BurgerFi(BFI) - 2025 Q1 - Quarterly Results

First Quarter 2024 Results Overview BurgerFi reported a challenging first quarter with declining revenue and systemwide sales, though net loss narrowed, and management noted sequential improvements and strategic focus First Quarter 2024 Highlights BurgerFi reported a challenging first quarter with total revenue decreasing to $42.9 million from $45.7 million year-over-year, with net loss narrowing to $6.5 million Q1 2024 Key Financial Results vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $42.9 million | $45.7 million | | Consolidated Systemwide Sales | $66.0 million | $73.4 million | | Net Loss | $6.5 million | $9.2 million | | Diluted EPS | $(0.24) | $(0.39) | | Adjusted EBITDA | $0.3 million | $2.6 million | Q1 2024 Same-Store and Systemwide Sales Growth | Brand/Metric | Change vs. Q1 2023 | | :--- | :--- | | Anthony's Same-Store Sales | -2% | | BurgerFi Systemwide Sales | -17% | | BurgerFi Systemwide Same-Store Sales | -13% | - The company opened one franchised BurgerFi and one corporate-owned flagship BurgerFi in New York City during the quarter[17] - Employee turnover rates continued to decline significantly, with both hourly and management turnover improving, and Anthony's turnover is within industry benchmarks while BurgerFi approaches them[48] Management Commentary Management acknowledged a difficult start to 2024 due to a challenging consumer environment and unfavorable weather, but noted sequential improvement and strategic focus - CEO Carl Bachmann stated that despite a difficult start, performance is not indicative of the brands' long-term potential, noting sequential improvement during the quarter, with March same-store sales at Anthony's being flat after adjusting for the Easter shift[17] - The company remains focused on driving revenue growth and enhancing operational efficiencies through five key strategic priorities implemented since July 2023[18] - CFO Christopher Jones highlighted the rollout of new inventory control systems for both brands and a new point-of-sale platform for Anthony's, which are expected to support future progress and operational streamlining[18] Financial Performance The company experienced a decline in Q1 2024 consolidated systemwide sales and total revenue, while net loss improved, and Adjusted EBITDA significantly decreased, reflecting operational challenges Key Metrics Summary In Q1 2024, consolidated systemwide restaurant sales fell 10% to $66.0 million, with same-store sales declining 7%, while the digital channel's contribution remained steady at 32% Consolidated Key Metrics (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Systemwide Restaurant Sales | $66,034 | $73,445 | | Systemwide Restaurant Sales Growth | (10)% | —% | | Systemwide Restaurant Same-Store Sales Growth | (7)% | 1% | | Corporate-Owned Restaurant Sales | $40,885 | $43,310 | | Corporate-Owned Restaurant Same-Store Sales Growth | (5)% | 1% | | Franchise Restaurant Sales | $25,149 | $30,135 | | Franchise Restaurant Same-Store Sales Growth | (12)% | 2% | | Digital Channel % of Systemwide Sales | 32% | 32% | Brand-Specific Key Metrics (Q1 2024 vs Q1 2023) | Metric (Growth) | Anthony's | BurgerFi | | :--- | :--- | :--- | | Systemwide Restaurant Sales | (1)% | (17)% | | Systemwide Same-Store Sales | (2)% | (13)% | | Corporate-Owned Sales | (2)% | (16)% | | Corporate-Owned Same-Store Sales | (2)% | (16)% | First Quarter 2024 Financial Results Total revenue decreased 6% to $42.9 million in Q1 2024, driven by lower same-store sales and corporate store closures, while net loss narrowed to $6.5 million - Total revenue decreased 6% to $42.9 million in Q1 2024, down from $45.7 million in Q1 2023, primarily due to decreased same-store sales and the closure of underperforming corporate-owned BurgerFi locations[21] - Restaurant-level operating expenses as a percentage of sales increased by 360 basis points for Anthony's and 850 basis points for BurgerFi, mainly due to higher labor rates and lower sales leverage[22] - Net loss narrowed to $6.5 million from $9.2 million year-over-year, primarily due to lower share-based compensation, general and administrative expenses, and restructuring costs[23] - Adjusted EBITDA decreased by $2.3 million to $0.3 million compared to Q1 2023, driven by lost leverage on sales and higher wages[24] Financial Statements The company's financial statements show a decrease in total assets to $252.6 million and a slight decrease in total liabilities, with a net loss of $6.5 million for the quarter Consolidated Balance Sheets As of April 1, 2024, BurgerFi had total assets of $252.6 million, down from $258.5 million, with cash and cash equivalents decreasing to $4.1 million Balance Sheet Summary (in thousands) | Account | April 1, 2024 (in thousands) | January 1, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $4,147 | $7,556 | | Total Current Assets | $9,959 | $12,500 | | Total Assets | $252,608 | $258,476 | | Total Current Liabilities | $82,598 | $82,692 | | Total Liabilities | $200,514 | $201,226 | | Total Stockholders' Equity | $52,094 | $57,250 | Consolidated Statements of Operations For Q1 2024, total revenue was $42.9 million, a decrease from $45.7 million, with the net loss attributable to BurgerFi improving to $6.5 million or $(0.24) per share Statement of Operations Summary (in thousands, except per share data) | Account | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Total Revenue | $42,879 | $45,726 | | Operating Loss | $(4,208) | $(7,000) | | Net loss attributable to BurgerFi | $(6,538) | $(9,151) | | Net loss per common share | $(0.24) | $(0.39) | Reconciliation of Net Loss to Adjusted EBITDA Consolidated Adjusted EBITDA for Q1 2024 was $0.3 million, a sharp decline from $2.6 million in Q1 2023, with the BurgerFi segment contributing a negative $1.5 million Adjusted EBITDA by Segment (in thousands) | Segment | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Anthony's | $1,710 | $3,052 | | BurgerFi | $(1,452) | $(502) | | Consolidated Total | $258 | $2,550 | Restaurant Level Operating Expenses Consolidated restaurant-level operating expenses rose to 87.8% of sales in Q1 2024, primarily due to increased labor costs, with BurgerFi experiencing a more significant increase to 95.9% of sales Anthony's Restaurant Level Operating Expenses (% of sales) | Expense Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Food, beverage and paper | 26.6% | 26.1% | | Labor and related expenses | 33.6% | 30.9% | | Total | 85.7% | 82.1% | BurgerFi Restaurant Level Operating Expenses (% of sales) | Expense Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Food, beverage and paper | 27.8% | 29.0% | | Labor and related expenses | 35.7% | 29.3% | | Total | 95.9% | 87.4% | Operational and Strategic Update The company saw a net reduction in restaurant count during Q1 2024, primarily in the BurgerFi brand, and maintains its full-year outlook, trending towards the lower end of guidance Restaurant Development As of April 1, 2024, the company had 162 total restaurants, with BurgerFi experiencing a net reduction of 6 locations during Q1 due to closures Q1 2024 Store Count Changes | Brand | Beginning Count | Opened | Closed | Ending Count | | :--- | :--- | :--- | :--- | :--- | | BurgerFi | 108 | 2 | (8) | 102 | | Anthony's | 60 | 0 | 0 | 60 | | Total | 168 | 2 | (8) | 162 | - In Q1 2024, BurgerFi opened one franchised location and one corporate-owned flagship restaurant in New York City[26] - In Q2 2024 to date, BurgerFi has opened two additional franchised locations[27] 2024 Outlook Management is maintaining its full-year 2024 outlook, expecting annual revenues of $170-$180 million and Adjusted EBITDA between $7-$9 million, trending towards the low end of the range - Management is trending to the low end of its previously stated 2024 outlook range[28] Fiscal Year 2024 Guidance | Metric | Outlook | | :--- | :--- | | Annual Revenues | $170 - $180 million | | Corporate Same-Store Sales Growth | Low-single digit | | New Restaurants | 10 - 15 (9-14 franchised) | | Adjusted EBITDA | $7 - $9 million | | Capital Expenditures | $2 - $3 million | Appendix The appendix provides an overview of BurgerFi International's multi-brand restaurant concepts, definitions of key financial metrics, details on non-GAAP measures, and information regarding forward-looking statements and the Q1 2024 conference call About BurgerFi International BurgerFi International is a multi-brand restaurant company owning BurgerFi and Anthony's, with a combined 162 locations as of April 1, 2024 - BurgerFi International is a multi-brand restaurant company owning BurgerFi and Anthony's, with a combined 162 locations as of April 1, 2024[11] - Anthony's, acquired in 2021, is a premium pizza and wing brand with 60 locations (59 corporate-owned) centered around a 900-degree coal-fired oven[12] - BurgerFi is a fast-casual better burger concept with 102 locations (27 corporate-owned, 75 franchised) that uses 100% American Angus Beef with no steroids, antibiotics, or growth hormones[14] Key Metrics Definitions The company defines key performance metrics such as Systemwide Restaurant Sales, Same-Store Sales, Digital Channel %, and Adjusted EBITDA, a non-GAAP measure - Systemwide Restaurant Sales: Aggregates sales from all franchised, ghost kitchen, and corporate-owned restaurants[4] - Same-Store Sales: Calculated for restaurants after 14 months of operation to evaluate the performance of the existing store base, excluding new and permanently closed stores[7] - Adjusted EBITDA: A non-GAAP measure defined as net loss adjusted for items such as lease termination, share-based compensation, D&A, interest expense, restructuring costs, and other non-recurring items[9] About Non-GAAP Financial Measures The company uses Adjusted EBITDA, a non-GAAP measure, for financial and operational decision-making, believing it provides meaningful supplemental information for evaluating performance - The company uses Adjusted EBITDA, a non-GAAP measure, for financial and operational decision-making and to evaluate period-to-period comparisons[30][31] - A reconciliation for forward-looking Adjusted EBITDA guidance is not provided due to the impracticality of predicting certain market-based components like share-based compensation without unreasonable effort[47] Forward-Looking Statements This press release contains forward-looking statements regarding future business outlook, financial results, and strategic execution, which are subject to risks and uncertainties - The report includes forward-looking statements concerning future business outlook, liquidity, and financial results, identified by words like "anticipates," "believes," and "expects"[33] - These statements are subject to risks and uncertainties, and the company undertakes no obligation to revise them except as required by law[34] Conference Call Information The company held a conference call on May 15, 2024, at 8:30 a.m. Eastern time to discuss its first quarter 2024 results, with a replay available online - A conference call to discuss Q1 2024 results was scheduled for Wednesday, May 15, 2024, at 8:30 a.m. Eastern time[1] - The conference call will be broadcast live and available for a two-week replay on the company's Investor Relations website[2]