Bad Daddy’s Same Store Sales Increase 3.2%
Good Times’ Same Store Sales Increase 0.5% Net
of Remodel Closures
Total Revenues +19% with Restaurant Level
Operating Profit +16% in Q1*
Conference Call Wednesday, May 10, 2017, at
3:00 p.m. MDT/5:00 p.m. EDT
Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Good
Times Burgers & Frozen Custard, a regional quick service
restaurant chain focused on fresh, high quality, all natural
products, and Bad Daddy’s Burger Bar, a full service, upscale
concept, today announced its preliminary unaudited financial
results for the second fiscal quarter ended March 28, 2017.
Key highlights of the Company’s financial results
include:
- Same store sales for company-owned Good
Times restaurants increased 0.1% for the quarter on top of last
year’s increase of 0.5%. Excluding the days that the Good Times’
restaurants were closed for kitchen remodels to add new production
line equipment, same store sales increased 0.5% for the quarter.
Year to date, same store sales decreased 0.2% versus last year’s
increase of 2.6%.
- Same store sales for company-owned Bad
Daddy’s restaurants increased 3.2% for the quarter on top of last
year’s increase of 1.9%. Year to date, same store sales increased
2.6% versus last year’s increase of 4.0%.
- Total revenues increased 19% to
$18,239,000 for the quarter
- The Company opened one new Bad Daddy’s
restaurant during the quarter and has opened one additional
restaurant after the quarter ended for a total of three new Bad
Daddy’s restaurants opened so far in fiscal 2017 and expects five
more to open by fiscal year end.
- The Company opened one new Good Times
restaurant during the quarter.
- Sales for the Bad Daddy’s restaurants
for the quarter increased 33% versus last year to $11,187,000 and
Restaurant Level Operating Profit (a non-GAAP measure) increased
35% to $1,803,000 or 16.1% as a percent of sales*
- Adjusted EBITDA (a non-GAAP measure)
for the quarter was $619,000 versus $639,000 last year*
- The Company ended the quarter with $4.8
million in cash and $1.4 million of long-term debt
Boyd Hoback, President & CEO, said, “We are very pleased
with both our same store sales trends and the sales from our new
restaurants. As a result, we remain confident in our expectations
for our same store sales and operating margins, as we’ve seen some
acceleration in Good Times’ sales subsequent to the quarter’s end
from the rollout of our Better Burger and West Coast Burger
initiatives. Our most recent store openings’ sales in both brands
have exceeded our expectations, including the new Good Times
restaurant that has set sales records for any Good Times restaurant
and our two newest Bad Daddy’s that look like they will both settle
in above our average restaurant sales and above our target of $2.5
million. We are also on track for five new Bad Daddy’s to open in
May, June, August and September and are building our pipeline for
fiscal 2018.”
Fiscal 2017 Outlook:
The Company reiterated the following guidance for fiscal
2017:
- Total revenues of approximately $78
million to $80 million with a year-end revenue run rate of
approximately $92 million to $94 million
- Total revenue estimates assume same
store sales of approximately +3% to +3.5% for Good Times and +1% to
+2% for Bad Daddy’s in Q3 and Q4
- General and administrative expenses of
approximately $7.0 million, including approximately $800,000 of
non-cash equity compensation expense
- The opening of a total of 8 new Bad
Daddy’s restaurants (including 2 joint venture units) and 1 new
Good Times restaurant
- Total Adjusted EBITDA* of approximately
$4.0 million to $4.5 million
- Restaurant pre-opening expenses of
approximately $3 million
- Capital expenditures (net of tenant
improvement allowances) of approximately $12 million including
approximately $2 million related to fiscal 2018 development
- Fiscal year end long term debt of
approximately $6 million
*For a reconciliation of restaurant level operating profit and
Adjusted EBITDA to the most directly comparable financial measures
presented in accordance with GAAP and a discussion of why the
Company considers them useful, see the financial information
schedules accompanying this release.
Conference Call: Management will host a conference call
to discuss its second quarter 2017 financial results on Wednesday,
May 10 at 3:00 p.m. MDT/5:00 p.m. EDT. Hosting the call will be
Boyd Hoback, President and Chief Executive Officer, and Jim Zielke,
Chief Financial Officer.
The conference call can be accessed live over the phone by
dialing (888) 339-0806 and requesting the Good Times Restaurants
(GTIM) call. The conference call will also be webcast live from the
Company's corporate website www.goodtimesburgers.com under the
Investor section. An archive of the webcast will be available at
the same location on the corporate website shortly after the call
has concluded.
About Good Times Restaurants Inc.: Good Times Restaurants
Inc. (GTIM) operates Good Times Burgers & Frozen Custard, a
regional chain of quick service restaurants located primarily in
Colorado, in its wholly owned subsidiary, Good Times Drive Thru
Inc. Good Times provides a menu of high-quality all natural
hamburgers, 100% all natural chicken tenderloins, fresh frozen
custard, natural cut fries, fresh lemonades and other unique
offerings. Good Times currently operates and franchises a total of
38 restaurants.
GTIM owns, operates, franchises and licenses 21 Bad Daddy’s
Burger Bar restaurants through its wholly-owned subsidiaries. Bad
Daddy’s Burger Bar is a full service, upscale, “small box”
restaurant concept featuring a chef driven menu of gourmet
signature burgers, chopped salads, appetizers and sandwiches with a
full bar and a focus on a selection of craft microbrew beers in a
high-energy atmosphere that appeals to a broad consumer base.
Good Times Forward-Looking Statements: This press release
contains forward-looking statements within the meaning of federal
securities laws. The words “intend,” “may,” “believe,” “will,”
“should,” “anticipate,” “expect,” “seek” and similar expressions
are intended to identify forward-looking statements. These
statements involve known and unknown risks, which may cause the
Company’s actual results to differ materially from results
expressed or implied by the forward-looking statements. These risks
include such factors as the uncertain nature of current restaurant
development plans and the ability to implement those plans and
integrate new restaurants, delays in developing and opening new
restaurants because of weather, local permitting or other reasons,
increased competition, cost increases or shortages in raw food
products, and other matters discussed under the “Risk Factors”
section of Good Times’ Annual Report on Form 10-K for the fiscal
year ended September 27, 2016 filed with the SEC. Although Good
Times may from time to time voluntarily update its forward-looking
statements, it disclaims any commitment to do so except as required
by securities laws.
Good Times Restaurants Inc. Unaudited Supplemental
Information
(In thousands, except per share
amounts)
Second Quarter Year To
Date Statement of Operations 2017
2016 2017
2016 Net revenues: $ 18,077 $
15,141 $ 34,463 $ 28,797
162
177 331
359 18,239 15,310 34,797 29,156 Restaurant
Operating Costs: Food and packaging costs 5,614 4,785 10,769 9,290
Payroll and other employee benefit costs 6,675 5,394 12,670 10,166
Restaurant occupancy costs 1,429 1,231 2,723 2,294 Other restaurant
operating costs 1,579 1,332 3,107 2,583 Royalty expense 0 0 0 0 New
store preopening costs 567 576 918 1,301 Depreciation and
amortization
703 549
1,333
1,008
Total restaurant operating costs 16,567 13,867 31,520 26,642
General and administrative costs 1,746 1,510 3,391 3,116
Advertising costs 431 352 843 718 Franchise costs 28 27 52 54 Gain
on restaurant asset sale
(5 )
(7 ) (11
) (12 ) Loss from
operations (528 ) (431 ) (1,001 ) (731 ) Other income (expense):
Interest income (expense), net
(36
) (36 )
(56 ) (66
) Total other income (expense), net
(36 ) (36
) (56 )
(66 ) Net loss ($564 ) ($467 ) ($1,057 )
($1,428 ) Income attributable to non-controlling interest
(147 ) (206
) (287 )
(369 ) Net loss attributable to Good
Times Restaurants Inc.
($711 )
($673 )
($1,344 ) ($1,797
) Basic and diluted loss per share ($0.06 ) ($0.05 )
($0.11 ) ($0.15 )
Basic and diluted weighted average common
shares outstanding
12,298 12,263 12,293 12,262
Good Times Restaurants
Inc. Unaudited Supplemental Information
(In thousands)
Mar. 28,2017
Sep. 27,2016
Balance Sheet Data Cash & cash equivalents $ 4,828 $
6,330 Current assets 6,843 7,793 Property and Equipment, net 24,122
19,692 Other assets 19,347 19,392 Total assets $ 50,312 $ 46,877
Current liabilities, including capital
lease obligations and long-term debt due within one year
7,115 5,122 Long-term debt due after one year 1,448 19 Other
liabilities 4,709 3,938 Total liabilities $ 13,272 $ 9,079
Stockholders’ equity $ 37,040 $ 37,798
Supplemental Information:
Good Times Burgers & Frozen Custard
Bad Daddy’s Burger Bar Second Quarter
Year To Date Second Quarter
Year To Date 2017
2016 2017
2016 2017
2016 2017
2016 Restaurant Sales (in thousands) $ 6,890 $
6,700 $ 13,765 $ 13,647 $ 11,187 $ 8,441 $ 20,698 $ 15,150
Restaurants open during period 1 0 1 0 1 2 2 4 Restaurants open at
period end 28 27 28 27 18 14 18 14 Restaurant operating weeks 353.3
351.0 704.3 705.9 231.3 175.0 441.3 320.3 Average weekly sales per
restaurant (in thousands) $ 19.5 $ 19.1 $ 19.5 $ 19.3 $ 48.4 $ 48.2
$ 46.9 $ 47.3
Reconciliation of Non-GAAP Measurements
to US GAAP Results
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to
Loss from Operations
(In thousands, except percentage data)
Good Times Burgers &Frozen Custard
Bad Daddy’sBurger Bar Good
TimesRestaurants Inc.
----------------------------------------------Fiscal Second
Quarter----------------------------------------------
2017 2016 2017 2016
2017 2016 Restaurant Sales $ 6,890
100.0 % $ 6,700 100.0 % $ 11,187 100.0 % $ 8,441
100.0 % $ 18,077 $ 15,141
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 2,187 31.7 % 2,124 31.7 % 3,427 30.6 %
2,661 31.5 % 5,614 4,785 Payroll and other employee benefit costs
2,462 35.7 % 2,283 34.1 % 4,213 37.7 % 3,111 36.9 % 6,675 5,394
Restaurant occupancy costs 716 10.4 % 692 10.3 % 713 6.4 % 539 6.4
% 1,429 1,231 Other restaurant operating costs
548 8.0 %
538 8.0 %
1,031 9.2 %
794 9.4 %
1,579 1,332
Restaurant-level operating profit $ 977 14.2 % $ 1,063 15.9 % $
1,803 16.1 % $ 1,336 15.8 % 2,780 2,399 Franchise royalty income,
net 162 177
Deduct - Other operating: Depreciation and
amortization 703 549 General and administrative 1,746 1,510
Advertising costs 431 352 Franchise costs 28 27 Gain on restaurant
asset sale (5 ) (7 ) Preopening costs
567
576 Total other operating
3,470 3,007 Loss
from Operations
$ (528 )
$ (431 )
Certain percentage amounts in the table above
do not total due to rounding as well as the fact that restaurant
operating costs are expressed as a percentage of restaurant
revenues, as opposed to total revenues.
Reconciliation of Non-GAAP Measurements
to US GAAP Results
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to
Loss from Operations
(In thousands, except percentage data)
Good Times Burgers &Frozen Custard
Bad Daddy’sBurger Bar Good
TimesRestaurants Inc.
----------------------------------------------Year To
Date----------------------------------------------
2017 2016 2017 2016
2017 2016 Restaurant Sales $ 13,765
100.0 % $ 13,647 100.0 % $ 20,698 100.0 % $ 15,150
100.0 % $ 34,463 $ 28,797
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 4,399 32.0 % 4,437 32.5 % 6,370 30.8 %
4,853 32.0 % 10,769 9,290 Payroll and other employee benefit costs
4,860 35.3 % 4,582 33.6 % 7,810 37.7 % 5,584 36.9 % 12,670 10,166
Restaurant occupancy costs 1,382 10.0 % 1,349 9.9 % 1,341 6.5 % 945
6.2 % 2,723 2,294 Other restaurant operating costs
1,153 8.4 %
1,126 8.3 %
1,954 9.4 %
1,457 9.6 %
3,107 2,583
Restaurant-level operating profit $ 1,971 14.3 % $ 2,153 15.8 % $
3,223 15.6 % $ 2,331 15.3 % 5,194 4,464 Franchise royalty income,
net 331 359
Deduct - Other operating: Depreciation and
amortization 1,333 1,008 General and administrative 3,391 3,116
Advertising costs 843 718 Franchise costs 52 54 Gain on restaurant
asset sale (11 ) (12 ) Preopening costs
918
1,301 Total other operating
6,526 6,185
Loss from Operations
$ (1,001
) $ (1,362 )
Certain percentage amounts in the table above
do not total due to rounding as well as the fact that restaurant
operating costs are expressed as a percentage of restaurant
revenues, as opposed to total revenues.
The Company believes that restaurant-level operating profit is
an important measure for management and investors because it is
widely regarded in the restaurant industry as a useful metric by
which to evaluate restaurant-level operating efficiency and
performance. The Company defines restaurant-level operating profit
to be restaurant revenues minus restaurant-level operating costs,
excluding restaurant closures and impairment costs. The measure
includes restaurant level occupancy costs, which include fixed
rents, percentage rents, common area maintenance charges, real
estate and personal property taxes, general liability insurance and
other property costs, but excludes depreciation. The measure
excludes depreciation and amortization expense, substantially all
of which is related to restaurant level assets, because such
expenses represent historical sunk costs which do not reflect
current cash outlay for the restaurants. The measure also excludes
selling, general and administrative costs, and therefore excludes
occupancy costs associated with selling, general and administrative
functions, and pre-opening costs. The Company excludes restaurant
closure costs as they do not represent a component of the
efficiency of continuing operations. Restaurant impairment costs
are excluded, because, similar to depreciation and amortization,
they represent a non-cash charge for the Company’s investment in
its restaurants and not a component of the efficiency of restaurant
operations. Restaurant-level operating profit is not a measurement
determined in accordance with generally accepted accounting
principles (“GAAP”) and should not be considered in isolation, or
as an alternative, to income from operations or net income as
indicators of financial performance. Restaurant-level operating
profit as presented may not be comparable to other similarly titled
measures of other companies. The tables above set forth certain
unaudited information for the fiscal second quarters and year to
date for fiscal 2017 and fiscal 2016, expressed as a percentage of
total revenues, except for the components of restaurant operating
costs, which are expressed as a percentage of restaurant
revenues.
Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA
(In thousands)
Good Times Restaurants Inc.
Second Quarter Year To Date
2017 2016
2017 2016 Net
loss as reported ($711 ) ($673 ) ($1,344 ) ($1,797 ) Adjustments to
net loss: Depreciation and amortization 672 520 1,274 947 Interest
expense, net
37 36
57 66
EBITDA $ (2 ) $ (117 ) $ (13 ) $ (784 ) Preopening costs 431 576
713 1,301 Non-cash stock based compensation 205 177 404 355 GAAP
rent in excess of cash rent (11 ) 10 (16 ) 24 Non-cash disposal of
assets
(4 ) (7
) (11 )
(12 ) Adjusted EBITDA $ 619 $ 639 $ 1,077
$ 884
Adjusted EBITDA is a supplemental measure of operating
performance that does not represent and should not be considered as
an alternative to net income or cash flow from operations, as
determined by GAAP, and our calculation thereof may not be
comparable to that reported by other companies. This measure is
presented because we believe that investors' understanding of our
performance is enhanced by including this non-GAAP financial
measure as a reasonable basis for evaluating our ongoing results of
operations.
Adjusted EBITDA is calculated as net income before interest
expense, provision for income taxes and depreciation and
amortization and further adjustments to reflect the additions and
eliminations presented in the table above.
Adjusted EBITDA is presented because: (i) we believe it is a
useful measure for investors to assess the operating performance of
our business without the effect of non-cash charges such as
depreciation and amortization expenses and asset disposals, closure
costs and restaurant impairments and (ii) we use adjusted EBITDA
internally as a benchmark for certain of our cash incentive plans
and to evaluate our operating performance or compare our
performance to that of our competitors. The use of adjusted EBITDA
as a performance measure permits a comparative assessment of our
operating performance relative to our performance based on our GAAP
results, while isolating the effects of some items that vary from
period to period without any correlation to core operating
performance or that vary widely among similar companies. Companies
within our industry exhibit significant variations with respect to
capital structures and cost of capital (which affect interest
expense and income tax rates) and differences in book depreciation
of property, plant and equipment (which affect relative
depreciation expense), including significant differences in the
depreciable lives of similar assets among various companies. Our
management believes that adjusted EBITDA facilitates
company-to-company comparisons within our industry by eliminating
some of these foregoing variations. Adjusted EBITDA as presented
may not be comparable to other similarly-titled measures of other
companies, and our presentation of adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by excluded or unusual items.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170510005414/en/
Good Times Restaurants Inc.Investor Relations
Contacts:Boyd E. Hoback, 303-384-1411President and CEOorJim
Zielke, 303-384-1432Chief Financial OfficerorChristi Pennington,
303-384-1440
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