Dutch Bros Inc. 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

Issues Full Year 2022 Financial Outlook

GRANTS PASS, Ore.--()--Dutch Bros Inc. (NYSE: BROS; the “Company”) 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.
_______________

1

Same shop sales growth is defined in the section “Select Financial Metrics”.

2

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

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.
_______________

1

Same shop sales growth is defined in the section “Select Financial Metrics”.

2

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

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.
_______________

5

Same shop sales growth is defined in the section “Select Financial Metrics”.

6

We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, 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!

Forward-Looking Statements

In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros’ possible or assumed future results of operations, including guidance for 2022, new shop openings, business strategies, potential growth opportunities and the effects of regulation. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “should,” “future,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to the evolving COVID-19 pandemic, disruptions in our supply chain, ability to hire and retain employees; and other risks, including those described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the SEC on November 12, 2021 and in our future reports to be filed with the SEC, including our Annual Report on Form 10-K for the full year ended December 31, 2021. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.

 

DUTCH BROS INC.

Consolidated Statements of Operations

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(in thousands, except per share amounts; unaudited)

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

Company-operated shops

 

$

114,198

 

 

$

68,747

 

 

$

403,746

 

 

$

244,514

 

Franchising and other

 

 

25,882

 

 

 

21,149

 

 

 

94,130

 

 

 

82,899

 

Total revenues

 

 

140,080

 

 

 

89,896

 

 

 

497,876

 

 

 

327,413

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

Cost of sales

 

 

106,244

 

 

 

64,228

 

 

 

346,113

 

 

 

211,659

 

Selling, general and administrative

 

 

41,440

 

 

 

30,590

 

 

 

265,035

 

 

 

105,087

 

Total costs and expenses

 

 

147,684

 

 

 

94,818

 

 

 

611,148

 

 

 

316,746

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

(7,604

)

 

 

(4,922

)

 

 

(113,272

)

 

 

10,667

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(1,845

)

 

 

(1,086

)

 

 

(7,093

)

 

 

(3,736

)

Other income (expense), net

 

 

(141

)

 

 

306

 

 

 

(1,240

)

 

 

(363

)

Total other expense

 

 

(1,986

)

 

 

(780

)

 

 

(8,333

)

 

 

(4,099

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(9,590

)

 

 

(5,702

)

 

 

(121,605

)

 

 

6,568

 

Income tax expense (benefit)

 

 

209

 

 

 

505

 

 

 

(507

)

 

 

843

 

NET INCOME (LOSS)

 

$

(9,799

)

 

$

(6,207

)

 

$

(121,098

)

 

$

5,725

 

Less: Net income (loss) attributable to Dutch Bros OpCo prior to the Reorganization Transactions

 

 

 

 

 

(6,207

)

 

 

(68,602

)

 

 

5,725

 

Less: Net loss attributable to non-controlling interests

 

 

(6,929

)

 

 

 

 

 

(38,461

)

 

 

 

NET LOSS ATTRIBUTABLE TO DUTCH BROS INC.

 

$

(2,870

)

 

$

 

 

$

(14,035

)

 

$

 

Net loss per share of Class A and Class D common stock:1

 

 

 

 

 

 

 

 

Basic

 

$

(0.06

)

 

 

N/A

 

 

$

(0.31

)

 

 

N/A

 

Diluted

 

$

(0.06

)

 

 

N/A

 

 

$

(0.31

)

 

 

N/A

 

Weighted-average shares of Class A and Class D common stock outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

45,874

 

 

 

N/A

 

 

 

45,864

 

 

 

N/A

 

Diluted

 

 

45,874

 

 

 

N/A

 

 

 

45,864

 

 

 

N/A

 

_______________

1

Basic and diluted net loss per share of Class A and Class D common stock is applicable only for the period September 14, 2021 through December 31, 2021, which is the period effective with and following the IPO and Reorganization Transactions.

 

DUTCH BROS INC.

Segment Financials

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(in thousands; unaudited)

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

114,198

 

 

$

68,747

 

 

$

403,746

 

 

$

244,514

 

Franchising and other

 

 

25,882

 

 

 

21,149

 

 

 

94,130

 

 

 

82,899

 

Total revenues

 

 

140,080

 

 

 

89,896

 

 

 

497,876

 

 

 

327,413

 

Cost of Sales:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

98,053

 

 

 

54,754

 

 

 

318,563

 

 

 

184,146

 

Franchising and other

 

 

8,191

 

 

 

9,474

 

 

 

27,550

 

 

 

27,513

 

Total cost of sales

 

 

106,244

 

 

 

64,228

 

 

 

346,113

 

 

 

211,659

 

Segment gross profit:

 

 

 

 

 

 

 

 

Company-operated shops

 

 

16,145

 

 

 

13,993

 

 

 

85,183

 

 

 

60,368

 

Franchising and other

 

 

17,691

 

 

 

11,675

 

 

 

66,580

 

 

 

55,386

 

Total gross profit

 

 

33,836

 

 

 

25,668

 

 

 

151,763

 

 

 

115,754

 

Selling, general and administrative

 

 

(41,440

)

 

 

(30,590

)

 

 

(265,035

)

 

 

(105,087

)

Interest expense, net

 

 

(1,845

)

 

 

(1,086

)

 

 

(7,093

)

 

 

(3,736

)

Other income (expense), net

 

 

(141

)

 

 

306

 

 

 

(1,240

)

 

 

(363

)

Income (loss) before income taxes

 

$

(9,590

)

 

$

(5,702

)

 

$

(121,605

)

 

$

6,568

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

Company-operated shops

 

$

5,253

 

 

$

2,830

 

 

$

16,291

 

 

$

9,737

 

Franchising and other

 

 

1,535

 

 

 

1,220

 

 

 

6,263

 

 

 

4,349

 

All other

 

 

702

 

 

 

331

 

 

 

2,663

 

 

 

1,451

 

Total depreciation and amortization

 

$

7,490

 

 

$

4,381

 

 

$

25,217

 

 

$

15,537

 

 

DUTCH BROS INC.

Company-Operated Shop Results

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop revenue

 

114,198

 

100.0

 

68,747

 

100.0

 

403,746

 

100.0

 

244,514

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverage, food and packaging costs

 

30,658

 

26.8

 

15,773

 

22.9

 

102,222

 

25.3

 

54,820

 

22.4

Labor costs

 

34,881

 

30.5

 

20,446

 

29.7

 

123,679

 

30.6

 

71,651

 

29.3

Occupancy and other costs

 

21,086

 

18.5

 

12,062

 

17.5

 

63,570

 

15.7

 

38,611

 

15.8

Pre-opening costs

 

6,175

 

5.4

 

3,643

 

5.3

 

12,801

 

3.2

 

9,327

 

3.8

Depreciation

 

5,253

 

4.6

 

2,830

 

4.1

 

16,291

 

4.0

 

9,737

 

4.0

Company-operated shop gross profit

 

16,145

 

14.1

 

13,993

 

20.4

 

85,183

 

21.1

 

60,368

 

24.7

Company-operated shop contribution 1

 

21,398

 

18.7

 

16,823

 

24.5

 

101,474

 

25.1

 

70,105

 

28.7

_______________

1

Reconciliation of GAAP to non-GAAP results are provided below in the “Reconciliation of GAAP Financial Metrics to Non-GAAP” section of this press release.

 

DUTCH BROS INC.

Summary Cash Flows Data

 

 

 

Year Ended
December 31,

(in thousands; unaudited)

 

 

2021

 

 

 

2020

 

Net cash flows provided by operating activities

 

$

80,375

 

 

$

53,549

 

Net cash flows used in investing activities

 

 

(121,089

)

 

 

(45,570

)

Net cash provided by financing activities

 

 

27,580

 

 

 

8,077

 

Net increase (decrease) in cash

 

$

(13,134

)

 

$

16,056

 

Cash and cash equivalents at beginning of period

 

 

31,640

 

 

 

15,584

 

Cash and cash equivalents at end of period

 

$

18,506

 

 

$

31,640

 

 

DUTCH BROS INC.

Condensed Consolidated Balance Sheets

 

 

 

As of

(in thousands; unaudited)

 

December 31, 2021

 

December 31, 2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

18,506

 

 

$

31,640

Accounts receivable, net

 

 

10,644

 

 

 

10,837

Inventory

 

 

23,345

 

 

 

15,580

Prepaid expenses and other current assets

 

 

8,796

 

 

 

5,015

Total current assets

 

 

61,291

 

 

 

63,072

Property and equipment, net

 

 

303,244

 

 

 

165,423

Intangibles, net

 

 

11,103

 

 

 

11,323

Goodwill

 

 

18,715

 

 

 

18,075

Deferred income tax asset, net

 

 

159,031

 

 

 

193

Other long-term assets

 

 

1,562

 

 

 

1,573

Total assets

 

$

554,946

 

 

$

259,659

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

20,440

 

 

$

16,092

Accrued liabilities

 

 

24,513

 

 

 

10,036

Other current liabilities

 

 

6,471

 

 

 

1,429

Deferred revenue

 

 

22,807

 

 

 

11,192

Line of credit

 

 

64,104

 

 

 

15,000

Current portion of tax receivable agreements liability

 

 

450

 

 

 

Current portion of capital lease obligations

 

 

3,389

 

 

 

2,331

Current portion of long-term debt

 

 

103

 

 

 

3,788

Total current liabilities

 

 

142,277

 

 

 

59,868

Deferred revenue, net of current portion

 

 

5,030

 

 

 

4,746

Tax receivable agreements liability, net of current portion

 

 

109,283

 

 

 

Capital lease obligations, net of current portion

 

 

79,588

 

 

 

49,637

Long-term debt, net of current portion

 

 

4,749

 

 

 

24,367

Profits interest liability

 

 

 

 

 

41,845

Deferred rent

 

 

3,153

 

 

 

2,740

Other long-term liabilities

 

 

680

 

 

 

466

Total liabilities

 

 

344,760

 

 

 

183,669

Equity:

 

 

 

 

Members’ equity

 

 

 

 

 

75,990

Common stock

 

 

2

 

 

 

Additional paid in capital

 

 

107,531

 

 

 

Retained earnings (accumulated deficit)

 

 

(14,035

)

 

 

Total stockholders' equity attributable to Dutch Bros Inc. / members’ equity

 

 

93,498

 

 

 

75,990

Non-controlling interests

 

 

116,688

 

 

 

Total equity

 

 

210,186

 

 

 

75,990

Total liabilities and equity

 

$

554,946

 

 

$

259,659

 

DUTCH BROS INC.

Select Financial Metrics

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

(in thousands, except number of shops data; unaudited)

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Shop count, beginning of period

 

 

 

 

 

 

 

 

Company-operated

 

 

241

 

 

 

157

 

 

 

182

 

 

 

118

 

Franchised

 

 

262

 

 

 

258

 

 

 

259

 

 

 

252

 

 

 

 

503

 

 

 

415

 

 

 

441

 

 

 

370

 

Company-operated new openings

 

 

30

 

 

 

20

 

 

 

82

 

 

 

59

 

Franchised new openings

 

 

5

 

 

 

6

 

 

 

16

 

 

 

13

 

Acquisition of franchise shops

 

 

 

 

 

5

 

 

 

7

 

 

 

5

 

Closures 1

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Shop count, end of period

 

 

 

 

 

 

 

 

Company-operated

 

 

271

 

 

 

182

 

 

 

271

 

 

 

182

 

Franchised

 

 

267

 

 

 

259

 

 

 

267

 

 

 

259

 

Total shop count

 

 

538

 

 

 

441

 

 

 

538

 

 

 

441

 

 

 

 

 

 

 

 

 

 

Average unit volume (AUV) 2

 

 

N/A

 

 

 

N/A

 

 

$

1,850

 

 

$

1,679

 

Company-operated shops

 

 

N/A

 

 

 

N/A

 

 

$

1,752

 

 

$

1,524

 

 

 

 

 

 

 

 

 

 

Same shop sales growth 3 5

 

 

10.1

%

 

 

5.7

%

 

 

8.4

%

 

 

2.0

%

Company-operated shops

 

 

11.5

%

 

 

6.8

%

 

 

9.0

%

 

 

0.8

%

 

 

 

 

 

 

 

 

 

Company-operated shop revenue

 

$

114,198

 

 

$

68,747

 

 

$

403,746

 

 

$

244,514

 

Company-operated gross profit

 

$

16,145

 

 

$

13,993

 

 

$

85,183

 

 

$

60,368

 

Company-operated shop contribution 4

 

$

21,398

 

 

$

16,823

 

 

$

101,474

 

 

$

70,105

 

Company-operated shop gross profit as a % of

company-operated shop revenue

 

 

14.1

%

 

 

20.4

%

 

 

21.1

%

 

 

24.7

%

Company-operated shop contribution as a % of

company-operated shop revenue 4

 

 

18.7

%

 

 

24.5

%

 

 

25.1

%

 

 

28.7

%

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(9,799

)

 

$

(6,207

)

 

$

(121,098

)

 

$

5,725

 

Adjusted EBITDA 4

 

$

13,283

 

 

$

13,044

 

 

$

82,086

 

 

$

69,764

 

Net income (loss) as % of revenue

 

 

(7.0

) %

 

 

(6.9

) %

 

 

(24.3

) %

 

 

1.7

%

Adjusted EBITDA as % of revenue 4

 

 

9.5

%

 

 

14.5

%

 

 

16.5

%

 

 

21.3

%

 

 

 

 

 

 

 

 

 

Systemwide sales 4 5

 

$

240,525

 

 

$

175,372

 

 

$

913,822

 

 

$

687,238

 

Dutch Rewards member registrations 6

 

 

464

 

 

 

8

 

 

 

3,202

 

 

 

8

 

_______________

1

Represents a temporary shop closure in 2021 and a permanent shop closure in 2020.

2

AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.

3

Same shop sales growth reflects the change in year-over-year sales for the comparable shop base, which we define as shops open for 15 complete months or longer. Management uses this metric as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

Systemwide shop base

 

398

 

344

 

354

 

316

Company-operated shop base

 

157

 

113

 

120

 

89

4

Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

5

Systemwide sales and systemwide same shop sales include company-operated shop revenue and sales at franchised shops during the comparable periods noted. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of overall Dutch Bros locations financial health, growth and future expansion prospects.

6

Dutch Rewards, a digitally-based rewards program available exclusively through the Dutch Rewards app, was launched February 2021. As such, there is no information for the comparable periods of 2020. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this release contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects where applicable. Income tax effects have been calculated based on the combined total non-GAAP adjustments using our total effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

Company-operated shop contribution (in dollars and as a percentage of revenue)

Definition and/or calculation

Company-operated segment gross profit, before company-operated shop depreciation and amortization. Company-operated shop contribution in dollars (as defined), taken as a percentage of company-operated shop revenue.

This non-GAAP measure is used by our management in making performance decisions without the impact of non-cash depreciation charges. This is a standard metric used across the industry by our investors.

EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)

EBITDA — definition and/or calculation

Net income (loss) before interest expense (net of interest income), income taxes expense (benefit), and depreciation and amortization expense.

Adjusted EBITDA — definition and/or calculation

Defined as EBITDA (as defined above), excluding equity-based compensation, expenses and donations associated with equity offerings, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: royalty abatement expenses, COVID-19: first responder donation, impacts of transition from paper stamp card to Dutch Rewards loyalty app, and expenses associated with the exit of our in-house merchandising business, Dutchwear. Adjusted EBITDA in dollars (as defined), taken as a percentage of total revenue.

Adjusted EBITDA Margin — definition and/or calculation

Defined as Adjusted EBITDA (as defined above), taken as a percentage of total revenue.

Usefulness to management and investors

These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe the non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.

Adjusted net income (loss)

Definition and/or calculation

Net income (loss), excluding equity-based compensation expense, expenses and donations associated with equity offering, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: royalty abatement expenses, COVID-19: first responder donation, impacts of transition from paper stamp card to Dutch Rewards loyalty app, and expenses associated with the exit of our in-house merchandising business, Dutchwear, and income tax effects of items excluded from net income (loss).

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted fully exchanged weighted-average shares of diluted common stock outstanding

Definition and/or calculation

Weighted-average shares of Class A and Class D common stock outstanding - basic with addition of dilutive impacts of RSAs and RSUs, as well as the assumed exchange of the weighted-average shares of Class B and Class C common stock.

Usefulness to management and investors

This non-GAAP measure is used a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By adding in the assumed full exchange of all of our outstanding Class B and Class C common stock, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted net income per fully exchanged share of diluted common stock

Definition and/or calculation

Net income (loss) per share of Class A and Class D common stock – diluted, excluding per share impacts of equity-based compensation expense, expenses and donations associated with equity offering, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: royalty abatement expenses, COVID-19: first responder donation, impacts of transition from paper stamp card to Dutch Rewards loyalty app, and expenses associated with the exit of our in-house merchandising business, Dutchwear, income tax effects of items excluding from net income (loss), and removal of per share impacts of controlling and non-controlling interests.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all of our outstanding Class B and Class C common stock and related net income adjustments, we believe these measures facilitate a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Non-GAAP adjustments

Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above.

Equity-based compensation

Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros Pubco8 and/or Profit Interest Units in Dutch Bros Opco9 to certain eligible employees. These awards are accounted for in accordance with guidance prescribed for in accounting for share-based compensation.

Expenses associated with equity offerings

Costs incurred as a result of our stock offerings. These costs include legal fees, consulting fees, tax and accounting fees, and payroll taxes related to the grant and vesting of stock awards for certain employees.

Donations associated with equity offerings

As part of our IPO, we made a donation to the Dutch Bros Foundation. This donation is separate from other donations to the Dutch Bros Foundation that we may periodically make.

COVID-19: “thank you” pay and catastrophic leave

Costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. All COVID-19-related protocols, including catastrophic leave, will remain in effect until the end of the COVID-19 pandemic as determined by the appropriate government agency.

COVID-19: royalty abatement

In April 2020, we permitted franchise partners to skip one month of royalty payments to support their cash flow needs. We discontinued this support one month later in May 2020.

COVID-19: first responder donation

During 2020, we made specific donations to the First Responders First organization to support the acquisition and distribution of personal protective equipment for first responders.

_______________

8

Dutch Bros PubCo refers to Dutch Bros Inc., a Delaware Corporation, in which its Class A common stock are publicly traded on the New York Stock Exchange under the symbol “BROS”.

9

Dutch Bros OpCo refers to Dutch Mafia, LLC, a Delaware limited liability company, and a direct subsidiary of Dutch Bros Inc.

Dutch Rewards transition

In 2020, we discontinued issuing new stamp cards under the stamp card loyalty program, which we recognized previously deferred revenue as a result of customers redeeming their stamp cards. In 2021, the stamp card loyalty program was suspended.

Dutchwear merchandising adjustment

During 2020, we incurred a series of costs associated with the strategic decision to exit our internal merchandising business related to Dutch-branded goods such as mugs and cups. These costs include write-off and disposal of obsolete inventory and severance for staff dedicated to in-house support services related to our Dutchwear business.

Assumed exchange of weighted-average Class B and Class C shares of common stock

Weighted-average shares of Class B and C common stock that are assumed to be exchanged for Class A common stock.

Removal of allocation for controlling and non-controlling interests

Removal of the net income allocation to controlling and non-controlling interests to align the numerator of the net income (loss) per share to the denominator, which assumes the full exchange of shares of Class B and Class C common stock.

Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Following are the reconciliations of the most comparable GAAP financial measure to non-GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the reconciliations from U.S. GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Financial Measures" in this release for a detailed explanation of the adjustments made to the comparable U.S. GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Company-operated shop gross profit

 

16,145

 

14.1

 

13,993

 

20.4

 

85,183

 

21.1

 

60,368

 

24.7

Depreciation and amortization

 

5,253

 

4.6

 

2,830

 

4.1

 

16,291

 

4.0

 

9,737

 

4.0

Company-operated shop contribution

 

21,398

 

18.7

 

16,823

 

24.5

 

101,474

 

25.1

 

70,105

 

28.7

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

(in thousands; unaudited)

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Net income (loss)

 

(9,799

)

 

(7.0

)

 

(6,207

)

 

(6.9

)

 

(121,098

)

 

(24.3

)

 

5,725

 

 

1.7

 

Depreciation and amortization

 

7,490

 

 

5.3

 

 

4,381

 

 

4.9

 

 

25,217

 

 

5.1

 

 

15,537

 

 

4.7

 

Interest expense, net

 

1,845

 

 

1.3

 

 

1,086

 

 

1.2

 

 

7,093

 

 

1.4

 

 

3,736

 

 

1.1

 

Income tax expense (benefit)

 

209

 

 

0.1

 

 

505

 

 

0.6

 

 

(507

)

 

(0.1

)

 

843

 

 

0.3

 

EBITDA

 

(255

)

 

(0.2

)

 

(235

)

 

(0.3

)

 

(89,295

)

 

(17.9

)

 

25,841

 

 

7.9

 

Equity-based compensation

 

9,955

 

 

7.1

 

 

11,715

 

 

13.0

 

 

157,716

 

 

31.7

 

 

35,087

 

 

10.7

 

Expenses associated with equity offerings

 

862

 

 

0.6

 

 

 

 

 

 

6,523

 

 

1.3

 

 

 

 

 

Donations associated with equity offerings

 

2,400

 

 

1.7

 

 

 

 

 

 

3,792

 

 

0.8

 

 

 

 

 

COVID-19: “thank you pay” and catastrophic leave

 

321

 

 

0.2

 

 

1,700

 

 

1.9

 

 

3,350

 

 

0.7

 

 

4,942

 

 

1.5

 

COVID-19: royalty abatement

 

 

 

 

 

 

 

 

 

 

 

 

 

1,400

 

 

0.4

 

COVID-19: first responder donation

 

 

 

 

 

 

 

 

 

 

 

 

 

2,000

 

 

0.6

 

Dutch Rewards transition

 

 

 

 

 

(2,377

)

 

(2.6

)

 

 

 

 

 

(3,669

)

 

(1.1

)

Dutchwear merchandising adjustment

 

 

 

 

 

2,241

 

 

2.5

 

 

 

 

 

 

4,163

 

 

1.3

 

Adjusted EBITDA

 

13,283

 

 

9.5

 

 

13,044

 

 

14.5

 

 

82,086

 

 

16.5

 

 

69,764

 

 

21.3

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(in thousands; unaudited)

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net income (loss)

 

$

(9,799

)

 

$

(6,207

)

 

$

(121,098

)

 

$

5,725

 

Equity-based compensation

 

 

9,955

 

 

 

11,715

 

 

 

157,716

 

 

 

35,087

 

Expenses associated with equity offerings

 

 

862

 

 

 

 

 

 

6,523

 

 

 

 

Donations associated with equity offerings

 

 

2,400

 

 

 

 

 

 

3,792

 

 

 

 

COVID-19: “thank you pay” and catastrophic leave

 

 

321

 

 

 

1,700

 

 

 

3,350

 

 

 

4,942

 

COVID-19: royalty abatement

 

 

 

 

 

 

 

 

 

 

 

1,400

 

COVID-19: first responder donation

 

 

 

 

 

 

 

 

 

 

 

2,000

 

Dutch Rewards transition

 

 

 

 

 

(2,377

)

 

 

 

 

 

(3,669

)

Dutchwear merchandising adjustment

 

 

 

 

 

2,241

 

 

 

 

 

 

4,163

 

Income tax effects

 

 

(236

)

 

 

 

 

 

(2,029

)

 

 

 

Adjusted net income

 

$

3,503

 

 

$

7,072

 

 

$

48,254

 

 

$

49,648

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(in thousands, except per share amounts; unaudited)

 

 

2021

 

 

2020

 

 

2021

 

 

2020

Weighted-average shares of Class A and Class D common stock outstanding - diluted1

 

 

45,874

 

 

N/A

 

 

45,864

 

1

N/A

Dilutive effects of RSAs and RSUs

 

 

2,807

 

 

N/A

 

 

2,579

 

1

N/A

Assumed exchange of weighted-average Class B and Class C shares of common stock

 

 

113,705

 

 

N/A

 

 

113,705

 

1

N/A

Adjusted fully exchanged weighted-average shares of common stock outstanding - diluted

 

 

162,386

 

 

N/A

 

 

162,148

 

1

N/A

 

 

 

 

 

 

 

 

 

Net loss per share of Class A and Class D common stock - diluted

 

$

(0.06

)

 

N/A

 

$

(0.31

)

1

N/A

Controlling and non-controlling interest adjustments

N/A

(0.43

)

N/A

Equity-based compensation

 

 

0.06

 

 

N/A

 

 

0.97

 

 

N/A

Expenses associated with equity offerings

 

 

0.01

 

 

N/A

 

 

0.04

 

 

N/A

Donations associated with equity offerings

 

 

0.01

 

 

N/A

 

 

0.02

 

 

N/A

COVID-19: “thank you pay” and catastrophic leave

 

 

 

 

N/A

 

 

0.02

 

 

N/A

COVID-19: royalty abatement

 

 

 

 

N/A

 

 

 

 

N/A

COVID-19: first responder donation

 

 

 

 

N/A

 

 

 

 

N/A

Dutch Rewards transition

 

 

 

 

N/A

 

 

 

 

N/A

Dutchwear merchandising adjustment

 

 

 

 

N/A

 

 

 

 

N/A

Income tax effects

 

 

 

 

N/A

 

 

(0.01

)

 

N/A

Adjusted net income per fully exchanged share of common stock

 

$

0.02

 

 

N/A

 

$

0.30

 

 

N/A

_______________

1

Weighted-average shares and net loss per share of Class A and Class D common stock on a diluted basis is applicable only for the period September 14, 2021 through December 31, 2021, which is the period effective with and following the IPO and Reorganization Transactions.

 

Contacts

For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com

For Media Relations inquiries:
Jessical Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com

Contacts

For Investor Relations inquiries:
Raphael Gross
ICR
(203) 682-8253
investors@dutchbros.com

For Media Relations inquiries:
Jessical Liddell
ICR
(203) 682-8208
jessica.liddell@icrinc.com