EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

Logo, company name Description automatically generated

 

Muscle Maker Inc. Reports First Quarter 2023 Results

 

Revenue Rises to $213 Million From $3 Million

 

Adjusted EBITDA Rises to $2.4 Million vs. Loss in Prior Year

 

Fort Worth, Texas, May 10, 2023 (ACCESSWIRE) – Muscle Maker, Inc. (Nasdaq: GRIL) (“Muscle Maker”, “GRIL” or the “Company”), a global agricultural-commodity supply chain and emerging growth stage restaurant company, today announced its first quarter results ending March 31, 2023. Chief Executive Officer, Michael Roper and Chief Financial Officer, Jennifer Black will host a conference call at 5 pm Eastern Daylight Time on May 10, 2023, to discuss the results. All interested parties are invited to join this call. The Q1 2023 financial statements for the quarter ended March 31, 2023, are available on the Investors section of our website and can also be found on sec.gov.

 

“We are pleased to report that Muscle Maker had a successful first quarter of the year, marked by a significant move towards becoming a diversified global food organization,” said Michael Roper, CEO of Muscle Maker. “This transformation was made possible by the creation of our wholly owned subsidiary, Sadot LLC. Our shift to diversify our U.S.-centric restaurant business towards a more globally focused food organization is proving out by the progress we have made thus far is encouraging, and we are confident that we are on the right path to realizing our vision for a more diversified and successful future.”

 

Financial highlights for the three months ended March 31, 2023:

 

●For the three months ended March 31, 2023, the Company reported consolidated revenue of $213 million, a significant increase compared to $3 million for the prior year ended March 31, 2022.
●Non-GAAP adjusted EBITDA from operations was $2.4 million in the first quarter of 2023 compared to a $1.5 million loss in the first quarter 2022.
●Sadot subsidiary generated a net income of $4.3 million.
●MMI Restaurant Brands subsidiary generated a net loss of $406,000 for the first quarter.
●The Company, as of March 31, 2023, had a cash balance of $6.4 million and a working capital surplus of $6.4 million.

 

Recent strategic and operational highlights during the first quarter of 2023 include:

 

Sadot subsidiary

 

●Completed 19 transactions in Q1 with the average revenue per transaction of $11.1 million.
●Average COGS per transaction of $10.8 million.
●These 19 transactions were completed throughout 11 different countries.

 

MMI Restaurant Brands Subsidiary

 

●50+ units across two fast casual concepts.
●Subscription-based fresh meal prep service with 30+ points of distribution plus in-home and national delivery.
●Currently have over 45 Pokemoto franchise agreements sold but not yet open.
●Recently launched a new dual concept unit that combines our Pokemoto brand with our Muscle Maker Grill concept under the same roof.

 

 

 

 

Operating Results

 

For the three months ended March 31, 2023, the Company reported consolidated revenue of $213 million, an increase of $210 million or 7000% from the comparative period in 2022. The increase from the first quarter of the prior year can be attributed to the formation of the Sadot subsidiary. As of March 31, 2023, Muscle Maker had a cash balance of $6.4 million. The cash decrease in the first quarter of 2023 was primarily due to Sadot offering terms on the commodity trade transactions to generate a higher margin on the trade. The Company has over $4 million in receivables that are due in less than 60 days.

 

Outlook

 

“We are extremely pleased with MMI’s performance this quarter – fueled by our new diversification strategy. Investors may notice a growing disparity in the operating results between the two business units and management is committed to focusing our resources on the path that will create the most value for shareholders going forward. We are confident in the future of both Sadot in the global supply-chain and our restaurant group as it’s downstream retail vertical, and we look forward to continued growth in the months and years to come,” commented Mr. Roper.

 

Webcast Details

 

Date: May 10, 2023

 

Time: 5:00 PM EDT / 2:00 AM PDT

 

To register, please use the link below:

 

* https://audience.mysequire.com/webinar-view?webinar_id=0e6c02ab-718c-470b-80b4-04c16ac0f67d

 

* Please note that when logging into the Webcast individuals must, when prompted to, “allow video and audio” access to your device to view and hear the call.

 

About Muscle Maker, Inc.

 

In late 2022, Muscle Maker began its evolution from a consumer-focused, U.S. restaurant business into a global, food-focused organization with two distinct business units:

 

Sadot LLC

 

Muscle Maker’s largest operating unit is its newly-created subsidiary, Sadot LLC. Sadot is an international agri-foods company engaged in trading and shipping food (and feed) commodities such as soybean meal, wheat and corn. Sadot was formed in partnership with Aggia LLC FZ, a Dubai based, international consulting firm that provides services to companies operating in the global food supply chain.

 

MMI Restaurant Group

 

Muscle Maker’s legacy business is our limited collection of 50+ restaurants, including Pokémoto Hawaiian Poké & Boba Tea and Muscle Maker Grill, and our subscription, fresh-prep meal service, Superfit Foods, with 30+ points of distribution plus in-home and national delivery. All three concepts compete in the growing healthier-for-you segment. National franchise development of the Pokémoto concept is the key growth driver with more than 45 franchise units already in the pipeline.

 

 

 

 

Muscle Maker, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

  

March 31,

2023

  

December 31,

2022

 
   $’000   $’000 
Assets        
Current assets:          
Cash   6,386    9,898 
Accounts receivable, net of allowance for doubtful accounts of $28.8 thousand and $23.4 thousand as of March 31, 2023 and December 31, 2022, respectively   4,961    135 
Inventory   35,145    298 
Prepaid expenses and other current assets   206    317 
Total current assets   46,698    10,648 
Right to use assets   2,189    2,433 
Property and equipment, net   1,680    1,895 
Goodwill   2,626    2,626 
Intangible assets, net   4,301    4,611 
Deposit on farmland   5,002    4,914 
Security deposits and other assets   102    103 
Total assets   62,598    27,230 
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable and accrued expenses   35,863    1,953 
Accrued stock-based compensation expense - related party   3,400    3,603 
Notes payable, current   225    222 
Operating lease liability, current   505    560 
Deferred revenue, current   90    95 
Other current liabilities   195    182 
Total current liabilities   40,278    6,615 
Notes payable, non-current   722    759 
Operating lease liability, non-current   1,800    2,019 
Deferred revenue, non-current   1,228    1,276 
Total liabilities   44,028    10,669 
Commitments and Contingencies          
Stockholders’ equity:          
Common stock, $0.0001 par value, 150 million shares authorized, 32.2 million and 29.3 million shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively   3    3 
Additional paid-in capital   98,988    95,913 
Accumulated deficit   (80,421)   (79,355)
Total stockholders’ equity   18,570    16,561 
Total liabilities and stockholders’ equity   62,598    27,230 

 

 
 

 

Muscle Maker, Inc.

Condensed Consolidated Statement of Operations

(Unaudited)

 

   For the Three Months Ended March 31, 
   2023   2022 
   $’000   $’000 
Revenues:          
Commodity sales   210,366    - 
Company restaurant sales, net of discounts   2,301    2,694 
Franchise royalties and fees   284    208 
Franchise advertising fund contributions   16    18 
Total revenues   212,967    2,920 
Operating Costs and Expenses:          
Commodity operating expenses:          
Commodity cost   205,055    - 
Labor   620    - 
Other commodity operating expenses   154    - 
Total commodity operating expenses   205,829    - 
Restaurant operating expenses:          
Food and beverage costs   839    1,026 
Labor   880    1,073 
Rent   274    340 
Other restaurant operating expenses   472    650 
Total restaurant operating expenses   2,465    3,089 
Depreciation and amortization expenses   633    476 
Franchise advertising fund expenses   16    18 
Pre-opening expenses   36    - 
Post-closing expenses   94    - 
Stock-based consulting expenses   3,359    - 
Sales, general and administrative expenses   2,142    1,324 
Total costs and expenses   214,574    4,907 
Loss from operations   (1,607)   (1,987)
Other Income:          
Other income / (expense)   -    (19)
Interest income / (expense), net   3    (18)
Change in fair value of accrued compensation   541    - 
Gain on debt extinguishment   -    140 
Total other income, net   544    103 
Loss Before Income Tax   (1,063)   (1,884)
Income tax   3    2 
Net loss   (1,066)   (1,886)
           
Net Loss Per Share:          
Basic and Diluted   (0.04)   (0.07)
           
Weighted average Number of Common Shares Outstanding:          
Basic and Diluted   29,443   $27,802 

 

 
 

 

Muscle Maker, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   Three Months Ended March 31, 
   2023   2022 
   $’000   $’000 
Cash Flows from Operating Activities          
Net loss   (1,066)   (1,886)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   633    476 
Stock-based compensation   55    72 
Gain on extinguishments of debt   -    (140)
Stock-based consulting expenses   3,359    - 
Change in fair value of compensation   541    - 
Loss on disposal of assets   -    240 
Bad debt expense   (5)   (9)
Changes in operating assets and liabilities:          
Accounts receivable, net   (4,821)   (175)
Inventory   (34,848)   (1)
Prepaid expenses and other current assets   111    698 
Security deposits and other assets   -    16 
Accounts payable and accrued expenses   33,910    (404)
Accrued stock-based compensation expense - related party   (1,082)   - 
Deferred rent   -    (128)
Operating right of use asset and liability, net   (30)   129 
Deferred revenue   (53)   191 
Other current liabilities   14    (8)
Total adjustments   (2,216)   957 
Net cash used in operating activities   (3,282)   (929)
Cash Flows from Investing Activities          
Deposit on farmland   (87)   - 
Purchases of property and equipment   (109)   (35)
Net cash used in investing activities   (196)   (35)
Cash Flows from Financing Activities          
Repayments of notes payables   (34)   (32)
Net cash used in financing activities   (34)   (32)
Net Decrease in Cash   (3,512)   (996)
Cash – beginning of period   9,898    15,767 
Cash – end of period   6,386    14,771 

 

 
 

 

Reconciliations of EBITDA, Adjusted EBITDA and Other Non-GAAP Measures

 

The following table presents a reconciliation of EBITDA and Adjusted EBITDA from the most comparable U.S. GAAP measure, Net loss, and the calculations of the Net loss margin and Adjusted EBITDA Margin for the three months ended March 31, 2023 and 2022:

 

   For the Three Months Ended March 31, 
   2023   2022 
   $’000   $’000 
Net loss   (1,066)   (1,886)
Adjustments to EBITDA:          
Depreciation and amortization expenses   633    476 
Interest expense, net   3    (18)
Income tax   3    2 
EBITDA   (427)   (1,426)
Adjustments to Adjusted EBITDA:          
Other income / (expense)   —    19 
Change in fair value of accrued compensation   (541)   — 
Gain on debt extinguishment   —    (140)
Stock-based consulting expenses   3,359    — 
Adjusted EBITDA   2,391    (1,547)
Total revenue   212,967    2,920 
           
Net loss Margin   (0.5)%   (64.6)%
Adjusted EBITDA Margin   1.1%   (53.0)%

 

Forward-Looking Statements

 

This press release may include “forward-looking statements” pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products, or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “should”, “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Muscle Maker, Inc., does not undertake any duty to update any forward-looking statements except as may be required by law.

 

Investor Relations:

 

Frank Pogubila

SVP

Integrous Communications

W - 951.946.5288

E - IR@musclemakergrill.com