FAT Brands(US:FAT)2021-05-12 20:32Financial Performance - Total revenues for the thirteen weeks ended March 28, 2021, were $6,649,000, an increase of 50.3% from $4,423,000 for the same period in 2020, primarily due to the acquisition of Johnny Rockets[207]. - The net loss for the thirteen weeks ended March 28, 2021, was $2,432,000 compared to a net loss of $2,370,000 for the same period in 2020, indicating a slight increase in losses[206]. - General and administrative expenses rose to $4,926,000 for the first quarter of 2021, up from $3,531,000 in the first quarter of 2020, reflecting an increase of 39.5%[209]. - Other expenses totaled $2,665,000 for the first quarter of 2021, compared to $2,090,000 for the same period in 2020, marking an increase of 27.5%[211]. - Advertising expenses increased to $1,192,000 in the first quarter of 2021 from $931,000 in the first quarter of 2020, reflecting a rise of 28.1%[210]. - The company’s refranchising efforts resulted in operating costs of $427,000 in the first quarter of 2021, down from $539,000 in the same period of 2020[210]. Cash and Liquidity - The company reported a cash and restricted cash balance of $4,915,000 as of March 28, 2021, down from $7,211,000 as of December 27, 2020[219]. - The company expects its liquidity position to be sufficient for the twelve months following the issuance of the Form 10-Q, aided by improved operating performance post-COVID-19[218]. - Net cash used in investing activities decreased by $2,840,000 in the thirteen weeks ended March 28, 2021 compared to the prior year[227]. - Net cash from financing activities decreased by $12,950,000 in the thirteen weeks ended March 28, 2021 compared to the prior year, with proceeds from borrowings being $37,271,000 higher in 2020 due to the sale of Series A-2 and B-2 Notes[228]. Financing Activities - On April 26, 2021, the company completed a private offering of fixed-rate secured notes, resulting in net proceeds of approximately $57 million[217]. - The Series A-2 and B-2 Notes had a combined face amount of $40,000,000, with net proceeds from the issuance being $37,389,000 after discounts and debt offering costs[232]. - Approximately $24,730,000 of the proceeds from the Series M-2 Notes were used to acquire Johnny Rockets, with the remaining balance available for working capital[236]. - Scheduled principal payments of $1,000,000 per quarter on each of the Series A-2 and B-2 Notes are expected to begin in the second quarter of 2021[238]. Corporate Governance - The Board of Directors declared a cash dividend of $0.13 per share, totaling $1,590,000, payable on May 7, 2021[229]. - The Management Agreement provides for a management fee of $200,000 per month, subject to a 3% annual increase[239]. - As of March 28, 2021, FAT Royalty was in compliance with the financial and non-financial covenants associated with the 2020 Securitization Notes[242]. Regulatory and Compliance - The 2021 Securitization Notes included an initial principal amount of $97,104,000 for Series 2021-1 Fixed Rate Senior Secured Notes, Class A-2[244]. - The Company does not have any material commitments for capital expenditures as of March 28, 2021[247]. - The Company is classified as a Smaller Reporting Company (SRC) and is adopting the deferral period for ASU 2016-13, allowing implementation until fiscal periods beginning after December 15, 2022[259]. - The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements but does not expect a material impact[259].