Chanticleer Holdings Reports First Quarter Revenue Growth of 34%
Total revenue was $11.6 million, a 34.0% increase as compared to revenue of $8.7 million in the same prior year quarter.
Chanticleer Holdings, Inc. (NASDAQ: HOTR), owner, operator and franchisor of multiple branded restaurants in the U.S. and abroad, today announced financial results for the first quarter ended March 31, 2016.
Mike Pruitt, Chairman and CEO of Chanticleer commented, "During the first quarter we achieved strong revenue growth and restaurant EBITDA increased 85% to $1 million. Our Better Burger business, which accounted for 48% of our sales up from 17% last year, performed well with excellent store level economics due to the strength of our regional brands. We are focused on expanding our Better Burger concepts and recently announced plans to open 3 additional Little Big Burger locations in Portland by the end of the year. We also signed a new BGR franchisee with plans to open five stores in the Salt Lake City market and an agreement to open up to 10 Little Big Burger stores in the Seattle market.
"We are additionally beginning to benefit from the increased scale of the business as well as aggressive efficiency initiatives. General and Administrative expenses reduced to 15% of sales for the quarter compared to 22% in the same quarter last year. We are continuing the process of integrating and streamlining our acquired operations, and expect those actions to result in further margin improvement in the second half of the year."
First Quarter Revenue Increases 34%; Adjusted EBITDA Improves 22%
Total revenue was $11.6 million, a 34.0% increase as compared to revenue of $8.7 million in the same prior year quarter. The increase resulted from the significant growth in our Better Burger group and was partially offset by lower revenues from our Hooters group.
Restaurant revenues increased 34.3% to $11.3 million for the quarter ended March 31, 2016 as compared with the same quarter last year. Revenue increased as growth in store count was partially offset by reduced revenue levels at our Hooters Australia restaurants, combined with the unfavorable impact of foreign currency rates on financial statement translation. Same store sales improved 10.9% in the Better Burger category and 2.0% in the Just Fresh business, while same stores sales in the Hooters business declined largely due to foreign currency fluctuations and local economic conditions in our international markets.
Chanticleer reported a loss from continuing operations of $1.6 million in the first quarter of 2016 as compared to a loss from continuing operations of $1.9 million in the first quarter of fiscal 2015. Chanticleer recorded a net loss of $1.4 million, or $0.07 per basic and diluted share in the first quarter of fiscal 2016, compared with a net loss of $2.3 million or $0.27 per basic and diluted share, in the first quarter of fiscal 2015.
Non-GAAP Adjusted EBITDA was a loss of $640 thousand for the quarter compared to a loss of $821 thousand in the first quarter of 2015. Approximately $440 thousand of the first quarter 2016 adjusted EBITDA loss was attributable to the Company's Australia and Budapest Hooters operations in the quarter. Non-GAAP Restaurant EBITDA was $998 thousand for the quarter compared to $540 thousand in the first quarter of 2015.
Mike Pruitt continued, "Our iconic Hooters brand continues to resonate internationally with most of our stores performing well. We have seen improved performance at four of our five Australia locations as the recently strengthened management team drives operational improvements. However, those improvements have been slower than planned and two of our international stores are underperforming; we expect to drive further improvements or take other actions to reduce the negative impact in the near term.
"We plan to grow our Better Burger business while implementing cost reduction initiatives throughout the organization and continue to strengthen our financial performance going forward."
About Chanticleer Holdings, Inc.
Headquartered in Charlotte, NC, Chanticleer Holdings (HOTR), together with its subsidiaries, owns and operates restaurant brands in the United States and internationally. The Company is a franchisee owner of Hooters® restaurants in international markets including Australia, South Africa, and Europe, and two Hooters restaurants in the United States. The Company also owns and operates American Burger Co., BGR the Burger Joint, BT's Burger Joint, Little Big Burger and Just Fresh restaurants in the U.S.
| Chanticleer Holdings, Inc. and Subsidiaries | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (Unaudited) | |||||||||||
| March 31, 2016 | December 31, 2015 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 1,178,000 | $ | 1,527,886 | |||||||
| Accounts and other receivables | 956,741 | 882,263 | |||||||||
| Inventories | 646,759 | 726,624 | |||||||||
| Due from related parties | 45,615 | 45,615 | |||||||||
| Prepaid expenses and other current assets | 480,173 | 636,188 | |||||||||
| TOTAL CURRENT ASSETS | 3,307,288 | 3,818,576 | |||||||||
| Property and equipment, net | 16,409,702 | 16,641,232 | |||||||||
| Goodwill | 12,701,022 | 12,702,139 | |||||||||
| Intangible assets, net | 7,204,514 | 7,282,074 | |||||||||
| Investments at fair value | 29,203 | 31,322 | |||||||||
| Other investments | 1,050,000 | 1,050,000 | |||||||||
| Deposits and other assets | 685,937 | 679,863 | |||||||||
| TOTAL ASSETS | $ | 41,387,666 | $ | 42,205,206 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 6,447,069 | $ | 5,505,265 | |||||||
| Current maturities of long-term debt and notes payable, net of discount of $128,899 and $171,868, respectively | 6,088,264 | 5,383,002 | |||||||||
| Current maturities of convertible notes payable, net of debt discount of $594,394 and $914,724, respectively | 3,130,466 | 2,810,276 | |||||||||
| Current maturities of capital leases payable | 33,620 | 39,303 | |||||||||
| Due to related parties | 597,862 | 403,742 | |||||||||
| Deferred rent | 739,405 | 683,793 | |||||||||
| Derivative liabilities | 615,946 | 1,231,608 | |||||||||
| Liabilities of discontinued operations | 124,043 | 124,043 | |||||||||
| TOTAL CURRENT LIABILITIES | 17,776,675 | 16,181,032 | |||||||||
| Long-term debt, less current maturities, net of debt discount of $0 and $171,868, respectively | 318,920 | 1,098,641 | |||||||||
| Capital leases payable, less current maturities | 13,059 | 15,969 | |||||||||
| Deferred rent | 1,523,556 | 1,798,660 | |||||||||
| Deferred tax liabilities | 1,386,004 | 1,353,771 | |||||||||
| TOTAL LIABILITIES | 21,018,214 | 20,448,073 | |||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock: no par value; authorized 5,000,000 shares; none issued and outstanding | - | - | |||||||||
| Common stock: $0.0001 par value; authorized 45,000,000 shares; issued and outstanding 21,337,247 | 2,134 |
2,134 |
|||||||||
| Additional paid in capital | 55,365,597 | 55,365,597 | |||||||||
| Accumulated other comprehensive loss | (791,412 | ) | (987,695 | ) | |||||||
| Non-controlling interest | 231,210 | 389,810 | |||||||||
| Accumulated deficit | (34,438,077 | ) | (33,012,713 | ) | |||||||
| TOTAL STOCKHOLDERS' EQUITY | 20,369,452 | 21,757,133 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 41,387,666 | $ | 42,205,206 | |||||||
| Chanticleer Holdings, Inc. and Subsidiaries | ||||||||||||
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, 2016 | March 31, 2015 | |||||||||||
| Revenue: | ||||||||||||
| Restaurant sales, net | $ | 11,310,632 | $ | 8,421,842 | ||||||||
| Gaming income, net | 99,534 | 132,027 | ||||||||||
| Management fee income - non-affiliates | 25,000 | 101,221 | ||||||||||
| Franchise income | 182,552 | 16,059 | ||||||||||
| Total revenue | 11,617,718 | 8,671,149 | ||||||||||
| Expenses: | ||||||||||||
| Restaurant cost of sales | 3,776,795 | 2,961,658 | ||||||||||
| Restaurant operating expenses | 6,818,391 | 5,068,139 | ||||||||||
| Restaurant pre-opening and closing expenses | 7,555 | 206,747 | ||||||||||
| General and administrative expenses | 1,761,007 | 1,898,353 | ||||||||||
| Depreciation and amortization | 828,655 | 438,637 | ||||||||||
| Total expenses | 13,192,403 | 10,573,534 | ||||||||||
| Loss from continuing operations | (1,574,685 | ) | (1,902,385 | ) | ||||||||
| Other (expense) income | ||||||||||||
| Interest expense | (609,833 | ) | (704,852 | ) | ||||||||
| Change in fair value of derivative liabilities | 615,662 | 338,053 | ||||||||||
| Loss on extinguishment of debt | - | (170,089 | ) | |||||||||
| Other income (expense) | 8,108 | (1,533 | ) | |||||||||
| Total other (expense) income | 13,937 | (538,421 | ) | |||||||||
| Loss from continuing operations before income taxes | (1,560,748 | ) | (2,440,806 | ) | ||||||||
| Income tax benefit (expense) | (36,231 | ) | 32,920 | |||||||||
| Loss from continuing operations | (1,596,979 | ) | (2,407,886 | ) | ||||||||
| Loss from discontinued operations, net of taxes | - | (1,899 | ) | |||||||||
| Consolidated net loss | (1,596,979 | ) | (2,409,785 | ) | ||||||||
| Less: Net loss attributable to non-controlling interest | 171,615 | 141,784 | ||||||||||
| Net loss attributable to Chanticleer Holdings, Inc. | $ | (1,425,364 | ) | $ | (2,268,001 | ) | ||||||
| Net loss attributable to Chanticleer Holdings, Inc.: | ||||||||||||
| Loss from continuing operations | $ | (1,425,364 | ) | $ | (2,266,102 | ) | ||||||
| Loss from discontinued operations | - | (1,899 | ) | |||||||||
| Net loss attributable to Chanticleer Holdings, Inc. | $ | (1,425,364 | ) | $ | (2,268,001 | ) | ||||||
| Other comprehensive loss: | ||||||||||||
| Unrealized loss on available-for-sale securities | $ | (2,120 | ) | $ | - | |||||||
| Foreign currency translation (loss) gain | 198,403 | (1,286,028 | ) | |||||||||
| Total other comprehensive gain (loss) | 196,283 | (1,286,028 | ) | |||||||||
| Comprehensive loss | $ | (1,229,081 | ) | $ | (3,554,029 | ) | ||||||
| Net loss attributable to Chanticleer Holdings, Inc. per commonshare, basic and diluted: | ||||||||||||
| Continuing operations attributable to common stockholders, basic and diluted | $ | (0.07 | ) | $ | (0.27 | ) | ||||||
| Discontinued operations attributable to common stockholders, basic and diluted | $ | - | $ | - | ||||||||
| Weighted average shares outstanding, basic and diluted | 21,337,247 | 8,249,453 | ||||||||||
| Chanticleer Holdings, Inc. and Subsidiaries | ||||||||||
| Reconcilation of Net Loss to EBITDA | ||||||||||
| Three Months Ended | ||||||||||
| March 31, 2016 | March 31, 2015 | |||||||||
| Consolidated net loss | $ | (1,596,979 | ) | $ | (2,407,886 | ) | ||||
| Interest expense | 609,833 | 704,852 | ||||||||
| Income tax | 36,231 | (32,920 | ) | |||||||
| Depreciation and amortization | 828,655 | 438,637 | ||||||||
| EBITDA | $ | (122,260 | ) | $ | (1,297,317 | ) | ||||
| Restaurant pre-opening and closing expenses | 7,555 | 206,747 | ||||||||
| Change in fair value of derivative liabilities | (615,662 | ) | (338,053 | ) | ||||||
| Loss on extinguishment of debt | - | 170,089 | ||||||||
| Transaction-related expenses | 98,399 | 435,715 | ||||||||
| Other income | (8,108 | ) | 1,533 | |||||||
| Adjusted EBITDA | $ | (640,076 | ) | $ | (821,286 | ) | ||||
| General and administrative expenses | 1,662,608 | 1,462,638 | ||||||||
| Management fee revenue | (25,000 | ) | (101,221 | ) | ||||||
| Restaurant EBITDA | $ | 997,532 | $ | 540,131 | ||||||
