Overview

Flanigan’s Enterprises, Inc. is a Florida-based company that operates and franchises restaurants, package liquor stores, and combination restaurant/package liquor stores. As of December 28, 2024, the company operates 32 units and franchises an additional 5 units.

Results of Operations

• Total revenue for the 13 weeks ended December 28, 2024 increased 11.35% to $50.26 million, primarily due to increased package liquor store and restaurant sales, higher menu prices, and the opening of a new corporate-owned restaurant.
• Restaurant food sales increased 10.5% to $29.13 million, with comparable weekly sales up 4.58% for company-owned and affiliated limited partnership restaurants.
• Restaurant bar sales increased 6.7% to $7.96 million, with comparable weekly sales up 1.74% for company-owned and affiliated limited partnership restaurants.
• Package store sales increased 17.3% to $12.44 million, with same-store sales up 17.28%.
• Costs and expenses increased 11.4% to $49.40 million, primarily due to higher payroll, food costs, and expenses from the new restaurant opening.
• Gross profit margins decreased slightly for both restaurant food/bar sales (64.87%) and package store sales (23.76%) due to higher costs.
• Net income increased 6.4% to $632,000, but net income attributable to Flanigan’s Enterprises stockholders decreased 49.5% to $55,000 due to higher expenses and more income attributable to noncontrolling interests.

Menu Price Increases and Trends

• The company implemented menu price increases in December 2024 and November 2024 to target annual increases of 4.90% for bar offerings and 4.14% for food offerings to offset higher costs.
• Prior to these increases, the company had raised prices in the second quarter of fiscal year 2023.

Liquidity and Capital Resources

• The company had $27.32 million in cash and cash equivalents as of December 28, 2024, an increase of $5.92 million from September 28, 2024.
• Inflation is having a material impact on the company’s operations, including food, beverage, fuel, and labor costs.
• The company believes its current cash and positive cash flow will be sufficient to fund operations and planned capital expenditures for at least the next 12 months.

Cash Flows

• Net cash provided by operating activities was $7.70 million for the 13 weeks ended December 28, 2024, compared to $3.45 million in the prior year period.
• Net cash used in investing activities was $703,000, primarily for property and equipment acquisitions.
• Net cash used in financing activities was $1.08 million.

Capital Expenditures

• The company acquired $745,000 in property and equipment during the 13 weeks ended December 28, 2024, including $87,000 for package store renovations.
• The company anticipates capital expenditures of approximately $550,000 for refurbishments in fiscal year 2025.

Long-Term Debt

• The company had $21.59 million in long-term debt as of December 28, 2024, down from $21.91 million as of September 28, 2024.
• The company is in compliance with all loan covenants.

Working Capital

• The company had $11.61 million in working capital as of December 28, 2024, relatively flat compared to September 28, 2024.
• The company believes its cash on hand and positive cash flow will adequately fund operations, debt reduction, and planned capital expenditures in fiscal year 2025.

Inflation

• Inflation is having a material impact on the company’s operations, especially rising food, fuel, and labor costs.
• The company has offset these effects by increasing menu prices.