Conference call and webcast today at 5:00 p.m. ET
“With the acquisition of
Fiscal Fourth Quarter 2023 Highlights
- Total revenue improved 52.8% to
$158.6 million compared to$103.8 million in the fourth quarter of 2022- System-wide sales growth of 16.5% in the fiscal fourth quarter of 2023 compared to the prior year fiscal quarter
- System-wide same-store sales declined 0.6% in the fiscal fourth quarter of 2023 compared to the prior fiscal year
- 29 new store openings during the fiscal fourth quarter of 2023
- Loss from operations of
$3.1 million compared to$32.6 million in the fiscal fourth quarter of 2022 - Net loss of
$26.2 million , or$1.68 per diluted share, compared to$70.8 million , or$4.39 per diluted share, in the fiscal fourth quarter of 2022 - Adjusted EBITDA(1) of
$27.0 million compared to$19.6 million in the fiscal fourth quarter of 2022 - Adjusted net loss(1) of
$17.3 million , or$1.15 per diluted share, compared to$43.0 million , or$2.70 per diluted share, in the fiscal fourth quarter of 2022
Fiscal Year 2023 Highlights
- Total revenue increased 18.0% to
$480.5 million compared to$407.2 million in fiscal 2022- System-wide sales growth of 6.9% compared to fiscal 2022
- System-wide same-store sales growth of 0.8% in fiscal 2023 compared to fiscal 2022
- 125 new store openings during fiscal 2023
- Income from operations of
$22.3 million compared to loss from operations of$17.9 million in the fiscal quarter of 2022 - Net loss of
$90.1 million , or$5.85 per diluted share, compared to$126.2 million , or$8.06 per diluted share, in fiscal 2022 - Adjusted EBITDA(1) of
$91.2 million compared to$88.8 million in fiscal 2022 - Adjusted net loss(1) of
$56.5 million , or$3.83 per diluted share, compared to$80.9 million , or$5.32 per diluted share, in fiscal 2022
(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 Fourth Quarter 2023 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 losses and advertising fees. Costs and expenses increased
General and administrative expense decreased
Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and our dough factory and increased
Depreciation and amortization increased
Refranchising losses in the fiscal fourth quarter of 2023 and 2022 were
Advertising expenses increased
Total other expense, net for the fiscal fourth quarters of 2023 and 2022 was
Adjusted net loss 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
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
Conference Call and Webcast
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About FAT (Fresh. Authentic. Tasty.) Brands
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, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, 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
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 losses, 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
ir-fatbrands@icrinc.com
646-277-1224
Media Relations:
emandzik@fatbrands.com
860-212-6509
Fourteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Revenue | ||||||||||||||||
Royalties | $ | 24,869 | $ | 22,525 | $ | 94,036 | $ | 87,921 | ||||||||
Restaurant sales | 111,072 | 61,528 | 299,029 | 241,001 | ||||||||||||
Advertising fees | 10,510 | 9,589 | 39,490 | 37,997 | ||||||||||||
Factory revenues | 9,810 | 8,916 | 37,983 | 33,504 | ||||||||||||
Franchise fees | 937 | 943 | 4,979 | 3,706 | ||||||||||||
Other revenue | 1,438 | 313 | 4,940 | 3,095 | ||||||||||||
Total revenue | 158,636 | 103,814 | 480,457 | 407,224 | ||||||||||||
Costs and expenses | ||||||||||||||||
General and administrative expense | 30,298 | 39,125 | 93,117 | 113,313 | ||||||||||||
Cost of restaurant and factory revenues | 105,130 | 61,726 | 282,887 | 221,627 | ||||||||||||
Depreciation and amortization | 9,914 | 6,939 | 31,131 | 27,015 | ||||||||||||
Impairment of goodwill and other intangible assets | 500 | 14,000 | 500 | 14,000 | ||||||||||||
Refranchising loss | 2,127 | 3,055 | 2,873 | 4,178 | ||||||||||||
Acquisition costs | — | — | — | 383 | ||||||||||||
Advertising fees | 13,811 | 11,574 | 47,619 | 44,612 | ||||||||||||
Total costs and expenses | 161,780 | 136,419 | 458,127 | 425,128 | ||||||||||||
(Loss) income from operations | (3,144 | ) | (32,605 | ) | 22,330 | (17,904 | ) | |||||||||
Other (expense) income, net | ||||||||||||||||
Interest expense | (28,925 | ) | (20,947 | ) | (99,342 | ) | (78,477 | ) | ||||||||
Interest expense related to preferred shares | (4,417 | ) | (4,691 | ) | (18,189 | ) | (16,372 | ) | ||||||||
Net gain (loss) on extinguishment of debt | 325 | — | (2,397 | ) | — | |||||||||||
Other (expense) income, net | 1,096 | 1,456 | 1,233 | 5,375 | ||||||||||||
Total other expense, net | (31,921 | ) | (24,182 | ) | (118,695 | ) | (89,474 | ) | ||||||||
Loss before income tax provision | (35,065 | ) | (56,787 | ) | (96,365 | ) | (107,378 | ) | ||||||||
Income tax provision (benefit) | (8,827 | ) | 14,021 | (6,255 | ) | 18,810 | ||||||||||
Net loss | $ | (26,238 | ) | $ | (70,808 | ) | $ | (90,110 | ) | $ | (126,188 | ) | ||||
Net loss | $ | (26,238 | ) | $ | (70,808 | ) | $ | (90,110 | ) | $ | (126,188 | ) | ||||
Dividends on preferred shares | (1,832 | ) | (1,661 | ) | (7,007 | ) | (6,636 | ) | ||||||||
$ | (28,070 | ) | $ | (72,469 | ) | $ | (97,117 | ) | $ | (132,824 | ) | |||||
Basic and diluted loss per common share | $ | (1.68 | ) | $ | (4.39 | ) | $ | (5.85 | ) | $ | (8.06 | ) | ||||
Basic and diluted weighted average shares outstanding | 16,675,096 | 16,530,934 | 16,599,015 | 16,476,090 | ||||||||||||
Cash dividends declared per common share | $ | 0.14 | $ | 0.14 | $ | 0.56 | $ | 0.54 |
Fourteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
(In thousands) | ||||||||||||||||
Net loss | $ | (26,238 | ) | $ | (70,808 | ) | $ | (90,110 | ) | $ | (126,188 | ) | ||||
Interest expense, net | 33,342 | 25,638 | 117,531 | 94,849 | ||||||||||||
Income tax provision (benefit) | (8,827 | ) | 14,021 | (6,255 | ) | 18,810 | ||||||||||
Depreciation and amortization | 9,914 | 6,939 | 31,131 | 27,015 | ||||||||||||
EBITDA | 8,191 | (24,210 | ) | 52,297 | 14,486 | |||||||||||
Bad debt expense (recovery) | 2,868 | 17,793 | (9,827 | ) | 23,736 | |||||||||||
Share-based compensation expenses | 947 | 1,584 | 3,615 | 7,665 | ||||||||||||
Non-cash lease expenses | 535 | 808 | 1,766 | 2,478 | ||||||||||||
Acquisition costs | — | — | — | 383 | ||||||||||||
Refranchising loss | 2,127 | 3,055 | 2,873 | 4,178 | ||||||||||||
Litigation costs | 8,832 | 4,788 | 28,280 | 18,958 | ||||||||||||
Severance | 341 | — | 1,377 | 526 | ||||||||||||
Net loss related to advertising fund deficit | 1,946 | 1,038 | 6,310 | 1,041 | ||||||||||||
Net (gain) loss on extinguishment of debt | (325 | ) | — | 2,397 | — | |||||||||||
Impairment losses | 1,006 | 14,454 | 1,006 | 14,454 | ||||||||||||
Pre-opening expenses | 564 | 298 | 1,136 | 900 | ||||||||||||
Adjusted EBITDA | $ | 27,032 | $ | 19,608 | $ | 91,230 | $ | 88,805 |
Fourteen Weeks Ended | Fiscal Year Ended | |||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Net loss | $ | (26,238 | ) | $ | (70,808 | ) | $ | (90,110 | ) | $ | (126,188 | ) | ||||
Refranchising loss | 2,127 | 3,055 | 2,873 | 4,178 | ||||||||||||
Acquisition costs | — | — | — | 383 | ||||||||||||
Net (gain) loss on extinguishment of debt | (325 | ) | — | 2,397 | — | |||||||||||
Impairment losses | 1,006 | 14,454 | 1,006 | 14,454 | ||||||||||||
Litigation costs | 8,832 | 4,788 | 28,280 | 18,958 | ||||||||||||
Severance | 341 | — | 1,377 | 526 | ||||||||||||
Tax adjustments, net (1) | (3,016 | ) | 5,505 | (2,332 | ) | 6,744 | ||||||||||
Adjusted net loss | $ | (17,273 | ) | $ | (43,006 | ) | $ | (56,509 | ) | $ | (80,945 | ) | ||||
Net loss | $ | (26,238 | ) | $ | (70,808 | ) | $ | (90,110 | ) | $ | (126,188 | ) | ||||
Dividends on preferred shares | (1,832 | ) | (1,661 | ) | (7,007 | ) | (6,636 | ) | ||||||||
$ | (28,070 | ) | $ | (72,469 | ) | $ | (97,117 | ) | $ | (132,824 | ) | |||||
Adjusted net loss | $ | (17,273 | ) | $ | (43,006 | ) | $ | (56,509 | ) | $ | (80,945 | ) | ||||
Dividends on preferred shares | (1,832 | ) | (1,661 | ) | (7,007 | ) | (6,636 | ) | ||||||||
$ | (19,105 | ) | $ | (44,667 | ) | $ | (63,516 | ) | $ | (87,581 | ) | |||||
Loss per basic and diluted share | $ | (1.68 | ) | $ | (4.38 | ) | $ | (5.85 | ) | $ | (8.06 | ) | ||||
Adjusted net loss per basic and diluted share | $ | (1.15 | ) | $ | (2.70 | ) | $ | (3.83 | ) | $ | (5.32 | ) | ||||
Weighted average basic and diluted shares outstanding | 16,675,096 | 16,530,934 | 16,599,015 | 16,476,090 |
(1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.
Source:
2024 GlobeNewswire, Inc., source