In a regulatory filling on Monday Shake Shack Inc said it is looking to raise a place holder amount of $100 million, more than 10 years after the restaurateur Danny Meyer opened its first location in New York.
The company has gone a long way since Mr. Meyer set up a single hog dog cart in 2001 as part of a program to renovate Manhattans Madison Square Park. Currently Shake Shack operates 63 locations globally, including London and Dubai.
Shake Shack is hoping to get listed on the New York Stock Exchange under the ticker symbol SHAK and it has appointed JPMorgan Chase and Goldman Sachs to manage the offering. The structure of the IPO includes several tax and governance provisions aimed at defending the early investments made by the companys founders and investors.
However, the company is obligated to wait at least 21 days before it starts to officially advertise its stock sale because Shake Shack filled as an emerging-growth company under the Jumpstart Our Business Startups Act.
The filling said that US burger sales reached $72 billion in 2013, which is twice as much of what pizza sales generated for the same period. Globally burger sales accounted for $135 billion. Shake Shack also said it has been profitable during the recent two financial years, for 2012 it reached net income of $4.1 million on a revenue of $57 million and in 2013 it had net income of $5.4 million with a revenue of $82 million.
Additionally the company said its revenue increased 41% to $84 million for the first nine months of 2014, but its profit fell to 3.5 million as Shake Shack was focused on creating new locations.
According to the filling the company will use to funds from the IPO to repay debt, open new locations and renovate existing ones. The company also announced it plans to open 10 new stores in the US every year in line with its attempt to reach 450 locations over the long term.
Shake Shack has built a reputation for using only few specially picked suppliers, which has won them many customers. However, the company warned that it may also hurt them.
“If there is an interruption of operation at any one of our regional grinder’s facilities, we face an immediate risk because each Shack typically has less than three days of beef patty inventory on hand,” Shake Shack said.
Shake Shack is privately owned by Union Square Hospitality Group, which is led by Mr. Meyer as CEO.