Falcon’s Beyond Announces Second Quarter 2024 Results
Company Reports Consolidated Revenue of
Company’s Unconsolidated Subsidiary, Falcon’s
Scott Demerau, Co-Founder and Executive Chairman of Falcon’s Beyond, commented, “We saw continued strength in the second quarter of 2024 with positive revenue increases across Falcon’s
Second Quarter 2024 Financial Highlights
-
Falcon’s Beyond generated consolidated revenues of
$1.8 million for the three-month period endedJune 30, 2024 , representing fees for corporate and shared services earned from its FCG division. The Company’s FCG subsidiary was deconsolidated and accounted for as an equity method investment for all periods subsequent toJuly 27, 2023 .
-
FCG recorded revenues of
$15.7 million in the three-month period endedJune 30, 2024 , representing an increase of$10.5 million , or 202%, over the corresponding period of 2023 for FCG when it was fully consolidated by the Company. FCG also recorded operating income of$2.3 million and net income of$2.5 million in the three-month period endedJune 30, 2024 compared with an operating loss of($1.1) million and net loss of($1.1) million for the corresponding 2023 period. After the QIC preferred return and amortization, Falcon’s Beyond’s share of income was$1.0 million from FCG for Q2 2024.
-
Falcon’s Beyond’s
Producciones de Parques, S.L . (“PDP”) 50:50 joint venture with Melia Hotels International recognized revenues of$11.3 million in the three-month period endedJune 30, 2024 , a$0.9 million increase over the corresponding 2023 period, primarily due to increases in occupancy and rates at the Tenerife and Mallorca properties. Income from operations increased$0.8 million to$1.6 million for the three-month period endedJune 30, 2024 , and net income increased$0.7 million to$1.3 million , as compared with the corresponding 2023 period. Falcon’s Beyond’s share of income was$0.7 million from PDP for Q2 2024.
-
Falcon’s Beyond’s consolidated net income increased by
$16.8 million to$8.0 million for the three months endedJune 30, 2024 , compared with($8.8) million loss for the three months endedJune 30, 2023 , primarily driven by a$13.0 million gain from change in fair value of earnout liabilities, a$4.1 million decrease in losses from operations and a$2.6 million increase in share of gain from equity method investments, partially offset by a$2.6 million loss from the change in fair value of warrant liabilities.
-
Adjusted EBITDA1 increased
$6.5 million to($1.9) million for the three months endedJune 30, 2024 , compared to($8.4) million for the three months endedJune 30, 2023 , primarily driven by lower selling, general and administrative expenses due to reduction in third-party accounting, audit and legal fees relating to public company readiness as the Company moves forward from its completed business combination transaction inOctober 2023 and realizes positive returns from the Company’s equity method investments.
About Falcon’s Beyond
Falcon’s Beyond is a visionary leader in innovative and immersive storytelling, sitting at the intersection of three potential high growth business opportunities: content, technology, and experiences. Falcon’s Beyond propels intellectual property (IP) activations concurrently across physical and digital experiences through three core business units: Falcon’s
FALCON’S BEYOND and its related trademarks are owned by Falcon’s Beyond.
Falcon’s Beyond will be posting an updated Investor Presentation in the Investor Relations section of its website at https://investors.falconsbeyond.com/.
Falcon’s Beyond may use its website as a distribution channel of material Company information. Financial and other important information regarding the Company is routinely accessed through and posted on our website at https://investors.falconsbeyond.com/. In addition, you may automatically receive email alerts and other information about Falcon’s when you enroll your email address by visiting the Email Alerts section at https://investors.falconsbeyond.com/.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this Form 8-K, words such as “continue,” “potential,” “plans,” and similar expressions identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those expressed in or implied by the forward-looking statements, including (1) our ability to sustain our growth, effectively manage our anticipated future growth, and implement our business strategies to achieve the results we anticipate, (2) impairments of our intangible assets and equity method investment in our joint ventures, (3) our ability to raise additional capital, (4) the closure of Katmandu Park DR and the repositioning and rebranding of our FBD business, (5) the success of our growth plans in FCG, (6) our customer concentration in FCG, (7) the risk that contractual restrictions relating to the
_________________________ |
1 Adjusted EBITDA is a non-GAAP financial measure. See “Use and Definition of Non-GAAP Financial Measure” below for more information and a reconciliation to the most directly comparable GAAP measure. |
Use and Definition of Non-GAAP Financial Measure
We prepare our unaudited condensed consolidated financial statements in accordance with US GAAP. In addition to disclosing financial results prepared in accordance with US GAAP, we disclose information regarding Adjusted EBITDA which is a non-GAAP measure. We define Adjusted EBITDA as net income (loss), determined in accordance with US GAAP, for the period presented, before interest expense, net, income tax expense, depreciation and amortization, transaction expenses related to the business combination, credit loss expense, change in fair value of warrant liabilities, and change in fair value of earnout liabilities. We believe that Adjusted EBITDA is useful to investors as it eliminates the non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in any business combination and improves comparability by eliminating the interest expense associated with our debt facilities, which may not be comparable with other companies based on our structure.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under US GAAP. A reconciliation of non-GAAP Adjusted EBITDA to GAAP Net Income, the most directly comparable GAAP financial measure, is included below under the heading “Reconciliation of Non-GAAP Financial Measure”.
FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands of |
||||||||
|
|
|
|
|
As of
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,664 |
|
|
$ |
672 |
|
Accounts receivable, net ( |
|
|
34 |
|
|
|
696 |
|
Other current assets |
|
|
1,078 |
|
|
|
1,061 |
|
Total current assets |
|
|
2,776 |
|
|
|
2,429 |
|
Investments and advances to equity method investments |
|
|
62,826 |
|
|
|
60,643 |
|
Property and equipment, net |
|
|
23 |
|
|
|
23 |
|
Other non-current assets |
|
|
305 |
|
|
|
264 |
|
Total assets |
|
$ |
65,930 |
|
|
$ |
63,359 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity (deficit) |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable ( |
|
$ |
3,822 |
|
|
$ |
3,852 |
|
Accrued expenses and other current liabilities ( |
|
|
23,513 |
|
|
|
20,840 |
|
Short-term debt ( |
|
|
8,471 |
|
|
|
— |
|
Current portion of long-term debt ( |
|
|
7,190 |
|
|
|
6,651 |
|
Earnout liabilities – current portion |
|
|
73,843 |
|
|
|
183,055 |
|
Total current liabilities |
|
|
116,839 |
|
|
|
214,398 |
|
Other long-term payables |
|
|
5,500 |
|
|
|
5,500 |
|
Long-term debt, net of current portion ( |
|
|
19,852 |
|
|
|
22,965 |
|
Earnout liabilities, net of current portion |
|
|
216,922 |
|
|
|
305,586 |
|
Warrant liabilities |
|
|
6,290 |
|
|
|
3,904 |
|
Total liabilities |
|
|
365,403 |
|
|
|
552,353 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies – Note 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity (deficit) |
|
|
|
|
|
|
|
|
Class A common stock ( |
|
|
1 |
|
|
|
1 |
|
Class B common stock ( |
|
|
6 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
5,681 |
|
|
|
11,699 |
|
Accumulated deficit |
|
|
(50,191) |
|
|
|
(68,594 |
) |
Accumulated other comprehensive loss |
|
|
(216) |
|
|
|
(216 |
) |
Total equity attributable to common stockholders |
|
|
(44,719) |
|
|
|
(57,105 |
) |
Non-controlling interests |
|
|
(254,754) |
|
|
|
(431,889 |
) |
Total equity |
|
|
(299,473) |
|
|
|
(488,994 |
) |
Total liabilities and equity |
|
$ |
65,930 |
|
|
$ |
63,359 |
|
FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (LOSS) (UNAUDITED)
(in thousands of |
|||||||||||||||
For the three months ended |
For the six months ended |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenue ( |
$ |
1,798 |
|
|
$ |
5,322 |
|
|
$ |
3,314 |
|
|
$ |
14,516 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
Project design and build expense |
|
- |
|
|
|
3,141 |
|
|
|
- |
|
|
|
9,429 |
|
Selling, general and administrative expense |
|
5,308 |
|
|
|
9,151 |
|
|
|
12,101 |
|
|
|
18,900 |
|
Transaction expenses |
|
- |
|
|
|
- |
|
|
|
7 |
|
|
|
- |
|
Credit loss expense – related party ( |
|
- |
|
|
|
- |
|
|
|
12 |
|
|
|
254 |
|
Research and development expense ( |
|
10 |
|
|
|
439 |
|
|
|
26 |
|
|
|
902 |
|
Depreciation and amortization expense |
2 |
|
174 |
|
3 |
|
1,516 |
|
|||||||
Total operating expenses |
|
5,320 |
|
|
|
12,905 |
|
|
|
12,149 |
|
|
|
31,001 |
|
Loss from operations |
|
(3,522 |
) |
|
|
(7,583 |
) |
|
|
(8,835 |
) |
|
|
(16,485 |
) |
Share of gain (loss) from equity method investments |
|
1,720 |
|
|
|
(856 |
) |
|
|
2,874 |
|
|
|
(2,135 |
) |
Interest expense ( |
|
(438 |
) |
|
(295 |
) |
|
(707 |
) |
|
(566 |
) |
|||
Interest income |
|
3 |
|
|
|
45 |
|
|
|
6 |
|
|
|
45 |
|
Change in fair value of warrant liabilities |
|
(2,599 |
) |
|
— |
|
|
(2,391 |
) |
|
— |
|
|||
Change in fair value of earnout liabilities |
|
13,006 |
|
|
|
— |
|
|
|
131,621 |
|
|
|
— |
|
Foreign exchange transaction gain (loss) |
(142 |
) |
(129 |
) |
(517 |
) |
470 |
|
|||||||
Net income (loss) before taxes |
|
8,028 |
|
|
(8,818 |
) |
|
122,051 |
|
|
(18,671 |
) |
|||
Income tax benefit |
|
— |
|
|
|
16 |
|
|
|
1 |
|
|
|
19 |
|
Net income (loss) |
$ |
8,028 |
|
$ |
(8,802 |
) |
$ |
122,052 |
|
$ |
(18,652 |
) |
|||
Net income attributable to noncontrolling interest |
|
6,794 |
|
|
|
— |
|
|
|
103,648 |
|
|
|
— |
|
Net income attributable to common stockholders |
1,234 |
|
— |
|
18,404 |
|
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share, basic |
0.12 |
|
n/a |
|
1.93 |
|
n/a |
|
|||||||
Net income per share, diluted |
|
0.01 |
|
|
|
n/a |
|
|
|
1.37 |
|
|
|
n/a |
|
Weighted average shares outstanding, basic |
10,008,941 |
|
n/a |
|
9,515,230 |
|
n/a |
|
|||||||
Weighted average shares outstanding, diluted |
|
10,066,633 |
|
n/a |
|
9,731,576 |
|
n/a |
|
FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of |
|||||||||
|
|
For the six months ended |
|
||||||
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2023 |
|
|||
Cash flows from operating activities |
|
|
|
|
|
|
|||
Net income (loss) |
|
|
122,052 |
|
|
|
|
(18,652 |
) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
3 |
|
|
|
|
1,516 |
|
Deferred loss on sales to equity method investments |
|
|
- |
|
|
|
|
194 |
|
Foreign exchange transaction loss (gain) |
|
|
517 |
|
|
|
|
(478 |
) |
Share of (gain) loss from equity method investments |
|
|
(2,874 |
) |
|
|
|
2,135 |
|
Loss on sale of equipment |
|
|
2 |
|
|
|
|
— |
|
Change in deferred tax asset |
|
|
- |
|
|
|
|
(19 |
) |
Credit loss expense ( |
|
|
12 |
|
|
|
|
254 |
|
Change in fair value of earnouts |
|
|
(131,621 |
) |
|
|
|
— |
|
Change in fair value of warrants |
|
|
2,391 |
|
|
|
|
— |
|
Share based compensation expense |
|
|
699 |
|
|
|
|
— |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable, net ( |
|
|
627 |
|
|
|
|
(4,521 |
) |
Other current assets |
|
|
(18 |
) |
|
|
|
(164 |
) |
Inventories |
|
|
- |
|
|
|
|
(106 |
) |
Contract assets ( |
|
|
- |
|
|
|
|
880 |
|
Capitalization of ride media content |
|
|
- |
|
|
|
|
(78 |
) |
Deferred transaction costs |
|
|
- |
|
|
|
|
(637 |
) |
Long term receivable – related party |
|
|
- |
|
|
|
|
(1,271 |
) |
Other non-current assets |
|
|
(41 |
) |
|
|
|
64 |
|
Accounts payable ( |
|
|
(22 |
) |
|
|
|
5,173 |
|
Accrued expenses and other current liabilities ( |
|
|
1,888 |
|
|
|
|
2,908 |
|
Contract liabilities ( |
|
|
- |
|
|
|
|
192 |
|
Net cash used in operating activities |
|
|
(6,385 |
) |
|
|
|
(12,610 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(5 |
) |
|
|
|
(283 |
) |
Investments and advances to unconsolidated joint ventures |
- |
|
|
(1,379 |
) | ||||
Net cash used in investing activities |
|
|
(5 |
) |
|
|
|
(1,662 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Short-term advances from affiliates ( |
|
|
796 |
|
|
|
|
— |
|
Principal payment on finance lease obligation |
|
|
- |
|
|
|
|
(93 |
) |
Proceeds from debt – related party |
|
|
7,221 |
|
|
|
|
— |
|
Proceeds from debt – third-party |
|
|
1,250 |
|
|
|
|
— |
|
Repayment of debt – related party |
|
|
(1,757 |
) |
|
|
|
(222 |
) |
Repayment of debt – third-party |
|
|
(858 |
) |
|
|
|
(835 |
) |
Proceeds from related party credit facilities |
|
|
5,600 |
|
|
|
|
8,959 |
|
Repayment of related party credit facilities |
|
|
(5,392 |
) |
|
|
|
(2,500 |
) |
Equity contributions |
|
|
- |
|
|
|
|
1,791 |
|
Proceeds from exercised warrants |
|
|
111 |
|
|
|
|
— |
|
Proceeds from RSUs issued to affiliates |
|
|
426 |
|
|
|
|
— |
|
Net cash provided by financing activities |
|
|
7,397 |
|
|
|
|
7,100 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
1,007 |
|
|
|
|
(7,172 |
) |
Foreign exchange impact on cash |
|
|
(15 |
) |
|
|
|
(8 |
) |
Cash and cash equivalents – beginning of period |
|
|
672 |
|
|
|
|
8,366 |
|
Cash and cash equivalents at end of period |
|
|
1,664 |
|
|
|
|
1,186 |
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
|
280 |
|
|
|
|
550 |
|
Non-cash activities: |
|
|
|
|
|
|
|
|
|
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities (all operating lease assets and liabilities have been deconsolidated as of |
|
|
- |
|
|
|
|
514 |
|
Finance lease right-of-use assets obtained in exchange for new finance lease liabilities |
|
|
- |
|
|
|
|
35 |
|
Conversion of warrants to common shares, Class A |
|
|
7,137 |
|
|
|
|
— |
|
Conversion of Class B Common Stock to Class A Common Stock |
|
|
14,733 |
|
|
|
|
— |
|
Release of earnout Common shares from escrow |
|
|
66,255 |
|
|
|
|
— |
|
Reconciliation of Non-GAAP Financial Measure |
|||||||||
|
|
Three months ended
|
|
|
Three months ended
|
|
|||
Net income (loss) |
|
$ |
8,028 |
|
|
|
$ |
(8,802 |
) |
Interest expense |
|
|
438 |
|
|
|
|
295 |
|
Interest income |
|
|
(3 |
) |
|
|
|
(45 |
) |
Income tax benefit |
|
|
— |
|
|
|
|
(16 |
) |
Depreciation and amortization expense |
|
|
2 |
|
|
|
|
174 |
|
EBITDA |
|
|
8,465 |
|
|
|
|
(8,394 |
) |
Change in fair value of warrant liabilities |
|
|
2,599 |
|
|
|
|
— |
|
Change in fair value of earnout liabilities |
|
|
(13,006 |
) |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(1,942 |
) |
|
|
$ |
(8,394 |
) |
|
|
Six months ended
|
|
|
Six months ended
|
|
|||
Net income (loss) |
|
$ |
122,052 |
|
|
|
$ |
(18,652 |
) |
Interest expense |
|
|
707 |
|
|
|
|
566 |
|
Interest income |
|
|
(6 |
) |
|
|
|
(45 |
) |
Income tax benefit |
|
|
(1 |
) |
|
|
|
(19 |
) |
Depreciation and amortization expense |
|
|
3 |
|
|
|
|
1,516 |
|
EBITDA |
|
|
122,755 |
|
|
|
|
(16,634 |
) |
Transaction expenses |
|
|
7 |
|
|
|
|
— |
|
Credit loss expense |
|
|
12 |
|
|
|
|
254 |
|
Change in fair value of warrant liabilities |
|
|
2,391 |
|
|
|
|
— |
|
Change in fair value of earnout liabilities |
|
|
(131,621 |
) |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(6,456 |
) |
|
|
$ |
(16,380 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240813430652/en/
Investor Relations:
IR@FalconsBeyond.com
Source: Falcon's