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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2024
FAT Brands Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware001-3825082-1302696
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
9720 Wilshire Blvd., Suite 500
Beverly Hills, CA
(Address of Principal Executive Offices)
90212
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (310) 319-1850
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareFATThe Nasdaq Stock Market LLC
Class B Common Stock, par value $0.0001 per shareFATBBThe Nasdaq Stock Market LLC
Series B Cumulative Preferred Stock, par value $0.0001 per shareFATBPThe Nasdaq Stock Market LLC
Warrants to purchase Class A Common StockFATBWThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition.
On October 30, 2024, FAT Brands Inc. (the “Company”) issued a press release announcing its financial results for the thirteen and thirty-nine week periods ended September 29, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The Company also hosted a conference call on October 30, 2024 in which the financial results were discussed. A replay is available until Wednesday, November 20, 2024 and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 13748855.
The webcast is available at www.fatbrands.com under the “Investors” section.
Item 7.01 Regulation FD Disclosure.
On October 30, 2024, the Company provided supplemental financial information to be used in its earnings presentation for the thirteen and thirty-nine week periods ended September 29, 2024 on its website at https://ir.fatbrands.com/events-and-presentations/default.aspx. A copy of the earning supplement is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Securities and Exchange Act of 1934 or the Securities Act of 1933 only if, and to the extent that, such subsequent filing specifically references such information.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number		Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
    


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FAT Brands Inc.
Date: October 30, 2024/s/ Kenneth J. Kuick
Kenneth J. Kuick
Co-Chief Executive Officer and Chief Financial Officer

Exhibit 99.1
image_0a.jpg
FAT BRANDS INC. REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
Conference call and webcast today at 5:00 p.m. ET
LOS ANGELES (October 30, 2024) – FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported financial results for the fiscal third quarter ended September 29, 2024.
Andy Wiederhorn, Chairman of FAT Brands, said, “Over the last three years, we have expanded our brand portfolio to include 18 distinct concepts while our footprint has increased tenfold, now encompassing over 2,300 locations across more than 40 countries and 49 U.S. states or territories. We opened 22 new units during the third quarter, bringing our year-to-date openings to 71 new units and are on track to end the year with 100 new units.”

Wiederhorn added, “We have signed 225 development deals year-to-date versus 226 deals in all of 2023, bringing our current development pipeline to approximately 1,000 locations. This is a strong indicator of confidence within the FAT franchise system.”

Ken Kuick, Co-Chief Executive Officer of FAT Brands, said, “We continue to prioritize accelerated growth in our Polished Casual category, particularly through Twin Peaks, our fastest-growing concept. Year to date, we opened nine new lodges, bringing our total to 115 locations. We also completed our first Smokey Bones to Twin Peaks conversion in Lakeland, Florida during the third quarter, with our second conversion underway and several more planned for next year.”

Rob Rosen, Co-Chief Executive Officer of FAT Brands, said, “In May, Twin Peaks and Smokey Bones, as a combined entity, took a significant step towards becoming a standalone public company. We view this potential IPO or alternative transaction as a strategic opportunity to unlock value for FAT shareholders. Shortly, we intend to refinance Twin Peaks’ securitization debt, which will optimize our financial structure prior to any IPO or other transaction.”

Fiscal Third Quarter 2024 Highlights
•Total revenue grew 31.1% to $143.4 million compared to $109.4 million in the fiscal third quarter of 2023
◦System-wide sales grew 6.4% in the fiscal third quarter of 2024 compared to the prior year fiscal quarter
◦Year-to-date system-wide same-store sales declined 2.7% compared to the prior year
◦22 new store openings during the fiscal third quarter of 2024
•Net loss of $44.8 million, or $2.74 per diluted share, compared to $24.7 million, or $1.59 per diluted share, in the fiscal third quarter of 2023
•EBITDA(1) of $1.7 million compared to $10.8 million in the fiscal third quarter of 2023
•Adjusted EBITDA(1) of $14.1 million compared to $21.9 million in the fiscal third quarter of 2023
•Adjusted net loss(1) of $38.0 million, or $2.34 per diluted share, compared to adjusted net loss(1) of $17.1 million, or $1.14 per diluted share, in the fiscal third quarter of 2023

(1)EBITDA, adjusted EBITDA and adjusted net loss are non-GAAP measures defined below, under “Non-GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net loss are included in the accompanying financial tables.

Summary of Fiscal Third Quarter 2024 Financial Results
Total revenue increased $34.0 million, or 31.1%, in the third quarter of 2024 to $143.4 million compared to $109.4 million in the same period of 2023, driven by the acquisition of Smokey Bones in September 2023 and revenues from new restaurant openings.
Costs and expenses consist of general and administrative expense, cost of restaurant and factory revenues, depreciation and amortization, refranchising net loss and advertising fees. Costs and expenses increased $49.5 million, or 48.1%, in the third quarter of 2024 to $152.2 million compared to the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and increased activity from Company-owned restaurants and the Company's factory.
General and administrative expense increased $10.0 million, or 41.0%, in the third quarter of 2024 to $34.5 million compared to $24.5 million in the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and increased professional fees related to pending litigation.
Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and dough factory and increased $37.6 million, or 63.6%, in the third quarter of 2024, primarily due to the acquisition of Smokey Bones in September 2023 and higher company-owned restaurant sales.
Depreciation and amortization increased $3.7 million, or 52.5% in the third quarter of 2024 compared to the same period in the prior year, primarily due to the acquisition of Smokey Bones in September 2023 and depreciation of new property and equipment at company-owned restaurant locations.
Refranchising net loss, comprised of restaurant operating costs, net of food sales, was $0.2 million in the third quarter of 2024 compared to $0.4 million in the third quarter of 2023.
Advertising expenses decreased $1.6 million in the third quarter of 2024 compared to the prior year period. These expenses vary in relation to advertising revenues.
Total other expense, net, for the third quarter of 2024 and 2023 was $35.8 million and $32.6 million, respectively, which is inclusive of interest expense of $35.5 million and $29.7 million, respectively. This increase is primarily due to new debt issuances. Total other expense, net, for the third quarter of 2023 also consisted of a $2.7 million net loss on the extinguishment of debt.
Adjusted net loss(1) was $38.0 million, or $2.34 per diluted share, compared to adjusted net loss(1) of $17.1 million, or $1.14 per diluted share, in the fiscal third quarter of 2023.
Key Financial Definitions
New store openings - The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of stores openings has, and will continue to have, an impact on our results.
Same-store sales growth - Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year.
System-wide sales growth - System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of

acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period.
Conference Call and Webcast
FAT Brands will host a conference call and webcast to discuss its fiscal third quarter 2024 financial results today at 5:00 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 1-877-704-4453 from the U.S. or 1-201-389-0920 internationally. A replay will be available after the call until Wednesday, November 20, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 13748855. The webcast will be available at www.fatbrands.com under the “Investors” section and will be archived on the site shortly after the call has concluded.
About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, the timing and performance of new store openings, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.
Non-GAAP Measures (Unaudited)
This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net loss.
EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP.
Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising loss, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations.


Adjusted net loss is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net loss is defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results.
Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below.

Investor Relations:
ICR
Michelle Michalski
ir-fatbrands@icrinc.com
646-277-1224
Media Relations:
Erin Mandzik
emandzik@fatbrands.com
860-212-6509

FAT Brands Inc. Consolidated Statements of Operations

Thirteen Weeks EndedThirty-Nine Weeks Ended
(In thousands, except share and per share data)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Revenue
Royalties$22,353 $23,930 $67,618 $69,166 
Restaurant sales99,238 62,578 312,587 187,957 
Advertising fees9,708 9,960 29,569 28,979 
Factory revenues9,490 9,323 28,599 28,174 
Franchise fees2,576 2,477 5,170 4,042 
Other revenue— 1,098 3,829 3,503 
Total revenue143,365 109,366 447,372 321,821 
Costs and expenses
General and administrative expense34,481 24,458 94,044 62,820 
Cost of restaurant and factory revenues96,792 59,168 295,955 177,757 
Depreciation and amortization10,736 7,040 31,176 21,217 
Refranchising loss157 408 1,840 746 
   Advertising fees10,032 11,671 37,275 33,808 
Total costs and expenses152,198 102,745 460,290 296,348 
(Loss) income from operations(8,833)6,621 (12,918)25,473 
Other (expense) income, net
Interest expense(31,109)(25,319)(90,318)(70,417)
Interest expense related to preferred shares(4,418)(4,417)(13,253)(13,771)
Net gain (loss) on extinguishment of debt— (2,723)427 (2,723)
Other (expense) income, net(252)(128)(800)137 
Total other expense, net(35,779)(32,587)(103,944)(86,774)
Loss before income tax provision (benefit)(44,612)(25,966)(116,862)(61,301)
Income tax provision (benefit)143 (1,310)5,568 2,572 
Net loss$(44,755)$(24,656)$(122,430)$(63,873)
Net loss$(44,755)$(24,656)$(122,430)$(63,873)
Dividends on preferred shares(1,935)(1,794)(5,736)(5,175)
$(46,690)$(26,450)$(128,166)$(69,048)
Basic and diluted loss per common share$(2.74)$(1.59)$(7.54)$(4.17)
Basic and diluted weighted average shares outstanding17,052,007 16,613,840 16,999,889 16,553,528 
Cash dividends declared per common share$0.14 $0.14 $0.42 $0.42 






FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation
Thirteen Weeks EndedThirty-Nine Weeks Ended
(In thousands)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Net loss$(44,755)$(24,656)$(122,430)$(63,873)
Interest expense, net35,527 29,736 103,571 84,188 
Income tax provision (benefit)143 (1,310)5,568 2,572 
Depreciation and amortization10,736 7,040 31,176 21,217 
EBITDA1,651 10,810 17,885 44,104 
Bad debt expense2,348 (630)787 (12,701)
Share-based compensation expenses539 1,096 1,961 2,668 
Non-cash lease expenses398 558 1,786 1,232 
Refranchising loss157 408 1,840 746 
Litigation costs6,175 4,780 17,835 19,448 
Severance384 — 425 1,036 
Net loss related to advertising fund deficit1,563 1,591 4,985 4,365 
Net (gain) loss on extinguishment of debt— 2,723 (427)2,723 
Pre-opening expenses844 537 935 577 
Adjusted EBITDA$14,059 $21,874 $48,012 $64,197 



FAT Brands Inc. Adjusted Net Loss Reconciliation
Thirteen Weeks EndedThirty-Nine Weeks Ended
(In thousands, except share and per share data)September 29, 2024September 24, 2023September 29, 2024September 24, 2023
Net loss$(44,755)$(24,656)$(122,430)$(63,873)
Refranchising loss157 408 1,840 746 
Net (gain) loss on extinguishment of debt— 2,723 (427)2,723 
Litigation costs6,175 4,780 17,835 19,448 
Severance384 — 425 1,036 
Tax adjustments, net (1)22 (398)937 1,365 
Adjusted net loss$(38,017)$(17,143)$(101,820)$(38,555)
Net loss$(44,755)$(24,656)$(122,430)$(63,873)
Dividends on preferred shares(1,935)(1,794)(5,736)(5,175)
$(46,690)$(26,450)$(128,166)$(69,048)
Adjusted net loss$(38,017)$(17,143)$(101,820)$(38,556)
Dividends on preferred shares(1,935)(1,794)(5,736)(5,175)
$(39,952)$(18,937)$(107,556)$(43,731)
Loss per basic and diluted share$(2.74)$(1.59)$(7.54)$(4.17)
Adjusted net loss per basic and diluted share$(2.34)$(1.14)$(6.33)$(2.64)
Weighted average basic and diluted shares outstanding17,052,007 16,613,840 16,999,889 16,553,528 
(1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

Q3 2024 EARNINGS SUPPLEMENT OCTOBER 30, 2024

 
LEGAL DISCLAIMER This earnings supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this earnings supplement. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this earnings supplement. 2

 
Q3 2024 HIGHLIGHTS 3 6.4% Sales Growth (1) System-Wide -2.6% SSS Decline (2) System-Wide 22 New Store Openings (3) Q3 2024 $143.4mm Total Revenue Q3 2024 $14.1mm Adj. EBITDA (4) Q3 2024 $600.7mm System-Wide Sales (1) System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. (2) Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. (3) New store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. (4) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

 
Q3 2024 RESULTS 4 (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. 2Q 2023 includes $12.7 million related to Employee Retention Tax Credits and 2Q 2024 includes $2.1 million related to Employee Retention Tax Credits. Royalties $23.9mm $22.4mm Q3 2023 Q3 2024 Systemwide Sales Revenue $109.4mm $143.4mm Q3 2023 Q3 2024 Adj. EBITDA (1) $21.9mm $14.1mm Q3 2023 Q3 2024 $564.6mm $600.7mm Q3 2023 Q3 2024

 
YTD Q3 2024 HIGHLIGHTS 5 7.3% Sales Growth (1) System-Wide -2.7% SSS Decline (2) System-Wide 62 New Store Openings (3) YTD Q3 2024 $447.4mm Total Revenue YTD Q3 2024 $48.0mm Adj. EBITDA (4) YTD Q3 2024 $1,822.6mm System-Wide Sales (1) System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. (2) Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. (3) New store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. (4) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

 
YTD Q3 2024 RESULTS 6 (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. 2Q 2023 includes $12.7 million related to Employee Retention Tax Credits and 2Q 2024 includes $2.1 million related to Employee Retention Tax Credits. Royalties $69.2mm $67.6mm YTD Q3 2023 YTD Q3 2024 Systemwide Sales Revenue $321.8mm $447.4mm YTD Q3 2023 YTD Q3 2024 Adj. EBITDA (1) $64.2mm $48.0mm YTD Q3 2023 YTD Q3 2024 $1,698.9mm $1,822.6mm YTD Q3 2023 YTD Q3 2024

 
2024 STRATEGIC FOCUS 7 Accelerate Build-Out of 1,100+ Unit New Store Pipeline Drive Adj. EBITDA Growth ~$10mm from New Stores ~$5mm from Factory Maintain Strong Liquidity Continue to Build Net Asset Value for Future Liquidity (Debt Reduction) Event Grow Factory Production to Utilize ~60% Excess Capacity via Expanded Organic Channels & 3rd Party Dough & Mix Manufacturing Realize Purchasing Savings from ~$600mm in Purchasing Power Effectively Reducing Costs

 
APPENDIX

 
DEFINITIONS “EBITDA,” a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted EBITDA,” a non-GAAP measure, defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted net loss,” a non-GAAP measure, defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non- GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results. Reconciliations of net loss attributable to FAT Brands Inc. presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the Appendix. “Same-store sales growth” or “SSS” a non-GAAP measure, reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. “System-wide sales growth,” a non-GAAP measure, reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. I

 
CONSOLIDATED STATEMENT OF OPERATIONS II FAT Brands Inc. Consolidated Statements of Operations Thirteen Weeks Ended Thirty-Nine Weeks Ended (In thousands, except share and per share data) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Revenue Royalties $ 22,353 $ 23,930 $ 67,618 $ 69,166 Restaurant sales 99,238 62,578 312,587 187,957 Advertising fees 9,708 9,960 29,569 28,979 Factory revenues 9,490 9,323 28,599 28,174 Franchise fees 2,576 2,477 5,170 4,042 Other revenue — 1,098 3,829 3,503 Total revenue 143,365 109,366 447,372 321,821 Costs and expenses General and administrative expense 34,481 24,458 94,044 62,820 Cost of restaurant and factory revenues 96,792 59,168 295,955 177,757 Depreciation and amortization 10,736 7,040 31,176 21,217 Refranchising loss 157 408 1,840 746 Advertising fees 10,032 11,671 37,275 33,808 Total costs and expenses 152,198 102,745 460,290 296,348 (Loss) income from operations (8,833) 6,621 (12,918) 25,473 Other (expense) income, net Interest expense (31,109) (25,319) (90,318) (70,417) Interest expense related to preferred shares (4,418) (4,417) (13,253) (13,771) Net gain (loss) on extinguishment of debt — (2,723) 427 (2,723) Other (expense) income, net (252) (128) (800) 137 Total other expense, net (35,779) (32,587) (103,944) (86,774) Loss before income tax provision (benefit) (44,612) (25,966) (116,862) (61,301) Income tax provision (benefit) 143 (1,310) 5,568 2,572 Net loss $ (44,755) $ (24,656) $ (122,430) $ (63,873) Net loss $ (44,755) $ (24,656) $ (122,430) $ (63,873) Dividends on preferred shares (1,935) (1,794) (5,736) (5,175) $ (46,690) $ (26,450) $ (128,166) $ (69,048) Basic and diluted loss per common share $ (2.74) $ (1.59) $ (7.54) $ (4.17) Basic and diluted weighted average shares outstanding 17,052,007 16,613,840 16,999,889 16,553,528 Cash dividends declared per common share $ 0.14 $ 0.14 $ 0.42 $ 0.42

 
CONSOLIDATED EBITDA & ADJ. EBITDA RECONCILIATION IV FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation Thirteen Weeks Ended Thirty-Nine Weeks Ended (In thousands) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Net loss $ (44,755) $ (24,656) $ (122,430) $ (63,873) Interest expense, net 35,527 29,736 103,571 84,188 Income tax provision (benefit) 143 (1,310) 5,568 2,572 Depreciation and amortization 10,736 7,040 31,176 21,217 EBITDA 1,651 10,810 17,885 44,104 Bad debt expense 2,348 (630) 787 (12,701) Share-based compensation expenses 539 1,096 1,961 2,668 Non-cash lease expenses 398 558 1,786 1,232 Refranchising loss 157 408 1,840 746 Litigation costs 6,175 4,780 17,835 19,448 Severance 384 — 425 1,036 Net loss related to advertising fund deficit 1,563 1,591 4,985 4,365 Net (gain) loss on extinguishment of debt — 2,723 (427) 2,723 Pre-opening expenses 844 537 935 577 Adjusted EBITDA $ 14,059 $ 21,874 $ 48,012 $ 64,197

 
ADJUSTED NET LOSS RECONCILIATION V FAT Brands Inc. Adjusted Net Loss Reconciliation Thirteen Weeks Ended Thirty-Nine Weeks Ended (In thousands, except share and per share data) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Net loss $ (44,755) $ (24,656) $ (122,430) $ (63,873) Refranchising loss 157 408 1,840 746 Net (gain) loss on extinguishment of debt — 2,723 (427) 2,723 Litigation costs 6,175 4,780 17,835 19,448 Severance 384 — 425 1,036 Tax adjustments, net (1) 22 (398) 937 1,365 Adjusted net loss $ (38,017) $ (17,143) $ (101,820) $ (38,555) Net loss $ (44,755) $ (24,656) $ (122,430) $ (63,873) Dividends on preferred shares (1,935) (1,794) (5,736) (5,175) $ (46,690) $ (26,450) $ (128,166) $ (69,048) Adjusted net loss $ (38,017) $ (17,143) $ (101,820) $ (38,556) Dividends on preferred shares (1,935) (1,794) (5,736) (5,175) $ (39,952) $ (18,937) $ (107,556) $ (43,731) Loss per basic and diluted share $ (2.74) $ (1.59) $ (7.54) $ (4.17) Adjusted net loss per basic and diluted share $ (2.34) $ (1.14) $ (6.33) $ (2.64) Weighted average basic and diluted shares outstanding 17,052,007 16,613,840 16,999,889 16,553,528 (1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

 
CONTACT INVESTOR RELATIONS: MEDIA RELATIONS: ICR MICHELLE MICHALSKI IR-FATBRANDS@ICRINC.COM 646-277-1224 FAT BRANDS ERIN MANDZIK EMANDZIK@FATBRANDS.COM 860-212-6509

 
v3.24.3
Cover
Oct. 30, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Oct. 30, 2024
Entity Registrant Name FAT Brands Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38250
Entity Tax Identification Number 82-1302696
Entity Address, Address Line One 9720 Wilshire Blvd.
Entity Address, Address Line Two Suite 500
Entity Address, City or Town Beverly Hills
Entity Address, State or Province CA
Entity Address, Postal Zip Code 90212
City Area Code 310
Local Phone Number 319-1850
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0001705012
Amendment Flag false
Class A Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Class A Common Stock, par value $0.0001 per share
Trading Symbol FAT
Security Exchange Name NASDAQ
Class B Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Class B Common Stock, par value $0.0001 per share
Trading Symbol FATBB
Security Exchange Name NASDAQ
Series B Cumulative Preferred Stock  
Document Information [Line Items]  
Title of 12(b) Security Series B Cumulative Preferred Stock, par value $0.0001 per share
Trading Symbol FATBP
Security Exchange Name NASDAQ
Warrants to Purchase Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Warrants to purchase Class A Common Stock
Trading Symbol FATBW
Security Exchange Name NASDAQ
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