Twin Hospitality Group Inc-A(TWNP) - 2025 Q2 - Quarterly Results

Executive Summary & Business Overview This section provides an overview of the company's strategic priorities, development pipeline, and core business operations, highlighting leadership commentary and company profile CEO & CFO Commentary The new CEO, Kim Boerema, outlined six strategic priorities to address short-term pressures and drive long-term value, focusing on operational fundamentals, cost discipline, and menu streamlining. CFO Ken Kuick highlighted the strong development pipeline, including successful conversions from Smokey Bones to Twin Peaks and nearly 100 signed franchise agreements, as key to efficient expansion and attractive returns - CEO Kim Boerema outlined six clear priorities to improve execution and deliver long-term value: focusing on great operations, reducing complexity, sharpening cost discipline, streamlining menu offerings, market-informed pricing, and positioning for dynamic growth[3] - The development pipeline remains a key asset, with a franchised Twin Peaks lodge opening in Fayetteville, NC by year-end, and two company-owned conversions planned for early 2026. Converted locations deliver significantly higher volumes than as Smokey Bones[4] - The company has nearly 100 signed franchise agreements and strong demand from existing partners, indicating confidence in efficient expansion through new builds and conversions[4] Company Profile Twin Hospitality Group Inc. operates and franchises specialty casual dining restaurant concepts, Twin Peaks and Smokey Bones, aiming to redefine the casual dining category with experiential brands. Twin Peaks is an award-winning sports lodge with 114 locations, while Smokey Bones is a full-service, meat-centric restaurant with 51 locations - Twin Hospitality Group Inc. (NASDAQ: TWNP) develops, operates, and franchises specialty casual dining restaurant concepts: Twin Peaks and Smokey Bones[16] - Twin Peaks, known as the ultimate sports lodge, has 114 locations across 27 states and Mexico, offering made-from-scratch food, 29-degree draft beer, innovative cocktails, and wall-to-wall televisions for sports[16] - Smokey Bones is a full-service, meat-centric restaurant brand with 51 locations across 16 states, specializing in ribs and other slow-smoked, fire-grilled, and seared meats, along with a full bar[16] Fiscal Second Quarter 2025 Financial Performance This section details Twin Hospitality Group's financial results for Q2 2025, including revenue, operating income, net loss, and key margin metrics, highlighting a decline in overall performance Overall Financial Summary Twin Hospitality Group reported a 4.1% decrease in total revenue for Q2 2025, primarily due to Smokey Bones closures and lower same-store sales, despite new Twin Peaks lodges. The company shifted from an operating income to a significant operating loss, and net loss more than doubled. Restaurant contribution margin and Adjusted EBITDA also declined | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | | Total Revenue | $87.8 | $91.6 | -4.1% | | Twin Peaks System-Wide Sales | +0.3% | N/A | +0.3% | | Twin Peaks Same-Store Sales | -4.4% | N/A | -4.4% | | Loss from Operations | ($11.6) | $1.4 | N/A | | Net Loss | ($20.8) | ($10.7) | +94.4% | | Restaurant Contribution Margin | 11.8% | 13.4% | -1.6 pp | | Adjusted EBITDA | $5.2 | $7.0 | -25.9% | - Total revenue decreased by $3.7 million, or 4.1%, to $87.8 million in Q2 2025, driven by Smokey Bones closures and lower same-store sales, partially offset by new Twin Peaks lodges[6] - The company reported a loss from operations of $11.6 million in Q2 2025, a significant decline from an income from operations of $1.4 million in Q2 2024[9] Detailed Costs and Expenses Food and beverage costs decreased in absolute terms due to lower sales but remained stable as a percentage of restaurant sales. Labor and benefits costs also decreased in absolute terms but slightly increased as a percentage of restaurant sales due to wage inflation. Other operating costs increased both in absolute terms and as a percentage of restaurant sales | Cost Category | Q2 2025 ($M) | Q2 2025 (% of sales) | Q2 2024 ($M) | Q2 2024 (% of sales) | YoY Change ($M) | YoY Change (% of sales) | | :-------------------- | :----------- | :------------------- | :----------- | :------------------- | :-------------- | :---------------------- | | Food & Beverage Cost | $21.5 | 27.1% | $22.9 | 27.4% | -$1.4 | -0.3 pp | | Labor & Benefits Cost | $25.3 | 31.8% | $26.4 | 31.6% | -$1.1 | +0.2 pp | - Food and beverage cost decreased by $1.4 million (6.1%) to $21.5 million, primarily due to lower same-store sales, with its percentage of restaurant sales at 27.1% in 2025 compared to 27.4% in 2024[7] - Labor and benefits cost decreased by $1.1 million (4.3%) to $25.3 million, mainly due to lower same-store sales, with its percentage of restaurant sales at 31.8% in 2025 compared to 31.6% in 2024[8] Other Expense, Net Other expense, net, primarily consisting of interest expense, slightly decreased to $11.3 million in Q2 2025 from $12.2 million in the prior year period | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change ($M) | | :---------------- | :-------------------- | :-------------------- | :-------------- | | Other Expense, Net | $11.3 | $12.2 | -$0.9 | - Other expense, net, was $11.3 million in Q2 2025, down from $12.2 million in Q2 2024, primarily consisting of interest expense in both periods[10] Financial Statements & Reconciliations This section presents the consolidated statements of operations and reconciliations for non-GAAP measures, providing a comprehensive view of the company's financial performance and adjustments Consolidated Statements of Operations The Consolidated Statements of Operations provide a detailed breakdown of revenues, costs, and expenses, culminating in the net loss for the thirteen and twenty-six weeks ended June 29, 2025, and June 30, 2024. It shows a significant increase in net loss and a shift from operating income to loss in the current fiscal periods | (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Twenty-Six Weeks Ended June 29, 2025 | Twenty-Six Weeks Ended June 30, 2024 | | :-------------------------------- | :--------------------------------- | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Restaurant sales | $79,625 | $83,706 | $158,028 | $166,995 | | Franchise revenue | $8,221 | $7,888 | $16,923 | $16,660 | | Total revenue | $87,846 | $91,594 | $174,951 | $183,655 | | Total costs and expenses | $99,435 | $90,200 | $187,596 | $180,927 | | Income (loss) from operations | ($11,589) | $1,394 | ($12,645) | $2,728 | | Total other expense, net | ($11,314) | ($12,225) | ($22,105) | ($22,701) | | Loss before income tax provision | ($22,903) | ($10,831) | ($34,750) | ($19,973) | | Income tax provision | ($2,119) | ($99) | ($1,854) | ($20) | | Net loss | ($20,784) | ($10,732) | ($32,896) | ($19,953) | EBITDA and Adjusted EBITDA Reconciliation This section provides a reconciliation of net loss to EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended June 29, 2025, and June 30, 2024. It shows a negative EBITDA for Q2 2025, which becomes positive Adjusted EBITDA after adding back equity-based compensation | (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Twenty-Six Weeks Ended June 29, 2025 | Twenty-Six Weeks Ended June 30, 2024 | | :-------------------------- | :--------------------------------- | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Net loss | ($20,784) | ($10,732) | ($32,896) | ($19,953) | | Interest expense, net | $11,456 | $12,004 | $22,278 | $22,412 | | Income tax provision | ($2,119) | ($99) | ($1,854) | ($20) | | Depreciation and amortization | $4,072 | $5,841 | $10,166 | $11,587 | | EBITDA | ($7,375) | $7,014 | ($2,306) | $14,026 | | Equity based compensation | $12,552 | — | $12,552 | $202 | | Adjusted EBITDA | $5,177 | $7,014 | $10,246 | $14,228 | Restaurant-Level Contribution and Margin Reconciliation This reconciliation details the calculation of Restaurant-Level Contribution and Restaurant-Level Contribution Margin, showing a decrease in both metrics for the current fiscal periods compared to the prior year, reflecting operational pressures | (in thousands) | Thirteen Weeks Ended June 29, 2025 | Thirteen Weeks Ended June 30, 2024 | Twenty-Six Weeks Ended June 29, 2025 | Twenty-Six Weeks Ended June 30, 2024 | | :-------------------------------- | :--------------------------------- | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Income (loss) from operations | ($11,589) | $1,394 | ($12,645) | $2,728 | | Less: Royalties and franchise fees | ($5,259) | ($5,211) | ($10,516) | ($10,207) | | Plus: General and administrative expense | $19,894 | $6,902 | $26,708 | $13,894 | | Company-owned restaurant advertising expense | $2,094 | $2,217 | $3,728 | $4,299 | | Depreciation and amortization | $4,072 | $5,841 | $10,166 | $11,587 | | Pre-opening expense | $178 | $64 | $695 | $92 | | Restaurant-level contribution | $9,390 | $11,207 | $18,136 | $22,393 | | Company-owned restaurant sales | $79,625 | $83,706 | $158,028 | $166,995 | | Restaurant-Level Contribution Margin | 11.8% | 13.4% | 11.5% | 13.4% | Non-GAAP Financial Measures This section provides definitions and explanations for the non-GAAP financial measures used by Twin Hospitality Group, clarifying their purpose and limitations for financial analysis Definitions of Non-GAAP Measures This section defines the non-GAAP financial measures used by Twin Hospitality Group, including EBITDA, Adjusted EBITDA, Restaurant-Level Contribution, and Restaurant-Level Contribution Margin. It clarifies their calculation, purpose for investors and analysts, and acknowledges their limitations as alternatives to GAAP measures - EBITDA is defined as earnings before interest, taxes, and depreciation and amortization, used to evaluate operating performance by eliminating non-business performance expenses[19] - Adjusted EBITDA is EBITDA excluding expenses related to acquisitions, refranchising losses, impairment charges, and certain non-recurring or non-cash items not indicative of core operations[20] - Restaurant-Level Contribution represents company-owned restaurant sales less restaurant operating costs, with Restaurant-Level Contribution Margin being this contribution as a percentage of company-owned restaurant sales, used to evaluate restaurant-level productivity and performance[21] Key Financial Definitions This section outlines the definitions for critical operational metrics used in the financial report, providing clarity on how performance is measured and reported Operational Metrics Definitions This section provides definitions for key operational metrics used in the financial report, including new store openings, same-store sales growth, and system-wide sales growth, clarifying how these metrics are calculated and their impact on results - New store openings reflect the number of stores opened during a reporting period, impacting results based on total number and timing[11] - Same-store sales growth reflects the year-over-year change for comparable stores open in the Twin Hospitality Group system for at least eighteen months, with adjustments for temporary closures[12] - System-wide sales growth reflects the percentage change in sales for all stores in any given fiscal period compared to the prior fiscal period[13] Additional Information This section includes important supplementary information such as forward-looking statements, details for the conference call and webcast, and contact information for investor and media relations Forward-Looking Statements This section includes a standard disclaimer regarding forward-looking statements, emphasizing that they are subject to significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from expectations. The company undertakes no obligation to update these statements - The press release contains forward-looking statements regarding future financial and operating results, new store openings, expense reductions, and the development pipeline[17] - Forward-looking statements are subject to significant business, economic, and competitive risks, uncertainties, and contingencies that could cause actual results to differ materially[17] - The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of the press release[17] Conference Call & Webcast Twin Hospitality Group Inc. will host a conference call and webcast on July 30, 2025, at 5:15 PM ET to discuss its fiscal second quarter 2025 financial results, with CEO Kim Boerema and CFO Ken Kuick presenting. Details for live access and replay are provided - Twin Hospitality Group Inc. hosted a conference call and webcast on July 30, 2025, at 5:15 PM ET to discuss fiscal second quarter 2025 financial results[14] - The call featured Kim Boerema (CEO and President) and Ken Kuick (CFO)[14] - Access details for the live call were 1-877-407-0792 (U.S.) or 1-201-689-8263 (international), with a replay available until August 13, 2025, and webcast archived at www.twinpeaksrestaurant.com[15](index=15&type=chunk) Investor & Media Contacts Contact information for investor relations and media inquiries is provided, with specific contacts for each department - Investor Relations contact: Michelle Michalski at ir@twinpeaksrestaurant.com[23] - Media Relations contact: Destinee Rollins at destinee.rollins@tprest.com or 972-342-5902[23]