Chanticleer Holdings, Inc. (HOTR), owner, operator and franchisor of multiple branded restaurants in the U.S. and abroad, announced financial results last week for the fourth quarter and year ended December 31, 2016.
Annual Revenue Growth of 18.0%; First Full Year of Positive Adjusted EBITDA in the history of the Company
- Total revenue for year increased 18.0% to $41.7 million, primarily resulting from growth in the Fast Casual Better Burger segment.
- Cost of sales as a percentage of restaurant sales improved to 33.0%, compared to 34.4% in the comparable period last year.
- Operating expenses as a percentage of restaurant sales improved to 55.7% compared to 57.5% in the comparable period last year.
- General and administrative expenses as a percentage of total revenue decreased to 13.9% from 19.2% of sales in the comparable period last year.
- Loss from continuing operations improved to $(4.3) million or $(0.20) per share, compared to $(8.1) million or $(0.57) in the comparable period last year.
- Net cash used in operating activities of continuing operations improved to $0.4 million compared to $4.2 million in the prior year.
- Restaurant EBITDA improved 60.9% to $5.0 million compared to $3.1 million for the year.
- Adjusted EBITDA improved to positive $82 thousand for the current year compared to a loss of $(1.8) million last year, with 2016 being the Company’s first year of positive Adjusted EBITDA.
Fourth Quarter Revenue Decreased 9.7%, Margins Improved, Quarterly Comparisons Impacted by Strong Dollar and Investment Management Revenue decline.
- Total revenue for the fourth quarter decreased 9.7% to $9.9 million from $10.9 million in the prior year, primarily due to the absence of non-recurring investment management revenue related to the Hooters dividend that was included in prior year revenue, as well as the impact of the stronger dollar on our foreign operations.
- Cost of sales as a percentage of restaurant sales improved to 32.8% compared to 34.3% in the comparable quarter last year.
- Operating expenses as a percentage of restaurant sales increased to 57.5% compared to 56.6% in the comparable quarter last year.
- General and administrative expenses as a percentage of total revenue decreased to 14.2% from 15.0% in the comparable quarter last year.
- Net loss from continuing operations increased to $(1.9) million or $(0.09) per share, compared to $(1.8) million or $(0.08) in the comparable quarter last year.
- Restaurant EBITDA was relatively unchanged at $1.1 million compared to $1.0 million for the comparable quarter of last year.
- Adjusted EBITDA was negative $(0.1) million compared to positive $0.1 million in the comparable quarter last year. The decline in quarterly Adjusted EBITDA was primarily due to the prior year including investment management revenue related to Hooters dividends, which did not recur in the fourth quarter of 2016.
Mike Pruitt, Chairman and CEO of Chanticleer commented, “We made great progress in fiscal 2016 and our annual results demonstrate the efforts to build scale and drive efficiencies in our business over the past two years. We achieved our first year of EBITDA profitability, while establishing our regional brand strategy and laying the foundation to begin to accelerate growth.”
“We have three Little Big Burger stores opening in the first four months of 2017 and are on track to open 8-12 new company and franchise stores by the end of this year. That’s a significant change coming out of a year where we opened no new company stores as we shift our focus from internal integration projects to external growth and franchising initiatives.”
Mr. Pruitt continued, “Given our increased emphasis on high returning assets and expanding our core brands, we are also committed to taking actions to strengthen our balance sheet and improve liquidity as we prepare to accelerate our growth in 2017.”
Conference Call
A replay of the teleconference will be available until April 28, 2017 and may be accessed at the company’s investor relations website or by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 10289.
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.
About Chanticleer Holdings, Inc.
Headquartered in Charlotte, NC, Chanticleer Holdings (HOTR), 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.
photo attribute from the company website photo Richard Smart cnngo
Read Next
