Biglari Holdings Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
BH$322.43-2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001726173-24-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001726173-24-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 81 current paragraphs.
56 unchanged; 21 reworded; 4 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
The Company recorded $853 of impairment charges in the second quarter of 2023 and $107 and $1,629 in the first six months of 2024 and 2023, respectively, related to underperforming stores.
Current report
Southern Pioneer’s ratio of losses and loss adjustment expenses to premiums earned was 70.6% during the second quarter of 2024 as compared to 61.0% during the second quarter of 2023 and 66.4% during the first six months of 2024 as compared to 59.2% during the first six months of 2023.
Current report
In 2024, cash from operating activities decreased by $10,608 as compared to 2023. The change was primarily attributable to a decrease in cash flows from Steak n Shake’s operations.
Current report
Cash used in investing activities decreased during 2024 by $8,888 as compared to 2023 primarily due to an increase in proceeds from property and equipment disposals.
Removed paragraphs (3)
Previous report
Southern Pioneer’s underwriting gain was primarily attributable to a lower expense ratio. The prior year’s higher expense ratio was caused by information technology projects related to the implementation of a new policy administration system.
Previous report
The increase in cash during 2024 was $6,470 compared to $2,146 during 2023. The increase is primarily due to a decrease in cash used in investing activities and financing activities. Cash from operating activities in the first quarter of 2024 remained consistent with the first quarter of 2023.
Previous report
Cash used in investing activities was $1,493 lower during the first quarter of 2024 as compared to 2023. The decrease is primarily due to lower investment activity during 2024. Purchases of investments, net of proceeds from redemptions of fixed maturity securities, decreased by $2,655 in 2024 compared to 2023.
Reworded paragraphs (21)
Previous wording
Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 485 company-operated and franchise restaurants as of March 31, 2024.
Current wording
Our restaurant businesses, which include Steak n Shake and Western Sizzlin, comprise 477 company-operated and franchise restaurants as of June 30, 2024.
Previous wording
As of March 31, 2024, 15 of the 148 company-operated Steak n Shake stores were closed. Steak n Shake plans to sell or lease 9 of the 15 locations and refranchise the balance.
Current wording
As of June 30, 2024, 15 of the 142 company-operated Steak n Shake stores were closed. Steak n Shake plans to sell or lease 8 of the 15 locations and refranchise the balance.
Previous wording
Net sales for the first quarter of 2024 were $38,735 as compared to $36,894 during the first quarter of 2023. The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 9.9% during the first quarter of 2024.
Current wording
Net sales for the second quarter and first six months of 2024 were $40,815 and $79,550, respectively, representing an increase of $1,291 or 3.3% and $3,132 or 4.1%, compared to the second quarter and first six months of 2023, respectively. The increase in net sales was primarily due to an increase in Steak n Shake’s same-store sales of 7.0% during the second quarter of 2024.
Previous wording
Our franchise partner fees were $17,758 during the first quarter of 2024, as compared to $17,912 during the first quarter of 2023. As of March 31, 2024 and 2023, there were 178 franchise partner units. Included in franchise partner fees were $5,705 and $5,575 of rental income during the first quarter of 2024 and 2023, respectively. Franchise partners rent buildings and equipment from Steak n Shake. Our share of franchise partner fees was lower primarily because our franchise partners’ food and labor expenses were 1.8 percentage points higher during the first quarter of 2024 as compared to the first quarter of 2023.
Current wording
Our franchise partner fees were $18,149 during the second quarter of 2024, as compared to $19,070 during the second quarter of 2023. Franchise partner fees were $35,907 and $36,982 during the first six months of 2024 and 2023, respectively. As of June 30, 2024 and June 30, 2023, there were 182 and 177 franchise partner units, respectively. Included in franchise partner fees were $5,780 and $5,763 of rental income during the second quarter of 2024 and 2023, respectively, and $11,485 and $11,338 during the first six months of 2024 and 2023, respectively. Franchise partners rent buildings and equipment from Steak n Shake. Our share of franchise partner fees was lower primarily because our franchise partners’ food and labor expenses were higher during the first six months of 2024 as compared to the first six months of 2023.
Previous wording
The franchise royalties and fees generated by the traditional franchising business were $3,477 during the first quarter of 2024, as compared to $4,258 during the first quarter of 2023. The decrease in franchise royalties and fees was primarily due to the closing of traditional franchise stores. There were 125 Steak n Shake traditional units open on March 31, 2024, as compared to 143 units open on March 31, 2023.
Current wording
The franchise royalties and fees generated by the traditional franchising business were $3,615 during the second quarter of 2024, as compared to $4,125 during the second quarter of 2023. Franchise royalties and fees during the first six months of 2024 were $7,092 as compared to $8,383 during the first six months of 2023. There were 120 Steak n Shake traditional units open on June 30, 2024, as compared to 138 units open on June 30, 2023. The decrease in franchise royalties and fees was primarily due to fewer traditional units open during 2024.
Previous wording
The cost of food at company-operated units during the first quarter of 2024 was $10,974 or 28.3% of net sales, as compared to $10,448 or 28.3% of net sales during the first quarter of 2023. The cost of food expressed as a percentage of net sales in 2024 remained consistent with 2023.
Current wording
The cost of food at company-operated units during the second quarter of 2024 was $12,357 or 30.3% of net sales, as compared to $11,702 or 29.6% of net sales during the second quarter of 2023. The cost of food at company-operated units during the first six months of 2024 was $23,331 or 29.3% of net sales, as compared to $22,150 or 29.0% of net sales during the first six months of 2023. Cost of food expressed as a percentage of net sales remained relatively consistent.
Previous wording
Labor costs at company-operated restaurants during the first quarter of 2024 were $12,429 or 32.1% of net sales, as compared to $11,603 or 31.4% of net sales during the first quarter of 2023. Labor costs expressed as a percentage of net sales in 2024 remained consistent with 2023.
Current wording
Labor costs at company-operated restaurants during the second quarter of 2024 were $12,992 or 31.8% of net sales, as compared to $12,175 or 30.8% of net sales in the second quarter of 2023. Labor costs at company-operated restaurants during the first six months of 2024 were $25,536 or 32.1% of net sales, as compared to $23,885 or 31.3% of net sales in 2023. Labor costs expressed as a percentage of net sales increased during 2024 compared to 2023 primarily due to an increase in store level managers in Steak n Shake company-operated restaurants.
Previous wording
General and administrative expenses during the first quarter of 2024 were $11,730 or 18.9% of total revenue, as compared to $10,463 or 17.1% of total revenue during the first quarter of 2023. General and administrative expenses increased in 2024 as compared to 2023 primarily because of higher salaries and wages. Salaries and wages were higher due to an increase in Steak n Shake’s personnel.
Current wording
General and administrative expenses during the second quarter of 2024 were $13,016 or 20.2% of total revenue, as compared to $10,790 or 16.7% of total revenue in the second quarter of 2023. General and administrative expenses during the first six months of 2024 were $24,746 or 19.6% of total revenue, as compared to $21,253 or 16.9% of total revenue in the first six months of 2023. The increase in general and administrative expenses was mainly attributable to higher personnel costs at Steak n Shake.
Previous wording
Interest on obligations under leases was $1,314 during the first quarter of 2024 versus $1,307 during the first quarter of 2023.
Current wording
Interest on obligations under leases was $2,663 during 2024 versus $2,608 during 2023.
Previous wording
Other income was $234 during the first quarter of 2024 versus $1,612 during the first quarter of 2023. Western Sizzlin received a settlement of $450 during 2024 and Steak n Shake recorded gains of sales of properties of $1,431 during 2023.
Current wording
Other income was $2,442 during 2024 versus $4,301 during 2023. During 2024, Western Sizzlin received a settlement of $450. During 2024, Steak n Shake sold three properties for a gain of $1,957 and sold four properties for a gain of $4,414 during 2023.
Previous wording
First Guard produced an underwriting gain in the first quarter of 2024, despite having a higher ratio of losses and loss adjustment expenses to premiums earned (72.8%) than it had during the first quarter of 2023 (58.9%).
Current wording
First Guard produced an underwriting gain in the second quarter and first six months of 2024, despite having a higher ratio of losses and loss adjustment expenses to premiums earned (64.9% in the second quarter and 68.8% in the first six months) than it had in 2023 (46.2% in the second quarter and 52.4% in the first six months).
Previous wording
During the third quarter of 2023, Abraxas Petroleum entered into a royalty-based arrangement with an unaffiliated party to conduct development activities; however, Abraxas Petroleum will not be required to fund any exploration expenditures on its undeveloped properties. In the first quarter of 2024, Abraxas Petroleum sold additional undeveloped reserves, which resulted in a gain of $481.
Current wording
During the first six months of 2024, Abraxas Petroleum recorded a gain of $16,646 as a result of selling undeveloped reserves to an unaffiliated party whose aim is to conduct development activities; however, Abraxas Petroleum will not be required to fund any exploration expenditures on its undeveloped properties. During the third quarter of 2023, Abraxas Petroleum entered into a similar royalty-based arrangement on its undeveloped properties.
Previous wording
Licensing revenue was lower during 2024 as compared to 2023 primarily due to fewer licensing events in the first quarter of 2024.
Current wording
Licensing revenue was lower during 2024 as compared to 2023 primarily due to fewer licensing events in the first six months of 2024.
Previous wording
Investment gains net of tax for the first quarter of 2024 and 2023 were $1,332 and $2,865, respectively. Dividends and interest earned on investments are reported as investment income by our insurance companies. We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.
Current wording
Investment losses net of tax for the second quarter of 2024 were $2,159 as compared to investment gains net of tax for the second quarter of 2023 of $276. Investment losses net of tax for the first six months of 2024 were $827 as compared to investment gains net of tax for the first six months of 2023 of $3,141. Dividends earned on investments are reported as investment income by our insurance companies. We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating.
Previous wording
Earnings from our investments in partnerships are summarized below.
Current wording
Earnings (loss) from our investments in partnerships are summarized below.
Previous wording
Investment gains and losses in 2024 and 2023 were mainly derived from our investments in equity securities and included unrealized gains and losses from market price changes during the period. We believe that investment and derivative gains/losses are generally meaningless for analytical purposes in understanding our reported quarterly and annual results. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.
Current wording
Investment gains and losses in 2024 and 2023 were mainly derived from our investments in equity securities and included unrealized gains and losses from market price changes during the period. We believe that investment and derivative gains/losses are generally meaningless for analytical purposes in understanding our quarterly and annual results.
Previous wording
Corporate expenses exclude the activities of the restaurant, insurance, brand licensing, and oil and gas businesses. Corporate and other net losses during the first quarter of 2024 were relatively consistent to the same period during 2023.
Current wording
Corporate expenses exclude the activities of the restaurant, insurance, brand licensing, and oil and gas businesses. Corporate and other net losses during the second quarter and first six months of 2024 decreased as compared to the same periods in 2023 because of lower incentive fees accrued.
Previous wording
Income tax expense for the first quarter of 2024 was $6,816 compared to an income tax expense of $19,738 for the first quarter of 2023. The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships. Investment partnership pretax gains were $21,985 during the first quarter of 2024 compared to pretax gains of $72,588 during the first quarter of 2023.
Current wording
Income tax benefit for the second quarter of 2024 was $14,725 compared to income tax expense of $1,018 for the second quarter of 2023. Income tax benefit for the first six months of 2024 was $7,909 compared to income tax expense of $20,756 for the first six months of 2023. The variance in income taxes between 2024 and 2023 is attributable to taxes on income generated by the investment partnerships. Investment partnership pre-tax losses were $79,890 during the second quarter of 2024 compared to pre-tax losses of $7,496 during the second quarter of 2023. Investment partnership pre-tax losses were $57,905 during the first six months of 2024 compared to pre-tax gains of $65,092 during the first six months of 2023.
Previous wording
Cash used by financing activities was $3,647 lower during the first quarter of 2024 as compared to 2023 primarily due to principal payments on the Company’s line of credit in 2023.
Current wording
Cash used in financing activities decreased during 2024 by $6,787 as compared to 2023 primarily due to principal payments on the Company’s line of credit in 2023.
Previous wording
Biglari Holdings’ available line of credit is $30,000. The line of credit matures on September 12, 2024. The line of credit includes customary covenants, as well as financial maintenance covenants. As of March 31, 2024, we were in compliance with all covenants. There was no balance on the line of credit on March 31, 2024, or December 31, 2023.
Current wording
Biglari Holdings line of credit is $30,000. The line of credit matures on September 12, 2024. The line of credit includes customary covenants, as well as financial maintenance covenants. As of June 30, 2024, we were in compliance with all covenants. There was no balance on the line of credit on June 30, 2024, or December 31, 2023.
Previous wording
Western Sizzlin’s available line of credit is $500. As of March 31, 2024, and December 31, 2023, Western Sizzlin had no debt outstanding on its revolver.
Current wording
Western Sizzlin’s available line of credit is $500. As of June 30, 2024, Western Sizzlin had a balance of $50 under its revolver. As of December 31, 2023, there was no debt outstanding under its revolver.