FAT Brands Inc. (FATBB) Bundle
A Brief History of FAT Brands Inc.
Company Overview
FAT Brands Inc. is a global franchising company that operates a portfolio of fast-casual and casual dining restaurant brands. As of 2024, the company has expanded its reach significantly, driven by strategic acquisitions and a focus on franchising.
Financial Performance
For the thirty-nine weeks ended September 29, 2024, FAT Brands reported total revenue of $447.4 million, marking a 39.0% increase from $321.8 million in the same period of 2023. This growth was largely attributed to the acquisition of Smokey Bones in September 2023 and new restaurant openings.
| Financial Metrics | 2024 (39 Weeks) | 2023 (39 Weeks) |
|---|---|---|
| Total Revenue | $447.4 million | $321.8 million |
| Net Loss | $(122.4 million) | $(63.9 million) |
| Basic and Diluted Loss Per Share | $(7.54) | $(4.17) |
Acquisition Strategy
In September 2023, FAT Brands acquired Smokey Bones, a significant addition to its portfolio. This acquisition has not only expanded the company's brand offerings but has also contributed to increased revenue from restaurant sales, which reached $312.6 million for the first three quarters of 2024 compared to $188.0 million in 2023.
Operational Challenges
Despite the revenue growth, FAT Brands faced operational challenges, including a net loss of $(122.4 million) for the first three quarters of 2024, compared to a net loss of $(63.9 million) in the previous year. The increase in losses was primarily due to higher general and administrative expenses, which rose to $94.0 million, up 49.7% from $62.8 million in 2023.
| Expense Metrics | 2024 (39 Weeks) | 2023 (39 Weeks) |
|---|---|---|
| General and Administrative Expense | $94.0 million | $62.8 million |
| Advertising Fees | $37.3 million | $33.8 million |
| Depreciation and Amortization | $31.2 million | $21.2 million |
Debt and Financial Obligations
As of September 29, 2024, FAT Brands had total liabilities and stockholders’ deficit of $1.34 billion, with long-term debt amounting to $1.18 billion. The company has been actively managing its debt, with significant interest expenses reported, totaling $90.3 million for the first three quarters of 2024.
Future Prospects
FAT Brands continues to focus on expanding its franchise operations globally. The company aims to leverage its recent acquisitions and the growth in its restaurant portfolio to enhance profitability and market share in the competitive dining sector.
A Who Owns FAT Brands Inc. (FATBB)
Ownership Structure
As of 2024, FAT Brands Inc. (FATBB) has a diverse ownership structure comprising both institutional and retail investors. The company has issued two classes of common stock: Class A and Class B.
| Share Class | Shares Outstanding | Par Value | Additional Paid-In Capital | Accumulated Deficit |
|---|---|---|---|---|
| Class A Common Stock | 15,835,663 | $0.0001 | ($36,051) | ($391,207) |
| Class B Common Stock | 1,270,805 | $0.0001 | ($36,049) | Not Applicable |
Major Shareholders
The major shareholders of FAT Brands Inc. include institutional investors, company executives, and private equity firms. The following table outlines significant shareholders and their respective ownership stakes:
| Shareholder | Type of Ownership | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| FB Resid Holdings 1, LLC | Institutional | 3,089,245 | 17.7% |
| Other Institutional Investors | Institutional | 5,000,000 (approx.) | 28.0% |
| Executive Management | Management | 1,500,000 (approx.) | 8.5% |
| Public Float | Retail | 7,516,423 (approx.) | 45.8% |
Financial Overview
FAT Brands has experienced fluctuating financial performance in 2024. The following key financial metrics provide insight into the company's performance:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $143.4 million | $109.4 million |
| Net Loss | ($44.8 million) | ($24.7 million) |
| Operating Expenses | $152.2 million | $102.7 million |
| Basic Loss per Share | ($2.74) | ($1.59) |
Debt Obligations
As of September 29, 2024, FAT Brands has significant debt obligations which impact its financial health:
| Debt Type | Outstanding Amount | Interest Rate | Maturity |
|---|---|---|---|
| Securitization Notes | $350 million | Varies by tranche | 2025-2031 |
| Secured Notes | $150 million | Fixed rate | 2024-2028 |
Liquidity Position
The liquidity position of FAT Brands as of September 29, 2024, is as follows:
| Metric | Amount |
|---|---|
| Cash and Restricted Cash | $66.7 million |
| 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 |
FAT Brands Inc. continues to navigate its ownership structure and financial challenges as it expands its restaurant brand portfolio globally, with a focus on increasing franchise locations and managing its debt effectively.
FAT Brands Inc. (FATBB) Mission Statement
Company Overview
FAT Brands Inc. operates a multi-brand restaurant platform, focusing on the franchising and management of various restaurant concepts. The mission of FAT Brands is to create exceptional dining experiences by offering diverse food options through its numerous brands, which include Fatburger, Johnny Rockets, and Twin Peaks.
Mission Statement
The mission statement of FAT Brands is to leverage its portfolio of restaurant brands to provide high-quality food and service, focusing on innovation and customer satisfaction. The company aims to expand its market presence through strategic acquisitions and franchising opportunities, ensuring sustainable growth and profitability.
Financial Performance
As of the third quarter of 2024, FAT Brands reported significant financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $143.4 million | $109.4 million | 31.1% |
| Net Loss | $(44.8) million | $(24.7) million | 81.6% |
| Basic Loss per Share | $(2.74) | $(1.59) | 72.0% |
| Gross Profit | $(8.8) million | $6.6 million | – |
| Operating Expenses | $152.2 million | $102.7 million | 48.1% |
Strategic Goals
FAT Brands has outlined several strategic goals to enhance its mission:
- Expand its franchise network globally to increase brand presence.
- Enhance operational efficiencies across all restaurant brands.
- Invest in marketing strategies to boost brand recognition and customer loyalty.
- Utilize technology for better customer engagement and operational management.
- Focus on sustainable practices in food sourcing and restaurant operations.
Recent Acquisitions and Growth
In 2024, FAT Brands made significant strides in growth through acquisitions, including:
- Acquisition of Smokey Bones in September 2023, contributing to a revenue increase of $125.6 million or 39% year-over-year.
- Opening of new restaurant locations, driving additional sales growth.
Challenges and Financial Outlook
Despite the revenue growth, FAT Brands faces challenges, including:
- Accumulated deficit of $391.2 million as of September 29, 2024.
- Negative working capital of $210.8 million, including liabilities related to redeemable preferred stock.
- Need for continuous capital to support expansion and operational initiatives.
The company plans to address these challenges through strategic financing and operational improvements, aiming for a turnaround in profitability in upcoming quarters.
How FAT Brands Inc. (FATBB) Works
Business Model
FAT Brands Inc. operates a diverse portfolio of restaurant brands, focusing on franchising and company-owned locations. The company has expanded rapidly through acquisitions, including notable brands like Twin Peaks and Smokey Bones. As of 2024, FAT Brands manages a total of 18 restaurant concepts across various dining segments.
Financial Performance
For the third quarter ended September 29, 2024, FAT Brands reported total revenue of $143.4 million, a 31.1% increase from $109.4 million in the same period of 2023. Year-to-date revenue for the thirty-nine weeks ending September 29, 2024, was $447.4 million, up from $321.8 million in 2023, marking a 39.0% increase.
| Financial Metrics | Q3 2024 | Q3 2023 | 39 Weeks 2024 | 39 Weeks 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) |
| Operating Income (Loss) | ($8.8 million) | $6.6 million | ($12.9 million) | $25.5 million |
| General and Administrative Expense | $34.5 million | $24.5 million | $94.0 million | $62.8 million |
Acquisitions
FAT Brands' growth strategy heavily relies on acquisitions. The acquisition of Smokey Bones in September 2023 significantly contributed to revenue growth. The company also expanded through the acquisition of Twin Peaks, which was completed in October 2021.
Costs and Expenses
The company's total costs and expenses for Q3 2024 were $152.2 million, a 48.1% increase from $102.7 million in Q3 2023. For the year-to-date, total costs and expenses reached $460.3 million, up from $296.3 million in the previous year, primarily due to increased operational activity and the costs associated with acquisitions.
Debt Obligations
As of September 29, 2024, FAT Brands has significant debt obligations, including:
- FB Royalty Securitization: $137.0 million
- GFG Royalty Securitization: $271.2 million
- Twin Peaks Securitization: $243.7 million
- Fazoli's/Native Securitization: $126.2 million
Stock Performance
FAT Brands' common stock is traded under the ticker symbol FATBB. As of late 2024, the stock has seen fluctuations in response to its financial performance and market conditions. The company has issued a total of 15,835,663 shares of Class A common stock and 1,270,805 shares of Class B common stock.
Liquidity and Capital Resources
The company reported cash and restricted cash of $66.7 million as of September 29, 2024. FAT Brands has sufficient liquidity to meet its operational and expansion needs, primarily through cash flows from operations and access to capital markets.
Future Outlook
FAT Brands aims to continue its expansion through franchising and acquisitions, which will require ongoing capital investment. The company is focused on increasing its footprint in the fast-casual dining segment and enhancing its brand portfolio.
How FAT Brands Inc. (FATBB) Makes Money
Revenue Streams
FAT Brands Inc. generates revenue through various channels, including:
- Royalties: $67.6 million for the thirty-nine weeks ended September 29, 2024.
- Restaurant Sales: $312.6 million for the thirty-nine weeks ended September 29, 2024.
- Advertising Fees: $29.6 million for the thirty-nine weeks ended September 29, 2024.
- Factory Revenues: $28.6 million for the thirty-nine weeks ended September 29, 2024.
- Franchise Fees: $5.2 million for the thirty-nine weeks ended September 29, 2024.
- Other Revenue: $3.8 million for the thirty-nine weeks ended September 29, 2024.
| Revenue Category | Q3 2024 (in millions) | Q3 2023 (in millions) | 39 Weeks 2024 (in millions) | 39 Weeks 2023 (in millions) |
|---|---|---|---|---|
| Royalties | 22.4 | 23.9 | 67.6 | 69.2 |
| Restaurant Sales | 99.2 | 62.6 | 312.6 | 188.0 |
| Advertising Fees | 9.7 | 10.0 | 29.6 | 29.0 |
| Factory Revenues | 9.5 | 9.3 | 28.6 | 28.2 |
| Franchise Fees | 2.6 | 2.5 | 5.2 | 4.0 |
| Other Revenue | — | 1.1 | 3.8 | 3.5 |
Cost Structure
The company's costs and expenses for the thirty-nine weeks ended September 29, 2024, totaled $460.3 million, reflecting a 55.3% increase from the prior year, primarily due to the acquisition of Smokey Bones and increased operational activities.
- General and Administrative Expense: $94.0 million.
- Cost of Restaurant and Factory Revenues: $296.0 million.
- Depreciation and Amortization: $31.2 million.
- Refranchising Loss: $1.8 million.
- Advertising Fees: $37.3 million.
| Cost Category | Q3 2024 (in millions) | Q3 2023 (in millions) | 39 Weeks 2024 (in millions) | 39 Weeks 2023 (in millions) |
|---|---|---|---|---|
| General and Administrative Expense | 34.5 | 24.5 | 94.0 | 62.8 |
| Cost of Restaurant and Factory Revenues | 96.8 | 59.2 | 296.0 | 177.8 |
| Depreciation and Amortization | 10.7 | 7.0 | 31.2 | 21.2 |
| Refranchising Loss | 0.2 | 0.4 | 1.8 | 0.7 |
| Advertising Fees | 10.0 | 11.7 | 37.3 | 33.8 |
Net Income and Loss
For the thirty-nine weeks ended September 29, 2024, FAT Brands reported a net loss of $122.4 million, compared to a net loss of $63.9 million in the same period of the previous year.
The loss before income tax provision for the thirty-nine weeks ended September 29, 2024, was $116.9 million.
Debt and Financing Activities
FAT Brands has significant debt obligations, with total other expenses, including interest expense, amounting to $103.9 million for the first three quarters of 2024. Major debt components include:
- FB Royalty Securitization: $137.0 million.
- GFG Royalty Securitization: $271.2 million.
- Twin Peaks Securitization: $243.7 million.
- Fazoli's/Native Securitization: $126.2 million.
- FB Resid Securitization: $50.9 million.
| Debt Type | Face Value (in millions) | Book Value (in millions) |
|---|---|---|
| FB Royalty Securitization | 137.0 | 134.7 |
| GFG Royalty Securitization | 271.2 | 265.9 |
| Twin Peaks Securitization | 243.7 | 241.5 |
| Fazoli's/Native Securitization | 126.2 | 125.6 |
| FB Resid Securitization | 50.9 | 50.7 |
Liquidity Position
As of September 29, 2024, FAT Brands had a cash and restricted cash balance of $66.7 million, compared to $91.9 million as of December 31, 2023. The company reported negative working capital of $210.8 million and an accumulated deficit of $391.2 million.
The company continues to seek financing to support its expansion and operational needs. Future acquisitions may require additional capital investments beyond existing cash flows.
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Article updated on 8 Nov 2024
Resources:
- FAT Brands Inc. (FATBB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FAT Brands Inc. (FATBB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View FAT Brands Inc. (FATBB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.