BH.A Biglari Holdings Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K/A 

(Amendment No. 1) 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): September 9, 2019

 

BIGLARI HOLDINGS INC.
(Exact Name of Registrant as Specified in Its Charter)
INDIANA	001-38477	82-3784946
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
17802 IH 10 West, Suite 400, San Antonio, Texas		78257
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (210) 344-3400

 

(Former Name or Former Address, If Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A common stock	BH.A	New York Stock Exchange
Class B common stock	BH	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY NOTE

On September 12, 2019, Biglari Holdings Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) reporting that, on September 9, 2019, a wholly-owned subsidiary of the Company, Southern Oil Company, acquired all of the membership interests in Upstream Exploration Holdings LLC for an adjusted purchase price of $51,505,254 in cash. Upon completion of the transaction, Upstream Exploration Holdings LLC was converted to a corporation named Southern Oil of Louisiana Inc. (“Southern Oil”). The Company is filing this Amendment No. 1 on Form 8-K/A (this “Amendment”) to amend the Original Report to include certain financial statements of Southern Oil and certain pro forma financial information of the Company, as required by Item 9.01(a) and Item 9.01(b), respectively, of Form 8-K.

Except as described in this Explanatory Note, this Amendment does not amend or otherwise update the Original Report. Therefore, this Amendment should be read in conjunction with the Original Report.

Item 9.01.

Financial Statements and Exhibits.

(a)

Financial Statements of Businesses Acquired.

Southern Oil’s audited financial statements as of and for the year ended December 31, 2018, and the accompanying notes thereto, and unaudited financial statements as of and for the six months ended June 30, 2019 are attached as Exhibits 99.1 and 99.2, respectively, to this Amendment and are incorporated herein by reference.

(b)

Pro Forma Financial Information.

The Company’s unaudited pro forma consolidated statements of earnings for the year ended December 31, 2018 and the six months ended June 30, 2019, and the accompanying notes thereto, are attached as Exhibit 99.3 to this Amendment and are incorporated herein by reference.

A consolidated balance sheet as of September 30, 2019, including the assets and liabilities of Southern Oil, is included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission on November 1, 2019.

(d)

Exhibits.

Exhibit No.	Description
99.1	Southern Oil’s audited financial statements as of and for the year ended December 31, 2018.
99.2	Southern Oil’s unaudited financial statements as of and for the six months ended June 30, 2019.
99.3	The Company’s unaudited pro forma consolidated statements of earnings for the year ended December 31, 2018 and the six months ended June 30, 2019.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K/A to be signed on its behalf by the undersigned hereunto duly authorized.

 

November 25, 2019	BIGLARI HOLDINGS INC.
	By:	/s/ Bruce Lewis
		Name:	Bruce Lewis
		Title:	Controller

 

Exhibit 99.2

 

SOUTHERN OIL
BALANCE SHEET
(in thousands)
		June 30, 2019
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	29,185
Receivables			7,536
Prepaid assets			1,257
Other current assets			636
Total current assets			38,614
Oil and gas properties, net			71,861
Other property and equipment, net			189
Other assets			50
Total assets		$	110,714
Liabilities and members’ equity
Liabilities
Current liabilities:
Accounts payable and accrued expenses		$	7,344
Asset retirement obligation - current portion			1,420
Total current liabilities			8,764
Asset retirement obligation - long-term portion			9,840
Deferred taxes			5,867
Other liabilities			81
Total liabilities			24,552
Members’ equity			86,162
Total liabilities and members’ equity		$	110,714

 

 

SOUTHERN OIL
STATEMENT OF EARNINGS AND MEMBERS’ EQUITY
(in thousands)
		First Six Months 2019
		(Unaudited)
Revenues
Oil and gas		$	39,927
Cost and expenses
Oil and gas production costs			9,822
Selling, general and administrative			3,051
Depreciation, depletion and amortization			9,804
			22,677
Other income (expenses)
Interest expense			(9	)
Earnings before income taxes			17,241
Income tax expense			4,215
Net earnings		$	13,026
Members’ equity - beginning			73,136
Contributions			-
Members’ equity - ending		$	86,162

 

 

 

 

 

 

SOUTHERN OIL
STATEMENT OF CASH FLOWS
(in thousands)
		First Six Months
		2019
		(Unaudited)
Operating activities
Net earnings		$	13,026
Adjustments to reconcile net earnings to operating cash flows:
Depreciation, depletion and amortization			9,804
Provision for deferred income taxes			1,002
Mark to market of hedge position			1,003
Non-cash expenses			238
Changes in receivables and inventories			(734	)
Changes in other assets			(824	)
Changes in accounts payable and accrued expenses			211
Net cash provided by operating activities			23,726
Investing activities
Capital expenditures			(5,084	)
Net cash (used in) investing activities			(5,084	)
Decrease in cash, cash equivalents and restricted cash			18,642
Cash, cash equivalents and restricted cash at beginning of year			10,593
Cash, cash equivalents and restricted cash at end of second quarter		$	29,235

Exhibit 99.3

 

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements give effect to the Company’s acquisition of Southern Oil on September 9, 2019 and include adjustments for certain reclassifications to conform historical financial statement presentation of the Company and Southern Oil.

The following unaudited pro forma combined financial statements and related notes are based on and should be read in conjunction with (i) the historical unaudited consolidated financial statements of the Company for the six months ended June 30, 2019 and the related notes included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, (ii) the historical unaudited consolidated financial statements of Southern Oil for the six months ended June 30, 2019, which financial statements are filed as Exhibit 99.2 to this Current Report on Form 8-K/A, (iii) the historical audited consolidated financial statements of the Company for the year ended December 31, 2018 and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and (iv) the historical audited consolidated financial statements of Southern Oil and the related notes for the year ended December 31, 2018, which financial statements are filed as Exhibit 99.1 to this Current Report on Form 8-K/A.

The unaudited pro forma combined statements of earnings for the six months ended June 30, 2019 and the year ended December 31, 2018 give effect to the acquisition as if it had been completed on January 1, 2018. A consolidated balance sheet as of September 30, 2019, including the assets and liabilities of Southern Oil, is included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission on November 1, 2019.

The adjustments to the historical financial statements are based upon currently available information and certain estimates and assumptions. Actual effects of this transaction will differ from the pro forma adjustments. The unaudited pro forma combined financial statements are not necessarily indicative of the results that would have occurred if the transaction had been completed on the dates indicated or what could be achieved in the future. No adjustments have been made to our historical financial statements to reflect other events subsequent to the periods shown by such financial statements. As no intangibles were identified in the preliminary purchase price allocation, any adjustments to fair value were allocated to oil and gas reserves.    

 

BIGLARI HOLDINGS INC.
UNAUDITED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2018
(in thousands)
		Biglari Holdings				Southern Oil				Pro Forma Adjustments				Notes				Pro Forma Combined
Revenues
Restaurant operations		$	775,690			$	—			$	—							$	775,690
Insurance premiums and other			27,628				—				—								27,628
Oil and gas			—				48,189				1,872				A				50,061
Media and licensing			6,576				—				—								6,576
			809,894				48,189				1,872								859,955
Cost and expenses
Restaurant cost of sales			636,456				—				—								636,456
Insurance losses and underwriting expenses			20,831				—				—								20,831
Oil and gas production costs			—				15,377				(1,653	)			B				13,724
Media and licensing costs			4,152				—				—								4,152
Selling, general and administrative			127,232				6,836				—								134,068
Impairments			5,677				—				—								5,677
Depreciation, depletion and amortization			19,318				9,942				—								29,260
			813,666				32,155				(1,653	)							844,168
Other income (expenses)
Interest expense			(11,677	)			(11	)			—								(11,688	)
Interest on obligations under leases			(8,207	)			—				—								(8,207	)
Unrealized gains on commodity derivative instruments			—				1,872				(1,872	)			A				—
Other income			—				2,853				(2,853	)			B				—
Investment partnership gains			40,411				—				—								40,411
Total other income (expenses)			20,527				4,714				(4,725	)							20,516
Earnings (loss) before income taxes			16,755				20,748				(1,200	)							36,303
Income tax expense (benefit)			(2,637	)			5,331				(312	)							2,382
Net earnings (loss)		$	19,392			$	15,417			$	(888	)						$	33,921

 

Adjustment Note A – Unrealized gains on commodity derivative instruments of $1,872 were reclassified to revenue to conform with Biglari Holdings Inc.’s reporting.

 

Adjustment Note B – A non-recurring intercompany management fee of $1,200 reported in other income was eliminated from the combined financial statements. Property tax and other refunds of $1,653 were reclassified to oil and gas production costs to conform with Biglari Holdings Inc.’s reporting.

 

 

BIGLARI HOLDINGS INC.
UNAUDITED COMBINED STATEMENT OF EARNINGS
FIRST SIX MONTHS ENDED JUNE 30, 2019
(in thousands)
		Biglari Holdings				Southern Oil				Pro Forma Combined
Revenues
Restaurant operations		$	333,836			$	—			$	333,836
Insurance premiums and other			14,624				—				14,624
Oil and gas			—				39,927				39,927
Media and licensing			1,742				—				1,742
			350,202				39,927				390,129
Cost and expenses
Restaurant cost of sales			284,199				—				284,199
Insurance losses and underwriting expenses			11,158				—				11,158
Oil and gas production costs			—				9,822				9,822
Media and licensing costs			1,589				—				1,589
Selling, general and administrative			58,941				3,051				61,992
Impairments			2,338				—				2,338
Depreciation, depletion and amortization			10,677				9,804				20,481
			368,902				22,677				391,579
Other income (expenses)
Interest expense			(6,208	)			(9	)			(6,217	)
Interest on finance leases and obligations			(4,012	)			—				(4,012	)
Investment partnership gains			68,352				—				68,352
Total other income (expenses)			58,132				(9	)			58,123
Earnings before income taxes			39,432				17,241				56,673
Income tax expense			7,640				4,215				11,855
Net earnings		$	31,792			$	13,026			$	44,818

This regulatory filing also includes additional resources:
ex991to8ka07428007_11252019.pdf