First Watch Restaurant (FWRG) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for the thirteen weeks ended March 30, 2025, were $282.24 million, an increase of 16.5% compared to $242.45 million for the same period in 2024[13] - Restaurant sales reached $279.59 million, up from $239.31 million, reflecting a growth of 16.8% year-over-year[13] - Net loss for the period was $829,000, compared to a net income of $7.21 million in the prior year, indicating a significant decline in profitability[13] - The company reported a comprehensive loss of $1.49 million for the quarter, compared to a comprehensive income of $8.14 million in the prior year[13] - The net cash provided by operating activities was $20.14 million, a decrease from $24.98 million in the same period last year[18] - The effective income tax rate for the thirteen weeks ended March 30, 2025, was 46.1%, significantly higher than the 28.0% for the same period in 2024[62] - Stock-based compensation expense for the thirteen weeks ended March 30, 2025, was $2.3 million, compared to $1.9 million for the same period in 2024[60] Assets and Liabilities - Total assets increased to $1.54 billion as of March 30, 2025, compared to $1.51 billion at the end of December 2024, representing a growth of 2.5%[11] - Total liabilities rose to $947.85 million, up from $918.97 million, marking an increase of 3.2%[11] - Cash and cash equivalents decreased to $18.61 million from $33.31 million, a decline of 44.6%[11] - The total accounts receivable decreased to $5.96 million from $7.24 million at the end of the previous year[34] - As of March 30, 2025, the total net long-term debt was $191.5 million, an increase from $189.0 million as of December 29, 2024[36] - The estimated fair value of the outstanding debt as of March 30, 2025, was $201.8 million, compared to $198.3 million as of December 29, 2024[41] Capital Expenditures and Investments - Capital expenditures for the period were $36.56 million, compared to $28.58 million in the prior year, indicating an increase of 28%[18] - The Company drew $7.0 million and $20.5 million from the Delayed Draw Term Facility on April 11 and April 25, 2025, respectively, to fund acquisitions[40] - The company acquired 16 restaurants for approximately $49.0 million and three restaurants for approximately $7.0 million in April 2025[71] Operational Metrics - The company operated 498 company-owned restaurants and 86 franchise-owned restaurants as of March 30, 2025[24] - In-restaurant dining sales reached $226.73 million, a rise of 16.2% compared to $195.20 million in the prior year[33] - The total lease expense for the thirteen weeks ended March 30, 2025, was $25.1 million, compared to $20.4 million for the same period in 2024[50] Debt and Interest Management - Cash paid for interest was $3.07 million, up from $2.77 million in the previous year[20] - The Company has a $100.0 million Term Facility, a $125.0 million Revolving Credit Facility, and a $125.0 million Delayed Draw Term Facility under its Credit Facility[37] - The Company utilized interest rate swaps with an aggregate notional amount of $150.0 million to hedge cash flows of variable rate debt[45][46] - The company entered into variable-to-fixed interest rate swap agreements to hedge $150.0 million of outstanding variable rate debt, with fixed rates of 4.16% and 4.42%[154] Shareholder Information - The weighted average number of common shares outstanding increased to 60.77 million from 60.01 million, reflecting a rise of 1.3%[13] - The weighted average common shares outstanding for basic net loss per share was 60,767,401 for the thirteen weeks ended March 30, 2025[70] Compliance and Valuation - The Company was in compliance with all covenants under the credit agreement as of March 30, 2025[43] - The company has established a valuation allowance on deferred tax assets deemed not realizable as of March 30, 2025, due to insufficient earnings history[64] - The company continues to assess the need for a valuation allowance for deferred tax assets, which may change with future taxable earnings[65] - Unrecognized stock-based compensation expense as of March 30, 2025, included $19,000 for stock options and $18.634 million for restricted stock units[61] Deferred Revenue - Deferred gift card revenue at the end of the period was $3.15 million, down from $5.39 million at the beginning of the period[33]