FAT BRANDS INC. REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS
FAT Brands Inc. (NASDAQ: FAT) reported its fiscal second quarter 2024 financial results, showing significant growth and expansion. Key highlights include:
- Total revenue increased 42.4% to $152.0 million
- System-wide sales growth of 8.6%
- 24 new store openings in Q2, with 45 year-to-date
- Over 180 development deals signed year-to-date
- Pipeline of approximately 1,100 locations
However, the company also reported a net loss of $39.4 million, or $2.43 per diluted share. Adjusted EBITDA was $15.7 million, down from $23.1 million in Q2 2023. The company continues to focus on expanding its portfolio, particularly the Twin Peaks brand, and creating value through organic growth and strategic acquisitions.
FAT Brands Inc. (NASDAQ: FAT) ha riportato i risultati finanziari del secondo trimestre fiscale 2024, evidenziando una crescita significativa e l'espansione. I punti salienti includono:
- Ricavi totali aumentati del 42,4% a 152,0 milioni di dollari
- Crescita delle vendite a livello di sistema del 8,6%
- 24 nuove aperture di negozi nel secondo trimestre, con un totale di 45 dall'inizio dell'anno
- Oltre 180 contratti di sviluppo firmati dall'inizio dell'anno
- Pipeline di circa 1.100 location
Tuttavia, l'azienda ha anche riportato una perdita netta di 39,4 milioni di dollari, ovvero 2,43 dollari per azione diluita. L'EBITDA rettificato è stato di 15,7 milioni di dollari, in diminuzione rispetto ai 23,1 milioni di dollari del secondo trimestre 2023. L'azienda continua a concentrarsi sull'espansione del proprio portafoglio, in particolare del marchio Twin Peaks, e sulla creazione di valore attraverso la crescita organica e acquisizioni strategiche.
FAT Brands Inc. (NASDAQ: FAT) reportó sus resultados financieros del segundo trimestre fiscal 2024, mostrando un crecimiento significativo y expansión. Los puntos destacados incluyen:
- Los ingresos totales aumentaron un 42.4% a 152.0 millones de dólares
- Crecimiento de ventas a nivel de sistema del 8.6%
- 24 nuevas aperturas de tiendas en el segundo trimestre, con un total de 45 en lo que va del año
- Más de 180 contratos de desarrollo firmados en lo que va del año
- Pipeline de aproximadamente 1,100 ubicaciones
No obstante, la compañía también reportó una pérdida neta de 39.4 millones de dólares, o 2.43 dólares por acción diluida. El EBITDA ajustado fue de 15.7 millones de dólares, una disminución desde los 23.1 millones de dólares en el segundo trimestre de 2023. La compañía sigue enfocándose en expandir su portafolio, particularmente la marca Twin Peaks, y en crear valor a través del crecimiento orgánico y adquisiciones estratégicas.
FAT Brands Inc. (NASDAQ: FAT)는 2024 회계 연도 두 번째 분기 재무 결과를 발표하며 상당한 성장과 확장을 보여주었습니다. 주요 내용은 다음과 같습니다:
- 총 수익이 42.4% 증가하여 1억 5,200만 달러에 달함
- 시스템 전반의 판매 성장률 8.6%
- 2분기에 24개 신규 매장 오픈, 연초부터 총 45개
- 연초부터 180건 이상의 개발 계약 체결
- 약 1,100개의 위치에 대한 계획
그러나 회사는 3940만 달러의 순손실을 보고했습니다. 이는 희석주당 2.43달러에 해당합니다. 조정 EBITDA는 1,570만 달러로, 2023년 2분기 2,310만 달러에서 감소했습니다. 회사는 특히 Twin Peaks 브랜드를 중심으로 포트폴리오 확장과 유기적 성장, 전략적 인수를 통한 가치 창출에 집중하고 있습니다.
FAT Brands Inc. (NASDAQ: FAT) a publié ses résultats financiers pour le deuxième trimestre fiscal 2024, montrant une croissance significative et une expansion. Les principaux points à retenir incluent :
- Revenus totaux en hausse de 42,4 % à 152,0 millions de dollars
- Croissance des ventes à l'échelle du système de 8,6 %
- 24 nouvelles ouvertures de magasins au deuxième trimestre, avec un total de 45 depuis le début de l’année
- Plus de 180 contrats de développement signés depuis le début de l’année
- Pipeline d'environ 1 100 emplacements
Cependant, l'entreprise a également rapporté une perte nette de 39,4 millions de dollars, soit 2,43 dollars par action diluée. L'EBITDA ajusté s'élevait à 15,7 millions de dollars, en baisse par rapport à 23,1 millions de dollars au deuxième trimestre 2023. L'entreprise continue de se concentrer sur l'expansion de son portefeuille, en particulier de la marque Twin Peaks, et sur la création de valeur par la croissance organique et les acquisitions stratégiques.
FAT Brands Inc. (NASDAQ: FAT) hat die finanziellen Ergebnisse für das zweite Quartal des Geschäftsjahres 2024 veröffentlicht, die ein signifikantes Wachstum und Expansion zeigen. Die wichtigsten Punkte sind:
- Der Gesamtumsatz stieg um 42,4% auf 152,0 Millionen US-Dollar
- Umsatzwachstum im gesamten System von 8,6%
- 24 neue Filialeröffnungen im 2. Quartal, insgesamt 45 seit Jahresbeginn
- Über 180 unterzeichnete Entwicklungsgeschäfte seit Jahresbeginn
- Pipeline von etwa 1.100 Standorten
Das Unternehmen berichtete jedoch auch von einem Nettoverlust von 39,4 Millionen US-Dollar, was 2,43 US-Dollar pro verwässerter Aktie entspricht. Das bereinigte EBITDA betrug 15,7 Millionen US-Dollar, ein Rückgang von 23,1 Millionen US-Dollar im 2. Quartal 2023. Das Unternehmen konzentriert sich weiterhin auf die Erweiterung seines Portfolios, insbesondere der Marke Twin Peaks, und die Schaffung von Werten durch organisches Wachstum und strategische Übernahmen.
- Total revenue increased 42.4% to $152.0 million compared to Q2 2023
- System-wide sales growth of 8.6% in Q2 2024
- 24 new store openings during Q2, with 45 year-to-date
- Over 180 development deals signed year-to-date, compared to 226 for all of 2023
- Current pipeline of approximately 1,100 locations
- Plans to open 12-15 new Twin Peaks lodges in 2024
- Net loss of $39.4 million, or $2.43 per diluted share, compared to $7.1 million in Q2 2023
- Year-to-date system-wide same-store sales declined 1.6% in Q2 2024
- Adjusted EBITDA decreased to $15.7 million from $23.1 million in Q2 2023
- Adjusted net loss of $30.9 million, compared to adjusted net income of $3.0 million in Q2 2023
- Total other expense increased to $34.8 million from $24.2 million in Q2 2023
Insights
FAT Brands' Q2 2024 results present a mixed picture. While the company showed impressive revenue growth of
The revenue boost is largely attributed to the acquisition of Smokey Bones in September 2023 and new restaurant openings. However, the system-wide same-store sales decline of
The company's aggressive expansion strategy is evident, with 45 new restaurants opened year-to-date and plans for over 120 in 2024. The pipeline of approximately 1,100 locations and 180 development deals signed year-to-date indicate strong growth potential. However, this rapid expansion has led to increased costs, with general and administrative expenses rising by a staggering
The adjusted EBITDA decreased to
Investors should closely monitor the company's ability to manage its debt, as interest expenses increased to
FAT Brands' Q2 2024 results reveal intriguing market dynamics. The company's system-wide sales growth of
The company's multi-brand strategy, now encompassing 18 restaurant brands, provides diversification but also increases complexity. The focus on Twin Peaks expansion, with plans to end 2024 with approximately 125 lodges, indicates a bet on the sports bar and grill segment. This could be a response to changing consumer preferences post-pandemic, with a focus on experiential dining.
The strong new franchisee activity and interest in co-branding opportunities highlight the appeal of FAT Brands' portfolio to operators. This could lead to accelerated growth and market penetration. However, the challenge lies in maintaining brand identity and quality across this diverse and rapidly expanding network.
The conversion of Smokey Bones locations to Twin Peaks represents an interesting pivot, potentially indicating a shift in market demand or a strategy to optimize real estate assets. This adaptive approach could be important in navigating the evolving restaurant landscape.
Overall, FAT Brands' market strategy appears to be one of aggressive expansion and portfolio optimization. The success of this approach will depend on the company's ability to execute effectively across multiple brands and markets, while also addressing the underlying issues causing same-store sales declines.
Conference call and webcast today at 5:00 p.m. ET
LOS ANGELES, July 31, 2024 (GLOBE NEWSWIRE) -- FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported financial results for the fiscal second quarter ended June 30, 2024.
“Over the last three years, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with approximately 2,300 units across 40 countries and 49 U.S. states,” said Andy Wiederhorn, Chairman of FAT Brands. “We have opened 45 restaurants year to date, including 24 that opened during the second quarter, and plan to open over 120 new restaurants in 2024. We are seeing strong new franchisee activity as well as continued demand from existing franchise partners to develop other brands within our portfolio and heightened interest from our franchise partners who are eager to explore additional co-branding opportunities that leverage synergies within our brand offerings.”
Ken Kuick, Co-Chief Executive Officer of FAT Brands, commented, “We have signed over 180 development deals year to date, compared to 226 deals for the entirety of 2023, bringing our current pipeline to approximately 1,100 locations.” Kuick continued, “Continuing in 2024 is our focus on the expansion of Twin Peaks. We opened four new lodges during the first half of 2024 and plan to open another 12 to 15 new Twin Peaks lodges in 2024, ending the year with approximately 125 lodges. Additionally, our first conversion of a Smokey Bones location is officially underway. We see this as the first of many sites we will use to fuel Twin Peaks’ fast-paced growth.”
Rob Rosen, Co-Chief Executive Officer of FAT Brands, concluded, “Opportunities in 2024 are abundant. Our long-term strategy is to create value through the organic expansion of our existing brands, acquire additional brands that strategically complement our portfolio, realize value from strategic divestments when appropriate to manage outstanding debt, and ultimately increase long-term value for our stakeholders.”
Fiscal Second Quarter 2024 Highlights
- Total revenue improved
42.4% to$152.0 million compared to$106.8 million in the fiscal second quarter of 2023- System-wide sales growth of
8.6% in the fiscal second quarter of 2024 compared to the prior year fiscal quarter- Year-to-date system-wide same-store sales declined of
1.6% in the fiscal second quarter of 2024 compared to the prior year
- Year-to-date system-wide same-store sales declined of
- 24 new store openings during the fiscal second quarter of 2024
- System-wide sales growth of
- Net loss of
$39.4 million , or$2.43 per diluted share, compared to$7.1 million , or$0.53 per diluted share, in the fiscal second quarter of 2023
- EBITDA(1) of
$6.8 million compared to$25.6 million in the fiscal second quarter of 2023 - Adjusted EBITDA(1) of
$15.7 million compared to$23.1 million in the fiscal second quarter of 2023 - Adjusted net loss(1) of
$30.9 million , or$1.93 per diluted share, compared to adjusted net income(1) of$3.0 million , or
(1) EBITDA, adjusted EBITDA and adjusted net (loss) income are non-GAAP measures defined below, under “Non- GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net (loss) income are included in the accompanying financial tables.
Summary of Fiscal Second Quarter 2024 Financial Results
Total revenue increased
Costs and expenses consist of general and administrative expense, cost of restaurant and factory revenues, depreciation and amortization, refranchising net loss and advertising fees. Costs and expenses increased
General and administrative expense increased
Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and dough factory and increased
Depreciation and amortization increased
Refranchising net loss in the second quarter of 2024 of
Advertising expenses increased
Total other expense, net, for the second quarter of 2024 and 2023 was
Adjusted net loss(1) of
Key Financial Definitions
New store openings - The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of stores openings has, and will continue to have, an impact on our results.
Same-store sales growth - Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year.
System-wide sales growth - System wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of
acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period.
Conference Call and Webcast
FAT Brands will host a conference call and webcast to discuss its fiscal second quarter 2024 financial results today at 5:00 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 1-844-826-3035 from the U.S. or 1-412-317-5195 internationally. A replay will be available after the call until Wednesday, August 21, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10189773. The webcast will be available at www.fatbrands.com under the “Investors” section and will be archived on the site shortly after the call has concluded.
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, the timing and performance of new store openings, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward- looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.
Non-GAAP Measures (Unaudited)
This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net (loss) income.
EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP.
Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising loss, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations.
Adjusted net (loss) income is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net (loss) income is defined as net (loss) income plus the impact of adjustments and the tax effects of such adjustments. Adjusted net (loss) income is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net (loss) income as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results.
Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below.
Investor Relations:
ICR
Michelle Michalski
ir-fatbrands@icrinc.com
646-277-1224
Media Relations:
Erin Mandzik emandzik@fatbrands.com 860-212-6509
FAT Brands Inc. Consolidated Statements of Operations
Thirteen Weeks Ended Twenty-Six Weeks Ended
| (In thousands, except share and per share data) | June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 | |
| Revenue | |||||
| Royalties | $ 23,318 | $ 22,751 | $ 45,265 | $ | 45,236 |
| Restaurant sales | 107,410 | 62,778 | 213,348 | 125,379 | |
| Advertising fees | 10,065 | 9,668 | 19,861 | 19,019 | |
| Factory revenues | 9,636 | 9,686 | 19,110 | 18,851 | |
| Franchise fees | 1,113 | 763 | 2,594 | 1,565 | |
| Other revenue | 498 | 1,118 | 3,829 | 2,405 | |
| Total revenue | 152,040 | 106,764 | 304,007 | 212,455 | |
| Costs and expenses | |||||
| General and administrative expense | 29,558 | 9,947 | 59,563 | 38,362 | |
| Cost of restaurant and factory revenues | 100,113 | 59,502 | 199,163 | 118,589 | |
| Depreciation and amortization | 10,246 | 7,061 | 20,440 | 14,177 | |
| Refranchising loss | 175 | 179 | 1,683 | 338 | |
| Advertising fees | 14,651 | 11,610 | 27,243 | 22,137 | |
| Total costs and expenses | 154,743 | 88,299 | 308,092 | 193,603 | |
| (Loss) income from operations | (2,703) | 18,465 | (4,085) | 18,852 | |
| Other (expense) income, net | |||||
| Interest expense | (29,586) | (20,008) | (59,209) | (45,098) | |
| Interest expense related to preferred shares | (4,417) | (4,311) | (8,835) | (9,354) | |
| Net gain on extinguishment of debt | — | — | 427 | — | |
| Other (expense) income, net | (752) | 109 | (548) | 265 | |
| Total other expense, net | (34,755) | (24,210) | (68,165) | (54,187) | |
| Loss before income tax provision | (37,458) | (5,745) | (72,250) | (35,335) | |
| Income tax provision | (1,901) | (1,346) | (5,425) | (3,882) | |
| Net loss | $ (39,359) | $ (7,091) | $ (77,675) | $ | (39,217) |
| Net loss | $ (39,359) | $ (7,091) | $ (77,675) | $ | (39,217) |
| Dividends on preferred shares | (1,920) | (1,615) | (3,801) | (3,381) | |
| $ (41,279) | $ (8,706) | $ (81,476) | $ | (42,598) | |
| Basic and diluted loss per common share | $ (2.43) | $ (0.53) | $ (4.80) | $ | (2.58) |
| Basic and diluted weighted average shares | |||||
| outstanding | 17,007,352 | 16,522,379 16,977,376 | 16,521,590 | ||
| Cash dividends declared per common share | $ 0.14 | $ 0.14 $ 0.28 | $ 0.28 | ||
FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation
Thirteen Weeks Ended Twenty-Six Weeks Ended
| (In thousands) | June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 |
| Net loss | $ (39,359) | $ (7,091) | $ (77,675) | $ (39,217) |
| Interest expense, net | 34,003 | 24,319 | 68,044 | 54,452 |
| Income tax provision | 1,901 | 1,346 | 5,425 | 3,882 |
| Depreciation and amortization | 10,246 | 7,061 | 20,440 | 14,177 |
| EBITDA | 6,791 | 25,635 | 16,234 | 33,294 |
| Bad debt expense | (1,729) | (13,106) | (1,561) | (12,071) |
| Share-based compensation expenses | 677 | 477 | 1,422 | 1,572 |
| Non-cash lease expenses | 758 | 293 | 1,388 | 674 |
| Refranchising loss | 175 | 179 | 1,683 | 338 |
| Litigation costs | 7,852 | 6,924 | 11,660 | 14,668 |
| Severance | 19 | 1,036 | 41 | 1,036 |
| Net loss related to advertising fund deficit | 1,140 | 1,688 | 3,422 | 2,773 |
| Net gain on extinguishment of debt | — | — | (427) | — |
| Pre-opening expenses | 63 | 11 | 91 | 40 |
| Adjusted EBITDA | $ 15,747 | $ 23,137 | $ 33,953 | $ 42,325 |
FAT Brands Inc. Adjusted Net (Loss) Income Reconciliation
Thirteen Weeks Ended Twenty-Six Weeks Ended
| (In thousands, except share and per share data) | June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 |
| Net loss | $ (39,359) | $ (7,091) | $ (77,675) | $ (39,217) |
| Refranchising loss | 175 | 179 | 1,683 | 338 |
| Net gain on extinguishment of debt | — | — | (427) | — |
| Litigation costs | 7,852 | 6,924 | 11,660 | 14,668 |
| Severance | 19 | 1,036 | 41 | 1,036 |
| Tax adjustments, net (1) | 408 | 1,907 | 973 | 1,762 |
| Adjusted net (loss) income | $ (30,904) | $ 2,955 | $ (63,745) | $ (21,413) |
| Net loss | $ (39,359) | $ (7,091) | $ (77,675) | $ (39,217) |
| Dividends on preferred shares | (1,920) | (1,615) | (3,801) | (3,381) |
| $ (41,279) | $ (8,706) | $ (81,476) | $ (42,598) | |
| Adjusted net (loss) income | $ (30,904) | $ 2,955 | $ (63,745) | $ (21,413) |
| Dividends on preferred shares | (1,920) | (1,615) | (3,801) | (3,381) |
| $ (32,824) | $ 1,340 | $ (67,546) | $ (24,794) | |
| Loss per basic and diluted share | $ (2.43) | $ (0.53) | $ (4.80) | $ (2.58) |
| Adjusted net (loss) income per basic and diluted share | $ (1.93) | $ 0.08 | $ (3.98) | $ (1.50) |
| Weighted average basic and diluted shares outstanding | 17,007,352 | 16,522,379 | 16,977,376 | 16,521,590 |
(1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.
FAQ
What was FAT Brands' revenue growth in Q2 2024?
How many new stores did FAT Brands open in Q2 2024?
What was FAT Brands' net loss in Q2 2024?
How many development deals has FAT Brands signed in 2024 so far?
What is FAT Brands' current restaurant pipeline?
