Conference Call Thursday, August 13, 2020, at
3:00 p.m. MT/5:00 p.m. ET
Good Times Restaurants Inc. (NASDAQ: GTIM) announced its
preliminary unaudited financial results for the third fiscal
quarter ended June 30, 2020 and provided a general business update
in connection with the ongoing COVID-19 pandemic.
Key highlights of the Company’s financial results
include:
- Total revenues for the quarter decreased 17.3% versus the prior
year to $24.4 million
- Same store sales for company-owned Good Times restaurants
increased 11.9% and for Bad Daddy’s restaurants decreased
36.7%
- Total Restaurant Sales for Good Times restaurants were $9.3
million and Good Times Restaurant Level Operating Profit* (a
non-GAAP measure) was $2.5 million or 27.2% as a percent of
sales
- Total Restaurant Sales for Bad Daddy’s restaurants were $14.9
million and Bad Daddy’s Restaurant Level Operating Profit* (a
non-GAAP measure) was $2.3 million or 15.4% of sales
- Net Income Attributable to Common Shareholders was $0.3
million, or $0.02 per share for the quarter
- Adjusted EBITDA* (a non-GAAP measure) for the quarter was $2.4
million
- The Company ended the quarter with $12.7 million in cash, $9.9
million drawn against its senior credit facility, and $11.6 million
in outstanding PPP loans
“At the domestic onset of the pandemic in March, our full team
banded together with a mission to keep our employees and guests
safe while continuing to deliver stellar food and service despite
the pandemic. The financial results from this quarter are the
result of this team working together to understand how to operate
our business efficiently in a crisis. I could not be more impressed
with the agility of the team as the rules of the game continue to
change and where an existing playbook simply didn’t previously
exist,” commented Ryan M. Zink, Good Times Chief Executive Officer.
“We operated all of our Bad Daddy’s restaurants in a carry-out and
delivery model on a restricted menu for the majority of April and
May. As restrictions on dining room service began to be lifted in
May, our Bad Daddy’s restaurants implemented protocols consistent
with health experts and local guidelines to ensure a safe
on-premise dining experience where allowed by local authorities,
and we continue to re-evaluate our policies and procedures to
ensure that we continue to provide a safe environment for both our
employees and our guests.”
“Our Good Times Burgers & Frozen Custard business, despite
sustaining significant initial losses in sales during late March
and into April, has been seen as a safe alternative to
in-restaurant dining due to the drive-thru nature of that business,
satisfying both a convenience and safety need for our guests. We
similarly have made the safety of our employees and guests a focus
at Good Times, designing protocols for health screenings, mask
usage, and other safety precautions well before required by local
and state regulations and orders,” Zink continued.
Zink concluded, “We continue to monitor the situation closely,
and although we cannot control the progression of the pandemic, nor
the respective governmental responses, we believe we are prepared
to adapt and act accordingly to ensure that we are able to safely
serve our guests our all-natural burgers and frozen custard at Good
Times; and hand crafted, chef-inspired burgers, sandwiches, and
giant chopped salads at Bad Daddy’s, while at the same time
creating a solid foundation on which to build future growth through
financial discipline and exceptional operating capability.”
Fiscal 2020 and 2021 Outlook:
Same store sales during the Company’s fiscal month of July were
up 15.6% versus the prior year at Good Times. Same store sales at
Bad Daddy’s during July were down 19.6% versus the prior year,
improving sequentially each week during the month. Average weekly
sales for company-owned restaurants during July were approximately
$28,900 at Good Times and $38,100 at Bad Daddy’s.
Due to continuing unprecedented economic conditions associated
with the ongoing COVID-19 pandemic and unpredictable nature of the
novel coronavirus and government responses to the evolving
situation, the Company had previously withdrawn its prior financial
outlook. At the current time, the Company is not able to reasonably
estimate the full impact of the continuing pandemic and beyond
providing the above update on July sales is unable to provide an
updated outlook for the balance of this fiscal year or for fiscal
2021.
*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 2020 financial results on Thursday,
August 13, 2020 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will
be Ryan M. Zink, President and Chief Executive 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. 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 39 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 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
33 Good Times Burgers & Frozen Custard restaurants located
primarily in Colorado.
Forward-Looking Statements Disclaimer:
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 disruption to our business
from the novel coronavirus (COVID-19) pandemic and the impact of
the pandemic on our results of operations, financial condition and
prospects which may vary depending on the duration and extent of
the pandemic and the impact of federal, state and local
governmental actions and customer behavior in response to the
pandemic, the lack of assurance that the full amount of the PPP
loans will be forgiven, 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 24, 2019 filed with the SEC, and other filings
with the SEC. Good Times disclaims any obligation or duty to update
or modify these forward-looking statements.
Category: Financial
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands, except per share
amounts)
Statement of Operations
Fiscal Quarter Ended
Year-To-Date
June 30, 2020
(13 weeks)
June 25, 2019
(13 weeks)
June 30, 2020
(40 weeks)
June 25, 2019
(39 weeks)
Net revenues:
Restaurant sales
$
24,190
$
29,180
$
80,781
$
81,281
Franchise revenues
167
270
572
701
Total net revenues
24,357
29,450
81,353
81,982
Restaurant operating costs:
Food and packaging costs
6,724
8,529
23,376
23,955
Payroll and other employee benefit
costs
7,389
10,677
29,082
30,458
Restaurant occupancy costs
2,089
2,091
6,739
6,221
Other restaurant operating costs
3,164
3,070
9,673
8,708
Preopening costs
31
129
992
949
Depreciation and amortization
983
1,104
3,175
3,227
Total restaurant operating costs
20,380
25,600
73,037
73,518
General and administrative costs
1,689
2,063
5,538
6,091
Advertising costs
515
659
1,571
1,824
Franchise costs
6
8
14
31
Impairment of goodwill
-
-
10,000
-
Impairment of long-lived assets
932
-
5,291
-
Gain (loss) on disposal of restaurants and
equipment
(8
)
44
(36
)
5
Income (loss) from operations
843
1,076
(14,062
)
513
Other income (expense):
Interest income (expense), net
(202
)
(202
)
(638
)
(561
)
Other income
-
(1
)
-
(1
)
Total other income (expense), net
(202
)
(203
)
(638
)
(562
)
Net income (loss)
641
873
(14,700
)
(49
)
Income attributable to non-controlling
interests
(352
)
(333
)
(738
)
(912
)
Net income (loss) attributable to common
shareholders
$
289
$
540
$
(15,438
)
$
(961
)
Basic and diluted income (loss) per
share
$
0.02
$
0.04
$
(1.23
)
$
(0.08
)
Basic weighted average common shares
outstanding
12,591
12,523
12,593
12,517
Diluted weighted average common shares
outstanding
12,696
12,723
12,593
12,517
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(dollars in thousands)
Balance Sheet Data
June 30, 2020
September 24, 2019
Cash and cash equivalents
$
12,665
$
2,745
Current assets
$
15,566
$
4,915
Total assets1
$
104,290
$
59,905
Current maturities of long-term debt
$
4,794
$
-
Long-term debt due after one year
16,751
12,850
Stockholders’ equity
$
13,510
$
28,920
1 Includes approximately $50.9 million of
operating lease right of use assets recorded during the first
quarter of 2020 as a result of the adoption of Accounting Standards
Update 2016-02, Leases (Topic 842).
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Third Fiscal Quarter
Year-to-Date
Third Fiscal Quarter
Year-to-Date
2020
(13 weeks)
2019
(13 weeks)
2020
(40 weeks)
2019
(39 weeks)
2020
(13 weeks)
2019
(13 weeks)
2020
(40 weeks)
2019
(39 weeks)
Restaurant sales
$
14,916
$
21,080
$
57,028
$
59,714
$
9,275
$
8,100
$
23,753
$
21,567
Restaurants opened during period
-
-
2
2
-
-
-
-
Restaurants closed during period
-
-
-
-
-
-
-
-
Restaurants open at period end
37
33
37
33
25
26
25
26
Restaurant operating weeks
481.0
429.0
1470.6
1267.3
325
328
*
1,013
1,004
*
Average weekly sales per restaurant
$
31.0
$
49.1
$
38.8
$
47.1
$
28.5
$
24.7
$
23.4
$
21.5
*Adjusted for store closure due to
remodel
Reconciliation of
Non-GAAP Measurements to U.S. GAAP Results
Reconciliation of Non-GAAP
Restaurant-Level Operating Profit to Income from Operations
(In thousands, except percentage
data)
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Good Times
Restaurants Inc.
Fiscal Quarter Ended
June 30, 2020
June 25, 2019
June 30, 2020
June 25, 2019
June 30,
2020
June 25,
2019
Restaurant sales
$
14,915
100.0%
$
21,080
100.0%
$
9,275
100.0%
$
8,100
100.0%
$
24,190
$
29,180
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
3,932
26.4%
6,063
28.8%
2,792
30.1%
2,466
30.4%
6,724
8,529
Payroll and benefits costs
4,780
32.1%
7,851
37.2%
2,609
28.1%
2,826
34.9%
7,389
10,677
Restaurant occupancy costs
1,486
10.0%
1,391
6.6%
603
6.5%
700
8.6%
2,089
2,091
Other restaurant operating costs
2,419
16.2%
2,396
11.4%
745
8.0%
674
8.3%
3,164
3,070
Restaurant-level operating profit
$
2,298
15.4%
$
3,379
16.0%
$
2,526
27.2%
$
1,434
17.7%
$
4,824
$
4,813
Franchise advertising contributions and
net royalty income
167
270
Deduct - Other operating:
Depreciation and amortization
983
1,104
General and administrative
1,689
2,063
Advertising costs
515
659
Franchise costs
6
8
Gain (Loss) on restaurant asset sale
(8
)
44
Impairment of goodwill
-
-
Impairment of long-lived assets
932
-
Preopening costs
31
129
Total other operating
4,148
4,007
Income from operations
$
843
$
1,076
Certain percentage amounts in the
table above do not reconcile 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 from Operations
(In thousands, except percentage
data)
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Good Times
Restaurants Inc.
Year-To-Date
June 30, 2020
June 25, 2019
June 30, 2020
June 25, 2019
June 30,
2020
June 25,
2019
(40 weeks)
(39 weeks)
(40 weeks)
(39 weeks)
(40 wks)
(39 wks)
Restaurant sales
$
57,028
100.0%
$
59,714
100.0%
$
23,753
100.0%
$
21,567
100.0%
$
80,781
$
81,281
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
16,108
28.2%
17,136
28.7%
7,268
30.6%
6,819
31.6%
23,376
23,955
Payroll and other employee benefit
costs
20,973
36.8%
22,502
37.7%
8,109
34.1%
7,956
36.9%
29,082
30,458
Restaurant occupancy costs
4,600
8.1%
4,022
6.7%
2,139
9.0%
2,199
10.2%
6,739
6,221
Other restaurant operating costs
7,549
13.2%
6,770
11.3%
2,124
8.9%
1,938
9.0%
9,673
8,708
Restaurant-level operating profit
$
7,798
13.7%
$
9,284
15.5%
$
4,113
17.3%
$
2,655
12.3%
11,911
11,939
Franchise royalty income, net
572
701
Deduct - Other operating:
Depreciation and amortization
3,175
3,227
General and administrative
5,538
6,091
Advertising costs
1,571
1,824
Franchise costs
14
31
Gain (Loss) on restaurant asset sale
(36
)
5
Impairment of goodwill
10,000
-
Impairment of long-lived assets
5,291
-
Preopening costs
992
949
Total other operating
26,545
12,127
Income (loss) from operations
$
(14,062
)
$
513
Certain percentage amounts in the
table above do not reconcile 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 current and prior year fiscal
quarters and year-to-date periods for fiscal 2019 and fiscal 2018,
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 Income (Loss) to Non-GAAP Adjusted
EBITDA (in thousands):
Fiscal Quarter Ended
Year-to-Date
June 30, 2020
(13 Weeks)
June 25, 2019
(13 Weeks)
June 30, 2020
(40 Weeks)
June 25, 2019
(39 Weeks)
Adjusted EBITDA:
Net Income (Loss), as reported
$
289
$
540
$
(15,438
)
$
(961
)
Depreciation and amortization
968
1,096
3,140
3,157
Interest expense, net
202
202
638
561
EBITDA
1,459
1,838
$
(11,660
)
2,757
Preopening expense
31
128
992
928
Non-cash stock-based compensation
74
110
223
331
Non-recurring severance costs
-
-
41
-
GAAP rent-cash cash difference
(95
)
(44
)
(118
)
(50
)
Gain (Loss) on disposal of assets
(8
)
44
(36
)
5
Asset impairment charge
932
-
15,291
-
Adjusted EBITDA
$
2,393
$
2,076
$
4,733
$
3,971
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/20200813005694/en/
GOOD TIMES RESTAURANTS INC. Ryan M. Zink,
President and Chief Executive Officer (303) 384-1411 Christi
Pennington (303) 384-1440
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