News Release
BBQ Holdings, Inc. Reports Results for Third Quarter 2021
Third Quarter 2021 Highlights:
Financial:
- Total revenue of
$55.4 million vs.$35.5 million in the third quarter of 2020. - Net income of
$4.8 million vs.$0.3 million in the third quarter of 2020. - Adjusted EBITDA, a non-GAAP measure, was
$4.4 million vs.$2.0 million in the third quarter of 2020. - Combined brands restaurant-level margins of 8.6% vs 3.4% last year.
- Prime costs were 62.6% of sales vs. 67.8% third quarter 2019.
Third Quarter Same Store Sales | ||||||
2021 vs. 2020 |
2021 vs. 2019 |
|||||
Famous Dave's Company-owned | 19.3 | % | 12.4 | % | ||
Famous Dave's Franchise-operated* | 18.0 | % | 6.9 | % | ||
31.4 | % | (0.5 | )% | |||
37.0 | % | (8.1 | )% | |||
48.2 | % | NA | % | |||
32.4 | % | (20.2 | )% | |||
* as reported by franchisees | ||||||
** includes sales under prior ownership |
Executive Comments
Growth:
Purchased Village Inn , 109 franchise and 21 corporate restaurants, and11 Bakers Square corporate restaurants inJuly 2021 .- Purchased five Tahoe Joe’s Steakhouses in
October 2021 . - Purchased four Famous Dave’s franchise restaurants in
Tennessee andKentucky inJuly 2021 . - Famous Dave’s franchisees opened line-serve restaurants in
Las Vegas, NV inAugust 2021 andCoon Rapids, MN inOctober 2021 . - Opened a Real Urban Barbeque restaurant in
Chicago, IL inOctober 2021 . - Famous Dave’s Drive thru in
Salt Lake City, UT expected to open inDecember 2021 . - Dual concept
Granite City/Village Inn expected to open inJanuary 2022 . New Village Inn prototype expected to open inOmaha, NE early Q1 2022.
Updated 2021 Guidance:
Based on the results to date through the third quarter 2021, and including the uncertainty related to COVID-19, the Company has updated its 2021 guidance as follows:
- Net Revenue remains at
$183 -$188mm - Increased Net Income range from
$20.6 -$21 .0mm to$22.5 -$23 .0mm - Increased Cash EBITDA range from
$14.5 -$15 .0mm to$16.5 -$17 .0mm
Key Operating Metrics | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Restaurant count: | ||||||||||||||||
Franchise-operated | 213 | 98 | 213 | 98 | ||||||||||||
Company-owned | 83 | 49 | 83 | 49 | ||||||||||||
Total | 296 | 147 | 296 | 147 | ||||||||||||
Same store net restaurant sales %: | ||||||||||||||||
Franchise-operated | 18.0 | % | (10.0 | )% | 25.6 | % | (18.3 | )% | ||||||||
Company-owned | 24.0 | % | (4.6 | )% | 36.3 | % | (9.9 | )% | ||||||||
Total | 20.4 | % | (8.7 | )% | 29.3 | % | (16.7 | )% | ||||||||
(in thousands, expect per share data) | ||||||||||||||||
System-wide restaurant sales(1) | $ | 141,125 | $ | 84,434 | $ | 335,421 | $ | 222,374 | ||||||||
Net income attributable to shareholders | $ | 4,834 | $ | 328 | $ | 21,419 | $ | 7,783 | ||||||||
Net income attributable to shareholders, per diluted share | $ | 0.46 | $ | 0.04 | $ | 2.20 | $ | 0.85 | ||||||||
Adjusted EBITDA(2) | $ | 4,425 | $ | 1,995 | $ | 12,649 | $ | 2,915 | ||||||||
_________________________ |
(1) System-wide restaurant sales include sales for all Company-owned and franchise-operated restaurants, as reported by franchisees. Restaurant sales for franchise-operated restaurants are not revenues of the Company and are not included in the Company’s consolidated financial statements.
(2) Adjusted EBITDA is a non-GAAP measure. A reconciliation of all non-GAAP measures to the most directly comparable GAAP measure is included in the accompanying financial tables. See “Non-GAAP Reconciliation.”
Third Quarter 2021 Review
Total revenue for the third quarter of 2021 was
Net income attributable to shareholders was approximately
Restaurant-level operating margin as a percentage of restaurant net sales, a non-GAAP measure, was 8.6% for Company-owned restaurants in the third quarter of fiscal 2021 compared to 3.4% in the third quarter of fiscal 2020. This increase in restaurant-level operating margin as a percentage of net restaurant sales was due primarily to leverage on our fixed operating costs from the increased revenue resulting from the easing of dine-in restrictions and restrictions on large gatherings which were put in place in 2020 due to COVID-19 concerns. A reconciliation of restaurant sales to restaurant-level margin is included in the accompanying financial tables. General and administrative expenses for the quarter ended
About
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in
Adjusted EBITDA is net income plus asset impairment, estimated lease termination charges and other closing costs, settlement agreements, interest expense, net, depreciation and amortization, net (gain) loss on disposal of equipment, stock-based compensation, acquisition costs, pre-opening costs, severance, gain on debt forgiveness, gain on bargain purchase, COVID-19-related expense and provision (benefit) for income taxes.
Restaurant-level operating margins are equal to net restaurant sales, less restaurant-level food and beverage cost, labor and benefit costs, and operating expenses.
Forward-Looking Statements
Statements in this press release that are not strictly historical, including but not limited to statements regarding the timing of the Company’s restaurant openings, the timing of refreshes and the timing or success of refranchising plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from expected results. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectation will be attained. Factors that could cause actual results to differ materially from the Company’s expectation include the impact of the COVID-19 virus pandemic, financial performance, restaurant industry conditions, execution of restaurant development and construction programs, franchisee performance, changes in local or national economic conditions, availability of financing, governmental approvals and other risks detailed from time to time in the Company’s
Contact: | ||
jeff.crivello@bbq-holdings.com |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
Revenue: | |||||||||||||||
Restaurant sales, net | $ | 50,374 | $ | 32,559 | $ | 125,182 | $ | 78,251 | |||||||
Franchise royalty and fee revenue | 3,329 | 2,153 | 8,649 | 6,628 | |||||||||||
Franchisee national advertising fund contributions | 461 | 302 | 1,210 | 826 | |||||||||||
Licensing and other revenue | 1,219 | 497 | 3,181 | 1,423 | |||||||||||
Total revenue | 55,383 | 35,511 | 138,222 | 87,128 | |||||||||||
Costs and expenses: | |||||||||||||||
Food and beverage costs | 14,731 | 9,735 | 36,720 | 24,206 | |||||||||||
Labor and benefits costs | 16,805 | 11,189 | 39,488 | 26,976 | |||||||||||
Operating expenses | 14,512 | 10,521 | 36,355 | 26,251 | |||||||||||
Depreciation and amortization expenses | 1,940 | 1,397 | 4,925 | 3,820 | |||||||||||
General and administrative expenses | 5,109 | 3,138 | 13,691 | 9,973 | |||||||||||
National advertising fund expenses | 461 | 302 | 1,210 | 826 | |||||||||||
Asset impairment, estimated lease termination charges and other closing costs, net | 69 | (138 | ) | 106 | 4,814 | ||||||||||
Pre-opening expenses | 63 | (120 | ) | 183 | (93 | ) | |||||||||
(Gain) loss on disposal of property, net | (1 | ) | (530 | ) | 134 | (1,107 | ) | ||||||||
Total costs and expenses | 53,689 | 35,494 | 132,812 | 95,666 | |||||||||||
Income (loss) from operations | 1,694 | 17 | 5,410 | (8,538 | ) | ||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (124 | ) | (326 | ) | (439 | ) | (866 | ) | |||||||
Interest income | 49 | 94 | 147 | 380 | |||||||||||
Gain on forgiveness of debt | — | — | 14,109 | — | |||||||||||
Gain on bargain purchase | 3,203 | — | 3,203 | 13,675 | |||||||||||
Total other income (expense) | 3,128 | (232 | ) | 17,020 | 13,189 | ||||||||||
Income (loss) before income taxes | 4,822 | (215 | ) | 22,430 | 4,651 | ||||||||||
Income tax (expense) benefit | (36 | ) | 273 | (517 | ) | 2,519 | |||||||||
Net income | 4,786 | 58 | 21,913 | 7,170 | |||||||||||
Net (income) loss attributable to non-controlling interest | 48 | 270 | (494 | ) | 613 | ||||||||||
Net income attributable to shareholders | $ | 4,834 | $ | 328 | $ | 21,419 | $ | 7,783 | |||||||
Income per common share: | |||||||||||||||
Basic net income per share attributable to shareholders | $ | 0.47 | $ | 0.04 | $ | 2.23 | $ | 0.85 | |||||||
Diluted net income per share attributable to shareholders | $ | 0.46 | $ | 0.04 | $ | 2.20 | $ | 0.85 | |||||||
Weighted average shares outstanding - basic | 10,345 | 9,151 | 9,619 | 9,138 | |||||||||||
Weighted average shares outstanding - diluted | 10,482 | 9,158 | 9,737 | 9,145 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, except per share data) | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 28,977 | $ | 18,101 | ||||
Restricted cash | 1,146 | 1,502 | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
4,900 | 4,823 | ||||||
Inventories | 2,949 | 2,271 | ||||||
Prepaid expenses and other current assets | 2,367 | 1,252 | ||||||
Assets held for sale | 1,024 | 1,070 | ||||||
Total current assets | 41,363 | 29,019 | ||||||
Property, equipment and leasehold improvements, net | 39,174 | 32,389 | ||||||
Other assets: | ||||||||
Operating lease right-of-use assets | 78,581 | 61,634 | ||||||
1,071 | 601 | |||||||
Intangible assets, net | 23,231 | 9,967 | ||||||
Deferred tax asset, net | 3,382 | 4,934 | ||||||
Other assets | 1,129 | 1,724 | ||||||
Total assets | $ | 187,931 | $ | 140,268 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,092 | $ | 6,385 | ||||
Current portion of lease liabilities | 10,624 | 6,185 | ||||||
Current portion of long-term debt | 2,192 | 2,111 | ||||||
Accrued compensation and benefits | 7,929 | 2,390 | ||||||
Other current liabilities | 12,014 | 9,766 | ||||||
Total current liabilities | 39,851 | 26,837 | ||||||
Long-term liabilities: | ||||||||
Lease liabilities, less current portion | 78,470 | 63,105 | ||||||
Long-term debt, less current portion | 6,578 | 22,169 | ||||||
Other liabilities | 1,458 | 1,224 | ||||||
Total liabilities | 126,357 | 113,335 | ||||||
Shareholders’ equity: | ||||||||
Common stock, |
105 | 93 | ||||||
Additional paid-in capital | 21,464 | 8,748 | ||||||
Retained earnings | 40,789 | 19,370 | ||||||
Total shareholders’ equity | 62,358 | 28,211 | ||||||
Non-controlling interest | (784 | ) | (1,278 | ) | ||||
Total equity | 61,574 | 26,933 | ||||||
Total liabilities and equity | $ | 187,931 | $ | 140,268 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Nine Months Ended | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 21,913 | $ | 7,170 | ||||
Adjustments to reconcile net income to cash flows provided by operations: | ||||||||
Depreciation and amortization | 4,925 | 3,820 | ||||||
Stock-based compensation | 932 | 422 | ||||||
Net loss (gain) on disposal | 134 | (1,080 | ) | |||||
Asset impairment, estimated lease termination charges and other closing costs, net | — | 4,788 | ||||||
Gain on forgiveness of debt | (14,109 | ) | — | |||||
Gain on bargain purchase | (3,203 | ) | (13,675 | ) | ||||
Amortization of operating right-of-use assets | 5,194 | 5,818 | ||||||
Deferred tax asset | 441 | (2,569 | ) | |||||
Other non-cash items | (49 | ) | 488 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (126 | ) | 494 | |||||
Prepaid expenses and other assets | (1,368 | ) | 102 | |||||
Accounts payable | 707 | 985 | ||||||
Accrued compensation | 4,445 | (408 | ) | |||||
Lease liabilities | (5,000 | ) | (5,067 | ) | ||||
Accrued and other liabilities | 505 | (641 | ) | |||||
Cash flows provided by operating activities | 15,341 | 647 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from the sale of assets | — | 27 | ||||||
Purchases of property, equipment and leasehold improvements | (2,416 | ) | (2,671 | ) | ||||
Payments for acquired restaurants | (14,548 | ) | (4,952 | ) | ||||
Transfer from HFS | 46 | — | ||||||
Payments received on note receivable | 779 | 24 | ||||||
Cash flows used for investing activities | (16,139 | ) | (7,572 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | — | 22,058 | ||||||
Payments for debt issuance costs | — | (45 | ) | |||||
Payments on long-term debt | (1,572 | ) | (664 | ) | ||||
Proceeds from sale of common stock, net of offering costs | 12,445 | — | ||||||
Proceeds from exercise of stock options | 445 | — | ||||||
Cash provided by financing activities | 11,318 | 21,349 | ||||||
Increase in cash, cash equivalents and restricted cash | 10,520 | 14,424 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 19,603 | 6,086 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 30,123 | $ | 20,510 | ||||
Supplemental Disclosures | ||||||||
Cash paid for interest, net | $ | 769 | $ | 829 | ||||
Cash paid for income taxes, net | — | — | ||||||
Non-cash investing and financing activities: | ||||||||
Operating right-of-use assets acquired | 19,339 | 51,682 | ||||||
Lease liabilities assumed pursuant to acquisitions | 21,830 | 51,682 | ||||||
Gift card liability assumed pursuant to acquisitions | 1,202 | 3,923 |
OPERATING RESULTS | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
Food and beverage costs(1) | 29.2 | % | 29.9 | % | 29.3 | % | 30.9 | % | ||||
Labor and benefits costs(1) | 33.4 | % | 34.4 | % | 31.5 | % | 34.5 | % | ||||
Operating expenses(1) | 28.8 | % | 32.3 | % | 29.0 | % | 33.5 | % | ||||
Restaurant-level operating margin(1)(2) | 8.6 | % | 3.4 | % | 10.1 | % | 1.0 | % | ||||
Depreciation and amortization expenses(3) | 3.5 | % | 3.9 | % | 3.6 | % | 4.4 | % | ||||
General and administrative expenses(3) | 9.2 | % | 8.8 | % | 9.9 | % | 11.4 | % | ||||
Income (loss) from operations(3) | 3.1 | % | 0.0 | % | 3.9 | % | (9.8 | )% | ||||
________________________ |
(1) As a percentage of restaurant sales, net
(2) Restaurant-level operating margins are equal to restaurant sales, net, less restaurant-level food and beverage costs, labor and benefit costs, and operating expense.
(3) As a percentage of total revenue
RESTAURANT-LEVEL PROFIT AND RESTAURANT-LEVEL MARGIN | |||||||||||||||
NON-GAAP RECONCILIATION | |||||||||||||||
(in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
Restaurant sales, net | $ | 50,374 | $ | 32,559 | $ | 125,182 | $ | 78,251 | |||||||
Restaurant operating costs (1) | 46,048 | 31,445 | 112,563 | 77,433 | |||||||||||
Restaurant-level profit | $ | 4,326 | $ | 1,114 | $ | 12,619 | $ | 818 | |||||||
Restaurant-level margin | 8.6 | % | 3.4 | % | 10.1 | % | 1.0 | % | |||||||
________________________ |
(1) Restaurant operating cost consist of food and beverage cost, labor and benefits costs and operating expenses.
NON-GAAP RECONCILIATION | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(dollars in thousands) | ||||||||||||||||
Net income | $ | 4,786 | $ | 58 | $ | 21,913 | $ | 7,170 | ||||||||
Asset impairment and estimated lease termination charges and other closing costs | 69 | (138 | ) | 106 | 4,814 | |||||||||||
Depreciation and amortization | 1,940 | 1,397 | 4,925 | 3,820 | ||||||||||||
Interest expense, net | 75 | 232 | 292 | 486 | ||||||||||||
Net (gain) loss on disposal of equipment | (1 | ) | (530 | ) | 134 | (1,107 | ) | |||||||||
Stock-based compensation | 294 | 174 | 932 | 422 | ||||||||||||
Acquisition costs | 366 | 29 | 550 | (46 | ) | |||||||||||
Pre-opening costs | 63 | (120 | ) | 183 | (93 | ) | ||||||||||
Severance | — | 21 | — | 52 | ||||||||||||
Gain on debt forgiveness | — | — | (14,109 | ) | — | |||||||||||
Gain on bargain purchase | (3,203 | ) | — | (3,203 | ) | (13,675 | ) | |||||||||
Provision for income taxes | 36 | (273 | ) | 517 | (2,519 | ) | ||||||||||
COVID-19-related expense | — | 1,145 | 409 | 3,591 | ||||||||||||
Adjusted EBITDA | $ | 4,425 | $ | 1,995 | $ | 12,649 | $ | 2,915 |
(1) COVID-19 expenses consisted primarily of cleaning and sanitation supplies, payments to employees for unemployment related costs, inventory waste, rent and rent-related costs for limited-operations restaurants from the day that the restaurant dining room partially or fully closed.
Nine Months Ended | ||||||||
(dollars in thousands) | ||||||||
Net income | $ | 21,913 | $ | 7,170 | ||||
Asset impairment and estimated lease termination charges and other closing costs | 106 | 4,814 | ||||||
Depreciation and amortization | 4,925 | 3,820 | ||||||
Interest expense, net | 292 | 486 | ||||||
Net (gain) loss on disposal of equipment | 134 | (1,107 | ) | |||||
Stock-based compensation | 932 | 422 | ||||||
Acquisition costs | 550 | (46 | ) | |||||
Pre-opening costs | 183 | (93 | ) | |||||
Severance | - | 52 | ||||||
Gain on debt forgiveness | (14,109 | ) | - | |||||
Gain on bargain purchase | (3,203 | ) | (13,675 | ) | ||||
Provision for income taxes | 517 | (2,519 | ) | |||||
Non-Cash Rent | 660 | 1,540 | ||||||
Cash EBITDA | $ | 12,900 | $ | 864 |
A presentation accompanying this announcement is available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/17a0cc25-b1e9-4157-8f49-2310e2b70624

Source: BBQ Holdings, Inc.