Company Reports Consolidated Revenue of $1.8
Million and Remains Positioned for Ongoing Positive Growth
Company’s Unconsolidated Subsidiary, Falcon’s
Creative Group, Q2 Revenue Increased to $15.7 Million and
Company’s Unconsolidated Joint Venture, Producciones de Parques, Q2
Revenue Increased to $11.3 Million
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 second
quarter of fiscal year 2024 ended June 30, 2024.
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 Creative
Group, Producciones de Parques and Falcon’s Beyond Global. This
quarter's performance highlights our strategic focus as we continue
to grow our differentiated product and services, further laying the
groundwork for the Company’s continued growth.”
Simon Philips, President of Falcon’s Beyond, stated, “For FCG,
our master planning, attraction design and creative guardian work
on the first-ever Dragon Ball theme park has been a monumental
achievement and reflects our commitment to delivering unparalleled
immersive experiences. In addition to the Dragon Ball theme park,
FCG is supporting the creative development of multiple
entertainment experiences with Qiddiya City, including Saudi
Arabia's first water theme park, Aquarabia, and the world's first
dedicated Gaming and Esports district. We are thrilled with the
progress and the positive reception these projects have garnered
thus far. Looking ahead, we are excited about the future
opportunities that are in the works and the expansion of our
business. The momentum we are building is just the beginning of an
extraordinary journey for Falcon's Beyond Global.”
Second Quarter 2024 Financial Highlights
- Falcon’s Beyond generated consolidated revenues of $1.8 million
for the three-month period ended June 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 to July 27,
2023.
- FCG recorded revenues of $15.7 million in the three-month
period ended June 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 ended June 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 ended June 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 ended June 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 ended June 30, 2024,
compared with ($8.8) million loss for the three months ended June
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 ended June 30, 2024, compared to ($8.4) million
for the three months ended June 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 in October 2023 and realizes
positive returns from the Company’s equity method investments.
Jo Merrill, Chief Financial Officer of Falcon's Beyond, stated,
“We continue to see a robust positive performance trend in our
second quarter with a year-over-year increase in revenue in excess
of 200% in Falcon’s Creative Group, and a significant reduction in
Company overhead costs. Looking forward, the Company is committed
to continuing to deliver 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.
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
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.
_________________________
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 U.S.
dollars)
As of June 30, 2024
As of December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
1,664
$
672
Accounts receivable, net ($34 and $632
related party as of June 30, 2024 and December 31, 2023,
respectively)
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 ($1,665 and $1,357
related party as of June 30, 2024 and December 31, 2023,
respectively)
$
3,822
$
3,852
Accrued expenses and other current
liabilities ($1,328 and $475 related party as of June 30, 2024 and
December 31, 2023, respectively)
23,513
20,840
Short-term debt ($904 related party as of
June 30, 2024)
8,471
—
Current portion of long-term debt ($5,573
and $4,878 related party as of June 30, 2024 and December 31, 2023,
respectively)
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
($16,653 and $18,897 related party as of June 30, 2024 and December
31, 2023, respectively)
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 ($0.0001 par value,
500,000,000 shares authorized; 10,066,629 issued and outstanding at
June 30, 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; 57,346,617 issued and outstanding at
June 30, 2024 and 150,000,000 shares authorized; 52,034,117 issued
and outstanding as of December 31, 2023)
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 U.S. dollars,
except share and per share data)
For the three months
ended
For the six months
ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenue ($1,798, $738, $3,314 and $4,236
related party for the three months ended June 30, 2024 and 2023 and
for the six months ended June 30, 2024 and 2023, respectively)
$
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 ($0,
$0, $12 and $254 related party for the three months ended June 30,
2024 and 2023 and for the six months ended June 30, 2024 and 2023,
respectively)
-
-
12
254
Research and development expense ($10, $0,
$26 and $0 related party for the three months ended June 30, 2024
and 2023 and for the six months ended June 30, 2024 and 2023,
respectively)
10
439
26
902
Depreciation and amortization expense
2
174
3
1,516
Total operating expenses
5,320
12,905
12,149
31,001
Loss from operations
(3,522
)
(7,583
)
(8,835
)
(16,485
)
Share of gain (loss) from equity method
investments
1,720
(856
)
2,874
(2,135
)
Interest expense ($(235), $(217), $(426)
and $(420) related party for the three months ended June 30, 2024
and 2023 and for the six months ended June 30, 2024 and 2023,
respectively)
(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 U.S.
dollars)
For the six months
ended
June 30,
June 30,
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 and $254 related
party for the six months ended June 30, 2024 and 2023,
respectively)
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 ($586 and
$(4,711) related party for the six months ended June 30, 2024 and
2023, respectively)
627
(4,521
)
Other current assets
(18
)
(164
)
Inventories
-
(106
)
Contract assets ($0 and $1,680 related
party for the six months ended June 30, 2024 and 2023,
respectively)
-
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 ($308 related party for
the six months ended June 30, 2024)
(22
)
5,173
Accrued expenses and other current
liabilities ($57 and $(152) related party for the six months ended
June 30, 2024 and 2023, respectively)
1,888
2,908
Contract liabilities ($0 and $314 related
party for the six months ended June 30, 2024 and 2023,
respectively)
-
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
related party for the six months ended June 30, 2024)
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 July 27, 2023)
-
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 June 30,
2024
Three months ended June 30,
2023
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 June 30,
2024
Six months ended June 30,
2023
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: Brett Milotte, ICR
IR@FalconsBeyond.com
Falcons Beyond Global (NASDAQ:FBYD)
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