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 second
fiscal quarter ended March 28, 2023.
Key highlights of the Company’s financial results
include:
- Total Revenues for the quarter increased 3.5% to $34.8 million
compared to fiscal 2022 second quarter
- Total Restaurant Sales for Bad Daddy’s restaurants were $26.3
million for the quarter
- Same Store Sales1 for company-owned Bad Daddy’s
restaurants increased 4.6% for the quarter
- Total Restaurant Sales for Good Times restaurants were $8.2
million for the quarter
- Same Store Sales for company-owned Good Times restaurants
increased 7.6% for the quarter
- Net Income Attributable to Common Shareholders was $10.6
million for the quarter, including a $10.0 million income tax
benefit
- Adjusted EBITDA2 (a non-GAAP measure) for the quarter was $1.5
million
- The Company ended the quarter with $5.4 million in cash and no
long-term debt
Ryan M. Zink, the Company’s Chief Executive Officer, said, “I am
pleased to report a strong second fiscal quarter with positive same
store sales and improved year-over-year growth at both brands and
improved profit and EBITDA.”
Mr. Zink continued, “Subsequent to the end of the quarter we
amended and restated our credit facility with Cadence Bank which
extended the term for five years. Though we are not currently in a
borrowing position, this facility will provide us with committed
capital for discretionary use. We recently began construction on
our upcoming Bad Daddy’s in Huntsville, Alabama, for which we
anticipate a late summer opening. We are entering the second half
of the year from a position of strength and we are looking towards
a strong summer at both brands that will continue to demonstrate
our relevance with our guests as well as our strong and mindful
commitment to our brands.”
“I once again thank our management and restaurant teams who
continue to impress our guests with great food and beverage and
stellar service, and our positive sales at both brands are evident
of their continued commitment,” Zink concluded.
Conference Call: Management will host a conference call
to discuss its second quarter 2023 financial results on Thursday,
May 9, 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 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 filed with the SEC, and other
filings 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 (26
weeks)
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
NET REVENUES:
Restaurant sales
$
34,568
$
33,364
$
67,747
$
66,040
Franchise revenues
217
233
432
473
Total net revenues
34,785
33,597
68,179
66,513
RESTAURANT OPERATING COSTS:
Food and packaging costs
10,655
10,457
21,262
20,683
Payroll and other employee benefit
costs
11,989
11,555
23,537
22,732
Restaurant occupancy costs
2,428
2,377
4,886
4,705
Other restaurant operating costs
4,826
4,667
9,318
8,805
Preopening costs
30
-
30
50
Depreciation and amortization
911
1,013
1,821
1,997
Total restaurant operating costs
30,839
30,069
60,854
58,972
General and administrative costs
2,297
2,577
4,672
5,282
Advertising costs
778
812
1,672
1,453
Franchise costs
-
6
3
11
Impairment of long-lived assets
76
1,753
76
1,753
Gain on restaurant asset sale and lease
termination
(22
)
(43
)
(22
)
(657
)
Litigation contingencies
-
332
-
332
INCOME (LOSS) FROM OPERATIONS:
817
(1,909
)
924
(633
)
Interest and other expense,
net
(26
)
(11
)
(38
)
(29
)
NET INCOME (LOSS) BEFORE INCOME TAXES:
791
(1,920
)
886
(662
)
Provision for income taxes
9,952
-
9,952
(8
)
NET INCOME (LOSS):
$
10,743
$
(1,920
)
$
10,838
$
(670
)
Income attributable to non-controlling
interests
(122
)
(230
)
(344
)
(1,150
)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
10,621
$
(2,150
)
$
10,494
$
(1,820
)
NET INCOME (LOSS) PER SHARE, ATTRIBUTABLE
TO COMMON SHAREHOLDERS:
Basic
$
0.90
$
(0.17
)
$
0.88
$
(0.15
)
Diluted
$
0.89
$
(0.17
)
$
0.88
$
(0.15
)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
11,818,651
12,527,625
11,930,140
12,525,048
Diluted
11,884,123
12,527,625
11,985,254
12,525,048
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
Balance Sheet Data
March 28, 2023
September 27, 2022
Cash and cash equivalents
$
5,367
$
8,906
Current assets
$
9,036
$
11,875
Total assets
$
91,896
$
86,388
Current liabilities
$
15,370
$
12,897
Shareholders’ equity
$
33,329
$
27,788
Supplemental Information for
Company-Owned Restaurants (dollars in thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
Second Quarter (13
weeks)
Year-to-Date (26
weeks)
Second Quarter (13
weeks)
Year-to-Date (26
weeks)
2023
2022
2023
2022
2023
2022
2023
2022
Restaurant sales
$
26,342
$
25,447
$
51,507
$
50,037
$
8,226
$
7,917
$
16,240
$
16,003
Restaurants opened or acquired during
period
-
1
-
1
-
-
-
-
Restaurants closed during period
1
-
1
-
-
1
-
1
Restaurants open at period end
39
40
39
40
23
23
23
23
Restaurant operating weeks
507
508
1,027
1,015
299
311
598
623
Average weekly sales per restaurant
$
52.0
$
50.1
$
50.2
$
49.3
$
27.5
$
25.5
$
27.2
$
25.7
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.
------------------------------------------Quarter Ended (13
Weeks)-----------------------------------------
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
Restaurant sales
$
26,342
100.0
%
$
25,447
100.0
%
$
8,226
100.0
%
$
7,917
100.0
%
$
34,568
$
33,364
Restaurant operating costs (exclusive of
depreciation and amortization and preopening, shown separately
below):
Food and packaging costs
8,052
30.6
%
7,972
31.3
%
2,603
31.6
%
2,485
31.4
%
10,655
10,457
Payroll and benefits costs
9,143
34.7
%
8,736
34.3
%
2,846
34.6
%
2,819
35.6
%
11,989
11,555
Restaurant occupancy costs
1,693
6.4
%
1,679
6.6
%
735
8.9
%
698
8.8
%
2,428
2,377
Other restaurant operating costs
3,811
14.5
%
3,670
14.4
%
1,015
12.3
%
997
12.6
%
4,826
4,667
Restaurant-level operating profit
$
3,643
13.8
%
$
3,390
13.3
%
$
1,027
12.5
%
$
918
11.6
%
$
4,670
$
4,308
Franchise revenues
217
233
Deduct - Other operating:
Depreciation and amortization
911
1,013
General and administrative
2,297
2,577
Advertising costs
778
812
Litigation contingencies
-
332
Franchise costs
-
6
Impairment of long-lived assets
76
1,753
Gain on restaurant asset sale and lease
termination
(22
)
(43
)
Pre-opening costs
30
-
Total other operating
4,070
6,450
Income (loss) from operations
$
817
$
(1,909
)
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 (Loss) 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 (26 weeks)---------------------------------
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
Restaurant sales
$
51,507
100.0
%
$
50,037
100.0
%
$
16,240
100.0
%
$
16,003
100.0
%
$
67,747
$
66,040
Restaurant operating costs (exclusive of
depreciation and amortization, and preopening, shown separately
below:
Food and packaging costs
16,025
31.1
%
15,784
31.5
%
5,237
32.2
%
4,899
30.6
%
21,262
20,683
Payroll and benefits costs
17,898
34.7
%
17,154
33.3
%
5,639
34.7
%
5,578
34.9
%
23,537
22,732
Restaurant occupancy costs
3,425
6.6
%
3,327
6.6
%
1,461
9.0
%
1,378
8.6
%
4,886
4,705
Other restaurant operating costs
7,333
14.2
%
6,955
13.9
%
1,985
12.2
%
1,850
11.6
%
9,318
8,805
Restaurant-level operating profit
$
6,826
13.3
%
$
6,817
13.6
%
$
1,918
11.8
%
$
2,298
14.4
%
$
8,744
$
9,115
Franchise revenues
432
473
Deduct - Other operating:
Depreciation and amortization
1,821
1,997
General and administrative
4,672
5,282
Advertising costs
1,672
1,453
Litigation contingencies
-
332
Franchise costs
3
11
Impairment of long-lived assets
76
1,753
Gain on restaurant asset sale and lease
termination
(22
)
(657
)
Pre-opening costs
30
50
Total other operating
8,252
10,221
Income (loss) from operations
$
924
$
(633
)
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 (26
weeks)
March 28, 2023
March 29, 2022
March 28, 2023
March 29, 2022
Adjusted EBITDA:
Net Income (Loss), as reported
$
10,621
$
(2,150
)
$
10,494
$
(1,820
)
Depreciation and amortization
900
977
1,767
1,982
Interest expense, net
25
11
38
29
Provision for income taxes
(9,952
)
-
(9,952
)
8
EBITDA
1,594
(1,162
)
2,347
199
Preopening expense
30
-
30
50
Non-cash stock-based compensation
43
52
89
147
Asset Impairment
76
1,753
76
1,753
GAAP rent-cash rent difference
(190
)
(110
)
(314
)
(182
)
Gain on restaurant asset sales and lease
termination
(22
)
(35
)
(22
)
(519
)
One-time special allocation to Bad Daddy’s
partnerships
-
-
-
516
Litigation contingencies
-
332
-
332
Adjusted EBITDA
$
1,531
$
830
$
2,206
$
2,296
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005032/en/
Ryan M. Zink, Chief Executive Officer (303) 384-1432 Christi
Pennington (303) 384-1440
Good Times Restaurants (NASDAQ:GTIM)
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