Arcos Dorados (US:ARCO)2025-05-14 12:02Financial Performance - Total revenues for Q1 2025 were $1,076,592, a slight decrease of 0.3% from $1,081,356 in Q1 2024[10] - Net income attributable to Arcos Dorados Holdings Inc. for Q1 2025 was $13,930, down 51.1% from $28,509 in Q1 2024[10] - Basic and diluted net income per share decreased to $0.07 in Q1 2025 from $0.14 in Q1 2024[10] - Comprehensive income attributable to Arcos Dorados Holdings Inc. for Q1 2025 was $57,727, compared to $20,036 in Q1 2024, representing a significant increase[13] - For the three-month period ended March 31, 2024, Arcos Dorados Holdings Inc. reported a net income of $28,509 thousand, compared to a net income of $13,930 thousand for the same period in the previous year, representing a year-over-year increase of approximately 104%[23] - Adjusted EBITDA for the same period was $91,279, down from $108,935 year-over-year, reflecting a decrease of approximately 16.3%[94] - Net income attributable to Arcos Dorados Holdings Inc. for the three-month period was $13,930, down from $28,509 in the prior year, a decrease of approximately 51.1%[94] Assets and Liabilities - Total current assets increased significantly to $860,809 in Q1 2025 from $468,403 at the end of 2024, representing an increase of 83.5%[16] - Total assets increased to $3,467,020 in Q1 2025 from $2,892,654 at the end of 2024, reflecting a growth of 20%[16] - Total liabilities also increased to $2,950,257 in Q1 2025 from $2,383,225 at the end of 2024, an increase of 23.7%[16] - The total shareholders' equity at the end of the reporting period was $486,525 thousand, reflecting a decrease from the previous period due to comprehensive losses[23] - The retained earnings at the end of the period were $544,140 thousand, down from $566,188 thousand at the beginning of the fiscal year[23] - As of March 31, 2025, the total short-term debt amounted to $38,366, a decrease of 36.3% from $60,251 as of December 31, 2024[47] - Long-term debt increased to $1,175,408 as of March 31, 2025, compared to $718,598 as of December 31, 2024, reflecting a significant rise of 63.5%[57] - The fair value of the company's short-term and long-term debt was estimated at $1,195,979,000, compared to a carrying amount of $1,235,647,000 as of March 31, 2025[120] Cash Flow and Financing Activities - Net cash used in operating activities was $13,436 in Q1 2025, compared to $9,388 in Q1 2024, indicating a decline in cash flow from operations[18] - Net cash provided by financing activities was $418,675 in Q1 2025, a substantial increase compared to a net cash used of $8,045 in Q1 2024[18] - The Company issued Senior Notes for an aggregate principal amount of $600 million maturing in 2032, with an interest rate of 6.375% per annum[58] - The proceeds from the 2032 Notes were used to redeem 35.27% of the outstanding principal of the 2027 Notes for $136,145 plus accrued interest[59] - The Company maintained revolving credit facilities totaling $75 million, with interest rates ranging from 2.65% to 4.85%[50] Operational Highlights - The company operates and franchises McDonald's restaurants across 20 territories in Latin America and the Caribbean, with rights granted by McDonald's Corporation through Master Franchise Agreements[27] - Effective January 1, 2025, the company entered into new Master Franchise Agreements with McDonald's Corporation, extending the operational terms for most territories to 20 years[28] - The Company expects to open 90-100 new restaurants in 2025, with a commitment to reimage at least 10% of its eligible restaurants[79] Derivatives and Risk Management - The Company has entered into various derivatives, including sustainability-linked ESG principal only swaps, to hedge against foreign exchange risks[63] - The Company reported a net derivative loss of $(14,835) recognized in accumulated other comprehensive income for the three-month period ended March 31, 2025[68] - The total fair value of derivative instruments as of March 31, 2025, was $75,539, down from $82,383 as of December 31, 2024, indicating a decrease of about 8.8%[64] - The notional amount of forward contracts designated as cash flow hedges increased to $58,414 as of March 31, 2025, from $48,799 as of December 31, 2024[67] Shareholder Information - The Company declared cash dividends of $0.24 per share, totaling $50,557 thousand distributed to shareholders during the period[23] - The Company approved a cash dividend distribution of $0.24 per share, to be paid in four installments of $0.06 each on March 27, June 27, September 26, and December 26, 2025[103] - The Company’s cash dividends paid as of March 31, 2025, totaled $12,640,000[103] - As of March 31, 2025, the Company had 210,663,057 shares outstanding, including 130,663,057 Class A shares and 80,000,000 Class B shares[100] Accounting and Compliance - The Company is currently assessing the impact of new accounting standards on its consolidated financial statement disclosures[44] - The company’s total assets and liabilities are reported in accordance with US GAAP, with significant intercompany balances eliminated in consolidation[29] - The Company’s total liabilities must not exceed its assets for dividend distributions to be made[102] - No material fair value adjustments were required for non-financial assets or liabilities as of March 31, 2025[121] - The company’s derivative contracts were valued using pricing models that incorporate observable market parameters, indicating a robust valuation approach[119]