Financial Performance - Net earnings for the third quarter of 2025 were $(5,291) thousand, compared to $32,125 thousand in the same period of 2024, reflecting a significant decline [116]. - Total revenue for the third quarter of 2025 was $71,741 thousand, an increase of 15.0% from $62,384 thousand in the third quarter of 2024 [120]. - Net sales for the third quarter of 2025 reached $47,462 thousand, representing a 19.7% increase compared to $39,660 thousand in the third quarter of 2024, driven by a 15.6% increase in same-store sales for domestic company-operated units [121]. - Franchise partner fees increased to $19,166 thousand in the third quarter of 2025 from $17,157 thousand in the same quarter of 2024, attributed to a 14.8% increase in franchise partner same-store sales [123]. Cost and Expenses - The cost of food at company-operated units was $14,849 thousand or 31.3% of net sales in the third quarter of 2025, up from $12,218 thousand or 30.8% in the same quarter of 2024 [126]. - Labor costs at company-operated restaurants were $14,573 thousand or 30.7% of net sales in the third quarter of 2025, down from $13,158 thousand or 33.2% in the third quarter of 2024 [127]. - General and administrative expenses for the third quarter of 2025 were $12,129 thousand, representing 16.9% of total revenue, compared to $10,355 thousand or 16.6% in the same quarter of 2024 [128]. - Marketing expenses increased to $5,370 thousand or 7.5% of total revenue in the third quarter of 2025, compared to $3,182 thousand or 5.1% in the same quarter of 2024, due to promotions of new products [129]. Operational Metrics - The company operated 441 restaurants as of September 30, 2025, down from 492 restaurants at the end of 2024, indicating a reduction in total store count [117]. - The company recorded no impairment charges in the third quarter of 2025, maintaining a focus on operational efficiency [130]. Insurance Operations - Underwriting gain for First Guard increased to $1,691 in Q3 2025 from $1,366 in Q3 2024, and for the first nine months, it rose to $4,997 from $3,497 [136]. - Southern Pioneer reported premiums written of $8,408 in Q3 2025, up from $7,496 in Q3 2024, and a 21.9% increase in premiums earned for the first nine months compared to 2024 [142]. - Total pre-tax underwriting gain for the insurance operations reached $4,537 in Q3 2025, significantly higher than $2,278 in Q3 2024 [138]. - Net investment income for the insurance operations was $651 in Q3 2025, slightly up from $645 in Q3 2024 [144]. - Total other income for the insurance operations was $710 in Q3 2025, compared to $845 in Q3 2024 [138]. - First Guard's underwriting expenses decreased to $928 in Q3 2025 from $2,025 in Q3 2024, indicating improved cost efficiency [140]. Oil and Gas Operations - Oil and gas revenues decreased to $7,372 in Q3 2025 from $9,574 in Q3 2024, with a total contribution to net earnings of $1,342 in Q3 2025 [146]. - Abraxas Petroleum's oil and gas revenues fell to $4,276 in Q3 2025 from $6,019 in Q3 2024, with a total contribution to net earnings of $722 in Q3 2025 [148]. - Southern Oil's oil and gas revenues were $3,096 in Q3 2025, down from $3,555 in Q3 2024, but the contribution to net earnings increased to $620 [151]. - The total cost and expenses for oil and gas operations were $6,801 in Q3 2025, down from $8,916 in Q3 2024 [146]. Investment and Financing - Licensing and media revenue for Q3 2025 was $1,446 million, up from $202 million in Q3 2024, and for the first nine months of 2025, it reached $5,140 million compared to $715 million in the same period of 2024 [153]. - Investment gains net of tax for Q3 2025 were $1,184 million, a decrease from $3,706 million in Q3 2024, while for the first nine months of 2025, they were $2,214 million compared to $2,879 million in the same period of 2024 [154]. - Interest expense on notes payable increased to $829 million in Q3 2025 from $275 million in Q3 2024, and for the first nine months, it rose to $2,581 million from $317 million in the same period of 2024 [160]. - Corporate and other net losses for Q3 2025 were $3,775 million, down from $5,548 million in Q3 2024, primarily due to no accrued incentive fees in 2025 [161]. - Income tax benefit for Q3 2025 was $2,261 million compared to an expense of $11,201 million in Q3 2024, while the expense for the first nine months of 2025 was $4,002 million, up from $3,292 million in the same period of 2024 [162]. - Total cash and investments as of September 30, 2025, amounted to $1,117,184 million, an increase from $789,950 million as of December 31, 2024 [164]. - Net cash provided by operating activities for the first nine months of 2025 was $89,188 million, significantly higher than $31,665 million in the same period of 2024 [166]. - Cash used in investing activities increased to $36,200 million in the first nine months of 2025 from $34,916 million in the same period of 2024 [167]. - Biglari Holdings' line of credit was amended to $35,000 million, with a balance of $15,000 million as of September 30, 2025 [168]. - Steak n Shake obtained a loan of $225,000 million on September 30, 2025, with a fixed interest rate of 8.8% per annum [170].
Biglari (BH_A) - 2025 Q3 - Quarterly Report