Tims China Announces Second Quarter 2024 Financial Results
Tims China (Nasdaq: THCH) announced its Q2 2024 financial results, marking its first-ever quarterly adjusted corporate EBITDA profitability at RMB4.1 million (USD0.6 million), compared to a loss of RMB40.8 million in Q2 2023. However, total revenues declined by 10.9% YoY to RMB366.8 million (USD50.5 million).
Key highlights include system sales of RMB403.8 million (USD55.6 million), a 1.6% increase from Q2 2023, and a record adjusted store EBITDA margin of 10.3%. The company opened 31 franchised stores, resulting in a net increase of one store despite closures of underperforming company-owned stores.
Cost-cutting efforts led to significant reductions in food and packaging costs (down 19.2%), rental expenses (down 17.5%), and payroll expenses (down 23.4%). Marketing and adjusted G&A expenses also saw declines of 49.2% and 37.1%, respectively. Nonetheless, the company reported a net loss from continuing operations of RMB99.5 million (USD13.7 million).
Recent developments included receiving a Nasdaq notice for failing to meet the USD1.00 minimum bid price requirement, with a 180-day compliance period ending January 15, 2025.
Tims China (Nasdaq: THCH) ha annunciato i suoi risultati finanziari Q2 2024, segnando la prima volta che raggiunge la redditività dell'EBITDA aziendale rettificato con 4,1 milioni di RMB (0,6 milioni di USD), rispetto a una perdita di 40,8 milioni di RMB nel Q2 2023. Tuttavia, i ricavi totali sono diminuiti dell'10,9% rispetto all'anno precedente, attestandosi a 366,8 milioni di RMB (50,5 milioni di USD).
Le principali evidenze includono vendite di sistema per 403,8 milioni di RMB (55,6 milioni di USD), con un incremento dell'1,6% rispetto al Q2 2023, e un record per il margine di EBITDA rettificato dei negozi, pari al 10,3%. L'azienda ha aperto 31 negozi in franchising, portando a un aumento netto di un negozio nonostante le chiusure di negozi di proprietà poco performanti.
Gli sforzi di riduzione dei costi hanno portato a significative diminuzioni nei costi di cibo e imballaggio (giù del 19,2%), nelle spese di affitto (giù del 17,5%) e nelle spese per il personale (giù del 23,4%). Anche le spese per marketing e quelle generali e amministrative rettificate hanno visto diminuzioni rispettivamente del 49,2% e del 37,1%. Tuttavia, l'azienda ha riportato una perdita netta dalle operazioni continuative di 99,5 milioni di RMB (13,7 milioni di USD).
I recenti sviluppi comprendono la ricezione di un avviso da Nasdaq per inadempimento riguardo al prezzo minimo di offerta di 1,00 USD, con un periodo di conformità di 180 giorni che scade il 15 gennaio 2025.
Tims China (Nasdaq: THCH) anunció sus resultados financieros del Q2 2024, marcando su primer EBITDA corporativo ajustado en ganancias de 4,1 millones de RMB (0,6 millones de USD), en comparación con una pérdida de 40,8 millones de RMB en el Q2 2023. Sin embargo, los ingresos totales disminuyeron un 10,9% en comparación con el año anterior, alcanzando 366,8 millones de RMB (50,5 millones de USD).
Los puntos destacados clave incluyen ventas del sistema de 403,8 millones de RMB (55,6 millones de USD), un aumento del 1,6% desde el Q2 2023, y un récord en el margen de EBITDA ajustado de la tienda del 10,3%. La empresa abrió 31 tiendas franquiciadas, lo que resultó en un aumento neto de una tienda a pesar del cierre de tiendas de propiedad que no cumplían con las expectativas.
Los esfuerzos de reducción de costos llevaron a reducciones significativas en los costos de alimentos y empaques (bajaron un 19,2%), gastos de alquiler (bajaron un 17,5%) y gastos de nómina (bajaron un 23,4%). Los gastos de marketing y los gastos generales y administrativos ajustados también vieron disminuciones del 49,2% y 37,1%, respectivamente. No obstante, la empresa reportó una pérdida neta de operaciones continuas de 99,5 millones de RMB (13,7 millones de USD).
Los desarrollos recientes incluyeron la recepción de un aviso de Nasdaq por no cumplir con el requisito de precio mínimo de oferta de 1,00 USD, con un período de cumplimiento de 180 días que finaliza el 15 de enero de 2025.
팀스 차이나 (Nasdaq: THCH)는 2024년 2분기 재무 결과를 발표하며, 410만 위안(60만 달러)의 조정된 법인 EBITDA 이익을 기록하여 처음으로 분기 순익을 달성했다고 밝혔다. 이는 2023년 2분기 4080만 위안의 손실에 비해 큰 성과이다. 하지만 총 매출은 지난해 대비 10.9% 감소하여 3억6680만 위안(5050만 달러)에 그쳤다.
주요 하이라이트로는 4억380만 위안(5560만 달러)의 시스템 매출이 있으며, 이는 2023년 2분기 대비 1.6% 증가한 수치이다. 또한 조정된 매장 EBITDA 마진은 10.3%로 기록적인 수치를 기록했다. 이 회사는 31개의 프랜차이즈 매장을 열어 성과가 낮은 자회사 매장을 정리함에도 불구하고 순 실매장 수가 한 개 증가하였다.
비용 절감 노력은 음식 및 포장 비용을 19.2% 줄이고, 임대료를 17.5% 줄이며, 인건비를 23.4% 줄이는 등 상당한 감소를 가져왔다. 마케팅 및 조정된 총 관리비도 각각 49.2%, 37.1% 감소했다. 그럼에도 불구하고 회사는 계속 운영에서 9950만 위안(1370만 달러)의 순손실을 보고했다.
최근 동향은 최소 입찰 가격 요건인 1.00 USD를 충족하지 못해 Nasdaq의 통지를 받았으며, 180일의 준수 기간이 2025년 1월 15일에 만료된다.
Tims China (Nasdaq: THCH) a annoncé ses résultats financiers du 2ème trimestre 2024, marquant pour la première fois sa rentabilité EBITDA ajustée à 4,1 millions de RMB (0,6 million USD), comparativement à une perte de 40,8 millions de RMB au 2ème trimestre 2023. Cependant, les revenus totaux ont diminué de 10,9% par rapport à l'année précédente, atteignant 366,8 millions de RMB (50,5 millions USD).
Les points saillants clés incluent des ventes du système de 403,8 millions de RMB (55,6 millions USD), soit une augmentation de 1,6% par rapport au 2ème trimestre 2023, et une marge record de l'EBITDA ajusté des magasins de 10,3%. L'entreprise a ouvert 31 magasins franchisés, ce qui a conduit à une augmentation nette d'un magasin malgré la fermeture de magasins détenus ne répondant pas aux attentes.
Les efforts de réduction des coûts ont entraîné des réductions significatives des coûts alimentaires et d'emballage (en baisse de 19,2%), des frais de location (en baisse de 17,5%) et des dépenses de personnel (en baisse de 23,4%). Les dépenses de marketing et les frais généraux et administratifs ajustés ont également diminué de 49,2% et 37,1%, respectivement. Néanmoins, l'entreprise a signalé une perte nette provenant des opérations continues de 99,5 millions de RMB (13,7 millions USD).
Les dévéloppements récents incluent la réception d'un avis de Nasdaq pour ne pas avoir respecté l'exigence de prix d'offre minimum de 1,00 USD, avec une période de conformité de 180 jours qui se termine le 15 janvier 2025.
Tims China (Nasdaq: THCH) gab seine finanziellen Ergebnisse Q2 2024 bekannt und erzielte dabei erstmalig eine bereinigte EBITDA-Rentabilität von 4,1 Millionen RMB (0,6 Millionen USD), nachdem im Q2 2023 eine Verlust von 40,8 Millionen RMB verzeichnet wurde. Allerdings sanken die Gesamteinnahmen im Jahresvergleich um 10,9% auf 366,8 Millionen RMB (50,5 Millionen USD).
Wichtige Highlights sind Systemverkäufe von 403,8 Millionen RMB (55,6 Millionen USD), was einem Anstieg von 1,6% gegenüber Q2 2023 entspricht, sowie eine Rekord-Marge für das bereinigte EBITDA der Geschäfte von 10,3%. Die Firma eröffnete 31 franchisierte Geschäfte, was zu einem Nettowachstum von einem Geschäft führte, trotz der Schließung von weniger erfolgreichen firmeneigenen Geschäften.
Kostenreduzierungsmaßnahmen führten zu erheblichen Einsparungen bei Lebensmittel- und Verpackungskosten (um 19,2%), Mietausgaben (um 17,5%) und Personalaufwand (um 23,4%). Auch Marketing- und bereinigte allgemeine Verwaltungsaufwendungen sanken um 49,2% bzw. 37,1%. Dennoch berichtete das Unternehmen von einem Nettoverlust aus fortgeführten Aktivitäten in Höhe von 99,5 Millionen RMB (13,7 Millionen USD).
Zu den aktuellen Entwicklungen gehört die Benachrichtigung von Nasdaq über die Nichterfüllung der Mindestangebotspreisanforderung von 1,00 USD, wobei eine 180-tägige Frist zur Einhaltung am 15. Januar 2025 endet.
- First-ever quarterly adjusted corporate EBITDA profitability: RMB4.1 million (USD0.6 million).
- Record adjusted store EBITDA margin: 10.3%, up 5.3 percentage points YoY.
- System sales increased by 1.6% YoY to RMB403.8 million (USD55.6 million).
- Significant cost reductions: food and packaging (down 19.2%), rental (down 17.5%), and payroll (down 23.4%).
- Marketing expenses decreased by 49.2%, adjusted G&A expenses decreased by 37.1%.
- Total revenues declined by 10.9% YoY to RMB366.8 million (USD50.5 million).
- Net loss from continuing operations: RMB99.5 million (USD13.7 million).
- Same-store sales growth declined by 13.8% for company-owned stores.
- Received Nasdaq notice for failing to comply with USD1.00 minimum bid price requirement.
Tims China's Q2 2024 results show significant progress towards profitability, marking a important turning point for the company. The achievement of first-ever positive adjusted corporate EBITDA of
- Record-high adjusted store EBITDA margin of
10.3% , up 5.3 percentage points year-over-year - Substantial cost reductions across food and packaging (
-3.1% ), rent (-1.5% ), labor (-3.0% ) and other operating expenses (-1.3% ) - Streamlined G&A expenses, down
68.7% year-over-year
However, challenges remain with a
Tims China's strategic pivot towards profitability and franchising is showing promising results, but it's important to monitor the impact on brand perception and market share. The 45.4% increase in loyalty club members to 21.4 million is encouraging, suggesting strong brand engagement despite store closures. However, the
The company's focus on "great value for money and a differentiated fresh food offering" aligns well with current consumer trends in China's coffee market. The strong sub-franchise pipeline (over 3,600 applications) suggests confidence in the brand's potential among local entrepreneurs. Moving forward, Tims China's ability to balance profitability with market expansion and maintain its value proposition will be critical for long-term success in the highly competitive Chinese coffee market.
The Nasdaq non-compliance notice regarding the
The recent
Investors should closely monitor Tims China's compliance efforts and any further financing arrangements, as these will be critical for the company's future on Nasdaq and its overall financial stability.
Achieved First-ever Quarterly Adjusted Corporate EBITDA1 Profitability
Generated Highest-ever Adjusted Store EBITDA Margin of
SHANGHAI and NEW YORK, Aug. 29, 2024 (GLOBE NEWSWIRE) -- TH International Limited (Nasdaq: THCH), the exclusive operator of Tim Hortons coffee shops in China (“Tims China” or the “Company”), today announced its unaudited financial results for the second quarter 2024.
SECOND QUARTER 2024 HIGHLIGHTS
- Total revenues of RMB366.8 million (USD50.5 million), representing a
10.9% decrease from the same quarter of 2023.
- System sales2 of RMB403.8 million (USD55.6 million), representing a
1.6% increase from the same quarter of 2023.
- Net new store openings for franchised stores totaled 31 for the quarter (one systemwide net new store opening, as certain company-owned underperforming stores were closed and we focused on sub-franchise development).
- Adjusted store EBITDA3 was RMB33.2 million (USD4.6 million), representing a
81.7% increase from the same quarter of 2023.
- Adjusted store EBITDA margin4 was
10.3% , representing a 5.3 percentage points improvement over the same quarter of 2023.
- Achieved first-ever positive adjusted corporate EBITDA1 of RMB4.1 million (USD0.6 million), compared to a loss of RMB40.8 million in the same quarter of 2023.
- Registered loyalty club members totaled 21.4 million members as of June 30, 2024, representing a
45.4% increase from the same quarter of 2023.
COMPANY MANAGEMENT STATEMENT
Mr. Yongchen Lu, CEO & Director of Tims China, commented, “Tims has achieved a critical milestone in the second quarter, as we achieved adjusted corporate EBITDA profitability for the first time in our corporate history. This result was driven by an intense focus on our core strengths of delivering guests great value for money and a differentiated fresh food offering, coupled with continuous improvements in operational efficiency. This important milestone comes as we deliver eight consecutive quarters of adjusted store EBITDA profitability, with our highest ever adjusted store EBITDA margin of
Our focus on profitable growth has included greater emphasis on building our franchise network, collaborating closely with our sub-franchisees to provide them with compelling unit economics while delivering our guests a consistent experience and driving our bottom-line profit. Our efforts are paying off not just in our improving profitability but in the strength of our sub-franchisees pipeline, which stands at over 3,600 applications as of the end of June.”
Mr. Dong (Albert) Li, CFO of Tims China, commented, “In the second quarter of 2024, we achieved positive adjusted corporate EBITDA for the first time. We reached this significant improvement in our financial performance by optimizing our store unit economics, streamlining headquarter costs and closing underperforming stores. We substantially improved our store profitability and delivered year-over-year reductions in food and packaging costs, rental expenses, labor costs, and other store operating expenses (as a percentage of revenues from company owned and operated stores) by 3.1 percentage points, 1.5 percentage points, 3.0 percentage points, and 1.3 percentage points, respectively. Our marketing expenses and adjusted general and administrative expenses as a percentage of total revenues decreased by 2.6 percentage points and 3.4 percentage points year-over-year, respectively.”
Mr. Li continued, “Looking ahead, our focus remains on executing our strategy driving profitable, and capital-efficient growth. We will continue to strengthen our brand and expand our great value for money, freshly prepared food offering. We will also work closely with our sub-franchisees to drive traffic and enhance our supply chain efficiency, improving their store economics and driving our bottom-line profitability.”
SECOND QUARTER 2024 FINANCIAL RESULTS
Total revenues reached RMB366.8 million (USD50.5 million) for the three months ended June 30, 2024, representing a decrease of
- Revenues from Company owned and operated store sales were RMB322.3 million (USD44.4 million) for the three months ended June 30, 2024, representing a decrease of
11.1% from RMB362.6 million in the same quarter of 2023. The decrease was primarily attributable to closures of underperforming stores and a13.8% decrease in same-store sales growth for company owned and operated stores in the second quarter of 2024.
- Other revenues were RMB44.5 million (USD6.1 million) for the three months ended June 30, 2024, representing a decrease of
9.3% from RMB49.1 million in the same quarter of 2023. The decline was primarily due to a decrease of revenue from e-commence business, offset by an increase in the revenues generated from franchise business as the number of our franchised stores increased from 129 as of June 30, 2023 to 333 as of June 30, 2024.
Company owned and operated store costs and expenses were RMB309.9 million (USD42.6 million) for the three months ended June 30, 2024, representing a decrease of
- Food and packaging costs were RMB99.7 million (USD13.7 million), representing a decrease of
19.2% from RMB123.4 million, as we continue to benefit from higher efficiencies in supply chains and cost reduction on raw materials, logistic and warehousing expenses. Accordingly, food and packaging costs as a percentage of revenues from company owned and operated stores decreased by 3.1 percentage points from34.0% in the second quarter of 2023 to30.9% in the same quarter of 2024.
- Rental and property management fee was RMB62.2 million (USD8.6 million), representing a decrease of
17.5% from RMB75.3 million, mainly due to the closure of certain underperforming stores during the second quarter 2024. As a result, rental and property management fee as a percentage of revenues from company owned and operated stores decreased by 1.5 percentage points from20.8% in the second quarter of 2023 to19.3% in the same quarter of 2024.
- Payroll and employee benefits expenses were RMB60.8 million (USD8.4 million), representing a decrease of
23.4% from RMB79.4 million. Payroll and employee benefits as a percentage of revenues from company owned and operated stores decreased by 3.0 percentage points from21.9% in the second quarter of 2023 to18.9% in the same quarter of 2024, primarily due to the continuous refinement of staffing arrangement and optimization of store managerial efficiency.
- Delivery costs were RMB32.2 million (USD4.4 million), representing an increase of
10.4% from RMB29.2 million, due to an increased proportion of home-delivery orders. Delivery costs as a percentage of revenues from company owned and operated stores increased by 1.9 percentage points to10.0% in the second quarter of 2024 compared to8.1% in the same quarter of 2023.
- Other operating expenses were RMB24.4 million (USD3.4 million), representing a decrease of
24.6% from RMB32.3 million, driven by the cost optimization measures and in line with the revenue trend. Other operating expenses as a percentage of revenues from company owned and operated stores decreased by 1.3 percentage points to7.6% in the second quarter of 2024 compared to8.9% in the same quarter of 2023.
- Store depreciation and amortization expenses were RMB30.5 million (USD4.2 million), representing a decrease of
11.4% from RMB34.5 million, which was attributable to the closure of certain underperforming stores and in line with the revenue trend. Store depreciation and amortization as a percentage of revenues from company owned and operated stores remained steady at9.5% in both the second quarter of 2023 and the same quarter of 2024.
Costs for other revenues were RMB34.7 million (USD4.8 million) for the three months ended June 30, 2024, representing a decrease of
Marketing expenses were RMB12.8 million (USD1.8 million) for the three months ended June 30, 2024, representing a decrease of
General and administrative expenses were RMB39.8 million (USD5.5 million) for the three months ended June 30, 2024, representing a decrease of
Franchise and royalty expenses were RMB15.0 million (USD2.1 million) for the three months ended June 30, 2024, representing an increase of
Impairment losses of long-lived assets were RMB5.8 million (USD0.8 million) for the three months ended June 30, 2024, compared to RMB4.4 million in the same quarter of 2023, which was primarily due to the planned closing of underperforming company owned and operated stores.
As a result of the foregoing, operating loss was RMB54.7 million (USD7.5 million) for the three months ended June 30, 2024, a significant reduction compared to RMB171.5 million in the same quarter of 2023.
Adjusted Corporate EBITDA was a gain of RMB4.1 million (USD0.6 million) for the three months ended June 30, 2024, compared to a loss of RMB40.8 million in the same quarter of 2023. Adjusted Corporate EBITDA margin was positive
Net loss from continuing operations was RMB99.5 million (USD13.7 million) for the three months ended June 30, 2024, compared to RMB220.3 million for the same quarter of 2023. Adjusted net loss was RMB46.7 million (USD6.4 million) for the three months ended June 30, 2024, compared to RMB83.8 million for the same quarter of 2023. Adjusted net loss margin was negative
Net gain from discontinued operations was RMB53.1 million (USD7.3 million) for the three months ended June 30, 2024 (including gain on disposal of RMB66.2million), compared to net loss of RMB7.4 million for the same quarter of 2023.
Net loss was RMB46.4 million (USD6.4 million) for the three months ended June 30, 2024, compared to RMB227.7 million for the same quarter of 2023.
Basic and diluted net loss per ordinary share was RMB0.29 (USD0.04) in the second quarter of 2024, compared to RMB1.50 in the same quarter of 2023. Adjusted basic and diluted net loss per ordinary share was RMB0.30 (USD0.04) in the second quarter of 2024, compared to RMB0.56 in the same quarter of 2023.
Liquidity
As of June 30, 2024, the Company’s total cash and cash equivalents, time deposits, and amount due from related parties in relation to the financing from RBI were RMB253.2 million (USD34.8 million), compared to RMB219.5 million as of December 31, 2023. The change was primarily attributable to the financing from our founding shareholders, partially offset by cash disbursements on the back of the expansion of our business and store network nationwide and the repayment of bank borrowings.
KEY OPERATING DATA
| Tims only | For the three months ended or as of | |||||||||||||
| （Exclude the discontinued business) | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | |||||||||
| 2023 | 2023 | 2023 | 2024 | 2024 | ||||||||||
| Total stores | 700 | 759 | 902 | 906 | 907 | |||||||||
| Company owned and operated stores | 571 | 585 | 619 | 604 | 574 | |||||||||
| Franchised stores | 129 | 174 | 283 | 302 | 333 | |||||||||
| Same-store sales growth for system-wide stores | 19.9 | % | 0.1 | % | 2.6 | % | -13.6 | % | -14.6 | % | ||||
| Same-store sales growth for company owned and operated stores | 20.4 | % | -0.4 | % | 2.5 | % | -11.7 | % | -13.8 | % | ||||
| Registered loyalty club members (in thousands) | 14,721 | 16,867 | 18,545 | 20,009 | 21,403 | |||||||||
| Adjusted store EBITDA (Renminbi in thousands) | 18,244 | 29,010 | 15,714 | 7,241 | 33,154 | |||||||||
| Adjusted store EBITDA margin | 5.0 | % | 7.5 | % | 4.8 | % | 2.4 | % | 10.3 | % | ||||
KEY DEFINITIONS
- Same-store sales growth. The percentage change in the sales of stores that have been operating for 12 months or longer during a certain period compared to the same period from the prior year. The same-store sales growth for any period of more than a month equals to the arithmetic average of the same-store sales growth of each month covered in the period. If a store was closed for seven days or more during any given month, its sales during that month and the same month in the comparison period are excluded for purposes of measuring same-store sales growth.
- Net new store openings. The gross number of new stores opened during the period minus the number of stores permanently closed during the period.
- System sales. Gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
- Adjusted store EBITDA. Calculated as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization, and store pre-opening expenses.
- Adjusted store EBITDA margin. Calculated as adjusted store EBITDA as a percentage of revenues from company owned and operated stores.
- Adjusted general and administrative expenses. Calculated as general and administrative expenses excluding share-based compensation expenses, expenses related to the issuance of certain ordinary shares to CF Principal Investments LLC in November 2022 (the “Commitment Shares”), offering costs related to the ESA (the “ESA Offering Costs”), expenses related to 200,000 of our ordinary shares that may be purchased from our controlling shareholder by a holder of our convertible notes at its option pursuant to the terms of an Option Agreement dated September 28, 2022 (the “Option Shares”), and professional fees related to warrant exchange and other financing programs.
- Adjusted corporate EBITDA. Calculated as operating loss for continuing operations excluding store pre-opening expenses, and certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of rental deposits, one-off expense of store closure, professional fees related to Popeyes transaction and other financing programs, impairment losses of long-lived assets and loss on disposal of property and equipment.
- Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as a percentage of total revenues.
- Adjusted net loss. Calculated as net loss for continuing operations excluding store pre-opening expenses, share-based compensation expenses, professional fees related to Popeyes transaction and other financing programs, impairment losses of long-lived assets, impairment losses of rental deposits, one-off expense of store closure, loss on disposal of property and equipment, changes in fair value of Deferred Contingent consideration, changes in fair value of convertible notes, loss of the debt extinguishment and gain on disposal of Popeyes business.
- Adjusted net loss margin. Calculated as adjusted net loss as a percentage of total revenues.
- Adjusted basic and diluted net loss per ordinary share. Calculated as adjusted net loss attributable to the Company’s ordinary shareholders divided by weighted-average number of basic and diluted ordinary shares.
RECENT BUSINESS DEVELOPMENTS
On July 19, 2024, Tims China received a notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”), stating that the Company’s ordinary shares, par value
On June 28, 2024, Tims China announced that it had secured an aggregate of up to USD65 million of financing and additional funding from its founding shareholders, Cartesian Capital Group, LLC (“Cartesian”) and Restaurant Brands International Inc. (“RBI” (NYSE: QSR)). The financing includes USD50 million in convertible notes, of which USD40 million was issued at closing, with the balance to be funded over the following 7 months, subject in each case to certain conditions. The three-year notes are convertible into newly issued convertible preferred shares of Tims China, which convert to ordinary shares at a price per share based on
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP financial measures, namely adjusted store EBITDA, adjusted store EBITDA margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) adjusted store EBITDA as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization, and store pre-opening expenses; (ii) adjusted store EBITDA margin as adjusted store EBITDA as a percentage of revenues from company owned and operated stores; (iii) adjusted general and administrative expenses as general and administrative expenses excluding share-based compensation expenses, expenses related to the Commitment Shares, the ESA Offering Costs, and expenses related to the Option Shares, and professional fees related to warrant exchange and other financing programs; (iv) adjusted corporate EBITDA as operating loss for continuing operations excluding store pre-opening expenses, and certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, expenses related to the Commitment Shares, the ESA Offering Costs, expenses related to the Option Shares, professional fees related to warrant exchange and other financing programs, impairment losses of long-lived assets, and loss on disposal of property and equipment; (v) adjusted corporate EBITDA margin as adjusted corporate EBITDA as a percentage of total revenues; (vi) adjusted net loss as net loss for continuing operations excluding store pre-opening expenses, share-based compensation expenses, expenses related to the Commitment Shares, the ESA Offering Costs, expenses related to the Option Shares, professional fees related to warrant exchange and other financing programs, impairment losses of long-lived assets, loss on disposal of property and equipment, changes in fair value of convertible notes, changes in fair value of warrant liabilities, changes in fair value of ESA derivative liabilities, loss of the debt extinguishment and gain on disposal of Popeyes business; (vii) adjusted net loss margin as adjusted net loss as a percentage of total revenues; and (viii) adjusted basic and diluted net loss per ordinary share as adjusted net loss for continuing operations attributable to the Company’s ordinary shareholders divided by weighted-average number of basic and diluted ordinary share. The Company believes adjusted store EBITDA, adjusted store EBITDA margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company’s performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures.” The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.
EXCHANGE RATE INFORMATION
This earnings release contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.2672 to USD1.00, the exchange rate in effect on June 28, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any rate or at all.
CONFERENCE CALL
The Company will hold a conference call today, on Thursday, August 29, 2024, at 8:00 am Eastern Time (on Thursday, August 29, 2024, at 8:00 pm Beijing Time) to discuss the financial results.
Participants are strongly encouraged to pre-register for the conference call, by using the weblink provided below.
https://register.vevent.com/register/BIdea2b3bd339c462c8304fe5fcabe5a18
Participants may also view the live webcast by registering through below weblink:
https://edge.media-server.com/mmc/p/99dxxwxu
The webcast features a 'Submit Your Question' tab at the top, where you will have the opportunity to submit your questions before and during the call.
A live and archived webcast of the conference call will also be available at the Company’s Investor Relations website at https://ir.timschina.com under “Events and Presentations”.
FORWARD-LOOKING STATEMENTS
Certain statements in this earnings release may be considered forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, such as the Company’s ability to further grow its business and store network, optimize its cost structure, improve its operational efficiency, and achieve profitable growth. Forward-looking statements are statements that are not historical facts and generally relate to future events or the Company’s future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “target,” “plan,” “expect,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, as the case may be, are inherently uncertain and subject to material change. Factors that may cause actual results to differ materially from current expectations include various factors beyond management’s control, including, but not limited to, general economic conditions and other risks, uncertainties and factors set forth in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 20-F, and other filings it makes with the Securities and Exchange Commission. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Except as required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based.
ABOUT TH INTERNATIONAL LIMITED
TH International Limited (Nasdaq: THCH) (“Tims China”) is the parent company of the exclusive master franchisees of Tim Hortons coffee shops in mainland China, Hong Kong and Macau. Tims China was founded by Cartesian Capital Group and Tim Hortons Restaurants International, a subsidiary of Restaurant Brands International (TSX: QSR) (NYSE: QSR).
The Company’s philosophy is rooted in world-class execution and data-driven decision making and centered around true local relevance, continuous innovation, genuine community, and absolute convenience. For more information, please visit https://www.timschina.com.
INVESTOR AND MEDIA CONTACTS
Investor Relations
Gemma Bakx
IR@timschina.com, or gemma.bakx@cartesiangroup.com
Public and Media Relations
Patty Yu
Patty.Yu@timschina.com
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Amounts in thousands of RMB and US$, except for number of shares) | |||||||||
| As of | |||||||||
| December 31, 2023 | June 30, 2024 (Unaudited） | ||||||||
| RMB | RMB | US$ | |||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | 202,315 | 168,867 | 23,237 | ||||||
| Time deposits | 17,165 | 3,000 | 413 | ||||||
| Amount due from related parties | - | 81,369 | 11,197 | ||||||
| Accounts receivable, net | 27,562 | 31,749 | 4,369 | ||||||
| Inventories | 49,866 | 43,115 | 5,933 | ||||||
| Prepaid expenses and other current assets | 156,855 | 164,114 | 22,582 | ||||||
| Current assets of discontinued operations | 4,857 | - | - | ||||||
| Total current assets | 458,620 | 492,214 | 67,731 | ||||||
| Non-current assets: | |||||||||
| Property and equipment, net | 669,641 | 569,746 | 78,400 | ||||||
| Intangible assets, net | 107,317 | 107,567 | 14,802 | ||||||
| Operating lease right-of-use assets | 785,437 | 590,264 | 81,223 | ||||||
| Other non-current assets | 63,855 | 61,422 | 8,451 | ||||||
| Noncurrent assets of discontinued operations | 130,569 | - | - | ||||||
| Total non-current assets | 1,756,819 | 1,328,999 | 182,876 | ||||||
| Total assets | 2,215,439 | 1,821,213 | 250,607 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Bank borrowings, current | 538,233 | 393,962 | 54,211 | ||||||
| Accounts payable | 219,775 | 199,626 | 27,469 | ||||||
| Contract liabilities | 40,715 | 56,455 | 7,768 | ||||||
| Amount due to related parties | 53,004 | 21,621 | 2,975 | ||||||
| Operating lease liabilities | 189,835 | 177,423 | 24,414 | ||||||
| Other current liabilities | 290,713 | 240,846 | 33,143 | ||||||
| Current liabilities of discontinued operations | 63,558 | - | - | ||||||
| Total current liabilities | 1,395,833 | 1,089,933 | 149,980 | ||||||
| Non-current liabilities: | |||||||||
| Bank borrowings, non-current | 5,266 | 2,532 | 348 | ||||||
| Convertible notes, at fair value | 420,712 | 849,515 | 116,897 | ||||||
| Contract liabilities | 5,272 | 5,676 | 781 | ||||||
| Amount due to related parties | 94,200 | - | - | ||||||
| Operating lease liabilities | 653,659 | 474,953 | 65,356 | ||||||
| Other non-current liabilities | 8,637 | 7,709 | 1,061 | ||||||
| Noncurrent liabilities of discontinued operations | 54,289 | - | - | ||||||
| Total non-current liabilities | 1,242,035 | 1,340,385 | 184,443 | ||||||
| Total liabilities | 2,637,868 | 2,430,318 | 334,423 | ||||||
| Shareholders’ equity: | |||||||||
| Ordinary shares | 10 | 10 | 1 | ||||||
| Additional paid-in capital | 1,807,715 | 1,816,847 | 250,006 | ||||||
| Accumulated losses | (2,256,424 | ) | (2,448,095 | ) | (336,869 | ) | |||
| Accumulated other comprehensive income | 21,492 | 14,896 | 2,050 | ||||||
| Treasury shares | - | - | - | ||||||
| Total (deficit) equity attributable to shareholders of the Company | (427,207 | ) | (616,342 | ) | (84,812 | ) | |||
| Non-controlling interests | 4,778 | 7,237 | 996 | ||||||
| Total shareholders’ (deficit) equity | (422,429 | ) | (609,105 | ) | (83,816 | ) | |||
| Commitments and Contingencies | - | - | - | ||||||
| Total liabilities and shareholders’ equity (deficit) | 2,215,439 | 1,821,213 | 250,607 | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) | ||||||||||||||||||
| (Amounts in thousands of RMB and US$, except for per share data) | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Revenues: | ||||||||||||||||||
| Company owned and operated stores | 362,627 | 322,311 | 44,352 | 673,078 | 618,686 | 85,133 | ||||||||||||
| Other revenues | 49,079 | 44,524 | 6,126 | 75,107 | 80,293 | 11,049 | ||||||||||||
| Total revenues | 411,706 | 366,835 | 50,478 | 748,185 | 698,979 | 96,182 | ||||||||||||
| Costs and expenses, net: | ||||||||||||||||||
| Company owned and operated stores | ||||||||||||||||||
| Food and packaging | 123,394 | 99,725 | 13,723 | 234,720 | 202,434 | 27,856 | ||||||||||||
| Rental and property management fee | 75,308 | 62,164 | 8,554 | 146,718 | 126,772 | 17,445 | ||||||||||||
| Payroll and employee benefits | 79,371 | 60,800 | 8,366 | 152,331 | 125,979 | 17,335 | ||||||||||||
| Delivery costs | 29,216 | 32,248 | 4,439 | 51,998 | 59,782 | 8,226 | ||||||||||||
| Other operating expenses | 32,341 | 24,396 | 3,357 | 57,429 | 48,613 | 6,689 | ||||||||||||
| Store depreciation and amortization | 34,454 | 30,521 | 4,199 | 67,428 | 63,748 | 8,772 | ||||||||||||
| Company owned and operated store costs and expenses | 374,084 | 309,854 | 42,638 | 710,624 | 627,328 | 86,323 | ||||||||||||
| Costs of other revenues | 37,826 | 34,726 | 4,778 | 56,694 | 59,750 | 8,222 | ||||||||||||
| Marketing expenses | 25,253 | 12,828 | 1,765 | 43,556 | 32,589 | 4,484 | ||||||||||||
| General and administrative expenses | 127,148 | 39,783 | 5,475 | 197,768 | 94,250 | 12,970 | ||||||||||||
| Franchise and royalty expenses | 14,929 | 14,969 | 2,060 | 26,834 | 28,177 | 3,877 | ||||||||||||
| Other operating costs and expenses | 4,361 | 5,518 | 759 | 9,933 | 9,696 | 1,334 | ||||||||||||
| Loss on disposal of property and equipment | 961 | 614 | 84 | 1,857 | 2,618 | 360 | ||||||||||||
| Impairment losses of long-lived assets | 4,360 | 5,836 | 803 | 8,778 | 24,801 | 3,413 | ||||||||||||
| Other income | 5,758 | 2,580 | 355 | 5,984 | 4,255 | 586 | ||||||||||||
| Total costs and expenses, net | 583,164 | 421,548 | 58,007 | 1,050,060 | 874,954 | 120,397 | ||||||||||||
| Operating loss | (171,458 | ) | (54,713 | ) | (7,529 | ) | (301,875 | ) | (175,975 | ) | (24,215 | ) | ||||||
| Interest income | 1,487 | 252 | 35 | 3,510 | 1,241 | 171 | ||||||||||||
| Interest expenses | (4,853 | ) | (9,079 | ) | (1,250 | ) | (9,189 | ) | (14,664 | ) | (2,017 | ) | ||||||
| Foreign currency transaction loss | 15 | 504 | 69 | (1,773 | ) | 4,454 | 611 | |||||||||||
| Loss of the debt extinguishment | - | (10,657 | ) | (1,466 | ) | - | (10,657 | ) | (1,466 | ) | ||||||||
| Changes in fair value of Deferred Contingent consideration | - | (14,811 | ) | (2,038 | ) | - | (16,941 | ) | (2,331 | ) | ||||||||
| Changes in fair value of convertible notes | (7,054 | ) | (9,889 | ) | (1,361 | ) | (21,326 | ) | (20,540 | ) | (2,826 | ) | ||||||
| Changes in fair value of warrant liabilities | (25,782 | ) | - | - | (83,966 | ) | - | - | ||||||||||
| Changes in fair value of ESA derivative liabilities | (12,614 | ) | - | - | 19,909 | - | - | |||||||||||
| Loss from continuing operations before income taxes | (220,259 | ) | (98,393 | ) | (13,540 | ) | (394,710 | ) | (233,082 | ) | (32,073 | ) | ||||||
| Income tax expenses | - | (1,089 | ) | (150 | ) | - | (1,089 | ) | (150 | ) | ||||||||
| Net loss from continuing operations | (220,259 | ) | (99,482 | ) | (13,690 | ) | (394,710 | ) | (234,171 | ) | (32,223 | ) | ||||||
| Discontinued operations： | ||||||||||||||||||
| Loss from discontinued operations（including gain on disposal of Popeyes business RMB66,203 thousand in 2024) before income taxes | (7,398 | ) | 53,098 | 7,307 | (7,398 | ) | 44,959 | 6,187 | ||||||||||
| Income tax expenses | - | - | - | - | - | - | ||||||||||||
| Net loss from discontinued operations | (7,398 | ) | 53,098 | 7,307 | (7,398 | ) | 44,959 | 6,187 | ||||||||||
| Net loss | (227,657 | ) | (46,384 | ) | (6,383 | ) | (402,108 | ) | (189,212 | ) | (26,036 | ) | ||||||
| Less: Net (income) loss attributable to non-controlling interests | 1,023 | 1,243 | 171 | 1,456 | 2,459 | 338 | ||||||||||||
| Net Loss attributable to shareholders of the Company | ||||||||||||||||||
| -from continuing operations | (221,282 | ) | (100,725 | ) | (13,861 | ) | (396,166 | ) | (236,630 | ) | (32,561 | ) | ||||||
| -from discontinued operations | (7,398 | ) | 53,098 | 7,307 | (7,398 | ) | 44,959 | 6,187 | ||||||||||
| Basic and diluted loss per Ordinary Share | (1.50 | ) | (0.29 | ) | (0.04 | ) | (2.76 | ) | (1.18 | ) | (0.16 | ) | ||||||
| Net loss | (227,657 | ) | (46,384 | ) | (6,383 | ) | (402,108 | ) | (189,212 | ) | (26,036 | ) | ||||||
| Other comprehensive income (loss) | ||||||||||||||||||
| Unrealized gain on short-term investment, net of nil income taxes | 2,131 | - | - | 2,831 | - | - | ||||||||||||
| Fair value changes of convertible notes due to instrument-specific credit risk, net of nil income taxes | (5,059 | ) | 2,057 | 283 | (7,666 | ) | (1,493 | ) | (205 | ) | ||||||||
| Foreign currency translation adjustment, net of nil income taxes | (7,758 | ) | (2,068 | ) | (284 | ) | (6,729 | ) | (5,102 | ) | (703 | ) | ||||||
| Total comprehensive loss | (238,343 | ) | (46,395 | ) | (6,384 | ) | (413,672 | ) | (195,807 | ) | (26,944 | ) | ||||||
| Less: Comprehensive loss attributable to non- controlling interests | 1,023 | 1,243 | 171 | 1,456 | 2,459 | 338 | ||||||||||||
| Comprehensive loss attributable to shareholders of the Company | (239,366 | ) | (47,638 | ) | (6,555 | ) | (415,128 | ) | (198,266 | ) | (27,282 | ) | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
| (Amounts in thousands of RMB and US$) | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net cash provided by/(used in) operating activities | 241 | 31,707 | 4,363 | (85,119 | ) | 4,961 | 683 | |||||||||||
| Net cash provided by/(used in) investing activities | 13,919 | (21,421 | ) | (2,948 | ) | 64,157 | (28,685 | ) | (3,947 | ) | ||||||||
| Net cash provided by/(used in) financing activities | (135,370 | ) | (37,751 | ) | (5,195 | ) | 28,613 | (11,776 | ) | (1,620 | ) | |||||||
| Effect of foreign currency exchange rate changes on cash | 12,232 | (558 | ) | (76 | ) | 8,864 | 780 | 106 | ||||||||||
| Net increase/(decrease) in cash | (108,978 | ) | (28,023 | ) | (3,856 | ) | 16,515 | (34,720 | ) | (4,778 | ) | |||||||
| Cash at beginning of the period | 364,570 | 196,890 | 27,093 | 239,077 | 203,587 | 28,015 | ||||||||||||
| Cash at end of the period | 255,592 | 168,867 | 23,237 | 255,592 | 168,867 | 23,237 | ||||||||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES | ||||||||||||||||||
| (Unaudited, amounts in thousands of RMB and US$, except for number of shares and per share data) | ||||||||||||||||||
| A. Adjusted store EBITDA and adjusted store EBITDA margin | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Revenues - company owned and operated stores | 362,627 | 322,311 | 44,352 | 673,078 | 618,686 | 85,133 | ||||||||||||
| Food and packaging costs - company owned and operated stores | (123,394 | ) | (99,725 | ) | (13,723 | ) | (234,720 | ) | (202,434 | ) | (27,856 | ) | ||||||
| Rental expenses - company owned and operated stores | (75,308 | ) | (62,164 | ) | (8,554 | ) | (146,718 | ) | (126,772 | ) | (17,445 | ) | ||||||
| Payroll and employee benefits - company owned and operated stores | (79,371 | ) | (60,800 | ) | (8,366 | ) | (152,331 | ) | (125,979 | ) | (17,335 | ) | ||||||
| Delivery costs - company owned and operated stores | (29,216 | ) | (32,248 | ) | (4,439 | ) | (51,998 | ) | (59,782 | ) | (8,226 | ) | ||||||
| Other operating expenses - company owned and operated stores | (32,341 | ) | (24,396 | ) | (3,357 | ) | (57,429 | ) | (48,613 | ) | (6,689 | ) | ||||||
| Store depreciation and amortization | (34,454 | ) | (30,521 | ) | (4,199 | ) | (67,428 | ) | (63,748 | ) | (8,772 | ) | ||||||
| Franchise and royalty expenses - company owned and operated stores | (11,654 | ) | (10,549 | ) | (1,452 | ) | (21,477 | ) | (20,388 | ) | (2,805 | ) | ||||||
| Fully-burdened gross (loss) profit - company owned and operated stores | (23,111 | ) | 1,908 | 262 | (59,023 | ) | (29,030 | ) | (3,995 | ) | ||||||||
| Store depreciation and amortization | 34,454 | 30,521 | 4,199 | 67,428 | 63,748 | 8,772 | ||||||||||||
| Store pre-opening expenses | 6,901 | 725 | 100 | 15,841 | 5,677 | 781 | ||||||||||||
| Adjusted Store EBITDA | 18,244 | 33,154 | 4,561 | 24,246 | 40,395 | 5,558 | ||||||||||||
| Adjusted Store EBITDA Margin | 5.0 | % | 10.3 | % | 10.3 | % | 3.6 | % | 6.5 | % | 6.5 | % | ||||||
| B. Adjusted general and administrative expenses | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| General and administrative expenses from continuing operations | (127,148 | ) | (39,783 | ) | (5,475 | ) | (197,768 | ) | (94,250 | ) | (12,970 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Share-based compensation expenses | 55,557 | (1,129 | ) | (155 | ) | 58,718 | (115 | ) | (16 | ) | ||||||||
| Professional fees related to financing programs | 23,219 | 10,464 | 1,440 | 23,219 | 10,464 | 1,440 | ||||||||||||
| Impairment losses of rental deposits | - | - | - | - | 2,457 | 338 | ||||||||||||
| Adjusted General and administrative expenses | (48,372 | ) | (30,448 | ) | (4,190 | ) | (115,831 | ) | (81,444 | ) | (11,208 | ) | ||||||
| Adjusted General and administrative expenses as a % of total revenue | 11.7 | % | 8.3 | % | 8.3 | % | 15.5 | % | 11.7 | % | 11.7 | % | ||||||
| C. Adjusted corporate EBITDA and adjusted corporate EBITDA margin | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Operating loss from continuing operations | (171,458 | ) | (54,713 | ) | (7,529 | ) | (301,875 | ) | (175,975 | ) | (24,215 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Store pre-opening expenses | 6,901 | 725 | 100 | 15,841 | 5,677 | 781 | ||||||||||||
| Depreciation and amortization | 39,677 | 41,357 | 5,691 | 78,034 | 83,582 | 11,501 | ||||||||||||
| Share-based compensation expenses | 55,557 | (1,129 | ) | (155 | ) | 58,718 | (115 | ) | (16 | ) | ||||||||
| Impairment losses of rental deposits | - | - | - | - | 2,457 | 338 | ||||||||||||
| One-off expense of store closure | - | 916 | 126 | - | 3,181 | 438 | ||||||||||||
| Professional fees related to financing programs | 23,219 | 10,464 | 1,440 | 23,219 | 10,464 | 1,440 | ||||||||||||
| Impairment losses of long-lived assets | 4,360 | 5,836 | 803 | 8,778 | 24,801 | 3,413 | ||||||||||||
| Loss on disposal of property and equipment | 961 | 614 | 84 | 1,857 | 2,618 | 360 | ||||||||||||
| Adjusted Corporate EBITDA | (40,783 | ) | 4,070 | 560 | (115,428 | ) | (43,310 | ) | (5,960 | ) | ||||||||
| Adjusted Corporate EBITDA Margin | -9.9 | % | 1.1 | % | 1.1 | % | -15.4 | % | -6.2 | % | -6.2 | % | ||||||
| D. Adjusted net loss and adjusted net loss margin | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net loss from continuing operations | (220,259 | ) | (99,482 | ) | (13,690 | ) | (394,710 | ) | (234,171 | ) | (32,223 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Store pre-opening expenses | 6,901 | 725 | 100 | 15,841 | 5,677 | 781 | ||||||||||||
| Share-based compensation expenses | 55,557 | (1,129 | ) | (155 | ) | 58,718 | (115 | ) | (16 | ) | ||||||||
| Professional fees related to financing programs | 23,219 | 10,464 | 1,440 | 23,219 | 10,464 | 1,440 | ||||||||||||
| Impairment losses of long-lived assets | 4,360 | 5,836 | 803 | 8,778 | 24,801 | 3,413 | ||||||||||||
| Impairment losses of rental deposits | - | - | - | - | 2,457 | 338 | ||||||||||||
| One-off expense of store closure | - | 916 | 126 | - | 3,181 | 438 | ||||||||||||
| Loss on disposal of property and equipment | 961 | 614 | 84 | 1,857 | 2,618 | 360 | ||||||||||||
| Loss of the debt extinguishment | - | 10,657 | 1,466 | - | 10,657 | 1,466 | ||||||||||||
| Changes in fair value of Deferred Contingent consideration | - | 14,811 | 2,038 | - | 16,941 | 2,331 | ||||||||||||
| Changes in fair value of convertible notes | 7,054 | 9,889 | 1,361 | 21,326 | 20,540 | 2,826 | ||||||||||||
| Changes in fair value of warrant liabilities | 25,782 | - | - | 83,966 | - | - | ||||||||||||
| Changes in fair value of ESA derivative liabilities | 12,614 | - | - | (19,909 | ) | - | - | |||||||||||
| Adjusted Net loss | (83,811 | ) | (46,699 | ) | (6,427 | ) | (200,914 | ) | (136,950 | ) | (18,846 | ) | ||||||
| Adjusted Net loss Margin | -20.4 | % | -12.7 | % | -12.7 | % | -26.9 | % | -19.6 | % | -19.6 | % | ||||||
| E. Adjusted basic and diluted net loss per Ordinary Share | ||||||||||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net loss from continuing operations to shareholders of the Company | (221,282 | ) | (100,725 | ) | (13,861 | ) | (396,166 | ) | (236,630 | ) | (32,561 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Store pre-opening expenses | 6,901 | 725 | 100 | 15,841 | 5,677 | 781 | ||||||||||||
| Share-based compensation expenses | 55,557 | (1,129 | ) | (155 | ) | 58,718 | (115 | ) | (16 | ) | ||||||||
| Professional fees related to financing programs | 23,219 | 10,464 | 1,440 | 23,219 | 10,464 | 1,440 | ||||||||||||
| Impairment losses of long-lived assets | 4,360 | 5,836 | 803 | 8,778 | 24,801 | 3,413 | ||||||||||||
| Impairment losses of rental deposits | - | - | - | - | 2,457 | 338 | ||||||||||||
| One-off expense of store closure | - | 916 | 126 | - | 3,181 | 438 | ||||||||||||
| Loss on disposal of property and equipment | 961 | 614 | 84 | 1,857 | 2,618 | 360 | ||||||||||||
| Loss of the debt extinguishment | - | 10,657 | 1,466 | - | 10,657 | 1,466 | ||||||||||||
| Changes in fair value of Deferred Contingent consideration | - | 14,811 | 2,038 | - | 16,941 | 2,331 | ||||||||||||
| Changes in fair value of convertible notes | 7,054 | 9,889 | 1,361 | 21,326 | 20,540 | 2,826 | ||||||||||||
| Changes in fair value of warrant liabilities | 25,782 | - | - | 83,966 | - | - | ||||||||||||
| Changes in fair value of ESA derivative liabilities | 12,614 | - | - | (19,909 | ) | - | - | |||||||||||
| Adjusted Net loss attributable to shareholders of the Company | (84,834 | ) | (47,942 | ) | (6,598 | ) | (202,370 | ) | (139,409 | ) | (19,184 | ) | ||||||
| Weighted average shares outstanding used in calculating basic and diluted loss per share | 152,280,039 | 162,360,883 | 162,360,883 | 145,981,327 | 161,805,264 | 161,805,264 | ||||||||||||
| Adjusted basic and diluted net loss per Ordinary Share | (0.56 | ) | (0.30 | ) | (0.04 | ) | (1.39 | ) | (0.86 | ) | (0.12 | ) | ||||||
__________________
1 Excluding the transferred Popeyes business.
2 System sales is calculated as the gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
3 Adjusted store EBITDA is calculated as fully burdened gross profit5 of company owned and operated stores excluding depreciation & amortization and store pre-opening expenses.
4 Adjusted store EBITDA margin is calculated as adjusted store EBITDA as a percentage of revenues from company owned and operated stores.
5 Fully burdened gross profit of company owned and operated stores, the most comparable GAAP measure to adjusted store EBITDA, was a gain of RMB1.9 million (USD0.3 million) for the three months ended June 30, 2024, compared to a loss of RMB23.1 million in the same quarter of 2023.
FAQ
What are the Q2 2024 revenues for THCH?
Did THCH achieve profitability in Q2 2024?
What was the adjusted store EBITDA margin for THCH in Q2 2024?
How many new stores did THCH open in Q2 2024?
What cost reductions did THCH achieve in Q2 2024?
What was the net loss for THCH in Q2 2024?
Did THCH receive a Nasdaq notice in Q2 2024?
