FAT Brands(US:FAT)2024-08-01 18:52Revenue and Growth - Total revenue increased by $91.6 million, or 43.1%, to $304.0 million for the first two quarters of 2024 compared to $212.5 million in the same period of 2023, primarily driven by the acquisition of Smokey Bones and new restaurant openings [111]. - Total revenue for the second quarter of 2024 increased by $45.3 million, or 42.4%, to $152.0 million compared to $106.8 million in the same period of 2023 [117]. Costs and Expenses - Total costs and expenses rose by $114.5 million, or 59.1%, to $308.1 million in the first two quarters of 2024, mainly due to the acquisition of Smokey Bones and increased activity from company-owned restaurants [112]. - Costs and expenses for the second quarter of 2024 increased by $66.4 million, or 75.2%, to $154.7 million compared to the same period in the prior year [117]. - General and administrative expenses increased by $21.2 million, or 55.3%, in the first two quarters of 2024, attributed to the acquisition of Smokey Bones and recognition of Employee Retention Credits [114]. - Cost of restaurant and factory revenues increased by $80.6 million, or 67.9%, in the first two quarters of 2024, primarily due to the acquisition of Smokey Bones and higher sales from company-owned restaurants [115]. - Depreciation and amortization expenses rose by $6.3 million, or 44.2%, in the first two quarters of 2024, mainly due to the acquisition of Smokey Bones and new property depreciation [115]. Net Loss and Other Expenses - Net loss for the first two quarters of 2024 was $77.7 million, compared to a net loss of $39.2 million in the same period of 2023 [111]. - Total other expense, net, for the first two quarters of 2024 was $68.2 million, up from $54.2 million in the same period of 2023, primarily due to new debt offerings [116]. - The effective income tax rate was 7.5% for the first two quarters of 2024, compared to 11.0% for the same period in 2023 [116]. Cash Flow and Liquidity - As of June 30, 2024, the company's cash and restricted cash balance was $73.1 million, down from $91.9 million as of December 31, 2023 [124]. - Net cash used in operating activities increased by $21.4 million to $(42.6) million for the twenty-six weeks ended June 30, 2024, compared to $(21.2) million in the same period of 2023 [125]. - Net cash used in investing activities was $18.2 million for the twenty-six weeks ended June 30, 2024, compared to $6.9 million in the comparable period of 2023, primarily due to increased purchases of property and equipment [126]. - Net cash provided by financing activities was $42.0 million for the twenty-six weeks ended June 30, 2024, mainly from borrowings [127]. - The company believes it has sufficient liquidity to meet its needs for at least the next twelve months through available cash and cash flows from operations [122]. Dividends and Liabilities - The company declared a cash dividend of $0.14 per share for Class A and Class B common stock, totaling $2.4 million, payable on March 1, 2024 [128]. - The company has liabilities of $91.8 million related to put options on Series B Cumulative Preferred Stock, with options to extend repayment [122]. Future Plans and Commitments - The company is involved in a worldwide expansion of franchise locations, which will require significant liquidity primarily from franchisees [121]. - Future acquisitions of additional restaurant concepts will likely necessitate financing through additional debt or equity transactions [121]. - The company does not have any material commitments for capital expenditures as of June 30, 2024 [129].