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SEC Filings

S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/23/2005
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Quarterly Financial Data

        The following table presents consolidated statements of operations data for each of the eleven quarters in the period ended September 30, 2005. The operating results for any quarter are not necessarily indicative of the results for any subsequent quarter.

 
  2003 Quarters Ended
  2004 Quarters Ended
  2005 Quarters Ended
 
  Mar. 31
  June 30
  Sept. 30
  Dec. 31
  Mar. 31
  June 30
  Sept. 30
  Dec. 31
  Mar. 31
  June 30
  Sept. 30
 
  (in millions)

Revenue   $ 64.7   $ 77.3   $ 85.4   $ 88.1   $ 101.4   $ 117.2   $ 124.6   $ 127.5   $ 133.4   $ 156.3   $ 164.7
Operating income (loss)     (4.0 )   (0.6 )   0.2     (3.5 )   0.7     4.9     4.2     (3.8 )   4.4     9.3     9.5
Net income (loss)     (3.9 )   (0.5 )   0.3     (3.5 )   0.5     5.0     4.3     (3.7 )   2.6     25.7     5.1
Number of stores opened in quarter     7     10     28     31     29     26     21     28     18     17     17

        Seasonal factors cause our revenue to fluctuate from quarter to quarter. Historically, our revenue is lower in the first and fourth quarters due, in part, to the holiday season and because fewer people eat out during periods of inclement weather (the winter months) than during periods of mild or warm weather (the spring, summer and fall months). Other factors also have a seasonal effect on our results. For example, stores located near colleges and universities generally do more business during the academic year. The number of trading days can also affect our results. For example, 2004 was a leap year, which contributed about 3 percentage points of the increase in our restaurant sales in February of that year. Overall, on a year-to-year basis, changes in trading days do not have a significant impact on our results.

        Our quarterly results are also affected by other factors such as the number of new stores opened in a quarter and unanticipated events. New stores have lower margins immediately following opening as a result of the expenses associated with opening new stores and their operating inefficiencies in the months immediately following opening. Because we tend to open more new stores later in the fiscal year, our fourth quarter net income may be lower than in other quarters. In addition, unanticipated events also impact our results. For example, in the second quarter of 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance, resulting in a net tax benefit of $16.7 million in that quarter. At December 31, 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges and for the cost of replacing cards and monitoring expenses and fees, which reduced our operating income. Our loss on disposal of assets in the first quarter of 2004 decreased compared to the same period in 2003 largely due to a $2.0 million write-off associated with the closing of three stores in the first quarter of 2003. Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year.

Liquidity and Capital Resources

        Our primary liquidity and capital requirements are for new store construction, working capital and general corporate needs. We have financed these requirements primarily through equity sales to McDonald's and others as well as through cash flows from operations. At September 30, 2005, we had $2.0 million in cash and cash equivalents.

        McDonald's and, to a lesser extent, some of our minority shareholders have historically provided us with significant financing. We have also historically obtained short-term borrowings from McDonald's from time to time under documented lines of credit at an interest rate equal to the U.S. prime rate plus 100 basis points. We've repaid these loans using a portion of the proceeds of private placements of our equity securities. In March 2004, April 2003 and April 2002, we issued shares of common stock to McDonald's, certain directors, employees and other persons who were accredited investors (consisting of friends and family of our employees and persons having business relationships with us), in each case as identified in our shareholders' agreement, for an aggregate purchase price of $65.0 million, $38.0 million and $55.0 million, respectively.

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