Triton Affiliate Tasty Brands Reports 3Q21 Portfolio Performance Update

Tasty Brands LP, an affiliate of Los Angeles-based private equity firm Triton Pacific Capital Partners, reported its financial results for the third quarter of 2021.

Tasty Brands LP, an affiliate of Los Angeles-based private equity firm Triton Pacific Capital Partners, reported its financial results for the third quarter of 2021.

Tasty Brands LP is a multi-brand restaurant franchisee within the quick service restaurant industry. Its portfolio companies include Tasty Hut LLC, a Pizza Hut franchisee and Tasty King LLC, a Burger King franchisee. As of October 6, 2021, the company owned 229 restaurants, including 67 Burger King and 162 Pizza Hut locations.

Highlights for the third quarter of 2021:

Total restaurant sales increased 33.9 percent to $50.9 million compared to $38.1 million in the third quarter of 2020. Year-to-date, restaurant sales totaled $175.7 million, an increase of 43.6 percent compared to $122.4 million in the prior year’s period.

Adjusted restaurant-level EBITDA totaled $5.4 million compared to $3.3 million in the prior year quarter. Year-to-date, adjusted restaurant-level EBITDA totaled $21.2 million compared to $10.1 million in the prior year, a 109.2 percent increase.

Adjusted income from operations totaled $2.7 million in the third quarter of 2021, compared to $1.4 million in the prior year quarter. Year-to-date, adjusted income from operations increased 218 percent, from $4.1 million in 2020 to $13.1 million in 2021.

Loan-to-value for consolidated restaurant operations was 14.3 percent.

Adjusted income from operations was $2.7 million for the quarter, compared to $1.4 million in the prior year period, reflecting 5.3 percent of total restaurant sales. Administrative general and administrative expenses were higher by $0.85 million.

“Q3 marked a strong quarter for Tasty Brands, LP as financial results surpassed 2021 performance for the same period and its investments in both Burger King and Pizza Hut franchisees continue to execute their respective operational and growth strategies,” Tasty Brands said. “The continued success and financial performance of the business has been underpinned by the investments made to support off-premise dining, strategic restaurant remodels and new store development, as well as an acute focus on operational metrics and customer satisfaction.”

The company also noted that the reemergence of dining rooms led to incremental sales for many of its dine-in focused assets, while the carry-out, delivery and drive-thru channels continued to sustain growth from pre-COVID levels. “The investments in restaurant remodels, relocations and new store development are on track to hit return targets which create long-term value for Tasty Brands.”

The company pointed out “several accomplishments” that took place during the quarter. Of note were the openings of a new Burger King restaurant in Clinton, Missouri and a scraped and rebuilt store in Newton, Iowa. Tasty Hut built a new restaurant in Abingdon, Virginia, and preliminary financial results exceeded budget. Average weekly sales are currently running at $25,000+, which implies $1.3 million annualized, which the company claims is “a very high volume for Pizza Hut.” An add-on investment is under contract and at an advanced stage for Tasty Hut – a 26-store acquisition that extends the Pizza Hut footprint to another three states.

Tasty Brands declared a quarterly distribution of $0.4375 per share for the third quarter.

Triton Pacific, founded in 2001, is a private equity firm offering investment programs for accredited investors and focuses on investing in established companies across multiple sectors.

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