1Q21 Results. Fat Brands reported 1Q21 revenue of $6.6 million, compared to $4.4 million in 1Q20. The increased revenue was driven by royalties, which rose to $4.9 million in the quarter from $3.3 million in 1Q20. Cost and expenses were impacted by increased compensation and legal expenses, which combined with higher interest expense, resulted in a reported loss for the quarter of $2.4 million, or $0.20 per share, compared to a loss of $2.4, or $0.20 per share last year. We had projected revenue of $6.75 million and a net loss of $675,000, or $0.06 per share.Sales Trends Improving. The first quarter saw a continuation of improving sales trends off COVID lows. System-wide sales were $114.4 million in the quarter, up from $47.7 million in 2Q20, and $84.9 million in 1Q20. Average weekly sales hit nearly $19 million for the month of April, up from $18.1 million in March and $8.7 million in the year ago April. Third party delivery sales rose 70% in 1Q21 compared to 3Q20. We expect overall sales to continue to improve.M&A. Management remains actively seeking M&A candidates and hopes to complete one or two deals before quarter's end. With the recently completed securitization refinancing, FAT has a significant pile of dry powder to pursue additional accretive acquisitions. Management's goal is to significantly increase the overall store count by year-end.Updated Projections. We expect the operating improvement to continue to pick-up momentum as COVID restrictions ease and more stores open. We are maintaining our second quarter revenue projection of $8 million and net income of $0.03 per share, although the improved bottom line comes from estimating a gain on the sale of owned Johnny Rockets locations. For the full year, we are at revenue of $33.6 million and breakeven net income.Maintaining Outperform and $12 Price Target. We are maintaining our Outperform and our $12.00 12-month price target. The new whole business securitization provides the Company with ample funds to acquire additional concepts while providing a lower weighted average interest rate. We continue to believe the Johnny Rockets acquisition to be transformative, providing the Company with significant size in terms of number of locations and systemwide sales, enhanced geographic diversification, a broadened franchisee base, and multiple avenues for additional growth. And we see more M&A to come. Read More >>