Financial Performance - Total revenue for the three months ended March 31, 2021, was $11,035,000, a 32.3% increase from $8,337,000 for the same period in 2020[10] - Restaurant sales increased to $8,506,000 in Q1 2021, up from $6,123,000 in Q1 2020, representing a 39.0% growth[10] - The net loss for the three months ended March 31, 2021, was $8,210,000, compared to a net income of $777,000 for the same period in 2020[10] - Systemwide restaurant sales for the three months ended March 31, 2021, reached $39.82 million, reflecting a 19% growth compared to the same period in 2020[92] - Same store sales increased by 4% for the three months ended March 31, 2021, compared to the same period in 2020[91] - Corporate restaurant sales amounted to $8.14 million, with a growth of 41% year-over-year[92] - Digital channel systemwide sales were $13.01 million, showing a significant growth of 98% compared to the previous year[92] Operating Expenses - Total operating expenses for Q1 2021 were $13,692,000, compared to $7,589,000 in Q1 2020, reflecting an increase of 80.0%[10] - The company reported a significant increase in depreciation and amortization expense to $2,108,000 in Q1 2021 from $244,000 in Q1 2020[10] - Share-based compensation expense for Q1 2021 was $522,000, reflecting the company's commitment to incentivizing its workforce[10] - General and administrative expenses increased by approximately $1.4 million, driven by merger and acquisition-related expenses and labor costs[110] - Depreciation and amortization expense increased by approximately $1.9 million, primarily due to the amortization of intangible assets acquired in the Business Combination[112] Cash Flow and Liquidity - Cash provided by operating activities for Q1 2021 was $1,026,000, down from $1,616,000 in Q1 2020[14] - The company had a cash balance of $36,778,000 at the end of Q1 2021, significantly up from $3,210,000 at the end of Q1 2020[14] - Cash flows provided by operating activities for the three months ended March 31, 2021, were approximately $1.0 million, resulting from a net loss of $8.2 million and a net working capital increase of approximately $1.1 million[127] - Cash flows used in investing activities during the same period were approximately $1.6 million, primarily due to the construction and development of new corporate-owned restaurants, with two new restaurants opened and four under construction[128] - Cash flows used in financing activities were $3.0 million, mainly due to the termination and repayment of a line of credit[129] Business Operations - The company operates approximately 117 franchised and corporate-owned restaurants, focusing on delivering a premium burger experience[15] - The business combination with Opes Acquisition Corp. was completed on December 16, 2020, marking a significant transition for the company[16] - As of March 31, 2021, BurgerFi had 98 franchised stores, a decrease from 102 at the end of 2020, with 6 stores closed during the period[21] - The company opened 2 corporate-owned stores during the three months ended March 31, 2021, increasing the total from 17 to 19[21] - The company plans to offer franchises in states where demographics indicate demand for its services, following the preparation of its Franchise Disclosure Document[20] Financial Position - The company recorded property and equipment, net of $9.26 million as of March 31, 2021, up from $8.00 million at the end of 2020[30] - Goodwill as of March 31, 2021, was $119.96 million, reflecting an adjustment of $0.41 million since December 31, 2020[37] - The aggregate value of the consideration paid in the Business Combination was approximately $236.9 million, including a cash payment of $30 million and the issuance of 6,603,773 common stock shares valued at approximately $103.68 million[35] - The company recorded adjustments to goodwill amounting to $413,000 during the three months ended March 31, 2021[64] - The company has a full valuation allowance of $1.2 million against its net deferred tax assets as of March 31, 2021[66] Debt and Liabilities - As of March 31, 2021, the Company had total notes payable of $2,836,000, down from $2,960,000 as of December 31, 2020[62] - The Company had a revolving line of credit agreement of $5,000,000, with an outstanding balance of $3,012,000 as of December 31, 2020, which was fully paid off in January 2021[59] - Future minimum payments on operating leases as of March 31, 2021 are approximately $2,523,000 for the remainder of 2021 and $29,477,000 for 2026 and thereafter[49] - The liability classified warrants were valued at $21,462,000 as of March 31, 2021, reflecting a change in value of $4,946,000 for the period[72] Internal Controls and Governance - Management identified a material weakness in internal control over financial reporting related to the financial close and reporting process, necessitating the use of outside consultants[134] - A new Chief Financial Officer was hired effective May 3, 2021, as part of the remediation plan for the identified material weaknesses[135] - The company plans to engage external advisors to evaluate and document the design and operating effectiveness of its internal control over financial reporting[135] - The financial statements included in the quarterly report fairly present the company's financial condition and results of operations in conformity with GAAP[137] - The company continues to assess its internal control over financial reporting and intends to take further action as necessary[136]
BurgerFi(BFI) - 2022 Q1 - Quarterly Report