BH-A · Biglari Holdings Inc.

Period Performance

Biglari Holdings reported total revenue of $97.5 million for the first quarter of 2026, up 2.6% from $95.0 million in the same period last year. Net loss improved to $14.5 million from a loss of $33.3 million, a 56.3% narrowing, primarily due to a sharp reduction in investment partnership losses ($13.5 million vs $49.6 million). Basic loss per Class A share was $55.81 compared to $126.40.

Operating income (defined as revenue less total costs and expenses) turned negative to -$4.1 million from +$10.0 million in the prior year, reflecting higher selling, general and administrative expenses ($24.9 million vs $21.4 million) and a $4.8 million increase in interest expense on debt due to the Steak n Shake loan. The operating margin fell from 10.5% to -4.2%, a decline of 1,477 basis points.

Balance Sheet & Liquidity

Total assets decreased to $1.018 billion from $1.025 billion at year-end 2025, driven by a $68.7 million reduction in cash and cash equivalents (to $200.1 million) due to investing activities. Investments increased to $114.2 million from $69.1 million. Total liabilities fell to $499.1 million from $502.0 million, with current liabilities down $11.6 million. Shareholders' equity declined to $519.2 million from $523.4 million, primarily due to the net loss and treasury stock increase. The company maintained significant liquidity with $200.1 million cash and $165.5 million in investment partnerships (carrying value).

Cash Flow Quality

Cash from operations was $20.3 million, up from $15.8 million, despite the net loss, due to $13.0 million in distributions from investment partnerships and $10.7 million in non-cash depreciation. Capital expenditures totaled $7.0 million, resulting in free cash flow of $13.4 million. Investing activities used $95.1 million, largely for purchases of limited partnership interests ($42.1 million) and investments ($53.4 million). Financing activities provided $6.1 million, including $14.9 million from stock issuance under the ATM program, partially offset by $7.0 million net debt repayments.

MD&A / Forward View

Management highlighted the transition from company-operated to franchise partner units as a key strategy for Steak n Shake, noting that revenue from franchise partners increased 20% to $20.5 million. Same-store sales for company-operated units rose 10%, but overall net sales declined due to fewer units. The insurance segment improved underwriting results, with Southern Pioneer achieving an underwriting gain of $1.3 million vs a loss of $0.5 million last year. Oil and gas results were down sharply, excluding a prior-year $9.3 million gain on property sales. No forward guidance was provided.

Notes & Operating Detail

• Segment: Restaurant revenue grew 2.8%, but operating income fell 13.2% due to higher food costs (31.4% of sales vs 30.0%) and increased SG&A (26.3% of revenue vs 24.0%).
• Insurance: Pre-tax underwriting gain of $3.0 million, up from $0.7 million, driven by lower loss ratios at both First Guard and Southern Pioneer.
• Oil and Gas: Revenue declined 8.0%; excluding the prior-year gain, operating income fell 23.5% due to lower production at Southern Oil.
• Maxim: Revenue more than doubled to $3.3 million, driven by digital contests, producing a small profit.
• Investment partnerships: Losses of $13.5 million vs $49.6 million, reflecting improved market performance.
• During the quarter, the company sold 4,312 Class A and 14,500 Class B shares under ATM, raising $14.9 million. The Lion Fund purchased 9,717 Class B shares in open market.
• There were no impairments recorded; material weakness in internal controls remains unremediated.