Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Entity Registrant Name | BIGLARI HOLDINGS INC. | |
Entity Central Index Key | 1,726,173 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 206,864 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 2,068,640 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 45,444 | $ 58,577 |
Investments | 24,157 | 23,289 |
Receivables | 12,187 | 16,284 |
Inventories | 7,312 | 7,268 |
Other current assets | 9,299 | 7,221 |
Total current assets | 98,399 | 112,639 |
Property and equipment | 291,625 | 295,800 |
Goodwill and other intangible assets | 66,774 | 66,645 |
Investment partnerships | 545,939 | 566,021 |
Other assets | 17,846 | 22,479 |
Total assets | 1,020,583 | 1,063,584 |
Current liabilities: | ||
Accounts payable and accrued expenses | 106,708 | 128,744 |
Current portion of notes payable and other borrowings | 6,524 | 6,748 |
Total current liabilities | 113,232 | 135,492 |
Long-term notes payable and other borrowings | 254,988 | 256,994 |
Deferred taxes | 89,387 | 88,401 |
Other liabilities | 11,269 | 11,369 |
Total liabilities | 468,876 | 492,256 |
Shareholders' equity | ||
Common Stock | 1,071 | 1,071 |
Additional paid-in capital | 381,975 | 382,014 |
Retained earnings | 563,780 | 565,504 |
Accumulated other comprehensive loss | (966) | (1,404) |
Treasury stock, at cost | (394,153) | (375,857) |
Biglari Holdings Inc. shareholders' equity | 551,707 | 571,328 |
Total liabilities and shareholders' equity | $ 1,020,583 | $ 1,063,584 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, shares outstanding | 2,068,535 | 2,067,613 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Restaurant operations | $ 193,934 | $ 195,694 |
Insurance premiums and other | 6,547 | 6,080 |
Media advertising and other | 1,744 | 1,619 |
Total revenues | 202,225 | 203,393 |
Cost and expenses | ||
Restaurant cost of sales | 158,350 | 157,298 |
Insurance losses and underwriting expenses | 5,928 | 5,020 |
Media cost of sales | 1,517 | 1,493 |
Selling, general and administrative | 32,650 | 29,486 |
Depreciation and amortization | 4,946 | 5,621 |
Total cost and expenses | 203,391 | 198,918 |
Other income (expenses) | ||
Interest expense | (2,754) | (2,824) |
Interest on obligations under leases | (2,186) | (2,280) |
Investment partnership gains (losses) | 3,495 | (24,968) |
Total other income (expenses) | (1,445) | (30,072) |
Earnings (losses) before income taxes | (2,611) | (25,597) |
Income tax benefit | (797) | (9,776) |
Net loss | $ (1,814) | $ (15,821) |
Earnings per share | ||
Net earnings per equivalent Class A share | $ (5.15) | $ (42.72) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Consolidated Statements Of Comprehensive Income | ||
Net loss | $ (1,814) | $ (15,821) |
Other comprehensive income: | ||
Net change in unrealized gains and losses on investments | 0 | 191 |
Applicable income taxes | 0 | (67) |
Reclassification to earnings | (73) | 0 |
Applicable income taxes | 15 | 0 |
Foreign currency translation | 496 | 185 |
Other comprehensive income, net | 438 | 309 |
Total comprehensive loss | $ (1,376) | $ (15,512) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net earnings (loss) | $ (1,814) | $ (15,821) |
Adjustments to reconcile net earnings (loss) to operating cash flows: | ||
Depreciation and amortization | 4,946 | 5,621 |
Provision for deferred income taxes | 380 | (10,281) |
Asset impairments and other non-cash expenses | 239 | 435 |
Loss on disposal of assets | 96 | 99 |
Investment partnership gains/losses | (3,495) | 24,968 |
Distributions from investment partnerships | 5,200 | 5,015 |
Changes in receivables and inventories | 3,861 | 5,202 |
Changes in other assets | 1,121 | (114) |
Changes in accounts payable and accrued expenses | (19,979) | (5,261) |
Net cash provided by (used in) operating activities | (9,445) | 9,863 |
Investing activities | ||
Capital expenditures | (2,452) | (1,990) |
Proceeds from property and equipment disposals | 1,524 | 50 |
Purchases of investments | (18,340) | (16,945) |
Redemptions of fixed maturity securities | 17,492 | 18,653 |
Net cash used in investing activities | (1,776) | (232) |
Financing activities | ||
Payments on revolving credit facility | (39) | (20) |
Principal payments on long-term debt | (550) | (15,550) |
Principal payments on direct financing lease obligations | (1,400) | (1,356) |
Proceeds from exercise of stock options | 42 | 30 |
Net cash used in financing activities | (1,947) | (16,896) |
Effect of exchange rate changes on cash | 35 | 17 |
Decrease in cash, cash equivalents and restricted cash | (13,133) | (7,248) |
Cash, cash equivalents and restricted cash at beginning of year | 67,230 | 75,833 |
Cash, cash equivalents and restricted cash at end of third quarter | $ 54,097 | $ 68,585 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Balance at Dec. 31, 2016 | $ 1,071 | $ 381,906 | $ 515,433 | $ (3,584) | $ (362,886) | $ 531,940 |
Net earnings (loss) | (15,821) | (15,821) | ||||
Other comprehensive income, net | 309 | 309 | ||||
Adjustment to treasury stock for holdings in investment partnerships | 116 | (1,600) | (1,484) | |||
Exercise of stock options | (8) | 38 | 30 | |||
Balance at Mar. 31, 2017 | 1,071 | 382,014 | 499,612 | (3,275) | (364,448) | 514,974 |
Balance at Dec. 31, 2017 | 1,071 | 382,014 | 565,504 | (1,404) | (375,857) | 571,328 |
Net earnings (loss) | (1,814) | (1,814) | ||||
Adoption of accounting standards | 90 | 90 | ||||
Other comprehensive income, net | 438 | 438 | ||||
Adjustment to treasury stock for holdings in investment partnerships | (18,377) | (18,377) | ||||
Exercise of stock options | (39) | 81 | 42 | |||
Balance at Mar. 31, 2018 | $ 1,071 | $ 381,975 | $ 563,780 | $ (966) | $ (394,153) | $ 551,707 |
Note 1. Summary of Significant
Note 1. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Note 1. Summary of Significant Accounting Policies | Description of Business The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2017. Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major operating, investment, and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of March 31, 2018, Mr. Biglari’s beneficial ownership of the Company’s outstanding common stock was approximately 54.8%. On March 5, 2018, the Company entered into an agreement with NBHSA Inc. (“New BH”), a direct, wholly owned subsidiary of the Company, and BH Merger Company (“Merger Sub”), a wholly owned subsidiary of New BH. Pursuant to the agreement, on April 30, 2018, Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of New BH. Upon completion of the merger, New BH changed its name to “Biglari Holdings Inc.” and replaced the Company as the publicly held corporation through which our collection of businesses is conducted. New BH has two classes of common stock designated Class A common stock and Class B common stock. A share of Class B common stock has economic rights equivalent to 1/5 th As a result of the April 30, 2018 transaction, the current shareholders of the Company became shareholders of New BH and received, for every ten (10) shares of common stock of the Company they owned on April 30, 2018, (i) ten (10) shares of Class B common stock of New BH and (ii) one (1) share of Class A common stock of New BH. In other words, shareholders received for a share of common stock of the Company (i) one (1) share of Class B common stock of New BH and (ii) 1/10 th Starting on May 1, 2018, the shares of New BH Class A common stock trade on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A,” whereas the New BH Class B common stock trades on the NYSE under the ticker symbol “BH,” which is the former ticker symbol for the Company’s common stock. For accounting purposes, the April 30, 2018 transaction will be treated as a merger of entities under common control. Accordingly, the consolidated financial position and results of operations of the Company will be included in the consolidated financial statements of New BH on the same basis as currently presented, except for earnings per share which is impacted by the issuance of the new common shares. The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”). Intercompany accounts and transactions have been eliminated in consolidation. |
Note 2. New Accounting Standard
Note 2. New Accounting Standards | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Note 2. New Accounting Standards | In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The objective of the update is to reduce diversity in how certain transactions are classified in the statement of cash flows. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2016-15 did not have a material effect on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The following table summarizes the impact of the adoption of ASC 606 on revenues, operating expenses and net earnings for the three months ended March 31, 2018. As Reported Adjustments for the Adoption of ASC 606 Amounts without Adoption of ASC 606 Statements of Earnings Revenues Restaurant operations Net sales $ 185,571 $ - $ 185,571 Franchise royalties and fees 7,102 2,369 4,733 Other 1,261 279 982 Selling, general and administrative 32,650 2,522 30,128 Earnings (loss) before income taxes (2,611) 126 (2,737) Income tax expense (benefit) (797) 31 (828) Net earnings (loss) (1,814) 95 (1,909) The impact of ASC 606 on the Company’s balance sheet as of March 31, 2018 was not material. The cumulative change in retained earnings as of January 1, 2018 was $90. Upon adoption of ASC 606, the Company changed its restaurant operations accounting policies for the recognition of franchise fees, recording of advertising arrangements, and recognition of gift card revenue. See additional revenue disclosures in Note 8 Restaurant Operations Revenues. The adoption of ASC 606 did not have any significant impact on our insurance or media businesses. |
Note 3. Earnings Per Share
Note 3. Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings per share | |
Note 3. Earnings Per Share | Earnings per share of common stock is based on the weighted average number of shares outstanding during the year. The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P. and The Lion Fund II, L.P. (collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted average common shares outstanding. However, these shares are legally outstanding. On September 16, 2017, The Lion Fund II, L.P. entered into a Rule 10b5-1 trading plan to purchase up to an aggregate of 110,000 shares of Biglari Holdings common stock at prevailing market prices. During the first quarter of 2018, 45,302 shares were purchased. All of the shares to be purchased under the trading plan remain legally outstanding. On April 30, 2018 the Company's shareholders exchanged their shares of Company common stock for dual common stock - Class A common stock and Class B common stock. The following table presents shares authorized, issued and outstanding on March 31, 2018 and December 31, 2017. March 31, December 31, 2017 Common stock authorized 2,500,000 2,500,000 Common stock issued 2,142,202 2,142,202 Treasury stock held by the Company (73,667) (74,589) Outstanding shares 2,068,535 2,067,613 The issuance of dual class common stock on April 30, 2018 is applied on a retrospective basis for the calculation of earnings per share. Accordingly, earnings per share for the first quarters of 2018 and 2017 are impacted by the issuance of the new common shares. The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” As of March 31, 2018, the total outstanding shares of the Company were 2,068,535. The calculation of earnings per share reflects an exchange of 2,068,535 outstanding shares of the Company for 206,854 shares of New BH Class A common stock and 2,068,535 shares of New BH Class B common stock. On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of March 31, 2018 and 620,284 shares outstanding as of December 31, 2017. For financial reporting purposes, the proportional ownership of the Company’s common stock owned by the investment partnerships is excluded in the earnings per share calculation. After giving effect for the investment partnerships’ proportional ownership of New BH’s common stock, the equivalent Class A weighted average common shares during the first quarter of 2018 and 2017 were 352,191 and 370,344, respectively. Each Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5th) of such rights of Class A common stock; however, Class B common stock has no voting rights. |
Note 4. Investments
Note 4. Investments | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Investments [Abstract] | |
Note 4. Investments | Investments consisted of the following. March 31, December 31, 2017 Cost $ 24,099 $ 23,216 Gross unrealized gains 58 73 Fair value $ 24,157 $ 23,289 Investments in equity securities and a related put option of $4,463 are included in other current assets as of March 31, 2018 and in other assets as of December 31, 2017. The investments are recorded at fair value. |
Note 5. Investment Partnerships
Note 5. Investment Partnerships | 3 Months Ended |
Mar. 31, 2018 | |
Note 5. Investment Partnerships Details Narrative | |
Note 5. Investment Partnerships | The Company reports on the limited partnership interests in investment partnerships under the equity method of accounting. We record our proportional share of equity in the investment partnerships but exclude Company common stock held by said partnerships. The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though they are legally outstanding. The Company records gains/losses from investment partnerships (inclusive of the investment partnerships’ unrealized gains and losses on their securities) in the consolidated statements of earnings based on our carrying value of these partnerships. The fair value is calculated net of the general partner’s accrued incentive fees. Gains and losses on Company common stock included in the earnings of these partnerships are eliminated because they are recorded as treasury stock. The fair value and adjustment for Company common stock held by the investment partnerships to determine carrying value of our partnership interest is presented below. Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (1,850) (5,345) 3,495 Contributions (net of distributions) to investment partnerships (5,200) (5,200) Increase in proportionate share of Company stock held 18,377 (18,377) Partnership interest at March 31, 2018 $ 918,229 $ 372,290 $ 545,939 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (59,517) (34,549) (24,968) Contributions (net of distributions) to investment partnerships (5,015) (5,015) Increase in proportionate share of Company stock held 1,484 (1,484) Partnership interest at March 31, 2017 $ 908,175 $ 362,005 $ 546,170 The carrying value of the investment partnerships net of deferred taxes is presented below. March 31, December 31, 2017 Carrying value of investment partnerships $ 545,939 $ 566,021 Deferred tax liability related to investment partnerships (96,327) (95,309) Carrying value of investment partnerships net of deferred taxes $ 449,612 $ 470,712 The Company’s proportionate share of Company stock held by investment partnerships at cost is $373,316 and $354,939 at March 31, 2018 and December 31, 2017, respectively, and is recorded as treasury stock. The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value is according to our proportional ownership interest of the fair value of investments held by the investment partnerships. The fair value measurement is classified as level 3 within the fair value hierarchy. Gains (losses) from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below. First Quarter 2018 2017 Gains (losses) on investment partnership $ 3,495 $ (24,968) Tax expense (benefit) 420 (9,761) Contribution to net earnings (loss) $ 3,075 $ (15,207) On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp. (“Biglari Capital”), will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above a hurdle rate of 6% over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. The Company did not accrue an incentive fee during the first quarter of 2018 or 2017. Our investments in these partnerships are committed on a rolling 5-year basis. Biglari Capital is an entity solely owned by Mr. Biglari. Summarized financial information for The Lion Fund, L.P. and The Lion Fund II, L.P. is presented below. Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of March 31, 2018 $ 198,286 $ 1,057,316 Total liabilities as of March 31, 2018 $ 1,481 $ 200,831 Revenue for the first quarter ended March 31, 2018 $ (4,135) $ 3,069 Earnings (loss) for the first quarter ended March 31, 2018 $ (4,151) $ 922 Biglari Holdings’ ownership interest as of March 31, 2018 65.1% 92.3% Total assets as of December 31, 2017 $ 203,560 $ 1,060,737 Total liabilities as of December 31, 2017 $ 157 $ 199,974 Revenue for the first quarter ended March 31, 2017 $ (15,696) $ (52,652) Earnings (loss) for the quarter first ended ended March 31, 2017 $ (15,716) $ (53,514) Biglari Holdings’ ownership interest as of March 31, 2017 63.6% 92.5% Revenue in the above summarized financial information of the investment partnerships includes investment income and unrealized gains and losses on investments. The investments held by the investment partnerships are largely concentrated in the common stock of one investee, Cracker Barrel Old Country Store, Inc. |
Note 6. Property and Equipment
Note 6. Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Note 6. Property and Equipment | Property and equipment is composed of the following. March 31, 2018 December 31, 2017 Land $ 156,176 $ 156,506 Buildings 151,669 152,610 Land and leasehold improvements 162,518 162,652 Equipment 200,240 203,145 Construction in progress 1,797 1,782 672,400 676,695 Less accumulated depreciation and amortization . (380,775) (380,895) Property and equipment, net $ 291,625 $ 295,800 |
Note 7. Goodwill and Other Inta
Note 7. Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Note 7. Goodwill and Other Intangible Assets | Goodwill Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions. A reconciliation of the change in the carrying value of goodwill is as follows. Restaurants Other Total Goodwill at December 31, 2017 $ 28,168 $ 11,913 $ 40,081 Change in foreign exchange rates during first quarter 2018 18 - 18 Goodwill at March 31, 2018 $ 28,186 $ 11,913 $ 40,099 We are required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we test for potential impairment using a two-step approach. The first is the estimation of fair value of each reporting unit. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment occurs when the estimated fair value of goodwill is less than its carrying value. The valuation methodology and underlying financial information included in our determination of fair value require significant management judgments. We use both market and income approaches to derive fair value. The judgments in these two approaches include, but are not limited to, comparable market multiples, long-term projections of future financial performance, and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results. No impairment charges for goodwill were recorded in the first three months of 2018 or 2017. Other Intangible Assets Other intangible assets are composed of the following. March 31, 2018 December 31, 2017 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (4,248) $ 1,062 $ 5,310 $ (4,116) $ 1,194 Other 810 (751) 59 810 (743) 67 Total 6,120 (4,999) 1,121 6,120 (4,859) 1,261 Intangible assets with indefinite lives: Trade names 15,876 - 15,876 15,876 - 15,876 Other assets with indefinite lives 9,678 - 9,678 9,427 - 9,427 Total intangible assets $ 31,674 $ (4,999) $ 26,675 $ 31,423 $ (4,859) $ 26,564 Intangible assets subject to amortization consist of franchise agreements connected with the purchase of Western as well as rights to favorable leases related to prior acquisitions. These intangible assets are being amortized over their estimated weighted average of useful lives ranging from eight to twelve years. Amortization expense for each of the first quarters of 2018 and 2017 was $140 and $142, respectively. The Company’s intangible assets with definite lives will fully amortize in 2020. Total annual amortization expense for 2019 is expected to be approximately $500. Intangible assets with indefinite lives consist of trade names, franchise rights as well as lease rights. |
Note 8. Restaurant Operations R
Note 8. Restaurant Operations Revenues | 3 Months Ended |
Mar. 31, 2018 | |
Note 8. Restaurant Operations Revenues | |
Note 8. Restaurant Operations Revenues | Restaurant operations revenues were as follows. First Quarter 2018 2017 Net sales $ 185,571 $ 189,051 Franchise royalties and fees 7,102 5,556 Other 1,261 1,087 $ 193,934 $ 195,694 The Company’s accounting policies and practices related to restaurant operations revenues consist of the following under ASC 606. Net sales Net sales were comprised of retail sales of food through Company-owned stores. Company-owned store revenues are recognized when control of the food items are transferred to our customers at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of income as revenue. Franchise royalties and fees Franchise royalties and fees are comprised of royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalty revenues are based on a percentage of franchise sales and are recognized when the retail food items are purchased by franchise customers. Initial franchise fees received are deferred when amounts are received and recognized as revenue on a straight-line basis over the term of each respective franchise agreement, which is typically 20 years. This represents a change in methodology for we have historically recognized initial franchise fees upon the opening of a franchise restaurant. During the quarter ended March 31, 2018, restaurant operations recognized $369 in revenue related to initial franchise fees. As of March 31, 2018 and January 1, 2018, restaurant operations had deferred revenue related to franchise fees of $10,818 and $10,581, respectively. Restaurant operations expects to recognize approximately $450 of deferred revenue balance during the remainder of 2018, approximately $600 in 2019 and the balance in the years 2020 through 2037. Our advertising arrangements with franchisees are reported in franchise royalties and fees. This represents a change in methodology as we have historically reported advertising funds from the franchisees as an offset to marketing expense in our consolidated statement of earnings. During the quarter ended March 31, 2018, restaurant operations recognized $2,437 in revenue related to franchise advertising fees. As of March 31, 2018 and January 1, 2018, restaurant operations had deferred revenue related to franchisee advertising fees of $2,065 and $2,064, respectively. Restaurant operations expect to recognize approximately $900 of deferred revenue balance during the remainder of 2018 and the balance in 2019. Gift card revenue Restaurant operations sells gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimates breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage. This represents a change in the methodology used to estimate breakage as we have historically recognized breakage for the portion of the gift card balances that remained outstanding following 48 months of issuance. For the quarter ended March 31, 2018, restaurant operations recognized $9,287 of revenue from gift card redemptions. As of March 31, 2018 and January 1, 2018, restaurant operations had deferred revenue related to unredeemed gift cards of $14,993 and $20,968, respectively. The Company expects to recognize approximately $8,700 of deferred revenue balance during the remainder of 2018, approximately $4,200 in 2019, and the balance in the years 2020 through 2022. |
Note 9. Accounts Payable and Ac
Note 9. Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Note 9. Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses include the following. March 31, December 31, 2017 Accounts payable $ 36,342 $ 40,616 Gift card liability 14,993 27,436 Salaries, wages, and vacation 9,389 22,875 Taxes payable 11,786 10,571 Workers' compensation and other self-insurance accruals 7,915 9,047 Deferred revenue 17,744 9,522 Other 8,539 8,677 Accounts payable and accrued expenses $ 106,708 $ 128,744 |
Note 10. Borrowings
Note 10. Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Note 10. Borrowings | Notes payable and other borrowings include the following. Current portion of notes payable and other borrowings March 31, December 31, 2017 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (324) (321) Unamortized debt issuance costs (591) (585) Obligations under leases 5,103 5,279 Western revolver 136 175 Total current portion of notes payable and other borrowings $ 6,524 $ 6,748 Long-term notes payable and other borrowings Notes payable $ 183,148 $ 183,698 Unamortized original issue discount (690) (772) Unamortized debt issuance costs (1,255) (1,405) Obligations under leases 73,785 75,473 Total long-term notes payable and other borrowings $ 254,988 $ 256,994 Steak n Shake Credit Facility On March 19, 2014, Steak n Shake and its subsidiaries entered into a credit agreement which provided for a senior secured term loan facility in an aggregate principal amount of $220,000 and a senior secured revolving credit facility in an aggregate principal amount of up to $30,000. On October 27, 2017, Steak n Shake determined to end the use of its senior secured revolving credit facility. In 2017, Steak n Shake deposited $8,628 to satisfy required collateral for casualty insurance previously collateralized by letters of credit issued through the revolving credit facility. The deposits are recorded in other assets as restricted cash in the consolidated balance sheets. The term loan is scheduled to mature on March 19, 2021. It amortizes at an annual rate of 1.0% in equal quarterly installments, beginning June 30, 2014, at 0.25% of the original principal amount of the term loan, subject to mandatory prepayments from excess cash flow, asset sales and other events described in the credit agreement. The balance will be due at maturity. Steak n Shake has the right to request an incremental term loan facility from participating lenders and/or eligible assignees at any time, up to an aggregate total principal amount not to exceed $70,000 if certain customary conditions within the credit agreement are met. The interest rate on the term loan was 5.40% as of March 31, 2018. The credit agreement includes customary affirmative and negative covenants and events of default. Steak n Shake’s credit facility contains restrictions on its ability to pay dividends to Biglari Holdings. The term loan is secured by first priority security interests in substantially all the assets of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility. As of March 31, 2018, $185,348 was outstanding under the term loan. Western Revolver As of March 31, 2018, Western has $136 due June 13, 2018. Fair Value of Debt The fair value of long-term debt, excluding capitalized lease obligations, was approximately $165,000 at March 31, 2018. The fair value of our debt was estimated based on quoted market prices. The fair value was determined to be a Level 3 fair value measurement. |
Note 11. Accumulated Other Comp
Note 11. Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Note 11. Accumulated Other Comprehensive Income | During the first quarters of 2018 and 2017, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. Three months ended March 31, 2018 Three months ended March 31, 2017 Foreign currency translation adjustments Accumulated other comprehensive income (loss) Foreign currency translation adjustments Accumulated Beginning Balance $ (1,462) $ 58 $ (1,404) $ (3,447) $ (137) $ (3,584) Other comprehensive income (loss) before reclassifications - - 124 124 Reclassification to (earnings) loss - (58) (58) - - - Foreign currency translation 496 496 185 185 Ending Balance $ (966) $ - $ (966) $ (3,262) $ (13) $ (3,275) Reclassifications made from accumulated other comprehensive income to the consolidated statement of earnings during the first quarter of 2018 were $58; there were no reclassifications from accumulated other comprehensive income to earnings during the first quarter of 2017. |
Note 12. Income Taxes
Note 12. Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Note 12. Income Taxes | In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring items are separately recognized during the quarter in which they occur. Income tax benefit for the first quarter of 2018 was $797 compared to $9,776 for the first quarter of 2017. The Tax Cuts and Jobs Act was signed into law on December 22, 2017. The U.S. corporate federal statutory income tax rate was reduced from 35.0% to 21.0% for tax years beginning in 2018. The variance in income taxes between 2018 and 2017 is attributable to the reduced corporate tax rate and taxes on income and losses generated by the investment partnerships. As of March 31, 2018 and December 31, 2017, we had approximately $363 and $357, respectively, of unrecognized tax benefits, which are included in other liabilities in the consolidated balance sheets. |
Note 13. Commitments and Contin
Note 13. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 13. Commitments and Contingencies | We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements is not likely to have a material effect on our results of operations, financial position or cash flows. On January 29, 2018, a shareholder of the Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholder generally alleges claims for breach of fiduciary duty by the individual defendants and unjust enrichment to Mr. Biglari as a result of the agreement with NBHSA Inc. and the issuance of dual class common stock. The shareholder seeks, for himself and on behalf of all other shareholders as a class (other than the individual defendants and those related to or affiliated with them), to seek a declaration that the defendants breached their duty to the shareholder and the class and that Mr. Biglari would be unjustly enriched, and to recover unspecified damages, pre-judgment and post-judgment interest, and an award of their attorneys’ fees and other costs. On March 26, 2018, a second shareholder of the Company filed a purported class action complaint against the Company, the members of our Board of Directors, New BH, and Merger Sub in the Superior Court of Hamilton County, Indiana. This shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors. This shareholder sought to enjoin the shareholder vote on April 28, 2018 to approve the agreement with NBHSA Inc. and the issuance of dual class common stock. On April 16, 2018, the shareholder withdrew his motion to enjoin the special meeting. The Company believes the claims in each case are without merit and intends to defend these cases vigorously. |
Note 14. Fair Value of Financia
Note 14. Fair Value of Financial Assets | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Note 14. Fair Value of Financial Assets | The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below. · Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. · Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector. · Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. Cash equivalents: Equity securities: Bonds: Non-qualified deferred compensation plan investments: Derivative instruments: As of March 31, 2018 and December 31, 2017, the fair values of financial assets were as follows. March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 4,997 $ - $ - $ 4,997 $ 5,785 $ - $ - $ 5,785 Equity securities: Consumer goods 2,290 - - 2,290 2,445 - - 2,445 Bonds - 26,767 - 26,767 - 25,901 - 25,901 Options on equity securities - 2,173 - 2,173 - 2,018 - 2,018 Non-qualified deferred compensation plan investments 3,277 - - 3,277 3,459 - - 3,459 Total assets at fair value $ 10,564 $ 28,940 $ - $ 39,504 $ 11,689 $ 27,919 $ - $ 39,608 There were no changes in our valuation techniques used to measure fair values on a recurring basis. |
Note 15. Related Party Transact
Note 15. Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Note 15. Related Party Transactions | Services Agreement On September 15, 2017, the Company entered into a services agreement with Biglari Enterprises LLC and Biglari Capital (collectively, the “Biglari Entities”). The Biglari Entities are owned by Mr. Biglari. The services agreement replaces the shared services agreement between the Company and Biglari Capital dated July 1, 2013. The services agreement was executed in connection with a review of the relationships and transactions between the Company and Biglari Capital. After careful consideration, including an assessment by a public accounting firm of administrative-related costs incurred by the Company in connection with its investments, the Company’s Governance, Compensation and Nominating Committee, comprised solely of independent board members, approved the services agreement. Under the terms of the services agreement, the Company will no longer provide business and administrative-related services to Biglari Capital. Instead, the Biglari Entities will assume the responsibility to provide the services and the Company will pay a fixed fee to the Biglari Entities. The services agreement has a five-year term, effective on October 1, 2017. The fixed fee is $700 per month for the first year with adjustments in years two through five. The services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital by the Company. Investments in The Lion Fund, L.P. and The Lion Fund II, L.P. Distributions from The Lion Fund II, L.P. were $5,200 and $5,015 during the first quarters of 2018 and 2017, respectively. As the general partner of the investment partnerships, Biglari Capital on December 31 of each year will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above a hurdle rate of 6% over the previous high water mark. Our policy is to accrue an estimated incentive fee throughout the year. The Company did not accrue incentive fees for Biglari Capital during the first quarters of 2018 and 2017. Incentive Agreement Amendment During 2013, Biglari Holdings and Mr. Biglari entered into an amendment to the Incentive Agreement to exclude earnings by the investment partnerships from the calculation of Mr. Biglari’s incentive bonus. Under the Amended and Restated Incentive Agreement Mr. Biglari would receive a payment of approximately $14,700 if an event occurred entitling him to a severance payment. License Agreement On January 11, 2013, the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The License Agreement was unanimously approved by the Governance, Nominating and Compensation Committee (comprised of independent members of the Company’s Board of Directors). In addition, the license under the License Agreement is provided on a royalty-free basis in the absence of specified extraordinary events described below. Accordingly, the Company and its subsidiaries have paid no royalties to Mr. Biglari under the License Agreement since its inception. Under the License Agreement, Mr. Biglari granted to the Company an exclusive license to use the Biglari and Biglari Holdings names (the “Licensed Marks”) in association with various products and services (collectively the “Products and Services”). Upon (a) the expiration of twenty years from the date of the License Agreement (subject to extension as provided in the License Agreement), (b) Mr. Biglari’s death, (c) the termination of Mr. Biglari’s employment by the Company for Cause (as defined in the License Agreement), or (d) Mr. Biglari’s resignation from his employment with the Company absent an Involuntary Termination Event (as defined in the License Agreement), the Licensed Marks for the Products and Services will transfer from Mr. Biglari to the Company, without any compensation, if the Company is continuing to use the Licensed Marks in the ordinary course of its business. Otherwise, the rights will revert to Mr. Biglari. If (i) a Change of Control (as defined in the License Agreement) of the Company; (ii) the termination of Mr. Biglari’s employment by the Company without Cause; or (iii) Mr. Biglari’s resignation from his employment with the Company due to an Involuntary Termination Event (each, a “Triggering Event”) were to occur, Mr. Biglari would be entitled to receive a 2.5% royalty on “Revenues” with respect to the “Royalty Period.” The royalty payment to Mr. Biglari would not apply to all revenues received by Biglari Holdings and its subsidiaries nor would it apply retrospectively ( i.e. “Revenues” means all revenues received, on an accrual basis under GAAP, by the Company, its subsidiaries and affiliates from the following: (1) all Products and Services covered by the License Agreement bearing or associated with the names Biglari and Biglari Holdings at any time (whether prior to or after a Triggering Event). This category would include, without limitation, the use of Biglari or Biglari Holdings in the public name of a business providing any covered Product or Service; and (2) all covered Products, Services and businesses that the Company has specifically identified, prior to a Triggering Event, will bear, use or be associated with the name Biglari or Biglari Holdings. The Governance, Nominating and Compensation Committee unanimously approved the association of the Biglari name and mark with all of Steak n Shake’s restaurants (including Company operated and franchised locations), products and brands. On May 14, 2013, the Company, Steak n Shake, LLC and Steak n Shake Enterprises, Inc. entered into a Trademark Sublicense Agreement in connection therewith. Accordingly, revenues received by the Company, its subsidiaries and affiliates from Steak n Shake’s restaurants, products and brands would come within the definition of Revenues for purposes of the License Agreement. The “Royalty Period” is a defined period of time, after the Triggering Event, calculated as follows: (i) if, following three months after a Triggering Event, the Company or any of its subsidiaries or affiliates continues to use the Biglari or Biglari Holdings name in connection with any covered product or service, or continues to use Biglari as part of its corporate or public company name, then the Royalty Period will equal (a) the period of time during which the Company or any of its subsidiaries or affiliates continues any such use, plus (b) a period of time after the Company, its subsidiaries and affiliates have ceased all uses of the names Biglari and Biglari Holdings equal to the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings names two years after the Triggering Event, the Royalty Period will equal a total of ten years (the sum of two years after the Triggering Event during which the Biglari and Biglari Holdings names are being used, plus a period of time equal to the five years prior to the Triggering Event, plus three years); or (ii) if the Company, its subsidiaries and affiliates cease all uses of the Biglari and Biglari Holdings names within three months after a Triggering Event, then the Royalty Period will equal the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings names two months after the Triggering Event, the Royalty Period will equal a total of eight years (the sum of the period of time equal to the five years prior to the Triggering Event, plus three years). Notwithstanding the above methods of determining the Royalty Period, the minimum Royalty Period is five years after a Triggering Event. The actual amount of royalties paid to Mr. Biglari following the occurrence of a Triggering Event (as defined in the License Agreement) would depend on the Company’s revenues during the applicable period following the Triggering Event, and, therefore, depends on material assumptions and estimates regarding future operations and revenues. Assuming for purposes of illustration a Triggering Event occurred on December 31, 2017, using revenue from 2017 as an estimate of future revenue and calculated according to terms of the License Agreement, Mr. Biglari would receive approximately $20,000 in royalty payments annually. At a minimum, the royalties would be earned on revenue generated from January 1, 2018 through December 21, 2024. Royalty payments beyond the minimum period would be subject to the licensee's continued use of the licensed marks. |
Note 16. Business Segment Repor
Note 16. Business Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Note 16. Business Segment Reporting | Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations includes Steak n Shake and Western. The Company also reports segment information for First Guard and Maxim. Other business activities not specifically identified with reportable business segments are presented in “other” within total operating businesses. We report our earnings from investment partnerships separate from our corporate expenses. We assess and measure segment operating results based on segment earnings as disclosed below. Segment earnings from operations are neither necessarily indicative of cash available to fund cash requirements, nor synonymous with cash flow from operations. The tabular information that follows shows data of our reportable segments reconciled to amounts reflected in the consolidated financial statements. Revenue and earnings (losses) before income taxes for the first quarters of 2018 and 2017 were as follows. Revenue First Quarter 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 190,293 $ 192,690 Western 3,641 3,004 Total Restaurant Operations 193,934 195,694 First Guard 6,547 6,080 Maxim 1,744 1,619 $ 202,225 $ 203,393 Earnings (Losses) Before Income Taxes First Quarter 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ (922) $ 3,352 Western 374 450 Total Restaurant Operations (618) 3,802 First Guard 510 969 Maxim (217) (324) Other 139 148 Total Operating Businesses (186) 4,595 Corporate and Investments: Corporate (3,166) (2,400) Investment partnership gains 3,495 (24,968) Total Corporate and Investments 329 (27,368) Interest expense on notes payable and other borrowings (2,754) (2,824) $ (2,611) $ (25,597) |
Note 1. Summary of Significan24
Note 1. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2017. Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major operating, investment, and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of March 31, 2018, Mr. Biglari’s beneficial ownership of the Company’s outstanding common stock was approximately 54.8%. On March 5, 2018, the Company entered into an agreement with NBHSA Inc. (“New BH”), a direct, wholly owned subsidiary of the Company, and BH Merger Company (“Merger Sub”), a wholly owned subsidiary of New BH. Pursuant to the agreement, on April 30, 2018, Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of New BH. Upon completion of the merger, New BH changed its name to “Biglari Holdings Inc.” and replaced the Company as the publicly held corporation through which our collection of businesses is conducted. New BH has two classes of common stock designated Class A common stock and Class B common stock. A share of Class B common stock has economic rights equivalent to 1/5 th As a result of the April 30, 2018 transaction, the current shareholders of the Company became shareholders of New BH and received, for every ten (10) shares of common stock of the Company they owned on April 30, 2018, (i) ten (10) shares of Class B common stock of New BH and (ii) one (1) share of Class A common stock of New BH. In other words, shareholders received for a share of common stock of the Company (i) one (1) share of Class B common stock of New BH and (ii) 1/10 th Starting on May 1, 2018, the shares of New BH Class A common stock trade on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A,” whereas the New BH Class B common stock trades on the NYSE under the ticker symbol “BH,” which is the former ticker symbol for the Company’s common stock. For accounting purposes, the April 30, 2018 transaction will be treated as a merger of entities under common control. Accordingly, the consolidated financial position and results of operations of the Company will be included in the consolidated financial statements of New BH on the same basis as currently presented, except for earnings per share which is impacted by the issuance of the new common shares. The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”). Intercompany accounts and transactions have been eliminated in consolidation. |
Note 2. New Accounting Standa25
Note 2. New Accounting Standards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Note 2. New Accounting Standards Tables | |
Impact of new accounting pronouncements | As Reported Adjustments Amounts without Statements of Earnings Revenues Restaurant operations Net sales $ 185,571 $ - $ 185,571 Franchise royalties and fees 7,102 2,369 4,733 Other 1,261 279 982 Selling, general and administrative 32,650 2,522 30,128 Earnings (loss) before income taxes (2,611) 126 (2,737) Income tax expense (benefit) (797) 31 (828) Net earnings (loss) (1,814) 95 (1,909) |
Note 3. Earnings Per Share (Tab
Note 3. Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings per share | |
Summary of outstanding shares | March 31, December 31, 2017 Common stock authorized 2,500,000 2,500,000 Common stock issued 2,142,202 2,142,202 Treasury stock held by the Company (73,667) (74,589) Outstanding shares 2,068,535 2,067,613 |
Note 4. Investments (Tables)
Note 4. Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Investments [Abstract] | |
Schedule of fair value of Investments | March 31, December 31, 2017 Cost $ 24,099 $ 23,216 Gross unrealized gains 58 73 Fair value $ 24,157 $ 23,289 |
Note 5. Investment Partnershi28
Note 5. Investment Partnerships (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Note 5. Investment Partnerships Details Narrative | |
Fair value and carrying value of our partnership interest | Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (1,850) (5,345) 3,495 Contributions (net of distributions) to investment partnerships (5,200) (5,200) Increase in proportionate share of Company stock held 18,377 (18,377) Partnership interest at March 31, 2018 $ 918,229 $ 372,290 $ 545,939 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (59,517) (34,549) (24,968) Contributions (net of distributions) to investment partnerships (5,015) (5,015) Increase in proportionate share of Company stock held 1,484 (1,484) Partnership interest at March 31, 2017 $ 908,175 $ 362,005 $ 546,170 |
Carrying value of investment partnerships net of deferred taxes | March 31, December 31, 2017 Carrying value of investment partnerships $ 545,939 $ 566,021 Deferred tax liability related to investment partnerships (96,327) (95,309) Carrying value of investment partnerships net of deferred taxes $ 449,612 $ 470,712 |
Gains (loss) from investment partnerships | First Quarter 2018 2017 Gains (losses) on investment partnership $ 3,495 $ (24,968) Tax expense (benefit) 420 (9,761) Contribution to net earnings (loss) $ 3,075 $ (15,207) |
Summarized financial information for Equity in Investment Partnerships | Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of March 31, 2018 $ 198,286 $ 1,057,316 Total liabilities as of March 31, 2018 $ 1,481 $ 200,831 Revenue for the first quarter ended March 31, 2018 $ (4,135) $ 3,069 Earnings (loss) for the first quarter ended March 31, 2018 $ (4,151) $ 922 Biglari Holdings’ ownership interest as of March 31, 2018 65.1% 92.3% Total assets as of December 31, 2017 $ 203,560 $ 1,060,737 Total liabilities as of December 31, 2017 $ 157 $ 199,974 Revenue for the first quarter ended March 31, 2017 $ (15,696) $ (52,652) Earnings (loss) for the quarter first ended ended March 31, 2017 $ (15,716) $ (53,514) Biglari Holdings’ ownership interest as of March 31, 2017 63.6% 92.5% |
Note 6. Property and Equipment
Note 6. Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | March 31, 2018 December 31, 2017 Land $ 156,176 $ 156,506 Buildings 151,669 152,610 Land and leasehold improvements 162,518 162,652 Equipment 200,240 203,145 Construction in progress 1,797 1,782 672,400 676,695 Less accumulated depreciation and amortization . (380,775) (380,895) Property and equipment, net $ 291,625 $ 295,800 |
Note 7. Goodwill and Other In30
Note 7. Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Restaurants Other Total Goodwill at December 31, 2017 $ 28,168 $ 11,913 $ 40,081 Change in foreign exchange rates during first quarter 2018 18 - 18 Goodwill at March 31, 2018 $ 28,186 $ 11,913 $ 40,099 |
Schedule of Other Intangible Assets | March 31, 2018 December 31, 2017 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (4,248) $ 1,062 $ 5,310 $ (4,116) $ 1,194 Other 810 (751) 59 810 (743) 67 Total 6,120 (4,999) 1,121 6,120 (4,859) 1,261 Intangible assets with indefinite lives: Trade names 15,876 - 15,876 15,876 - 15,876 Other assets with indefinite lives 9,678 - 9,678 9,427 - 9,427 Total intangible assets $ 31,674 $ (4,999) $ 26,675 $ 31,423 $ (4,859) $ 26,564 |
Note 8. Restaurant Operations31
Note 8. Restaurant Operations Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Note 8. Restaurant Operations Revenues | |
Summary of restaurant operations revenues | First Quarter 2018 2017 Net sales $ 185,571 $ 189,051 Franchise royalties and fees 7,102 5,556 Other 1,261 1,087 $ 193,934 $ 195,694 |
Note 9. Accounts Payable And 32
Note 9. Accounts Payable And Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Note 9. Accounts Payable And Accrued Expenses Tables | |
Schedule of Accounts Payable and Accrued Expenses | March 31, December 31, 2017 Accounts payable $ 36,342 $ 40,616 Gift card liability 14,993 27,436 Salaries, wages, and vacation 9,389 22,875 Taxes payable 11,786 10,571 Workers' compensation and other self-insurance accruals 7,915 9,047 Deferred revenue 17,744 9,522 Other 8,539 8,677 Accounts payable and accrued expenses $ 106,708 $ 128,744 |
Note 10. Borrowings (Tables)
Note 10. Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and other borrowings | Current portion of notes payable and other borrowings March 31, December 31, 2017 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (324) (321) Unamortized debt issuance costs (591) (585) Obligations under leases 5,103 5,279 Western revolver 136 175 Total current portion of notes payable and other borrowings $ 6,524 $ 6,748 Long-term notes payable and other borrowings Notes payable $ 183,148 $ 183,698 Unamortized original issue discount (690) (772) Unamortized debt issuance costs (1,255) (1,405) Obligations under leases 73,785 75,473 Total long-term notes payable and other borrowings $ 254,988 $ 256,994 |
Note 11. Accumulated Other Co34
Note 11. Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Component of accumulated other comprehensive income | Three months ended March 31, 2018 Three months ended March 31, 2017 Foreign currency translation adjustments Accumulated other comprehensive income (loss) Foreign currency translation adjustments Accumulated Beginning Balance $ (1,462) $ 58 $ (1,404) $ (3,447) $ (137) $ (3,584) Other comprehensive income (loss) before reclassifications - - 124 124 Reclassification to (earnings) loss - (58) (58) - - - Foreign currency translation 496 496 185 185 Ending Balance $ (966) $ - $ (966) $ (3,262) $ (13) $ (3,275) |
Note 14. Fair Value of Financ35
Note 14. Fair Value of Financial Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Fair Value Assets | March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 4,997 $ - $ - $ 4,997 $ 5,785 $ - $ - $ 5,785 Equity securities: Consumer goods 2,290 - - 2,290 2,445 - - 2,445 Bonds - 26,767 - 26,767 - 25,901 - 25,901 Options on equity securities - 2,173 - 2,173 - 2,018 - 2,018 Non-qualified deferred compensation plan investments 3,277 - - 3,277 3,459 - - 3,459 Total assets at fair value $ 10,564 $ 28,940 $ - $ 39,504 $ 11,689 $ 27,919 $ - $ 39,608 |
Note 16. Business Segment Rep36
Note 16. Business Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule Of Revenue by Segment | Revenue First Quarter 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 190,293 $ 192,690 Western 3,641 3,004 Total Restaurant Operations 193,934 195,694 First Guard 6,547 6,080 Maxim 1,744 1,619 $ 202,225 $ 203,393 |
Schedule of earnings (losses) before income taxes by segment | Earnings (Losses) Before Income Taxes First Quarter 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ (922) $ 3,352 Western 374 450 Total Restaurant Operations (618) 3,802 First Guard 510 969 Maxim (217) (324) Other 139 148 Total Operating Businesses (186) 4,595 Corporate and Investments: Corporate (3,166) (2,400) Investment partnership gains 3,495 (24,968) Total Corporate and Investments 329 (27,368) Interest expense on notes payable and other borrowings (2,754) (2,824) $ (2,611) $ (25,597) |
Note 2. New Accounting Standa37
Note 2. New Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Restaurant operations net sales | $ 193,934 | $ 195,694 |
Restaurant operations other | 1,261 | 1,087 |
Selling, general and administrative | 32,650 | 29,486 |
Earnings (loss) before income taxes | (2,611) | (25,597) |
Income tax expense (benefit) | (797) | (9,776) |
Net earnings (loss) | (1,814) | $ (15,821) |
As Reported | ||
Revenues | ||
Restaurant operations net sales | 185,571 | |
Restaurant operations franchise royalties and fees | 7,102 | |
Restaurant operations other | 1,261 | |
Selling, general and administrative | 32,650 | |
Earnings (loss) before income taxes | (2,611) | |
Income tax expense (benefit) | (797) | |
Net earnings (loss) | (1,814) | |
Adjustments for the Adoption of ASC 606 | ||
Revenues | ||
Restaurant operations net sales | 0 | |
Restaurant operations franchise royalties and fees | 2,369 | |
Restaurant operations other | 279 | |
Selling, general and administrative | 2,522 | |
Earnings (loss) before income taxes | 126 | |
Income tax expense (benefit) | 31 | |
Net earnings (loss) | 95 | |
Amounts without Adoption of ASC 606 | ||
Revenues | ||
Restaurant operations net sales | 185,571 | |
Restaurant operations franchise royalties and fees | 4,733 | |
Restaurant operations other | 982 | |
Selling, general and administrative | 30,128 | |
Earnings (loss) before income taxes | (2,737) | |
Income tax expense (benefit) | (828) | |
Net earnings (loss) | $ (1,909) |
Note 3. Earnings Per Share (Det
Note 3. Earnings Per Share (Details) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Note 3. Earnings Per Share Details | ||
Common stock authorized | 2,500,000 | 2,500,000 |
Common stock issued | 2,142,202 | 2,142,202 |
Treasury stock held by the Company | (73,667) | (74,589) |
Outstanding shares | 2,068,535 | 2,067,613 |
Note 4. Investments (Details)
Note 4. Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Investments [Abstract] | ||
Cost | $ 24,099 | $ 23,216 |
Gross unrealized gains | 58 | 73 |
Fair value | $ 24,157 | $ 23,289 |
Note 5. Investment Partnershi40
Note 5. Investment Partnerships (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Partnership interest, beginning | $ 566,021 | |
Investment partnership gains (losses) | 3,495 | $ (24,968) |
Partnership interest, ending | 545,939 | |
Fair Value | ||
Partnership interest, beginning | 925,279 | 972,707 |
Investment partnership gains (losses) | (1,850) | (59,517) |
Contributions (net of distributions) to investment partnerships | (5,200) | (5,015) |
Increase in proportionate share of Company stock held | 0 | 0 |
Partnership interest, ending | 918,229 | 908,175 |
Company common Stock | ||
Partnership interest, beginning | 359,258 | 395,070 |
Investment partnership gains (losses) | (5,345) | (34,549) |
Contributions (net of distributions) to investment partnerships | 0 | 0 |
Increase in proportionate share of Company stock held | 18,377 | 1,484 |
Partnership interest, ending | 372,290 | 362,005 |
Carrying Value | ||
Partnership interest, beginning | 566,021 | 577,637 |
Investment partnership gains (losses) | 3,495 | (24,968) |
Contributions (net of distributions) to investment partnerships | (5,200) | (5,015) |
Increase in proportionate share of Company stock held | (18,377) | (1,484) |
Partnership interest, ending | $ 545,939 | $ 546,170 |
Note 5. Investment Partnershi41
Note 5. Investment Partnerships (Details 1) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Note 5. Investment Partnerships Details Narrative | ||
Carrying value of investment partnerships | $ 545,939 | $ 566,021 |
Deferred tax liability related to investment partnerships | (96,327) | (95,309) |
Carrying value of investment partnerships net of deferred taxes | $ 449,612 | $ 470,712 |
Note 5. Investment Partnershi42
Note 5. Investment Partnerships (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Note 5. Investment Partnerships Details 2 | ||
Gains (losses) on investment partnership | $ 3,495 | $ (24,968) |
Tax expense (benefit) | (420) | 9,761 |
Contributions to net earnings (loss) | $ 3,075 | $ (15,207) |
Note 5. Investment Partnershi43
Note 5. Investment Partnerships (Details 3) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Lion Fund | |||
Total Assets | $ 198,286 | $ 203,560 | |
Total Liabilities | 1,481 | 157 | |
Revenue for the first quarter | (4,135) | $ (15,696) | |
Earnings (loss) for the first quarter | $ (4,151) | $ (15,716) | |
Biglari Holdings' Ownership Interest | 65.10% | 63.60% | |
Lion Fund II | |||
Total Assets | $ 1,057,316 | 1,060,737 | |
Total Liabilities | 200,831 | $ 199,974 | |
Revenue for the first quarter | 3,069 | $ (52,652) | |
Earnings (loss) for the first quarter | $ 922 | $ (53,514) | |
Biglari Holdings' Ownership Interest | 92.30% | 92.50% |
Note 5. Investment Partnershi44
Note 5. Investment Partnerships (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Note 5. Investment Partnerships Details Narrative | ||
Proportionate share of Company stock held by investment partnerships at cost | $ 373,316 | $ 354,939 |
Note 6. Property and Equipmen45
Note 6. Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 156,176 | $ 156,506 |
Buildings | 151,669 | 152,610 |
Land and leasehold improvements | 162,518 | 162,652 |
Equipment | 200,240 | 203,145 |
Construction in progress | 1,797 | 1,782 |
Property and equipment, gross | 672,400 | 676,695 |
Less accumulated depreciation and amortization | (380,775) | (380,895) |
Property and equipment, net | $ 291,625 | $ 295,800 |
Note 7. Goodwill and Other In46
Note 7. Goodwill and Other Intangible Assets (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Balance at beginning of year | $ 40,081 |
Change in foreign exchange rates during first quarter 2018 | 18 |
Balance at end of period | 40,099 |
Restaurant | |
Balance at beginning of year | 28,168 |
Change in foreign exchange rates during first quarter 2018 | 18 |
Balance at end of period | 28,186 |
Other | |
Balance at beginning of year | 11,913 |
Change in foreign exchange rates during first quarter 2018 | 0 |
Balance at end of period | $ 11,913 |
Note 7. Goodwill and Other In47
Note 7. Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Gross carrying amount | $ 31,674 | $ 31,423 |
Accumulated amortization | (4,999) | (4,859) |
Total intangible assets | 26,675 | 26,564 |
Finite-Lived Intangible Assets [Member] | ||
Gross carrying amount | 6,120 | 6,120 |
Accumulated amortization | (4,999) | (4,859) |
Total intangible assets | 1,121 | 1,261 |
Franchise Agreement | Finite-Lived Intangible Assets [Member] | ||
Gross carrying amount | 5,310 | 5,310 |
Accumulated amortization | (4,248) | (4,116) |
Total intangible assets | 1,062 | 1,194 |
Other | Finite-Lived Intangible Assets [Member] | ||
Gross carrying amount | 810 | 810 |
Accumulated amortization | (751) | (743) |
Total intangible assets | 59 | 67 |
Other | Indefinite-lived Intangible Assets [Member] | ||
Gross carrying amount | 9,678 | 9,427 |
Accumulated amortization | 0 | 0 |
Total intangible assets | 9,678 | 9,427 |
Trade names [Member] | Indefinite-lived Intangible Assets [Member] | ||
Gross carrying amount | 15,876 | 15,876 |
Accumulated amortization | 0 | 0 |
Total intangible assets | $ 15,876 | $ 15,876 |
Note 7. Goodwill and Other In48
Note 7. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 140 | $ 142 |
Total annual amortization expense for 2019 | $ 500 |
Note 8. Restaurant Operations49
Note 8. Restaurant Operations Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Note 8. Restaurant Operations Revenues | ||
Net sales | $ 185,571 | $ 189,051 |
Franchise royalties and fees | 7,102 | 5,556 |
Other | 1,261 | 1,087 |
Restaurant operations revenue | $ 193,934 | $ 195,694 |
Note 9. Accounts Payable and 50
Note 9. Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Accounts payable | $ 36,342 | $ 40,616 |
Gift card liability | 14,993 | 27,436 |
Salaries, wages, and vacation | 9,389 | 22,875 |
Taxes payable | 11,786 | 10,571 |
Workers' compensation and other self insurance accruals | 7,915 | 9,047 |
Deferred revenue | 17,744 | 9,522 |
Other | 8,539 | 8,677 |
Accounts payable and accrued expenses | $ 106,708 | $ 128,744 |
Note 10. Borrowings (Details)
Note 10. Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current portion of notes payable and other borrowings | ||
Notes payable | $ 2,200 | $ 2,200 |
Unamortized original issue discount | (324) | (321) |
Unamortized debt issuance costs | (591) | (585) |
Obligations under leases | 5,103 | 5,279 |
Western revolver | 136 | 175 |
Total current portion of notes payable and other borrowings | 6,524 | 6,748 |
Long-term notes payable and other borrowings | ||
Notes payable | 183,148 | 183,698 |
Unamortized original issue discount | (690) | (772) |
Unamortized debt issuance costs | (1,255) | (1,405) |
Obligations under leases | 73,785 | 75,473 |
Total long-term notes payable and other borrowings | $ 254,988 | $ 256,994 |
Note 10. Borrowings (Details Na
Note 10. Borrowings (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Western revolver | $ 136 | $ 175 |
Term Loan | ||
Outstanding debt | $ 185,348 | |
Steak n Shake Agreement 2014 [Member] | ||
Interest rate | 5.40% |
Note 11. Accumulated Other Co53
Note 11. Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Beginning Balance | $ (1,404) | $ (3,584) |
Other comprehensive income (loss) before reclassifications | 0 | 124 |
Reclassification to (earnings) loss | (58) | 0 |
Foreign currency translation | 496 | 185 |
Ending Balance | (966) | (3,275) |
Foreign Currency Translation Adjustments | ||
Beginning Balance | (1,462) | (3,447) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Reclassification to (earnings) loss | 0 | 0 |
Foreign currency translation | 496 | 185 |
Ending Balance | (966) | (3,262) |
Investment Gain (Loss) | ||
Beginning Balance | 58 | (137) |
Other comprehensive income (loss) before reclassifications | 0 | 124 |
Reclassification to (earnings) loss | (58) | 0 |
Foreign currency translation | 0 | 0 |
Ending Balance | $ 0 | $ (13) |
Note 12. Income Taxes (Details
Note 12. Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ (797) | $ (9,776) | |
Unrecognized tax benefits | $ 363 | $ 357 |
Note 14. Fair Value of Financ55
Note 14. Fair Value of Financial Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash equivalents | $ 4,997 | $ 5,785 |
Equity securities: Consumer goods | 2,290 | 2,445 |
Bonds | 26,767 | 25,901 |
Options on equity securities | 2,173 | 2,018 |
Non-qualified deferred compensation plan investments | 3,277 | 3,459 |
Total assets at fair value | 39,504 | 39,608 |
Level 1 | ||
Assets | ||
Cash equivalents | 4,997 | 5,785 |
Equity securities: Consumer goods | 2,290 | 2,445 |
Bonds | 0 | 0 |
Options on equity securities | 0 | 0 |
Non-qualified deferred compensation plan investments | 3,277 | 3,459 |
Total assets at fair value | 10,564 | 11,689 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Equity securities: Consumer goods | 0 | 0 |
Bonds | 26,767 | 25,901 |
Options on equity securities | 2,173 | 2,018 |
Non-qualified deferred compensation plan investments | 0 | 0 |
Total assets at fair value | 28,940 | 27,919 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Equity securities: Consumer goods | 0 | 0 |
Bonds | 0 | 0 |
Options on equity securities | 0 | 0 |
Non-qualified deferred compensation plan investments | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Note 16. Business Segment Rep56
Note 16. Business Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Steak n Shake | ||
Revenue | $ 190,293 | $ 192,690 |
Western | ||
Revenue | 3,641 | 3,004 |
Total Restaurant Operations | ||
Revenue | 193,934 | 195,694 |
First Guard | ||
Revenue | 6,547 | 6,080 |
Maxim | ||
Revenue | 1,744 | 1,619 |
Total Revenue | ||
Revenue | $ 202,225 | $ 203,393 |
Note 16. Business Segment Rep57
Note 16. Business Segment Reporting (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings (loss) before income taxes | $ (2,611) | $ (25,597) |
Restaurant | Steak n Shake | ||
Earnings (loss) before income taxes | (992) | 3,352 |
Restaurant | Western | ||
Earnings (loss) before income taxes | 374 | 450 |
Restaurant | Total Restaurant Operations | ||
Earnings (loss) before income taxes | (618) | 3,802 |
Operating Business | ||
Earnings (loss) before income taxes | (186) | 4,595 |
Operating Business | First Guard | ||
Earnings (loss) before income taxes | 510 | 969 |
Operating Business | Maxim | ||
Earnings (loss) before income taxes | (217) | (324) |
Operating Business | Other | ||
Earnings (loss) before income taxes | 139 | 148 |
Corporate | Corporate | ||
Earnings (loss) before income taxes | (3,166) | (2,400) |
Corporate | Investment Partnership Gains [Member] | ||
Earnings (loss) before income taxes | 3,495 | (24,968) |
Corporate | Total Corporate And Investments [Member] | ||
Earnings (loss) before income taxes | 329 | (27,368) |
Reconciliation Of Segments | Interest expense on notes payable and other borrowings [Member] | ||
Earnings (loss) before income taxes | $ (2,754) | $ (2,824) |