8-K: Twin Hospitality Group Reports Mixed Fiscal 2024 Results Amid Expansion and Conversion Strategy

Twin Hospitality Group announced its fiscal fourth quarter and full-year 2024 results, highlighting expansion efforts, Smokey Bones conversions, and a new securitization facility, despite a net loss for the year.

Summary

• Twin Hospitality Group Inc. reported its financial results for the fourth quarter and full fiscal year of 2024, which ended on December 29, 2024.
• The company opened nine new Twin Peaks lodges in 2024 and completed its first Smokey Bones conversion in September 2024, with a second in February 2025.
• Total revenue for fiscal year 2024 increased by 53.2% to $353.8 million, compared to $230.9 million in fiscal year 2023.
• System-wide sales grew by 25.3% in fiscal year 2024.
• Twin Peaks' same-store sales declined by 3.1% in fiscal year 2024.
• The company reported a net loss of $48.2 million for fiscal year 2024, compared to a net loss of $13.8 million in the prior year.
• Adjusted EBITDA for fiscal year 2024 was $20.7 million, down from $28.3 million in fiscal year 2023.
• The company refinanced its credit facility to a new 30-year securitization facility during the fourth quarter.
• Twin Hospitality plans to open approximately nine to eleven Twin Peaks locations in 2025 and complete two additional Smokey Bones conversions.

Sentiment

Score: 4

Explanation: While the company is expanding and has a positive long-term outlook, the net loss, decline in same-store sales, and decrease in adjusted EBITDA contribute to a moderately negative sentiment.

Positives

• The company's flexible real estate model, converting legacy restaurants into Twin Peaks, has proven successful, enabling faster time to market, lower buildout costs, and accelerated return on investment.
• The company has a long-term goal of 650 domestic and 250 international lodges.
• The refinancing of the credit facility allows the company to further drive growth.

Negatives

• Total revenue for the fourth quarter decreased 8.2% to $86.5 million compared to the same period in 2023.
• Twin Peaks same-store sales declined 0.6% in Q4 2024 and 3.1% for the full year.
• The company reported a net loss of $12.0 million in Q4 2024 and $48.2 million for the full year.
• Adjusted EBITDA decreased to $4.1 million in Q4 2024 and $20.7 million for the full year.

Risks

• Forward-looking statements are subject to significant business, economic, and competitive risks, uncertainties, and contingencies.
• Many factors are difficult to predict and beyond the company's control, which could cause actual results to differ materially from projections.
• The company recognized a $2.4 million loss on extinguishment of debt related to the refinancing of its securitized debt.

Future Outlook

Twin Hospitality is targeting approximately nine to eleven Twin Peaks openings in 2025 and projects completing two additional Smokey Bones conversions. The company is pursuing its long-term goal of 650 domestic and 250 international lodges.

Management Comments

• 2024 marked a year of significant strategic progress and we are thankful to our franchise partners, team and loyal guests for their contributions to strengthening the Twin Peaks brand.
• We expanded our footprint opening nine new Twin Peak lodges and signed four area development agreements with a commitment to open 24 lodges, increasing our development pipeline to over 100 lodges.
• In 2025, we are targeting approximately nine to eleven Twin Peaks openings as we pursue our long-term goal of 650 domestic and 250 international lodges,
• Looking ahead, we will continue to deliver exceptional guest experiences through our differentiated offering of quality dining and premier customer service, grow our brand through company and franchised expansion and optimize our real estate through additional Smokey Bones conversions.
• We could not be more excited to be a stand-alone publicly traded company and are working hard every day to build long-term value for our shareholders.
• Our flexible real estate model has proven highly successful in converting legacy restaurants into Twin Peaks. These conversions enable faster time to market, lower buildout costs and accelerated return on investment.
• We have also made progress with our strategic plans to convert Smokey Bones into Twin Peaks. Our first Twin Peaks conversion, which opened in Lakeland, Florida last September, is exceeding expectations, while our second Twin Peaks conversion in Brandon, Florida opened this month and is off to a strong start. We project completing two additional conversions in 2025.
• During the fourth quarter, we refinanced our credit facility to a new 30-year securitization facility. This refinancing stabilizes Twin Peaks financial structure and allows us to further drive growth,

Industry Context

The announcement reflects the ongoing trend of restaurant chains focusing on expansion and optimizing their real estate portfolios. The conversion strategy aligns with the broader industry movement towards adapting to changing consumer preferences and maximizing asset utilization.

Comparison to Industry Standards

• Comparable companies in the casual dining sector include Brinker International (Chili's, Maggiano's), Darden Restaurants (Olive Garden, LongHorn Steakhouse), and Bloomin' Brands (Outback Steakhouse, Carrabba's).
• Twin Peaks' same-store sales decline of 3.1% is worse than some competitors, while its unit growth is relatively strong. Darden reported positive same-store sales growth in its most recent quarter. Brinker and Bloomin' Brands have experienced mixed same-store sales results.
• Twin Peaks' focus on sports-themed dining differentiates it from traditional casual dining chains, placing it in a sub-segment with competitors like Buffalo Wild Wings.

Stakeholder Impact

• Shareholders: The net loss and decline in same-store sales may negatively impact shareholder value in the short term, but the long-term expansion strategy could lead to future growth.
• Employees: Expansion may create new job opportunities.
• Customers: New locations and conversions provide more dining options.
• Franchise Partners: Expansion and area development agreements create opportunities for franchise partners.

Next Steps

• Approximately nine to eleven Twin Peaks openings are targeted for 2025.
• Two additional Smokey Bones conversions are projected for completion in 2025.

Key Dates