Little Big Burger Expansion Continues with Seattle,
Portland, Charlotte Openings Accelerating.
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 financial
results for the period ended September 30, 2018.
Mike Pruitt, Chairman and CEO of Chanticleer
commented, “We continue to make measurable progress towards our
goals of driving the growth of our better burger brands footprint.
During the quarter, we opened three units that will contribute to
our financial results going forward. We expect to open five
additional Little Big Burgers in Q4 which will result in our 2018
store count approximately doubling, just as previously
projected.”
Pruitt continued, “On the heels of recent store
growth, we recently announced the addition of Fred Glick as our new
President. Fred is a proven and well-regarded operator who chose to
join our team leaving a coveted job with a great company after
seeing a compelling opportunity to be a part of our future. We
fully expect him to add significant value to our team and we’re
excited to have him. With an already solid and strengthening
foundation, together we look forward to focusing on accelerating
growth while maximizing profitability. Our collective goals include
further strengthening our brands through more new store openings
and driving both topline and same store sales throughout the
balance of 2018 and beyond.”
Third Quarter and Nine Month YTD 2018
Highlights
• Total company revenue was $30.5 million for the first nine
months and $10.1 million for the third quarter, a decrease of 2.7%
and 5.8% from the prior year with the decrease largely due to the
closure of underperforming locations.
- Revenue increased 6.9% for the first nine months and 3.2%.for
the third quarter when adjusted to exclude closed
locations.
- Third quarter revenues and operating results were negatively
impacted by the effects of two hurricanes and increased rainy
weather days which decreased store opening days and traffic during
the month of September. The Company estimates that the third
quarter restaurant revenue was negatively impacted approximately
$48 thousand.
• Net loss and EBITDA metrics improved on a year-to-date
basis:
- Non-GAAP Restaurant EBITDA increased 7.0% to $3.2 million for
first nine months and 5.7% to $0.9 million for the third
quarter.
- Non-GAAP Adjusted EBITDA increased to $166 thousand for the
first nine months and decreased to $(35) thousand for the third
quarter.
- Net loss attributable to Common Shareholders improved 14.4% to
$4.7 million for the first nine months and 27.2% to $1.3 million
for the third quarter.
- Net loss per common share improved 44.1% to $(1.35) for the
first nine months and 50.8% to $(0.34) for the third quarter.
• Completed a $1.4 million equity financing providing working
capital for new store construction projects in May 2018.
• Entered into Little Big Burger store partnership with NASCAR
superstar Denny Hamlin.
• Celebrated BGR 10-year anniversary
• Opened 5 new franchise locations (2 LBB San Diego, LBB Austin,
BGR Bloomfield & BGR Reston), 2 Company locations (LBB
Multnomah Village & BGR Catholic University) and acquired 1
franchise location (BGR Annapolis).
• Subsequent to Q3, opened 2 new Company locations (Wallingford,
Seattle & Magnolia Plaza, Charlotte), with 4 additional new
LBB’s underway.
- LBB store count to approximately double in 2018.
• Little Big Burger voted Best Burger in Charlotte by Creative
Loafing - October 2018
• Industry veteran Fred Glick named President
Conference Call
The Company will host a conference call on Tuesday November 13,
2018 at 4:30 PM Eastern Time /1:30 PM PT, which can be accessed by
calling:
U.S.: (877) 876-9176 International: (785) 424-1669
In addition, the call can be accessed
at https://www.chanticleerholdings.com/investor-relations/
A replay will be available until Thursday, December 13, 2018 by
dialing (844) 512-2921 in the U.S. and Canada and (412) 317-6671
internationally and entering the pin number: 132116.
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 Holdings Form 10-Q to be filed with the SEC on or about
November 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
Assad678-570-6791Ja@chanticleerholdings.com
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
(Unaudited) |
|
|
|
September 30, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
1,091,519 |
|
|
$ |
272,976 |
|
Restricted cash |
|
6,085 |
|
|
|
165,517 |
|
Accounts
and other receivables, net |
|
365,030 |
|
|
|
475,988 |
|
Inventories |
|
407,611 |
|
|
|
460,756 |
|
Prepaid
expenses and other current assets |
|
316,835 |
|
|
|
324,324 |
|
Assets
held for sale, net |
|
- |
|
|
|
100,000 |
|
TOTAL CURRENT ASSETS |
|
2,187,080 |
|
|
|
1,799,561 |
|
Property and equipment,
net |
|
9,532,367 |
|
|
|
8,548,592 |
|
Goodwill |
|
11,334,910 |
|
|
|
12,647,806 |
|
Intangible assets,
net |
|
5,462,733 |
|
|
|
5,896,732 |
|
Investment, at
cost |
|
800,000 |
|
|
|
800,000 |
|
Deposits and other
assets |
|
449,310 |
|
|
|
490,328 |
|
TOTAL ASSETS |
$ |
29,766,400 |
|
|
$ |
30,183,019 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
7,110,982 |
|
|
$ |
5,797,252 |
|
Current
maturities of long-term debt and notes payable net of unamortized
discount and deferred financing costs of $293,347 and $1,173,190,
respectively |
|
6,333,132 |
|
|
|
5,741,911 |
|
Current
maturities of convertible notes payable |
|
3,000,000 |
|
|
|
3,000,000 |
|
Due to
related parties |
|
191,226 |
|
|
|
191,850 |
|
TOTAL CURRENT LIABILITIES |
|
16,635,340 |
|
|
|
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
$182,610 and $208,697, respectively |
|
666,216 |
|
|
|
640,129 |
|
Deferred rent |
|
2,102,071 |
|
|
|
2,156,378 |
|
Deferred tax
liabilities |
|
- |
|
|
|
779,359 |
|
Deferred revenue |
|
1,195,216 |
|
|
|
175,000 |
|
TOTAL LIABILITIES |
|
20,598,843 |
|
|
|
18,694,135 |
|
Commitments and
contingencies |
|
|
|
Stockholders'
equity: |
|
|
|
Common
stock: $0.0001 par value; authorized 45,000,000 shares;
issued and outstanding 3,706,563 and 3,045,809 shares,
respectively |
|
372 |
|
|
|
305 |
|
Additional paid-in capital |
|
63,217,471 |
|
|
|
60,750,330 |
|
Accumulated other comprehensive loss |
|
(140,678 |
) |
|
|
(934,901 |
) |
Accumulated deficit |
|
(54,831,438 |
) |
|
|
(49,109,303 |
) |
Total Chanticleer Holdings, Inc. Stockholders'
Equity |
|
8,245,727 |
|
|
|
10,706,431 |
|
Non-Controlling Interests |
|
921,830 |
|
|
|
782,453 |
|
TOTAL STOCKHOLDERS' EQUITY |
|
9,167,557 |
|
|
|
11,488,884 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
29,766,400 |
|
|
$ |
30,183,019 |
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Unaudited Condensed Consolidated Statements of
Operations |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
September 30, 2018 |
|
September 30, 2017 |
|
|
September 30, 2018 |
|
September 30, 2017 |
Revenue: |
|
|
|
|
|
|
|
|
Restaurant sales, net |
$ |
9,848,302 |
|
|
$ |
10,479,274 |
|
|
|
$ |
29,802,969 |
|
|
$ |
30,657,215 |
|
Gaming
income, net |
|
111,301 |
|
|
|
115,267 |
|
|
|
|
285,578 |
|
|
|
328,855 |
|
Management fee income |
|
24,999 |
|
|
|
24,999 |
|
|
|
|
74,997 |
|
|
|
74,982 |
|
Franchise
income |
|
113,798 |
|
|
|
105,823 |
|
|
|
|
330,295 |
|
|
|
289,626 |
|
Total revenue |
|
10,098,400 |
|
|
|
10,725,363 |
|
|
|
|
30,493,839 |
|
|
|
31,350,678 |
|
Expenses: |
|
|
|
|
|
|
|
|
Restaurant cost of sales |
|
3,259,223 |
|
|
|
3,605,213 |
|
|
|
|
9,912,091 |
|
|
|
10,376,160 |
|
Restaurant operating expenses |
|
5,781,284 |
|
|
|
6,119,561 |
|
|
|
|
17,008,047 |
|
|
|
17,649,532 |
|
Restaurant pre-opening and closing expenses |
|
113,000 |
|
|
|
34,349 |
|
|
|
|
312,652 |
|
|
|
139,545 |
|
General
and administrative expenses |
|
1,092,529 |
|
|
|
952,959 |
|
|
|
|
3,407,612 |
|
|
|
3,413,001 |
|
Asset
impairment charge |
|
- |
|
|
|
838,928 |
|
|
|
|
1,731,267 |
|
|
|
1,472,890 |
|
Depreciation and amortization |
|
523,680 |
|
|
|
572,798 |
|
|
|
|
1,594,673 |
|
|
|
1,768,837 |
|
Total operating expenses |
|
10,769,716 |
|
|
|
12,123,808 |
|
|
|
|
33,966,342 |
|
|
|
34,819,965 |
|
Operating
loss |
|
(671,316 |
) |
|
|
(1,398,445 |
) |
|
|
|
(3,472,503 |
) |
|
|
(3,469,287 |
) |
Other (expense)
income |
|
|
|
|
|
|
|
|
Interest
expense |
|
(630,223 |
) |
|
|
(462,870 |
) |
|
|
|
(1,895,162 |
) |
|
|
(1,946,712 |
) |
Loss on debt
refinancing |
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(95,310 |
) |
Other
income (expense) |
|
(223,439 |
) |
|
|
37,838 |
|
|
|
|
(217,949 |
) |
|
|
50,050 |
|
Total
other expense |
|
(853,662 |
) |
|
|
(425,032 |
) |
|
|
|
(2,113,111 |
) |
|
|
(1,991,972 |
) |
Loss from
continuing operations before income taxes |
|
(1,524,978 |
) |
|
|
(1,823,477 |
) |
|
|
|
(5,585,614 |
) |
|
|
(5,461,259 |
) |
Income
tax benefit (expense) |
|
206,366 |
|
|
|
(56,070 |
) |
|
|
|
779,361 |
|
|
|
(169,398 |
) |
Consolidated
net loss |
|
(1,318,612 |
) |
|
|
(1,879,547 |
) |
|
|
|
(4,806,253 |
) |
|
|
(5,630,657 |
) |
Less net
loss attributable to non-controlling interest: |
|
80,737 |
|
|
|
168,772 |
|
|
|
|
210,484 |
|
|
|
245,943 |
|
Net loss
attributable to Chanticleer Holdings, Inc. |
$ |
(1,237,875 |
) |
|
$ |
(1,710,775 |
) |
|
|
$ |
(4,595,769 |
) |
|
$ |
(5,384,714 |
) |
Dividends
on redeemable preferred stock |
|
(28,219 |
) |
|
|
(28,219 |
) |
|
|
|
(84,020 |
) |
|
|
(79,988 |
) |
Net loss attributable to common shareholders of Chanticleer
Holdings, Inc. |
$ |
(1,266,094 |
) |
|
$ |
(1,738,994 |
) |
|
|
$ |
(4,679,789 |
) |
|
$ |
(5,464,702 |
) |
|
|
|
|
|
|
|
|
|
Net loss
attributable to Chanticleer Holdings, Inc. per common share, basic
and diluted: |
$ |
(0.34 |
) |
|
$ |
(0.70 |
) |
|
|
$ |
(1.35 |
) |
|
$ |
(2.42 |
) |
Weighted average shares
outstanding, basic and diluted |
|
3,704,800 |
|
|
|
2,501,534 |
|
|
|
|
3,457,145 |
|
|
|
2,258,013 |
|
|
|
|
|
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
|
|
|
|
Nine Months Ended |
|
September 30, 2018 |
|
September 30, 2017 |
Cash flows from
operating activities: |
|
|
|
Net
loss |
$ |
(4,806,253 |
) |
|
$ |
(5,630,657 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
Depreciation and amortization |
|
1,594,673 |
|
|
|
1,768,837 |
|
Loss on
extinguishment of debt |
|
- |
|
|
|
95,310 |
|
Asset
impairment charge |
|
1,731,267 |
|
|
|
1,472,890 |
|
Loss on
investments |
|
45,932 |
|
|
|
- |
|
Common
stock and warrants issued for services |
|
129,767 |
|
|
|
217,816 |
|
Amortization of debt discount |
|
893,873 |
|
|
|
501,126 |
|
Change in
assets and liabilities: |
|
|
|
Accounts
and other receivables |
|
114,007 |
|
|
|
249,255 |
|
Prepaid
and other assets |
|
2,767 |
|
|
|
50,667 |
|
Inventory |
|
72,802 |
|
|
|
23,872 |
|
Accounts
payable and accrued liabilities |
|
1,346,910 |
|
|
|
1,048,468 |
|
Related
party payables |
|
(624 |
) |
|
|
- |
|
Deferred
revenue |
|
(22,130 |
) |
|
|
- |
|
Deferred
income taxes |
|
(779,359 |
) |
|
|
105,729 |
|
Deferred
rent |
|
(54,307 |
) |
|
|
109,219 |
|
Net cash
provided by operating activities |
|
269,325 |
|
|
|
12,532 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchase
of property and equipment |
|
(1,698,747 |
) |
|
|
(1,323,066 |
) |
Cash paid
for acquisitions, net of cash acquired |
|
(30,000 |
) |
|
|
- |
|
Net cash
used in investing activities |
|
(1,728,747 |
) |
|
|
(1,323,066 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds
from sale of common stock and warrants |
|
1,687,184 |
|
|
|
- |
|
Proceeds
from sale of preferred stock |
|
- |
|
|
|
591,651 |
|
Payments
related to sale of preferred stock |
|
- |
|
|
|
(243,480 |
) |
Loan
proceeds |
|
- |
|
|
|
6,594,535 |
|
Payment
of deferred financing costs |
|
- |
|
|
|
(293,294 |
) |
Loan
repayments |
|
(270,579 |
) |
|
|
(5,706,774 |
) |
Capital
lease payments |
|
- |
|
|
|
(20,916 |
) |
Distributions to non-controlling interest |
|
(101,163 |
) |
|
|
- |
|
Contributions of non-controlling interest |
|
800,000 |
|
|
|
675,000 |
|
Net cash
provided by financing activities |
|
2,115,442 |
|
|
|
1,596,722 |
|
Effect of
exchange rate changes on cash |
|
3,091 |
|
|
|
(8,440 |
) |
Net
increase in cash and restricted cash |
|
659,111 |
|
|
|
277,748 |
|
Cash and
restricted cash, beginning of period |
|
438,493 |
|
|
|
268,575 |
|
Cash and
restricted cash, end of period |
$ |
1,097,604 |
|
|
$ |
546,323 |
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Reconciliation of Net Loss to
EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2018 |
|
September 30, 2017 |
|
September 30, 2018 |
|
September 30, 2017 |
|
|
|
|
|
|
|
|
Consolidated
net loss |
$ |
(1,318,612 |
) |
|
$ |
(1,879,547 |
) |
|
$ |
(4,806,253 |
) |
|
$ |
(5,630,657 |
) |
Interest expense |
|
630,223 |
|
|
|
462,870 |
|
|
|
1,895,162 |
|
|
|
1,946,712 |
|
Income tax |
|
(206,366 |
) |
|
|
56,070 |
|
|
|
(779,361 |
) |
|
|
169,398 |
|
Depreciation and
amortization |
|
523,680 |
|
|
|
572,798 |
|
|
|
1,594,673 |
|
|
|
1,768,837 |
|
EBITDA |
$ |
(371,075 |
) |
|
$ |
(787,809 |
) |
|
$ |
(2,095,779 |
) |
|
$ |
(1,745,710 |
) |
Restaurant pre-opening
and closing expenses |
|
113,000 |
|
|
|
34,349 |
|
|
|
312,652 |
|
|
|
139,545 |
|
Loss on debt
refinancing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
95,310 |
|
Asset impairment
charge |
|
- |
|
|
|
838,928 |
|
|
|
1,731,267 |
|
|
|
1,472,890 |
|
Transaction and
severance related expenses |
|
- |
|
|
|
- |
|
|
|
|
|
214,905 |
|
Other income
(expense) |
|
223,439 |
|
|
|
(37,838 |
) |
|
|
217,949 |
|
|
|
(50,050 |
) |
Adjusted EBITDA |
$ |
(34,636 |
) |
|
$ |
47,630 |
|
|
$ |
166,089 |
|
|
$ |
126,890 |
|
General and
administrative expenses |
|
1,092,529 |
|
|
|
952,959 |
|
|
|
3,407,612 |
|
|
|
3,198,096 |
|
Franchise revenues |
|
(113,798 |
) |
|
|
(105,823 |
) |
|
|
(330,295 |
) |
|
|
(289,626 |
) |
Management fee
revenue |
|
(24,999 |
) |
|
|
(24,999 |
) |
|
|
(74,997 |
) |
|
|
(74,982 |
) |
Restaurant EBITDA |
$ |
919,096 |
|
|
$ |
869,767 |
|
|
$ |
3,168,409 |
|
|
$ |
2,960,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chanticleer (NASDAQ:BURG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Chanticleer (NASDAQ:BURG)
Historical Stock Chart
From Apr 2023 to Apr 2024