BurgerFi International, Inc. Fiscal Year 2023 Fourth Quarter Financial Results

Executive Summary

BurgerFi International, Inc. (NASDAQ: BFI), a significant player in the consumer cyclical sector within the restaurant industry, announced its financial results for the fourth quarter and the full fiscal year ending January 1, 2024. The period was marked by challenging market conditions, which impacted both revenue streams and profitability.

Financial Performance Overview

BurgerFi reported quarterly revenue of $41.47M, a decrease of 8.3% from the previous year's fourth quarter, where the revenue was $45.2M. This decline in revenue is mainly attributed to reduced same-store sales across both corporate-owned and franchise stores, despite additional revenue from two newly acquired franchise locations. Operating expenses were reported at $6.87M, with total costs and expenses recorded at $44.71M.

The company incurred an operating loss of $3.24M and a net loss of -$10.60M for the quarter, resulting in an earnings per share (EPS) of -$0.40. This net loss is significantly reduced in comparison to a net loss of $26.2M in the same quarter of the previous year, primarily due to decreased goodwill and asset impairments as well as reduced general and administrative expenses.

Adjusted EBITDA stood at $120K, down from $2.6M in Q4 FY2022, reflecting ongoing challenges in operational efficiency and a competitive market environment.

Operational Highlights

The quarter witnessed reductions in labor costs and enhancements in inventory and cost management strategies, which are integral to the company's long-term strategy to improve financial health. Management emphasized their commitment to supporting franchise partners, optimizing the menu offerings, and leveraging technology, including the deployment of new POS systems expected by Q2 FY2024.

Following a strategic review, the company has committed to a more targeted franchise support model and the closure of underperforming outlets, aiming to focus on high-impact locations, particularly in strategic markets like South Florida.

Liquidity and Capital Resources

As of January 1, 2024, BurgerFi's cash and cash equivalents totaled $7.56M, down from $11.9M at the end of the previous year. The company's total debt stands at $123.78M. The current financial strategies are aimed at stabilizing operational cash flows and complying with creditor requirements, in light of existing covenant compliance challenges.

Future Outlook

For the fiscal year 2024, BurgerFi projects revenues to be between $170M and $180M, driven by modest growth in same-store sales and the addition of 10 to 15 new franchise restaurants. Adjusted EBITDA is anticipated to be between $7M and $9M, with capital expenditures budgeted at $2M to $3M.

Conclusion

BurgerFi is actively navigating a transitional phase under new management, focusing on strategic initiatives designed to revitalize the brand and return to profitability. Despite current challenges, the company remains optimistic about gaining positive momentum in the upcoming fiscal periods.