Flanigan's Enterprises, Inc. (BDL): A Diversified Restaurant and Liquor Store Operator Delivering Steady Performance

Published on September 24, 2024 | Ticker: BDL

Flanigan's Enterprises, Inc. (NYSE American: BDL) is a diversified operator of restaurants and package liquor stores in South Florida. The company has a long history of serving the local community, with a focus on providing high-quality dining experiences and a wide selection of alcoholic beverages.

Business Overview

Flanigan's Enterprises operates a total of 32 units, consisting of 19 restaurants, 9 package liquor stores, and 4 combination restaurant/package liquor stores. The company also franchises an additional 5 units, including 2 restaurants and 3 combination restaurant/package liquor stores. The restaurants operate under the "Flanigan's Seafood Bar and Grill" or "Flanigan's" service marks, while the package liquor stores operate under the "Big Daddy's Liquors" or "Big Daddy's Wine & Liquors" service marks.

Flanigan's Enterprises generates revenue from several sources, including restaurant food and bar sales, package store sales, franchise-related revenues, rental income, and other operating income. For the twenty-six weeks ended March 30, 2024, the company reported total revenue of $93,209,000, with restaurant food sales accounting for $55,711,000, restaurant bar sales at $15,203,000, and package store sales of $20,742,000.

Quarterly Performance

In the second quarter of fiscal year 2024, Flanigan's Enterprises reported strong financial results. Total revenue increased by 9.74% to $48,069,000, compared to $43,803,000 in the same period of the prior year. This growth was driven by a 8.26% increase in restaurant food sales, a 6.31% increase in restaurant bar sales, and a 17.11% increase in package store sales.

The company's net income for the second quarter of fiscal year 2024 was $2,524,000, up 15.89% from $2,178,000 in the same period of the prior year. This increase was primarily due to the higher revenue, partially offset by higher operating costs and expenses, including increased payroll, consultant fees, and general cost inflation.

For the first half of fiscal year 2024, Flanigan's Enterprises reported total revenue of $93,209,000, up 8.81% from $85,664,000 in the same period of the prior year. Net income for the first six months of fiscal 2024 was $3,118,000, a 2.16% increase from $3,052,000 in the first half of fiscal 2023.

Liquidity and Capital Resources

As of March 30, 2024, Flanigan's Enterprises had cash and cash equivalents of $22,002,000, a decrease from $25,532,000 as of September 30, 2023. The decrease was primarily due to the payment of $3.92 million for insurance premiums and the completion of the construction of the company's restaurant in Hollywood, Florida.

The company believes that its current cash availability and positive cash flow from operations will be sufficient to fund its operations and planned capital expenditures for at least the next twelve months. Flanigan's Enterprises had long-term debt (including the current portion) of $22,501,000 as of March 30, 2024, down from $23,128,000 as of September 30, 2023.

Risks and Challenges

Flanigan's Enterprises faces several risks and challenges, including the ongoing impact of the COVID-19 pandemic, rising food and labor costs, and the highly competitive nature of the restaurant and liquor store industries. The company has taken steps to mitigate these risks, such as implementing price increases, diversifying its supply chain, and focusing on operational efficiency.

Outlook and Guidance

The company has not provided specific financial guidance for the remainder of fiscal year 2024. However, management has indicated that they expect continued growth in both restaurant and package store sales, driven by increased customer traffic and the recent opening of new locations. Flanigan's Enterprises also plans to continue investing in its operations, with a focus on renovations and upgrades to existing facilities.

Conclusion

Flanigan's Enterprises is a well-established operator of restaurants and package liquor stores in South Florida, with a diversified revenue stream and a focus on delivering high-quality products and services to its customers. The company's strong financial performance in the first half of fiscal year 2024, coupled with its prudent management of liquidity and capital resources, position it well to navigate the challenges facing the industry. While risks remain, Flanigan's Enterprises appears poised to continue its steady growth and deliver value to its shareholders.

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