Company: FWRG
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001789940-25-000010
Chunk: 95

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 7
Chunk 95
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 operations including deleveraging of occupancy expenses, (ii) increase in depreciation and amortization attributed primarily to locations opened and acquired in 2024 and (iii) the increase in interest expense associated with increased borrowings to fund acquisitions.

Restaurant Level Operating Profit and Restaurant level Operating Profit Margin

FISCAL YEAR(in thousands)20242023ChangeRestaurant level operating profit$201,761 $175,658 $26,103 14.9 %Restaurant level operating profit margin20.1 %20.0 %0.1%

Restaurant level operating profit margin during 2024 increased as compared to 2023 primarily due to (i) favorable food and beverage costs as a percent of sales, (ii) favorable labor and other related expenses as a percent of sales and (iii) acquired restaurants. This was partially offset by the deleverage of occupancy expenses.

Restaurant level operating profit during 2024 increased as compared to 2023 primarily due to (i) menu price increases and (ii) revenue from the increase in the number of restaurants. This was partially offset by the increase in (i) operating costs and expenses driven by our restaurant growth and (ii) deleverage of occupancy expenses.

Adjusted EBITDA and Adjusted EBITDA Margin

FISCAL YEAR(in thousands)20242023ChangeAdjusted EBITDA$113,836 $99,483 $14,353 14.4 %Adjusted EBITDA margin11.2 %11.2 %—%

The increase in Adjusted EBITDA and consistent Adjusted EBITDA margin during 2024 as compared to 2023 was primarily due to the increase in (i) restaurant level operating profit and (ii) restaurant level operating profit margin. This was partially offset by the increase in general and administrative expenses, mainly due to the increase in compensation expense.

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Non-GAAP Financial Measure Reconciliations

Adjusted EBITDA and Adjusted EBITDA margin - The following table reconciles Net income (Loss) and Net income (loss) margin, the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted EBITDA margin for the periods indicated:

.FISCAL YEAR(in thousands)202420232022Net income (loss)$18,925 $25,385 $6,907 Depreciation and amortization57,715 41,223 34,230 Interest expense12,640 8,063 5,232 Income