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SeeThruEquity Issues Update on Chanticleer Holdings (NASDAQ: HOTR) Highlighting Continued Growth
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September 15, 2015 9:00am
SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has issued a an update on Chanticleer Holdings, Inc. (NASDAQ: HOTR), a company that owns and operates Hooters branded restaurants in emerging international markets.
The update note is available here: HOTR Update Note. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
"We see the recent results as encouraging for Chanticleer and also as validating the company's strategic decision in 2013 to expand beyond the Hooter's concept and invest in building a portfolio of fast-casual restaurants characterized by high quality, a strong local following, and potential for profit growth and franchising. We are particularly encouraged by the performance of the American Burger Company, given the significant investment by Chanticleer in building a collection of strong regional better burger concept restaurants. The "better burger" space is a high growth segment within the $34.5Bn fast casual restaurant industry, with an estimated market size of $2.4Bn.We are maintaining our 12-month price target of $5.00 per share," stated Ajay Tandon, CEO of SeeThruEquity.
Additional highlights of the update note are as follows:
Corporate Update highlights upcoming milestones
Chanticleer held a call with investors on August 26, 2015, providing a detailed review of 2Q15 and results and issuing an upbeat outlook for the company as it progresses towards 2016. At the end of 2Q15, the company had 47 restaurants and was operating at an annualized revenue run rate of over $40m, with nicely positive EBITDA at the restaurant level. Management has indicated that it expects to reach 64 restaurants by the end of the year, including the recently announced acquisition of Portland, OR-based Little Big Burger. The additional scale should enable the company to reach an annualized revenue run rate of $60mn+, with restaurant-level EBITDA of $6-8mn. According to Chanticleer CEO Michael Pruitt, this scale should enable the company to generate recurring EBITDA at the corporate level. We would see positive corporate-level EBITDA as a key achievement for Chanticleer, as the company should benefit from earnings leverage with future growth in restaurant-level profits flowing to the overall Chanticleer bottom line.
Recent results show continued growth, power in burger concept
Chanticleer's 2Q15 operating results continued the company's streak of high growth in the top line, as the company continued to invest in growth through new openings, franchising, and acquisitions, and benefitted from strong same store performance in its fast casual concepts. For the quarter, revenue came in at $10.8mn, up 64.9% from 2Q14. For the first half of the year, the company generated revenue of $19.5mn, up 63.7% from 1H14. We note that Chanticleer grew its restaurant unit count by over 110% from the year-ago period, and is now targeting 64 has increased its year-end, including the pending acquisition of Little Big Burger, a well respected West Coast burger concept based in Portland, OR, which has eight locations and generated $6mn in sales in 2014 at 25% EBITDA margins. Even adjusting for the acquisition of Little Big Burger, Chanticleer is well ahead of its initial goal of surpassing 50 units by year-end.
Recent results show continued growth, power in burger concept
Chanticleer is currently seeking to raise up to $10mn (7.4mn shars) through an ongoing rights offering with an exercise price of $1.35. We expect the company to use the proceeds to fund the acquisition of Little Big Burger, as well as for working capital and ongoing expansion plans and new openings in its existing fast casual better burger brands, the purchase of additional ownership in Hooters Australia, and initiating a franchise expansion plan for its Just Fresh concept.
Please review important disclosures on our website at www.seethruequity.com.
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About Chanticleer Holdings, Inc.
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Headquartered in Charlotte, NC, Chanticleer Holdings (HOTR), together with its subsidiaries, owns and operates restaurant brands in the United States and internationally. The Company is a franchisee owner of Hooters® restaurants in international markets including Australia, South Africa, and Europe, and two Hooters restaurants in the United States. The Company also owns and operates American Burger Co., BGR the Burger Joint, BT's Burger Joint and owns a majority interest in Just Fresh restaurants in the U.S. Chanticleerholdings.com
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SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. SeeThruEquity does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute its research to its database of opt-in investors. SeeThruEquity also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
info@seethruequity.com
DISCLOSURES
See www.seethruequity.com for important disclosures.
This report has been prepared and distributed by SeeThruEquity, LLC. This report is based on sources that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. All information contained herein is subject to change without notice. This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any information in this report is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. Statements included in this report may constitute forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues. SeeThruEquity has not been compensated for the preparation of this report. SeeThruEquity and/or its affiliates may have a long position with respect to the publicly traded shares of the subject company covered in this report. SeeThruEquity, LLC is not a broker-dealer and does not generate any investment banking or commission-based revenue with respect to the securities of the company described herein. Our professionals may provide oral or written market commentary that reflects opinions that are contrary to the opinions expressed in this report. The price and value of the investment referred to in this report may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Our report is disseminated primarily electronically, and, in some cases, in printed form. Electronic report is simultaneously available to all recipients in any form. The information contained in this report is not incorporated into the contents of our website and should be read independently thereof. Copyright 2011-2015 SeeThruEquity, LLC. No part of this material may be (i) copied, photocopied or duplicated in any for by any means or (ii) redistributed without the prior written consent of SeeThruEquity, LLC.
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