Fat Brands : 4Q23 Earnings Call

Q4 2023

EARNINGS SUPPLEMENT

MARCH 7, 2024

LEGAL DISCLAIMER

This earnings supplement 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 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 earnings supplement. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this earnings supplement.

2

YTD Q4 2023 HIGHLIGHTS

6.9% Sales Growth (1)	0.8% SSS Growth (2)	$2,327.9mm
YTD Q4 2023 v YTD Q4 2022	YTD Q4 2023 v YTD Q4 2022	System-Wide Sales
System-Wide	System-Wide	YTD Q4 2023

125 New Store Openings	$480.5mm Total Revenue	$91.2mm Adj. EBITDA (4)
YTD Q4 2023 (3)	YTD Q4 2023	YTD Q4 2023

1. System-widesales 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.
2. Same-storesales 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.
3. 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 store openings has, and will continue to have, an impact on our results.
4. EBITDA is defined as earnings before interest, taxes, 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 income (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 gain or 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. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

3

YTD Q4 2023 RESULTS

	Royalties
$87.9mm	$94.0mm
YTD Q4 2022	YTD Q4 2023

	Revenue
	$480.5mm
$407.2mm
YTD Q4 2022	YTD Q4 2023

Systemwide Sales

Adj. EBITDA (1)

$2,178.5mm	$2,327.9mm
YTD Q4 2022	YTD Q4 2023

$88.8mm	$91.2mm
YTD Q4 2022	YTD Q4 2023

(1)	EBITDA is defined as earnings before interest, taxes, 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 income (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 gain or 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. A reconciliation of net income presented in	4
	accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

Q4 2023 HIGHLIGHTS

16.5% Sales Growth (1)	0.6% SSS Decline (2)	$626.7mm
Q4 2023 v Q4 2022	Q4 2023 v Q4 2022	System-Wide Sales
System-Wide	System-Wide	Q4 2023

29 New Store Openings	$158.6mm Total Revenue	$27.0mm Adj. EBITDA (4)
Q4 2023 (3)	Q4 2023	Q4 2023

1. System-widesales 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.
2. Same-storesales 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.
3. 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 store openings has, and will continue to have, an impact on our results.
4. EBITDA is defined as earnings before interest, taxes, 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 income (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 gain or 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. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

5

Q4 2023 RESULTS

Royalties

Revenue

	$24.9mm
$22.5mm
Q4 2022	Q4 2023

Systemwide Sales

	$158.6mm
$103.8mm
Q4 2022	Q4 2023

Adj. EBITDA (1)

	$626.7mm
$538.1mm
Q4 2022	Q4 2023

	$27.0mm
$19.6mm
Q4 2022	Q4 2023

(1)	EBITDA is defined as earnings before interest, taxes, 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 income (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 gain or 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. A reconciliation of net income presented in	6
	accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

2024 STRATEGIC FOCUS

Accelerate

Build-Out of 1,100+

Unit New Store Pipeline

Drive Adj. EBITDA Growth ~$10mm from New Stores ~$5mm from Factory

		Grow Factory Production
Maintain		to Utilize ~60% Excess Capacity via
Strong		Expanded Organic Channels
Liquidity		& 3rd Party Dough & Mix
		Manufacturing

Continue to Build		Realize Purchasing
Net Asset Value		Savings from ~$600mm
for Future Liquidity		in Purchasing Power
(Debt Reduction) Event		Effectively Reducing Costs

7

APPENDIX

DEFINITIONS

"EBITDA," a non-GAAPmeasure, defined as earnings before interest, taxes, 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 income (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. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

"Adjusted EBITDA," a non-GAAPmeasure, defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or 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. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

"Adjusted net loss," a non-GAAPmeasure, 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 attributable to FAT Brands Inc. presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the Appendix.

"Same-storesales growth" or "SSS" a non-GAAPmeasure, 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-widesales growth," a non-GAAPmeasure, 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.

I

CONSOLIDATED STATEMENT OF OPERATIONS

	Fourteen Weeks Ended		Fiscal Year Ended
(In thousands, except share and per share data)	December 31,		December 25,		December 31,		December 25,
2023		2022		2023		2022

Revenue

Royalties

Restaurant sales

Advertising fees

Factory revenues

Franchise fees

Other revenue

Total revenue

Costs and expenses

General and administrative expense

Cost of restaurant and factory revenues

Depreciation and amortization

Impairment of goodwill and other intangible assets Refranchising loss

Acquisition costs

Advertising fees

Total costs and expenses

(Loss) income from operations

$	24,869	$
	111,072
	10,510
	9,810
	937
	1,438
	158,636

30,298
105,130
9,914
500
2,127
-
13,811
161,780
(3,144)

22,525	$	94,036	$	87,921
61,528		299,029		241,001
9,589		39,490		37,997
8,916		37,983		33,504
943		4,979		3,706
313		4,940		3,095
103,814		480,457		407,224
39,125		93,117		113,313
61,726		282,887		221,627
6,939		31,131		27,015
14,000		500		14,000
3,055		2,873		4,178
-		-		383
11,574		47,619		44,612
136,419		458,127		425,128
(32,605)		22,330		(17,904)

Other (expense) income, net

Interest expense

Interest expense related to preferred shares Net gain (loss) on extinguishment of debt Other (expense) income, net

Total other expense, net

Loss before income tax provision

Income tax provision (benefit)

Net loss

	(28,925)
	(4,417)
	325
	1,096
	(31,921)
	(35,065)
	(8,827)
$	(26,238)	$

(20,947)		(99,342)		(78,477)
(4,691)		(18,189)		(16,372)
-		(2,397)		-
1,456		1,233		5,375
(24,182)		(118,695)		(89,474)
(56,787)		(96,365)		(107,378)
14,021		(6,255)		18,810
(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

II