Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Entity Registrant Name | Biglari Holdings Inc. | |
Entity Central Index Key | 0001726173 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
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 | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 27,662 | $ 48,557 |
Investments | 41,476 | 33,860 |
Receivables | 8,833 | 15,743 |
Inventories | 5,166 | 7,537 |
Other current assets | 4,610 | 9,236 |
Total current assets | 87,747 | 114,933 |
Property and equipment | 296,694 | 274,716 |
Operating lease assets | 66,372 | 0 |
Goodwill and other intangible assets | 67,820 | 68,166 |
Investment partnerships | 622,066 | 557,480 |
Other assets | 13,970 | 14,198 |
Total assets | 1,154,669 | 1,029,493 |
Current liabilities: | ||
Accounts payable and accrued expenses | 130,442 | 117,265 |
Current portion of operating lease liabilities | 11,918 | 0 |
Current portion of notes payable and other borrowings | 6,924 | 5,720 |
Total current liabilities | 149,284 | 122,985 |
Long-term notes payable and other borrowings | 265,809 | 240,001 |
Operating lease liabilities | 60,354 | 0 |
Deferred taxes | 74,952 | 86,871 |
Other liabilities | 1,908 | 9,181 |
Total liabilities | 552,307 | 459,038 |
Shareholders' equity | ||
Common stock | 1,138 | 1,138 |
Additional paid-in capital | 381,904 | 381,904 |
Retained earnings | 597,451 | 564,160 |
Accumulated other comprehensive loss | (2,624) | (2,516) |
Treasury stock, at cost | (375,507) | (374,231) |
Biglari Holdings Inc. shareholders' equity | 602,362 | 570,455 |
Total liabilities and shareholders' equity | $ 1,154,669 | $ 1,029,493 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Revenues | |||||
Restaurant operations | $ 160,061 | $ 200,594 | $ 333,836 | $ 394,528 | |
Insurance premiums and other | 7,417 | 6,745 | 14,624 | 13,292 | |
Media advertising and other | 865 | 1,400 | 1,742 | 3,144 | |
Total revenues | 168,343 | 208,739 | 350,202 | 410,964 | |
Cost and expenses | |||||
Restaurant cost of sales | 131,750 | 160,559 | 284,199 | 318,909 | |
Insurance losses and underwriting expenses | 5,498 | 4,473 | 11,158 | 10,401 | |
Media cost of sales | 641 | 980 | 1,589 | 2,497 | |
Selling, general and administrative | 26,423 | 32,950 | 61,279 | 65,600 | |
Depreciation and amortization | 5,206 | 4,816 | 10,677 | 9,762 | |
Total cost and expenses | 169,518 | 203,778 | 368,902 | 407,169 | |
Other income (expenses) | |||||
Interest expense | (3,150) | (2,898) | (6,208) | (5,652) | |
Interest on finance leases and obligations | (2,003) | (2,151) | (4,012) | (4,337) | |
Investment partnership gains (losses) | 34,198 | (8,341) | 68,352 | (4,846) | |
Total other income (expenses) | 29,045 | (13,390) | 58,132 | (14,835) | |
Earnings (loss) before income taxes | 27,870 | (8,429) | 39,432 | (11,040) | |
Income tax expense (benefit) | 5,896 | (890) | 7,640 | (1,687) | |
Net earnings (loss) | $ 21,974 | $ (7,539) | $ 31,792 | $ (9,353) | |
Earnings per share | |||||
Net earnings (loss) per equivalent Class A share | [1] | $ 63.50 | $ (21.73) | $ 91.85 | $ (26.76) |
[1] | Net earnings (loss) per equivalent Class B share outstanding is one-fifth of the equivalent Class A share or $12.70 and $18.37 for the second quarter and first six months of 2019, respectively, and $(4.35) and $(5.35) for the second quarter and first six months of 2018, respectively. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Consolidated Statements Of Comprehensive Income | ||||
Net earnings (loss) | $ 21,974 | $ (7,539) | $ 31,792 | $ (9,353) |
Other comprehensive income: | ||||
Reclassification to earnings | 0 | 0 | 0 | (73) |
Applicable income taxes | 0 | 0 | 0 | 15 |
Foreign currency translation | 196 | (1,141) | (108) | (645) |
Other comprehensive income (loss), net | 196 | (1,141) | (108) | (703) |
Total comprehensive income (loss) | $ 22,170 | $ (8,680) | $ 31,684 | $ (10,056) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net earnings (loss) | $ 31,792 | $ (9,353) |
Adjustments to reconcile net earnings (loss) to operating cash flows: | ||
Depreciation and amortization | 10,677 | 9,762 |
Provision for deferred income taxes | (12,184) | (2,858) |
Asset impairments and other non-cash expenses | 3,442 | 714 |
(Gains) losses on disposal of assets | (663) | 103 |
Investment partnership (gains) losses | (68,352) | 4,846 |
Distributions from investment partnerships | 2,490 | 7,700 |
Changes in receivables and inventories | 9,272 | 4,817 |
Changes in other assets | 35 | 1,212 |
Changes in accounts payable and accrued expenses | 15,196 | (17,408) |
Net cash used in operating activities | (8,295) | (465) |
Investing activities | ||
Capital expenditures | (6,238) | (7,218) |
Proceeds from property and equipment disposals | 390 | 2,476 |
Distributions from investment partnerships | 40,000 | 0 |
Purchases of limited partner interests | (40,000) | 0 |
Purchases of investments | (56,321) | (24,972) |
Redemptions of fixed maturity securities | 53,550 | 24,000 |
Net cash used in investing activities | (8,619) | (5,714) |
Financing activities | ||
Payments on revolving credit facility | 0 | (132) |
Principal payments on long-term debt | (1,100) | (1,100) |
Principal payments on direct financing lease obligations | (2,884) | (2,749) |
Proceeds from exercise of stock options | 0 | 49 |
Net cash used in financing activities | (3,984) | (3,932) |
Effect of exchange rate changes on cash | 3 | (55) |
Decrease in cash, cash equivalents and restricted cash | (20,895) | (10,166) |
Cash, cash equivalents and restricted cash at beginning of year | 55,010 | 67,230 |
Cash, cash equivalents and restricted cash at end of second quarter | $ 34,115 | $ 57,064 |
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, 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 |
Balance at Dec. 31, 2017 | 1,071 | 382,014 | 565,504 | (1,404) | (375,857) | 571,328 |
Net earnings (loss) | (9,353) | |||||
Other comprehensive income, net | (703) | |||||
Balance at Jun. 30, 2018 | 1,138 | 381,904 | 535,415 | (2,107) | (373,620) | 542,730 |
Balance at Mar. 31, 2018 | 1,071 | 381,975 | 563,780 | (966) | (394,153) | 551,707 |
Net earnings (loss) | (7,539) | (7,539) | ||||
Other comprehensive income, net | (1,141) | (1,141) | ||||
Conversion of common stock | 67 | (67) | (20,826) | 20,826 | 0 | |
Adjustment to treasury stock for holdings in investment partnerships | (304) | (304) | ||||
Exercise of stock options | (4) | 11 | 7 | |||
Balance at Jun. 30, 2018 | 1,138 | 381,904 | 535,415 | (2,107) | (373,620) | 542,730 |
Balance at Dec. 31, 2018 | 1,138 | 381,904 | 564,160 | (2,516) | (374,231) | 570,455 |
Net earnings (loss) | 9,818 | 9,818 | ||||
Adoption of accounting standards | 1,499 | 1,499 | ||||
Other comprehensive income, net | (304) | (304) | ||||
Adjustment to treasury stock for holdings in investment partnerships | (114) | (114) | ||||
Balance at Mar. 31, 2019 | 1,138 | 381,904 | 575,477 | (2,820) | (374,345) | 581,354 |
Balance at Dec. 31, 2018 | 1,138 | 381,904 | 564,160 | (2,516) | (374,231) | 570,455 |
Net earnings (loss) | 31,792 | |||||
Other comprehensive income, net | (108) | |||||
Balance at Jun. 30, 2019 | 1,138 | 381,904 | 597,451 | (2,624) | (375,507) | 602,362 |
Balance at Mar. 31, 2019 | 1,138 | 381,904 | 575,477 | (2,820) | (374,345) | 581,354 |
Net earnings (loss) | 21,974 | 21,974 | ||||
Other comprehensive income, net | 196 | 196 | ||||
Adjustment to treasury stock for holdings in investment partnerships | (1,162) | (1,162) | ||||
Balance at Jun. 30, 2019 | $ 1,138 | $ 381,904 | $ 597,451 | $ (2,624) | $ (375,507) | $ 602,362 |
Note 1. Summary of Significant
Note 1. Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018. 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 June 30, 2019, Mr. Biglari’s beneficial ownership was approximately 60.7% of the Company’s outstanding Class A common stock and 55.4% of the Company’s outstanding Class B common stock. 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 Sizzlin”), 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 | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Note 2. New Accounting Standards | In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases Leases In adopting and applying ASC 842, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification. In addition, we elected certain practical expedients and accounting policies, including an accounting policy election to keep leases with an initial term of 12 months or less from the balance sheet. We recognize those lease payments in the consolidated statements of earnings on a straight-line basis over the lease term. |
Note 3. Earnings Per Share
Note 3. Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
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. The following table presents shares authorized, issued and outstanding on June 30, 2019 and December 31, 2018. June 30, 2019 December 31, 2018 Class A Class B Class A Class B Common stock authorized 500,000 10,000,000 500,000 10,000,000 Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640 The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of June 30, 2019 and December 31, 2018. There are no dilutive securities outstanding. 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 common stock, the equivalent Class A weighted average number of common shares during the second quarters of 2019 and 2018 were 346,034 and 346,988, respectively. The equivalent Class A weighted average number of common shares during the first six months of 2019 and 2018 were 346,129 and 349,575, respectively. Each Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5 th |
Note 4. Investments
Note 4. Investments | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of Investments [Abstract] | |
Note 4. Investments | Available for sale investments were $37,013 and $33,860 as of June 30, 2019 and December 31, 2018, respectively. Investments in equity securities and a related derivative position of $4,463 are included in investments as of June 30, 2019 and in other current assets as of December 31, 2018. The investments are recorded at fair value. |
Note 5. Investment Partnerships
Note 5. Investment Partnerships | 6 Months Ended |
Jun. 30, 2019 | |
Note 5. Investment Partnerships | |
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. Biglari Capital Corp. is the general partner of the investment partnerships and is an entity solely owned by Mr. Biglari. The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest is presented below. Fair Value Company Carrying Value Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains 54,374 (13,978 ) 68,352 Contributions (net of distributions) to investment partnerships (2,490 ) (2,490 ) Increase in proportionate share of Company stock held 1,276 (1,276 ) Partnership interest at June 30, 2019 $ 766,986 $ 144,920 $ 622,066 Fair Value Company Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (128,725 ) (123,879 ) (4,846 ) Contributions (net of distributions) to investment partnerships (7,700 ) (7,700 ) Increase in proportionate share of Company stock held 18,681 (18,681 ) Partnership interest at June 30, 2018 $ 788,854 $ 254,060 $ 534,794 The carrying value of the investment partnerships net of deferred taxes is presented below. June 30, 2019 December 31, 2018 Carrying value of investment partnerships $ 622,066 $ 557,480 Deferred tax liability related to investment partnerships (83,187 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 538,879 $ 464,777 The Company’s proportionate share of Company stock held by investment partnerships at cost is $375,507 and $374,231 at June 30, 2019 and December 31, 2018, 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. Second Quarter First Six Months 2019 2018 2019 2018 Gains (losses) on investment partnership $ 34,198 $ (8,341 ) $ 68,352 $ (4,846 ) Tax expense (benefit) 7,944 (2,464 ) 15,861 (2,044 ) Net earnings (loss) $ 26,254 $ (5,877 ) $ 52,491 $ (2,802 ) On December 31 of each year, the general partner of the investment partnerships 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 six months of 2019 or 2018. Our investments in these partnerships are committed on a rolling 5-year basis. 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 June 30, 2019 $ 106,657 $ 911,690 Total liabilities as of June 30, 2019 $ 90 $ 165,787 Revenue for the first six months of 2019 $ 121 $ 62,499 Earnings for the first six months of 2019 $ 88 $ 58,068 Biglari Holdings’ ownership interest as of June 30, 2019 66.1 % 93.4 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the first six months of 2018 $ (49,773 ) $ (99,751 ) Earnings (loss) for the first six months of 2018 $ (49,805 ) $ (104,290 ) Biglari Holdings’ ownership interest as of June 30, 2018 65.3 % 92.2 % 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. Transactions with The Lion Fund II, L.P. were as follows. Second Quarter First Six Months 2019 2018 2019 2018 Contributions $ — $ — $ 40,000 $ — Distributions (2,490 ) (2,500 ) (42,490 ) (7,700 ) $ (2,490 ) $ (2,500 ) $ (2,490 ) $ (7,700 ) |
Note 6. Property and Equipment
Note 6. Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Note 6. Property and Equipment | Property and equipment is composed of the following. June 30, 2019 December 31, 2018 Land $ 151,671 $ 146,015 Buildings 145,915 142,658 Land and leasehold improvements 162,839 158,938 Equipment 200,076 201,738 Construction in progress 2,910 1,703 663,411 651,052 Less accumulated depreciation and amortization (366,717 ) (376,336 ) Property and equipment, net $ 296,694 $ 274,716 The Company recorded an impairment to long-lived assets of $438 and $2,338 in selling, general and administrative expenses in the second quarter and first six months of 2019, respectively, and no impairment to long-lived assets in the first six months of 2018. The fair value of the long-lived assets was determined based on Level 2 inputs using a discounted cash flow model and quoted prices for the properties. The fair value of the assets impaired was not material for any of the applicable periods. As of June 30, 2019, a total of 103 Steak n Shake restaurants have been temporarily closed. The Company is actively working to identify franchise partners for these stores. The Company has recorded impairments of $2,006 during the first six months of 2019 associated with temporarily closed units. Although the Company is committed to the franchise partnership model, future impairments are possible. |
Note 7. Goodwill and Other Inta
Note 7. Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during the first six months of 2019 (4 ) — (4 ) Goodwill at June 30, 2019 $ 28,135 $ 11,913 $ 40,048 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. 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 six months of 2019 or 2018. Other Intangible Assets Other intangible assets are composed of the following. June 30, 2019 December 31, 2018 Gross Accumulated Total Gross Accumulated Total Franchise agreement $ 5,310 $ (4,912 ) $ 398 $ 5,310 $ (4,647 ) $ 663 Other 810 (783 ) 27 810 (774 ) 36 Total 6,120 (5,695 ) 425 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,471 — 11,471 11,539 — 11,539 Total intangible assets $ 33,467 $ (5,695 ) $ 27,772 $ 33,535 $ (5,421 ) $ 28,114 Intangible assets subject to amortization consist of franchise agreements connected with the purchase of Western Sizzlin 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 the first six months of 2019 and 2018 was $274 and $281, respectively. The Company’s intangible assets with definite lives will fully amortize in 2020. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Note 8. Restaurant Operations Revenues | |
Note 8. Restaurant Operations Revenues | Restaurant operations revenues were as follows. Second Quarter First Six Months 2019 2018 2019 2018 Net sales $ 152,062 $ 191,797 $ 317,693 $ 377,368 Franchise royalties and fees 7,146 7,773 14,058 14,875 Other 853 1,024 2,085 2,285 $ 160,061 $ 200,594 $ 333,836 $ 394,528 Net sales Net sales were composed 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 earnings as revenue. Franchise royalties and fees Franchise royalties and fees are composed 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. Our advertising arrangements with franchisees are reported in franchise royalties and fees. 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. |
Note 9. Accounts Payable and Ac
Note 9. Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Note 9. Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses include the following. June 30, December 31, Accounts payable $ 31,416 $ 41,967 Gift card liability 17,199 22,685 Salaries, wages, and vacation 19,000 13,107 Taxes payable 30,264 11,214 Insurance accruals 13,693 12,127 Deferred revenue 13,657 11,681 Other 5,213 4,484 Accounts payable and accrued expenses $ 130,442 $ 117,265 |
Note 10. Notes Payable and Othe
Note 10. Notes Payable and Other Borrowings | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Note 10. Notes Payable and Other Borrowings | Notes payable and other borrowings include the following. Current portion of notes payable and other borrowings June 30, 2019 December 31, 2018 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount and debt issuance costs (962 ) (943 ) Finance obligations 4,052 4,463 Finance lease liabilities 1,634 — Total current portion of notes payable and other borrowings $ 6,924 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 180,398 $ 181,498 Unamortized original issue discount and debt issuance costs (748 ) (1,234 ) Finance obligations 75,709 59,737 Finance leases liabilities 10,450 — Total long-term notes payable and other borrowings $ 265,809 $ 240,001 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. 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. Interest on the term loan is based on a Eurodollar rate plus an applicable margin of 3.75% or on the prime rate plus an applicable margin of 2.75%. The interest rate on the term loan was 6.19% as of June 30, 2019. 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. Disruptions in debt capital markets that restrict access to funding when needed could adversely affect the results of operations, liquidity and capital resources of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility. As of June 30, 2019, $182,598 was outstanding under the term loan. |
Note 11. Leases
Note 11. Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Note 11. Leases | The Company adopted ASC 842 on January 1, 2019, as discussed in Note 2. Under ASC 842, leases are generally classified as either operating right-of-use assets or finance lease assets. Right-of-use assets represent the Company's right to use an underlying asset during the lease term. Right-of-use liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and liabilities are calculated by using the net present value of fixed lease payments over the lease term. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company applied an incremental borrowing rate to determine the present value of lease payments. Finance lease agreements include an interest rate that is used to determine the present value of future lease payments. A significant portion of our operating and finance lease portfolio includes restaurant locations. The Company’s operating leases with a term of 12 months or greater were recognized as operating right-of-use assets and liabilities and recorded as operating lease assets and operating lease liabilities. Historical capital leases and certain historical build-to-suit leases were reclassified from obligations under leases to finance lease assets and liabilities. Finance lease assets are recorded in property and equipment and finance lease liabilities are recorded in notes payable and other borrowings. Historical sale-and-leaseback transactions in which the Company is deemed to have a continued interest in the leased asset are recorded as property and equipment and as finance obligations. Finance obligations are recorded in notes payable and other borrowings. Operating lease expense and finance lease depreciation expense are recognized on a straight line basis over the lease term. Total lease cost consists of the following. Second Quarter First Six Months Finance lease costs: Amortization of right-of-use assets $ 487 $ 979 Interest on lease liabilities 215 422 Operating lease costs * 4,003 7,860 Total lease costs $ 4,705 $ 9,261 *Includes short-term leases, variable lease costs and sublease income, which are immaterial. Supplemental cash flow information related to leases is as follows. First Six Months 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 797 Operating cash flows from finance leases $ 422 Operating cash flows from operating leases $ 8,375 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 8,919 Supplemental balance sheet information related to leases is as follows. June 30, 2019 Finance leases: Property and equipment, net $ 11,755 Current portion of notes payable and other borrowings $ 1,634 Long-term notes payable and other borrowings 10,450 Total finance lease liabilities $ 12,084 Weighted-average lease terms and discount rates are as follows. June 30, 2019 Weighted-average remaining lease terms: Finance leases 8.7 years Operating leases 7.3 years Weighted-average discount rates: Finance leases 7.1 % Operating leases 6.9 % Maturities of lease liabilities as of June 30, 2019 are as follows. Year Operating Leases Finance Leases 2019 $ 8,439 $ 1,218 2020 15,797 2,377 2021 14,701 2,358 2022 12,438 1,869 2023 10,588 1,669 After 2023 31,397 6,815 Total lease payments 93,360 16,306 Less interest 21,088 4,222 Total lease liabilities $ 72,272 $ 12,084 On December 31, 2018, obligations under non-cancelable finance obligations, capital leases, and operating leases (excluding real estate taxes, insurance and maintenance costs) require the following minimum future rental payments. Operating Leases Year Finance Capital Total Operating Non-Operating 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737 |
Note 12. Accumulated Other Comp
Note 12. Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Note 12. Accumulated Other Comprehensive Income | During the first six months of 2019 and 2018, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. Six months ended June 30, 2019 Six months ended June 30, 2018 Foreign Accumulated Foreign Accumulated Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — — (58 ) (58 ) Foreign currency translation (108 ) (108 ) (645 ) (645 ) Ending Balance $ (2,624 ) $ — $ (2,624 ) $ (2,107 ) $ — $ (2,107 ) During the second quarter of 2019 and 2018, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. Second Quarter 2019 Second Quarter 2018 Foreign Accumulated Foreign Accumulated Beginning Balance $ (2,820 ) $ — $ (2,820 ) $ (966 ) $ — $ (966 ) Reclassification to (earnings) loss — — — — Foreign currency translation 196 196 (1,141 ) (1,141 ) Ending Balance $ (2,624 ) $ — $ (2,624 ) $ (2,107 ) $ — $ (2,107 ) There were no reclassifications from accumulated other comprehensive income to earnings during the second quarters of 2019 and 2018 and first six months of 2019. Reclassifications made from accumulated other comprehensive income to earnings during the first six months of 2018 were $58. |
Note 13. Income Taxes
Note 13. Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Note 13. Income Taxes | In determining the quarterly provision for income taxes, the Company used a discrete effective tax rate method based on statutory tax rates for 2019 and an estimated annual effective tax rate for 2018. Our periodic effective income tax rate is affected by the relative mix of pre-tax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions. Income tax expense for the second quarter of 2019 was $5,896 compared to an income tax benefit of $890 for the second quarter of 2018. Income tax expense for the first six months of 2019 was $7,640 compared to an income tax benefit of $1,687 for the first six months of 2018. The variance in income taxes between 2019 and 2018 is attributable to taxes on income generated by the investment partnerships. As of June 30, 2019 and December 31, 2018, we had approximately $352 and $341, respectively, of unrecognized tax benefits, which are included in other liabilities in the consolidated balance sheets. |
Note 14. Commitments and Contin
Note 14. Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 14. 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 flow. 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 of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari as a result of the dual class structure. On March 26, 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. 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 26, 2018 to approve the dual class structure. On April 16, 2018, the shareholders withdrew their motions to enjoin the shareholder vote on April 26, 2018. On May 17, 2018, the shareholders who filed the January 29, 2018 complaint and the March 26, 2018 complaint filed a new, consolidated complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholders generally allege claims of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari arising out of the dual class structure. The shareholders seek, for themselves and on behalf of all other shareholders as a class, a declaration that the defendants breached their duty to the shareholders and the class, and to recover unspecified damages, pre-judgment and post-judgment interest, and an award of their attorneys’ fees and other costs. On December 14, 2018, the judge of the Superior Court of Hamilton County, Indiana issued an order granting the Company’s motion to dismiss the shareholders’ lawsuits. On January 11, 2019, the shareholders filed an appeal of the judge’s order dismissing the lawsuits. The Company continues to believe the claim is without merit and will defend the appeal vigorously. On September 8, 2014, two former restaurant manager employees filed a purported class action lawsuit against Steak n Shake (Drake v. Steak n Shake). On January 30, 2017, a former restaurant manager employee filed a purported class action lawsuit against Steak n Shake (Clendenen v. Steak n Shake). The plaintiffs generally allege claims that Steak n Shake improperly classified its managerial employees as exempt. On February 28, 2019, a jury returned a verdict in the Drake case against Steak n Shake. The Company agreed to settle both cases for $8,350 and the Court approved the terms of the settlement on July 26, 2019. |
Note 15. Fair Value of Financia
Note 15. Fair Value of Financial Assets | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Note 15. 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. The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets: Cash equivalents: Equity securities: Bonds: Non-qualified deferred compensation plan investments: Derivative instruments: As of June 30, 2019 and December 31, 2018, the fair values of financial assets were as follows. June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 10,118 $ — $ — $ 10,118 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods — 6,421 — 6,421 1,708 4,100 — 5,808 Bonds 35,557 — — 35,557 32,404 — — 32,404 Options on equity securities — 2,142 — 2,142 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,057 — — 2,057 2,149 — — 2,149 Total assets at fair value $ 47,732 $ 8,563 $ — $ 56,295 $ 57,709 $ 6,855 $ — $ 64,564 There were no changes in our valuation techniques used to measure fair values on a recurring basis. |
Note 16. Related Party Transact
Note 16. Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Note 16. Related Party Transactions | Services Agreement During 2017, the Company entered into a services agreement with Biglari Enterprises LLC and Biglari Capital Corp. (collectively, the “Biglari Entities”) under which the Biglari Entities provide business and administrative related services to the Company. The Biglari Entities are owned by Mr. Biglari. 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 monthly fee will remain at $700 during 2019. The Company paid Biglari Enterprises $4,200 in service fees during the first six months of 2019 and 2018. The services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp. by the Company. License Agreement During 2013, the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The Company and its subsidiaries paid no royalties to Mr. Biglari under the License Agreement during its term. The License Agreement was terminated on March 26, 2019. Incentive Agreement Amendment The Incentive Agreement was amended on March 26, 2019 to remove the annual limitation on Mr. Biglari’s incentive compensation, as well as the requirement of Mr. Biglari to use 30% of his incentive payments to purchase shares of the Company. In connection with the amendment, the change of control and severance provisions contained in the Incentive Agreement were eliminated and the License Agreement was terminated. The amendment is effective in 2019. |
Note 17. Business Segment Repor
Note 17. Business Segment Reporting | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Note 17. Business Segment Reporting | Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations include Steak n Shake and Western Sizzlin. 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 for the second quarters and first six months of 2019 and 2018 were as follows. Revenue Second Quarter First Six Months 2019 2018 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ 156,006 $ 196,578 $ 326,117 $ 386,871 Western Sizzlin 4,055 4,016 7,719 7,657 Total Restaurant Operations 160,061 200,594 333,836 394,528 First Guard 7,417 6,745 14,624 13,292 Maxim 865 1,400 1,742 3,144 $ 168,343 $ 208,739 $ 350,202 $ 410,964 Earnings (losses) before income taxes for the second quarters and first six months of 2019 and 2018 were as follows. Earnings (Losses) Before Income Taxes Second Quarter First Six Months 2019 2018 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ (3,057 ) $ 2,659 $ (21,915 ) $ 1,667 Western Sizzlin 506 674 889 1,048 Total Restaurant Operations (2,551 ) 3,333 (21,026 ) 2,715 First Guard 1,850 2,301 3,394 2,811 Maxim 176 16 64 (201 ) Other 114 164 253 303 Total Operating Businesses (411 ) 5,814 (17,315 ) 5,628 Corporate and Investments: Corporate (2,767 ) (3,004 ) (5,397 ) (6,170 ) Investment partnership gains (losses) 34,198 (8,341 ) 68,352 (4,846 ) Total Corporate and Investments 31,431 (11,345 ) 62,955 (11,016 ) Interest expense on notes payable and other borrowings (3,150 ) (2,898 ) (6,208 ) (5,652 ) $ 27,870 $ (8,429 ) $ 39,432 $ (11,040 ) |
Note 1. Summary of Significan_2
Note 1. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018. 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 June 30, 2019, Mr. Biglari’s beneficial ownership was approximately 60.7% of the Company’s outstanding Class A common stock and 55.4% of the Company’s outstanding Class B common stock. |
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 Sizzlin”), 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 3. Earnings Per Share (Tab
Note 3. Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share | |
Summary of outstanding shares | June 30, 2019 December 31, 2018 Class A Class B Class A Class B Common stock authorized 500,000 10,000,000 500,000 10,000,000 Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640 |
Note 5. Investment Partnershi_2
Note 5. Investment Partnerships (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Note 5. Investment Partnerships | |
Fair value and carrying value of our partnership interest | Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains 54,374 (13,978 ) 68,352 Contributions (net of distributions) to investment partnerships (2,490 ) (2,490 ) Increase in proportionate share of Company stock held 1,276 (1,276 ) Partnership interest at June 30, 2019 $ 766,986 $ 144,920 $ 622,066 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (128,725 ) (123,879 ) (4,846 ) Contributions (net of distributions) to investment partnerships (7,700 ) (7,700 ) Increase in proportionate share of Company stock held 18,681 (18,681 ) Partnership interest at June 30, 2018 $ 788,854 $ 254,060 $ 534,794 |
Carrying value of investment partnerships net of deferred taxes | June 30, 2019 December 31, 2018 Carrying value of investment partnerships $ 622,066 $ 557,480 Deferred tax liability related to investment partnerships (83,187 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 538,879 $ 464,777 |
Gains (loss) from investment partnerships | Second Quarter First Six Months 2019 2018 2019 2018 Gains (losses) on investment partnership $ 34,198 $ (8,341 ) $ 68,352 $ (4,846 ) Tax expense (benefit) 7,944 (2,464 ) 15,861 (2,044 ) Net earnings (loss) $ 26,254 $ (5,877 ) $ 52,491 $ (2,802 ) |
Summarized financial information for equity in investment partnerships | Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of June 30, 2019 $ 106,657 $ 911,690 Total liabilities as of June 30, 2019 $ 90 $ 165,787 Revenue for the first six months of 2019 $ 121 $ 62,499 Earnings for the first six months of 2019 $ 88 $ 58,068 Biglari Holdings’ ownership interest as of June 30, 2019 66.1 % 93.4 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the first six months of 2018 $ (49,773 ) $ (99,751 ) Earnings (loss) for the first six months of 2018 $ (49,805 ) $ (104,290 ) Biglari Holdings’ ownership interest as of June 30, 2018 65.3 % 92.2 % |
Contributions to and distributions from the investment partnerships | Second Quarter First Six Months 2019 2018 2019 2018 Contributions $ — $ — $ 40,000 $ — Distributions (2,490 ) (2,500 ) (42,490 ) (7,700 ) $ (2,490 ) $ (2,500 ) $ (2,490 ) $ (7,700 ) |
Note 6. Property and Equipment
Note 6. Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | June 30, 2019 December 31, 2018 Land $ 151,671 $ 146,015 Buildings 145,915 142,658 Land and leasehold improvements 162,839 158,938 Equipment 200,076 201,738 Construction in progress 2,910 1,703 663,411 651,052 Less accumulated depreciation and amortization (366,717 ) (376,336 ) Property and equipment, net $ 296,694 $ 274,716 |
Note 7. Goodwill and Other In_2
Note 7. Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Restaurants Other Total Goodwill at December 31, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during the first six months of 2019 (4 ) — (4 ) Goodwill at June 30, 2019 $ 28,135 $ 11,913 $ 40,048 |
Schedule of other intangible assets | June 30, 2019 December 31, 2018 Gross Accumulated Total Gross Accumulated Total Franchise agreement $ 5,310 $ (4,912 ) $ 398 $ 5,310 $ (4,647 ) $ 663 Other 810 (783 ) 27 810 (774 ) 36 Total 6,120 (5,695 ) 425 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,471 — 11,471 11,539 — 11,539 Total intangible assets $ 33,467 $ (5,695 ) $ 27,772 $ 33,535 $ (5,421 ) $ 28,114 |
Note 8. Restaurant Operations_2
Note 8. Restaurant Operations Revenues (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Note 8. Restaurant Operations Revenues | |
Summary of restaurant operations revenues | Second Quarter First Six Months 2019 2018 2019 2018 Net sales $ 152,062 $ 191,797 $ 317,693 $ 377,368 Franchise royalties and fees 7,146 7,773 14,058 14,875 Other 853 1,024 2,085 2,285 $ 160,061 $ 200,594 $ 333,836 $ 394,528 |
Note 9. Accounts Payable And _2
Note 9. Accounts Payable And Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Note 9. Accounts Payable And Accrued Expenses | |
Schedule of accounts payable and accrued expenses | June 30, December 31, Accounts payable $ 31,416 $ 41,967 Gift card liability 17,199 22,685 Salaries, wages, and vacation 19,000 13,107 Taxes payable 30,264 11,214 Insurance accruals 13,693 12,127 Deferred revenue 13,657 11,681 Other 5,213 4,484 Accounts payable and accrued expenses $ 130,442 $ 117,265 |
Note 10. Notes Payable and Ot_2
Note 10. Notes Payable and Other Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and other borrowings | Current portion of notes payable and other borrowings June 30, 2019 December 31, 2018 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount and debt issuance costs (962 ) (943 ) Finance obligations 4,052 4,463 Finance lease liabilities 1,634 — Total current portion of notes payable and other borrowings $ 6,924 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 180,398 $ 181,498 Unamortized original issue discount and debt issuance costs (748 ) (1,234 ) Finance obligations 75,709 59,737 Finance leases liabilities 10,450 — Total long-term notes payable and other borrowings $ 265,809 $ 240,001 |
Note 11. Leases (Tables)
Note 11. Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease cost | Second Quarter 2019 First Six Months 2019 Finance lease costs: Amortization of right-of-use assets $ 487 $ 979 Interest on lease liabilities 215 422 Operating lease costs * 4,003 7,860 Total lease costs $ 4,705 $ 9,261 *Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Schedule of supplemental cash flow information related to leases | First Six Months 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 797 Operating cash flows from finance leases $ 422 Operating cash flows from operating leases $ 8,375 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 8,919 |
Schedule of supplemental balance sheet information related to leases | June 30, 2019 Finance leases: Property and equipment, net $ 11,755 Current portion of notes payable and other borrowings $ 1,634 Long-term notes payable and other borrowings 10,450 Total finance lease liabilities $ 12,084 |
Schedule of weighted-average lease terms and discount rates | June 30, 2019 Weighted-average remaining lease terms: Finance leases 8.7 years Operating leases 7.3 years Weighted-average discount rates: Finance leases 7.1 % Operating leases 6.9 % |
Schedule of maturities of lease liabilities at June 30, 2019 | Year Operating Leases Finance Leases 2019 $ 8,439 $ 1,218 2020 15,797 2,377 2021 14,701 2,358 2022 12,438 1,869 2023 10,588 1,669 After 2023 31,397 6,815 Total lease payments 93,360 16,306 Less interest 21,088 4,222 Total lease liabilities $ 72,272 $ 12,084 |
Schedule of future minimum lease payments at December 31, 2018 | Operating Leases Year Finance Capital Total Operating Non-Operating 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737 |
Note 12. Accumulated Other Co_2
Note 12. Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Component of accumulated other comprehensive income | Six months ended June 30, 2019 Six months ended June 30, 2018 Foreign Accumulated Foreign Accumulated Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — — (58 ) (58 ) Foreign currency translation (108 ) (108 ) (645 ) (645 ) Ending Balance $ (2,624 ) $ — $ (2,624 ) $ (2,107 ) $ — $ (2,107 ) Second Quarter 2019 Second Quarter 2018 Foreign Accumulated Foreign Accumulated Beginning Balance $ (2,820 ) $ — $ (2,820 ) $ (966 ) $ — $ (966 ) Reclassification to (earnings) loss — — — — Foreign currency translation 196 196 (1,141 ) (1,141 ) Ending Balance $ (2,624 ) $ — $ (2,624 ) $ (2,107 ) $ — $ (2,107 ) |
Note 15. Fair Value of Financ_2
Note 15. Fair Value of Financial Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets | June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 10,118 $ — $ — $ 10,118 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods — 6,421 — 6,421 1,708 4,100 — 5,808 Bonds 35,557 — — 35,557 32,404 — — 32,404 Options on equity securities — 2,142 — 2,142 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,057 — — 2,057 2,149 — — 2,149 Total assets at fair value $ 47,732 $ 8,563 $ — $ 56,295 $ 57,709 $ 6,855 $ — $ 64,564 |
Note 17. Business Segment Rep_2
Note 17. Business Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenue by segment | Revenue Second Quarter First Six Months 2019 2018 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ 156,006 $ 196,578 $ 326,117 $ 386,871 Western Sizzlin 4,055 4,016 7,719 7,657 Total Restaurant Operations 160,061 200,594 333,836 394,528 First Guard 7,417 6,745 14,624 13,292 Maxim 865 1,400 1,742 3,144 $ 168,343 $ 208,739 $ 350,202 $ 410,964 |
Schedule of earnings (losses) before income taxes by segment | Earnings (Losses) Before Income Taxes Second Quarter First Six Months 2019 2018 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ (3,057 ) $ 2,659 $ (21,915 ) $ 1,667 Western Sizzlin 506 674 889 1,048 Total Restaurant Operations (2,551 ) 3,333 (21,026 ) 2,715 First Guard 1,850 2,301 3,394 2,811 Maxim 176 16 64 (201 ) Other 114 164 253 303 Total Operating Businesses (411 ) 5,814 (17,315 ) 5,628 Corporate and Investments: Corporate (2,767 ) (3,004 ) (5,397 ) (6,170 ) Investment partnership gains (losses) 34,198 (8,341 ) 68,352 (4,846 ) Total Corporate and Investments 31,431 (11,345 ) 62,955 (11,016 ) Interest expense on notes payable and other borrowings (3,150 ) (2,898 ) (6,208 ) (5,652 ) $ 27,870 $ (8,429 ) $ 39,432 $ (11,040 ) |
Note 3. Earnings Per Share (Det
Note 3. Earnings Per Share (Details) - shares | Jun. 30, 2019 | Dec. 31, 2018 |
Class A Common Stock | ||
Common stock authorized | 500,000 | 500,000 |
Common stock issued | 206,864 | 206,864 |
Common stock outstanding | 206,864 | 206,864 |
Class B Common Stock | ||
Common stock authorized | 10,000,000 | 10,000,000 |
Common stock issued | 2,068,640 | 2,068,640 |
Common stock outstanding | 2,068,640 | 2,068,640 |
Note 3. Earnings Per Share (D_2
Note 3. Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Note 3.Earnings Per Share Details Narrative Abstract | ||||
Equivalent Class A weighted average number of common shares | 346,034 | 346,988 | 346,129 | 349,575 |
Note 4. Investments (Details Na
Note 4. Investments (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Investments [Abstract] | ||
Available for sale investments | $ 37,013 | $ 33,860 |
Investments in equity securities and a related derivative position | $ 4,463 | $ 4,463 |
Note 5. Investment Partnershi_3
Note 5. Investment Partnerships (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investment partnership gains (losses) | $ 34,198 | $ (8,341) | $ 68,352 | $ (4,846) |
Fair Value | ||||
Partnership interest, beginning | 715,102 | 925,279 | ||
Investment partnership gains (losses) | 54,374 | (128,725) | ||
Contributions (net of distributions) to investment partnerships | (2,490) | (7,700) | ||
Increase in proportionate share of Company stock held | 0 | 0 | ||
Partnership interest, ending | 766,986 | 788,854 | 766,986 | 788,854 |
Company Common Stock | ||||
Partnership interest, beginning | 157,622 | 359,258 | ||
Investment partnership gains (losses) | (13,978) | (123,879) | ||
Contributions (net of distributions) to investment partnerships | 0 | 0 | ||
Increase in proportionate share of Company stock held | 1,276 | 18,681 | ||
Partnership interest, ending | 144,920 | 254,060 | 144,920 | 254,060 |
Carrying Value | ||||
Partnership interest, beginning | 557,480 | 566,021 | ||
Investment partnership gains (losses) | 68,352 | (4,846) | ||
Contributions (net of distributions) to investment partnerships | (2,490) | (7,700) | ||
Increase in proportionate share of Company stock held | (1,276) | (18,681) | ||
Partnership interest, ending | $ 622,066 | $ 534,794 | $ 622,066 | $ 534,794 |
Note 5. Investment Partnershi_4
Note 5. Investment Partnerships (Details 1) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Note 5. Investment Partnerships | ||
Carrying value of investment partnerships | $ 622,066 | $ 557,480 |
Deferred tax liability related to investment partnerships | (83,187) | (92,703) |
Carrying value of investment partnerships net of deferred taxes | $ 538,879 | $ 464,777 |
Note 5. Investment Partnershi_5
Note 5. Investment Partnerships (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Note 5.Investment Partnerships Details 2Abstract | ||||
Gains (losses) on investment partnership | $ 34,198 | $ (8,341) | $ 68,352 | $ (4,846) |
Tax expense (benefit) | 7,944 | (2,464) | 15,861 | (2,044) |
Net earnings (loss) | $ 26,254 | $ (5,877) | $ 52,491 | $ (2,802) |
Note 5. Investment Partnershi_6
Note 5. Investment Partnerships (Details 3) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Lion Fund | |||
Total assets | $ 106,657 | $ 107,207 | |
Total liabilities | 90 | 447 | |
Revenue for the first six months | 121 | $ (49,773) | |
Earnings (loss) for the first six months | $ 88 | $ (49,805) | |
Biglari Holdings' ownership interest | 66.10% | 65.30% | |
Lion Fund II | |||
Total assets | $ 911,690 | 901,750 | |
Total liabilities | 165,787 | $ 202,770 | |
Revenue for the first six months | 62,499 | $ (99,751) | |
Earnings (loss) for the first six months | $ 58,068 | $ (104,290) | |
Biglari Holdings' ownership interest | 93.40% | 92.20% |
Note 5. Investment Partnershi_7
Note 5. Investment Partnerships (Details 4) - Lion Fund II - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Contributions | $ 0 | $ 0 | $ 40,000 | $ 0 |
Distributions | (2,490) | (2,500) | (42,490) | (7,700) |
Total contributions and distributions | $ (2,490) | $ (2,500) | $ (2,490) | $ (7,700) |
Note 5. Investment Partnershi_8
Note 5. Investment Partnerships (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Note 5. Investment Partnerships | ||
Proportionate share of Company stock held by investment partnerships at cost | $ 375,507 | $ 374,231 |
Note 6. Property and Equipmen_2
Note 6. Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 151,671 | $ 146,015 |
Buildings | 145,915 | 142,658 |
Land and leasehold improvements | 162,839 | 158,938 |
Equipment | 200,076 | 201,738 |
Construction in progress | 2,910 | 1,703 |
Property and equipment, gross | 663,411 | 651,052 |
Less accumulated depreciation and amortization | (366,717) | (376,336) |
Property and equipment, net | $ 296,694 | $ 274,716 |
Note 7. Goodwill and Other In_3
Note 7. Goodwill and Other Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill, beginning | $ 40,052 |
Change in foreign exchange rates during the first six months of 2019 | (4) |
Goodwill, ending | 40,048 |
Restaurant | |
Goodwill, beginning | 28,139 |
Change in foreign exchange rates during the first six months of 2019 | (4) |
Goodwill, ending | 28,135 |
Other | |
Goodwill, beginning | 11,913 |
Change in foreign exchange rates during the first six months of 2019 | 0 |
Goodwill, ending | $ 11,913 |
Note 7. Goodwill and Other In_4
Note 7. Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Gross carrying amount | $ 33,467 | $ 33,535 |
Accumulated amortization | (5,695) | (5,421) |
Total intangible assets | 27,772 | 28,114 |
Finite-Lived Intangible Assets | ||
Gross carrying amount | 6,120 | 6,120 |
Accumulated amortization | (5,695) | (5,421) |
Total intangible assets | 425 | 699 |
Franchise Agreement | Finite-Lived Intangible Assets | ||
Gross carrying amount | 5,310 | 5,310 |
Accumulated amortization | (4,912) | (4,647) |
Total intangible assets | 398 | 663 |
Other | Finite-Lived Intangible Assets | ||
Gross carrying amount | 810 | 810 |
Accumulated amortization | (783) | (774) |
Total intangible assets | 27 | 36 |
Other | Indefinite-lived Intangible Assets | ||
Gross carrying amount | 11,471 | 11,539 |
Accumulated amortization | 0 | 0 |
Total intangible assets | 11,471 | 11,539 |
Trade names | Indefinite-lived Intangible Assets | ||
Gross carrying amount | 15,876 | 15,876 |
Accumulated amortization | 0 | 0 |
Total intangible assets | $ 15,876 | $ 15,876 |
Note 7. Goodwill and Other In_5
Note 7. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 274 | $ 281 |
Note 8. Restaurant Operations_3
Note 8. Restaurant Operations Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Note 8. Restaurant Operations Revenues | ||||
Net sales | $ 152,062 | $ 191,797 | $ 317,693 | $ 377,368 |
Franchise royalties and fees | 7,146 | 7,773 | 14,058 | 14,875 |
Other | 853 | 1,024 | 2,085 | 2,285 |
Restaurant operations revenue | $ 160,061 | $ 200,594 | $ 333,836 | $ 394,528 |
Note 9. Accounts Payable and _3
Note 9. Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 31,416 | $ 41,967 |
Gift card liability | 17,199 | 22,685 |
Salaries, wages, and vacation | 19,000 | 13,107 |
Taxes payable | 30,264 | 11,214 |
Insurance accruals | 13,693 | 12,127 |
Deferred revenue | 13,657 | 11,681 |
Other | 5,213 | 4,484 |
Accounts payable and accrued expenses | $ 130,442 | $ 117,265 |
Note 10. Notes Payable and Ot_3
Note 10. Notes Payable and Other Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current portion of notes payable and other borrowings | ||
Notes payable | $ 2,200 | $ 2,200 |
Unamortized original issue discount and debt issuance costs | (962) | (943) |
Finance obligations | 4,052 | 4,463 |
Finance lease liabilities | 1,634 | 0 |
Total current portion of notes payable and other borrowings | 6,924 | 5,720 |
Long-term notes payable and other borrowings | ||
Notes payable | 180,398 | 181,498 |
Unamortized original issue discount and debt issuance costs | (748) | (1,234) |
Finance obligations | 75,709 | 59,737 |
Finance lease liabilities | 10,450 | 0 |
Total long-term notes payable and other borrowings | $ 265,809 | $ 240,001 |
Note 10. Notes Payable and Ot_4
Note 10. Notes Payable and Other Borrowings (Details Narrative) - Steak n Shake Agreement 2014 $ in Thousands | Jun. 30, 2019USD ($) |
Interest rate | 6.19% |
Outstanding debt | $ 182,598 |
Note 11. Leases (Details)
Note 11. Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | ||
Finance lease costs: | |||
Amortization of right-of-use assets | $ 487 | $ 979 | |
Interest on lease liabilities | 215 | 422 | |
Operating lease costs | [1] | 4,003 | 7,860 |
Total lease costs | $ 4,705 | $ 9,261 | |
[1] | Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Note 11. Leases (Details 1)
Note 11. Leases (Details 1) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liablities: | |
Financing cash flows from finance leases | $ 797 |
Operating cash flows from finance leases | 422 |
Operating cash flows from operating leases | 8,375 |
Right-of-use assets obtained in exchange for lease obligations: | |
Finance lease liabilities | 1,097 |
Operating lease liabilities | $ 8,919 |
Note 11. Leases (Details 2)
Note 11. Leases (Details 2) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finance leases: | ||
Property and equipment, net | $ 11,755 | |
Current portion of notes payable and other borrowings | 1,634 | $ 0 |
Long-term notes payable and other borrowings | 10,450 | $ 0 |
Total finance lease liablities | $ 12,084 |
Note 11. Leases (Details 3)
Note 11. Leases (Details 3) | Jun. 30, 2019 |
Weighted-average remaining lease terms: | |
Finance leases | 8 years 8 months 12 days |
Operating leases | 7 years 3 months 18 days |
Weighted-average discount rates: | |
Finance leases | 7.10% |
Operating leases | 6.90% |
Note 11. Leases (Details 4)
Note 11. Leases (Details 4) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 8,439 |
2020 | 15,797 |
2021 | 14,701 |
2022 | 12,438 |
2023 | 10,588 |
After 2023 | 31,397 |
Total lease payments | 93,360 |
Less interest | 21,088 |
Total lease liabilities | 72,272 |
Finance Leases | |
2019 | 1,218 |
2020 | 2,377 |
2021 | 2,358 |
2022 | 1,869 |
2023 | 1,669 |
After 2023 | 6,815 |
Total lease payments | 16,306 |
Less interest | 4,222 |
Total lease liabilities | $ 12,084 |
Note 11. Leases (Details 5)
Note 11. Leases (Details 5) $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 11,169 |
2020 | 8,095 |
2021 | 5,980 |
2022 | 2,956 |
2023 | 1,587 |
After 2023 | 1,673 |
Total minimum future rental payments | 31,460 |
Less amount representing interest | 18,064 |
Total principal obligations under leases | 13,396 |
Less current portion | 4,463 |
Non-current principal obligations under leases | 8,933 |
Residual value at end of lease term | 50,804 |
Obligations under leases | 59,737 |
Finance Obligations | |
2019 | 11,114 |
2020 | 8,040 |
2021 | 5,925 |
2022 | 2,951 |
2023 | 1,587 |
After 2023 | 1,673 |
Total minimum future rental payments | 31,290 |
Less amount representing interest | 18,004 |
Total principal obligations under leases | 13,286 |
Less current portion | 4,433 |
Non-current principal obligations under leases | 8,853 |
Residual value at end of lease term | 50,744 |
Obligations under leases | 59,597 |
Capital Leases | |
2019 | 55 |
2020 | 55 |
2021 | 55 |
2022 | 5 |
2023 | 0 |
After 2023 | 0 |
Total minimum future rental payments | 170 |
Less amount representing interest | 60 |
Total principal obligations under leases | 110 |
Less current portion | 30 |
Non-current principal obligations under leases | 80 |
Residual value at end of lease term | 60 |
Obligations under leases | 140 |
Operating Property | |
2019 | 17,914 |
2020 | 16,691 |
2021 | 16,787 |
2022 | 15,603 |
2023 | 14,071 |
After 2023 | 36,709 |
Total minimum future rental payments | 117,775 |
Non-Operating Property | |
2019 | 483 |
2020 | 554 |
2021 | 578 |
2022 | 599 |
2023 | 539 |
After 2023 | 1,790 |
Total minimum future rental payments | $ 4,543 |
Note 12. Accumulated Other Co_3
Note 12. Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Beginning balance | $ (2,820) | $ (966) | $ (2,516) | $ (1,404) |
Reclassification to (earnings) loss | 0 | 0 | 0 | (58) |
Foreign currency translation | 196 | (1,141) | (108) | (645) |
Ending balance | (2,624) | (2,107) | (2,624) | (2,107) |
Foreign Currency Translation Adjustments | ||||
Beginning balance | (2,820) | (966) | (2,516) | (1,462) |
Reclassification to (earnings) loss | 0 | 0 | 0 | 0 |
Foreign currency translation | 196 | (1,141) | (108) | (645) |
Ending balance | (2,624) | (2,107) | (2,624) | (2,107) |
Investment Gain (Loss) | ||||
Beginning balance | 0 | 0 | 0 | 58 |
Reclassification to (earnings) loss | 0 | 0 | 0 | (58) |
Foreign currency translation | 0 | 0 | 0 | 0 |
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Note 13. Income Taxes (Details
Note 13. Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Income tax (benefit) expense | $ 5,896 | $ (890) | $ 7,640 | $ (1,687) | |
Unrecognized tax benefits | $ 352 | $ 352 | $ 341 |
Note 15. Fair Value of Financ_3
Note 15. Fair Value of Financial Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash equivalents | $ 10,118 | $ 21,448 |
Equity securities: Consumer goods | 6,421 | 5,808 |
Bonds | 35,557 | 32,404 |
Options on equity securities | 2,142 | 2,755 |
Non-qualified deferred compensation plan investments | 2,057 | 2,149 |
Total assets at fair value | 56,295 | 64,564 |
Level 1 | ||
Assets | ||
Cash equivalents | 10,118 | 21,448 |
Equity securities: Consumer goods | 0 | 1,708 |
Bonds | 35,557 | 32,404 |
Options on equity securities | 0 | 0 |
Non-qualified deferred compensation plan investments | 2,057 | 2,149 |
Total assets at fair value | 47,732 | 57,709 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Equity securities: Consumer goods | 6,421 | 4,100 |
Bonds | 0 | 0 |
Options on equity securities | 2,142 | 2,755 |
Non-qualified deferred compensation plan investments | 0 | 0 |
Total assets at fair value | 8,563 | 6,855 |
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 17. Business Segment Rep_3
Note 17. Business Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 168,343 | $ 208,739 | $ 350,202 | $ 410,964 |
Steak n Shake | ||||
Revenue | 156,006 | 196,578 | 326,117 | 386,871 |
Western Sizzlin | ||||
Revenue | 4,055 | 4,016 | 7,719 | 7,657 |
Total Restaurant Operations | ||||
Revenue | 160,061 | 200,594 | 333,836 | 394,528 |
First Guard | ||||
Revenue | 7,417 | 6,745 | 14,624 | 13,292 |
Maxim | ||||
Revenue | 865 | 1,400 | 1,742 | 3,144 |
Total Revenue | ||||
Revenue | $ 168,343 | $ 208,739 | $ 350,202 | $ 410,964 |
Note 17. Business Segment Rep_4
Note 17. Business Segment Reporting (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings (loss) before income taxes | $ 27,870 | $ (8,429) | $ 39,432 | $ (11,040) |
Restaurant | Steak n Shake | ||||
Earnings (loss) before income taxes | (3,057) | 2,659 | (21,915) | 1,667 |
Restaurant | Western Sizzlin | ||||
Earnings (loss) before income taxes | 506 | 674 | 889 | 1,048 |
Restaurant | Total Restaurant Operations | ||||
Earnings (loss) before income taxes | (2,551) | 3,333 | (21,026) | 2,715 |
Operating Business | ||||
Earnings (loss) before income taxes | (411) | 5,814 | (17,315) | 5,628 |
Operating Business | First Guard | ||||
Earnings (loss) before income taxes | 1,850 | 2,301 | 3,394 | 2,811 |
Operating Business | Maxim | ||||
Earnings (loss) before income taxes | 176 | 16 | 64 | (201) |
Operating Business | Other | ||||
Earnings (loss) before income taxes | 114 | 164 | 253 | 303 |
Corporate | Corporate | ||||
Earnings (loss) before income taxes | (2,767) | (3,004) | (5,397) | (6,170) |
Corporate | Investment Partnership Gains (Losses) | ||||
Earnings (loss) before income taxes | 34,198 | (8,341) | 68,352 | (4,846) |
Corporate | Total Corporate And Investments | ||||
Earnings (loss) before income taxes | 31,431 | (11,345) | 62,955 | (11,016) |
Reconciliation Of Segments | Interest expense on notes payable and other borrowings | ||||
Earnings (loss) before income taxes | $ (3,150) | $ (2,898) | $ (6,208) | $ (5,652) |