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 third
fiscal quarter ended June 27, 2023.
Key highlights of the Company’s financial results
include:
- Total Revenues for the quarter decreased 2.4% to $35.6 million
compared to fiscal 2022 third quarter
- Total Restaurant Sales for Bad Daddy’s restaurants were $26.1
million for the quarter
- Same Store Sales1 for company-owned Bad Daddy’s
restaurants decreased 1.4% for the quarter
- Total Restaurant Sales for Good Times restaurants were $9.1
million for the quarter
- Same Store Sales for company-owned Good Times restaurants
increased 2.1% for the quarter
- Net Income Attributable to Common Shareholders was $0.3 million
for the quarter
- Adjusted EBITDA2 (a non-GAAP measure) for the quarter was $2.1
million
- The Company ended the quarter with $3.7 million in cash and no
long-term debt
Ryan M. Zink, the Company’s Chief Executive Officer, said, “Our
Good Times brand had a fantastic quarter for both sales and
profits, as we posted positive same store sales despite
meaningfully unfavorable weather comparisons. I am pleased with the
improvements made in food costs at both brands and the improvement
in labor costs made at Good Times during what is typically our
highest sales-indexing quarter.”
Mr. Zink continued, “We have invested in additional multi-unit
supervisory roles at Bad Daddy’s to reduce spans of control as we
seek to address declining sales in a couple of markets, most
notably in the Atlanta market. We believe that the investment will
pay off as we have already begun to see a turnaround in one of our
most challenging restaurants in the market, which has followed the
installation of a new general manager. We have completed
construction of our upcoming Bad Daddy’s in Huntsville, Alabama,
and are looking forward to its opening later this month.”
“Additionally, in late July, we acquired a previously-franchised
Good Times restaurant in Greenwood Village, Colorado, a southern
suburb of Denver. We look forward to the contribution of this
restaurant to our Company-owned results moving in the future,” Zink
concluded.
Conference Call: Management will host a conference call
to discuss its third quarter 2023 financial results on Thursday,
August 3, 2023 at 3:00 p.m. MT/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 and entering Participant 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.
About Good Times Restaurants Inc.: Good Times Restaurants
Inc. (GTIM) owns, operates, and licenses 40 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 and subsequent filings filed
with the SEC.
Category: Financial
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands, except per share
amounts)
Quarter Ended (13
Weeks)
Year-to-Date (39
Weeks)
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
NET REVENUES:
Restaurant sales
$
35,376
$
36,265
$
103,123
$
102,305
Franchise revenues
244
232
676
705
Total net revenues
35,620
36,497
103,799
103,010
RESTAURANT OPERATING COSTS:
Food and packaging costs
10,923
11,767
32,185
32,450
Payroll and other employee benefit
costs
11,940
12,295
35,477
35,027
Restaurant occupancy costs
2,432
2,383
7,318
7,088
Other restaurant operating costs
4,811
4,753
14,129
13,558
Preopening costs
80
-
110
50
Depreciation and amortization
919
993
2,740
2,990
Total restaurant operating costs
31,105
32,191
91,959
91,163
General and administrative costs
2,365
2,384
7,040
7,677
Advertising costs
751
807
2,423
2,260
Impairment of long-lived assets
965
303
1,041
2,056
Gain on restaurant asset sale and lease
termination
(10
)
(9
)
(32
)
(666
)
Litigation contingencies
-
-
-
332
INCOME FROM OPERATIONS:
444
821
1,368
188
Interest and other expense, net
(18
)
(12
)
(56
)
(41
)
NET INCOME BEFORE INCOME TAXES:
426
809
1,312
147
Provision for Income Taxes
(551
)
(1
)
(10,503
)
(9
)
NET INCOME:
$
977
$
808
$
11,815
$
138
Income attributable to non-controlling
interests
(135
)
(339
)
(479
)
(1,489
)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
842
$
469
$
11,336
$
(1,351
)
NET INCOME (LOSS) PER SHARE, ATTRIBUTABLE
TO COMMON SHAREHOLDERS:
Basic
$
0.07
$
0.04
$
0.96
$
(0.11
)
Diluted
$
0.07
$
0.04
$
0.95
$
(0.11
)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
11,700,044
12,457,251
11,853,441
12,502,449
Diluted
11,769,286
12,560,658
11,910,491
12,502,449
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
June 27, 2023
September 27, 2022
Selected Balance Sheet Data
Cash and cash equivalents
$
3,684
$
8,906
Current Assets
$
7,180
$
11,875
Total assets
$
90,713
$
86,388
Current Liabilities
$
13,601
$
12,897
Stockholders’ equity
$
33,843
$
27,788
Supplemental Information for
Company-Owned Restaurants (dollars in thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Third Fiscal Quarter (13
Weeks)
Year-to-Date (39
Weeks)
Third Fiscal Quarter (13
Weeks)
Year-to-Date (39
Weeks)
2023
2022
2023
2022
2023
2022
2023
2022
Restaurant sales
$
26,085
$
27,172
$
77,592
$
77,210
$
9,291
$
9,093
$
25,531
$
25,095
Restaurants open at beginning of
period
39
40
40
39
23
23
23
24
Restaurants opened or acquired during
period
0
0
-
1
-
-
-
-
Restaurants closed during period
-
-
1
-
-
-
-
1
Restaurants open at period end
39
40
39
40
23
23
23
23
Restaurant operating weeks
504.0
520.0
1545.5
1535.0
299.0
299.0
897.0
922.0
Average weekly sales per restaurant
$
51.8
$
52.3
$
50.2
$
50.3
$
31.1
$
30.4
$
28.5
$
27.2
Certain percentage amounts in the table above
may 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 from Operations
(In thousands, except percentage
data)
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Good Times Restaurants
Inc.
----------------------------------------Quarter Ended (13
Weeks)----------------------------------------
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
Restaurant sales
$
26,085
100.0
%
$
27,172
100.0
%
$
9,291
100.0
%
$
9,093
100.0
%
$
35,376
$
36,265
Restaurant operating costs (exclusive of
depreciation and amortization and preopening, shown separately
below):
Food and packaging costs
8,106
31.1
%
8,832
32.5
%
2,817
30.3
%
2,935
32.3
%
10,923
11,767
Payroll and benefits costs
9,054
34.7
%
9,296
34.2
%
2,886
31.1
%
2,999
33.0
%
11,940
12,295
Restaurant occupancy costs
1,700
6.5
%
1,684
6.2
%
732
7.9
%
699
7.7
%
2,432
2,383
Other restaurant operating costs
3,750
14.4
%
3,742
13.8
%
1,061
11.4
%
1,011
11.1
%
4,811
4,753
Restaurant-level operating profit
$
3,475
13.3
%
$
3,618
13.3
%
$
1,795
19.3
%
$
1,449
15.9
%
$
5,270
$
5,067
Franchise revenues
244
232
Deduct - Other operating:
Depreciation and amortization
919
993
General and administrative
2,365
2,384
Advertising costs
751
807
Impairment of long-lived assets
965
303
Gain on restaurant asset sale and lease
termination
(10
)
(9
)
Pre-opening costs
80
-
Total other operating
5,070
4,478
Income from operations
$
444
$
821
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 from Operations
(In thousands, except percentage
data)
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Good Times Restaurants
Inc.
--------------------------------------Year-to-Date Period Ended
(39 Weeks)--------------------------------------
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
Restaurant sales
$
77,592
100.0
%
$
77,210
100.0
%
$
25,531
100.0
%
$
25,095
100.0
%
$
103,123
$
102,305
Restaurant operating costs (exclusive of
depreciation and amortization, and preopening, shown separately
below):
Food and packaging costs
24,131
31.1
%
24,615
31.9
%
8,054
31.5
%
7,835
31.2
%
32,185
32,450
Payroll and benefits costs
26,951
34.7
%
26,450
34.3
%
8,526
33.4
%
8,577
34.2
%
35,477
35,027
Restaurant occupancy costs
5,124
6.6
%
5,011
6.5
%
2,194
8.6
%
2,077
8.3
%
7,318
7,088
Other restaurant operating costs
11,084
14.3
%
10,696
13.9
%
3,045
11.9
%
2,862
11.4
%
14,129
13,558
Restaurant-level operating profit
$
10,302
13.3
%
$
10,438
13.5
%
$
3,712
14.5
%
$
3,744
14.9
%
$
14,014
$
14,182
Franchise revenues
676
705
Deduct - Other operating:
Depreciation and amortization
2,740
2,990
General and administrative
7,040
7,677
Advertising costs
2,423
2,260
Litigation Contingencies
-
332
Impairment of long-lived assets
1,041
2,056
Gain on restaurant asset sale
(32
)
(666
)
Pre-opening costs
110
50
Total other operating
13,322
14,699
Income from operations
$
1,368
$
188
Certain percentage amounts in the table above
may 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 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)
Quarter Ended (13
Weeks)
Year-to-Date (39
Weeks)
June 27, 2023
June 28, 2022
June 27, 2023
June 28, 2022
Adjusted EBITDA:
Net Income (Loss), as reported
$
291
$
469
$
10,785
$
(1,351
)
Depreciation and amortization
924
951
2,691
2,933
Interest expense, net
18
12
56
41
Provision for income taxes
(551
)
1
(10,503
)
9
EBITDA
1,233
1,433
3,580
1,632
Preopening expense
80
-
110
50
Non-cash stock-based compensation
15
60
104
208
Asset Impairment
965
303
1,041
2,056
GAAP rent-cash rent difference
(135
)
(103
)
(450
)
(286
)
Gain on restaurant asset sales and lease
termination
(10
)
(9
)
(32
)
(528
)
One-time special allocation to Bad Daddy’s
partnerships
-
-
-
516
Litigation contingencies
-
-
-
332
Adjusted EBITDA
$
2,148
$
1,684
$
4,353
$
3,980
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.
____________________
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 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230803693380/en/
Ryan M. Zink, Chief Executive Officer (303) 384-1432 Christi
Pennington (303) 384-1440
Good Times Restaurants (NASDAQ:GTIM)
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