Company Reports Consolidated Revenue of $1.5
Million
Company’s Unconsolidated Subsidiary, Falcon’s
Creative Group, Q1 Revenue Increased to $14.9 million and Company’s
Unconsolidated Joint Venture, Producciones de Parques, Q1 Revenue
Increased to $7.5 million
Company Plans Growth Amidst Surge in Global
Spending in Theme Parks and Location-Based Entertainment
Falcon’s Beyond Global, Inc. (Nasdaq: FBYD) (“Falcon’s Beyond”,
“Falcon’s” or the “Company”), a visionary leader in innovative and
immersive storytelling through Falcon’s Creative Group (“FCG”),
Falcon’s Beyond Destinations (“FBD”) and Falcon’s Beyond Brands
(“FBB”), today announced its financial results for the first
quarter of fiscal year 2024 ended March 31, 2024.
Scott Demerau, Co-Founder and Executive Chairman of Falcon’s
Beyond, commented, “We are thrilled to share our earnings results
for the first quarter since our Nasdaq listing at the end of last
year, and this milestone marks the beginning of an exciting new
chapter for Falcon's Beyond as a public company. Falcon’s Beyond
connects the world by bringing stories to life through theme parks,
resorts, ride and technology sales, animation, consumer products,
gaming and beyond. Our Company is more than just an entertainment
pioneer; we are innovators in immersive storytelling, operating at
the intersection of content, technology and experiences and, with
our innovative approach and industry-leading expertise, we are
poised to unlock significant growth opportunities in the
ever-evolving and rapidly growing entertainment landscape.”
Demerau continued, “This year, we remain well-positioned to
continue expanding our IP and leveraging our critical partnerships,
including with Qiddiya, the organization behind entertainment and
tourism megaprojects, and Raging Power Limited, a subsidiary of
K11, the Hong Kong-based mall developer. As the entertainment
industry continues to undergo rapid transformation fueled by
unprecedented spending in both legacy U.S. and new markets, we see
immense growth potential for our Company. As we embark on this new
chapter as a public company, we remain steadfast in our commitment
to pushing the boundaries of immersive storytelling and delivering
extraordinary moments that inspire and delight audiences
worldwide.”
Simon Philips, President of Falcon’s Beyond, stated, "We are
delighted to share the exciting developments at Falcon’s in the
first quarter of 2024. Early in the quarter, we announced a
licensing agreement with The Hershey Company to bring their iconic
brands, including Hershey’s, Reese’s, Jolly Rancher, and Twizzlers,
to life in new location-based entertainment attractions.
Additionally, we were pleased to announce that Falcon’s Creative
Group, as part of our ongoing partnership with Qiddiya City near
Riyadh, Saudi Arabia, will serve as the master planner, attraction
designer, and creative guardian for the pioneering Dragon Ball
theme park. Qiddiya has revealed that the park will feature five
state-of-the-art rides as part of a lineup of over 30 attractions
set against the stunning Tuwaiq mountains backdrop. Furthermore,
within Qiddiya City, Falcon’s Creative Group is overseeing the
creative guardianship of Saudi Arabia’s first water theme park,
Aquarabia, and supporting the creation of a dedicated Gaming &
Esports District."
Philips continued, "This quarter, Falcon’s also entered into a
letter of intent with Tanseisha Co., a Tokyo-based designer and
creator of commercial and cultural facilities, to explore
developing new themed entertainment experiences, including
location-based entertainment that brings popular Japanese anime and
manga to life. In March, we launched Falcon’s Attractions Systems
& Technologies, our latest expansion strategy, highlighting
Falcon’s Beyond’s commitment to selling cutting-edge immersive
rides and attractions worldwide. This quarter’s achievements
underscore the strength of our business model, the creativity of
our team and the enduring appeal of our unique entertainment
offerings."
First Quarter 2024 Financial Highlights
- Falcon’s Beyond generated consolidated revenues of $1.5 million
for the three-month period ended March 31, 2024, representing fees
for corporate and shared services earned by its FCG division.
- The Company’s FCG subsidiary was deconsolidated and accounted
for as an equity method investment for all periods subsequent to
July 27, 2023, when an affiliate of the Qiddiya Investment Company
(“QIC”) invested $30 million in FCG as a strategic investment to
obtain a 25% equity interest in the form of preferred units of FCG
with the Company holding the remaining 75% interest in the form of
common units. The deconsolidation was due to certain participation
rights held by QIC in conjunction with the strategic
investment.
- FCG recorded revenues of $14.9 million in the three-month
period ended March 31, 2024, representing an increase of $6.9
million, or 87%, over the corresponding period of 2023 when FCG was
fully consolidated by the Company. FCG also recorded operating
income of $1.6 million and net income of $1.8 million in the
three-month period ended March 31, 2024 compared with an operating
loss of $1.2 million and net loss of $1.2 million for the
corresponding period of 2023. After the QIC preferred return and
amortization, Falcon’s Beyond’s share of income was $0.5 million
from FCG for Q1 2024.
- Falcon’s Beyond’s Producciones de Parques, S.L. (“PDP”) 50:50
joint venture with Melia Hotels International recognized revenues
of $7.5 million in the three-month period ended March 31, 2024, a
$1.2 million increase over the corresponding period of 2023,
primarily due to increases in rate at the Tenerife and Mallorca
hotels. Income from operations increased $0.8 million to $1.3
million and net income $0.8 million to $1.0 million. Falcon’s
Beyond’s share of income was $0.5 million from PDP for Q1
2024.
- Falcon’s Beyond consolidated net income increased by $123.8
million to $114.0 million for the three months ended March 31,
2024, compared to ($9.9) million loss for the three months ended
March 31, 2023, primarily driven by a $118.6 million gain from
change in fair value of earnout liabilities.
- Adjusted EBITDA1 increased from $(8.0) million to $(4.5)
million for the three months ended March 31, 2024, compared to
($8.0) million for the three months ended March 31, 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 in October 2023.
Jo Merrill, Chief Financial Officer of Falcon's Beyond, stated,
“We saw robust financial performance in our inaugural earnings
report, including an 87% year-over-year increase in revenue in
Falcon’s Creative Group, and we are committed to reinvesting in and
optimizing our business to foster our continued growth. We are
excited to continue delivering exceptional experiences for our
guests, customers and partners.”
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 Creative Group creates
master plans, designs attractions and experiential entertainment,
and produces content, interactives and software. Falcon’s Beyond
Destinations develops a diverse range of entertainment experiences
using both Falcon’s Beyond owned and third party licensed
intellectual property, spanning location-based entertainment,
dining, and retail. Falcon’s Beyond Brands endeavors to bring
brands and intellectual property to life through animation, movies,
licensing and merchandising, gaming as well as ride and technology
sales. Falcon’s Beyond also invents immersive rides, attractions
and technologies for entertainment destinations around the
world.
FALCON’S BEYOND and its related trademarks are owned by Falcon’s
Beyond.
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.
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,” “will,” “expected,” “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
Strategic Investment may affect our ability to access the public
markets and expand our business, (8) the risks of doing business
internationally, including in the Kingdom of Saudi Arabia, (9) our
indebtedness, (10) our dependence on strategic relationships with
local partners in order to offer and market our products and
services in certain jurisdictions, (11) our reliance on our senior
management and key employees, and our ability to hire, train,
retain, and motivate qualified personnel, (12)
cybersecurity-related risks, (13) our ability to protect our
intellectual property, (14) our ability to remediate identified
material weaknesses in our internal controls over financial
reporting, (15) the concentration of share ownership and the
significant influence of the Demerau Family and Cecil D. Magpuri,
(16) the outcome of pending, threatened and future legal
proceedings, (17) our continued compliance with Nasdaq continued
listing standards, (18) risks related to our Up-C entity structure
and the fact that we may be required to make substantial payments
to certain unitholders under our Tax Receivable Agreement, and the
risks disclosed under the caption “Risk Factors” in the Company’s
Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission on April 29, 2024, and the Company’s other
filings with the Securities and Exchange Commission. The
forward-looking statements herein speak only as of the date of this
press release, and the Company undertakes no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
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 (in
thousands of U.S. dollars)
(Unaudited) As of March 31,
2024
As of December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
1,050
$
672
Accounts receivable, net ($1,794 and $632
related party as of March 31, 2024 and December 31, 2023,
respectively)
1,794
696
Other current assets ($2,094 related party
as of March 31, 2024)
3,303
1,061
Total current assets
6,147
2,429
Investments and advances to equity method
investments
61,292
60,643
Property and equipment, net
22
23
Other non-current assets
322
264
Total assets
$
67,783
$
63,359
Liabilities and stockholders’ equity
(deficit)
Current liabilities:
Accounts payable ($1,601 and $1,357
related party as of March 31, 2024 and December 31, 2023,
respectively)
$
6,524
$
3,852
Accrued expenses and other current
liabilities ($445 and $475 related party as of March 31, 2024 and
December 31, 2023, respectively)
20,741
20,840
Short-term debt ($7,221 related party as
of March 31, 2024)
8,471
—
Current portion of long-term debt ($4,899
and $4,878 related party as of March 31, 2024 and December 31,
2023, respectively)
6,660
6,651
Earnout liabilities – current portion
155,331
183,055
Total current liabilities
197,727
214,398
Other long-term payables
5,500
5,500
Long-term debt, net of current portion
($16,952 and $18,897 related party as of March 31, 2024 and
December 31, 2023, respectively)
20,476
22,965
Earnout liabilities, net of current
portion
214,695
305,586
Warrant liabilities
3,691
3,904
Total liabilities
442,089
552,353
Commitments and contingencies – Note
10
Stockholders’ equity (deficit)
Class A common stock ($0.0001 par value,
500,000,000 shares authorized; 9,879,248 issued and outstanding at
March 31, 2024 and 500,000,000 shares authorized; 7,871,643 issued
and outstanding as of December 31, 2023)
1
1
Class B common stock ($0.0001 par value,
150,000,000 shares authorized; 50,034,117 issued and outstanding at
March 31, 2024 and 150,000,000 shares authorized; 52,034,117 issued
and outstanding as of December 31, 2023)
5
5
Additional paid-in capital
(10,086
)
11,699
Accumulated deficit
(51,425
)
(68,594
)
Accumulated other comprehensive loss
(215
)
(216
)
Total equity attributable to common
stockholders
(61,720
)
(57,105
)
Non-controlling interests
(312,586
)
(431,889
)
Total equity
(374,306
)
(488,994
)
Total liabilities and equity
$
67,783
$
63,359
FALCON’S BEYOND GLOBAL, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in thousands of
U.S. dollars, except share and per share data)
Three months ended March 31,
2024
Three months ended March 31,
2023
Revenue ($1,516 and $3,498 related party
for the three months ended March 31, 2024 and 2023,
respectively)
$
1,516
$
9,194
Operating expenses:
Project design and build expense
—
6,288
Selling, general and administrative
expense
6,793
9,749
Transaction expenses
7
—
Credit loss expense ($12 and $254 related
party for the three months ended March 31, 2024 and 2023,
respectively)
12
254
Research and development expense ($16 and
$0 related party for the three months ended March 31, 2024 and
2023, respectively)
16
463
Depreciation and amortization expense
1
1,342
Total operating expenses
6,829
18,096
Loss from operations
(5,313
)
(8,902
)
Share of gain (loss) from equity method
investments
1,154
(1,279
)
Interest expense ($(205) and $(204)
related party for the three months ended March 31, 2024 and 2023,
respectively)
(269
)
(271
)
Interest income
3
—
Change in fair value of warrant
liabilities
208
—
Change in fair value of earnout
liabilities
118,615
—
Foreign exchange transaction gain
(loss)
(375
)
599
Net income (loss) before taxes
$
114,023
$
(9,853
)
Income tax benefit
1
3
Net income (loss)
$
114,024
$
(9,850
)
Net income attributable to noncontrolling
interest
96,855
—
Net income attributable to common
stockholders
17,169
—
Net income (loss) per share, basic
1.90
n/a
Net income (loss) per share, diluted
1.53
n/a
Weighted average shares outstanding,
basic
9,021,520
n/a
Weighted average shares outstanding,
diluted
9,209,020
n/a
Comprehensive income (loss):
Net income (loss)
$
114,024
$
(9,850
)
Foreign currency translation gain
4
283
Total comprehensive income
(loss)
$
114,028
$
(9,567
)
Comprehensive income attributable to
noncontrolling interest
96,858
n/a
Comprehensive income attributable to
common stockholders
$
17,170
n/a
FALCON’S BEYOND GLOBAL, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (in thousands of U.S. dollars)
Three months
Three months
ended March 31,
ended March 31,
2024
2023
Cash flows from operating
activities
Net income (loss)
114,024
(9,850
)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization
1
1,342
Deferred loss on sales to equity method
investments
—
185
Foreign exchange transaction loss
(gain)
375
(607
)
Share of (gain) loss from equity method
investments
(1,154
)
1,279
Loss on sale of equipment
2
—
Change in deferred tax asset
—
(3
)
Credit loss expense ($12 and $254 related
party for the three months ended March 31, 2024 and 2023,
respectively)
12
254
Change in fair value of earnouts
(118,615
)
—
Change in fair value of warrants
(208
)
—
Share based compensation expense
346
—
Changes in assets and liabilities:
Accounts receivable, net ($(1,174) and
$(1,428) related party for the three months ended March 31, 2024
and 2023, respectively)
(1,133
)
(845
)
Other current assets
73
(89
)
Inventories
—
(107
)
Contract assets ($0 and $(334) related
party for the three months ended March 31, 2024 and 2023,
respectively)
—
(2,215
)
Capitalization of ride media content
—
(60
)
Deferred transaction costs
—
(465
)
Long term receivable – related party
—
(1,227
)
Other non-current assets
(58
)
26
Accounts payable ($241 related party for
the three months ended March 31, 2024)
2,669
1,794
Accrued expenses and other current
liabilities ($33 and $448 related party for the three months ended
March 31, 2024 and 2023, respectively)
(102
)
3,791
Contract liabilities ($0 and $(123)
related party for the three months ended March 31, 2024 and 2023,
respectively)
—
299
Net cash used in operating activities
(3,768
)
(6,498
)
Cash flows from investing
activities
—
Purchase of property and equipment
(4
)
(133
)
Short-term advances to affiliates
(2,094
)
—
Proceeds from sale of equipment
2
—
Net cash used in investing activities
(2,096
)
(133
)
Cash flows from financing
activities
Principal payment on finance lease
obligation
—
(40
)
Proceeds from debt – related party
7,221
—
Proceeds from debt – third party
1,250
—
Repayment of debt – related party
(1,182
)
(222
)
Repayment of debt – third party
(427
)
(416
)
Proceeds from related party credit
facilities
4,650
3,000
Repayment of related party credit
facilities
(5,392
)
(2,500
)
Proceeds from exercised warrants
111
—
Net cash provided by (used in) financing
activities
6,231
(178
)
Net increase (decrease) in cash and
cash equivalents
367
(6,809
)
Foreign exchange impact on cash
11
(6
)
Cash and cash equivalents – beginning of
period
672
8,366
Cash and cash equivalents at end of
year
1,050
1,551
Supplemental disclosures:
Cash paid for interest
207
456
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 July 27, 2023)
—
514
Conversion of warrants to common shares,
Class A
7,137
—
Conversion of Class B Common Stock to
Class A Common Stock
14,733
—
FALCON’S BEYOND GLOBAL, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY (DEFICIT)/MEMBERS’ EQUITY (UNAUDITED) (in
thousands of U.S. dollars, except unit and share data)
Units
Members’ capital
Accumulated deficit
Accumulated other
comprehensive loss
Members’ equity
December 31, 2022
54,483,789
$
94,201
$
(24,147
)
$
(1,690
)
$
68,364
Net loss
(9,850
)
(9,850
)
Foreign currency translation gain
283
283
March 31, 2023
54,483,789
$
94,201
$
(33,997
)
$
(1,407
)
$
58,797
Common Stock, Class A
Common Stock, Class B
Additional paid-in
Accumulated other
comprehensive
Accumulated
Total equity attributable to
common
Non- Controlling
Total
Shares
Amount
Shares
Amount
capital
loss
deficit
stockholders
Interest
equity
December 31, 2023
7,871,643
$
1
52,034,117
$
5
$
11,699
$
(216
)
$
(68,594
)
$
(57,105
)
$
(431,889
)
$
(488,994
)
Conversion of Warrants to Common
Shares
7,605
(7,137
)
(7,137
)
7,230
93
Conversion of Class B Common Stock to
Class A Common Stock
2,000,000
(2,000,000
)
(14,733
)
(14,733
)
14,733
-
Stock compensation expense
85
85
482
567
Net income
17,169
17,169
96,855
114,024
Foreign currency translation gain
1
1
3
4
March 31, 2024
9,879,248
$
1
50,034,117
$
5
(10,086
)
(215
)
(51,425
)
(61,720
)
(312,586
)
(374,306
)
Reconciliation of Non-GAAP Financial
Measure
Three months ended March 31,
2024
Three months ended March 31,
2023
Net income (loss)
$
114,024
$
(9,850)
Interest expense
269
271
Interest income
(3
)
—
Income tax benefit
(1
)
(3
)
Depreciation and amortization expense
1
1,342
EBITDA
114,290
(8,240
)
Transaction expenses
7
—
Credit loss expense
12
254
Change in fair value of warrant
liabilities
(208
)
—
Change in fair value of earnout
liabilities
(118,615
)
—
Adjusted EBITDA
$
(4,514
)
$
(7,986
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240516969997/en/
Investor Relations: Brett Milotte, ICR
IR@FalconsBeyond.com
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