Chanticleer Holdings Reports First Quarter Operating Results
CHARLOTTE, N.C., May 14, 2018 (GLOBE NEWSWIRE) -- Chanticleer Holdings, Inc. (NASDAQ:BURG) (“Chanticleer,” or the “Company”), owner, operator and franchisor of multiple branded restaurants in the U.S. and abroad, today announced its first quarter financial results for the three months ended March 31, 2018.
First Quarter Financial and Operational Highlights
- Total revenue of $10.0 million increased 1.4% compared to the same period last year. Growth in our Better Burger and Hooters businesses were offset by lower traffic in our Just Fresh business and the closure of underperforming locations.
- G&A decreased 13.2% to $1.2 million compared with $1.4 million in the prior year.
- Net loss attributable to Common Shareholders was $2.6 million, $(0.83) per share, compared to $1.8 million, $(0.79) per share in the prior year. Excluding the non-cash impairment charges, net loss attributable to Common Shareholders would have been approximately $1.0 million or $(0.30) per share.
- Non-Gaap Restaurant EBITDA improved to $1.0 million for the three months ended March 31, 2018 compared to $0.9 million for the three months ended March 31, 2017.
- Non-Gaap Adjusted EBITDA improved to $0.0 million for the three months ended March 31, 2018 compared to a loss of $0.3 million for the three months ended March 31, 2017.
- Cash from operating activities was positive $0.1 million for the three months ended March 31, 2018 compared to negative $0.6 million for the three months ended March 31, 2017.
- Opened one company store and one franchise stores - Purchased one previously franchised store
- Entered into partnership with NASCAR superstar Denny Hamlin for Little Big Burger with option on nine additional stores.
Mike Pruitt, Chairman and CEO of Chanticleer commented, “We’re pleased with our Q1 2018 financial results. All of our core operating units exceeded our internal budgets. As indicated previously, we continue to believe the Company has reached an inflection point as we accelerate growth of our Little Big Burger concept with new locations generating above average unit economics and many outperforming our expectations. This growth phase consists of a robust pipeline of locations to support future growth, currently expecting to open 8-12 new Little Big Burger stores annually going forward, with upside to those expectations as new franchisees come on line.”
Pruitt continued, “Todays results are tangible progress towards the execution of our evolving and narrowing our strategic focus and allocation of resources to the domestic better burger segment where we generate the highest margins and rates of return. As we continue to increase focus on the domestic burger business, we are continuing to evaluate the potential sale of our domestic non-burger and international operations which would streamline the Company’s operations and significantly increase operating margins going forward.”
Conference Call
The Company will host a webcast and conference call on Monday May 14, 2018 at 4:30 PM ET/1:30 PM PT
To access the call, dial 1-877-407-0784 approximately five minutes prior to the scheduled start time. International callers please dial 1-201-689-8560. To access the webcast, log into the following link: http://public.viavid.com/index.php?id=129455.
The broadcast will be archived online upon completion of the conference call. A telephonic replay of the conference call will also be available until 11:59 p.m. ET on Thursday, June 14, 2018 by dialing (844) 512-2921 in the U.S. and Canada and (412) 317-6671 internationally and entering the pin number: 13679123.
Use of Non-GAAP Measures
Chanticleer Holdings, Inc. prepares its condensed consolidated financial statements in accordance with United States generally accepted accounting principles (”GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding Adjusted EBITDA and Restaurant EBITDA, which differ from the term EBITDA as it is commonly used. In addition to adjusting net income (loss) from continuing operations to exclude taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes pre-opening and closing costs for our restaurants, non-cash expenses, transaction and severance related expenses, change in fair value of derivative liability and other income and expenses.
In addition, Restaurant EBITDA also excludes management fee income, franchise revenue and general and administrative expenses. Adjusted EBITDA and restaurant EBITDA are not measures of performance defined in accordance with GAAP. However, adjusted EBITDA and restaurant EBITDA are used internally in planning and evaluating the company's operating performance and by the Company’s creditors. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the company's operations that, when coupled with the GAAP results, provides a more complete understanding of the Company's financial results.
Adjusted EBITDA and Restaurant EBITDA should not be considered as alternatives to net loss or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the company's performance. A reconciliation of GAAP net income (loss) to Adjusted EBITDA and Restaurant EBITDA is included in the accompanying financial schedules.
For further information, please refer to Chanticleer’s Annual Report on Form 10-Q to be filed with the SEC on or about May 14, 2018, available online at www.sec.gov.
About Chanticleer Holdings, Inc.
Headquartered in Charlotte, NC, Chanticleer Holdings (BURG), owns, operates and franchises fast casual and full-service restaurant brands, including American Burger Company, BGR – Burgers Grilled Right, Little Big Burger, Just Fresh and Hooters.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include projections, predictions, expectations or statements as to beliefs or future events or results or refer to other matters that are not historical facts. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by these statements. The forward-looking statements contained in this press release are based on various factors and were derived using numerous assumptions. In some cases, you can identify these forward-looking statements by the words “anticipate”, “estimate”, “plan”, “project”, “continuing”, “ongoing”, “target”, “aim”, “expect”, “believe”, “intend”, “may”, “will”, “should”, “could”, or the negative of those words and other comparable words.
Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, increased sales and marketing expenses, and the expected results from the integration of our acquisitions.
Forward-looking statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from those anticipated by such statements. These factors include, but are not limited to, the Company's ability to manage growth; integrate acquisitions; manage debt; meet development goals; and other important risks and uncertainties referenced and discussed under the heading titled “Risk Factors” in the Company's filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in the forward-looking statements contained in this press release are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Contact:
Investor Relations
Jason Assad
678-570-6791
Ja@chanticleerholdings.com
| Chanticleer Holdings, Inc. and Subsidiaries | |||||
| Condensed Consolidated Balance Sheets | |||||
| (Unaudited) | |||||
| March 31, 2018 | December 31, 2017 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash | $ | 411,081 |
$ | 272,976 | |
| Restricted cash | 102,584 | 165,517 | |||
| Accounts and other receivables, net | 344,769 | 475,988 | |||
| Inventories | 388,490 | 460,756 | |||
| Prepaid expenses and other current assets | 247,554 | 324,324 | |||
| Assets held for sale, net | 2,090,000 | 100,000 | |||
| TOTAL CURRENT ASSETS | 3,584,478 | 1,799,561 | |||
| Property and equipment, net | 8,203,981 | 8,548,592 | |||
| Goodwill | 10,164,374 | 12,647,806 | |||
| Intangible assets, net | 5,759,818 | 5,896,732 | |||
| Investment, at cost | 800,000 | 800,000 | |||
| Deposits and other assets | 452,957 | 490,328 | |||
| TOTAL ASSETS | $ | 28,965,608 | $ | 30,183,019 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable and accrued expenses | $ | 6,305,556 | $ | 5,797,252 | |
| Current maturities of long-term debt and notes payable net of unamortized discount and deferred financing costs of $880,043 and $1,173,190, respectively |
5,957,262 | 5,741,911 | |||
| Current maturities of convertible notes payable | 3,000,000 | 3,000,000 | |||
| Due to related parties | 191,850 | 191,850 | |||
| TOTAL CURRENT LIABILITIES | 15,454,668 | 14,731,013 | |||
| Convertible notes payable, net of unamortized debt premium of $0 and $12,256, respectively | - | 212,256 | |||
| Redeemable preferred stock: no par value;authorized 5,000,000 shares; 62,876 shares issued and outstanding, net of unamortized discount of $200,002 and $208,697, respectively |
648,824 | 640,129 | |||
| Deferred rent | 2,107,173 | 2,156,378 | |||
| Deferred tax liabilities | 443,163 | 779,359 | |||
| Deferred revenue | 1,236,636 | 175,000 | |||
| TOTAL LIABILITIES | 19,890,464 | 18,694,135 | |||
| Commitments and contingencies | |||||
| Stockholders' equity: | |||||
| Common stock: $0.0001 par value; authorized 45,000,000 | |||||
| shares; issued and outstanding 3,222,209 and 3,045,809 | |||||
| shares, respectively | 323 | 305 | |||
| Additional paid-in capital | 61,263,606 | 60,750,330 | |||
| Accumulated other comprehensive loss | (109,960) | (934,901) | |||
| Accumulated deficit | (52,776,873) | (49,109,303) | |||
| Total Chanticleer Holdings, Inc, Stockholders' Equity | 8,377,096 | 10,706,431 | |||
| Non-Controlling Interests | 698,048 | 782,453 | |||
| TOTAL STOCKHOLDERS' EQUITY | 9,075,144 | 11,488,884 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 28,965,608 | $ | 30,183,019 | |
| Chanticleer Holdings, Inc. and Subsidiaries | ||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||
| Three Months Ended | ||||||||
| March 31, 2018 | March 31, 2017 | |||||||
| Revenue: | ||||||||
| Restaurant sales, net | $ | 9,769,508 | $ | 9,653,154 | ||||
| Gaming income, net | 93,155 | 106,067 | ||||||
| Management fee income | 25,000 | 24,990 | ||||||
| Franchise income | 107,853 | 75,786 | ||||||
| Total revenue | 9,995,516 | 9,859,997 | ||||||
| Expenses: | ||||||||
| Restaurant cost of sales | 3,276,175 | 3,191,390 | ||||||
| Restaurant operating expenses | 5,586,149 | 5,674,560 | ||||||
| Restaurant pre-opening and closing expenses | 102,882 | 14,435 | ||||||
| General and administrative expenses | 1,193,417 | 1,375,620 | ||||||
| Asset impairment charge | 1,677,055 | - | ||||||
| Depreciation and amortization | 540,679 | 593,380 | ||||||
| Total operating expenses | 12,376,357 | 10,849,385 | ||||||
| Operating loss | (2,380,841 | ) | (989,388 | ) | ||||
| Other (expense) income | ||||||||
| Interest expense | (635,081 | ) | (404,136 | ) | ||||
| Gain (loss) on debt refinancing | - | (362,822 | ) | |||||
| Other income (expense) | (2,114 | ) | 12,234 | |||||
| Total other expense | (637,195 | ) | (754,724 | ) | ||||
| Loss from continuing operations before income taxes | (3,018,036 | ) | (1,744,112 | ) | ||||
| Income tax expense | 336,197 | (3,797 | ) | |||||
| Consolidated net loss | (2,681,839 | ) | (1,747,909 | ) | ||||
| Less net loss attributable to non-controlling interest: Continuing operations |
84,407 | 20,843 | ||||||
| Net loss attributable to Chanticleer Holdings, Inc. | $ | (2,597,432 | ) | $ | (1,727,066 | ) | ||
| Dividends on redeemable preferred stock | (27,794 | ) | (24,147 | ) | ||||
| Net loss attributable to common shareholders of Chanticleer Holdings, Inc. | $ | (2,625,226 | ) | $ | (1,751,213 | ) | ||
| Net loss attributable to Chanticleer Holdings, Inc. per common | ||||||||
| share, basic and diluted: | $ | (0.83 | ) | $ | (0.79 | ) | ||
| Weighted average shares outstanding, basic and diluted | 3,165,972 | 2,210,624 | ||||||
| Chanticleer Holdings, Inc. and Subsidiaries | |||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||
| Three Months Ended | |||||||||
| March 31, 2018 | March 31, 2017 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net loss | $ | (2,681,839 | ) | $ | (1,747,909 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
| Depreciation and amortization | 540,679 | 593,380 | |||||||
| Loss on extinguishment of debt | 362,822 | ||||||||
| Asset impairment charge | 1,677,055 | - | |||||||
| Common stock and warrants issued for services | - | 102,791 | |||||||
| Amortization of debt discount | 289,787 | 122,694 | |||||||
| Change in assets and liabilities: | |||||||||
| Accounts and other receivables | 148,427 | 175,478 | |||||||
| Prepaid and other assets | 48,238 | 14,054 | |||||||
| Inventory | 12,556 | 19,526 | |||||||
| Accounts payable and accrued liabilities | 470,496 | (231,283 | ) | ||||||
| Deferred income taxes | (336,196 | ) | - | ||||||
| Deferred rent | (49,205 | ) | 15,793 | ||||||
| Net cash provided by (used i)n operating activities | 119,998 | (572,654 | ) | ||||||
| Cash flows from investing activities: | |||||||||
| Purchase of property and equipment | (166,589 | ) | (450,641 | ) | |||||
| Cash paid for acquisitions, net of cash acquired | (30,000 | ) | - | ||||||
| Net cash used in investing activities | (196,589 | ) | (450,641 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Proceeds from sale of common stock and warrants | 290,000 | - | |||||||
| Proceeds from sale of preferred stock | - | 591,651 | |||||||
| Payments related to sale of preferred stock | - | (258,153 | ) | ||||||
| Loan proceeds | - | 512,780 | |||||||
| Loan repayments | (134,229 | ) | (194,069 | ) | |||||
| Capital lease payments | - | (4,779 | ) | ||||||
| Contribution of non-controlling interest | - | 375,000 | |||||||
| Net cash provided by financing activities | 155,771 | 1,022,430 | |||||||
| Effect of exchange rate changes on cash | (4,008 | ) | 10,110 | ||||||
| Net increase in cash and restricted cash | 75,172 | 9,245 | |||||||
| Cash and restricted cash, beginning of period | 438,493 | 268,575 | |||||||
| Cash and restricted cash, end of period | $ | 513,665 | $ | 277,820 | |||||
| Chanticleer Holdings, Inc. and Subsidiaries | ||||||||
| Reconcilation of Net Loss to EBITDA | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, 2018 | March 31, 2017 | |||||||
| Consolidated net loss | $ | (2,681,839 | ) | $ | (1,747,909 | ) | ||
| Interest expense | 635,081 | 404,136 | ||||||
| Income tax | (336,197 | ) | 3,797 | |||||
| Depreciation and amortization | 540,679 | 593,380 | ||||||
| EBITDA | $ | (1,842,276 | ) | $ | (746,596 | ) | ||
| Restaurant pre-opening and closing expenses | 102,882 | 14,435 | ||||||
| Operating results of restuarants closed in period | 19,080 | - | ||||||
| (Gain) loss on debt refinancing | - | 362,822 | ||||||
| Asset impairment charge | 1,677,055 | - | ||||||
| Transaction and severence related expenses | - | 92,750 | ||||||
| Other income (expense) | 2,114 | (12,234 | ) | |||||
| Adjusted EBITDA | $ | (41,145 | ) | $ | (288,823 | ) | ||
| General and administrative expenses | 1,193,417 | 1,282,870 | ||||||
| Franchise revenues | (107,853 | ) | (75,786 | ) | ||||
| Management fee revenue | (25,000 | ) | (24,990 | ) | ||||
| Restaurant EBITDA | $ | 1,019,419 | $ | 893,271 | ||||
Released May 14, 2018