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CST: 20/05/2019 08:36:36   

Chanticleer Holdings Reports Operating Results for the Quarter Ended March 31, 2019

4 Days ago

CHARLOTTE, N.C., May 15, 2019 (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 quarter ended March 31, 2019.

Financial Highlights for the Quarter Ended March 31, 2019

  • Revenue for the year was $10.2 million in the first quarter of 2019 compared with $10.0 million in the first quarter of 2018.

  • Cost of sales as a percentage of restaurant sales improved to 33.1% in the first quarter of 2019 compared to 33.5% in the first quarter of 2018.

  • Operating loss was $1.7 million in the first quarter of 2019 compared to $2.4 million in the first quarter of 2018.

  • Net loss attributable to Common Shareholders was $1.9 million, ($0.51) per share in the first quarter of 2019, compared to net loss of $2.6 million, ($0.83) per share in the first quarter of 2018.

  • Non-GAAP Restaurant EBITDA was $560,000 in the first quarter of 2019 compared to $1.1 million in the first quarter of 2018.

  • Non-GAAP Adjusted EBITDA was negative $766,000 in the first quarter of 2019 compared to $10,000 in the first quarter of 2018.

  • During the first quarter of 2019, the Company opened one new Little Big Burger location. The Company expects to open another two Little Big Burger restaurant locations in 2019 and, announced in May 2019, the opening of a Little Big Burger in the concession area at the Charlotte Motor Speedway. 

  • The Company also sold one underperforming company-owned location in in the first quarter of 2019 which resulted in non-cash impairment charges and is expected to contribute to improved operating performance in future periods.

Mike Pruitt, Chairman and CEO of Chanticleer commented, "With the recent additions of Fred, Patrick and Troy, I continue to believe we have put together an outstanding executive team capable of stewarding the company’s future growth both operationally and financially. We expect to report meaningful increases in both revenues and EBITDA throughout the balance of 2019 as recent partnerships, systems and processes begin to contribute tangible top line and bottom results.

"We look forward to also hosting a conference call near term to specially discuss the recently proposed acquisition of a highly complementary better burger brand with industry leading metrics. The target company has reported revenues of $10 million per year and historically demonstrated store level EBITDA of approximately 20%.”

Conference Call

The Company will host a webcast and conference call on Wednesday, May 15, 2019 at 4:30 p.m. ET.

To access the call, dial 1-877-407-0784 approximately five minutes prior to the scheduled start time. International callers please dial 1-201-689-8560. To access the webcast, log into the following link: http://public.viavid.com/index.php?id=134580

A replay of the teleconference will be available until June 15, 2019 and may be accessed by dialing 1-844-512-2921. International callers may dial 1-412-317-6671. Callers should use conference PIN: 13690808.

Use of Non-GAAP Measures

Chanticleer Holdings, Inc. prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (”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’s Quarterly Report on Form 10-Q to be filed with the SEC on or about May 15, 2019, 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)    
  March 31, 2019   December 31, 2018
ASSETS      
Current assets:      
Cash $ 561,754     $ 629,871  
Restricted cash   335       335  
Accounts and other receivables, net   523,437       387,239  
Inventories   424,585       478,314  
Prepaid expenses and other current assets   192,973       179,377  
TOTAL CURRENT ASSETS     1,703,084         1,675,136  
Property and equipment, net   10,156,579       10,467,841  
Operating lease assets   18,662,935       -  
Goodwill   11,312,980       11,280,465  
Intangible assets, net   5,002,878       5,123,159  
Investments   800,000       800,000  
Deposits and other assets   447,809       446,639  
TOTAL ASSETS $     48,086,265     $     29,793,240  
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable and accrued expenses $ 8,266,821     $ 7,386,506  
Current maturities of long-term debt and notes payable   6,772,324       3,740,101  
Current maturities of convertible notes payable   3,000,000       3,000,000  
Current operating lease liabilities   3,750,175       -  
Due to related parties   185,726       185,726  
TOTAL CURRENT LIABILITIES     21,975,046         14,312,333  
Long-term debt   -       3,000,000  
Redeemable preferred stock: no par value, 62,876 shares issued and outstanding, net of discount of $165,219 and $173,914, respectively   683,607       674,912  
Deferred rent   -       2,297,199  
Long-term operating lease liabilities   17,228,799       -  
Deferred revenue   1,115,574       1,174,506  
Deferred tax liabilities   119,915       76,765  
TOTAL LIABILITIES     41,122,941         21,535,715  
Commitments and contingencies (see Note 13)      
Equity:      
Preferred stock: no par value; authorized 5,000,000 shares; 62,876 issued and outstanding   -       -  
Common stock: $0.0001 par value; authorized 45,000,000      
shares; issued and outstanding 3,731,786 and 3,715,444      
shares, respectively   374       373  
Additional paid in capital   65,126,235       64,756,903  
Accumulated other comprehensive loss   (164,283 )     (202,115 )
Accumulated deficit   (59,025,540 )     (57,124,673 )
Total Chanticleer Holdings, Inc, Stockholders' Equity     5,936,786         7,430,488  
Non-Controlling Interests   1,026,538       827,037  
TOTAL EQUITY     6,963,324         8,257,525  
TOTAL LIABILITIES AND EQUITY $     48,086,265     $     29,793,240  
       

 

Chanticleer Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
       
  Three Months Ended
    March 31, 2019       March 31, 2018  
Revenue:      
Restaurant sales, net $ 9,910,028     $ 9,769,508  
Gaming income, net   116,085       93,155  
Management fee income   25,000       25,000  
Franchise income   146,657       107,853  
Total revenue     10,197,770         9,995,516  
Expenses:      
Restaurant cost of sales   3,277,579       3,276,175  
Restaurant operating expenses   6,430,544       5,586,149  
Restaurant pre-opening and closing expenses   66,175       102,882  
General and administrative expenses   1,497,618       1,193,417  
Asset impairment charge   91,491       1,677,055  
Depreciation and amortization   542,401       540,679  
Total expenses     11,905,808         12,376,357  
Operating loss       (1,708,038 )       (2,380,841 )
Other expense        
Interest expense   (211,770 )     (635,081 )
Other income (expense)   (18,274 )     (2,114 )
Total other expense   (230,044 )     (637,195 )
Loss before income taxes     (1,938,082 )       (3,018,036 )
Income tax benefit (expense)   (50,581 )     336,197  
Consolidated net loss     (1,988,663 )       (2,681,839 )
Less: Net loss attributable to non-controlling interests   115,591       84,407  
Net loss attributable to Chanticleer Holdings, Inc. $     (1,873,072 )   $     (2,597,432 )
Dividends on redeemable preferred stock   (27,794 )     (27,794 )
Net loss attributable to common shareholders of Chanticleer Holdings, Inc. $     (1,900,866 )   $     (2,625,226 )
       
Net loss attributable to Chanticleer Holdings, Inc. per common  share, basic and diluted: $     (0.51 )   $     (0.83 )
Weighted average shares outstanding, basic and diluted   3,721,436       3,165,972  
       

 

Chanticleer Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
       
  Three Months Ended
    March 31, 2019       March 31, 2018  
Cash flows from operating activities:      
Net loss $ (1,988,663 )   $ (2,681,839 )
Adjustments to reconcile net loss to net cash flows from operating activities:      
Depreciation and amortization   542,401       540,679  
Amortization of operating lease assets   461,009       -  
Asset impairment charge   91,491       1,677,055  
Stock based compensation   100,707       -  
Gain on investments   (4,270 )     -  
Amortization of debt discount and discount on preferred stock   8,695       289,787  
Change in assets and liabilities:      
Accounts and other receivables   (142,296 )     148,427  
Prepaid and other assets   (20,546 )     48,238  
Inventory   44,275       12,556  
Accounts payable and accrued liabilities   739,787       470,496  
Deferred income taxes   43,150       (336,196 )
Operating lease liabilities   (463,279 )     -  
Deferred revenue   (58,932 )     -  
Deferred rent   -       (49,205 )
Net cash flows from operating activities   (646,471 )     119,998  
       
Cash flows from investing activities:      
Purchase of property and equipment   (334,630 )     (166,589 )
Proceeds from tenant improvement allowances   141,860       -  
Cash paid for acquisitions   -       (30,000 )
Proceeds from sale of assets   173,977       -  
Net cash flows from investing activities   (18,793 )     (196,589 )
       
Cash flows from financing activities:      
Proceeds from sale of common stock and warrants   -       290,000  
Loan proceeds   197,438       -  
Loan repayments   (164,769 )     (134,229 )
Distributions to non-controlling interest   (10,804 )     -  
Contributions from non-controlling interest   575,000       -  
Net cash flows from financing activities   596,865       155,771  
Effect of exchange rate changes on cash   282       (4,008 )
Net increase (decrease) in cash and restricted cash   (68,117 )     75,172  
Cash and restricted cash,   beginning of period   630,206       438,493  
Cash and restricted cash, end of period $ 562,089     $ 513,665  
       

 

Chanticleer Holdings, Inc. and Subsidiaries
Reconciliation of Net Loss to EBITDA
(Unaudited)
       
  Three Months Ended
    March 31, 2019       March 31, 2018  
       
Consolidated net loss $     (1,988,663 )   $     (2,681,839 )
Interest expense     211,770         635,081  
Income tax     50,581         (336,197 )
Depreciation and amortization     542,401         540,679  
EBITDA $     (1,183,911 )   $     (1,842,276 )
Restaurant pre-opening and closing expenses     66,175         102,882  
Operating results of restaurants closed in period     50,536         69,896  
Additional non-cash expenses impacting operating results     191,125         -  
Asset impairment charge     91,491         1,677,055  
Other income (expense)     18,274         2,114  
Adjusted EBITDA $     (766,310 )   $     9,671  
General and administrative expenses     1,497,618         1,193,417  
Franchise revenues     (146,657 )       (107,853 )
Management fee revenue     (25,000 )       (25,000 )
Restaurant EBITDA $     559,651     $     1,070,235  

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