Twin Hospitality Group Inc-A(TWNP) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights Twin Hospitality Group reported a challenging Q1 FY2025 with total revenue decreasing 5.4% to $87.1 million and a widened net loss of $12.1 million, despite Twin Peaks' sales growth and continued expansion Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $87.1 million | $92.1 million | -5.4% | | System-wide Sales | - | - | -3.5% | | Twin Peaks Same-Store Sales | - | - | -1.5% | | Income (Loss) from Operations | $(1.1) million | $1.3 million | - | | Net Loss | $(12.1) million | $(9.2) million | +31.4% | | Adjusted EBITDA | $5.1 million | $7.1 million | -28.7% | | Restaurant Contribution Margin | 11.2% | 13.6% | -2.4 p.p. | - The Twin Peaks brand demonstrated strong performance with system-wide sales growing 5% to $146.3 million, driven by new company-owned restaurants[3] - The company is actively expanding its footprint, opening two new lodges in Q1, including the second successful conversion of a Smokey Bones restaurant, bringing the total system to 116 locations[1][3] - Due to construction delays, the company has revised its full-year opening forecast to three to four new units, while the development pipeline remains robust with 100 franchise agreements[3] Detailed Financial Performance Detailed financials show a 5.4% revenue decrease to $87.1 million, with rising costs as a percentage of revenue leading to an operating loss and wider net loss Revenues Total revenue decreased by $5.0 million to $87.1 million in Q1 2025, primarily due to lower same-store sales and a temporary restaurant closure Revenue Breakdown (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Restaurant sales | $78,403 | $83,289 | -5.9% | | Franchise revenue | $8,702 | $8,772 | -0.8% | | Total revenue | $87,105 | $92,061 | -5.4% | - The revenue decline was driven by a 1.5% decrease in Twin Peaks same-store sales and the closure of one Smokey Bones location during its conversion[5][7] Costs and Expenses Costs and expenses increased as a percentage of revenue, with food and labor costs rising, while advertising expenses decreased due to reduced marketing for Smokey Bones Key Restaurant Operating Costs as a % of Restaurant Sales | Cost Category | Q1 2025 (%) | Q1 2024 (%) | | :--- | :--- | :--- | | Food and beverage costs | 27.1% | 26.9% | | Labor and benefits cost | 32.2% | 31.9% | - Advertising expenses decreased by $0.9 million (14.9%) to $5.1 million, mainly due to reduced marketing for the Smokey Bones brand[10] - Total other expense, primarily interest expense, remained high at $10.8 million for the quarter[11] Profitability Profitability declined significantly in Q1 2025, with an operating loss of $1.1 million, a wider net loss of $12.1 million, and a 28.7% drop in Adjusted EBITDA Profitability Comparison (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income (loss) from operations | $(1,056) | $1,334 | | Net loss | $(12,112) | $(9,221) | | Adjusted EBITDA | $5,069 | $7,113 | - The restaurant contribution margin for the Twin Peaks brand was 16.9%, significantly higher than the Smokey Bones brand at 4.4%[7] Appendix: Non-GAAP Reconciliations & Definitions This appendix defines key performance indicators and provides reconciliations for non-GAAP financial measures like EBITDA, Adjusted EBITDA, and Restaurant-Level Contribution Key Financial Definitions This section defines key financial metrics, including same-store sales growth for stores open at least 18 months and system-wide sales growth for all stores - Same-store sales growth is calculated for stores open for at least eighteen months[13] - System-wide sales growth includes sales from all stores in the system for a given period compared to the prior period[14] Non-GAAP Measures and Reconciliations The company uses non-GAAP measures like Adjusted EBITDA ($5.1 million) and Restaurant-Level Contribution ($8.7 million, 11.2% margin), with detailed reconciliations provided Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(12,112) | $(9,221) | | Interest expense, net | $10,822 | $10,408 | | Income tax provision | $265 | $79 | | Depreciation and amortization | $6,094 | $5,746 | | EBITDA | $5,069 | $7,012 | | Equity based compensation | $0 | $101 | | Adjusted EBITDA | $5,069 | $7,113 | Restaurant-Level Contribution Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income (loss) from operations | $(1,056) | $1,334 | | Plus/Less Adjustments | ... | ... | | Restaurant-level contribution | $8,745 | $11,296 | | Company-owned restaurant sales | $78,403 | $83,289 | | Restaurant-Level Contribution Margin | 11.2% | 13.6% |