BBQ Holdings, Inc. Reports Results for Third Quarter of Fiscal Year 2020

MINNEAPOLIS, Nov. 10, 2020 (GLOBE NEWSWIRE) — BBQ Holdings, Inc. (NASDAQ: BBQ) (the “Company”), an innovating global owner and operator of restaurants, today reported financial results for the third fiscal quarter ended September 27, 2020. Note: The third quarter results were affected by the COVID-19 pandemic as well as federal and state level mandates requiring restaurants to limit or eliminate in-store dining.
Third Quarter 2020 Highlights:Net income of $328,000, driven in part by a gain on a renegotiated leased asset of $630,000.Adjusted EBITDA, a non-GAAP measure was $2.0 million which includes a $1.1 million COVID-related expense addback.Company-owned Famous Dave’s third quarter same store net sales decreased 4.6% compared to third quarter 2019.Franchise-operated same store net sales decreased 10.0%.Granite City third quarter same store net sales decreased 25.9% compared to third quarter 2019.Same store sales at our Famous Dave’s restaurants increased 2.0% while same store sales at our Granite City restaurants decreased 23.8% during the four weeks ended October 25, 2020 compared to the same four-week period in 2019.Entered into a 25-unit development agreement with Bluestone Hospitality Group to open Famous Dave’s ghost kitchens and dual restaurant concepts with the Johnny Carino’s Italian brand.Executive CommentsJeff Crivello, CEO, commented, “We continue to allocate much of our time and resources to COVID-19 related regulations. With restaurants in 19 states, this is not an easy task. Nonetheless, we are pleased to return to positive EBITDA during the quarter. The team captured many wins during the quarter including signing of a 25-unit ghost kitchen development agreement with Bluestone Hospitality Group. Additionally, we are seeing success in the recent opening of a Famous Dave’s ghost kitchen within the St. Cloud Granite City Food & Brewery. To drive add-on revenues, we will be repeating this process in six more Granite City locations by the end of the first quarter 2021. The recent opening of the Texas T-Bone and Famous Dave’s dual concept has been very successful, and we hope to expand that concept as well. On the technical side, we launched our new website to make the ordering process even more seamless to our patrons. Finally, we our beginning the roll-out of our Symphony POS system which we feel will enhance the customer experience of our loyalty promotions as well as simplify our overall internal operating systems. It has been a busy quarter, but we feel the entrepreneurial spirit of BBQ Holdings is hitting on all cylinders, and we expect to continue driving sales in a variety of ways as we adapt to the ever-changing consumer.”
Key Operating Metrics

Third Quarter 2020 Review
Total revenue for the third quarter of 2020 was $35.5 million, up 47.9% from the third quarter of 2019. The increase in year-over-year restaurant net sales for the quarter ended September 27, 2020 was driven primarily by the addition of 18 Granite City restaurants, a Clark Crew BBQ and a Real Urban Barbecue restaurant. On a weighted basis, Company-owned Famous Dave’s same-store net sales for our to-go line of business increased 73.3% in the third quarter of fiscal 2020 as compared to the prior year period, offset by a decrease of 55.0% in net catering sales and 33.4% in dine-in sales due to federal, state and local mandates prohibiting large group gatherings and in-store dining in an attempt to reduce the spread of COVID-19. Restaurant-level operating margin, as a percentage of restaurant net sales, for Company-owned restaurants was 3.4% in the third quarter of fiscal 2020 compared to 0.6% in the third quarter of fiscal 2019. This increase in restaurant-level operating margin was primarily a result of the reduction of labor and food costs as our restaurant operators adjusted to the increase in to-go sales and reduction of dine-in customers as a result of COVID-19 concerns.General and administrative expenses for the quarter ended September 27, 2020 and September 29, 2019 represented approximately 8.8% and 11.0% of total revenues, respectively. The decrease in general and administrative expenses as a percentage of revenue in the third quarter of 2020 was due in part to the increase in the revenue base with the addition of 20 locations during 2020.Net income attributable to shareholders was approximately $328,000, or $0.04 per share, in the third quarter of fiscal 2020 compared to net income of $17,000, or $0.00 per share, in the third quarter of fiscal 2019. Adjusted net income attributable to shareholders, a non-GAAP measure, was approximately $480,000, or $0.05 per share, compared to adjusted net income attributable to shareholders of approximately $166,000, or $0.02 per share, in the third quarter of fiscal 2019. A reconciliation between adjusted net income attributable to shareholders and its most directly comparable GAAP measure is included in the accompanying financial tables.About BBQ HoldingsBBQ Holdings, Inc. (NASDAQ: BBQ) BBQ Holdings is a national restaurant company engaged in the ownership and operation of casual and fast dining restaurants. As of November 10, 2020, BBQ Holdings had four brands with 146 overall locations in 31 states and three countries, including 48 company-owned and 98 franchise-operated restaurants. While BBQ Holdings continues to diversify its ownership in the restaurant community, it was founded with the principle of combining the “art and science” of barbecue to serve up the very best of the best to barbecue lovers everywhere. BBQ Holdings, through partnerships, has extended Travis Clark’s award-winning line of barbecue sauces, rubs and seasonings into the retail market. Along with a wide variety of BBQ favorites served at their BBQ restaurants, BBQ Holdings newest addition, Granite City Food and Brewery, offers award winning craft beer and a made-from-scratch, chef driven menu featuring contemporary American cuisine. Non-GAAP Financial MeasuresTo supplement its consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses non-GAAP measures including those indicated below. These non-GAAP measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s consolidated financial statements and are subject to inherent limitations. By providing non-GAAP measures, together with a reconciliation to the most comparable GAAP measure, the Company believes that it is enhancing investors’ understanding of the Company’s business and results of operations. These measures are not intended to be considered in isolation of, as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures presented may be different from the measures used by other companies. The Company urges investors to review the reconciliation of its non-GAAP measures to the most directly comparable GAAP measure, included in the accompanying financial tables.Adjusted net income attributable to shareholders is net income attributable to shareholders, plus asset impairment, estimated lease termination charges and other closing costs, settlement agreements, net (loss) gain on disposal of equipment, stock-based compensation, severance, acquisition costs, and the related tax impact. This number is divided by the weighted-average number of diluted shares of common stock outstanding during each period presented to arrive at adjusted net income, per share. Adjusted EBITDA is net income (loss), plus asset impairment, estimated lease termination charges and other closing costs, settlement agreements, depreciation and amortization, interest expense, net, net (loss) gain on disposal of equipment, stock-based compensation, severance, acquisition costs and provision (benefit) for income taxes.Forward-Looking StatementsStatements in this press release that are not strictly historical, including but not limited to statements regarding the timing of the Company’s restaurant openings, the timing of refreshes and the timing or success of refranchising plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from expected results. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectation will be attained. Factors that could cause actual results to differ materially from the Company’s expectation include the impact of the COVID-19 virus pandemic, financial performance, restaurant industry conditions, execution of restaurant development and construction programs, franchisee performance, changes in local or national economic conditions, availability of financing, governmental approvals and other risks detailed from time to time in the Company’s SEC reports.


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