BT Brands Reports First Quarter 2024 Results

Rhea-AI Summary

BT Brands (Nasdaq: BTBD) reported its financial results for the first quarter of 2024, ending March 31. The company operates 17 restaurants, including its recent acquisition, Schnitzel Haus, completed on May 13, 2024. Total revenues increased by 3.9% to $3.2 million compared to the same period in 2023. However, operating loss widened to $631,000 from $251,000, and net loss attributable to common shareholders was $445,700 or $0.07 per share. Restaurant-level adjusted EBITDA dropped to a loss of $15,672 from a profit of $24,946. BT Brands ended the quarter with $6.1 million in cash and short-term investments, a decline from $6.9 million a year ago. CEO Gary Copperud mentioned efforts to reduce costs and improve performance amid inflationary pressures and staffing challenges. The company did not provide a financial forecast for fiscal 2024 due to ongoing uncertainties.

Positive

• Total revenues for the first quarter of 2024 increased by 3.9% to $3.2 million.
• Completed the acquisition of the Schnitzel Haus restaurant, which offers growth opportunities.
• BT Brands operates a diverse portfolio of 17 restaurants, including new and established locations.

Negative

• Operating loss widened to $631,000 from $251,000 in the same period of 2023.
• Net loss attributable to common shareholders was $445,700 or $0.07 per share.
• Restaurant-level adjusted EBITDA declined to a loss of $15,672 from a profit of $24,946.
• Cash and short-term investments decreased to $6.1 million from $6.9 million one year ago.
• Persistent inflationary pressures on cost inputs and upward pressure on labor costs.
• Ongoing challenges with staffing despite slight improvements in labor market conditions.
• No financial forecast provided for fiscal 2024 due to uncertainties in market conditions.

Insights

Financial Analyst

BT Brands' first-quarter financial report and recent acquisition of Schnitzel Haus are notable events for investors. The total revenue growth of 3.9% year-over-year to $3.2 million is a positive sign, indicating some resilience despite broader economic challenges. However, the operating loss widening to $631,000 from $251,000 in the comparable period last year is concerning. This negative trend suggests that cost management and operational efficiency are areas needing improvement.

The acquisition of Schnitzel Haus could positively impact BT Brands in the long run. If managed well, expanding serving hours and optimizing operations could drive substantial revenue growth. Yet, the company acknowledges not providing a financial forecast for fiscal 2024 due to uncertainties, which could be a cautious stance in a volatile market.

From a cash flow perspective, the company has $6.1 million in total cash and short-term investments, down from $6.9 million the previous year. This decrease needs to be monitored, especially in light of ongoing acquisition and operational challenges. Strategic improvements in cost control and leveraging new acquisitions will be critical to reversing the current financial setbacks and achieving profitability.

Market Research Analyst

The acquisition of Schnitzel Haus presents both opportunities and risks for BT Brands. The restaurant's upscale nature and limited previous serving hours offer room for growth and increased cash flow. However, the integration of this new asset into BT Brands' portfolio will require careful management to avoid operational disruptions and ensure its potential is realized.

In the broader market context, BT Brands continues to face inflationary pressures, particularly in their cost of sales and labor expenses. While labor market conditions are improving, the upward pressure on wages persists. The company's strategic response to these challenges could determine its ability to stabilize and grow in the near term.

Inflation and supply chain constraints remain broader economic concerns that BT Brands needs to navigate skillfully. Investors should watch how the company manages these factors and capitalizes on its acquisitions to drive growth. The lack of a financial forecast for 2024 reflects this uncertainty, underscoring the need for a cautious and strategic approach.

Acquisition of Schnitzel Haus Completed

WEST FARGO, N.D.--(BUSINESS WIRE)-- BT Brands, Inc. (Nasdaq: BTBD and BTBDW), today reported its financial results for the first quarter, the thirteen weeks ending March 31, 2024.

Including our 40% ownership of Bagger Dave’s Burger Tavern with six locations (OTCMarkets: BDVB), BT Brands currently operates a total of seventeen restaurants comprising the following:

• Eight Burger Time fast-food restaurants; located in the North Central region of the United States, collectively (“BTND”);
• Bagger Dave’s Burger Tavern, Inc., a 40% owned affiliate, operates 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, a German-themed restaurant, bar, and entertainment venue in Cocoa, Florida (“VBG”).
• Effective May 13, 2024, the Company completed the purchase of the upscale Schnitzel Haus restaurant, www.schnitzelhaushobesound.com located in Hobe Sound, near Stuart, Florida

Highlights and recent activities include:

• Total revenues for the 2024 period increased 3.9% over 2023 to $3.2 million;
• Operating loss for the year declined to a loss of $631,000 from an operating loss of $251,000 in 2023;
• Net loss attributable to common shareholders was $445,700, or $.07 per share for the year;
• Restaurant-level adjusted EBITDA (a non-GAAP measure) for the year declined to a loss of $15,672 in 2024 from a profit of $24,946 in the same period in 2023;
• Our equity in the first quarter loss of our Bagger Dave’s affiliate was $94,500;
• We ended the quarter with $6.1 million in total cash and short-term investments down from $6.9 million one year ago;
• First quarter results for 2023 include a pre-tax gain of $313,000 from the sale of a former Burger Time property in West St. Paul

Gary Copperud, the Company’s Chief Executive Officer, said, “The first quarter is seasonally slower for our Burger Time and Pie in the Sky businesses; we were disappointed in our performance during the first quarter this year and have taken a number of steps to reduce costs and improve performance in all of our businesses. Overall, we continue to see inflationary pressure on our cost of sales inputs. There are persistent challenges with staffing, which, although staffing pressure is lessening as labor markets are more favorable, upward pressure on labor costs continues. As we look toward the balance of 2023, we remain focused on achieving profitability consistent with our expectations.”

Schnitzel Haus Acquisition

Effective May 13, 3024, we acquired the assets of the approximately 175-seat upscale Schnitzel Haus restaurant in Hobe Sound, Florida. The retirement of the previous owners presented BT Brands with an opportunity to acquire a business with robust cash flow at a particularly low multiple. Considerable upside exists as the prior owners had significantly limited the serving hours. There are several potential opportunities available to grow the business.

Fiscal 2024 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, impacts of supply chain constraints, and the current inflationary environment, the Company is not at this point, providing a financial forecast for fiscal 2024.

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. In addition, the Company owns the Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts, the Village Bier Garten in Cocoa, Florida, Keegan’s Seafood Grille near Clearwater, Florida and Schnitzel Haus in Hobe Sound, 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,

Any forward-looking statement made by us 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. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		13 Weeks Ended,				13 Weeks Ended,
		March 31, 2024				April 2, 2023
SALES		$	3,190,147			$	3,070,799
COSTS AND EXPENSES
Restaurant operating expenses
Food and paper costs			1,278,958				1,290,323
Labor costs			1,386,686				1,202,760
Occupancy costs			336,275				357,125
Other operating expenses			203,900				195,614
Depreciation and amortization expenses			160,542				163,507
General and administrative expenses			454,615				425,915
Gain on sale of assets held for sale			-				(313,688	)
Total costs and expenses			3,820,976				3,321,556
Loss from operations			(630,829	)			(250,758	)
UNREALIZED GAIN ON MARKETABLE SECURITIES			114,763				69,856
INTEREST EXPENSE			(27,488	)			(25,533	)
INTEREST AND DIVIDEND INCOME			74,854				89,048
EQUITY IN LOSS OF AFFILIATE			(94,500	)			(54,399	)
LOSS BEFORE TAXES			(563,200	)			(141,786	)
INCOME TAX BENEFIT			117,500				30,000
NET LOSS		$	(445,700	)		$	(141,786	)
NET LOSS PER COMMON SHARE - Basic and Diluted		$	(0.07	)		$	(0.02	)
WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted			6,246,118				6,280,729

BT BRANDS, INC., AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
		Unaudited
		March 31, 2024				December 31, 2023
ASSETS
CURRENT ASSETS
Cash and equivalents		$	4,668,295			$	5,300,446
Marketable securities			1,458,213				1,392,060
Receivables			13,263				28,737
Inventory			226,218				201,333
Prepaid expenses and other current assets			77,824				47,246
Assets held for sale			258,751				258,751
Total current assets			6,702,564				7,228,573
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET			3,225,456				3,247,013
OPERATING LEASES RIGHT-OF-USE ASSETS			1,732,525				1,789,285
INVESTMENTS			928,306				1,022,806
DEFERRED INCOME TAXES			323,500				206,000
GOODWILL			671,220				671,220
INTANGIBLE ASSETS, NET			368,970				395,113
OTHER ASSETS, NET			48,776				49,202
Total assets		$	14,001,317			$	14,609,212
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	629,504			$	555,247
Broker margin loan			-				115,899
Current maturities of long-term debt			171,782				183,329
Current operating lease obligations			213,995				215,326
Accrued expenses			399,906				480,289
Total current liabilities			1,415,187				1,550,090
LONG-TERM DEBT, LESS CURRENT PORTION			2,237,610				2,269,771
NONCURRENT LEASE OBLIGATIONS			1,551,491				1,600,622
Total liabilities			5,204,288				5,420,483
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value, 2,000,000 shares authorized, no shares outstanding			-				-
Common stock, $.002 par value, 50,000,000 authorized, 6,461,118 issued and 6,246,118 shares outstanding at March 31, 2024 and December 31,2023			12,492				12,492
Less cost of 215,000 held in Treasury at March 31, 2024 and December 31, 2023,			(357,107	)			(357,107	)
Additional paid-in capital			11,445,135				11,583,235
Accumulated deficit		$	(2,495,591	)			(2,049,891	)
Total shareholders' equity			8,797,029				9,188,729
Total liabilities and shareholders' equity		$	14,001,317			$	14,609,212

Category: Financial Category

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515987617/en/

Kenneth Brimmer, 612-229-8811

Source: BT Brands, Inc.

FAQ

What were BT Brands' total revenues for the first quarter of 2024?

BT Brands' total revenues for the first quarter of 2024 increased by 3.9% to $3.2 million.

What was BT Brands' operating loss for the first quarter of 2024?

BT Brands' operating loss for the first quarter of 2024 was $631,000, up from $251,000 in the same period of 2023.

What is the net loss attributable to BT Brands' common shareholders for the first quarter of 2024?

The net loss attributable to BT Brands' common shareholders for the first quarter of 2024 was $445,700 or $0.07 per share.

How much did BT Brands' cash and short-term investments decrease by the end of the first quarter of 2024?

By the end of the first quarter of 2024, BT Brands' cash and short-term investments decreased to $6.1 million from $6.9 million one year ago.

When did BT Brands complete the acquisition of Schnitzel Haus?

BT Brands completed the acquisition of Schnitzel Haus on May 13, 2024.

How many restaurants does BT Brands currently operate?

BT Brands currently operates a total of 17 restaurants.

Did BT Brands provide a financial forecast for fiscal 2024?

No, BT Brands did not provide a financial forecast for fiscal 2024 due to ongoing uncertainties.