2Q21 Results. Fat Brands reported 2Q21 revenue of $8.3 million, compared to $3.1 million in 2Q20. The increased revenue was driven by royalties, which rose to $6.2 million in the quarter from $2.2 million in 2Q20. FAT reported operating income of $2.0 million in the second quarter versus an operating loss of $2.6 million, excluding impairment charges, last year. A $6.4 million charge for debt extinguishment drove a reported $5.9 million, or $0.48 per share, loss in the quarter, compared to a $4.3 million, or $0.36 per share loss last year. We had projected revenue of $8 million and net income of $350,000, or $0.03 per share.Sales Trends Continue Improving. Building on the first quarter, second quarter sales trends continued to improve. System-wide sales were $144 million, up from $114.4 million in the first quarter, and up 201.9% from the COVID impacted 2Q20. Average weekly sales were $20,056 in the quarter, up from $16,472 in the first quarter and improved to $22,674 in the first three weeks of 3Q21.Global Franchise Group. The acquisition was completed on July 22nd. GFG added five new restaurant concepts, 1,433 locations, 463 franchise partners, and 109 multi-unit operators. Combined, FAT Brands should now be generating over $100 million of normalized annual revenue and nearly $60 million of adjusted EBITDA.Updated Projections. We expect the operating improvement to continue to pick-up momentum as COVID restrictions ease and more stores re-open. Global Franchise will contribute two months to the third quarter. We are projecting third quarter revenue of $14.8 million and a net loss of $1.35 million, or $0.09 per share. We expect the projected combined annual run rate to be approached in 4Q21, assuming no additional COVID complications. For the full year, we are at revenue of $49.7 million and a net loss of $10.7 million, or $0.79 per share.Maintaining Outperform, $25 PT. We believe the GFG acquisition represents a new paradigm for FAT Brands and vaults the Company into the "big leagues," in our view. We are maintaining our Outperform rating and our 12-month price target of $25, which equates to 15.1 times normalized 2022 EBITDA, still a discount to its peer group. Read More >>