Dutch Bros Inc. Reports Fourth Quarter 2023 Financial Results
Achieves
Releases 2024 Guidance
She continued, “We are optimistic for our next phase of growth. In January, we announced three additions to our leadership team:
She added, “Our leadership team embarked on a project last year to outline how our corporate team can best support our shops as we scale and grow. We recognize the importance of continuing to attract top-notch talent, and we believe adding a significant presence in the
She concluded, “It is incredible that a single coffee cart in
Fourth Quarter 2023 Highlights
- Opened 37 new shops, 32 of which were company-operated, across 10 states.
-
Total revenues grew 25.9% to
$254.1 million as compared to$201.8 million in the same period of 2022. - System same shop sales1 increased 5.0%, 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 4.6%, as compared to the same period of 2022.
-
Company-operated shop revenues increased 29.5% to
$227.4 million , as compared to$175.5 million in the same period of 2022. -
Company-operated shop gross profit was
$42.3 million as compared to$38.8 million in the same period of 2022. In the fourth quarter of 2023, company-operated shop gross margin, which includes 150bps of pre-opening costs, was 18.6%, a year-over-year decrease of 350bps. -
Company-operated shop contribution2, a non-GAAP financial measure, grew 20.5% to
$60.2 million as compared to$50.0 million in the same period of 2022. In the fourth quarter of 2023, company-operated shop contribution margin, which includes 150bps of pre-opening costs, was 26.5%, a year-over-year decrease of 200 bps. -
Selling, general, and administrative expenses were
$56.9 million (22.4% of revenue) as compared to$50.6 million (25.1% of revenue) in the same period of 2022. -
Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were
$44.2 million (17.4% of revenue) as compared to$38.1 million (18.9% of revenue) in the same period of 2022. -
Net loss was
$3.8 million as compared to$2.8 million in the same period of 2022. -
Adjusted EBITD
A2, a non-GAAP financial measure, grew 16.2% to
$34.6 million as compared to$29.8 million in the same period of 2022. -
Adjusted net income2, a non-GAAP financial measure, was
$7.4 million as compared to$4.8 million in the same period of 2022. -
Net loss per share of Class A and Class D common stock - diluted was
$0.02 as compared to$0.01 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
$0.04 as compared to$0.03 in the same period of 2022.
Full Year 2023 Highlights:
- Opened 159 new shops, 146 of which were company-operated, across 13 states.
-
Total revenues grew 30.7% to
$965.8 million as compared to$739.0 million in 2022. - System same shop sales1 grew 2.8%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to 2022. Company-operated same shop sales grew 1.5%, as compared to 2022.
-
Company-operated shop revenues increased 34.1% to
$857.9 million , as compared to$639.7 million in 2022. -
Company-operated shop gross profit was
$180.2 million as compared to$121.3 million in 2022. In 2023, company-operated shop gross margin, which includes 160bps of pre-opening costs, improved to 21.0%, a year-over-year increase of 200 bps. -
Company-operated shop contribution2, a non-GAAP financial measure, grew 53.7% to
$242.3 million as compared to$157.6 million in 2022. In 2023, company-operated shop contribution margin, which includes 160bps of pre-opening costs, improved to 28.2%, a year-over-year increase of 360 bps. -
Selling, general, and administrative expenses were
$205.1 million (21.2% of revenue) as compared to$183.5 million (24.8% of revenue) in 2022. -
Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were
$160.7 million (16.6% of revenue) as compared to$136.4 million 4 (18.5% of revenue) in 2022. -
Net income (loss) was
$10.0 million as compared to$(19.3) million in 2022. -
Adjusted EBITDA2,a non-GAAP financial measure, increased 75.5% to
$160.1 million as compared to$91.2 million in 2022. -
Adjusted net income2, a non-GAAP financial measure, was
$50.2 million as compared to$25.2 million in 2022. -
Net income (loss) per share of Class A and Class D common stock - diluted was
$0.03 as compared to$(0.09) in 2022. -
Adjusted net income per fully exchanged share of common stock2, a non-GAAP financial measure, was
$0.30 as compared to$0.16 in 2022.
Arizona Support Center Expansion
-
As part of this move, the Company estimates approximately 40% of support center staff will be located in
Arizona byJanuary 1, 2025 . Many of these positions will focus on driving the strategic direction of the Company and assisting day-to-day operations in the field. -
The Company expects to maintain a significant presence in
Southern Oregon , where its roasting, accounting and select other support functions will continue to be based. -
The Company anticipates this initiative will incur approximately
$24 million to$31 million in costs, plus approximately$6 million to$10 million in capital expenditures related to theArizona office expansion.
Outlook
- Total system shop openings in 2024 are expected to be in the range of 150 to 165.
-
Total revenues are projected to be between
$1.190 billion and$1.205 billion . - Same shop sales growth is estimated to be in the low single digits.
-
Adjusted EBITDA
3 is estimated to be between
$185 million to$195 million and Adjusted SG&A3 is estimated to be between$183 million and$189 million . The expected costs related to our announced support center expansion inArizona will be excluded from Adjusted EBITDA and Adjusted SG&A. Stock based compensation, which is also excluded from Adjusted EBITDA and Adjusted SG&A, is estimated to be in the range of$12 million to$17 million . -
Capital Expenditures are estimated to be between
$280 million to$320 million , primarily related to new shop construction. This estimate includes approximately$10 million in incremental spend related to our roasting facility, which we expect to open in the middle of 2024, and$6 million to$10 million in capital expenditures related to theArizona office expansion.
____________________
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 or Adjusted SG&A 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
Event: Fourth Quarter 2023 Conference Call and Webcast
Date:
Time:
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
To learn more about
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 and expectations regarding Dutch Bros’ leadership transitions, estimated costs associated with Dutch Bros’
Consolidated Statements of Operations |
||||||||||||||||
|
|
Three Months Ended D ecember 31, |
|
Year Ended D ecember 31, |
||||||||||||
(in thousands, except per share amounts; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUES |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
$ |
227,351 |
|
|
$ |
175,510 |
|
|
$ |
857,939 |
|
|
$ |
639,710 |
|
Franchising and other |
|
|
26,772 |
|
|
|
26,317 |
|
|
|
107,837 |
|
|
|
99,302 |
|
Total revenues |
|
|
254,123 |
|
|
|
201,827 |
|
|
|
965,776 |
|
|
|
739,012 |
|
|
|
|
|
|
|
|
|
|
||||||||
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
|
194,998 |
|
|
|
147,467 |
|
|
|
714,480 |
|
|
|
558,096 |
|
Selling, general and administrative |
|
|
56,946 |
|
|
|
50,594 |
|
|
|
205,074 |
|
|
|
183,528 |
|
Total costs and expenses |
|
|
251,944 |
|
|
|
198,061 |
|
|
|
919,554 |
|
|
|
741,624 |
|
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM OPERATIONS |
|
|
2,179 |
|
|
|
3,766 |
|
|
|
46,222 |
|
|
|
(2,612 |
) |
|
|
|
|
|
|
|
|
|
||||||||
OTHER EXPENSE |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(6,052 |
) |
|
|
(6,922 |
) |
|
|
(32,321 |
) |
|
|
(18,018 |
) |
Other income |
|
|
812 |
|
|
|
5,638 |
|
|
|
3,018 |
|
|
|
3,976 |
|
Total other expense |
|
|
(5,240 |
) |
|
|
(1,284 |
) |
|
|
(29,303 |
) |
|
|
(14,042 |
) |
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
(3,061 |
) |
|
|
2,482 |
|
|
|
16,919 |
|
|
|
(16,654 |
) |
Income tax expense |
|
|
708 |
|
|
|
5,299 |
|
|
|
6,967 |
|
|
|
2,599 |
|
NET INCOME (LOSS) |
|
$ |
(3,769 |
) |
|
$ |
(2,817 |
) |
|
$ |
9,952 |
|
|
$ |
(19,253 |
) |
Less: Net income (loss) attributable to non-controlling interests |
|
|
(2,367 |
) |
|
|
(2,154 |
) |
|
|
8,234 |
|
|
|
(14,500 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC. |
|
$ |
(1,402 |
) |
|
$ |
(663 |
) |
|
$ |
1,718 |
|
|
$ |
(4,753 |
) |
Net income (loss) per share of Class A and Class D common stock: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
Diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
Weighted-average shares of Class A and Class D common stock outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
75,356 |
|
|
|
55,286 |
|
|
|
62,074 |
|
|
|
51,871 |
|
Diluted |
|
|
75,356 |
|
|
|
55,286 |
|
|
|
62,074 |
|
|
|
51,871 |
|
Segment Financials |
||||||||||||||||
|
|
Three Months Ended D ecember 31, |
|
Year Ended D ecember 31, |
||||||||||||
(in thousands; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
$ |
227,351 |
|
|
$ |
175,510 |
|
|
$ |
857,939 |
|
|
$ |
639,710 |
|
Franchising and other |
|
|
26,772 |
|
|
|
26,317 |
|
|
|
107,837 |
|
|
|
99,302 |
|
Total revenues |
|
|
254,123 |
|
|
|
201,827 |
|
|
|
965,776 |
|
|
|
739,012 |
|
Cost of Sales: |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
|
185,059 |
|
|
|
136,760 |
|
|
|
677,704 |
|
|
|
518,383 |
|
Franchising and other |
|
|
9,939 |
|
|
|
10,707 |
|
|
|
36,776 |
|
|
|
39,713 |
|
Total cost of sales |
|
|
194,998 |
|
|
|
147,467 |
|
|
|
714,480 |
|
|
|
558,096 |
|
Segment gross profit: |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
|
42,292 |
|
|
|
38,750 |
|
|
|
180,235 |
|
|
|
121,327 |
|
Franchising and other |
|
|
16,833 |
|
|
|
15,610 |
|
|
|
71,061 |
|
|
|
59,589 |
|
Total gross profit |
|
|
59,125 |
|
|
|
54,360 |
|
|
|
251,296 |
|
|
|
180,916 |
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
|
17,956 |
|
|
|
11,235 |
|
|
|
62,088 |
|
|
|
36,306 |
|
Franchising and other |
|
|
1,369 |
|
|
|
1,366 |
|
|
|
5,398 |
|
|
|
5,706 |
|
All other 1 |
|
|
399 |
|
|
|
596 |
|
|
|
1,649 |
|
|
|
2,716 |
|
Total depreciation and amortization |
|
|
19,724 |
|
|
|
13,197 |
|
|
|
69,135 |
|
|
|
44,728 |
|
Segment contribution: |
|
|
|
|
|
|
|
|
||||||||
Company-operated shops |
|
|
60,248 |
|
|
|
49,985 |
|
|
|
242,323 |
|
|
|
157,633 |
|
Franchising and other |
|
|
18,202 |
|
|
|
16,976 |
|
|
|
76,459 |
|
|
|
65,295 |
|
Total segment contribution |
|
|
78,450 |
|
|
|
66,961 |
|
|
|
318,782 |
|
|
|
222,928 |
|
Selling, general and administrative |
|
|
(56,946 |
) |
|
|
(50,594 |
) |
|
|
(205,074 |
) |
|
|
(183,528 |
) |
Interest expense, net |
|
|
(6,052 |
) |
|
|
(6,922 |
) |
|
|
(32,321 |
) |
|
|
(18,018 |
) |
Other income |
|
|
812 |
|
|
|
5,638 |
|
|
|
3,018 |
|
|
|
3,976 |
|
Income (loss) before income taxes |
|
$ |
(3,061 |
) |
|
$ |
2,482 |
|
|
$ |
16,919 |
|
|
$ |
(16,654 |
) |
1 |
|
Included in selling, general and administrative expenses and not part of segment contribution calculation. |
Company-Operated Shop Results |
||||||||||||||||||||||||
|
|
Three Months Ended D ecember 31, |
|
Year Ended D ecember 31, |
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
||||||||
Company-operated shops revenue |
|
227,351 |
|
100.0 |
|
175,510 |
|
100.0 |
|
857,939 |
|
100.0 |
|
639,710 |
|
100.0 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beverage, food and packaging costs |
|
60,431 |
|
|
26.6 |
|
|
45,602 |
|
|
26.0 |
|
|
230,133 |
|
|
26.9 |
|
|
171,864 |
|
|
26.9 |
|
Labor costs |
|
61,700 |
|
|
27.1 |
|
|
44,860 |
|
|
25.5 |
|
|
230,505 |
|
|
26.9 |
|
|
182,861 |
|
|
28.6 |
|
Occupancy and other costs |
|
41,568 |
|
|
18.3 |
|
|
31,225 |
|
|
17.8 |
|
|
140,895 |
|
|
16.4 |
|
|
109,366 |
|
|
17.1 |
|
Pre-opening costs |
|
3,404 |
|
|
1.5 |
|
|
3,838 |
|
|
2.2 |
|
|
14,083 |
|
|
1.6 |
|
|
17,986 |
|
|
2.8 |
|
Depreciation and amortization |
|
17,956 |
|
|
7.9 |
|
|
11,235 |
|
|
6.4 |
|
|
62,088 |
|
|
7.2 |
|
|
36,306 |
|
|
5.6 |
|
Company-operated shop costs and expenses |
|
185,059 |
|
|
81.4 |
|
|
136,760 |
|
|
77.9 |
|
|
677,704 |
|
|
79.0 |
|
|
518,383 |
|
|
81.0 |
|
Company-operated shops gross profit |
|
42,292 |
|
|
18.6 |
|
|
38,750 |
|
|
22.1 |
|
|
180,235 |
|
|
21.0 |
|
|
121,327 |
|
|
19.0 |
|
Company-operated shops contribution 1 |
|
60,248 |
|
|
26.5 |
|
|
49,985 |
|
|
28.5 |
|
|
242,323 |
|
|
28.2 |
|
|
157,633 |
|
|
24.6 |
|
1 |
|
Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”. |
Summary Cash Flows Data |
||||||||
|
|
Year Ended D ecember 31, |
||||||
(in thousands; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
139,915 |
|
|
$ |
59,883 |
|
Net cash used in investing activities |
|
|
(227,280 |
) |
|
|
(192,572 |
) |
Net cash provided by financing activities |
|
|
200,732 |
|
|
|
134,361 |
|
Net increase in cash and cash equivalents |
|
$ |
113,367 |
|
|
$ |
1,672 |
|
Cash and cash equivalents at beginning of period |
|
|
20,178 |
|
|
|
18,506 |
|
Cash and cash equivalents at end of period |
|
$ |
133,545 |
|
|
$ |
20,178 |
|
Consolidated Balance Sheets |
||||||||
(in thousands; unaudited) |
|
2 023 |
|
2 022 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
133,545 |
|
|
$ |
20,178 |
|
Accounts receivable, net |
|
|
9,124 |
|
|
|
11,966 |
|
Inventories, net |
|
|
46,953 |
|
|
|
39,229 |
|
Prepaid expenses and other current assets |
|
|
15,637 |
|
|
|
10,949 |
|
Total current assets |
|
|
205,259 |
|
|
|
82,322 |
|
Property and equipment, net |
|
|
542,440 |
|
|
|
365,468 |
|
Finance lease right-of-use assets, net |
|
|
382,734 |
|
|
|
247,943 |
|
Operating lease right-of-use assets, net |
|
|
199,673 |
|
|
|
169,302 |
|
Intangibles, net |
|
|
5,415 |
|
|
|
8,804 |
|
|
|
|
21,629 |
|
|
|
21,629 |
|
Deferred income tax assets, net |
|
|
402,995 |
|
|
|
288,765 |
|
Other long-term assets |
|
|
3,865 |
|
|
|
2,127 |
|
Total assets |
|
$ |
1,764,010 |
|
|
$ |
1,186,360 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
29,957 |
|
|
$ |
21,270 |
|
Accrued compensation and benefits |
|
|
31,405 |
|
|
|
19,706 |
|
Other accrued liabilities |
|
|
15,770 |
|
|
|
9,667 |
|
Other current liabilities |
|
|
6,423 |
|
|
|
5,939 |
|
Deferred revenue |
|
|
30,349 |
|
|
|
25,335 |
|
Line of credit |
|
|
— |
|
|
|
110,865 |
|
Current portion of finance lease liabilities |
|
|
9,482 |
|
|
|
7,971 |
|
Current portion of operating lease liabilities |
|
|
10,239 |
|
|
|
9,317 |
|
Current portion of long-term debt |
|
|
4,491 |
|
|
|
2,609 |
|
Total current liabilities |
|
|
138,116 |
|
|
|
212,679 |
|
Deferred revenue, net of current portion |
|
|
6,676 |
|
|
|
6,119 |
|
Finance lease liabilities, net of current portion |
|
|
367,775 |
|
|
|
237,130 |
|
Operating lease liabilities, net of current portion |
|
|
191,419 |
|
|
|
161,228 |
|
Long-term debt, net of current portion |
|
|
93,175 |
|
|
|
96,297 |
|
Tax receivable agreements liability |
|
|
290,920 |
|
|
|
220,923 |
|
Other long-term liabilities |
|
|
8 |
|
|
|
8 |
|
Total liabilities |
|
|
1,088,089 |
|
|
|
934,384 |
|
Equity: |
|
|
|
|
||||
Common stock |
|
|
2 |
|
|
|
2 |
|
Additional paid in capital |
|
|
379,391 |
|
|
|
145,613 |
|
Accumulated other comprehensive income |
|
|
544 |
|
|
|
813 |
|
Accumulated deficit |
|
|
(15,592 |
) |
|
|
(17,310 |
) |
Total stockholders' equity attributable to |
|
|
364,345 |
|
|
|
129,118 |
|
Non-controlling interests |
|
|
311,576 |
|
|
|
122,858 |
|
Total equity |
|
|
675,921 |
|
|
|
251,976 |
|
Total liabilities and equity |
|
$ |
1,764,010 |
|
|
$ |
1,186,360 |
|
Select Financial Metrics |
||||||||||||||||
|
|
Three Months Ended D ecember 31, |
|
Year Ended D ecember 31, |
||||||||||||
(in thousands, except number of shops data; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Shop count, beginning of period |
|
|
|
|
|
|
|
|
||||||||
Company-operated |
|
|
510 |
|
|
|
370 |
|
|
|
396 |
|
|
|
271 |
|
Franchised |
|
|
284 |
|
|
|
271 |
|
|
|
275 |
|
|
|
267 |
|
|
|
|
794 |
|
|
|
641 |
|
|
|
671 |
|
|
|
538 |
|
Company-operated new openings |
|
|
32 |
|
|
|
26 |
|
|
|
146 |
|
|
|
120 |
|
Franchised new openings |
|
|
5 |
|
|
|
4 |
|
|
|
13 |
|
|
|
13 |
|
Acquisition of franchise shops |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
Re-openings 1 |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Shop count, end of period |
|
|
|
|
|
|
|
|
||||||||
Company-operated |
|
|
542 |
|
|
|
396 |
|
|
|
542 |
|
|
|
396 |
|
Franchised |
|
|
289 |
|
|
|
275 |
|
|
|
289 |
|
|
|
275 |
|
Total shop count |
|
|
831 |
|
|
|
671 |
|
|
|
831 |
|
|
|
671 |
|
|
|
|
|
|
|
|
|
|
||||||||
Systemwide AUV 2 |
|
|
N/A |
|
|
|
N/A |
|
|
$ |
1,973 |
|
|
$ |
1,924 |
|
Company-operated shops AUV 2 |
|
|
N/A |
|
|
|
N/A |
|
|
$ |
1,902 |
|
|
$ |
1,895 |
|
|
|
|
|
|
|
|
|
|
||||||||
Systemwide same shop sales 3, 4 |
|
|
5.0 |
% |
|
|
(0.6 |
)% |
|
|
2.8 |
% |
|
|
1.0 |
% |
Company-operated same shop sales 3 |
|
|
4.6 |
% |
|
|
(2.1 |
)% |
|
|
1.5 |
% |
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Systemwide sales 4 |
|
$ |
375,149 |
|
|
$ |
298,253 |
|
|
$ |
1,444,433 |
|
|
$ |
1,163,182 |
|
Company-operated operating weeks 5 |
|
|
6,819 |
|
|
|
4,963 |
|
|
|
24,395 |
|
|
|
17,489 |
|
Franchising and other operating weeks 5 |
|
|
3,743 |
|
|
|
3,536 |
|
|
|
14,624 |
|
|
|
13,828 |
|
Dutch Rewards member registrations 6 |
|
|
602 |
|
|
|
453 |
|
|
|
2,252 |
|
|
|
2,004 |
|
|
|
Three Months Ended D ecember 31, |
|
Year Ended D ecember 31, |
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
||||||||
Company-operated shop revenues |
|
227,351 |
|
100.0 |
|
175,510 |
|
100.0 |
|
857,939 |
|
100.0 |
|
639,710 |
|
100.0 |
||||||||
Company-operated gross profit |
|
42,292 |
|
|
18.6 |
|
|
38,750 |
|
|
22.1 |
|
|
180,235 |
|
|
21.0 |
|
|
121,327 |
|
|
19.0 |
|
Company-operated shop contribution 7 |
|
60,248 |
|
|
26.5 |
|
|
49,985 |
|
|
28.5 |
|
|
242,323 |
|
|
28.2 |
|
|
157,633 |
|
|
24.6 |
|
Selling, general, and administrative expenses |
|
56,946 |
|
|
22.4 |
|
|
50,594 |
|
|
25.1 |
|
|
205,074 |
|
|
21.2 |
|
|
183,528 |
|
|
24.8 |
|
Adjusted selling, general, and administrative expenses 7 |
|
44,188 |
|
|
17.4 |
|
|
38,136 |
|
|
18.9 |
|
|
160,749 |
|
|
16.6 |
|
|
136,441 |
|
|
18.5 |
|
Net income (loss) |
|
(3,769 |
) |
|
(1.5 |
) |
|
(2,817 |
) |
|
(1.4 |
) |
|
9,952 |
|
|
1.0 |
|
|
(19,253 |
) |
|
(2.6 |
) |
Adjusted EBITDA 7 |
|
34,575 |
|
|
13.6 |
|
|
29,750 |
|
|
14.7 |
|
|
160,062 |
|
|
16.6 |
|
|
91,181 |
|
|
12.3 |
|
1 |
|
Re-opening of a shop that was temporarily closed in 2021. |
2 |
|
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. |
3 |
|
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 as of the first day of the reporting period. 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
|
|
Year Ended
|
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Systemwide shop base |
|
603 |
|
470 |
|
503 |
|
414 |
||||
Company-operated shop base |
|
336 |
|
|
216 |
|
|
246 |
|
|
173 |
|
4 |
|
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. |
5 |
|
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. |
6 |
|
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. |
7 |
|
Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”. |
Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
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
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 our industry by 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, 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 transitions costs, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expenses related to certain legal disputes, and organization realignment and restructuring costs
Adjusted EBITDA in dollars (as defined), taken as a percentage of total revenue.
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, executives transitions, estimated expense related to certain legal disputes, and organization realignment and restructuring costs.
Adjusted selling, general, and administrative in dollars (as defined), taken as a percentage of total revenue.
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, estimated expense related to certain legal disputes, organization realignment and restructuring costs, 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, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expense related to certain legal disputes, organization realignment and restructuring 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
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
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
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 consolidated statements of operations related to adjustments of our TRAs liabilities.
Legal proceedings
Estimated loss accrual related to certain legal disputes.
Organization realignment and restructuring
Fees and costs, including consulting fees and costs, related to a comprehensive initiative to develop and implement a long-term strategy involving changes to our organizational structure to support our growth, and the resulting realignment activities that have occurred in 2023 and are expected to continue for at least the next two years. Given this strategic initiative's magnitude and scope, the Company does not expect such costs will recur in the foreseeable future. The Company does not consider such costs reflective of the ongoing costs necessary to operate its business.
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 |
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
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
||||||||
Company-operated shop gross profit |
|
42,292 |
|
18.6 |
|
38,750 |
|
22.1 |
|
180,235 |
|
21.0 |
|
121,327 |
|
19.0 |
||||||||
Depreciation and amortization |
|
17,956 |
|
|
7.9 |
|
|
11,235 |
|
|
6.4 |
|
|
62,088 |
|
|
7.2 |
|
|
36,306 |
|
|
5.6 |
|
Company-operated shop contribution |
|
60,248 |
|
|
26.5 |
|
|
49,985 |
|
|
28.5 |
|
|
242,323 |
|
|
28.2 |
|
|
157,633 |
|
|
24.6 |
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
||||||||
Net income (loss) |
|
(3,769 |
) |
|
(1.5 |
) |
|
(2,817 |
) |
|
(1.4 |
) |
|
9,952 |
|
|
1.0 |
|
|
(19,253 |
) |
|
(2.6 |
) |
Depreciation and amortization |
|
19,724 |
|
|
7.7 |
|
|
13,197 |
|
|
6.6 |
|
|
69,135 |
|
|
7.2 |
|
|
44,728 |
|
|
6.0 |
|
Interest expense, net |
|
6,052 |
|
|
2.4 |
|
|
6,922 |
|
|
3.4 |
|
|
32,321 |
|
|
3.3 |
|
|
18,018 |
|
|
2.4 |
|
Income tax expense |
|
708 |
|
|
0.3 |
|
|
5,299 |
|
|
2.6 |
|
|
6,967 |
|
|
0.8 |
|
|
2,599 |
|
|
0.4 |
|
EBITDA |
|
22,715 |
|
|
8.9 |
|
|
22,601 |
|
|
11.2 |
|
|
118,375 |
|
|
12.3 |
|
|
46,092 |
|
|
6.2 |
|
Equity-based compensation |
|
10,205 |
|
|
4.0 |
|
|
10,662 |
|
|
5.3 |
|
|
39,222 |
|
|
4.1 |
|
|
41,657 |
|
|
5.6 |
|
COVID-19: “thank you pay” and catastrophic leave |
|
— |
|
|
— |
|
|
67 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,468 |
|
|
0.2 |
|
COVID-19: prepaid costs not utilized |
|
— |
|
|
— |
|
|
1,105 |
|
|
0.6 |
|
|
— |
|
|
— |
|
|
2,305 |
|
|
0.3 |
|
Milestone events |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,434 |
|
|
0.3 |
|
Executives transition costs |
|
400 |
|
|
0.2 |
|
|
691 |
|
|
0.3 |
|
|
1,000 |
|
|
0.1 |
|
|
691 |
|
|
0.1 |
|
TRAs remeasurements |
|
(898 |
) |
|
(0.3 |
) |
|
(5,376 |
) |
|
(2.7 |
) |
|
(2,638 |
) |
|
(0.3 |
) |
|
(3,466 |
) |
|
(0.4 |
) |
Legal proceedings |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,950 |
|
|
0.2 |
|
|
— |
|
|
— |
|
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
2,153 |
|
|
0.8 |
|
|
— |
|
|
— |
|
|
2,153 |
|
|
0.2 |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
|
34,575 |
|
|
13.6 |
|
|
29,750 |
|
|
14.7 |
|
|
160,062 |
|
|
16.6 |
|
|
91,181 |
|
|
12.3 |
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
||||||||
Selling, general, and administrative 1 |
|
56,946 |
|
|
22.4 |
|
|
50,594 |
|
|
25.1 |
|
|
205,074 |
|
|
21.2 |
|
|
183,528 |
|
|
24.8 |
|
Equity-based compensation |
|
(10,205 |
) |
|
(4.0 |
) |
|
(10,662 |
) |
|
(5.3 |
) |
|
(39,222 |
) |
|
(4.1 |
) |
|
(41,657 |
) |
|
(5.6 |
) |
COVID-19: prepaid costs not utilized |
|
— |
|
|
— |
|
|
(1,105 |
) |
|
(0.6 |
) |
|
— |
|
|
— |
|
|
(2,305 |
) |
|
(0.3 |
) |
Milestone events |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,434 |
) |
|
(0.3 |
) |
Executives transition costs |
|
(400 |
) |
|
(0.2 |
) |
|
(691 |
) |
|
(0.3 |
) |
|
(1,000 |
) |
|
(0.1 |
) |
|
(691 |
) |
|
(0.1 |
) |
Legal proceedings |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,950 |
) |
|
(0.2 |
) |
|
— |
|
|
— |
|
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
(2,153 |
) |
|
(0.8 |
) |
|
— |
|
|
— |
|
|
(2,153 |
) |
|
(0.2 |
) |
|
— |
|
|
— |
|
Adjusted selling, general, and administrative |
|
44,188 |
|
|
17.4 |
|
|
38,136 |
|
|
18.9 |
|
|
160,749 |
|
|
16.6 |
|
|
136,441 |
|
|
18.5 |
|
1 |
|
Selling, general, and administrative expenses include depreciation and amortization. |
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
|
$ |
(3,769 |
) |
|
$ |
(2,817 |
) |
|
$ |
9,952 |
|
|
$ |
(19,253 |
) |
Equity-based compensation |
|
|
10,205 |
|
|
|
10,662 |
|
|
|
39,222 |
|
|
|
41,657 |
|
COVID-19: “thank you pay” and catastrophic leave |
|
|
— |
|
|
|
67 |
|
|
|
— |
|
|
|
1,468 |
|
COVID-19: prepaid costs not utilized |
|
|
— |
|
|
|
1,105 |
|
|
|
— |
|
|
|
2,305 |
|
Milestone events |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,434 |
|
Executives transition costs |
|
|
400 |
|
|
|
691 |
|
|
|
1,000 |
|
|
|
691 |
|
TRAs remeasurements |
|
|
(898 |
) |
|
|
(5,376 |
) |
|
|
(2,638 |
) |
|
|
(3,466 |
) |
Legal proceedings |
|
|
— |
|
|
|
— |
|
|
|
1,950 |
|
|
|
— |
|
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
|
2,153 |
|
|
|
— |
|
|
|
2,153 |
|
|
|
— |
|
Income tax effects |
|
|
(675 |
) |
|
|
442 |
|
|
|
(1,456 |
) |
|
|
(609 |
) |
Adjusted net income |
|
$ |
7,416 |
|
|
$ |
4,774 |
|
|
$ |
50,183 |
|
|
$ |
25,227 |
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands, except per share amounts; unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Weighted-average shares of Class A and Class D common stock outstanding - diluted |
|
|
75,356 |
|
|
|
55,286 |
|
|
|
62,074 |
|
|
|
51,871 |
|
Dilutive effects of RSUs and RSAs |
|
|
1,154 |
|
|
|
1,481 |
|
|
|
826 |
|
|
|
1,523 |
|
Assumed exchange of weighted-average Class B and Class C shares of common stock |
|
|
100,454 |
|
|
|
105,756 |
|
|
|
104,419 |
|
|
|
109,132 |
|
Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted |
|
|
176,964 |
|
|
|
162,523 |
|
|
|
167,319 |
|
|
|
162,526 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share of Class A and Class D common stock - diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
Controlling and non-controlling interest adjustments |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.03 |
|
|
|
(0.02 |
) |
Equity-based compensation |
|
|
0.06 |
|
|
|
0.07 |
|
|
|
0.24 |
|
|
|
0.26 |
|
COVID-19: “thank you pay” and catastrophic leave |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
COVID-19: prepaid costs not utilized |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Milestone events |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Executives transition costs |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
TRAs remeasurements |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Legal proceedings |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
||||||||
Consulting |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Income tax effects |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
Adjusted net income per fully exchanged share of diluted common stock |
|
$ |
0.04 |
|
|
$ |
0.03 |
|
|
$ |
0.30 |
|
|
$ |
0.16 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221153674/en/
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