First Watch Restaurant (US:FWRG)2025-11-04 12:04Financial Performance - Total revenues for the thirteen weeks ended September 28, 2025, were $316.022 million, a 25.6% increase from $251.609 million for the same period in 2024[13] - Restaurant sales reached $313.636 million for the thirteen weeks ended September 28, 2025, compared to $248.965 million in the prior year, reflecting a 26.0% growth[13] - Net income for the thirteen weeks ended September 28, 2025, was $2.991 million, up from $2.112 million in the same quarter of 2024, representing a 41.5% increase[13] - Operating income for the thirteen weeks ended September 28, 2025, was $10.050 million, compared to $6.313 million in the prior year, marking a 59.5% increase[13] - The company reported a comprehensive income of $3.057 million for the thirteen weeks ended September 28, 2025, compared to a loss of $560,000 in the same period of 2024[13] - For the thirty-nine weeks ended September 28, 2025, net income was $4,268,000, a decrease from $18,226,000 for the same period in 2024[17] - Basic net income per common share increased to $0.05 for the thirteen weeks ended September 28, 2025, up from $0.03 in the same period of 2024[78] Assets and Liabilities - Total assets as of September 28, 2025, were $1.720 billion, an increase from $1.514 billion as of December 29, 2024[11] - Total liabilities increased to $1.113 billion as of September 28, 2025, compared to $918.967 million at the end of the previous fiscal year[11] - The company’s accumulated deficit decreased to $49.554 million as of September 28, 2025, from $53.822 million at the end of the previous fiscal year[11] - As of September 28, 2025, total debt, net was $264.1 million, an increase from $198.3 million as of December 29, 2024[40] - Total accrued liabilities increased to $49.8 million as of September 28, 2025, compared to $39.6 million as of December 29, 2024[39] Cash Flow and Investments - Net cash provided by operating activities was $107,452,000 for the thirty-nine weeks ended September 28, 2025, compared to $92,749,000 in 2024, indicating a 15.8% increase[17] - Capital expenditures for the same period were $120,108,000, up from $87,272,000 in 2024, marking a 37.7% increase[17] - The company reported a net cash used in investing activities of $175,771,000 for the thirty-nine weeks ended September 28, 2025, compared to $165,919,000 in 2024[17] - Proceeds from borrowings on the revolving credit facility amounted to $261,500,000 in 2025, significantly higher than $22,500,000 in 2024[17] - The ending cash and cash equivalents balance was $20,714,000 as of September 28, 2025, down from $51,129,000 in 2024[17] Expenses - Labor and related expenses for the thirteen weeks ended September 28, 2025, were $102,387,000, a 22.2% increase from $83,756,000 in the same period of 2024[76] - Occupancy expenses increased to $25,891,000 for the thirteen weeks ended September 28, 2025, compared to $21,075,000 in the same period of 2024, representing a 22.9% increase[76] - General and administrative expenses for the thirteen weeks ended September 28, 2025, were $30,869,000, up from $25,604,000 in the same period of 2024, indicating a 20.5% increase[76] - Depreciation and amortization for the same period was $54,355,000, compared to $41,960,000 in 2024, reflecting a 29.5% increase[17] - Stock-based compensation increased to $7,926,000 in 2025 from $6,394,000 in 2024, representing an increase of 24%[17] Acquisitions and Growth - The company acquired 19 franchise-operated First Watch restaurants in two transactions during the second quarter of 2025, with a total purchase price of $56.2 million[33][34] - Goodwill recognized from the acquisitions amounted to $21.6 million, reflecting expected synergies and an assembled workforce[34] - The company expects to finalize the valuations of acquired assets within one year from the acquisition dates[33] - The weighted average estimated useful life of reacquired rights from the acquisitions is 6.1 years[35] Lease and Debt Management - Total lease assets increased to $622.1 million as of September 28, 2025, compared to $530.4 million as of December 29, 2024[52] - Total lease liabilities increased to $731.2 million as of September 28, 2025, from $614.0 million as of December 29, 2024[52] - Operating lease expense for the thirteen weeks ended September 28, 2025, was $21.9 million, up from $18.3 million for the same period in 2024[54] - The company entered into two variable-to-fixed interest rate swaps with an aggregate notional amount of $90.0 million, paying a fixed rate of 4.16% and maturing on October 6, 2026[48] - An additional two variable-to-fixed interest rate swaps were entered into with a notional amount of $60.0 million, paying a fixed rate of 4.42% and maturing on June 30, 2027[49] Tax and Market Risks - The effective income tax rate for the thirteen weeks ended September 28, 2025, was 47.3%, an increase from 39.6% in the prior year[66] - The company has established a valuation allowance for deferred tax assets deemed not realizable as of September 28, 2025[71] - The company does not anticipate any material changes to its exposure to market risks as disclosed in the 2024 Form 10-K[169] Shareholder Information - The weighted average number of common shares outstanding was 61,027,278 for the thirteen weeks ended September 28, 2025, compared to 60,428,016 in the same period of 2024[13] - The company granted a total of 1,028,509 restricted stock units during the thirty-nine weeks ended September 28, 2025[62]