IPO Snapshot: Burger King (BKC)

All data taken from latest prospectus. Likely listing next week:

* Currently into first 9 months of fiscal 2006.

* FY 2005 EBITDA up Y/Y 65% or absolutely $89M ($225M/$136M). Annualized 9 month 2006 EBITDA up Y/Y 30% or absolutely $67M ($219M/$225Mx4/3). So growth is healthy but slowing.

* FY 2005 operating income up Y/Y 107% or absolutely $78M ($151M/$73M). Annualized 9 month 2006 operating income up Y/Y 38% or absolutely $57M ($156M/$151Mx4/3). Again, healthy, but slowing.

* FY 2005 net earnings up Y/Y absolutely $42M ($47M-$5M; % change irrelevant since small number). Annualized 9 month 2006 net earnings up Y/Y 5% or absolutely $2.3M ($37M/$47Mx4/3). Flat and boring (although a non-recurring $14M charge is included in there).

* They recently paid out about $350M in debt from the company to the private investors. Almost all of the stock proceeds to the company from the current offering will go to retire that company debt. The IPO listing will not financially improve the company, but rather just get it back to where it was prior to the February debt payout. As the proceeds do not change the company prospects, past is the best performance prologue.

* The private equity sponsors currently have 95% of the company stock, and will still have about 75% after the public listing, so they are not abandoning their interest in the company, despite the big balloon debt-based payment.

Expected offering of 25M shares at $15-$17, with ca. 132M shares outstanding. Say operating earnings growth stays flat at $60M next year (better than their current rate). That gives them forward operating earnings of $268M ($156Mx4/3+$60) on 132M shares, or forward operating EPS of about $2.00. At the high end of the price range that gives them a forward operating P/E of 9 ($17/$2). EBITDA and operating earnings growth has dropped about $20M Y/Y. Projecting that forward gives $40M in operating earnings growth, a projected forward operating EPS of $1.88 and a similar operating P/E of 9.

Net income, on the other hand, could increase 80% (from ca. $49M to $89M), all else being equal (which it is likely to be). That gives forward net EPS of $0.67 and a forward net P/E of 25, which is about right or a little high (McDonalds' (MCD) trailing P/E is 18, forward P/E is 15).