Dutch Bros Inc. (NYSE: BROS) Reports Strong Fourth Quarter and Full Year 2021 Financial Results

March 1, 2022 admin Consumer, Newsmakers Comments Off on Dutch Bros Inc. (NYSE: BROS) Reports Strong Fourth Quarter and Full Year 2021 Financial Results

Opened 98 Shops in 2021, Expects At Least 125 Shop Openings in 2022

System Same Shop Sales Grew 10.1% in Fourth Quarter and 8.4% in 2021

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Issues Full Year 2022 Financial Outlook

GRANTS PASS, Ore., March 01, 2022—Dutch Bros Inc. (NYSE: BROS) one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the fourth quarter and year ended December 31, 2021. The Company also provided its full year 2022 financial outlook.

Joth Ricci, Chief Executive Officer and President of Dutch Bros Inc., stated, “2021 was a fantastic year for Dutch Bros. We started the year with the launch of the brand in Texas, which was a major milestone for the Company. Led by a talented pipeline of regional operators and long-term franchise partners, unit growth accelerated to 98 new shop openings, revenue grew 52.1% and same shop sales increased 8.4%. 2021 was also the year we converted customers from a long-standing, paper-based stamp card loyalty program to the Dutch Bros app, which grew to 3.2 million members. And, this summer, the Dutch Bros story was presented to the public markets. Through all this, we delivered financial results that exceeded our expectations and kept our brand promise of speed, quality and service.”

He added, “In 2022, we celebrate Dutch Bros’ milestone 30th anniversary, and begin our expansion east with our entrance into Nashville. While our history shows we’re a well-established and respected brand, we are still in the early stages of our long-term story. Two years ago, we entered 2020 with just 370 shops in 7 states. We finished 2021 with 538 shops in 12 states. Importantly, new shops are opening at higher average unit volumes than the system average, including in new markets. In 2022, we have committed to opening at least 125 new shops, supported by a robust pipeline and strong consumer acceptance of Dutch Bros. In addition to moving east, we are excited about further expansion in existing markets, including Southern California, a market we believe will be a significant growth driver. Over the next 10 to 15 years, we foresee at least 4,000 shops across the United States. As we continue on this journey, we will always put our people first and remain committed to making a massive difference in the lives of our employees, customers, and communities.”

Fourth Quarter 2021 Highlights:

  • Opened 35 new shops, surpassing the prior record of 33 openings in a single quarter. Company operated shops represented 30 of these openings. This included opening 23 shops in the month of December alone, and six shops in six states on December 3rd, demonstrating our ability to move rapidly.
  • Total revenues grew 55.8% to $140.1 million as compared to $89.9 million in the same period of 2020.
  • Company-operated shops revenues increased 66.1% to $114.2 million as compared to $68.7 million in the same period of 2020.
  • System same shop sales grew1 10.1% in the fourth quarter and 15.3% on a two-year basis. Company-operated same shop sales grew1 11.5% in the fourth quarter and 17.3% on a two-year basis.
  • Company-operated shop gross profit grew 15.4% to $16.1 million as compared to $14.0 million in the same period of 2020.
  • Company-operated shop contribution2, a non-GAAP financial measure, grew 27.2% to $21.4 million as compared to $16.8 million in the same period of 2020.
  • Net loss was $(9.8) million, as compared to $(6.2) million in the same period of 2020. For the fourth quarter of 2021, we recognized $10.0 million of non-cash equity-based compensation.
  • Adjusted EBITDA2, a non-GAAP financial measure, was $13.3 million, as compared to $13.0 million in the same period of 2020. Included in this comparison is a year over year increase in preopening expenses of $2.5 million, driven by both 50% more company shop openings as compared to the same period in the prior year, and a spillover of expenses from a series of late third quarter 2021 openings. 2020 results were positively impacted by lower discount and promotional costs as a result of the COVID-related suspension of its legacy paper-based loyalty program. The Company transitioned its loyalty program to a digital format through the launch of its digital rewards app in February 2021, with discount and promotional costs now normalized close to the Company’s going forward run rate. Finally our 2021 results now include $3.1 million in costs related to being a public company that did not exist in the prior comparable period.
  • Adjusted net income2, a non-GAAP financial measure, was $3.5 million, as compared to $7.1 million in the same period of 2020.
  • Net loss per share of Class A and Class D common stock – diluted was $(0.06) and Adjusted net income per fully exchanged share of common stock2, a non-GAAP financial measure, was $0.02.
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1Same shop sales growth is defined in the section “Select Financial Metrics”.
2Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

Full Year 2021 Highlights:

  • Opened 98 new shops, of which 82 were company-operated.
  • Total revenues grew 52.1% to $497.9 million as compared to $327.4 million in 2020.
  • Company-operated shops revenues increased 65.1% to $403.7 million as compared to $244.5 million in 2020.
  • System same shop sales grew1 8.4% for the year 2021 and 10.3% on a two-year basis. Company-operated same shop sales grew1 9.0% for the year 2021 and 11.1% on a two-year basis.
  • Company-operated shop gross profit grew 41.1% to $85.2 million as compared to $60.4 million in 2020. Company-operated shop contribution2, a non-GAAP financial measure, grew 44.7% to $101.5 million as compared to $70.1 million in 2020.
  • Net income (loss) was $(121.1) million, as compared to $5.7 million in 2020. For the year 2021, we recognized $157.7 million of non-cash equity-based compensation.
  • Adjusted EBITDA2, a non-GAAP financial measure, increased 17.7% to $82.1 million as compared to $69.8 million in year 2020. Please note 2020’s comparable results were positively impacted by lower discount and promotional costs as a result of the COVID-related suspension of the Company’s legacy paper-based loyalty program.
  • Adjusted net income2, a non-GAAP financial measure, was $48.3 million, as compared to $49.6 million in 2020.
  • Net loss per share of Class A and Class D common stock – diluted was $(0.31) and Adjusted net income per fully exchanged share of common stock2, a non-GAAP financial measure, was $0.30.
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1Same shop sales growth is defined in the section “Select Financial Metrics”.
2Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

Outlook

For full year 2022 , Dutch Bros is providing the following outlook:

  • Total system shop openings are expected to be at least 125, of which at least 105 shops will be company-operated.
  • Total revenues are projected to be in the range of $700 million to $715 million.
  • Same shop sales growth5 is estimated in the mid-single digits.
  • Adjusted EBITDA6 is estimated to be in the range of $115 million to $120 million.
  • Capital expenditures are estimated to be in the range of $175 million to $200 million.

For Q1 2022, Dutch Bros is providing the following outlook:

  • Total system shop openings are expected to be at least 30, of which nearly all shops will be company-operated.
  • Same shop sales growth5 is estimated in the mid-single digits.
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5Same shop sales growth is defined in the section “Select Financial Metrics”.
6We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Refinancing

On February 28, 2022, Dutch Bros refinanced its existing credit facility to provide greater liquidity and maintain a strong, growth-oriented balance sheet. The new five-year facility provides $500 million in committed capital, consisting of a $100 million fully drawn term loan, a $150 million undrawn delayed draw term loan, and a $250 million revolving credit facility. This structure provides ample capital while enabling Dutch Bros to maintain modest leverage as the brand grows.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer and President, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast to discuss financial results for the fourth quarter and full year ended December 31, 2021 today at 5:00 p.m. Eastern Time (ET).

Event: Fourth Quarter 2021 Conference Call and Webcast

Date: Tuesday, March 1, 2022

Time: 5:00 p.m. ET

Dial In: 1-201-493-6779

Webcast: https://investors.dutchbros.com under “Events & Presentations”.

The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.

About Dutch Bros Inc.

Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. While espresso-based beverages are still at the core of what we do, Dutch Bros now offers a wide variety of unique, customizable cold and hot beverages that delight a broad array of customers. We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers and communities. This combination of hand-crafted and high-quality beverages, our unique drive-thru experience and our community-driven, people-first culture has allowed us to successfully open new shops and continue to share the “Dutch Luv” at 538 locations across 12 states as of December 31, 2021.

To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, Twitter, and TikTok, and download the Dutch Bros app to earn points and score rewards!