Biglari Holdings Inc. News Release

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May 21, 2010, 04:28 ET

San Antonio, TX, May 21 /PRNewswire-FirstCall/ -- Biglari Holdings Inc. (NYSE: BH) announces its fiscal second quarter 2010 results:

Biglari Holdings Inc.'s operating results for the sixteen and the twenty-eight weeks, which ended April 14, 2010, are summarized below. To become apprised fully of our results, shareholders should carefully study our 10-Q, which has been posted at www.biglariholdings.com.

(Amounts in $000s, except share and per share data)
	Sixteen Weeks Ended				Twenty-Eight Weeks Ended
	April 14,		April 8,		April 14,		April 8,
	2010		2009		2010		2009
Pre-tax operating earnings (loss)	$	7,840	$	2,606	$	15,689	$	(3,375)
Realized investment gains/losses		522		-		834		-
Income taxes		(2,838)		(353)		(5,522)		2,188
Net earnings (loss) attributable to Biglari Holdings Inc.	$	5,524	$	2,253	$	11,001	$	(1,187)
Diluted net earnings (loss) per common and common equivalent share*	$	3.84	$	1.58	$	7.66	$	(0.84)
Weighted average diluted shares and equivalents*		1,437,806		1,427,720		1,436,746		1,420,134
* Adjusted for 1-for-20 reverse stock split effective December 18, 2009.

Net earnings for fiscal second quarter 2010 were $5.5 million, or $3.84 per diluted share, as contrasted with net earnings for the second quarter of fiscal year 2009 of $2.3 million, or $1.58 per diluted share. In the current quarter, net revenues increased 4.7% from $189 million to $197.8 million. Year-to-date net revenues increased 8% from $320.7 million to $346.3 million.

About Biglari Holdings Inc.

Biglari Holdings Inc. is a holding company engaged in a number of diverse business activities. The most important operating subsidiaries are engaged in investment management and the franchising and operating of restaurants.

The company's long-term objective is to maximize its per-share intrinsic value. Strategically, the holding company reinvests cash generated from its operating subsidiaries into investments whose purpose is to achieve high risk-adjusted returns. All investment and other capital allocation decisions are made by Sardar Biglari, Chairman and Chief Executive Officer, on behalf of the company.

Comment on Regulation G

This press release includes certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Biglari Holdings defines pre-tax operating earnings as exclusive of investment gains/losses and income taxes but inclusive of noncontrolling interest.

Risks Associated with Forward-Looking Statements

This news release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These statements which may concern anticipated future results are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ markedly from those projected or discussed here. Biglari Holdings cautions readers not to place undue reliance upon any such forward-looking statements, for actual results may differ materially from expectations. Biglari Holdings does not update publicly or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Further information on the types of factors that could affect Biglari Holdings and its business can be found in the company's filings with the SEC.

Condensed Consolidated Statements of Financial Position (Unaudited)

Biglari Holdings Inc.

(Amounts in $000s, except share and per share data)

April 14,

September 30,

2010

2009

Assets

Current assets:

Cash and cash equivalents

75,216

51,395

Investments

5,806

3,001

Receivables, net of allowance of $538 and $538, respectively

10,848

7,660

Inventories

8,125

6,595

Deferred income taxes

4,329

3,910

Assets held for sale

12,284

13,733

Other current assets

4,561

4,421

Total current assets

121,169

90,715

Property and equipment, net

392,609

399,635

Marketable securities held by consolidated affiliated partnerships

11,658

Goodwill

33,220

14,503

Other intangible assets, net

1,463

1,567

Other assets

8,420

8,076

Total assets

568,539

514,496

Liabilities and shareholders' equity

Liabilities

Current liabilities:

Accounts payable

25,962

22,293

Accrued expenses

33,628

30,381

Revolving credit

17,500

18,500

Current portion of obligations under leases

4,390

4,339

Current portion of long-term debt

148

Total current liabilities

81,628

75,533

Deferred income taxes

10,754

9,388

Obligations under leases

127,098

130,076

Long-term debt

25,396

Other long-term liabilities

9,377

7,404

Total liabilities

254,253

222,449

Commitments and contingencies

Redeemable noncontrolling interests of consolidated affiliated partnerships

12,004

Shareholders' equity

Common stock - $0.50 stated value, 2,500,000 shares authorized - 1,511,175 shares issued, 1,431,608 shares outstanding*

756

757

Additional paid-in capital

143,693

143,691

Retained earnings

178,732

167,731

Accumulated other comprehensive income

252

112

Treasury stock - at cost: 79,567 shares as of April 14, 2010; 77,796 shares as of September 30, 2009*

(21,151)

(20,430)

Biglari Holdings Inc. shareholders' equity

302,282

291,861

Noncontrolling interest

186

Total shareholders' equity

302,282

292,047

Total liabilities and shareholders' equity

568,539

514,496

* Adjusted for 1-for-20 reverse stock split effective December 18, 2009.


Condensed Consolidated Statements of Operations (Unaudited)
Biglari Holdings Inc.
(Amounts in $000s except share and per share data)
	Sixteen Weeks Ended				Twenty-Eight Weeks Ended
	April 14,		April 8,		April 14,		April 8,
	2010		2009		2010		2009
Revenues
Net sales	$	196,650	$	187,975	$	344,236	$	318,694
Franchise fees		1,192		1,054		2,111		2,012
Total revenues		197,842		189,029		346,347		320,706

Costs and expenses
Cost of sales		54,160		50,714		92,639		85,831
Restaurant operating costs		98,394		96,423		171,551		168,019
General and administrative		11,609		10,799		20,394		19,444
Depreciation and amortization		8,962		9,606		15,885		17,049
Marketing		9,882		9,873		17,609		17,416
Interest		3,527		4,049		6,081		7,651
Rent		4,936		4,659		8,629		8,224
Asset impairments and provision for restaurant closing		(28)		741		143		917
Loss (gain) on disposal of assets		122		47		99		(12)
Total costs and expenses		191,564		186,911		333,030		324,539
Other income (expense)
Other income		1,741		726		2,677		1,254
Other expense		(186)		(238)		(295)		(796)
Other income (expense), net		1,555		488		2,382		458
Realized investment gains/losses		522		-		834		-
Earnings (loss) before income taxes		8,355		2,606		16,533		(3,375)
Income taxes		2,838		353		5,522		(2,188)
Net earnings (loss)		5,517		2,253		11,011		(1,187)
Less: (Loss) earnings attributable to noncontrolling interest		(7)		-		10		-
Net earnings (loss) attributable to Biglari Holdings Inc.	$	5,524	$	2,253	$	11,001	$	(1,187)
Basic earnings (loss) per common and common equivalent share*	$	3.87	$	1.58	$	7.70	$	(0.84)
Diluted earnings (loss) per common and common equivalent share*	$	3.84	$	1.58	$	7.66	$	(0.84)
Weighted average shares and equivalents*
Basic		1,428,699		1,423,918		1,427,835		1,420,134
Diluted		1,437,806		1,427,720		1,436,746		1,420,134
* Adjusted for 1-for-20 reverse stock split effective December 18, 2009.

Condensed Consolidated Statements of Cash Flows (Unaudited)
Biglari Holdings Inc.
(Amounts in $000s)
	Twenty-Eight Weeks Ended
	April 14,		April 8,
	2010		2009
Operating activities
Net earnings (loss)	$	11,011	$	(1,187)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		15,885		17,049
Provision for deferred income taxes		1,519		1,748
Asset impairments and provision for restaurant closing		143		917
Stock-based compensation and other non-cash expenses		900		1,942
Loss (gain) on disposal of assets		99		(12)
Realized investment gains		(834)		-
Changes in receivables and inventories		(3,152)		9,312
Changes in other assets		(126)		(2,098)
Changes in accounts payable and accrued expenses		5,650		(1,868)
Net cash provided by operating activities		31,095		25,803
Investing activities
Additions of property and equipment		(4,648)		(2,612)
Proceeds from property and equipment disposals		711		6,590
Purchases of investments		(9,532)		-
Sale of investments		9,169		-
Cash from merger activities		1,208		-
Net cash (used in) provided by investing activities		(3,092)		3,978
Financing activities
Proceeds from revolving credit facility		-		7,400
Payments on revolving credit facility		(1,000)		(4,580)
Principal payments on long-term debt		(8)		(4,482)
Proceeds from property sale-leaseback		-		2,005
Principal payments on direct financing lease obligations		(2,253)		(2,407)
Proceeds from exercise of stock options and employee stock purchase plan		210		566
Cash paid in lieu of fractional shares		(711)		-
Repurchase of employee shares for tax withholding		(199)		(128)
Distributions to noncontrolling interest		(221)		-
Net cash used in financing activities		(4,182)		(1,626)
Increase in cash and cash equivalents		23,821		28,155
Cash and cash equivalents at beginning of period		51,395		6,855
Cash and cash equivalents at end of period	$	75,216	$	35,010