News Release
BBQ Holdings, Inc. Reports Results for First Quarter 2022
First Quarter Highlights:
First Quarter | |||||||||||||
(dollars in thousands, except per share data) | 2022 | 2021 | 2020 | 2019 | |||||||||
Total revenue | $ | 64,184 | $ | 37,319 | $ | 23,855 | $ | 14,193 | |||||
Net income (loss) | $ | 767 | $ | 799 | $ | 13,707 | $ | 82 | |||||
Earnings (loss) per diluted share | $ | 0.07 | $ | 0.08 | $ | 1.49 | $ | 0.01 | |||||
Adjusted net income (loss) | $ | 1,138 | $ | 811 | $ | (484 | ) | $ | 489 | ||||
Adjusted earnings (loss) per diluted share | $ | 0.11 | $ | 0.09 | $ | (0.05 | ) | $ | 0.05 | ||||
Cash EBITDA | $ | 3,748 | $ | 3,220 | $ | (457 | ) | $ | 1,030 | ||||
Restaurant-level margins | 6.4 | % | 9.1 | % | (1.9 | )% | (1.7 | )% | |||||
Prime costs | 64.3 | % | 60.4 | % | 69.9 | % | 71.0 | % | |||||
Free cash flow | $ | 3,026 | $ | 2,529 | $ | (1,406 | ) | $ | 809 |
First Quarter Same Store Sales | ||||||
2022 vs. 2021 | 2022 vs. 2020 | 2022 vs. 2019 | ||||
Famous Dave's Company-owned | 7.9 | % | 22.6 % | 12.6 % | ||
Famous Dave's Franchise-operated* | 8.6 | % | 21.3 % | 5.6 % | ||
Granite City** | 24.1 | % | 21.4 % | (1.7)% | ||
19.1 | % | 8.8 % | (8.0)% | |||
19.9 | % | NA% | NA% | |||
17.0 | % | (12.5)% | (17.7)% | |||
5.0 | % | 5.8 % | NA% | |||
Real Urban BBQ** | 11.0 | % | NA% | NA% | ||
6.0 | % | NA% | NA% |
* as reported by franchisees
** includes sales under prior ownership
*** it is our policy to include in our same store net sales base, restaurants that have been open for 12 months under our company’s ownership
Subsequent Events:
On
On
Current and Projected (“PF”) Portfolio:
FAMOUS DAVE’S |
VILLAGE INN |
GRANITE CITY |
BAKERS SQUARE |
REAL URBAN BBQ |
CLARK CREW BBQ |
TAHOE JOE’S |
BARRIO QUEEN |
BAR CONCEPTS |
TOTAL | |||||||||||
2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | 2022 Q1 | 2022 PF | |
Corporate Locations | 40 | 43 | 22 | 22 | 18 | 18 | 14 | 31 | 2 | 2 | 1 | 1 | 4 | 4 | 7 | 3 | 4 | 104 | 132 | |
Brick & Mortar | 31 | 33 | 21 | 21 | 17 | 17 | 11 | 11 | 2 | 2 | 1 | 1 | 4 | 4 | 7 | 3 | 4 | 90 | 100 | |
Dual Concept | 1 | 1 | 1 | 1 | 1 | 1 | 3 | 3 | ||||||||||||
|
8 | 9 | 3 | 20 | 11 | 29 | ||||||||||||||
Franchise/License Locations | 104 | 105 | 103 | 105 | 4 | 24 | 211 | 234 | ||||||||||||
Brick & Mortar | 85 | 85 | 103 | 105 | 188 | 190 | ||||||||||||||
Dual Concept | 1 | 0 | 1 | |||||||||||||||||
|
19 | 19 | 4 | 24 | 23 | 43 | ||||||||||||||
Total Locations | 144 | 148 | 125 | 127 | 18 | 18 | 18 | 55 | 2 | 2 | 1 | 1 | 4 | 4 | 7 | 3 | 4 | 315 | 366 | |
Growth Plan | New line serve / drive thru and Ghost locations | New trendy breakfast prototype | Dual concept with new breakfast brand | Sell pies in retail, kiosk and other restaurants | New line serve locations and CPGs | CPGs | Dual Concept with FDs | Franchise and Corporate | Corporate | |||||||||||
# Opening in 2022 | Q1: 3 | Q1: 1 | n/a | Q1: 1 | n/a | n/a | Q1: - | n/a | Q1: - | Total: | 47 | |||||||||
Q2: 1 | Q2: 1 | Q2: 5 | Q2: - | Q2: 1 | ||||||||||||||||
Q3: 1 | Q3: 1 | Q3: 25 | Q3: - | Q3: - | ||||||||||||||||
Q4: 1 | Q4: 2 | Q4: 3 | Q4: 1 | Q4: - |
Filling Latent Capacity:
- Dual concept
Granite City/Village Inn opened inMaple Grove, MN inMarch 2022 . - Famous Dave’s ghost kitchen opened in Granite City in
Fargo, ND inApril 2022 .
Organic Unit Growth:
- Famous Dave’s Drive thru in
Salt Lake City, UT opened inMarch 2022 . - Famous Dave’s franchisee opened an additional restaurant in
Grand Forks, ND inApril 2022 . - Famous Dave’s franchisee opened an additional restaurant in the
United Arab Emirates inFebruary 2022 . New Village Inn prototype expected to open inOmaha, NE in the third quarter of 2022.
Mergers and Acquisitions:
- Closed the purchase of Barrio Queen in
April 2022 . - Closed the purchase of three bar-centric company-owned locations in
March 2022 . - Signed an asset purchase agreement for an additional bar-centric location in
April 2022 .
Updated 2022 Guidance:
- Net restaurant revenue of $280mm to $290mm
- Net income and adjusted net income range from
$12 .5mm to$15 .5mm - We expect to exhaust our deferred tax assets mid-2022
- Diluted earnings per share and adjusted earnings per diluted share of
$1.15 to$1.45 - Cash EBITDA range from $23mm to $25mm
- Free cash flow range from
$13 .5mm to$15 .5mm
12-Month Pro Forma Guidance*:
- Net restaurant revenue of $290mm to $310mm
- Net income and adjusted net income range from
$14 .0mm to$17 .0mm - Diluted earnings per share and adjusted earnings per diluted share of
$1.30 to$1.60 - Cash EBITDA range from
$25 .5mm to$27 .5mm - Free cash flow range from
$15 .5mm to$17 .5mm
*Projected results for the next 12 months inclusive of expected results of all completed acquisitions
Executive Comments
The Company diversified into authentic Mexican cuisine with the Barrio Queen purchase, which closed in
Despite a challenging inflationary environment, and acknowledge continued headwinds, we continue to deliver consistent results, and look forward to a successful 2022.”
Key Operating Metrics
Three Months Ended | |||||||
Restaurant count: | |||||||
Franchise-operated | 211 | 100 | |||||
Company-owned | 104 | 47 | |||||
Total | 315 | 147 | |||||
Same store net restaurant sales %: | |||||||
Franchise-operated | 8.6 | % | 16.0 | % | |||
Company-owned | 14.5 | % | 17.7 | % | |||
Total | 11.0 | % | 13.1 | % | |||
(in thousands, expect per share data) | |||||||
System-wide restaurant sales(1) | $ | 158,731 | $ | 87,040 | |||
Net income attributable to shareholders | $ | 767 | $ | 799 | |||
Net income attributable to shareholders, per diluted share | $ | 0.07 | $ | 0.08 | |||
Cash EBITDA(2) | $ | 3,748 | $ | 3,220 |
(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) Cash 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.”
First Quarter 2022 Review
Total revenue for the first quarter of 2022 was
Net income attributable to shareholders was approximately
Restaurant-level operating margin as a percentage of restaurant net sales, a non-GAAP measure, was 6.4% for Company-owned restaurants in the first quarter of fiscal year 2022, compared to 9.1% in the first quarter of fiscal year 2021. This decrease in restaurant-level operating margin as a percentage of net restaurant sales was due primarily to increases in the cost of food and labor throughout 2021 and the first quarter of 2022. 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
Cash EBITDA is net income plus asset impairment, estimated lease termination charges and other closing costs, depreciation and amortization, net interest expense, net (gain) loss on disposal of equipment, stock-based compensation, acquisition costs, pre-opening costs, severance, gain on debt forgiveness, gain on bargain purchase, provision (benefit) for income taxes, and non-cash rent.
Free cash flow is the Cash EBITDA less cash paid for property, equipment and leasehold improvements. Adjusted net income (loss) is net income plus asset impairment, estimated lease termination charges and other closing costs, less gain on debt forgiveness and gain on bargain purchase. Adjusted earnings per diluted share equals adjusted net income (loss) divided by the weighted average shares outstanding, assuming dilution.
Restaurant-level operating margins are equal to net restaurant sales, less restaurant-level food and beverage costs, labor and benefit costs, and operating expenses for Company-owned restaurants.
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, inflation, 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 | |||||||||
Revenue: | |||||||||
Restaurant sales, net | $ | 58,731 | $ | 33,603 | |||||
Franchise royalty and fee revenue | 3,607 | 2,374 | |||||||
Franchisee national advertising fund contributions | 490 | 328 | |||||||
Licensing and other revenue | 1,356 | 1,014 | |||||||
Total revenue | 64,184 | 37,319 | |||||||
Costs and expenses: | |||||||||
Food and beverage costs | 18,357 | 10,057 | |||||||
Labor and benefits costs | 19,386 | 10,254 | |||||||
Operating expenses | 17,239 | 10,249 | |||||||
Depreciation and amortization expenses | 2,423 | 1,552 | |||||||
General and administrative expenses | 5,291 | 4,038 | |||||||
National advertising fund expenses | 490 | 328 | |||||||
Asset impairment, estimated lease termination charges and other closing costs, net | 409 | 12 | |||||||
Pre-opening expenses | 65 | 28 | |||||||
Loss (gain) on disposal of property, net | 44 | (8 | ) | ||||||
Total costs and expenses | 63,704 | 36,510 | |||||||
Income from operations | 480 | 809 | |||||||
Other income (expense): | |||||||||
Interest expense | (120 | ) | (54 | ) | |||||
Interest income | 8 | 24 | |||||||
Gain on bargain purchase | 38 | — | |||||||
Total other income (expense) | (74 | ) | (30 | ) | |||||
Income before income taxes | 406 | 779 | |||||||
Income tax (expense) benefit | 241 | (82 | ) | ||||||
Net income | 647 | 697 | |||||||
Net (income) loss attributable to non-controlling interest | 120 | 102 | |||||||
Net income attributable to shareholders | $ | 767 | $ | 799 | |||||
Income per common share: | |||||||||
Basic net income per share attributable to shareholders | $ | 0.07 | $ | 0.09 | |||||
Diluted net income per share attributable to shareholders | $ | 0.07 | $ | 0.08 | |||||
Weighted average shares outstanding - basic | 10,552 | 9,208 | |||||||
Weighted average shares outstanding - diluted | 10,649 | 9,501 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 35,431 | $ | 40,309 | ||||
Restricted cash | 1,677 | 1,152 | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
3,188 | 5,476 | ||||||
Inventories | 3,281 | 3,316 | ||||||
Prepaid expenses and other current assets | 4,313 | 3,919 | ||||||
Total current assets | 47,890 | 54,172 | ||||||
Property, equipment and leasehold improvements, net | 39,748 | 39,943 | ||||||
Other assets: | ||||||||
Operating lease right-of-use assets | 81,248 | 78,843 | ||||||
5,676 | 3,037 | |||||||
Intangible assets, net | 23,714 | 23,444 | ||||||
Deferred tax asset, net | 3,922 | 3,692 | ||||||
Other assets | 1,493 | 1,292 | ||||||
Total assets | $ | 203,691 | $ | 204,423 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,951 | $ | 7,661 | ||||
Current portion of operating lease liabilities | 12,511 | 11,904 | ||||||
Current portion of long-term debt and finance lease liabilities | 1,488 | 1,621 | ||||||
Accrued compensation and benefits | 6,157 | 7,121 | ||||||
Gift card liability | 8,809 | 11,257 | ||||||
Other current liabilities | 8,752 | 8,510 | ||||||
Total current liabilities | 44,668 | 48,074 | ||||||
Long-term liabilities: | ||||||||
Operating lease liabilities, less current portion | 79,362 | 77,729 | ||||||
Finance lease liabilities, less current portion | 292 | 79 | ||||||
Long-term debt, less current portion | 12,819 | 13,197 | ||||||
Other liabilities | 1,087 | 997 | ||||||
Total liabilities | 138,228 | 140,076 | ||||||
Shareholders’ equity: | ||||||||
Common stock, |
108 | 105 | ||||||
Additional paid-in capital | 22,248 | 21,782 | ||||||
Retained earnings | 44,158 | 43,391 | ||||||
Total shareholders’ equity | 66,514 | 65,278 | ||||||
Non-controlling interest | (1,051 | ) | (931 | ) | ||||
Total equity | 65,463 | 64,347 | ||||||
Total liabilities and equity | $ | 203,691 | $ | 204,423 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 647 | $ | 697 | ||||
Adjustments to reconcile net income to cash flows provided by operations: | ||||||||
Depreciation and amortization | 2,423 | 1,552 | ||||||
Stock-based compensation | 384 | 318 | ||||||
Net (gain) loss on disposal | 44 | (8 | ) | |||||
Asset impairment, estimated lease termination charges and other closing costs, net | 409 | 12 | ||||||
Gain on bargain purchase | (38 | ) | — | |||||
Amortization of operating right-of-use assets | 2,894 | 2,134 | ||||||
Deferred tax asset | (230 | ) | 82 | |||||
Other non-cash items | (6 | ) | 186 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 2,296 | 598 | ||||||
Prepaid expenses and other assets | (114 | ) | (1,197 | ) | ||||
Accounts payable | (710 | ) | 1,635 | |||||
Accrued compensation and benefits | (871 | ) | 1,678 | |||||
Lease liabilities | (3,258 | ) | (1,513 | ) | ||||
Gift card liability | (2,544 | ) | (1,563 | ) | ||||
Accrued and other liabilities | 62 | (425 | ) | |||||
Cash flows provided by operating activities | 1,388 | 4,186 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, equipment and leasehold improvements | (722 | ) | (691 | ) | ||||
Payments for acquired restaurants | (4,434 | ) | — | |||||
Payments received on note receivable | — | 6 | ||||||
Cash flows provided by (used for) investing activities | (5,156 | ) | (685 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on long-term debt | (562 | ) | (519 | ) | ||||
Tax payments for restricted stock units and stock options exercised | (130 | ) | — | |||||
Proceeds from exercise of stock options | 107 | — | ||||||
Cash flows provided by (used for) financing activities | (585 | ) | (519 | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | (4,353 | ) | 2,982 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 41,461 | 19,603 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 37,108 | $ | 22,585 | ||||
Supplemental Disclosures | ||||||||
Cash paid for interest, net | $ | 107 | $ | 116 | ||||
Non-cash investing and financing activities: | ||||||||
Operating right-of-use assets acquired | 4,533 | — | ||||||
Lease liabilities assumed pursuant to acquisitions | 4,574 | — | ||||||
Gift card liability assumed pursuant to acquisitions | 96 | — | ||||||
Inventory acquired pursuant to acquisitions | 85 | — |
OPERATING RESULTS
(unaudited)
Three Months Ended | |||||
Food and beverage costs(1) | 31.3 | % | 29.9 | % | |
Labor and benefits costs(1) | 33.0 | % | 30.5 | % | |
Operating expenses(1) | 29.3 | % | 30.5 | % | |
Restaurant-level operating margin(1)(2) | 6.4 | % | 9.1 | % | |
Depreciation and amortization expenses(3) | 3.8 | % | 4.2 | % | |
General and administrative expenses(3) | 8.2 | % | 10.8 | % | |
Income (loss) from operations(3) | 0.7 | % | 2.2 | % |
(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 expenses.
(3) As a percentage of total revenue
RESTAURANT-LEVEL PROFIT AND RESTAURANT-LEVEL MARGIN (1)
NON-GAAP RECONCILIATION
(in thousands)
Three Months Ended | |||||||||
Restaurant sales, net | $ | 58,731 | $ | 33,603 | |||||
Restaurant operating costs(1) | 54,982 | 30,560 | |||||||
Restaurant-level profit | $ | 3,749 | $ | 3,043 | |||||
Restaurant-level margin | 6.4 | % | 9.1 | % |
(1) For company-owned restaurants.
(2) Restaurant operating costs consist of food and beverage costs, labor and benefits costs and operating expenses.
CASH EBITDA AND FREE CASH FLOW
NON-GAAP RECONCILIATION
(in thousands, except per share data)
(unaudited)
Three Months Ended | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Net income | $ | 647 | $ | 697 | $ | 13,311 | $ | 82 | ||||||||
Asset impairment and estimated lease termination charges and other closing costs | 409 | 12 | 173 | 407 | ||||||||||||
Depreciation and amortization | 2,423 | 1,552 | 1,045 | 264 | ||||||||||||
Interest expense, net | 112 | 30 | 76 | 17 | ||||||||||||
Net loss (gain) on disposal of equipment | 44 | (8 | ) | (477 | ) | (6 | ) | |||||||||
Stock-based compensation | 384 | 318 | 137 | 83 | ||||||||||||
Acquisition costs | 167 | - | (62 | ) | 163 | |||||||||||
Pre-opening costs | 65 | 28 | 25 | - | ||||||||||||
Severance | - | - | 28 | 3 | ||||||||||||
Gain on bargain purchase | (38 | ) | - | (14,364 | ) | - | ||||||||||
Provision for income taxes | (241 | ) | 82 | (349 | ) | 17 | ||||||||||
Non-cash rent | (224 | ) | 509 | - | - | |||||||||||
Cash EBITDA | $ | 3,748 | $ | 3,220 | $ | (457 | ) | $ | 1,030 | |||||||
Less cash paid for property, equipment and leasehold improvements | (722 | ) | (691 | ) | (949 | ) | (221 | ) | ||||||||
Free cash flow | $ | 3,026 | $ | 2,529 | $ | (1,406 | ) | $ | 809 |
ADJUSTED NET INCOME (LOSS) AND EARNINGS (LOSS) PER DILUTED SHARE
NON-GAAP RECONCILIATION
(in thousands, except per share data)
(unaudited)
Three Months Ended | ||||||||||||||
(dollars in thousands) | ||||||||||||||
Net income (loss) attributable to shareholders | $ | 767 | $ | 799 | $ | 13,707 | $ | 82 | ||||||
Asset impairment, estimated lease termination charges and other closing costs | 409 | 12 | 173 | 407 | ||||||||||
Gain on bargain purchase | (38 | ) | — | (14,364 | ) | — | ||||||||
Adjusted net income (loss) | 1,138 | 811 | (484 | ) | 489 | |||||||||
Weighted average shares outstanding - diluted | 10,649 | 9,501 | 9,202 | 9,189 | ||||||||||
Adjusted earnings (loss) per diluted share | $ | 0.11 | $ | 0.09 | $ | (0.05 | ) | $ | 0.05 |

Source: BBQ Holdings, Inc.