CHARLOTTE, NC--(Marketwire -
January 22, 2013) - Chanticleer Holdings, Inc. (NASDAQ: HOTR)
(NASDAQ: HOTRW) ("Chanticleer Holdings" or the "Company"), a
minority owner in the privately-held parent company of the Hooters®
brand, Hooters of America ("HOA"), and a franchisee of
international Hooters restaurants, today provided a corporate
update on its business, operational initiatives, and roll-out
plan.
The past two years have been very eventful for Chanticleer
Holdings. In January 2011, Chanticleer and a group of private
equity investors acquired HOA, five years after the Company made
its original investment in HOA and subsequent to the death of Mr.
Bob Brooks, the founder and former owner of HOA. In October 2011,
the Company acquired the majority ownership in its first three
South African Hooters restaurants. Concurrently, the Company formed
its own management company to operate all Hooters® restaurants in
South Africa. In 2012, the Company opened three additional
Hooters restaurants in Campbelltown, Australia, Emperor's Palace,
South Africa, and Budapest, Hungary.
Emperor's Palace was the first restaurant opened under the
complete leadership of Chanticleer Holdings and Gordon Jestin,
Chief Operating Officer of its South African subsidiaries ("Hooters
South Africa"). Emperor's Palace has proven to be a successful
and profitable restaurant, indicating the Hooters brand can be
successful in South Africa. The Company plans to open its next
South African restaurant in Pretoria in the first half of 2013.
For 2013, the Company is focused on achieving same store sales
growth, increasing consolidated gross margin to 62% from 58.2%,
increasing overall profitability, and expanding its number of
Hooters® restaurants. The Company has already initiated and
taken steps to improve same store sales growth and gross margin for
2013. In December, Hooters South Africa implemented price
increases of 7% for all food items and 5% for all liquor, where
this new pricing still reflects competitive pricing in the current
marketplace. Hooters South Africa also updated its menu
offerings by removing slow moving items and adding new offerings
appealing to women. Hooters South Africa has added two new
salads to the menu, expanded wrap offerings, added a "ladies cut"
steak, and has given guests the option to purchase a smaller
portion of curly fries to add to their main course. During the
fourth quarter of 2012, Hooters South Africa experienced an
improvement in same store sales, where the Company attributes this
growth to the leadership of its Chief Operating Officer in South
Africa and the guidance and support of HOA.
In addition to improvements to the menu, the Company continues
to improve the appeal of its restaurants to meet the wants and
needs of its Hooters® guests. During the fourth quarter of
2012, the Durban, South Africa restaurant increased its number of
seats by 25, which is expected to increase revenues on its busier
weekend nights. This additional seating also helped create a
private area for functions of 30 to 40 guests. Also during the
fourth quarter of 2012, the Johannesburg, South Africa restaurant
invested in additional televisions to improve the guest experience.
The Company also plans to improve its brand loyalty by rewarding
its loyal patrons with the launch of a Hooters® loyalty program in
the first quarter of 2013.
The Company has also begun operational initiatives at the
Hooters of Budapest, in Hungary, to reduce costs, increase
profitability, and increase guest traffic. During the fourth
quarter of 2012, Hooters of Budapest began its initiative to reduce
labor costs. During the first quarter of 2013, Hooters of
Budapest will be launching its Efficient Operating Network, a tool
developed, requiring daily, weekly, and monthly reporting and
maintenance, to lower cost of sales and labor and improve overall
operational efficiency. To increase guest traffic, Hooters of
Budapest will be hosting its first tequila party, bike night,
Valentine's Day blowout, and launching its "Girls of Budapest"
pictorial. Hooters of Budapest also plans to open its outdoor
patio, adding 140+ seats, increasing restaurant seating by 56% to a
total of 390 seats, in time for tourist season, beginning in April
through October. Budapest, Hungary is one of the most popular
tourist destinations in central Europe.
The Company has also focused on improving its internal
operations. During the fourth quarter, the Company hired
in-house counsel and hired a highly experienced CFO for its South
African subsidiaries. As a result of the previously disclosed
Audit Committee investigation, the Company is also in the process
of implementing certain new internal controls which will provide
better checks and balances for financial reporting. The
Company's CFO, Eric Lederer, will spend nine days in South Africa
beginning on January 26th, 2013, to assist with the 2012 audit,
review internal controls being implemented, observe operations, and
also focus on our gross profit improvement initiatives. Marcum
LLP is also scheduled to travel to South Africa beginning January
26, 2013 to begin their audit for the year ended December 31,
2012.
Separately, at the request of the NASDAQ Staff, the Company has
hired Watermark Auditors, a South African affiliate of RBSM LLP, to
re-test its controls over financial reporting prior to Mr.
Lederer's arrival, to determine how operations have changed since
the conclusion of the Audit Committee's investigation, and to
provide any suggestions on continued improvement. Watermark
Auditors will assist management in reviewing the Company's South
African subsidiaries' controls each quarter to see that all
previously suggested improvements to internal controls are fully
implemented and effective by November of this year.
Following the previous disclosure of misconduct by Mr. Hezlett,
the former CFO of Hooters South Africa, a lawsuit was filed against
the Company in October 2012. The Company has hired experienced
legal counsel to assist with a timely and proper resolution of the
lawsuit.
The Company is continuing to move forward with its development
plan. The Company expects to secure a long awaited site in Rio
de Janeiro, Brazil within the first quarter of 2013 and open a
restaurant in Pretoria, South Africa in the first half of
2013. The Company's Campbelltown, Australia location became
profitable in the third quarter of 2012, giving confidence that the
new Surfers Paradise, Australia location could be a
success. After finding a better opportunity for the Surfer's
Paradise location, a new lease agreement has been entered into,
pending HOA approval. Construction is set to commence at this
location after receipt of HOA approval, which is expected
mid-February 2013. The Company plans to increase the number of
restaurants operating in 2013 to a total of 10 restaurants as
compared to 6 total restaurants operating at 2012 year-end.
Mike Pruitt, President and CEO of Chanticleer Holdings,
commented, "I regret to have inconvenienced our shareholders during
the trading halt, and am pleased NASDAQ has determined to allow the
Company's common shares and warrants to have resumed trading last
week. We continue to remain confident in the fundamentals of
our business and the Hooters® brand. We are committed to
generating same store sales growth, improving profitability, and
developing new Hooters restaurants in our exclusive international
franchise territories. While we remain in the early stages of
developing our territories of Europe and Brazil, we have made
considerable investments in them, laying the foundation for growth
opportunities we see continuing for the foreseeable future."
About Chanticleer Holdings,
Inc. Chanticleer Holdings is focused on expanding the
Hooters® casual dining restaurant brand in international
emerging markets. Chanticleer currently owns in whole or part of
the exclusive franchise rights to develop and operate Hooters
restaurants in South Africa, Hungary and parts of Brazil, and has
joint ventured with the current Hooters franchisee in Australia,
while evaluating several additional international opportunities.
The Company currently owns and operates in whole or part of six
Hooters restaurants in its international franchise territories:
Durban, Johannesburg, Cape Town and Emperor's Palace in South
Africa; Campbelltown in Australia; and Budapest in Hungary.
In 2011, Chanticleer and a group of noteworthy private equity
investors, which included H.I.G. Capital, KarpReilly, LLC and Kelly
Hall, president of Texas Wings Inc., the largest Hooters franchisee
in the United States, acquired Hooters of America (HOA), a
privately held company. Today, HOA is an operator and the
franchisor of over 430 Hooters® restaurants in 28 countries.
Chanticleer maintains a minority ownership stake in HOA and its
CEO, Mike Pruitt, is also a member of HOA's Board of Directors. For
further information, please visit
www.chanticleerholdings.com or www.hooters.com and
follow us on Twitter at @ChantHoldings or @Hooters.
Forward-Looking
Statements:Any statements that are not historical facts
contained in this release are "forward-looking statements" as that
term is defined under the Private Securities Litigation Reform Act
of 1995 (PSLRA), which statements may be identified by words such
as "expects," "plans," "projects," "will," "may," "anticipates,"
"believes," "should," "intends," "estimates," and other words of
similar meaning. Many factors could cause our actual
activities or results to differ materially from the activities and
results anticipated in forward-looking statements. These factors
include those described in the companies' filings with the
Securities and Exchange Commission. The forward-looking statements
contained in this press release speak only as of the date the
statements were made, and the companies do not undertake any
obligation to update forward-looking statements. We intend that all
forward-looking statements be subject to the safe-harbor provisions
of the PSLRA.
Company Contact:Shannon DiGennaroV.P. Investor RelationsPhone:
704.941.0959sd@chanticleerholdings.com
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