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Falcon's Beyond (FBYD) - 2024 Q2 - Quarterly Report
FBYDFalcon's Beyond (FBYD)2024-08-13 21:07

Revenue Performance - Total revenue for the three months ended June 30, 2024, was 1,798,000,comparedto1,798,000, compared to 738,000 for the same period in 2023, representing a 143% increase[24] - Total revenue for the six months ended June 30, 2024, was 3,314million,withasignificantcontributionfromFalcon′sCreativeGroupat3,314 million, with a significant contribution from Falcon's Creative Group at 1,521 million[116] - Total revenue for the six months ended June 30, 2024 decreased by 11.2millionto11.2 million to 3.3 million compared to 14.5millionforthesameperiodin2023,primarilyduetothedeconsolidationofFCG[195]−Revenuefromservicestransferredovertimetotaled14.5 million for the same period in 2023, primarily due to the deconsolidation of FCG[195] - Revenue from services transferred over time totaled 1.8 million for the three months and 5.3millionforthesixmonthsendedJune30,2024,adecreasefrom5.3 million for the six months ended June 30, 2024, a decrease from 3.3 million and 13.2millionin2023[60]−FCGrecordedrevenuesof13.2 million in 2023[60] - FCG recorded revenues of 30.6 million for the six months ended June 30, 2024, an increase of 17.5millionor13417.5 million or 134% compared to the same period in 2023[186] Net Income and Loss - Net income attributable to common stockholders for the three months ended June 30, 2024, was 1,234,000, compared to a loss of 8,802,000forthesameperiodin2023[24]−ForthesixmonthsendedJune30,2024,Falcon′sBeyondreportedanetincomeof8,802,000 for the same period in 2023[24] - For the six months ended June 30, 2024, Falcon's Beyond reported a net income of 122,052 thousand, a significant improvement from a net loss of 18,652thousandinthesameperiodof2023[25]−NetincomeforthesixmonthsendedJune30,2024,was18,652 thousand in the same period of 2023[25] - Net income for the six months ended June 30, 2024, was 122.1 million compared to a loss of 18.7millionforthesameperiodin2023[177]−NetincomeforthethreemonthsendedJune30,2024,was18.7 million for the same period in 2023[177] - Net income for the three months ended June 30, 2024, was 8.0 million, compared to a net loss of 8.8millionforthesameperiodin2023[156]ExpensesandCostManagement−OperatingexpensesforthethreemonthsendedJune30,2024,totaled8.8 million for the same period in 2023[156] Expenses and Cost Management - Operating expenses for the three months ended June 30, 2024, totaled 5,320,000, down from 12,905,000forthesameperiodin2023,adecreaseof58.812,905,000 for the same period in 2023, a decrease of 58.8%[24] - Selling, general and administrative expenses decreased by 3.9 million to 5.3millionforthethreemonthsendedJune30,2024,comparedto5.3 million for the three months ended June 30, 2024, compared to 9.2 million for the same period in 2023, driven by reductions in audit fees and professional services[160] - Selling, general and administrative expense decreased by 6.8millionto6.8 million to 12.1 million for the six months ended June 30, 2024, compared to 18.9millionforthesameperiodin2023[181]−Researchanddevelopmentexpensesdecreasedtolessthan18.9 million for the same period in 2023[181] - Research and development expenses decreased to less than 0.1 million for the three months ended June 30, 2024, compared to 0.4millionforthesameperiodin2023,duetothecompletionofFBBdivisionprojects[161]AssetsandLiabilities−Totalcurrentassetsincreasedto0.4 million for the same period in 2023, due to the completion of FBB division projects[161] Assets and Liabilities - Total current assets increased to 2,776,000 as of June 30, 2024, from 2,429,000asofDecember31,2023,reflectinga14.32,429,000 as of December 31, 2023, reflecting a 14.3% growth[21] - Total liabilities decreased to 365,403,000 as of June 30, 2024, from 552,353,000asofDecember31,2023,indicatingareductionof33.9552,353,000 as of December 31, 2023, indicating a reduction of 33.9%[22] - The company has 15.7 million in debt maturing within the next 12 months and does not currently have sufficient cash or liquidity to meet its liabilities[42] - The company has a working capital deficiency of 24.6millionasofJune30,2024,excludingnon−cashearnoutliabilitybalanceandmaturingdebt[149]EquityandInvestments−Totalequityattributabletocommonstockholdersimprovedto24.6 million as of June 30, 2024, excluding non-cash earnout liability balance and maturing debt[149] Equity and Investments - Total equity attributable to common stockholders improved to (44,719,000) as of June 30, 2024, from (57,105,000)asofDecember31,2023,reflectingapositivechangeof21.7(57,105,000) as of December 31, 2023, reflecting a positive change of 21.7%[23] - The investment in Falcon's Creative Group (FCG) was recorded at fair value of 39.1 million as of July 27, 2023, following its deconsolidation[65] - The company recognized a net income of 1.0millionfromFCGforthethreemonthsendedJune30,2024,and1.0 million from FCG for the three months ended June 30, 2024, and 1.5 million for the six months, after adjustments for preferred returns and amortization[73] - The company reported a share of gain from equity method investments totaling 2,874million,indicatingrobustinvestmentperformance[116]StrategicDevelopments−ThecompanycompletedamergerwithFASTIIonOctober5,2023,whichisexpectedtoenhanceitsoperationalcapabilitiesandmarketreach[30]−Falcon′sBeyondoperatesthroughthreebusinessdivisions,focusingoncontentcreation,experientialentertainment,andbrandoptimization,whichareexpectedtodrivefuturegrowth[32]−ThecompanyhascommittedtofunditsshareofadditionalinvestmentinKarnivalTP−AQHoldingsLimitedforconstructingVquariumEntertainmentCentersinChina[41]FinancialAdjustmentsandRisks−Thecompanyincurredtransactioncostsrelatedtothebusinesscombinationtotaling2,874 million, indicating robust investment performance[116] Strategic Developments - The company completed a merger with FAST II on October 5, 2023, which is expected to enhance its operational capabilities and market reach[30] - Falcon's Beyond operates through three business divisions, focusing on content creation, experiential entertainment, and brand optimization, which are expected to drive future growth[32] - The company has committed to fund its share of additional investment in Karnival TP-AQ Holdings Limited for constructing Vquarium Entertainment Centers in China[41] Financial Adjustments and Risks - The company incurred transaction costs related to the business combination totaling 22.1 million, which are still under negotiation and may impact future financial results[31] - The company has accrued significant expenses related to external advisors and legal costs, impacting its financial position as of June 30, 2024[42] - The company is evaluating the impact of recently issued accounting standards on its financial statements and disclosures[53][55] - The company has a concentration of credit risk with significant revenue dependence on a few customers, particularly QIC[51][52] Foreign Exchange and Other Financial Impacts - The company experienced a foreign exchange transaction loss of 517millionduringthereportingperiod,impactingoverallfinancialresults[116]−TheeffectivetaxratefortheCompanywas0517 million during the reporting period, impacting overall financial results[116] - The effective tax rate for the Company was 0% for the three and six months ended June 30, 2024, with less than 0.1 million paid in income taxes during the same period[102] Litigation and Commitments - The company is involved in ongoing litigation with Guggenheim Securities, LLC, claiming 11.1millionforservicesrelatedtotheBusinessCombination,whichthecompanydenies[219]−ThecompanyhasunfundedcommitmentstoitsunconsolidatedjointventureKarnivalof11.1 million for services related to the Business Combination, which the company denies[219] - The company has unfunded commitments to its unconsolidated joint venture Karnival of 2.4 million (HKD 18.7 million) as of June 30, 2024[109]