Company: FWRG
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001789940-25-000041
Chunk: 43

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 which are primarily comprised of franchise rights. 

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeDepreciation and amortization$16,557 $12,271 34.9 %

The increase in depreciation and amortization during the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year is primarily related to depreciating and amortizing the assets of NROs and of acquired restaurants, including reacquired rights from franchisees .

Transaction Expenses, Net

Transaction expenses, net include (i) costs incurred in connection with the acquisition of franchise-owned restaurants, (ii) costs related to certain equity offerings, (iii) costs related to restaurant closures, (iv) gains or losses associated with lease or contract terminations and (v) revaluations of contingent consideration payable to previous stockholders for tax savings generated through the use of federal and state loss carryforwards and general business credits that had been accumulated from operations prior to August 2017.

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeTransaction expenses, net$873 $669 30.5 %

24

The increase in Transaction expenses, net during the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year was primarily due to recording a $0.6 million reduction to contingent consideration liability in the first quarter of 2024 offset in part by $0.3 million of debt modification costs incurred in the first quarter of 2024.

Income from Operations  

THIRTEEN WEEKS ENDED(in thousands)MARCH 30, 2025MARCH 31, 2024ChangeIncome from operations$1,113 $12,286 (90.9)%As a percentage of restaurant sales0.4 %5.1 %(4.7)%

Income from operations margin decreased during the thirteen weeks ended March 30, 2025 as compared to the same period in the prior year primarily due to increases in restaurant level expenses as a percent of restaurant sales, primarily (i) food and beverage cost inflation, (ii) labor and other related expense including health insurance, (iii) higher depreciation and amortization expense driven by restaurant growth, (iv) other restaurant operating expenses including utilities, supplies and repairs and maintenance costs, and (v