Chanticleer Holdings, a franchisee of international Hooters® restaurants and a minority owner in the privately held parent company of the Hooters® brand, today reported its financial results for the three-month period ended March 31, 2013.
Highlights for the quarter include:
• Restaurant revenue for the first quarter 2013 rose from $1.4 million to $1.7 million, an 18.4% increase. As of March 31, 2013, the company had six restaurants (five consolidated and one joint venture) compared with five restaurants (four consolidated and one joint venture) a year earlier.
• Gross profit margins for the first quarter 2013 improved 3.0% to 61.1% compared with 58.1% in the first quarter 2012.
• Same-store gross sales for restaurants opened more than 12 months increased 10.1% in local currency (Rands) and decreased 5.4% in U.S. dollars for the 2012 first quarter compared with last year, due to fluctuations in the exchange rate.
• Restaurant operating expenses for the first quarter 2013 were $980,000 or 59.7% of restaurant revenue, compared with $769,000 or 55.4% of restaurant revenue for the year-ago quarter. Operating expenses for the 2013 quarter included Chanticleer’s Budapest, Hungary, location (opened in August 2012) whose operating expenses were a higher percentage of revenue compared with South African stores.
• Net loss from continuing operations for the first quarter 2013 was reduced from $642,000 or $0.26 per share for the year-ago first quarter, to $747,000 or $0.20 per share.
• Restaurant EBITDA for the first quarter 2013 was approximately $61,000 compared with $97,000 in the first quarter 2012. Improved gross margins were offset by an increase in operating expenses, including professional fees and higher payroll costs.
• General and administrative expenses for the first quarter 2013 were $730,000 or 44.0% of revenue, compared with $450,000 or 32.4% of total revenue in the year-ago quarter. These costs increased primarily because of increases in audit and legal fees, additional costs related to NASDAQ fees and SEC filings, as well as an increase in corporate personnel.
• Following the end of the quarter, the company announced it had selected a site in Townsville, Australia, for its seventh Hooters restaurant, and the approval of a site by HOA in Surfers Paradise, Australia, which will mark its eighth location.
• The company settled outstanding liabilities from a South African bank, with a payment of approximately $99,000 and a release of all other liabilities, resulting in a gain on extinguishment of debt of approximately $71,000, which appears as “other income” in the current income statement. In April 2013 the company entered into a credit agreement with Paragon Commercial Bank for an additional $500,000 revolving-credit facility to finance new business ventures and general corporate working capital requirements.
“With continued improvements in revenue, gross margins and same-store sales, we are well on our way toward meeting our 2013 goal of having 10 restaurants opened by year-end 2013,” Mike Pruitt, President and CEO of Chanticleer, commented. “We are excited about the pending opening of our two new Hooters restaurants in Australia, which are both located in vibrant and growing markets. Construction has commenced in Townsville, and we expect to open that restaurant in the third quarter of 2013. Following that opening, we plan to begin construction on Surfers Paradise.
“We believe our strong increase in same-store sales is attributable to several factors, including restaurant remodeling, improvements to our menu and the growing excitement of the iconic Hooters brand. Hooters continues to be a destination stop for sports enthusiasts, and our new menu offerings attract more health-conscious patrons to our restaurants as well as women.
“Our Budapest restaurant has been a successful launch into the Eastern European market; we increased our seating space by over 50% with the opening of the new patio area, which has been extremely well-received by our customers. We are looking forward with great anticipation to our next Eastern European location, and to replicating the success of Hungary. We also continue to explore the Brazilian market, and we are seeking a location that will fit well with our successful business model.
“We are also pleased with our financial results this quarter. Despite a seasonally slow quarter, we produced strong improvements in restaurant sales growth, same-store sales growth and gross profits. We look forward to a successful year ahead as we continue to expand our footprint and launch our new Hooters restaurants,” Pruitt concluded.
For more information, visit www.chanticleerholdings.com
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