Good Times Restaurants Inc. (Nasdaq: GTIM), operator of the Bad
Daddy’s Burger Bar and Good Times Burgers & Frozen Custard
restaurant brands, today reported financial results for the first
fiscal quarter ended December 27, 2022.
Key highlights of the Company’s financial results
include:
- Total Revenues for the quarter increased 1.5% to $33.4 million
compared to fiscal 2022 first quarter
- Total Restaurant Sales for Bad Daddy’s restaurants were $25.2
million for the quarter
- Same Store Sales1 for company-owned Bad Daddy’s
restaurants increased 2.4% for the quarter
- Total Restaurant Sales for Good Times restaurants were $8.0
million for the quarter
- Same Store Sales for company-owned Good Times restaurants
increased 3.0% for the quarter
- Net Loss Attributable to Common Shareholders was $0.1 million
for the quarter
- Adjusted EBITDA2 (a non-GAAP measure) for the quarter was $0.7
million
- The Company ended the quarter with $6.9 million in cash and no
long-term debt
Ryan M. Zink, the Company’s Chief Executive Officer, said,
“During this first quarter of fiscal 2023, we continued to
experience challenges with inflationary pressure, particularly at
the Good Times brand where our cost of sales increased
significantly compared to last year’s quarter with lesser increases
throughout the rest of the P&L. These increases in cost of
sales have been primarily driven by increases in beef cost, though
we have experienced increased costs of other products including
buns and burger toppings. We increased prices by 3.4% at the start
of calendar 2023 which will partially offset the increases we have
seen in cost of sales and should also temper the impact of the
eight percent minimum wage increase in Colorado. Though our mission
continues to be in long-term profitability, the extent of the input
costs we are seeing, coupled with the longer-term forward outlook
on beef prices is driving increased focus on cost savings at the
restaurant level. We continue to invest in this brand and are on
target with our signage replacement program where we expect to
replace all of the signage throughout the system by the end of
fiscal 2024.”
Mr. Zink continued, “At Bad Daddy’s we experienced improvement
on the cost of sales line, as our primary suppliers of certain
commodities are different from Good Times and are contracted based
upon different pricing strategies. I am pleased with the relatively
tame restaurant-level operating profit erosion we saw in the first
quarter at Bad Daddy’s and expect some sequential improvement in
restaurant margins in the second fiscal quarter” Zink concluded.
Subsequent to the end of the quarter we acquired all of the
membership interests in five Bad Daddy’s that previously were
jointly owned with individuals associated with the founder of the
concept. The landlord at our upcoming Huntsville location is
nearing completion of the building and we continue to target a late
summer opening for that new Bad Daddy’s location.”
“Our sales momentum at both brands is impressive and I am
grateful and appreciative for the efforts of our team members and
operations management teams who continue to execute our concepts,
delivering next-level service experiences and food and beverage
that we believe drive customer loyalty to our brands, which are all
part of the foundation of our long-term success,” Zink
concluded.
Conference Call: Management will host a conference call
to discuss its first quarter 2023 financial results on Thursday,
February 2, 2023 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call
will be Ryan M. Zink, its Chief Executive Officer and Matthew
Karnes, its Senior Vice President of Finance.
The conference call can be accessed live over the phone by
dialing 844-210-2831 and entering Participant access code 2024033.
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, 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 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. 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
Company's financial performance and its cash flows from operations
and general economic conditions, which could adversely affect the
Company's results of operations and cash flows. These risks also
include such factors as the disruption to our business from the
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 impact and duration of
staffing constraints and wage increases for employees 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, 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, 2022 filed with the SEC, and other
filings with the SEC.
Category: Financial
____________________________________________ 1 Sales 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
quarter’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 First Quarter
2023
2022
Statement of Operations
(13 weeks)
(13 weeks)
Net revenues:
Restaurant sales
$
33,179
$
32,676
Franchise revenues
215
240
Total net revenues
33,394
32,916
RESTAURANT OPERATING COSTS:
Food and packaging costs
10,607
10,226
Payroll and other employee benefit
costs
11,548
11,177
Restaurant occupancy costs
2,458
2,328
Other restaurant operating costs
4,492
4,138
Preopening costs
-
50
Depreciation and amortization
910
984
Total restaurant operating costs
30,015
28,903
General and administrative costs
2,375
2,705
Advertising costs
894
641
Franchise costs
3
5
Gain on restaurant asset sales and lease
termination
-
(614
)
INCOME FROM OPERATIONS
107
1,276
Interest expense, net
(12
)
(18
)
NET INCOME BEFORE PROVISION FOR INCOME
TAXES
$
95
$
1,258
PROVISION FOR INCOME TAXES
-
8
NET INCOME
95
1,250
Income attributable to non-controlling
interests
(222
)
(920
)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
(127
)
$
330
BASIC AND DILUTED INCOME PER SHARE:
Net (loss) income attributable to Common
Shareholders
$
(.01
)
$
.03
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
12,041,628
12,522,471
Diluted
12,041,628
12,684,979
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
Balance Sheet Data
December 27, 2022
December 28, 2021
Cash and cash equivalents
$
6,914
$
7,640
Current assets
$
11,389
$
12,871
Total assets
$
84,238
$
93,394
Current liabilities
$
13,431
$
12,828
Stockholders’ equity
$
26,810
$
31,589
Supplemental Information for Company-Owned Restaurants (dollars
in thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Fiscal First Quarter
2023 (13 weeks)
2022 (13 weeks)
2023 (13 weeks)
2022 (13 weeks)
Restaurant sales
$
25,165
$
24,590
$
8,014
$
8,086
Restaurants opened during period
-
-
-
-
Restaurants closed during period
-
-
-
-
Restaurants open at period end
40
39
23
24
Restaurant operating weeks
520.0
507.0
299.0
312.0
Average weekly sales per restaurant
$
48.4
$
48.5
$
26.8
$
25.9
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 First Quarter
Ended--------------------------------------------------------------------
December 27, 2022 (13
weeks)
December 28, 2021 (13
weeks)
December 27, 2022 (13
weeks)
December 28, 2021 (13
weeks)
Dec 27, 2022 (13 wks)
Dec 28, 2021 (13 wks)
Restaurant sales
$
25,165
100.0
%
$
24,590
100.0
%
$
8,014
100.0
%
$
8,086
100.0
%
$
33,179
$
32,676
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
7,973
31.7
%
7,812
31.8
%
2,634
32.9
%
2,414
29.9
%
10,607
10,226
Payroll and benefits costs
8,754
34.8
%
8,418
34.2
%
2,794
34.9
%
2,759
34.1
%
11,548
11,177
Restaurant occupancy costs
1,732
6.9
%
1,649
6.7
%
726
9.1
%
679
8.4
%
2,458
2,328
Other restaurant operating costs
3,521
14.0
%
3,285
13.4
%
971
12.1
%
853
10.5
%
4,492
4,138
Restaurant-level operating profit
$
3,185
12.7
%
$
3,426
13.9
%
$
889
11.1
%
$
1,381
17.1
%
$
4,074
$
4,807
Franchise revenues
215
240
Deduct - Other operating:
Depreciation and amortization
910
984
General and administrative
2,375
2,705
Advertising costs
894
641
Franchise costs
3
5
Gain on restaurant asset sale
-
(614
)
Pre-opening costs
-
50
Total other operating
4,182
3,771
Income from operations
$
107
$
1,276
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 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.
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
(Thousands of US Dollars)
Fiscal First Quarter
Ended
December 27, 2022 (13
weeks)
December 28, 2021 (13
weeks)
Net (Loss) income, as reported
$
(127
)
$
330
Depreciation and amortization 3
867
1,004
Interest expense, net
12
18
Provision for income taxes
-
8
EBITDA
752
1,360
Pre-opening expense
-
50
Non-cash stock-based compensation
46
95
GAAP rent-cash rent difference
(124
)
(73
)
Gain on restaurant asset sales and lease
termination 4
-
(484
)
One-time special allocation to Bad Daddy’s
partnerships5
-
516
Adjusted EBITDA
$
674
$
1,464
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.
____________________________________________ 3 Depreciation and
amortization expense have been reduced by amounts attributable to
non-controlling interests of $66,000 thousand and $67,000 for the
quarters ended December 27, 2022 and December 28, 2021,
respectively. 4 Gain on restaurant asset sales and lease
termination has been reduced by amounts attributable to
non-controlling interests of $0.00and $130,000 for the quarters
ended December 27, 2022 and December 28, 2021, respectively. 5
Amount represents the portion of a one-time payroll cost rebate
attributable to the non-controlling partners in these partnerships
for the quarter ended December 28, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230202005009/en/
GOOD TIMES RESTAURANTS INC. CONTACTS: Ryan M. Zink, Chief
Executive Officer (303) 384-1432 Christi Pennington (303)
384-1440
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