CHARLOTTE, N.C., Aug. 13, 2018 (GLOBE NEWSWIRE) -- 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 June 30, 2018.
Mike Pruitt, Chairman and CEO of Chanticleer, commented, “We’re pleased to report that revenue trends strengthened across our brands over the past few months. In addition, as a result of the operational initiatives implemented in prior periods, our operating and overhead expenses improved resulting in positive Adjusted EBITDA for the quarter and the first half.
“The capital raise in April significantly strengthens our balance sheet and positions the Company to complete construction of the Little Big Burger locations currently underway.
“Following the close of the quarter, we opened the Multnomah Village location in Portland and our franchisee opened the first Little Big Burger in Austin. As we speak, there are six more LBB locations underway and slated to open in the second half of the year. We are especially looking forward to the expected September opening of our LBB Cornelius N.C. with Denny Hamlin, in addition to opening our first unit in Seattle.”
First Half and Second Quarter 2018 Highlights
- Total company revenue was $20.4 million for the first half and $10.4 million for the second quarter, a decrease of 1.1% and 3.4% from the prior year largely due to the closure of underperforming locations.
- Excluding closed locations, revenue increased 9.9% for the first half and 11.7%.for the second quarter.
- Sequentially, revenue increased 4.0% from the first quarter to the second quarter of 2018 on increased delivery revenue and new store openings.
- Excluding closed locations, revenue increased 9.9% for the first half and 11.7%.for the second quarter.
- Net loss and EBITDA metrics improved for both the first half and second quarter:
- Non-Gaap Restaurant EBITDA increased 7.6% to $2.2 million for first half and 4.3% to $1.2 million for the second quarter.
- Non-Gaap Adjusted EBITDA more than doubled to $0.2 million for the first half and 6.1% to $0.3 million for the second quarter.
- Net loss attributable to Common Shareholders improved 8.6% to $3.4 million for the first half and 60.9% to $0.8 million for the second quarter.
- Net loss per common share improved 37.9% to $(1.02) for the first half and 72.2% to $(0.23) for the second quarter.
- Non-Gaap Restaurant EBITDA increased 7.6% to $2.2 million for first half and 4.3% to $1.2 million for the second quarter.
- Completed a $1.4 million equity financing, increasing balance sheet liquidity in second quarter 2018 and providing working capital for new store construction projects.
- Opened 3 new franchise locations (2 LBB San Diego & BGR Bloomfield), 1 Company (BGR Catholic University) and acquired 1 franchise unit (BGR Annapolis).
- Opened 1 new franchise location (Austin) and 1 new Company location (Multnomah Village Portland) in July, with 6 new LBB’s and 1 new BGR franchise location underway.
- LBB store count to approximately double in 2018.
- LBB store count to approximately double in 2018.
- Entered into Little Big Burger store partnership with NASCAR superstar Denny Hamlin.
- Celebrated BGR 10-year anniversary.
Conference Call
The Company will host a conference call on Monday, August 13, 2018 at 4:30 PM Eastern Time /1:30 PM PT, which can be accessed by calling:
U.S.: (877) 407-0784
International: (201) 689-8560
In addition, the call can be accessed at https://www.chanticleerholdings.com/investor-relations/.
A replay will be available until Thursday, September 13, 2018 by dialing (844) 512-2921 in the U.S. and Canada and (412) 317-6671 internationally and entering the pin number: 13681836..
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 August 13, 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 Assad
678-570-6791
Ja@chanticleerholdings.com
| Chanticleer Holdings, Inc. and Subsidiaries | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (Unaudited) | |||||||
| June 30, 2018 | December 31, 2017 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash | $ | 1,485,060 | $ | 272,976 | |||
| Restricted cash | 27,082 | 165,517 | |||||
| Accounts and other receivables, net | 641,602 | 475,988 | |||||
| Inventories | 345,902 | 460,756 | |||||
| Prepaid expenses and other current assets | 701,910 | 324,324 | |||||
| Assets held for sale, net | 2,090,000 | 100,000 | |||||
| TOTAL CURRENT ASSETS | 5,291,556 | 1,799,561 | |||||
| Property and equipment, net | 8,236,276 | 8,548,592 | |||||
| Goodwill | 10,126,609 | 12,647,806 | |||||
| Intangible assets, net | 5,600,243 | 5,896,732 | |||||
| Investment, at cost | 800,000 | 800,000 | |||||
| Deposits and other assets | 452,675 | 490,328 | |||||
| TOTAL ASSETS | $ | 30,507,359 | $ | 30,183,019 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued expenses | $ | 6,503,248 | $ | 5,797,252 | |||
| Current maturities of long-term debt and notes payable net of unamortized discount and deferred financing costs of $586,695 and $1,173,190, respectively | 6,157,534 | 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 | 15,852,632 | 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 $191,306 and $208,697, respectively | 657,520 | 640,129 | |||||
| Deferred rent | 2,037,289 | 2,156,378 | |||||
| Deferred tax liabilities | 206,365 | 779,359 | |||||
| Deferred revenue | 1,215,926 | 175,000 | |||||
| TOTAL LIABILITIES | 19,969,732 | 18,694,135 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity: | |||||||
| Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 3,699,270 and 3,045,809 shares, respectively | 371 | 305 | |||||
| Additional paid-in capital | 63,208,218 | 60,750,330 | |||||
| Accumulated other comprehensive loss | (106,689 | ) | (934,901 | ) | |||
| Accumulated deficit | (53,565,342 | ) | (49,109,303 | ) | |||
| Total Chanticleer Holdings, Inc. Stockholders' Equity | 9,536,558 | 10,706,431 | |||||
| Non-Controlling Interests | 1,001,069 | 782,453 | |||||
| TOTAL STOCKHOLDERS' EQUITY | 10,537,627 | 11,488,884 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 30,507,359 | $ | 30,183,019 | |||
| Chanticleer Holdings, Inc. and Subsidiaries | ||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant sales, net | $ | 10,185,159 | $ | 10,524,787 | $ | 19,954,667 | $ | 20,177,941 | ||||||||
| Gaming income, net | 81,122 | 107,521 | 174,277 | 213,588 | ||||||||||||
| Management fee income | 24,999 | 24,993 | 49,998 | 49,983 | ||||||||||||
| Franchise income | 108,644 | 108,017 | 216,497 | 183,803 | ||||||||||||
| Total revenue | 10,399,924 | 10,765,318 | 20,395,439 | 20,625,315 | ||||||||||||
| Expenses: | ||||||||||||||||
| Restaurant cost of sales | 3,376,693 | 3,579,557 | 6,652,868 | 6,770,947 | ||||||||||||
| Restaurant operating expenses | 5,640,614 | 5,855,411 | 11,226,763 | 11,529,971 | ||||||||||||
| Restaurant pre-opening and closing expenses | 96,770 | 90,760 | 199,652 | 105,196 | ||||||||||||
| General and administrative expenses | 1,121,666 | 1,084,422 | 2,315,083 | 2,460,042 | ||||||||||||
| Asset impairment charge | 54,212 | 633,962 | 1,731,267 | 633,962 | ||||||||||||
| Depreciation and amortization | 530,314 | 602,659 | 1,070,993 | 1,196,039 | ||||||||||||
| Total operating expenses | 10,820,269 | 11,846,771 | 23,196,626 | 22,696,157 | ||||||||||||
| Operating loss | (420,345 | ) | (1,081,453 | ) | (2,801,187 | ) | (2,070,842 | ) | ||||||||
| Other (expense) income | ||||||||||||||||
| Interest expense | (629,858 | ) | (1,079,706 | ) | (1,264,939 | ) | (1,483,842 | ) | ||||||||
| Gain (loss) on debt refinancing | - | 267,512 | - | (95,310 | ) | |||||||||||
| Other income (expense) | 7,605 | (22 | ) | 5,490 | 12,212 | |||||||||||
| Total other expense | (622,253 | ) | (812,216 | ) | (1,259,449 | ) | (1,566,940 | ) | ||||||||
| Loss from continuing operations before income taxes | (1,042,598 | ) | (1,893,669 | ) | (4,060,636 | ) | (3,637,782 | ) | ||||||||
| Income tax benefit (expense) | 236,798 | (109,531 | ) | 572,995 | (113,328 | ) | ||||||||||
| Consolidated net loss | (805,800 | ) | (2,003,200 | ) | (3,487,641 | ) | (3,751,110 | ) | ||||||||
| Less net loss attributable to non-controlling interest: | 45,340 | 56,328 | 129,747 | 77,171 | ||||||||||||
| Net loss attributable to Chanticleer Holdings, Inc. | $ | (760,460 | ) | $ | (1,946,872 | ) | $ | (3,357,894 | ) | $ | (3,673,939 | ) | ||||
| Dividends on redeemable preferred stock | (28,007 | ) | (27,622 | ) | (55,801 | ) | (51,769 | ) | ||||||||
| Net loss attributable to common shareholders of Chanticleer Holdings, Inc. | $ | (788,467 | ) | $ | (1,974,494 | ) | $ | (3,413,695 | ) | $ | (3,725,708 | ) | ||||
| Net loss attributable to Chanticleer Holdings, Inc. per common | ||||||||||||||||
| share, basic and diluted: | $ | (0.23 | ) | $ | (0.81 | ) | $ | (1.02 | ) | $ | (1.65 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 3,494,803 | 2,432,313 | 3,331,296 | 2,257,767 | ||||||||||||
| Chanticleer Holdings, Inc. and Subsidiaries | |||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||
| Six Months Ended | |||||||
| June 30, 2018 | June 30, 2017 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (3,487,641 | ) | $ | (3,751,110 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization | 1,070,993 | 1,196,039 | |||||
| Loss on extinguishment of debt | - | 95,310 | |||||
| Asset impairment charge | 1,731,267 | 633,962 | |||||
| Common stock and warrants issued for services | 129,767 | 154,318 | |||||
| Amortization of debt discount | 591,830 | 408,359 | |||||
| Change in assets and liabilities: | |||||||
| Accounts and other receivables | (241,772 | ) | 194,426 | ||||
| Prepaid and other assets | (412,423 | ) | 26,460 | ||||
| Inventory | 60,093 | (20,693 | ) | ||||
| Accounts payable and accrued liabilities | 849,132 | 555,875 | |||||
| Deferred income taxes | (572,994 | ) | 73,520 | ||||
| Deferred rent | (119,089 | ) | 178,453 | ||||
| Net cash used in operating activities | (400,837 | ) | (255,081 | ) | |||
| Cash flows from investing activities: | |||||||
| Purchase of property and equipment | (664,801 | ) | (984,301 | ) | |||
| Cash paid for acquisitions, net of cash acquired | (30,000 | ) | - | ||||
| Net cash used in investing activities | (694,801 | ) | (984,301 | ) | |||
| 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 | - | (258,153 | ) | ||||
| Loan proceeds | - | 6,598,161 | |||||
| Payment of deferred financing costs | - | (293,294 | ) | ||||
| Loan repayments | (207,531 | ) | (5,478,494 | ) | |||
| Capital lease payments | - | (14,551 | ) | ||||
| Distributions to non-controlling interest | (42,603 | ) | - | ||||
| Contribution of non-controlling interest | 750,000 | 500,000 | |||||
| Net cash provided by financing activities | 2,187,050 | 1,645,320 | |||||
| Effect of exchange rate changes on cash | (17,763 | ) | (21,355 | ) | |||
| Net increase in cash and restricted cash | 1,073,649 | 384,583 | |||||
| Cash and restricted cash, beginning of period | 438,493 | 268,575 | |||||
| Cash and restricted cash, end of period | $ | 1,512,142 | $ | 653,158 | |||
| Chanticleer Holdings, Inc. and Subsidiaries | |||||||||||||||
| Reconcilation of Net Loss to EBITDA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
| Consolidated net loss | $ | (805,800 | ) | $ | (2,003,200 | ) | $ | (3,487,641 | ) | $ | (3,751,110 | ) | |||
| Interest expense | 629,858 | 1,079,706 | 1,264,939 | 1,483,842 | |||||||||||
| Income tax | (236,798 | ) | 109,531 | (572,995 | ) | 113,328 | |||||||||
| Depreciation and amortization | 530,314 | 602,659 | 1,070,993 | 1,196,039 | |||||||||||
| EBITDA | $ | 117,574 | $ | (211,304 | ) | $ | (1,724,704 | ) | $ | (957,901 | ) | ||||
| Restaurant pre-opening and closing expenses | 96,770 | 90,760 | 199,652 | 105,196 | |||||||||||
| (Gain) loss on debt refinancing | - | (267,512 | ) | - | 95,310 | ||||||||||
| Asset impairment charge | 54,212 | 633,962 | 1,731,267 | 633,962 | |||||||||||
| Transaction and severence related expenses | - | - | 214,905 | ||||||||||||
| Other income (expense) | (7,605 | ) | 22 | (5,490 | ) | (12,212 | ) | ||||||||
| Adjusted EBITDA | $ | 260,951 | $ | 245,928 | $ | 200,725 | $ | 79,260 | |||||||
| General and administrative expenses | 1,121,666 | 1,084,422 | 2,315,083 | 2,245,137 | |||||||||||
| Franchise revenues | (108,644 | ) | (108,017 | ) | (216,497 | ) | (183,803 | ) | |||||||
| Management fee revenue | (24,999 | ) | (24,993 | ) | (49,998 | ) | (49,983 | ) | |||||||
| Restaurant EBITDA | $ | 1,248,974 | $ | 1,197,340 | $ | 2,249,313 | $ | 2,090,611 | |||||||