Total Revenues Increase
20%Consolidated Net Income Increases to
$304,000Initial Fiscal 2019 Guidance Provided
Conference Call Thursday, August 9, 2018, 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 third fiscal quarter ended June 26, 2018.
Key highlights of the Company’s financial results
include:
- Same store sales for company-owned Good
Times restaurants increased 3.8% for the quarter on top of last
year’s increase of 3.7%. Year to date, same store sales increased
4.9% versus last year’s increase of 1.2%
- Bad Daddy’s same store sales increased
0.5% during the quarter over the prior year’s increase of 0.1%.
Year to date, same store sales increased 0.5% versus last year’s
increase of 1.7%. Same store sales exclude the weeks during which
the original Bad Daddy’s in Charlotte, NC was closed for
remodeling. Total revenues increased 20% to $26,175,000 for the
quarter
- The Company opened two new Bad Daddy’s
restaurants during the quarter for a total of five new restaurants
opened through the third quarter of 2018. Subsequent to the end of
the quarter, the Company opened an additional two restaurants and
expects to open two more before the end of the fiscal year for a
total of nine new restaurants in fiscal 2018
- Sales for the Bad Daddy’s restaurants
for the quarter increased 37% versus last year to $17,765,000
- Restaurant Level Operating Profit (a
non-GAAP measure) increased 26.8% to $4,779,000 (18.4% as a percent
of sales) from $3,770,000 (17.5% as a percent of sales)*
- Adjusted EBITDA (a non-GAAP measure)
for the quarter increased 36.6% to $1,907,000 from $1,396,000 last
year*
- The Company ended the quarter with $3.2
million in cash and $5.1 million of long-term debt
Boyd Hoback, President & CEO, said, “We are very pleased
with our continued growth in same store sales at both brands as
well as our improved operating margins. Our class of 2018 Bad
Daddy’s openings have been very strong on average and we anticipate
they will be settling into a sales trend post-honeymoon at or above
our system average. We are now operating in seven different
metropolitan areas and are on track to enter three to four
additional new areas in fiscal 2019, as we continue our expansion
focused primarily on the Southeast.”
Regarding initial fiscal 2019 guidance, Ryan Zink, Chief
Financial Officer, commented, “The strength of our new Bad Daddy’s
restaurants opened during the 2018 fiscal year has generated cash
for development which has limited our need to incur any significant
incremental debt, and that has created a strong foundation on which
to continue development in 2019. With this growth, we expect
Adjusted EBITDA of between $7.6 and $8.1 million for the 2019
fiscal year, with an estimated run rate at the end of the fiscal
year that approaches $10 million, consistent with our prior
commentary projecting continued 40% annual growth in our Adjusted
EBITDA.”
Fiscal 2018 Outlook:
The Company provided the following guidance for fiscal 2018:
- Total revenues of approximately $99
million to $100 million with a year-end revenue run rate of
approximately $110 million
- Total revenue estimates assume same
store sales of approximately +1% for Good Times and flat to
slightly positive for Bad Daddy’s in Q4
- General and administrative expenses of
approximately $7.9 million, including approximately $500,000 of
non-cash equity compensation expense
- The opening of a total of 4 new Bad
Daddy’s restaurants (including 1 joint venture unit) in Q4, for a
total of 9 new restaurants during the full fiscal year
- Total Adjusted EBITDA* of approximately
$5.4 million to $5.6 million
- Restaurant pre-opening expenses of
approximately $2.7 million
- Capital expenditures (net of tenant
improvement allowances and sale-leaseback proceeds) of
approximately $8.5 to $9.0 million including approximately $0.6
million related to fiscal 2019 development
- Fiscal year-end long term debt of
approximately $9.0 to $9.5 million
Fiscal 2019 Outlook:
The Company provided the following initial guidance for fiscal
2019:
- Total revenues of approximately $120
million to $123 million with a year-end revenue run rate of
approximately $130 million
- Total revenue estimates assume same
store sales of approximately +2% for Good Times, excluding Q2 where
we project flat comparable sales, and assumes +1% for Bad
Daddy’s
- General and administrative expenses of
approximately $8.7 to $9.0 million, including approximately
$600,000 of non-cash equity compensation expense
- The opening of a total of 7 - 9 new
company-owned Bad Daddy’s restaurants
- Total Adjusted EBITDA* of approximately
$7.6 million to $8.1 million
- Restaurant pre-opening expenses of
approximately $2.5 million to $3.0 million
- Capital expenditures (net of tenant
improvement allowances) of approximately $11.0 – $11.5 million
- Fiscal year-end long term debt of
approximately $13.0 - $13.5 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 third quarter 2018 financial results on Thursday,
August 9, 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 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
36 restaurants.
GTIM also owns, operates, franchises and licenses 31 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 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)
Third Quarter Year to
Date Statement of Operations 2018
2017 2018 2017 Net
revenues: Restaurant sales $ 25,990 $ 21,518 $ 71,929 $ 55,981
Franchise Revenues
185
184 515
515 Total net revenues 26,175 21,702 72,444
56,496
Restaurant Operating Costs: Food and packaging
costs 7,833 6,822 22,154 17,591 Payroll and other employee benefit
costs 9,155 7,546 26,076 20,216 Restaurant occupancy costs 1,850
1,484 5,278 4,207 Other restaurant operating costs 2,373 1,896
6,626 5,003 New store preopening costs 610 819 1,683 1,737
Depreciation and amortization
937
753 2,665
2,086 Total restaurant operating costs 22,758
19,320 64,482 50,840 General and administrative costs 2,069
1,831 5,884 5,222 Advertising costs 565 514 1,587 1,357 Franchise
costs 11 28 32 80 Asset Impairment Costs 0 0 72 0 Loss (gain) on
restaurant asset sale
(9 )
(6 ) (26
) (17 ) Income (loss)
from operations 781 15 413 (986 )
Other income
(expense): Interest income (expense), net (96 ) (49 ) (270 )
(105 ) Other income (expense), net
0
(1 ) 0
(1 ) Total other income (expense),
net
(96 ) (50
) (270 )
(106 ) Net Income (loss): $
685 ($35 ) $ 143 ($1,092 ) Income attributable to non-controlling
interest
(381 )
(212 ) (853
) (499 )
Net income (loss) attributable to Good
Times Restaurants Inc.
$ 304 ($247
) ($710 )
($1,591 ) Basic and diluted income
(loss) per share $ 0.02 ($0.02 ) ($0.06 ) ($0.13 )
Weighted average common shares outstanding
- basic
12,468,326 12,301,007 12,460,467 12,296,793
Weighted average common shares outstanding
- diluted
12,665,172 N/A N/A N/A
Good Times Restaurants
Inc. Unaudited Supplemental Information
($ in thousands)
Jun. 26, 2018
Sep. 26, 2017 Balance Sheet Data: Cash &
cash equivalents 3,186 4,337 Current assets 5,120 6,066 Property
and Equipment, net 33,113 29,560 Other assets 19,359 19,397 Total
assets $ 57,592 $ 55,153
Current liabilities, including capital
lease obligations and long-term debt due within one year
7,944 6,916 Long-term debt due after one year 5,126 5,339 Other
liabilities 7,204 5,614 Total liabilities $ 20,274 $ 17,869
Stockholders’ equity $ 37,318 $ 37,284
Good Times Burgers & Frozen Custard Bad
Daddy’s Burger Bar Third Quarter Year
to Date Third Quarter Year to Date
2018 2017 2018
2017 2018 2017 2018
2017 Restaurant sales $ 8,225 $ 8,546 $
23,223 $ 22,310 $ 17,765 $ 12,972 $ 48,706 $ 33,671 Restaurants
open during period 0 0 0 1 2 3 5 5 Restaurants closed during period
1 0 2 0 Restaurants open at period end 26 28 26 28 27 21 27 21
Restaurant operating weeks 342.0 364.0 1,062.0 1,068.3 337.6 249.6
970.4 690.9 Average weekly sales per restaurant $ 24.0 $ 23.5 $
21.9 $ 20.9 $ 52.6 $ 52.0 $ 50.2 $ 48.7
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 Third Quarter
2018 2017 2018
2017 2018 2017 Restaurant sales
$ 8,225 100.0 % $ 8,546 100.0 % $ 17,765 100.0
% $ 12,972 100.0 % $ 25,990 $ 21,518 Restaurant operating
costs (exclusive ofdepreciation and amortization shownseparately
below): Food and packaging costs 2,654 32.3 % 2,792 32.7 % 5,179
29.2 % 4,030 31.1 % 7,833 6,822 Payroll and other employee benefit
costs 2,716 33.0 % 2,846 33.3 % 6,439 36.2 % 4,700 36.2 % 9,155
7,546 Restaurant occupancy costs 694 8.4 % 693 8.1 % 1,156 6.5 %
791 6.1 % 1,850 1,484 Other restaurant operating costs
648 7.9 %
680 8.0 %
1,725 9.7 %
1,216 9.4 %
2,373 1,896
Restaurant-level operating profit $ 1,513 18.4 % $ 1,535 18.0 %
3,266 18.4 % $ 2,235 17.2 % 4,779 3,770 Franchise royalty
income, net 185 184 Deduct - other operating: Depreciation
and amortization 937 753 General and administrative 2,069 1,831
Advertising costs 565 514 Franchise costs 11 28 Loss (gain) on
restaurant asset sale (9 ) (6 ) Preopening costs
610 819 Total other
operating
4,183
3,939 Income (loss) from operations
$ 781 $
15
Certain percentage amounts in the table
above do not total due to rounding.
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
2018 2017 2018
2017 2018 2017 Restaurant
sales $ 23,223 100.0 % $ 22,310 100.0 % $ 48,706
100.0 % $ 33,671 100.0 % $ 71,929 $ 55,981 Restaurant
operating costs (exclusive ofdepreciation and amortization
shownseparately below): Food and packaging costs 7,615 32.8 % 7,191
32.2 % 14,539 29.9 % 10,400 30.9 % 22,154 17,591 Payroll and other
employee benefit costs 8,074 34.8 % 7,706 34.5 % 18,002 37.0 %
12,510 37.2 % 26,076 20,216 Restaurant occupancy costs 2,164 9.3 %
2,075 9.3 % 3,114 6.4 % 2,132 6.3 % 5,278 4,207 Other restaurant
operating costs
1,891 8.1
% 1,833 8.2
% 4,735 9.7
% 3,170 9.4
% 6,626
5,003 Restaurant-level operating profit 3,479
15.0 % $ 3,505 15.7 % 8,316 17.1 % $ 5,459 16.2 % 11,795 8,964
Franchise royalty income, net 515 515 Deduct - Other
operating: Depreciation and amortization 2,665 2,086 General and
administrative 5,884 5,222 Advertising costs 1,587 1,357 Franchise
costs 32 80 Loss (gain) on restaurant asset sale (26 ) (17 ) Asset
impairment charge 72 0 Preopening costs
1,683
1,737 Total other operating
11,897 10,465
Income (loss) from operations
$
413 $ (986
)
Certain percentage amounts in the table
above do not total due to rounding.
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 third quarters and year to
date for fiscal 2018 and fiscal 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. Third
Quarter Year to Date 2018
2017 2018 2017 Net
income (loss) as reported $ 304 ($247 ) ($710 ) ($1,591 )
Adjustments to net income (loss): Depreciation and amortization 897
727 2,550 2,001 Interest expense, net
97
50 272
108 EBITDA $ 1,298 $ 530 $ 2,112 $ 518
Preopening costs 565 685 1,541 1,400 Non-cash stock-based
compensation 88 205 303 609 GAAP rent in excess of cash rent (35 )
(18 ) (51 ) (34 ) Non-cash disposal of assets
(9 ) (6
) (26 )
(17 ) Asset impairment charge
0 0
72 0 Adjusted EBITDA
$ 1,907 $
1,396 $ 3,951
$ 2,476
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/20180809005501/en/
Good Times Restaurants Inc.Investor Relations
Contacts:Boyd E. Hoback, 303-384-1411President and CEOorRyan M.
Zink, 303-384-1432Chief Financial OfficerorChristi Pennington,
303-384-1440
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