FAT Brands(US:FAT)2024-10-31 21:25Revenue Growth - Total revenue increased by $125.6 million, or 39.0%, to $447.4 million for the first three quarters of 2024 compared to $321.8 million in the same period of 2023, primarily driven by the acquisition of Smokey Bones and new restaurant openings [124]. - Restaurant sales rose to $312.6 million for the first three quarters of 2024, up from $187.9 million in the same period of 2023, reflecting a significant increase in company-owned restaurant performance [123]. - Total revenue for the third quarter of 2024 increased by $34.0 million, or 31.1%, to $143.4 million compared to $109.4 million in the same period of 2023 [133]. Costs and Expenses - Total costs and expenses increased by $163.9 million, or 55.3%, to $460.3 million in the first three quarters of 2024, mainly due to the acquisition of Smokey Bones and increased activity from company-owned restaurants [125]. - Costs and expenses for the third quarter of 2024 rose by $49.5 million, or 48.1%, to $152.2 million, largely due to the acquisition of Smokey Bones and increased activity from company-owned restaurants [134]. - General and administrative expenses rose by $31.2 million, or 49.7%, to $94.0 million in the first three quarters of 2024, influenced by the acquisition of Smokey Bones and increased professional fees [127]. - Cost of restaurant and factory revenues increased by $118.2 million, or 66.5%, in the first three quarters of 2024, driven by the acquisition of Smokey Bones and higher sales from company-owned locations [128]. Net Loss and Other Expenses - Net loss for the first three quarters of 2024 was $122.4 million, compared to a net loss of $63.9 million in the same period of 2023 [123]. - Total other expense, net, for the first three quarters of 2024 was $103.9 million, up from $86.8 million in the prior year, primarily due to increased interest expenses from new debt offerings [132]. Cash Flow and Liquidity - As of September 29, 2024, the company's cash and restricted cash balance was $66.7 million, down from $91.9 million as of December 31, 2023 [146]. - Net cash used in operating activities increased by $22.8 million to $(45.8) million for the thirty-nine weeks ended September 29, 2024, compared to $(23.0) million in 2023 [147]. - Net cash used in investing activities was $26.0 million for the thirty-nine weeks ended September 29, 2024, compared to $14.3 million in the same period of 2023 [148]. - Net cash provided by financing activities was $46.6 million for the thirty-nine weeks ended September 29, 2024, primarily from borrowings [149]. - 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 [144]. Future Plans and Commitments - The company plans to expand franchise locations, which will require significant liquidity primarily from franchisees [142]. - Future acquisitions of restaurant concepts are expected to necessitate financing through additional debt or equity transactions [143]. - There are no material commitments for capital expenditures as of September 29, 2024 [152]. Dividends and Liabilities - The company declared cash dividends of $0.14 per share for Class A and Class B common stock, totaling $2.4 million for each declaration [150]. - The company has liabilities of $91.8 million related to put options on Series B Cumulative Preferred Stock, with options to extend repayment [144]. Tax Rate - The effective income tax rate for the first three quarters of 2024 was (4.8)%, compared to (4.2)% for the same period in 2023, reflecting changes in valuation allowances and nondeductible expenses [133].