Dutch Bros Inc. Reports Third Quarter 2021 Financial Results

November 10, 2021 4:05 PM EST
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Surpassed 500 shops, Company-owned shops revenue expands 62.9%

Reiterates long-term potential of at least 4,000 shops nationwide

GRANTS PASS, Ore.--(BUSINESS WIRE)-- Dutch Bros Inc. (NYSE: BROS), one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the third quarter ended September 30, 2021. We also provided our fourth quarter 2021 financial outlook and our preliminary outlook for 2022 new shop openings.

Joth Ricci, Chief Executive Officer and President of Dutch Bros Inc., stated, “We are very pleased with the strength of our third quarter and year-to-date results which are exceeding the optimistic set of expectations we established going into 2021. While we are excited to have recently begun our journey as a public company, we are already focused on a clear set of growth-minded objectives that make Dutch Bros a national brand. This includes expanding what is already a strong pipeline of homegrown regional operators and combining that with a disciplined, people-led growth strategy that creates the potential for at least 4,000 shops nationwide. As we open new stores in both existing and new markets, we will provide our customers with unique drive-thru experiences based upon Speed, Quality and Service while solidifying our strong commitment to communities.”

Third Quarter 2021 Highlights:

  • Surpassed 500 operating shops with our Hutto, Texas opening (Northeast of Austin).
  • Opened 33 new shops, of which 30 were company-operated
  • Total revenues grew 49.8% to $129.8 million as compared to the same period last year.
  • Company-operated shops revenues increased 62.9% to $108.7 million as compared to $66.7 million in the same period last year.
  • System same shop sales grew 7.3% in the third quarter and 10.7% on a two-year basis. Company-operated same shop sales grew 4.7% in the third quarter and 10.1% on a two-year basis.
  • Company-operated shop gross profit grew 18.0% to $22.8 million as compared to $19.3 million in the same period last year. Company-operated contribution1, excluding pre-opening and COVID costs grew 23.8% to $27.1 million as compared to $21.9 million in the same period last year.
  • Net income (loss) was $(117.1) million, or $(0.15) per diluted share as compared to $6.7 million in the same period last year. In the third quarter of 2021, we recognized $124.8 million of non-cash equity-based compensation related to our initial public offering.
  • Adjusted net income1 was $11.0 million, or $0.23 per diluted share, as compared to $16.2 million in the same period last year.
  • Adjusted EBITDA1 decreased 2.6% to $20.6 million as compared to $21.2 million in the same period last year. The decrease was primarily due to abnormally low systemwide discounts last year during the initial COVID-19 pandemic outbreak.

Initial Public Offering

On September 17, 2021, we successfully closed our initial public offering ("IPO") of 24,210,526 shares of Class A common stock, including the exercise in full of the underwriters’ option to purchase 3,157,894 additional shares, at a price to the public of $23.00 per share. Proceeds from the IPO were approximately $556.8 million, before deducting underwriting discounts and commissions and other offering expenses.

Our Class A common stock began trading on The New York Stock Exchange (“NYSE”) under the symbol “BROS” on September 15, 2021.

Outlook

For the fourth quarter, we are providing the following outlook:

  • Total system shop openings are expected to be at least 30.
  • Total revenue is projected to be in the range of $125.0 million - $128.0 million.
  • Same shop sales are estimated in the mid single-digits.
  • Adjusted EBITDA2 is projected to be in the range of $12.5 million - $13.5 million.

For the year 2022, we are providing the following preliminary outlook for new shop openings:

  • Total system shop openings are expected to be at least 112.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer and President, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast to discuss financial results for the third quarter ended September 30, 2021 today at 5:00 p.m. Eastern Time (ET).

Event: Third Quarter 2021 Conference Call and Webcast
Date: Wednesday, November 10, 2021
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 (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 more than 500 locations across 11 states as of September 30, 2021.

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

Forward-Looking Statements

In addition to historical information, this release may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros’ possible or assumed future results of operations, new shop openings, business strategies, competitive position, industry environment, potential growth opportunities and the effects of regulation. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “should,” “future,” “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 the evolving COVID-19 pandemic, disruptions in our supply chain, ability to hire and retain employees; and other risks, including those described under the heading “Risk Factors” in our final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, dated September 16, 2021 and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. 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

1 Adjusted net income, Adjusted EBITDA, and Company-operated shop contribution are non-GAAP financial measures frequently used by analysts, investors and other interested parties to evaluate companies in our industry. However, our non-GAAP financial measures are not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. Please see definitions and the reconciliation of these non-GAAP financial measures accompanying this release.

2We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

 

DUTCH BROS INC.

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands, except per share amounts; unaudited)

 

2021

 

2020

 

2021

 

2020

REVENUES

 

 

 

 

 

 

 

 

Company-operated stores

 

$

108,661

 

 

$

66,695

 

 

$

289,548

 

 

$

175,767

 

Franchising and other

 

21,142

 

 

19,963

 

 

68,248

 

 

61,750

 

Total revenues

 

129,803

 

 

86,658

 

 

357,796

 

 

237,517

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

Cost of sales

 

91,060

 

 

52,502

 

 

239,869

 

 

147,431

 

Selling, general and administrative

 

153,727

 

 

26,197

 

 

223,595

 

 

74,497

 

Total costs and expenses

 

244,787

 

 

78,699

 

 

463,464

 

 

221,928

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

(114,984

)

 

7,959

 

 

(105,668

)

 

15,589

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense, net

 

(2,393

)

 

(950

)

 

(5,248

)

 

(2,650

)

Other expense, net

 

(1,041

)

 

(353

)

 

(1,099

)

 

(669

)

Total other expense

 

(3,434

)

 

(1,303

)

 

(6,347

)

 

(3,319

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(118,418

)

 

6,656

 

 

(112,015

)

 

12,270

 

Income tax expense (benefit)

 

(1,280

)

 

 

 

(716

)

 

338

 

NET INCOME (LOSS)

 

$

(117,138

)

 

$

6,656

 

 

$

(111,299

)

 

$

11,932

 

Less: Net loss attributable to Dutch Bros OpCo prior to the Reorganization Transactions

 

(74,441

)

 

 

 

(68,602

)

 

 

Less: Net loss attributable to non-controlling interests

 

(35,959

)

 

 

 

(35,959

)

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC.

 

$

(6,738

)

 

$

6,656

 

 

$

(6,738

)

 

$

11,932

 

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

 

 

 

 

 

 

 

 

Basic

 

$

(0.15

)

 

N/A

 

$

(0.15

)

 

N/A

Diluted

 

$

(0.15

)

 

N/A

 

$

(0.15

)

 

N/A

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

 

 

 

 

 

 

 

 

Basic

 

44,991

 

 

N/A

 

44,991

 

 

N/A

Diluted

 

47,232

 

 

N/A

 

47,232

 

 

N/A

 

DUTCH BROS INC.

Segment Financials

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands; unaudited)

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

108,661

 

 

$

66,695

 

 

$

289,548

 

 

$

175,767

 

Franchising and other

 

21,142

 

 

19,963

 

 

68,248

 

 

61,750

 

Total revenues

 

129,803

 

 

86,658

 

 

357,796

 

 

237,517

 

Cost of Sales:

 

 

 

 

 

 

 

 

Company-operated shops

 

85,853

 

 

47,374

 

 

220,510

 

 

129,392

 

Franchising and other

 

5,207

 

 

5,128

 

 

19,359

 

 

18,039

 

Total cost of sales

 

91,060

 

 

52,502

 

 

239,869

 

 

147,431

 

Segment profit:

 

 

 

 

 

 

 

 

Company-operated shops

 

22,808

 

 

19,321

 

 

69,038

 

 

46,375

 

Franchising and other

 

15,935

 

 

14,835

 

 

48,889

 

 

43,711

 

Total gross profit

 

38,743

 

 

34,156

 

 

117,927

 

 

90,086

 

Selling, general and administrative

 

(153,727

)

 

(26,197

)

 

(223,595

)

 

(74,497

)

Interest expense, net

 

(2,393

)

 

(950

)

 

(5,248

)

 

(2,650

)

Other expense, net

 

(1,041

)

 

(353

)

 

(1,099

)

 

(669

)

Income (loss) before income taxes

 

$

(118,418

)

 

$

6,656

 

 

$

(112,015

)

 

$

12,270

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

4,294

 

 

$

2,564

 

 

$

11,038

 

 

$

6,907

 

Franchising and other

 

1,703

 

 

1,156

 

 

4,728

 

 

3,129

 

All other

 

699

 

 

347

 

 

1,961

 

 

1,120

 

Total depreciation and amortization

 

$

6,696

 

 

$

4,067

 

 

$

17,727

 

 

$

11,156

 

 

DUTCH BROS INC.

Company-Operated Shop Results

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(in thousands; unaudited)

 

2021

 

2020

 

2021

 

2020

 

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop revenue

 

108,661

 

 

100.0

 

 

66,695

 

 

100.0

 

 

289,548

 

 

100.0

 

 

175,767

 

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, food and packaging costs

 

27,846

 

25.6

 

 

14,618

 

 

21.9

 

 

71,564

 

 

24.7

 

 

39,047

 

 

22.2

 

Labor costs

 

33,610

 

30.9

 

 

18,800

 

 

28.2

 

 

88,798

 

 

30.7

 

 

51,205

 

 

29.1

 

Occupancy and other costs

 

17,041

 

15.7

 

 

9,789

 

 

14.7

 

 

42,484

 

 

14.7

 

 

26,549

 

 

15.1

 

Pre-opening costs

 

3,062

 

2.8

 

 

1,603

 

 

2.4

 

 

6,626

 

 

2.3

 

 

5,684

 

 

3.2

 

Depreciation

 

4,294

 

4.0

 

 

2,564

 

 

3.8

 

 

11,038

 

 

3.8

 

 

6,907

 

 

3.9

 

Company-operated shop gross profit

 

22,808

 

21.0

 

 

19,321

 

 

29.0

 

 

69,038

 

 

23.8

 

 

46,375

 

 

26.4

 

Company-operated shop contribution 1

 

27,102

 

24.9

 

 

21,885

 

 

32.8

 

 

80,076

 

 

27.7

 

 

53,282

 

 

30.3

 

1

Reconciliation of GAAP to non-GAAP results are provided below in the “Reconciliation of GAAP Financial Metrics to Non-GAAP” section of this press release.

 

DUTCH BROS INC.

Summary Cash Flows Data

 

 

 

Nine Months Ended September 30,

(in thousands; unaudited)

 

2021

 

2020

Net cash flows provided by operating activities

 

$

72,304

 

 

$

42,664

 

Net cash flows used in investing activities

 

(76,781

)

 

(25,488

)

Net cash provided by (used in) financing activities

 

(1,300

)

 

4,694

 

Net increase (decrease) in cash

 

$

(5,777

)

 

$

21,870

 

Cash and cash equivalents at beginning of period

 

31,640

 

 

15,584

 

Cash and cash equivalents at end of period

 

$

25,863

 

 

$

37,454

 

 

DUTCH BROS INC.

Condensed Consolidated Balance Sheets

 

 

 

As of

(in thousands; unaudited)

 

September 30, 2021

 

December 31, 2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

25,863

 

 

$

31,640

 

Accounts receivable, net

 

11,019

 

 

10,837

 

Inventory

 

18,494

 

 

15,580

 

Prepaid expenses and other current assets

 

7,152

 

 

5,015

 

Total current assets

 

62,528

 

 

63,072

 

Property and equipment, net

 

250,110

 

 

165,423

 

Intangibles, net

 

12,054

 

 

11,323

 

Goodwill

 

18,715

 

 

18,075

 

Deferred income tax asset

 

158,663

 

 

 

Other long-term assets

 

1,562

 

 

1,766

 

Total assets

 

$

503,632

 

 

$

259,659

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

24,605

 

 

$

16,092

 

Accrued expenses

 

17,924

 

 

10,036

 

Other current liabilities

 

5,041

 

 

1,429

 

Deferred revenue

 

17,177

 

 

11,192

 

Line of credit

 

34,053

 

 

15,000

 

Current portion of capital lease obligations

 

3,060

 

 

2,331

 

Current portion of long-term debt

 

101

 

 

3,788

 

Total current liabilities

 

101,961

 

 

59,868

 

Deferred revenue, net of current portion

 

4,378

 

 

4,746

 

Tax receivable agreements liability, net of current portion

 

109,733

 

 

 

Capital lease obligations, net of current portion

 

72,348

 

 

49,637

 

Long-term debt, net of current portion

 

2,035

 

 

24,367

 

Profits interest liability

 

 

 

41,845

 

Deferred rent

 

2,983

 

 

2,740

 

Other long-term liabilities

 

572

 

 

466

 

Total liabilities

 

294,010

 

 

183,669

 

Equity:

 

 

 

 

Members’ equity

 

 

 

75,990

 

Common stock

 

2

 

 

 

Additional paid in capital

 

101,614

 

 

 

Retained earnings (deficit)

 

(6,738

)

 

 

Total stockholders' equity attributable to Dutch Bros Inc. / members’ equity

 

94,878

 

 

75,990

 

Non-controlling interests

 

114,744

 

 

 

Total equity

 

209,622

 

 

75,990

 

Total liabilities and equity

 

$

503,632

 

 

$

259,659

 

 

DUTCH BROS INC.

Select Financial Metrics

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

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

 

2021

2020

 

2021

 

2020

Shop count, beginning of period

 

 

 

 

 

 

 

Company-operated

 

207

 

146

 

 

182

 

 

118

 

Franchised

 

264

 

255

 

 

259

 

 

252

 

 

 

471

 

401

 

 

441

 

 

370

 

Company-operated new openings

 

30

 

11

 

 

52

 

 

39

 

Franchised new openings

 

3

 

3

 

 

11

 

 

7

 

Ownership transfers

 

4

 

 

 

7

 

 

 

Closures 1

 

(1

)

 

 

(1

)

 

(1

)

Shop count, end of period

 

 

 

 

 

 

 

Company-operated

 

241

 

157

 

 

241

 

 

157

 

Franchised

 

262

 

258

 

 

262

 

 

258

 

Total shop count

 

503

 

415

 

 

503

 

 

415

 

 

 

 

 

 

 

 

 

Average unit volume (AUV) 2

 

N/A

 

N/A

 

 

1,808

 

 

1,653

 

Company-operated shops

 

N/A

 

N/A

 

 

1,699

 

 

1,462

 

 

 

 

 

 

 

 

 

Same shop sales growth

 

7.3

%

2.4

%

 

8.0

%

 

0.6

%

Company-operated shops

 

4.7

%

2.5

%

 

8.3

%

 

(0.5

)%

 

 

 

 

 

 

 

 

Company-operated shop revenue

 

108,661

 

66,695

 

 

289,548

 

 

175,767

 

Company-operated gross profit 3

 

22,808

 

19,321

 

 

69,038

 

 

46,375

 

Company-operated shop contribution 3

 

27,102

 

21,885

 

 

80,076

 

 

53,282

 

% of company-operated shop revenue

 

24.9

%

32.8

%

 

27.7

%

 

30.3

%

 

 

 

 

 

 

 

 

Net income (loss) 3

 

(117,138

)

6,656

 

 

(111,299

)

 

11,932

 

Adjusted EBITDA 3

 

20,647

 

21,195

 

 

68,803

 

 

56,720

 

% of revenue

 

15.9

%

24.5

%

 

19.2

%

 

23.9

%

 

 

 

 

 

 

 

 

Systemwide sales 4

 

241,254

 

182,094

 

 

673,297

 

 

511,866

 

Dutch Rewards member activations 5

 

509

 

 

 

2,738

 

 

 

___________

1

Represents a temporary shop closure in 2021 and a permanent shop closure in 2020.

 

2

At Dutch Bros we track systemwide and company-operated shop AUVs. AUVs for any trailing twelve-month period consist of the net sales of systemwide and company-operated shops, respectively, for all shops that have been open for the entire 15-month measurement period. AUVs are calculated by dividing the total net sales by the total number of systemwide and company-operated shops, respectively, that were open for 15 months at the time of AUV calculation.

 

3

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

 

4

Systemwide sales and systemwide same shop sales include company-operated shop revenue and sales at franchised shops during the comparable periods noted. 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.

 

5

Dutch Rewards, a digitally-based rewards program available exclusively through the Dutch Rewards app, was launched February 2021. As such, there is no information for the comparable periods of 2020.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release contains non-GAAP financial results, including adjusted net income, EBITDA and Adjusted EBITDA. We use these non-GAAP measures to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with GAAP, we believe that providing these non-GAAP financial measures are useful to our investors as they present an informative supplemental view of our results from period to period by removing the effect of non-recurring items.

However, the non-GAAP financial measures presented herein are specific to us and may not be comparable to similar measures disclosed by other companies because of differing methods used by other companies in calculating them. These measures are also not intended to be measures of free cash flow for management’s discretionary use, as they do not reflect tax payments, debt service requirements and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs. Management compensates for these limitations by relying on our GAAP results in addition to using these non-GAAP financial measures. The non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Company-operated shop contribution

Company-operated shop contribution, a non-GAAP financial measure, is defined as net sales less beverage, food and packaging costs, labor, occupancy and other costs, and pre-opening costs. Company-operated shop contribution is included in this press release because it is a key metric used by management and our board of directors to assess our financial performance, frequently used by analysts, investors and other interested parties to evaluate companies in our industry.

EBITDA and Adjusted EBITDA

We define EBITDA, a non-GAAP financial measure, as GAAP net income (loss) adjusted for interest income or expense, income tax expense (benefit) and other income or expense, depreciation and amortization. Additionally, we define Adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted for equity-based compensation, expenses related to public or private offerings, pandemic-related costs, and other non-recurring items as determined by management. EBITDA and Adjusted EBITDA are included in this press release because they are key metrics used by management and our board of directors to assess our financial performance, frequently used by analysts, investors, and other interested parties to evaluate companies in our industry.

Adjusted Net Income

We define Adjusted Net Income, a non-GAAP financial measure, as GAAP net income (loss) adjusted for equity-based compensation, expenses related to public or private offerings, pandemic-related costs, and other non-recurring items as determined by management, net of income tax effects. Adjusted Net Income is included in this press release because it is a key metric used by management and our board of directors to assess our financial performance, and is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry.

Following are the reconciliations of the most comparable GAAP metric to non-GAAP metrics presented:

 

DUTCH BROS INC.

Reconciliation of GAAP Financial Metrics to Non-GAAP


Reconciliation of company-operated shop gross profit to company-operated shop contribution

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2021

 

2020

 

2021

 

2020

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop gross profit

 

$

22,808

 

 

21.0

 

 

$

19,321

 

 

29.0

 

 

$

69,038

 

 

23.8

 

 

$

46,375

 

 

26.4

 

Depreciation

 

4,294

 

 

4.0

 

 

2,564

 

 

3.8

 

 

11,038

 

 

3.8

 

 

6,907

 

 

3.9

 

Company-operated shop contribution

 

$

27,102

 

 

24.9

 

 

$

21,885

 

 

32.8

 

 

$

80,076

 

 

27.7

 

 

$

53,282

 

 

30.3

 

Reconciliation of net income (loss) to EBITDA and adjusted EBITDA

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands; unaudited)

 

2021

 

2020

 

2021

 

2020

Net income (loss)

 

$

(117,138

)

 

$

6,656

 

 

$

(111,299

)

 

$

11,932

 

Depreciation and amortization

 

6,696

 

 

4,067

 

 

17,727

 

 

11,156

 

Interest expense, net

 

2,393

 

 

950

 

 

5,248

 

 

2,650

 

Income tax expense (benefit)

 

(1,280

)

 

 

 

(716

)

 

 

338

 

EBITDA

 

$

(109,329

)

 

$

11,673

 

 

$

(89,040

)

 

$

26,076

 

Equity-based compensation 1

124,779

 

 

9,815

 

 

147,761

 

 

23,372

 

Expenses associated with equity offering 2

3,332

 

 

 

 

5,661

 

 

 

Donation associated with equity offering 3

1,392

 

 

 

 

1,392

 

 

 

COVID-19: "thank you” pay and catastrophic leave 4

473

 

 

218

 

 

3,029

 

 

3,242

 

COVID-19: royalty abatement 5

 

 

 

 

 

 

1,400

 

COVID-19: first responder donation 6

 

 

 

 

 

 

2,000

 

Dutch Rewards transition 7

 

 

(1,250

)

 

 

 

(1,292

)

Dutchwear merchandising adjustment 8

 

 

739

 

 

 

 

1,922

 

Adjusted EBITDA

$

20,647

 

$

21,195

 

$

68,803

 

 

$

 

56,720

 

Adjusted EBITDA margin 9

 

15.9

%

24.5

%

 

19.2

%

 

 

23.9

%

___________

1

Represents non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros Inc. and/or Profits Interest Units in Dutch Bros OpCo to certain employees. These awards are accounted for in accordance with guidance prescribed for accounting for share-based compensation.

 

2

Represents costs incurred as a result of our IPO. These costs include legal fees, consulting fees, tax and accounting fees, and payroll taxes related to the grant and vesting of stock awards for certain employees.

 

3

As part of our IPO, we made a one-time donation to the Dutch Bros Foundation. This donation is separate from other donations to the Dutch Bros Foundation that we may periodically make.

 

4

Represents costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. All COVID-19-related protocols, including catastrophic leave, will remain in effect until the end of the COVID-19 pandemic as determined by the appropriate government agency.

 

5

In April 2020, we permitted franchise partners to skip one month of royalty payments to support their cash flow needs. We discontinued this support one month later in May 2020.

 

6

During 2020, we made specific donations to the First Responders First organization to support the acquisition and distribution of personal protective equipment for first responders.

 

7

We recorded a benefit related to our transition from a paper-based stamp card loyalty program to our current app-based loyalty rewards program.

 

8

During 2020, we incurred a series of one-time costs associated with the strategic decision to exit our internal merchandising business related to Dutch-branded goods such as mugs and cups. These costs include write-off and disposal of obsolete inventory and severance for staff dedicated to in-house support services related to our Dutchwear business.

 

9

Calculated as a percentage of total revenue.

Reconciliation of net income (loss) to adjusted net income

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands; unaudited)

 

2021

 

2020

 

2021

 

2020

Net income (loss)

 

$

(117,138

)

 

$

6,656

 

 

$

(111,299

)

 

$

11,932

 

Equity-based compensation 1

 

124,779

 

 

9,815

 

 

147,761

 

 

23,372

 

Expenses associated with equity offering 2

 

3,332

 

 

 

 

5,661

 

 

 

Donation associated with equity offering 3

 

1,392

 

 

 

 

1,392

 

 

 

COVID-19: "thank you pay" and catastrophic leave 4

 

473

 

 

218

 

 

3,029

 

 

3,242

 

COVID-19: royalty abatement 5

 

 

 

 

 

 

 

1,400

 

COVID-19: first responder donation 6

 

 

 

 

 

 

 

2,000

 

Dutch Rewards transition 7

 

 

 

(1,250

)

 

 

 

(1,292

)

Dutchwear merchandising adjustment 8

 

 

 

739

 

 

 

 

1,922

 

Income tax effects

 

(1,793

)

 

 

 

(1,793

)

 

 

Adjusted net income

 

$

11,045

 

 

$

16,178

 

 

$

44,751

 

 

$

42,576

 

___________

1

Represents non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros PubCo and/or Profits Interest Units in Dutch Bros OpCo to certain employees. These awards are accounted for in accordance with guidance prescribed for accounting for share-based compensation.

 

2

Represents costs incurred as a result of our IPO. These costs include legal fees, consulting fees, tax and accounting fees, and payroll taxes related to the grant and vesting of stock awards for certain employees.

 

3

As part of our IPO, we made a donation to the Dutch Bros Foundation. This donation is separate from other donations to the Dutch Bros Foundation that we may periodically make.

 

4

Represents costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. All COVID-19-related protocols, including catastrophic leave, will remain in effect until the end of the COVID-19 pandemic as determined by the appropriate government agency.

 

5

In April 2020, we permitted franchise partners to skip one month of royalty payments to support their cash flow needs. We discontinued this support one month later in May 2020.

 

6

During 2020, we made specific donations to the First Responders First organization to support the acquisition and distribution of personal protective equipment for first responders.

 

7

We recorded a benefit related to our transition from a paper-based stamp card loyalty program to our current app-based loyalty rewards program.

 

8

During 2020, we incurred a series of one-time costs associated with the strategic decision to exit our internal merchandising business related to Dutch-branded goods such as mugs and cups. These costs include write-off and disposal of obsolete inventory and severance for staff dedicated to in-house support services related to our Dutchwear business.

 

For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com

For Media Relations inquiries:
Jessical Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com

Source: Dutch Bros Inc.



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