BT Brands, Inc. (BTBD) - Q3 2025 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the 13-week and 39-week periods ended September 28, 2025. BT Brands, Inc. operates a portfolio of restaurants including Burger Time (fast-food), Keegan's Seafood Grille, Pie In The Sky Coffee and Bakery, and Schnitzel Haus. The Company also holds a 40.7% equity interest in Bagger Dave's Burger Tavern, Inc. During the period, the Company closed underperforming locations (Village Bier Garten, Ham Lake Burger Time, and Minot Burger Time) and entered into a definitive merger agreement with Aero Velocity Inc.
Key Financial Metrics
| Metric | 13 Weeks Ended Sept 28, 2025 | 39 Weeks Ended Sept 28, 2025 |
|---|---|---|
| Sales | $3,853,682 | $10,864,445 |
| Net Income (Loss) | $914,975 | $640,157 |
| Operating Income (Loss) | $735,042 | $367,725 |
| Restaurant-Level EBITDA | $822,660 (21.3% margin) | $1,738,104 (16.0% margin) |
| Cash and Cash Equivalents | $1,277,738 (as of Sept 28, 2025) | |
| Marketable Securities | $3,461,842 (as of Sept 28, 2025) | |
| Total Debt (Current + Long-Term) | $2,133,680 (as of Sept 28, 2025) | |
| Net Working Capital | ~$5.7 million |
Material Changes vs. Prior Period
- Revenue Decline: Sales decreased 11.4% in the quarter and 6.7% for the 39-week period compared to 2024, primarily due to the closure of two underperforming locations (Village Bier Garten and Ham Lake).
- Profitability Improvement: Despite lower sales, the Company turned a net loss of $219,479 in Q3 2024 into a net income of $914,975 in Q3 2025. Operating income improved from a loss of $75,011 to a profit of $735,042.
- Cost Efficiency: Labor costs as a percentage of sales dropped to 33.5% (from 39.0% in 2024), and food/paper costs fell to 30.5% (from 35.9%).
- Investment Gains: Significant non-operating gains included a $462,020 unrealized gain on marketable securities and a $138,890 realized investment gain.
- Impairment Charges: The Company recorded a $304,000 impairment charge to fully write down its investment in NGI Corporation and recognized a $99,734 equity loss from its Bagger Dave's affiliate.
Guidance, Outlook, and Risks
- Merger with Aero Velocity: On September 2, 2025, BT Brands entered a merger agreement with Aero Velocity. The transaction involves a spin-off of BT Brands' restaurant assets into a new subsidiary (BT Group, Inc.) and a significant dilution of current shareholders, who will retain an 11% stake in the merged entity.
- Related Party Exposure: The Company has significant exposure to NGI Corporation, with $744,858 in loans and $339,511 in Disney-licensed bottled water inventory. NGI has recurring losses, and the Company has fully impaired its equity investment in NGI.
- Lease Contingency: The Company is evaluating a potential liability regarding the Village Bier Garten lease, where the sub-lessee defaulted on payments in August 2025. The Company has reinstated the lease liability on its balance sheet.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of September 28, 2025, citing a material weakness previously disclosed in the 2024 10-K.
Investor Verification Checklist
- Merger Terms: Verify the final terms of the Aero Velocity merger, specifically the valuation of the spin-off entity and the dilution impact on existing shareholders.
- NGI Recoverability: Assess the likelihood of recovering the $744,858 in loans and the $339,511 inventory investment in NGI Corporation given its financial distress.
- Lease Liability: Confirm the status of the Village Bier Garten lease default and whether BT Brands will be held liable for the remaining ~$215,000 obligation.
- Asset Sales: Monitor the progress of the sale of the Ham Lake property and other assets held for sale to realize the projected gains.
- Internal Controls: Review the remediation plan for the material weakness in internal controls over financial reporting.