Hello, welcome to the BurgerFi International, Inc. Q4 2022 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I now would like to turn the conference over to Ian Baines, BurgerFi's CEO. Mr. Baines, please go ahead. Thank you. Thank you for joining us today, and we appreciate your continued interest in BurgerFi. Let me begin by thanking our entire team, franchisees, and their employees for their dedication and hard work in this challenging environment. My plan is to first recap our fiscal year and fourth quarter performance and then discuss our current initiatives. Following that, Mike will review the quarterly financials in greater detail and reiterate our 2023 guidance. We are pleased to report that total revenue grew 160% to $178.7 million for fiscal year 2022 when compared to the prior year. The significant increase in revenue was related to the full-year impact from the acquisition of 61 corporate-owned Anthony's Coal Fired Pizza & Wings in November 2021. We also grew our Adjusted EBITDA to $9.2 million, a 141% increase from prior year. Turning to the fourth quarter, total revenue increased 29% to $45.2 million, primarily driven from Anthony's results being included for the full quarter compared to nine weeks in the prior year. Consolidated systemwide restaurant sales decreased 2% to $71.6 million, as we experienced a 5% decrease at BurgerFi that was only partially offset by a 2% increase at Anthony's. System-wide comparable same-store sales decreased 4% for the quarter, consisting of a 1% increase at Anthony's and a 9% decrease at BurgerFi. 2022 was a pivotal year for BurgerFi as we integrated the Anthony's acquisition into our system. Notably, we completed our back office integration of the two companies and delivered on our goal of achieving over $2.5 million in annualized synergies. Over the last year, our teams have been laser-focused on operations and the customer experience with the goal of increased sales and margin improvement of both brands. As a result, Anthony's grew same-store sales 5% when compared to the prior fiscal year. Notably, sales are continuing their recovery to pre-COVID levels, both in our home market of Florida and in the Northeast, where we don't have as strong of a brand awareness. This top-line momentum has continued throughout the first quarter of 2023, with competitive period trends of 2%-3% for each brand than those realized in the fourth quarter of 2022. With the continued strengthening on the top line supported by food cost stability, we are off to a good start for the new year and are expecting good results for our first quarter of fiscal 2023. Additionally, margins continue to expand at Anthony's. We ended the fourth quarter with a restaurant-level operating margin of 15.2%. Sequentially, Anthony's margins increased 70 basis points from the 14.5% in the third quarter. The margin improvement at Anthony's is a testament to our sales leverage coupled with a stabilization in commodities. We are seeing continued margin expansion in the first quarter with positive same-store sales trends and continued stabilization in food costs. As a reminder, chicken wings make up a meaningful component of our purchasing at Anthony's, and we see this as a tailwind for the remainder of 2023 and expect further margin improvements on a comparative basis. Now turning to BurgerFi. As you saw in our earnings release, we ended the fiscal year with a 7% decrease in same-store sales when compared to the prior year. While the sales recovery that we reached pre-COVID levels in the summer of 2021 had since lagged due to not matching up on the strong tourism experience in that period as a result of Florida being an open market. We are beginning to see an increase in customer satisfaction scores and a decrease in employee turnover, which we believe will translate to improved sales over time. Looking at the first quarter comparative period, sales trends are 2%-3% better than the fourth quarter, and we believe BurgerFi has begun a positive turn in terms of top line and operating margin trends. Additionally, operating margins have begun to improve sequentially. When compared to the third quarter, operating margins grew 280 basis points to 9.4% for the fourth quarter. This is a result of cost management, supply chain tailwinds, and reduced employee turnover at BurgerFi. This progress has continued into Q1 2023, and as a result, we are seeing further margin recovery as our first quarter comes to an end. Now, I'd like to update you on some of the strategic initiatives we are working on to improve sales and operations, starting with BurgerFi. At the end of 2022, we onboarded a new advertising agency to drive brand awareness, capitalizing on BurgerFi's unique attributes of quality fresh ingredients, our chef-inspired offerings, and the market's continued interest in the better burger category. With the help of our new agency, in the fourth quarter, we launched a new BurgerFi app and website which provides guests with a better experience and has enhanced loyalty benefits. In conjunction with this launch, we launched a new secret menu that is exclusively for our loyalty members. Through our loyalty program, we are able to leverage additional consumers' data to grow and elevate the overall guest experience in addition to directly marketing to our members. We believe this will help drive sales. We are also making good progress in rolling out our kiosk program at BurgerFi. As of today, 23 corporate-owned BurgerFis and 17 franchise-owned BurgerFis have kiosks available for ordering. More franchisees continue to follow the benefits of this technology, and we expect adoption to continue. We believe kiosks can be a high-margin channel as they allow us to upsell our guests, ensure order accuracy, and redeploy or reduce our labor. During the fourth quarter, we leaned into value with a limited time bundle called Make It a Meal. This bundle included an entree, a side, and a fountain drink at a discounted price and was successful in terms of attachment and number of transactions. We saw an attachment rate lift of sides and beverages of between 10% and 20%, which translated to an increase in average check. We really saw this as an additive in our delivery channel where we do not typically see beverage attachment, as now there is a value opportunity to add a beverage. We also continue to have fun with our LTO program at BurgerFi to enhance the guest journey. In February, we launched the Barbecue Rodeo Burger, which will be available through mid-April. The Barbecue Rodeo Burger is made from the brand's signature all-natural Angus beef, seared with charred jalapenos, and topped with pepper jack cheese, homemade crispy haystack onions, and a tangy Memphis sweet barbecue sauce. Importantly, we featured the Barbecue Rodeo Burger in this year's Burger Bash, hosted by Emeril Lagasse at the annual South Beach Wine & Food Festival in February, and won the coveted Schweid & Sons The Very Best Burger Award. We are truly proud of our culinary team's hard work and invite you to stop in to your local BurgerFi to try this award-winning burger. Turning to Anthony's, we continue to lean into digital marketing and our loyalty reward program to drive engagement. This has been paying dividends as seen in our increase in same-store sales. Given off-premise orders account for nearly 50% of sales at Anthony's, with 15% coming in via phone orders, we have implemented ConverseNow AI technology across all 60 corporate-owned Anthony's locations. This AI phone answering system undoubtedly helps the brand meet ordering demand, as it can answer 100% of calls while helping to facilitate an average check increase of 10%-12%. It provides faster service and an improved customer experience. Guests can also seamlessly integrate their loyalty numbers to earn points and rewards when ordering with AI. Now turning to development. As of January second, our portfolio consists of 114 BurgerFi restaurants, 25 corporate-owned, 89 franchised, and 660 corporate-owned Anthony's. During the fourth quarter, we opened two franchised BurgerFi restaurants, bringing our fiscal year 2022 openings to 11 restaurants. We also closed one underperforming company-owned Anthony's restaurants and five franchised BurgerFi restaurants closed in the fourth quarter. Looking ahead to 2023, we plan to open 15-20 new restaurants, all of which have been franchised. Included in this number is 2-3 new franchised Anthony's locations in the first quarter of 2023. We have opened two restaurants to date. We kicked off our 2023 development in January with the opening of a BurgerFi franchise in Newark Liberty Airport. BurgerFi's flexible footprint model makes airport locations ideal for introducing the brand to a wider audience, particularly one that values convenience without sacrificing quality. Airports continue to deliver high volumes. Airports do continue to grow as part of our development strategy. We plan to continue strengthening our presence in airports across the country in 2023 with a second location in Fort Lauderdale-Hollywood International Airport opening later this year, with several others under negotiation. There's a broad level of interest in our brand from several airport concessionaires. We see this as a win-win for the brand, the concessionaires, and most importantly, meeting the desire for our products with consumers. Also this year, we are excited to launch our first-ever co-branded Anthony's and BurgerFi location with our franchisee, NDM Hospitality Services in Kissimmee, Florida, with an existing BurgerFi. Our agreement with them calls for three franchise Anthony's locations in Florida over the next two years. The Anthony's brand already has strong awareness in the Orlando market, while this new Kissimmee location addresses an underserved area with strong tourism. The second and third Anthony's location through NDM agreement will both be the freestanding, smaller Anthony's prototype that we have developed. In closing, we have two very high-quality brands that are on trend with consumers and are laser-focused on enhancing operations and driving sales to achieve profitable growth. We further believe we're in the early innings of our growth story with significant white space ahead. Once again, I'd like to thank all of our team members for their tireless efforts and dedication. I'll now turn the call over to our CFO, Mike Rabinovitch, who will provide additional commentary on our fourth quarter 2022 performance. Go ahead, Mike. Thank you, Ian. Good morning, everyone. I'd like to remind you that in July, our board of directors approved the company's change to a 52, 53-week fiscal year ending on the Monday nearest to December 31st of each year in order to improve the alignment of financial and business processes following our acquisition of Anthony's. This change is reflected in that our fiscal fourth quarter ended on January 2nd, as compared to December 31st, 2021. Fourth quarter total revenues were $45.2 million, increasing 29% from $35.1 million for the same quarter last year. Anthony's contributed $33 million to revenues in the period. Shifting to our individual brands results for Q4, the BurgerFi corporate-owned restaurant sales increased 2% to 8.9% for the fourth quarter of 2022, driven by the addition of new corporate-owned restaurants over the last year, offset by a decrease in same-store sales. BurgerFi systemwide same-store sales decreased 9% in the fourth quarter compared to the same period in 2021. For corporate-owned BurgerFi same-store sales decreased 10%, and franchise restaurant same-store sales decreased 8% versus 2021. System-wide sales for BurgerFi in the fourth quarter decreased 5% to $38.7 million, compared to $40.7 million in the year-ago quarter, primarily due to the decline in same-store sales, partially offset by new restaurant unit growth. BurgerFi's restaurant-level operating expenses increased 340 basis points to 90.6% for the quarter, compared to 87.2% in the prior year fourth quarter, primarily due to loss leverage on fixed costs due to the same-store sales decline. Turning specifically to Anthony's, restaurant sales were $33 million in the fourth quarter compared to $22.4 million in the prior year. The increase was driven by a 1% increase in same-store sales when comparing the fourth quarter of 2021 and the inclusion of Anthony's results for three months this year, compared to nine weeks post-acquisition in the prior year period. Regarding restaurant profitability, Anthony's restaurant-level operating expenses increased 120 basis points to 84.8% for the quarter compared to the prior year fourth quarter. As Ian noted, we are beginning to see a stabilization of commodity costs, especially in chicken wing prices. We expect operating margins to continue improving throughout 2023. On a consolidated basis, we reported a net loss of $26.2 million in the fourth quarter compared to a net loss of $117.3 million in the year-ago quarter. This year's net loss included $18.3 million of non-cash impairment charges, $1.5 million of restructuring costs, $1.2 million of legal settlements within general and administrative expenses, and $3.7 million of depreciation and amortization. Adjusted EBITDA in the fourth quarter was $2.6 million in both the fourth quarter of 2021 and 2022. Moving on to the balance sheet. Our cash balance at January 2nd was $11.9 million, compared to $14.9 million at December 31st, 2021. The decrease in cash was the result of term loan repayments and capital expenditures, offset by cash produced by operations. Now, turning to our fiscal year 2023 outlook, we are reiterating our 2023 guidance, which is the following. Total revenue of $175 million-$180 million, which assumes a low single-digit increase in same-store sales. The addition of 15-20 new franchised restaurants, including 2-3 new Anthony's. Quarter to date, we have opened 2 franchised BurgerFis. Adjusted EBITDA of $10 million-$12 million for the year, and we are expecting capital expenditures to be approximately $1 million-$2 million for the full year. Before we wrap up today's call, I'd like to call your attention to announcement we made at the end of February, where we received additional shareholder support as we continue to execute on our growth and development plans. Ophir Sternberg, the executive chairman of BurgerFi and Lionheart Capital founder, along with members of the senior BurgerFi management team, including myself, purchased 1.5 million shares of BurgerFi from an affiliate of L Catterton. Following this purchase, Lionheart, together with its founder, Ophir Sternberg, and the BurgerFi management team, are collectively the largest shareholders in the company. In turn, L Catterton also provided an additional $5.1 million of financing through a junior secured promissory note with 4% interest accrued to maturity in September 2027. In connection with this investment, we expanded our board of directors to seven members and appointed David Heidecorn, Senior Advisor to L Catterton, to serve alongside the existing members of the board. Satisfying the terms of our credit facility highlights our commitment to enhancing our balance sheet and financial flexibility. We are pleased to have the support of long-term, highly respected stockholders such as L Catterton and Lionheart Capital as we continue executing on our growth and development plans. With the covenants agreed to in the company's December bank amendments, coupled with the receipt of the additional financing, the company is in compliance with all of its debt covenants. Additionally, we expect to be in compliance with our covenants and can meet our obligations as they become due over the foreseeable future. I'd like to take a moment and read the forward-looking statements. I'd like to remind everyone that this conference call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be related to BurgerFi's estimates of its future business outlook, liquidity, store opening plans, same-store sales, restaurant operating margin growth plans, prospects or financial results including projected sales, restaurant EBITDA, or financial results from the company's acquisition of Anthony's Coal Fired Pizza & Wings. Forward-looking statements generally can be identified by words such as anticipates, believes, estimates, expects, intends, plans, predicts, projects, and will be, will continue, will likely result in similar expressions. These forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties, which could cause the company's actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the annual report on Form 10-K for the year ended January 2nd, 2023, and those disclosed in other documents that the company files with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to BurgerFi or persons acting on BurgerFi's results are expressly qualified in their entirety by the cautionary statements included in this conference call. The company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these statements and uncertainties, listeners are cautioned not to place undue reliance on such forward-looking statements. The following discussion may contain non-GAAP financial measures. For a discussion and reconciliation of these non-GAAP financial measures, please see the earnings release for the fourth quarter and fiscal year 2022. I would also like to remind everyone that this call will be available via telephonic replay for two weeks starting today. A webcast replay will also be available via the link provided in today's press release, as well as the company's website at www.burgerfi.com. Operator, I'd like to turn it over to you. Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. The first question comes from Peter Saleh with BTIG. Yes, thank you, and good morning, gentlemen. Good morning. This is actually Ben Parente on for Peter this morning. Couple questions from our end. First, I think for probably Ian. If you could just go over the sales performance for both brands and how both of those compare to, say, pre-COVID, 2019 levels, including any, you know, relevant geographies for both brands being, you know, Florida and how that's performing for BurgerFi and then the Northeast for the Anthony's business. Yeah, thanks, Ben. you know, each brand for fourth quarter were sort of negative single digits versus 2019. I think that was your question. Yeah, just some color on that. That trend was improving throughout the year, and that improvement continued for the fourth quarter. Both brands are, as Ian said, negative single digits. I'd say that they're in the mid single digits for Anthony's and maybe more towards the mid to high single digits for BurgerFi. You also asked a sub-part to your question about geography of North and South. We did see the North begin an acceleration in closing that gap in the fourth quarter, and we're extremely pleased to see that momentum strengthening here in the first quarter. Got it. Got it. Appreciate that. I also wanted to ask just around the BurgerFi closure activity. I think there were about five closures in the fourth quarter. Either Mike or Ian, could you maybe speak to what kind of trends you're seeing on the closure front, if you have an expectation for, you know, franchise closures this year? I think more, maybe more qualitatively, if you could just speak to maybe the state of the franchise base for BurgerFi and some of the efforts you've made there over the last couple of years. Yeah, sure. This is Mike. I'll start out with some, and Ian can chime in if I miss anything. You know, COVID had just a profound effect on our, on our restaurant business and not just the company stores, but the franchise network as well. Our franchise network, if you roll back about 18-24 months, it was comprised of mainly single store and two store operators, many of which, from prior years just did not have the financial wherewithal to weather that COVID storm. Many of those closed during 2020 and 2021. A few remained. Some of those less capitalized, you know, franchisees individually or, those that maybe didn't have, you know, a certain level of operating expertise or were in markets where labor availability really impacted their ability to stay open. Some of those continued into the fourth quarter, through 22 and into the fourth quarter as they kind of ran out of cash and closed their businesses. I think the sub-part of your question is, you know, what's our, you know, what are we seeing now and going forward? We think that there's still some franchise locations that are struggling with labor availability, which then translates into their sales and their financial performance. I think that there likely will be a few closures here in 2023. Ian and his team are doing a lot of work to really support them through training, you know, menu, marketing advice, and, you know, from a, from a business perspective, trying to help them out as much as possible. But we stop the line at helping them financially. We don't help them financially, there is that small subset that remains that, you know, that are not financially strong. On the flip side, the remaining franchise network has some of the stronger performers in it, and we're seeing really outsized performance from some of our better operators. It just is a testament to the strength of the brand. Yeah. They continue to open, you know, new locations and look for further locations. You know, the interest, you know, remains very, very strong. Our relationship with our franchisees is very strong. In fact, we have our franchise summit coming up, you know, later in April, which is the first one we've had, you know, for a couple of years, you know, given COVID and what have you. We're looking forward to spending time with them, and as we always do, sharing best practices amongst our franchisees and our corporate locations. Thank you. I certainly appreciate that. Maybe one or two more on my end. In terms of the franchise, Anthony's openings that you expect for this year, I believe you mentioned two or three. Could you give us a little bit more detail on the potential timing of those openings and the location? You know, what part of the country, those openings are planned for? Yeah. The first one, is in Kissimmee, Florida. I expect that to be by June of this year. That's that one. The other one also is here in southern Florida, actually in Miami, more likely to be in the fourth quarter. Certainly. The last one for me, maybe one for Mike, just on the guidance for 23. Is there a particular or specific restaurant-level margin outlook embedded in the guidance? You know, if there is or is not, maybe you could also speak just qualitatively to some of the pushes and pulls on the restaurant-level margin as we're thinking about this year. Commodity inflation, labor inflation, any other, you know, inflationary pressures on the business. If you could just speak on that. I think that'll be it for me then. Sure. Happy to. We haven't explicitly given any, call it, percent of sales or basis point guidance implied within our EBITDA guide for the year. Of course, it's an element of coming out with those estimates. I can certainly speak qualitatively and directionally into what we're expecting to see. At Anthony's, where you have same-store sales increases planned, you gain leverage on your fixed costs. We are seeing, continue to see, and expecting to see for the year expansion on the food side, primarily as a result of the stabilization in input prices, especially chicken wings, but also as a result of the procurement activities that the team has been very busy on over the course of the last year, which includes things like changing out suppliers, and, you know, negotiating with existing suppliers to get the best possible price in order to try to manage price increases to the minimal level possible. We're expecting good things on the top line and on the food side. The wage pressure, though, that we experienced in 2022, from a wages per hour, minimum wage increases, moves necessary to keep top performing restaurant retention. You know, those are going to cause what I would say pressure on the labor line. Overall, expecting greater expansion than contraction. The two tailwinds of top line leverage and food cost expansion, should over encompass the labor rate pressures. Also from a labor standpoint, you know, still challenging, environment when it comes to hiring, you know, managers and team members, but significantly better than it was, you know, this time last year. That too, helps, you know, to stabilize the business, because with the stabilization of managers and team members, you know, the restaurants just become that much more productive, which helps in terms of fighting against that wage inflation rate. For BurgerFi, turning to BurgerFi, the same three elements are at play for BurgerFi, but instead of same-store sales increases, we have been experiencing same-store sales decreases, you know, of mid to high single digits towards the end of the year, really even creeping into the low double digits. Those trends have improved. They've improved sequentially in the first quarter from the fourth quarter, by 2%-3% on a comparative basis. Even though it's improving, it is still negative, and that does compress the leverage available on the BurgerFi fixed costs, whether it be occupancy managers or a certain level of operating expenses. On the commodity side. We are seeing an improvement. As we see BurgerFi sales trends continue to improve throughout the year, when they eclipse and move into positive compares, you would gain back that top line leverage. We have the same three elements at play, but at BurgerFi, the top line leverage will wait until the same-store sales turn positive. All of that inputs and intelligence that, you know, Mike talked about went into as we looked at, putting our plan together for 2023. Okay. Definitely appreciate that color. That does it for me. Thank you both this morning. Thanks, Ben. Thank you. The next question comes from Mike Albanese with EF Hutton. Good morning, Mike. Hey, Mike. How you guys doing? Good. Good. Good. Good. Good. Just one quick question from me. I wanted to ask about your off-premise sales. you know, obviously, you picked up a lot of volume in that space during COVID and have certainly, you know, made efforts to improve your tech stack to kind of hold on to that volume. you know, what are the trends you're seeing across both BurgerFi and Anthony's regarding your off-premise sales and how much of that volume have you really been able to hold on to as things kinda normalize for you? Yeah. First, I'll talk about Anthony's, and Ian may supplement me because he's got some great history with Anthony's before the acquisition. Anthony's historically had a very strong off-premises business prior to COVID, prior to the, you know, institutionalizing of the delivery providers as a service. There was a small delivery component, but a large takeout business. What we've seen in the fourth quarter and then continuing into the first quarter is a restabilization into takeout and dine in as a percentage of our business. We've been able to hold on to a very good percentage, call it 70%-80% of the delivery penetration that we've had. As that mix shifts back into the takeout and the dine in, it's a more profitable equation for us. On BurgerFi, we had, I'd say that the trends are about the same. There's probably a small decrease in the delivery business and an increase in the takeout business. Yeah. Overall, though, not as much of a needle mover as Anthony's that we've seen. Especially with Anthony's having a full bar, you know, the in-restaurant really allows the brand to, you know, exercise all of its attributes to the customer rather than it be handled through a third-party delivery provider, which we all know at times can be challenging. Right. Mm-hmm. Got it. Thanks. That's really helpful. You know, I guess it's more specific to Anthony's. Basically, you know, what you're saying is, you know, if you hold on to that volume, the mix should be more profitable. This is, you know, is this kind of a margin accretive business off-premise sales? No, not necessarily. Okay. You know, there are, you know, different pricing, in terms of some, you know, some of the off-premise business. Certainly as, you know, Mike alluded to that, you know, getting in Anthony's get inside the restaurant provides opportunities, you know, more opportunities for upselling and provides that opportunity for, you know, the very, very profitable alcohol sales. Just to, just to- Yeah Put a wrap on that. The off-prem business is a profitable channel, whether it be the takeout or the delivery providers. We believe it's more profitable for in-store dining and takeout. Got it. The delivery is accretive, it is positive. It's more profitable when it's in store. Understood. Got it. Thank you. Thank you. This concludes the question and answer session. I would like to return the call to Ian Baines for any closing comments. Thank you, Keith. I'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our first quarter and year-end results in May of 2023. Thanks again for joining. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.