november 2016 nasdaq: hotr · nasdaq: hotr 20 american burger bgr little big burger est. revenue...
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NASDAQ: HOTR
November 2016NASDAQ: HOTR
NASDAQ: HOTR
Statements in this presentation that are not descriptions of historical facts are forward-looking statements relating to future events, and as suchall forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. Statements may contain certain forward-looking statements pertaining to future anticipated or projected plans, performance and developments, as well as other statements relating tofuture operations and results. Any statements in this presentation that are not statements of historical fact may be considered to be forward-looking statements. Words such as "may," "will," "expect," "believe," "anticipate," "estimate," "intends," "goal," "objective," "seek," "attempt,"or variations of these or similar words, identify forward-looking statements. These forward-looking statements by their nature are estimates offuture results only and involve substantial risks and uncertainties, including but not limited to risks associated with the uncertainty of futurefinancial results, additional financing requirements, development of new stores, successful completion of the Company’s proposed acquisitionsand expansion, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertaintiesdetailed from time to time in our reports filed with the Securities and Exchange Commission. There can be no assurance that our actual resultswill not differ materially from expectations and other factors more fully described in our public filings with the U.S. Securities and ExchangeCommission, which can be reviewed at www.sec.gov.
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Chanticleer Holdings, Inc. prepares its condensed consolidated financial statements in accordance with United States generally acceptedaccounting principles (”GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses informationregarding Adjusted EBITDA and Restaurant EBITDA, which differ from the term EBITDA as it is commonly used. In addition to adjusting netincome (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-related expenses, change in fair value of derivative liability andother income and expenses. In addition, Restaurant EBITDA also excludes management fee income and general and administrative expenses.Adjusted EBITDA and restaurant EBITDA are not measures of performance defined in accordance with GAAP. However, adjusted EBITDA andrestaurant 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 thecompany'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 ameasure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludesfinancial information that some may consider important in evaluating the company's performance. A reconciliation of GAAP net income (loss) toAdjusted EBITDA and Restaurant EBITDA is included in the accompanying financial schedules. For further information, please refer toChanticleer’s Quarterly Report on Form 10-Q filed with the SEC on November 16, 2015, available online at www.sec.gov.
Forward‐Looking Statements
Non-Gaap Measures
NASDAQ: HOTR 3
NASDAQ: HOTR
Founded in 2005
Started with Hooters
Growing with Burgers
Distinctive, Award Winning RegionalFast Casual Brands
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Future
Acquisition Phase Profitable Growth
2012-2015
• Integrate Acquired Operations• Improve Margins• Expense Reductions•Disciplined Growth•Address Balance Sheet
Integration Phase
• Fast Casual Acquisitions•Little Big Burger•BGR The Burger Joint•BT’s Burger Joint•American Burger Co•Just Fresh
Current Focus
•Accelerate Growth• Franchising •Drive Cash Flow
Hooters Franchisee
2005- >
•Hooters Investor & Franchisee
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8
5
Revenue
$1.5
$6.4 $7.3
$23.3
$35.3
$43.9
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2011 2012 2013 2014 2015 Q3 16annualized
1 2 3
6
813 15
9
5
6 5
95
7 7 8
23 22
4
8
8
0
10
20
30
40
50
60
70
2009 2010 2011 2012 2013 2014 2015 Q3 16
Hooters ABC
JF BGR
BT LBB
18
62
26
5
56
Systemwide Store Countas of September 2, 2016
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NASDAQ: HOTR
“Made in America” menu thatincludes premium burgers, chickensandwiches, salads & shakes
9 Restaurants
Carolinas Region
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Gourmet Fast Casual – Open Flame
Voted Best Burger in DC & NamedOne of America’s Top 10 ChainBurgers by MSN
22 Restaurants
U.S. & International
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Chef Driven - Uniquely Simple
Best Burger in Portland
8 Restaurants
Portland / Pacific Northwest
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Fresh healthy selections withdistinctive sandwiches, soups andsalads
8 Restaurants
North Carolina
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Operate 9 Hooters under FranchiseAgreements
United States: 2
South Africa: 6
Europe: 1
Chanticleer also holds a smallminority stake in Hooters ofAmerica
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13
Q3 15
45.1%
39.3%
15.3%
0.3%
Better Burgers Fast Casual Hooters Full Service
Just Fresh Fast Casual Corp & Other
52.3%33.5%
13.9%
0.3%
Better Burgers Fast Casual Hooters Full Service
Just Fresh Fast Casual Corp & Other
Q3 16
NASDAQ: HOTR
Burger Business: Grow and Accelerate Margin Expansion
Regional Brand Focus
Leverage most profitable segment
LBB & BGR - New Store Development Focus
Just Fresh: Hidden Gem - Continue to Drive Profit and Cash Flow
Hooters: Improve Profit and Cash Flow, Exiting UnprofitableLocations
Leveraging Scale & Driving Operational Improvements
Targeted, Profitable Growth
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NASDAQ: HOTR
Store level trends strengthening
COS, Opex, G&A, EBITDA tracking towards target levels
Beginning to realize benefit of larger scale & expense rationalization initiatives
Strategic decision to exit 6 underperforming international Hooters
Milestone Quarter
Second Consecutive EBITDA profitability, Restaurant EBITDA > 13%
Focus Areas –
Operational improvement
Targeted Growth
Balance Sheet
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$0.5$0.7
$0.9 $1.0 $1.1$1.4 $1.47.8
%
7.7%
9.9%9.6%
11.3%
13.4% 13.2%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
$-
$0.5
$1.0
$1.5
35.3%
34.5%
33.6%34.3%
33.1%32.7%
33.1%
32%
33%
34%
35%
36%
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
-$0.7 -$0.6-$0.4
-$0.1 -$0.2
$0.2 $0.2
-11.1%-6.9%
-4.2%
-0.6%-2.3%
1.8% 2.1%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
-$0.8
-$0.6
-$0.4
-$0.2
$0.0
$0.2
$0.4
26.1%
21.0%17.8%
15.0%16.6%
12.8% 12.3%10%
15%
20%
25%
30%
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Restaurant EBITDA
Cost of Goods% G&A %
Adjusted EBITDA
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Consolidated
Q3 15 Q3 16 Target
COS % 33.6% 33.1% 32-33%
OPEX % 57.3% 54.8% 52-54%
Restaurant EBITDA% 10.2% 13.2% 14-16%
G&A% 17.8% 12.3% 9-10%
Adjusted EBITDA -2.3% 2.2% 4-7%
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Dollars in millions September 30, 2016 December 31, 2015
Assets
Cash $1.0 $1.2
Property, Plant & Equipment 11.5 12.1
Goodwill & Intangible Assets 19.1 19.5
Total Assets 34.1 42.2
Liabilities
Accounts Payable & Accrued Expenses $5.0 $4.7
Debt, Conv. Debt, & Capital Leases 10.1 9.3
Total Liabilities 19.0 20.4
Stockholders’ Equity 15.1 21.8
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American Burger BGR Little Big Burger
Est. Revenue per store 850,000$ 825,000$ 700,000$
Avg Size , sq ft. 2,500 1,800 1,400
Target EBITDA margin 15% 15% 20%
EBITDA per unit 127,500$ 123,750$ 140,000$
Est. Initial Investment 450,000$ 400,000$ 250,000$ Est. 15% TI allowance (67,500)$ (60,000)$ (37,500)$ Est. Net Initial Investment 382,500$ 340,000$ 212,500$
Est. Cash on Cash return 33% 36% 66%
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Strong opportunity to grow store count in all segments
Financing strategies: EB-5 Financing
LOI with U.S. investor to fully fund restaurant openings
• Up to 10 Little Big Burger restaurants in Seattle and other markets
• Near closing on first two stores – Seattle and Portland
Franchise Strategy Expand regional brands domestically and internationally
Strong international pipeline: Franchise BGR opened in the Sultanate of Oman
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Little Big Burger (1200-2000 sq ft)
Location TimingHassalo on Eight - Portland, OR Late 2016 / Early 2017 (EB5)
Platform District - Hillsboro, OR Late 2016/Early 2017 (EB5)
Progress Ridge - Beaverton, OR Late 2016 /Early 2017 (Fin Ptr)
Green Lake Village - Seattle, WA 2017 (Fin Ptr)
Two Additional Sites in negotiation, Seattle, WA TBD (Fin Ptr)
Location Timing
Mosaic District - Northern Virginia Early 2017
Catholic University - Northern Virginia Early 2017
*Franchisees – Multiple locations/Areas*
Location Timing
Prosperity Village – Charlotte, NC Mid 2017 (EB5)
BGR (1500-2400 sg ft)
American Burger (2000-2500+ sq ft)
NASDAQ: HOTR
$13.5M; 9% trading convertible preferred – NASDAQ listed
Use of Proceeds to retire current debt and provide working capital for future store-related growth
Strengthens balance sheet and efficiently addresses debt position
Accelerate growth in high return burger concepts
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2012 20162020 Vison
Targets
Store Count 6 56 110-140
Revenues $7M $42M $100 - $125M
Restaurant EBITDA% Breakeven 12% - 14% 16% - 20%
EBITDA% Negative 1% - 2% 10% - 15%
Double store count over next 4 years:• Company stores• Investor stores (JV, EB-5)• Franchise stores
Disciplined focus on costs, operating margins and site selection
Significant increase in profitability as business scales
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Differentiated Regional Strategy
Award Winning Regional Brands
Strong Store Level Performance
Improving Margins & Profitability
Disciplined Growth and Operational Execution
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NASDAQ: HOTR
Thank YouNASDAQ: HOTR
Investor Contact: Institutional Marketing Services (IMS)Investor Relations(203) [email protected]
Investor Contact: Chanticleer Holdings, Inc.Investor & Media Relations(704) [email protected]
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Appendix - Revenue & Systemwide Store Count by Segment ($ in Millions)
Revenue Restaurant Gaming Franchise
Management
Fee Total
% of
Total Company Franchise Total
Hooters Full Service 3,564,204$ 118,136$ -$ -$ 3,682,340$ 33.5% 9 - 9
Better Burgers Fast Casual 5,646,241 - 95,542 - 5,741,783 52.3% 27 12 39
Just Fresh Fast Casual 1,527,516 - - - 1,527,516 13.9% 8 - 8
Corporate and Other - - - 25,000 25,000 0.3% - - -
Total Revenue 10,737,960$ 118,136$ 95,542$ 25,000$ 10,976,639$ 100.0% 44 12 56
Revenue Restaurant Gaming Franchise Mgmt Fee Total
% of
Total Company Franchise Total
Hooters Full Service 3,554,501$ 94,008$ -$ -$ 3,648,509$ 39.3% 8 - 8
Better Burgers Fast Casual 4,064,881 - 119,950 - 4,184,831 45.1% 15 11 26
Just Fresh Fast Casual 1,419,857 - - - 1,419,857 15.3% 7 - 7
Corporate and Other - - - 25,000 25,000 0.3% - - -
Total Revenue 9,039,239$ 94,008$ 119,950$ 25,000$ 9,278,197$ 100.0% 30 11 41
Store Count, end of period
Store Count, end of period
Three Months Ended September 30, 2016
Three Months Ended September 30, 2015
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Appendix - EBITDA Reconciliation ($ in Millions)
(Unaudited)
September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015
Loss from Continuing Operations (888,291)$ (1,691,067)$ (2,405,108)$ (6,318,749)$
Interest expense 453,151 657,906 1,704,556 2,736,555
Income tax 52,474 12,954 137,867 (30,298)
Depreciation and amortization 590,433 354,119 1,738,815 973,374
EBITDA 207,767$ (666,089)$ 1,176,130$ (2,639,118)$
Restaurant pre-opening and closing expenses 110,432 141,306 117,987 480,645
Change in fair value of derivative liabilities (102,507) (262,232) (1,231,608) (833,139)
Loss on extinguishment of debt - 145,834 - 315,923
Equity in losses of investments - - - -
Asset impairment charge - - - -
Transaction-related expenses 48,214 384,430 146,613 820,145
Other income (32,357) 52,956 (12,388) (50,190)
Adjusted EBITDA 231,549$ (203,795)$ 196,734$ (1,905,735)$
General and administrative expenses 1,302,897 1,266,621 4,254,213 4,343,780
Franchise revenues (95,542) (119,950) (381,481) (270,948)
Management fee revenue (25,000) (25,000) (75,000) (75,000)
Restaurant EBITDA 1,413,903$ 917,876$ 3,994,465$ 2,092,098$
Chanticleer Holdings, Inc. and SubsidiariesReconcilation of Net Loss to EBITDA
Three Months Ended Nine Months Ended
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