Press Release | 09/04/2018
Increases ARC Group Revenue Run Rate to Over $15 Million with Over $1 Million of Net Income
Acquisition Completed Without Equity Dilution and Expected to be Immediately Accretive to Earnings
JACKSONVILLE, Fla., Sept. 04, 2018 (GLOBE NEWSWIRE) — ARC Group, Inc. (OTC: ARCK), the owner, operator and franchisor of the award-winning Dick’s Wings & Grill® concept, announced today that it has completed the acquisition of the Fat Patty’s® franchise. ARC Group has acquired all of the assets of Fat Patty’s for a purchase price of $12.3 million. The Fat Patty’s franchise generated more than $11 million in revenue and $700,000 in net income during 2017.
Fat Patty’s has four locations in operation in West Virginia and Kentucky. It offers a number of specialty burgers and sandwiches, wings, appetizers, salads, wraps, and steak and chicken dinners in a family friendly, casual dining environment. Each restaurant has a full bar and several large, flat-screen televisions.
Seenu G. Kasturi, President and Chief Financial Officer of ARC Group, stated, “This acquisition is consistent with our strategy of building a highly scalable and profitable organization. Importantly, we completed the acquisition on very favorable terms without equity dilution to our shareholders, and expect Fat Patty’s to be immediately accretive to earnings. Moreover, we anticipate ARC Group’s combined annualized revenue run rate will now be in excess of $15 million. Fat Patty’s is a very successful franchise and is the perfect addition to our portfolio of leading restaurant brands. We plan to grow the business at the current locations and we believe we can expand the brand through the addition of new franchises in other states.”
ARC Group, which generated approximately $4,400,000 of revenue and $340,000 of net income in 2017, recently announced a plan to add the Tilted Kilt Pub and Eatery® franchise to its restaurant portfolio as well. The Tilted Kilt® has 47 locations in operation across the United States and Canada and offers 30+ draught and bottled beers along with excellent tasting, high quality menu items served by the World Famous Kilt Girls®. ARC Group is in the process of finalizing a financing plan that will enable it to complete the acquisition of Tilted Kilt within the next few months. The Tilted Kilt franchise generated almost $14 million in revenue during 2017.
Dick’s Wings restaurants are family fun fooderys® where both families and sports fans can go to enjoy a unique restaurant experience from first bite to last call®. Dick’s Wings offers a variety of boldly-flavored menu items highlighted by its award-winning, Buffalo, New York-style chicken wings and hog wings and its Dick’s Blingz® boneless chicken wings, for which it boasts 365 mouth-watering flavors. It also offers customers a variety of fresh sandwiches, burgers, wraps, salads and signature waffle fries. Guests enjoy these menu items in an elevated sports-themed environment that includes flat screen TVs located throughout each restaurant and children’s areas filled with video games and other forms of children’s entertainment.
Dick’s Wings is actively offering franchise opportunities in Florida, Georgia, Alabama, Louisiana, North Carolina and South Carolina. For more information about Dick’s Wings exciting menu offering and locations, and for additional franchising information, please visit www.dickswingsandgrill.com.
About ARC Group, Inc.
ARC Group, Inc., headquartered in Jacksonville, Florida, is the owner, operator and franchisor of the Dick’s Wings & Grill concept. Now in its 23rd year of operation, Dick’s Wings prides itself on its award-winning chicken wings, hog wings and duck wings spun in its signature sauces and seasonings. Dick’s Wings has 15 restaurants in Florida and five restaurants in Georgia. It also has two concession stands at TIAA Bank Field (formerly EverBank Field), home of the NFL’s Jacksonville Jaguars, as well as a concession stand at Jacksonville Veterans Memorial Arena, home of the National Arena League’s Jacksonville Sharks and the ECHL’s Jacksonville Icemen.
Pro Forma Financial Information
The pro forma financial information included in this press release was prepared by management for illustrative purposes only using unaudited financial information for Fat Patty’s that was provided to ARC Group by Fat Patty’s. The pro forma financial information is not necessarily indicative of the financial position or results of operations that would have been realized had ARC Group completed the acquisition of Fat Patty’s on January 1, 2018, nor is it meant to be indicative of any anticipated financial position or future results of operations that ARC Group or Fat Patty’s will experience in the event the acquisition is completed in the future. In addition, the pro forma financial information does not include any pro forma adjustments to reflect any operational efficiencies, cost savings or economies of scale that may be achievable, or the impact of any non-recurring charges and transaction-related costs that result directly from the proposed acquisition. Future results of operations are also subject to risks and uncertainties that could cause such results to differ materially from those reflected in the pro forma financial information. Readers are cautioned not to place undue reliance on the pro forma financial information presented in this press release. See “Safe Harbor Provision” below regarding forward-looking statements presented in this press release.
Safe Harbor Provision
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the Company’s future financial position, business strategy, plans and objectives, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” or “believes” or the negative thereof or any variation thereon or similar terminology or expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from results proposed in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, those factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and its other filings and submissions with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
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