Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad
Daddy’s Burger Bar, a full-service premium burger bar concept, and
Good Times Burgers & Frozen Custard, a regional quick-service
restaurant chain focused on fresh, high-quality, all-natural
products, today reported financial results for the fiscal fourth
quarter and year ended September 24, 2019.
Key highlights of the Company’s financial results
include:
- Total Revenues increased 7.0% to $28.8 million for the quarter
and 11.2% to $110.8 million for the year
- Total Restaurant Sales for Bad Daddy’s restaurants increased
7.0% to $20.0 million for the quarter and increased 18.3% to $79.8
million for the year
- The Company opened two Bad Daddy’s restaurants during the
fourth quarter, bringing the total new development for the year to
four restaurants
- Total Restaurant Sales for Good Times restaurants increased
$0.6 million for the quarter to $8.5 million and decreased $1.1
million to $30.0 million for the year
- Same Store Sales for company-owned Bad Daddy’s restaurants
decreased 1.3% for the quarter and decreased 0.2% for the year
- Same Store Sales for company-owned Good Times restaurants
increased 7.2% for the quarter and decreased 0.4% for the year
- Net Loss Attributable to Common Shareholders was $4.2 million
for the quarter including $2.8 million of asset impairment costs,
$0.8 million of pre-opening costs, and $0.8 million of accrued
non-recurring severance costs in connection with the separation of
the Company’s former CEO in October 2019
- For the year, Net Loss Attributable to Common Shareholders was
$5.1 million
- Adjusted EBITDA* (a non-GAAP measure) for the quarter was $1.5
million and $5.4 million for the year
- The Company ended the quarter with $2.7 million in cash and
$12.9 million drawn against its senior credit facility
Ryan M. Zink, the Company’s Acting Chief Executive Officer,
said, “Fiscal 2019 saw significant erosion in margins, primarily
due to higher wage costs and significant opt-in by our customers to
our third-party delivery option, as well as the de-leveraging
impact of lower unit volumes at some of our class of 2018 and the
first of our class of 2019 restaurants. Our focus during fiscal
2020 has shifted from unit growth to stabilization of margins and
earnings growth through improving unit-level performance at our
existing restaurants. We have opened four restaurants during the
past three months, all of which are performing at or above our
sales target for new restaurants. Our guidance for fiscal 2020
calls for Adjusted EBITDA of approximately $6.0 to $6.2 million,
reflecting the expectation that we will stabilize EBITDA margins on
a year-over-year basis with a view that such margins will be
expansionary in future years, coupled with new restaurant
development resuming in fiscal 2021.”
Fiscal 2020 Outlook:
Additionally, the Company provided guidance for fiscal 2020:
- Total revenues of approximately $120 to $123 million
- Total revenue estimates assume generally flat same store sales
for the year for Bad Daddy’s and same store sales increases of
approximately 3.5% for Good Times
- General and administrative expenses of approximately $8.5 to
$8.7 million including approximately $400,000 to $450,000 of
non-cash equity compensation expense
- No additional restaurant openings during fiscal 2020
- Net loss of approximately $0.5 to $0.7 million, including
approximately $0.9 million of pre-opening costs
- Total Adjusted EBITDA* between $6.0 and $6.2 million
- Capital expenditures (net of tenant improvement allowances) of
approximately $1.7 million including approximately $0.6 million
related to the two stores opened in October and December 2019.
- Fiscal year-end long-term debt of approximately $10.7 to $11.2
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 fourth quarter 2019 financial results on Thursday,
December 12, 2019 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call
will be Ryan M. Zink, its Acting Chief Executive Officer and its
Chief Financial Officer and Treasurer.
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
34 Good Times Burgers & Frozen Custard restaurants focused on
fresh, high quality, all-natural products which are located
primarily in Colorado.
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 25, 2018 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)
Fiscal Quarter Ended
Year-To-Date
Statement of Operations
Sept. 24, 2019
Sept. 25, 2018
Sept 24, 2019
Sept 25, 2018
Net revenues:
Restaurant sales
$
28,519
$
26,635
$
109,800
$
98,564
Franchise revenues
240
229
958
1,007
Total net revenues
28,759
26,864
110,758
99,571
Restaurant operating costs:
Food and packaging costs
8,516
8,102
32,471
30,256
Payroll and other employee benefit
costs
10,763
9,577
41,221
35,653
Restaurant occupancy costs
2,134
1,983
8,355
7,261
Other restaurant operating costs
3,069
2,657
11,470
9,283
Pre-opening costs
825
1,101
1,774
2,784
Depreciation and amortization
1,118
1,040
4,345
3,705
Total restaurant operating costs
26,425
24,460
99,636
88,942
General and administrative costs
3,063
1,973
9,461
7,857
Advertising costs
511
472
2,352
2,322
Franchise costs
7
9
38
41
Asset impairment charge
2,771
-
2,771
72
Gain on disposal of restaurants and
equipment
(10
)
(9
)
(5
)
(35
)
Income (loss) from operations
(4,008
)
(41
)
(3,495
)
372
Other income (expense):
Interest income (expense), net
(192
)
(118
)
(753
)
(388
)
Other income (expense)
1
(1
)
-
(1
)
Total other expense
(191
)
(119
)
(753
)
(389
)
Net loss
(4,199
)
(160
)
(4,248
)
(17
)
Loss (income) attributable to
non-controlling interests
23
(164
)
(889
)
(1,017
)
Net loss attributable to common
shareholders
$
(4,176
)
$
(324
)
$
(5,137
)
$
(1,034
)
Basic and diluted loss per share
$
(0.33
)
$
(0.03
)
$
(0.41
)
$
(0.08
)
Basic and diluted weighted average common
shares outstanding
12,540
12,474
12,523
12,464
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
September 24, 2019
September 25, 2018
Balance Sheet Data
Cash and cash equivalents
$
2,745
$
3,477
Current assets
$
4,915
$
6,381
Property and equipment, net
35,677
35,245
Other assets
19,313
19,324
Total assets
$
59,905
$
60,950
Current liabilities, including capital
lease obligations and long-term debt due within one year
$
9,228
$
8,335
Long-term debt due after one year
12,850
7,472
Other liabilities
8,907
7,922
Total liabilities
$
30,985
$
23,729
Stockholders’ equity
$
28,920
$
37,221
Supplemental Information (dollars in
thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Fiscal Fourth Quarter
2019
2018
2019
2018
Restaurant sales
$
20,039
$
18,722
$
8,480
$
7,913
Restaurants opened during period
2
5
-
-
Restaurants closed during period
-
-
-
-
Restaurants open at period end
35
31
26
26
Restaurant operating weeks
432
367
338
338
Average weekly sales per restaurant
$
46.4
$
51.0
$
25.1
$
23.4
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Fiscal Year
2019
2018
2019
2018
Restaurant sales
$
79,753
$
67,428
$
30,047
$
31,136
Restaurants opened during period
4
9
-
0
Restaurants closed during period
-
-
-
2
Restaurants open at period end
35
31
26
26
Restaurant operating weeks
1,699
1,341
1,699
1,400
Average weekly sales per restaurant
$
46.9
$
50.3
$
22.2
$
22.2
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
September 24, 2019
September 25, 2018
September 24, 2019
September 25, 2018
Sept 24, 2019
Sept 25, 2018
Restaurant sales
$
20,039
100.0
%
$
18,722
100.0
%
$
8,480
100.0
%
$
7,913
100.0
%
$
28,519
$
26,635
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
5,869
29.3
%
5,509
29.4
%
2,647
31.2
%
2,593
32.8
%
8,516
8,102
Payroll and benefits costs
7,721
38.5
%
6,859
36.6
%
3,042
35.9
%
2,718
34.3
%
10,763
9,577
Restaurant occupancy costs
1,392
6.9
%
1,234
6.6
%
742
8.8
%
749
9.4
%
2,134
1,983
Other restaurant operating costs
2,334
11.6
%
1,984
10.6
%
735
8.7
%
673
8.5
%
3,069
2,657
Restaurant-level operating profit
$
2,723
13.6
%
$
3,136
16.8
%
$
1,314
15.5
%
$
1,180
14.9
%
$
4,037
$
4,316
Franchise advertising contributions and
net royalty income
240
229
Deduct - Other operating:
Depreciation and amortization
1,118
1,040
General and administrative
3,063
1,973
Advertising costs
511
472
Franchise costs
7
9
Gain on restaurant asset sale
(10
)
(9
)
Asset impairment charge
2,771
-
Pre-opening costs
825
1,101
Total other operating
8,285
4,586
Loss from operations
$
(4,008
)
$
(41
)
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
September 24, 2019
September 25, 2018
September 24, 2019
September 25, 2018
Sept 24, 2019
Sept 25, 2018
Restaurant sales
$
79,753
100.0
%
$
67,428
100.0
%
$
30,047
100.0
%
$
31,136
100.0
%
$
109,800
$
98,564
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
23,006
28.8
%
20,048
29.7
%
9,465
31.5
%
10,208
32.8
%
32,471
30,256
Payroll and other employee benefit
costs
30,224
37.9
%
24,861
36.9
%
10,997
36.6
%
10,792
34.7
%
41,221
35,653
Restaurant occupancy costs
5,413
6.8
%
4,348
6.4
%
2,942
9.8
%
2,913
9.4
%
8,355
7,261
Other restaurant operating costs
8,894
11.2
%
6,719
10.0
%
2,576
8.6
%
2,564
8.2
%
11,470
9,283
Restaurant-level operating profit
$
12,216
15.3
%
$
11,452
17.0
%
$
4,067
13.5
%
$
4,659
14.9
%
$
16,283
$
16,111
Franchise royalty income, net
958
1,007
Deduct - Other operating:
Depreciation and amortization
4,345
3,705
General and administrative
9,461
7,857
Advertising costs
2,352
2,322
Franchise costs
38
41
Gain on restaurant asset sale
(5
)
(35
)
Asset impairment charge
2,771
72
Pre-opening costs
1,774
2,784
Total other operating
20,736
16,746
Income (loss) from operations
$
(3,495
)
$
372
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 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 (Thousands of US Dollars)
Fiscal Quarter Ended
Year-to-Date
Sept 24, 2019
Sept 25, 2018
Sept 24, 2019
Sept 25, 2018
Adjusted EBITDA:
Net loss, as reported
$
(4,176
)
$
(324
)
$
(5,137
)
$
(1,034
)
Depreciation and amortization 1
1,105
977
4,262
3,528
Interest expense, net
191
118
753
391
EBITDA
(2,880
)
771
(122
)
2,885
Pre-opening expense 1
824
922
1,752
2,463
Non-cash stock-based compensation
388
114
719
417
Non-recurring severance costs
731
-
731
-
GAAP rent-cash rent difference
(61
)
7
(111
)
(44
)
Gain on disposal of assets
(9
)
(9
)
(5
)
(35
)
Asset impairment charge 1
2,476
-
2,476
72
Adjusted EBITDA
$
1,469
$
1,805
$
5,440
$
5,758
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
Depreciation and amortization,
pre-opening expense, and asset impairment charge have been reduced
by any amounts attributable to non-controlling interests.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191212005809/en/
Good Times Restaurants Inc. Contacts: Ryan Zink, Acting
Chief Executive Officer, Chief Financial Officer and Treasurer,
(303) 384-1432 Christi Pennington, (303) 384-1440
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