Sign In  |  Register  |  About Mill Valley  |  Contact Us

Mill Valley, CA
September 01, 2020 1:29pm
7-Day Forecast | Traffic
  • Search Hotels in Mill Valley

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Dutch Bros Inc. Reports Fourth Quarter 2023 Financial Results

Achieves $254 million in Revenue in Quarter, a 26% Increase Year-over-Year

Releases 2024 Guidance

Announces Project to Establish Organizational Structure of the Future

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 fourth quarter and year ended December 31, 2023.

Christine Barone, Chief Executive Officer and President of Dutch Bros, stated, “We had an exceptional 2023 and entered 2024 with great momentum. We continued to drive steady new shop growth, and Q4 marked our 10th consecutive quarter of 30+ new shop openings. In 2023, we opened 159 shops, of which 146 were company-operated. Our system AUV reached its highest on record since the IPO, and we delivered a 2.8% increase in system same shop sales growth. These results led to a terrific 2023 where we delivered 31% in annual revenue growth. Early last year, we began a series of traffic-driving initiatives outlined on our Q1 call in May. We saw the impact of these efforts culminate with a 5.0% increase in system same shop sales in Q4, driven by a sequential improvement in customer traffic.”

She continued, “We are optimistic for our next phase of growth. In January, we announced three additions to our leadership team: Sumi Ghosh, incoming President of Operations, Josh Guenser, incoming CFO, and Jess Elmquist, Chief People Officer. The entire team is looking forward to adding the wealth of experience they bring to what already makes Dutch Bros great.”

She added, “Our leadership team embarked on a project last year to outline how our corporate team can best support our shops as we scale and grow. We recognize the importance of continuing to attract top-notch talent, and we believe adding a significant presence in the Phoenix market positions us to better compete for this talent. We also believe this expansion will enable easier access to our operations as we grow across the United States.”

She concluded, “It is incredible that a single coffee cart in Grants Pass, Oregon has grown over the last 30+ years to over 830 shops across 16 states employing approximately 24,000 people. We are proud of our origin and heritage, and we expect to maintain a significant presence in Southern Oregon, where our roasting, accounting and other functions will continue to be based. Southern Oregon has been a key part of Dutch Bros’ success, and we will remain connected to the region in a meaningful way. ”

Fourth Quarter 2023 Highlights

  • Opened 37 new shops, 32 of which were company-operated, across 10 states.
  • Total revenues grew 25.9% to $254.1 million as compared to $201.8 million in the same period of 2022.
  • System same shop sales1 increased 5.0%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to the same period in 2022. Company-operated same shop sales increased 4.6%, as compared to the same period of 2022.
  • Company-operated shop revenues increased 29.5% to $227.4 million, as compared to $175.5 million in the same period of 2022.
  • Company-operated shop gross profit was $42.3 million as compared to $38.8 million in the same period of 2022. In the fourth quarter of 2023, company-operated shop gross margin, which includes 150bps of pre-opening costs, was 18.6%, a year-over-year decrease of 350bps.
  • Company-operated shop contribution2, a non-GAAP financial measure, grew 20.5% to $60.2 million as compared to $50.0 million in the same period of 2022. In the fourth quarter of 2023, company-operated shop contribution margin, which includes 150bps of pre-opening costs, was 26.5%, a year-over-year decrease of 200 bps.
  • Selling, general, and administrative expenses were $56.9 million (22.4% of revenue) as compared to $50.6 million (25.1% of revenue) in the same period of 2022.
  • Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were $44.2 million (17.4% of revenue) as compared to $38.1 million (18.9% of revenue) in the same period of 2022.
  • Net loss was $3.8 million as compared to $2.8 million in the same period of 2022.
  • Adjusted EBITDA2, a non-GAAP financial measure, grew 16.2% to $34.6 million as compared to $29.8 million in the same period of 2022.
  • Adjusted net income2, a non-GAAP financial measure, was $7.4 million as compared to $4.8 million in the same period of 2022.
  • Net loss per share of Class A and Class D common stock - diluted was $0.02 as compared to $0.01 per share in the same period of 2022.
  • Adjusted net income per fully exchanged share of diluted common stock2, a non-GAAP financial measure, was $0.04 as compared to $0.03 in the same period of 2022.

Full Year 2023 Highlights:

  • Opened 159 new shops, 146 of which were company-operated, across 13 states.
  • Total revenues grew 30.7% to $965.8 million as compared to $739.0 million in 2022.
  • System same shop sales1 grew 2.8%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to 2022. Company-operated same shop sales grew 1.5%, as compared to 2022.
  • Company-operated shop revenues increased 34.1% to $857.9 million, as compared to $639.7 million in 2022.
  • Company-operated shop gross profit was $180.2 million as compared to $121.3 million in 2022. In 2023, company-operated shop gross margin, which includes 160bps of pre-opening costs, improved to 21.0%, a year-over-year increase of 200 bps.
  • Company-operated shop contribution2, a non-GAAP financial measure, grew 53.7% to $242.3 million as compared to $157.6 million in 2022. In 2023, company-operated shop contribution margin, which includes 160bps of pre-opening costs, improved to 28.2%, a year-over-year increase of 360 bps.
  • Selling, general, and administrative expenses were $205.1 million (21.2% of revenue) as compared to $183.5 million (24.8% of revenue) in 2022.
  • Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were $160.7 million (16.6% of revenue) as compared to $136.4 million4 (18.5% of revenue) in 2022.
  • Net income (loss) was $10.0 million as compared to $(19.3) million in 2022.
  • Adjusted EBITDA2, a non-GAAP financial measure, increased 75.5% to $160.1 million as compared to $91.2 million in 2022.
  • Adjusted net income2, a non-GAAP financial measure, was $50.2 million as compared to $25.2 million in 2022.
  • Net income (loss) per share of Class A and Class D common stock - diluted was $0.03 as compared to $(0.09) in 2022.
  • Adjusted net income per fully exchanged share of common stock2, a non-GAAP financial measure, was $0.30 as compared to $0.16 in 2022.

Arizona Support Center Expansion

Dutch Bros is engaging in a large-scale organizational design initiative that will shift certain positions to its Phoenix, Arizona office:

  • As part of this move, the Company estimates approximately 40% of support center staff will be located in Arizona by January 1, 2025. Many of these positions will focus on driving the strategic direction of the Company and assisting day-to-day operations in the field.
  • The Company expects to maintain a significant presence in Southern Oregon, where its roasting, accounting and select other support functions will continue to be based.
  • The Company anticipates this initiative will incur approximately $24 million to $31 million in costs, plus approximately $6 million to $10 million in capital expenditures related to the Arizona office expansion.

Outlook

  • Total system shop openings in 2024 are expected to be in the range of 150 to 165.
  • Total revenues are projected to be between $1.190 billion and $1.205 billion.
  • Same shop sales growth is estimated to be in the low single digits.
  • Adjusted EBITDA3 is estimated to be between $185 million to $195 million and Adjusted SG&A3 is estimated to be between $183 million and $189 million. The expected costs related to our announced support center expansion in Arizona will be excluded from Adjusted EBITDA and Adjusted SG&A. Stock based compensation, which is also excluded from Adjusted EBITDA and Adjusted SG&A, is estimated to be in the range of $12 million to $17 million.
  • Capital Expenditures are estimated to be between $280 million to $320 million, primarily related to new shop construction. This estimate includes approximately $10 million in incremental spend related to our roasting facility, which we expect to open in the middle of 2024, and $6 million to $10 million in capital expenditures related to the Arizona office expansion.

____________________

1

 

Same shop sales is defined in the section “Select Financial Metrics”.

2

 

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

3

 

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

Conference Call and Webcast Today

Christine Barone, Chief Executive Officer and President, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast today at 4:30 p.m. Eastern Time (ET) to discuss financial results for the fourth quarter and year ended December 31, 2023.

Event: Fourth Quarter 2023 Conference Call and Webcast

Date: Wednesday, February 21, 2024

Time: 4:30 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 831 locations across 16 states as of December 31, 2023.

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, information and expectations regarding Dutch Bros’ leadership transitions, estimated costs associated with Dutch Bros’ Arizona support center expansion, 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,” “projected,” “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 benefits and costs of Dutch Bros’ Arizona support center expansion, 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed with the SEC on November 8, 2023, and in our future reports to be filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023. 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.

Consolidated Statements of Operations

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in thousands, except per share amounts; unaudited)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

REVENUES

 

 

 

 

 

 

 

 

Company-operated shops

 

$

227,351

 

 

$

175,510

 

 

$

857,939

 

 

$

639,710

 

Franchising and other

 

 

26,772

 

 

 

26,317

 

 

 

107,837

 

 

 

99,302

 

Total revenues

 

 

254,123

 

 

 

201,827

 

 

 

965,776

 

 

 

739,012

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

Cost of sales

 

 

194,998

 

 

 

147,467

 

 

 

714,480

 

 

 

558,096

 

Selling, general and administrative

 

 

56,946

 

 

 

50,594

 

 

 

205,074

 

 

 

183,528

 

Total costs and expenses

 

 

251,944

 

 

 

198,061

 

 

 

919,554

 

 

 

741,624

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

2,179

 

 

 

3,766

 

 

 

46,222

 

 

 

(2,612

)

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(6,052

)

 

 

(6,922

)

 

 

(32,321

)

 

 

(18,018

)

Other income

 

 

812

 

 

 

5,638

 

 

 

3,018

 

 

 

3,976

 

Total other expense

 

 

(5,240

)

 

 

(1,284

)

 

 

(29,303

)

 

 

(14,042

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(3,061

)

 

 

2,482

 

 

 

16,919

 

 

 

(16,654

)

Income tax expense

 

 

708

 

 

 

5,299

 

 

 

6,967

 

 

 

2,599

 

NET INCOME (LOSS)

 

$

(3,769

)

 

$

(2,817

)

 

$

9,952

 

 

$

(19,253

)

Less: Net income (loss) attributable to non-controlling interests

 

 

(2,367

)

 

 

(2,154

)

 

 

8,234

 

 

 

(14,500

)

NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC.

 

$

(1,402

)

 

$

(663

)

 

$

1,718

 

 

$

(4,753

)

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

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

(0.01

)

 

$

0.03

 

 

$

(0.09

)

Diluted

 

$

(0.02

)

 

$

(0.01

)

 

$

0.03

 

 

$

(0.09

)

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

 

 

 

 

 

 

 

 

Basic

 

 

75,356

 

 

 

55,286

 

 

 

62,074

 

 

 

51,871

 

Diluted

 

 

75,356

 

 

 

55,286

 

 

 

62,074

 

 

 

51,871

 

 

DUTCH BROS INC.

Segment Financials

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in thousands; unaudited)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

227,351

 

 

$

175,510

 

 

$

857,939

 

 

$

639,710

 

Franchising and other

 

 

26,772

 

 

 

26,317

 

 

 

107,837

 

 

 

99,302

 

Total revenues

 

 

254,123

 

 

 

201,827

 

 

 

965,776

 

 

 

739,012

 

Cost of Sales:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

185,059

 

 

 

136,760

 

 

 

677,704

 

 

 

518,383

 

Franchising and other

 

 

9,939

 

 

 

10,707

 

 

 

36,776

 

 

 

39,713

 

Total cost of sales

 

 

194,998

 

 

 

147,467

 

 

 

714,480

 

 

 

558,096

 

Segment gross profit:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

42,292

 

 

 

38,750

 

 

 

180,235

 

 

 

121,327

 

Franchising and other

 

 

16,833

 

 

 

15,610

 

 

 

71,061

 

 

 

59,589

 

Total gross profit

 

 

59,125

 

 

 

54,360

 

 

 

251,296

 

 

 

180,916

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

17,956

 

 

 

11,235

 

 

 

62,088

 

 

 

36,306

 

Franchising and other

 

 

1,369

 

 

 

1,366

 

 

 

5,398

 

 

 

5,706

 

All other 1

 

 

399

 

 

 

596

 

 

 

1,649

 

 

 

2,716

 

Total depreciation and amortization

 

 

19,724

 

 

 

13,197

 

 

 

69,135

 

 

 

44,728

 

Segment contribution:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

60,248

 

 

 

49,985

 

 

 

242,323

 

 

 

157,633

 

Franchising and other

 

 

18,202

 

 

 

16,976

 

 

 

76,459

 

 

 

65,295

 

Total segment contribution

 

 

78,450

 

 

 

66,961

 

 

 

318,782

 

 

 

222,928

 

Selling, general and administrative

 

 

(56,946

)

 

 

(50,594

)

 

 

(205,074

)

 

 

(183,528

)

Interest expense, net

 

 

(6,052

)

 

 

(6,922

)

 

 

(32,321

)

 

 

(18,018

)

Other income

 

 

812

 

 

 

5,638

 

 

 

3,018

 

 

 

3,976

 

Income (loss) before income taxes

 

$

(3,061

)

 

$

2,482

 

 

$

16,919

 

 

$

(16,654

)

 

1

 

Included in selling, general and administrative expenses and not part of segment contribution calculation.

 

DUTCH BROS INC.

Company-Operated Shop Results

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shops revenue

 

227,351

 

100.0

 

175,510

 

100.0

 

857,939

 

100.0

 

639,710

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, food and packaging costs

 

60,431

 

 

26.6

 

 

45,602

 

 

26.0

 

 

230,133

 

 

26.9

 

 

171,864

 

 

26.9

 

Labor costs

 

61,700

 

 

27.1

 

 

44,860

 

 

25.5

 

 

230,505

 

 

26.9

 

 

182,861

 

 

28.6

 

Occupancy and other costs

 

41,568

 

 

18.3

 

 

31,225

 

 

17.8

 

 

140,895

 

 

16.4

 

 

109,366

 

 

17.1

 

Pre-opening costs

 

3,404

 

 

1.5

 

 

3,838

 

 

2.2

 

 

14,083

 

 

1.6

 

 

17,986

 

 

2.8

 

Depreciation and amortization

 

17,956

 

 

7.9

 

 

11,235

 

 

6.4

 

 

62,088

 

 

7.2

 

 

36,306

 

 

5.6

 

Company-operated shop costs and expenses

 

185,059

 

 

81.4

 

 

136,760

 

 

77.9

 

 

677,704

 

 

79.0

 

 

518,383

 

 

81.0

 

Company-operated shops gross profit

 

42,292

 

 

18.6

 

 

38,750

 

 

22.1

 

 

180,235

 

 

21.0

 

 

121,327

 

 

19.0

 

Company-operated shops contribution 1

 

60,248

 

 

26.5

 

 

49,985

 

 

28.5

 

 

242,323

 

 

28.2

 

 

157,633

 

 

24.6

 

 

1

 

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

DUTCH BROS INC.

Summary Cash Flows Data

 

 

 

Year Ended

December 31,

(in thousands; unaudited)

 

 

2023

 

 

 

2022

 

Net cash provided by operating activities

 

$

139,915

 

 

$

59,883

 

Net cash used in investing activities

 

 

(227,280

)

 

 

(192,572

)

Net cash provided by financing activities

 

 

200,732

 

 

 

134,361

 

Net increase in cash and cash equivalents

 

$

113,367

 

 

$

1,672

 

Cash and cash equivalents at beginning of period

 

 

20,178

 

 

 

18,506

 

Cash and cash equivalents at end of period

 

$

133,545

 

 

$

20,178

 

 

DUTCH BROS INC.

Consolidated Balance Sheets

 

(in thousands; unaudited)

 

December 31,

2023

 

December 31,

2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

133,545

 

 

$

20,178

 

Accounts receivable, net

 

 

9,124

 

 

 

11,966

 

Inventories, net

 

 

46,953

 

 

 

39,229

 

Prepaid expenses and other current assets

 

 

15,637

 

 

 

10,949

 

Total current assets

 

 

205,259

 

 

 

82,322

 

Property and equipment, net

 

 

542,440

 

 

 

365,468

 

Finance lease right-of-use assets, net

 

 

382,734

 

 

 

247,943

 

Operating lease right-of-use assets, net

 

 

199,673

 

 

 

169,302

 

Intangibles, net

 

 

5,415

 

 

 

8,804

 

Goodwill

 

 

21,629

 

 

 

21,629

 

Deferred income tax assets, net

 

 

402,995

 

 

 

288,765

 

Other long-term assets

 

 

3,865

 

 

 

2,127

 

Total assets

 

$

1,764,010

 

 

$

1,186,360

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

29,957

 

 

$

21,270

 

Accrued compensation and benefits

 

 

31,405

 

 

 

19,706

 

Other accrued liabilities

 

 

15,770

 

 

 

9,667

 

Other current liabilities

 

 

6,423

 

 

 

5,939

 

Deferred revenue

 

 

30,349

 

 

 

25,335

 

Line of credit

 

 

 

 

 

110,865

 

Current portion of finance lease liabilities

 

 

9,482

 

 

 

7,971

 

Current portion of operating lease liabilities

 

 

10,239

 

 

 

9,317

 

Current portion of long-term debt

 

 

4,491

 

 

 

2,609

 

Total current liabilities

 

 

138,116

 

 

 

212,679

 

Deferred revenue, net of current portion

 

 

6,676

 

 

 

6,119

 

Finance lease liabilities, net of current portion

 

 

367,775

 

 

 

237,130

 

Operating lease liabilities, net of current portion

 

 

191,419

 

 

 

161,228

 

Long-term debt, net of current portion

 

 

93,175

 

 

 

96,297

 

Tax receivable agreements liability

 

 

290,920

 

 

 

220,923

 

Other long-term liabilities

 

 

8

 

 

 

8

 

Total liabilities

 

 

1,088,089

 

 

 

934,384

 

Equity:

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

Additional paid in capital

 

 

379,391

 

 

 

145,613

 

Accumulated other comprehensive income

 

 

544

 

 

 

813

 

Accumulated deficit

 

 

(15,592

)

 

 

(17,310

)

Total stockholders' equity attributable to Dutch Bros Inc.

 

 

364,345

 

 

 

129,118

 

Non-controlling interests

 

 

311,576

 

 

 

122,858

 

Total equity

 

 

675,921

 

 

 

251,976

 

Total liabilities and equity

 

$

1,764,010

 

 

$

1,186,360

 

 

DUTCH BROS INC.

Select Financial Metrics

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

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

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Shop count, beginning of period

 

 

 

 

 

 

 

 

Company-operated

 

 

510

 

 

 

370

 

 

 

396

 

 

 

271

 

Franchised

 

 

284

 

 

 

271

 

 

 

275

 

 

 

267

 

 

 

 

794

 

 

 

641

 

 

 

671

 

 

 

538

 

Company-operated new openings

 

 

32

 

 

 

26

 

 

 

146

 

 

 

120

 

Franchised new openings

 

 

5

 

 

 

4

 

 

 

13

 

 

 

13

 

Acquisition of franchise shops

 

 

 

 

 

 

 

 

 

 

 

5

 

Re-openings 1

 

 

 

 

 

 

 

 

1

 

 

 

 

Shop count, end of period

 

 

 

 

 

 

 

 

Company-operated

 

 

542

 

 

 

396

 

 

 

542

 

 

 

396

 

Franchised

 

 

289

 

 

 

275

 

 

 

289

 

 

 

275

 

Total shop count

 

 

831

 

 

 

671

 

 

 

831

 

 

 

671

 

 

 

 

 

 

 

 

 

 

Systemwide AUV 2

 

 

N/A

 

 

 

N/A

 

 

$

1,973

 

 

$

1,924

 

Company-operated shops AUV 2

 

 

N/A

 

 

 

N/A

 

 

$

1,902

 

 

$

1,895

 

 

 

 

 

 

 

 

 

 

Systemwide same shop sales 3, 4

 

 

5.0

%

 

 

(0.6

)%

 

 

2.8

%

 

 

1.0

%

Company-operated same shop sales 3

 

 

4.6

%

 

 

(2.1

)%

 

 

1.5

%

 

 

0.6

%

 

 

 

 

 

 

 

 

 

Systemwide sales 4

 

$

375,149

 

 

$

298,253

 

 

$

1,444,433

 

 

$

1,163,182

 

Company-operated operating weeks 5

 

 

6,819

 

 

 

4,963

 

 

 

24,395

 

 

 

17,489

 

Franchising and other operating weeks 5

 

 

3,743

 

 

 

3,536

 

 

 

14,624

 

 

 

13,828

 

Dutch Rewards member registrations 6

 

 

602

 

 

 

453

 

 

 

2,252

 

 

 

2,004

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop revenues

 

227,351

 

100.0

 

175,510

 

100.0

 

857,939

 

100.0

 

639,710

 

100.0

Company-operated gross profit

 

42,292

 

 

18.6

 

 

38,750

 

 

22.1

 

 

180,235

 

 

21.0

 

 

121,327

 

 

19.0

 

Company-operated shop contribution 7

 

60,248

 

 

26.5

 

 

49,985

 

 

28.5

 

 

242,323

 

 

28.2

 

 

157,633

 

 

24.6

 

Selling, general, and administrative expenses

 

56,946

 

 

22.4

 

 

50,594

 

 

25.1

 

 

205,074

 

 

21.2

 

 

183,528

 

 

24.8

 

Adjusted selling, general, and administrative expenses 7

 

44,188

 

 

17.4

 

 

38,136

 

 

18.9

 

 

160,749

 

 

16.6

 

 

136,441

 

 

18.5

 

Net income (loss)

 

(3,769

)

 

(1.5

)

 

(2,817

)

 

(1.4

)

 

9,952

 

 

1.0

 

 

(19,253

)

 

(2.6

)

Adjusted EBITDA 7

 

34,575

 

 

13.6

 

 

29,750

 

 

14.7

 

 

160,062

 

 

16.6

 

 

91,181

 

 

12.3

 

 

1

 

Re-opening of a shop that was temporarily closed in 2021.

2

 

AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.

3

 

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

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

Systemwide shop base

 

603

 

470

 

503

 

414

Company-operated shop base

 

336

 

 

216

 

 

246

 

 

173

 

4

 

Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented. Franchise sales represent sales at all franchise shops and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

5

 

Company-operated and franchise shops operating weeks are calculated based on the number operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the end date of the periods presented. The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

6

 

Dutch Rewards is our digitally-based rewards program available exclusively through the Dutch Rewards app. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.

7

 

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

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with 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 (loss) before interest expense (net of interest income), income tax expense, and depreciation and amortization expense.

Adjusted EBITDA — definition and/or calculation

Defined as EBITDA (as defined above), excluding equity-based compensation, COVID-19: “Thank You” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transitions costs, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expenses related to certain legal disputes, and organization realignment and restructuring costs

Adjusted EBITDA in dollars (as defined), taken as a percentage of total revenue.

Usefulness to management and investors

These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.

Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)

Definition and/or calculation

Selling, general, and administrative expenses, excluding equity-based compensation expense, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transitions, estimated expense related to certain legal disputes, and organization realignment and restructuring costs.

Adjusted selling, general, and administrative in dollars (as defined), taken as a percentage of total revenue.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe the non-GAAP measure presented provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because it excludes items that may not be indicative of our ongoing operating performance.

Adjusted net income

Definition and/or calculation

Net income (loss), excluding equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expense related to certain legal disputes, organization realignment and restructuring costs, and income tax effects of items excluded from net income (loss).

Usefulness to management and investors

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

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

Definition and/or calculation

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

Usefulness to management and investors

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

Adjusted net income per fully exchanged share of diluted common stock

Definition and/or calculation

Net income (loss) per share of Class A and Class D common stock - diluted, excluding per share impacts of equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expense related to certain legal disputes, organization realignment and restructuring costs, income tax effects of items excluded from net income (loss), and removal of per share impacts of controlling and non-controlling interests.

Usefulness to management and investors

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

Non-GAAP adjustments

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

Equity-based compensation

Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros Inc. and/or Profit Interest Units in Dutch Bros OpCo1 to certain eligible 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. The catastrophic leave program was retired in May 2023.

COVID-19: Prepaid costs not utilized

Costs related to the write-off of previously prepaid expenses for the development of a virtual corporate engagement platform built in response to the health restrictions of the COVID-19 pandemic. The platform was developed as a substitute for in person engagement practices used pre-pandemic. The platform has been determined ineffective, particularly as we shift back to in-person events with the easing of restrictions related to the COVID-19 pandemic.

Milestone events

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

Executives transition

Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023.

TRAs remeasurements

(Gain) loss impacts on consolidated statements of operations related to adjustments of our TRAs liabilities.

Legal proceedings

Estimated loss accrual related to certain legal disputes.

Organization realignment and restructuring

Fees and costs, including consulting fees and costs, related to a comprehensive initiative to develop and implement a long-term strategy involving changes to our organizational structure to support our growth, and the resulting realignment activities that have occurred in 2023 and are expected to continue for at least the next two years. Given this strategic initiative's magnitude and scope, the Company does not expect such costs will recur in the foreseeable future. The Company does not consider such costs reflective of the ongoing costs necessary to operate its business.

Dilutive effects of RSAs and RSUs

Addition of incremental shares of RSAs and RSUs calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares on a non-GAAP basis.

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

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

Removal of allocation for controlling and non-controlling interests

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

____________________

1

 

Dutch Bros OpCo refers to 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

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop gross profit

 

42,292

 

18.6

 

38,750

 

22.1

 

180,235

 

21.0

 

121,327

 

19.0

Depreciation and amortization

 

17,956

 

 

7.9

 

 

11,235

 

 

6.4

 

 

62,088

 

 

7.2

 

 

36,306

 

 

5.6

 

Company-operated shop contribution

 

60,248

 

 

26.5

 

 

49,985

 

 

28.5

 

 

242,323

 

 

28.2

 

 

157,633

 

 

24.6

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Net income (loss)

 

(3,769

)

 

(1.5

)

 

(2,817

)

 

(1.4

)

 

9,952

 

 

1.0

 

 

(19,253

)

 

(2.6

)

Depreciation and amortization

 

19,724

 

 

7.7

 

 

13,197

 

 

6.6

 

 

69,135

 

 

7.2

 

 

44,728

 

 

6.0

 

Interest expense, net

 

6,052

 

 

2.4

 

 

6,922

 

 

3.4

 

 

32,321

 

 

3.3

 

 

18,018

 

 

2.4

 

Income tax expense

 

708

 

 

0.3

 

 

5,299

 

 

2.6

 

 

6,967

 

 

0.8

 

 

2,599

 

 

0.4

 

EBITDA

 

22,715

 

 

8.9

 

 

22,601

 

 

11.2

 

 

118,375

 

 

12.3

 

 

46,092

 

 

6.2

 

Equity-based compensation

 

10,205

 

 

4.0

 

 

10,662

 

 

5.3

 

 

39,222

 

 

4.1

 

 

41,657

 

 

5.6

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

 

67

 

 

 

 

 

 

 

 

1,468

 

 

0.2

 

COVID-19: prepaid costs not utilized

 

 

 

 

 

1,105

 

 

0.6

 

 

 

 

 

 

2,305

 

 

0.3

 

Milestone events

 

 

 

 

 

 

 

 

 

 

 

 

 

2,434

 

 

0.3

 

Executives transition costs

 

400

 

 

0.2

 

 

691

 

 

0.3

 

 

1,000

 

 

0.1

 

 

691

 

 

0.1

 

TRAs remeasurements

 

(898

)

 

(0.3

)

 

(5,376

)

 

(2.7

)

 

(2,638

)

 

(0.3

)

 

(3,466

)

 

(0.4

)

Legal proceedings

 

 

 

 

 

 

 

 

 

1,950

 

 

0.2

 

 

 

 

 

Organization realignment and restructuring:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

2,153

 

 

0.8

 

 

 

 

 

 

2,153

 

 

0.2

 

 

 

 

 

Adjusted EBITDA

 

34,575

 

 

13.6

 

 

29,750

 

 

14.7

 

 

160,062

 

 

16.6

 

 

91,181

 

 

12.3

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Selling, general, and administrative 1

 

56,946

 

 

22.4

 

 

50,594

 

 

25.1

 

 

205,074

 

 

21.2

 

 

183,528

 

 

24.8

 

Equity-based compensation

 

(10,205

)

 

(4.0

)

 

(10,662

)

 

(5.3

)

 

(39,222

)

 

(4.1

)

 

(41,657

)

 

(5.6

)

COVID-19: prepaid costs not utilized

 

 

 

 

 

(1,105

)

 

(0.6

)

 

 

 

 

 

(2,305

)

 

(0.3

)

Milestone events

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,434

)

 

(0.3

)

Executives transition costs

 

(400

)

 

(0.2

)

 

(691

)

 

(0.3

)

 

(1,000

)

 

(0.1

)

 

(691

)

 

(0.1

)

Legal proceedings

 

 

 

 

 

 

 

 

 

(1,950

)

 

(0.2

)

 

 

 

 

Organization realignment and restructuring:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

(2,153

)

 

(0.8

)

 

 

 

 

 

(2,153

)

 

(0.2

)

 

 

 

 

Adjusted selling, general, and administrative

 

44,188

 

 

17.4

 

 

38,136

 

 

18.9

 

 

160,749

 

 

16.6

 

 

136,441

 

 

18.5

 

 

1

 

Selling, general, and administrative expenses include depreciation and amortization.

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in thousands; unaudited)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss)

 

$

(3,769

)

 

$

(2,817

)

 

$

9,952

 

 

$

(19,253

)

Equity-based compensation

 

 

10,205

 

 

 

10,662

 

 

 

39,222

 

 

 

41,657

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

 

67

 

 

 

 

 

 

1,468

 

COVID-19: prepaid costs not utilized

 

 

 

 

 

1,105

 

 

 

 

 

 

2,305

 

Milestone events

 

 

 

 

 

 

 

 

 

 

 

2,434

 

Executives transition costs

 

 

400

 

 

 

691

 

 

 

1,000

 

 

 

691

 

TRAs remeasurements

 

 

(898

)

 

 

(5,376

)

 

 

(2,638

)

 

 

(3,466

)

Legal proceedings

 

 

 

 

 

 

 

 

1,950

 

 

 

 

Organization realignment and restructuring:

 

 

 

 

 

 

 

 

Consulting

 

 

2,153

 

 

 

 

 

 

2,153

 

 

 

 

Income tax effects

 

 

(675

)

 

 

442

 

 

 

(1,456

)

 

 

(609

)

Adjusted net income

 

$

7,416

 

 

$

4,774

 

 

$

50,183

 

 

$

25,227

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in thousands, except per share amounts; unaudited)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

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

 

 

75,356

 

 

 

55,286

 

 

 

62,074

 

 

 

51,871

 

Dilutive effects of RSUs and RSAs

 

 

1,154

 

 

 

1,481

 

 

 

826

 

 

 

1,523

 

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

 

 

100,454

 

 

 

105,756

 

 

 

104,419

 

 

 

109,132

 

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

 

 

176,964

 

 

 

162,523

 

 

 

167,319

 

 

 

162,526

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.02

)

 

$

(0.01

)

 

$

0.03

 

 

$

(0.09

)

Controlling and non-controlling interest adjustments

 

 

 

 

 

(0.01

)

 

 

0.03

 

 

 

(0.02

)

Equity-based compensation

 

 

0.06

 

 

 

0.07

 

 

 

0.24

 

 

 

0.26

 

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

 

 

 

 

 

 

 

0.01

 

COVID-19: prepaid costs not utilized

 

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

Milestone events

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Executives transition costs

 

 

 

 

 

 

 

 

0.01

 

 

 

 

TRAs remeasurements

 

 

(0.01

)

 

 

(0.03

)

 

 

(0.02

)

 

 

(0.02

)

Legal proceedings

 

 

 

 

 

 

 

 

0.01

 

 

 

 

Organization realignment and restructuring:

 

 

 

 

 

 

 

 

Consulting

 

 

0.01

 

 

 

 

 

 

0.01

 

 

 

 

Income tax effects

 

 

 

 

 

 

 

 

(0.01

)

 

 

 

Adjusted net income per fully exchanged share of diluted common stock

 

$

0.04

 

 

$

0.03

 

 

$

0.30

 

 

$

0.16

 

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 MillValley.com & California Media Partners, LLC. All rights reserved.