18.9% Revenue growth year-over-year driven by
new venue development Seventeen open venues with five additional
locations in development as of September 4, 2024 Secures $5 million
in funding from existing lenders and upsized future loan
Pinstripes Holdings, Inc. (“Pinstripes” or “the Company”) (NYSE:
PNST), a best-in-class experiential dining and entertainment brand
combining bistro, bowling, bocce and private event space, today
reported its financial results for the fiscal quarter ended July
21, 2024.
First Quarter Fiscal 2025
Highlights
- Total revenue increased 18.9% to $30.6 million, compared to the
prior year fiscal quarter
- Food and beverage revenues increased 16.1% to $23.8
million
- Recreation revenues increased 29.7% to $6.8 million
- Same store sales decreased (2.4)% over the prior year
period
- Operating loss was $7.6 million, including pre-opening expenses
of $1.0 million, or (24.9)% of total revenue, compared to operating
loss of $0.9 million, including pre-opening expenses of $2.3
million, or (3.4)% of total revenue, in the prior year period.
- Net loss was $10.0 million compared to a net loss of $3.0
million in the prior year period.
- Venue-Level EBITDA(1) was $2.2 million, a decrease of $1.7
million from the prior year period
- Venue-Level EBITDA margin was 7.2%, a decrease of 786 basis
points from the prior year period
- Venue-Level EBITDA margin for mature venues(2) was 12.6%, a
decrease of 246 basis points from the prior year period
- Adjusted EBITDA(1) was $(3.5) million compared to $(1.0)
million in the prior year period.
Dale Schwartz, Founder and CEO, stated, “Our first quarter
results did not meet our expectations as we faced a challenging
macro environment. Nevertheless, our team remains focused on
executing on our top-line and profitability initiatives while
ensuring we provide our guests with those magical moments they’ve
come to expect from visiting Pinstripes.”
Schwartz continued, “We have made significant progress on
rationalizing our cost structure by removing an annualized $10
million in venue-level costs across our system during the first
quarter. In addition, our team has identified an additional $4
million in annualized savings in our SG&A that we have begun to
implement across the company. We believe these actions further
position our brand for improved profitability as the macro
environment improves.”
Schwartz concluded, “Our fiscal 2024 openings continue to see
the anticipated improvements in both top-line sales and
profitability as they continue to mature, with all four venues
seeing improvement in venue-level EBITDA relative to the fourth
quarter. As we look ahead, we have five additional venues currently
under development with two expected to open in fiscal 2025, and
another 30 potential sites in various stages of development.
Despite the current macro volatility and consumer softness, we
firmly believe that our high-quality, connection-oriented dining,
entertainment and event venues uniquely position us to succeed and
drive long-term shareholder value.”
(1) Venue-Level EBITDA, Venue-Level EBITDA
for mature venues and Adjusted EBITDA are non-GAAP measures. For
reconciliations of these measures to the most directly comparable
GAAP measure, see the accompanying financial tables.
(2) Mature Venues are defined as venues
open greater than 24 months.
Development Update
The company did not open a new venue during the first quarter,
with a total venue count of 17 as of July 21, 2024.
Review of First Quarter Fiscal 2025
Financial Results
Total revenues were $30.6 million compared to $25.7 million in
the first quarter of fiscal 2025. Same store sales decreased (2.4)%
for the first quarter of 2025 as compared to the first quarter of
fiscal 2024. The increase in revenue for the first quarter of
fiscal 2025 compared to the first quarter of fiscal 2024 was
primarily due to having four new stores open in the first quarter
of fiscal 2025 compared to the first quarter of fiscal 2024,
partially offset by modest decreases in volume at our 13 legacy
locations, which are locations open greater than 24 months (“Mature
Venues”).
Food and beverage costs as a percentage of revenues were 18.1%
for the first quarter of 2025 compared to 17.2% in the first
quarter of fiscal 2024. As a percentage of revenue, the increase in
food and beverage costs for the first quarter of fiscal 2025
compared to the first quarter of fiscal 2024 was primarily due to
inefficiencies resulting from an increase in relatively higher cost
open play sales (vs. private event sales) from the four new
locations open in the first quarter of fiscal 2025 compared to the
first quarter of fiscal 2024 and modest food cost inflation in
seafood and poultry.
Store labor and benefits costs as a percentage of sales were
38.1% for the first quarter of 2025 compared to 36.1% in the first
quarter of fiscal 2024. The increase in store labor and benefits
expenses for the first quarter of fiscal 2025 compared to the first
quarter of fiscal 2024 was primarily due to the addition of four
new stores contributed to higher store labor and benefits costs.
Excluding the addition of four new stores, store labor and benefits
costs were flat.
Store occupancy costs, excluding depreciation, as a percentage
of sales were 21.4% for the first quarter of 2025 compared to 3.9%
in the first quarter of fiscal 2024. The increase in store
occupancy costs, excluding depreciation, including as a percentage
of revenue, for the first quarter of fiscal 2025 compared to the
first quarter of fiscal 2024, was primarily due to the impact of an
amendment of a lease agreement entered in June 2023, resulting in a
reduction of occupancy cost in the first fiscal quarter of 2024 of
approximately $3.3 million offset in part by four new locations
open in the first quarter of fiscal 2025 compared to the first
quarter of fiscal 2024.
Other store operating costs, excluding depreciation, as a
percentage of sales were 17.8% compared to 17.2% for the first
quarter of 2025 in the first quarter of fiscal 2024. As a
percentage of revenue, the increase in other store operating
expenses, excluding depreciation, for the first quarter of fiscal
2025 compared to the first quarter of fiscal 2024 was primarily due
to increases in repairs and maintenance activities, music and
entertainment costs, lead generation, janitorial costs and an
increase in our insurance costs in the first quarter of fiscal 2025
compared to the first quarter of fiscal 2024.
General and administrative expenses were $5.5 million for the
first quarter of 2025 compared to $3.5 million in the first quarter
of fiscal 2024. As a percentage of sales, general and
administrative expenses were 18.0% for the first quarter of 2025
compared to 13.7% in the first quarter of fiscal 2024. The increase
in general and administrative expenses, including as a percentage
of total revenue, for the first quarter of fiscal 2025 compared to
the first quarter of fiscal 2024 was primarily due to increases in
public company readiness initiatives, including additional
headcount and increased marketing, as well as an increase in stock
compensation expense.
Operating loss was $7.6 million for the first quarter of 2025
compared to $0.9 million in the first quarter of fiscal 2024. The
increase in operating loss was primarily due to the impact of the
amendment of our lease agreement entered in June 2023, resulting in
a reduction of occupancy cost in the first fiscal quarter of 2024
of approximately $3.3 million, in addition to higher depreciation
and operating expenses of four new locations open in the first
quarter of fiscal 2025 compared to the first quarter of fiscal
2024, and expenses related to being a public company in the first
quarter of fiscal 2025 compared to the first quarter of fiscal
2024.
Net loss was $10.0 million for the first quarter of 2025
compared to $3.0 million in the first quarter of fiscal 2024.
Subsequent Events
Subsequent to the quarter-end, the Company entered into a
definitive agreement with Oaktree Fund Administration, LLC and
Silverview Credit Partners LP for an additional $5.0 million of
financing, and in conjunction with this financing Oaktree Fund
Administration, LLC upsized its potential future fundings by $10
million.
Updated Fiscal 2025
Guidance
Fiscal 2025
Same Store Sales Growth
Negative low single digit to
Positive low single digit
New Venue Openings
2 venues
Mature Store(1) Venue-Level Margin
17-20%
General & Administrative Expenses
including non-cash stock comp & tax
Approximately $15 million
Pre-Opening Expenses
$3 million
Adjusted EBITDA
$8-12 million
(1) Mature stores are stores open 24 or
more months
Conference Call
A conference call and webcast to discuss Pinstripes’ financial
results is scheduled for 5:00 p.m. ET today. Hosting the conference
call and webcast will be Dale Schwartz, Founder and Chief Executive
Officer, and Tony Querciagrossa, Chief Financial Officer.
Interested parties may listen to the conference call via
telephone by dialing 201-389-0920. A telephone replay will be
available shortly after the call has concluded and can be accessed
by dialing 412-317-6671; the passcode is 13748427. The webcast will
be available at investor.pinstripes.com under the events &
presentations section and will be archived on the site shortly
after the call has concluded.
About Pinstripes Holdings,
Inc.
Born in the Midwest, Pinstripes’ best-in-class venues offer a
combination of made-from-scratch dining, bowling and bocce and
flexible private event space. From its full-service
Italian-American food and beverage menu to its gaming array of
bowling and bocce, Pinstripes offers multi-generational activities
seven days a week. Its elegant and spacious 25,000-38,000 square
foot venues can accommodate groups of 20 to 1,500 for private
events, parties, and celebrations. For more information on
Pinstripes, led by Founder and CEO Dale Schwartz, please visit
www.pinstripes.com.
Forward-Looking
Statements
Certain statements in this press release, including the
statements under the section titled “Updated Fiscal 2025 Guidance,”
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. We intend such
forward-looking statements to be covered by the safe harbor
provisions for the forward-looking statements contained in Section
27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). All statements other than statements
of historical facts contained in this press release may be
forward-looking statements. Such forward-looking statements are
often identified by words such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“would,” “plan,” “predict,” “forecasted,” “projected,” “potential,”
“seem,” “future,” “outlook,” and similar expressions that predict
or indicate future events or trends or otherwise indicate
statements that are not of historical matters, but the absence of
these words does not mean that a statement is not forward-looking.
These forward-looking statements and factors that may cause actual
results to differ materially from current expectations include, but
are not limited to: the ability of Pinstripes to recognize the
anticipated benefits of Pinstripes’ recently completed business
combination transaction, which may be affected by, among other
things, competition, the ability of Pinstripes to grow and manage
growth profitably, maintain key relationships and retain its
management and key employees; risks related to the uncertainty of
the projected financial information with respect to Pinstripes;
risks related to Pinstripes’ current growth strategy; Pinstripes’
ability to successfully open and integrate new locations on a
timely basis; risks related to the substantial indebtedness of
Pinstripes; risks related to the capital intensive nature of
Pinstripes’ business; the ability of Pinstripes’ to attract new
customers and retain existing customers; the impact of labor
shortage and inflation on Pinstripes; and other economic, business
and/or competitive factors. The foregoing list of factors is not
exhaustive.
Stockholders and prospective investors should carefully consider
the foregoing factors and the other risks and uncertainties
described in the “Risk Factors” section of the Annual Report on
Form 10-K filed by Pinstripes on June 28, 2024 and other documents
filed by Pinstripes from time to time with the SEC.
Stockholders and prospective investors are cautioned not to
place undue reliance on these forward-looking statements, which
only speak as of the date made, are not a guarantee of future
performance and are subject to a number of uncertainties, risks,
assumptions and other factors, many of which are outside the
control of Pinstripes. Except as expressly required by the federal
securities laws, Pinstripes 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 expectations of Pinstripes with respect thereto or any
change in events, conditions or circumstances on which any
statement is based.
Non-GAAP Measures
We prepare our financial statements in accordance with Generally
Accepted Accounting Principles (“GAAP”). Within this presentation,
we make reference to Venue-Level EBITDA and Adjusted EBITDA, which
are non-GAAP financial measures. The Company includes these
non-GAAP financial measures because management believes they are
useful to investors in that they provide for greater transparency
with respect to supplemental information used by management in its
financial and operational decision making.
We define Adjusted EBITDA as net income (loss) as adjusted for
the effects of: (i) depreciation and amortization; (ii) interest
expense, net; (iii) income tax expense; (iv) costs associated with
our recently completed business combination transaction and public
company readiness and related expenses; (v) venue-level
adjustments; (vi) gain on change in fair value of warrant
liability; (vii) non-cash stock compensation expense; and (viii)
Paycheck Protection Program loan forgiveness. We define Venue-Level
EBITDA as income (loss) from operations as adjusted for the effects
of: (i) depreciation expense; (ii) pre-opening expense; (iii)
general and administrative expenses; and (iv) venue-level
adjustments. We define Venue-Level EBITDA margin as Venue-Level
EBITDA divided by revenue. We defined Venue-Level EBITDA margin for
mature venues as Venue-Level EBITDA less income (loss) from
operations for non-mature venues divided by revenue. Management
uses Venue-Level EBITDA and Adjusted EBITDA to evaluate the
Company’s performance and in order to have comparable financial
results to analyze changes in our underlying business from quarter
to quarter. Adjusted EBITDA excludes the impact of certain non-cash
charges and other items that affect the comparability of results in
past quarters and which we do not believe are reflective of
underlying business performance.
Accordingly, the Company believes the presentation of these
non-GAAP financial measures, when used in conjunction with GAAP
financial measures, is a useful financial analysis tool that can
assist investors in assessing the Company’s operating performance
and underlying prospects. This analysis should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction
with the Company’s financial statements and footnotes contained in
the documents that the Company files with the U.S. Securities and
Exchange Commission. The non-GAAP financial measures used by the
Company in this presentation may be different from the methods used
by other companies.
The Company is not providing a quantitative reconciliation of
the forward-looking non-GAAP financial measures presented under the
heading Fiscal 2025 Guidance. In accordance with Item10(e)(1)(i)(B)
of Regulation S-K, a quantitative reconciliation of a
forward-looking non-GAAP financial measure is only required to the
extent it is available without unreasonable efforts. The Company
does not currently have sufficient data to accurately estimate the
variables and individual adjustments for such reconciliation, or to
quantify the probable significance of these items. The adjustments
required for any such reconciliation of the Company’s
forward-looking non-GAAP financial measures cannot be accurately
forecast by the Company, and therefore the reconciliation has been
omitted.
Pinstripes Holdings,
Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except share
and per share amounts)
(Unaudited)
July 21, 2024
April 28, 2024
Assets
Current Assets
Cash and cash equivalents
$
5,029
$
13,171
Accounts receivable
1,291
1,137
Inventories
892
949
Prepaid expenses and other current
assets
2,269
2,101
Total current assets
9,481
17,358
Property and equipment, net
78,830
80,015
Operating lease right-of-use assets
75,309
66,362
Other long-term assets
2,941
3,586
Total assets
$
166,561
$
167,321
Liabilities, Redeemable Convertible
Preferred Stock, and Stockholders’ Deficit
Current Liabilities
Accounts payable
$
25,381
$
22,706
Amounts due to customers
7,745
8,633
Current portion of long-term notes
payable
5,610
4,818
Accrued occupancy costs
7,581
6,508
Other accrued liabilities
7,201
6,546
Current portion of operating lease
liabilities
15,363
15,259
Warrant liabilities
3,373
5,411
Total current liabilities
72,254
69,881
Long-term notes payable
73,065
70,677
Long-term accrued occupancy costs
218
277
Operating lease liabilities
98,330
94,256
Other long-term liabilities
1,386
1,386
Total liabilities
245,253
236,477
Commitments and contingencies (Note
12)
Stockholders’ deficit
Common stock (par value: $0.0001;
authorized: 430,000,000 shares; issued and outstanding: 40,087,785
shares at July 21, 2024 and 40,087,785 shares at April 28,
2024)
4
4
Additional paid-in capital
57,096
56,623
Accumulated deficit
(135,792
)
(125,783
)
Total stockholders’ deficit
(78,692
)
(69,156
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ deficit
$
166,561
$
167,321
Pinstripes Holdings,
Inc.
Unaudited Condensed
Consolidated Statements of Operations
(in thousands, except share
and per share amounts)
Twelve Weeks Ended
July 21, 2024
July 23, 2023
Food and beverage revenues
$
23,819
$
20,517
Recreation revenues
6,776
5,223
Total revenue
30,595
25,740
Cost of food and beverage
5,535
4,438
Store labor and benefits
11,658
9,297
Store occupancy costs, excluding
depreciation
6,555
1,007
Other store operating expenses, excluding
depreciation
5,431
4,422
General and administrative expenses
5,504
3,528
Depreciation expense
2,518
1,644
Pre-opening expenses
1,006
2,277
Operating loss
(7,612
)
(873
)
Interest expense, net
(4,994
)
(1,692
)
Gain (loss) on change in fair value of
warrant liabilities and other
2,675
(409
)
Loss before income taxes
(9,931
)
(2,974
)
Income tax expense
75
72
Net loss
(10,006
)
(3,046
)
Less: Cumulative unpaid dividends and
change in redemption amount of redeemable convertible preferred
stock
—
(1,557
)
Net loss attributable to common
stockholders
$
(10,006
)
$
(4,603
)
Basic loss per share
$
(0.23
)
$
(0.38
)
Diluted loss per share
$
(0.23
)
$
(0.38
)
Weighted average shares outstanding,
basic
42,587,785
12,122,394
Weighted average shares outstanding,
diluted
42,587,785
12,122,394
Pinstripes Holdings,
Inc.
Unaudited Condensed
Consolidated Statements of Cash Flows
(in thousands)
Twelve Weeks Ended
July 21, 2024
July 23, 2023
Cash flows from operating
activities
Net loss
$
(10,006
)
$
(3,046
)
Adjustments to reconcile net loss to
net cash used in operating activities
Gain on modification of operating
leases
—
(3,281
)
Depreciation expense
2,518
1,644
Non-cash operating lease expense
1,598
1,325
Paid-in-kind interest
2,486
—
Operating lease tenant allowances
(521
)
1,610
Stock-based compensation
546
141
(Gain) loss on change in fair value of
warrant liabilities and other
(2,675
)
409
Interest on finance lease obligation
6
—
Amortization of debt issuance costs
546
451
(Increase) decrease in operating
assets
Accounts receivable
(154
)
389
Inventories
57
—
Prepaid expenses and other current
assets
(169
)
(58
)
Operating right-of-use asset
(3,822
)
—
Other long-term assets
645
(50
)
(Decrease) increase in operating
liabilities
Accounts payable
4,377
(762
)
Amounts due to customers
(888
)
(341
)
Accrued occupancy costs
1,013
(2,764
)
Other accrued liabilities
1,191
1,711
Operating lease liabilities
(2,545
)
(2,697
)
Net cash (used in) operating
activities
(5,797
)
(5,319
)
Cash flows from investing
activities
Purchase of property and equipment
(2,128
)
(5,244
)
Net cash (used in) investing
activities
(2,128
)
(5,244
)
Cash flows from financing
activities
Proceeds from issuance of redeemable
convertible preferred stock, net
—
19,886
Principal payments on finance lease
obligation
(18
)
—
Principal payments on long-term notes
payable
(225
)
(138
)
Debt issuance costs
26
—
Net cash provided by (used in)
financing activities
(217
)
19,748
Net change in cash and cash
equivalents
(8,142
)
9,185
Cash and cash equivalents, beginning of
period
13,171
8,436
Cash and cash equivalents, end of
period
$
5,029
$
17,621
Supplemental disclosures of cash flow
information
Cash paid for interest
$
4,368
$
1,148
Supplemental disclosures of non-cash
operating, investing and financing activities
Transaction costs incurred in connection
with the registration statements but not yet paid
$
100
$
—
Operating lease rent abatement
$
—
$
3,214
Right-of-use assets obtained in exchange
for lease liabilities
$
6,723
$
(63
)
Non-cash finance obligation
$
360
$
—
Non-cash capital expenditures included in
accounts payable
$
1,677
$
2,710
Change in the redemption amount of the
redeemable convertible preferred stock
$
—
$
1,423
Accretion of cumulative dividends on
Series I redeemable convertible preferred stock
$
—
$
134
Pinstripes Holdings,
Inc.
Reconciliation of Net Loss to
Non-GAAP Adjusted EBITDA
(in thousands)
Twelve Weeks Ended
July 21, 2024
July 23, 2023
Net Loss
$
(10,006
)
$
(3,046
)
Depreciation expense
2,518
1,644
Interest expense, net
4,994
1,692
Income tax expense
75
72
Reported EBITDA
$
(2,419
)
$
362
M&A, public company readiness and
other related expenses1
247
832
Venue-level adjustments2
772
(2,712
)
Gain on change in fair value of warrant
liabilities and other
(2,675
)
409
Non-cash stock comp
546
141
Adjusted EBITDA
$
(3,529
)
$
(968
)
Adjusted EBITDA Margin
(11.5
)%
(3.8
)%
1 Primarily represents legal and
audit-related costs associated with pursuing becoming a public
entity and other related expenses
2 Represents adjustment to reflect
non-cash gains or losses on modifications of venue leases and other
related venue expenses
Pinstripes Holdings,
Inc.
Reconciliation of Loss from
Operations to Non-GAAP Venue-Level EBITDA
(in thousands)
Twelve Weeks Ended
July 21, 2024
July 23, 2023
Loss from Operations
$
(7,612
)
$
(873
)
Loss from Operating Margin
(24.9
)%
(3.4
)%
Depreciation expense
2,518
1,644
Pre-opening expenses
1,006
2,277
General and administrative expenses
5,504
3,528
Venue-Level adjustments1
772
(2,712
)
Venue-Level EBITDA
$
2,188
$
3,864
Venue-Level EBITDA Margin
7.2
%
15.0
%
1 Represents adjustment to reflect
non-cash gains or losses on restructure of venue leases, impairment
loss, other related venue expenses
Pinstripes Holdings,
Inc.
Reconciliation of Loss from
Operations to Non-GAAP Venue-Level EBITDA
Mature Venues
(in thousands)
Twelve Weeks ended
July 21, 2024
July 23, 2023
Loss from Operations
$
(7,612
)
$
(873
)
Loss from Operating Margin
(24.9
)%
(3.4
)%
Depreciation expense
2,518
1,644
Pre-opening expenses
1,006
2,277
General and administrative expenses
5,504
3,528
Venue-Level adjustments1
772
(2,712
)
Non-Mature Loss
966
—
Venue-Level EBITDA Mature
Venues
$
3,154
$
3,864
Venue-Level EBITDA Margin Mature
Venues
12.6
%
15.0
%
1 Represents adjustment to reflect
non-cash gains or losses on restructure of venue leases, impairment
loss, other related venue expenses
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240904932945/en/
Investor Relations: Jeff Priester 332-242-4370
Investor@pinstripes.com Media: ICR for Pinstripes
PinstripesPR@icrinc.com
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