FAT BRANDS INC. REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
FAT Brands Inc. reported its Q3 2024 financial results, showing total revenue growth of 31.1% to $143.4 million. The company opened 22 new units during Q3, bringing year-to-date openings to 71. System-wide sales grew 6.4%, while year-to-date same-store sales declined 2.7%. The company reported a net loss of $44.8 million ($2.74 per diluted share). FAT Brands' portfolio now includes 18 concepts with over 2,300 locations across 40+ countries. The company has signed 225 development deals year-to-date and maintains a development pipeline of approximately 1,000 locations. Twin Peaks and Smokey Bones are being prepared for a potential IPO or alternative transaction.
FAT Brands Inc. ha riportato i risultati finanziari per il terzo trimestre del 2024, evidenziando una crescita dei ricavi totali del 31,1% a $143,4 milioni. La società ha aperto 22 nuove unità durante il terzo trimestre, portando il totale delle aperture da inizio anno a 71. Le vendite complessive sono cresciute del 6,4%, mentre le vendite comparative nello stesso periodo sono diminuite del 2,7%. La società ha registrato una perdita netta di $44,8 milioni ($2,74 per azione diluita). Il portafoglio di FAT Brands ora comprende 18 concetti con oltre 2.300 sedi in più di 40 paesi. L'azienda ha firmato 225 contratti di sviluppo dall'inizio dell'anno e mantiene un piano di sviluppo di circa 1.000 sedi. Twin Peaks e Smokey Bones stanno preparando un potenziale IPO o un'alternativa transazionale.
FAT Brands Inc. presentó sus resultados financieros para el tercer trimestre de 2024, mostrando un crecimiento en los ingresos totales del 31.1% a $143.4 millones. La compañía abrió 22 nuevas unidades durante el tercer trimestre, llevando el total de aperturas en lo que va del año a 71. Las ventas a nivel del sistema crecieron un 6.4%, mientras que las ventas en tiendas comparables disminuyeron un 2.7% en lo que va del año. La compañía reportó una pérdida neta de $44.8 millones ($2.74 por acción diluida). La cartera de FAT Brands ahora incluye 18 conceptos con más de 2,300 ubicaciones en más de 40 países. La compañía ha firmado 225 acuerdos de desarrollo en lo que va del año y mantiene un pipeline de desarrollo de aproximadamente 1,000 ubicaciones. Twin Peaks y Smokey Bones se están preparando para una posible oferta pública inicial o una transacción alternativa.
FAT Brands Inc.는 2024년 3분기 재무 결과를 발표했으며, 총 수익이 31.1% 증가하여 $143.4 백만에 달했다고 밝혔습니다. 회사는 3분기에 22개의 신규 매장을 열어 연간 총 개점을 71개로 늘렸습니다. 시스템 전체의 판매는 6.4% 성장했으며, 연간 동기 대비 같은 매장 판매는 2.7% 감소했습니다. 회사는 $44.8 백만의 순손실을 보고했습니다 ($2.74의 희석주당 손실). FAT Brands의 포트폴리오는 현재 40개 이상의 국가에 2,300개 이상의 매장을 포함한 18개의 개념을 포함하고 있습니다. 회사는 지금까지 225개의 개발 계약을 체결했으며 약 1,000개의 매장 개발 파이프라인을 유지하고 있습니다. Twin Peaks와 Smokey Bones는 잠재적인 IPO 또는 대체 거래를 준비하고 있습니다.
FAT Brands Inc. a annoncé ses résultats financiers pour le troisième trimestre 2024, montrant une croissance du chiffre d'affaires total de 31,1% pour atteindre 143,4 millions de dollars. L'entreprise a ouvert 22 nouvelles unités au cours du T3, portant le total des ouvertures depuis le début de l'année à 71. Les ventes à l'échelle du système ont augmenté de 6,4%, tandis que les ventes des mêmes magasins en année à ce jour ont diminué de 2,7%. L'entreprise a enregistré une perte nette de 44,8 millions de dollars (2,74 dollars par action diluée). Le portefeuille de FAT Brands comprend désormais 18 concepts avec plus de 2 300 emplacements dans plus de 40 pays. L'entreprise a signé 225 contrats de développement depuis le début de l'année et maintient un pipeline de développement d'environ 1 000 emplacements. Twin Peaks et Smokey Bones se préparent à une éventuelle introduction en bourse ou à une transaction alternative.
FAT Brands Inc. hat seine finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, welche ein Umsatzwachstum von 31,1% auf 143,4 Millionen US-Dollar zeigen. Das Unternehmen eröffnete im 3. Quartal 22 neue Standorte, was die Gesamtzahl der Eröffnungen im laufenden Jahr auf 71 erhöht. Der Gesamtumsatz wuchs um 6,4%, während die Umsätze in den gleichen Geschäften im bisherigen Jahresverlauf um 2,7% zurückgingen. Das Unternehmen meldete einen Nettoverlust von 44,8 Millionen US-Dollar (2,74 US-Dollar pro verwässerter Aktie). Das Portfolio von FAT Brands umfasst nun 18 Konzepte mit über 2.300 Standorten in mehr als 40 Ländern. Das Unternehmen hat im laufenden Jahr 225 Entwicklungsverträge unterzeichnet und hat eine Entwicklungspipeline von etwa 1.000 Standorten. Twin Peaks und Smokey Bones werden auf einen möglichen Börsengang oder eine alternative Transaktion vorbereitet.
- Revenue growth of 31.1% to $143.4 million
- System-wide sales growth of 6.4%
- 22 new store openings in Q3, 71 year-to-date
- 225 development deals signed year-to-date
- Development pipeline of approximately 1,000 locations
- Net loss increased to $44.8 million from $24.7 million YoY
- Year-to-date system-wide same-store sales declined 2.7%
- Adjusted EBITDA decreased to $14.1 million from $21.9 million YoY
- Interest expense increased to $35.5 million from $29.7 million YoY
- General and administrative expenses increased 41.0%
Insights
FAT Brands' Q3 2024 results show concerning trends despite expansion. While revenue grew
The company's aggressive expansion strategy, including 22 new units in Q3 and a pipeline of 1,000 locations, comes with substantial costs. Interest expenses increased to
The franchise development metrics reveal mixed signals. While maintaining strong development deal momentum (225 YTD vs 226 in 2023) shows franchisee confidence, the declining same-store sales suggest operational challenges in executing the rapid expansion strategy. The focus on Twin Peaks conversions and expansion represents a strategic pivot toward higher-margin polished casual dining, but carries execution risks.
The planned refinancing of Twin Peaks' securitization debt, coupled with IPO preparations, indicates a complex financial restructuring that could impact near-term performance. The company's expansion from 18 concepts across 2,300 locations might be stretching management resources too thin, particularly given the challenging operating environment.
Conference call and webcast today at 5:00 p.m. ET
LOS ANGELES, Oct. 30, 2024 (GLOBE NEWSWIRE) -- FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported financial results for the fiscal third quarter ended September 29, 2024.
Andy Wiederhorn, Chairman of FAT Brands, said, “Over the last three years, we have expanded our brand portfolio to include 18 distinct concepts while our footprint has increased tenfold, now encompassing over 2,300 locations across more than 40 countries and 49 U.S. states or territories. We opened 22 new units during the third quarter, bringing our year-to-date openings to 71 new units and are on track to end the year with 100 new units.”
Wiederhorn added, “We have signed 225 development deals year-to-date versus 226 deals in all of 2023, bringing our current development pipeline to approximately 1,000 locations. This is a strong indicator of confidence within the FAT franchise system.”
Ken Kuick, Co-Chief Executive Officer of FAT Brands, said, “We continue to prioritize accelerated growth in our Polished Casual category, particularly through Twin Peaks, our fastest-growing concept. Year to date, we opened nine new lodges, bringing our total to 115 locations. We also completed our first Smokey Bones to Twin Peaks conversion in Lakeland, Florida during the third quarter, with our second conversion underway and several more planned for next year.”
Rob Rosen, Co-Chief Executive Officer of FAT Brands, said, “In May, Twin Peaks and Smokey Bones, as a combined entity, took a significant step towards becoming a standalone public company. We view this potential IPO or alternative transaction as a strategic opportunity to unlock value for FAT shareholders. Shortly, we intend to refinance Twin Peaks’ securitization debt, which will optimize our financial structure prior to any IPO or other transaction.”
Fiscal Third Quarter 2024 Highlights
- Total revenue grew
31.1% to$143.4 million compared to$109.4 million in the fiscal third quarter of 2023- System-wide sales grew
6.4% in the fiscal third quarter of 2024 compared to the prior year fiscal quarter - Year-to-date system-wide same-store sales declined
2.7% compared to the prior year - 22 new store openings during the fiscal third quarter of 2024
- System-wide sales grew
- Net loss of
$44.8 million , or$2.74 per diluted share, compared to$24.7 million , or$1.59 per diluted share, in the fiscal third quarter of 2023 - EBITDA(1) of
$1.7 million compared to$10.8 million in the fiscal third quarter of 2023 - Adjusted EBITDA(1) of
$14.1 million compared to$21.9 million in the fiscal third quarter of 2023 - Adjusted net loss(1) of
$38.0 million , or$2.34 per diluted share, compared to adjusted net loss(1) of$17.1 million , or$1.14 per diluted share, in the fiscal third quarter of 2023
(1) EBITDA, adjusted EBITDA and adjusted net loss are non-GAAP measures defined below, under “Non-GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net loss are included in the accompanying financial tables.
Summary of Fiscal Third 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, comprised of restaurant operating costs, net of food sales, was
Advertising expenses decreased
Total other expense, net, for the third quarter of 2024 and 2023 was
Adjusted net loss(1) was
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 third 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 1-877-704-4453 from the U.S. or 1-201-389-0920 internationally. A replay will be available after the call until Wednesday, November 20, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 13748855. 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.
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 is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net loss is defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss 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 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 | Thirty-Nine Weeks Ended | |||||||||||||||
| (In thousands, except share and per share data) | September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
| Revenue | ||||||||||||||||
| Royalties | $ | 22,353 | $ | 23,930 | $ | 67,618 | $ | 69,166 | ||||||||
| Restaurant sales | 99,238 | 62,578 | 312,587 | 187,957 | ||||||||||||
| Advertising fees | 9,708 | 9,960 | 29,569 | 28,979 | ||||||||||||
| Factory revenues | 9,490 | 9,323 | 28,599 | 28,174 | ||||||||||||
| Franchise fees | 2,576 | 2,477 | 5,170 | 4,042 | ||||||||||||
| Other revenue | — | 1,098 | 3,829 | 3,503 | ||||||||||||
| Total revenue | 143,365 | 109,366 | 447,372 | 321,821 | ||||||||||||
| Costs and expenses | ||||||||||||||||
| General and administrative expense | 34,481 | 24,458 | 94,044 | 62,820 | ||||||||||||
| Cost of restaurant and factory revenues | 96,792 | 59,168 | 295,955 | 177,757 | ||||||||||||
| Depreciation and amortization | 10,736 | 7,040 | 31,176 | 21,217 | ||||||||||||
| Refranchising loss | 157 | 408 | 1,840 | 746 | ||||||||||||
| Advertising fees | 10,032 | 11,671 | 37,275 | 33,808 | ||||||||||||
| Total costs and expenses | 152,198 | 102,745 | 460,290 | 296,348 | ||||||||||||
| (Loss) income from operations | (8,833 | ) | 6,621 | (12,918 | ) | 25,473 | ||||||||||
| Other (expense) income, net | ||||||||||||||||
| Interest expense | (31,109 | ) | (25,319 | ) | (90,318 | ) | (70,417 | ) | ||||||||
| Interest expense related to preferred shares | (4,418 | ) | (4,417 | ) | (13,253 | ) | (13,771 | ) | ||||||||
| Net gain (loss) on extinguishment of debt | — | (2,723 | ) | 427 | (2,723 | ) | ||||||||||
| Other (expense) income, net | (252 | ) | (128 | ) | (800 | ) | 137 | |||||||||
| Total other expense, net | (35,779 | ) | (32,587 | ) | (103,944 | ) | (86,774 | ) | ||||||||
| Loss before income tax provision (benefit) | (44,612 | ) | (25,966 | ) | (116,862 | ) | (61,301 | ) | ||||||||
| Income tax provision (benefit) | 143 | (1,310 | ) | 5,568 | 2,572 | |||||||||||
| Net loss | $ | (44,755 | ) | $ | (24,656 | ) | $ | (122,430 | ) | $ | (63,873 | ) | ||||
| Net loss | $ | (44,755 | ) | $ | (24,656 | ) | $ | (122,430 | ) | $ | (63,873 | ) | ||||
| Dividends on preferred shares | (1,935 | ) | (1,794 | ) | (5,736 | ) | (5,175 | ) | ||||||||
| $ | (46,690 | ) | $ | (26,450 | ) | $ | (128,166 | ) | $ | (69,048 | ) | |||||
| Basic and diluted loss per common share | $ | (2.74 | ) | $ | (1.59 | ) | $ | (7.54 | ) | $ | (4.17 | ) | ||||
| Basic and diluted weighted average shares outstanding | 17,052,007 | 16,613,840 | 16,999,889 | 16,553,528 | ||||||||||||
| Cash dividends declared per common share | $ | 0.14 | $ | 0.14 | $ | 0.42 | $ | 0.42 | ||||||||
FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
| (In thousands) | September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
| Net loss | $ | (44,755 | ) | $ | (24,656 | ) | $ | (122,430 | ) | $ | (63,873 | ) | ||||
| Interest expense, net | 35,527 | 29,736 | 103,571 | 84,188 | ||||||||||||
| Income tax provision (benefit) | 143 | (1,310 | ) | 5,568 | 2,572 | |||||||||||
| Depreciation and amortization | 10,736 | 7,040 | 31,176 | 21,217 | ||||||||||||
| EBITDA | 1,651 | 10,810 | 17,885 | 44,104 | ||||||||||||
| Bad debt expense | 2,348 | (630 | ) | 787 | (12,701 | ) | ||||||||||
| Share-based compensation expenses | 539 | 1,096 | 1,961 | 2,668 | ||||||||||||
| Non-cash lease expenses | 398 | 558 | 1,786 | 1,232 | ||||||||||||
| Refranchising loss | 157 | 408 | 1,840 | 746 | ||||||||||||
| Litigation costs | 6,175 | 4,780 | 17,835 | 19,448 | ||||||||||||
| Severance | 384 | — | 425 | 1,036 | ||||||||||||
| Net loss related to advertising fund deficit | 1,563 | 1,591 | 4,985 | 4,365 | ||||||||||||
| Net (gain) loss on extinguishment of debt | — | 2,723 | (427 | ) | 2,723 | |||||||||||
| Pre-opening expenses | 844 | 537 | 935 | 577 | ||||||||||||
| Adjusted EBITDA | $ | 14,059 | $ | 21,874 | $ | 48,012 | $ | 64,197 | ||||||||
FAT Brands Inc. Adjusted Net Loss Reconciliation
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
| (In thousands, except share and per share data) | September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
| Net loss | $ | (44,755 | ) | $ | (24,656 | ) | $ | (122,430 | ) | $ | (63,873 | ) | ||||
| Refranchising loss | 157 | 408 | 1,840 | 746 | ||||||||||||
| Net (gain) loss on extinguishment of debt | — | 2,723 | (427 | ) | 2,723 | |||||||||||
| Litigation costs | 6,175 | 4,780 | 17,835 | 19,448 | ||||||||||||
| Severance | 384 | — | 425 | 1,036 | ||||||||||||
| Tax adjustments, net (1) | 22 | (398 | ) | 937 | 1,365 | |||||||||||
| Adjusted net loss | $ | (38,017 | ) | $ | (17,143 | ) | $ | (101,820 | ) | $ | (38,555 | ) | ||||
| Net loss | $ | (44,755 | ) | $ | (24,656 | ) | $ | (122,430 | ) | $ | (63,873 | ) | ||||
| Dividends on preferred shares | (1,935 | ) | (1,794 | ) | (5,736 | ) | (5,175 | ) | ||||||||
| $ | (46,690 | ) | $ | (26,450 | ) | $ | (128,166 | ) | $ | (69,048 | ) | |||||
| Adjusted net loss | $ | (38,017 | ) | $ | (17,143 | ) | $ | (101,820 | ) | $ | (38,556 | ) | ||||
| Dividends on preferred shares | (1,935 | ) | (1,794 | ) | (5,736 | ) | (5,175 | ) | ||||||||
| $ | (39,952 | ) | $ | (18,937 | ) | $ | (107,556 | ) | $ | (43,731 | ) | |||||
| Loss per basic and diluted share | $ | (2.74 | ) | $ | (1.59 | ) | $ | (7.54 | ) | $ | (4.17 | ) | ||||
| Adjusted net loss per basic and diluted share | $ | (2.34 | ) | $ | (1.14 | ) | $ | (6.33 | ) | $ | (2.64 | ) | ||||
| Weighted average basic and diluted shares outstanding | 17,052,007 | 16,613,840 | 16,999,889 | 16,553,528 | ||||||||||||
(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 Q3 2024?
How many new stores did FAT Brands open in Q3 2024?
What was FAT Brands' net loss in Q3 2024?
What was FAT Brands' same-store sales performance in 2024?
