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
Assad678-570-6791Ja@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 |
|
|
|
|
|
|
|
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