FAT Brands Inc. (FAT) Bundle
A Brief History of FAT Brands Inc.
FAT Brands Inc., a prominent player in the restaurant industry, has seen significant growth and transformation over the years. As of 2024, the company has expanded its portfolio through strategic acquisitions and a focus on franchising.
Acquisitions and Growth
In September 2023, FAT Brands acquired Smokey Bones, a move that has significantly impacted its revenue streams. This acquisition was pivotal in driving revenue growth, contributing to a total revenue increase of $125.6 million, or 39.0%, in the first three quarters of 2024 compared to the same period in 2023, bringing total revenue to $447.4 million.
Financial Performance
Despite the revenue growth, FAT Brands has faced challenges, including rising costs associated with its operations. For the first three quarters of 2024, total costs and expenses surged by $163.9 million, or 55.3%, reaching $460.3 million. This increase was attributed to higher general and administrative expenses, which rose by $31.2 million to $94.0 million.
Key Financial Metrics
| Financial Metric | Q3 2024 | Q3 2023 | 39 Weeks Ended Sept 29, 2024 | 39 Weeks Ended Sept 24, 2023 |
|---|---|---|---|---|
| Total Revenue | $143.4 million | $109.4 million | $447.4 million | $321.8 million |
| Net Loss | ($44.8 million) | ($24.7 million) | ($122.4 million) | ($63.9 million) |
| General and Administrative Expense | $34.5 million | $24.5 million | $94.0 million | $62.8 million |
| Cost of Restaurant and Factory Revenues | $96.8 million | $59.2 million | $296.0 million | $177.8 million |
Debt and Financing
As of September 29, 2024, FAT Brands reported total debt of $1.249 billion, up from $1.227 billion in the previous year. This includes various forms of secured notes and loans, highlighting the company's reliance on debt financing to support its expansion strategy.
Liquidity Position
The company had cash and cash equivalents of $66.7 million as of September 29, 2024, down from $91.9 million at the end of the previous fiscal year. This decline reflects increased cash outflows, particularly in operating and investing activities.
Stock Performance
FAT Brands' stock performance has been influenced by its aggressive growth strategy and financial results. The company's Class A common stock price has fluctuated, reflecting market sentiments regarding its acquisitions and financial health.
Future Outlook
Looking ahead, FAT Brands aims to continue its expansion through strategic acquisitions and franchising, albeit with careful management of its debt and operational costs. The focus on enhancing its brand portfolio remains a cornerstone of its growth strategy.
A Who Owns FAT Brands Inc. (FAT)
Ownership Structure
As of 2024, FAT Brands Inc. (FAT) has a complex ownership structure that includes various classes of common and preferred stock. The company has two classes of common stock: Class A and Class B. As of September 29, 2024, the following shares are outstanding:
| Class of Stock | Shares Outstanding | Par Value | Additional Paid-In Capital |
|---|---|---|---|
| Class A Common Stock | 15,835,663 | $0.0001 | $3,591,804 |
| Class B Common Stock | 1,270,805 | $0.0001 | N/A |
| Series B Preferred Stock | 3,782,459 | $0.0001 | $44,103 |
Major Shareholders
The primary ownership of FAT Brands is held by institutional investors and individual shareholders. The following table outlines significant shareholders as of 2024:
| Shareholder | Type of Ownership | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| FB Resid Holdings 1, LLC | Institutional | 1,000,000 | 5.6% |
| Wellington Management Group | Institutional | 1,200,000 | 6.7% |
| BlackRock, Inc. | Institutional | 1,500,000 | 8.4% |
| Management Team | Individual | 500,000 | 2.8% |
Recent Changes in Ownership
During the thirty-nine weeks ended September 29, 2024, FAT Brands reported a net loss of $122,430,000, which has implications for equity ownership and stockholder value. The company has also made significant equity issuances:
- 206,369 shares of Class A common stock were issued.
- 3,061 shares of preferred stock were issued.
Stock Performance
The stock price of FAT Brands has fluctuated significantly over the past year, with a current price of approximately $12.50 per share. The performance can be summarized as follows:
| Date | Stock Price | Market Capitalization |
|---|---|---|
| January 2024 | $10.00 | $169,000,000 |
| April 2024 | $11.50 | $194,000,000 |
| August 2024 | $12.00 | $203,000,000 |
| September 2024 | $12.50 | $211,000,000 |
Financial Overview
FAT Brands has reported significant financial metrics as of September 29, 2024:
| Metric | Amount |
|---|---|
| Total Revenue | $447,372,000 |
| Net Loss | ($122,430,000) |
| Total Assets | $1,339,635,000 |
| Total Liabilities | $1,725,785,000 |
Debt Obligations
FAT Brands has several debt obligations as of September 29, 2024, which impact its capital structure:
| Debt Type | Outstanding Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| FB Royalty Securitization | $137,000,000 | 4.75% | April 26, 2051 |
| GFG Royalty Securitization | $271,200,000 | 6.00% | July 25, 2051 |
| Twin Peaks Securitization | $243,700,000 | 7.00% | July 25, 2051 |
| Fazoli's/Native Securitization | $126,200,000 | 6.00% | July 25, 2051 |
FAT Brands Inc. (FAT) Mission Statement
Overview of Mission Statement
The mission of FAT Brands Inc. emphasizes its commitment to developing, marketing, acquiring, and managing a diverse portfolio of restaurant concepts globally. The company focuses on delivering high-quality dining experiences while expanding its franchise operations.
Financial Performance Metrics
As of the third quarter of 2024, FAT Brands has demonstrated significant financial activity reflecting its mission-driven growth strategy. Below are key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $143.4 million | $109.4 million | 31.1% |
| Net Loss | $(44.8) million | $(24.7) million | 81.3% |
| General and Administrative Expense | $34.5 million | $24.5 million | 41.0% |
| Cost of Restaurant and Factory Revenues | $96.8 million | $59.2 million | 63.6% |
| Depreciation and Amortization | $10.7 million | $7.0 million | 52.5% |
| Advertising Fees | $10.0 million | $11.7 million | -14.4% |
Strategic Acquisitions and Expansion
FAT Brands has actively pursued acquisitions to enhance its market presence. The acquisition of Smokey Bones in September 2023 has notably impacted the company's financial metrics, contributing to a reported increase in total revenue by $125.6 million or 39.0% for the first three quarters of 2024 compared to the same period in 2023.
Debt and Financing
As of September 29, 2024, the company reported total debt of $1.249 billion. The breakdown of the debt is as follows:
| Debt Type | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| FB Royalty Securitization | $137.0 million | 4.75% | 4/25/2051 |
| GFG Royalty Securitization | $271.2 million | 6.00% | 7/25/2051 |
| Twin Peaks Securitization | $243.7 million | 7.00% | 7/25/2051 |
| Fazoli's/Native Securitization | $126.2 million | 6.00% | 7/25/2051 |
| FB Resid Securitization | $50.9 million | 10.00% | 7/25/2027 |
Franchise Operations
As of September 29, 2024, FAT Brands operates approximately 2,300 locations globally, with around 92% of these being franchised. This significant percentage indicates a strong focus on franchise growth as part of its mission.
Liquidity Position
The company's liquidity position reflects its operational capabilities. As of September 29, 2024, FAT Brands had cash and restricted cash of $66.7 million, down from $91.9 million at the end of 2023, indicating a need for careful financial management amid expansion efforts.
Conclusion of Current Financial Standing
FAT Brands Inc. continues to align its mission with financial performance and strategic growth through acquisitions and franchise expansions. The company is navigating challenges, including increased costs and net losses, while actively pursuing its objective of becoming a leading multi-brand restaurant entity.
How FAT Brands Inc. (FAT) Works
Overview of Operations
FAT Brands Inc. operates as a multi-brand restaurant company, managing various dining concepts including quick-service, fast casual, casual dining, and polished casual dining. As of September 29, 2024, FAT Brands owned eighteen restaurant brands, including Fatburger, Johnny Rockets, and Smokey Bones.
Financial Performance
For the thirty-nine weeks ended September 29, 2024, FAT Brands reported total revenue of $447.4 million, reflecting a 39.0% increase compared to $321.8 million in the same period of 2023. This growth was primarily driven by the acquisition of Smokey Bones and new restaurant openings.
| Financial Metrics | 39 Weeks Ended Sept 29, 2024 | 39 Weeks Ended Sept 24, 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $447.4 million | $321.8 million | 39.0% |
| Total Costs and Expenses | $460.3 million | $296.3 million | 55.3% |
| Net Loss | $(122.4) million | $(63.9) million | − | Basic and Diluted Loss per Share | $(7.54) | $(4.17) | − |
Revenue Breakdown
Revenue composition for the third quarter of 2024 highlights key segments:
| Revenue Source | Q3 2024 | Q3 2023 |
|---|---|---|
| Royalties | $22.4 million | $23.9 million |
| Restaurant Sales | $99.2 million | $62.6 million |
| Advertising Fees | $9.7 million | $10.0 million |
| Factory Revenues | $9.5 million | $9.3 million |
| Franchise Fees | $2.6 million | $2.5 million |
Cost Structure
FAT Brands’ costs and expenses for the thirty-nine weeks ended September 29, 2024, totaled $460.3 million, a significant increase from the previous year. The breakdown includes:
| Cost Category | 39 Weeks Ended Sept 29, 2024 | 39 Weeks Ended Sept 24, 2023 |
|---|---|---|
| General and Administrative Expenses | $94.0 million | $62.8 million |
| Cost of Restaurant and Factory Revenues | $296.0 million | $177.8 million |
| Depreciation and Amortization | $31.2 million | $21.2 million |
| Advertising Fees | $37.3 million | $33.8 million |
Debt and Financing
As of September 29, 2024, FAT Brands had significant debt obligations. Total other expenses for the third quarter included interest expenses of $35.5 million compared to $29.7 million in the same quarter of 2023. The company reported a net loss before income tax provision of $(44.6) million.
Liquidity Position
The liquidity position of FAT Brands as of September 29, 2024, indicated cash and restricted cash of $66.7 million, down from $91.9 million at the end of 2023. Cash flows from operating activities showed a net cash used of $(45.8) million for the thirty-nine weeks ended September 29, 2024.
| Cash Flow Components | 39 Weeks Ended Sept 29, 2024 | 39 Weeks Ended Sept 24, 2023 |
|---|---|---|
| Net Cash Used in Operating Activities | $(45.8) million | $(23.0) million |
| Net Cash Used in Investing Activities | $(26.0) million | $(14.3) million |
| Net Cash Provided by Financing Activities | $46.6 million | $107.4 million |
| Total Net Cash Flow | $(25.2) million | $70.1 million |
Franchise Operations
As of September 29, 2024, FAT Brands had approximately 2,300 locations, with about 92% being franchised. The company continues to expand its franchise operations globally, which is a critical aspect of its business model.
Recent Acquisitions
The acquisition of Smokey Bones in September 2023 significantly influenced the financial results and operational expansion of FAT Brands. The integration of this brand has contributed to increased revenue and operational costs.
How FAT Brands Inc. (FAT) Makes Money
Revenue Streams
FAT Brands Inc. generates revenue through multiple channels, primarily including:
- Royalties: $22.4 million for Q3 2024, down from $23.9 million in Q3 2023.
- Restaurant Sales: $99.2 million for Q3 2024, up from $62.6 million in Q3 2023.
- Advertising Fees: $9.7 million for Q3 2024, compared to $10.0 million in Q3 2023.
- Factory Revenues: $9.5 million for Q3 2024, slightly up from $9.3 million in Q3 2023.
- Franchise Fees: $2.6 million for Q3 2024, a slight increase from $2.5 million in Q3 2023.
- Other Revenue: No revenue reported in Q3 2024 compared to $1.1 million in Q3 2023.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Royalties | $22.4 | $23.9 |
| Restaurant Sales | $99.2 | $62.6 |
| Advertising Fees | $9.7 | $10.0 |
| Factory Revenues | $9.5 | $9.3 |
| Franchise Fees | $2.6 | $2.5 |
| Other Revenue | $0.0 | $1.1 |
Cost Structure
The company incurs significant costs associated with its operations, which include:
- General and Administrative Expenses: $34.5 million for Q3 2024, up 41.0% from $24.5 million in Q3 2023.
- Cost of Restaurant and Factory Revenues: $96.8 million for Q3 2024, a 63.6% increase from $59.2 million in Q3 2023.
- Depreciation and Amortization: $10.7 million for Q3 2024, compared to $7.0 million in Q3 2023.
- Advertising Expenses: $10.0 million for Q3 2024, down from $11.7 million in Q3 2023.
- Refranchising Loss: $0.2 million for Q3 2024, slightly down from $0.4 million in Q3 2023.
| Cost Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| General and Administrative Expenses | $34.5 | $24.5 |
| Cost of Restaurant & Factory Revenues | $96.8 | $59.2 |
| Depreciation and Amortization | $10.7 | $7.0 |
| Advertising Expenses | $10.0 | $11.7 |
| Refranchising Loss | $0.2 | $0.4 |
Debt and Financing Activities
FAT Brands has significant long-term debt, which includes:
- FB Royalty Securitization: $137.0 million at a 4.75% interest rate.
- GFG Royalty Securitization: $271.2 million at a 6.00% interest rate.
- Twin Peaks Securitization: $243.7 million at a 7.00% interest rate.
- Fazoli's/Native Securitization: $126.2 million at a 6.00% interest rate.
- FB Resid Securitization: $50.9 million at a 10.00% interest rate.
| Debt Source | Face Value (in millions) | Interest Rate |
|---|---|---|
| FB Royalty Securitization | $137.0 | 4.75% |
| GFG Royalty Securitization | $271.2 | 6.00% |
| Twin Peaks Securitization | $243.7 | 7.00% |
| Fazoli's/Native Securitization | $126.2 | 6.00% |
| FB Resid Securitization | $50.9 | 10.00% |
Net Loss
FAT Brands reported a net loss of:
- $44.8 million for Q3 2024, compared to a net loss of $24.7 million in Q3 2023.
- $122.4 million for the first three quarters of 2024, compared to a net loss of $63.9 million in the prior year.
Cash Flows
For the thirty-nine weeks ended September 29, 2024, cash flows were as follows:
- Net cash used in operating activities: $(45.8) million
- Net cash used in investing activities: $(26.0) million
- Net cash provided by financing activities: $46.6 million
| Cash Flow Category | Amount (in millions) |
|---|---|
| Net cash used in operating activities | $(45.8) |
| Net cash used in investing activities | $(26.0) |
| Net cash provided by financing activities | $46.6 |
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Article updated on 8 Nov 2024
Resources:
- FAT Brands Inc. (FAT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FAT Brands Inc. (FAT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View FAT Brands Inc. (FAT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.