MINNEAPOLIS, March 14, 2022 (GLOBE NEWSWIRE) -- BBQ Holdings, Inc. (NASDAQ: BBQ) (the "Company"), an innovating global franchisor, owner and operator of restaurants, today reported financial results for the fourth quarter and fiscal year ended January 2, 2022.
Fourth Quarter Highlights:
| Fourth Quarter | ||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2020 | 2019 | |||||||||||
| Total revenue | $ | 68,395 | $ | 34,258 | $ | 23,613 | ||||||||
| Net income (loss) | $ | 2,602 | $ | (2,836 | ) | $ | (1,788 | ) | ||||||
| Earnings (loss) per diluted share | $ | 0.25 | $ | (0.31 | ) | $ | (0.20 | ) | ||||||
| Adjusted net income (loss) | $ | 2,820 | $ | (1,538 | ) | $ | (1,210 | ) | ||||||
| Adjusted earnings (loss) per diluted share | $ | 0.27 | $ | (0.17 | ) | $ | (0.13 | ) | ||||||
| Cash EBITDA | $ | 4,550 | $ | 85 | $ | (692 | ) | |||||||
| Restaurant-level margins | 7.6 | % | 2.1 | % | (3.0 | ) | % | |||||||
| Prime costs | 62.3 | % | 63.6 | % | 67.9 | % | ||||||||
| Free cash flow | $ | 3,140 | $ | (743 | ) | $ | (3,655 | ) | ||||||
| Fourth Quarter Same Store Sales | ||||||
| 2021 vs. 2020 | 2021 vs. 2019 | |||||
| Famous Dave's Company-owned | 22.8 | % | 15.5 | % | ||
| Famous Dave's Franchise-operated* | 26.5 | % | 18.8 | % | ||
| Granite City** | 63.8 | % | (2.4 | ) | % | |
| Village Inn Company-owned** | 54.5 | % | (9.2 | ) | % | |
| Village Inn Franchise-operated* | 51.7 | % | NA | % | ||
| Bakers Square** | 50.4 | % | (12.7 | ) | % | |
| Clark Crew | 17.0 | % | NA | % | ||
| Real Urban BBQ** | 8.9 | % | 2.7 | % | ||
| * as reported by franchisees | ||||||
| ** includes sales under prior ownership | ||||||
Fiscal Year Highlights:
| Fiscal Year | ||||||||||||||
| (dollars in thousands, except per share data) | 2021 | 2020 | 2019 | |||||||||||
| Total revenue | $ | 206,442 | $ | 121,237 | $ | 83,555 | ||||||||
| Net income (loss) | $ | 24,021 | $ | 4,947 | $ | (649 | ) | |||||||
| Earnings (loss) per diluted share | $ | 2.42 | $ | 0.54 | $ | (0.07 | ) | |||||||
| Adjusted net income (loss) | $ | 7,033 | $ | (2,616 | ) | $ | 647 | |||||||
| Adjusted earnings (loss) per diluted share | $ | 0.71 | $ | (0.29 | ) | $ | 0.07 | |||||||
| Cash EBITDA | $ | 17,450 | $ | 948 | $ | 3,423 | ||||||||
| Restaurant-level margins | 9.3 | % | 1.3 | % | (0.1 | ) | % | |||||||
| Prime costs | 61.4 | % | 64.9 | % | 67.2 | % | ||||||||
| Free cash flow | $ | 13,624 | $ | (2,551 | ) | $ | (3,332 | ) | ||||||
| Fiscal Year Same Store Sales | ||||||
| 2021 vs. 2020 | 2021 vs. 2019 | |||||
| Famous Dave's Company-owned | 23.7 | % | 13.7 | % | ||
| Famous Dave's Franchise-operated* | 25.9 | % | 6.6 | % | ||
| Granite City** | 50.0 | % | (8.6 | ) | % | |
| Village Inn Company-owned** | 42.0 | % | (13.0 | ) | % | |
| Village Inn Franchise-operated* | 49.1 | % | NA | % | ||
| Bakers Square** | 29.9 | % | (21.5 | ) | % | |
| Clark Crew | 17.3 | % | NA | % | ||
| Real Urban BBQ** | 11.5 | % | 0.8 | % | ||
| * as reported by franchisees **includes sales under prior ownership | ||||||
Subsequent Events:
On March 10, 2022, we executed an Asset Purchase Agreement for substantially all the assets related to the fast-growing Barrio Queen restaurant group, and we expect to close the transaction within 45 days. Barrio Queen is known for their authentic Mexican fine dining in Phoenix, Arizona. There are currently seven operating restaurants and a lease signed for an eighth with a target opening date of December 2022. The purchase price of $28.0 million will be funded with cash and debt. Further details of the transaction will be made public upon closing.
On March 11, 2022, we closed the purchase of three bar-centric locations. The purchase price of $4.5 million was funded with cash at a multiple of 3.25 times 2021 store-level EBITDA.
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 | |||||||||||
| 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | 2021 | 2022 PF | |
| Corporate Locations | 39 | 41 | 21 | 22 | 18 | 18 | 14 | 14 | 2 | 2 | 1 | 1 | 5 | 4 | 8 | 3 | 100 | 113 | ||
| Brick & Mortar | 30 | 31 | 21 | 21 | 18 | 17 | 11 | 11 | 2 | 2 | 1 | 1 | 5 | 4 | 8 | 3 | 88 | 98 | ||
| Dual Concept | 1 | 1 | 1 | 1 | 1 | 3 | ||||||||||||||
| Ghost Kitchens | 8 | 9 | 3 | 3 | 11 | 12 | ||||||||||||||
| Franchise/License Locations | 104 | 107 | 108 | 111 | 4 | 4 | 1 | 216 | 223 | |||||||||||
| Brick & Mortar | 85 | 87 | 108 | 111 | 193 | 198 | ||||||||||||||
| Dual Concept | 1 | 1 | 0 | 2 | ||||||||||||||||
| Ghost Kitchens | 19 | 19 | 4 | 4 | 23 | 23 | ||||||||||||||
| Total Locations | 143 | 148 | 129 | 133 | 18 | 18 | 18 | 18 | 2 | 2 | 1 | 1 | 5 | 5 | 8 | 3 | 316 | 336 | ||
| 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 | n/a | n/a | n/a | Q1: - | Q1: - | n/a | Total: | 13 | |||||||||
| Q2: 1 | Q2: 1 | Q2: - | Q2: - | |||||||||||||||||
| Q3: 1 | Q3: 1 | Q3: - | Q3: 1 | |||||||||||||||||
| Q4: 1 | Q4: 2 | Q4: 1 | Q4: - | |||||||||||||||||
Filling Latent Capacity:
- Dual concept Granite City/Village Inn opened in Maple Grove, MN in March 2022.
- Famous Dave's ghost kitchen to open in Granite City in Fargo, ND in March 2022.
Organic Unit Growth:
- Famous Dave's franchisee opened a line-serve restaurant in Coon Rapids, MN in October 2021.
- Opened a Real Urban Barbeque restaurant in Chicago, IL in October 2021.
- Famous Dave's Drive thru in Salt Lake City, UT opened in March 2022.
- Famous Dave's franchisee opened an additional restaurant in the United Arab Emirates in February 2022.
- New Village Inn prototype expected to open in Omaha, NE in the second quarter of 2022.
Mergers and Acquisitions:
- Purchased Tahoe Joe's Steakhouse brand in October 2021.
- Signed an Asset Purchase Agreement to acquire Barrio Queen in March 2022.
- Closed the purchase of three bar-centric company-owned locations in March 2022.
2022 Guidance:
- Net restaurant revenue of $265mm to $280mm
- 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 Run Rate Guidance:
- Net restaurant revenue of $280mm to $295mm
- 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***
*** assumes completion of Barrio Queen and Bar Concepts acquisitions
Executive Comments
Jeff Crivello, CEO, commented, "The fourth quarter of 2021 marked another successful quarter of strong operational execution and company growth. We continue to successfully execute our three core growth initiatives which include filling latent capacity of our current restaurants, organic unit growth, and build a diversified portfolio of food and beverage brands via accretive M&A.
In December 2021 and January 2022, we experienced a traffic decline associated with the Omicron variant of COVID-19. However, as case counts have declined, we have seen rebounds in both dine-in traffic and catering sales in February and March of 2022.
As we have continued to diversify our portfolio of restaurant brands, we will be changing the name of our parent company from BBQ Holdings, Inc. to Famous Hospitality, Inc."
Key Operating Metrics
| Three Months Ended | Year Ended | |||||||||||||||
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | |||||||||||||
| Restaurant count: | ||||||||||||||||
| Franchise-operated | 216 | 98 | 216 | 98 | ||||||||||||
| Company-owned | 100 | 47 | 100 | 47 | ||||||||||||
| Total | 316 | 145 | 316 | 145 | ||||||||||||
| Same store net restaurant sales %: | ||||||||||||||||
| Franchise-operated | 26.5 | % | (13.6 | ) | % | 25.9 | % | (17.0 | ) | % | ||||||
| Company-owned | 37.8 | % | (5.5 | ) | % | 36.7 | % | (8.5 | ) | % | ||||||
| Total | 30.8 | % | (11.6 | ) | % | 29.8 | % | (15.3 | ) | % | ||||||
| (in thousands, expect per share data) | ||||||||||||||||
| System-wide restaurant sales(1) | $ | 171,086 | $ | 78,894 | $ | 507,882 | $ | 301,743 | ||||||||
| Net income attributable to shareholders | $ | 2,602 | $ | (2,836 | ) | $ | 24,021 | $ | 4,947 | |||||||
| Net income attributable to shareholders, per diluted share | $ | 0.25 | $ | (0.31 | ) | $ | 2.42 | $ | 0.54 | |||||||
| Cash EBITDA(2) | $ | 4,550 | $ | 85 | $ | 17,450 | $ | 948 | ||||||||
(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."
Fourth Quarter and Fiscal Year 2021 Review
Total revenue for the fourth quarter of 2021 was $68.4 million, up 99.6% from the fourth quarter of 2020. Total revenue for fiscal year 2021 was $206.4 million, up 70.3% from fiscal year 2020. The increase in year-over-year revenue was driven primarily by the acquisitions of the Village Inn and Bakers Square brands, four additional Famous Dave's restaurants, and the Tahoe Joe's Steakhouse brand, as well as the reduction of dining restrictions in 2021 compared to 2020.
Net income attributable to shareholders was approximately $2.6 million, or $0.25 per diluted share, in the fourth quarter of fiscal 2021 compared to a loss of approximately $2.8 million, or $0.31 per diluted share, in the fourth quarter of fiscal 2020. Fiscal year 2021 net income was $24.0 million compared to $4.9 million in fiscal year 2020. This increase in net income was mainly attributable to a gain on forgiveness of debt and a gain on bargain purchase. Additionally, the increase in net income was also driven by (i) an increase in same store sales, (ii) sales from the acquisitions of the Village Inn and Bakers Square brands, four additional Famous Dave's restaurants, and the Tahoe Joe's Steakhouse brand, (iii) improvements in restaurant-level margins and (iv) improvements in general and administrative expense efficiency. Cash EBITDA, a non-GAAP measure, increased $4.5 million from $0.1 million in the fourth quarter of 2020 to $4.6 million in the fourth quarter of 2021. Cash EBITDA for fiscal year 2021 was $17.5 million, an increase of $16.5 million over fiscal year 2020. A reconciliation between cash EBITDA and its most directly comparable GAAP measure is included in the accompanying financial tables.
Restaurant-level operating margin as a percentage of restaurant net sales, a non-GAAP measure, was 7.6% and 9.3% for Company-owned restaurants in the fourth quarter and fiscal year 2021, respectively, compared to 2.1% and 1.3% in the fourth quarter and fiscal year 2020, respectively. 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 reduction of dine-in restrictions and restrictions on large gatherings which were put in place in 2020 due to COVID-19 concerns, as well as the acquisition of the Village Inn and Bakers Square brands, four additional Famous Dave's restaurants, and the Tahoe Joe's Steakhouse brand. A reconciliation of restaurant sales to restaurant-level margin is included in the accompanying financial tables. General and administrative expenses for the quarter ended January 2, 2022, and January 3, 2021 represented approximately 8.3% and 12.8% of total revenues, respectively. General and administrative expenses for fiscal year 2021 and fiscal year 2020 represented approximately 9.3% and 11.9% of total revenues, respectively. While general and administrative expenses increased in fiscal year 2021 compared to fiscal year 2020, such expenses decrease as a percentage of revenue in 2021 due primarily to the increase in total revenue.
About BBQ Holdings
BBQ Holdings, Inc. (NASDAQ: BBQ) is a national restaurant company engaged in franchising, ownership and operation of casual and fast dining restaurants. As of March 14, 2022, BBQ Holdings had multiple brands with over 100 Company-owned locations and over 200 franchised locations, including ghost kitchens operating out of the kitchen of another restaurant location or shared kitchen space. While BBQ Holdings continues to diversify its ownership in the restaurant community, it was founded with the principle of combining the "art and science" of barbecue to serve up the very best of the best to barbecue lovers everywhere. Along with a wide variety of BBQ favorites served at their BBQ restaurants, BBQ Holdings also operates Granite City Food and Brewery restaurants which offer award winning craft beer and a made-from-scratch, chef driven menu featuring contemporary American cuisine. Village Inn and Bakers Square add a legendary Family Dining element to BBQ Holdings, with these concepts specializing in breakfast and pies. Tahoe Joe's is known for their pellet-broiler cooked and smoked infused steak.
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses non-GAAP measures including those indicated below. These non-GAAP measures exclude significant expenses and income that are required by GAAP to be recorded in the Company's consolidated financial statements and are subject to inherent limitations. By providing non-GAAP measures, together with a reconciliation to the most comparable GAAP measure, the Company believes that it is enhancing investors' understanding of the Company's business and results of operations. These measures are not intended to be considered in isolation of, as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures presented may be different from the measures used by other companies. The Company urges investors to review the reconciliation of its non-GAAP measures to the most directly comparable GAAP measure, included in the accompanying financial tables.
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 cost, 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, 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 SEC reports.
| Contact: | Jeff Crivello - Chief Executive Officer |
| jeff.crivello@bbq-holdings.com |
BBQ HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | |||||||||||||
| Revenue: | ||||||||||||||||
| Restaurant sales, net | $ | 62,690 | $ | 31,293 | $ | 187,872 | $ | 109,544 | ||||||||
| Franchise royalty and fee revenue | 3,538 | 2,291 | 12,187 | 8,919 | ||||||||||||
| Franchisee national advertising fund contributions | 501 | 298 | 1,711 | 1,124 | ||||||||||||
| Licensing and other revenue | 1,666 | 376 | 4,672 | 1,650 | ||||||||||||
| Total revenue | 68,395 | 34,258 | 206,442 | 121,237 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Food and beverage costs | 19,249 | 9,661 | 55,969 | 33,867 | ||||||||||||
| Labor and benefits costs | 19,809 | 10,252 | 59,297 | 37,228 | ||||||||||||
| Operating expenses | 18,868 | 10,733 | 55,223 | 36,984 | ||||||||||||
| Depreciation and amortization expenses | 2,470 | 1,301 | 7,395 | 5,121 | ||||||||||||
| General and administrative expenses | 5,660 | 4,371 | 19,176 | 14,195 | ||||||||||||
| National advertising fund expenses | 501 | 298 | 1,711 | 1,124 | ||||||||||||
| Asset impairment, estimated lease termination charges and other closing costs, net | 10 | 869 | 116 | 5,683 | ||||||||||||
| Pre-opening expenses | 21 | 103 | 204 | 10 | ||||||||||||
| Gain on disposal of property, net | (1,113 | ) | (703 | ) | (979 | ) | (1,810 | ) | ||||||||
| Total costs and expenses | 65,475 | 36,885 | 198,112 | 132,402 | ||||||||||||
| Income (loss) from operations | 2,920 | (2,627 | ) | 8,330 | (11,165 | ) | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (144 | ) | (214 | ) | (583 | ) | (805 | ) | ||||||||
| Interest income | 31 | 49 | 178 | 154 | ||||||||||||
| Gain on forgiveness of debt | — | — | 14,109 | — | ||||||||||||
| Gain on bargain purchase | (208 | ) | (429 | ) | 2,995 | 13,246 | ||||||||||
| Total other income (expense) | (321 | ) | (594 | ) | 16,699 | 12,595 | ||||||||||
| Income (loss) before income taxes | 2,599 | (3,221 | ) | 25,029 | 1,430 | |||||||||||
| Income tax (expense) benefit | (144 | ) | 318 | (661 | ) | 2,837 | ||||||||||
| Net income (loss) | 2,455 | (2,903 | ) | 24,368 | 4,267 | |||||||||||
| Net (income) loss attributable to non-controlling interest | 147 | 67 | (347 | ) | 680 | |||||||||||
| Net income (loss) attributable to shareholders | $ | 2,602 | $ | (2,836 | ) | $ | 24,021 | $ | 4,947 | |||||||
| Income (loss) per common share: | ||||||||||||||||
| Basic net income (loss) per share attributable to shareholders | $ | 0.25 | $ | (0.31 | ) | $ | 2.44 | $ | 0.54 | |||||||
| Diluted net income (loss) per share attributable to shareholders | $ | 0.25 | $ | (0.31 | ) | $ | 2.42 | $ | 0.54 | |||||||
| Weighted average shares outstanding - basic | 10,445 | 9,175 | 9,826 | 9,155 | ||||||||||||
| Weighted average shares outstanding - diluted | 10,550 | 9,175 | 9,922 | 9,156 | ||||||||||||
BBQ HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
| ASSETS | ||||||||
| Current assets: | January 2, 2022 | January 3, 2021 | ||||||
| Cash and cash equivalents | $ | 40,309 | $ | 18,101 | ||||
| Restricted cash | 1,152 | 1,502 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $270,000 and $277,000, respectively | 5,476 | 4,823 | ||||||
| Inventories | 3,316 | 2,271 | ||||||
| Prepaid expenses and other current assets | 3,919 | 1,252 | ||||||
| Assets held for sale | — | 1,070 | ||||||
| Total current assets | 54,172 | 29,019 | ||||||
| Property, equipment and leasehold improvements, net | 39,943 | 32,389 | ||||||
| Other assets: | ||||||||
| Operating lease right-of-use assets | 78,843 | 61,634 | ||||||
| Goodwill | 3,037 | 601 | ||||||
| Intangible assets, net | 23,444 | 9,967 | ||||||
| Deferred tax asset, net | 3,692 | 4,934 | ||||||
| Other assets | 1,292 | 1,724 | ||||||
| Total assets | $ | 204,423 | $ | 140,268 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,661 | $ | 6,385 | ||||
| Current portion of operating lease liabilities | 11,904 | 6,185 | ||||||
| Current portion of long-term debt and finance lease liabilities | 1,621 | 2,111 | ||||||
| Accrued compensation and benefits | 7,121 | 2,390 | ||||||
| Gift card liability | 11,257 | 6,554 | ||||||
| Other current liabilities | 8,510 | 3,212 | ||||||
| Total current liabilities | 48,074 | 26,837 | ||||||
| Long-term liabilities: | ||||||||
| Operating lease liabilities, less current portion | 77,729 | 63,105 | ||||||
| Finance lease liabilities, less current portion | 79 | — | ||||||
| Long-term debt, less current portion | 13,197 | 22,169 | ||||||
| Other liabilities | 997 | 1,224 | ||||||
| Total liabilities | 140,076 | 113,335 | ||||||
| Shareholders' equity: | ||||||||
| Common stock, $.01 par value, 100,000 shares authorized, 10,495 and 9,307 shares issued and outstanding at January 2, 2022 and January 3, 2021, respectively | 105 | 93 | ||||||
| Additional paid-in capital | 21,782 | 8,748 | ||||||
| Retained earnings | 43,391 | 19,370 | ||||||
| Total shareholders' equity | 65,278 | 28,211 | ||||||
| Non-controlling interest | (931 | ) | (1,278 | ) | ||||
| Total equity | 64,347 | 26,933 | ||||||
| Total liabilities and equity | $ | 204,423 | $ | 140,268 | ||||
BBQ HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Year Ended | ||||||||
| January 2, 2022 | January 3, 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 24,368 | $ | 4,267 | ||||
| Adjustments to reconcile net income to cash flows provided by operations: | ||||||||
| Depreciation and amortization | 7,395 | 5,121 | ||||||
| Stock-based compensation | 1,268 | 886 | ||||||
| Net gain on disposal | (979 | ) | (1,783 | ) | ||||
| Asset impairment, estimated lease termination charges and other closing costs, net | — | 5,483 | ||||||
| Gain on forgiveness of debt | (14,109 | ) | — | |||||
| Gain on bargain purchase | (2,995 | ) | (13,246 | ) | ||||
| Amortization of operating right-of-use assets | 8,514 | 5,249 | ||||||
| Deferred tax asset | 337 | (2,837 | ) | |||||
| Other non-cash items | 905 | 796 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (1,570 | ) | (1,011 | ) | ||||
| Prepaid expenses and other assets | (2,983 | ) | 1,460 | |||||
| Accounts payable | 1,276 | 2,418 | ||||||
| Accrued compensation | 4,730 | (244 | ) | |||||
| Lease liabilities | (8,278 | ) | (5,152 | ) | ||||
| Gift card liability | 3,341 | (2,133 | ) | |||||
| Accrued and other liabilities | 3,638 | 2,814 | ||||||
| Cash flows provided by operating activities | 24,858 | 2,088 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from the sale of assets | 2,587 | 2,869 | ||||||
| Purchases of property, equipment and leasehold improvements | (3,826 | ) | (3,499 | ) | ||||
| Payments for acquired restaurants | (18,808 | ) | (5,381 | ) | ||||
| Payments received on note receivable | 785 | 42 | ||||||
| Cash flows used for investing activities | (19,262 | ) | (5,969 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from long-term debt | 15,000 | 22,058 | ||||||
| Payments for debt issuance costs | (114 | ) | (45 | ) | ||||
| Payments on long-term debt | (10,403 | ) | (4,621 | ) | ||||
| Tax payments for restricted stock units and stock options exercised | (1,094 | ) | — | |||||
| Proceeds from sale of common stock, net of offering costs | 12,428 | — | ||||||
| Proceeds from exercise of stock options | 445 | 6 | ||||||
| Cash provided by financing activities | 16,262 | 17,398 | ||||||
| Increase in cash, cash equivalents and restricted cash | 21,858 | 13,517 | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | 19,603 | 6,086 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 41,461 | $ | 19,603 | ||||
| Supplemental Disclosures | ||||||||
| Cash paid for interest, net | $ | 494 | $ | 706 | ||||
| Non-cash investing and financing activities: | ||||||||
| Operating right-of-use assets acquired | 23,544 | 51,682 | ||||||
| Lease liabilities assumed pursuant to acquisitions | 26,166 | 51,682 | ||||||
| Gift card liability assumed pursuant to acquisitions | 1,362 | 3,923 | ||||||
| Inventory acquired pursuant to acquisitions | 623 | 1,178 | ||||||
BBQ HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS
(unaudited)
| Three Months Ended | Year Ended | ||||||||||||
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | ||||||||||
| Food and beverage costs(1) | 30.7 | % | 30.9 | % | 29.8 | % | 30.9 | % | |||||
| Labor and benefits costs(1) | 31.6 | % | 32.8 | % | 31.6 | % | 34.0 | % | |||||
| Operating expenses(1) | 30.1 | % | 34.3 | % | 29.4 | % | 33.8 | % | |||||
| Restaurant-level operating margin(1)(2) | 7.6 | % | 2.1 | % | 9.3 | % | 1.3 | % | |||||
| Depreciation and amortization expenses(3) | 3.6 | % | 3.8 | % | 3.6 | % | 4.2 | % | |||||
| General and administrative expenses(3) | 8.3 | % | 12.8 | % | 9.3 | % | 11.7 | % | |||||
| Income (loss) from operations(3) | 4.3 | % | (7.7 | ) | % | 4.0 | % | (9.2 | ) | % | |||
(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 expense.
(3) As a percentage of total revenue
BBQ HOLDINGS, INC. AND SUBSIDIARIES
RESTAURANT-LEVEL PROFIT AND RESTAURANT-LEVEL MARGIN (1)
NON-GAAP RECONCILIATION
(in thousands)
| Three Months Ended | Year Ended | ||||||||||||||
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | ||||||||||||
| Restaurant sales, net | $ | 62,690 | $ | 31,293 | $ | 187,872 | $ | 109,544 | |||||||
| Restaurant operating costs (2) | 57,926 | 30,646 | 170,489 | 108,079 | |||||||||||
| Restaurant-level profit | $ | 4,764 | $ | 647 | $ | 17,383 | $ | 1,465 | |||||||
| Restaurant-level margin | 7.6 | % | 2.1 | % | 9.3 | % | 1.3 | % | |||||||
(1) For Company-owned restaurants.
(2) Restaurant operating costs consist of food and beverage costs, labor and benefits costs and operating expenses.
BBQ HOLDINGS, INC. AND SUBSIDIARIES
CASH EBITDA AND FREE CASH FLOW
NON-GAAP RECONCILIATION
(in thousands, except per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | |||||||||||||
| (dollars in thousands) | ||||||||||||||||
| Net income | $ | 2,455 | $ | (2,903 | ) | $ | 24,368 | $ | 4,267 | |||||||
| Asset impairment and estimated lease termination charges and other closing costs | 10 | 869 | 116 | 5,683 | ||||||||||||
| Depreciation and amortization | 2,470 | 1,301 | 7,395 | 5,121 | ||||||||||||
| Interest expense, net | 113 | 165 | 405 | 651 | ||||||||||||
| Net gain on disposal of equipment | (1,113 | ) | (703 | ) | (979 | ) | (1,810 | ) | ||||||||
| Stock-based compensation | 336 | 517 | 1,268 | 939 | ||||||||||||
| Acquisition costs | 375 | (58 | ) | 925 | (105 | ) | ||||||||||
| Pre-opening costs | 21 | 103 | 204 | 10 | ||||||||||||
| Severance | - | 35 | - | 86 | ||||||||||||
| Gain on debt forgiveness | - | - | (14,109 | ) | - | |||||||||||
| Gain on bargain purchase | 208 | 429 | (2,995 | ) | (13,246 | ) | ||||||||||
| Provision for income taxes | 144 | (318 | ) | 661 | (2,837 | ) | ||||||||||
| Non-cash rent | (469 | ) | 648 | 191 | 2,189 | |||||||||||
| Cash EBITDA | $ | 4,550 | $ | 85 | $ | 17,450 | $ | 948 | ||||||||
| Less cash paid for property, equipment and leasehold improvements | (1,410 | ) | (828 | ) | (3,826 | ) | (3,499 | ) | ||||||||
| Free cash flow | $ | 3,140 | $ | (743 | ) | $ | 13,624 | $ | (2,551 | ) | ||||||
BBQ HOLDINGS, INC. AND SUBSIDIARIES
ADJUSTED NET INCOME (LOSS) AND EARNINGS (LOSS) PER DILUTED SHARE
NON-GAAP RECONCILIATION
(in thousands, except per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| (dollars in thousands) | January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | ||||||||||||
| Net income (loss) attributable to shareholders | $ | 2,602 | $ | (2,836 | ) | $ | 24,021 | $ | 4,947 | |||||||
| Asset impairment, estimated lease termination charges and other closing costs | 10 | 869 | 116 | 5,683 | ||||||||||||
| Gain on debt forgiveness | — | — | (14,109 | ) | — | |||||||||||
| Gain on bargain purchase | 208 | 429 | (2,995 | ) | (13,246 | ) | ||||||||||
| Adjusted net income (loss) | 2,820 | (1,538 | ) | 7,033 | (2,616 | ) | ||||||||||
| Weighted average shares outstanding - diluted | 10,550 | 9,175 | 9,922 | 9,155 | ||||||||||||
| Adjusted earnings (loss) per diluted share | $ | 0.27 | $ | (0.17 | ) | $ | 0.71 | $ | (0.29 | ) | ||||||
A presentation accompanying this announcement is available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/1a29f163-d269-424b-87c1-2f433536eaa0
