Financial Data and Key Metrics Changes - Total revenue for Q4 2024 decreased by 8.4% to $145.3 million compared to $158.6 million in Q4 2023, primarily due to one less operating week in the current quarter [15][43] - System-wide sales were $580.2 million for the quarter, representing a 7.4% decrease from the previous year, again impacted by the fewer operating weeks [15][43] - The net loss for Q4 2024 was $67.4 million, or $4.06 per diluted share, compared to a net loss of $26.2 million, or $1.68 per share in the prior year [47] - Adjusted EBITDA for the quarter was $14.4 million, down from $27 million in the year-ago quarter [48] Business Line Data and Key Metrics Changes - The company opened 92 new restaurants in 2024 and plans to open over 100 in 2025, with 17 units already opened year-to-date [18][19] - The company is focusing on organic growth across its existing brand portfolio, with a pipeline of over 1,000 additional locations signed [20] - Co-branding initiatives have been successful, with Great American Cookies and Marble Slab Creamery growing to over 160 co-branded locations since 2014 [21] Market Data and Key Metrics Changes - International locations for Johnny Rockets now represent over 55% of the brand's global footprint, with 11 new international locations opened in 2024 [23] - The company continues to expand in key international markets, with over 40 locations in Brazil and nearly 25 in Mexico [23] Company Strategy and Development Direction - The company is focused on three core strategic initiatives: generating organic growth, evaluating strategic acquisitions, and expanding manufacturing capabilities [17] - The spin-off of Twin Hospitality Group is seen as a major milestone, enhancing transparency and providing additional growth opportunities for shareholders [7][8] - The company aims to reduce debt by $75 million or more in 2025, with a commitment to not pay a FAT common dividend until a minimum of $25 million is paid [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting strong consumer demand and a robust development pipeline [20][38] - The company noted challenges in the QSR sector, particularly with Fazoli's, but also mentioned positive trends in other brands like Round Table Pizza [75] - Management is focused on deleveraging the balance sheet while executing on organic growth opportunities [38][80] Other Important Information - The company recognized a non-cash goodwill and other intangible asset impairment of $30.6 million in Q4 2024 due to declining restaurant performance [46] - The FAT Brands Foundation increased its giving by 36% in 2024, providing approximately $325,000 in grants [34] Q&A Session Summary Question: Regarding the Smokey Bones impairment loss - Management confirmed that the operating loss from closed restaurants affected results, quantified at about $2.6 million for the full year [50][53] Question: Update on litigation costs - Management expressed hope that most litigation would be resolved in the current year, potentially reducing future legal expenses [54][56] Question: Liquidity status - Management reported approximately $150 million in available-for-sale securities and an ATM on file for liquidity needs [58][59] Question: Performance of different brands - Management noted that Fazoli's faced challenges, while Round Table Pizza and cookie brands showed positive performance [75] Question: M&A pipeline post-election - Management indicated ongoing interest in strategic acquisitions but emphasized a focus on deleveraging rather than increasing leverage [78][80]

Core Viewpoint - Trian Fund Management commends Solventum Corporation for the sale of its Purification & Filtration business to Thermo Fisher Scientific, viewing it as a significant step in the company's value creation journey [1][2] Group 1: Sale Details - Solventum's Purification & Filtration business was sold to Thermo Fisher Scientific, with Trian noting the high valuation multiple attracted by the division's differentiated technology and material science [1] - Thermo Fisher anticipates that the acquisition will be accretive by $0.28, indicating strong cost synergies from replacing Solventum's allocated segment costs with lower costs within Thermo Fisher [2] Group 2: Financial Performance and Growth Potential - Trian highlighted that Solventum has the opportunity to right-size costs and achieve higher margins while reinvesting in growth [3] - Historically, while part of 3M, Solventum achieved 3-4% organic growth and a 26-27% EBIT margin, and Trian believes that as a standalone company, Solventum can deliver faster organic growth and higher margins [4]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported sales of $2.8 billion and EBITDA of $416 million, representing a 7% increase in EBITDA compared to Q4 2023's EBITDA of $390 million [17][24] - Full year 2024 net income was $677 million, with EBITDA totaling $2.3 billion, while total sales for 2024 declined by 3% to $12.1 billion due to a 10% decline in average sales prices [25][26] - The company achieved total cost reductions of $170 million in 2024, exceeding the target of $125 million to $150 million [16][32] Business Segment Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment achieved record income from operations of $807 million and an EBITDA margin of 24%, driven by an 8% sales volume growth [20][28] - The Performance and Essential Materials (PEM) segment saw a 1% increase in sales volume, primarily due to export market demand, although average sales prices were impacted by industry capacity increases [18][30] - HIP's EBITDA margin improved to 19% in Q4 2024, while PEM's EBITDA margin increased to 12% from 11% in the same period of 2023 [27][31] Market Data and Key Metrics Changes - North America showed strong demand across both segments, supported by a broad product portfolio and a strong feedstock position [19] - The company expects housing starts for 2025 to remain similar to 2024 at 1.3 million [33] Company Strategy and Development Direction - The company is focused on sustainability and has initiated several key projects, including a pilot program for post-consumer recycled PVC and investments in carbon waste transformation technology [36][37] - The company plans to continue optimizing its business to drive operational performance and reduce costs, with a target of $125 million to $150 million in cost reductions for 2025 [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the HIP segment, citing strong brand offerings and geographical reach [39][41] - The company acknowledges uncertainties in the global macroeconomic environment but remains focused on actions within its control to improve business performance [41] Other Important Information - The company returned approximately $325 million to shareholders through dividends and share repurchases in 2024 [21][32] - As of December 31, 2024, the company had $2.9 billion in cash and cash equivalents, with total debt of $4.6 billion [31] Q&A Session Summary Question: Insights on HIP margins and expected degradation - Management indicated that margin guidance reflects a product mix shift rather than a decline in overall demand [49] Question: Cost cuts distribution across divisions - Cost reduction efforts will be significant in both HIP and PEM segments, particularly in logistics and procurement [52] Question: Concerns about homebuilder outlook affecting volumes - Management remains confident in growth, expecting market penetration to increase despite broader economic concerns [59] Question: Impact of tariffs on PVC trade flows - Management is monitoring potential impacts of tariffs on trade patterns and will adapt as necessary [62] Question: Volume and price changes for the year - Year-over-year volume improvements were 6% for PEM and 8% for HIP, with price declines of 12% for PEM and 6% for HIP [81][84] Question: Free cash flow outlook for 2025 - Management expects stronger free cash flow generation in 2025 due to continued strength in the HIP business [90] Question: Recent demand experience in major product lines - Demand for polyethylene remains strong, with price initiatives reflecting good market conditions [118] Question: Expectations for EBITDA margins in 2025 - Management views the 20% to 22% EBITDA margin guidance as conservative, with potential for improvement if housing starts increase [132]