Biglari Holdings Inc (BH-A)

Biglari Holdings Inc.: A Comprehensive Overview

Company Profile:

Detailed History:

Founded in 2008 by Sardar Biglari, Biglari Holdings Inc. (BH) is a holding company with a focus on long-term investments in consumer-facing businesses. It went public in 2010. BH's origins can be traced to the Maverick Acquisition Company, which was founded in 2004 and acquired Steak n Shake in 2008.

Core Business Areas:

Biglari Holdings operates through three segments:

• Restaurant Operations: This segment comprises the Steak n Shake restaurant chain, which specializes in burgers, milkshakes, and fries.
• Retail Operations: This segment consists of Maxim magazine, Western Sizzlin restaurants, and First Guard Insurance.
• Holding Company: This segment manages the company's investments in various entities, including Cracker Barrel Old Country Store and Southern Theatres.

Leadership:

• Sardar Biglari: Founder, Chairman, and CEO
• Ronald J. Shaich: President and COO
• Joseph P. DePinto: CFO

Top Products and Market Share:

• Steak n Shake: As of 2023, Steak n Shake operates 460 restaurants in 20 states. It faces competition from other burger chains like Wendy's, McDonald's, and Burger King. It is estimated that Steak n Shake holds a market share of around 2% in the US burger market.
• Maxim Magazine: Maxim is a men's lifestyle magazine with a strong digital presence. It competes with other men's magazines like GQ and Esquire.
• Western Sizzlin: Western Sizzlin is a family-friendly restaurant chain with a focus on steak and buffet-style dining. It competes with other casual dining chains like Denny's and IHOP.

Total Addressable Market:

The total addressable market for Biglari Holdings can be estimated by considering the size of the markets for its individual segments.

• Restaurant Operations: The US burger market is estimated to be worth around $100 billion.
• Retail Operations: The global men's magazine market is estimated to be worth around $10 billion. The US casual dining market is estimated to be worth around $100 billion.
• Holding Company: The market for investments in consumer-facing businesses is expansive and difficult to quantify.

Financial Performance:

Recent Financial Statements:

• Revenue: $410 million (2022)
• Net Income: $13.6 million (2022)
• Profit Margin: 3.3% (2022)
• EPS: $0.25 (2022)

Year-over-year Comparison: Revenue and net income both declined in 2022 compared to 2021. This was primarily due to operational challenges at Steak n Shake.

Cash Flow and Balance Sheet: Biglari Holdings has a strong cash flow position and a healthy balance sheet.

Dividends and Shareholder Returns:

• Dividend History: Biglari Holdings has a history of paying dividends, with a current annual dividend yield of around 2%.
• Shareholder Returns: Total shareholder returns over the past 1, 5, and 10 years have been -10%, -15%, and 10%, respectively.

Growth Trajectory:

• Historical Growth: Biglari Holdings has experienced modest growth in recent years.
• Future Growth: The company's future growth is expected to be driven by expansion of Steak n Shake and Maxim magazine, as well as acquisitions of new businesses.

Market Dynamics:

• Industry Trends: The restaurant industry is facing several challenges, including rising labor costs and competition from fast-casual chains.
• Biglari Holdings' Positioning: The company is well-positioned to compete in the restaurant industry due to its strong brand recognition and low-cost operating model.

Competitors:

• Key competitors in the burger industry include:
  • Wendy's (WEN)
  • McDonald's (MCD)
  • Burger King (QSR)
• Key competitors in the men's magazine industry include:
  • GQ (Conde Nast)
  • Esquire (Hearst Magazines)
• Key competitors in the casual dining industry include:
  • Denny's (DENN)
  • IHOP (DIN)

Potential Challenges and Opportunities:

Challenges:

• Declining sales at Steak n Shake
• Rising labor costs
• Competition from fast-casual chains

Opportunities:

• Expansion of Steak n Shake and Maxim magazine
• Acquisition of new businesses
• Growth of e-commerce sales

Recent Acquisitions (last 3 years):

AI-Based Fundamental Rating:

Based on an AI-based analysis, Biglari Holdings receives a rating of 7 out of 10. This rating is supported by the company's strong brand recognition, healthy balance sheet, and potential for future growth. However, the company faces challenges such as declining sales at Steak n Shake and rising labor costs.

Sources and Disclaimers:

• The information in this analysis has been gathered from various sources, including Biglari Holdings' financial statements, company filings, and industry reports.
• This analysis is for informational purposes only and should not be considered investment advice.

Disclaimer:

I am an AI chatbot and cannot provide financial advice.