Company Reports Consolidated Revenue of $2.1
Million and Remains Positioned for Ongoing Positive Growth
Company’s Unconsolidated Subsidiary, Falcon’s
Creative Group, Q3 Revenue Increased to $13.2 Million and
Company’s Unconsolidated Joint Venture, Producciones de Parques, Q3
Revenue Increased to $17.8 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 third
quarter of fiscal year 2024 ended September 30, 2024.
Simon Philips, President of Falcon’s Beyond, stated, “Falcon's
performance in Q3 is a testament to the strength of our strategic
initiatives and the dedication of our teams. We’ve achieved
substantial revenue growth in Falcon’s Creative Group compared to
last year, positioning us for continued success as we move into
2025 and beyond. One of the key highlights of this quarter is our
ongoing project work for the Qiddiya Investment Company in Saudi
Arabia focused on the master planning and designing of several
first-of-its-kind immersive entertainment projects for Qiddiya
City, which further showcase our commitment to delivering services
that create innovation and groundbreaking entertainment. We are
thrilled with the progress and the positive reception that our
projects have garnered thus far. With the momentum we’ve built and
our unwavering focus across all divisions, we are more confident
than ever in our ability to deliver long-term value to our
stakeholders.”
Third Quarter 2024 Financial Highlights
- Falcon’s Beyond generated consolidated revenues of $2.1 million
for the three-month period ended September 30, 2024, representing
fees for corporate and shared services earned from its FCG division
and management fees from its Producciones de Parques, S.L. (“PDP”)
50:50 joint venture with Melia Hotels Int’l. 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 $13.2 million in the three-month
period ended September 30, 2024, representing an increase of $8.6
million, or 190%, over the corresponding period of 2023. FCG
recorded operating income of $0.1 million and a net loss of $0.1
million in the three-month period ended September 30, 2024,
compared with an operating loss of ($5.2) million and net loss of
($5.1) million for the corresponding 2023 period. After the Qiddiya
Investment Company (QIC) preferred return and amortization of basis
difference, Falcon’s Beyond’s net loss from FCG was $1.7 million in
the three-month period ended September 30, 2024.
- PDP recognized revenues of $17.8 million in the three-month
period ended September 30, 2024, a $2.0 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 $1.1 million to $5.7 million for the
three-month period ended September 30, 2024, and net income
increased $0.2 million to $3.2 million, as compared with the
corresponding 2023 period. Falcon’s Beyond’s share of income was
$1.6 million from PDP for Q3 2024.
- Falcon’s Beyond’s consolidated net income increased by $35.0
million to $39.3 million for the three-month period ended September
30, 2024, primarily driven by a $40.6 million gain from change in
fair value of earnout liabilities, a $17.9 million decrease in
losses from operations, a $1.5 million increase in share of gains
from equity method investments, a $0.7 million change in fair value
of warrant liabilities, and a $1.6 million increase in foreign
exchange gains, partially offset by a $27.4 million gain from
deconsolidation of FCG in the prior year comparative quarter.
- Adjusted EBITDA1 increased $4.6 million to ($1.6) million for
the three months ended September 30, 2024, compared to ($6.2)
million for the three months ended September 30, 2023, primarily
driven by a $1.6 million increase in share of gain from equity
method investments, a $1.6 million increase in foreign exchange
gains and a $1.84 million increase in revenues from shared services
following the deconsolidation of FCG in 2023, partially offset by a
$0.4 increase in other expenses.
- Effective September 30, 2024, the Company entered into an
Amended and Restated Credit Agreement with Infinite Acquisition
Partners, LLC, a greater than 10% shareholder, to increase the
Revolving Line of Credit from a $10 million facility to a $15
million facility. The amended facility is unsecured, bears simple
interest on the unpaid principal at a rate equal to three-month
SOFR plus 2.75% (previously 2.75%), payable quarterly in arrears.
This facility will mature on September 30, 2034.
- Also effective on September 30, 2024, the Company terminated
and replaced $14.8 million of Term Debt with Infinite Acquisitions
partners. The new term loan is unsecured, bears interest a rate of
8% per annum (previously 3% per annum), payable quarterly in areas
and will mature on September 30, 2034. Principal amortization on
this Term debt commences on October 1, 2029.
- The Company’s legacy investors agreed to forfeit all
outstanding performance based earnout shares held in escrow for
their benefit, in order to reduce volatility in earnings created by
the accounting treatment of these awards. 437,500 shares of Class A
common stock and 17,062,500 shares of Class B common stock and
units were forfeited on September 30, 2024.
- On September 30, 2024, the Company declared a stock dividend of
0.2 shares of class A common stock per share of Class A common
stock outstanding, payable on December 17, 2024 to stockholders of
record as of December 10, 2024. A total of approximately 2.0
million shares of Class A common stock and approximately 11.5
million shares of Class B common stock are expected to be issued in
connection with the stock dividend.
_______________________
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.
Jo Merrill, Chief Financial Officer of Falcon's Beyond, stated,
“We continue to see positive momentum in our third quarter with a
year-over-year increase in revenue in excess of 190% in Falcon’s
Creative Group, and a significant reduction in Company overhead
costs. The Company has taken significant steps this quarter to
restructure and simplify its capital and debt stack to pave the way
for the near-term expansion of the business segments as we
approached our first anniversary as a public company.”
About Falcon’s Beyond
Falcon’s Beyond is a visionary innovator in 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 brings 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 is headquartered in Orlando, Fla. Learn more at
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 Statement
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 press release, words such as
“will”, “aimed”, “expected” 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 and reliance on related parties with respect to such
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 control 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 (UNAUDITED)
(in thousands of U.S.
dollars)
As of September 30,
2024
As of December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
828
$
672
Accounts receivable, net ($219 and $632
related party as of September 30, 2024 and December 31, 2023,
respectively)
219
696
Other current assets
1,025
1,061
Total current assets
2,072
2,429
Investments and advances to equity method
investments
63,915
60,643
Property and equipment, net
24
23
Other non-current assets
539
264
Total assets
$
66,550
$
63,359
Liabilities and stockholders’ equity
(deficit)
Current liabilities:
Accounts payable ($1,488 and $1,357
related party as of September 30, 2024 and December 31, 2023,
respectively)
$
4,710
$
3,852
Accrued expenses and other current
liabilities ($2,429 and $475 related party as of September 30, 2024
and December 31, 2023, respectively)
24,332
20,840
Short-term debt ($904 related party as of
September 30, 2024)
8,471
—
Current portion of long-term debt ($0 and
$4,878 related party as of September 30, 2024 and December 31,
2023, respectively)
1,868
6,651
Earnout liabilities – current portion
—
183,055
Total current liabilities
39,381
214,398
Other long-term payables
5,500
5,500
Long-term debt, net of current portion
($22,822 and $18,897 related party as of September 30, 2024 and
December 31, 2023, respectively)
25,530
22,965
Earnout liabilities, net of current
portion
—
305,586
Warrant liabilities
5,614
3,904
Total liabilities
76,025
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
September 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
September 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
43,116
11,699
Accumulated deficit
(44,322
)
(68,594
)
Accumulated other comprehensive loss
(215
)
(216
)
Total equity attributable to common
stockholders
(1,414
)
(57,105
)
Non-controlling interests
(8,061
)
(431,889
)
Total equity
(9,475
)
(488,994
)
Total liabilities and equity
$
66,550
$
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 nine months
ended
September 30, 2024
September 30, 2023
September 30,
2024
September 30,
2023
Revenue ($2,069, $391, $5,383 and $4,628
related party for the three months ended September 30, 2024 and
2023 and for the nine months ended September 30, 2024 and 2023,
respectively)
$
2,069
$
1,581
$
5,383
$
16,097
Operating expenses:
Project design and build expense
—
722
—
10,151
Selling, general and administrative
expense
4,490
4,330
16,591
23,230
Transaction expenses
—
8,918
7
8,918
Credit loss expense – related party ($0,
$5,230, $12 and $5,484 related party for the three months ended
September 30, 2024 and 2023 and for the nine months ended September
30, 2024 and 2023, respectively)
—
5,230
12
5,484
Research and development expense ($31,
$145, $57 and $145 related party for the three months ended
September 30, 2024 and 2023 and for the nine months ended September
30, 2024 and 2023, respectively)
39
349
65
1,251
Intangible asset impairment loss
—
2,377
—
2,377
Depreciation and amortization expense
1
59
4
1,575
Total operating expenses
4,530
21,985
16,679
52,986
Loss from operations
(2,461
)
(20,404
)
(11,296
)
(36,889
)
Share of gain (loss) from equity method
investments
38
(1,555
)
2,912
(3,690
)
Gain on deconsolidation of FCG
—
27,402
—
27,402
Interest expense $(189), $(241), $(615)
and $(624) related party for the three months ended September 30,
2024 and 2023 and for the nine months ended September 30, 2024 and
2023, respectively)
(421
)
(321
)
(1,128
)
(887
)
Interest income
4
47
10
92
Change in fair value of warrant
liabilities
676
—
(1,715
)
—
Change in fair value of earnout
liabilities
40,649
—
172,271
—
Foreign exchange transaction gain
(loss)
816
(866
)
298
(396
)
Net income (loss) before taxes
39,301
4,303
161,352
(14,368
)
Income tax benefit
—
7
1
26
Net income (loss)
$
39,301
$
4,310
$
161,353
$
(14,342
)
Net income attributable to noncontrolling
interest
33,432
—
137,081
—
Net income attributable to common
stockholders
5,869
—
24,272
—
Net income per share
Net income per share, basic
0.58
n/a
2.50
n/a
Net income per share, diluted
0.46
n/a
1.83
n/a
Weighted average shares outstanding,
basic
10,066,629
n/a
9,700,372
n/a
Weighted average shares outstanding,
diluted
10,253,082
n/a
9,906,753
n/a
FALCON’S BEYOND GLOBAL, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands of U.S.
dollars)
For the nine months
ended
September 30,
September 30,
2024
2023
Cash flows from operating
activities
Net income (loss)
161,353
(14,342
)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization
4
1,575
Deferred loss on sales to equity method
investments
—
155
Foreign exchange transaction loss
(gain)
(261
)
372
Share of (gain) loss from equity method
investments
(2,912
)
3,690
Loss on sale of equipment
2
—
Gain on deconsolidation of FCG
—
(27,402
)
Change in deferred tax asset
—
(26
)
Credit loss expense ($12 and $5,484
related party for the nine months ended September 30, 2024 and
2023, respectively)
12
5,484
Intangible asset impairment
—
2,377
Change in fair value of earnouts
(172,271
)
—
Change in fair value of warrants
1,715
—
Share based compensation expense
1,072
—
Changes in assets and liabilities:
Accounts receivable, net ($401 and
$(4,952) related party for the nine months ended September 30, 2024
and 2023, respectively)
441
(3,061
)
Other current assets
36
26
Inventories
—
(123
)
Contract assets ($0 and $1,680 related
party for the nine months ended September 30, 2024 and 2023,
respectively)
—
466
Capitalization of ride media content
—
(78
)
Deferred transaction costs
—
1,842
Long term receivable – related party
—
(1,314
)
Other non-current assets
(274
)
66
Accounts payable ($127 related party for
the nine months ended September 30, 2024)
854
6,494
Accrued expenses and other current
liabilities ($66 and $33 related party for the nine months ended
September 30, 2024 and 2023, respectively)
1,471
7,507
Contract liabilities ($0 and $236 related
party for the nine months ended September 30, 2024 and 2023,
respectively)
—
(129
)
Net cash used in operating activities
(8,758
)
(16,421
)
Cash flows from investing
activities
Purchase of property and equipment
(9
)
(307
)
Proceeds from sale of equipment
2
—
Cash inflow on deconsolidation of FCG
—
2,577
Investments and advances to unconsolidated
joint ventures
—
(1,509
)
Net cash (used in) provided by investing
activities
(7
)
761
Cash flows from financing
activities
Short-term advances from affiliates
($2,287 related party for the nine months ended September 30,
2024)
2,287
—
Principal payment on finance lease
obligation
—
(106
)
Proceeds from debt – related party
7,221
—
Proceeds from debt – third-party
1,250
—
Repayment of debt – related party
(2,297
)
(222
)
Repayment of debt – third-party
(1,344
)
(1,253
)
Proceeds from related party credit
facilities
6,464
10,629
Repayment of related party credit
facilities
(5,392
)
(3,153
)
Equity contributions
—
1,791
Proceeds from exercised warrants
111
—
Proceeds from RSUs issued to
affiliates
626
—
Net cash provided by financing
activities
8,926
7,686
Net increase (decrease) in cash and
cash equivalents
161
(7,974
)
Foreign exchange impact on cash
(5
)
(21
)
Cash and cash equivalents – beginning of
period
672
8,366
Cash and cash equivalents at end of
period
828
371
Reconciliation of Non-GAAP
Financial Measure
Three months ended September
30, 2024
Three months ended September
30, 2023
Net income (loss)
$
39,301
$
4,310
Interest expense
421
321
Interest income
(4
)
(47
)
Income tax benefit
—
(7
)
Depreciation and amortization expense
1
59
EBITDA
39,719
4,636
Transaction expenses
—
8,918
Credit loss expense
—
5,230
Change in fair value of warrant
liabilities
(676
)
—
Change in fair value of earnout
liabilities
(40,649
)
—
Intangible asset impairment loss
—
2,377
Gain on deconsolidation
—
(27,402
)
Adjusted EBITDA
$
(1,606
)
$
(6,241
)
Nine months ended September
30, 2024
Nine months ended September
30, 2023
Net income (loss)
$
161,353
$
(14,342
)
Interest expense
1,128
887
Interest income
(10
)
(92
)
Income tax benefit
(1
)
(26
)
Depreciation and amortization expense
4
1,575
EBITDA
162,474
(11,998
)
Transaction expenses
7
8,918
Credit loss expense
12
5,484
Intangible asset impairment loss
—
2,377
Gain on deconsolidation
—
(27,402
)
Change in fair value of warrant
liabilities
1,715
—
Change in fair value of earnout
liabilities
(172,271
)
—
Adjusted EBITDA
$
(8,063
)
$
(22,621
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241114625202/en/
Media Relations: Kathleen Prihoda, Falcon’s Beyond
kprihoda@falconsbeyond.com Investor Relations:
ir@falconsbeyond.com
Falcons Beyond Global (NASDAQ:FBYD)
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