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.
- 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.
- 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.
- 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
Assad678-570-6791Ja@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 45,000,000shares; issued and
outstanding 3,699,270 and 3,045,809shares, 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 |
|
|
|
|
|
|
|
|
|
Chanticleer (NASDAQ:BURG)
Historical Stock Chart
From Sep 2024 to Oct 2024
Chanticleer (NASDAQ:BURG)
Historical Stock Chart
From Oct 2023 to Oct 2024