Core Insights - Cracker Barrel's preliminary Q1 2025 earnings announcement raises concerns about the company's direction and performance [1] - The adjusted EBITDA margin for Q1 2025 was 5.4%, which is 70 basis points lower than Q1 2023 and similar to Q1 2024, indicating that the transformation plan may not be effective [2] - Management did not change its FY 2025 guidance, expecting revenue and adjusted EBITDA to be similar to or lower than FY 2024, despite significant capital expenditures [3] - The Board's attempt to present a positive outlook contrasts with the unchanged guidance, reflecting a lack of confidence from analysts and investors regarding the $700 million transformation plan [3] - The Q1 2025 results highlight ongoing concerns and the urgent need for change, with shareholders urged to take action to protect their investments [4]

Core Viewpoint - Biglari Capital is advocating for a change in the Board of Directors at Cracker Barrel Old Country Store, citing poor performance and significant shareholder value destruction under the current leadership [2][6][9]. Group 1: Performance Issues - The current Board, led by Carl Berquist and Meg Crofton, has overseen a decline in shareholder value, with negative total shareholder return (TSR) over three and five-year periods [6][8]. - ISS and Glass Lewis have both highlighted the unacceptable performance metrics of Cracker Barrel, indicating that the company has not performed well against its peers [6][8]. - The Board's failure to address operational issues has led to significant regression in performance and competitive positioning, with a lack of accountability for long-serving directors [6][8]. Group 2: Transformation Plan Concerns - Analysts express skepticism regarding Cracker Barrel's costly three-year transformation plan, with doubts about its ability to meet financial objectives [6][8]. - The reliance on only two test remodels and the absence of specific metrics for early progress raise concerns about the effectiveness of the transformation strategy [6][8]. - Glass Lewis points out an inconsistency in the Board's claims about past capital expenditures and the current need for updates, suggesting a lack of strategic foresight [7][8]. Group 3: Nominees and Recommendations - Biglari Capital has nominated Sardar Biglari, Milena Alberti-Perez, and Michael Goodwin for the Board, emphasizing their expertise in turnaround strategies and capital allocation [9][10]. - Glass Lewis and ISS recommend shareholders vote for the nominees, with Glass Lewis specifically noting Alberti-Perez's critical financial expertise and her positive impact on shareholder value at Pitney Bowes [10][11]. - The call to action urges shareholders to protect their investments by voting for all three nominees on the GOLD proxy card, highlighting the urgency for change at the Board level [5][10].

Core Viewpoint - Institutional Shareholder Services (ISS) and Glass Lewis have recommended that Cracker Barrel shareholders vote against the nominations of Milena Alberti-Perez and Sardar Biglari, citing concerns over their qualifications and governance track records [1][2][3] Summary by Sections ISS Recommendations - ISS has consistently recommended against Sardar Biglari in all proxy contests at Cracker Barrel where he has nominated himself, indicating a lack of confidence in his ability to contribute positively to the board [2] - The ISS report highlighted that both Alberti-Perez and Biglari are not suitable nominees to oversee Cracker Barrel's growth, warranting "withholds" against them [2][3] Governance Concerns - ISS criticized Alberti-Perez for her lack of preparation and relevant experience in the restaurant industry, raising concerns about her ability to contribute effectively [3] - Biglari's governance practices at his own company, Biglari Holdings, were described as inadequate, undermining his credibility for a position on Cracker Barrel's board [3] Cracker Barrel's Position - Cracker Barrel's board emphasized the importance of continuing its strategic transformation plan and argued that neither Alberti-Perez nor Biglari would add value to the board [3][4] - The board has been significantly refreshed in recent years, with a focus on relevant skill sets and a low average director tenure, which supports the company's growth strategy [4][7] Board Composition - If all recommended nominees are elected, the average tenure of independent directors will be less than three years, indicating a strong commitment to board refreshment [7] - Key board members, Carl Berquist and Meg Crofton, bring extensive experience from leading roles in major hospitality brands, contributing valuable industry insights [8] Call to Action - The board urges shareholders to vote for all ten recommended nominees on the WHITE proxy card to ensure the continued success of Cracker Barrel's transformation plan [10][12]

Financial Results - Biglari Holdings Inc. reported its financial results for Q3 and the first nine months of 2024, ending September 30, 2024[5] - The press release detailing the financial results was issued on November 8, 2024[5] - The report includes an exhibit with detailed financial statements[7] Company Information - The company is listed on the New York Stock Exchange under the trading symbols BH.A and BH for Class A and Class B common stock, respectively[2] - The company is not classified as an emerging growth company under the Securities Act of 1933[3] - The financial information provided in the report is not deemed "filed" under the Securities Exchange Act of 1934[6] Management - Bruce Lewis serves as the Controller for Biglari Holdings Inc.[8] - The report was signed and submitted on November 8, 2024[8]

Financial Performance - Net earnings attributable to Biglari Holdings Inc. shareholders for Q3 2024 were $32,125, a significant recovery from a loss of $56,514 in Q3 2023[100]. - Net sales for Q3 2024 were $39,660, representing an increase of $465 or 1.2% compared to Q3 2023, driven by a 5.4% increase in same-store sales at Steak n Shake[107]. - Total revenue for Q3 2024 was $62,384, compared to $61,886 in Q3 2023, reflecting a growth in overall business performance[106]. - Total operating businesses reported earnings of $7,520 in Q3 2024, a decline from $20,319 in Q3 2023, primarily due to lower performance in oil and gas operations[100]. - Net sales for the third quarter of 2024 were $82,553, up from $81,780 in 2023, while net sales for the first nine months of 2024 reached $246,811 compared to $242,741 in 2023[118]. Costs and Expenses - Franchise partner fees decreased to $17,157 in Q3 2024 from $17,622 in Q3 2023, attributed to higher food and labor expenses for franchise partners[109]. - The cost of food at company-operated units was $12,218 or 30.8% of net sales in Q3 2024, up from 30.3% in Q3 2023[111]. - Labor costs at company-operated restaurants rose to $13,158 or 33.2% of net sales in Q3 2024, compared to 31.1% in Q3 2023[112]. - General and administrative expenses were $10,355 or 16.6% of total revenue in Q3 2024, down from 17.3% in Q3 2023[113]. - Cost of food as a percentage of net sales increased to 30.4% in Q3 2024 from 28.8% in Q3 2023, while labor costs rose to 27.2% from 26.6%[118]. Asset Management - The company recorded no impairment charges in Q3 2024, contrasting with $752 in Q3 2023, reflecting improved asset management[114]. - As of September 30, 2024, the company operated 143 Steak n Shake locations, down from 159 a year earlier, indicating a strategic reduction in company-operated units[102]. Insurance Operations - Underwriting gain for First Guard was $1,366 in Q3 2024, down from $2,362 in Q3 2023, with a total underwriting gain of $3,497 for the first nine months of 2024 compared to $7,379 in 2023[120]. - Southern Pioneer reported premiums written of $7,496 in Q3 2024, an increase of 29.2% from $5,804 in Q3 2023, with a loss ratio of 47.9% compared to 60.5% in the same period last year[126]. - The company's insurance operations reported a pre-tax underwriting gain of $2,278 in Q3 2024, compared to $2,196 in Q3 2023[120]. - The ratio of losses and loss adjustment expenses to premiums earned for Southern Pioneer improved to 59.9% in the first nine months of 2024 from 59.6% in 2023[126]. Investment Performance - Net investment income for the third quarter of 2024 was $645, slightly down from $658 in Q3 2023, with total investment income for the first nine months reaching $2,122 compared to $1,714 in 2023[128]. - Investment income for the first nine months of 2024 was $2,686, compared to $2,169 in the same period of 2023[128]. - Investment gains net of tax for Q3 2024 were $3,706 million, compared to losses of $3,710 million in Q3 2023[138]. Cash Flow and Debt - Consolidated cash and investments as of September 30, 2024, totaled $624,382 million, an increase from $592,717 million on December 31, 2023[147]. - Net cash provided by operating activities for the first nine months of 2024 was $31,665 million, down 34.9% from $48,676 million in the same period of 2023[149]. - Cash used in investing activities decreased by $21,310 million in 2024 compared to 2023, primarily due to a decrease in investments[150]. - The balance of the line of credit was $9,000 million on September 30, 2024, with an increase in the available line of credit to $35,000 million[144]. - Biglari Holdings' line of credit was increased to $35 million as of September 30, 2024, with a balance of $9 million[151]. - The interest rate on the line of credit was 7.71% as of September 30, 2024, compared to 8.06% on December 31, 2023[151]. - Western Sizzlin had no debt outstanding under its $500,000 revolver as of September 30, 2024[152]. Regulatory and Compliance - There have been no material changes to critical accounting policies since the annual report for the year ended December 31, 2023[153]. - No recently issued accounting pronouncements were applicable for the Quarterly Report on Form 10-Q[154]. - Disclosure controls and procedures were deemed effective as of September 30, 2024[158]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2024[159]. - There have been no material changes to risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[160].

Core Viewpoint - Biglari Capital Corp. expresses significant concerns regarding the performance and management of Cracker Barrel Old Country Store, Inc., highlighting a substantial loss in shareholder value and calling for a change in the Board of Directors to address ongoing issues [2][4][29]. Financial Performance - Since 2019, Cracker Barrel shareholders have lost over $2.9 billion in market value, with the stock price down 50.9% since the appointment of the current CEO, Julie Felss Masino [2][3]. - Total shareholder returns for Cracker Barrel over the past one, three, and five years are -49.6%, -65.3%, and -70.2%, respectively, significantly underperforming compared to proxy peer groups and the S&P 500 [5]. Management and Board Issues - The letter criticizes the Board for its role in the company's poor performance, citing a lack of accountability and poor capital allocation decisions during the tenure of former CEO Sandy Cochran [8][10]. - The Board's decision to promote the former CEO to Chairman is viewed as indicative of governance failures, with the current Board being described as lacking the necessary experience to address the company's challenges [9][17]. Strategic Missteps - Cracker Barrel's strategy of opening new stores during a period of declining customer traffic is deemed unnecessary and costly, with significant closures occurring in recent years, particularly on the West Coast [14][20]. - The company has made poor investments in new brands, such as Holler & Dash and Punch Bowl Social, which have resulted in substantial financial losses [14][15]. Proposed Changes - Biglari Capital advocates for a low-capex plan focusing on core business operations rather than high-capital expenditures, suggesting the divestment of non-core brands and halting new store openings [21][22]. - The company should prioritize improving store-level economics and customer service to regain lost traffic and enhance shareholder value [21][22]. Call for Accountability - The letter emphasizes the need for a change in the Board to prevent further decline, arguing that the current Board has failed to address internal issues that have led to significant shareholder losses [23][24][28]. - Biglari Capital seeks to bring its expertise and long-term investment perspective to the Board to help restore value for shareholders [27][30].

Financial Results - Biglari Holdings Inc. reported its financial results for Q2 and the first six months ending June 30, 2024[4]. - The financial results include key metrics that are expected to be detailed in the attached press release[4]. Press Release - The press release detailing these results was issued on August 9, 2024[4]. Company Information - The company is listed on the New York Stock Exchange under the trading symbols BH.A and BH[2]. - The company’s address is listed as 19100 Ridgewood Parkway, Suite 1200, San Antonio, Texas 78259[1]. Compliance and Reporting - The report is not intended to be filed under the Securities Exchange Act of 1934, indicating a focus on transparency[5]. - The report is part of the company's ongoing compliance with SEC regulations[5]. - The company has not indicated that it is an emerging growth company, which may affect its reporting requirements[3]. Financial Statements - The financial statements and exhibits related to the report are included in the filing[6]. Management - Bruce Lewis serves as the Controller for Biglari Holdings Inc., signing off on the report[7].

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported significant net losses for Q2 and H1 2024, driven by unrealized investment losses which reduced total assets and equity Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$809,053** | **$849,422** | | Total Current Assets | $151,154 | $152,551 | | Investment Partnerships | $158,731 | $199,103 | | **Total Liabilities** | **$239,874** | **$250,092** | | **Total Shareholders' Equity** | **$569,179** | **$599,330** | Consolidated Earnings Summary (in thousands) | Metric | Q2 2024 (Unaudited) | Q2 2023 | First Six Months 2024 (Unaudited) | First Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $91,141 | $93,540 | $180,592 | $183,716 | | Investment Partnership (Losses) Gains | $(79,890) | $(7,496) | $(57,905) | $65,092 | | **Net (Loss) Earnings Attributable to BH** | **$(48,190)** | **$1,936** | **$(25,611)** | **$66,822** | | Net (Loss) Earnings per Class A Share | $(171.89) | $6.64 | $(90.80) | $229.00 | Consolidated Cash Flow Summary - First Six Months (in thousands) | Cash Flow Activity | 2024 (Unaudited) | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,910 | $31,518 | | Net cash used in investing activities | $(19,586) | $(28,474) | | Net cash used in financing activities | $(2,691) | $(9,478) | | **Decrease in cash, cash equivalents and restricted cash** | **$(1,374)** | **$(6,336)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail a decentralized operating structure with centralized financial decisions and highlight the equity method for investments as a source of earnings volatility - Biglari Holdings operates as a holding company with diverse subsidiaries and centralized investment decisions made by Chairman and CEO Sardar Biglari, who holds a **beneficial voting interest of approximately 71.5%** as of June 30, 2024[19](index=19&type=chunk) - The company accounts for its limited partnership interests using the equity method, which is a **primary source of volatility** in its consolidated earnings due to unrealized gains and losses[27](index=27&type=chunk)[31](index=31&type=chunk) - During the second quarter of 2024, the company recorded a **goodwill impairment charge of $1,000** related to its Western Sizzlin reporting unit[40](index=40&type=chunk) Restaurant Operations Revenues - First Six Months (in thousands) | Revenue Source | 2024 | 2023 | | :--- | :--- | :--- | | Net sales | $79,550 | $76,418 | | Franchise partner fees | $35,907 | $36,982 | | Franchise royalties and fees | $7,092 | $8,383 | | Other | $3,922 | $3,837 | | **Total** | **$126,471** | **$125,620** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28MD&A%29) Management attributes the net loss to non-operating investment partnership losses, which overshadowed positive results from operating businesses - Management states that investment and derivative gains/losses, a major source of earnings volatility, are **generally meaningless for analytical purposes** in understanding the company's results[126](index=126&type=chunk) Disaggregation of Net Earnings (Loss) - After Tax (in thousands) | Category | Q2 2024 | Q2 2023 | First Six Months 2024 | First Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total operating businesses** | **$18,842** | **$12,342** | **$24,937** | **$21,983** | | Goodwill impairment | $(1,000) | $— | $(1,000) | $— | | Corporate and other | $(3,125) | $(5,243) | $(5,121) | $(8,241) | | Investment partnership (losses) gains | $(60,748) | $(5,499) | $(43,600) | $50,530 | | Investment (losses) gains | $(2,159) | $276 | $(827) | $3,141 | | **Net (Loss) Earnings** | **$(48,190)** | **$1,876** | **$(25,611)** | **$67,413** | Financial Condition Summary (in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $26,897 | $28,066 | | Investments | $93,619 | $91,879 | | Fair value of interest in investment partnerships | $482,051 | $472,772 | | **Total cash and investments** | **$602,567** | **$592,717** | [Restaurants Segment](index=27&type=section&id=Restaurants%20Segment) The restaurant segment's profitability declined due to lower franchise fees and higher costs, despite an increase in same-store sales - Net sales for the restaurant segment increased 3.3% in Q2 2024, primarily driven by a **7.0% increase in Steak n Shake's same-store sales**[93](index=93&type=chunk) - Labor costs as a percentage of net sales at company-operated restaurants **increased from 30.8% to 31.8%** year-over-year, mainly due to an increase in store-level managers[96](index=96&type=chunk) Restaurant Store Count Change | Period | Company-Operated | Franchise Partner | Traditional Franchise | Total | | :--- | :--- | :--- | :--- | :--- | | **June 30, 2023** | **167** | **177** | **138** | **521** | | **June 30, 2024** | **142** | **182** | **120** | **477** | | Change | (25) | 5 | (18) | (44) | [Insurance Segment](index=30&type=section&id=Insurance%20Segment) The insurance segment's pre-tax earnings decreased due to a significantly lower underwriting gain, driven by a higher loss ratio at its First Guard subsidiary - First Guard's loss ratio **increased significantly to 64.9%** in Q2 2024 from 46.2% in Q2 2023, contributing to the lower underwriting gain[107](index=107&type=chunk) Pre-tax Underwriting Gain (Loss) (in thousands) | Subsidiary | Q2 2024 | Q2 2023 | First Six Months 2024 | First Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | First Guard | $1,331 | $3,155 | $2,131 | $5,017 | | Southern Pioneer | $(785) | $(451) | $(726) | $(562) | | **Total** | **$546** | **$2,704** | **$1,405** | **$4,455** | [Oil and Gas Segment](index=33&type=section&id=Oil%20and%20Gas%20Segment) The Oil and Gas segment's earnings surged due to a significant one-time gain on the sale of undeveloped reserves - During the first six months of 2024, Abraxas Petroleum recorded a **gain of $16,646** from selling undeveloped reserves to an unaffiliated party[116](index=116&type=chunk) Oil and Gas Segment Earnings (in thousands) | Line Item | Q2 2024 | Q2 2023 | First Six Months 2024 | First Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Oil and gas revenues | $8,671 | $10,741 | $18,181 | $22,964 | | Gain on sale of properties | $16,165 | $— | $16,646 | $— | | **Earnings before income taxes** | **$17,351** | **$2,890** | **$18,817** | **$4,993** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has determined that this section is not applicable for this reporting period - The company states that this item is **'Not applicable'**[141](index=141&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The Chief Executive Officer and Controller concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by this report[141](index=141&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[141](index=141&type=chunk) [Part II – Other Information](index=39&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Management does not expect the ultimate liability from pending legal matters to have a material effect on the company's financial position or results - Information regarding legal proceedings is incorporated by reference from **Note 13** to the Consolidated Financial Statements[142](index=142&type=chunk) - Note 13 states that the ultimate liability from pending legal proceedings and claims is **not likely to have a material effect** on the company's results of operations, financial position, or cash flow[72](index=72&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - **No material changes** from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023, were reported[143](index=143&type=chunk) [Other Part II Items](index=39&type=section&id=Other%20Part%20II%20Items) This section confirms no unregistered equity sales or defaults occurred and lists the exhibits filed with the report, including required certifications - The company reported **'None'** for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), and Item 5 (Other Information)[143](index=143&type=chunk) - Item 6 lists the exhibits filed, including **CEO and CFO certifications** pursuant to the Sarbanes-Oxley Act of 2002 and Interactive Data Files[145](index=145&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): May 10, 2024 | --- | --- | |----------------------------------------------------------------------------------------|-----------------------------------------| | (Exact Name of Registrant as Specified in Charter) \nIndiana 001-38477 | 82-3784946 | | (State or Other Jurisdic ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ | --- | --- | --- | |----------------------------------------------------------------------|-----------------------------------------|-------------------------------------------------------| | | | | | (State or other jurisdiction of incorporation) | | (I.R.S. Employer Identification No.) | | 19100 Ridgewood Parkway Suite 1200 | | | | San Antonio, Texas | | 78259 | | (Address of ...