News

Q1 revenues, sales up for FAT Brands

May 15, 2019

FAT Brands Inc., parent company of several restaurant brands including Fatburger, today reported a system-wide sales growth of 26.4% and that revenues were up more than 35% for the fiscal first quarter period ending March 3.

"Results in the first quarter reflect continued strength of the Fatburger brand and improvements at the Hurricane brand, offset by softness at Ponderosa and Bonanza Steakhouses," President and CEO Andy Wiederhorn said in a company press release. "During the quarter, we continued to execute our key strategic initiatives to drive same-store sales growth across our brands: third-party delivery, a remodel program, menu innovation including our preferred partnership with the provider of Impossible Burger, which we now offer in nearly all of our brands, and cross-selling brands to existing franchisees."

Quarter 2019 highlights

• Total revenues of $4.9 million, up 35.9% from $3.6 million in the first quarter of 2018. Excluding advertising revenues, revenues grew 30.4% from $3.0 million in first quarter of 2018 to $3.9 million in first quarter of 2019.
• System-wide sales growth of 26.4%.
•  United States sales growth of 39.7%. 
• Canada sales growth of 5.7%.
• Other International(1) sales growth of (5.5%).
•  System-wide same store sales growth of (1.3%) 
• Fatburger worldwide same store sales growth of 1.8% y/y, and 2.9% in North America.
• Buffalo's Cafe worldwide same store sales growth of 2.9% 
• Hurricane worldwide same-store sales growth of 4.2%.
• Ponderosa/Bonanza worldwide same store sales growth of (6.6%) and (5.5%) excluding Puerto Rico.
• United States same-store sales growth of (0.4%).
• Canada same-store sales growth of 5.1%.
• Other International(1) same-store sales growth of (9.1%) .
• Five franchised store openings.
• Ending store count: 334 franchised stores, seven company-managed stores.
• Net loss of $710,000 or $0.06 per share on a basic and fully diluted basis, as compared to net income of $509,000 or $0.05 per share on a basic and fully diluted basis in the first quarter of 2018.

"Our pipeline for acquisitions remains robust, and we continue to seek synergistic opportunities where we can leverage our platform to drive efficiencies and growth," Wiederhorn said. "We are in the final stages of evaluating several acquisitions and expect to be able to announce an acquisition during the second quarter of this year."
          
Events in the quarter
On Jan. 29, the company entered into a loan agreement borrowing $20 million from The Lion Fund L.P. and the Lion Fund II L.P. to repay the existing $16 million term loan from FB Lending, LLC plus accrued interest and fees, as well as to provide additional general working capital to the company, according to the release.

On Feb. 7, its board of directors approved the payment of a quarterly stock dividend equal to 2.13% on its common stock, representing an amount equal to $0.12 per share of common stock based on the closing price as of Feb. 6, 2019. The dividend was paid on Feb. 28, to shareholders of record as of the close of business on Feb. 19, 2019. The company issued 245,376 shares of common stock at a value of $5.64 per share (plus cash in lieu of fractional shares) in satisfaction of the dividend payable.

FAT Brands, which owns Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, and Ponderosa and Bonanza Steakhouses, has more than 300 locations open and more than 200 under development around the world.