Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad
Daddy’s Burger Bar and Good Times Burgers & Frozen Custard,
today reported financial results for the fiscal fourth quarter and
fiscal year ended September 26, 2023.
Highlights of the Company’s financial results
include:
- Total Revenues decreased 0.1% to $138.1 million for the year
compared to the 2022 fiscal year
- Total Restaurant Sales for company-owned Good Times restaurants
increased $0.6 million to $9.5 million for the fourth quarter
compared to the same prior year fourth quarter and increased $1.0
million to $35.0 million for the year compared to the 2022 fiscal
year
- Same Store Sales for company-owned Good Times restaurants
increased 2.4% for the fourth quarter compared to the prior year
fourth quarter and increased 3.7% for the year compared to the 2022
fiscal year
- Total Restaurant Sales for Bad Daddy’s restaurants decreased
$1.4 million to $24.6 million for the fourth quarter compared to
the prior year fourth quarter and decreased $1.0 million to $102.2
million for the year compared to the 2022 fiscal year
- Same Store Sales1 for company-owned Bad Daddy’s
restaurants decreased 4.9% for the fourth quarter compared to the
prior year fourth quarter and increased 0.1% for the year compared
to the 2022 fiscal year
- Net Loss Attributable to Common Shareholders was $0.3 million
for the fourth quarter. Net Income Attributable to Common
Shareholders was $11.1 million for the year
- Adjusted EBITDA2 (a non-GAAP measure) was $1.1 million for the
fourth quarter and $5.5 million for the year
- The Company ended the fourth quarter with $4.2 million in cash
and $0.8 million of long-term debt
Ryan M. Zink, the Company’s Chief Executive Officer, said, “We
are thrilled about the continued same store sales increases that we
are seeing at Good Times. We are on the path to modernizing and
re-energizing this 36-year-old regional brand and we believe the
financial results this year, especially considering the unusual
level of input cost inflation, demonstrate the impact that our
investments in technology and in our facilities is making on the
business.”
“Unfortunately, Bad Daddy’s did not perform to our expectations
during the fourth quarter, and we know that this quarter’s results
are not consistent with what the brand is capable of. We have never
compromised on our food, and during this year we have only improved
the quality and relevance of our product selection. We have missed
the mark in the front-of-house, including at the bar, and we have
identified specific priorities to address these opportunities and
to improve the brand’s operational and financial performance.” Zink
continued.
Mr. Zink concluded, “We made significant investments this year
in both brands, including our purchase of the interests in certain
Bad Daddy’s restaurants that were held by unaffiliated partners;
the opening of a new Bad Daddy’s in Madison, Alabama; and our
purchase of two Good Times restaurants from franchisees. I am
optimistic about the continued strength of both of our brands and
in the anticipated sales turnaround at Bad Daddy’s.”
Cash and Liquidity
As of September 26, 2023, the Company had outstanding borrowings
of approximately $0.8 million under its credit facility,
approximately $4.2 million of cash and cash equivalents, and total
liquidity of approximately $11.4 million including cash and cash
equivalents and amounts available for borrowing under its credit
facility.
Share Repurchase Activity
During the fourth quarter of fiscal 2023 the Company repurchased
176,140 shares of common stock at an average price of $3.11 under
its $5 million share repurchase program. During the full 2023
fiscal year, the Company repurchased 838,048 shares of common stock
under its repurchase program. Repurchase activity is conditioned on
compliance with certain financial covenants under the Company’s
credit facility. Under the repurchase program, purchases may be
made at the Company’s discretion and the Company is not obligated
to purchase any certain amount of common stock.
Unit Development and Restaurant Acquisitions
During the fourth quarter of fiscal 2023, the Company opened a
new Bad Daddy’s restaurant in Madison, Alabama, a suburb of
Huntsville, Alabama. Additionally, during the fourth fiscal
quarter, the Company repurchased a Good Times restaurant in
Lafayette, Colorado from a franchisee, and purchased the land,
building, and all restaurant assets associated with a Good Times
restaurant in Greenwood Village, Colorado. The Company continues to
operate both restaurants and expects to hold the real estate
purchased in connection with the Greenwood Village location.
Conference Call
Management will host a conference call to discuss its fiscal
fourth quarter and year ended September 26, 2023 financial results
on Thursday, December 14, 2023 at 5:00 p.m. ET. Hosting the call
will be Ryan M. Zink, its Chief Executive Officer.
The conference call can be accessed live over the phone by
dialing 888-210-2831, access code 3024033. The conference call will
also be webcast live from the Company's corporate website
www.goodtimesburgers.com. An archive of the webcast will be
available at the same location on the corporate website shortly
after the call has concluded.
Good Times Restaurants Inc. (Nasdaq: GTIM)
Good Times Restaurants Inc. owns, operates, and licenses 41 Bad
Daddy’s Burger Bar restaurants through its wholly owned
subsidiaries. Bad Daddy’s Burger Bar is a full-service “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 beers in a high-energy
atmosphere that appeals to a broad consumer base. Additionally,
through its wholly owned subsidiaries, Good Times Restaurants Inc.
owns, operates and franchises 31 Good Times Burgers & Frozen
Custard restaurants primarily in Colorado. Good Times is a regional
quick-service concept featuring 100% all-natural burgers and
chicken sandwiches, signature wild fries, green chili breakfast
burritos and fresh frozen custard desserts.
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,” “plan”
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.
Such risks and uncertainties include, among other things, the
market price of the Company's stock prevailing from time to time,
the nature of other investment opportunities presented to the
Company, the disruption to our business from pandemics and other
public health emergencies, the impact and duration of staffing
constraints at our restaurants, the impact of supply chain
constraints and the current inflationary environment, 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, other general economic and
operating conditions, risks associated with our share repurchase
program, risks associated with the acquisition of additional
restaurants, the adequacy of cash flows and the cost and
availability of capital or credit facility borrowings to provide
liquidity, changes in federal, state, or local laws and regulations
affecting the operation of our restaurants, including minimum wage
and tip credit regulations, 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, 2023 filed with the SEC, and
other filings with the SEC.
_______________
1 Same store sales are a metric used in
evaluating the performance of established restaurants and is a
commonly used metric in the restaurant industry. Same store sales
for our brands are calculated using all units open for at least 18
full fiscal months and use the comparable operating weeks from the
prior year to the current year period’s operating weeks.
2 For a reconciliation of 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.
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands, except per share
amounts
Fiscal Quarter Ended
Fiscal Year Ended
September 26,
2023
September 27,
2022
September 26,
2023
September 27,
2022
NET REVENUES:
Restaurant sales
$
34,106
$
34,945
$
137,229
$
137,250
Franchise revenues
217
245
893
950
Total net revenues
34,323
35,190
138,122
138,200
RESTAURANT OPERATING COSTS:
Food and packaging costs
10,725
11,427
42,910
43,877
Payroll and other employee benefit
costs
12,072
11,488
47,549
46,515
Restaurant occupancy costs
2,289
2,352
9,607
9,440
Other restaurant operating costs
4,884
4,957
19,013
18,515
Preopening costs
374
1
484
51
Depreciation and amortization
923
905
3,663
3,895
Total restaurant operating costs
31,267
31,130
123,226
122,293
General and administrative costs
2,087
2,845
9,127
10,506
Advertising costs
835
904
3,258
3,164
Franchise costs
-
6
-
22
Impairment of long-lived assets
548
1,381
1,589
3,437
Gain on restaurant asset sale and lease
termination
(9
)
(10
)
(41
)
(676
)
Litigation contingencies
-
-
-
332
(LOSS) INCOME FROM OPERATIONS:
(405
)
(1,066
)
963
(878
)
Other Expenses:
Interest and other expense, net
(22
)
(13
)
(78
)
(54
)
NET (LOSS) INCOME BEFORE INCOME TAXES:
(427
)
(1,079
)
885
(932
)
Provision for income taxes
284
14
10,787
5
NET (LOSS) INCOME:
$
(143
)
$
(1,065
)
$
11,672
$
(927
)
Income attributable to non-controlling
interests
(107
)
(225
)
(586
)
(1,714
)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
(250
)
$
(1,290
)
$
11,086
$
(2,641
)
NET (LOSS) INCOME PER SHARE, ATTRIBUTABLE
TO COMMON SHAREHOLDERS:
Basic
$
(0.02
)
$
(0.10
)
$
0.94
$
(0.21
)
Diluted
$
(0.02
)
$
(0.10
)
$
0.94
$
(0.21
)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
11,531
12,350
11,773
12,464
Diluted
11,596
12,350
11,828
12,464
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
September 26, 2023
September 27, 2022
Selected Balance Sheet Data
Cash and cash equivalents
$
4,182
$
8,906
Current Assets
$
6,593
$
11,875
Total assets
$
91,088
$
86,388
Current Liabilities
$
14,890
$
12,897
Stockholders’ equity
$
32,994
$
27,788
Supplemental Information for
Company-Owned Restaurants (dollars in thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Fourth Fiscal Quarter
Fiscal Year Ended
Fourth Fiscal Quarter
Fiscal Year Ended
2023
(13 weeks)
2022
(13 weeks)
2023
(52 weeks)
2022
(52 weeks)
2023
(13 weeks)
2022
(13 weeks)
2023
(52 weeks)
2022
(52 weeks)
Restaurant sales
$
24,649
$
26,006
$
102,241
$
103,216
$
9,457
$
8,939
$
34,988
$
34,034
Restaurants opened or acquired during
period
1
-
1
1
2
-
-
-
Restaurants closed during period
-
-
1
-
-
-
2
1
Restaurants open at period end
40
40
40
40
25
23
25
23
Restaurant operating weeks
512
520
2,042
2,054
313
299
1,210
1,226
Average weekly sales per restaurant
$
48.1
$
50.0
$
50.1
$
50.3
$
30.2
$
29.9
$
28.9
$
27.8
Reconciliation of
Non-GAAP Measurements to U.S. GAAP Results
Reconciliation of Non-GAAP
Restaurant-Level Operating Profit to Loss from Operations
(In thousands, except percentage
data)
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Good Times
Restaurants Inc.
----------Fiscal Quarter Ended
(13 weeks)----------
September 26, 2023
September 27, 2022
September 26, 2023
September 27, 2022
Sept. 26, 2023
Sept. 27, 2022
Restaurant sales
$
24,649
100.0
%
$
26,006
100.0
%
$
9,457
100.0
%
$
8,939
100.0
%
$
34,106
$
34,945
Restaurant operating costs (exclusive of
depreciation and amortization and preopening, shown separately
below):
Food and packaging costs
7,839
31.8
%
8,540
32.8
%
2,886
30.5
%
2,887
32.3
%
10,725
11,427
Payroll and benefits costs
8,942
36.3
%
8,635
33.2
%
3,130
33.1
%
2,853
31.9
%
12,072
11,488
Restaurant occupancy costs
1,517
6.2
%
1,657
6.4
%
772
8.2
%
695
7.8
%
2,289
2,352
Other restaurant operating costs
3,749
15.2
%
3,823
14.7
%
1,135
12.0
%
1,134
12.7
%
4,884
4,957
Restaurant-level operating profit
$
2,602
10.6
%
$
3,351
12.9
%
$
1,534
16.2
%
$
1,370
15.3
%
$
4,136
$
4,721
Franchise revenues
217
245
Deduct - Other operating:
Depreciation and amortization
923
905
General and administrative
2,087
2,845
Advertising costs
835
904
Franchise costs
-
6
Impairment of long-lived assets
548
1,381
Gain on restaurant asset sale
(9
)
(10
)
Pre-opening costs
374
1
Total other operating
4,758
6,032
Loss from operations
$
(405
)
$
(1,066
)
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 U.S. 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 Times
Restaurants Inc.
----------Fiscal Year
Ended----------
September 26, 2023
September 27, 2022
September 26, 2023
September 27, 2022
Sept. 26, 2023
Sept. 27, 2022
Restaurant sales
$
102,241
100.0
%
$
103,216
100.0
%
$
34,988
100.0
%
$
34,034
100.0
%
$
137,229
$
137,250
Restaurant operating costs (exclusive of
depreciation and amortization, and preopening, shown separately
below):
Food and packaging costs
31,972
31.3
%
33,155
32.1
%
10,938
31.3
%
10,722
31.5
%
42,910
43,877
Payroll and benefits costs
35,892
35.1
%
35,085
34.0
%
11,657
33.3
%
11,430
33.6
%
47,549
46,515
Restaurant occupancy costs
6,642
6.5
%
6,668
6.5
%
2,965
8.5
%
2,772
8.1
%
9,607
9,440
Other restaurant operating costs
14,834
14.5
%
14,519
14.1
%
4,179
11.9
%
3,996
11.7
%
19,013
18,515
Restaurant-level operating profit
$
12,901
12.6
%
$
13,789
13.4
%
$
5,249
15.0
%
$
5,114
15.0
%
$
18,150
$
18,903
Franchise revenues
893
950
Deduct - Other operating expense
(income):
Depreciation and amortization
3,663
3,895
General and administrative
9,127
10,506
Advertising costs
3,258
3,164
Litigation Contingencies
-
332
Franchise costs
-
22
Impairment of long-lived assets
1,589
3,437
Gain on restaurant asset sale
(41
)
(676
)
Pre-opening costs
484
51
Total other operating expense (income)
18,080
20,731
Income (Loss) from operations
$
963
$
(878
)
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, like 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 (loss) 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 current and prior year fiscal
quarters and year-to-date periods for fiscal 2023 and fiscal 2022,
expressed as a percentage of total revenues, except for the
components of restaurant operating costs, which are expressed as a
percentage of restaurant revenues.
Quarter Ended
Fiscal Year Ended
Sept. 26, 2023
(13 Weeks)
Sept. 27, 2022
(13 Weeks)
Sept. 26, 2023
(52 Weeks)
Sept. 27, 2022
(52 Weeks)
Adjusted EBITDA:
Net (Loss) Income, as reported
$
(250
)
$
(1,290
)
$
11,086
$
(2,641
)
Depreciation and amortization
926
863
3,617
3,796
Interest expense, net
22
13
78
54
Provision for income taxes
(284
)
(14
)
(10,787
)
(5
)
EBITDA
414
(428
)
3,994
1,204
Preopening expense
374
1
484
51
Non-cash stock-based compensation
28
43
131
250
Asset Impairment
548
1,381
1,589
3,437
GAAP rent-cash rent difference
(214
)
(117
)
(666
)
(403
)
Gain on restaurant asset sales and lease
termination
(9
)
(10
)
(41
)
(538
)
Litigation Contingencies
-
-
-
332
One-time special allocation to Bad Daddy's
partnerships
-
-
-
516
Adjusted EBITDA
$
1,141
$
870
$
5,491
$
4,849
Adjusted EBITDA is a supplemental measure of operating
performance that does not represent and should not be considered as
an alternative to net (loss) 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 (loss) 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.
Category: Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231214502387/en/
Investor Relations: Ryan M. Zink, Chief Executive Officer
(303) 384-1432 Christi Pennington (303) 384-1440
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