Dutch Bros Inc. Reports First Quarter 2024 Financial Results
Dutch Bros Inc. reported strong financial results for the first quarter of 2024, with revenues reaching $275 million, a 39% increase year-over-year. The company achieved 10.0% growth in same shop sales, opened a record number of new shops, and raised its 2024 guidance. Additionally, Dutch Bros saw improvements in traffic and customer engagement, leading to a positive outlook for the year.
Record revenue of $275 million, a 39% increase year-over-year
10.0% growth in system same shop sales, the highest since Q4 2021
45 new shops opened in the first quarter, tying a company record
Company-operated shop revenues increased by 43.3%
Adjusted EBITDA grew by 120.0% to $52.5 million
Net income was $16.2 million, down from $(9.4) million in the same period of 2023
Adjusted net income per fully exchanged share of diluted common stock was $0.09, down from $0.00 in the same period of 2023
No guidance reconciliation for Adjusted EBITDA due to uncontrollable reconciling items
Insights
Dutch Bros Inc.'s recent financial results indicate a robust performance that is likely to pique investor interest. The reported 39% year-over-year growth in revenue, reaching
Another promising detail for stakeholders is the revision of the 2024 outlook, including an increase in projected revenues to between
The impressive system average unit volumes (AUVs) expanding to $2.0 million reflect Dutch Bros' ability to leverage its brand and operational prowess in driving revenue. A key metric often overlooked is the 66% of transactions from Dutch Rewards members, illustrating a deepening customer loyalty that can lead to a more predictable revenue stream. The record pace of new shop openings, with 45 in the first quarter, could create a dual-edged sword situation where rapid expansion fuels revenue growth but may also ramp up cannibalization risk through its 'fortressing strategy'.
For investors, the traffic trajectory reported by the company bodes well for future sales and indicates effective market penetration, especially in new regions. The mention of investing more to capitalize on traction in new markets is a strategic move which investors should interpret as proactive market development, although it will require careful monitoring of the return on these marketing investments over time.
Achieves
Delivers
Raises 2024 Guidance
Christine Barone, Chief Executive Officer and President of Dutch Bros, stated, “We are pleased with our performance in the first quarter - we delivered exceptional results and witnessed the momentum we saw leaving 2023 continue into Q1. Headlining Q1 performance was
She continued, “System same shop sales growth featured a healthy combination of ticket expansion and traffic. Our traffic trajectory is particularly encouraging, and has now improved for two consecutive quarters. We believe our success is due in part to the plans we began setting in motion last year, underscored by two strong new product launches in Q1. Notably, a record
Barone added, “Bolstered by strong system same shop sales growth, system AUVs expanded to
First Quarter 2024 Highlights
- Opened 45 new shops, 40 of which were company-operated, across 14 states.
-
Total revenues grew
39.5% to$275.1 million $197.3 million -
System same shop sales1 increased
10.0% , 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 2023. Company-operated same shop sales increased10.9% , as compared to the same period of 2023. -
Company-operated shop revenues increased
43.3% to$248.1 million $173.2 million -
Company-operated shop gross profit was
$54.3 million $28.9 million 21.9% , a year-over-year increase of 520bps. -
Company-operated shop contribution2, a non-GAAP financial measure, grew
76.7% to$74.0 million $41.9 million 29.8% , a year-over-year increase of 560 bps. -
Selling, general, and administrative expenses were
$46.2 million 16.8% of revenue) as compared to$46.0 million 23.3% of revenue) in the same period of 2023. -
Adjusted selling, general, and administrative expenses2, a non-GAAP financial measure, were
$40.4 million 14.7% of revenue) as compared to$36.2 million 18.4% of revenue) in the same period of 2023. -
Net income (loss) was
$16.2 million $(9.4) million -
Adjusted EBITDA2, a non-GAAP financial measure, grew
120.0% to$52.5 million $23.9 million -
Adjusted net income (loss)2, a non-GAAP financial measure, was
$16.5 million $(0.5) million -
Net income (loss) per share of Class A and Class D common stock - diluted was
$0.08 $(0.07) -
Adjusted net income (loss) per fully exchanged share of diluted common stock2, a non-GAAP financial measure, was
$0.09 $0.00
Revised 2024 Outlook
- Total system shop openings in 2024 are expected to remain in the range of 150 to 165.
-
Total revenues are now projected to be between
$1.20 billion $1.21 5 billion$1.19 0 billion$1.20 5 billion - Same shop sales growth is expected to remain in the low single digits.
-
Adjusted EBITDA3 is now estimated to be between
$195 million $205 million $185 million $195 million -
Capital Expenditures are estimated to remain between
$280 million $320 million
_________________ |
||
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 to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort. |
|
Executive Leadership Transitions
Pursuant to the previously announced planned senior leadership changes, the Board of Directors appointed Joshua Guenser to the role of Chief Financial Officer from his previous role as Incoming Chief Financial Officer, effective as of May 9, 2024. Guenser will succeed Charley Jemley, who will step into the role of Strategic Advisor, to provide support for a transitional period prior to his planned retirement.
This transition follows the previously announced appointment by the Board of Directors of Brian Maxwell to the newly created role of Vice Chair, and Sumi Ghosh to the role of President of Operations from his previous role of Incoming President of Operations, effective April 1.
Christine Barone stated, “I would like to express my deepest gratitude to Charley for his almost five years of exceptional service to Dutch Bros. Charley’s leadership and steady hand has been invaluable to shepherding us through our IPO and our subsequent growth and success. His dedication to the Dutch Bros family will be greatly missed. On behalf of the entire team, thank you, Charley, for your unwavering commitment and outstanding contributions to our company.”
She added, “Working with Josh and Sumi over the past several months has solidified my belief that they are great additions to the Dutch Bros senior leadership team and terrific examples of the Dutch Bros culture. Both Josh and Sumi exemplify Dutch Bros' core values, including a passion for serving others and a commitment to excellence. I look forward to working closely together to continue Dutch Bros' growth and success in this next chapter.”
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 5:00 p.m. Eastern Time (ET) to discuss financial results for the first quarter ended March 31, 2024.
Event: First Quarter 2024 Conference Call and Webcast
Date: Tuesday, May 7, 2024
Time: 5:00 p.m. ET
Dial In: 1-201-493-6779
Webcast: https://investors.dutchbros.com under “Events & Presentations”.
The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.
About Dutch Bros Inc.
Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in
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 capital expenditures, Dutch Bros’ possible or assumed future results of operations, including guidance for 2024, new shop openings, business strategies, and potential growth opportunities. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “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, general economic conditions, commodity inflation, increased labor costs, disruptions in our supply chain, ability to hire and retain employees, and other risks, including those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.
DUTCH BROS INC. |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
|
|
Three Months Ended
|
||||||
(in thousands, except per share amounts; unaudited) |
|
2024 |
|
2023 |
||||
REVENUES |
|
|
|
|
||||
Company-operated shops |
|
$ |
248,085 |
|
|
$ |
173,164 |
|
Franchising and other |
|
|
27,014 |
|
|
|
24,103 |
|
Total revenues |
|
|
275,099 |
|
|
|
197,267 |
|
|
|
|
|
|
||||
COSTS AND EXPENSES |
|
|
|
|
||||
Cost of sales |
|
|
203,326 |
|
|
|
151,523 |
|
Selling, general and administrative |
|
|
46,194 |
|
|
|
45,976 |
|
Total costs and expenses |
|
|
249,520 |
|
|
|
197,499 |
|
|
|
|
|
|
||||
INCOME (LOSS) FROM OPERATIONS |
|
|
25,579 |
|
|
|
(232 |
) |
|
|
|
|
|
||||
OTHER EXPENSE |
|
|
|
|
||||
Interest expense, net |
|
|
(6,393 |
) |
|
|
(7,886 |
) |
Other income, net |
|
|
5,801 |
|
|
|
1,307 |
|
Total other expense |
|
|
(592 |
) |
|
|
(6,579 |
) |
|
|
|
|
|
||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
24,987 |
|
|
|
(6,811 |
) |
Income tax expense |
|
|
8,772 |
|
|
|
2,580 |
|
NET INCOME (LOSS) |
|
$ |
16,215 |
|
|
$ |
(9,391 |
) |
Less: Net income (loss) attributable to non-controlling interests |
|
|
9,153 |
|
|
|
(5,549 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO DUTCH BROS INC. |
|
$ |
7,062 |
|
|
$ |
(3,842 |
) |
Net income (loss) per share of Class A and Class D common stock: |
|
|
|
|
||||
Basic |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
Diluted |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
Weighted-average shares of Class A and Class D common stock outstanding: |
|
|
|
|
||||
Basic |
|
|
83,328 |
|
|
|
56,664 |
|
Diluted |
|
|
83,410 |
|
|
|
56,664 |
|
DUTCH BROS INC. |
||||||||
Segment Financials |
||||||||
|
|
Three Months Ended
|
||||||
(in thousands; unaudited) |
|
2024 |
|
2023 |
||||
Revenues: |
|
|
|
|
||||
Company-operated shops |
|
$ |
248,085 |
|
|
$ |
173,164 |
|
Franchising and other |
|
|
27,014 |
|
|
|
24,103 |
|
Total revenues |
|
|
275,099 |
|
|
|
197,267 |
|
Cost of Sales: |
|
|
|
|
||||
Company-operated shops |
|
|
193,780 |
|
|
|
144,292 |
|
Franchising and other |
|
|
9,546 |
|
|
|
7,231 |
|
Total cost of sales |
|
|
203,326 |
|
|
|
151,523 |
|
Segment gross profit: |
|
|
|
|
||||
Company-operated shops |
|
|
54,305 |
|
|
|
28,872 |
|
Franchising and other |
|
|
17,468 |
|
|
|
16,872 |
|
Total gross profit |
|
|
71,773 |
|
|
|
45,744 |
|
Depreciation and amortization: |
|
|
|
|
||||
Company-operated shops |
|
|
19,694 |
|
|
|
13,001 |
|
Franchising and other |
|
|
1,295 |
|
|
|
1,361 |
|
All other 1 |
|
|
264 |
|
|
|
417 |
|
Total depreciation and amortization |
|
|
21,253 |
|
|
|
14,779 |
|
Segment contribution: |
|
|
|
|
||||
Company-operated shops |
|
|
73,999 |
|
|
|
41,873 |
|
Franchising and other |
|
|
18,763 |
|
|
|
18,233 |
|
Total segment contribution |
|
|
92,762 |
|
|
|
60,106 |
|
Selling, general and administrative |
|
|
(46,194 |
) |
|
|
(45,976 |
) |
Interest expense, net |
|
|
(6,393 |
) |
|
|
(7,886 |
) |
Other income, net |
|
|
5,801 |
|
|
|
1,307 |
|
Income (loss) before income taxes |
|
$ |
24,987 |
|
|
$ |
(6,811 |
) |
_________________ |
||
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
|
||||||||||
|
|
2024 |
|
2023 |
||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
||||
Company-operated shops revenue |
|
248,085 |
|
100.0 |
|
173,164 |
|
100.0 |
||||
|
|
|
|
|
|
|
|
|
||||
Beverage, food and packaging costs |
|
63,716 |
|
|
25.7 |
|
|
48,952 |
|
|
28.3 |
|
Labor costs |
|
65,427 |
|
|
26.4 |
|
|
48,549 |
|
|
28.0 |
|
Occupancy and other costs |
|
41,496 |
|
|
16.7 |
|
|
30,559 |
|
|
17.6 |
|
Pre-opening costs |
|
3,447 |
|
|
1.4 |
|
|
3,231 |
|
|
1.9 |
|
Depreciation and amortization |
|
19,694 |
|
|
7.9 |
|
|
13,001 |
|
|
7.5 |
|
Company-operated shop costs and expenses |
|
193,780 |
|
|
78.1 |
|
|
144,292 |
|
|
83.3 |
|
Company-operated shops gross profit |
|
54,305 |
|
|
21.9 |
|
|
28,872 |
|
|
16.7 |
|
Company-operated shops contribution 1 |
|
73,999 |
|
|
29.8 |
|
|
41,873 |
|
|
24.2 |
|
_________________ |
||
1 |
Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”. |
|
DUTCH BROS INC. |
||||||||
Summary Cash Flows Data |
||||||||
|
|
Three Months Ended
|
||||||
(in thousands; unaudited) |
|
2024 |
|
2023 |
||||
Net cash provided by operating activities |
|
$ |
41,193 |
|
|
$ |
3,077 |
|
Net cash used in investing activities |
|
|
(57,462 |
) |
|
|
(43,043 |
) |
Net cash provided by financing activities |
|
|
145,443 |
|
|
|
34,084 |
|
Net increase (decrease) in cash and cash equivalents |
|
$ |
129,174 |
|
|
$ |
(5,882 |
) |
Cash and cash equivalents at beginning of period |
|
|
133,545 |
|
|
|
20,178 |
|
Cash and cash equivalents at end of period |
|
$ |
262,719 |
|
|
$ |
14,296 |
|
DUTCH BROS INC. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands; unaudited) |
|
March 31,
|
|
December 31,
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
262,719 |
|
|
$ |
133,545 |
|
Accounts receivable, net |
|
|
11,659 |
|
|
|
9,124 |
|
Inventories, net |
|
|
45,393 |
|
|
|
46,953 |
|
Prepaid expenses and other current assets |
|
|
15,308 |
|
|
|
15,637 |
|
Total current assets |
|
|
335,079 |
|
|
|
205,259 |
|
Property and equipment, net |
|
|
585,271 |
|
|
|
542,440 |
|
Finance lease right-of-use assets, net |
|
|
380,932 |
|
|
|
382,734 |
|
Operating lease right-of-use assets, net |
|
|
234,352 |
|
|
|
199,673 |
|
Intangibles, net |
|
|
4,615 |
|
|
|
5,415 |
|
Goodwill |
|
|
21,629 |
|
|
|
21,629 |
|
Deferred income tax assets, net |
|
|
507,357 |
|
|
|
402,995 |
|
Other long-term assets |
|
|
4,080 |
|
|
|
3,865 |
|
Total assets |
|
$ |
2,073,315 |
|
|
$ |
1,764,010 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
38,763 |
|
|
$ |
29,957 |
|
Accrued compensation and benefits |
|
|
23,061 |
|
|
|
31,405 |
|
Other accrued liabilities |
|
|
17,281 |
|
|
|
15,770 |
|
Other current liabilities |
|
|
5,613 |
|
|
|
6,423 |
|
Deferred revenue |
|
|
29,110 |
|
|
|
30,349 |
|
Current portion of finance lease liabilities |
|
|
10,681 |
|
|
|
9,482 |
|
Current portion of operating lease liabilities |
|
|
9,417 |
|
|
|
10,239 |
|
Current portion of long-term debt |
|
|
12,618 |
|
|
|
4,491 |
|
Total current liabilities |
|
|
146,544 |
|
|
|
138,116 |
|
Deferred revenue, net of current portion |
|
|
6,313 |
|
|
|
6,676 |
|
Finance lease liabilities, net of current portion |
|
|
368,198 |
|
|
|
367,775 |
|
Operating lease liabilities, net of current portion |
|
|
226,877 |
|
|
|
191,419 |
|
Long-term debt, net of current portion |
|
|
233,571 |
|
|
|
93,175 |
|
Tax receivable agreements liability |
|
|
395,841 |
|
|
|
290,920 |
|
Other long-term liabilities |
|
|
8 |
|
|
|
8 |
|
Total liabilities |
|
|
1,377,352 |
|
|
|
1,088,089 |
|
Equity: |
|
|
|
|
||||
Common stock |
|
|
2 |
|
|
|
2 |
|
Additional paid in capital |
|
|
424,721 |
|
|
|
379,391 |
|
Accumulated other comprehensive income |
|
|
925 |
|
|
|
544 |
|
Accumulated deficit |
|
|
(8,530 |
) |
|
|
(15,592 |
) |
Total stockholders' equity attributable to Dutch Bros Inc. |
|
|
417,118 |
|
|
|
364,345 |
|
Non-controlling interests |
|
|
278,845 |
|
|
|
311,576 |
|
Total equity |
|
|
695,963 |
|
|
|
675,921 |
|
Total liabilities and equity |
|
$ |
2,073,315 |
|
|
$ |
1,764,010 |
|
DUTCH BROS INC. |
||||||||
Select Financial Metrics |
||||||||
|
|
Three Months Ended
|
||||||
(in thousands, except number of shops data; unaudited) |
|
2024 |
|
2023 |
||||
Shop count, beginning of period |
|
|
|
|
||||
Company-operated |
|
|
542 |
|
|
|
396 |
|
Franchised |
|
|
289 |
|
|
|
275 |
|
|
|
|
831 |
|
|
|
671 |
|
Company-operated new openings |
|
|
40 |
|
|
|
42 |
|
Franchised new openings |
|
|
5 |
|
|
|
3 |
|
Shop count, end of period |
|
|
|
|
||||
Company-operated |
|
|
582 |
|
|
|
438 |
|
Franchised |
|
|
294 |
|
|
|
278 |
|
Total shop count |
|
|
876 |
|
|
|
716 |
|
|
|
|
|
|
||||
Systemwide AUV 1 |
|
$ |
1,995 |
|
|
$ |
1,916 |
|
Company-operated shops AUV 1 |
|
$ |
1,915 |
|
|
$ |
1,879 |
|
|
|
|
|
|
||||
Systemwide same shop sales 2, 3 |
|
|
10.0 |
% |
|
|
(2.0 |
)% |
Company-operated same shop sales 2 |
|
|
10.9 |
% |
|
|
(3.5 |
)% |
|
|
|
|
|
||||
Systemwide sales 3 |
|
$ |
397,553 |
|
|
$ |
302,782 |
|
Company-operated operating weeks 4 |
|
|
7,274 |
|
|
|
5,322 |
|
Franchising and other operating weeks 4 |
|
|
3,779 |
|
|
|
3,546 |
|
Dutch Rewards transactions as a percentage of total transactions 5 |
|
|
66.5 |
% |
|
|
65.0 |
% |
|
|
Three Months Ended
|
||||||||||
|
|
2024 |
|
2023 |
||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
||||
Company-operated shop revenues |
|
248,085 |
|
100.0 |
|
173,164 |
|
|
100.0 |
|
||
Company-operated gross profit |
|
54,305 |
|
|
21.9 |
|
|
28,872 |
|
|
16.7 |
|
Company-operated shop contribution 6 |
|
73,999 |
|
|
29.8 |
|
|
41,873 |
|
|
24.2 |
|
Selling, general, and administrative expenses |
|
46,194 |
|
|
16.8 |
|
|
45,976 |
|
|
23.3 |
|
Adjusted selling, general, and administrative expenses 6 |
|
40,430 |
|
|
14.7 |
|
|
36,239 |
|
|
18.4 |
|
Net income (loss) |
|
16,215 |
|
|
5.9 |
|
|
(9,391 |
) |
|
(4.8 |
) |
Adjusted EBITDA 6 |
|
52,540 |
|
|
19.1 |
|
|
23,880 |
|
|
12.1 |
|
___________ |
||
1 |
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. |
|
2 |
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
|
||||
|
|
2024 |
|
2023 |
||
Systemwide shop base |
|
641 |
|
503 |
||
Company-operated shop base |
|
370 |
|
|
246 |
|
3 |
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. |
|
4 |
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. |
|
5 |
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. |
|
6 |
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
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
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, expenses associated with equity offerings, executives transition, (gain) loss on the remeasurement of the liability related to the TRAs, and organization realignment and restructuring costs.
Adjusted EBITDA in dollars (as defined), taken as a percentage of total revenue.
Usefulness to management and investors
These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.
Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)
Definition and/or calculation
Selling, general, and administrative expenses, excluding depreciation and amortization, equity-based compensation expense, expenses associated with equity offerings, executives transition, 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 (loss)
Definition and/or calculation
Net income (loss), excluding equity-based compensation expense, expenses associated with equity offerings, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, 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 (loss) 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, expenses associated with equity offerings, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, 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, including restricted stock awards and restricted stock units in Dutch Bros Inc. to certain eligible employees.
Expenses associated with equity offerings
Costs incurred as a result of our equity offerings, including Secondary Offerings by our Sponsor. These costs include, but are not limited to, legal fees, consulting fees, tax fees, and accounting fees.
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, and amortized through early 2024.
TRAs remeasurements
(Gain) loss impacts on condensed consolidated statements of operations related to adjustments of our TRAs liabilities.
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 2024, and are expected to continue for at least the next year. 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.
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
|
|
Three Months Ended March 31, |
||||||||||
|
|
2024 |
|
2023 |
||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
||||
Company-operated shop gross profit |
|
54,305 |
|
21.9 |
|
28,872 |
|
16.7 |
||||
Depreciation and amortization |
|
19,694 |
|
|
7.9 |
|
|
13,001 |
|
|
7.5 |
|
Company-operated shop contribution |
|
73,999 |
|
|
29.8 |
|
|
41,873 |
|
|
24.2 |
|
|
|
Three Months Ended March 31, |
||||||||||
|
|
2024 |
|
2023 |
||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
||||
Net income (loss) |
|
16,215 |
|
|
5.9 |
|
|
(9,391 |
) |
|
(4.8 |
) |
Depreciation and amortization |
|
21,253 |
|
|
7.7 |
|
|
14,779 |
|
|
7.5 |
|
Interest expense, net |
|
6,393 |
|
|
2.3 |
|
|
7,886 |
|
|
4.0 |
|
Income tax expense |
|
8,772 |
|
|
3.2 |
|
|
2,580 |
|
|
1.3 |
|
EBITDA |
|
52,633 |
|
|
19.1 |
|
|
15,854 |
|
|
8.0 |
|
Equity-based compensation |
|
1,933 |
|
|
0.7 |
|
|
9,170 |
|
|
4.6 |
|
Expenses associated with equity offerings |
|
961 |
|
|
0.3 |
|
|
— |
|
|
— |
|
Executives transition |
|
75 |
|
|
— |
|
|
150 |
|
|
0.1 |
|
TRAs remeasurements |
|
(5,687 |
) |
|
(2.0 |
) |
|
(1,294 |
) |
|
(0.6 |
) |
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
||||
Employee-related costs |
|
2,625 |
|
|
1.0 |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
|
52,540 |
|
|
19.1 |
|
|
23,880 |
|
|
12.1 |
|
|
|
Three Months Ended March 31, |
||||||||||
|
|
2024 |
|
2023 |
||||||||
(in thousands; unaudited) |
|
$ |
|
% |
|
$ |
|
% |
||||
Selling, general, and administrative |
|
46,194 |
|
|
16.8 |
|
|
45,976 |
|
|
23.3 |
|
Depreciation and amortization |
|
(264 |
) |
|
(0.1 |
) |
|
(417 |
) |
|
(0.2 |
) |
Equity-based compensation |
|
(1,839 |
) |
|
(0.7 |
) |
|
(9,170 |
) |
|
(4.6 |
) |
Expenses associated with equity offerings |
|
(961 |
) |
|
(0.3 |
) |
|
— |
|
|
— |
|
Executives transition |
|
(75 |
) |
|
— |
|
|
(150 |
) |
|
(0.1 |
) |
Organization realignment and restructuring: |
|
|
|
|
|
|
|
|
||||
Employee-related costs |
|
(2,625 |
) |
|
(1.0 |
) |
|
— |
|
|
— |
|
Adjusted selling, general, and administrative |
|
40,430 |
|
|
14.7 |
|
|
36,239 |
|
|
18.4 |
|
|
|
Three Months Ended
|
||||||
(in thousands; unaudited) |
|
2024 |
|
2023 |
||||
Net income (loss) |
|
$ |
16,215 |
|
|
$ |
(9,391 |
) |
Equity-based compensation |
|
|
1,933 |
|
|
|
9,170 |
|
Expenses associated with equity offerings |
|
|
961 |
|
|
|
— |
|
Executives transition |
|
|
75 |
|
|
|
150 |
|
TRAs remeasurements |
|
|
(5,687 |
) |
|
|
(1,294 |
) |
Organization realignment and restructuring: |
|
|
|
|
||||
Employee-related costs |
|
|
2,625 |
|
|
|
— |
|
Income tax effects |
|
|
350 |
|
|
|
830 |
|
Adjusted net income (loss) |
|
$ |
16,472 |
|
|
$ |
(535 |
) |
|
|
Three Months Ended
|
||||||
(in thousands, except per share amounts; unaudited) |
|
2024 |
|
2023 |
||||
Weighted-average shares of Class A and Class D common stock outstanding - basic |
|
|
83,328 |
|
|
|
56,664 |
|
Dilutive effects of RSUs and RSAs |
|
|
82 |
|
|
|
— |
|
Weighted-average shares of Class A and Class D common stock outstanding - diluted |
|
|
83,410 |
|
|
|
56,664 |
|
Assumed exchange of weighted-average Class B and Class C shares of common stock |
|
|
93,777 |
|
|
|
105,756 |
|
Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted |
|
|
177,187 |
|
|
|
162,420 |
|
|
|
|
|
|
||||
Net income (loss) per share of Class A and Class D common stock - diluted |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
Controlling and non-controlling interest adjustments |
|
|
0.01 |
|
|
|
0.01 |
|
Equity-based compensation |
|
|
0.01 |
|
|
|
0.06 |
|
Expenses associated with equity offerings |
|
|
0.01 |
|
|
|
— |
|
Executives transition |
|
|
— |
|
|
|
— |
|
TRAs remeasurements |
|
|
(0.03 |
) |
|
|
(0.01 |
) |
Organization realignment and restructuring: |
|
|
|
|
||||
Employee-related costs |
|
|
0.01 |
|
|
|
— |
|
Income tax effects |
|
|
— |
|
|
|
0.01 |
|
Adjusted net income (loss) per fully exchanged share of diluted common stock |
|
$ |
0.09 |
|
|
$ |
— |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507530847/en/
For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com
For Media Relations inquiries:
Jessica Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com
Source: Dutch Bros Inc.
FAQ
How much did Dutch Bros Inc. report in revenues for the first quarter of 2024?
What was the percentage increase in same shop sales for Dutch Bros Inc. in the first quarter of 2024?
How many new shops did Dutch Bros Inc. open in the first quarter of 2024?
Who was appointed as the Chief Financial Officer of Dutch Bros Inc. in May 2024?
What was the net income for Dutch Bros Inc. in the first quarter of 2024?
