Chanticleer Holdings Reports Improvements in Revenue, Gross Profit Margins for Fourth Quarter and Full Year 2012

Chanticleer Holdings Reports Improvements in Revenue, Gross Profit Margins for 
Fourth Quarter and Full Year 2012 
Fourth Quarter Same Store Gross Sales Increase 13.2% in Local
Currency  
CHARLOTTE, NC  -- (Marketwired) -- 04/02/13 --  Chanticleer Holdings,
Inc. (NASDAQ: HOTR) ("Chanticleer" or "the Company"), a minority
owner in the privately held parent company of the Hooters® brand,
Hooters of America ("HOA"), and a franchisee of international
Hooters® restaurants, announced today its financial results for the
fourth quarter and full year ended December 31, 2012. 
Highlights Include:  


 
--  Restaurant revenue for the fourth quarter 2012 increased to $2.0
    million, compared with $1.7 million in the third quarter 2012, an
    increase of 14.5%, and $980,000 in the year-ago fourth quarter. For the
    full year 2012, restaurant revenue was $6.8 million compared with
    $980,000 in the year-ago period. As of December 31, 2012, the Company
    had six restaurants (five consolidated and one joint venture) compared
    with three consolidated restaurants as of December 31, 2011.
--  Gross profit margins for the fourth quarter 2012 were 61.4% compared
    with 58.2% in the third quarter 2012, and 48.5% in the year-ago fourth
    quarter. For the full year, gross profit margins were 59.1% compared
    with 48.5% in 2011.
--  Same-store gross sales for restaurants opened more than a year increased
    13.2% in local currency (Rands) and 5.2% in U.S. dollars for the fourth
    quarter 2012.
--  Restaurant operating expenses for the fourth quarter 2012 were $1.1
    million or 58.7% of restaurant revenue, compared with $598,000, or 61.0%
    for the year-ago quarter. For the full year 2012, restaurant operating
    expenses were $3.8 million, or 56.1% of revenue, compared with $598,000
    or 61.0% for the full year 2011.
--  The company opened three (two consolidated, one joint venture) new
    locations in 2012, and has targeted an additional four (three
    consolidated, one joint venture) locations for 2013. 
--  Net loss for the fourth quarter 2012 was $879,000, or $0.24 per share,
    compared with $667,000, or $0.53 per share for the year-ago fourth
    quarter. Net loss for the full year was $3.2 million, or $1.25 per
    share, comp
ared with $1.2 million, or $0.98 per share.
--  Restaurant EBITDA for the fourth quarter 2012 was $94,393 compared with
    $(20,625) in 2011; for the full year 2012 Restaurant EBITDA was $322,415
    vs. $(20,625) in 2011.
--  General and administrative ("G&A") expenses for the fourth quarter 2012
    were $784,000, or 39.7% of total revenue, compared with $488,000 or
    48.4% in the year-ago fourth quarter. A portion of this increase was
    related to the Company's South African operations' accounting issues,
    which have been resolved. Full-year 2012 G & A was $2.6 million, or
    38.0% of total revenue compared with $1.2 million, or 84.6% for the full
    year 2011.

 
Mike Pruitt, President and CEO of Chanticleer, commented, "2012 was a
significant year for Chanticleer Holdings as we lay the foundation
for growth in the four international regions we are doing business
in, improved our gross profit margins to 61.4%, and produced a robust
increase in same-store sales growth. Specifically, we increased our
footprint in South Africa and also expanded to Hungary, bringing the
iconic Hooters brand, and the American experience, to new audiences.
We have implemented several operational initiatives in South Africa,
updated our menu offerings in conjunction with Hooters of America,
and have added several items to the menu that are attractive to
health-conscious consumers and the female market." 
"W
e expect to open four new locations in 2013, to bring our total
restaurants to 10. We are pleased with our expansion into Hungary,
and look forward to moving ahead with our plans to increase our
seating capacity in that restaurant with the opening of a new patio
area, in time for the upcoming tourist season. While our Budapest
location is our first entry into the Eastern Europe market, we are
targeting other locations in that region. In addition to Eastern
Europe, we are also focusing on opening in Rio de Janeiro, Brazil,
and other South African cities. We believe we have a solid business
model that will help us to propel our growth in our international
markets." 
Use of Non-GAAP Measures  
Chanticleer Holdings, Inc. prepares its consolidated financial
statements in accordance with United States generally accepted
accounting principles ("GAAP"). In addition to disclosing financial
results prepared in accordance with GAAP, the company discloses
information regarding EBITDA, which differs from the term EBITDA as
it is commonly used. In addition to adjusting net income (loss) from
continuing operations to exclude taxes, interest, and depreciation
and amortization, EBITDA also excludes pre-opening costs for our
restaurants. EBITDA is not a measure of performance defined in
accordance with GAAP. However, EBITDA is used internally in planning
and evaluating the company's operating performance. Accordingly,
management believes that disclosure of this metric offers investors,
bankers and other stakeholders an additional view of the company's
operations that, when coupled with the GAAP results, provides a more
complete understanding of the company's financial results.  
EBITDA should not be considered as an alternative to net loss or to
net cash used in operating activities as a measure of operating
results or of liquidity. It may not be comparable to similarly titled
measures used by other companies, and it excludes financial
information that some may consider important in evaluating the
company's performance. A reconciliation of GAAP net income (loss) to
EBITDA is included in the accompanying financial schedules. 
About Chanticleer Holdings, Inc.
Chanticleer Holdings is focused on expanding the Hooters® casual
dining restaurant brand in international emerging markets.
Chanticleer currently owns all or part of the exclusive franchise
rights to develop and operate Hooters restaurants in South Africa,
Hungary and parts of Brazil, and has joint ventured with the current
Hooters franchisee in Australia, while evaluating several additional
international opportunities. The Company currently owns and operates
in whole or part six Hooters restaurants in its international
franchise territories: Durban, Johannesburg, Cape Town and Emperor's
Palace in South Africa; Campbelltown in Australia; and Budapest in
Hungar
y.  
In 2011, Chanticleer and a group of noteworthy private equity
investors, which included H.I.G. Capital, KarpReilly, LLC and Kelly
Hall, president of Texas Wings Inc., the largest Hooters franchisee
in the United States, acquired Hooters of America (HOA), a privately
held company. Today, HOA is the franchisor and operator of over 430
Hooters® restaurants in 28 countries. Chanticleer maintains a
minority ownership stake in HOA and its CEO, Mike Pruitt, is also a
member of HOA's Board of Directors. 
For further information, please visit www.chanticleerholdings.com 
Facebook: www.Facebook.com/ChanticleerHOTR
Twitter: http://Twitter.com/ChanticleerHOTR  
For further information on Hooters of America, visit www.Hooters.com
Facebook: www.Facebook.com/Hooters
Twitter: http://Twitter.com/Hooters 
Safe Harbor/Risk Factors
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on expectations, forecasts, and
assumptions by our management and involve a number of risks,
uncertainties, and other factors that could cause actual results to
differ materially from those stated, including, without limitation:  


 
--  Operating losses continuing for the foreseeable future; we may never be
    profitable;
--  Our business strategy includes operating a new line of business that is
    distinct and separate from our primary existing operations, which could
    be subject to additional business and operating risks;
--  Inherent risks in expansion of operations, including our ability to
    acquire additional territories, generate profits from new restaurants,
    find suitable sites and develop and construct locations in a timely and
    cost-effective way;
--  General risk factors affecting the restaurant industry, including
    current economic climate, costs of labor and food prices;
--  Intensive competition in our industry and competition with national,
    regional chains and independent restaurant operators; 
--  Our rights to operate and franchise Hooters-branded restaurants are
    dependent on the Hooters' franchise agreements;
--  Our business depends on our relationship with Hooters;
--  We do not have full operational control over the businesses of our
    franchise partners;
--  Failure by Hooters to protect its intellectual property rights,
    including its brand image;
--  Our business has been adversely affected by declines in discretionary
    spending and may be affected by changes in consumer preferences; 
--  Increases in costs, including food, labor and energy prices;
--  Our business and the growth of our Company is dependent on the skills
    and expertise of management and key personnel;
--  Constraints could effect our ability to maintain competitive cost
    structure, including, but not limited to labor constraints; 
--  Work stoppages at our restaurants or supplier facilities or other
    interruptions of production;
--  Our food service business and the restaurant industry are subject to
    extensive government regulation;
--  We may be subject to significant foreign currency exchange controls in
    certain countries in which we operate;
--  Inherent risk in foreign operation;
--  We may not attain our target development goals and aggressive
    development could cannibalize existing sales;
--  Current conditions in the global financial markets and the distressed
    economy;
--  A decline in market share or failure to achieve growth;
--  Unusual or significant litigation, governmental investigations or
    adverse publicity, or otherwise;
--  Adverse effects on our operations resulting from the current class
    action litigation in which the Company is one of several defendants;
--  Adverse effects on our results from a decrease in or cessation or
    clawback of government incentives related to investments; 
--  Adverse effects on our operations resulting from certain geo-political
    or other events. 

 
Chanticleer cannot be certain that any expectation, forecast, or
assumption made in preparing any forward-looking statements will
prove accurate, or that any projection will be realized. It is to be
expected that there may be differences between projected and actual
results. The statements in this press release are made as of the date
of this press release, even if subsequently made available by the
Company on its Web site or otherwise. We undertake no obligation to
update the forward-looking statements provided to reflect events or
circumstances that occur after the date on which they were made.
Further information on our business, including important factors
which could affect actual results are discussed in the Company's
filings with the SEC, including its Annual Report on Form 10-K under
the headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations." 


 
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries       
          
                        Consolidated Balance Sheets                         
                         December 31, 2012 and 2011                         
                                                     2012          2011     
                                                 ------------  ------------ 
                     ASSETS                       (Unaudited)               
Current assets:                                                             
  Cash                                           $  1,248,274  $    165,129 
  Accounts receivable                                 161,073       108,714 
  Other receivable                                     85,473        42,109 
  Inventory                                           227,023       105,073 
  Due from related parties                            137,763        76,591 
  Prepaid expenses                                    170,769       144,347 
                                                 ------------  ------------ 
    TOTAL CURRENT ASSETS                            2,030,375       641,963 
Property and equipment, net                         2,316,146     1,505,059 
Goodwill                                              396,487       396,487 
Intangible assets, net                                559,832       325,084 
Investments at fair value                              56,949       318,353 
Other investments                                   2,116,915     1,582,148 
Deposits and other assets                             169,727        29,605 
                                                 ------------  ------------ 
    TOTAL ASSETS                                 $  7,646,431  $  4,798,699 
                                                 ============  ============ 
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Current liabilities:                                                        
  Current maturities of long-term debt and notes                            
   payable                                       $    236,110  $  1,171,855 
  Convertible notes payable                                 -     1,625,000 
  Accounts payable and accrued expenses             1,122,633       478,005 
  Other current liabilities                           361,586       330,607 
  Current maturities of capital leases payable         27,965        41,590 
  Deferred rent                                        10,825        43,225 
  Due to related parties                               13,733        30,204 
                                                 ------------  ------------ 
    TOTAL CURRENT LIABILITIES                       1,772,852     3,720,486 
Capital leases payable, less current maturities        60,518        85,853 
Deferred rent                                          98,448         7,162 
Other liabilities                                     186,060       263,321 
Long-term debt, less current maturities                     -       236,109 
                                                 ------------  ------------ 
    TOTAL LIABILITIES                               2,117,878     4,312,931 
                                                 ------------  ------------ 
Commitments and contingencies (Note 14)                                     
                                                                            
Stockholders' equity:                                                       
  Common stock: $0.0001 par value; authorized                               
   20,000,000 and 200,000,000 shares; issued                                
   3,698,896 shares and 1,506,061 shares; and                               
   outstanding 3,698,896 and 1,249,446 shares at                            
   December 31, 2012 and 2011, respectively               370           151 
  Additional paid in capital                       14,898,423     6,459,656 
  Other comprehensive (loss) income                  (181,741)       50,650 
  Non-controlling interest                             70,198       593,863 
  Accumulated deficit                              (9,258,697)   (6,092,132)
  Less treasury stock, 256,615 shares at                                    
   December 31, 2011                                        -      (526,420)
                                                 ------------  ------------ 
                                                    5,528,553       485,768 
                                                 ------------  ------------ 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $  7,646,431  $  4,798,699 
                                                 ============  ============ 
                                                                            
                                                                            
 

 
                                                                              
                                                                              
              Chanticleer Holdings, Inc. and Subsidiaries                     
                 Consolidated Statements of Operations                      
  
                                                                              
                           Three months ended             Years ended         
                              December 31,                December 31,        
                       --------------------------  -------------------------- 
                           2012          2011          2012          2011     
                       ------------  ------------  ------------  ------------ 
                        (Unaudited)   (Unaudited)   (Unaudited)               
                       ------------  ------------  ------------               
Revenue:                                                                      
  Restaurant sales,                                                           
   net                 $  1,958,073  $    980,247  $  6,752,323  $    980,247 
  Management fee                                                              
   income - non-                                                              
   affiliates                25,000        26,500       100,000       493,167 
  Management fee                                                              
   income - affiliates       (7,815)        1,485        30,743         3,235 
                       ------------  ------------  ------------  ------------ 
    Total revenue         1,975,258     1,008,232     6,883,066     1,476,649 
Expenses:                                                                     
  Restaurant cost of                                                          
   sales                    756,235       504,971     2,761,949       504,971 
  Restaurant operating                                                        
   expenses               1,148,794       594,401     3,785,034       594,401 
  Restaurant pre-                                                             
   opening expenses          13,959         3,824       204,126         3,824 
  General and                                                                 
   administrative                                                             
   expense                  784,435       487,590     2,618,368     1,249,749 
  Depreciation and                                                            
   amortization             118,386        71,969       383,454        79,542 
                       ------------  ------------  ------------  ------------ 
    Total expenses        2,821,809     1,662,755     9,752,931     2,432,487 
                       ------------  ------------  ------------  ------------ 
Loss from operations       (846,551)     (654,523)   (2,869,865)     (955,838)
Other income (expense)                                                        
  Equity in earnings                                                          
   (losses) of                                                                
   investments               (4,329)      (66,857)      (14,803)      (76,113)
  Realized (losses)                                                           
   gains from sales of                                                        
   investments              (16,598)       74,362       (16,598)       94,353 
  Other (expense)                                                             
   income                      (816)            -           864         5,017 
  Interest expense          (42,131)     (119,591)     (474,926)     (183,467)
  Other than temporary                                                        
   decline in                                                                 
   available-for-sale                                                         
   securities                     -             -             -      (147,973)
                       ------------  ------------  ------------  ------------ 
    Total other                                                               
     expense                (63,874)     (112,086)     (505,463)     (308,183)
                       ------------  ------------  ------------  ------------ 
Net loss before income                                                        
 taxes                     (910,425)     (766,609)   (3,375,328)   (1,264,021)
    Provision for                                                             
     income taxes            11,208             -        19,205             - 
                       ------------  ------------  ------------  ------------ 
Net loss before non-                                                          
 controlling interest      (921,633)     (766,609)   (3,394,533)   (1,264,021)
    Non-controlling                                                           
     interest                42,257        99,932       227,968       101,307 
                       ------------  ------------  ------------  ------------ 
Net loss               $   (879,376) $   (666,677) $ (3,166,565) $ (1,162,714)
                       ============  ============  ============  ============ 
                                                                              
Net loss per share,                                                           
 basic and diluted     $      (0.24) $      (0.53) $      (1.25) $      (0.98)
                       ============  ============  ============  ============ 
Weighted average                                                              
 shares outstanding       3,698,896     1,249,428     2,541,696     1,185,018 
                       ------------  ------------  ------------  ------------ 
                                                                              
                                                                              
 

 
                                                                            
                                                                            
Chanticleer Holdings, Inc. and Subsidiaries                                 
Consolidated Statements of Operations                                       
(Unaudited)                                                                 
                                                Three months ended          
                                      ------------------------------------- 
                                      December 31, 2012  September 30, 2012 
                                      -----------------  ------------------ 
Revenue:                                                                    
  Restaurant sales, net               $       1,958,073  $        1,710,632 
  Management fee income - non-                                              
   affiliates                                    25,000              25,000 
  Management fee income - affiliates             (7,815)             31,880 
                                      -----------------  ------------------ 
    Total revenue                             1,975,258           1,767,512 
Expenses:                                                     
              
  Restaurant cost of sales                      756,235             714,551 
  Restaurant operating expenses               1,148,794             943,618 
  Restaurant pre-opening expenses                13,959             125,947 
  General and administrative expense            784,435             666,300 
  Depreciation and amortization                 118,386              97,883 
                                      -----------------  ------------------ 
    Total expenses                            2,821,809           2,548,299 
                                      -----------------  ------------------ 
Loss from operations                           (846,551)           (780,787)
Other income (expense)                                                      
  Equity in earnings (losses) of                                            
   investments                                   (4,329)             33,412 
  Realized losses from sales of                                             
   investments                                  (16,598)                  - 
  Other (expense) income                           (816)              1,680 
  Interest expense                              (42,131)            (39,583)
                                      -----------------  ------------------ 
    Total other expense                         (63,874)             (4,491)
                                      -----------------  ------------------ 
Net loss before income taxes                   (910,425)           (785,278)
    Provision for income taxes                   11,208               7,997 
                                      -----------------  ------------------ 
Net loss before non-controlling                                             
 interest                                      (921,633)           (793,275)
    Non-controlling interest                     42,257              53,509 
                                      -----------------  ------------------ 
Net loss                              $        (879,376) $         (739,766)
                                      =================  ================== 
                                                                            
Net loss per share, basic and diluted $           (0.24) $            (0.20)
                                      =================  ================== 
Weighted average shares outstanding           3,698,896           3,698,896 
                                      =================  ================== 
                                                                            
                                                                            
 

 
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
                   Consolidated Statements of Cash Flows                    
               For the Years Ended December 31, 2012 and 2011               
                                                                            
                                                     2012          2011     
                                                 ------------  ------------ 
Cash flows from operating activities:             (Unaudited)               
Net loss                                         $ (3,394,533) $ (1,264,021)
Adjustments to reconcile net loss to net cash                               
 used in operating activities:                                              
  Other than temporary decline in value of                                  
   available-for-sale securities                            -       147,973 
  Bad debt expense - related party                          -           750 
  Consulting and other services rendered in                                 
   exchange for investment securities                       -        (1,500)
  Depreciation and amortization                       383,454        79,542 
  Equity in (earnings) loss of investments             14,803        76,113 
  Common stock issued for services                     32,400        74,573 
  Loss (gain) on sale of investments                   16,598       (94,353)
  Revaluation of equity investment prior to                                 
   acquisitions                                             -        74,362 
  Amortization of warrants                            169,201        35,247 
  Increase in amounts due from affiliate              (77,643)      (54,217)
  Increase in accounts receivable                     (52,359)      (81,528)
  Increase in other receivable                        (43,364)      (42,109)
  Increase in prepaid expenses and other assets      (125,368)      (58,690)
  Increase in inventory                              (121,950)      (36,676)
  Increase (decrease) in accounts payable and                               
   accrued expenses                                   785,965       (30,701)
  Increase in deferred rent                            58,886        20,308 
  Decrease in deferred revenue                              -        (1,750)
                                                 ------------  ------------ 
    Net cash used by operating activities          (2,353,910)   (1,156,677)
                                                 ------------  ------------ 
                                                                            
Cash flows from investing activities:                                       
  Proceeds from sale of investments                         -       190,325 
  Investment distribution                                   -         8,140 
  Purchase of investments                          (1,202,936)   (1,502,247)
  Franchise costs                                    (239,684)      (75,000)
  Purchase of property and equipment               (1,173,801)     (219,811)
  Treasury stock proceeds                                   -        26,400 
                                                 ------------  ------------ 
    Net cash used by investing activities          (2,616,421)   (1,572,193)
                                                 ------------  ------------ 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from sale of common stock                7,051,464           500 
  Proceeds from sale of common stock warrants,                              
   net                                                      -        20,608 
  Loan proceeds                                     2,915,000     2,790,000 
  Loan repayment                                   (3,939,098)       (7,036)
  Capital lease payments                              (45,814)      (13,970)
  Non-controlling interest investment                  90,000             - 
  Other liabilities                                   (46,282)       62,262 
                                                 ------------  ------------ 
    Net cash provided by financing activities       6,025,270     2,852,364 
  Effect of exchange rate changes on cash              28,206        (4,372)
                                                 ------------  ------------ 
Net increase in cash and cash equivalents           1,083,145       119,122 
Cash, beginning of year                               165,129        46,007 
                                                 ------------  ------------ 
Cash, end of year                                $  1,248,274  $    165,129 
                                                 ============  ============ 
                                                                            
                                                                            
 

 
                                                                            
                                    
                                        
Reconciliation of net income (loss) to EBITDA                               
Unaudited                                                                   
                                                                            
Year ended December 31,                                                     
 2012:                                                                      
                          South Africa   Hungary    Management     Totals   
                         -------------  ---------  -----------  ----------- 
Net loss                 $     (30,940) $(303,128) $(2,832,497) $(3,166,565)
  Interest expense              53,339          -      421,587      474,926 
  Pre-opening costs             37,772    166,354            -      204,126 
  Depreciation and                                                          
   amortization                334,520     45,293        3,641      383,454 
  Income taxes                  19,205          -            -       19,205 
                         -------------  ---------  -----------  ----------- 
EBITDA                   $     413,896  $ (91,481) $(2,407,269) $(2,084,854)
                         =============  =========  ===========  =========== 
                                                                            
Year ended December 31,                                                     
2011:                                                                       
                          South Africa   Hungary    Management     Totals   
                         -------------  ---------  -----------  ----------- 
Net loss                 $    (103,310) $       -  $(1,059,404) $(1,162,714)
  Interest expense               7,332          -      176,135      183,467 
  Pre-opening costs              3,824          -            -        3,824 
  Depreciation and                                                          
   amortization                 71,529          -        8,013       79,542 
                         -------------  ---------  -----------  ----------- 
EBITDA                   $     (20,625) $       -  $  (875,256) $  (895,881)
                         =============  =========  ===========  =========== 
                                                                            
Three months ended                                                          
December 31, 2012:                                                          
                          South Africa   Hungary    Management     Totals   
                         -------------  ---------  -----------  ----------- 
Net income (loss)        $      23,153  $ (86,338) $  (816,211) $  (879,396)
  Interest expense              15,824          -       26,307       42,131 
  Pre-opening costs                  -     13,959            -       13,959 
  Depreciation and                                                          
   amortization                 86,619     29,968        1,799      118,386 
  Income taxes                  11,208          -            -       11,208 
                         -------------  ---------  -----------  ----------- 
EBITDA                   $     136,804  $ (42,411) $  (788,105) $  (693,712)
                         =============  =========  ===========  =========== 
                                                                            
Three months ended                                                          
December 31, 2011:                                                          
                                                                            
                          South Africa   Hungary    Management     Totals   
                         -------------  ---------  -----------  ----------- 
Net loss                 $    (103,310) $       -  $  (563,367) $  (666,677)
  Interest expense               7,332          -      112,259      119,591 
  Pre-opening costs              3,824          -            -        3,824 
  Depreciation and                                                          
   amortization                 71,529          -          440       71,969 
                         -------------  ---------  -----------  ----------- 
EBITDA                                                                      
                         $     (20,625) $       -  $  (450,668) $  (471,293)
                         =============  =========  ===========  =========== 

  
Contact:
Chanticleer Holdings, Inc.
Mike Pruitt
Chairman/CEO
Phone: 704.366.5122 x 1
mp@chanticleerholdings.com 
Dian Griesel Inc.
Investor Relations:
Cheryl Schneider
cschneider@dgicomm.com 
Public Relations:
Enrique Briz
ebriz@dgicomm.com
212.825.3210