Q2 2024 BT Brands Inc Earnings Call

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Welcome to the BT brands Q3, 2023 earnings call our host for today's call is Kenneth Berber.

At this time all participants are in a listen only mode. Later, we will conduct a question and answer session.

I would now like to turn the call over to your host Mr. Berger you may begin.

Okay, Thanks, Dan and.

Thank you for joining us today for the third quarter 2023, BP brands Conference call.

The way this will run as I think typically the way we've done it in the past I'm not going to read the financials or read the 10-K to you you certainly can do that and we're always available to answer questions.

And I'd give you.

A couple of highlights in terms of the quarterly performance and then I think probably most important from an investor standpoint.

Focus to the future and where we're going with the with <unk> brands.

On an overall basis for the quarter, our sales were about flat with last year.

At just over $4 million for the current year with $4 million in 7000 in a year ago with $4 million and 23000.

Two or three background points to that our Burger time business was down around 5% during the quarter, which.

Reflects what a lot of restaurants are seen we've had to curtail some hours in a number of cases and that does impact sales and the curtailment of ours has been driven by basically labor shortages.

Couple of cases, there were some repair issues that needed to get accomplished both I think had we not had the the curtailment of ours, which is a major focus for us going forward.

Sales at at Burger Times, certainly would've been up.

The.

Brightest spot in our acquisitions and as you know we've bought three restaurants operating restaurants since our public offering and we acquired a significant stake in Bagger Dave.

Which operate six restaurants in Michigan, Ohio, and Indiana.

The Oh through the nine months I would only say that the profit from a pie in the Sky has actually exceeded the profit from Burger time, and we've come very close on a just a cash flow basis.

To.

Earning and nearly 100% return of our investment during that time period.

It's a.

We've described before in calls because the pie property is a unique property located.

In our wood told Massachusetts.

Right near the ferry terminal that both the Martha's vineyard, so if you're.

If you are getting on the ferry or if you're taking the bike path in wood pole.

Youre going to see pie in the Sky and it's a very inviting.

Environment, and we get a large portion of the visitors who come in and buy a copy or smoothie or an example, just pie in the sky.

What we're doing now that pie right now is significant going forward, we're doing two things I mean, obviously, it's a breakfast coffee place, but it's a significant gathering place.

And so what we're exploring right now or some menu additions, which would give us.

More offerings in the afternoon period in late afternoon, where people, perhaps aren't looking for baked goods, they're looking for something else to eat so we're expanding that menu and we're also in the process.

Applying for a beer and wine license.

Which we don't believe we'll have any problem getting for Pi and we think those two additions to the.

Pi menu could result in a significant sales increase as we look at next year.

Meantime, I would also note that our wood told us a challenging place to recruit people and we've had our fair share of challenges out there as they have had other operators in that marketplace.

Where we are you know continuously striving to get to retain people and part of it is just the shortage of affordable housing and would Tau, which is not a problem. We're equipped to solve but hopefully others will step up and we can find people who will commute to buy and it does create a probably a pre.

Labor cost, which we've been able to overcome.

And the results for the quarter, which were a slight increase in profit from the same quarter a year ago.

Certainly in terms of pie, we're helped by moderating commodity cost.

We saw egg prices pork butter I'll moderate from the year ago levels.

And the biggest benefit as you look at our numbers.

Has been also in <unk>.

We.

Reducing labor hours in terms of what we had available last year to this year, which created sort of a natural a moderating of growth force.

And in Florida, as we've stated in the press release that went out with the earnings that market for US has still been a challenging to get where we want it to be.

We've been very focused at improving profitability in both tickets and at the village beer Garden and that focus has gone through menu engineering menu pricing.

Upping our levels of customer service, we're looking at a major initiative in a curbside to go that business has been a particularly strong at keagan.

Over the last year.

A year and we're going to.

Focus on that both at the beer Garden and continue to focus on upgrading that taken where in the past we have not done any third party delivery, it's only been customer pick up but we're looking at implementing a third party delivery just to get the more incremental sales.

In both of those stores, so that's kind of our major sales initiatives other than that the.

Quarter was impacted as we noted in our press release.

We had a slight gain in our marketable securities portfolio versus a loss last year and we did have additional.

G&A expenses related to pretty well publicized.

A proxy where we were a proxy to center, we had a proxy contest relevant to our interest in noble Romans we.

We didn't come out on the AR on the upside of that but we still own our position and we think that certainly we will get our value, but in the meantime during the quarter. Our lease costs have a way of of increase of mounting I would say, we incurred about $100000 of.

What I would only say as a non recurring G&A.

Which involved the lawyers proxy solicitors press releases and similar items associated with that with that proxy contest.

We also had a fairly significant ongoing charges.

As a result.

As you know.

I'm sure you're aware we need to.

Record expense for for equity compensation, which does not involve a cash compensation, but basically during the quarter. We ended up with about $120000 related to our equity based compensation plans, which also.

Impacted the earnings for the quarter and probably the most significant item and the one I wanted to address with our Investor group is the a.

Equity in the net loss of affiliate and that's our interest in and Bagger Dave's and this is a.

Very much a significant focus of our management group right now.

We basically have control these six doors in Michigan, and we've had a number of people a number of potential partners joint venture partners are just friends of ours go over and take a look at all the stores. The stores are in excellent excellent locations and they are very clean and well maintained.

Staff in all of these locations appears to be a you know operating at the level they should be but we're not doing the kind of business, we need to do so we see it as an upside in terms of Ah and you'll be hearing more from us on this over the next couple of months of taking a look at the Bagger Dave's.

Stores and Repurposing them read developing them in terms of another concept.

We just haven't exactly settle on what that concept a.

Will be but we think in terms of an average sales volume in those stores, which are four to 5000 square feet doors. So theres a lot of seeding those doors. We think we've got the opportunity to increase those stores to an average unit volume of a couple of million dollars and in terms of that generating a bottom line profit.

Of our 15%. So if you were to take the simple math and we worked to.

Do somewhere between 10, and 12 million of sales and generate 15% at the bottom line. It would be between one and have happened $2 million of contribution versus our year to date, we've recorded our equity portion of a loss of 254000. So this I think will be a major focus as we go.

Through the end of the year to develop our plan and to go about implementing again, we think.

You know, we don't get a two or three chances to make a new impression on the marketplaces, where in we'd like to come up with a concept that has legs that we can grow beyond those six stores.

So we're talking with people, we know when the restaurant business in terms of ideas suggestions we've looked at everything from a breakfast to barbecue pizza.

The you know just more of what we're doing so we've looked at a number a number of potential opportunities and we'd like to find a proven operator, who could work with us in terms of guaranteeing and I put that in quotes I mean, and obviously Oh I should say are helping to assure our success.

And the conversion of the Bagger Dave's stores. So that's you know something that we've been working on and we will continue to work on between now and hopefully early next year, when we'll start to roll out.

The things that we're talking about.

Just turning to for a moment to our balance sheet.

We ended the quarter actually pretty flat.

With approximately $7 million in cash and short term investments.

We've taken on no additional debt and are in the last year and obviously, we continue to pay down the debt that we do have so our basic financial position has continued to improve.

And we are you know obviously of the investing public did not give us the cash to park. It in the money market, So where our focus is to look for.

Acquisitions that.

Are things that we could grow into a significant businesses that are larger in scope than just a couple of units. So we want to fund.

Concept that either through.

Our own development or through.

Our franchising program, we could open up a significant number of stores.

Throughout the region or the market and our CEO Gary Cop route as every day he's identified potential opportunity and you know we've just been very picky I think one of the things that are in the three acquisitions, we've done and in their own restaurant.

Business.

We've gained kind of a free significant understanding of what we think will take two.

Propel BP brands into a much more significant company and if anything as things have softened a bit in the consumer market than a lot of restaurants continue to face labor challenges and aren't able to generate.

The profit that they historically had oh, we see potential for a.

More opportunities in the next year and we plan on pursuing them and I'm sure. We will have more things to report to you as we get into 'twenty 'twenty four in terms of growing our business into a very significant business. Obviously, we're a public company we comment on that in the press release.

Although we've certainly benefited by higher investment income and interest income this year.

That's not a that's not our purpose we want to maintain a strong financial position.

But I think we need to go out and find things, where we can get a high return on equity and grow the business significantly so that the shareholders. All of US who are shareholders can be report rewarded with significant returns going forward.

Jan having said that I'm, a ready and Gary May have joined US just in the last few minutes ready to take any questions that.

Anybody may have so.

Gary you would join US Yep Yep go ahead, okay, great. Okay.

If you would like to ask a question. Please press star one on your telephone keypad now you'll be placed into the queue in the order received please.

Please be prepared to ask your question when prompted.

Once again, if you have a question. Please press star one on your phone now.

And once again its star one to ask a question.

Okay. Mr. Bergman and it appears there are no questions at this time I will turn the conference back to you.

Okay, I guess I would only conclude by we're a highly focused on moving this business forward and moving it forward to a much more significant levels in terms of the scope of our activities and the size of our business. So hopefully everybody will stay in touch and.

Our weekend deliver on that promise and the other thing I would say is that both Gary and I are available we do talk to our investors.

And whenever they call them. They are all highly reachable my my cell phone is the number that's at the bottom of that press release, and if somebody's got a question or a comment or something they think we should be considered.

I answered that phone you know pretty much every time it rings and we look forward to taking out taking any of the questions and.

Wants it could be tea brands and I think we have a highly sure brush shareholder friendly company.

Company, so with that I would thank everybody who dialed in this morning. This today and we will have a replay of this conference call up on the brokered time website, probably within the next 24 hours. So if you want to refer it to somebody else to just listen to the call that would be that would be great. So with that I think we can.

And our Q3 investor call.

And this does conclude today's conference. Thank you for attending.

Okay. Thank you. Thank you everybody.

Yes.

The host has ended this call goodbye.