BT Brands, Inc. (BTBD) - Q2 2025 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 29, 2025, and the 26-week period ended on the same date. BT Brands, Inc. operates a portfolio of restaurants including Burger Time (fast-food), Keegan's Seafood Grille, Pie In The Sky (PIE), 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 two underperforming locations (Village Bier Garten and Ham Lake Burger Time) and completed the sale of a Richmond property in August 2025 (subsequent event).
Key Financial Metrics
| Metric | 13 Weeks Ended June 29, 2025 | 26 Weeks Ended June 29, 2025 |
|---|---|---|
| Sales (Revenue) | $3,779,690 | $7,010,763 |
| Net Income (Loss) | $55,031 | $(274,818) |
| Loss from Operations | $(75,121) | $(367,317) |
| Restaurant-Level EBITDA | $600,661 (15.9% margin) | $915,894 (13.1% margin) |
| Cash and Cash Equivalents | $560,068 (as of June 29, 2025) | |
| Marketable Securities | $2,970,284 (as of June 29, 2025) | |
| Total Debt (Current + Long-Term) | $2,183,769 | |
| Net Working Capital | $4,363,566 |
Material Changes vs. Prior Period
- Revenue Decline: Sales decreased 8.1% in the quarter and 4.0% for the 26-week period compared to 2024, primarily due to the closure of two locations (Village Bier Garten and Ham Lake) which contributed approximately $935,000 in revenue in the prior year.
- Profitability Improvement: Despite lower sales, the Company turned a net loss of $69,952 in Q2 2024 into a net income of $55,031 in Q2 2025. The 26-week net loss improved significantly from $515,652 to $274,818.
- Margin Expansion: Restaurant-level EBITDA margin improved to 15.9% in Q2 2025 from 10.6% in Q2 2024. Food and paper costs decreased to 33.1% of sales (from 38.1%), and labor costs decreased to 36.4% (from 37.7%) due to closures and cost controls.
- Investment Activity: The Company recorded a realized investment gain of $79,026 in the quarter and $174,064 for the 26-week period, offsetting operating losses.
Outlook, Risks, and Unusual Items
- Related Party Transactions: The Company advanced $572,357 in loans to NGI Corporation and purchased $292,372 of Disney-licensed bottled water inventory for NGI during the period. Total investment in NGI (equity, loans, and inventory) reached $996,357.
- Subsequent Event: On August 13, 2025, the Company sold its Richmond property for $550,000, expecting to recognize an estimated gain of $250,000 in Q3 2025.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 29, 2025, due to a material weakness previously disclosed in the 2024 10-K. The Company has engaged a third-party accounting firm to assist with accounts payable and payroll to improve segregation of duties.
- Risks: Key risks include capital availability for growth, execution of acquisition strategy, labor shortages, and the financial performance of the unconsolidated affiliate, Bagger Dave's, which is currently negotiating with potential purchasers for its store locations.
Investor Verification Checklist
- NGI Exposure: Verify the collectability of the $692,357 in demand notes and the marketability of the $292,372 Disney water inventory held for NGI Corporation.
- Internal Control Remediation: Monitor progress on remediation of the material weakness in internal controls over financial reporting.
- Bagger Dave's Status: Track the outcome of Bagger Dave's negotiations with potential purchasers, as this impacts the valuation of BT Brands' 40.7% equity stake.
- Richmond Sale Proceeds: Confirm the recognition of the $250,000 gain on the Richmond property sale in the Q3 2025 filing.
- Liquidity Position: Assess the impact of significant cash outflows for NGI-related activities ($864,729 total in the quarter) on future working capital needs.