BT Brands(BTBD) - 2025 Q4 - Annual Report

Financial Performance - Net sales for fiscal 2025 decreased by $1.3 million, or 7.5%, to $13.5 million from $14.8 million in fiscal 2024, primarily due to the closure of the Village Bier Garten location[203]. - Comparable restaurant sales for Burger Time locations open for the full year declined approximately $224,000, or 3.9%, attributed to reduced customer traffic[205]. - Net loss improved to $687,839 in fiscal 2025 from a loss of $2.3 million in fiscal 2024, reflecting higher restaurant-level profitability and lower impairment charges[217]. - The company recorded a net loss of $687,839 in fiscal 2025, an improvement from a net loss of $2,311,208 in fiscal 2024[224]. Cost Management - Restaurant operating costs as a percentage of sales improved to 87.2% in fiscal 2025 from 95.1% in fiscal 2024, driven by the closure of less-profitable locations and improved margins[206]. - Food and paper costs decreased to 33.3% of restaurant sales in fiscal 2025 from 37.8% in fiscal 2024, reflecting cost control initiatives and a more moderate inflationary environment[209]. - Labor costs decreased to 37.9% of restaurant sales in 2025 from 41.3% in 2024, resulting from the closure of unprofitable locations and better cost control[210]. Acquisition and Mergers - In May 2024, the company acquired Schnitzel Haus, contributing approximately $1.5 million in sales during fiscal 2025[204]. - The company entered into a Merger Agreement with Aero Velocity in September 2025, with plans to spin off restaurant operations into a separate entity, BT Group, Inc.[196]. - The proposed merger with Aero Velocity Inc. could fundamentally change the company's capital structure and strategic focus[235]. Cash Flow and Investments - Cash and marketable securities increased to $4,442,300 as of December 28, 2025, up from $4,270,970 in the previous year[223]. - Net cash provided by operating activities was $284,876 in fiscal 2025, a significant improvement from net cash used in operating activities of $284,876 in fiscal 2024[229]. - Cash used in investing activities included approximately $172,925 for capital expenditures and $380,861 for the purchase of Water Bottle Inventory[231]. Liabilities and Obligations - The company has approximately $3.7 million in contractual obligations, with monthly required payments totaling approximately $47,000[234]. - An accrued liability of $215,000 was recorded related to litigation concerning a lease dispute[226]. Shareholder Actions - The company did not repurchase any shares during fiscal 2025, despite having a Board-authorized Share Repurchase Program[240]. Investment Valuation - The carrying value of the investment in Bagger Dave's Burger Tavern, Inc. was reduced to zero due to cumulative equity losses[247]. Customer Metrics - Average customer transaction at Burger Time restaurants remained stable at approximately $14.50 in fiscal 2025[191]. - Restaurant-level EBITDA for fiscal 2025 was $1,720,909, representing a margin of 12.4%, compared to $723,828 and a margin of 4.9% in fiscal 2024[221].