3.9 Percentage Points Improvement in Company Owned and Operated Store Contribution Margin
76 Net New Store Openings During the Fourth Quarter,
1,022 System-Wide Stores at Year-End 2024
24.0 Million Registered Loyalty Club Members at Year-End,
Representing 29.7% Year-over-Year Growth
SHANGHAI and NEW YORK, April 15, 2025 (GLOBE NEWSWIRE) -- TH International Limited (Nasdaq: THCH), the exclusive operator of Tim Hortons coffee shops in China ("Tims China" or the "Company") today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2024.
FOURTH QUARTER 2024 HIGHLIGHTS
-- Total revenues of RMB332.6 million (USD45.6 million), representing
a 12.0% decrease from the same quarter of 2023.
-- System sales1 of RMB345.7 million (USD47.4 million), representing a 7.9%
decrease from the same quarter of 2023.
-- Net new store openings totaled 76 (12 company owned and operated stores
and 64 franchised stores).
-- Company owned and operated store contribution2, previously reported as
adjusted store EBITDA, was RMB13.0 million (USD1.8 million), representing
a 353.1% increase from the same quarter of 2023.
-- Company owned and operated store contribution margin3, previously
reported as adjusted store EBITDA margin, was 4.8%, representing a 3.9
percentage points improvement over the same quarter of 2023.
FULL YEAR 2024 HIGHLIGHTS
-- Total revenues were RMB1,391.2 million (USD190.6 million), representing
a 10.8% decrease from 2023.
-- Net new store openings for franchised stores totaled 163 in 2024 (120
system-wide net new store openings, as certain underperforming company
owned and operated stores were closed and we focused on sub-franchise
development).
-- Registered loyalty club members totaled 24.0 million members as of
December 31, 2024, representing a 29.7% growth from 2023.
COMPANY MANAGEMENT STATEMENT
Mr. Yongchen Lu, CEO & Director of Tims China, commented, "2024 marked a pivotal year for the Company, we solidified our differentiated strategic positioning in "Coffee + Freshly Prepared Food", completed the made-to-order renovation of almost all company owned and operated stores, surpassed 24 million registered loyalty club members, and received over 6,200 individual sub-franchisee applications by year-end. In Q4 2024, we celebrated the grand opening of the 1,000(th) Tims China shop in central Shanghai, where the Tims China story began. This achievement is a testament to Tims China's enduring presence in the region, and to our ambition for further growth.
Amidst macroeconomic volatility and intense market competition, our team demonstrated great resilience and achieved significant profitability improvements through enhanced operational efficiencies, supply chain optimizations, and rigorous cost controls. 2024 full-year company owned and operated store contribution margin and full-year adjusted corporate EBITDA margin improved by 5.3 percentage points, and 9.9 percentage points year-over-year, respectively."
Mr. Dong (Albert) Li, CFO of Tims China, commented, "We're committed to further improving our financial performance by refining store unit economics and driving efficiencies at both store and corporate levels. Our sub-franchise business also contributed steady cash flows and profitability. During the fourth quarter of 2024, we continued to improve our company owned and operated store contribution margin and adjusted corporate EBITDA margin by 3.9 percentage points and 0.1 percentage points, respectively. Specifically, our food and packaging costs, labor costs (as a percentage of revenues from company owned and operated stores), and our marketing expenses as a percentage of total revenues decreased by 3.7 percentage points, 2.5 percentage points, and 1.5 percentage points, respectively."
Mr. Li continued, "Looking ahead, and thanks to our team's tireless work, Tims China is standing at the turning point to achieve full-year corporate EBITDA breakeven. With profitable growth being front and center of everything we do, we are excited to further enhance our supply chain capabilities and efficiencies, roll out our differentiating made-to-order fresh and healthy food preparation model to drive traffic, finesse optimization of overall store unit economics, and accelerate the expansion of our successful sub-franchising."
FOURTH QUARTER 2024 FINANCIAL RESULTS
Total revenues were RMB332.6 million (USD45.6 million) for the three months ended December 31, 2024, representing a decrease of 12.0% from RMB377.9 million in the same quarter of 2023. Total revenues comprise:
-- Revenues from Company owned and operated stores were RMB270.2 million
(USD37.0 million) for the three months ended December 31, 2024,
representing a decrease of 17.7% from RMB328.2 million in the same
quarter of 2023. The decrease was primarily attributable to closures of
certain underperforming stores and a 12.3% decrease in same-store sales
growth for company owned and operated stores in the fourth quarter of
2024. The decrease was also attributable to a 13.8% decline in the number
of orders from 11.6 million in the fourth quarter of 2023 to 10.0 million
in the same quarter of 2024, and a 1.5% year-over-year decrease in
average ticket size.
-- Other revenues were RMB62.5 million (USD8.6 million) for the three months
ended December 31, 2024, representing an increase of 25.8% from RMB49.7
million in the same quarter of 2023. The increase was primarily due to
the expansion of our franchise business as the number of our franchised
stores increased from 283 as of December 31, 2023 to 446 as of December
31, 2024.
Company owned and operated store costs and expenses were RMB283.9 million (USD38.9 million) for the three months ended December 31, 2024, representing a decrease of 18.8% from RMB349.6 million in the same quarter of 2023. Company owned and operated store costs and expenses comprise:
-- Food and packaging costs were RMB84.8 million (USD11.6 million) for the
three months ended December 31, 2024, representing a decrease of 26.5%
from RMB115.3 million in the same quarter of 2023, as we continue to
benefit from higher efficiencies in supply chains and cost reduction on
raw materials, logistic and warehousing expenses. Accordingly, food and
packaging costs as a percentage of revenues from company owned and
operated stores decreased by 3.7 percentage points from 35.1% in the
fourth quarter of 2023 to 31.4% in the same quarter of 2024.
-- Rental and property management fees were RMB56.9 million (USD7.8 million)
for the three months ended December 31, 2024, representing a decrease of
16.0% from RMB67.7 million in the same quarter of 2023, mainly due to the
closure of certain underperforming stores and in line with the revenue
trend. Rental and property management fees as a percentage of revenues
from company owned and operated stores increased by 0.4 percentage points
from 20.6% in the fourth quarter of 2023 to 21.0% in the same quarter of
2024.
-- Payroll and employee benefits expenses were RMB54.9 million (USD7.5
million) for the three months ended December 31, 2024, representing a
decrease of 26.7% from RMB74.9 million in the same quarter of 2023.
Payroll and employee benefits expenses as a percentage of revenues from
company owned and operated stores decreased by 2.5 percentage points from
22.8% in the fourth quarter of 2023 to 20.3% in the same quarter of 2024,
primarily due to the continuous refinement of staffing arrangements and
optimization of store managerial efficiency.
-- Delivery costs were RMB28.6 million (USD3.9 million) for the three months
ended December 31, 2024, representing a decrease of 5.6% from RMB30.3
million in the same quarter of 2023, which was in line with the trend of
delivery orders. Delivery costs as a percentage of revenues from company
owned and operated stores increased by 1.4 percentage points to 10.6% in
the fourth quarter of 2024 compared to 9.2% in the same quarter of 2023.
-- Other operating expenses were RMB22.7 million (USD3.1 million) for the
three months ended December 31, 2024, representing a decrease of 13.8%
from RMB26.4 million in the same quarter of 2023, driven by the cost
optimization measures and in line with the revenue trend. Other operating
expenses as a percentage of revenues from company owned and operated
stores increased by 0.4 percentage points to 8.4% in the fourth quarter
of 2024 compared to 8.0% in the same quarter of 2023.
-- Store depreciation and amortization expenses were RMB36.1 million (USD4.9
million), representing an increase of 3.2% from RMB35.0 million in the
same quarter of 2023, which was attributable to the accelerated
amortization of upfront unit fees in relation to the closure of certain
underperforming stores; offset by the decrease in the number of company
owned and operated stores from 619 as of December 31, 2023 to 576 as of
December 31, 2024. Store depreciation and amortization as a percentage of
revenues from company owned and operated stores increased by 2.8
percentage points to 13.4% in the fourth quarter of 2024 compared to
10.6% in the same quarter of 2023.
Costs of other revenues were RMB48.5 million (USD6.6 million) for the three months ended December 31, 2024, representing a decrease of 4.6% from RMB50.9 million in the same quarter of 2023, which was primarily driven by an increase in the revenues generated from franchise business as the number of our franchised stores increased from 283 as of December 31, 2023 to 446 as of December 31, 2024, offset by the streamlined e-commerce business. Costs of other revenues as a percentage of other revenues decreased by 24.8 percentage points from 102.5% in the fourth quarter of 2023 to 77.7% in the same quarter of 2024 due to higher margins we generated from both franchise business and e-commerce business during the fourth quarter of 2024.
Marketing expenses were RMB13.8 million (USD1.9 million) for the three months ended December 31, 2024, representing a decrease of 35.0% from RMB21.2 million in the same quarter of 2023, driven by our cost optimization measures and higher brand influence. Marketing expenses as a percentage of total revenues decreased by 1.5 percentage points from 5.6% in the fourth quarter of 2023 to 4.1% in the same quarter of 2024.
General and administrative expenses were RMB76.3 million (USD10.5 million) for the three months ended December 31, 2024, representing an increase of 23.8% from RMB61.7 million in the same quarter of 2023, which was primarily due to: (i) bonus accruals of RMB9.0 million (USD1.2 million) during the fourth quarter of 2024; (ii) increase in credit loss of account receivables of RMB9.6 million (USD1.3 million); and (iii) increase in professional fees of RMB13.6 million (USD1.9 million); offset by a reduction of our headquarter headcount and cost optimization measures. Adjusted general and administrative expenses, which excludes reversals of share-based compensation expenses of RMB0.7 million (USD0.1 million), were RMB77.1 million (USD10.6 million), representing an increase of 82.8% from RMB42.2 million in the same quarter of 2023. Adjusted general and administrative expenses as a percentage of total revenues increased by 12.0 percentage points from 11.2% in the fourth quarter of 2023 to 23.2% in the same quarter of 2024. For more information on the Company's non-GAAP financial measures, please see the section "Use of Non-GAAP Financial Measures" and the table captioned "Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures" set forth at the end of this earnings release.
Franchise and royalty expenses were RMB14.0 million (USD1.9 million) for the three months ended December 31, 2024, representing a decrease of 7.6% from RMB15.1 million in the same quarter of 2023, which was in line with the decrease in system sales. Franchise and royalty expenses as a percentage of total revenues increased by 0.2 percentage points, from 4.0% in the fourth quarter of 2023 to 4.2% in the same quarter of 2024 due to the increase of amortized upfront franchise fees.
Impairment losses of long-lived assets were RMB15.9 million (USD2.2 million) for the three months ended December 31, 2024, compared to RMB 89.6 million in the same quarter of 2023, which was primarily due to the decrease in the number of closures of underperforming company owned and operated stores.
As a result of the foregoing, operating loss was RMB117.2 million (USD16.1 million) for the three months ended December 31, 2024, a significant reduction compared to RMB218.4 million in the same quarter of 2023.
Adjusted Corporate EBITDA was a loss of RMB49.4 million (USD6.8 million) for the three months ended December 31, 2024, compared to a loss of RMB56.7 million in the same quarter of 2023. Adjusted Corporate EBITDA margin was negative 14.9% in the fourth quarter of 2024, representing an improvement of 0.1 percentage points from negative 15.0% in the same quarter of 2023.
Net loss from continuing operations was RMB138.9 million (USD19.0 million) for the three months ended December 31, 2024, compared to RMB297.4 million for the same quarter of 2023. Adjusted net loss was RMB98.0 million (USD13.4 million) for the three months ended December 31, 2024, compared to RMB120.3 million for the same quarter of 2023. Adjusted net loss margin was negative 29.5% in the fourth quarter of 2024, compared to negative 31.8% in the same quarter of 2023.
Net gain from discontinued operations was RMB6.5 million (USD0.9 million) for the three months ended December 31, 2024, compared to net loss of RMB13.8 million for the same quarter of 2023.
Net loss was RMB132.4 million (USD18.1 million) for the three months ended December 31, 2024, compared to RMB311.2 million for the same quarter of 2023.
Basic and diluted net loss per ordinary share was RMB4.05 (USD0.55) in the fourth quarter of 2024, compared to RMB9.71 in the same quarter of 2023. Adjusted basic and diluted net loss per ordinary share was RMB2.99 (USD0.41) in the fourth quarter of 2024, compared to RMB3.78 in the same quarter of 2023.
Liquidity
As of December 31, 2024, the Company's total cash and cash equivalents, restricted cash and time deposits were RMB184.2 million (USD25.2 million), compared to RMB219.5 million as of December 31, 2023. The change was primarily attributable to the financing from our founding shareholders, partially offset by cash disbursements on the back of the expansion of our business and store network nationwide and the repayment of certain bank borrowings.
KEY OPERATING DATA
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' 61(st) 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.
https://s1.c-conf.com/diamondpass/10046826-m38kfp.html
Participants may also view the live webcast by registering through below weblink:
https://edge.media-server.com/mmc/p/n2xgnen5
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 https://ir.timschina.com 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) $(QSR)$.
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 https://www.timschina.com.
INVESTOR AND MEDIA CONTACTS
Investor Relations
Gemma Bakx
IR@timschina.com, or gemma.bakx@cartesiangroup.com
Public and Media Relations
Patty Yu
Patty.Yu@timschina.com
TH INTERNATIONAL LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of RMB and US$, except for number
of shares)
As of
--------------------------------------
December 31, December 31, 2024
2023 (Unaudited
------------ ------------------------
RMB RMB US$
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$)
For the three months ended For the year ended December
December 31, 31,
---------------------------- ------------------------------
2023 2024 2023 2024
--------- ----------------- --------- -------------------
RMB RMB US$ 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) $(533.SI)$ 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.
(END) Dow Jones Newswires
April 15, 2025 07:06 ET (11:06 GMT)
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