first nine months of 2005, and our EBITDA was $27.9 million in 2004 and $43.7 million in the first nine months of 2005.


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