Muscle Maker Inc. (GRIL:NASDAQ) recently reported top-line revenue of over US$52.8 Million for May 2023. This initial statement was garnered from data as of May 31, 2023, and management's initial review of operations and financial results as of such date
The company has also named David Errington to its Board of Directors. The company made the appointment after Sadot LLC, the company's wholly-owned subsidiary, generated a net income of US$9.9 million for Muscle Maker, which triggered the final three board nominations by Aggia LLC FZ, as outlined in a service agreement finalized on November 18, 2022.
As part of the agreement, Sadot LLC engaged Aggia to perform services related to the purchase and sale of physical food commodities. As Sadot generated certain net income targets, Aggia gained the right to nominate up to eight directors and be issued shares of common stock.
Once the final three board nominations are finalized, all eight positions will have been filled, and the number of MMI board directors will reach 15.
Mr. Errington marks the second nomination of the three. He has more than 20 years of experience in the sustainability and environmental sector, including 13 as part of the Gulf Cooperation Council in regions including KSA, Bahrain, Qatar, Kuwait, UAE, and Oman.
Working previously as the Head of Engineering at Muscle Maker, he carried out research and development activities related to global sustainability and recycling, spearheaded the development and management of strategic partnerships and joint ventures, and was responsible for a strategic review of sustainable and innovative technologies.
MMI CEO Michael Roper said of the appointment, "We are thrilled to welcome David to the Muscle Maker board," and that his "expertise in the sustainability and environmental sector, particularly in the GCC region, will bring valuable insights as MMI continues to grow into a global, food-focused organization."
According to its website and as reported by Streetwise Reports, Muscle Maker, Inc. moved from "a consumer-focused, U.S. restaurant business into a global, food-focused organization with two distinct business units." Its largest operating unit is Sadot LLC, which is an international agri-foods company trading and shipping food and feed items like soybean meal, wheat, and corn.
Sadot LLC was formed in partnership with Aggia LLC FZ, a Dubai-based international consulting firm that provides services to companies that operate in the global food supply chain.
MMI also continues to operate its limited collection of over 50 restaurants, including Pokémoto Hawaiian Poké & Boba Tea and Muscle Maker Grill. It also offers a subscription, fresh-prep meal service, Superfit Foods, which has over 30 points of distribution as well as in-home and national delivery.
Exciting Growth Opportunities
With involvement in both restaurant franchises and global bulk agriculture trade, MMI offers something for investors looking to access both markets. The company is driving growth with more than 50 franchise units of the Pokémoto concept, as well as a continued presence in the healthier-for-you segment.
Its website reiterates its core focus of sourcing and providing healthier foods, stating that "MMI continues to grow in size, diversity of operations, as well as in human and financial capital, but the principles that guided us when we began remain the same."
CEO Michael Roper explained that, as well as the company's trading activities, it recently acquired a "5,000-acre grain and fruit farm in Zambia, which we believe represents the next step of building the foundations for growth and diversification into additional verticals in the supply chain."
The farm is expected to generate revenue by the end of this year's harvest season.
Technical Analyst Clive Maund wrote of the company: "Basically, what happened with Muscle Maker over the past two months is that, after big gains, it had gotten tired and needed to take a rest," going on to state that "as shown by the MACD indicator, it is now good and rested and believed to be ready to advance anew."
In a research report, Alliance Global Partners found the company "reported sales in line with our estimate, with the company reporting positive EBITDA of US$2.4M."
Zacks Small-Cap Research believes that the company's shares could be worth US$5 a share. It reports that Muscle Maker "has a well-seasoned management team with experience in M&A, SEC regulations, strategic planning, as well as restaurant development with experience at national chains such as Quiznos, Taco Bueno, Dickey's BBQ, and Rocky Mountain Chocolate Factory." It also reported that the company has around US$6.4 million in cash on the balance sheet and US$947,000 in debt as of March 31, 2023.
Zacks believes the creation of Sadot is "expected to generate significantly higher revenues and net income for the company in 2023 and beyond."
Alliance Global Partners agreed, modeling Sadot revenues of US$960 million in 2024.
Streetwise Ownership Overview*Ownership and Share Structure
According to Reuters, as of May 23, 8.43% of Muscle Maker's stock is held by management and insiders. Director Paul L. Menchik has 0.37%, with 0.12 million shares. Director Jeff Carl has 0.26%, with 0.08 million. Director Stephan A. Spanos has 0.25%, with 0.08 million, and Major Malcolm Frost has 0.23%, with 0.07 million. Other insider owners include Southall Alfred BIII Southall, Phillip Balatsos, Kevin James Mohan, and Michael John Roper.
15.40% is with strategic investors. AGGIA LLC FZ has 8.85%, with 2.85 million shares.
5.69% is with institutions. Catalytic Holdings LLC has 3.51%, with 1.13 million shares. Thoroughbred Diagnostics' has 3.04%, with 0.98 million, and Joey Giamichael of Thoroughbred Diagnostics has 5.04%, with 1.62 million.
The Vangaurd Group Inc. has 1.67%, with 0.54 million. Geode Capital Management LLC has 0.99%, with 0.32 million. BNY Mellon Asset Management has 0.53%, with 0.17 million, and Citadel Advisors LLC has 0.51%, with 0.16 million.
Other institutional investors include Walleye Capital, Northern Trust, and Virtu Americas LLC.
The rest is in retail.
Headquartered in Fort Worth, Texas, Muscle Maker has a market cap of US$42.2 million and has 32.1 million shares outstanding.
It trades at a 52-week range of US$0.30 and US$1.52.
