BT Brands Reports 2023 Results

Rhea-AI Summary

BT Brands, Inc. (BTBD) reports financial results for 2023 with a 15.1% revenue increase but a net loss of $887,368. The company's equity in the loss of Bagger Dave’s was $347,081, affecting restaurant-level adjusted EBITDA. Despite challenges, plans for rebranding and profitability improvements are underway.

Insights

Financial Analyst

The reported net loss of $887,368, which translates to a loss of $0.14 per share, is a significant figure that requires attention. The decline in restaurant-level adjusted EBITDA to 6.2% indicates a potential concern regarding operational efficiency and profitability. The equity loss from Bagger Dave's, although a non-cash charge, still represents a substantial portion of the total loss, which could signal underlying issues with this investment. The cash and short-term investments position of $6.9 million provides some liquidity cushion, but the company's ability to manage expenses and achieve economies of scale, as mentioned by the CEO, will be important in mitigating the impact of general and administrative costs.

The mention of inflationary pressures and increased labor costs reflects broader economic challenges that many businesses are facing. The company's proactive stance on rebranding and aiming for profitability with minimal investment is a strategic move that could benefit the company if executed effectively. However, the decision not to provide a financial forecast due to uncertainties is a conservative approach that may be seen as a lack of confidence by some investors.

Market Research Analyst

The 15.1% increase in total revenues is a positive development, indicating that the company is experiencing growth in sales. This growth, however, must be weighed against the net loss reported, suggesting that the company is selling more but not necessarily translating that into bottom-line profitability. The rebranding efforts for Bagger Dave's and the focus on improving the profitability of Florida locations show that the company is attempting to revitalize its brand and operations. These initiatives may be well-received by the market if they lead to a turnaround in performance.

It's also worth noting the company's mention of recent moderation in inflationary pressures which could be a positive signal for future cost management. The lack of a financial forecast, while prudent in uncertain times, may affect investor sentiment as it introduces ambiguity regarding future performance. Investors typically seek transparency and guidance to gauge potential risks and returns.

Economist

The company's situation reflects the broader economic conditions, such as inflation and labor cost increases, which are impacting the restaurant industry as a whole. The ability to manage these costs effectively will be key to the company's success moving forward. The non-recurring expenses related to investment activities, such as the contested proxy solicitation, are a reminder of the additional costs public companies may incur. These costs can have a material impact on financials, particularly for smaller companies like BT Brands.

From an economic perspective, the company's strategy to expand its revenue base to offset compliance and administrative expenses is sound. However, the execution of this strategy in the current economic climate will be challenging. The company's decision not to provide a financial forecast suggests caution in an unpredictable market, which may be a rational approach but also indicates the potential volatility and uncertainty the company faces.

Earnings Conference Call at 4:15 Eastern Today

WEST FARGO, N.D.--(BUSINESS WIRE)-- BT Brands, Inc. (Nasdaq: BTBD and BTBDW), today reported its financial results for the 52 weeks ending December 31, 2023, and for the 13 weeks then ended. The results include our 40% share of Bagger Dave’s Burger Tavern results with its six locations. BT Brands currently operates a total of seventeen restaurants comprising the following:

• Seven Burger Time locations and one Dairy Queen franchise are in the North Central region of the United States, collectively (“BTND”).
• Bagger Dave’s Burger Tavern, Inc., a 40%- %-owned affiliate operating six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“Bagger Dave’s”).
• Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”).
• Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”).
• Village Bier Garten, in Cocoa, Florida (“VBG”).

Highlights and recent activities include:

• Total revenues for 2023 increased 15.1% over 2022 to $11.1 million.
• Net loss attributable to common shareholders was $887,368, or $.14 per share in 2023.
• For the year, restaurant-level adjusted EBITDA (a non-GAAP measure) declined to 6.2%.
• Our equity in the loss of Bagger Dave’s was $347,081.
• On December 31, 2023, we had $6.9 million in cash and short-term investments.

Gary Copperud, the Company’s Chief Executive Officer, said, “Certainly, the loss for the year was disappointing. Our share of the Bagger Dave loss of $347,081 is a noncash charge representing 35% of our total loss for the year. Our two Florida locations continued to perform below our expectations; however, recent results have been more encouraging. We are in the midst of a significant effort to rebrand the Bagger locations with a different concept, and we are confident that we can achieve profitability in this entity with minimal investment. Improving the profitability of our Florida businesses continues to be a significant focus of our current activity. We also incurred approximately $100,000 in non-recurring expenses related to our investment activities, including the contested proxy solicitation at Noble Roman. As a public company, we bear the burden of general and administrative costs related to compliance and other public company activities; our goal is to spread these expenses over a larger revenue base in the future. We are seeing some moderation of inflationary pressure on our cost of sales inputs; however, we continue to face challenges, and the hourly cost of labor has increased significantly. As we consider the balance of 2024, we are focused on achieving profitability consistent with our expectations. We are in the early stages of reviewing several opportunities that could contribute significantly to improved results."

Fiscal 2024 Outlook: Because of the evolving character of our Company and because of continuing uncertainty surrounding public health concerns, impacts of supply chain constraints, and the current inflationary environment, the Company is not providing a financial forecast for fiscal 2023 and 2024.

Conference Call: Management will host a conference call to discuss the second quarter financial results today, November 15, 2023, at 4:30 p.m. ET. Kenneth Brimmer, Chief Financial Officer, and Gary Copperud, Chief Executive Officer, will host the call.

Dial: 877-344-7967 Secondary, international dial-in: +1-213-992-4618 The conference call can be accessed live over the phone by dialing the access code. In addition, an archive of the call will be available on the Company’s corporate website page after the call has concluded. Website www.itsburgertime.com.

About BT Brands Inc.: BT Brands, Inc. (BTBD and BTBDW) owns and operates a fast-food restaurant chain called Burger Time with locations in North and South Dakota and Minnesota and Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts, the Village Bier Garten in Cocoa, Florida, and Keegan’s Seafood Grille near Clearwater, Florida. BT Brands is seeking acquisitions within the restaurant industry.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding guidance relating to net income and net income per share, expected operating results, such as revenue growth and earnings, anticipated levels of capital expenditures for the 2024 fiscal year, current or future volatility in the credit markets and future market conditions, our belief that we have sufficient liquidity to fund our business operations during the next fiscal year, market position, financial results and reserves, and strategy for risk management.

Any forward-looking statement in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
										UNAUDITED
		52 Weeks Ended				52 Weeks Ended,				13 Weeks Ended,				13 Weeks Ended,
		December 31, 2023				January 1, 2023				December 31, 2023				January 1, 2023
SALES		$	14,076,653			$	12,601,169			$	2,998,234			$	2,979,173
COSTS AND EXPENSES
Restaurant operating expenses
Food and paper costs			5,597,167				4,854,321				1,248,873				1,216,507
Labor costs			5,458,351				4,126,837				1,333,494				1,003,970
Occupancy costs			1,312,717				1,147,744				466,854				343,952
Other operating expenses			841,894				780,564				237,930				200,001
Depreciation and amortization			598,540				449,038				127,739				101,482
General and administrative			1,650,755				1,633,829				362,736				489,452
Gain on sale of assets			(310,182	)			-				3,506				-
Total costs and expenses			15,149,242				12,992,333				3,781,132				3,355,364
Income (loss) from operations			(1,072,589	)			(391,164	)			(782,898	)			(376,191	)
GAIN (LOSS) ON MARKETABLE SECURITIES			80,139				(86,422	)			46,955				28,798
INTEREST AND OTHER INCOME			300,923				125,529				177,293				69,693
OTHER INCOME (EXPENSE)			103,848				(80,649	)			-				-
INTEREST EXPENSE			(97,608	)			(114,766	)			(23,751	)			(26,667	)
EQUITY NET LOSS OF AFFILIATE			(347,081	)			(194,813	)			(92,809	)			(59,000	)
LOSS BEFORE TAXES			(1,032,368	)			(742,285	)			(675,210	)			(363,367	)
INCOME TAX BENEFIT			145,000				180,000				63,000				-
NET LOSS		$	(887,368	)		$	(562,285	)		$	(612,210	)		$	(363,367	)
NET LOSS PER COMMON SHARE -		$	(0.14	)		$	(0.09	)		$	(0.10	)		$	(0.06	)
WEIGHTED AVERAGE SHARES			6,261,631				6,455,379				6,261,631				6,261,631

BT BRANDS, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
	December 31, 2023				January 1, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,300,446			$	2,150,578
Marketable securities		1,392,060				5,994,295
Receivables		28,737				76,948
Inventory		201,333				158,351
Prepaid expenses and other current assets		47,246				37,397
Assets held for sale		258,751				446,524
Total current assets		7,228,573				8,864,093
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET		3,247,013				3,294,644
OPERATING LEASES RIGHT-OF-USE ASSETS		1,789,285				2,004,673
INVESTMENTS		1,022,806				1,369,186
DEFERRED INCOME TAXES		206,000				61,000
GOODWILL		671,220				671,220
INTANGIBLE ASSETS, NET		395,113				453,978
OTHER ASSETS, NET		49,202				50,903
Total assets	$	14,609,212			$	16,769,697
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	555,247			$	448,605
Broker margin loan		115,899				791,370
Current maturities of long-term debt		183,329				167,616
Current operating lease obligations		215,326				193,430
Accrued expenses		480,289				532,520
Total current liabilities		1,550,090				2,133,541
LONG-TERM DEBT, LESS CURRENT PORTION		2,269,771				2,658,477
NONCURRENT LEASE OBLIGATIONS		1,600,622				1,825,057
Total liabilities		5,420,483				6,617,075
SHAREHOLDERS' EQUITY
Common stock		12,492				12,792
Less cost of Treasury shares(357,107)						(106,882	)
Additional paid-in capital		11,583,235				11,409,235
Accumulated deficit		(2,049,891	)			(1,162,523	)
Total shareholders' equity		9,188,729				10,152,622
Total liabilities and shareholders' equity	$	14,609,212			$	16,769,697

Category: Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20240328306121/en/

Kenneth Brimmer, 612-229-8811

Source: BT Brands, Inc.

FAQ

What were BT Brands, Inc.'s total revenues for 2023?

Total revenues for 2023 increased by 15.1% over 2022 to $11.1 million.

What was the net loss attributable to common shareholders in 2023?

The net loss attributable to common shareholders was $887,368, or $.14 per share in 2023.

What was the equity in the loss of Bagger Dave’s for BT Brands, Inc.?

BT Brands, Inc.'s equity in the loss of Bagger Dave’s was $347,081.

What was the decline in restaurant-level adjusted EBITDA for BT Brands, Inc. in 2023?

The restaurant-level adjusted EBITDA for BT Brands, Inc. declined to 6.2% in 2023.

What was the company's cash and short-term investments on December 31, 2023?

BT Brands, Inc. had $6.9 million in cash and short-term investments on December 31, 2023.

Who is the Chief Executive Officer of BT Brands, Inc.?

Gary Copperud is the Chief Executive Officer of BT Brands, Inc.

What are BT Brands, Inc.'s plans for rebranding and profitability improvements?

BT Brands, Inc. is in the midst of a significant effort to rebrand the Bagger locations with a different concept to achieve profitability with minimal investment. Improving the profitability of Florida businesses is a significant focus.

Is BT Brands, Inc. providing a financial forecast for fiscal 2023 and 2024?

BT Brands, Inc. is not providing a financial forecast for fiscal 2023 and 2024 due to the evolving character of the company and uncertainty surrounding public health concerns, supply chain constraints, and the inflationary environment.