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Sep 17, 2021
The DI Wire Triton Affiliate Tasty Brands Reports 2Q21 Portfolio Performance Update Tasty Brands LP, an affiliate of Los Angeles-based private equity firm Triton Pacific Capital Partners, reported its financial results for the second quarter of 2021. September 17, 2021 DIRECTORY SPOTLIGHT Tasty Brands LP, an affiliate of Los Angeles-based private equity firm Triton Pacific Capital Partners, reported its financial results for the second quarter of 2021. Tasty Brands LP is a multi-brand restaurant franchisee within the quick service restaurant industry. Its portfolio companies include Tasty Hut LLC, a Pizza Hut franchisee and Tasty King LLC, a Burger King franchisee. As of July 14, 2021, the company owned 227 restaurants, including 66 Burger King and 161 Pizza Hut locations. Highlights for the second quarter of 2021: Total restaurant sales increased 35.5 percent to $52.8 million compared to $39 million in the second quarter of 2020. Year-to-date, restaurant sales totaled $124.7 million, an increase of 47.9 percent compared to $84.3 million during the prior year’s period. Adjusted restaurant-level EBITDA totaled $5.7 million in the second quarter of 2021, compared to $4.2 million for the same period last year. Year-to-date, adjusted restaurant-level EBITDA totaled $15.8 million, compared to $6.6 million in the prior year, a 139 percent increase. Adjusted Restaurant-Level EBITDA margin was 10.7 percent of restaurant sales and decreased 14 basis points from the second quarter of 2020, primarily driven by increased labor expense due to inflationary pressures present in the broader industry, the company said. Adjusted income from operations totaled $3.5 million in the second quarter of 2021, compared to $2.4 million in the second quarter of 2020, reflecting a margin of 6.6 percent of total restaurant sales. Year-to-date, adjusted income from operations increased 293 percent from $2.7 million in 2020 to $10.4 million in 2021. Administrative general and administrative expenses were higher by $0.4 million, but at 3.1 percent of revenue, flat to the second quarter of 2020, the company said. Loan-to-value for consolidated restaurant operations was 7 percent. “Tasty Brands’ leadership did an excellent job driving sustained top-line sales while managing food cost, labor, and other restaurant-level expenses through the quarter,” the company said. “With inflationary pressures becoming visible across the U.S. economy, Tasty Brands’ portfolio companies undertook detailed pricing analysis which is expected to result in targeted price increases implemented in [the third quarter], demonstrating the ability of [quick service restaurant] businesses to manage well relative to other businesses in an inflationary environment.” Tasty Brands said that its portfolio companies have taken steps to further build sales, including expanded hours of operation in many restaurants towards pre-pandemic levels which has led to an increase in breakfast and late-night sales for the Burger King business. Within its Pizza Hut business, the company said that the re-opening of dining rooms in many markets has resulted in “the continued momentum in sales compared to pre-pandemic levels.” The company said that it declared a $0.4375 per share distribution for the second quarter of 2021. According to public filings with the Securities and Exchange Commission, Tasty Brand LP’s Regulation D private placement offering launched in early 2017 and seeks to raise $150 million in investor equity. Triton Pacific, founded in 2001, is a private equity firm offering investment programs for accredited investors and focuses on investing in established companies across multiple sectors.