BT Brands, Inc. Reports Results for the Third Quarter Ending October 2, 2022

Rhea-AI Summary

For the fiscal third quarter ended October 2, 2022, BTBD reported a 76.4% increase in revenue, reaching $4.0 million compared to $2.3 million in 2021, largely due to contributions from recently acquired businesses. However, same-store sales for Burger Time fell by 14.0%, impacted by staffing challenges, leading to limited operational hours. The year-to-date net loss was $224,531, down from a net income of $583,267 in the previous year. Due to inflation, staffing issues, and uncertainties related to acquisitions, the company is withholding its financial forecast for fiscal 2022.

Positive

• Revenue increased by 76.4% to $4.0 million, driven by acquisitions.
• The company ended the quarter with $7.2 million in cash.
• Acquired restaurants contributed $1.9 million in revenue.

Negative

• Same-store sales for Burger Time decreased by 14.0%.
• Income from operations declined to $8,991 from $358,743 year-over-year.
• Year-to-date net loss of $224,531 compared to net income of $583,267 last year.
• Higher-than-expected costs related to the transition of acquired businesses.
• Unrealized loss on investments of $155,220 and a loss on equity in Bagger Dave's of $135,813.
• Inflationary pressures and challenges in employee recruitment and retention.

WEST FARGO, ND / ACCESSWIRE / November 15, 2022 / West Fargo, North Dakota (NASDAQ:BTBD)(NASDAQ:BTBDW), operator of Burger Time, Keegan's Seafood Grille, Pie in the Sky Coffee and Bakery and Village Bier Garten, today reported financial results for the fiscal third quarter ended October 2, 2022.

Key highlights of the Company's financial results include:

• Revenue for the third quarter of 2022 increased 76.4% to $4.0 million from $2.3 in fiscal 2021. The increase during the period resulted from sales from the recently acquired businesses that contributed $1.9 million in revenue.
• Recently acquired restaurants contributed $1.9 million in revenue during the quarter
• The Company ended the quarter with $7.2 million in cash
• Same Store Sales for company-owned Burger Time restaurants decreased by 14.0% for the quarter compared to the prior year's quarter. Staffing challenges also adversely impacted Burger Time, resulting in limited hours and isolated daily store closures during the quarter
• Income from operations for the 39 weeks declined to $8,991 from $358,743 in the year-earlier period
• The year-to-date net loss was $224,531 compared to the net income of $583,267 a year ago

Gary Copperud, the Company's Chief Executive Officer, said, "Our results this quarter reflect continued growth in revenue as a result of our recent acquisitions offsetting a decline in revenues at Burger Time. We also incurred higher-than-expected costs related to transitioning the acquired businesses. Results reflect an unrealized loss on investments of $155,220 and a loss on the equity in Bagger Dave's of $135,813. The Company faced inflationary pressures on costs and increased challenges in recruiting and retaining employees. I'm excited about all three of our recent restaurant acquisitions, which we expect will meet our target returns and contribute to a doubling of sales for fiscal 2022 compared to 2021."

Fiscal 2022 Outlook: Because of the uncertain nature of the performance of recent acquisitions and the evolving character of our Company and because of continuing uncertainty surrounding public health concerns and the aftermath, impacts of supply chain constraints, and the current inflationary environment, the Company is not, at this point, providing a financial forecast for fiscal 2022.

About BT Brands Inc.: BT Brands, Inc. (Nasdaq: BTBD BTBDW) BT Brands owns and operates twelve restaurants, including eight Burger Time restaurants in the North Central region of the United States, a Dairy Queen fast-food franchised location in suburban Minneapolis, Minnesota. The Company owns Keegan's Seafood Grille, a dine-in restaurant near Clearwater, Florida, and Pie In The Sky Coffee and Bakery, a casual dining coffee shop and bakery located in Woods Hole, Massachusetts. Our Burger Time restaurants feature a variety of burgers and other affordable foods, sides, and soft drinks. Keegan's Seafood Grille has operated in Indian Rocks Beach, Florida, for more than thirty-five years and offers a variety of traditional fresh seafood items for lunch and dinner. The menu at Keegan's includes beer and wine. Pie In The Sky features an array of fresh baked goods, freshly made sandwiches, and our locally roasted coffee. Our revenues are derived from food and beverages at our restaurants; retail goods such as apparel, private-labeled "Keegan's Hot Sauce," and other souvenir items account for an insignificant portion of our income. Following the end of the quarter, we acquired the Village Bier Garten located in Cocoa, Florida.

Forward-Looking Statements Disclaimer: This press release contains forward-looking statements within the meaning of federal securities laws. The words "intend," "may," "believe," "will," "should," "anticipate," "expect," "seek," and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause the Company's actual results to differ materially from results expressed or implied by the forward-looking statements. Such risks and uncertainties include, among other things, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company'sCompany's financial performance, and its cash flows from operations, general economic conditions, which could adversely affect the Company's results of operations and cash flows. These risks also include such factors as the disruption to our business from public health issues, including the coronavirus pandemic and its impact on our operations, which may vary depending on the duration and extent of the effects of governmental actions and customer behavior in response, the impact and duration of staffing constraints at our restaurants, the impact of supply chain constraints and the current inflationary environment, the uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants, delays in developing and opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or shortages in raw food products, and other matters discussed under the Risk Factors section of BT Brands Annual Report on Form 10-K for the fiscal year ended March 17, 2022, filed with the SEC, and other filings with the SEC. BT Brands disclaims any obligation or duty to update or modify these forward-looking statements.

FINANCIAL TABLES FOLLOW:

BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		39 Weeks Ended October 2, 2022				39 Weeks Ended October 3, 2021				13 Weeks Ended October 2, 2022				13 Weeks Ended October 3, 2021
SALES		$	9,621,996			$	6,604,554			$	4,023,920			$	2,280,999
COSTS AND EXPENSES
Restaurant operating expenses
Food and paper costs			3,637,814				2,580,224				1,604,858				944,171
Labor costs			3,122,867				1,794,499				1,336,039				607,780
Occupancy costs			803,792				436,196				367,872				132,542
Other operating expenses			577,035				355,024				248,383				102,943
Depreciation and amortization expenses			351,084				173,799				168,855				60,405
General and administrative expenses			1,035,639				295,397				288,921				74,415
Total costs and expenses			9,528,231				5,635,139				4,014,929				1,922,256
Income (loss) from operations			93,765				969,415				8,991				358,743
UNREALIZED LOSS ON MARKETABLE SECURITIES			(155,220	)			-				(74,982	)			-
INTEREST AND OTHER INCOME			55,836				-				46,364				-
INTEREST EXPENSE			(88,099	)			(161,148	)			(33,638	)			(32,916	)
EQUITY IN NET LOSS OF AFFILIATE			(135,813	)			-				(121,641	)			-
INCOME (LOSS) BEFORE TAXES			(229,531	)			808,267				(174,906	)			325,827
INCOME TAX (EXPENSE) BENEFIT			5,000				(225,000	)			-				(90,000	)
NET INCOME (LOSS)		$	(224,531	)		$	583,267			$	(174,906	)		$	235,827
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted		$	(0.03	)		$	0.14			$	(0.04	)		$	0.06
WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted			6,459,223				4,047,506				6,461,118				4,047,506

BT BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

		October 2, 2022
		(Unaudited)				January 2, 2022
ASSETS
CURRENT ASSETS
Cash		$	7,165,704			$	12,385,632
Marketable securities			653,399				-
Receivables			57,603				72,251
Inventory			150,814				79,510
Prepaid expenses and other current assets			50,375				27,186
Total current assets			8,077,895				12,564,579
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET			3,541,493				1,592,338
OPERATING LEASES RIGHT-OF-USE ASSETS			1,562,672				-
INVESTMENTS			1,428,187				75,000
GOODWILL			488,431				-
INTANGIBLE ASSETS			545,500				-
OTHER ASSETS, net			280,412				273,810
Total assets		$	15,924,591			$	14,505,727
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	354,486			$	291,973
Current maturities of long-term debt			169,504				169,908
Current operating lease obligations			217,744				-
Accrued expenses			490,627				254,341
Income taxes payable			8,000				209,088
Total current liabilities			1,240,361				925,310
LONG-TERM DEBT, LESS CURRENT PORTION			2,698,030				2,833,064
NONCURRENT LEASE OBLIGATIONS			1,353,702				-
DEFERRED INCOME TAXES			51,510				119,000
Total liabilities		$	5,343,603			$	3,877,374
SHAREHOLDERS' EQUITY :
Preferred stock, $.001 par value, 2,000,000 shares authorized, no shares outstanding at October 2, 2022 and January 2, 2022			-				-
Common stock, $.002 par value, 50,000,000 authorized, 6,461,118 shares issued and outstanding at October 2, 2022 and 6,447,506 issued and outstanding at January 2, 2022			12,922				12,895
Additional paid-in capital			11,392,835				11,215,696
Accumulated deficit			(824,769	)			(600,238	)
Total shareholders' equity			10,580,988				10,628,353
Total liabilities and shareholders' equity		$	15,924,591			$	14,505,727

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the 39-week periods-						Common Stock				Additional				Accumulated
		Shares				Amount				Paid-in Capital				(Deficit)				Total
Balances, January 2, 2022			6,447,506			$	12,895			$	11,215,696			$	(600,238	)		$	10,628,353
Stock-based compensation			-				-				102,300				-				102,300
Shares issued in exercise of warrants			13,612				27				74,839				-				74,866
Net loss			-				-				-				(224,531	)			(224,531	)
Balances, October 2, 2022			6,461,118			$	12,922			$	11,392,835			$	(824,769	)		$	10,580,988
		Shares				Common Stock Amount				Additional Paid-in Capital					Accumulated (Deficit)				Total
Balances, January 3, 2021			4,047,502			$	8,095			$	497,671			$	(1,208,089	)		$	(702,323	)
Shares issued for fractional holding			4				- #				-				-				-
Net income			-				-				-				583,267				583,267
Balances, October 3, 2021			4,047,506			$	8,095			$	497,671			$	(624,822	)		$	(119,056	)
For the 13-week periods-		Shares				Common Stock Amount				Additional Paid-in Capital					Accumulated (Deficit)				Total
Balances, July 3, 2022			6,461,118			$	12,922			$	11,363,935			$	(649,863	)		$	10,726,994
Stock-based compensation			-				-				28,900				-				28,900
Net loss			-				-				-				(174,906	)			(174,906	)
Balances, October 2, 2022			6,461,118			$	12,922			$	11,392,835			$	(824,769	)		$	10,580,988
		Shares				Common Stock Amount				Additional Paid-in Capital					Accumulated (Deficit)				Total
Balances, July 4, 2021			4,047,506			$	8,095			$	497,671			$	(860,649	)		$	(354,883	)
Net income			-				-				-				235,827				235,827
Balances, October 3, 2021			4,047,506			$	8,095			$	497,671			$	(624,822	)		$	(119,056	)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

			39 Weeks Ended
			October 2, 2022				October 2, 2022
Cash Flows from Operating Activities
Net Income (Loss)		$	(224,531	)		$	583,267
Adjustments to reconcile net income (loss) to net cash provided by operating activities-
Depreciation and amortization of franchise cost			306,584				173,799
Amortization of intangible assets			44,500				-
Amortization of debt issuance costs included in interest expense			4,050
Deferred taxes			(67,490	)			58,000
Stock-based compensation			102,300				-
Unrealized loss on marketable securities			155,220				-
Loan forgiveness			(13,750				-
Loss on equity method investment			135,813				-
Changes in operating assets and liabilities, net of acquisitions -
Receivables			14,648				(12,721	)
Inventory			(15,755	)			(8,867	)
Prepaid expenses and other current assets			(23,189	)			(29,195	)
Accounts payable			62,512				148,520
Accrued expenses			204,600				(116,136	)
Income taxes payable			(201,088	)			79,110
Net cash provided by operating activities			484,504				931,332
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of net assets of Keegan's Seafood Grille			(1,150,000	)			-
Acquisition of net assets of Pie In The Sky Coffee and Bakery			(1,159,600	)
Acquisition of net assets of Village Bier Garten			(690,000	)			-
Investment in Bagger Dave's Burger Tavern, Inc.			(1,260,000	)			-
Purchase of property and equipment			(349,739	)			(85,821	)
Investment in related Company			(229,000	)			-
Purchase of marketable securities			(808,619	)			-
Other assets			(6,602	)			-
Net cash used in investing activities			(5,653,560	)			(85,821	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt			-				3,107,100
Principal payment on long-term debt			(125,738	)			(3,113,521	)
Proceeds from exercise of common stock warrants			74,866				-
Payment of debt issuance costs			-				(49,699	)
Payment of deferred offering costs			-				(31,823	)
Net cash used in financing activities			(50,872	)			(87,943	)
CHANGE IN CASH			(5,219,928	)			757,568
CASH, BEGINNING OF PERIOD			12,385,632				1,321,244
CASH, END OF PERIOD		$	7,165,704			$	2,078,812

SOURCE: BT Brands, Inc.

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FAQ

What were BTBD's revenue figures for the third quarter of 2022?

BTBD reported a revenue of $4.0 million for the third quarter of 2022, representing a 76.4% increase from the previous year.

How did same-store sales perform for Burger Time in Q3 2022?

Same-store sales for Burger Time decreased by 14.0% in the third quarter of 2022 compared to the same quarter in 2021.

What was BTBD's net loss for the year-to-date period in 2022?

BTBD reported a year-to-date net loss of $224,531 for 2022, down from a net income of $583,267 in the previous year.

What cash position did BTBD have at the end of Q3 2022?

At the end of the third quarter of 2022, BTBD had $7.2 million in cash.

Is BTBD providing a financial forecast for fiscal 2022?

BTBD is not providing a financial forecast for fiscal 2022 due to uncertainties regarding recent acquisitions and external market conditions.