Total Revenues for Fiscal 2018 Increased 25% to
$99 Million
Net Loss for the Year Narrowed to $1.0
Million
Conference Call Thursday, December 13, 2018, at
3:00 p.m. MT/5:00 p.m. ET
Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad
Daddy’s Burger Bar, a full-service, upscale burger bar concept, and
Good Times Burgers & Frozen Custard, a regional quick-service
restaurant chain focused on fresh, high-quality, all-natural
products, today announced its preliminary unaudited financial
results for the fourth fiscal quarter ended September 25, 2018.
Key highlights of the Company’s financial results vs prior
year include:
- Total revenues increased 19% to
$26,796,000 for the quarter and increased 25% to $99,240,000 for
the year, which reflects the addition of nine new Bad Daddy’s
restaurants during the year
- Same store sales for company-owned Good
Times restaurants increased 0.5% for the quarter and increased 4.2%
for the year on top of last year’s increases of 3.9% for the
quarter and 2.1% for the year
- Adjusted for the impact of Hurricane
Florence, same store sales for company-owned Bad Daddy’s
restaurants increased 0.7% for the quarter and 0.8% for the year on
top of last year’s increases of 1.4% for the quarter and 1.6% for
the year
- The company opened five restaurants
during the fiscal fourth quarter, bringing the total new
restaurants opened during fiscal 2018 to nine
- Income from Operations improved from a
loss of $1,422,000 to income of $372,000 for the year, which
includes the impact of $2,784,000 of new store preopening costs
incurred in fiscal 2018
- Restaurant Level Operating Profit (a
non-GAAP measure) for Bad Daddy’s restaurants improved 50% to
$3,136,000 in the fourth quarter from $2,081,000 in the fourth
quarter last year*
- Total Restaurant Level Operating Profit
(a non-GAAP measure) increased 26% to $4,318,000 for the quarter
and increased 30% to $16,111,000 for the year*
- Net Loss Attributable to Common
Shareholders for the year narrowed to $324,000 for the quarter and
$1,034,000 for the full fiscal year
- Adjusted EBITDA (a non-GAAP measure)
for the quarter increased 38% to $1,805,000 and increased 52% to
$5,758,000* for the fiscal year
- The Company ended the year with $3.5
million in cash and $7.5 million of long term debt
Boyd Hoback, President & CEO, said, “We are very pleased
with our results for the quarter and fiscal year, including our
adjusted EBITDA that was slightly ahead of the upper end of our
guidance for the fiscal year. Even though labor costs continue to
be a pressure point on our operating margins, Bad Daddy’s
Restaurant Level Operating Profit margin improved to 17% for the
year from 15.8% last year.”
Commenting on fiscal 2019, Hoback added, “At the end of the
fiscal year, we opened two new Bad Daddy’s restaurants, one in the
Atlanta metro area and one in Greenville, South Carolina and
subsequent to year end we’ve opened one additional restaurant in
the Atlanta metro area with another restaurant scheduled to open on
January 2, 2019 in the Raleigh metro area. During our first fiscal
quarter of 2019, our Good Times and Bad Daddy’s sales have been
negatively impacted by much more inclement weather compared to last
year, including the loss of approximately 10 store days due to the
snow storm in North Carolina. The new Atlanta & Greenville,
South Carolina restaurants have had relatively softer openings than
the high honeymoon sales we experienced in our fiscal 2017 and 2018
openings, so we’ve moderated our development schedule for the
balance of the year as we fine tune our site selection model for
accelerated growth in fiscal 2020. As a result, we expect our first
fiscal 2019 quarter’s results to be negatively impacted which is
reflected in our overall fiscal 2019 guidance.”
Fiscal 2019 Outlook:
The Company has updated its guidance for fiscal 2019 to reflect
its adjusted development expectations:
- Total revenues of approximately $112
million to $114 million with a year-end revenue run rate of
approximately $120 million
- Total revenue estimates assume same
store sales of approximately -2% to -3% for the year for Good Times
due to inclement weather in Q1 and Q2 compared to unseasonably warm
weather in the prior year, and approximately +1 to +2% for Bad
Daddy’s
- General and administrative expenses of
approximately $8.4 million to $8.6 million, including approximately
$500,000 of non-cash equity compensation expense
- The opening of 5 to 6 new Bad Daddy’s
restaurants
- Net loss of approximately $0.9 million,
including preopening expenses of approximately $1.6 million
- Total Adjusted EBITDA* of approximately
$6.0 million to $6.5 million
- Capital expenditures (net of tenant
improvement allowances) of approximately $7.0 - $7.5 million
including approximately $0.6 million related to fiscal 2020
development
- Debt balance at the end of the year
between $11.0 and $11.5 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 fourth quarter 2018 financial results on Thursday,
December 13, 2018 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call
will be Boyd Hoback, President and Chief Executive Officer, and
Ryan Zink, Chief Financial Officer.
The conference call can be accessed live by telephone 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.investors.goodtimesburgers.com. 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) owns, operates, franchises and licenses 34 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.
Additionally, through its wholly-owned subsidiaries, Good Times
Restaurants Inc. operates and franchises a regional quick service
restaurant chain consisting of 35 Good Times Burgers & Frozen
Custard restaurants, located primarily in Colorado.
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 26, 2017 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)
Fiscal Quarter Ended
Fiscal Year Ended Sept. 25, Sept.
26, Sept. 25, Sept. 26,
Statement of Operations 2018 2017 2018
2017 Net revenues: Restaurant sales $ 26,635 $ 22,414 $
98,564 $ 78,395 Franchise revenues
161
170 676
685 Total net revenues 26,796 22,584
99,240 79,080 Restaurant Operating Costs: Food and packaging
costs 8,102 7,309 30,256 24,900 Payroll and other employee benefit
costs 9,577 8,058 35,653 28,274 Restaurant occupancy costs 1,983
1,552 7,261 5,759 Other restaurant operating costs 2,657 2,081
9,283 7,084 New store preopening costs 1,101 851 2,784 2,588
Depreciation and amortization
1,040
811 3,705
2,897 Total restaurant operating costs
24,460 20,662 88,942 71,502 General and administrative costs
1,973 1,780 7,857 7,002 Advertising costs 404 337 1,991 1,694
Franchise costs 9 28 41 108 Asset impairment costs - 219 72 219
Gain on disposal of restaurants and equipment
(9 ) (6
) (35 )
(23 ) Income (loss) from operations (41 )
(436 ) 372 (1,422 ) Other income (expense): Interest income
(expense), net (118 ) (77 ) (388 ) (182 ) Other expense
(1 ) -
(1 ) (1
) Total other expense
(119
) (77 )
(389 ) (183
) Net loss
($160
) ($513 )
($17
) ($1,605 ) Income attributable to non-controlling interest
(164 ) (151
) (1,017 )
(650 ) Net loss attributable to Good
Times Restaurants Inc.
(324 )
(664 ) (1,034
) ($2,255 )
Basic and diluted loss per share ($0.03 ) ($0.05 ) ($0.08 ) ($0.18
)
Basic and diluted weighted average common
shares outstanding
12,474 12,393 12,464 12,321
Good Times Restaurants
Inc. Unaudited Supplemental Information
(In thousands)
Sept. 25,
Sept. 26, Balance Sheet Data 2018 2017
Cash & cash equivalents $ 3,477 $ 4,337 Current assets 6,381
6,066 Property and Equipment, net 35,245 29,691 Other assets 19,324
19,397 Total assets $ 60,950 $ 55,153
Current liabilities, including capital
lease obligations and long-term debt due within one year
$ 8,335 $ 6,916 Long-term debt due after one year 7,472 5,339 Other
liabilities 7,922 5,614 Total liabilities $ 23,729 $ 17,869
Stockholders’ equity $ 37,221 $ 37,284
Supplemental Information:
Company-Owned Restaurants Bad Daddy’s
Burger Bar Good Times Burgers & Frozen
Custard Fiscal Quarter Ended Fiscal Year
Ended Fiscal Quarter Ended Fiscal Year
Ended Sept. 25,2018 Sept.
26,2017 Sept. 25,2018 Sept.
26,2017 Sept. 25,2018 Sept.
26,2017 Sept. 25,2018 Sept.
26,2017 Restaurant Sales $ 18,723 $ 14,036 67,428 $
47,706 $ 7,912 $ 8,378 31,136 $ 30,689 Average weekly sales per
restaurant 51.0 50.6 50.3 49.3 22.5 23.0 21.9 21.4
Restaurant operating weeks 367 277.3 1,341 968.1 351 364 1,422
1,432 Restaurants open during period 5 1 9 6 0 0 0 1 Restaurants
open at period end 31 22 31 22 26 28 26 28
Reconciliation of Non-GAAP Measurements
to US GAAP Results
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to
Income (Loss) from Operations
(In thousands, except percentage data)
Bad Daddy’s Burger Bar Good
Times Burgers &Frozen Custard Good
TimesRestaurants Inc. Fiscal Quarter Ended
Sept. 25, 2018 Sept. 26, 2017 Sept. 25,
2018 Sept. 26, 2017 Sept. 25,2018
Sept. 26,2017 Restaurant Sales $ 18,723
100.0 % $ 14,036 100.0 % $ 7,912 100.0 % $ 8,378
100 % 26,635 $ 22,414
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 5,510 29.4 % 4,507 32.1 % 2,592 32.8 %
2,802 33.4 % 8,102 7,309
Payroll and other employee benefit
costs
6,858 36.6 % 5,215 37.2 % 2,719 34.4 % 2,843 33.9 % 9,577 8,058
Restaurant occupancy costs 1,236 6.6 % 855 6.1 % 747 9.4 % 697 8.3
% 1,983 1,552 Other restaurant operating costs
1,983 10.6 %
1,378 9.8 %
674 8.5 %
703 8.4 % 2,657
2,081 Restaurant-level operating
profit 3,136 16.8 % 2,081 14.8 % 1,180 15.0 % 1,333 15.9 % 4,316
3,414
Franchise royalty income and expense,
net
161 170 Deduct - Other operating: Depreciation and amortization
1,040 811 General and administrative 1,973 1,780 Advertising costs
404 337 Franchise costs 9 28
Gain on disposal of restaurants and
equipment
(9 ) (6 ) Asset impairment costs - 219 Preopening costs
1,101 851 Total
other operating
4,518 4,020
Loss from Operations
($41 )
($436 )
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
Income (Loss) from Operations
(In thousands, except percentage data)
Bad Daddy’s Burger Bar Good
Times Burgers &Frozen Custard Good
TimesRestaurants Inc. Fiscal Year Ended Sept.
25, 2018 Sept. 26, 2017 Sept. 25, 2018
Sept. 26, 2017 Sept. 25,2018
Sept. 26,2017 Restaurant Sales 67,428 100.0 %
$ 47,706 100.0 % 31,136 100.0 % $ 30,689 100 %
98,564 $ 78,395
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 20,048 29.7 % 14,906 31.2 % 10,208 32.8 %
9,994 32.6 % 30,256 24,900
Payroll and other employee benefit
costs
24,861 36.9 % 17,726 37.2 % 10,792 34.7 % 10,548 34.4 % 35,653
28,274 Restaurant occupancy costs 4,348 6.4 % 2,987 6.3 % 2,913 9.4
% 2,772 9.0 % 7,261 5,759 Other restaurant operating costs
6,719 10.0 %
4,548 9.5 %
2,564 8.2 %
2,536 8.3 %
9,283 7,084
Restaurant-level operating profit 11,452 17.0 % 7,539 15.8 % 4,659
15.0 % 4,839 15.8 % 16,111 12,378
Franchise royalty income and expense,
net
676 685 Deduct - Other operating: Depreciation and amortization
3,705 2,897 General and administrative 7,857 7,002 Advertising
costs 1,991 1,694 Franchise costs 41 108
Gain on disposal of restaurants and
equipment
(35 ) (23 ) Asset impairment costs 72 219 Preopening costs
2,784 2,588 Total
other operating
16,415
14,485 Income (Loss) from Operations
372 ($1,422 )
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 preopening 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 quarters and fiscal years
ended September 25, 2018 and September 26, 2017, 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. Fiscal Quarter
Ended Fiscal Year Ended Sept. 25,
Sept. 26, Sept. 25,
Sept. 26, 2018 2017 2018 2017
Net loss as reported ($324 ) ($664 ) ($1,034 ) ($2,255 )
Adjustments to net loss: Depreciation and amortization 977 774
3,528 2,776 Interest expense, net
118
77 391
185 EBITDA 771 187 2,885 706 Asset impairment
cost - 219 72 219 Preopening expense 922 759 2,463 2,154 Non-cash
stock-based compensation 114 139 417 748 GAAP rent - cash rent
difference 7 7 (44 ) (27 ) Non-cash disposal of assets
(9 ) (6
) (35 )
(23 ) Adjusted EBITDA
$
1,805 $ 1,305
5,758 $ 3,777
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: https://www.businesswire.com/news/home/20181213005837/en/
Good Times Restaurants Inc.Investor Relations
Contacts:Boyd E. Hoback, President and CEO, 303-384-1411Ryan M.
Zink, Chief Financial Officer, 303-384-1432Christi Pennington,
303-384-1440
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