BT Brands Reports Second Quarter 2024 Results

Rhea-AI Summary

BT Brands, Inc. (Nasdaq: BTBD) reported Q2 2024 financial results. Total revenues increased 2.7% to $4.1 million, but the company posted a net loss of $69,952 ($.010 per share), an improvement from a $233,734 loss in 2023. Restaurant-level adjusted EBITDA declined to $437,000 from $632,000 year-over-year. Cash and short-term investments decreased to $5.2 million from $6.9 million last year.

Highlights include:

• Pie in the Sky's revenue increased 17.5% to $1,057,000
• Burger Time units saw 10%+ same-store sales growth
• Acquired Schnitzel Haus restaurant in Florida

The company faces challenges with increased labor costs and input prices but expects significant improvement in restaurant operating results in H2 2024.

Positive

• Total revenues increased 2.7% to $4.1 million in Q2 2024
• Net loss improved to $69,952 from $233,734 in the previous year
• Pie in the Sky revenue increased 17.5% to $1,057,000
• Burger Time units saw over 10% same-store sales growth
• Acquired Schnitzel Haus restaurant with potential for growth

Negative

• Restaurant-level adjusted EBITDA declined to $437,000 from $632,000 year-over-year
• Cash and short-term investments decreased to $5.2 million from $6.9 million last year
• Facing persistent challenges in staffing and upward pressure on labor costs
• Experiencing pressure on cost of sales inputs
• Not providing financial forecast for fiscal 2024 due to uncertainties

Insights

Financial Analyst

BT Brands' Q2 2024 results present a mixed picture. The 2.7% revenue increase to $4.1 million is positive, but the net loss of $69,952 is concerning, albeit an improvement from 2023. The decline in restaurant-level adjusted EBITDA from $632,000 to $437,000 indicates pressure on profitability. Notably, cash reserves decreased from $6.9 million to $5.2 million year-over-year, reflecting recent acquisitions and capital improvements.

Bright spots include Pie in the Sky's 17.5% revenue growth and Burger Time's 10%+ same-store sales increase. However, persistent challenges in staffing, rising labor costs and inflationary pressures on input costs are squeezing margins. The acquisition of Schnitzel Haus presents growth potential, but its impact remains to be seen. The lack of financial guidance for 2024 suggests uncertainty in the company's near-term outlook.

Restaurant Industry Expert

BT Brands' diverse portfolio of restaurant concepts shows promise, but also presents operational challenges. The strong performance of Pie in the Sky and Burger Time units demonstrates the company's ability to grow existing brands. However, the overall modest revenue growth suggests difficulties in scaling across all concepts.

The acquisition of Schnitzel Haus is intriguing, offering potential for growth through extended operating hours. Yet, integrating a new concept while managing existing brands may strain resources. The company's focus on cost reduction and performance improvement is crucial, especially given the persistent labor and input cost pressures. The lack of 2024 guidance raises questions about the company's ability to navigate these challenges effectively and achieve consistent profitability across its diverse portfolio.

Market Research Analyst

BT Brands' Q2 results reflect broader industry trends, particularly in labor and input costs. The company's multi-concept strategy provides diversification but also increases complexity in a challenging market. The strong performance of Pie in the Sky and Burger Time suggests these concepts are resonating with consumers, possibly due to their value proposition in an inflationary environment.

The acquisition of Schnitzel Haus indicates a strategic move towards upscale dining, which could be risky given current economic uncertainties. However, the potential for expansion and the low acquisition multiple could prove advantageous if executed well. The company's cautious outlook, evidenced by the lack of 2024 guidance, aligns with the uncertain economic climate but may concern investors looking for clear growth trajectories in the competitive restaurant sector.

WEST FARGO, N.D.--(BUSINESS WIRE)-- BT Brands, Inc. (Nasdaq: BTBD and BTBDW), today reported its financial results for the second quarter, the thirteen weeks ending June 30, 2024.

Including our 40% ownership of Bagger Dave’s Burger Tavern with six locations (OTCMarkets: BDVB), BT Brands currently operates 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”).
• Schnitzel Haus, a German food restaurant, located in Hobe Sound, near Stuart, Florida (“Schnitzel”).

Highlights and recent activities include:

• Total revenues for the 2024 period increased 2.7% over 2023 to $4.1 million;
• Net loss attributable to common shareholders was $69,952, or $.010 per share for the second quarter compared to a net loss of $233,734 in 2023;
• Restaurant-level adjusted EBITDA (a non-GAAP measure) for the 13-week period was $437,000, a decline from $632,000 in the prior year's second quarter ;
• Our equity in the second quarter loss of our Bagger Dave’s affiliate was $81,000;
• We ended the quarter with $5.2 million in total cash and short-term investments, down from $6.9 million one year ago as a result of our recent acquisition and capital improvements at our restaurant;
• Pie in the Sky continues to contribute strong performance, with a second-quarter revenue increase of approximately 17.5% over the same period in 2023 to approximately $1,057,000.
• The Burger Time units increased same-store sales by more than 10% and increased total revenue by approximately 15% over the prior year.

Gary Copperud, the Company’s Chief Executive Officer, said, “Our second quarter results reflect improving results at our restaurants, reduced by increased labor costs, including the addition of senior staff at Pie In the Sky. Our stores experience seasonal sales patterns; Burger Time and Pie in the Sky traditionally see an increase in sales in the second quarter compared to the first quarter due to weather and tourism. Overall, we continue to see pressure on our cost of sales inputs. There is a persistent challenge in staffing, which, even though the shortage of candidates has moderated we continue to see an upward pressure on labor costs. We are continuing our initiative to reduce costs and improve performance in all of our businesses, and we remain focused on achieving profitability consistent with our expectations.”

Kenneth Brimmer, COO, commented, “We expect to see significant improvement in restaurant operating results in the second half of 2024.”

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. We believe there is considerable upside exists as the prior owners significantly limited the serving hours. There are several potential opportunities available to grow the business.

Fiscal 2024 Outlook: Because of the uncertain nature of recent acquisitions' performance and our evolving character, as well as continuing uncertainty surrounding the current inflationary environment and the state of the economy, 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 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.

Financial Results Follow:

BT BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
					26 Weeks Ended,			26 Weeks Ended,			13 Weeks Ended,			13 Weeks Ended,
					June 30, 2024			July 2, 2023			June 30, 2024			July 2, 2023
SALES				$	7,300,786		$	7,070,763		$	4,110,639		$	3,999,965
COSTS AND EXPENSES
Restaurant operating expenses
Food and paper costs					2,844,028			2,898,498			1,565,070			1,608,175
Labor costs					2,938,448			2,615,136			1,551,762			1,412,376
Occupancy costs					680,631			505,861			344,356			148,736
Other operating expenses					415,738			394,243			211,838			198,629
Depreciation and amortization expenses					331,893			356,027			171,351			192,520
General and administrative expenses					909,420			944,992			454,805			519,077
Gain on sale of assets					-			(313,688)			-			-
Total costs and expenses					8,120,158			7,401,069			4,299,182			4,079,513
Loss from operations					(819,372)			(330,306)			(188,543)			(79,548)
UNREALIZED GAIN (LOSS) ON MARKETABLE SECURITIES					232,947			(23,064)			118,184			(92,920)
REALIZED GAIN ON SALE OF MARKETABLE SECURITIES					29,562			-			29,562			-
INTEREST AND OTHER INCOME					136,750			90,809			61,896			1,761
INTEREST EXPENSE					(50,039)			(49,909)			(22,551)			(24,376)
EQUITY IN NET LOSS OF AFFILIATE					(175,500)			(145,050)			(81,000)			(90,651)
LOSS BEFORE TAXES					(645,652)			(457,520)			(82,452)			(285,734)
INCOME TAX BENEFIT					130,000			82,000			12,500			52,000
NET LOSS				$	(515,652)		$	(375,520)		$	(69,952)		$	(233,734)
NET LOSS PER COMMON SHARE -				$	(0.08)		$	(0.06)		$	(0.01)		$	(0.04)
WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted					6,240,953			6,261,631			6,235,788			6,246,114

BT BRANDS, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
		(Unaudited)
ASSETS		June 30, 2024					December 31, 2023
CURRENT ASSETS
Cash		$	3,772,177					$		5,300,446
Marketable securities			1,513,146							1,392,060
Receivables			28,310							28,737
Inventory			300,147							201,333
Prepaid expenses and other current assets			93,017							47,246
Assets held for sale			258,751							258,751
Total current assets			5,965,548							7,228,573
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET			3,773,270							3,247,013
OPERATING LEASES RIGHT-OF-USE ASSETS			1,854,459							1,789,285
INVESTMENTS AND NOTE RECEIVABLE			954,024							1,022,806
DEFERRED INCOME TAXES			182,988							206,000
GOODWILL			796,220							671,220
INTANGIBLE ASSETS, NET			442,830							395,113
OTHER ASSETS, NET			43,648							49,202
Total assets		$	14,072,499					$		14,609,212
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	612,585					$		555,247
Broker margin loan			-							115,899
Current maturities of long-term debt			164,408							183,329
Current operating lease obligations			282,803							215,326
Accrued expenses			452,680							480,289
Total current liabilities			1,492,476							1,550,090
LONG-TERM DEBT, LESS CURRENT PORTION			2,200,897							2,269,771
NONCURRENT LEASE OBLIGATIONS			1,630,165							1,600,622
Total liabilities			5,323,538							5,420,483
TOTAL SHAREHOLDERS’ EQUITY			13,714,457							9,188,729
Total liabilities and shareholders' equity		$	19,179,676					$		14,609,212

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240812146703/en/

Kenneth Brimmer, 612-229-8811

Source: BT Brands, Inc.

FAQ

What was BT Brands' (BTBD) revenue growth in Q2 2024?

BT Brands (BTBD) reported a 2.7% increase in total revenues for Q2 2024, reaching $4.1 million.

How did BT Brands' (BTBD) net loss compare to the previous year in Q2 2024?

BT Brands (BTBD) reported a net loss of $69,952 in Q2 2024, an improvement from a net loss of $233,734 in the same quarter of 2023.

What was the performance of Pie in the Sky for BT Brands (BTBD) in Q2 2024?

Pie in the Sky, owned by BT Brands (BTBD), saw a 17.5% increase in revenue to approximately $1,057,000 in Q2 2024 compared to the same period in 2023.

How did Burger Time units perform for BT Brands (BTBD) in Q2 2024?

Burger Time units, owned by BT Brands (BTBD), increased same-store sales by more than 10% and total revenue by approximately 15% over the prior year in Q2 2024.

What recent acquisition did BT Brands (BTBD) make in Q2 2024?

BT Brands (BTBD) acquired the assets of Schnitzel Haus, a 175-seat upscale restaurant in Hobe Sound, Florida, effective May 13, 2024.