FAT Brands (FAT) Reports Q4 Loss of $0.08, Revenues Miss

FAT Brands (NASDAQ: FAT) reported Q4 EPS of ($0.08), versus ($0.23) reported last year. Revenue for the quarter came in at $5.3 million versus the consensus estimate of $5.86 million.

Fiscal Fourth Quarter 2019 Highlights

• Total revenues of $5.3 million, up 17.3% from $4.5 million in the fourth quarter of 2018. Excluding advertising revenues, revenues grew 20.8% to $4.3 million from $3.6 million in the fourth quarter of 2018.
  • System-wide sales growth of 8.1% y/y
    • System-wide sales growth (excluding Ponderosa & Bonanza) of 18.1% y/y
    • United States sales growth of 4.8% y/y
    • Canada sales growth of 4.0% y/y
    • Other International(1) sales growth of 25.5% y/y
  • System-wide same-store sales decline of 0.6% y/y
    • System-wide same-store sales decline (excluding Ponderosa & Bonanza) of 0.5% y/y
    • United States same-store sales growth of 0.2% y/y
    • Canada same-store sales growth of 1.6% y/y
    • Other International(1) sales decline of 6.4% y/y
  • 5 new franchised store openings during the fourth quarter 2019
    • Store count as of December 29, 2019: 374 stores system-wide
• Net loss of $953,000 or $0.08 per share on a basic and fully diluted basis, as compared to net loss of $2.7 million or $0.23 per share on a basic and fully diluted basis in the fourth quarter of 2018
• EBITDA(2) of $726,000 as compared to a loss of $467,000 in the fourth quarter of 2018
• Adjusted EBITDA(2) of $1.8 million as compared to $732,000 in the fourth quarter of 2018. The reconciliation of EBITDA to Adjusted EBITDA can be found in the accompanying financial tables.

Andy Wiederhorn, President and CEO of FAT Brands, commented, “We are committed to supporting our franchise partners in these challenging times; their health and safety, along with that of their guests, remains our top priority. Our franchisees are complying with all state and local regulations, temporarily closing dining rooms and shifting to a take-out and delivery model only, where it makes sense. We are helping franchisees to acquire personal protective equipment for their staff, so that they may safely serve their communities. In order to facilitate their long-term wellbeing, we have secured extended terms from suppliers on our franchise partners’ behalf, and we are coaching them to access funds provided by the CARES Act and negotiate rent deferrals from their landlords. I’m proud of the way our team and franchisees have come together to successfully navigate this new landscape.”

Wiederhorn continued, “Before the COVID-19 pandemic ramped up in the U.S., we were very excited about the coming year. 2019 had ended with solid business momentum across many of our brands, which had continued through January and February. Furthermore, in March, we completed our whole business securitization transaction, which not only significantly lowered our cost of capital, but also provided ample fuel for our brand acquisition strategy. While the world now looks very different than it did just a few short months ago, the strength of our platform and of our brands remains the same. We are well positioned to weather this crisis, and I am confident that FAT Brands will emerge even stronger than before.”

For earnings history and earnings-related data on FAT Brands (FAT) click here.

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