Wingstop Inc. (WING)
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Status Update

Mar 14, 2022

Operator

Good evening, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Inc. Business Update Conference Call. All participants will be in a listen only mode. Please note that this conference is being recorded today, Monday, March 14, 2022. On the call today are Mr. Charlie Morrison, former Chairman and Chief Executive Officer, and Mr. Michael Skipworth, President and Chief Executive Officer. I would now like to turn the conference call over to Mr. Charlie. Please go ahead.

Charlie Morrison
Former Chairman and CEO, Wingstop

Welcome and good afternoon. This afternoon, we issued a press release announcing my resignation as Chairman and CEO at Wingstop, and the appointment of Michael Skipworth as President and CEO. After nearly 10 years leading this tremendous brand, today is a bittersweet moment for me. However, I have this opportunity to hand over the reins to a talented and exceptional leader. Michael has been by my side as my esteemed colleague and trusted partner and friend for the past eight years. We've accomplished great things together. When I look back on my time here at Wingstop, our strategy of strengthening best in class returns, scaling the global brand, and accelerating growth has remained consistent. At the foundation of that strategy is people, which is where we have focused our time as we build our bench of talent for Wingstop's next phase of growth.

The board of directors' immediate decision to appoint Michael as CEO is a testament to our focus on people. I truly believe we have some of the best and brightest minds in the business right here at Wingstop, and know the team Michael has at the helm of this company is an industry-leading team that will further propel this business forward. Great things are in store for this brand, and I couldn't be more honored to turn the keys over to a phenomenal leader and friend. Michael joined Wingstop in 2014, and together, we took the brand public in 2015 with one of the most successful IPOs in the history of the restaurant industry. Since our IPO, our five-year stacked domestic same-store sales is nearly 50%. New unit development averaged a growth rate of 11.5% annually. System-wide sales growth averaged 19%, and adjusted EBITDA growth averaged 20%.

We achieved our 18th consecutive positive same-store sales growth year with Wingstop, and Wingstop has an incredible amount of momentum behind the brand. Over the years, you all have forged personal relationships with Michael as our CFO, COO, and now our CEO. I address you today knowing the future of this company couldn't be in better hands. Although I'm moving on from Wingstop, I will remain one of the brand's biggest cheerleaders as I watch Michael and this talented team scale the company for its next inflection point of success. I'd now like to turn the call over to Michael Skipworth, Wingstop's President and CEO, for a few comments.

Michael Skipworth
President and CEO, Wingstop

Thank you, Charlie, and thank you all for joining us today. As Charlie transitions to his new opportunity, I found myself reflecting on the past decade he's had with our brand. I have mixed emotions as we bid farewell to Charlie and I transition into my new role. Not only has he been a great mentor and business partner, we've also developed a close friendship over the years. We've experienced a great deal together over the past eight years, and I wanna thank him for the opportunity he provided me to join this tremendous brand. When Charlie joined in 2012, his focus was on scaling the brand for rapid growth. At the time when he arrived, technology was not a priority. Cash registers and fax machines were used to fulfill orders, and digital sales accounted for a marginal percentage of our business.

He began investing in talent and building his team for the growth he knew would come through the execution of our strategies. He maintained the simplicity of the model, driving best in class returns for our brand partners and pivoted our business towards a technology forward company. Fast forward, our AUVs are $1.6 million, and digital sales mix now sustain greater than 60%. We're well on our way to executing against our stated goal of digitizing 100% of transactions. In March 2020, our world dramatically changed. No one ever prepares their business for a pandemic, but Wingstop was ready. The resiliency of Wingstop was proven once again as domestic same-store sales increased 21% in 2020, and we opened a record number of restaurants.

Many thought it would be challenging for us to lap 2020's performance, but we did it, and catapulted straight into our 18th year of consecutive same-store sales growth. It was this performance and resiliency that gave us the confidence to increase our global restaurant target to 7,000+. I truly believe the best is yet to come. The momentum we have behind this brand is stronger than it's ever been. We enter 2022 with a record development pipeline and wing deflation on the horizon, which positions us for the potential of another record year. We also have the talent in place to take Wingstop to the next level. I have the utmost confidence in my leadership team and know our bench of talent throughout the organization supports our growth aspirations well into the future.

I also wanna take a moment and to acknowledge and thank our board of directors for their confidence in me to lead our brand, and I am truly humbled by this opportunity. I look forward to the future of Wingstop with excitement and ask you all to join me in wishing Charlie the best in his new venture. Thank you for your time today.

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