Dutch Bros Inc.
11/06/2024 | Press release | Distributed by Public on 11/06/2024 15:11
Dutch Bros Inc. Reports Third Quarter 2024 Financial Results
Achieves $338 million in Revenues in Quarter, a 28% Increase Year-over-Year
Completes Mobile Order Capability Rollout
Raises Revenue and Adjusted EBITDA Guidance
GRANTS PASS, Ore.--(BUSINESS WIRE)-- Dutch Bros Inc. (NYSE: BROS; "Dutch Bros" or the "Company"), one of the fastest-growing brands in the quick service beverage industry in the United States by location count, today reported financial results for the third quarter ended September 30, 2024.
Christine Barone, Chief Executive Officer and President of Dutch Bros, stated, "We delivered exceptional performance in the third quarter as we executed our strategic and operational initiatives. We believe our brand is resonating with customers, as we had the highest same shop transaction growth quarter in two years, outside of the impact of Leap Day. In the third quarter we delivered a 28% revenue increase and systemwide same shop sales growth of 2.7%, which exceeded our expectations."
Barone continued, "We believe our refined real estate strategy is working, as we are seeing strong new shop productivity as we have shifted our development focus and elevated our site selection process. We continue to demonstrate remarkable consistency in our shop opening cadence with 38 shop openings in the third quarter. We are making major investments in our development and construction teams and our 2025 pipeline is strong, positioning us to accelerate new shop growth."
Barone concluded, "In the quarter, we accelerated our mobile order rollout, achieving 90% system and 96% company-operated shop coverage as of September 30th. We have received great feedback from broistas and customers and we believe we are beginning to see the impacts on our business."
Third Quarter 2024 Highlights
- Opened 38 new shops, 33 of which were company-operated, across 11 states.
- Total revenues grew 27.9% to $338.2 million as compared to $264.5 million in the same period of 2023.
- System same shop sales 1 and transactions increased 2.7% and 0.8%, respectively, relative to the same period in 2023. Company-operated same shop sales 1 and transactions increased 4.0% and 2.4%, respectively, relative to the same period of 2023.
- Company-operated shop revenues increased 30.4% to $308.3 million, as compared to $236.5 million in the same period of 2023.
- Company-operated shop gross profit was $68.4 million as compared to $57.0 million in the same period of 2023. In the third quarter of 2024, company-operated shop gross margin, which includes 120 bps of pre-opening costs, was 22.2%, a year-over-year decrease of 190 bps.
- Company-operated shop contribution 2 , a non-GAAP financial measure, grew 23.9% to $90.8 million as compared to $73.3 million in the same period of 2023. In the third quarter of 2024, company-operated shop contribution margin, which includes 120 bps of pre-opening costs, was 29.5%, a year-over-year decrease of 150 bps.
- Selling, general, and administrative expenses were $57.5 million (17.0% of revenue) as compared to $50.5 million (19.1% of revenue) in the same period of 2023.
- Adjusted selling, general, and administrative expenses 2 , a non-GAAP financial measure, were $50.3 million (14.9% of revenue) as compared to $40.2 million (15.2% of revenue) in the same period of 2023.
- Net income was $21.7 million as compared to $13.4 million in the same period of 2023.
- Adjusted EBITDA 2 , a non-GAAP financial measure, grew 20.3% to $63.8 million as compared to $53.0 million in the same period of 2023.
- Adjusted net income 2 , a non-GAAP financial measure, was $27.7 million as compared to $22.4 million in the same period of 2023.
- Net income per share of Class A and Class D common stock - diluted was $0.11 as compared to $0.07 per share in the same period of 2023.
- Adjusted net income per fully exchanged share of diluted common stock 2 , a non-GAAP financial measure, was $0.16 as compared to $0.14 in the same period of 2023.
Revised 2024 Outlook
- Total revenues are now projected to be between $1.255 billion and $1.260 billion, up from the prior range of $1.215 billion to $1.230 billion.
- Total system shop openings in 2024 are now expected to be 150, consistent with the previously communicated outlook at the lower end of 150 to 165. Capital expenditures are estimated to be between $245 million to $265 million, down from the prior range of $270 million to $290 million.
- Same shop sales 1 growth for 2024 is expected to be approximately 4.25%, from low single digits previously. Same shop sales 1 growth for the fourth quarter of 2024 is expected to be between 1% and 2%.
- Adjusted SG&A 3 is estimated to be between $195 million and $200 million, from $190 million to $200 million previously.
- Adjusted EBITDA 3 is now estimated to be between $215 million and $220 million, up from the prior range of $200 million to $210 million.
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_________________ |
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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, reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort. |
Conference Call and Webcast Today
Christine Barone, Chief Executive Officer and President, and Josh Guenser, 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, 2024.
Event : Third Quarter 2024 Conference Call and Webcast
Date : Wednesday, November 6, 2024
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 950 locations across 18 states as of September 30, 2024.
To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, X, 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, the success of Dutch Bros' mobile order capabilities and expansion of such capabilities, estimated capital expenditures, Dutch Bros' possible or assumed future results of operations, including guidance for 2024, 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," "project," "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 current expectations regarding Dutch Bros' leadership performance, the effectiveness of our marketing initiatives and technological advancements, 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, 2023 filed with the SEC on February 23, 2024, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the three months ended September 30, 2024. 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 |
Nine Months Ended |
|||||||||||||||
|
(in thousands, except per share amounts; unaudited) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
REVENUES |
||||||||||||||||
|
Company-operated shops |
$ |
308,295 |
$ |
236,472 |
$ |
851,648 |
$ |
630,588 |
||||||||
|
Franchising and other |
29,917 |
28,035 |
86,581 |
81,065 |
||||||||||||
|
Total revenues |
338,212 |
264,507 |
938,229 |
711,653 |
||||||||||||
|
COSTS AND EXPENSES |
||||||||||||||||
|
Cost of sales |
248,161 |
189,323 |
686,048 |
519,482 |
||||||||||||
|
Selling, general and administrative |
57,536 |
50,490 |
161,866 |
148,128 |
||||||||||||
|
Total costs and expenses |
305,697 |
239,813 |
847,914 |
667,610 |
||||||||||||
|
INCOME FROM OPERATIONS |
32,515 |
24,694 |
90,315 |
44,043 |
||||||||||||
|
OTHER EXPENSE |
||||||||||||||||
|
Interest expense, net |
(6,869 |
) |
(9,325 |
) |
(20,259 |
) |
(26,269 |
) |
||||||||
|
Other income (expense), net |
764 |
(140 |
) |
7,357 |
2,206 |
|||||||||||
|
Total other expense |
(6,105 |
) |
(9,465 |
) |
(12,902 |
) |
(24,063 |
) |
||||||||
|
INCOME BEFORE INCOME TAXES |
26,410 |
15,229 |
77,413 |
19,980 |
||||||||||||
|
Income tax expense |
4,698 |
1,828 |
17,330 |
6,259 |
||||||||||||
|
NET INCOME |
$ |
21,712 |
$ |
13,401 |
$ |
60,083 |
$ |
13,721 |
||||||||
|
Less: Net income attributable to non-controlling interests |
9,068 |
9,191 |
28,437 |
10,601 |
||||||||||||
|
NET INCOME ATTRIBUTABLE TO DUTCH BROS INC. |
$ |
12,644 |
$ |
4,210 |
$ |
31,646 |
$ |
3,120 |
||||||||
|
Net income per share of Class A and Class D common stock: |
||||||||||||||||
|
Basic |
$ |
0.11 |
$ |
0.07 |
$ |
0.32 |
$ |
0.05 |
||||||||
|
Diluted |
$ |
0.11 |
$ |
0.07 |
$ |
0.32 |
$ |
0.05 |
||||||||
|
Weighted-average shares of Class A and Class D common stock outstanding: |
||||||||||||||||
|
Basic |
113,819 |
59,366 |
99,756 |
57,598 |
||||||||||||
|
Diluted |
114,252 |
60,214 |
100,070 |
57,598 |
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DUTCH BROS INC. |
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Segment Financials |
||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
(in thousands; unaudited) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Revenues: |
||||||||||||||||
|
Company-operated shops |
$ |
308,295 |
$ |
236,472 |
$ |
851,648 |
$ |
630,588 |
||||||||
|
Franchising and other |
29,917 |
28,035 |
86,581 |
81,065 |
||||||||||||
|
Total revenues |
338,212 |
264,507 |
938,229 |
711,653 |
||||||||||||
|
Cost of Sales: |
||||||||||||||||
|
Company-operated shops |
239,918 |
179,480 |
658,950 |
492,645 |
||||||||||||
|
Franchising and other |
8,243 |
9,843 |
27,098 |
26,837 |
||||||||||||
|
Total cost of sales |
248,161 |
189,323 |
686,048 |
519,482 |
||||||||||||
|
Segment gross profit: |
||||||||||||||||
|
Company-operated shops |
68,377 |
56,992 |
192,698 |
137,943 |
||||||||||||
|
Franchising and other |
21,674 |
18,192 |
59,483 |
54,228 |
||||||||||||
|
Total gross profit |
90,051 |
75,184 |
252,181 |
192,171 |
||||||||||||
|
Depreciation and amortization: |
||||||||||||||||
|
Company-operated shops |
22,470 |
16,332 |
63,202 |
44,132 |
||||||||||||
|
Franchising and other |
1,022 |
1,371 |
3,394 |
4,029 |
||||||||||||
|
All other ¹ |
389 |
413 |
888 |
1,250 |
||||||||||||
|
Total depreciation and amortization |
23,881 |
18,116 |
67,484 |
49,411 |
||||||||||||
|
Segment contribution: |
||||||||||||||||
|
Company-operated shops |
90,847 |
73,324 |
255,900 |
182,075 |
||||||||||||
|
Franchising and other |
22,696 |
19,563 |
62,877 |
58,257 |
||||||||||||
|
Total segment contribution |
113,543 |
92,887 |
318,777 |
240,332 |
||||||||||||
|
Selling, general and administrative |
(57,536 |
) |
(50,490 |
) |
(161,866 |
) |
(148,128 |
) |
||||||||
|
Interest expense, net |
(6,869 |
) |
(9,325 |
) |
(20,259 |
) |
(26,269 |
) |
||||||||
|
Other income (expense), net |
764 |
(140 |
) |
7,357 |
2,206 |
|||||||||||
|
Income before income taxes |
$ |
26,410 |
$ |
15,229 |
$ |
77,413 |
$ |
19,980 |
|
__________________ |
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|
1 |
All other depreciation and amortization is included in selling, general and administrative expenses and is not part of the segment contribution calculations. |
|
DUTCH BROS INC. |
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Company-Operated Shop Results |
||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(in thousands; unaudited) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||
|
Company-operated shops revenue |
308,295 |
100.0 |
236,472 |
100.0 |
851,648 |
100.0 |
630,588 |
100.0 |
||||||||
|
Beverage, food and packaging costs |
78,060 |
25.3 |
61,317 |
25.9 |
216,923 |
25.5 |
169,702 |
26.8 |
||||||||
|
Labor costs |
85,144 |
27.6 |
61,521 |
26.0 |
230,807 |
27.1 |
168,805 |
26.8 |
||||||||
|
Occupancy and other costs |
50,693 |
16.4 |
36,126 |
15.3 |
136,466 |
16.0 |
99,327 |
15.8 |
||||||||
|
Pre-opening costs |
3,551 |
1.2 |
4,184 |
1.8 |
11,552 |
1.4 |
10,679 |
1.7 |
||||||||
|
Depreciation and amortization |
22,470 |
7.3 |
16,332 |
6.9 |
63,202 |
7.4 |
44,132 |
7.0 |
||||||||
|
Company-operated shop costs and expenses |
239,918 |
77.8 |
179,480 |
75.9 |
658,950 |
77.4 |
492,645 |
78.1 |
||||||||
|
Company-operated shops gross profit |
68,377 |
22.2 |
56,992 |
24.1 |
192,698 |
22.6 |
137,943 |
21.9 |
||||||||
|
Company-operated shops contribution 1 |
90,847 |
29.5 |
73,324 |
31.0 |
255,900 |
30.0 |
182,075 |
28.9 |
|
_________________ |
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|
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 |
||||||||
|
(in thousands; unaudited) |
2024 |
2023 |
||||||
|
Net cash provided by operating activities |
$ |
184,195 |
$ |
94,906 |
||||
|
Net cash used in investing activities |
(169,363 |
) |
(167,461 |
) |
||||
|
Net cash provided by financing activities |
132,757 |
202,163 |
||||||
|
Net increase in cash and cash equivalents |
$ |
147,589 |
$ |
129,608 |
||||
|
Cash and cash equivalents at beginning of period |
133,545 |
20,178 |
||||||
|
Cash and cash equivalents at end of period |
$ |
281,134 |
$ |
149,786 |
|
DUTCH BROS INC. |
||||||||
|
Condensed Consolidated Balance Sheets |
||||||||
|
(in thousands; unaudited) |
September 30, |
December 31, |
||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ |
281,134 |
$ |
133,545 |
||||
|
Accounts receivable, net |
10,362 |
9,124 |
||||||
|
Inventories, net |
38,381 |
46,953 |
||||||
|
Prepaid expenses and other current assets |
12,168 |
15,637 |
||||||
|
Total current assets |
342,045 |
205,259 |
||||||
|
Property and equipment, net |
662,759 |
542,440 |
||||||
|
Finance lease right-of-use assets, net |
377,561 |
382,734 |
||||||
|
Operating lease right-of-use assets, net |
301,896 |
199,673 |
||||||
|
Intangibles, net |
3,455 |
5,415 |
||||||
|
Goodwill |
21,629 |
21,629 |
||||||
|
Deferred income tax assets, net |
718,543 |
402,995 |
||||||
|
Other long-term assets |
3,628 |
3,865 |
||||||
|
Total assets |
$ |
2,431,516 |
$ |
1,764,010 |
||||
|
LIABILITIES AND EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
$ |
31,880 |
$ |
29,957 |
||||
|
Accrued compensation and benefits |
39,106 |
31,405 |
||||||
|
Other accrued liabilities |
26,162 |
15,770 |
||||||
|
Other current liabilities |
5,962 |
6,423 |
||||||
|
Deferred revenue |
35,738 |
30,349 |
||||||
|
Current portion of finance lease liabilities |
12,845 |
9,482 |
||||||
|
Current portion of operating lease liabilities |
12,987 |
10,239 |
||||||
|
Current portion of long-term debt |
15,746 |
4,491 |
||||||
|
Total current liabilities |
180,426 |
138,116 |
||||||
|
Deferred revenue, net of current portion |
6,367 |
6,676 |
||||||
|
Finance lease liabilities, net of current portion |
369,206 |
367,775 |
||||||
|
Operating lease liabilities, net of current portion |
293,474 |
191,419 |
||||||
|
Long-term debt, net of current portion |
224,361 |
93,175 |
||||||
|
Tax receivable agreements liability |
605,003 |
290,920 |
||||||
|
Other long-term liabilities |
8 |
8 |
||||||
|
Total liabilities |
1,678,845 |
1,088,089 |
||||||
|
Equity: |
||||||||
|
Common stock |
1 |
2 |
||||||
|
Additional paid in capital |
506,785 |
379,391 |
||||||
|
Accumulated other comprehensive income |
310 |
544 |
||||||
|
Retained earnings (accumulated deficit) |
16,054 |
(15,592 |
) |
|||||
|
Total stockholders' equity attributable to Dutch Bros Inc. |
523,150 |
364,345 |
||||||
|
Non-controlling interests |
229,521 |
311,576 |
||||||
|
Total equity |
752,671 |
675,921 |
||||||
|
Total liabilities and equity |
$ |
2,431,516 |
$ |
1,764,010 |
|
DUTCH BROS INC. |
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|
Select Financial Metrics |
||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
(in thousands, except number of shops data; unaudited) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Shop count, beginning of period |
||||||||||||||||
|
Company-operated |
612 |
473 |
542 |
396 |
||||||||||||
|
Franchised |
300 |
281 |
289 |
275 |
||||||||||||
|
912 |
754 |
831 |
671 |
|||||||||||||
|
Company-operated new openings |
33 |
37 |
103 |
114 |
||||||||||||
|
Franchised new openings |
5 |
2 |
16 |
8 |
||||||||||||
|
Re-openings 1 |
- |
1 |
- |
1 |
||||||||||||
|
Shop count, end of period |
||||||||||||||||
|
Company-operated |
645 |
510 |
645 |
510 |
||||||||||||
|
Franchised |
305 |
284 |
305 |
284 |
||||||||||||
|
Total shop count |
950 |
794 |
950 |
794 |
||||||||||||
|
Systemwide AUV 2 |
N/A |
N/A |
$ |
2,004 |
$ |
1,950 |
||||||||||
|
Company-operated shops AUV 2 |
N/A |
N/A |
$ |
1,921 |
$ |
1,901 |
||||||||||
|
Systemwide same shop sales 3, 4 |
2.7 |
% |
4.0 |
% |
5.2 |
% |
2.1 |
% |
||||||||
|
Ticket |
1.9 |
% |
9.5 |
% |
5.6 |
% |
7.6 |
% |
||||||||
|
Transactions |
0.8 |
% |
(5.5 |
)% |
(0.4 |
)% |
(5.5 |
)% |
||||||||
|
Company-operated same shop sales 3 |
4.0 |
% |
2.8 |
% |
6.3 |
% |
0.5 |
% |
||||||||
|
Ticket |
1.6 |
% |
9.1 |
% |
5.3 |
% |
7.6 |
% |
||||||||
|
Transactions |
2.4 |
% |
(6.3 |
)% |
1.0 |
% |
(7.1 |
)% |
||||||||
|
Systemwide sales 4 |
$ |
478,765 |
$ |
391,286 |
$ |
1,342,750 |
$ |
1,069,284 |
||||||||
|
Company-operated operating weeks 5 |
8,212 |
6,400 |
23,195 |
17,576 |
||||||||||||
|
Franchising and other operating weeks 5 |
3,955 |
3,703 |
11,576 |
10,881 |
||||||||||||
|
Dutch Rewards transactions as a percentage of total transactions 6 |
67.2 |
% |
63.1 |
% |
66.8 |
% |
64.2 |
% |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(in thousands; unaudited) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||
|
Company-operated shop revenues |
308,295 |
100.0 |
236,472 |
100.0 |
851,648 |
100.0 |
630,588 |
100.0 |
||||||||
|
Company-operated gross profit |
68,377 |
22.2 |
56,992 |
24.1 |
192,698 |
22.6 |
137,943 |
21.9 |
||||||||
|
Company-operated shop contribution 7 |
90,847 |
29.5 |
73,324 |
31.0 |
255,900 |
30.0 |
182,075 |
28.9 |
||||||||
|
Selling, general, and administrative expenses |
57,536 |
17.0 |
50,490 |
19.1 |
161,866 |
17.3 |
148,128 |
20.8 |
||||||||
|
Adjusted selling, general, and administrative expenses 7 |
50,268 |
14.9 |
40,154 |
15.2 |
138,321 |
14.7 |
115,311 |
16.2 |
||||||||
|
Net income |
21,712 |
6.4 |
13,401 |
5.1 |
60,083 |
6.4 |
13,721 |
1.9 |
||||||||
|
Adjusted EBITDA 7 |
63,762 |
18.9 |
53,008 |
20.0 |
181,461 |
19.3 |
125,487 |
17.6 |
|
___________ |
||
|
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. Same shop sales can be impacted by changes in customer transaction counts and by changes in the per-ticket amounts. 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 |
Nine Months Ended |
|||||||
|
2024 |
2023 |
2024 |
2023 |
|||||
|
Systemwide shop base |
716 |
572 |
641 |
503 |
||||
|
Company-operated shop base |
438 |
310 |
370 |
246 |
|
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 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 our industry by investors.
EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)
EBITDA - definition and/or calculation
Net income 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, expenses associated with equity offerings, executive transitions, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of Aircraft, 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 depreciation and amortization, equity-based compensation expense, expenses associated with equity offerings, executive transitions, legal proceedings, 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, excluding equity-based compensation expense, expenses associated with equity offerings, executive transitions, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of Aircraft, organization realignment and restructuring costs, and income tax effects of items excluded from net income.
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 restricted stock awards and units, as well as the assumed exchange of all of the Dutch Bros OpCo Class A common units not held by Dutch Bros Inc. for Dutch Bros Inc. Class A common stock.
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 adding in the assumed exchange of all of the outstanding Dutch Bros OpCo Class A common units not held by Dutch Bros Inc. for Dutch Bros Inc. Class A 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 per share of Class A and Class D common stock - diluted, excluding per share impacts of equity-based compensation expense, expenses associated with equity offerings, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, legal proceedings, sale of Aircraft, organization realignment and restructuring costs, income tax effects of items excluded from net income, 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 the outstanding Dutch Bros OpCo Class A common units not held by Dutch Bros Inc. for Dutch Bros Inc. Class A common stock and related net income 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, including restricted stock awards and restricted stock units in Dutch Bros Inc. to certain eligible employees.
Expenses associated with equity offerings
Costs incurred as a result of our equity offerings, including secondary offerings by TSG Consumer Partners, L.P. and certain of its affiliates. These costs include, but are not limited to, legal fees, consulting fees, tax fees, and accounting fees.
Executive transitions
Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023, and amortized through the first quarter of 2024.
TRAs remeasurements
(Gain) loss impacts related to adjustments of our TRAs liabilities.
Legal proceedings
Loss accrual related to certain legal disputes.
Sale of Aircraft
Gain impact related to the sale of our airplane, hangar and related equipment to our Co-Founder.
Organization realignment and restructuring
Fees and costs, including consulting, employee-related and other costs, in connection with our comprehensive initiative to develop and implement a long-term strategy involving changes to our organizational structure to support our growth. This initiative resulted in realignment activities that occurred in 2023, and restructuring activities that commenced in 2024, and are expected to continue for at least the next year. Given this strategic initiative's magnitude and scope, we do not expect such costs will recur in the foreseeable future, and do not consider such costs reflective of the ongoing costs necessary to operate our business.
Dilutive effects of restricted stock awards and units
Addition of incremental shares of restricted stock awards and units 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 LLC interests for shares of Class A common stock
Weighted-average of all outstanding Dutch Bros OpCo Class A common units not held by Dutch Bros Inc. that are assumed to be exchanged for Dutch Bros Inc. Class A common stock.
Controlling and non-controlling interest adjustments
Adjustments to controlling and non-controlling interests to align the numerator of the net income per share to the denominator, which assumes the full exchange of all outstanding Dutch Bros OpCo Class A common units not held by Dutch Bros Inc. for Dutch Bros Inc. Class A common stock.
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 measures should be carefully evaluated. Please refer to "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 |
Nine Months Ended |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(in thousands; unaudited) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||
|
Company-operated shop gross profit |
68,377 |
22.2 |
56,992 |
24.1 |
192,698 |
22.6 |
137,943 |
21.9 |
||||||||
|
Depreciation and amortization |
22,470 |
7.3 |
16,332 |
6.9 |
63,202 |
7.4 |
44,132 |
7.0 |
||||||||
|
Company-operated shop contribution |
90,847 |
29.5 |
73,324 |
31.0 |
255,900 |
30.0 |
182,075 |
28.9 |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||||||||
|
(in thousands; unaudited) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||
|
Net income |
21,712 |
6.4 |
13,401 |
5.1 |
60,083 |
6.4 |
13,721 |
1.9 |
||||||||||||||
|
Depreciation and amortization |
23,881 |
7.1 |
18,116 |
6.8 |
67,484 |
7.2 |
49,411 |
6.9 |
||||||||||||||
|
Interest expense, net |
6,869 |
2.0 |
9,325 |
3.5 |
20,259 |
2.2 |
26,269 |
3.7 |
||||||||||||||
|
Income tax expense |
4,698 |
1.4 |
1,828 |
0.7 |
17,330 |
1.8 |
6,259 |
0.9 |
||||||||||||||
|
EBITDA |
57,160 |
16.9 |
42,670 |
16.1 |
165,156 |
17.6 |
95,660 |
13.4 |
||||||||||||||
|
Equity-based compensation |
2,961 |
0.9 |
9,698 |
3.7 |
8,220 |
0.8 |
29,017 |
4.0 |
||||||||||||||
|
Expenses associated with equity offerings |
- |
- |
- |
- |
1,489 |
0.2 |
- |
- |
||||||||||||||
|
Executive transitions |
- |
- |
225 |
0.1 |
75 |
- |
600 |
0.1 |
||||||||||||||
|
TRAs remeasurements |
- |
- |
415 |
0.1 |
(5,687 |
) |
(0.6 |
) |
(1,740 |
) |
(0.2 |
) |
||||||||||
|
Legal proceedings |
- |
- |
- |
- |
- |
- |
1,950 |
0.3 |
||||||||||||||
|
Sale of Aircraft |
(550 |
) |
(0.2 |
) |
- |
- |
(1,302 |
) |
(0.1 |
) |
- |
- |
||||||||||
|
Organization realignment and restructuring: |
||||||||||||||||||||||
|
Employee-related costs |
3,998 |
1.2 |
- |
- |
13,287 |
1.4 |
- |
- |
||||||||||||||
|
Other costs |
193 |
0.1 |
- |
- |
223 |
- |
- |
- |
||||||||||||||
|
Total organization realignment and restructuring |
4,191 |
1.3 |
- |
- |
13,510 |
1.4 |
- |
- |
||||||||||||||
|
Adjusted EBITDA |
63,762 |
18.9 |
53,008 |
20.0 |
181,461 |
19.3 |
125,487 |
17.6 |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||||||||||
|
(in thousands; unaudited) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||
|
Selling, general, and administrative |
57,536 |
17.0 |
50,490 |
19.1 |
161,866 |
17.3 |
148,128 |
20.8 |
||||||||||||||||
|
Depreciation and amortization |
(389 |
) |
- |
(413 |
) |
(0.1 |
) |
(888 |
) |
(0.2 |
) |
(1,250 |
) |
(0.2 |
) |
|||||||||
|
Equity-based compensation |
(2,688 |
) |
(0.8 |
) |
(9,698 |
) |
(3.7 |
) |
(7,583 |
) |
(0.8 |
) |
(29,017 |
) |
(4.0 |
) |
||||||||
|
Expenses associated with equity offerings |
- |
- |
- |
- |
(1,489 |
) |
(0.2 |
) |
- |
- |
||||||||||||||
|
Executive transitions |
- |
- |
(225 |
) |
(0.1 |
) |
(75 |
) |
- |
(600 |
) |
(0.1 |
) |
|||||||||||
|
Legal proceedings |
- |
- |
- |
- |
- |
- |
(1,950 |
) |
(0.3 |
) |
||||||||||||||
|
Organization realignment and restructuring: |
||||||||||||||||||||||||
|
Employee-related costs |
(3,998 |
) |
(1.2 |
) |
- |
- |
(13,287 |
) |
(1.4 |
) |
- |
- |
||||||||||||
|
Other costs |
(193 |
) |
(0.1 |
) |
- |
- |
(223 |
) |
- |
- |
- |
|||||||||||||
|
Total organization realignment and restructuring |
(4,191 |
) |
(1.3 |
) |
- |
- |
(13,510 |
) |
(1.4 |
) |
- |
- |
||||||||||||
|
Adjusted selling, general, and administrative |
50,268 |
14.9 |
40,154 |
15.2 |
138,321 |
14.7 |
115,311 |
16.2 |
|
Three Months Ended |
||||||||
|
(in thousands; unaudited) |
2024 |
2023 |
||||||
|
Net income |
$ |
21,712 |
$ |
13,401 |
||||
|
Equity-based compensation |
2,961 |
9,698 |
||||||
|
Executive transitions |
- |
225 |
||||||
|
TRAs remeasurements |
- |
415 |
||||||
|
Sale of Aircraft |
(550 |
) |
- |
|||||
|
Organization realignment and restructuring: |
||||||||
|
Employee-related costs |
3,998 |
- |
||||||
|
Other costs |
193 |
- |
||||||
|
Subtotal: Organization realignment and restructuring |
4,191 |
- |
||||||
|
Income tax effects |
(652 |
) |
(1,327 |
) |
||||
|
Adjusted net income |
$ |
27,662 |
$ |
22,412 |
|
Three Months Ended |
||||||||
|
(in thousands, except per share amounts; unaudited) |
2024 |
2023 |
||||||
|
Weighted-average shares of Class A and Class D common stock outstanding - basic |
113,819 |
59,366 |
||||||
|
Dilutive effects of restricted stock awards and units |
433 |
848 |
||||||
|
Weighted-average shares of Class A and Class D common stock outstanding - diluted |
114,252 |
60,214 |
||||||
|
Assumed exchange of weighted-average Dutch Bros OpCo Class A common units for shares of Dutch Bros Inc. Class A common stock |
63,369 |
105,756 |
||||||
|
Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted |
177,621 |
165,970 |
||||||
|
Net income per share of Class A and Class D common stock - diluted |
$ |
0.11 |
$ |
0.07 |
||||
|
Controlling and non-controlling interest adjustments |
0.01 |
0.02 |
||||||
|
Equity-based compensation |
0.02 |
0.06 |
||||||
|
Executive transitions |
- |
- |
||||||
|
TRAs remeasurements |
- |
- |
||||||
|
Sale of Aircraft |
- |
- |
||||||
|
Organization realignment and restructuring: |
||||||||
|
Employee-related costs |
0.02 |
- |
||||||
|
Other costs |
- |
- |
||||||
|
Subtotal: Organization realignment and restructuring |
0.02 |
- |
||||||
|
Income tax effects |
- |
(0.01 |
) |
|||||
|
Adjusted net income per fully exchanged share of diluted common stock |
$ |
0.16 |
$ |
0.14 |
For Investor Relations inquiries:
Jeff Priester
ICR
(332) 242-4370
[email protected]
For Media Relations inquiries:
Jessica Liddell
ICR
(203) 682-8208
[email protected]