7.5% Revenue growth year-over-year driven by
new venue development Eighteen open venues with Walnut Creek open
as of November 15, 2024 Significant progress on removal of $15
million of annualized cost
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 October
13, 2024.
Second Quarter Fiscal 2025
Highlights
- Total revenue increased 7.5% to $26.5 million, compared to the
prior year fiscal quarter
- Food and beverage revenues increased 8.6% to $21.1 million
- Recreation revenues increased 3.6% to $5.4 million
- Operating loss was $7.9 million, including pre-opening expenses
of $1.6 million, or (29.7)% of total revenue, compared to operating
loss of $7.2 million, including pre-opening expenses of $3.0
million, or (29.3)% of total revenue, in the prior year
period.
- Net loss was $9.3 million compared to a net loss of $7.3
million in the prior year period.
- Same store sales decreased (9.4)% over the prior year
period
- Venue-Level EBITDA(1) was $1.3 million, a decrease of $0.3
million from the prior year period
- Venue-Level EBITDA margin was 5.0%, a decrease of 162 basis
points from the prior year period due to the less efficient ramp up
of our four new locations as they continue to mature.
- Venue-Level EBITDA margin for mature venues(2) was 8.3%, an
increase of 51 basis points from the prior year period
- Adjusted EBITDA(1) was $(3.1) million compared to $(4.2)
million in the prior year period.
Dale Schwartz, Founder and CEO, stated, “We continue to make
significant progress on rationalizing our cost structure by
removing an annualized $15 million at the store and corporate
level, and we have also initiated several local-store marketing
campaigns that are driving awareness and sales at all venues. We
believe these combined actions further position our brand for
improved profitability as the macro environment improves. We are
also excited about our most recent store opening in Walnut Creek,
and continue our new location development efforts.”
Schwartz concluded, “We are equally focused on strengthening our
balance sheet and raising additional capital to fund our operations
and expansion plans, and we continue to believe that our
high-quality, connection-oriented dining, entertainment and event
venues attractively position us to 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 second quarter,
with a total venue count of 17 as of October 13, 2024.
Subsequent to the end of the quarter, the Company opened a
location in Walnut Creek, CA on November 15, 2024.
Review of Second Quarter Fiscal 2025
Financial Results
Total revenues were $26.5 million compared to $24.6 million in
the second quarter of fiscal 2024. Same store sales decreased
(9.4)% for the second quarter of 2025 as compared to the second
quarter of fiscal 2024. The increase in total revenue was primarily
due to having four new stores open in the second quarter of fiscal
2025 for the full period compared to the second quarter of fiscal
2024, partially offset by modest decreases in volume at our 13
legacy locations.
Food and beverage costs as a percentage of total revenues were
17.5% for the second quarter of fiscal 2025 compared to 17.4% in
the second quarter of fiscal 2024. As a percentage of revenue, the
food and beverage costs for the second quarter of fiscal 2025
compared to the second quarter of fiscal 2024 were relatively flat
as cost efficiencies offset changes in product mix.
Store labor and benefits costs as a percentage of total sales
were 38.9% for the second quarter of fiscal 2025 compared to 37.9%
in the second quarter of fiscal 2024. As a percentage of revenue,
the increase in store labor and benefits expenses was primarily due
to the addition of four new stores open for the entire second
quarter of fiscal 2025, which contributed to higher store labor and
benefits costs. Excluding the addition of four new stores, store
labor and benefits costs were down approximately 30 basis
points.
Store occupancy costs, excluding depreciation, as a percentage
of total revenues were 18.6% for the second quarter of fiscal 2025
compared to 18.6% in the second quarter of fiscal 2024. As a
percentage of revenue, the decrease in store occupancy costs,
excluding depreciation, including as a percentage of revenue, for
the second quarter of fiscal 2025 compared to the second quarter of
fiscal 2024, was primarily due to four new locations open for the
entire second quarter of fiscal 2025 compared to the second quarter
of fiscal 2024.
Other store operating costs, excluding depreciation, as a
percentage of sales were 19.9% for the second quarter of fiscal
2025 compared to 20.9% in the second quarter of fiscal 2024. As a
percentage of revenue, the decrease in other store operating
expenses, excluding depreciation, was primarily due to decreases in
repairs and maintenance activities, credit card fees and
technology, offset by an increase in insurance costs and janitorial
costs in the second quarter of fiscal 2025 compared to the second
quarter of fiscal 2024.
General and administrative expenses were $5.1 million for the
second quarter of fiscal 2025 compared to $3.8 million in the
second quarter of fiscal 2024. As a percentage of sales, general
and administrative expenses were 19.2% for the second quarter of
fiscal 2025 compared to 15.3% in the second quarter of fiscal 2024.
The increase in general and administrative expenses, including as a
percentage of total revenue, was primarily due to increases in
public company readiness initiatives, including additional
headcount, consulting fees and increased marketing, as well as an
increase in stock-based compensation expense.
Operating loss was $7.9 million for the second quarter of fiscal
2025 compared to $7.2 million in the second quarter of fiscal 2024.
The increase in operating loss was primarily due to higher
depreciation and operating expenses of four new locations open for
the entire second quarter of fiscal 2025 compared to the second
quarter of fiscal 2024, and expenses related to being a public
company.
Net loss was $9.3 million for the second quarter of fiscal 2025
compared to $7.3 million in the second quarter of fiscal 2024.
Liquidity and Capital
Resources
To date, we have funded our operations through proceeds received
from previous common stock and preferred stock issuances, through
borrowings under various lending commitments and through cash flow
from operations. As of October 13, 2024 and April 28, 2024, we had
$3.2 million and $13.2 million in cash and cash equivalents,
respectively. We anticipate significant positive cash flow in the
fiscal third quarter as holiday sales volumes increase
substantially. We continue to implement sales and cost-savings
measures to increase profitability, and will also evaluate and seek
to raise additional capital from outside sources as well as
additional funds from our existing lenders to address our future
liquidity needs.
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 13749807. 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 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 Pinstripes’ ability to continue as a
going concern and raise additional capital; 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
liabilities; and (vii) non-cash stock compensation expense. 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)
October 13,
2024
April 28, 2024
Assets
Current Assets
Cash and cash equivalents
$
3,244
$
13,171
Accounts receivable
1,339
1,137
Inventories
860
949
Prepaid expenses and other current
assets
1,396
2,101
Total current assets
6,839
17,358
Property and equipment, net
77,265
80,015
Operating lease right-of-use assets
74,672
66,362
Other long-term assets
2,659
3,586
Total assets
$
161,435
$
167,321
Liabilities, Redeemable Convertible
Preferred Stock, and Stockholders’ Deficit
Current Liabilities
Accounts payable
$
23,014
$
22,706
Amounts due to customers
9,482
8,633
Current portion of long-term notes
payable
6,659
4,818
Accrued occupancy costs
8,365
6,508
Other accrued liabilities
9,015
6,546
Current portion of operating lease
liabilities
15,243
15,259
Warrant liabilities
766
5,411
Total current liabilities
72,544
69,881
Long-term notes payable
77,447
70,677
Long-term accrued occupancy costs
158
277
Operating lease liabilities
96,972
94,256
Other long-term liabilities
3,168
1,386
Total liabilities
250,289
236,477
Commitments and contingencies
Stockholders’ deficit
Common stock (par value: $0.0001;
authorized: 430,000,000 shares; issued and outstanding: 40,087,785
shares at October 13, 2024 and 40,087,785 shares at April 28,
2024)
4
4
Additional paid-in capital
56,244
56,623
Accumulated deficit
(145,102
)
(125,783
)
Total stockholders’ deficit
(88,854
)
(69,156
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ deficit
$
161,435
$
167,321
Pinstripes Holdings,
Inc.
Unaudited Condensed
Consolidated Statements of Operations
(in thousands, except share
and per share amounts)
Twelve Weeks Ended
Twenty-Four Weeks
Ended
October 13,
2024
October 15,
2023
October 13,
2024
October 15,
2023
Food and beverage revenues
$
21,108
$
19,435
$
44,927
$
39,952
Recreation revenues
5,374
5,188
12,150
10,412
Total revenue
26,482
24,623
57,077
50,364
Cost of food and beverage
4,638
4,278
10,173
8,715
Store labor and benefits
10,308
9,337
21,966
18,634
Store occupancy costs, excluding
depreciation
4,932
4,583
11,487
5,590
Other store operating expenses, excluding
depreciation
5,283
5,134
10,714
9,556
General and administrative expenses
5,080
3,774
10,584
7,302
Depreciation expense
2,547
1,697
5,065
3,341
Pre-opening expenses
1,568
3,026
2,574
5,304
Operating loss
(7,874
)
(7,206
)
(15,486
)
(8,078
)
Interest expense, net
(4,898
)
(1,908
)
(9,892
)
(3,601
)
Gain on change in fair value of warrant
liabilities and other
3,573
1,759
6,248
1,350
Other expense
(48
)
—
(48
)
—
Loss before income taxes
(9,247
)
(7,355
)
(19,178
)
(10,329
)
Income tax expense (benefit)
63
(72
)
138
—
Net loss
(9,310
)
(7,283
)
(19,316
)
(10,329
)
Less: Cumulative unpaid dividends and
change in redemption amount of redeemable convertible preferred
stock
—
(394
)
—
(1,951
)
Net loss attributable to common
stockholders
$
(9,310
)
$
(7,677
)
$
(19,316
)
$
(12,280
)
Basic loss per share
$
(0.22
)
$
(0.64
)
$
(0.45
)
$
(1.02
)
Diluted loss per share
$
(0.22
)
$
(0.64
)
$
(0.45
)
$
(1.02
)
Weighted average shares outstanding,
basic
43,099,877
12,066,454
42,905,215
12,094,424
Weighted average shares outstanding,
diluted
43,099,877
12,066,454
42,905,215
12,094,424
Pinstripes Holdings,
Inc.
Unaudited Condensed
Consolidated Statements of Cash Flows
(in thousands)
Twenty-Four Weeks
Ended
October 13, 2024
October 15, 2023
Cash flows from operating
activities
Net loss
$
(19,316
)
$
(10,329
)
Adjustments to reconcile net loss to
net cash used in operating activities
Gain on modification of operating
leases
—
(3,281
)
Depreciation expense
5,065
3,341
Non-cash operating lease expense
3,136
2,646
Paid-in-kind interest
4,942
—
Operating lease tenant allowances
(863
)
1,272
Stock-based compensation
1,065
361
Gain on change in fair value of warrant
liabilities and other
(6,248
)
(1,350
)
Warrant expense
28
—
Interest on finance lease obligation
24
—
Amortization of debt issuance costs
1,199
897
(Increase) decrease in operating
assets
Accounts receivable
(202
)
188
Inventories
89
(28
)
Prepaid expenses and other current
assets
705
(85
)
Operating right-of-use asset
(3,602
)
—
Other long-term assets
927
(5,005
)
(Decrease) increase in operating
liabilities
Accounts payable
2,052
3,258
Amounts due to customers
849
809
Accrued occupancy costs
1,738
(4,210
)
Other accrued liabilities
3,416
289
Operating lease liabilities
(5,144
)
(4,697
)
Net cash (used in) operating
activities
(10,140
)
(15,924
)
Cash flows from investing
activities
Purchase of property and equipment
(2,810
)
(9,793
)
Net cash (used in) investing
activities
(2,810
)
(9,793
)
Cash flows from financing
activities
Proceeds from issuance of redeemable
convertible preferred stock, net
—
19,843
Payment of transaction costs incurred in
connection with the registration statements
(10
)
(1,540
)
Principal payments on finance lease
obligation
(73
)
—
Principal payments on long-term notes
payable
(1,858
)
(283
)
Proceeds from warrant issuances
67
—
Debt issuance costs
76
(247
)
Proceeds from long-term notes payable,
net
4,821
7,499
Net cash provided by financing
activities
3,023
25,272
Net change in cash and cash
equivalents
(9,927
)
(445
)
Cash and cash equivalents, beginning of
period
13,171
8,436
Cash and cash equivalents, end of
period
$
3,244
$
7,991
Supplemental disclosures of cash flow
information
Cash paid for interest
$
3,197
$
2,287
Cash paid for income taxes
$
61
$
—
Supplemental disclosures of non-cash
operating, investing and financing activities
Transaction costs incurred in connection
with the registration statements but not yet paid
$
66
$
—
Operating lease rent abatement
$
—
$
3,214
Right-of-use assets obtained in exchange
for lease liabilities
$
7,844
$
(560
)
Non-cash finance obligation
$
360
$
665
Issuance of contingently issuable
warrants
$
401
$
—
Reclassification of liability-classified
warrants
$
1,864
$
—
Reclassification of Oaktree Tranche 2
Written Option from short-term to long-term
$
1,012
$
—
Non-cash capital expenditures included in
accounts payable
$
1,719
$
2,798
Change in the redemption amount of the
redeemable convertible preferred stock
$
—
$
1,423
Accretion of cumulative dividends on
Series I redeemable convertible preferred stock
$
—
$
528
Pinstripes Holdings,
Inc.
Reconciliation of Net Loss to
Non-GAAP Adjusted EBITDA
(in thousands)
Twelve Weeks Ended
October 13,
2024
October 15,
2023
Net Loss
$
(9,310
)
$
(7,283
)
Depreciation expense
2,547
1,697
Interest expense, net
4,898
1,908
Income tax expense (benefit)
63
(72
)
Reported EBITDA
$
(1,802
)
$
(3,750
)
Public company readiness, financing, and
other extraordinary expenses1
1,745
868
Venue-level adjustments2
—
337
Gain on change in fair value of warrant
liabilities and other
(3,573
)
(1,759
)
Stock-based compensation
519
141
Adjusted EBITDA
$
(3,111
)
$
(4,163
)
Adjusted EBITDA Margin
(11.7
)%
(16.9
)%
1 Primarily represents legal and
audit-related costs associated with pursuing becoming a public
entity, amending financing agreements, and other related or
extraordinary 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
October 13,
2024
October 15,
2023
Loss from Operations
$
(7,874
)
$
(7,206
)
Loss from Operating Margin
(29.7
)%
(29.3
)%
Depreciation expense
2,547
1,697
Pre-opening expenses
1,568
3,026
General and administrative expenses
5,080
3,774
Venue-Level adjustments1
—
337
Venue-Level EBITDA
$
1,321
$
1,628
Venue-Level EBITDA Margin
5.0
%
6.6
%
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
October 13,
2024
October 15,
2023
Loss from Operations
$
(7,874
)
$
(7,206
)
Loss from Operating Margin
(29.7
)%
(29.3
)%
Depreciation expense
2,547
1,697
Pre-opening expenses
1,568
3,026
General and administrative expenses
5,080
3,774
Venue-Level adjustments1
—
337
Non-Mature Loss
521
280
Venue-Level EBITDA Mature
Venues
$
1,842
$
1,908
Venue-Level EBITDA Margin Mature
Venues
8.3
%
7.8
%
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/20241126232080/en/
Investor Relations: Jeff Priester 332-242-4370
Investor@pinstripes.com
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