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Tims China Announces Fourth Quarter And Full Year 2024 Financial Results
| Tims only | For the three months ended or as of | ||||||||
| (Exclude the discontinued business) | Dec 31, | Mar 31, | Jun 30, | Sep 30, | Dec 31, | ||||
| 2023 | 2024 | 2024 | 2024 | 2024 | |||||
| Total stores | 902 | 906 | 907 | 946 | 1,022 | ||||
| Company owned and operated stores | 619 | 604 | 574 | 564 | 576 | ||||
| Franchised stores | 283 | 302 | 333 | 382 | 446 | ||||
| Same-store sales growth for system-wide stores | 2.6% | -13.6% | -14.6% | -21.7% | -13.3% | ||||
| Same-store sales growth for company owned and operated stores | 2.5% | -11.7% | -13.8% | -20.7% | -12.3% | ||||
| Registered loyalty club members (in thousands) | 18,545 | 20,009 | 21,403 | 22,815 | 24,045 | ||||
| Company owned and operated store contribution (Renminbi in thousands) | 2,863 | 2,289 | 32,429 | 39,922 | 12,973 | ||||
| Company owned and operated store contribution margin | 0.9% | 0.8% | 10.1% | 13.3% | 4.8% | ||||
KEY DEFINITIONS
- Same-store sales growth. The percentage change in the sales of stores that have been operating for 12 months or longer during a certain period compared to the same period from the prior year. The same-store sales growth for any period of more than a month equals to the arithmetic average of the same-store sales growth of each month covered in the period. If a store was closed for seven days or more during any given month, its sales during that month and the same month in the comparison period are excluded for purposes of measuring same-store sales growth. Net new store openings. The gross number of new stores opened during the period minus the number of stores permanently closed during the period. System sales. Gross merchandise value of sales generated from both company owned and operated stores and franchised stores. Company owned and operated store contribution (previously reported as adjusted store EBITDA). Calculated as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization. Company owned and operated store contribution margin (previously reported as adjusted store EBITDA margin). Calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores. Adjusted general and administrative expenses. Calculated as general and administrative expenses excluding share-based compensation expenses, expenses related to the issuance of certain ordinary shares to CF Principal Investments LLC in November 2022 (the“Commitment Shares”), offering costs related to the ESA (the“ESA Offering Costs”), expenses related to 200,000 of our ordinary shares that may be purchased from our controlling shareholder by a holder of our convertible notes at its option pursuant to the terms of an Option Agreement dated September 28, 2022 (the“Option Shares”), and professional fees related to warrant exchange and other financing programs. Adjusted corporate EBITDA. Calculated as operating loss for continuing operations excluding certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, expenses related to the Commitment Shares, the ESA Offering Costs, the Option Shares, and professional fees related to warrant exchange and other financing programs. Adjusted corporate EBITDA margin. Calculated as adjusted corporate EBITDA as a percentage of total revenues. Adjusted net loss. Calculated as net loss for continuing operations excluding share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, expenses related to the Commitment Shares, the ESA Offering Costs, the Option Shares, professional fees related to warrant exchange and other financing programs, changes in fair value of convertible notes, changes in fair value of warrant liabilities, changes in fair value of ESA derivative liabilities, loss of the debt extinguishment and gain on disposal of Popeyes business. Adjusted net loss margin. Calculated as adjusted net loss as a percentage of total revenues. Adjusted basic and diluted net loss per ordinary share. Calculated as adjusted net loss attributable to the Company's ordinary shareholders divided by weighted-average number of basic and diluted ordinary shares.
RECENT BUSINESS DEVELOPMENTS
On November 26, 2024, Tims China launched its inaugural "Timsgiving" pay-it-forward campaign across all its stores in China, marking the first time this Canadian tradition was introduced in the country. The campaign ran from November 26 to 28 and offered the first customer at each store a free beverage from the Double Series, encouraging them to pay-it-forward by purchasing a drink for the next guest. Over 1,500 people participated, with the longest chain of kindness reaching 30 customers in a row.
On January 13, 2025, Tims China completed the implementation of a 1-for-5 reverse stock split of the Company's ordinary shares. The reverse stock split was previously approved by the Company's shareholders on December 20, 2024 and board of directors on December 23, 2024.
On January 28, 2025, Tims China announced that the Company received a notification letter from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market Inc., informing the Company that it has regained compliance with the“Minimum Bid Price Requirement” pursuant to Nasdaq Listing Rule 5550(a)(1). Therefore, the Company' ordinary shares are no longer subject to delisting.
On February 18, 2025, Tims China launched its "Light Bagel Sandwich Lunch Box Series", reinforcing its commitment to providing high-quality, convenient coffee and warm, healthy food experiences. This new lunch offering, featuring a combination of a bagel sandwich, salad, and coffee, is designated to cater the needs of urban consumers seeking convenient and healthy meal options. It also aligns with the growing demand for healthy Western-style lunches.
On February 26, 2025, Tims China celebrated its sixth anniversary and global coffee chain Tim Hortons' 61st anniversary by releasing several beloved classics with exciting new twists. Among these, the classic donuts made a huge return with Chinese“Double-Double” upgrade, offering Chinese consumers a special anniversary treat.
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP financial measures, namely company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share in evaluating its operating results and for financial and operational decision-making purposes. The Company defines (i) company owned and operated store contribution as fully burdened gross profit of company owned and operated stores excluding depreciation and amortization; (ii) company owned and operated store contribution margin as company owned and operated store contribution as a percentage of revenues from company owned and operated stores; (iii) adjusted general and administrative expenses as general and administrative expenses excluding share-based compensation expenses, expenses related to the Commitment Shares, the ESA Offering Costs, the Option Shares, and professional fees related to warrant exchange and other financing programs; (iv) adjusted corporate EBITDA as operating loss for continuing operations excluding certain non-cash expenses consisting of depreciation and amortization, share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, expenses related to the Commitment Shares, the ESA Offering Costs, the Option Shares, and professional fees related to warrant exchange and other financing programs; (v) adjusted corporate EBITDA margin as adjusted corporate EBITDA as a percentage of total revenues; (vi) adjusted net loss as net loss for continuing operations excluding share-based compensation expenses, impairment losses of long-lived assets, loss on disposal of property and equipment, expenses related to the Commitment Shares, the ESA Offering Costs, the Option Shares, professional fees related to warrant exchange and other financing programs, changes in fair value of convertible notes, changes in fair value of warrant liabilities, changes in fair value of ESA derivative liabilities, loss of the debt extinguishment and gain on disposal of Popeyes business; (vii) adjusted net loss margin as adjusted net loss as a percentage of total revenues; and (viii) adjusted basic and diluted net loss per ordinary share as adjusted net loss for continuing operations attributable to the Company's ordinary shareholders divided by weighted-average number of basic and diluted ordinary share. The Company believes company owned and operated store contribution, company owned and operated store contribution margin, adjusted general and administrative expenses, adjusted corporate EBITDA, adjusted corporate EBITDA margin, adjusted net loss, adjusted net loss margin, and adjusted basic and diluted net loss per ordinary share enhance investors' overall understanding of its financial performance and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. As these non-GAAP financial measures have limitations as analytical tools and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled,“Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures.” The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure.
EXCHANGE RATE INFORMATION
This earnings release contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.2993 to USD1.00, the exchange rate in effect on December 31, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any rate or at all.
CONFERENCE CALL
The Company will hold a conference call today, on Tuesday, April 15, 2025, at 8:00 am Eastern Time (on Tuesday, April 15, 2025, at 8:00 pm Beijing Time) to discuss the financial results.
Participants are strongly encouraged to pre-register for the conference call, by using the weblink provided below.
Participants may also view the live webcast by registering through below weblink:
The webcast features a 'Submit Your Question' tab at the top, where you will have the opportunity to submit your questions before and during the call.
A live and archived webcast of the conference call will also be available at the Company's Investor Relations website at under“Events and Presentations”.
FORWARD-LOOKING STATEMENTS
Certain statements in this earnings release may be considered forward-looking statements within the meaning of the“safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, such as the Company's ability to further grow its business and store network, optimize its cost structure, improve its operational efficiency, and achieve profitable growth. Forward-looking statements are statements that are not historical facts and generally relate to future events or the Company's future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as“believe,”“may,”“will,”“potentially,”“estimate,”“continue,”“anticipate,”“intend,”“could,”“would,”“project,”“target,”“plan,”“expect,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, as the case may be, are inherently uncertain and subject to material change. Factors that may cause actual results to differ materially from current expectations include various factors beyond management's control, including, but not limited to, general economic conditions and other risks, uncertainties and factors set forth in the sections entitled“Risk Factors” and“Cautionary Statement Regarding Forward-Looking Statements” in the Company's Annual Report on Form 20-F, and other filings it makes with the Securities and Exchange Commission. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Except as required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based.
STATEMENT REGARDING PRELIMINARY UNAUDITED FINANCIAL INFORMATION
The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information. Accordingly, you should not place undue reliance upon these preliminary estimates. The preliminary unaudited financial information included in this press release has been prepared by, and is the responsibility of, the Company's management. The Company's auditor has not audited, reviewed, compiled, or applied agreed-upon procedures with respect to such preliminary financial data. Accordingly, the Company's auditor does not express an opinion or any other form of assurance with respect thereto. Upon completion of the year-end audit, the Company's audited financial results may differ materially from its preliminary estimates.
ABOUT TH INTERNATIONAL LIMITED
TH International Limited (Nasdaq: THCH) (“Tims China”) is the parent company of the exclusive master franchisees of Tim Hortons coffee shops in mainland China, Hong Kong and Macau. Tims China was founded by Cartesian Capital Group and Tim Hortons Restaurants International, a subsidiary of Restaurant Brands International (TSX: QSR) (NYSE: QSR).
The Company's philosophy is rooted in world-class execution and data-driven decision making and centered around true local relevance, continuous innovation, genuine community, and absolute convenience. For more information, please visit .
INVESTOR AND MEDIA CONTACTS
Investor Relations
Gemma Bakx
... , or ...
Public and Media Relations
Patty Yu
...
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | |||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Amounts in thousands of RMB and US$, except for number of shares) | |||||||||
| As of | |||||||||
| December 31, 2023 | December 31, 2024 (Unaudited) | ||||||||
| RMB | RMB | US$ | |||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | 202,315 | 152,368 | 20,874 | ||||||
| Restricted Cash | - | 31,869 | 4,366 | ||||||
| Time deposits | 17,165 | - | - | ||||||
| Amount due from related parties | - | 5,858 | 802 | ||||||
| Accounts receivable, net | 27,562 | 30,526 | 4,182 | ||||||
| Inventories | 49,866 | 37,578 | 5,148 | ||||||
| Prepaid expenses and other current assets | 156,855 | 158,882 | 21,768 | ||||||
| Current assets of discontinued operations | 4,857 | - | - | ||||||
| Total current assets | 458,620 | 417,081 | 57,140 | ||||||
| Non-current assets: | |||||||||
| Property and equipment, net | 665,992 | 502,159 | 68,795 | ||||||
| Intangible assets, net | 110,966 | 97,019 | 13,292 | ||||||
| Operating lease right-of-use assets | 785,437 | 493,308 | 67,583 | ||||||
| Other non-current assets | 63,855 | 53,967 | 7,393 | ||||||
| Noncurrent assets of discontinued operations | 130,569 | - | - | ||||||
| Total non-current assets | 1,756,819 | 1,146,453 | 157,063 | ||||||
| Total assets | 2,215,439 | 1,563,534 | 214,203 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Bank borrowings, current | 538,233 | 381,263 | 52,233 | ||||||
| Accounts payable | 219,775 | 223,838 | 30,666 | ||||||
| Contract liabilities | 40,715 | 39,678 | 5,436 | ||||||
| Amount due to related parties | 52,002 | 48,117 | 6,592 | ||||||
| Convertible notes, at fair value | - | 473,716 | 64,899 | ||||||
| Operating lease liabilities | 189,835 | 178,115 | 24,402 | ||||||
| Other current liabilities | 291,715 | 191,205 | 26,194 | ||||||
| Current liabilities of discontinued operations | 63,558 | - | - | ||||||
| Total current liabilities | 1,395,833 | 1,535,932 | 210,422 | ||||||
| Non-current liabilities: | |||||||||
| Bank borrowings, non-current | 5,266 | - | - | ||||||
| Convertible notes, at fair value | 420,712 | 464,847 | 63,684 | ||||||
| Contract liabilities | 5,272 | 8,022 | 1,099 | ||||||
| Amount due to related parties | 94,200 | - | - | ||||||
| Operating lease liabilities | 653,659 | 380,075 | 52,070 | ||||||
| Other non-current liabilities | 8,637 | 7,673 | 1,051 | ||||||
| Noncurrent liabilities of discontinued operations | 54,289 | - | - | ||||||
| Total non-current liabilities | 1,242,035 | 860,617 | 117,904 | ||||||
| Total liabilities | 2,637,868 | 2,396,549 | 328,326 | ||||||
| Shareholders' equity: | |||||||||
| Ordinary shares | 10 | 10 | 1 | ||||||
| Additional paid-in capital | 1,807,715 | 1,818,421 | 249,123 | ||||||
| Accumulated losses | (2,256,424 | ) | (2,668,505 | ) | (365,584 | ) | |||
| Accumulated other comprehensive income | 21,492 | 9,185 | 1,258 | ||||||
| Treasury shares | - | - | - | ||||||
| Total (deficit) equity attributable to shareholders of the Company | (427,207 | ) | (840,889 | ) | (115,202 | ) | |||
| Non-controlling interests | 4,778 | 7,874 | 1,079 | ||||||
| Total shareholders' (deficit) equity | (422,429 | ) | (833,015 | ) | (114,123 | ) | |||
| Commitments and Contingencies | - | - | - | ||||||
| Total liabilities and shareholders' equity (deficit) | 2,215,439 | 1,563,534 | 214,203 | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) | ||||||||||||||||||
| (Amounts in thousands of RMB and US$, except for per share data) | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Revenues: | ||||||||||||||||||
| Company owned and operated stores | 328,242 | 270,152 | 37,010 | 1,389,641 | 1,188,293 | 162,796 | ||||||||||||
| Other revenues | 49,656 | 62,473 | 8,559 | 170,365 | 202,865 | 27,792 | ||||||||||||
| Total revenues | 377,898 | 332,625 | 45,569 | 1,560,006 | 1,391,158 | 190,588 | ||||||||||||
| Costs and expenses, net: | ||||||||||||||||||
| Company owned and operated stores | ||||||||||||||||||
| Food and packaging | 115,340 | 84,797 | 11,617 | 486,359 | 374,086 | 51,250 | ||||||||||||
| Rental and property management fee | 67,712 | 56,854 | 7,789 | 289,556 | 241,425 | 33,075 | ||||||||||||
| Payroll and employee benefits | 74,868 | 54,880 | 7,519 | 304,545 | 231,542 | 31,721 | ||||||||||||
| Delivery costs | 30,291 | 28,584 | 3,916 | 116,449 | 119,171 | 16,326 | ||||||||||||
| Other operating expenses | 26,400 | 22,745 | 3,116 | 118,634 | 95,036 | 13,020 | ||||||||||||
| Store depreciation and amortization | 34,953 | 36,074 | 4,942 | 138,735 | 129,614 | 17,757 | ||||||||||||
| Company owned and operated store costs and expenses | 349,564 | 283,934 | 38,899 | 1,454,278 | 1,190,874 | 163,149 | ||||||||||||
| Costs of other revenues | 50,886 | 48,532 | 6,649 | 149,692 | 153,612 | 21,045 | ||||||||||||
| Marketing expenses | 21,169 | 13,764 | 1,886 | 96,679 | 64,849 | 8,885 | ||||||||||||
| General and administrative expenses | 61,662 | 76,321 | 10,455 | 325,259 | 210,323 | 28,814 | ||||||||||||
| Franchise and royalty expenses | 15,103 | 13,952 | 1,911 | 57,063 | 57,761 | 7,913 | ||||||||||||
| Other operating costs and expenses | 8,968 | 315 | 43 | 28,872 | 10,794 | 1,479 | ||||||||||||
| Loss on disposal of property and equipment | 2,624 | 431 | 59 | 16,404 | 4,147 | 568 | ||||||||||||
| Impairment losses of long-lived assets | 89,635 | 15,901 | 2,178 | 111,427 | 56,287 | 7,711 | ||||||||||||
| Other income | 3,311 | 3,338 | 457 | 11,743 | 8,408 | 1,152 | ||||||||||||
| Total costs and expenses, net | 596,300 | 449,812 | 61,623 | 2,227,931 | 1,740,239 | 238,412 | ||||||||||||
| Operating loss | (218,402 | ) | (117,187 | ) | (16,054 | ) | (667,925 | ) | (349,081 | ) | (47,824 | ) | ||||||
| Interest income | 3,200 | 982 | 135 | 14,183 | 3,203 | 439 | ||||||||||||
| Interest expenses | (6,659 | ) | (3,706 | ) | (509 | ) | (20,420 | ) | (22,448 | ) | (3,075 | ) | ||||||
| Foreign currency transaction loss | (16,158 | ) | (933 | ) | (127 | ) | (16,772 | ) | 3,484 | 477 | ||||||||
| Loss of the debt extinguishment | - | - | - | - | (10,657 | ) | (1,460 | ) | ||||||||||
| Changes in fair value of Deferred Contingent consideration | (32,437 | ) | - | - | (26,106 | ) | (16,941 | ) | (2,321 | ) | ||||||||
| Changes in fair value of convertible notes | (26,909 | ) | (17,413 | ) | (2,386 | ) | (58,281 | ) | (65,874 | ) | (9,025 | ) | ||||||
| Changes in fair value of warrant liabilities | - | - | - | (83,966 | ) | - | - | |||||||||||
| Changes in fair value of ESA derivative liabilities | 60 | - | - | 19,654 | - | - | ||||||||||||
| Loss from continuing operations before income taxes | (297,305 | ) | (138,257 | ) | (18,941 | ) | (839,633 | ) | (458,314 | ) | (62,789 | ) | ||||||
| Income tax expenses | (97 | ) | (616 | ) | (84 | ) | (97 | ) | (2,115 | ) | (290 | ) | ||||||
| Net loss from continuing operations | (297,402 | ) | (138,873 | ) | (19,025 | ) | (839,730 | ) | (460,429 | ) | (63,079 | ) | ||||||
| Discontinued operations: | ||||||||||||||||||
| Income/(loss) from discontinued operations(including gain on disposal of Popeyes business RMB70,665 thousand in 2024) before income taxes | (13,757 | ) | 6,485 | 888 | (33,196 | ) | 51,444 | 7,048 | ||||||||||
| Income tax expenses | - | - | - | - | - | - | ||||||||||||
| Net income/(loss) from discontinued operations | (13,757 | ) | 6,485 | 888 | (33,196 | ) | 51,444 | 7,048 | ||||||||||
| Net loss | (311,159 | ) | (132,388 | ) | (18,137 | ) | (872,926 | ) | (408,985 | ) | (56,031 | ) | ||||||
| Less: Net (income) loss attributable to non-controlling interests | 925 | (830 | ) | (114 | ) | 3,324 | 3,096 | 424 | ||||||||||
| Net Loss attributable to shareholders of the Company | ||||||||||||||||||
| -from continuing operations | (298,327 | ) | (138,043 | ) | (18,911 | ) | (843,054 | ) | (463,525 | ) | (63,503 | ) | ||||||
| -from discontinued operations | (13,757 | ) | 6,485 | 888 | (33,196 | ) | 51,444 | 7,048 | ||||||||||
| Basic and diluted loss per Ordinary Share | (9.71 | ) | (4.05 | ) | (0.55 | ) | (28.41 | ) | (12.70 | ) | (1.74 | ) | ||||||
| Net loss | (311,159 | ) | (132,388 | ) | (18,137 | ) | (872,926 | ) | (408,985 | ) | (56,031 | ) | ||||||
| Other comprehensive income (loss) | ||||||||||||||||||
| Unrealized gain on short-term investment, net of nil income taxes | - | - | - | 3,585 | - | - | ||||||||||||
| Fair value changes of convertible notes due to instrument-specific credit risk, net of nil income taxes | 7,731 | (1,282 | ) | (176 | ) | (2,117 | ) | (1,495 | ) | (205 | ) | |||||||
| Amounts reclassified from accumulated other comprehensive income | - | - | - | (5,719 | ) | - | - | |||||||||||
| Foreign currency translation adjustment, net of nil income taxes | 13,098 | (16,577 | ) | (2,271 | ) | 8,742 | (10,812 | ) | (1,481 | ) | ||||||||
| Total comprehensive loss | (290,330 | ) | (150,247 | ) | (20,584 | ) | (868,435 | ) | (421,292 | ) | (57,717 | ) | ||||||
| Less: Comprehensive loss attributable to non- controlling interests | 925 | (830 | ) | (114 | ) | 3,324 | 3,096 | 424 | ||||||||||
| Comprehensive loss attributable to shareholders of the Company | (291,255 | ) | (149,417 | ) | (20,470 | ) | (871,759 | ) | (424,388 | ) | (58,141 | ) | ||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
| (Amounts in thousands of RMB and US$) | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net cash provided by/(used in) operating activities | (80,565 | ) | (31,629 | ) | (4,333 | ) | (196,130 | ) | (39,667 | ) | (5,434 | ) | ||||||
| Net cash provided by/(used in) investing activities | (67,939 | ) | 13,222 | 1,811 | 59,999 | (8,037 | ) | (1,101 | ) | |||||||||
| Net cash provided by/(used in) financing activities | (119,602 | ) | 9,800 | 1,343 | 80,833 | 26,004 | 3,563 | |||||||||||
| Effect of foreign currency exchange rate changes on cash | 9,938 | (3,891 | ) | (533 | ) | 19,808 | 2,350 | 322 | ||||||||||
| Net increase/(decrease) in cash | (258,168 | ) | (12,498 | ) | (1,712 | ) | (35,490 | ) | (19,350 | ) | (2,651 | ) | ||||||
| Cash at beginning of the period | 461,755 | 196,734 | 26,952 | 239,077 | 203,587 | 27,891 | ||||||||||||
| Cash and cash equivalents and restricted cash, at end of year | 203,587 | 184,236 | 25,240 | 203,587 | 184,237 | 25,240 | ||||||||||||
| Less: Cash and restricted cash of discontinued operations at end of year | (1,272 | ) | - | - | (1,272 | ) | - | - | ||||||||||
| Cash and Restricted cash at end of the period | 202,315 | 184,237 | 25,240 | 202,315 | 184,237 | 25,240 | ||||||||||||
| TH INTERNATIONAL LIMITED AND SUBSIDIARIES | ||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES | ||||||||||||||||||
| (Unaudited, amounts in thousands of RMB and US$, except for number of shares and per share data) | ||||||||||||||||||
| A. Company owned and operated store contribution | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Revenues - company owned and operated stores | 328,242 | 270,152 | 37,010 | 1,389,641 | 1,188,293 | 162,796 | ||||||||||||
| Food and packaging costs - company owned and operated stores | (115,340 | ) | (84,797 | ) | (11,617 | ) | (486,359 | ) | (374,086 | ) | (51,250 | ) | ||||||
| Rental expenses - company owned and operated stores | (67,712 | ) | (56,854 | ) | (7,789 | ) | (289,556 | ) | (241,425 | ) | (33,075 | ) | ||||||
| Payroll and employee benefits - company owned and operated stores | (74,868 | ) | (54,880 | ) | (7,519 | ) | (304,545 | ) | (231,542 | ) | (31,721 | ) | ||||||
| Delivery costs - company owned and operated stores | (30,291 | ) | (28,584 | ) | (3,916 | ) | (116,449 | ) | (119,171 | ) | (16,326 | ) | ||||||
| Other operating expenses - company owned and operated stores | (26,400 | ) | (22,745 | ) | (3,116 | ) | (118,634 | ) | (95,036 | ) | (13,020 | ) | ||||||
| Store depreciation and amortization | (34,953 | ) | (36,074 | ) | (4,942 | ) | (138,735 | ) | (129,614 | ) | (17,757 | ) | ||||||
| Franchise and royalty expenses - company owned and operated stores | (10,768 | ) | (9,319 | ) | (1,277 | ) | (44,730 | ) | (39,420 | ) | (5,401 | ) | ||||||
| Fully-burdened gross (loss) profit - company owned and operated stores | (32,090 | ) | (23,101 | ) | (3,166 | ) | (109,367 | ) | (42,001 | ) | (5,754 | ) | ||||||
| Store depreciation and amortization | 34,953 | 36,074 | 4,942 | 138,735 | 129,614 | 17,757 | ||||||||||||
| Company owned and operated store contribution | 2,863 | 12,973 | 1,776 | 29,368 | 87,613 | 12,003 | ||||||||||||
| Company owned and operated store contribution margin | 0.9% | 4.8% | 4.8% | 2.1% | 7.4% | 7.4% | ||||||||||||
| B. Adjusted general and administrative expenses | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| General and administrative expenses from continuing operations | (61,662 | ) | (76,321 | ) | (10,455 | ) | (325,259 | ) | (210,323 | ) | (28,814 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Share-based compensation expenses | 6,351 | (741 | ) | (102 | ) | 68,078 | 519 | 71 | ||||||||||
| Professional fees related to financing programs | 678 | - | - | 28,519 | 10,464 | 1,434 | ||||||||||||
| Impairment losses of rental deposits | 12,471 | - | - | 12,471 | 2,457 | 337 | ||||||||||||
| Adjusted General and administrative expenses | (42,162 | ) | (77,062 | ) | (10,557 | ) | (216,191 | ) | (196,883 | ) | (26,972 | ) | ||||||
| Adjusted General and administrative expenses as a % of total revenue | 11.2% | 23.2% | 23.2% | 13.9% | 14.2% | 14.2% | ||||||||||||
| C. Adjusted corporate EBITDA and adjusted corporate EBITDA margin | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Operating loss from continuing operations | (218,402 | ) | (117,187 | ) | (16,054 | ) | (667,925 | ) | (349,081 | ) | (47,824 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Depreciation and amortization | 43,959 | 44,243 | 6,061 | 163,155 | 167,721 | 22,978 | ||||||||||||
| Share-based compensation expenses | 6,351 | (741 | ) | (102 | ) | 68,078 | 519 | 71 | ||||||||||
| Impairment losses of rental deposits | 12,471 | - | - | 12,471 | 2,457 | 337 | ||||||||||||
| One-off expense of store closure | 6,009 | 7,909 | 1,084 | 6,009 | 11,090 | 1,519 | ||||||||||||
| Professional fees related to financing programs | 678 | - | - | 28,519 | 10,464 | 1,434 | ||||||||||||
| Impairment losses of long-lived assets | 89,635 | 15,901 | 2,178 | 111,427 | 56,287 | 7,711 | ||||||||||||
| Loss on disposal of property and equipment | 2,624 | 431 | 59 | 16,404 | 4,147 | 568 | ||||||||||||
| Adjusted Corporate EBITDA | (56,675 | ) | (49,444 | ) | (6,774 | ) | (261,862 | ) | (96,396 | ) | (13,206 | ) | ||||||
| Adjusted Corporate EBITDA Margin | -15.0% | -14.9% | -14.9% | -16.8% | -6.9% | -6.9% | ||||||||||||
| D. Adjusted net loss and adjusted net loss margin | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net loss from continuing operations | (297,402 | ) | (138,873 | ) | (19,025 | ) | (839,730 | ) | (460,429 | ) | (63,079 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Share-based compensation expenses | 6,351 | (741 | ) | (102 | ) | 68,078 | 519 | 71 | ||||||||||
| Professional fees related to financing programs | 678 | - | - | 28,519 | 10,464 | 1,434 | ||||||||||||
| Impairment losses of long-lived assets | 89,635 | 15,901 | 2,178 | 111,427 | 56,287 | 7,711 | ||||||||||||
| Impairment losses of rental deposits | 12,471 | - | - | 12,471 | 2,457 | 337 | ||||||||||||
| One-off expense of store closure | 6,009 | 7,909 | 1,084 | 6,009 | 11,090 | 1,519 | ||||||||||||
| Loss on disposal of property and equipment | 2,624 | 431 | 59 | 16,404 | 4,147 | 568 | ||||||||||||
| Loss of the debt extinguishment | - | - | - | - | 10,657 | 1,460 | ||||||||||||
| Changes in fair value of Deferred Contingent consideration | 32,437 | - | - | 26,106 | 16,941 | 2,321 | ||||||||||||
| Changes in fair value of convertible notes | 26,909 | 17,413 | 2,386 | 58,281 | 65,874 | 9,025 | ||||||||||||
| Changes in fair value of warrant liabilities | - | - | - | 83,966 | - | - | ||||||||||||
| Changes in fair value of ESA derivative liabilities | (60 | ) | - | - | (19,654 | ) | - | - | ||||||||||
| Adjusted Net loss | (120,348 | ) | (97,960 | ) | (13,420 | ) | (448,123 | ) | (281,993 | ) | (38,633 | ) | ||||||
| Adjusted Net loss Margin | -31.8% | -29.5% | -29.4% | -28.7% | -20.3% | -20.3% | ||||||||||||
| E. Adjusted basic and diluted net loss per Ordinary Share | ||||||||||||||||||
| For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
| Net loss from continuing operations to shareholders of the Company | (298,326 | ) | (138,043 | ) | (18,911 | ) | (843,054 | ) | (463,525 | ) | (63,503 | ) | ||||||
| Adjusted for: | ||||||||||||||||||
| Share-based compensation expenses | 6,351 | (741 | ) | (102 | ) | 68,078 | 519 | 71 | ||||||||||
| Professional fees related to financing programs | 678 | - | - | 28,519 | 10,464 | 1,434 | ||||||||||||
| Impairment losses of long-lived assets | 89,635 | 15,901 | 2,178 | 111,427 | 56,287 | 7,711 | ||||||||||||
| Impairment losses of rental deposits | 12,471 | - | - | 12,471 | 2,457 | 337 | ||||||||||||
| One-off expense of store closure | 6,009 | 7,909 | 1,084 | 6,009 | 11,090 | 1,519 | ||||||||||||
| Loss on disposal of property and equipment | 2,624 | 431 | 59 | 16,404 | 4,147 | 568 | ||||||||||||
| Loss of the debt extinguishment | - | - | - | - | 10,657 | 1,460 | ||||||||||||
| Changes in fair value of Deferred Contingent consideration | 32,437 | - | - | 26,106 | 16,941 | 2,321 | ||||||||||||
| Changes in fair value of convertible notes | 26,909 | 17,413 | 2,386 | 58,281 | 65,874 | 9,025 | ||||||||||||
| Changes in fair value of warrant liabilities | - | - | - | 83,966 | - | - | ||||||||||||
| Changes in fair value of ESA derivative liabilities | (60 | ) | - | - | (19,654 | ) | - | - | ||||||||||
| Adjusted Net loss attributable to shareholders of the Company | (121,272 | ) | (97,130 | ) | (13,306 | ) | (451,447 | ) | (285,089 | ) | (39,057 | ) | ||||||
| Weighted average shares outstanding used in calculating basic and diluted loss per share | 32,124,164 | 32,494,265 | 32,494,265 | 30,848,340 | 32,444,772 | 32,444,772 | ||||||||||||
| Adjusted basic and diluted net loss per Ordinary Share | (3.78 | ) | (2.99 | ) | (0.41 | ) | (14.63 | ) | (8.79 | ) | (1.20 | ) | ||||||
_____________________
1 System sales is calculated as the gross merchandise value of sales generated from both company owned and operated stores and franchised stores.
2 Company owned and operated store contribution, is calculated as fully burdened gross profit 4 of company owned and operated stores excluding depreciation & amortization.
3 Company owned and operated store contribution margin, is calculated as company owned and operated store contribution as a percentage of revenues from company owned and operated stores.
4 Fully burdened gross profit of company owned and operated stores, the most directly comparable GAAP measure to company owned and operated store contribution, was a loss of RMB23.1 million (USD3.2 million) for the three months ended December 31, 2024, compared to a loss of RMB32.1 million in the same quarter of 2023.
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