BFI - Earnings call 4 2021 | BurgerFi International, Inc.

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Operator

Good morning, everyone, and thank you for participating in today's conference call to discuss BurgerFi's financial results for the fourth quarter and fiscal year ended December 31, 2021.

Joining us today are Ian Baines, CEO of BurgerFi International; and Mike Rabinovitch, CEO (sic) [ CFO ] of BurgerFi International.

Following their remarks, we'll open the call for your questions.

Before we begin today, I want to remind everyone this conference call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements related to BurgerFi's estimates of its future business outlook, store opening plans, same-store sales and restaurant operating margin growth plans, prospects of financial results, including projected sales, restaurant EBITDA or financial results from the company's acquisition of Anthony's Coal Fired Pizza & Wings.

similar be intends, words be, forward-looking those expectations plans, will actual result differ can believes, as will to and generally statements results which likely expects, forward-looking in could subject reflected statements. estimates, predicts, and and assumptions statements that identified on from to such by the anticipates, continue, are are Forward-looking based These risks current uncertainties, expressions. materially projects, our will cause

contribute such our in when to, for year differentiate file or on with differences cause other include, XX-K filed, but limited ended and Commission. report annual [ the for Securities XX-K XXXX, could not ] and ended on those that Factors December XXXX, to the year the Form annual XX, (sic) Exchange are in Form discussed discussed documents XX, December we our report those and

forward-looking acting entirety are to We except written attributable BurgerFi the statements, to and subsequent undertake the no cautionary persons by revision by required qualified oral expressly law. this statements any publicly the included to obligation or conference All results release or in as forward-looking behalf call. statements in BurgerFi's revise on of their

cautioned Given following forward-looking undue statements. measures. these discussion financial not Also, may listeners risks and reliance uncertainties, are the place to on such contain non-GAAP

XXXX. and year financial non-GAAP our For full for these fourth and measures, please see a quarter of reconciliation discussion earnings release the

company's link https://www.burgerfi.com/. starting today's at via also A release will I provided replay would webcast like to weeks the on well this as press available be everyone remind today. in via the as be telephonic will website that for X call available replay

CEO Ian call I'd over Ian? the to turn Now of to BurgerFi, the Baines. like

Ian Baines

a thrilled and remained Good operator. take successfully as be continue here I to navigate I'm this our entire they CEO to us Thank environment. have express dedicated very you as and team want for We're of join to BurgerFi. moment challenging gratitude morning, the happy today, can you, everyone. to

I you Pizza and was of the those company, Fired of to effective CEO company. the CEO I role Wings, combined previously For November X, assume Anthony's who Coal are the of new &

I'm very excited brands. premium these combine to X

for November purchase corporate-owned on BurgerFi As premium and operating future restaurant-level closed given opportunity casual potential locations top-tier profitability BurgerFi per million volumes unit $X.X basis. X, XX Fired Wings. a on foot XX% pre-COVID XXXX, $XXX name square strong under Anthony's transaction history with to economics Anthony's a unit on compelling of dining and the reminder, a Pizza & and was nearing Coal its average the sales margins

combination. Anthony's between brands strategies, efficient have ] strengthened of our business and in X million result potential greater team a to and cost savings realize plan already XXXX. our begun Wing. growth BurgerFi as as transaction, a and synergies. the in and attractive well, realize the overlap going strong there first and synergies synergies a as strategic our to wave to in very to from Roasted cost To with opportunity dedicated we foothold in we concept In Through that significant to teams franchise Anthony tucked behind we've $X end, addition The We restaurants, profitability, through a see footprint to system competencies virtual positive of very integration beginning the and smaller brand outstanding additional we from the Florida called elevated that long-term realize have both [ geography is we opportunities to core and the year growth. access our synergies opportunity having the plan this both revenue Anthony's this was a Furthermore, well of as BurgerFi is leadership into brands, market

to forward fantastic have company for We opportunities and forward. growth looking ahead of brands, moving the combined leading I'm the both

Our I'm recently Top Readers' in year brand progress Casual Burger year long-term industries. with the company Today's USA row in chain and fast-casual second the we're a the the XXXX. and in Fast & XXX casual multi-platform the XXXX #X recognized survey Movers XXBest And for dining Choice is BurgerFi Better goal FastCasual's end. List thrilled was of The Top in to Shakers as strong a making brand growth the for Best assemble towards that

Rabinovitch, Mike additional the fourth the on provide over the now to our turn commentary our performance results. and turn [ Mike, CFO CEO call I'd quarter full I'll (sic) over who to to like XXXX call you. financial ], for will year

Michael Rabinovitch

morning, to want Ian, a reported you, BurgerFi Anthony's include of our full that months quarter X of I good Thank quarter and mention everyone. fourth and To results. results start,

the Our fourth its revenue XXX% in by quarter. deliver to impacted total continued $XX.X able but be were quarter million COVID-XX to year sales we and ago in an variants, to of increase to million compared $X.X sales still in

addition same-store which rate a driven which November the Anthony's X growth of digital sales. by openings revenue product sales, new on new positive strong by operations, and supported high XXXX, on of acquired restaurant Our was retention BurgerFi were was X, months and innovation

sales For same-store a the locations increase a corporate-owned BurgerFi sales brand, very during the X% franchise quarter X% with performed fourth restaurants and increase. same-store in delivered our well

minus the the during sales of recouping as to XXXX, and $XX.X continued quarter in recover the challenges have same-store in are quarter Compared difficult million flat increased ago million restaurants our to $XX.X sales franchise year from making peak quarter. all for the COVID-XX. extremely XX% the progress to our franchisees fourth fourth pre-COVID-XX and in were sales System-wide locations to X% We significant corporate-owned levels. for compared we faced

XX% for quarter system-wide brand, of of the our in the fourth digital revenue sales BurgerFi Overall, channel comprised XXXX.

majority dining are pleased We COVID, recover. very retain peak to relative while our component business to in-restaurant of channel vast the to continues of digital our

were not invest year. cost supplies frictionless alone We labor to sales. continue omnichannel in goal inflationary the food, of and experience a feeling satisfaction will with guest the delivering drive this technology and We to in of more

operating compared restaurant-level year XXX quarter. basis points of the result, ago a margins that declined to As

Turning specifically restaurant-level to restaurants. fourth a the quarter. during realized Anthony's We XX.X% margin

yet pre-COVID restaurant below due to recovered levels expenses well able is therefore this not being lever and nature. operating in sales not fixed While that the are to fully

We which their than months XX%. by improvement for the operating in significant still continue expect XXXX higher sales December, recovery, below X as but restaurant we're ending margins X% XXXX

business margins chicken retained has we a and with our addition, this of when that increases, during Supporting In inflationary XX% significant strong sales normalization we sales pressures digital XX% of portion their of of price believe become strategies ownership. recently recapture procurement also that prices implemented, wing restaurant-level Anthony's can Anthony's normalized. is belief with and its

pricing. to on Moving

in late restaurants took price labor term, took a X.X% pressures a mid-January, costs, Here a price on increase BurgerFi company given the price inflationary X% short taken of in we follows last which X% at in pervasive late also increase January. June. food Anthony's, increase and At we

We $XXX.X and more will compares restaurant-level the reported environment. our shareholders a continue net normal loss to fourth We common which pricing monitor margins to an in attributable with elasticity $XXX.X a of costs drive aim million stable operating resulted to ago investments to quarter in million controlling being interest noncash attributable charges certain quarter. extent, a million related public gain of and, a loss the year in from a $X to to made a company. This primarily impairment lesser of to

the restaurants. ago $X.X compared corporate-owned being and This drive the growth quarter. and and of BurgerFi of by partially was development to growth, quarter to offset by those related fourth year the in was the in investments public the million company, $XXX,XXX driven year-over-year improvement Anthony's acquisition revenue EBITDA a to Adjusted

XXX% Next, to I'd increases XXXX. like impacted the for in instituted inclusion increase were XXXX, XXXX. in to of to supported $XX.X million locations, XXXX XXXX. compared towards compared innovation the -- recap at improved and COVID-XX XX% an the million Same-store BurgerFi as increased results the full compared throughout year XX% Brands our driven XXXX to increase by sales the the in the months and $XXX.X BurgerFi the menu in and revenue us $XX environment from end million check second end quarter, million selling franchised to sales when rose year value and X respectively, for Total addition XX% quarter from first of corporate-owned system-wide a sales. of system-wide new first Anthony's BurgerFi by year operations, an average the to in restaurants of same-store increased in early price for and restaurants XX% $XXX.X XX% resulting in in

a due fixed percent compared on in higher are higher XXXX improved labor million the leverage Restaurant-level percentage of costs, costs offset Restaurant-level by nature, full sales. to year to operating expenses $XX.X full points of as the XXXX year a compared for million were for XXX XXXX basis prior $XX.X of same-store sales as relatively operating the in which sales expenses to by occupancy from period. year

$XXX.X noncash impairment million shareholders expenses, of interest costs compared common December of loss in XXXX million common Net gain shareholders from the and investments and in share-based controlling to $XXX.X a costs, net a of of public to million $X.X attributable attributable loss to and to $X.X The XXXX. noncash related preopening charges, million company controlling compensation million $X.X million was interest resulted XXXX. acquisition-related primarily in becoming $X

increase November XX% by included, in acquired operations prior the Anthony's for to being XX% by BurgerFi the X XXXX associated This driven growth public 'XX, system-wide and year in support of Adjusted increased offset by growth months X, partially year was investments investments the million same-store EBITDA in was $X.X full new million on the $X.X and development. company XXXX. brand of to a from which company-owned resources to the accelerated restaurants from restaurant sales, related being a revenue BurgerFi with

our Moving on balance to sheet.

$XX.X the repayment end of as balance revolving locations. million cash termination of the difference of $XX.X as acquisition on repayment $XX.X cash to the $X of credit was year with December in of first the reflects of million to 'XX, related The the line $X.X XX, million of quarter new million expenditures our restaurant the Our Anthony's XXXX. of corporate-owned debt in at capital and of construction million associated of well compared

to to our growth. unit Next, speak I'd like

we locations. X restaurants fourth X the During consisting quarter, and franchise new opened of BurgerFi X corporate-owned

XX build on new For Most opened result, currently the locations in which locations, about 'XX, we unit markets X the have additional the stages in. the those strength through another represented growth. continuing brand excited operate of development. new to XX% of have various as under are areas. XX And of we opened a of full year this in we're Further, and March we year locations

the restaurants. expand Anthony's prototype look and are forward brand. Anthony's of the attractive increases a total to Anthony's, economics unit foot company-owned sites, our square a developing smaller to progressing alternative For with square the quarters foot franchising more providing our This We the coming provides will updates market. we X,XXX X,XXX of footprint as on addressable optionality traditional over growth

our to outlook. our optimistic on Moving prospects. and about long-term short-term We remain

While the the month, we have a stabilize seen more Omicron quarter variant, sales the January progressed. was volatile given surge as of sales

of of reaffirming $XXX guidance, locations, restaurants. new locations. $XXX assumes the increase are stores XX we includes With we a to between which our corporate most XXXX, For annual of the new the XX of million in previous million franchised which franchise respect same-store and versus sales revenues mid-single-digit to to addition breakout expect to be

We equipment, number million expenditures are more some to to said, from year. these in permitting total, In the the first new $X of we labor. half be of related XXXX, schedule securing and capital in to the seeing $X That openings are resulting of robust we did delays. opening delays million construction year the challenges and for unit scarcity between last see full here expecting slippage and a due store

growth Now our to discuss to it and I'll Ian? plan back initiatives send forward. going strategic Ian

Ian Baines

Mike. you, Thank

choose and we on, the focused by remains remain as team dining experience food. Our from off-premise digital a Further, Guests solutions our our delivery guests marketplace. on that can and order great-tasting have delivery our guest websites where meal. members. digital rooms and and with seamless pick order reopened, focused apps, high-quality, experience, dining our the ordering up in to the to largest and through mobile top when providers third-party priority providing our we have their so can order through continue a guest want we The intensely or optimize accompanied remain they

guest our omnichannel improve continued to of refinement our looking are we through way is experience experience. Another

on our and approach are We data-driven increase engagement and ultimately working among profitability. drive consumer-focused and more consumers sales to a

on building application and as mobile focused our also as are loyalty, features payment We capabilities. delivery well out our

in rolling our increasing corporate about the is, resulting we out kiosks excited very self-ordering begun are our BurgerFi, addition in the franchisees. to We to check state-of-the-art experience. strong of which in average, our guest on average, currently usage increases believe locations at We've of and improving some

they at experience. of customers of our customer We multichannel progress entering to are upgraded will leveraging through innovative choosing also refined testing where we improve marketing to confident and increase services, technology want beyond. recognition brand technology the Linking excited when also and we with our experience provide telephone upgraded their further our are improve are with our that consumer-focused experience By that Anthony's and the order. XXXX and we utilization as AI we

our to on strategy. Moving development

the Eastern the way expansion. Carolinas, work suburbs restaurant to the From Philadelphia New few Our development operate strategy on D.C. York. Along Southeast, years Atlanta key restaurants Nashville. Tampa, of in to building over with and up the the our our Washington, franchise Jacksonville, already cities scale be we of want corporate-owned and next will leverage Seaboard, we and clusters focused such as in

prominent So by East the presence Coast. are brand a moving along creating north, we

we franchise like deals our and meet only other Southwest pursue markets to in to Midwest, Looking if multiunit rigorous U.S. but opportunities, they intend criteria.

a potential in cultural well our markets and they business the to company. our expect geography franchise be be for in. fit good do capitalized, partners these of restaurant deep retail and We experience knowledge and/or have

Rico Continental To locations we restaurants additional that performing outside have Puerto already strong open market. a U.S., of address plans our the in to in opportunities with

We potential also early X again, fourth Latin XXXX, another Kingdom and Saudi restaurant various which first deal open currently in with opened stages of additional eastern of quarter opportunity. in We multiunit franchise to in signed is, have a to significant the province of in restaurants partners in Arabia. Arabia have development. franchise locations we the Saudi continue conversations growth In America, our

our interest significant we X early regarding Anthony's we're investing In network addition, potential. our an with this we as brands locations, which -- later BurgerFi we of are from in level is innings our to in at growth the on time very excited It year. begin and at high plan the franchise are early the are trend exciting premium consumer of franchise

would for open members again, Once call work, team challenging for their our thank times. to during operator, that, like With of perseverance please and up questions. hard I these the all dedication

Operator

come Peter Saleh And question BTIG. Instructions] our from first [Operator will with

Peter Saleh

Great.

at sales that Just a for much BurgerFi? is this And point if is menu XXXX, of of for same-store clarification. take The any point balance for that Anthony's? then year? mid-single-digit that you Does of guidance include the strictly how price secondarily, pricing this don't more

Michael Rabinovitch

at question, good a mid-single-digit a is the that combined. price Peter. a X.X%. a would be And X%, It's took of blend X% That -- brands around assumption and average X increase to somewhere given that we BurgerFi X.X% out

X/X coming X/X between price. of assumption is somewhere sales So the from and

Peter Saleh

Understood. And you.. do

Michael Rabinovitch

to I that. sorry, to clarification want Peter, I'm just a add further

see that also a a impact. price Given you last X-month BurgerFi would first increase took June,

overall to the rolling in closer same-store maybe So X-year impact sales would price be half?

Peter Saleh

Okay. half. Closer to

all Okay. Can I right, just mean, that's -- give you fair.

-- off sometime replace what's summer? to, what you plan Do pricing Okay. to guess, going this you later take year this to more I roll

Michael Rabinovitch

X, the value same the customer. was market months reaction the labor experiences X- able chain price because to do. want X-month supply is overall period the that to to give the proposition in that food offer market we saw to would not to evaluation want able took we to X We an We price January and to trailing be and increase X, of to The strategically want in be in taking we what of side.

commodity which our margins see pressure initiatives for the much year, would Anthony's which we've food side, to points was chicken in we normalize price. would biggest see example, less their in begin be focused already one those our as to on on and begun last So wings, of stabilization and of prices, the

the labor said Having continues and of continue the really but last saw in a food back lot if pressure that, equation no half would we we at price. side year, look inflation, which have to of the to choice to through of

Peter Saleh

Understood. it. Got

the on technology -- we just Can Okay. curious initiatives.

think on ordering you're those some you on Anthony's, and ordering. the kiosks; AI seeing little I use of for -- BurgerFi, doing both Can phone guys mentioned a you're what what brands? at elaborate of and you bit

Michael Rabinovitch

Yes.

So I'll about the talk kiosks.

So Ian talk AI I'll on phone. the the about let

restaurants at BurgerFi, X did quantitative cashier cashier registers kiosk X qualitative up XXX have test we for end of X system, registers, benefits doing We kiosks. number lift. of average those positively The check accuracy about where a therefore, of we that. replaced and, experience the affected. and an AI with order and So use days saw intelligence we on with within the Through is the customer the the a and we of

and that now. to way the made restaurants, corporate is roll all to out we've So under that decision

We the XX to XX days. next complete expect within that to be

should As options it have we restaurants. -- within points I relates just sale. the kiosk cashiers going to add, the It's the with adding to are of still

for For we're what explain we're it why -- it AI what Ian I'll on and trying the let right, Anthony's, telephone not only to doing matters. and improve, but

Ian Baines

Right.

terms Anthony's, shared do big example, is night still via to have, earlier, X digital a demographic online order X Friday Anthony's a presence to the time, is although of of in and between continues Part time. as peak us. I peak for which like an And ordering, telephone. increase ordering and So obviously, we

order the of upsell So ability the answering telephone and accuracy be and telephones getting answered people those challenging. the XX to also times

to the And and testing been AI technology respond learn a phone have as becomes it upsell. we the number what in then longer of are algorithms So guests the ordering answering it runs, locations better now. to

that experience. are early seamless So it indications a is quite

to in are an check. uptick seeing we And the kiosks, the then average similarly

we that clunky. that was experimented So bit with went months a quite type time we XX partner of the frankly, technology with And about this had ago. at

has to continued So it improve.

X add out in looking we've more. locations and rolled So to now

members guest it helps possibly team labor some have give could also experience, savings. it to not and helps So us the an but our -- opportunity and

Peter Saleh

Very Understood. helpful.

and about the X couple at confidence I you A talk on unit in questions my know XX, along. pass Okay. development but of the units. already this I'll for you're more Can then year? end, just XX it to targets

in more XX got You pipeline. the

that will be So hit number? this to there guys to you opportunity an how are Any outperform that there confident helpful. you that would thoughts XX Is XX year?

Michael Rabinovitch

Yes.

comfortable. comfortable XX. of the in we're range XX that think I to We're the very

to we've had the last marketplace about the labor, I year expect over the the lot it think of that the learnings contractor, we what in process. equipment comes a when

majority not out staffing So those delivery didn't cycle. confident a it's X we little their all where I we that last we not year and the They're both all towards a building the this in and are are took last our franchise-driven ranges of do. they feel of experienced of that year. feel bit slippage, the And given independent what we that in include because Having said and the a control what operators lens open happened and months and of we more then locations those -- backloaded the procuring are that, year. that's stores, could franchises

that months. that to a So we've or over but them X XX that would that to moving quicker than franchisees above be on seen able they're range last could there of XX range, be the be movement by little move within driven our

that we in not we we out a So put range there to thought would be have. position a that

Peter Saleh

Understood.

Okay. then just last question. And

more other any you the have below on January XQ quarter, stabilized. Are above full can first Is outlook but the or to I any are color? for provide think within volatile, that, there for provide mid-single-digit you same-store Mike, care do color things you that. sales you mentioned, year sales that

provide to care you be helpful. if would details any Just

Michael Rabinovitch

in Yes. I and market thoughtfully. give first because out what on want comment our color quarter provide to closing kind on for first more guide put But to we going pause able on for results the be quarter now. is will will them I the to that of experiences we're I what's year.

by it's on lot year. it's in an the ramping the is a marketplace, throughout and A based stabilization quarter, even of that continued not so

improvement. quarter the first that, strong is we and high quarter the of I'll through last first that at than that in note lower year comps as the just of It's guide data component in May. a mid-single continued last So is not annual year, digits. would guide we expect not revenue component -- and comp very in point, our the had BurgerFi, February

where up SWAG Burger. ended menu. we going that very our brand-new The period launched We're our against X% which being of a X% product, sales, strong about of

all So of and your kind we quarters. why that throughout it's that's even a ramping Does not the had address up question?

Peter Saleh

along. Yes, absolutely. I'll pass it

Operator

question next Drexel comes Orenstein Our Instructions] with Lynn [Operator from Hamilton.

Lynn Orenstein

you be you Will veterans to all, in you of question. have And first be you community. will Florida? I believe back veteran delivery locations for for thank all a expanding for usage? when payments the the do and that mobility And giving for do Gopuff South ready

Michael Rabinovitch

I second address us if am I think to either one, I think do. the see -- for a I can begin don't first the Ian one, response while of has

are creative in our of So a on very good market. the the test first a we going very partner, beginning and one, It's Gopuff. They're and well. they period with have

of So that that. The if And learnings Next. learnings we're a of market in into Where's translate strong Next, do It's not Florida. they together Where's have South likely using will next. the

calling is. be at But So that evaluate. that we where I think would we're be don't one together exactly the point the out would opportunities we where of

on payments, even how mobility up. it pass respond to to know because this the going have look at I'm On just that to I point. just I'll don't I

Operator

session. closing At remarks. our to this over for now back would Baines to call concludes like I Mr. time, this question-and-answer the turn

Ian Baines

Michelle. you, Thank

with about in are Thanks to I'd listening to speaking X when everyone and We today's report our quarter extremely results synergistic we excited to call, of again for look you thank we these like future the May. joining. brands. first for forward

Operator

teleconference. today's conclude does this gentlemen, and Ladies

time. lines participation. your for you your may You at Thank disconnect this

BurgerFi International (BFICQ) 14 Apr 222021 Q4 Earnings call transcript