Chanticleer Holdings Reports 18.4% Increase in Restaurant Revenue, and Strong Improvements in Gross Profit Margins for First Quarter 2013

Hooters
Published: May 14th, 2013

First Quarter Same Store Gross Sales Increase 10.1% in Local Currency

CHARLOTTE, NC - (Marketwired - May 14, 2013) - Chanticleer Holdings, Inc. (NASDAQ: HOTR) ("Chanticleer" or "the Company"), a franchisee of international Hooters® restaurants and a minority owner in the privately held parent company of the Hooters® brand, Hooters of America, ("HOA"), announced its financial results for the first quarter ended March 31, 2013.

Highlights Include:

• Restaurant revenue for the first quarter 2013 increased 18.4% to $1.7 million, compared with $1.4 million in the first quarter 2012. As of March 31, 2013, the Company had six restaurants (five consolidated and one joint venture) compared with five restaurants (four consolidated and one joint venture) as of March 31, 2012.
• Gross profit margins for the first quarter 2013 improved 3.0% to 61.1% compared with 58.1% in the first quarter 2012.
• Same-store gross sales for restaurants opened more than a year increased 10.1% in local currency (Rands) and decreased 5.4% in U.S. dollars for the 2012 first quarter compared with last year, due to fluctuations in the exchange rate.
• Restaurant operating expenses for the first quarter 2013 were $980,000 or 59.7% of restaurant revenue, compared with $769,000 or 55.4% of restaurant revenue for the year-ago quarter. Operating expenses for the 2013 quarter included our Budapest, Hungary location (opened in August 2012) whose operating expenses were a higher percentage of revenue compared with our South African stores.
• Net loss from continuing operations for the first quarter 2013 was $747,000 or $0.20 per share, compared with $642,000 or $0.26 per share for the year-ago first quarter. Net loss for the 2013 first quarter was $738,000 or $0.20 per share, compared with $704,000 or $0.28 per share.
• In March 2013, the company announced its exiting of the operation of its investment management business. During the second quarter 2013 the company is expected to receive two months of cost-saving benefits, and beginning in the third quarter 2013, the savings are estimated to be $50,000 per quarter. The revenues and expenses are presented as discontinued operations in our statement of operations.
• Restaurant EBITDA for the first quarter 2013 was approximately $61,000 compared with $97,000 in the first quarter 2012. Our improved gross margins were offset by an increase in operating expenses, including professional fees and higher payroll costs.
• General and administrative expenses for the first quarter 2013 were $730,000 or 44.0% of revenue, compared with $450,000 or 32.4% of total revenue in the year-ago quarter. These costs increased primarily because of increases in audit and legal fees, additional costs related to NASDAQ fees and SEC filings, as well as an increase in corporate personnel.
• Subsequent to the end of the quarter the company announced it had selected a site in Townsville, Australia for its seventh Hooters restaurant, and the approval of a site by HOA in Surfers Paradise, Australia, which will mark its eighth location.
• The company settled outstanding liabilities from a South African bank, with a payment of approximately $99,000 and a release of all other liabilities, resulting in a gain on extinguishment of debt of approximately $71,000, which appears as "other income" in the current income statement. In April 2013 the company entered into a credit agreement with Paragon Commercial Bank for an additional $500,000 revolving-credit facility to finance new business ventures and general corporate working capital requirements.

Mike Pruitt, President and CEO of Chanticleer, commented, "With continued improvements in revenue, gross margins and same-store sales, we are well on our way toward meeting our 2013 goal of having 10 restaurants opened by year-end 2013. We are excited about the pending opening of our two new Hooters restaurants in Australia, which are both located in vibrant and growing markets. Construction has commenced in Townsville, and we expect to open that restaurant in the third quarter of 2013. Following that opening, we plan to begin construction on Surfers Paradise.

"We believe our strong increase in same-store sales is attributable to several factors, including restaurant remodeling, improvements to our menu and the growing excitement of the iconic Hooters brand. Hooters continues to be a destination stop for sports enthusiasts, and our new menu offerings attract more health-conscious patrons to our restaurants as well as women.

"Our Budapest restaurant has been a successful launch into the Eastern European market; we increased our seating space by over 50% with the opening of the new patio area, which has been extremely well-received by our customers. We are looking forward with great anticipation to our next Eastern European location, and to replicating the success of Hungary. We also continue to explore the Brazilian market, and we are seeking a location that will fit well with our successful business model.

"We are also pleased with our financial results this quarter. Despite a seasonally slow quarter, we produced strong improvements in restaurant sales growth, same-store sales growth and gross profits. We look forward to a successful year ahead as we continue to expand our footprint and launch our new Hooters restaurants."

Use of Non-GAAP Measures

Chanticleer Holdings, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the company discloses information regarding EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income (loss) from continuing operations to exclude taxes, interest, and depreciation and amortization, EBITDA also excludes pre-opening costs for our restaurants and gain on extinguishment of debt. EBITDA is not a measure of performance defined in accordance with GAAP. However, EBITDA is used internally in planning and evaluating the company's operating performance. Accordingly, management believes that disclosure of this metric offers investors, bankers and other stakeholders an additional view of the company's operations that, when coupled with the GAAP results, provides a more complete understanding of the company's financial results.

EBITDA should not be considered as an alternative to net loss or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the company's performance. A reconciliation of GAAP net income (loss) to EBITDA is included in the accompanying financial schedules.

About Chanticleer Holdings, Inc.

Chanticleer Holdings (HOTR) is a franchisee of international Hooters® restaurants is focused on expanding the Hooters® casual dining restaurant brand in international emerging markets. Chanticleer currently owns in whole or part of the exclusive franchise rights to develop and operate Hooters restaurants in South Africa, Hungary and parts of Brazil, and has joint ventured with the current Hooters franchisee in Australia, while evaluating several additional international opportunities. The Company currently owns and operates in whole or part of six Hooters restaurants in its international franchise territories: Durban, Johannesburg, Cape Town and Emperor's Palace in South Africa; Campbelltown in Australia; and Budapest in Hungary. Chanticleer maintains a minority ownership stake in Hooters of America and its CEO, Mike Pruitt, is also a member of Hooters' Board of Directors. Hooters of America is an operator and the franchisor of over 430 Hooters® restaurants in 28 countries.

For further information, please visit www.chanticleerholdings.com

Facebook: www.Facebook.com/ChanticleerHOTR
Twitter: http://Twitter.com/ChanticleerHOTR

For further information on Hooters of America, visit www.Hooters.com
Facebook: www.Facebook.com/Hooters
Twitter: http://Twitter.com/Hooters

Safe Harbor/Risk Factors

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

• Operating losses continuing for the foreseeable future; we may never be profitable;
• Our business strategy includes operating a new line of business that is distinct and separate from our primary existing operations, which could be subject to additional business and operating risks;
• Inherent risks in expansion of operations, including our ability to acquire additional territories, generate profits from new restaurants, find suitable sites and develop and construct locations in a timely and cost-effective way;
• General risk factors affecting the restaurant industry, including current economic climate, costs of labor and food prices;
• Intensive competition in our industry and competition with national, regional chains and independent restaurant operators;
• Our rights to operate and franchise Hooters-branded restaurants are dependent on the Hooters' franchise agreements;
• Our business depends on our relationship with Hooters;
• We do not have full operational control over the businesses of our franchise partners;
• Failure by Hooters to protect its intellectual property rights, including its brand image;
• Our business has been adversely affected by declines in discretionary spending and may be affected by changes in consumer preferences;
• Increases in costs, including food, labor and energy prices;
• Our business and the growth of our Company is dependent on the skills and expertise of management and key personnel;
• Constraints could effect our ability to maintain competitive cost structure, including, but not limited to labor constraints;
• Work stoppages at our restaurants or supplier facilities or other interruptions of production;
• Our food service business and the restaurant industry are subject to extensive government regulation;
• We may be subject to significant foreign currency exchange controls in certain countries in which we operate;
• Inherent risk in foreign operation;
• We may not attain our target development goals and aggressive development could cannibalize existing sales;
• Current conditions in the global financial markets and the distressed economy;
• A decline in market share or failure to achieve growth;
• Unusual or significant litigation, governmental investigations or adverse publicity, or otherwise;
• Adverse effects on our operations resulting from the current class action litigation in which the Company is one of several defendants;
• Adverse effects on our results from a decrease in or cessation or clawback of government incentives related to investments;
• Adverse effects on our operations resulting from certain geo-political or other events.

Chanticleer cannot be certain that any expectation, forecast, or assumption made in preparing any forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its Web site or otherwise. We undertake no obligation to update the forward-looking statements provided to reflect events or circumstances that occur after the date on which they were made. Further information on our business, including important factors which could affect actual results are discussed in the Company's filings with the SEC, including its Annual Report on Form 10-K under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Contact:

Chanticleer Holdings, Inc.
Mike Pruitt
Chairman/CEO
Phone: 704.366.5122 x 1
mp@chanticleerholdings.com

Dian Griesel Inc.
Investor Relations
Cheryl Schneider
cschneider@dgicomm.com

Public Relations
Enrique Briz
ebriz@dgicomm.com
212.825.3210