FAT - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the FAT Brands Inc.

Second Quarter 2018 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. The lines will be opened for your questions following the presentation. conference recorded this XXXX. August that note is today, being X, Please

Chief would the Brands, call Executive and Roe, FAT today over Officer Officer. have Ron On Roe from President to we Mr. call to turn like now to Andy Ron Wiederhorn, and Financial the I begin. Chief

Ron Roe

ir.fatbrands.com to release our and which can release, good operator now Investor you, earnings website everyone. By press you found our on in should Thank afternoon, all section. Relations at have the access be

a begin, These we filings remind of a forward-looking statements that are press condition. those and Before of them. undue need these to I everyone impact upon statements results will We due guarantees placed therefore at Actual undertake refer and part that to from risks not and today later release indicated discussion may future discussion reliance risks our by include today's forward-looking of operating could be materially financial do for you to should future not forward-looking results date more these SEC our performance and and detailed forward-looking update not statements. statements a of the earnings number to uncertainties. recent differ

in are non-GAAP discuss as a President this turn for Reconciliations substitute can earnings in the measures Wiederhorn, to comparable available I performance. The may considered today's or over isolation Executive and Andy prepared additional be would results accordance Officer GAAP. like call we with in measures, release. in presentation information GAAP call, evaluating today's Chief which now to to we believe of financial useful During be our should not

Andrew Wiederhorn

and our as compliment and the made previously growth quickly announced the our acquisition on Express over have you Good providing we concept IPO, with have Ron. in you, smooth we organically FAT strategy. very synergies. platform to through joining sustainable can to and has cash discussed performance of cash our franchise closed thank against our that nearly today. wonderful acquisition. We're and Since a acquisitions our franchisee Buffalo’s pleased the acquisition, for with quality accretive last cross-sell shares the of steady to to accretive & onto We earnings of We acquisition. and strong for actionable healthy months, relationships. our ensure the Hurricane a we existing only anticipated world look brands be brands In for of and to records level but credibly can to flow operating are track for look enabled franchise prior developed around we The brand. Early opportunity has very potential powder of We’ve and Cafe July, of new both The couple brands afternoon we brand Buffalo’s progress sell pipeline provides acquisitions made-to-order our that Brands the franchisees commitment call evaluating grow, we Thank Wings. additional the all massive everyone a This our authentic not dry Hurricane to and significant. Hurricane Grill been long has ramped full partners. immediately closing to serves the target capital integration to synergies, the high meals in and flow it which asset-light raised modest multiple future. American for targets, valuations

through and has transactions. efficiency scale marketplace many our brands be we and on We strong continue to turbocharged platforms actively additional working are that could believe the

to our now results. Turning

positive business continued quarter momentum We growth, are all our pleased demonstrated results, which with of sales across second brands. same-store with

driving California, same-store industry, sales where saw growth. to X.X% quarter. both strength XX%, the achieving significantly same-store continued transaction system-wide the strong Our outpace sales We Fatburger in Buffalo’s segment, Express of X.X% growth including grew of second continued X.X% domestic which is and in in Fatburger growth the quarter, same-store comprised sales restaurants,

as, industry strong our in tastes momentum the be of well The and healthier been delivery, we with as beef plant-based traction by continues acceleration and smells, Burger outperformance has popular believes alike, of fueled increased plant-based the like vegan median the consumer both trend by in cooks, Impossible guests Our and that see to Impossible Burger. as towards options.

recently This segment from acceleration at can twice predominately strong growth Mill, the be in same-store in attributed relocated, trend of is Our unit sales restaurant old location. Cafe XX.X% Buffalo’s location, in strong the Georgia which first the results significant quarter saw of the the our to running average volume Hamilton quarter.

we sales introduction recent including packaging pork fest and driving success campaign Additionally, initiatives, in delivery. of new to-go the summer our had several and third-party

to and and acquisition continue with Ponderosa operating brands, be at of synergies. Bonanza the which successful integration are the very full We now Steakhouse pleased

in and calls. our were new in XX.X% pilot the these We our a Puerto Rico, currently a Puerto in quarter quarter, driving quarter. During sales sales grew Also of on still the have under sales open growth The was progress in stores new Rico construction Puerto of Same-store packaging tests impacted the and to on to-go Irma. up which and you in look XX with by Maria following same-store Rico delivery. X.X% restaurants media in locations, We system-wide. updating XXXX driven third-party the by Hurricanes heavily hurricanes. one were strength were future forward campaign test

active pipeline an across We our portfolio of have development brands.

all quarter, in one the restaurants During end in four a our in Fatburger, one one Express franchisees the brands. Canada. At Japan, of in opened the of quarter, had locations, the second XXX Philippines, one across co-branded of and we California total Buffalo’s

Our and to XXXX stages approximately XX track restaurants globally. construction of open various franchisees units on XX planning remain in in and currently have

new existing to seek development actively around the deals both with world. and continue We franchisees

Food Express five announced Bali the existing to Buffalo's with a Fatburger, we open at Jakarta. Global in During deal least Indonesia quarter, new an franchisee, co-branded locations PT. and development

announced development open We a three new also in to Singapore deal Fatburgers.

enabled franchisees new cross-sell provided our as have around that the brands world. future the we believe The poised grow secured, franchise Brands FAT for the growth. for the to we completion to In summary, from continues our accretive acquisition of generates dry and Hurricane pipeline base system financing is powder transactions. and interests global robust Our we momentum

Our scalable evaluate brands working we're our a and add of to to actively is attractive system. asset-light to highly number platform

portfolio of strong brands impressive Our and demonstrating existing is business momentum.

of have you from level. we a walk take to it and financials, We makes don't the next to robust don't growing sense have line development we're comparable pipeline the believe as ago the ready and our to growth year period. items data our through We

questions. the questions the in free feel any our Q&A. line results to for about please ask However, please Operator, open

Operator

The of Lafferty. is R.F. ahead. go from Mr. Anderson is Anderson your [Operator James Please first line question Instructions] open

James Anderson

the Or and Hey strong wondering mentioned more closer in for Bonanza same-store steadier do much fairly sales you there Andy, growth incremental? improvement? are growth the we franchises, Ponderosa terms of congrats are How they see that progress. on now you across you was to at regards the to a room full line being operating with do I think top state synergies franchises. where is

Andrew Wiederhorn

of same-store revenue. Well, I plenty for top and sales think domestically there's improvement in line room

same-store being water that's out a Puerto strong But growth and to sales and process we're things to of we go partly domestically people grow XXX% in see experiencing domestically not across power we're there that eat are and function base on really and Rico working and as initiatives a want island, the the very that well. number course, a of other so more. few from Of

James Anderson

food, you of wondering, you. great. term. strategy if But was continue you going in in terms the might growth to forward mentioned you if Okay, be your those any or product I at Hurricanes base of to acquisitions near know synergies acquisition was of had that diversify number you would Thank of And change of be at because Buffalo's existing a kind you looking sort emphasize wondering, color synergies us the the could footprint. maybe the I the some to looking all? at were continue on to give

Andrew Wiederhorn

want a to you brands other those really of point things that, a at, we’re or color, those other on but a looking coffee There any we’re Well, out, of both want brands burgers, But of are and so portfolio. want the additional like in up we easy more is steakhouse of have give menus our coming to looking timing we’re so a at, sellers. easy air in to it brands chicken ultimately you more already. there it's want terms there is our color. we as lot because would say to those acquisitions the wings look at. differently, make things add and sandwiches, desert, But little have concepts a it's you I are of little radar you'd more to question. we’re add and you of The lot pizza a more up portfolio, to diversified are to it's pizza, mean in but well-rounded looking upon bit more diligence, large, good products based very sense in be the with terms might Adding roll all at. food not us can those the would for complicated businesses are financing burger chicken might are which the of units you types

James Anderson

acquisition. very guys little the future? one it then and But the expect one be do following -- your the and the forecasted stage then process, the was the the so acquisition talks obviously ended bit longer small a capital choppy than to acquisition initially And raising And somewhat go and to capital with seem do the reach great. not on taking late you raises How more and completion one a of that execution end how be side, think question closed in capital reliable. terms you improved the coming in to that on Okay, fund at Hurricanes raising several up then you can you’ve you raises. last party it acquisition to recently with capital you

Andrew Wiederhorn

few that now get it think first do going a process see see or and we easier take lender a grow. know both as and it. having be upon market out you'll I participate understands forward, reflects in done much lender either to financial you lender one you to another It's the the these this of come as smoother

we we that definitely for standpoint, future So, organized. fairly forward experience the our that's easier an acquisition From it'll now be process going existing and lenders go have I possible that with through a lenders. us think

it's massage asset target moving a purchase with it's not real estate patience place into because owners. a before and control organized that And Sometimes owners have are of franchise little waiting that outside to the just done. of a there issues to or and of because a themselves franchisees everything purchase our that's buying deal like bit kind quite sometimes and be can simple get complex are -- there's you’re franchise

the additional so is the will think end forward, And up it you’ll before the of see us year. but I the acquisitions bit be little air, or timing think smoother a make much going in I two one

James Anderson

that. for Thanks Great.

Operator

is next a go The from ahead. question Cowen Martin Please Private [ph], Investor.

Martin Cowen

some time who do Fog the question of merger place? The a own wondering last lot how you too. of the just Cutter into Fog some I that's Brands. that we And had and would Cutter talk And is that still was about the mentioned if FAT in us, there spoke Fatburgers was the affect

Andrew Wiederhorn

both Fog together FAT quarter. fourth trying with Sure. anticipated stock expect it that, we can actively before QX, end notice Brands that bring to say and the on something the out, have to done boards progress vote that this this in in and things Cutter expect be make can proceed There exchange that Fog but reporting comment are tee it's talks that it that on up like right, have never a can complexities and in position a on quarter. if much company, this we’ll period both There's and pull the I iron can of issues are we we're and tax we'll know, no shareholder to to hopefully but fourth on wrong. basis. Cutter to quarter in working the that I I a get so The so, can't work to things some but related regulators shareholders not because for our you to merger. we too try it's quarter is it go

Martin Cowen

really Cutter point. the question, there’s the be be at sense shares in say that would So, asking what worth Fog no

Andrew Wiederhorn

no really question because answer that is knocking There right. into can’t You're I it. sense

Martin Cowen

luck good in Anyway I understand. of great Lots job. future. the

Andrew Wiederhorn

Thank you.

Operator

question ADW Adam next Please is Capital. The sir. go ahead, from Wyden of

Adam Wyden

Hi, Andy, quick just of couple questions.

$XX annualized million. rate So, of of guys run $XX million you and your run $XX annualized an targeted million revenue rate $XX to to million

Buffalo's, for helpful number. you’re what of bridge the I that kind I to to be don't And be like, you annualizing if and that think reported doesn't some bridge know of I include the X.X. could know I like synergies that will plus me it value would I maybe think to kind maybe other that, so think box helpful. kind each just people you of

Andrew Wiederhorn

Adam, good now. potentially have QX stores, and to just only of significantly So, than numbers you're open a in and talking another QX have There's them that Hurricane I XX the of number of and that for come you online. eight that the a think with as think of QX that QX of will open $X sort million about even you'll year, some course, a higher higher And QX think I them see we earnings additional QX for acquisition I the see But referenced, Hurricane then back-ended and because one. approaching in acquisition. the jump to you'll just closer know stores

for have some to it'll in from ton and new of over fee stores of the openings revenues light from itself up also all on so recognition an significantly get course, in system, QX. year. we that teed So, revenue Hurricane out previously of out; territory and smooth on their couple exclusivity up terminated and QX And those Also, having heavy be next jumps months. and received new was a that, both things income kind store the point comes couple it few the then of a openings and of a from QX just that expire agreements franchise a or will standpoint weeks

certain on store additional that will new already from reflected there's more that’s So, fee of that's going franchise QX be top recognition for QX to be happened in our income shortly in openings. royalties financials

Adam Wyden

is still all you mean, second annualized in it's a Ponderosa the of number. what a in that get getting is things are little [ph] quarter all the quarter, that X.X, couple the the okay, of fully in synergies costs there kind synergized Are you we light the you're second all bit So, on this from and -- saying I assets? second legacy quarter or front. well

Andrew Wiederhorn

QX, to full on We're from savings we we Bonanza that's maybe it. cost incremental standpoint. $XX,XXX that little pick month QX that very didn't practical the or in have and Ponderosa There's $XX,XXX will a a in side, really but up down synergies

was and run leases less that absorb. a much, collect much, Now faster franchisees in system becomes like in to place collecting that smoother a on out. Bonanza it's was very there royalties automated. over, systems place were the to nothing put Hurricane and to cut side, severance Ponderosa weren’t just like [ph] because before There in There were involved, and complicated ACH using to money and in it staff were that

closed to all So, those in Hurricane QX. us. very don't new side first pop the a We acquisition quick on the the of on and or quarter, things day it's the so on second place, already we -- are Hurricane

get there, quarter's all So, be have so place a as the revenue today. with whole already much by little expense. a eliminated in synergies of now to but some will we're transition we lot There XXth, of pretty August worth it's very really of expense, going

Adam Wyden

the XX openings, How got incremental couple really numbers me on new is of much new if $X incremental, number really you synergy store or you're to XX-XX? to or openings get quarter X of if versus like a to ask bit you you what a light little So, the really the Like second is on million like think the versus you’re saying the things. X is the store of today, say synergy percentage if annualizing XX. form,

Andrew Wiederhorn

Well, revenue it’s -- a quarters revenues. it’s not just the new -- it didn’t previous also include because didn't Hurricane include the

of million $X have Hurricane the you franchise it million you another of and rounding then have royalties, there. have just in then quarter or So, of $X.X sort $X.X you revenue so you a of million know fees and increase

things. combination a those it's So, of

Adam Wyden

Got it.

store feel saying, basically on the you’re lot Hurricanes. synergies is plus confident not of cost banking bank is bank openings, [ph] new of of revenues a you a reasonable, XX actual lot from XX So, that and to addition it's it

Andrew Wiederhorn

from be I’m the confident the majority quarter GAAP confident of already fourth revenue couldn’t it or that XX and the Yeah, is bag achievable. that recognized XX a be mean, I’m I already acquired recognized in the I in been the to that standpoint fees of is from aware franchise quarter will that previously. have am the in recognized

all but those a stores aren’t at our about people small and things and build open, to opening store They're dates at number help portion under already, stores construction. the New open, make might and them. go up point. does some are that. it that are have open teams point are just open they’re of it, These These that in hard that real a to going is like are on absolutely things training for to wall some

Adam Wyden

give kind this I Like you transactions, that a of us to like of lot kind your juncture? do borrowing at Last deal? just what of base of other estimate -- can financing your to net kind you how buy like you borrow kind is? of I’m of an debt how so a like of much more of [ph] question, kind is debt on -- going quote is net kind much, And where basis? give to what up you And a things us where can sense can kind of you where had know

Andrew Wiederhorn

substantive which there, will stock. think have of another cash $X.X acquisitions, $XX and is Make there debt, of what -- million is $XX the for subordinate acquisition of ability, stock in stock preferred some preferred preferred terms But including or then borrowing the not million both be acquisitions out in we we call that's I'll Well, acquisition have stock senior that our also with $X cash today million on instrument there’s approximately hand. and additional preferred million to powder leverage dry we -- stock. preferred in there’s

least have $XX at facility. hand. we the think million I power to So, our opportunity purchasing of there's expand on then And

think of So, lot a here. to room I go have we

same. the experience not will We

Let did me for months we that of not experience first will same say, of differently lag sort six also, financing this acquisitions and the the in year. half we

few bunch a But that had time know were finish just we get administrative start to always some that was sale and and this place seller up and to to has to lender things be we a in had the able to completed just fortunately, and the over case for dragged we that with were us, unfortunate annoying. because it's things the then that ready line sometimes to spend You be and be the not there to on. had in

done was I the to be important EBITDA have of else then now spreading case out squeaking So, to presented do, Hurricane expect we out can All us. really opportunities up on to going acquisition the to that been don't before behind things every would acquisition drop It we those got we revenue existing that too said and focused and growing that us. all us forward. completed the tied and anything we're very we get that's they’re from portfolio, base the in the

Adam Wyden

Right.

have it that? there the been with because to guys the of I kind curious mean, use release, working Fog think that guys that debt. other was gave company do I at you stock you an some seems if valuation news to on how openings? you value, line you of about I a the valued. What the are kind to of And have narrow like you consolidators in guys kind guess, people for stock, it So, I looking get are stock exchanged guys, to get Do that in can guess, things the have can gap? opportunity of other guys store new stock or original you you some some efforts you Cutter appropriately

Andrew Wiederhorn

a goal. Absolutely, that’s

right parties see I QX EBITDA meaningful we think how at much important. extent. in that's say I when merger are the like important sidelines be you’ll EBITDA, at EBITDA, rate, $XX anticipated price. million, that printing on Fog to the help with printing, will close is million how measurable I The looking -- I somewhat our real Cutter some mean, $XX run will do third to at Increasing flow mean,

benefits we in to the I Fog use able well for our think below we’ll of preferred go Cutter. FAT takes there's now Brands as tax able interim effectively position hangover been common, permission for for for have XX% the a stock not it's with and ownership preferred using worked and like Fog because acquisitions be but Cutter. stock well. we've use merger Once to that to place use – lenders the

at stock relatively And But whether the important of maintain cash. people so, its preferred view whatever can our ultimately that ultimately go that's will need at a definitely a research cash and right right coverage, point us additional to I sheet, I then leveraging additional of price, purchase well. with balance as premium And think so and think for or there’s we party leverage just disability. hard common it. way help use the low market price that the convertible for Meaning part it's about we receiving is to people if the that

I conferences, at call And hell, people get going we're broader those a at think often to to ignored some looking raise try microcap I ourselves exhibiting because small. so we're out do help And base it's of, will have to to been try just what things also all to so stock. of

Adam Wyden

right. Thank Well going. it you. keep All

Adam Wyden

Thank you congratulations. and

Operator

next Mutual of Please Dunn go Trust from Lenny America. with The Company ahead. question is

Lenny Dunn

but any and take of and three I appreciate while bad and a we’re that months some the of chances you, stock will. numbers this that reasons couple lot that takes Good that in out. is the because do the we on we're expect have afternoon waiting now could getting questions people and little one wish in while. about things we don't we’ve I'm a are with and luck pleased been presentation we're you’ve just put paid I and Everything the a for

makes So, getting this And did it paid time. listen you have the attractive we're that certainly to, that you I didn't said in investments. pay extremely I plan to that while hear already previous calls dividend,

like it some me I’d that, to give peace hear of So, would mind.

Andrew Wiederhorn

of easy. please all, dividend so rest absolutely, the paying First we continue to plan do

Lenny Dunn

Thank to make feel do have the set you. would fashion help up acquisitions do there. And going one I too it management rush is all then smart. I you And these Or of always in more do it’s in thing I time, a things three the be other Okay. than that one concept sense there at the you deliberate many understand will it to try out trying think place get caution to a at bunch you every one if do, once. in that and you in these to time. do months team more making whole But forward all because wouldn’t rather still opportunities to

Andrew Wiederhorn

advice. ago that that we a we for more the seven which or of last for deal acquisition and the six it. IPO we weeks nine on as And months worked the few Hurricane, a and Bonanza appreciate then ago, I months Ponderosa closed ago announced than just ago. Well, of was acquisition that was months we part The preparing year, made chain

to as certainly right, James of don't it's Those brand sure the is was, on to bit asked issues chicken it’s we another little something managing types another one steakhouse absorb. a If done be will than the of integrate that wings deployed And can. a questions every to The what market year I that's only know take know to another opportunity are to forward, those but we standards want our easy, we itself, brand effectively. brand really might to we’ve interesting that acquire by are but from operationally management businesses, easy was what Anderson that all we So, swallow But not the what to the to into going one it acquire wise, at three look different, just team brand marketing and acquire on so different depends that type being we are, and of thing and months. not standpoint, one than presents earlier or harder from are met. the burger dramatically platform, financial and making more boots acquire what we already on for, brand. Lafferty think pretty that our initiatives ground, a or

good that's So, about really one and and its the it when category. applies advice to our categories different we food talk same advantage food of

Lenny Dunn

I and so the at No, even be you there’s places say, can to many and time. only understand if same

thin guess, has same is just be opportunities intelligent, expansion the franchises coming. it keep the to should and priority like for situation that priority. on are So, I we're I and taken, sounds be out the going out saying the that what I out I'm that different rapid spread there little too in page, think should where you’re you a but and expansion The not deliberate it I’m just don't see want to there throwing

difficult some it’s field. have and year other very So, you're another to of going year a because and other year, in

it think opportunities. failures I will give other people's you that

Andrew Wiederhorn

for Thanks comment. the Understood.

Operator

Greg [ph], The ahead. go is private Fortuna a next Please from question investor.

Greg Fortuna

you how today. are Hey guys

Andrew Wiederhorn

Hi, thanks. Greg. Good

Greg Fortuna

I Good. How are of first Andy? look release. at you A couple guess, thing, the earnings questions, just let's

of just comfortable You revenue with estimates of or the $XX tightened in it couple more $XX getting you million sort million than tiny the rather you numbers a were to bit was you was committing million something to coming that things, you raised and there it widened or up to $XX a to your there?

Andrew Wiederhorn

is changed XXXX a the were place ago end in of with place is Well, income restaurant lowers the six just just not originally so, played closures, a into when revenue in that five and of year, also income. the there we the over which November guidance, last necessarily -- are in EBITDA that last was a fewer Hurricane or change months at some little that's bit. There’s negotiating XX weren't Hurricane, than restaurants there went the that in in There's amount. fee the year slight lowers initially that were of franchise get so so by place out today or January, recognition GAAP recognition that just

as adjusting to reporting revenues rather recognition. So, start EBITDA than fees, their their companies initial for that and amortization had that of was franchise

their So, everybody reporting of that. method switched

just few the was income it us, side. a on hundred thousand For

by a lowers number bottom to other, a that know are growing going and about line the good of same-store reason be pretty But it’s thousand and is it thousand that things. by hundred never deal. stores that's number, I hundred sales really it's for it’s the And the has hundred a positive very So, been it way so close, nicely, better. range. big just its it’s few one a you big the if very our look and Businesses lowers thousand few not feel very or the really few

Greg Fortuna

Okay.

everything's million -- annualized think that $XX cash to basis, Now an on you once going to EBITDA $XX got there what's in do what million free be. to run and rate, you flow the

Andrew Wiederhorn

million and going It’s that’s the that's of million service, and shareholders stock the debt have debt payable -- your common it's that, half debt have portion to in paid, it’s service to you public and paid cash in you And about around you preferred debt Fog more $X you all dividend. course, I another Cutter. to $X service if on whether be then the and than mean, the more have than, of the on

business, coverage into the pay you Cutter so, cash, in Fog requirements that reinvest to certain stock than its for subject the out everything of the in senior also place. anticipated now they has take cash there’s -- and debt enough service continue business will but So, lender that more to that's of

service coverage today any excess of of anywhere it’s in a covenant. lot the structured, we’re a there's debt close kind way to So,

Greg Fortuna

to just was what the like out I to so sheet will flow. balance like cash figure trying Well, free like go up, just --

say So, you I $XX keep a service so couldn’t you fast, your debt did million? do were and is you with what $X but about million going up you, little if

Andrew Wiederhorn

you senior stock if It's the about and the combining $X acquisition and preferred stock. million, are debt

there, of a cushion So, yeah. lot there’s in

Greg Fortuna

flow. of million cash cash So, you'll $X of have $X million to free million flow, free $X

Andrew Wiederhorn

that. Yeah, a little bit more than

Greg Fortuna

Okay.

minute. a for debt the about talk let's So,

idea the we high. largest money, and had XX you're you the I interest for have current to already that and I month get portion done And where the I Do cheaper was go going a any just assume agree term, is period to? raised -- because both have extremely you conversations an were You’ve short rate debt you could think renegotiate spoken, that that on debt.

Andrew Wiederhorn

to The dry month Well, facility us also a or terms so facility letting growing that's out it the other XX in acquisition some a maturity, of another both -- have two responsible on it lot lender decisions. all have in a we and facility permanent powder the capital. that first those year when stock we that for an with has got then take facility to and to facility was preferred is not lender looking some facility as preferred of as now serve current if the finding and that's very year; loan the stock, grow, a five is in he debt are time place open flexible make available and stock more of bridge a leverage right, and options. doesn't mind The

so, only it's as along here. we along progressed we’ve progress And as a month here, been

to banker open market, it there's or prepayment risk itself capacity the acquisition number to we'll the other think this that different requires don't whatever. some because where there's that dialogue we want to some It’s you fees, no or we don’t the opportunity through an There's so itself current expensive, and either or that have is unless presents penalty, lender every there’s legal hurry refinance they what’s interest go go a fees, no best. the there do take an or to refinance to there’s have out. time hurry to work I presents the that senior

So, little of -- have that's flexibility a very there. a it's and lot dialog fluid, think have we bit of we but I a open

Greg Fortuna

the I'm more high rate paying. market. seems focused It Well, quite to just the on you're relative

of that get the X of becomes guess, mean, the relative a the to X points your amount plan I money down. to bottom earnings line the or money you’re this on question brings borrowing I point. So, at to lot really what’s

Andrew Wiederhorn

means complete rate, the completed a we immediately that will well being as company. lower Canada the in course, bring be I and at If a people have and at we rather that but Right, to most MTY prepayment debt fees and or I strategy we transaction penalties had banking know where as to has, executed Canadian roll-up would being a and The be that new the said in done that's or the you representative refinance question something fact acquisition it strategy we rate. there’s go completed haven't to understand the that of the a new have did was there of There’s, U.S. completely just transaction place. on fees company. to could small lower you public in And

at the you we're it's go in. of lot have of to to So, that my but factor front it a again, mind, much going refinance pay tomorrow that also just very to practical, means fees and do it's to

Greg Fortuna

go current another Okay. else I deal, have stuck but But an question to should easier lender? somewhere comps, MTY, the better with this you idea that's borrow fees as your prove could if mentioned should we you pay mean, be if that asked Canada. far -- you case, of in another we and someone every give I Can you rates. earlier. the get in interest that were money move other time or us numbers Or you're it you on do valuation, lower with have to just where and you But clearly regarding get as any thinking about this be to one.

to, most I trading would higher know you that EBITDA you else than companies a yourselves anyone America are much at So, compare are. level in

Or think who do paying at who their So, about? we achieve do or look you to can level? who look and you at

Andrew Wiederhorn

organizations, there you either sector, quite asset-light can you burger multiple times XXx they’re at look the and in the can you number at just XXx a of franchise to time. asset-light that whole They point or at driven plays. you this are look collectively. the guys look trade So, order if asset-light, are all mostly models pure all in the at know at number XXXX But

take So, which -- dollar where in XXx you price immediately number, that you kind of $XX of million of share and our then excess to you expect are at if you $XX know it’s to price. I right, the XXXX you conservative XX take you share number, XXx, get be $XX, $XX can multiple, even million its IPO least if will apply, an apply you significantly right, higher, very

here. amount So, growth room tremendous of there's I think for

at ride boards I of of so quickly off bit done do is acquire that things provided we I dividend because as sort to once And own. People that stock I ceiling Showing things of paid it's increasing the being more increasing a very of merger really no where Cutter it think are in growing and get to much the then terms goes complete able there’s are so get there's -- clear that critical. the of much those But focused comfortable, working very overhang of an the all off need owns to other diligently current a and can how as it's absolute that I to But on. path. is EBITDA a takes growth the but and little both investors then stock think think away is possible a we’re Fog and do, of the need yield we're prospects helps. company And company's growth flow public Having how that's a do. of that is is very the EBITDA we whether the second caller little as we do, the charts, coverage, earlier think focus one need real wait. things something to bit the the arguable attractive opinion as one ours. ability the one price sometimes you're key the said, the to to for

Cutter’s I not think be the perspective, or shareholders would Cutter of the a company. XX% company, not XX%, small much happy XX%, of from larger XX% Fog Fog XX% owning than

So, good the getting last Hurricane – a preferred I that years But only now everyone get it’s still done now of to think really and and component completing the U.S. get for there's important and Bonanza and acquisitions lot the to a and months, done. done completed Ponderosa to three quarter in in obviously, restaurant in the IPO It's we done. other get last initiatives these I the that's financing and the fourth done, of stock focus XX through the want lot think of we’ve get

business EBITDA. So, to that path a multiple that there’s very clear let the on expand

Greg Fortuna

much small position. guys small big difficult real a you is the so there's for in it and can't too stock, cap really small that even a said, hell, get guy you’re you're Yeah, clearly, no fire,

more presentation, you delivery partnered and one just discuss know delivery mentioned packaging and opportunities see growth the delivery. trend, Okay, from you times, you a in you you question that your are Can with going, it number where area? who of

Andrew Wiederhorn

bet. You

driver a been has several years. us delivery So, for for

one of in the the pioneers We are delivery field.

and about good by it raises up delivery. us Grubhub, But several And just are that makes to those Eats, remember your marketing actively sales got guys. pioneer things platforms. on restaurants average Uber It a guys as that deeply -- delivery DoorDash important those XX% Our Postmates, about also it's with all of XX%. on for brands check are there's are really the partner involved a that those

more the means people ordering at than spend people line that standing counter. delivery So, are are in who who

I to delivery platforms other say and restaurant order app and the would and the note about it own me all that many be apps $XXX,XXX delivery show customers The you’d the $XX,XXX the your your their from just mentioned, on six thing in before app would on days that delivery for and -- these when to it to service put a road of old something is make every make update you’ve app app go proprietary service heard companies delivery you an the their But program that or you. spend or providers platform. months and on

user take or that the not just Ponderosa customers, So, is part and technology care Furthermore, delivery of the user they Fatburger or service. base all it's Hurricane that's of Buffalo’s or Bonanza’s cost. every that and

right for I up that and of delivery, instead travel of app to you the foods their hot vehicle Eats delivered exposing comparison done restaurant shows the that customer. for versus much the and travel travels at the Fatburgers in travel pop they and as right, on in one the Eats, types of the and so shakes it. we’ve elasticity delivery can much cold think put a delivery that course, best from hot the bag things an terms a still the that delivery aren’t fries, in that of delivery that door-to-door worst know milkshakes soggy. bigger burgers, fries best the And Food have and are customers XXX,XXX services not X an at when And, our we it are the going looking Los the and And looking sitting that by you there’s Uber to and of the open food the yet done. hot, customers our really base The can So, the down are advertising restaurant. to it app in itself we just eating example, all direct has at continues. Angeles to the that's customer in bit menu, to improve million packaging, worst in Uber example, the that’s pizza It’s it and of to make we Fatburger customers and and best a absorb. little thing arrives have

a difference. I make think those So, things

invest brand delivery get you more with can lot of companies to a popular to do of packaging. in make have promotion. you the You a the for sort given to There's sponsorships algorithm a

a had But good it's franchisees like very the that or We've on CapEx Day that’s whole that's Burger We're going do that. and whether to CapEx it’s increase franchisees real gift know facelift continue restaurants, XXX% on or You we’ve their certain National meaning increases awareness. for between reinvest a give. focused to spectrum whatever when free returns, there, to now. also your a a that delivery opportunity the seen or had remodel, we've in XX% holiday

for will big restaurants and us our us itself to over think reinvest again. get for it's proven So, moving over I And big in focus that into the a franchisees it’s be initiative a and to XXXX.

Greg Fortuna

Okay. do In that of percentage stores XX% delivery, of said, stores you delivery? do of and sales what delivery the

Andrew Wiederhorn

side testing XXX% it's market domestically, almost small available, Fatburger has now, services In and right XX%. the but large, every it's the we’re businesses a on Ponderosa maybe a is it's markets, XX%. Well, delivery not testing, service Bonanza side, maybe Buffalo's maybe in number, signing some but also up for just they're it’s on half And markets delivery Hurricane in of XX%. other and the Buffalo’s. the the a it's

Greg Fortuna

year next it thinking or much percentage you are it it the sort XX% is have it? of like, what that grow So, that be sales the could of Can of --? stores

Andrew Wiederhorn

No, like look I it could it grow know from way by XX%, don't to so XX% XX%. the to it that XX%, all would but if mean every year. goes growing surprises single

just give So, you number. I'm a -- really not I’m sure it's to just reaching how that

Greg Fortuna

time. your Okay. work. good Thanks Keep the up for

Andrew Wiederhorn

questions. the for Thanks

Greg Fortuna

so future. your happy buying I'm every day. for Thanks to the excited I'm stock much. be

Operator

Andy the concludes session. This Wiederhorn like for back to call closing question-and-answer remarks. over turn any the I'd to

Andrew Wiederhorn

Everyone to and feel you, free like a questions. joining further Please the have everyone, for any reach operator, great thank out, afternoon. to again, call I'd if Thank have today. you

Operator

This conference concludes today's call.

day. pleasant your a disconnect for you and may lines. You have Thank participating

FAT Brands (FAT) 12 Aug 182018 Q2 Earnings call transcript