• BurgerFi Reports Third Quarter 2021 Results

    Source: Nasdaq GlobeNewswire / 11 Nov 2021 07:00:01   America/New_York

    Total Revenue and Systemwide Sales Increased 25%, Corporate-Owned Restaurant Sales Up 34%,
    Corporate-Owned Restaurant Same Store Sales Up 7%

    Completed Acquisition of Anthony’s Coal Fired Pizza & Wings for $156.6 million

    Conference Call today, November 11, at 8:30 a.m. ET

    PALM BEACH, Fla., Nov. 11, 2021 (GLOBE NEWSWIRE) -- BurgerFi International Inc. (Nasdaq: BFI, BFIIW) (“BurgerFi” or the “Company”), owner of one of the nation’s fastest-growing premium fast-casual and casual dining concepts through the BurgerFi brand, and the high-quality, casual dining brand Anthony’s Coal Fired Pizza & Wings (“Anthony’s”), today reported financial results for the third quarter ended September 30, 2021.

    Third Quarter 2021 Key Metrics1 Summary

    (in thousands except for percentage data) Three Months
    Ended
    September 30,
    2021
     
    Systemwide Restaurant Sales $41,407 
    Systemwide Restaurant Sales Growth  25%
    Systemwide Restaurant Same Store Sales Growth  8%
    Corporate-Owned Restaurant Sales $8,470 
    Corporate-Owned Restaurant Sales Growth  34%
    Corporate-Owned Restaurant Same Store Sales Growth  7%
    Franchise Restaurant Sales $32,937 
    Franchise Restaurant Sales Growth  23%
    Franchise Restaurant Same Store Sales Growth  9%
    Digital Channel Systemwide Sales $15,383 
    Digital Channel Sales Growth  (4)%
    Digital Channel Orders  586 
    Digital Channel Orders % of Systemwide Sales  37%

    1    Refer to “Key Metrics Definitions” and “About Non-GAAP Financial Measures” sections below.

    Management Commentary

    Ophir Sternberg, Executive Chairman of BurgerFi, stated “The third quarter continued the positive momentum for BurgerFi driven by strong sales growth resulting from the addition of new units, same-store sales growth, improved operating margins and continued unit re-openings in our franchise network. We are also excited to have closed on the acquisition of Anthony’s Coal Fired Pizza & Wings on November 3, 2021, which we purchased from L Catterton for $156.6 million. We look forward to our ongoing strategic partnership with L Catterton as we set out on building this premium multi-brand platform as they have become one of BurgerFi’s largest shareholders and Andrew Taub, Managing Partner at L Catterton, has joined our board.”

    Ian Baines, who became Chief Executive Officer of the Company on November 8, 2021, added “The Anthony’s transaction is a historic moment for BurgerFi as it marks our first acquisition on our long- term growth strategy. We are thrilled to combine the BurgerFi and Anthony’s brands and see enhanced profitability and growth opportunities as we look out over the next several years. We are encouraged by the sales and operational recovery in performance of both of our brands despite a very challenging operating environment. I have the utmost confidence in our management teams leading these brands as we begin the integration process, take advantage of strategic synergies and execute on the combined company strategy.”

    Julio Ramirez, who became Chief Executive Officer and President of the BurgerFi brand on November 8, 2021, stated, “During the third quarter, we opened 2 corporate-owned restaurants, bringing our new restaurant count to 11 so far this year including one franchised location in October. Leases are signed for another 32 locations, 17 corporate owned and 15 franchised within our development pipeline, of which, 14 are in various stages of construction. While the restaurant industry is facing macro headwinds, we are resilient and continue to be proud of our operations teams and franchisee’s focus leading through the challenges presented in this unprecedented time. I’m very pleased with the team’s continued progress in driving improvements in restaurant operating margins through the effective management of price and cost programs and look forward to the benefits they will bring when challenges presented by COVID-19 subside.”

    Third quarter 2021 Financial Results

    Total revenue in the third quarter of 2021 increased 25% to $11.1 million compared to $8.9 million in the year-ago quarter, driven by the addition of new restaurants and same store sales. Systemwide sales in the third quarter of 2021 increased 25% to $41.4 million compared to $33.2 million in the prior year period. Same store sales increased 7% and 9% in corporate owned and franchised locations, respectively, and were supported by an increase in average check value, resulting from the solid performance of new menu items such as the SWAG burger and the price increases instituted towards the end of the second quarter.

    Restaurant-level operating expenses for the third quarter of 2021 were $7.8 million compared to $6.3 million in the third quarter of 2020, which increase was driven by increases in food, beverage and paper costs and labor and related expenses. Restaurant-level operating performance improved for the third quarter of 2021, compared to the third quarter of 2020, which was driven by leverage from higher same store sales, improvements in the efficiency of managing the costs of our digital channel sales as well as controlling store operating expenses, which helped offset the inflationary costs in food and challenges within the labor market.

    Net loss attributable to controlling interests and common shareholders in the third quarter was $5.0 million compared to net loss attributable to controlling interests and common shareholders of $0.8 million in the year-ago quarter. The increased loss resulted primarily from amortization of intangible assets resulting from the purchase of BurgerFi in December 2020, non-cash share based compensation expenses, M&A costs and selected investments related to being a public company. Preopening costs were also higher compared to the prior period as BurgerFi accelerated its company-owned store development. See reconciliation of GAAP to Non-GAAP measures below.

    Adjusted EBITDA in the third quarter of 2021 was $0.2 million compared to a loss of $32 thousand in the third quarter of 2020, driven by revenue growth and improvement in operating margin, largely offset by the investments related to being a public company and those to drive the growth and development of the company owned restaurants.

    Liquidity

    On September 30, 2021, the Company had $28.3 million in cash, compared to $40.4 million on December 31, 2020. BurgerFi repaid and then terminated its $3.0 million revolving credit line in the first quarter of 2021 and has invested $8.2 million in capital expenditures year to date.

    2021 Outlook

    Given the challenges we are facing, along with many in the industry, with the shortages of materials and labor for construction and development, we are providing the following updates to expectations for the full year 2021:

    • The Company plans to open approximately 18 new restaurants in 2021; the balance of the Company’s prior outlook of 20 to 25 locations is expected to open in the first quarter of 2022 due to construction supply chain limitations. The Company has opened 15 additional ghost kitchens year to date.
    • Capital expenditures are expected to be approximately $13 million for 2021 compared to prior guidance of $15 million, primarily due to the delay in construction and delivery of several corporate owned restaurant openings into next fiscal year.

    Conference Call

    The Company will hold a conference call today, November 11, at 8:30 a.m. Eastern time to discuss its third quarter 2021 results.

    Date: Thursday, November 11, 2021
    Time: 8:30 a.m. Eastern time
    Toll-free dial-in number: (833) 693-0539
    International dial-in number: (661) 407-1580
    Conference ID: 2395757

    Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact ICR at (646) 430-2216.

    The conference call will be broadcast live and available for two weeks for replay on the Company’s Investor Relations website at ir.burgerfi.com.

    Key Metrics Definitions

    The following definitions apply to the terms listed below:

    “Systemwide Restaurant Sales” is presented as informational data in order to understand the aggregation of franchised stores sales, ghost kitchen and corporate-owned stores sales performance. Systemwide restaurant sales growth refers to the percentage change in sales at all franchise restaurants, ghost kitchens and corporate-owned restaurants in one period from the same period in the prior year. Systemwide restaurant same store sales growth refers to the percentage change in sales at all franchise restaurants, ghost kitchens, and corporate-owned restaurants once the restaurant has been in operation after 14 months. See definition below for same store sales.

    “Corporate-Owned Restaurant Sales” represent the sales generated by corporate-owned restaurants. Corporate-owned restaurant sales growth refers to the percentage change in sales at all corporate-owned restaurants in one period from the same period in the prior year. Corporate-owned restaurant same stores sales growth refers to the percentage change in sales at all corporate-owned restaurants once the restaurant has been in operation after 14 months. These measures highlight the performance of existing corporate restaurants.

    “Franchise Restaurant Sales” represent the sales generated by franchisee-owned restaurants. Franchise restaurant sales growth refers to the percentage change in sales at all franchise restaurants in one period from the same period in the prior year. Franchise restaurant same store sales growth refers to the percentage change in sales at all franchise restaurants once the restaurant has been in operation after 14 months. These measures highlight the performance of existing franchise restaurants.

    “Same Store Sales” is used to evaluate the performance of our store base, which excludes the impact of new stores and closed stores, in both periods under comparison. We include a restaurant in the calculation of same store sales once it has been in operation after 14 months. A restaurant which is temporarily closed (including as a result of the COVID-19 pandemic), is included in the same store sales computation. A restaurant which is closed permanently, such as upon termination of the lease, or other permanent closure, is immediately removed from the same store sales computation. Our calculation of same store sales may not be comparable to others in the industry.

    “Digital Channel Systemwide Sales” is used to measure performance of our digital platform and partnerships with third party delivery partners. We believe our digital platform capabilities are a vital element to continuing to serve our customers and will continue to be a differentiator for BurgerFi as compared to some of our competitors. Digital channel systemwide sales refer to sales generated through the use of digital platforms across all our franchise and corporate-owned restaurants. Digital channel sales growth refers to the percentage change in sales through our digital platforms in one period from the same period in the prior year for all franchise and corporate-owned restaurants. Digital channel orders and digital channel orders as percentages of systemwide sales are indicative of the number of orders placed through our digital platforms and the percentage of those digital orders when compared to total number of orders at all our franchise and corporate restaurants.

    “Adjusted EBITDA,” a non-GAAP measure, is defined as net (loss) income attributable to common shareholders and controlling interests before interest, income taxes, depreciation and amortization, merger and acquisition related costs, preopening costs, share-based compensation expense, gains and losses on change in value of warrant liabilities, Paycheck Protection Program loan gain, certain legal matters, and may include certain other non-recurring items, such as store closure costs and loss on disposal of property and equipment.

    About BurgerFi International (Nasdaq: BFI, BFIIW)

    Established in 2011, BurgerFi is among the nation's fastest-growing better burger concepts with 116 BurgerFi restaurants domestically and internationally as of September 30, 2021. The concept is chef-founded and is committed to serving fresh food of transparent quality. BurgerFi uses 100% American Angus Beef with no steroids, antibiotics, growth hormones, chemicals, or additives. BurgerFi’s menu also includes high quality wagyu beef, antibiotic and cage-free chicken offerings, fresh, hand-cut sides and custard shakes and concretes. On November 3, 2021, BurgerFi completed the acquisition of Anthony’s Coal Fired Pizza & Wings with 61 company-owned locations in eight states. BurgerFi was named QSR Magazine's Breakout Brand of 2020, Fast Casual's 2021 #1 Brand of the Year, a "Top Restaurant Brand to Watch" by Nation's Restaurant News in 2019 and is included in Inc. Magazine's Fastest Growing Private Companies List. In 2021, in Consumer Report’s Chain Reaction Report, BurgerFi was praised for serving “no antibiotic beef” across all of its restaurants and Consumer Reports awarded BurgerFi an "A-Grade Angus Beef" rating for the third consecutive year. To learn more about BurgerFi or to find a full list of locations, please visit www.burgerfi.com. Download the BurgerFi App on iOS or Android devices for rewards and 'Like' BurgerFi on Facebook or follow @BurgerFi on Instagram and Twitter.  

    BurgerFi® is a Registered Trademark of BurgerFi IP, LLC, a wholly-owned subsidiary of BurgerFi.

    About Non-GAAP Projected Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the measure Adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

    We use this non-GAAP financial measure for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe this non-GAAP financial measure is useful to investors both because (1) it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) it is used by our institutional investors and the analyst community to help them analyze the health of our business.

    There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from this non-GAAP financial measure and evaluating this non-GAAP financial measure together with its relevant financial measures in accordance with GAAP.

    For more information on this non-GAAP financial measure, please see the tables captioned Reconciliation of Net Income (Loss) to Adjusted EBITDA included at the end of this release.

    Forward-Looking Statements

    This press release may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, including statements relating to BurgerFi’s estimates of its future business outlook, prospects or financial results, its acquisition of Anthony’s and the impact of the acquisition on BurgerFi’s growth and profitability, including those regarding our ongoing strategic partnership with L Catterton, confidence in our management teams leading the brands as we begin the integration process, take advantage of strategic synergies and execute on the combined company strategy, store opening plans, same store sales, restaurant operating margin growth plans, prospects or financial results, statements regarding the impact of the COVID-19 pandemic on our business, as well as statements set forth under the section entitled “2021 Outlook” above. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q, and those discussed in other documents we file with the Securities and Exchange Commission, including our ability to successfully realize the expected benefits of the acquisition of Anthony’s as a result of the impact of COVID-19 or any other factors. All subsequent written and oral forward-looking statements attributable to BurgerFi or persons acting on BurgerFi’s behalf are expressly qualified in their entirety by the cautionary statements included in this press release. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

    Investor Relations:
    ICR
    Lynne Collier
    IR-BFI@icrinc.com
    646-430-2216

    BurgerFi Contact:
    BurgerFi International Inc.
    IR@burgerfi.com

    Media Relations Contact:
    rbb Communications
    Christine Parsons, Christine.Parsons@rbbcommunications.com


    BurgerFi International Inc., and Subsidiaries
    Condensed Consolidated Balance Sheets

    (in thousands, except share data) September 30, 2021
    (unaudited)
      December 31,
    2020
     
    ASSETS        
    CURRENT ASSETS        
    Cash $28,295  $37,150 
    Cash - restricted     3,233 
    Accounts receivable, net  551   718 
    Inventory  398   268 
    Deferred income taxes     713 
    Assets held for sale  732   732 
    Other current assets  1,507   1,607 
    TOTAL CURRENT ASSETS  31,483   44,421 
    PROPERTY & EQUIPMENT, net  15,122   8,004 
    DUE FROM RELATED COMPANIES  83   74 
    GOODWILL  123,560   119,542 
    INTANGIBLE ASSETS, net  111,437   116,824 
    OTHER ASSETS  246   251 
    TOTAL ASSETS $281,931  $289,116 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    CURRENT LIABILITIES        
    Accounts payable - trade and other $2,391  $1,678 
    Accrued expenses  2,272   1,203 
    Other liabilities  4,128   430 
    Other deposit  907   907 
    Deferred revenue, current  587   490 
    Notes payable, current  76   1,438 
    Revolving line of credit     3,012 
    Deferred income taxes  18    
    TOTAL CURRENT LIABILITIES  10,379   9,158 
    NON-CURRENT LIABILITIES        
    Warrant liability  6,111   16,516 
    Deferred revenue, net of current portion  2,745   2,816 
    Notes payable, net of current portion  601   1,522 
    Deferred rent  472   29 
    TOTAL LIABILITIES  20,308   30,041 
    COMMITMENTS AND CONTINGENCIES        
    Stockholders’ equity        
    Common stock, $0.0001 par value, 100,000,000 shares authorized, 17,893,476 and 17,541,838 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively  2   2 
    Additional paid-in capital  268,083   261,298 
    Accumulated deficit  (6,462)  (2,225)
    TOTAL STOCKHOLDERS’ EQUITY  261,623   259,075 
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $281,931  $289,116 


    BurgerFi International Inc., and Subsidiaries
    Condensed Consolidated Statements of Operations
    (Unaudited)

      Successor   Predecessor   Successor   Predecessor 
    (in thousands) Three Months
    Ended
    September 30,
    2021
       Three Months
    Ended
    September 30,
    2020
       Nine Months
    Ended
    September 30,
    2021
       Nine Months
    Ended
    September 30,
    2020
     
    REVENUE                   
    Restaurant sales $8,688   $6,592   $26,067   $18,232 
    Royalty and other fees  1,861    1,770    5,940    4,687 
    Royalty - brand development and co-op  471    403    1,527    1,054 
    Franchise fees  95    108    293    307 
    TOTAL REVENUE  11,115    8,873    33,827    24,280 
    Restaurant level operating expenses:                   
    Food, beverage and paper costs  2,671    1,966    7,786    5,554 
    Labor and related expenses  2,504    1,848    6,988    4,834 
    Other operating expenses  1,892    1,580    5,861    3,939 
    Occupancy and related expenses  719    862    2,280    2,108 
    General and administrative expenses  4,060    2,196    10,599    4,981 
    Pre-opening costs  615    18    1,243    124 
    Store closure costs  132        132     
    Share-based compensation expense  3,668        6,785     
    Depreciation and amortization expense  2,194    315    6,473    811 
    Brand development and co-op advertising expense  412    915    1,785    1,822 
    TOTAL OPERATING EXPENSES  18,867    9,700    49,932    24,173 
    OPERATING (LOSS) INCOME  (7,752)   (827)   (16,105)   107 
    Other (loss) income  (2)       2,240     
    Gain on change in value of warrant liability  2,732        10,405     
    Interest expense  (5)   (10)   (46)   (97)
    (Loss) income before income taxes  (5,027)   (837)   (3,506)   10 
    Income tax (expense) benefit  9        (731)    
    Net (Loss) Income  (5,018)   (837)   (4,237)   10 
    Net Income Attributable to Non-Controlling Interests
      (predecessor)
          5        21 
    Net Loss Attributable to common
      shareholders (successor) and Controlling
      Interests (predecessor)
     $(5,018)  $(842)  $(4,237)  $(11)


    BurgerFi International Inc., and Subsidiaries
    Reconciliation of Net Loss to Adjusted EBITDA
    (Non-GAAP) (Unaudited)

     Successor   Predecessor   Successor   Predecessor 
    (in thousands)Three Months
    Ended
    September 30, 2021
       Three Months
    Ended
    September 30, 2020
       Nine Months
    Ended
    September 30, 2021
       Nine Months
    Ended
    September 30, 2020
     
    Net Loss Attributable to Common Shareholders (successor) and Controlling Interests (predecessor)$(5,018)  $(842)  $(4,237)  $(11)
    Gain on change in value of warrant liability (2,732)   -    (10,405)   - 
    Interest expense 5    10    46    97 
    Income tax (benefit) expense (9)   -    731    - 
    Depreciation and amortization expense 2,194    315    6,473    811 
    Share-based compensation expense 3,668    -    6,785    - 
    Pre-opening costs 615    18    1,243    124 
    Store closure costs 132    -    132    - 
    PPP loan gain -    -    (2,237)   - 
    Loss on disposal of property and equipment -    -    9    - 
    Legal settlements 66    -    477    - 
    M&A 1,271    467    2,169    506 
    Adjusted EBITDA$192   $(32)  $1,186   $1,527 


    BurgerFi International Inc., and Subsidiaries
    Restaurant Level Operating Expenses
    (Unaudited)

      Successor   Predecessor 
      Three Months
    Ended
    September 30,
    2021
       Three Months
    Ended
    September 30,
    2020
     
    (in thousands) In dollars As a percentage of
    restaurant sales
       In dollars As a percentage of
    restaurant sales
     
    Restaurant Sales $8,688 N/A   $6,592 N/A 
    Restaurant level operating expenses:               
    Food, beverage and paper costs $2,671  30.7%  $1,966  29.8%
    Labor and related expenses $2,504  28.8%  $1,848  28.0%
    Other operating expenses $1,892  21.8%  $1,580  24.0%
    Occupancy and related expenses $719  8.3%  $862  13.1%
    Total $7,786  89.6%  $6,256  94.9%
                    
      Successor   Predecessor 
      Nine Months
    Ended
    September 30,
    2021
       Nine Months
    Ended
    September 30,
    2020
     
    (in thousands) In dollars As a percentage of
    restaurant sales
       In dollars As a percentage of
    restaurant sales
     
    Restaurant Sales $26,067 N/A   $18,232 N/A 
    Restaurant level operating expenses:               
    Food, beverage and paper costs $7,786  29.9%  $5,554  30.5%
    Labor and related expenses $6,988  26.8%  $4,834  26.5%
    Other operating expenses $5,861  22.5%  $3,939  21.6%
    Occupancy and related expenses $2,280  8.7%  $2,108  11.6%
    Total $22,915  87.9%  $16,435  90.1%


    BurgerFi International Inc., and Subsidiaries
    BurgerFi Segmented Unit Counts

      Three Months Ended
    September 30, 2021
      Nine Months Ended
    September 30, 2021
      Year Ended
    December 31, 2020
     
    Franchised stores, beginning of the period  97   102   117 
    Stores opened during the period     3   9 
    Stores transferred/sold to the Company        (2)
    Stores closed during the period  (4)  (12)  (22)
    Franchised stores, end of the period  93   93   102 
                 
      Three Months Ended
    September 30, 2021
      Nine Months Ended
    September 30, 2021
      Year Ended
    December 31, 2020
     
    Corporate owned stores, beginning of the period  22   17   13 
    Stores opened during the period  2   7   2 
    Stores transferred/sold to the Company        2 
    Stores closed during the period  (1)  (1)   
    Corporate owned stores, end of the period  23   23   17 
                 
      Three Months Ended
    September 30, 2021
      Nine Months Ended
    September 30, 2021
      Year Ended
    December 31, 2020
     
    Total stores, beginning of the period  119   119   130 
    Total stores opened during the period  2   10   11 
    Total stores transferred/sold to the Company         
    Total stores closed during the period  (5)  (13)  (22)
    Total owned stores, end of the period  116   116   119 

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