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 quarter ended March 31, 2019.
Financial Highlights for the Quarter
Ended March 31, 2019
- Revenue for the year was $10.2 million in the first quarter of
2019 compared with $10.0 million in the first quarter of 2018.
- Cost of sales as a percentage of restaurant sales improved to
33.1% in the first quarter of 2019 compared to 33.5% in the first
quarter of 2018.
- Operating loss was $1.7 million in the first quarter of 2019
compared to $2.4 million in the first quarter of 2018.
- Net loss attributable to Common Shareholders was $1.9 million,
($0.51) per share in the first quarter of 2019, compared to net
loss of $2.6 million, ($0.83) per share in the first quarter of
2018.
- Non-GAAP Restaurant EBITDA was $560,000 in the first quarter of
2019 compared to $1.1 million in the first quarter of 2018.
- Non-GAAP Adjusted EBITDA was negative $766,000 in the first
quarter of 2019 compared to $10,000 in the first quarter of
2018.
- During the first quarter of 2019, the Company opened one new
Little Big Burger location. The Company expects to open another two
Little Big Burger restaurant locations in 2019 and, announced in
May 2019, the opening of a Little Big Burger in the concession area
at the Charlotte Motor Speedway.
- The Company also sold one underperforming company-owned
location in in the first quarter of 2019 which resulted in non-cash
impairment charges and is expected to contribute to improved
operating performance in future periods.
Mike Pruitt, Chairman and CEO of Chanticleer
commented, "With the recent additions of Fred, Patrick and Troy, I
continue to believe we have put together an outstanding executive
team capable of stewarding the company’s future growth both
operationally and financially. We expect to report meaningful
increases in both revenues and EBITDA throughout the balance of
2019 as recent partnerships, systems and processes begin to
contribute tangible top line and bottom results.
"We look forward to also hosting a conference
call near term to specially discuss the recently proposed
acquisition of a highly complementary better burger brand with
industry leading metrics. The target company has reported revenues
of $10 million per year and historically demonstrated store level
EBITDA of approximately 20%.”
Conference Call
The Company will host a webcast and conference call on
Wednesday, May 15, 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=134580
A replay of the teleconference will be available
until June 15, 2019 and may be accessed by dialing 1-844-512-2921.
International callers may dial 1-412-317-6671. Callers should use
conference PIN: 13690808.
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 Quarterly Report on Form 10-Q to be filed with the
SEC on or about May 15, 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 |
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
(Unaudited) |
|
|
|
March 31, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
561,754 |
|
|
$ |
629,871 |
|
Restricted cash |
|
335 |
|
|
|
335 |
|
Accounts and other receivables, net |
|
523,437 |
|
|
|
387,239 |
|
Inventories |
|
424,585 |
|
|
|
478,314 |
|
Prepaid expenses and other current assets |
|
192,973 |
|
|
|
179,377 |
|
TOTAL CURRENT ASSETS |
|
1,703,084 |
|
|
|
1,675,136 |
|
Property and equipment, net |
|
10,156,579 |
|
|
|
10,467,841 |
|
Operating lease assets |
|
18,662,935 |
|
|
|
- |
|
Goodwill |
|
11,312,980 |
|
|
|
11,280,465 |
|
Intangible assets, net |
|
5,002,878 |
|
|
|
5,123,159 |
|
Investments |
|
800,000 |
|
|
|
800,000 |
|
Deposits and other assets |
|
447,809 |
|
|
|
446,639 |
|
TOTAL ASSETS |
$ |
48,086,265 |
|
|
$ |
29,793,240 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
8,266,821 |
|
|
$ |
7,386,506 |
|
Current maturities of long-term debt and notes payable |
|
6,772,324 |
|
|
|
3,740,101 |
|
Current maturities of convertible notes payable |
|
3,000,000 |
|
|
|
3,000,000 |
|
Current operating lease liabilities |
|
3,750,175 |
|
|
|
- |
|
Due to related parties |
|
185,726 |
|
|
|
185,726 |
|
TOTAL CURRENT LIABILITIES |
|
21,975,046 |
|
|
|
14,312,333 |
|
Long-term debt |
|
- |
|
|
|
3,000,000 |
|
Redeemable preferred stock: no par value, 62,876 shares issued and
outstanding, net of discount of $165,219 and $173,914,
respectively |
|
683,607 |
|
|
|
674,912 |
|
Deferred rent |
|
- |
|
|
|
2,297,199 |
|
Long-term operating lease liabilities |
|
17,228,799 |
|
|
|
- |
|
Deferred revenue |
|
1,115,574 |
|
|
|
1,174,506 |
|
Deferred tax liabilities |
|
119,915 |
|
|
|
76,765 |
|
TOTAL LIABILITIES |
|
41,122,941 |
|
|
|
21,535,715 |
|
Commitments and contingencies
(see Note 13) |
|
|
|
Equity: |
|
|
|
Preferred stock: no par value; authorized 5,000,000 shares; 62,876
issued and outstanding |
|
- |
|
|
|
- |
|
Common stock: $0.0001 par value; authorized 45,000,000 |
|
|
|
shares; issued and outstanding 3,731,786 and 3,715,444 |
|
|
|
shares, respectively |
|
374 |
|
|
|
373 |
|
Additional paid in capital |
|
65,126,235 |
|
|
|
64,756,903 |
|
Accumulated other comprehensive loss |
|
(164,283 |
) |
|
|
(202,115 |
) |
Accumulated deficit |
|
(59,025,540 |
) |
|
|
(57,124,673 |
) |
Total Chanticleer Holdings, Inc, Stockholders'
Equity |
|
5,936,786 |
|
|
|
7,430,488 |
|
Non-Controlling Interests |
|
1,026,538 |
|
|
|
827,037 |
|
TOTAL EQUITY |
|
6,963,324 |
|
|
|
8,257,525 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
48,086,265 |
|
|
$ |
29,793,240 |
|
|
|
|
|
Chanticleer Holdings, Inc. and Subsidiaries |
Condensed Consolidated Statements of Operations
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31,
2019 |
|
March 31,
2018 |
Revenue: |
|
|
|
Restaurant sales, net |
$ |
9,910,028 |
|
|
$ |
9,769,508 |
|
Gaming income, net |
|
116,085 |
|
|
|
93,155 |
|
Management fee income |
|
25,000 |
|
|
|
25,000 |
|
Franchise income |
|
146,657 |
|
|
|
107,853 |
|
Total revenue |
|
10,197,770 |
|
|
|
9,995,516 |
|
Expenses: |
|
|
|
Restaurant cost of sales |
|
3,277,579 |
|
|
|
3,276,175 |
|
Restaurant operating expenses |
|
6,430,544 |
|
|
|
5,586,149 |
|
Restaurant pre-opening and closing expenses |
|
66,175 |
|
|
|
102,882 |
|
General and administrative expenses |
|
1,497,618 |
|
|
|
1,193,417 |
|
Asset impairment charge |
|
91,491 |
|
|
|
1,677,055 |
|
Depreciation and amortization |
|
542,401 |
|
|
|
540,679 |
|
Total expenses |
|
11,905,808 |
|
|
|
12,376,357 |
|
Operating
loss |
|
(1,708,038 |
) |
|
|
(2,380,841 |
) |
Other
expense |
|
|
|
Interest expense |
|
(211,770 |
) |
|
|
(635,081 |
) |
Other income (expense) |
|
(18,274 |
) |
|
|
(2,114 |
) |
Total other expense |
|
(230,044 |
) |
|
|
(637,195 |
) |
Loss before income taxes |
|
(1,938,082 |
) |
|
|
(3,018,036 |
) |
Income tax benefit
(expense) |
|
(50,581 |
) |
|
|
336,197 |
|
Consolidated net
loss |
|
(1,988,663 |
) |
|
|
(2,681,839 |
) |
Less: Net loss attributable to non-controlling interests |
|
115,591 |
|
|
|
84,407 |
|
Net loss attributable
to Chanticleer Holdings, Inc. |
$ |
(1,873,072 |
) |
|
$ |
(2,597,432 |
) |
Dividends on redeemable preferred stock |
|
(27,794 |
) |
|
|
(27,794 |
) |
Net loss attributable to common shareholders of Chanticleer
Holdings, Inc. |
$ |
(1,900,866 |
) |
|
$ |
(2,625,226 |
) |
|
|
|
|
Net loss attributable
to Chanticleer Holdings, Inc. per
common share, basic and
diluted: |
$ |
(0.51 |
) |
|
$ |
(0.83 |
) |
Weighted average shares
outstanding, basic and diluted |
|
3,721,436 |
|
|
|
3,165,972 |
|
|
|
|
|
Chanticleer Holdings, Inc. and Subsidiaries |
Condensed Consolidated Statements of Cash Flows
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31,
2019 |
|
March 31,
2018 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(1,988,663 |
) |
|
$ |
(2,681,839 |
) |
Adjustments to reconcile net
loss to net cash flows from operating activities: |
|
|
|
Depreciation and amortization |
|
542,401 |
|
|
|
540,679 |
|
Amortization of operating lease assets |
|
461,009 |
|
|
|
- |
|
Asset impairment charge |
|
91,491 |
|
|
|
1,677,055 |
|
Stock based compensation |
|
100,707 |
|
|
|
- |
|
Gain on investments |
|
(4,270 |
) |
|
|
- |
|
Amortization of debt discount and discount on preferred stock |
|
8,695 |
|
|
|
289,787 |
|
Change in assets and liabilities: |
|
|
|
Accounts and other receivables |
|
(142,296 |
) |
|
|
148,427 |
|
Prepaid and other assets |
|
(20,546 |
) |
|
|
48,238 |
|
Inventory |
|
44,275 |
|
|
|
12,556 |
|
Accounts payable and accrued liabilities |
|
739,787 |
|
|
|
470,496 |
|
Deferred income taxes |
|
43,150 |
|
|
|
(336,196 |
) |
Operating lease liabilities |
|
(463,279 |
) |
|
|
- |
|
Deferred revenue |
|
(58,932 |
) |
|
|
- |
|
Deferred rent |
|
- |
|
|
|
(49,205 |
) |
Net cash flows from operating activities |
|
(646,471 |
) |
|
|
119,998 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchase of property and equipment |
|
(334,630 |
) |
|
|
(166,589 |
) |
Proceeds from tenant improvement allowances |
|
141,860 |
|
|
|
- |
|
Cash paid for acquisitions |
|
- |
|
|
|
(30,000 |
) |
Proceeds from sale of assets |
|
173,977 |
|
|
|
- |
|
Net cash flows from investing activities |
|
(18,793 |
) |
|
|
(196,589 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from sale of common stock and warrants |
|
- |
|
|
|
290,000 |
|
Loan proceeds |
|
197,438 |
|
|
|
- |
|
Loan repayments |
|
(164,769 |
) |
|
|
(134,229 |
) |
Distributions to non-controlling interest |
|
(10,804 |
) |
|
|
- |
|
Contributions from non-controlling interest |
|
575,000 |
|
|
|
- |
|
Net cash flows from financing activities |
|
596,865 |
|
|
|
155,771 |
|
Effect of exchange rate changes on cash |
|
282 |
|
|
|
(4,008 |
) |
Net increase
(decrease) in cash and restricted cash |
|
(68,117 |
) |
|
|
75,172 |
|
Cash and restricted
cash, beginning of
period |
|
630,206 |
|
|
|
438,493 |
|
Cash and restricted
cash, end of period |
$ |
562,089 |
|
|
$ |
513,665 |
|
|
|
|
|
Chanticleer Holdings, Inc. and Subsidiaries |
Reconciliation of Net Loss to EBITDA |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31,
2019 |
|
March 31,
2018 |
|
|
|
|
Consolidated net loss |
$ |
(1,988,663 |
) |
|
$ |
(2,681,839 |
) |
Interest expense |
|
211,770 |
|
|
|
635,081 |
|
Income tax |
|
50,581 |
|
|
|
(336,197 |
) |
Depreciation and
amortization |
|
542,401 |
|
|
|
540,679 |
|
EBITDA |
$ |
(1,183,911 |
) |
|
$ |
(1,842,276 |
) |
Restaurant pre-opening and
closing expenses |
|
66,175 |
|
|
|
102,882 |
|
Operating results of
restaurants closed in period |
|
50,536 |
|
|
|
69,896 |
|
Additional non-cash expenses
impacting operating results |
|
191,125 |
|
|
|
- |
|
Asset impairment charge |
|
91,491 |
|
|
|
1,677,055 |
|
Other income (expense) |
|
18,274 |
|
|
|
2,114 |
|
Adjusted EBITDA |
$ |
(766,310 |
) |
|
$ |
9,671 |
|
General and administrative
expenses |
|
1,497,618 |
|
|
|
1,193,417 |
|
Franchise revenues |
|
(146,657 |
) |
|
|
(107,853 |
) |
Management fee revenue |
|
(25,000 |
) |
|
|
(25,000 |
) |
Restaurant EBITDA |
$ |
559,651 |
|
|
$ |
1,070,235 |
|
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