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 fourth quarter and year ended December 31, 2018.
Annual Financial Highlights for the Year
ended December 31, 2018
- Revenue for the year was $40.6 million in 2018 compared with
$41.4 million in 2017.
- Cost of sales as a percentage of restaurant sales improved to
33.5% in 2018 compared to 33.8% in 2017. The improvement in cost of
sales is primarily attributable to favorable movements in beef
prices combined with the expansion of the Little Big Burger
brand.
- General and administrative expenses as a percentage of total
revenue remained consistent at 11.3% compared to 11.0% in
2017.
- Operating loss was $5.4 million ($3.4 million excluding
non-cash asset impairment charges) in 2018 compared to $5.2 million
in 2017.
- Net loss attributable to Common Shareholders was $7.0 million,
($1.98) per share in 2018, compared to $6.9 million, ($2.73) per
share in 2017.
- Non-GAAP Restaurant EBITDA was $3.7 million in 2018 compared to
$4.2 million in 2017.
- Non-GAAP Adjusted EBITDA was negative $376,000 in 2018 compared
to $234,000 in 2017.
- Cash provided by operating activities was $575,000 in 2018
compared to cash used in operating activities of $725,000.
- During 2018, the Company opened 4 new Little Big Burger
locations, 1 new BGR location along with the acquisition of 2 other
BGR locations that were previously franchises. The Company expects
to open 4 to 6 new locations annually. The Company also closed 2
underperforming company-owned locations in 2018 which resulted in
non-cash impairment charges and is expected to contribute to
improved operating performance in future periods.
- Through a focus of the Company throughout 2018, as well
continued efforts through the year-end and audit process,
Management was able to fully remediate the material weaknesses that
were reported in the December 31, 2017 10-K. These material
weaknesses had been part of the Company’s 10-K disclosures since
2013.
Mike Pruitt, Chairman and CEO of Chanticleer
commented, “In 2018 we executed on exactly what we promised early
in the year, nearly doubling our Little Big Burger footprint.
“More importantly, we set the stage for the
future with the new addition of Fred Glick as our new President and
Patrick Harkleroad as CFO. These proven executives have already
demonstrated themselves as highly complementary to our existing
team. I can without hesitation say that never in the history of
Chanticleer, have I personally felt better about our executive team
and the value I believe we have the potential to create together.
What Fred has accomplished in just his first four short months is
nothing less than remarkable. His enthusiasm is infectious, and his
hands-on leadership has dramatically and favorably impacted
employee morale.
“I believe that the best days are just ahead for
Chanticleer. I look forward to continuing to work in concert with
my fellow members of our management team and board of directors,
all on behalf of our employees and shareholders.”
Conference Call
The Company will host a webcast and conference call on Monday,
April 1, 2019 at 4:30 p.m. ET.
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=133748.
A replay of the teleconference will be available
until May 1, 2019 and may be accessed by dialing 1-844-512-2921.
International callers may dial 1-412-317-6671. Callers should use
conference PIN: 13689056.
Use of Non-GAAP Measures
Chanticleer Holdings, Inc. prepares its
condensed consolidated financial statements in accordance with
accounting principles generally accepted in the United States
(”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-K to be filed with the SEC
on or about April 1, 2019, 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 |
Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
629,871 |
|
|
$ |
272,976 |
|
Restricted cash |
|
335 |
|
|
|
165,517 |
|
Accounts
and other receivables, net |
|
387,239 |
|
|
|
475,988 |
|
Inventories |
|
478,314 |
|
|
|
460,756 |
|
Prepaid
expenses and other current assets |
|
179,377 |
|
|
|
324,324 |
|
Assets
held for sale, net |
|
- |
|
|
|
100,000 |
|
TOTAL CURRENT ASSETS |
|
1,675,136 |
|
|
|
1,799,561 |
|
Property
and equipment, net |
|
10,467,841 |
|
|
|
8,548,592 |
|
Goodwill |
|
11,280,465 |
|
|
|
12,647,806 |
|
Intangible assets, net |
|
5,123,159 |
|
|
|
5,896,732 |
|
Investments |
|
800,000 |
|
|
|
800,000 |
|
Deposits
and other assets |
|
446,639 |
|
|
|
490,328 |
|
TOTAL ASSETS |
$ |
29,793,240 |
|
|
$ |
30,183,019 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
7,386,506 |
|
|
$ |
5,797,252 |
|
Current
maturities of long-term debt and notes payable, net of unamortized
discount and deferred financing costs of $0 and $1,173,190,
respectively |
|
3,740,101 |
|
|
|
5,741,911 |
|
Current
maturities of convertible notes payable |
|
3,000,000 |
|
|
|
3,000,000 |
|
Due to
related parties |
|
185,726 |
|
|
|
191,850 |
|
TOTAL CURRENT LIABILITIES |
|
14,312,333 |
|
|
|
14,731,013 |
|
Long-term
debt |
|
3,000,000 |
|
|
|
- |
|
Convertible notes payable, net of unamortized premium of $0 and
$12,256, respectively |
|
- |
|
|
|
212,256 |
|
Redeemable preferred stock: no par value, 62,876 shares issued and
outstanding, net of discount of $173,914 and $208,697,
respectively |
|
674,912 |
|
|
|
640,129 |
|
Deferred
rent |
|
2,297,199 |
|
|
|
2,156,378 |
|
Deferred
revenue |
|
1,174,506 |
|
|
|
175,000 |
|
Deferred
tax liabilities |
|
76,765 |
|
|
|
779,359 |
|
TOTAL LIABILITIES |
|
21,535,715 |
|
|
|
18,694,135 |
|
Commitments and
contingencies |
|
|
|
Common
stock subject to repurchase obligation; 0 and 56,290 shares issued
and outstanding, respectively |
|
- |
|
|
|
- |
|
Equity: |
|
|
|
Preferred
stock: no par value; authorized 5,000,000 shares; 62,876 issued and
outstanding, respectively |
|
- |
|
|
|
- |
|
Common
stock: $0.0001 par value; authorized 45,000,000 |
|
|
|
shares;
issued and outstanding 3,715,444 and 3,045,809 |
|
|
|
shares,
respectively |
|
373 |
|
|
|
305 |
|
Additional paid in capital |
|
64,756,903 |
|
|
|
60,750,330 |
|
Accumulated other comprehensive loss |
|
(202,115 |
) |
|
|
(934,901 |
) |
Accumulated deficit |
|
(57,124,673 |
) |
|
|
(49,109,303 |
) |
Total Chanticleer Holdings, Inc, Stockholders'
Equity |
|
7,430,488 |
|
|
|
10,706,431 |
|
Non-Controlling Interests |
|
827,037 |
|
|
|
782,453 |
|
TOTAL EQUITY |
|
8,257,525 |
|
|
|
11,488,884 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
29,793,240 |
|
|
$ |
30,183,019 |
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Consolidated Statements of
Operations |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2018 |
|
December 31,
2017 |
Revenue: |
|
|
|
|
|
|
|
Restaurant sales,
net |
$ |
9,862,794 |
|
|
$ |
9,837,951 |
|
|
$ |
39,665,763 |
|
|
$ |
40,495,166 |
|
Gaming
income, net |
|
117,033 |
|
|
|
113,666 |
|
|
|
402,611 |
|
|
|
442,521 |
|
Management fee income |
|
25,003 |
|
|
|
25,018 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Franchise
income |
|
115,040 |
|
|
|
105,550 |
|
|
|
445,335 |
|
|
|
395,176 |
|
Total revenue |
|
10,119,870 |
|
|
|
10,082,185 |
|
|
|
40,613,709 |
|
|
|
41,432,863 |
|
Expenses: |
|
|
|
|
|
|
|
Restaurant cost of sales |
|
3,376,331 |
|
|
|
3,316,761 |
|
|
|
13,288,422 |
|
|
|
13,692,921 |
|
Restaurant operating expenses |
|
6,557,479 |
|
|
|
5,782,592 |
|
|
|
23,565,526 |
|
|
|
23,432,124 |
|
Restaurant pre-opening and closing expenses |
|
100,327 |
|
|
|
179,737 |
|
|
|
412,979 |
|
|
|
319,282 |
|
General
and administrative expenses |
|
1,171,176 |
|
|
|
1,132,495 |
|
|
|
4,578,788 |
|
|
|
4,545,496 |
|
Asset
impairment charge |
|
228,243 |
|
|
|
922,726 |
|
|
|
1,959,510 |
|
|
|
2,395,616 |
|
Depreciation and amortization |
|
568,912 |
|
|
|
513,964 |
|
|
|
2,163,585 |
|
|
|
2,282,801 |
|
Total expenses |
|
12,002,468 |
|
|
|
11,848,275 |
|
|
|
45,968,810 |
|
|
|
46,668,240 |
|
Operating
loss |
|
(1,882,598 |
) |
|
|
(1,766,090 |
) |
|
|
(5,355,101 |
) |
|
|
(5,235,377 |
) |
Other (expense)
income |
|
|
|
|
|
|
|
Interest
expense |
|
(632,302 |
) |
|
|
(646,249 |
) |
|
|
(2,527,464 |
) |
|
|
(2,592,961 |
) |
Loss on
debt refinancing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(95,310 |
) |
Other
income (expense) |
|
200,024 |
|
|
|
62,934 |
|
|
|
(17,926 |
) |
|
|
112,984 |
|
Total
other expense |
|
(432,278 |
) |
|
|
(583,315 |
) |
|
|
(2,545,390 |
) |
|
|
(2,575,287 |
) |
Loss before income
taxes |
|
(2,314,876 |
) |
|
|
(2,349,405 |
) |
|
|
(7,900,491 |
) |
|
|
(7,810,664 |
) |
Income tax
benefit (expense) |
|
(78,137 |
) |
|
|
813,827 |
|
|
|
701,224 |
|
|
|
644,429 |
|
Consolidated
net loss |
|
(2,393,013 |
) |
|
|
(1,535,578 |
) |
|
|
(7,199,267 |
) |
|
|
(7,166,235 |
) |
Less: Net
loss attributable to non-controlling interests |
|
134,363 |
|
|
|
125,521 |
|
|
|
344,847 |
|
|
|
371,464 |
|
Net loss
attributable to Chanticleer Holdings, Inc. |
$ |
(2,258,650 |
) |
|
$ |
(1,410,057 |
) |
|
$ |
(6,854,420 |
) |
|
$ |
(6,794,771 |
) |
Dividends
on redeemable preferred stock |
|
(34,584 |
) |
|
|
(28,218 |
) |
|
|
(118,604 |
) |
|
|
(108,206 |
) |
Net loss attributable to common shareholders of Chanticleer
Holdings, Inc. |
$ |
(2,293,234 |
) |
|
$ |
(1,438,275 |
) |
|
$ |
(6,973,024 |
) |
|
$ |
(6,902,977 |
) |
|
|
|
|
|
|
|
|
Net
loss attributable to Chanticleer Holdings, Inc. per
common |
|
|
|
|
|
|
share, basic and
diluted: |
$ |
(0.62 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.98 |
) |
|
$ |
(2.73 |
) |
Weighted average shares
outstanding, basic and diluted |
|
3,713,220 |
|
|
|
2,959,284 |
|
|
|
3,520,125 |
|
|
|
2,525,037 |
|
|
|
|
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Consolidated Statements
of Cash Flows |
|
|
|
|
|
Year Ended |
|
December 31,
2018 |
|
December 31,
2017 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(7,199,267 |
) |
|
$ |
(7,166,235 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
Depreciation and amortization |
|
2,163,585 |
|
|
|
2,282,801 |
|
Asset
impairment charge |
|
1,959,510 |
|
|
|
2,395,616 |
|
Loss on
debt refinancing |
|
- |
|
|
|
95,310 |
|
Loss on
investments |
|
68,101 |
|
|
|
- |
|
Common
stock and warrants issued for services |
|
154,768 |
|
|
|
280,669 |
|
Amortization of debt discount |
|
1,195,918 |
|
|
|
788,187 |
|
Change in
assets and liabilities: |
|
|
|
Accounts
and other receivables |
|
91,798 |
|
|
|
35,154 |
|
Prepaid
and other assets |
|
116,154 |
|
|
|
22,157 |
|
Inventory |
|
8,885 |
|
|
|
23,062 |
|
Accounts
payable and accrued liabilities |
|
2,626,504 |
|
|
|
1,039,179 |
|
Change in
amounts payable to related parties |
|
(6,124 |
) |
|
|
(2,500 |
) |
Deferred
income taxes |
|
(702,594 |
) |
|
|
(706,195 |
) |
Deferred
revenue |
|
(42,840 |
) |
|
|
- |
|
Deferred
rent |
|
140,820 |
|
|
|
188,363 |
|
Net cash
provided by (used in) operating activities |
|
575,218 |
|
|
|
(724,432 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchase
of property and equipment |
|
(2,392,864 |
) |
|
|
(1,625,460 |
) |
Cash paid
for acquisitions |
|
(50,000 |
) |
|
|
- |
|
Proceeds
from sale of property |
|
- |
|
|
|
461,158 |
|
Net cash
used in investing activities |
|
(2,442,864 |
) |
|
|
(1,164,302 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds
from sale of common stock and warrants |
|
1,667,729 |
|
|
|
939,712 |
|
Proceeds
from sale of redeemable preferred stock, net of offerring costs of
$243,480 |
|
- |
|
|
|
348,171 |
|
Loan
proceeds |
|
100,000 |
|
|
|
6,578,090 |
|
Payment
of deferred financing costs |
|
- |
|
|
|
(293,294 |
) |
Loan
repayments |
|
(455,242 |
) |
|
|
(6,187,738 |
) |
Payments
on capital leases |
|
- |
|
|
|
(28,405 |
) |
Distributions to non-controlling interest |
|
(142,225 |
) |
|
|
- |
|
Contributions from non-controlling interest |
|
900,000 |
|
|
|
725,000 |
|
Net cash
provided by financing activities |
|
2,070,262 |
|
|
|
2,081,536 |
|
Effect of
exchange rate changes on cash |
|
(10,903 |
) |
|
|
(22,884 |
) |
Net increase in
cash and restricted cash |
|
191,713 |
|
|
|
169,918 |
|
Cash and
restricted cash, beginning of year |
|
438,493 |
|
|
|
268,575 |
|
Cash and
restricted cash, end of year |
$ |
630,206 |
|
|
$ |
438,493 |
|
|
|
|
|
|
Chanticleer Holdings, Inc. and
Subsidiaries |
Reconciliation of Net Loss to
EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2018 |
|
December 31,
2017 |
|
|
|
|
|
|
|
|
Consolidated net
loss |
$ |
(2,393,013 |
) |
|
$ |
(1,535,578 |
) |
|
$ |
(7,199,267 |
) |
|
$ |
(7,166,235 |
) |
Interest expense |
|
632,302 |
|
|
|
646,249 |
|
|
|
2,527,464 |
|
|
|
2,592,961 |
|
Income tax |
|
78,137 |
|
|
|
(813,827 |
) |
|
|
(701,224 |
) |
|
|
(644,429 |
) |
Depreciation and
amortization |
|
568,912 |
|
|
|
513,964 |
|
|
|
2,163,585 |
|
|
|
2,282,801 |
|
EBITDA |
$ |
(1,113,662 |
) |
|
$ |
(1,189,192 |
) |
|
$ |
(3,209,441 |
) |
|
$ |
(2,934,902 |
) |
Restaurant pre-opening
and closing expenses |
|
100,327 |
|
|
|
179,737 |
|
|
|
412,979 |
|
|
|
319,282 |
|
Operating results of
restaurants closed in period |
|
- |
|
|
|
69,896 |
|
|
|
4,789 |
|
|
|
369,011 |
|
Additional non-cash
expenses impacting operating results |
|
438,564 |
|
|
|
- |
|
|
|
438,564 |
|
|
|
- |
|
(Gain) loss on debt
refinancing |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
95,310 |
|
Asset impairment
charge |
|
228,243 |
|
|
|
922,726 |
|
|
|
1,959,510 |
|
|
|
2,395,616 |
|
Transaction and
severence related expenses |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
102,750 |
|
Other income
(expense) |
|
(200,024 |
) |
|
|
(62,934 |
) |
|
|
17,926 |
|
|
|
(112,984 |
) |
Adjusted EBITDA |
$ |
(546,552 |
) |
|
$ |
(79,767 |
) |
|
$ |
(375,673 |
) |
|
$ |
234,083 |
|
General and
administrative expenses |
|
1,171,176 |
|
|
|
1,132,495 |
|
|
|
4,578,788 |
|
|
|
4,442,746 |
|
Franchise revenues |
|
(115,040 |
) |
|
|
(105,550 |
) |
|
|
(445,335 |
) |
|
|
(395,176 |
) |
Management fee
revenue |
|
(25,003 |
) |
|
|
(25,018 |
) |
|
|
(100,000 |
) |
|
|
(100,000 |
) |
Restaurant EBITDA |
$ |
484,581 |
|
|
$ |
922,160 |
|
|
$ |
3,657,780 |
|
|
$ |
4,181,653 |
|
Chanticleer (NASDAQ:BURG)
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From Jun 2024 to Jul 2024
Chanticleer (NASDAQ:BURG)
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From Jul 2023 to Jul 2024