BT Brands, Inc. Reports Results for the Third Quarter Ending October 2, 2022
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 | 39 Weeks Ended | 13 Weeks Ended | 13 Weeks Ended | |||||||||||||
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 | ||||||||||
| Common Stock | Additional | Accumulated |
| ||||||||||||||||
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 | ) | |||||||||
|
| Common Stock | Additional | Accumulated |
| |||||||||||||||
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 | ||||||||||
| Common Stock | Additional | Accumulated |
| ||||||||||||||||
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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