Tasty Brands LP, an affiliate of Los Angeles-based private equity firm Triton Pacific Capital Partners, reported its financial results for the fourth 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 December 29, 2021, the company owned 253 restaurants, including 69 Burger King and 184 Pizza Hut locations.
Highlights for the fourth quarter of 2021:
Total restaurant sales increased 16.6 percent to $56 million, compared to $48 million in the fourth quarter of 2020. For the full year, restaurant sales totaled $231.7 million, an increase of 36 percent compared to $170.4 million in 2020.
Adjusted restaurant-level EBITDA totaled $5.8 million in fourth quarter of 2021, compared to $6 million in fourth quarter of 2020. Fiscal year 2021 adjusted restaurant-level EBITDA was $27 million compared to $16.1 million in 2020, an increase of 68 percent.
Adjusted income from operations totaled $3.4 million in the fourth quarter of 2021, compared to $2.9 million in the prior year’s quarter. On a full-year basis, adjusted income from operations increased 136 percent, from $7 million in 2020 to $16.6 million in 2021.
Loan-to-value for consolidated restaurant operations was 17.8 percent, as of year-end 2021.
“Overall performance for Tasty Brands in [the fourth quarter] was strong considering a challenging business environment in which inflationary cost pressures, labor shortages and lingering effects of the pandemic are all still very much evident,” the company said in a statement. “Tasty Brands, like the broader quick service restaurant industry, was tested in many ways in 2021, but its resiliency, stability, and value proposition yielded robust financial performance and continued growth.”
The company noted that both Burger King and Pizza Hut portfolio companies “continue to execute key strategic initiatives across all aspects of the business, while investments in people, assets, and the guest experience underpin the results.”
The company also pointed out “several accomplishments” that took place during the quarter.
Tasty King reportedly “experienced strong openings” for two new Burger King restaurants located in Butler, Missouri and Smithville, Missouri. Average weekly sales are currently running at $30,000+, which implies $1.5 million annualized, above brand average.
Tasty Brands noted that “sales growth at portfolio companies have outperformed other franchisees in their respective designated market areas in almost every period of 2021,” and both Tasty King and Tasty Hut achieved positive same store sales growth in the fourth quarter.
Tasty Hut completed an add-on investment of 23 units located throughout New York, New Hampshire and Massachusetts. The company has three additional units under contract from this transaction that will close in the first quarter of 2022 and has already secured properties for new store development within this region.
The company declared a quarterly distribution of $0.4375 per share.
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.