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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.

BT BRANDS INC., Wednesday, November 9, 2022, Press release picture

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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