Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Dutch Bros Inc. Announces Second Quarter 2022 Financial Results


Dutch Bros Inc. (NYSE: BROS; "Dutch Bros" or the "Company") one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the second quarter ended June 30, 2022.

Joth Ricci, Chief Executive Officer and President of Dutch Bros Inc., stated, "We surpassed two major brand milestones during the second quarter: opening our 600th shop and exceeding $1 billion in systemwide sales2 on a trailing twelve-month basis. These milestones demonstrate the strength of our people-first culture and our new shop development pipeline. We have opened 65 shops in the first half of 2022 and are on track for at least 130 shop openings for the full year. Our newest shops are exhibiting predictable and consistent sales and upward margin progression, while our 2020 and 2021 classes are generating annualized volumes that are 10% higher than our system average. As we pursue strategic growth from west to east, Dutch Bros' portability and brand acceptance have been outstanding."

He added, "Like many of our peers, the macro-economic environment is impacting various aspects of our business, and our company-operated shop margins continue to be pressured by record inflation in the second quarter. That said, our team accelerated efforts to increase productivity in the middle of our P&L, and we took a 3% price increase in the second quarter. These actions contributed to 630bps of sequential improvement in company-operated shop margins from 18.3% to 24.6% when compared to the first quarter of 2022. We are evaluating further menu pricing action as needed in the back half of the year."

He concluded, "We celebrated our annual Drink One for Dane fundraiser on May 20, and it was the second-largest day by transaction-count in our history. In 2022 we raised $2.3 million, and since 2018, we have raised over $8.3 million. We are upholding our mission to contribute to communities, making a massive difference, one cup at a time."

Second Quarter 2022 Highlights:

Outlook

Dutch Bros is affirming its full-year 2022 outlook:

_________________
1 Trailing-twelve months are the results for the past twelve consecutive months ended on June 30, 2022.
2 Definition of systemwide sales is provided in the section "Select Financial Metrics".
3 Same shop sales is defined in the section "Select Financial Metrics".
4 The Company's historical results have been revised to reflect an immaterial error correction related to employee sick leave accrual. For additional information, see sections "Condensed Consolidated Statements of Operations", "Company-operated Shop Results", and "Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals"
5 Reconciliation of GAAP to non-GAAP results is provided in the section "Non-GAAP Financial Measures".
6 We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer and President, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time (ET) to discuss financial results for the second quarter ended June 30, 2022.

Event: Second Quarter 2022 Conference Call and Webcast

Date: Wednesday, August 10, 2022

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 603 locations across 14 states as of June 30, 2022.

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

Dutch Bros, our Windmill logo, Dutch Bros Blue Rebel, Drink One for Dane, 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 tm symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Forward-Looking Statements

In addition to historical information, this release contains a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros' possible or assumed future results of operations, including guidance for 2022, new shop openings, business strategies, potential growth opportunities and the effects of current market conditions. 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, 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, 2021 filed with the SEC on March 11, 2022, our Quarterly Report on Form 10-Q for the period ended June 30, 2022 to be filed with the SEC, and in our future reports to be filed with the SEC. 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
June 30,

 

Six Months Ended
June 30,

(in thousands, except per share amounts; unaudited)

 

 

2022

 

 

2021 ¹

 

 

2022

 

 

2021 ¹

REVENUES

 

 

 

 

 

 

 

 

Company-operated shops

 

$

160,512

 

 

$

102,970

 

 

$

290,699

 

 

$

180,887

 

Franchising and other

 

 

25,869

 

 

 

26,238

 

 

 

47,838

 

 

 

47,106

 

Total revenues

 

 

186,381

 

 

 

129,208

 

 

 

338,537

 

 

 

227,993

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

Cost of sales

 

 

141,370

 

 

 

81,467

 

 

 

262,537

 

 

 

147,975

 

Selling, general and administrative

 

 

42,342

 

 

 

33,488

 

 

 

87,556

 

 

 

69,474

 

Total costs and expenses

 

 

183,712

 

 

 

114,955

 

 

 

350,093

 

 

 

217,449

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

2,669

 

 

 

14,253

 

 

 

(11,556

)

 

 

10,544

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(3,596

)

 

 

(1,838

)

 

 

(6,085

)

 

 

(2,855

)

Other income (expense), net

 

 

61

 

 

 

(5

)

 

 

282

 

 

 

(58

)

Total other expense

 

 

(3,535

)

 

 

(1,843

)

 

 

(5,803

)

 

 

(2,913

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(866

)

 

 

12,410

 

 

 

(17,359

)

 

 

7,631

 

Income tax expense

 

 

885

 

 

 

521

 

 

 

671

 

 

 

564

 

NET INCOME (LOSS)

 

$

(1,751

)

 

$

11,889

 

 

$

(18,030

)

 

$

7,067

 

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

 

 

?

 

 

 

11,889

 

 

 

?

 

 

 

7,067

 

Less: Net loss attributable to non-controlling interests

 

 

(845

)

 

 

?

 

 

 

(12,177

)

 

 

?

 

NET LOSS ATTRIBUTABLE TO DUTCH BROS INC.

 

$

(906

)

 

$

?

 

 

$

(5,853

)

 

$

?

 

Net loss per share of Class A and Class D common stock 2:

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

 

N/A

 

 

$

(0.12

)

 

 

N/A

 

Diluted

 

$

(0.02

)

 

 

N/A

 

 

$

(0.12

)

 

 

N/A

 

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

 

 

 

 

 

 

 

 

Basic

 

 

50,926

 

 

 

N/A

 

 

 

49,500

 

 

 

N/A

 

Diluted

 

 

50,926

 

 

 

N/A

 

 

 

49,500

 

 

 

N/A

 

_________________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within the condensed consolidated statement of operations with impacted line items presented below for the three and six months ended June 30, 2021, respectively.

2 Basic and diluted net loss per share of Class A and Class D common stock are applicable only for periods subsequent to September 14, 2021, which is the effective date of the Company's Reorganization Transactions and IPO.

DUTCH BROS INC.

Segment Financials

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

(in thousands; unaudited)

 

 

2022

 

 

2021 ¹

 

 

2022

 

 

2021 ¹

Revenues:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

160,512

 

 

$

102,970

 

 

$

290,699

 

 

$

180,887

 

Franchising and other

 

 

25,869

 

 

 

26,238

 

 

 

47,838

 

 

 

47,106

 

Total revenues

 

 

186,381

 

 

 

129,208

 

 

 

338,537

 

 

 

227,993

 

Cost of Sales:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

129,294

 

 

 

73,518

 

 

 

242,842

 

 

 

133,857

 

Franchising and other

 

 

12,076

 

 

 

7,949

 

 

 

19,695

 

 

 

14,118

 

Total cost of sales

 

 

141,370

 

 

 

81,467

 

 

 

262,537

 

 

 

147,975

 

Segment gross profit:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

31,218

 

 

 

29,452

 

 

 

47,857

 

 

 

47,030

 

Franchising and other

 

 

13,793

 

 

 

18,289

 

 

 

28,143

 

 

 

32,988

 

Total gross profit

 

 

45,011

 

 

 

47,741

 

 

 

76,000

 

 

 

80,018

 

Selling, general and administrative

 

 

(42,342

)

 

 

(33,488

)

 

 

(87,556

)

 

 

(69,474

)

Interest expense, net

 

 

(3,596

)

 

 

(1,838

)

 

 

(6,085

)

 

 

(2,855

)

Other income (expense), net

 

 

61

 

 

 

(5

)

 

 

282

 

 

 

(58

)

Income (loss) before income taxes

 

$

(866

)

 

$

12,410

 

 

$

(17,359

)

 

$

7,631

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

8,307

 

 

$

3,473

 

 

$

15,447

 

 

$

6,744

 

Franchising and other

 

 

1,520

 

 

 

1,532

 

 

 

2,862

 

 

 

3,025

 

All other

 

 

712

 

 

 

676

 

 

 

1,412

 

 

 

1,262

 

Total depreciation and amortization

 

$

10,539

 

 

$

5,681

 

 

$

19,721

 

 

$

11,031

 

_________________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within segment financials with impacted line items presented below for the three and six months ended June 30, 2021, respectively.

DUTCH BROS INC.

Company-Operated Shop Results

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2022

 

2021 ¹

 

2022

 

2021 ¹

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shops revenue

 

160,512

 

100.0

 

102,970

 

100.0

 

290,699

 

100.0

 

180,887

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, food and packaging costs

 

43,548

 

27.1

 

25,520

 

24.8

 

79,170

 

27.2

 

43,718

 

24.2

Labor costs

 

47,240

 

29.4

 

29,048

 

28.2

 

89,001

 

30.6

 

54,388

 

30.1

Occupancy and other costs

 

26,621

 

16.6

 

13,642

 

13.2

 

49,624

 

17.1

 

25,443

 

14.1

Pre-opening costs

 

3,578

 

2.2

 

1,835

 

1.8

 

9,600

 

3.3

 

3,564

 

2.0

Depreciation and amortization

 

8,307

 

5.2

 

3,473

 

3.4

 

15,447

 

5.3

 

6,744

 

3.7

Company-operated shops gross profit

 

31,218

 

19.4

 

29,452

 

28.6

 

47,857

 

16.5

 

47,030

 

26.0

Company-operated shops contribution 2

 

39,525

 

24.6

 

32,925

 

32.0

 

63,304

 

21.8

 

53,774

 

29.7

_________________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within the company-operated shop segment with the impacted line items are presented below for the three and six months ended June 30, 2021, respectively.

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

DUTCH BROS INC.

Summary Cash Flows Data

 

 

 

Six Months Ended
June 30,

(in thousands; unaudited)

 

 

2022

 

 

 

2021

 

Net cash flows provided by operating activities

 

$

16,713

 

 

$

56,199

 

Net cash flows used in investing activities

 

 

(88,633

)

 

 

(36,386

)

Net cash provided by (used in) financing activities

 

 

74,707

 

 

 

(31,876

)

Net increase (decrease) in cash

 

$

2,787

 

 

$

(12,063

)

Cash and cash equivalents at beginning of period

 

 

18,506

 

 

 

31,640

 

Cash and cash equivalents at end of period

 

$

21,293

 

 

$

19,577

 

DUTCH BROS INC.

Condensed Consolidated Balance Sheets

 

(in thousands; unaudited)

 

June 30, 2022

 

December 31, 2021 ¹

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

21,293

 

 

$

18,506

 

Accounts receivable, net

 

 

14,070

 

 

 

10,644

 

Inventories, net

 

 

32,854

 

 

 

23,345

 

Prepaid expenses and other current assets

 

 

7,050

 

 

 

8,796

 

Total current assets

 

 

75,267

 

 

 

61,291

 

Property and equipment, net

 

 

290,721

 

 

 

301,998

 

Finance lease right-of-use assets, net

 

 

167,220

 

 

 

?

 

Operating lease right-of-use assets, net

 

 

159,680

 

 

 

?

 

Intangibles, net

 

 

10,881

 

 

 

11,103

 

Goodwill

 

 

21,629

 

 

 

18,715

 

Deferred income tax assets, net

 

 

223,336

 

 

 

159,031

 

Other long-term assets

 

 

801

 

 

 

1,562

 

Total assets

 

$

949,535

 

 

$

553,700

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

22,511

 

 

$

20,440

 

Accrued liabilities

 

 

20,849

 

 

 

20,970

 

Other current liabilities

 

 

6,106

 

 

 

6,471

 

Deferred revenue

 

 

26,966

 

 

 

22,807

 

Line of credit

 

 

45,640

 

 

 

64,104

 

Current portion of tax receivable agreements liability

 

 

450

 

 

 

450

 

Current portion of finance lease obligations

 

 

5,340

 

 

 

3,389

 

Current portion of operating lease obligations

 

 

9,042

 

 

 

?

 

Current portion of long-term debt

 

 

2,606

 

 

 

103

 

Total current liabilities

 

 

139,510

 

 

 

138,734

 

Deferred revenue, net of current portion

 

 

4,690

 

 

 

5,030

 

Tax receivable agreements liability, net of current portion

 

 

164,460

 

 

 

109,283

 

Finance lease obligations, net of current portion

 

 

167,236

 

 

 

79,588

 

Operating lease obligations, net of current portion

 

 

152,277

 

 

 

?

 

Long-term debt, net of current portion

 

 

97,461

 

 

 

3,503

 

Deferred rent

 

 

?

 

 

 

3,153

 

Other long-term liabilities

 

 

664

 

 

 

680

 

Total liabilities

 

 

726,298

 

 

 

339,971

 

Equity:

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

Additional paid in capital

 

 

126,538

 

 

 

107,193

 

Accumulated other comprehensive income

 

 

145

 

 

 

?

 

Accumulated deficit

 

 

(18,146

)

 

 

(12,679

)

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

 

 

108,539

 

 

 

94,516

 

Non-controlling interests

 

 

114,698

 

 

 

119,213

 

Total equity

 

 

223,237

 

 

 

213,729

 

Total liabilities and equity

 

$

949,535

 

 

$

553,700

 

_______________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within the consolidated balance sheet as of December 31, 2021 with impacted line items presented below.

DUTCH BROS INC.

Select Financial Metrics

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

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

 

 

2022

 

 

2021 ¹

 

 

2022

 

 

2021 ¹

Shop count, beginning of period

 

 

 

 

 

 

 

 

Company-operated

 

 

310

 

 

 

191

 

 

 

271

 

 

 

182

 

Franchised

 

 

262

 

 

 

262

 

 

 

267

 

 

 

259

 

 

 

 

572

 

 

 

453

 

 

 

538

 

 

 

441

 

Company-operated new openings

 

 

26

 

 

 

13

 

 

 

60

 

 

 

22

 

Franchised new openings

 

 

5

 

 

 

5

 

 

 

5

 

 

 

8

 

Acquisition of franchise shops

 

 

?

 

 

 

3

 

 

 

5

 

 

 

3

 

Shop count, end of period

 

 

 

 

 

 

 

 

Company-operated

 

 

336

 

 

 

207

 

 

 

336

 

 

 

207

 

Franchised

 

 

267

 

 

 

264

 

 

 

267

 

 

 

264

 

Total shop count

 

 

603

 

 

 

471

 

 

 

603

 

 

 

471

 

 

 

 

 

 

 

 

 

 

Average unit volume (AUV) 2

 

 

N/A

 

 

 

N/A

 

 

$

1,900

 

 

$

1,766

 

Company-operated shops

 

 

N/A

 

 

 

N/A

 

 

$

1,862

 

 

$

1,654

 

 

 

 

 

 

 

 

 

 

Same shop sales growth (decline) 3, 5

 

 

(3.3

)%

 

 

9.0

%

 

 

1.0

%

 

 

8.0

%

Company-operated shops

 

 

(4.3

)%

 

 

10.0

%

 

 

0.3

%

 

 

9.0

%

 

 

 

 

 

 

 

 

 

Company-operated shop revenues

 

$

160,512

 

 

$

102,970

 

 

$

290,699

 

 

$

180,887

 

Company-operated gross profit

 

$

31,218

 

 

$

29,452

 

 

$

47,857

 

 

$

47,030

 

Company-operated shop contribution 4

 

$

39,525

 

 

$

32,925

 

 

$

63,304

 

 

$

53,774

 

Company-operated shop gross profit as a % of

company-operated shop revenue

 

 

19.4

%

 

 

28.6

%

 

 

16.5

%

 

 

26.0

%

Company-operated shop contribution as a % of

company-operated shop revenues 4

 

 

24.6

%

 

 

32.0

%

 

 

21.8

%

 

 

29.7

%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,751

)

 

$

11,889

 

 

$

(18,030

)

 

$

7,067

 

Adjusted EBITDA 4

 

$

23,939

 

 

$

30,699

 

 

$

33,601

 

 

$

49,384

 

Net income (loss) as % of revenue

 

 

(0.9

)%

 

 

9.2

%

 

 

(5.3

)%

 

 

3.1

%

Adjusted EBITDA as % of revenue 4

 

 

12.8

%

 

 

23.8

%

 

 

9.9

%

 

 

21.7

%

 

 

 

 

 

 

 

 

 

Systemwide sales 5

 

$

297,403

 

 

$

241,566

 

 

$

551,968

 

 

$

432,043

 

Dutch Rewards member registrations 6

 

 

496

 

 

 

674

 

 

 

985

 

 

 

2,229

 

___________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within the condensed consolidated statement of operations, segment financials, company-operated shop segment financial results, and non-GAAP results for the three and six months ended June 30, 2021 with impacted line items presented below.

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

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

Systemwide shop base

 

440

 

368

 

414

 

355

Company-operated shop base

 

193

 

130

 

173

 

120

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

5 Systemwide sales and systemwide same shop sales include company-operated shop revenue 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 overall Dutch Bros locations financial health, growth and future expansion prospects.

6 Dutch Rewards, a digitally-based rewards program available exclusively through the Dutch Rewards app, was launched February 2021. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.

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.

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

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

EBITDA ? definition and/or calculation
Net income (loss) before interest expense (net of interest income), income taxes expense (benefit), 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, COVID-19: "Thank You" pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, and costs incurred for company-wide milestone events.

Adjusted EBITDA Margin ? definition and/or calculation
Defined as Adjusted EBITDA (as defined above), 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 the 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 net income

Definition and/or calculation
Net income (loss), excluding equity-based compensation expense, expenses associated with equity offering, COVID-19: "thank you" pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, and income tax effects of items excluded from net income (loss).

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

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

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

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

Adjusted net income per fully exchanged share of diluted common stock

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

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

Non-GAAP adjustments

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

Equity-based compensation
Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros PubCo1 and/or Profit Interest Units in Dutch Bros OpCo2 to certain eligible employees.

Expenses associated with equity offerings
Costs incurred as a result of our stock offerings. 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.

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

COVID-19: Prepaid costs not utilized
Costs related to the write-off of previously prepaid expenses for the development of a virtual corporate engagement platform built in response to the health restrictions of the COVID-19 pandemic. The platform was developed as a substitute for in-person engagement practices used pre-pandemic. The platform has been determined ineffective, particularly as we shift back to in-person events with the easing of restrictions related to the COVID-19 pandemic.

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

Dilutive effects of RSAs
Addition of incremental shares of RSAs calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares - diluted on a non-GAAP basis, but not on a GAAP basis.

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

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

___________

1 Dutch Bros PubCo refers to Dutch Bros Inc., a Delaware Corporation, in which its Class A common stock is publicly traded on the New York Stock Exchange under the symbol "BROS".

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

Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

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

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021 ¹

 

2022

 

2021 ¹

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop gross profit

 

31,218

 

19.4

 

29,452

 

28.6

 

47,857

 

16.5

 

47,030

 

26.0

Depreciation and amortization

 

8,307

 

5.2

 

3,473

 

3.4

 

15,447

 

5.3

 

6,744

 

3.7

Company-operated shop contribution

 

39,525

 

24.6

 

32,925

 

32.0

 

63,304

 

21.8

 

53,774

 

29.7

_________________

1 The Company's historical results for the three and six months ended June 30, 2021 have been revised to reflect an immaterial error correction related to employee sick leave accrual. For additional information, see section "Company-operated Shop Results".

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

2021 ¹

 

2022

 

2021 ¹

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Net income (loss)

 

(1,751

)

 

(0.9

)

 

11,889

 

9.2

 

(18,030

)

 

(5.3

)

 

7,067

 

3.1

Depreciation and amortization

 

10,539

 

 

5.7

 

 

5,681

 

4.4

 

19,721

 

 

5.8

 

 

11,031

 

4.8

Interest expense, net

 

3,596

 

 

1.9

 

 

1,838

 

1.4

 

6,085

 

 

1.8

 

 

2,855

 

1.3

Income tax expense

 

885

 

 

0.5

 

 

521

 

0.4

 

671

 

 

0.2

 

 

564

 

0.2

EBITDA

 

13,269

 

 

7.1

 

 

19,929

 

15.4

 

8,447

 

 

2.5

 

 

21,517

 

9.4

Equity-based compensation

 

10,446

 

 

5.6

 

 

8,332

 

6.4

 

20,346

 

 

6.0

 

 

22,982

 

10.1

Expenses associated with equity offerings

 

?

 

 

?

 

 

2,253

 

1.7

 

?

 

 

?

 

 

2,329

 

1.0

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

 

224

 

 

0.1

 

 

185

 

0.1

 

1,174

 

 

0.3

 

 

2,556

 

1.1

COVID-19: prepaid costs not utilized

 

?

 

 

?

 

 

?

 

?

 

1,200

 

 

0.4

 

 

?

 

?

Milestone events

 

?

 

 

?

 

 

?

 

?

 

2,434

 

 

0.7

 

 

?

 

?

Adjusted EBITDA

 

23,939

 

 

12.8

 

 

30,699

 

23.8

 

33,601

 

 

9.9

 

 

49,384

 

21.7

 

 

Three Months Ended June 30,

(in thousands; unaudited)

 

 

2022

 

 

2021 ¹

Net income (loss)

 

$

(1,751

)

 

$

11,889

Equity-based compensation

 

 

10,446

 

 

 

8,332

Expenses associated with equity offerings

 

 

?

 

 

 

2,253

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

 

 

224

 

 

 

185

COVID-19: prepaid costs not utilized

 

 

?

 

 

 

?

Income tax effects

 

 

(215

)

 

 

?

Adjusted net income

 

$

8,704

 

 

$

22,659

_________________

1 The Company identified an immaterial error related to the accrual of employee sick leave and the application of ASC 710, Compensation - General, which resulted in corrections to prior period reported amounts within the condensed consolidated statements of operations and non-GAAP results for the three and six months ended June 30, 2021 with impacted line items presented below.

 

 

Three Months Ended
June 30,

(in thousands, except per share amounts; unaudited)

 

2022 ¹

 

2021

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

 

 

50,926

 

 

N/A

Dilutive effects of RSAs

 

 

1,530

 

 

N/A

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

 

 

110,085

 

 

N/A

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

 

 

162,541

 

 

N/A

 

 

 

 

 

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

 

$

(0.02

)

 

N/A

Controlling and non-controlling interest adjustments

 

 

0.01

 

 

N/A

Equity-based compensation

 

 

0.06

 

 

N/A

Expenses associated with equity offerings

 

 

?

 

 

N/A

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

 

 

?

 

 

N/A

Income tax effects

 

 

?

 

 

N/A

Adjusted net income per fully exchanged share of common stock

 

$

0.05

 

 

N/A

_________________

1 Weighted-average shares, net loss per share, and related adjustments on a diluted basis are applicable only for the periods subsequent to September 14, 2021, which is the effective date of the Company's Reorganization Transactions and IPO. As such there is no comparative information for 2021 periods presented.


These press releases may also interest you

at 02:00
C.K. McWhorter, chairman of the McWhorter Foundation, voices concerns over outdated perspectives in corporate leadership, exemplified by recent remarks from Nelson Peltz regarding Disney's film direction. After encountering instances of racism and...

at 02:00
OKX, a leading crypto exchange by trading volume and a leading Web3 technology company, has issued updates for March 29, 2024. OKX...

at 00:25
Shanghai Junshi Biosciences Co., Ltd ("Junshi Biosciences," HKEX: 1877; SSE: 688180), a leading innovation-driven biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies, announced its financial...

at 00:24
In the news release, Roborock Reports 2023 Full Year Financial Results, issued 28-Mar-2024 by Roborock over PR Newswire, we are advised by the company that in the first bullet point of "Growth across Product Categories", the USD amount should read...

28 mar 2024
Royal Bank of Canada ("RBC") today announced it has completed the acquisition of HSBC Bank Canada ("HSBC Canada"). "Today marks one of the most exciting times of our 155-year history and a pivotal milestone in our long-term growth story as we...

28 mar 2024
The opening ceremony of the Boao Forum for Asia (BFA) Annual Conference 2024 was held in Boao, south China's Hainan Province on Thursday, with China's top legislator Zhao Leji stressing China's economic potential, appealing to international investors...



News published on and distributed by: