0001021270-19-000086.txt : 20191112 0001021270-19-000086.hdr.sgml : 20191112 20191112160259 ACCESSION NUMBER: 0001021270-19-000086 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20191112 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20191112 DATE AS OF CHANGE: 20191112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BBQ HOLDINGS, INC. CENTRAL INDEX KEY: 0001021270 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 411782300 STATE OF INCORPORATION: MN FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-39053 FILM NUMBER: 191209220 BUSINESS ADDRESS: STREET 1: 12701 WHITEWATER DRIVE STREET 2: SUITE 290 CITY: MINNETONKA STATE: MN ZIP: 55343 BUSINESS PHONE: 952-294-1300 MAIL ADDRESS: STREET 1: 12701 WHITEWATER DRIVE STREET 2: SUITE 290 CITY: MINNETONKA STATE: MN ZIP: 55343 FORMER COMPANY: FORMER CONFORMED NAME: FAMOUS DAVES OF AMERICA INC DATE OF NAME CHANGE: 20001026 8-K 1 bbq-20191112x8k.htm 8-K dave_Current_Folio_8K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 12, 2019 

 

BBQ HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

Minnesota

001-39053

83-4222776

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

(Address of principal executive offices) (Zip Code)

 

12701 Whitewater Drive, Suite 290, Minnetonka, MN 55343

(952) 294-1300

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

DAVE

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

BBQ

The Nasdaq Global Market

 

 

Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Item 2.02.Results of Operations and Financial Condition.

On November 12, 2019, the Company issued a press release, which is attached hereto as Exhibit 99.1, announcing the financial results for the Company’s third quarter 2019.

The information set forth in Item 2.02 of this Current Report on Form 8-K is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), regardless of any general incorporation language in such filing.

Item 9.01.Financial Statements and Exhibits.

 

 

 

 

 

 

Exhibit No.

    

Description

99.1

 

Press Release, dated November 12, 2019

 

Page 2 of 3

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

BBQ HOLDINGS, INC.

 

 

Date: November 12, 2019

By:

/s/ Paul M. Malazita

 

 

Name: Paul M. Malazita

 

 

Title: Chief Financial Officer and Secretary

 

Page 3 of 3

EX-99.1 2 bbq-20191112ex991045c94.htm EX-99.1 dave_Ex99_2

Exhibit 99.1

 

Picture 2

 

BBQ Holdings, Inc. Reports Results for Third Quarter of Fiscal 2019

MINNEAPOLIS, November 12, 2019 –  BBQ Holdings, Inc. (NASDAQ: BBQ) (the “Company”), an innovating owner and operator of barbeque restaurants, globally, today reported financial results for the third fiscal quarter ended September 29, 2019.

 

Third Quarter 2019 Highlights:

·

Company-owned same store net sales increased 0.4%, driven by a  4.7% increase in To-Go same store net sales and a 12.7% increase in Catering, marking eight of the nine prior quarters experiencing positive comparable sales.

·

Franchise-operated same store net sales increased 2.1% year-over-year.

·

Reacquired five Famous Dave’s franchise stores. 

·

Achieved 53% of restaurant sales, net in growing off-premise lines of business and 47% dine-in.

·

Net loss of $50,000, driven by acquisition and pre-opening costs.

·

Adjusted EBITDA of $1.0 million.

·

Generated $1.0 million of operating cash flows.

·

Signed a lease on a 3,000 square foot bar-centric restaurant in the Uptown neighborhood of Minneapolis, which begins the execution of our small-box initiative in our Company-owned stores.

·

Approximately 135,500 downloads of loyalty app since it was launched in December 2018, which generated $1.2 million of system-wide sales through the app in Q3.

Highlights subsequent to the Third Quarter of Fiscal 2019:

·

Quarter-to-date as of November 10, 2019 company-owned comparable sales growth of 7.0%, driven by a 33.9% increase in catering sales and  10.0% increase in To-Go. 

·

Improved Dine-In traffic and sales driven by digital marketing initiatives and daily deals.

·

Quarter-to-date as of November 3, 2019 franchise-operated comparable sales growth of 2.8%.

·

Formed a subsidiary with Clark Championship Products LLC with an exclusive license to sell Clark Crew BBQ sauces, rubs, and other consumer packaged goods.  

Executive Comments

Jeff Crivello, CEO, commented, “Our financial results for the quarter reflect the investment and resources we have committed to reviving the Famous Dave’s brand and restaurant system performance. Our company-owned restaurants have generated positive comparable sales for eight of the last nine quarters, a statistic that separates us from almost every other multi-location restaurant operator within our industry, and our franchisees have sustained their positive comparable sales trend for this year.  Highlighting the execution of our 2019 strategic plan includes the reinvestment of approximately $10 million into our system through reacquisition of franchise stores and capital expenditures to refresh and update our company-owned restaurants.  The small-format restaurant in Minneapolis and the inaugural Clark Crew BBQ restaurant in Oklahoma City are both on-track for a fourth quarter open.”

 

Key Operating Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

    

September 29, 2019

    

September 30, 2018

 

 

 

September 29, 2019

    

September 30, 2018

Restaurant count:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise-operated

 

 

96

 

 

131

 

 

 

96

 

 

131

 

Company-owned

 

 

32

 

 

16

 

 

 

32

 

 

16

 

Total

 

 

128

 

 

147

 

 

 

128

 

 

147

 

Same store net restaurant sales %:

 

 

  

 

 

  

 

 

 

  

 

 

  

 

Franchise-operated, domestic

 

 

2.1

%  

 

(1.4)

%  

 

 

1.4

%  

 

(1.3)

%  

Franchise-operated, international(1)

 

 

5.5

%  

 

(12.3)

%  

 

 

(6.1)

%  

 

(9.7)

%  

Franchise-operated total

 

 

2.1

%  

 

(1.8)

%  

 

 

1.2

%  

 

(1.5)

%  

Company-owned

 

 

0.4

%  

 

2.1

%  

 

 

1.0

%  

 

2.8

%  

Total

 

 

1.9

%  

 

(1.4)

%  

 

 

1.2

%  

 

(1.0)

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, expect per share data)

 

 

  

 

 

  

 

 

 

  

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System-wide restaurant sales(2)

 

$

83,477

 

$

90,232

 

 

$

256,864

 

$

274,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to shareholders

 

$

17

 

$

1,402

 

 

$

1,139

 

$

3,792

 

Adjusted net income attributable to shareholders(3)

 

 

168

 

 

1,499

 

 

 

2,874

 

 

4,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to shareholders, per diluted share

 

$

0.00

 

$

0.15

 

 

$

0.13

 

$

0.45

 

Adjusted net income attributable to shareholders, per diluted share(3)

 

 

0.02

 

 

0.16

 

 

 

0.31

 

 

0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(3)

 

$

1,095

 

$

2,016

 

 

$

4,572

 

$

6,510

 

 

(1)

International franchise comparable sales declines are primarily related to Puerto Rico, which did not recover from the effects of recent hurricanes.

(2)

System-wide restaurant sales include sales for all Company-owned and franchise-operated restaurants, as reported by franchisees. Restaurant sales for franchise-operated restaurants are not revenues of the Company and are not included in the Company’s consolidated financial statements.

(3)

Adjusted net income (loss) from continuing operations and adjusted EBITDA are non-GAAP measures. A reconciliation of all non-GAAP measures to the most directly comparable GAAP measure is included in the accompanying financial tables.  See “Non-GAAP Reconciliation.”

Third Quarter 2019 Review

Total revenue for the third quarter of 2019 was $23.7 million, up 68.3% from the third quarter of 2018. The increase in year-over-year restaurant sales, net for the three months ended September 29, 2019 was driven primarily by the acquisition of Famous Dave’s stores in Colorado, Michigan, Ohio, Wisconsin, Indiana, Kentucky, Iowa, and Arizona and a 2.1% increase in franchise-operated same store net sales, partially offset by franchise and corporate restaurant closures. 

On a weighted basis, same store net sales for our To-Go and Catering lines of business increased 1.5%  and 2.2%, respectively, in the third quarter of fiscal 2019 as compared to the prior year period, partially offset by a decline in our Dine In line of business of 3.3%. During the third quarter of fiscal 2019, Dine In represented approximately 47% of our total restaurant sales, net, while To Go and Catering represented 33% and 20% of restaurant sales, net, respectively.     

Restaurant-level operating margin, as a percentage of restaurant sales, net, for Company-owned restaurants was 0.6% compared to 2.0% in the third quarter of fiscal 2018. This decline in restaurant-level operating margin was primarily a result of acquisitions of new stores in 2019, which we believe will stabilize over the remainder of fiscal 2019 and into the first quarter of fiscal 2020.

General and administrative expenses for the three months ended September 29, 2019 and September 30, 2018 represented approximately 11.2% and 13.8% of total revenues, respectively. The increase to general and administrative expenses primarily related to acquisition costs incurred related to our acquisitions and other transactions.

Page 2 of 8

Net income attributable to shareholders was approximately $17,000, or $0.00 per share, in the third quarter of fiscal 2019 compared to net income attributable to shareholders of approximately $1.4 million, or $0.15 per share, in the third quarter of fiscal 2018.  Adjusted net income attributable to shareholders, a non-GAAP measure, was approximately $168,000, or $0.02 per share, compared to adjusted net income attributable to shareholders of approximately $1.5 million, or $0.16 per share, in the third quarter of fiscal 2018. 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 Holdings

BBQ Holdings is a holding company formed for the purposes of developing, owning and franchising the Famous Dave’s and Clark Crew BBQ restaurant brands.  Its menus feature award-winning barbequed and grilled meats, a selection of salads, sandwiches, side items, and made-from-scratch desserts. As of November 12, 2019, the Company owns 32 Famous Dave’s locations and franchises an additional 96 Famous Dave’s restaurants in 32 states, Canada, and United Arab Emirates.  The inaugural Clark Crew BBQ restaurant is opening in Oklahoma City, Oklahoma during the fourth quarter of 2019. 

Non-GAAP Financial Measures

To 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 Statements

Statements 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 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.

Contact:Jeff Crivello – Chief Executive Officer
952-294-1300

Darrow Associates, Inc.
Peter Seltzberg – Managing Director
516-419-9915
pseltzberg@darrowir.com

Page 3 of 8

BBQ HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 (in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 29, 2019

 

September 30, 2018

 

September 29, 2019

    

September 30, 2018

 

Revenue:

 

  

 

 

  

 

 

  

 

 

  

 

Restaurant sales, net

$

20,114

 

$

9,903

 

$

47,326

 

$

28,571

 

Franchise royalty and fee revenue

 

2,909

 

 

3,462

 

 

9,560

 

 

10,623

 

Franchisee national advertising fund contributions

 

395

 

 

497

 

 

1,275

 

 

1,495

 

Licensing and other revenue

 

261

 

 

211

 

 

839

 

 

766

 

Total revenue

 

23,679

 

 

14,073

 

 

59,000

 

 

41,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

  

 

 

  

 

 

  

 

 

  

 

Food and beverage costs

 

6,383

 

 

3,091

 

 

15,068

 

 

8,907

 

Labor and benefits costs

 

7,477

 

 

3,601

 

 

17,253

 

 

10,158

 

Operating expenses

 

6,133

 

 

3,011

 

 

14,489

 

 

8,746

 

Depreciation and amortization expenses

 

576

 

 

281

 

 

1,355

 

 

983

 

General and administrative expenses

 

2,653

 

 

1,937

 

 

7,547

 

 

5,922

 

National advertising fund expenses

 

395

 

 

497

 

 

1,275

 

 

1,495

 

Asset impairment, estimated lease termination charges and other closing costs, net

 

214

 

 

31

 

 

718

 

 

143

 

Pre-opening expenses

 

94

 

 

 —

 

 

94

 

 

 —

 

Net (gain) loss on disposal of property and bargain purchases

 

(28)

 

 

 —

 

 

(174)

 

 

29

 

Total costs and expenses

 

23,897

 

 

12,449

 

 

57,625

 

 

36,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income from operations

 

(218)

 

 

1,624

 

 

1,375

 

 

5,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

  

 

 

  

 

 

  

 

 

  

 

Interest expense

 

(33)

 

 

(80)

 

 

(392)

 

 

(422)

 

Interest income

 

27

 

 

54

 

 

114

 

 

79

 

Total other expense

 

(6)

 

 

(26)

 

 

(278)

 

 

(343)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income before income taxes

 

(224)

 

 

1,598

 

 

1,097

 

 

4,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

174

 

 

(196)

 

 

(25)

 

 

(937)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

(50)

 

 

1,402

 

 

1,072

 

 

3,792

 

Less: Net loss attributable to non-controlling interest

 

67

 

 

 —

 

 

67

 

 

 —

 

Net income attributable to shareholders

$

17

 

$

1,402

 

$

1,139

 

$

3,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income per share attributable to shareholders

$

0.00

 

$

0.15

 

$

0.13

 

$

0.45

 

Diluted net (loss) income per share attributable to shareholders

$

0.00

 

$

0.15

 

$

0.12

 

$

0.45

 

Weighted average shares outstanding - basic

 

9,105

 

 

9,090

 

 

9,095

 

 

8,435

 

Weighted average shares outstanding - diluted

 

9,279

 

 

9,111

 

 

9,193

 

 

8,459

 

Page 4 of 8

BBQ HOLDINGS, INC. AND SUBSIDIARIES

OPERATING RESULTS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 29, 2019

    

September 30, 2018

    

    

September 29, 2019

    

September 30, 2018

    

    

Food and beverage costs(1)

 

31.7

%  

31.2

%  

 

31.8

%  

31.2

%  

 

Labor and benefits costs(1)

 

37.2

%  

36.4

%  

 

36.5

%  

35.6

%  

 

Operating expenses(1)

 

30.5

%  

30.4

%  

 

30.6

%  

30.6

%  

 

Restaurant level operating margin(1)(3)  

 

0.6

%  

2.0

%  

 

1.1

%  

2.7

%  

 

Depreciation and amortization expenses(2)

 

2.4

%  

2.0

%  

 

2.3

%  

2.4

%  

 

General and administrative expenses(2)

 

11.2

%  

13.8

%  

 

12.8

%  

14.3

%  

 

(Loss) income from operations(2)

 

(0.9)

%  

11.5

%  

 

2.3

%  

12.2

%  

 

(1)

As a percentage of restaurant sales, net

(2)

As a percentage of total revenue

(3)

Restaurant level margins are equal to restaurant sales, net, less restaurant level food and beverage costs, labor and benefit costs, and operating expenses.

Page 5 of 8

BBQ HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 (in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

September 29, 2019

    

December 30, 2018

Cash and cash equivalents

 

$

4,932

 

$

11,598

Restricted cash

 

 

657

 

 

842

Accounts receivable, net of allowance for doubtful accounts of $101,000 and $192,000, respectively

 

 

3,597

 

 

4,300

Inventories

 

 

1,202

 

 

722

Prepaid income taxes and income taxes receivable

 

 

339

 

 

377

Prepaid expenses and other current assets

 

 

1,242

 

 

1,363

Assets held for sale

 

 

2,842

 

 

 —

Total current assets

 

 

14,811

 

 

19,202

 

 

 

 

 

 

 

Property, equipment and leasehold improvements, net

 

 

17,816

 

 

10,385

 

 

 

 

 

 

 

Other assets:

 

 

  

 

 

  

Operating lease right-of-use assets

 

 

24,863

 

 

 —

Goodwill

 

 

845

 

 

61

Intangible assets, net

 

 

3,056

 

 

1,428

Deferred tax asset, net

 

 

5,717

 

 

5,747

Other assets

 

 

1,766

 

 

1,533

 

 

$

68,874

 

$

38,356

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

  

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

  

 

 

  

Accounts payable

 

$

5,082

 

$

3,765

Current portion of lease liabilities

 

 

3,920

 

 

 —

Current portion of long-term debt and financing lease obligations

 

 

101

 

 

1,369

Accrued compensation and benefits

 

 

1,811

 

 

808

Other current liabilities

 

 

3,361

 

 

2,970

Total current liabilities

 

 

14,275

 

 

8,912

 

 

 

  

 

 

  

Long-term liabilities:

 

 

  

 

 

  

Lease liabilities, less current portion

 

 

26,478

 

 

 —

Long-term debt, less current portion

 

 

2,471

 

 

2,411

Other liabilities

 

 

1,707

 

 

4,492

Total liabilities

 

 

44,931

 

 

15,815

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

  

 

 

  

Common stock, $.01 par value, 100,000 shares authorized, 9,274 and 9,085 shares issued and outstanding at September 29, 2019 and December 30, 2018, respectively

 

 

93

 

 

91

Additional paid-in capital

 

 

7,727

 

 

7,375

Retained earnings

 

 

16,190

 

 

15,075

Total shareholders’ equity

 

 

24,010

 

 

22,541

Non-controlling interest

 

 

(67)

 

 

 —

Total equity

 

 

23,943

 

 

22,541

 

 

$

68,874

 

$

38,356

 

Page 6 of 8

BBQ HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

    

September 29, 2019

    

September 30, 2018

Cash flows from operating activities:

 

 

  

 

 

  

Net income

 

$

1,072

 

$

3,792

Adjustments to reconcile net income to cash flows provided by operations:

 

 

  

 

 

  

Depreciation and amortization

 

 

1,355

 

 

983

Stock-based compensation

 

 

354

 

 

225

Net (gain) loss on disposal of property and bargain purchases

 

 

(174)

 

 

29

Asset impairment and estimated lease termination charges (gain)

 

 

660

 

 

(257)

Bad debts recovery

 

 

(67)

 

 

(35)

Deferred income taxes

 

 

36

 

 

(185)

Other non-cash items

 

 

280

 

 

(391)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(495)

 

 

(49)

Other assets

 

 

(580)

 

 

918

Accounts payable

 

 

1,371

 

 

(183)

Accrued and other liabilities

 

 

(356)

 

 

(1,023)

Cash flows provided by operating activities

 

 

3,456

 

 

3,824

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

  

 

 

  

Proceeds from the sale of assets

 

 

33

 

 

1,187

Purchases of property, equipment and leasehold improvements

 

 

(3,792)

 

 

(597)

Payments for acquired restaurants

 

 

(6,188)

 

 

(37)

Advances on notes receivable

 

 

(150)

 

 

(750)

Purchases of held to maturity securities

 

 

 —

 

 

(6,995)

Payments received on note receivable

 

 

20

 

 

 —

Cash flows used for investing activities

 

 

(10,077)

 

 

(7,192)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

  

 

 

  

Payments for debt issuance costs

 

 

(54)

 

 

 —

Payments on long-term debt and financing lease obligations

 

 

(176)

 

 

(6,625)

Proceeds from sale of common stock, net of offering costs

 

 

 —

 

 

5,120

Proceeds from exercise of stock options

 

 

 —

 

 

520

Cash flows used for financing activities

 

 

(230)

 

 

(985)

 

 

 

 

 

 

 

Decrease in cash, cash equivalents and restricted cash

 

 

(6,851)

 

 

(4,353)

Cash, cash equivalents and restricted cash, beginning of period

 

 

12,440

 

 

10,426

Cash, cash equivalents and restricted cash, end of period

 

$

5,589

 

$

6,073

 

Page 7 of 8

 

BBQ HOLDINGS, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

(dollars in thousands)

    

September 29, 2019

    

September 30, 2018

 

 

 

September 29, 2019

 

    

September 30, 2018

Net income attributable to shareholders

 

$

17

 

$

1,402

 

 

 

1,139

 

 

3,792

Asset impairment and estimated lease termination charges and other closing costs

 

 

214

 

 

31

 

 

 

718

 

 

143

Net gain on disposal of equipment

 

 

(28)

 

 

 —

 

 

 

(174)

 

 

29

Stock-based compensation

 

 

131

 

 

58

 

 

 

354

 

 

225

Acquisition costs

 

 

249

 

 

 —

 

 

 

770

 

 

 —

Pre-opening costs

 

 

94

 

 

 —

 

 

 

94

 

 

 —

Severance

 

 

10

 

 

22

 

 

 

13

 

 

58

Tax adjustment

 

 

(520)

 

 

(14)

 

 

 

(40)

 

 

(90)

Adjusted net income

 

$

168

 

$

1,499

 

 

$

2,874

 

$

4,157

Basic adjusted net income per common share

 

$

0.02

 

$

0.16

 

 

$

0.32

 

$

0.49

Diluted adjusted net income per common share

 

$

0.02

 

$

0.16

 

 

$

0.31

 

$

0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common share outstanding - basic

 

 

9,105

 

 

9,090

 

 

 

9,095

 

 

8,435

Weighted average common share outstanding - diluted

 

 

9,279

 

 

9,111

 

 

 

9,193

 

 

8,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

(50)

 

$

1,402

 

 

$

1,072

 

$

3,792

Asset impairment and estimated lease termination charges and other closing costs

 

 

214

 

 

31

 

 

 

718

 

 

143

Depreciation and amortization

 

 

576

 

 

281

 

 

 

1,355

 

 

983

Interest expense, net

 

 

 6

 

 

26

 

 

 

278

 

 

343

Net (gain) loss on disposal of equipment

 

 

(28)

 

 

 —

 

 

 

(174)

 

 

29

Stock-based compensation

 

 

131

 

 

58

 

 

 

354

 

 

225

Acquisition costs

 

 

249

 

 

 —

 

 

 

770

 

 

 —

Pre-opening costs

 

 

94

 

 

 —

 

 

 

94

 

 

 —

Severance

 

 

10

 

 

22

 

 

 

13

 

 

58

Provision for income taxes

 

 

(174)

 

 

196

 

 

 

25

 

 

937

Adjusted EBITDA

 

$

1,028

 

$

2,016

 

 

$

4,505

 

$

6,510

 

Page 8 of 8

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