Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 7, 2024

FAT Brands Inc.

(Exact name of Registrant as Specified in Its Charter)


Delaware	001-38250		82-1302696
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification No.)

9720 Wilshire Blvd., Suite 500 Beverly Hills, CA (Address of Principal Executive Offices)		90212 (Zip Code)

Registrant’s Telephone Number, Including Area Code: (310) 319-1850

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

FAT

The Nasdaq Stock Market LLC

Class B Common Stock, par value $0.0001 per share

FATBB

The Nasdaq Stock Market LLC

Series B Cumulative Preferred Stock, par value $0.0001 per share

FATBP

The Nasdaq Stock Market LLC

Warrants to purchase Class A Common Stock

FATBW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On March 7, 2024, FAT Brands Inc. (the “Company”) issued a press release announcing its financial results for the fourteen-week and fifty-three week periods ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

The Company also hosted a conference call on March 7, 2024 in which the financial results were discussed. A replay is available until Thursday, March 28, 2024 and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10186678.

The webcast is available at www.fatbrands.com under the “Investors” section.

Item 7.01 Regulation FD Disclosure.

On March 7, 2024, the Company provided supplemental financial information to be used in its earnings presentation for the fourteen-week and fifty-three week periods ended December 31, 2023 on its website at https://ir.fatbrands.com/events-and-presentations/default.aspx. A copy of the earning supplement is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Securities and Exchange Act of 1934 or the Securities Act of 1933 only if, and to the extent that, such subsequent filing specifically references such information.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit Number						Description
99.1						Press Release Dated March 7 , 2024
99.2						Earnings Supplement Q4 - 2023
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			FAT Brands Inc.

Date: March 7, 2024			/s/ Kenneth J. Kuick
			Kenneth J. Kuick
			Co-Chief Executive Officer and Chief Financial Officer

Exhibit 99.1

FAT BRANDS INC. REPORTS FISCAL FOURTH QUARTER AND FULL FISCAL YEAR 2023 FINANCIAL RESULTS

Conference call and webcast today at 5:00 p.m. ET

LOS ANGELES (March 7, 2024) – FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today reported fiscal fourth quarter and full fiscal year 2023 financial results for the fiscal year ended December 31, 2023.

“With the acquisition of Smokey Bones early in the fourth quarter, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with annualized system wide sales of $2.5 billion,” said Andy Wiederhorn, Chairman of FAT Brands. “We opened 125 restaurants in 2023, including 29 in the fourth quarter. We are seeing strong franchisee interest in development opportunities, having signed more than 225 development agreements in 2023, bringing our total pipeline to 1,100 units. This represents the potential for over 50% EBITDA growth over the next several years.”

Ken Kuick, Co-Chief Executive Officer of FAT Brands, commented, “While franchise interest remains high across all of our brands, we continue to be focused on the expansion of Twin Peaks. This year we opened 14 new lodges and ended the year with 109 lodges, a 33% increase since acquiring the brand in 2021. Our growth pipeline includes 113 lodges and Smokey Bones’ healthy real estate portfolio provides us with the opportunity to convert locations into Twin Peaks lodges, with the potential to significantly accelerate the growth of the brand.”

Rob Rosen, Co-Chief Executive Officer of FAT Brands, concluded, “We believe there are significant opportunities on the horizon for FAT Brands. Our seasoned leadership and strong brand management platform allow us to efficiently integrate new brands while maintaining a healthy and evolving pipeline for organic growth. These strengths position us for continued growth in the future, which will help deleverage our balance sheet.”

Fiscal Fourth Quarter 2023 Highlights

•Total revenue improved 52.8% to $158.6 million compared to $103.8 million in the fourth quarter of 2022

◦System-wide sales growth of 16.5% in the fiscal fourth quarter of 2023 compared to the prior year fiscal quarter

◦System-wide same-store sales declined 0.6% in the fiscal fourth quarter of 2023 compared to the prior fiscal year

◦29 new store openings during the fiscal fourth quarter of 2023

•Loss from operations of $3.1 million compared to $32.6 million in the fiscal fourth quarter of 2022

•Net loss of $26.2 million, or $1.68 per diluted share, compared to $70.8 million, or $4.39 per diluted share, in the fiscal fourth quarter of 2022

•Adjusted EBITDA(1) of $27.0 million compared to $19.6 million in the fiscal fourth quarter of 2022

•Adjusted net loss(1) of $17.3 million, or $1.15 per diluted share, compared to $43.0 million, or $2.70 per diluted share, in the fiscal fourth quarter of 2022

Fiscal Year 2023 Highlights

•Total revenue increased 18.0% to $480.5 million compared to $407.2 million in fiscal 2022

◦System-wide sales growth of 6.9% compared to fiscal 2022

◦System-wide same-store sales growth of 0.8% in fiscal 2023 compared to fiscal 2022

◦125 new store openings during fiscal 2023

•Income from operations of $22.3 million compared to loss from operations of $17.9 million in the fiscal quarter of 2022

•Net loss of $90.1 million, or $5.85 per diluted share, compared to $126.2 million, or $8.06 per diluted share, in fiscal 2022

•Adjusted EBITDA(1) of $91.2 million compared to $88.8 million in fiscal 2022

•Adjusted net loss(1) of $56.5 million, or $3.83 per diluted share, compared to $80.9 million, or $5.32 per diluted share, in fiscal 2022

(1)EBITDA, adjusted EBITDA and adjusted net loss are non-GAAP measures defined below, under “Non-GAAP Measures”. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net loss are included in the accompanying financial tables.

Summary of Fourth Quarter 2023 Financial Results

Total revenue increased $54.8 million, or 52.8%, in the fiscal fourth quarter of 2023, to $158.6 million compared to $103.8 million in the same fiscal period of 2022, driven by a 10.4% increase in royalties, an 80.5% increase in company-owned restaurant revenues driven by new restaurant openings and the acquisition of Smokey Bones during the fourth quarter of 2023 and a 10.0% increase in revenues from our manufacturing facility.

Costs and expenses consist of general and administrative expense, cost of restaurant and factory revenues, depreciation and amortization, refranchising net losses and advertising fees. Costs and expenses increased $25.4 million, or 18.6%, in the fiscal fourth quarter of 2023 to $161.8 million compared to $136.4 million in the same fiscal period in the prior fiscal year.

General and administrative expense decreased $8.8 million, or 22.6%, in the fiscal fourth quarter of 2023 compared to the same fiscal period in the prior fiscal year, primarily due to a $16.6 million non-cash reserve on claimed Employee Retention Credits recorded during the fourth quarter of 2022 and the recognition of $3.4 million related to Employee Retention Credits during the fiscal fourth quarter of 2023, partially offset by the acquisition of Smokey Bones in the fourth quarter of 2023 and higher professional fees related to certain litigation matters.

Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and our dough factory and increased $43.4 million, or 70.3%, in the fiscal fourth quarter of 2023 to $105.1 million, compared to the prior year quarter, primarily due to the acquisition of Smokey Bones in the fourth quarter of 2023.

Depreciation and amortization increased $3.0 million, or 42.9% in the fiscal fourth quarter of 2023 compared to the same fiscal period in the prior fiscal year, primarily due to the acquisition of Smokey Bones in the fourth quarter of 2023 and depreciation of new property and equipment at company-owned restaurant locations.

Refranchising losses in the fiscal fourth quarter of 2023 and 2022 were $2.1 million and $3.1 million, respectively, and were comprised of restaurant costs and expenses, net of food sales.

Advertising expenses increased $2.2 million in the fiscal fourth quarter of 2023 compared to the prior fiscal year period. These expenses vary in relation to advertising revenues.

Total other expense, net for the fiscal fourth quarters of 2023 and 2022 was $31.9 million and $24.2 million, respectively, primarily comprised of net interest expense of $33.3 million and $25.6 million, respectively.

Adjusted net loss was $17.3 million, or $1.15 per diluted share, in the fiscal fourth quarter of 2023 compared to $43.0 million, or $2.70 per diluted share, in the fiscal fourth quarter of 2022.

Key Financial Definitions

New store openings - The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of stores openings has, and will continue to have, an impact on our results.

Same-store sales growth - Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that

were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year.

System-wide sales growth - System wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period.

Conference Call and Webcast

FAT Brands will host a conference call and webcast to discuss its fiscal fourth quarter 2023 financial results today at 5:00 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer.

The conference call can be accessed live over the phone by dialing 1-844-826-3035 from the U.S. or 1-412-317-5195 internationally. A replay will be available after the call until Thursday, March 28, 2024, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 10186678. The webcast will be available at www.fatbrands.com under the “Investors” section and will be archived on the site shortly after the call has concluded.

About FAT (Fresh. Authentic. Tasty.) Brands

FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Non-GAAP Measures (Unaudited)

This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net loss.

EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP.

Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations.

Adjusted net loss is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net loss is defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results.

Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below.

Investor Relations:

ICR

Michelle Michalski

ir-fatbrands@icrinc.com

646-277-1224

Media Relations:

Erin Mandzik

emandzik@fatbrands.com

860-212-6509

FAT Brands Inc. Consolidated Statements of Operations


	Fourteen Weeks Ended				Fiscal Year Ended
(In thousands, except share and per share data)	December 31, 2023		December 25, 2022		December 31, 2023		December 25, 2022

Revenue
Royalties	$	24,869	$	22,525	$	94,036	$	87,921
Restaurant sales	111,072		61,528		299,029		241,001
Advertising fees	10,510		9,589		39,490		37,997
Factory revenues	9,810		8,916		37,983		33,504
Franchise fees	937		943		4,979		3,706
Other revenue	1,438		313		4,940		3,095
Total revenue	158,636		103,814		480,457		407,224

Costs and expenses
General and administrative expense	30,298		39,125		93,117		113,313
Cost of restaurant and factory revenues	105,130		61,726		282,887		221,627
Depreciation and amortization	9,914		6,939		31,131		27,015
Impairment of goodwill and other intangible assets	500		14,000		500		14,000
Refranchising loss	2,127		3,055		2,873		4,178
Acquisition costs	—		—		—		383
Advertising fees	13,811		11,574		47,619		44,612
Total costs and expenses	161,780		136,419		458,127		425,128

(Loss) income from operations	(3,144)		(32,605)		22,330		(17,904)

Other (expense) income, net
Interest expense	(28,925)		(20,947)		(99,342)		(78,477)
Interest expense related to preferred shares	(4,417)		(4,691)		(18,189)		(16,372)
Net gain (loss) on extinguishment of debt	325		—		(2,397)		—
Other (expense) income, net	1,096		1,456		1,233		5,375
Total other expense, net	(31,921)		(24,182)		(118,695)		(89,474)

Loss before income tax provision	(35,065)		(56,787)		(96,365)		(107,378)

Income tax provision (benefit)	(8,827)		14,021		(6,255)		18,810

Net loss	$	(26,238)	$	(70,808)	$	(90,110)	$	(126,188)

Net loss	$	(26,238)	$	(70,808)	$	(90,110)	$	(126,188)
Dividends on preferred shares	(1,832)		(1,661)		(7,007)		(6,636)
	$	(28,070)	$	(72,469)	$	(97,117)	$	(132,824)

Basic and diluted loss per common share	$	(1.68)	$	(4.39)	$	(5.85)	$	(8.06)
Basic and diluted weighted average shares outstanding	16,675,096		16,530,934		16,599,015		16,476,090
Cash dividends declared per common share	$	0.14	$	0.14	$	0.56	$	0.54

FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation


	Fourteen Weeks Ended				Fiscal Year Ended
(In thousands)	December 31, 2023		December 25, 2022		December 31, 2023		December 25, 2022
Net loss	$	(26,238)	$	(70,808)	$	(90,110)	$	(126,188)
Interest expense, net	33,342		25,638		117,531		94,849
Income tax provision (benefit)	(8,827)		14,021		(6,255)		18,810
Depreciation and amortization	9,914		6,939		31,131		27,015
EBITDA	8,191		(24,210)		52,297		14,486
Bad debt expense (recovery)	2,868		17,793		(9,827)		23,736
Share-based compensation expenses	947		1,584		3,615		7,665
Non-cash lease expenses	535		808		1,766		2,478
Acquisition costs	—		—		—		383
Refranchising loss	2,127		3,055		2,873		4,178
Litigation costs	8,832		4,788		28,280		18,958
Severance	341		—		1,377		526
Net loss related to advertising fund deficit	1,946		1,038		6,310		1,041
Net (gain) loss on extinguishment of debt	(325)		—		2,397		—
Impairment losses	1,006		14,454		1,006		14,454

Pre-opening expenses	564		298		1,136		900
Adjusted EBITDA	$	27,032	$	19,608	$	91,230	$	88,805

FAT Brands Inc. Adjusted Net Loss Reconciliation


	Fourteen Weeks Ended				Fiscal Year Ended
(In thousands, except share and per share data)	December 31, 2023		December 25, 2022		December 31, 2023		December 25, 2022
Net loss	$	(26,238)	$	(70,808)	$	(90,110)	$	(126,188)
Refranchising loss	2,127		3,055		2,873		4,178
Acquisition costs	—		—		—		383
Net (gain) loss on extinguishment of debt	(325)		—		2,397		—
Impairment losses	1,006		14,454		1,006		14,454
Litigation costs	8,832		4,788		28,280		18,958
Severance	341		—		1,377		526
Tax adjustments, net (1)	(3,016)		5,505		(2,332)		6,744
Adjusted net loss	$	(17,273)	$	(43,006)	$	(56,509)	$	(80,945)

Net loss	$	(26,238)	$	(70,808)	$	(90,110)	$	(126,188)
Dividends on preferred shares	(1,832)		(1,661)		(7,007)		(6,636)
	$	(28,070)	$	(72,469)	$	(97,117)	$	(132,824)

Adjusted net loss	$	(17,273)	$	(43,006)	$	(56,509)	$	(80,945)
Dividends on preferred shares	(1,832)		(1,661)		(7,007)		(6,636)
	$	(19,105)	$	(44,667)	$	(63,516)	$	(87,581)

Loss per basic and diluted share	$	(1.68)	$	(4.38)	$	(5.85)	$	(8.06)
Adjusted net loss per basic and diluted share	$	(1.15)	$	(2.70)	$	(3.83)	$	(5.32)

Weighted average basic and diluted shares outstanding	16,675,096		16,530,934		16,599,015		16,476,090

(1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

Q4 2023 EARNINGS SUPPLEMENT MARCH 7, 2024

LEGAL DISCLAIMER This earnings supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, estimates of future EBITDA, the timing and performance of new store openings, future reductions in cost of capital and leverage ratio, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this earnings supplement. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this earnings supplement. 2

YTD Q4 2023 HIGHLIGHTS 3 6.9% Sales Growth (1) YTD Q4 2023 v YTD Q4 2022 System-Wide 0.8% SSS Growth (2) YTD Q4 2023 v YTD Q4 2022 System-Wide 125 New Store Openings YTD Q4 2023 (3) $480.5mm Total Revenue YTD Q4 2023 $91.2mm Adj. EBITDA (4) YTD Q4 2023 $2,327.9mm System-Wide Sales YTD Q4 2023 (1) System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. (2) Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. (3) New store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. (4) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

YTD Q4 2023 RESULTS 4 (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. Royalties $87.9mm $94.0mm YTD Q4 2022 YTD Q4 2023 Systemwide Sales Revenue $407.2mm $480.5mm YTD Q4 2022 YTD Q4 2023 Adj. EBITDA (1) $88.8mm $91.2mm YTD Q4 2022 YTD Q4 2023 $2,178.5mm $2,327.9mm YTD Q4 2022 YTD Q4 2023

Q4 2023 HIGHLIGHTS 5 16.5% Sales Growth (1) Q4 2023 v Q4 2022 System-Wide 0.6% SSS Decline (2) Q4 2023 v Q4 2022 System-Wide 29 New Store Openings Q4 2023 (3) $158.6mm Total Revenue Q4 2023 $27.0mm Adj. EBITDA (4) Q4 2023 $626.7mm System-Wide Sales Q4 2023 (1) System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. (2) Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. (3) New store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. (4) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix.

Q4 2023 RESULTS 6 (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. Royalties $22.5mm $24.9mm Q4 2022 Q4 2023 Systemwide Sales Revenue $103.8mm $158.6mm Q4 2022 Q4 2023 Adj. EBITDA (1) $19.6mm $27.0mm Q4 2022 Q4 2023 $538.1mm $626.7mm Q4 2022 Q4 2023

2024 STRATEGIC FOCUS 7 Accelerate Build-Out of 1,100+ Unit New Store Pipeline Drive Adj. EBITDA Growth ~$10mm from New Stores ~$5mm from Factory Maintain Strong Liquidity Continue to Build Net Asset Value for Future Liquidity (Debt Reduction) Event Grow Factory Production to Utilize ~60% Excess Capacity via Expanded Organic Channels & 3rd Party Dough & Mix Manufacturing Realize Purchasing Savings from ~$600mm in Purchasing Power Effectively Reducing Costs

APPENDIX

DEFINITIONS “EBITDA,” a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization. We use the term EBITDA, as opposed to income from operations, as it is widely used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted EBITDA,” a non-GAAP measure, defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising gain or losses, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company’s recurring business operations. A reconciliation of net income presented in accordance with GAAP to EBITDA and adjusted EBITDA is set forth in the Appendix. “Adjusted net loss,” a non-GAAP measure, defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non- GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results. Reconciliations of net loss attributable to FAT Brands Inc. presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the Appendix. “Same-store sales growth” or “SSS” a non-GAAP measure, reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. “System-wide sales growth,” a non-GAAP measure, reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. I

CONSOLIDATED STATEMENT OF OPERATIONS II Fourteen Weeks Ended Fiscal Year Ended (In thousands, except share and per share data) December 31, 2023 December 25, 2022 December 31, 2023 December 25, 2022 Revenue Royalties $ 24,869 $ 22,525 $ 94,036 $ 87,921 Restaurant sales 111,072 61,528 299,029 241,001 Advertising fees 10,510 9,589 39,490 37,997 Factory revenues 9,810 8,916 37,983 33,504 Franchise fees 937 943 4,979 3,706 Other revenue 1,438 313 4,940 3,095 Total revenue 158,636 103,814 480,457 407,224 Costs and expenses General and administrative expense 30,298 39,125 93,117 113,313 Cost of restaurant and factory revenues 105,130 61,726 282,887 221,627 Depreciation and amortization 9,914 6,939 31,131 27,015 Impairment of goodwill and other intangible assets 500 14,000 500 14,000 Refranchising loss 2,127 3,055 2,873 4,178 Acquisition costs — — — 383 Advertising fees 13,811 11,574 47,619 44,612 Total costs and expenses 161,780 136,419 458,127 425,128 (Loss) income from operations (3,144) (32,605) 22,330 (17,904) Other (expense) income, net Interest expense (28,925) (20,947) (99,342) (78,477) Interest expense related to preferred shares (4,417) (4,691) (18,189) (16,372) Net gain (loss) on extinguishment of debt 325 — (2,397) — Other (expense) income, net 1,096 1,456 1,233 5,375 Total other expense, net (31,921) (24,182) (118,695) (89,474) Loss before income tax provision (35,065) (56,787) (96,365) (107,378) Income tax provision (benefit) (8,827) 14,021 (6,255) 18,810 Net loss $ (26,238) $ (70,808) $ (90,110) $ (126,188) Net loss $ (26,238) $ (70,808) $ (90,110) $ (126,188) Dividends on preferred shares (1,832) (1,661) (7,007) (6,636) $ (28,070) $ (72,469) $ (97,117) $ (132,824) Basic and diluted loss per common share $ (1.68) $ (4.39) $ (5.85) $ (8.06) Basic and diluted weighted average shares outstanding 16,675,096 16,530,934 16,599,015 16,476,090 Cash dividends declared per common share $ 0.14 $ 0.14 $ 0.56 $ 0.54

CONSOLIDATED EBITDA & ADJ. EBITDA RECONCILIATION IV Fourteen Weeks Ended Fiscal Year Ended (In thousands) December 31, 2023 December 25, 2022 December 31, 2023 December 25, 2022 Net loss $ (26,238) $ (70,808) $ (90,110) $ (126,188) Interest expense, net 33,342 25,638 117,531 94,849 Income tax provision (benefit) (8,827) 14,021 (6,255) 18,810 Depreciation and amortization 9,914 6,939 31,131 27,015 EBITDA 8,191 (24,210) 52,297 14,486 Bad debt expense (recovery) 2,868 17,793 (9,827) 23,736 Share-based compensation expenses 947 1,584 3,615 7,665 Non-cash lease expenses 535 808 1,766 2,478 Acquisition costs — — — 383 Refranchising loss 2,127 3,055 2,873 4,178 Litigation costs 8,832 4,788 28,280 18,958 Severance 341 — 1,377 526 Net loss related to advertising fund deficit 1,946 1,038 6,310 1,041 Net (gain) loss on extinguishment of debt (325) — 2,397 — Impairment losses 1,006 14,454 1,006 14,454 Pre-opening expenses 564 298 1,136 900 Adjusted EBITDA $ 27,032 $ 19,608 $ 91,230 $ 88,805

ADJUSTED NET LOSS RECONCILIATION V Fourteen Weeks Ended Fiscal Year Ended (In thousands, except share and per share data) December 31, 2023 December 25, 2022 December 31, 2023 December 25, 2022 Net loss $ (26,238) $ (70,808) $ (90,110) $ (126,188) Refranchising loss 2,127 3,055 2,873 4,178 Acquisition costs — — — 383 Net (gain) loss on extinguishment of debt (325) — 2,397 — Impairment losses 1,006 14,454 1,006 14,454 Litigation costs 8,832 4,788 28,280 18,958 Severance 341 — 1,377 526 Tax adjustments, net (1) (3,016) 5,505 (2,332) 6,744 Adjusted net loss $ (17,273) $ (43,006) $ (56,509) $ (80,945) Net loss $ (26,238) $ (70,808) $ (90,110) $ (126,188) Dividends on preferred shares (1,832) (1,661) (7,007) (6,636) $ (28,070) $ (72,469) $ (97,117) $ (132,824) Adjusted net loss $ (17,273) $ (43,006) $ (56,509) $ (80,945) Dividends on preferred shares (1,832) (1,661) (7,007) (6,636) $ (19,105) $ (44,667) $ (63,516) $ (87,581) Loss per basic and diluted share $ (1.68) $ (4.38) $ (5.85) $ (8.06) Adjusted net loss per basic and diluted share $ (1.15) $ (2.70) $ (3.83) $ (5.32) Weighted average basic and diluted shares outstanding 16,675,096 16,530,934 16,599,015 16,476,090 (1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.

CONTACT INVESTOR RELATIONS: MEDIA RELATIONS: ICR MICHELLE MICHALSKI IR-FATBRANDS@ICRINC.COM 646-277-1224 FAT BRANDS ERIN MANDZIK EMANDZIK@FATBRANDS.COM 860-212-6509

Cover	Mar. 07, 2024
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Mar. 07, 2024
Entity Registrant Name	FAT Brands Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38250
Entity Tax Identification Number	82-1302696
Entity Address, Address Line One	9720 Wilshire Blvd.
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Beverly Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90212
City Area Code	310
Local Phone Number	319-1850
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001705012
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	FAT
Security Exchange Name	NASDAQ
Class B Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock, par value $0.0001 per share
Trading Symbol	FATBB
Security Exchange Name	NASDAQ
Series B Cumulative Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series B Cumulative Preferred Stock, par value $0.0001 per share
Trading Symbol	FATBP
Security Exchange Name	NASDAQ
Warrants to Purchase Common Stock
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase Class A Common Stock
Trading Symbol	FATBW
Security Exchange Name	NASDAQ