Operations

Revenues down at Muscle Maker Grill

Provided

August 20, 2020

Although Muscle Maker Inc. reported Thursday that Q2 revenues were down from $1.38 to $0.834, CEO Michael Roper said things were looking up.

"Over the last several months, due to Covid-19, I have witnessed a disruption across the restaurant and hospitality industries like I have never experienced in my career," he said in a prepared statement. "Fortunately for us, we entered this downturn with a strong balance sheet and significant cost controls in place. I am happy to report that we believe we are starting to see a return to normalcy, albeit a new normal, across many of our locations."

The Bronx location, for example, is experiencing positive sales year-over-year, and military locations have seen sales increase over the last 30 days.

"While not at pre-pandemic levels, we are encouraged to see sales improve," Roper said.

Despite the contraction in revenues, Roper said that net loss decreased year-over-year to $1.5 million from $1.54 million, largely due to debt elimination stemming from the chan's February IPO.

"In regard to capitalization, we ended the quarter with $3.1 million in cash and total current assets of $3.5 million," he said.

The other good news was that the brand has been adding to its non-traditional location growth model, opening on university campuses and military bases.

"While I am not thrilled to report operating losses, I am happy to report that on a trending basis, we believe we are seeing the beginning of a return to normalcy across most of our existing markets," he said. "During this downturn we have continued to advance our non-traditional model, and we feel uniquely positioned to demonstrate material growth over the balance of this year. "

He believes that the company is in the early innings of an exciting growth path.

"We lost some time as a result of the impact of COVID, but these were simply unfortunate delays, and they have done nothing to derail our plans," he said. "In fact, it has probably forced us to focus more on the operating model and where we feel the future of the QSR (Quick Service Restaurant) industry is headed, so that we can continue to expand in a way that best aligns us with our customers, their demand trends and the changing experiential nature. We believe we are turning a corner right now that will be best demonstrated to investors over our next few quarters with the goal of continued location expansion and revenue growth."

Muscle Maker Inc., based in New Jersey, is the parent company of Muscle Maker Grill and Healthy Joe's.