Sign In  |  Register  |  About Livermore  |  Contact Us

Livermore, CA
September 01, 2020 1:25pm
7-Day Forecast | Traffic
  • Search Hotels in Livermore

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Dutch Bros Inc. Reports Third Quarter 2023 Financial Results and Announces Two New Directors

Opened 39 New Systemwide Shops in Q3 2023

Record Revenue of $265 million, a 33% Increase Year-over-Year

Updates 2023 Guidance, Increases Range for Adjusted EBITDA

Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”), one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the third quarter ended September 30, 2023.

Joth Ricci, Chief Executive Officer of Dutch Bros, stated, “By all accounts, Q3 was a fantastic quarter, and we are extremely pleased with our unit openings, same shop sales, revenue, and profitability results. I am very proud of the team for their accomplishments, and I am encouraged by the strength of the underlying business as we execute on our plan. In Q3, we opened 39 shops systemwide and entered two new states: Alabama and Kentucky. Despite a difficult consumer backdrop, we drove a 4.0% increase in systemwide same shop sales and delivered 33% growth in our top-line revenue.”

Ricci continued, “Even as we demonstrate our commitment to profitable growth, it is vital that we continue investing in the business. Our focus will therefore remain on recruiting and retaining top talent and keeping our operations efficient and competitive long-term. This way, we can ensure that our people pipeline and systems stay strong while preserving and amplifying our culture.”

He concluded, “During Q3 in a span of less than 45 days, we executed two transactions, an upgrade of our credit facility and a follow-on equity offering, that unlocked a total of almost $500 million in incremental liquidity and positioned our balance sheet to support a long runway of growth. We intend to continue confidently pursuing high-quality investments in new shops on our path to 4,000.”

Director Appointments

The Company welcomed two new members of the Board of Directors, C. David Cone and Sean Sullivan, who were recently added to fill vacancies on the Board resulting from the resignations of Shelley Broader and Charles Esserman. Mr. Cone will serve on the Audit and Risk Committee.

Mr. Cone served as Chief Financial Officer and Executive Vice President at Taylor Morrison Home Corporation (NYSE: TMHC), a residential homebuilding business and land developer, from October 2012 to December 2021. Prior to that, he held various roles at PetSmart, Inc. from 2003 to 2012, while the company was publicly-listed, most recently as Vice President, Finance Planning and Analysis. Mr. Cone previously served on the board of directors for Urbi Desarrollos Urbanos SAB DE CV. He received a B.A. in Business Economics with an emphasis in Accounting from the University of California at Santa Barbara.

Mr. Sullivan has served as Executive Vice President, Chief Strategy and Legal Officer of The Duckhorn Portfolio, Inc. (NYSE: NAPA), a producer of luxury wines in North America, since February 2019. Prior to that, he served as an attorney at Gibson, Dunn & Crutcher LLP, a multinational law firm, from 2012 to 2019. Mr. Sullivan previously worked as an investment banker at Credit Suisse Group AG. He received a J.D. from Columbia Law School, and a B.A. in Economics and Politics from St. Mary’s College of California.

Third Quarter 2023 Highlights

  • Completed follow-on offering of approximately 13.3 million new shares at $26.00 per share, raising approximately $330.1 million net of offering costs and underwriting discounts and commissions.
  • Opened 39 new shops, bringing total shop count to 794 as of September 30, 2023, a 23.9% increase from September 30, 2022. Of these 39 new shops opened across 11 states, 37 were company-operated. All of these new shops continue to be led by existing or newly-promoted regional operators.
  • Total revenues grew 33.2% to $264.5 million as compared to $198.6 million in the same period of 2022.
  • System same shop sales1 increased 4.0%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to the same period in 2022. Company-operated same shop sales increased 2.8%, as compared to the same period of 2022.
  • Company-operated shop revenues increased 36.3% to $236.5 million, as compared to $173.5 million in the same period of 2022.
  • Company-operated shop gross profit was $57.0 million as compared to $34.7 million in the same period of 2022. In the third quarter of 2023, company-operated shop gross margin, which includes 180bps of pre-opening expenses improved to 24.1%, a year-over-year increase of 410bps.
  • Company-operated shop contribution2, a non-GAAP financial measure, grew 65.4% to $73.3 million as compared to $44.3 million in the same period of 2022. In the third quarter of 2023, company-operated shop contribution margin, which includes 180bps of pre-opening expense, improved to 31.0%, a year-over-year increase of 540 bps.
  • Selling, general, and administrative expenses were $50.5 million (19.1% of revenue) as compared to $45.4 million (22.9% of revenue) in the same period of 2022.
  • Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were $40.6 million (15.3% of revenue) as compared to $34.7 million (17.5% of revenue) in the same period of 2022.
  • Net income was $13.4 million as compared to $1.6 million in the same period of 2022.
  • Adjusted EBITDA2, a non-GAAP financial measure, grew 90.5% to $53.0 million as compared to $27.8 million in the same period of 2022.
  • Adjusted net income2, a non-GAAP financial measure, was $22.4 million as compared to $14.3 million in the same period of 2022.
  • Net income per share of Class A and Class D common stock - diluted was $0.07 as compared to $0.03 per share in the same period of 2022.
  • Adjusted net income per fully exchanged share of diluted common stock2, a non-GAAP financial measure, was $0.14 as compared to $0.09 in the same period of 2022.

Outlook

Dutch Bros is providing the following guidance for the year 2023:

  • Our expectation for total system shop openings in 2023 remains unchanged. We expect to open at least 150 new shops, of which at least 130 will be company-operated.
  • Our expectation for capital expenditures remains unchanged, which we expect to be in the range of $225 million to $250 million. This includes approximately $15 million to $20 million in spending in 2023 for a new roasting facility, which is projected to open in 2024.
  • Our estimate of system same shop sales growth in the low single digits remains unchanged.
  • Our expectation that revenue would be at the lower end of the range of $950 million to $1 billion remains unchanged.
  • Given the strength of company-operated shops and continued SG&A leverage, we now estimate Adjusted EBITDA3 will be between $150 million to $155 million, up $15 million from last quarter. This reflects stronger than expected year-to-date profitability in Q3, partially offset by the increased shop labor investments in the range of $1.5 million to $2.0 million as well as certain investments we intend to make in business building activities throughout the fourth quarter.

_________________

1

Same shop sales is defined in the section “Select Financial Metrics”.

2

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

3

We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer, Christine Barone, President, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time (ET) to discuss financial results for the third quarter ended September 30, 2023.

Event: Third Quarter 2023 Conference Call and Webcast

Date: Tuesday, November 7, 2023

Time: 5:00 p.m. ET

Dial In: 1-201-493-6779

Webcast: https://investors.dutchbros.com under “Events & Presentations”.

The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.

About Dutch Bros Inc.

Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. While espresso-based beverages are still at the core of what we do, Dutch Bros now offers a wide variety of unique, customizable cold and hot beverages that delight a broad array of customers. We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers and communities. This combination of hand-crafted and high-quality beverages, our unique drive-thru experience and our community-driven, people-first culture has allowed us to successfully open new shops and continue to share the “Dutch Luv” at 794 locations across 16 states as of September 30, 2023.

To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, Twitter, and TikTok, and download the Dutch Bros app to earn points and score rewards!

Dutch Bros, our Windmill logo, Dutch Bros. Blue Rebel, and our other registered and common law trade names, trademarks and service marks are the property of Dutch Bros Inc. All other trademarks, trade names and service marks appearing in this Earnings Release are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Earnings Release may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Forward-Looking Statements

In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros’ possible or assumed future results of operations, including the effect of increased incremental liquidity on cash runway, guidance for 2023, new shop openings, business strategies, and potential growth opportunities. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “should,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to general economic conditions, commodity inflation, increased labor costs, disruptions in our supply chain, ability to hire and retain employees, and other risks, including those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 27, 2023, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the period ended September 30, 2023. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.

DUTCH BROS INC.

Condensed Consolidated Statements of Operations

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in thousands, except per share amounts; unaudited)

 

2023

 

2022

 

2023

 

2022

REVENUES

 

 

 

 

 

 

 

 

Company-operated shops

 

$

236,472

 

 

$

173,501

 

 

$

630,588

 

 

$

464,200

 

Franchising and other

 

 

28,035

 

 

 

25,147

 

 

 

81,065

 

 

 

72,985

 

Total revenues

 

 

264,507

 

 

 

198,648

 

 

 

711,653

 

 

 

537,185

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

Cost of sales

 

 

189,323

 

 

 

148,092

 

 

 

519,482

 

 

 

410,629

 

Selling, general and administrative

 

 

50,490

 

 

 

45,378

 

 

 

148,128

 

 

 

132,934

 

Total costs and expenses

 

 

239,813

 

 

 

193,470

 

 

 

667,610

 

 

 

543,563

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

24,694

 

 

 

5,178

 

 

 

44,043

 

 

 

(6,378

)

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(9,325

)

 

 

(5,011

)

 

 

(26,269

)

 

 

(11,096

)

Other income (expense), net

 

 

(140

)

 

 

(1,944

)

 

 

2,206

 

 

 

(1,662

)

Total other expense

 

 

(9,465

)

 

 

(6,955

)

 

 

(24,063

)

 

 

(12,758

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

15,229

 

 

 

(1,777

)

 

 

19,980

 

 

 

(19,136

)

Income tax expense (benefit)

 

 

1,828

 

 

 

(3,371

)

 

 

6,259

 

 

 

(2,700

)

NET INCOME (LOSS)

 

$

13,401

 

 

$

1,594

 

 

$

13,721

 

 

$

(16,436

)

Less: Net income (loss) attributable to non-controlling interests

 

 

9,191

 

 

 

(169

)

 

 

10,601

 

 

 

(12,346

)

NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC.

 

$

4,210

 

 

$

1,763

 

 

$

3,120

 

 

$

(4,090

)

Net income (loss) per share of Class A and Class D common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

 

$

0.03

 

 

$

0.05

 

 

$

(0.08

)

Diluted

 

$

0.07

 

 

$

0.03

 

 

$

0.05

 

 

$

(0.08

)

Weighted-average shares of Class A and Class D common stock outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

59,366

 

 

 

53,118

 

 

 

57,598

 

 

 

50,719

 

Diluted

 

 

60,214

 

 

 

54,418

 

 

 

57,598

 

 

 

50,719

 

DUTCH BROS INC.

Segment Financials

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in thousands; unaudited)

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

236,472

 

 

$

173,501

 

 

$

630,588

 

 

$

464,200

 

Franchising and other

 

 

28,035

 

 

 

25,147

 

 

 

81,065

 

 

 

72,985

 

Total revenues

 

 

264,507

 

 

 

198,648

 

 

 

711,653

 

 

 

537,185

 

Cost of Sales:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

179,480

 

 

 

138,781

 

 

 

492,645

 

 

 

381,623

 

Franchising and other

 

 

9,843

 

 

 

9,311

 

 

 

26,837

 

 

 

29,006

 

Total cost of sales

 

 

189,323

 

 

 

148,092

 

 

 

519,482

 

 

 

410,629

 

Segment gross profit:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

56,992

 

 

 

34,720

 

 

 

137,943

 

 

 

82,577

 

Franchising and other

 

 

18,192

 

 

 

15,836

 

 

 

54,228

 

 

 

43,979

 

Total gross profit

 

 

75,184

 

 

 

50,556

 

 

 

192,171

 

 

 

126,556

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

16,332

 

 

 

9,624

 

 

 

44,132

 

 

 

25,071

 

Franchising and other

 

 

1,371

 

 

 

1,478

 

 

 

4,029

 

 

 

4,340

 

All other ¹

 

 

413

 

 

 

708

 

 

 

1,250

 

 

 

2,120

 

Total depreciation and amortization

 

 

18,116

 

 

 

11,810

 

 

 

49,411

 

 

 

31,531

 

Segment contribution:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

73,324

 

 

 

44,344

 

 

 

182,075

 

 

 

107,648

 

Franchising and other

 

 

19,563

 

 

 

17,314

 

 

 

58,257

 

 

 

48,319

 

Total segment contribution

 

 

92,887

 

 

 

61,658

 

 

 

240,332

 

 

 

155,967

 

Selling, general and administrative

 

 

(50,490

)

 

 

(45,378

)

 

 

(148,128

)

 

 

(132,934

)

Interest expense, net

 

 

(9,325

)

 

 

(5,011

)

 

 

(26,269

)

 

 

(11,096

)

Other income (expense), net

 

 

(140

)

 

 

(1,944

)

 

 

2,206

 

 

 

(1,662

)

Income (loss) before income taxes

 

$

15,229

 

 

$

(1,777

)

 

$

19,980

 

 

$

(19,136

)

1

Included in selling, general and administrative expenses and not part of segment contribution calculation.

DUTCH BROS INC.

Company-Operated Shop Results

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shops revenue

 

236,472

 

100.0

 

173,501

 

100.0

 

630,588

 

100.0

 

464,200

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, food and packaging costs

 

61,317

 

25.9

 

47,092

 

27.1

 

169,702

 

26.8

 

126,262

 

27.2

Labor costs

 

61,521

 

26.0

 

49,000

 

28.3

 

168,805

 

26.8

 

138,001

 

29.8

Occupancy and other costs

 

36,126

 

15.3

 

28,517

 

16.4

 

99,327

 

15.8

 

78,141

 

16.8

Pre-opening costs

 

4,184

 

1.8

 

4,548

 

2.6

 

10,679

 

1.7

 

14,148

 

3.0

Depreciation and amortization

 

16,332

 

6.9

 

9,624

 

5.6

 

44,132

 

7.0

 

25,071

 

5.4

Company-operated shop costs and expenses

 

179,480

 

75.9

 

138,781

 

80.0

 

492,645

 

78.1

 

381,623

 

82.2

Company-operated shops gross profit

 

56,992

 

24.1

 

34,720

 

20.0

 

137,943

 

21.9

 

82,577

 

17.8

Company-operated shops contribution 1

 

73,324

 

31.0

 

44,344

 

25.6

 

182,075

 

28.9

 

107,648

 

23.2

_________________

1

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

DUTCH BROS INC.

Summary Cash Flows Data

 

 

Nine Months Ended

September 30,

(in thousands; unaudited)

 

2023

 

2022

Net cash provided by operating activities

 

$

94,906

 

 

$

42,768

 

Net cash used in investing activities

 

 

(167,461

)

 

 

(139,411

)

Net cash provided by financing activities

 

 

202,163

 

 

 

112,704

 

Net increase in cash and cash equivalents

 

$

129,608

 

 

$

16,061

 

Cash and cash equivalents at beginning of period

 

 

20,178

 

 

 

18,506

 

Cash and cash equivalents at end of period

 

$

149,786

 

 

$

34,567

 

DUTCH BROS INC.

Condensed Consolidated Balance Sheets

(in thousands; unaudited)

 

September 30,

2023

 

December 31,

2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

149,786

 

 

$

20,178

 

Accounts receivable, net

 

 

9,136

 

 

 

11,966

 

Inventories, net

 

 

50,296

 

 

 

39,229

 

Prepaid expenses and other current assets

 

 

12,188

 

 

 

10,949

 

Total current assets

 

 

221,406

 

 

 

82,322

 

Property and equipment, net

 

 

498,705

 

 

 

365,468

 

Finance lease right-of-use assets, net

 

 

364,757

 

 

 

247,943

 

Operating lease right-of-use assets, net

 

 

190,864

 

 

 

169,302

 

Intangibles, net

 

 

6,215

 

 

 

8,804

 

Goodwill

 

 

21,629

 

 

 

21,629

 

Deferred income tax assets, net

 

 

330,278

 

 

 

288,765

 

Other long-term assets

 

 

5,176

 

 

 

2,127

 

Total assets

 

$

1,639,030

 

 

$

1,186,360

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

27,703

 

 

$

21,270

 

Accrued liabilities

 

 

40,309

 

 

 

27,452

 

Other current liabilities

 

 

7,621

 

 

 

7,860

 

Deferred revenue

 

 

22,414

 

 

 

25,335

 

Line of credit

 

 

 

 

 

110,865

 

Current portion of finance lease liabilities

 

 

9,574

 

 

 

7,971

 

Current portion of operating lease liabilities

 

 

9,326

 

 

 

9,317

 

Current portion of long-term debt

 

 

3,864

 

 

 

2,609

 

Total current liabilities

 

 

120,811

 

 

 

212,679

 

Deferred revenue, net of current portion

 

 

5,524

 

 

 

6,119

 

Tax receivable agreements liability, net of current portion

 

 

219,183

 

 

 

220,923

 

Finance lease liabilities, net of current portion

 

 

347,961

 

 

 

237,130

 

Operating lease liabilities, net of current portion

 

 

182,201

 

 

 

161,228

 

Long-term debt, net of current portion

 

 

92,704

 

 

 

96,297

 

Other long-term liabilities

 

 

8

 

 

 

8

 

Total liabilities

 

 

968,392

 

 

 

934,384

 

Equity:

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

Additional paid in capital

 

 

344,771

 

 

 

145,613

 

Accumulated other comprehensive income

 

 

1,093

 

 

 

813

 

Accumulated deficit

 

 

(14,190

)

 

 

(17,310

)

Total stockholders' equity attributable to Dutch Bros Inc.

 

 

331,676

 

 

 

129,118

 

Non-controlling interests

 

 

338,962

 

 

 

122,858

 

Total equity

 

 

670,638

 

 

 

251,976

 

Total liabilities and equity

 

$

1,639,030

 

 

$

1,186,360

 

DUTCH BROS INC.

Select Financial Metrics

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in thousands, except number of shops data; unaudited)

 

2023

 

2022

 

2023

 

2022

Shop count, beginning of period

 

 

 

 

 

 

 

 

Company-operated

 

 

473

 

 

 

336

 

 

 

396

 

 

 

271

 

Franchised

 

 

281

 

 

 

267

 

 

 

275

 

 

 

267

 

 

 

 

754

 

 

 

603

 

 

 

671

 

 

 

538

 

Company-operated new openings

 

 

37

 

 

 

34

 

 

 

114

 

 

 

94

 

Franchised new openings

 

 

2

 

 

 

4

 

 

 

8

 

 

 

9

 

Acquisition of franchise shops

 

 

 

 

 

 

 

 

 

 

 

5

 

Re-openings 7

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Shop count, end of period

 

 

 

 

 

 

 

 

Company-operated

 

 

510

 

 

 

370

 

 

 

510

 

 

 

370

 

Franchised

 

 

284

 

 

 

271

 

 

 

284

 

 

 

271

 

Total shop count

 

 

794

 

 

 

641

 

 

 

794

 

 

 

641

 

 

 

 

 

 

 

 

 

 

Systemwide AUV 1

 

 

N/A

 

 

 

N/A

 

 

$

1,950

 

 

$

1,917

 

Company-operated shops AUV 1

 

 

N/A

 

 

 

N/A

 

 

$

1,901

 

 

$

1,875

 

 

 

 

 

 

 

 

 

 

Systemwide same shop sales 2, 3

 

 

4.0

%

 

 

1.7

%

 

 

2.1

%

 

 

1.4

%

Company-operated same shop sales 2

 

 

2.8

%

 

 

1.0

%

 

 

0.5

%

 

 

1.1

%

 

 

 

 

 

 

 

 

 

Systemwide sales 3

 

$

391,286

 

 

$

312,961

 

 

$

1,069,284

 

 

$

864,929

 

Company-operated operating weeks 4

 

 

6,400

 

 

 

4,614

 

 

 

17,576

 

 

 

12,526

 

Franchising and other operating weeks 4

 

 

3,703

 

 

 

3,513

 

 

 

10,881

 

 

 

10,291

 

Dutch Rewards member registrations 5

 

 

583

 

 

 

566

 

 

 

1,650

 

 

 

1,551

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop revenues

 

236,472

 

100.0

 

173,501

 

100.0

 

630,588

 

100.0

 

464,200

 

100.0

Company-operated gross profit

 

56,992

 

24.1

 

34,720

 

20.0

 

137,943

 

21.9

 

82,577

 

17.8

Company-operated shop contribution 6

 

73,324

 

31.0

 

44,344

 

25.6

 

182,075

 

28.9

 

107,648

 

23.2

Selling, general, and administrative expenses

 

50,490

 

19.1

 

45,378

 

22.9

 

148,128

 

20.8

 

132,934

 

24.8

Adjusted selling, general, and administrative expenses 6

 

40,567

 

15.3

 

34,729

 

17.5

 

116,561

 

16.4

 

98,305

 

18.3

Net income (loss)

 

13,401

 

5.1

 

1,594

 

0.8

 

13,721

 

1.9

 

(16,436)

 

(3.1)

Adjusted EBITDA 6

 

53,008

 

20.0

 

27,830

 

14.0

 

125,487

 

17.6

 

61,431

 

11.4

___________

1

AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.

 

2

Same shop sales reflects the change in year-over-year sales for the comparable shop base, which we define as shops open for 15 complete months or longer. Management uses this metric as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

Systemwide shop base

 

572

 

452

 

503

 

414

Company-operated shop base

 

310

 

203

 

246

 

173

3

Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented. Franchise sales represent sales at all franchise shops and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

 

4

Company-operated and franchise shops operating weeks are calculated based on the number operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the end date of the periods presented. The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

 

5

Dutch Rewards is our digitally-based rewards program available exclusively through the Dutch Rewards app. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.

 

6

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

 

7

Re-opening of a shop that was temporarily closed in 2021.

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this release contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects where applicable. Income tax effects have been calculated based on the combined total non-GAAP adjustments using our total effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

Company-operated shop contribution (in dollars and as a percentage of revenue)

Definition and/or calculation

Company-operated segment gross profit, before company-operated shop depreciation and amortization. Company-operated shop contribution in dollars (as defined), taken as a percentage of company-operated shop revenue.

Usefulness to management and investors

This non-GAAP measure is used by our management in making performance decisions without the impact of non-cash depreciation and amortization charges. This is a standard metric used across the industry by our investors.

EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)

EBITDA — definition and/or calculation

Net income (loss) before interest expense (net of interest income), income tax expense (benefit), and depreciation and amortization expense.

Adjusted EBITDA — definition and/or calculation

Defined as EBITDA (as defined above), excluding equity-based compensation, COVID-19: “Thank You” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, and estimated expense related to certain legal disputes.

Usefulness to management and investors

These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.

Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)

Definition and/or calculation

Selling, general, and administrative expenses, excluding equity-based compensation expense, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executive transitions costs, and estimated expense related to certain legal disputes.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe the non-GAAP measure presented provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because it excludes items that may not be indicative of our ongoing operating performance.

Adjusted net income

Definition and/or calculation

Net income (loss), excluding equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, and income tax effects of items excluded from net income (loss).

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted fully exchanged weighted-average shares of diluted common stock outstanding

Definition and/or calculation

Weighted-average shares of Class A and Class D common stock outstanding - basic with addition of dilutive impacts of RSAs and RSUs, as well as the assumed exchange of the weighted-average shares of Class B and Class C common stock.

Usefulness to management and investors

This non-GAAP measure is used a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By adding in the assumed full exchange of all of our outstanding Class B and Class C common stock, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted net income per fully exchanged share of diluted common stock

Definition and/or calculation

Net income (loss) per share of Class A and Class D common stock - diluted, excluding per share impacts of equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, income tax effects of items excluded from net income (loss), and removal of per share impacts of controlling and non-controlling interests.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all of our outstanding Class B and Class C common stock and related net income (loss) adjustments, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Non-GAAP adjustments

Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above.

Equity-based compensation

Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros Inc. and/or Profit Interest Units in Dutch Bros OpCo1 to certain eligible employees.

COVID-19: “thank you” pay and catastrophic leave

Costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. The catastrophic leave program was retired in May 2023.

COVID-19: Prepaid costs not utilized

Costs related to the write-off of previously prepaid expenses for the development of a virtual corporate engagement platform built in response to the health restrictions of the COVID-19 pandemic. The platform was developed as a substitute for in person engagement practices used pre-pandemic. The platform has been determined ineffective, particularly as we shift back to in-person events with the easing of restrictions related to the COVID-19 pandemic.

Milestone events

Costs incurred for company-wide events to celebrate 30 years of serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE to our customers.

Executives transition costs

Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023.

TRAs remeasurements

(Gain) loss impacts on condensed consolidated statements of operations related to adjustments of our TRAs liabilities.

Legal proceedings

Estimated loss accrual related to certain legal disputes.

Dilutive effects of RSAs and RSUs

Addition of incremental shares of RSAs and RSUs calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares on a non-GAAP basis.

Assumed exchange of weighted-average Class B and Class C shares of common stock

Weighted-average shares of Class B and Class C common stock that are assumed to be exchanged for Class A common stock.

Removal of allocation for controlling and non-controlling interests

Removal of the net income (loss) allocation to controlling and non-controlling interests to align the numerator of the net income (loss) per share to the denominator, which assumes the full exchange of shares of Class B and Class C common stock.

___________

1

Dutch Bros OpCo refers to Dutch Mafia, LLC, a Delaware limited liability company, and a direct subsidiary of Dutch Bros Inc.

Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Following are the reconciliations of the most comparable GAAP financial measure to non-GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the reconciliations from U.S. GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Financial Measures" in this release for a detailed explanation of the adjustments made to the comparable U.S. GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop gross profit

 

56,992

 

24.1

 

34,720

 

20.0

 

137,943

 

21.9

 

82,577

 

17.8

Depreciation and amortization

 

16,332

 

6.9

 

9,624

 

5.6

 

44,132

 

7.0

 

25,071

 

5.4

Company-operated shop contribution

 

73,324

 

31.0

 

44,344

 

25.6

 

182,075

 

28.9

 

107,648

 

23.2

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Net income (loss)

 

13,401

 

5.1

 

1,594

 

 

0.8

 

 

13,721

 

 

1.9

 

 

(16,436

)

 

(3.1

)

Depreciation and amortization

 

18,116

 

6.8

 

11,810

 

 

5.9

 

 

49,411

 

 

6.9

 

 

31,531

 

 

5.9

 

Interest expense, net

 

9,325

 

3.5

 

5,011

 

 

2.5

 

 

26,269

 

 

3.7

 

 

11,096

 

 

2.1

 

Income tax expense (benefit)

 

1,828

 

0.7

 

(3,371

)

 

(1.7

)

 

6,259

 

 

0.9

 

 

(2,700

)

 

(0.5

)

EBITDA

 

42,670

 

16.1

 

15,044

 

 

7.6

 

 

95,660

 

 

13.4

 

 

23,491

 

 

4.4

 

Equity-based compensation

 

9,698

 

3.7

 

10,649

 

 

5.4

 

 

29,017

 

 

4.0

 

 

30,995

 

 

5.8

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

227

 

 

0.1

 

 

 

 

 

 

1,401

 

 

0.3

 

COVID-19: prepaid costs not utilized

 

 

 

 

 

 

 

 

 

 

 

1,200

 

 

0.2

 

Milestone events

 

 

 

 

 

 

 

 

 

 

 

2,434

 

 

0.5

 

Executives transition costs

 

225

 

0.1

 

 

 

 

 

600

 

 

0.1

 

 

 

 

 

TRAs remeasurements

 

415

 

0.1

 

1,910

 

 

1.0

 

 

(1,740

)

 

(0.2

)

 

1,910

 

 

0.4

 

Legal proceedings

 

 

 

 

 

 

 

1,950

 

 

0.3

 

 

 

 

 

Adjusted EBITDA

 

53,008

 

20.0

 

27,830

 

 

14.0

 

 

125,487

 

 

17.6

 

 

61,431

 

 

11.4

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Selling, general, and administrative 1

 

50,490

 

 

19.1

 

 

45,378

 

 

22.9

 

 

148,128

 

 

20.8

 

 

132,934

 

 

24.8

 

Equity-based compensation

 

(9,698

)

 

(3.7

)

 

(10,649

)

 

(5.4

)

 

(29,017

)

 

(4.0

)

 

(30,995

)

 

(5.8

)

COVID-19: prepaid costs not utilized

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,200

)

 

(0.2

)

Milestone events

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,434

)

 

(0.5

)

Executives transition costs

 

(225

)

 

(0.1

)

 

 

 

 

 

(600

)

 

(0.1

)

 

 

 

 

Legal proceedings

 

 

 

 

 

 

 

 

 

(1,950

)

 

(0.3

)

 

 

 

 

Adjusted selling, general, and administrative

 

40,567

 

 

15.3

 

 

34,729

 

 

17.5

 

 

116,561

 

 

16.4

 

 

98,305

 

 

18.3

 

_________________

1

Selling, general, and administrative expenses include depreciation and amortization.

 

 

Three Months Ended September 30,

(in thousands; unaudited)

 

2023

 

2022

Net income

 

$

13,401

 

 

$

1,594

 

Equity-based compensation

 

 

9,698

 

 

 

10,649

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

 

227

 

Executives transition costs

 

 

225

 

 

 

 

TRAs remeasurements

 

 

415

 

 

 

1,910

 

Income tax effects

 

 

(1,327

)

 

 

(115

)

Adjusted net income

 

$

22,412

 

 

$

14,265

 

 

 

Three Months Ended September 30,

(in thousands, except per share amounts; unaudited)

 

2023

 

2022

Weighted-average shares of Class A and Class D common stock outstanding - basic

 

 

59,366

 

 

 

53,118

 

Dilutive effects of RSAs

 

 

848

 

 

 

1,300

 

Weighted-average shares of Class A and Class D common stock outstanding - diluted

 

 

60,214

 

 

 

54,418

 

Assumed exchange of weighted-average Class B and Class C shares of common stock

 

 

105,756

 

 

 

107,920

 

Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted

 

 

165,970

 

 

 

162,338

 

 

 

 

 

 

Net income per share of Class A and Class D common stock - diluted

 

$

0.07

 

 

$

0.03

 

Controlling and non-controlling interest adjustments

 

 

0.02

 

 

 

(0.02

)

Equity-based compensation

 

 

0.06

 

 

 

0.07

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

 

 

Executives transition costs

 

 

 

 

 

 

TRAs remeasurements

 

 

 

 

 

0.01

 

Income tax effects

 

 

(0.01

)

 

 

 

Adjusted net income per fully exchanged share of diluted common stock

 

$

0.14

 

 

$

0.09

 

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 Livermore.com & California Media Partners, LLC. All rights reserved.