Biglari (US:BH)2023-08-03 16:00Financial Performance - The cost of food at company-operated units in Q2 2023 was $11,702, representing 29.6% of net sales, a decrease from 30.2% in Q2 2022[9] - General and administrative expenses in Q2 2023 were $10,790, or 16.7% of total revenue, slightly down from 16.8% in Q2 2022[10] - Interest on lease obligations decreased to $2,608 in 2023 from $2,797 in 2022 due to the maturity and retirement of lease obligations[11] - First Guard's pre-tax underwriting gain increased to $2,704 in Q2 2023 from $1,433 in Q2 2022, while Southern Pioneer reported a pre-tax underwriting loss of $451 in Q2 2023[13] - Total premiums earned in Q2 2023 were $15,971, up from $15,226 in Q2 2022, with insurance losses decreasing to $8,372 from $9,244[14] - Oil and gas revenues in Q2 2023 were $4,810, a significant decline from $14,440 in Q2 2022, with production costs at $1,868 compared to $3,843[19] - Licensing and media revenue in Q2 2023 was $761, down from $1,249 in Q2 2022, with a corresponding decrease in costs[20] - Net investment income for Q2 2023 was $594 million, a significant increase from $203 million in Q2 2022, and for the first six months of 2023, it reached $1,056 million compared to $371 million in the same period of 2022[34] - Earnings before income taxes for Q2 2023 were $2,890 million, a decrease from $8,421 million in Q2 2022, with first six months earnings at $4,993 million compared to $12,342 million in 2022[35] - Total revenues for the second quarter of 2023 reached $93,540 thousand, up from $92,367 thousand in the same period of 2022, reflecting a year-over-year increase of 1.3%[83] - Net earnings attributable to Biglari Holdings Inc. shareholders for the second quarter of 2023 were $1,936 thousand, compared to a loss of $73,780 thousand in the second quarter of 2022[83] - The company reported a total of $64,491 thousand in revenues from restaurant operations for the second quarter of 2023, an increase from $60,324 thousand in the same quarter of 2022, marking a growth of 3.6%[83] - Net earnings for the first six months of 2023 were $67,413, compared to a loss of $74,078 in the same period of 2022[87] - Total comprehensive income attributable to Biglari Holdings Inc. shareholders for the second quarter of 2023 was $1,614, compared to a loss of $74,801 in the same quarter of 2022[101] Investment and Assets - The company acquired Maxim to transform its business model and generate non-magazine revenue through licensing and consumer products[37] - Total assets increased to $889,996 thousand in 2023 from $828,474 thousand in 2022, representing a growth of approximately 7.5%[67] - The company’s investment partnerships grew significantly to $228,736 thousand in 2023, up from $155,794 thousand in 2022, indicating a growth of approximately 46.7%[67] - The total fair value of financial assets as of June 30, 2023, was $105,222, compared to $88,267 as of December 31, 2022, indicating an increase of 19.2%[200] - The total assets of the investment partnerships as of June 30, 2023, were $423.880 million, with total liabilities of $19.939 million[120] Cash Flow and Liquidity - Net cash used in investing activities decreased by $4,345 in 2023 compared to 2022, with capital expenditures down by $5,856[27] - The company maintains significant liquidity, with consolidated cash flow activities reflecting improved asset sales[26] - Net cash provided by operating activities for the first six months of 2023 was $31,518 million, down from $34,204 million in 2022[42] - The company utilized $6,400 million for net payments on its line of credit during 2023, contributing to a decrease in cash[43] - The company reported net cash provided by operating activities of $31,518 for the first six months of 2023, down from $34,204 in 2022[87] - Cash, cash equivalents, and restricted cash at the end of the second quarter of 2023 totaled $32,469, a decrease from $41,850 at the end of the second quarter of 2022[87] - The company reported a decrease in cash and cash equivalents from $38,805 at the beginning of the year to $32,469 at the end of the second quarter[87] - The company’s cash and cash equivalents decreased to $30,881 thousand in 2023 from $37,467 thousand in 2022, a decline of about 17.4%[67] Liabilities and Expenses - Current liabilities decreased to $121,446 thousand in 2023 from $134,897 thousand in 2022, a reduction of approximately 10%[67] - Total liabilities slightly increased to $273,642 thousand in 2023 from $272,906 thousand in 2022, reflecting a marginal rise of 0.3%[67] - The net liabilities as of June 30, 2023, were $14,680, compared to $13,474 as of June 30, 2022, reflecting an increase of approximately 8.9%[148] - The company reported incurred losses and loss adjustment expenses of $16,968 for the first six months of 2023, down from $18,832 in the same period of 2022, indicating a decrease of about 9.9%[166] - The effective income tax expense for the first six months of 2023 was $20,756, compared to an income tax benefit of $22,880 for the same period in 2022, reflecting a significant change due to income generated by investment partnerships[174] Franchise and Operations - Franchise partner fees for the first six months of 2023 totaled $36.982 million, compared to $32.049 million in the same period of 2022, showing growth in franchise operations[144] - Franchise partner fees related to rental income for the first six months of 2023 were $11,338, up from $9,831 in the same period of 2022, showing an increase of about 15.3%[162] - Total lease income for the second quarter of 2023 was $5,965, compared to $5,371 in the second quarter of 2022, representing an increase of approximately 11%[157] - The company reported a total of 177 franchise partner units as of June 30, 2023, unchanged from the previous year, but with a decrease in traditional units from 166 to 138[205] - The company plans to refranchise the remaining closed company-operated Steak n Shake restaurants, with 30 out of 167 stores closed as of June 30, 2023[202] Operational Performance - Total operating businesses generated $16,253 in earnings for the second quarter of 2023, compared to $15,364 in the same quarter of 2022, reflecting a year-over-year increase of 5.8%[187] - Restaurant operations, including Steak n Shake and Western Sizzlin, reported earnings of $9,227 for the second quarter of 2023, up from $4,011 in the same quarter of 2022, representing a significant increase of 130.5%[187] - The insurance operations reported earnings of $3,968 for the second quarter of 2023, compared to $2,431 in the same quarter of 2022, reflecting a year-over-year increase of 63.4%[187] - Investment income and other for the second quarter of 2023 was $1,265, compared to $998 in the same quarter of 2022, representing a growth of 26.8%[187] - The company incurred a total interest expense of $(40) for the second quarter of 2023, compared to $(207) in the same quarter of 2022, showing a reduction in interest expenses[187]