Total Revenues Increased 31% to $22.5 Million
in Q4
Total Revenues for Fiscal 2017 Increased 23% to
$79 Million
Conference Call Thursday, December 7, 2017, at
3:00 p.m. MT/5:00 p.m. ET
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 fourth fiscal quarter ended September 26, 2017.
Key highlights of the Company’s financial results vs prior
year include:
- Same store sales for company-owned Good
Times restaurants increased 3.9% for the quarter and increased 2.1%
for the year on top of last year’s increase of 0.3% for the
year
- Same store sales for company-owned Bad
Daddy’s restaurants increased 1.4% for the quarter and 1.6% for the
year on top of last year’s increase of 1.9% for the quarter and
3.3% for the year
- Total revenues increased 31% to
$22,584,000 for the quarter and increased 23% to $79,080,000 for
the year, which reflects the addition of one new Good Times
restaurant and six Bad Daddy’s restaurants during the year
- Subsequent to the year end two
additional Bad Daddy’s opened during the first two weeks of
October
- Income from Operations declined by
$1,122,000 to a loss of $1,422,000 for the year, which includes the
impact of $2,588,000 of new store preopening costs incurred in
fiscal 2017.
- Restaurant Level Operating Profit (a
non-GAAP measure) for Good Times restaurants improved to $1,333,000
for the quarter versus $1,313,000 in the same quarter last
year*
- Restaurant Level Operating Profit (a
non-GAAP measure) for Bad Daddy’s restaurants improved 28% to
$2,081,000 in the fourth quarter from $1,631,000 in the fourth
quarter last year*
- Total Restaurant Level Operating Profit
(a non-GAAP measure) increased 16% to $3,414,000 for the quarter
and increased 15% to $12,378,000 for the year*
- Adjusted EBITDA (a non-GAAP measure)
for the quarter increased 24% to $1,305,000 from $1,051,000 and
increased 12% to $3,777,000 from $3,368,000 for the fiscal
year*
- The Company ended the quarter with $4.3
million in cash and $5.3 million of long term debt
Boyd Hoback, President & CEO, said, “We are pleased with our
results that were slightly ahead of our revised guidance for the
fourth quarter, particularly given the intense discounting and
value pricing environment in both segments and absorbing the spike
in commodity costs that began in our third quarter. For the first
nine weeks of our first quarter of fiscal 2018 same store sales are
+4.3% for Good Times and +1.7% at Bad Daddy’s. Our class of 2017
new Bad Daddy’s are averaging above our systemwide sales average
and we are pleased with their performance as they reach stabilized
sales trends after their honeymoon sales periods.”
Hoback added, “We opened two Bad Daddy’s on October 2nd and
October 9th in North Carolina that had been planned for the last
two weeks of fiscal 2017 and expect to open an additional seven
restaurants during the balance of fiscal 2018. We expect to open
our next Bad Daddy’s in the Atlanta, Georgia market in very early
January 2018 with additional units following in North Carolina,
South Carolina, and Tennessee. We have eight Bad Daddy’s leases
signed and expect to sign an additional four leases by the end of
the calendar year for our fiscal 2018 and initial 2019
development.”
Fiscal 2018 Outlook:
The Company has confirmed and updated its guidance for fiscal
2018:
- Total revenues of approximately $100
million to $102 million with a year-end revenue run rate of
approximately $109 million to $111 million
- Total revenue estimates assume same
store sales of approximately +3% to +3.5% for Good Times
consistently throughout the year and +1% to +2% for Bad
Daddy’s.
- General and administrative expenses of
approximately $7.8 million to $8.0 million, including approximately
$700,000 of non-cash equity compensation expense
- The opening of 9 new Bad Daddy’s
restaurants (including 2 joint venture units)
- Net loss of approximately $1.4 million,
including pre-opening expenses of approximately $2.5 million
- Total Adjusted EBITDA* of approximately
$5.0 million to $5.5 million
- Capital expenditures (net of tenant
improvement allowances) of approximately $9.5 million including
approximately $1.2 million related to fiscal 2019 development
*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 2017 financial results on Thursday,
December 7, 2017 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 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, through 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 also owns, operates, franchises and licenses 26 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)
Fiscal Quarter Ended
Fiscal Year Ended Sept. 26, Sept.
27, Sept. 26, Sept. 27,
Statement of Operations 2017 2016 2017
2016 Net revenues: Restaurant sales $ 22,414 $ 17,040 $
78,395 $ 63,716 Franchise revenues
170
177 685
723 Total net revenues 22,584 17,217
79,080 64,439 Restaurant Operating Costs: Food and packaging
costs 7,309 5,383 24,900 20,236 Payroll and other employee benefit
costs 8,058 5,868 28,274 22,098 Restaurant occupancy costs 1,552
1,290 5,759 4,893 Other restaurant operating costs 2,081 1,555
7,084 5,684 New store preopening costs 851 267 2,588 1,695
Depreciation and amortization
811
630 2,897
2,222 Total restaurant operating costs 20,662
14,993 71,502 56,828 General and administrative costs 1,780
1,587 7,002 6,288 Advertising costs 337 403 1,694 1,540 Franchise
costs 28 26 108 108 Asset impairment costs 219 0 219 0 (Gain) on
disposal of restaurants and equipment
(6
) (6 )
(23 ) (25
) Income (loss) from operations (436 ) 214 (1,422 )
(300 ) Other income (expense): Interest income (expense),
net (77 ) (17 ) (182 ) (107 ) Debt extinguishment costs 0 (57 ) 0
(57 ) Other expense
0
0 (1 )
(1 ) Total other income (expenses), net
(77 ) (74
) (183 )
(165 ) Net income (loss) ($513 ) $ 140
($1,605 ) ($465 ) Income attributable to non-controlling interest
(151 ) (211
) (650 )
(856 ) Net loss attributable to Good
Times Restaurants Inc.
(664 )
($71 ) ($2,255
) ($1,321 )
Basic and diluted loss per share ($0.05 ) ($0.01 ) ($0.18 ) ($0.11
)
Basic and diluted weighted average common
shares outstanding
12,393 12,283 12,321 12,269
Good Times Restaurants
Inc. Unaudited Supplemental Information
(In thousands)
Sept. 26, Sept.
27, Balance Sheet Data 2017 2016 Cash
& cash equivalents $ 4,337 $ 6,330 Current assets 6,066 7,793
Property and Equipment, net 29,691 19,692 Other assets 19,396
19,392 Total assets $ 55,153 $ 46,877 Current liabilities,
including capital lease obligations andlong-term debt due within
one year $ 6,916 $ 5,122 Long-term debt due after one year 5,339 19
Other liabilities 5,614 3,938 Total liabilities $ 17,869 $ 9,079
Stockholders’ equity $ 37,284 $ 37,798
Supplemental Information:
Good Times Burgers & Frozen Custard
Bad Daddy’s Burger Bar Fiscal Quarter
Ended Fiscal Year Ended Fiscal Quarter
Ended Fiscal Year Ended Sept. 26,
Sept. 27, Sept. 26, Sept. 27,
Sept. 26, Sept. 27, Sept. 26,
Sept. 27, 2017 2016 2017 2016
2017 2016 2017 2016 Restaurant Sales $
8,378 $ 7,500 $ 30,689 $ 28,861 $ 14,036 $ 9,540 $ 47,706 $ 34,855
Average weekly sales per restaurant 23.0 21.4 21.4 20.6 50.6 48.0
49.3 49.0 Restaurant operating weeks 364 351.0 1432.3
1,404.0 277.3 198.7 968.1 710.7 Restaurants open during period 0 0
1 0 1 1 6 6 Restaurants open at period end 28 27 28 27 22 16 22 16
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)
Good Times Burgers & Frozen Custard
Bad Daddy’s Burger Bar Good
Times Restaurants Inc. Fiscal Quarter Ended Fiscal
Quarter Ended Fiscal Quarter Ended Sept.
26,2017 Sept. 27,2016 Sept.
26,2017 Sept. 27,2016 Sept.
26,2017 Sept. 27,2016 Restaurant
Sales $ 8,378 100.0 % $ 7,500 100.0 % $ 14,036
100.0 % $ 9,540 100.0 % $ 22,414 $ 17,040
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 2,802 33.4 % 2,430 32.4 % 4,507 32.1 %
2,953 31.0 % 7,309 5,383
Payroll and other employee benefit
costs
2,843 33.9 % 2,424 32.3 % 5,215 37.2 % 3,444 36.1 % 8,058 5,868
Restaurant occupancy costs 697 8.3 % 686 9.1 % 855 6.1 % 604 6.3 %
1,552 1,290 Other restaurant operating costs
703 8.4 %
647 8.6 %
1,378 9.8 %
908 9.5 %
2,081 1,555
Restaurant-level operating profit 1,333 15.9 % 1,313 17.5 % 2,081
14.8 % 1,631 17.1 % 3,414 2,944
Franchise royalty income and expense,
net
170 177 Deduct - Other operating: Depreciation and amortization 811
630 General and administrative 1,780 1,587 Advertising costs 337
403 Franchise costs 28 26
(Gain) on disposal of restaurants and
equipment
(6 ) (6 ) Asset impairment costs
219
0 Preopening costs 851 267 Total other
operating
4,020
2,907 Income (loss) from Operations
($436 )
$ 214
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’s Burger Bar Good
Times Restaurants Inc. Fiscal Year Ended Fiscal Year
Ended Fiscal Year Ended Sept. 26, Sept.
27, Sept. 26, Sept. 27, Sept. 26,
Sept. 27, 2017
2016 2017
2016 2017
2016 Restaurant Sales $ 30,689 100 % $
28,861 100.0 % $ 47,706 100.0 % $ 34,855 100.0
% $ 78,395 $ 63,716
Restaurant Operating Costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs 9,994 32.6 % 9,346 32.4 % 14,906 31.2 %
10,890 31.2 % 24,900 20,236
Payroll and other employee benefit
costs
10,548 34.4 % 9,450 32.7 % 17,726 37.2 % 12,648 36.3 % 28,274
22,098 Restaurant occupancy costs 2,772 9.0 % 2,711 9.4 % 2,987 6.3
% 2,182 6.3 % 5,759 4,893 Other restaurant operating costs
2,536 8.3 %
2,381 8.2 %
4,548 9.5 %
3,303 9.5 %
7,084 5,684
Restaurant-level operating profit 4,839 15.8 % 4,973 17.2 % 7,539
15.8 % 5,832 16.7 % 12,378 10,805
Franchise royalty income and expense,
net
685 723 Deduct - Other operating: Depreciation and amortization
2,897 2,222 General and administrative 7,002 6,288 Advertising
costs 1694 1,540 Franchise costs 108 108
(Gain) on disposal of restaurants and
equipment
(23 ) (25 ) Asset impairment costs 219 0 Preopening costs
2,588 1,695 Total
other operating
14,485
11,828 Loss from Operations
($1,422 ) ($300
)
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 quarters and fiscal years
ended September 26, 2017 and September 27, 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. Fiscal
Quarter Ended Fiscal Year Ended Sept.
26, Sept. 27, Sept. 26,
Sept. 27, 2017 2016 2017
2016 Net loss as reported ($664 ) ($71 ) ($2,255 ) ($1,321 )
Adjustments to net income (loss): Depreciation and
amortization 774 611 2,776 2,116 Asset impairment cost 219 0 219 0
Interest expense, net
77
16 185
107 EBITDA 406 556 925 902 Preopening expense
759 253 2,154 1,680 Non-cash stock based compensation 139 186 748
718 Debt extinguishment costs 0 57 0 57 GAAP rent in excess of cash
rent 7 6 (27 ) 36 Non-cash disposal of assets
(6 ) (7
) (23 )
(25 ) Adjusted EBITDA
$
1,305 $ 1,051
$ 3,777 $
3,368
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/20171207006195/en/
Investor Relations Contacts:Good Times Restaurants
Inc.Boyd E. Hoback, 303-384-1411President and CEOorRyan M.
Zink, 303-384-1432Chief Financial OfficerorChristi Pennington,
303-384-1440
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