Achieves $338 million in Revenues in
Quarter, a 28% Increase Year-over-Year
Completes Mobile Order Capability
Rollout
Raises Revenue and Adjusted EBITDA
Guidance
Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”), one
of the fastest-growing brands in the quick service beverage
industry in the United States by location count, today reported
financial results for the third quarter ended September 30,
2024.
Christine Barone, Chief Executive Officer and President of Dutch
Bros, stated, “We delivered exceptional performance in the third
quarter as we executed our strategic and operational initiatives.
We believe our brand is resonating with customers, as we had the
highest same shop transaction growth quarter in two years, outside
of the impact of Leap Day. In the third quarter we delivered a 28%
revenue increase and systemwide same shop sales growth of 2.7%,
which exceeded our expectations.”
Barone continued, “We believe our refined real estate strategy
is working, as we are seeing strong new shop productivity as we
have shifted our development focus and elevated our site selection
process. We continue to demonstrate remarkable consistency in our
shop opening cadence with 38 shop openings in the third quarter. We
are making major investments in our development and construction
teams and our 2025 pipeline is strong, positioning us to accelerate
new shop growth.”
Barone concluded, "In the quarter, we accelerated our mobile
order rollout, achieving 90% system and 96% company-operated shop
coverage as of September 30th. We have received great feedback from
broistas and customers and we believe we are beginning to see the
impacts on our business.”
Third Quarter 2024 Highlights
- Opened 38 new shops, 33 of which were company-operated,
across 11 states.
- Total revenues grew 27.9% to $338.2 million as compared
to $264.5 million in the same period of 2023.
- System same shop sales1 and transactions increased 2.7%
and 0.8%, respectively, relative to the same period in 2023.
Company-operated same shop sales1 and transactions increased 4.0%
and 2.4%, respectively, relative to the same period of 2023.
- Company-operated shop revenues increased 30.4% to $308.3
million, as compared to $236.5 million in the same period of
2023.
- Company-operated shop gross profit was $68.4 million as
compared to $57.0 million in the same period of 2023. In the third
quarter of 2024, company-operated shop gross margin, which includes
120 bps of pre-opening costs, was 22.2%, a year-over-year decrease
of 190 bps.
- Company-operated shop contribution2, a non-GAAP
financial measure, grew 23.9% to $90.8 million as compared to $73.3
million in the same period of 2023. In the third quarter of 2024,
company-operated shop contribution margin, which includes 120 bps
of pre-opening costs, was 29.5%, a year-over-year decrease of 150
bps.
- Selling, general, and administrative expenses were $57.5
million (17.0% of revenue) as compared to $50.5 million (19.1% of
revenue) in the same period of 2023.
- Adjusted selling, general, and administrative expenses2,
a non-GAAP financial measure, were $50.3 million (14.9% of revenue)
as compared to $40.2 million (15.2% of revenue) in the same period
of 2023.
- Net income was $21.7 million as compared to $13.4
million in the same period of 2023.
- Adjusted EBITDA2, a non-GAAP financial measure, grew
20.3% to $63.8 million as compared to $53.0 million in the same
period of 2023.
- Adjusted net income2, a non-GAAP financial measure, was
$27.7 million as compared to $22.4 million in the same period of
2023.
- Net income per share of Class A and Class D common stock -
diluted was $0.11 as compared to $0.07 per share in the same
period of 2023.
- Adjusted net income per fully exchanged share of diluted
common stock2, a non-GAAP financial measure, was $0.16 as
compared to $0.14 in the same period of 2023.
Revised 2024 Outlook
- Total revenues are now projected to be between $1.255
billion and $1.260 billion, up from the prior range of $1.215
billion to $1.230 billion.
- Total system shop openings in 2024 are now expected to
be 150, consistent with the previously communicated outlook at the
lower end of 150 to 165. Capital expenditures are estimated
to be between $245 million to $265 million, down from the prior
range of $270 million to $290 million.
- Same shop sales1 growth for 2024 is expected to be
approximately 4.25%, from low single digits previously. Same shop
sales1 growth for the fourth quarter of 2024 is expected to be
between 1% and 2%.
- Adjusted SG&A3 is estimated to be between $195
million and $200 million, from $190 million to $200 million
previously.
- Adjusted EBITDA3 is now estimated to be between $215
million and $220 million, up from the prior range of $200 million
to $210 million.
_________________
1
Same shop sales is defined in the
section “Select Financial Metrics”.
2
Reconciliation of GAAP to
non-GAAP results is provided in the section “Non-GAAP Financial
Measures”.
3
We have not reconciled guidance
for Adjusted EBITDA or Adjusted SG&A to the corresponding GAAP
financial measure because we do not provide guidance for the
various reconciling items. We are unable to provide guidance for
these reconciling items because we cannot determine their probable
significance, as certain items are outside of our control and
cannot be reasonably predicted due to the fact that these items
could vary significantly from period to period. Accordingly,
reconciliation to the corresponding GAAP financial measure is not
available without unreasonable effort.
Conference Call and Webcast Today
Christine Barone, Chief Executive Officer and President, and
Josh Guenser, Chief Financial Officer, will host a conference call
and webcast today at 5:00 p.m. Eastern Time (ET) to discuss
financial results for the third quarter ended September 30,
2024.
Event: Third Quarter 2024 Conference Call and Webcast
Date: Wednesday, November 6, 2024
Time: 5:00 p.m. ET
Dial In: 1-201-493-6779
Webcast: https://investors.dutchbros.com under “Events
& Presentations”.
The webcast will be archived shortly after the conference call
has concluded. We will also publish earnings presentation slides
related to these financial results on our website
https://investors.dutchbros.com under “Events &
Presentations”.
About Dutch Bros Inc.
Dutch Bros Inc. (NYSE: BROS) is a high growth operator and
franchisor of drive-thru shops that focus on serving high QUALITY,
hand-crafted beverages with unparalleled SPEED and superior
SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch
Bros began with a double-head espresso machine and a pushcart in
Grants Pass, Oregon. While espresso-based beverages are still at
the core of what we do, Dutch Bros now offers a wide variety of
unique, customizable cold and hot beverages that delight a broad
array of customers. We believe Dutch Bros is more than just the
products we serve—we are dedicated to making a massive difference
in the lives of our employees, customers and communities. This
combination of hand-crafted and high-quality beverages, our unique
drive-thru experience and our community-driven, people-first
culture has allowed us to successfully open new shops and continue
to share the “Dutch Luv” at 950 locations across 18 states as of
September 30, 2024.
To learn more about Dutch Bros, visit www.dutchbros.com, follow
Dutch Bros Coffee on Instagram, Facebook, X, and TikTok, and
download the Dutch Bros app to earn points and score rewards!
Dutch Bros, our Windmill logo, Dutch Bros. Blue Rebel, and our
other registered and common law trade names, trademarks and service
marks are the property of Dutch Bros Inc. All other trademarks,
trade names and service marks appearing in this Earnings Release
are the property of their respective owners. Solely for
convenience, the trademarks and trade names in this Earnings
Release may be referred to without the ® and ™ symbols, but such
references should not be construed as any indicator that their
respective owners will not assert their rights thereto.
Forward-Looking Statements
In addition to historical information, this release contains a
number of “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, the success of Dutch Bros’
mobile order capabilities and expansion of such capabilities,
estimated capital expenditures, Dutch Bros’ possible or assumed
future results of operations, including guidance for 2024, new shop
openings, business strategies, and potential growth opportunities.
These statements are based on Dutch Bros’ current expectations and
beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“project,” “expects,” “should,” “guidance,” and variations of these
words or similar expressions (or the negative versions of such
words or expressions) are intended to identify forward-looking
statements. Such forward-looking statements are subject to known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside Dutch Bros’ control that could
cause actual results to differ materially from the results
discussed in the forward-looking statements, including those
related to current expectations regarding Dutch Bros’ leadership
performance, the effectiveness of our marketing initiatives and
technological advancements, general economic conditions, commodity
inflation, increased labor costs, disruptions in our supply chain,
ability to hire and retain employees, and other risks, including
those described under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2023 filed with
the SEC on February 23, 2024, and in our future reports to be filed
with the SEC, including our Quarterly Report on Form 10-Q for the
three months ended September 30, 2024. Forward-looking statements
contained in this press release are made as of this date, and Dutch
Bros undertakes no duty to update such information except as
required under applicable law.
DUTCH BROS INC.
Condensed Consolidated Statements
of Operations
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except per share amounts;
unaudited)
2024
2023
2024
2023
REVENUES
Company-operated shops
$
308,295
$
236,472
$
851,648
$
630,588
Franchising and other
29,917
28,035
86,581
81,065
Total revenues
338,212
264,507
938,229
711,653
COSTS AND EXPENSES
Cost of sales
248,161
189,323
686,048
519,482
Selling, general and administrative
57,536
50,490
161,866
148,128
Total costs and expenses
305,697
239,813
847,914
667,610
INCOME FROM OPERATIONS
32,515
24,694
90,315
44,043
OTHER EXPENSE
Interest expense, net
(6,869
)
(9,325
)
(20,259
)
(26,269
)
Other income (expense), net
764
(140
)
7,357
2,206
Total other expense
(6,105
)
(9,465
)
(12,902
)
(24,063
)
INCOME BEFORE INCOME TAXES
26,410
15,229
77,413
19,980
Income tax expense
4,698
1,828
17,330
6,259
NET INCOME
$
21,712
$
13,401
$
60,083
$
13,721
Less: Net income attributable to
non-controlling interests
9,068
9,191
28,437
10,601
NET INCOME ATTRIBUTABLE TO DUTCH BROS
INC.
$
12,644
$
4,210
$
31,646
$
3,120
Net income per share of Class A and Class
D common stock:
Basic
$
0.11
$
0.07
$
0.32
$
0.05
Diluted
$
0.11
$
0.07
$
0.32
$
0.05
Weighted-average shares of Class A and
Class D common stock outstanding:
Basic
113,819
59,366
99,756
57,598
Diluted
114,252
60,214
100,070
57,598
DUTCH BROS INC.
Segment Financials
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands; unaudited)
2024
2023
2024
2023
Revenues:
Company-operated shops
$
308,295
$
236,472
$
851,648
$
630,588
Franchising and other
29,917
28,035
86,581
81,065
Total revenues
338,212
264,507
938,229
711,653
Cost of Sales:
Company-operated shops
239,918
179,480
658,950
492,645
Franchising and other
8,243
9,843
27,098
26,837
Total cost of sales
248,161
189,323
686,048
519,482
Segment gross profit:
Company-operated shops
68,377
56,992
192,698
137,943
Franchising and other
21,674
18,192
59,483
54,228
Total gross profit
90,051
75,184
252,181
192,171
Depreciation and amortization:
Company-operated shops
22,470
16,332
63,202
44,132
Franchising and other
1,022
1,371
3,394
4,029
All other ¹
389
413
888
1,250
Total depreciation and amortization
23,881
18,116
67,484
49,411
Segment contribution:
Company-operated shops
90,847
73,324
255,900
182,075
Franchising and other
22,696
19,563
62,877
58,257
Total segment contribution
113,543
92,887
318,777
240,332
Selling, general and administrative
(57,536
)
(50,490
)
(161,866
)
(148,128
)
Interest expense, net
(6,869
)
(9,325
)
(20,259
)
(26,269
)
Other income (expense), net
764
(140
)
7,357
2,206
Income before income taxes
$
26,410
$
15,229
$
77,413
$
19,980
__________________
1
All other depreciation and
amortization is included in selling, general and administrative
expenses and is not part of the segment contribution
calculations.
DUTCH BROS INC.
Company-Operated Shop Results
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(in thousands; unaudited)
$
%
$
%
$
%
$
%
Company-operated shops revenue
308,295
100.0
236,472
100.0
851,648
100.0
630,588
100.0
Beverage, food and packaging costs
78,060
25.3
61,317
25.9
216,923
25.5
169,702
26.8
Labor costs
85,144
27.6
61,521
26.0
230,807
27.1
168,805
26.8
Occupancy and other costs
50,693
16.4
36,126
15.3
136,466
16.0
99,327
15.8
Pre-opening costs
3,551
1.2
4,184
1.8
11,552
1.4
10,679
1.7
Depreciation and amortization
22,470
7.3
16,332
6.9
63,202
7.4
44,132
7.0
Company-operated shop costs and
expenses
239,918
77.8
179,480
75.9
658,950
77.4
492,645
78.1
Company-operated shops gross profit
68,377
22.2
56,992
24.1
192,698
22.6
137,943
21.9
Company-operated shops contribution 1
90,847
29.5
73,324
31.0
255,900
30.0
182,075
28.9
_________________
1
Reconciliation of GAAP to
non-GAAP results is provided in the section “Non-GAAP Financial
Measures”.
DUTCH BROS INC.
Summary Cash Flows Data
Nine Months Ended
September 30,
(in thousands; unaudited)
2024
2023
Net cash provided by operating
activities
$
184,195
$
94,906
Net cash used in investing activities
(169,363
)
(167,461
)
Net cash provided by financing
activities
132,757
202,163
Net increase in cash and cash
equivalents
$
147,589
$
129,608
Cash and cash equivalents at beginning of
period
133,545
20,178
Cash and cash equivalents at end of
period
$
281,134
$
149,786
DUTCH BROS INC.
Condensed Consolidated Balance
Sheets
(in thousands; unaudited)
September 30,
2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
281,134
$
133,545
Accounts receivable, net
10,362
9,124
Inventories, net
38,381
46,953
Prepaid expenses and other current
assets
12,168
15,637
Total current assets
342,045
205,259
Property and equipment, net
662,759
542,440
Finance lease right-of-use assets, net
377,561
382,734
Operating lease right-of-use assets,
net
301,896
199,673
Intangibles, net
3,455
5,415
Goodwill
21,629
21,629
Deferred income tax assets, net
718,543
402,995
Other long-term assets
3,628
3,865
Total assets
$
2,431,516
$
1,764,010
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
31,880
$
29,957
Accrued compensation and benefits
39,106
31,405
Other accrued liabilities
26,162
15,770
Other current liabilities
5,962
6,423
Deferred revenue
35,738
30,349
Current portion of finance lease
liabilities
12,845
9,482
Current portion of operating lease
liabilities
12,987
10,239
Current portion of long-term debt
15,746
4,491
Total current liabilities
180,426
138,116
Deferred revenue, net of current
portion
6,367
6,676
Finance lease liabilities, net of current
portion
369,206
367,775
Operating lease liabilities, net of
current portion
293,474
191,419
Long-term debt, net of current portion
224,361
93,175
Tax receivable agreements liability
605,003
290,920
Other long-term liabilities
8
8
Total liabilities
1,678,845
1,088,089
Equity:
Common stock
1
2
Additional paid in capital
506,785
379,391
Accumulated other comprehensive income
310
544
Retained earnings (accumulated
deficit)
16,054
(15,592
)
Total stockholders' equity attributable to
Dutch Bros Inc.
523,150
364,345
Non-controlling interests
229,521
311,576
Total equity
752,671
675,921
Total liabilities and equity
$
2,431,516
$
1,764,010
DUTCH BROS INC.
Select Financial Metrics
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except number of shops
data; unaudited)
2024
2023
2024
2023
Shop count, beginning of period
Company-operated
612
473
542
396
Franchised
300
281
289
275
912
754
831
671
Company-operated new openings
33
37
103
114
Franchised new openings
5
2
16
8
Re-openings 1
—
1
—
1
Shop count, end of period
Company-operated
645
510
645
510
Franchised
305
284
305
284
Total shop count
950
794
950
794
Systemwide AUV 2
N/A
N/A
$
2,004
$
1,950
Company-operated shops AUV 2
N/A
N/A
$
1,921
$
1,901
Systemwide same shop sales 3, 4
2.7
%
4.0
%
5.2
%
2.1
%
Ticket
1.9
%
9.5
%
5.6
%
7.6
%
Transactions
0.8
%
(5.5
)%
(0.4
)%
(5.5
)%
Company-operated same shop sales 3
4.0
%
2.8
%
6.3
%
0.5
%
Ticket
1.6
%
9.1
%
5.3
%
7.6
%
Transactions
2.4
%
(6.3
)%
1.0
%
(7.1
)%
Systemwide sales 4
$
478,765
$
391,286
$
1,342,750
$
1,069,284
Company-operated operating weeks 5
8,212
6,400
23,195
17,576
Franchising and other operating weeks
5
3,955
3,703
11,576
10,881
Dutch Rewards transactions as a percentage
of total transactions 6
67.2
%
63.1
%
66.8
%
64.2
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(in thousands; unaudited)
$
%
$
%
$
%
$
%
Company-operated shop revenues
308,295
100.0
236,472
100.0
851,648
100.0
630,588
100.0
Company-operated gross profit
68,377
22.2
56,992
24.1
192,698
22.6
137,943
21.9
Company-operated shop contribution 7
90,847
29.5
73,324
31.0
255,900
30.0
182,075
28.9
Selling, general, and administrative
expenses
57,536
17.0
50,490
19.1
161,866
17.3
148,128
20.8
Adjusted selling, general, and
administrative expenses 7
50,268
14.9
40,154
15.2
138,321
14.7
115,311
16.2
Net income
21,712
6.4
13,401
5.1
60,083
6.4
13,721
1.9
Adjusted EBITDA 7
63,762
18.9
53,008
20.0
181,461
19.3
125,487
17.6
___________
1
Re-opening of a shop that was
temporarily closed in 2021.
2
AUVs are determined based on the
net sales for any trailing twelve-month period for systemwide and
company-operated shops that have been open a minimum of 15 months.
AUVs are calculated by dividing the systemwide and company-operated
shop net sales by the total number of systemwide and
company-operated shops, respectively. Management uses this metric
as an indicator of shop growth and future expectations of mature
locations.
3
Same shop sales reflects the
change in year-over-year sales for the comparable shop base, which
we define as shops open for 15 complete months or longer as of the
first day of the reporting period. Same shop sales can be impacted
by changes in customer transaction counts and by changes in the
per-ticket amounts. Management uses this metric as an indicator of
shop growth and future expansion strategy. The number of shops
included in the systemwide and company-operated comparable bases
for the respective periods are presented in the following
table.
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Systemwide shop base
716
572
641
503
Company-operated shop base
438
310
370
246
4
Systemwide sales and systemwide
same shop sales are operating measures that include sales at
company-operated shops and sales at franchised shops during the
comparable periods presented. Franchise sales represent sales at
all franchise shops and are revenues to our franchisees. We do not
record franchise sales as revenues; however, our royalty revenues
and advertising fund contributions are calculated based on a
percentage of franchise sales. As these metrics include sales
reported to us by our non-consolidated franchise partners, these
metrics should be considered as a supplement to, not a substitute
for, our results as reported under GAAP. Management uses these
metrics as indicators of our system’s overall financial health,
growth and future expansion prospects.
5
Company-operated and franchise
shops operating weeks are calculated based on the number operating
days for the shop base and dividing by 7. Our shop base is defined
as shops opened as of the end date of the periods presented. The
operating weeks calculations reflect re-acquired franchises through
2022. Management uses these metrics as indicators of our system’s
overall financial health, growth and future expansion
prospects.
6
Dutch Rewards is our
digitally-based rewards program available exclusively through the
Dutch Rewards app. Management uses this metric as an indicator of
customer loyalty adoption of our Dutch Rewards app and future
promotional plans.
7
Reconciliation of GAAP to
non-GAAP results is provided in the section “Non-GAAP Financial
Measures”.
Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
U.S. GAAP, this release contains references to the non-GAAP
financial measures below. We believe these non-GAAP financial
measures provide investors with useful supplemental information
about our operating performance, enable comparison of financial
trends and results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating our business and measuring our performance.
Our non-GAAP financial measures reflect adjustments based on one
or more of the following items, as well as the related income tax
effects where applicable. Income tax effects have been calculated
based on the combined total non-GAAP adjustments using our total
effective tax rate. These non-GAAP financial measures should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with U.S. GAAP, and the financial results
calculated in accordance with U.S. GAAP and reconciliations from
these results should be carefully evaluated.
Company-operated shop contribution (in dollars and as a
percentage of revenue)
Definition and/or calculation
Company-operated segment gross profit, before company-operated
shop depreciation and amortization. Company-operated shop
contribution in dollars (as defined), taken as a percentage of
company-operated shop revenue.
Usefulness to management and
investors
This non-GAAP measure is used by our management in making
performance decisions without the impact of non-cash depreciation
and amortization charges. This is a standard metric used across our
industry by investors.
EBITDA, Adjusted EBITDA (in dollars and as a percentage of
revenue)
EBITDA — definition and/or
calculation
Net income before interest expense (net of interest income),
income tax expense, and depreciation and amortization expense.
Adjusted EBITDA — definition and/or
calculation
Defined as EBITDA (as defined above), excluding equity-based
compensation, expenses associated with equity offerings, executive
transitions, (gain) loss on the remeasurement of the liability
related to the TRAs, legal proceedings, sale of Aircraft, and
organization realignment and restructuring costs.
Adjusted EBITDA in dollars (as defined), taken as a percentage
of total revenue.
Usefulness to management and
investors
These non-GAAP measures are supplemental operating performance
measures we believe facilitate comparisons to historical
performance and competitors’ operating results. We believe these
non-GAAP measures presented provide investors with a supplemental
view of our operating performance that facilitates analysis and
comparisons of our ongoing business operations because they exclude
items that may not be indicative of our ongoing operating
performance.
Adjusted selling, general, and administrative (in dollars and
as a percentage of revenue)
Definition and/or calculation
Selling, general, and administrative expenses, excluding
depreciation and amortization, equity-based compensation expense,
expenses associated with equity offerings, executive transitions,
legal proceedings, and organization realignment and restructuring
costs.
Adjusted selling, general, and administrative in dollars (as
defined), taken as a percentage of total revenue.
Usefulness to management and
investors
This non-GAAP measure is used as a supplemental measure of
operating performance that we believe is useful to evaluate our
performance period over period and relative to our competitors. We
believe the non-GAAP measure presented provides investors with a
supplemental view of our operating performance that facilitates
analysis and comparisons of our ongoing business operations because
it excludes items that may not be indicative of our ongoing
operating performance.
Adjusted net income
Definition and/or calculation
Net income, excluding equity-based compensation expense,
expenses associated with equity offerings, executive transitions,
(gain) loss on the remeasurement of the liability related to the
TRAs, legal proceedings, sale of Aircraft, organization realignment
and restructuring costs, and income tax effects of items excluded
from net income.
Usefulness to management and
investors
This non-GAAP measure is used as a supplemental measure of
operating performance that we believe is useful to evaluate our
performance period over period and relative to our competitors. We
believe this measure facilitates a better comparison with other
companies that have different organizational and tax structures, as
well as comparisons period over period.
Adjusted fully exchanged weighted-average shares of diluted
common stock outstanding
Definition and/or calculation
Weighted-average shares of Class A and Class D common stock
outstanding - basic with addition of dilutive impacts of restricted
stock awards and units, as well as the assumed exchange of all of
the Dutch Bros OpCo Class A common units not held by Dutch Bros
Inc. for Dutch Bros Inc. Class A common stock.
Usefulness to management and
investors
This non-GAAP measure is used as a supplemental measure of
operating performance that we believe is useful to evaluate our
performance period over period and relative to our competitors. By
adding in the assumed exchange of all of the outstanding Dutch Bros
OpCo Class A common units not held by Dutch Bros Inc. for Dutch
Bros Inc. Class A common stock, we believe this measure facilitates
a better comparison with other companies that have different
organizational and tax structures, as well as comparisons period
over period.
Adjusted net income per fully exchanged share of diluted
common stock
Definition and/or calculation
Net income per share of Class A and Class D common stock -
diluted, excluding per share impacts of equity-based compensation
expense, expenses associated with equity offerings, executives
transition costs, (gain) loss on the remeasurement of the liability
related to the TRAs, legal proceedings, sale of Aircraft,
organization realignment and restructuring costs, income tax
effects of items excluded from net income, and removal of per share
impacts of controlling and non-controlling interests.
Usefulness to management and
investors
This non-GAAP measure is used as a supplemental measure of
operating performance that we believe is useful to evaluate our
performance period over period and relative to our competitors. By
assuming the full exchange of all of the outstanding Dutch Bros
OpCo Class A common units not held by Dutch Bros Inc. for Dutch
Bros Inc. Class A common stock and related net income adjustments,
we believe this measure facilitates a better comparison with other
companies that have different organizational and tax structures, as
well as comparisons period over period.
Non-GAAP adjustments
Below are the definitions of the non-GAAP adjustments that are
used in the calculation of our non-GAAP measures, as described
above.
Equity-based compensation
Non-cash expenses related to the grant and vesting of stock
awards, including restricted stock awards and restricted stock
units in Dutch Bros Inc. to certain eligible employees.
Expenses associated with equity
offerings
Costs incurred as a result of our equity offerings, including
secondary offerings by TSG Consumer Partners, L.P. and certain of
its affiliates. These costs include, but are not limited to, legal
fees, consulting fees, tax fees, and accounting fees.
Executive transitions
Employee severance and related benefit costs, as well as sign-on
bonus(es) for several executive level transitions occurring in 2022
and 2023, and amortized through the first quarter of 2024.
TRAs remeasurements
(Gain) loss impacts related to adjustments of our TRAs
liabilities.
Legal proceedings
Loss accrual related to certain legal disputes.
Sale of Aircraft
Gain impact related to the sale of our airplane, hangar and
related equipment to our Co-Founder.
Organization realignment and
restructuring
Fees and costs, including consulting, employee-related and other
costs, in connection with our comprehensive initiative to develop
and implement a long-term strategy involving changes to our
organizational structure to support our growth. This initiative
resulted in realignment activities that occurred in 2023, and
restructuring activities that commenced in 2024, and are expected
to continue for at least the next year. Given this strategic
initiative's magnitude and scope, we do not expect such costs will
recur in the foreseeable future, and do not consider such costs
reflective of the ongoing costs necessary to operate our
business.
Dilutive effects of restricted stock
awards and units
Addition of incremental shares of restricted stock awards and
units calculated under the treasury stock method, when they are
dilutive for the calculation of weighted-average shares on a
non-GAAP basis.
Assumed exchange of weighted-average LLC
interests for shares of Class A common stock
Weighted-average of all outstanding Dutch Bros OpCo Class A
common units not held by Dutch Bros Inc. that are assumed to be
exchanged for Dutch Bros Inc. Class A common stock.
Controlling and non-controlling interest
adjustments
Adjustments to controlling and non-controlling interests to
align the numerator of the net income per share to the denominator,
which assumes the full exchange of all outstanding Dutch Bros OpCo
Class A common units not held by Dutch Bros Inc. for Dutch Bros
Inc. Class A common stock.
Supplemental Reconciliations of GAAP Actuals to Non-GAAP
Actuals
Following are the reconciliations of the most comparable GAAP
financial measure to non-GAAP financial measure. These non-GAAP
financial measures should not be considered a substitute for, or
superior to, financial measures calculated in accordance with U.S.
GAAP, and the reconciliations from U.S. GAAP to Non-GAAP measures
should be carefully evaluated. Please refer to "Non-GAAP Financial
Measures" in this release for a detailed explanation of the
adjustments made to the comparable U.S. GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why
management believes the non-GAAP measures provide useful
information for investors.
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
(in thousands; unaudited)
$
%
$
%
$
%
$
%
Company-operated shop gross
profit
68,377
22.2
56,992
24.1
192,698
22.6
137,943
21.9
Depreciation and amortization
22,470
7.3
16,332
6.9
63,202
7.4
44,132
7.0
Company-operated shop
contribution
90,847
29.5
73,324
31.0
255,900
30.0
182,075
28.9
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
(in thousands; unaudited)
$
%
$
%
$
%
$
%
Net income
21,712
6.4
13,401
5.1
60,083
6.4
13,721
1.9
Depreciation and amortization
23,881
7.1
18,116
6.8
67,484
7.2
49,411
6.9
Interest expense, net
6,869
2.0
9,325
3.5
20,259
2.2
26,269
3.7
Income tax expense
4,698
1.4
1,828
0.7
17,330
1.8
6,259
0.9
EBITDA
57,160
16.9
42,670
16.1
165,156
17.6
95,660
13.4
Equity-based compensation
2,961
0.9
9,698
3.7
8,220
0.8
29,017
4.0
Expenses associated with equity
offerings
—
—
—
—
1,489
0.2
—
—
Executive transitions
—
—
225
0.1
75
—
600
0.1
TRAs remeasurements
—
—
415
0.1
(5,687
)
(0.6
)
(1,740
)
(0.2
)
Legal proceedings
—
—
—
—
—
—
1,950
0.3
Sale of Aircraft
(550
)
(0.2
)
—
—
(1,302
)
(0.1
)
—
—
Organization realignment and
restructuring:
Employee-related costs
3,998
1.2
—
—
13,287
1.4
—
—
Other costs
193
0.1
—
—
223
—
—
—
Total organization realignment and
restructuring
4,191
1.3
—
—
13,510
1.4
—
—
Adjusted EBITDA
63,762
18.9
53,008
20.0
181,461
19.3
125,487
17.6
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
(in thousands; unaudited)
$
%
$
%
$
%
$
%
Selling, general, and
administrative
57,536
17.0
50,490
19.1
161,866
17.3
148,128
20.8
Depreciation and amortization
(389
)
—
(413
)
(0.1
)
(888
)
(0.2
)
(1,250
)
(0.2
)
Equity-based compensation
(2,688
)
(0.8
)
(9,698
)
(3.7
)
(7,583
)
(0.8
)
(29,017
)
(4.0
)
Expenses associated with equity
offerings
—
—
—
—
(1,489
)
(0.2
)
—
—
Executive transitions
—
—
(225
)
(0.1
)
(75
)
—
(600
)
(0.1
)
Legal proceedings
—
—
—
—
—
—
(1,950
)
(0.3
)
Organization realignment and
restructuring:
Employee-related costs
(3,998
)
(1.2
)
—
—
(13,287
)
(1.4
)
—
—
Other costs
(193
)
(0.1
)
—
—
(223
)
—
—
—
Total organization realignment and
restructuring
(4,191
)
(1.3
)
—
—
(13,510
)
(1.4
)
—
—
Adjusted selling, general, and
administrative
50,268
14.9
40,154
15.2
138,321
14.7
115,311
16.2
Three Months Ended September
30,
(in thousands; unaudited)
2024
2023
Net income
$
21,712
$
13,401
Equity-based compensation
2,961
9,698
Executive transitions
—
225
TRAs remeasurements
—
415
Sale of Aircraft
(550
)
—
Organization realignment and
restructuring:
Employee-related costs
3,998
—
Other costs
193
—
Subtotal: Organization realignment and
restructuring
4,191
—
Income tax effects
(652
)
(1,327
)
Adjusted net income
$
27,662
$
22,412
Three Months Ended September
30,
(in thousands, except per share amounts;
unaudited)
2024
2023
Weighted-average shares of Class A and
Class D common stock outstanding - basic
113,819
59,366
Dilutive effects of restricted stock
awards and units
433
848
Weighted-average shares of Class A and
Class D common stock outstanding - diluted
114,252
60,214
Assumed exchange of weighted-average Dutch
Bros OpCo Class A common units for shares of Dutch Bros Inc. Class
A common stock
63,369
105,756
Adjusted fully exchanged
weighted-average shares of common stock outstanding -
diluted
177,621
165,970
Net income per share of Class A and
Class D common stock - diluted
$
0.11
$
0.07
Controlling and non-controlling interest
adjustments
0.01
0.02
Equity-based compensation
0.02
0.06
Executive transitions
—
—
TRAs remeasurements
—
—
Sale of Aircraft
—
—
Organization realignment and
restructuring:
Employee-related costs
0.02
—
Other costs
—
—
Subtotal: Organization realignment and
restructuring
0.02
—
Income tax effects
—
(0.01
)
Adjusted net income per fully exchanged
share of diluted common stock
$
0.16
$
0.14
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106782709/en/
For Investor Relations inquiries: Jeff Priester ICR (332)
242-4370 investors@dutchbros.com
For Media Relations inquiries: Jessica Liddell ICR (203)
682-8208 jessica.liddell@icrinc.com
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