BurgerFi: Reports Fourth Quarter and Fiscal Year 2022 Results

Fort Lauderdale / FL. (bfi) BurgerFi International Inc., owner of a leading fast-casual «better burger» dining concept in the U.S., and a high-quality, casual dining pizza brand under the «Anthony’s» brand, reported financial results for the fourth quarter and fiscal year ended January 02, 2023.

Highlights for the Fourth Quarter 2022

  • Total revenue increased 29 percent to USD 45.2 million in the fourth quarter 2022 compared to USD 35.1 million in the fourth quarter 2021
    • Consolidated systemwide sales decreased by 2 percent to USD 71.6 million.
    • Corporate restaurant same-store sales for Anthony’s increased 1 percent
    • Systemwide sales for BurgerFi decreased 5 percent to USD 38.7 million
    • Systemwide same-store sales decreased 9 percent at BurgerFi
    • Opened two new franchised BurgerFi restaurants in the fourth quarter
  • Restaurant-level operating expenses as a percentage of sales increased by 1.5 percent
  • Net loss improved to USD 26.2 million or USD (1.18) per diluted share compared to prior fourth quarter net loss of USD 117.3 million or USD (5.84) per diluted share
  • Adjusted Ebitda1 of USD 2.6 million for both the fourth quarters of 2022 and 2021, respectively

Highlights for the Fiscal Year 2022

  • Total revenue increased 160 percent to USD 178.7 million in the fiscal year 2022 driven by the Anthony’s acquisition compared to fiscal year 2021
    • Consolidated systemwide sales of USD 289.6 million for both fiscal years 2022 and 2021, respectively.
    • Corporate restaurant same-store sales for Anthony’s increased 5 percent
    • Systemwide sales for BurgerFi decreased 3 percent to USD 160.8 million
    • Systemwide same-store sales for BurgerFi decreased by 7 percent
  • Opened 11 new BurgerFi restaurants (three corporate-owned and eight franchises)
  • Restaurant-level operating expenses as a percentage of sales of 86.2 percent for both fiscal years 2022 and 2021
  • Net loss improved to USD 103.4 million, or USD (4.66) per diluted share, compared to prior fiscal year net loss of USD 121.5 million, or USD (7.20) per diluted share
  • Adjusted Ebitda1 of USD 9.2 million compared to USD 3.8 million in the prior fiscal year

Management Commentary

Ophir Sternberg, Executive Chairman of BurgerFi, stated, «2022 was a pivotal year for BurgerFi as we integrated the Anthony’s acquisition into our system. We now have two high-quality brands that are on trend with the consumer, and we believe that we are in the early innings of growth across both brands. Early this year, we opened a franchised BurgerFi in Newark Liberty Airport, followed by a franchised BurgerFi in Orlando’s O-Town West. Airports continue to deliver high volumes and we expect airports to continue to be a growing part of our development strategy. We are also very excited for this year’s planned launch of our first Anthony’s franchise as part of our growth strategy in expanding the brand. I’m enthusiastic about the opportunities that lie ahead for both brands for 2023 and beyond.»

Ian Baines, Chief Executive Officer of BurgerFi, added, «Throughout 2022, we made progress executing on several strategic initiatives at BurgerFi and Anthony’s. We completed our back-office integration of the two companies and delivered on our goal of achieving over USD 2.5 million in annualized synergies. In the fourth quarter, we began to see margins stabilize with sequential improvement as a result of our procurement initiatives. I am optimistic that we can continue driving improvement in profitability and operating margins in 2023 in both brands.»

Baines continued, «I remain enthusiastic about the development pipeline in place as well as the long runway of whitespace opportunities ahead for both brands. In total, we plan to open 15-20 new franchised restaurants, including 2-3 Anthony’s in 2023.»

Fourth Quarter 2022 Financial Results

Total revenue increased 29 percent to USD 45.2 million compared to USD 35.1 million in the year-ago quarter, primarily driven by the addition of the Anthony’s business acquired on November 3, 2021. For the Anthony’s brand, same-store sales increased 1 percent, and for the BurgerFi brand, same-store sales decreased 10 percent and 8 percent in corporate-owned and franchised locations, respectively.

Restaurant-level operating expenses were USD 36.4 million compared to USD 26.9 million in 2021. The increase is driven by the inclusion of a full quarter of Anthony’s operations in 2022 whereas the prior period only had nine weeks. For the Anthony’s brand, restaurant-level operating expenses, as a percentage of sales, increased by 1.2 percent for the fourth quarter of 2022, primarily due to the 13-week quarter having less sales leverage on fixed costs than the prior period which included only 9 weeks. For the BurgerFi brand, restaurant-level operating expenses, as a percentage of sales, increased 3.4 percent compared to the prior year quarter, primarily due to lost leverage on fixed costs due to same-store sales declines.

Net loss in the fourth quarter was USD 26.2 million compared to a net loss of USD 117.3 million in the year-ago quarter. Net loss included USD 18.3 million of non-cash impairment charges, USD 1.5 million of restructuring costs, USD 1.2 million of legal settlements, within general and administrative expenses, and USD 3.7 million of depreciation and amortization.

Adjusted Ebitda in the fourth quarter of 2022 was USD 2.6 million in both the fourth quarter of 2021 and 2022. See the definition of Adjusted Ebitda, a non-accounting principle generally accepted in the United States (GAAP) financial measure, and the reconciliation to the most comparable GAAP measure below.

Fiscal Year 2022 Financial Results

Total revenue in the fiscal year of 2022 increased 160 percent to USD 178.7 million compared to USD 68.9 million in 2021, primarily driven by the addition of the Anthony’s business acquired on November 3, 2021. For the Anthony’s brand, same-store sales increased 5 percent. For the BurgerFi brand, same-store sales decreased 11 percent and 6 percent in corporate-owned and franchised locations, respectively.

Restaurant-level operating expenses for the fiscal year of 2022 were USD 144.2 million compared to USD 49.8 million in the fiscal year 2021. The increase was driven by the inclusion of a full year of Anthony’s operations, while the prior year included only nine weeks. For the Anthony’s brand, restaurant-level operating expenses, as a percentage of sales, increased 1.4 percent for the fiscal year 2022, compared to the fiscal year 2021, primarily due to higher labor costs partially offset by lower food costs due to continued stabilization of commodity costs, especially in chicken wing prices. For the BurgerFi brand, restaurant-level operating expenses, as a percentage of sales, increased 2.6 percent for the fiscal year 2022, compared to the fiscal year 2021, primarily due to lower leverage on fixed costs driven by lower same-store sales.

Net loss in the fiscal year 2022 was USD 103.4 million compared to a net loss of USD 121.5 million in 2021. The improvement in net loss of USD 18.1 million was primarily due to USD 41.3 million in lower non-cash impairment charges and the results of a full year of Anthony’s operations, while the prior year included only nine weeks. The improvement of USD 18.1 million in net loss was also partially offset by USD 11.3 million of lower gains on change in value of warrant liability, USD 7.3 million increase in interest expense, USD 7.1 million increase in depreciation and amortization expense, USD 2.7 million increase in share-based compensation expense and USD 1.8 million increase in store closure costs.

Adjusted Ebitda in the fiscal year 2022 increased 141 percent to USD 9.2 million compared to USD 3.8 million in the fiscal year 2021, driven by the acquisition of Anthony’s. See the definition of Adjusted Ebitda, a non-GAAP financial measure, and the reconciliation to the most comparable GAAP measure below.

Restaurant Development

As of January 2, 2023, there were 174 total BurgerFi and Anthony’s restaurants of which 114 were BurgerFi (25 corporate-owned and 89 franchised) and 60 were corporate-owned Anthony’s. During the year, there were 11 BurgerFi locations opened of which three were corporate stores and eight were franchised locations. During the year, 15 franchised BurgerFi locations and one corporate-owned Anthony’s location closed. During the fourth quarter 2022, there were two franchised BurgerFi openings, five franchised BurgerFi closures and one corporate-owned Anthony’s closure.

Quarter to date through March 2023 , the Company has opened two franchised BurgerFi locations.

2023 Outlook

Management is reiterating its outlook for the fiscal year 2023:

  • Annual revenues of USD 175-180 million
  • Low-single digit same-store sales growth for corporate-owned locations
  • 15-20 new franchised restaurants, including 2-3 new Anthony’s
  • Adjusted Ebitda of USD 10-12 million
  • Capital expenditures of approximately USD 1-2 million
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