Expenses weigh on Chanticleer Holdings Q4 profits

Charlotte-based Chanticleer Holdings reported another slump in quarterly and annual income but a surge in sales for 2014 thanks to a growth in restaurant sales, gaming revenue and management fees.

For the fourth quarter that ended Dec. 31, 2014, the investment company, whose business model is to own and operate Hooters and other franchises, posted a loss of $2.64 million, according to a securities filing released Wednesday. That’s down almost 13 percent from the same quarter of 2013, when the company lost $2.34 million.

For all of 2014, Chanticleer said it lost $5.89 million, compared with a loss of $5.19 million in 2013.

Hoping to become profitable, Chanticleer completed a number of acquisitions in 2014. An increase in expenses to keep its operations humming, however, continues to weigh on sales and earnings.

Restaurant operating expenses for the fourth quarter of 2014 were $5.34 million, compared with $2.08 million in the same period of 2013.

“We believe accretive acquisitions such as BGR: The Burger Joint, which brings an expansive franchising opportunity, and the opening of corporate locations when opportunities arise will lead us to achieve profitability by year end,” Mike Pruitt, the company’s chairman and CEO, said in a statement, referring to the company’s March 18 acquisition.

For the fourth quarter, Chanticleer said its sales grew 161 percent, to $8.64 million in 2014 from $3.31 million in 2013. The growth was due to increased restaurant sales, gaming revenue and management fees, the company said. For the year, sales rose 261.8 percent, to $29.84 million from $8.25 million in 2013.

Among other acquisitions and expansions in 2014, Chanticleer bought Hooters’ U.S. Pacific Northwest franchise rights and two existing restaurants in Portland, Ore., and Tacoma, Wash. It also bought The Burger Company in Charlotte, an award-winning “better-burger” restaurant, in September.

Most recently, Chanticleer announced on Tuesday it had signed an agreement to purchase BT’s Burger Joint, another “better burger concept” in Charlotte. With the acquisition, Chanticleer will operate 30 better burger concept locations.

Chanticleer had 26 restaurants as of Dec. 31, 2014, including several Hooters locations in the U.S. and elsewhere, the Charlotte-based Just Fresh restaurant chain, American Burger Company locations and The Burger Company restaurant.

This story was originally published April 1, 2015 at 10:02 AM with the headline "Expenses weigh on Chanticleer Holdings Q4 profits."