MINNEAPOLIS, May 13, 2020 (GLOBE NEWSWIRE) — BBQ Holdings, Inc. (NASDAQ: BBQ) (the “Company”), an innovating global owner and operator of restaurants, today reported financial results for the first fiscal quarter ended March 29, 2020. Note: The First Quarter results were affected by the COVID-19 pandemic as well as federal and state level mandates requiring stores to convert to To-go only business.
First Quarter 2020 Highlights:Company-owned Famous Dave’s same store net sales decreased 6.8%.Prior to the closure of our dining rooms mid-March same store net sales increased 3.0%.Franchise-operated same store net sales decreased 13.1%.Prior to the closure of dining rooms, Famous Dave’s franchise-operated same store net sales decreased $2.0%.Same store To-go sales increased 8.4% at Company-owned Famous Dave’s restaurants.Closed the Granite City Food & Brewery acquisition on March 9, 2020.Net Income of $13.7 million, driven by a one-time gain on the bargain purchase acquisition of Granite City restaurants.Adjusted EBITDA, a non-GAAP measure was ($457,000).Executive CommentsJeff Crivello, CEO, commented, “During the first two periods of the quarter, we made big improvements to restaurant-level labor and food costs. During the third period, we acquired 18 Granite City Food & Brewery restaurants, and shortly thereafter, were forced to comply with government mandated closures of all dining rooms. As a result of the dining room closures, we made the heart-wrenching decision to furlough roughly 85% of our workforce and shift our focus to cash management and executing to-go only. I couldn’t be prouder of the way the team came together and worked tirelessly to adapt. We leveraged our deep off- premise knowledge pool and found new solutions for delivering great food to the communities we love. “We appreciate the landlords and vendors who have been flexible and compassionate as we all navigate these new waters. Most of all, I appreciate our team members who continue to come to work in the restaurants each day. I am anxious to recall our furloughed employees as stores begin to open for full dine-in service across the U.S. Sanitation has always been our top priority, and we have further evolved our protocols as dining rooms reopen. We are hopeful that many of the lessons learned will be a positive factor for all our brands as we move forward.“Throughout April we continued to improve our off-premise-only business model in all brands, and find all potential sources of revenue and efficiencies.”
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First Quarter 2020 Review
Total revenue for the first quarter of 2020 was $23.5 million, up 65.4% from the first quarter of 2019. The increase in year-over-year restaurant net sales for the quarter ended March 29, 2020 was driven primarily by the addition of 13 Company-owned Famous Dave’s restaurants, 18 Granite City restaurants and a Clark Crew BBQ and Real Urban Barbecue restaurant. On a weighted basis, Company-owned Famous Dave’s same store net sales for our To-Go and Catering lines of business increased 8.4% and 0.1%, respectively, in the first quarter of fiscal 2020 as compared to the prior year period, offset by a decrease in of 18.4% in net Dine-In sales due to the closure of in-store dining in response to the COVID-19 pandemic. Restaurant-level operating margin, as a percentage of restaurant net sales, for Company-owned restaurants was (2.0)% in the first quarter of fiscal 2020 compared to (1.7)% in the first quarter of fiscal 2019. This decline in restaurant-level operating margin was primarily a result of acquisitions of new stores and the decline in same store sales in the first quarter of 2020.General and administrative expenses for the quarter ended March 29, 2020 and March 31, 2019 represented approximately 12.9% and 17.7% of total revenues, respectively. While as a percentage of revenues general and administrative expenses decreased year over year, we incurred additional expenditures for acquisition costs and ongoing oversite of our new restaurants.Net income attributable to shareholders was approximately $13.7 million, or $1.50 per share, in the first quarter of fiscal 2020 compared to $82,000, or $0.01 per share, in the first quarter of fiscal 2019. Adjusted net loss attributable to shareholders, a non-GAAP measure, was approximately $838,000, or $0.09 per share, compared to adjusted net income attributable to shareholders of approximately $620,000, or $0.07 per share, in the first quarter of fiscal 2019. A reconciliation between adjusted net income attributable to shareholders and its most directly comparable GAAP measure is included in the accompanying financial tables.About BBQ HoldingsBBQ Holdings, Inc. (NASDAQ: BBQ) BBQ Holdings is a national restaurant company engaged in the ownership and operation of casual and fast dining restaurants. As of May 13, 2020, BBQ Holdings had four brands with 145 overall locations in 33 states and three countries, including 50 company-owned and 95 franchise-operated restaurants. 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. BBQ Holdings, through partnerships, has extended Travis Clark’s award-winning line of barbecue sauces, rubs and seasonings into the retail market. Along with a wide variety of BBQ favorites served at their BBQ restaurants, BBQ Holdings newest addition, Granite City Food and Brewery, offers award winning craft beer and a made-from-scratch, chef driven menu featuring contemporary American cuisine. Non-GAAP Financial MeasuresTo supplement its 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.Adjusted net income attributable to shareholders is net income attributable to shareholders, plus asset impairment, estimated lease termination charges and other closing costs, settlement agreements, net (loss) gain on disposal of equipment, stock-based compensation, severance, acquisition costs, and the related tax impact. This number is divided by the weighted-average number of diluted shares of common stock outstanding during each period presented to arrive at adjusted net income, per share. Adjusted EBITDA is net income (loss), plus asset impairment, estimated lease termination charges and other closing costs, settlement agreements, depreciation and amortization, interest expense, net, net (loss) gain on disposal of equipment, stock-based compensation, severance, acquisition costs and provision (benefit) for income taxes.Forward-Looking StatementsStatements 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.
BBQ HOLDINGS, INC. AND SUBSIDIARIES
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