Good Times Restaurants Inc. (NASDAQ: GTIM), today reported
financial results for the fiscal fourth quarter and year ended
September 29, 2020.
Key highlights of the Company’s financial results
include:
- Total Revenues decreased 0.9% to $28.5 million for the quarter
and 0.8% to $109.9 million for the year
- Total Restaurant Sales for Bad Daddy’s restaurants decreased
3.8% to $19.3 million for the quarter and 4.3% to $76.3 million for
the year
- Total Restaurant Sales for Good Times restaurants increased
6.3% for the quarter to $9.0 million and 9.0% to $32.8 million for
the year
- Same Store Sales for company-owned Bad Daddy’s restaurants
decreased 12.2% for the quarter and decreased 17.7% for the
year
- Same Store Sales for company-owned Good Times restaurants
increased 10.0% for the quarter and 7.9% for the year
- Net Income Attributable to Common Shareholders was $1.5 million
for the quarter including $0.3 million of asset impairment
costs
- For the year, Net Loss Attributable to Common Shareholders was
$13.9 million including $15.6 million of asset impairment costs and
$1.0 million of preopening costs
- Adjusted EBITDA* (a non-GAAP measure) for the quarter was $2.9
million and $7.6 million for the year
- The Company ended the quarter with $11.5 million in cash, a
$5.5 million outstanding under its senior credit facility and $11.6
million outstanding in Paycheck Protection Program loans
Ryan M. Zink, the Company’s Chief Executive Officer, said, “In
spite of very significant concerns about liquidity and operating
cash flow at the outset of the COVID-19 pandemic, a combination of
quick decision-making, teamwork, and CARES Act relief have enabled
us to fight through the initial blows the pandemic hit us with, and
conclude fiscal 2020 on a positive note, with improved unit
economics, improved camaraderie and culture throughout the
organization, and a modestly improved balance sheet compared to the
end of fiscal 2019. Both of our concepts continue to outperform
their respective segments within the industry, and our leadership
team continues be creative and energetic, anticipating and adapting
to changes in our business driven by a pandemic that will likely be
with us for the foreseeable future. We are doing everything
possible to ensure we continue to operate all of our restaurants
safely and to the maximum extent allowed under each location’s
respective regulatory guidance.”
“We expect to resume Bad Daddy’s development in the second half
of fiscal 2021, developing the two remaining Bad Daddy’s leases
signed in 2019 and beginning the search for our 2022 development
pipeline. However, unlike our growth model in the past, we expect
our future development rate to be more modest, growing primarily
out of operating cash flow and at least initially, developing only
a couple of restaurants per year as we make a firm commitment to
financial discipline and growing from a strong balance sheet with a
minimal debt load.”
Fiscal 2021 Outlook:
Due to continuing unprecedented economic conditions associated
with the ongoing COVID-19 pandemic and unpredictable nature of
COVID-19 and government responses to the evolving situation, the
Company had previously withdrawn its prior financial outlook for
fiscal 2020 and has not provided a financial outlook for 2021. In
late November 2020, all twelve of the Company’s Bad Daddy’s
locations in Colorado had additional restrictions imposed upon them
resulting in the closure of dining rooms in those locations. The
removal of those restrictions will be dictated by specific metrics
related to the pandemic used by the State of Colorado in
determining such restrictions. The Company is unable to reasonably
predict when inside dining will again be allowed in its Colorado
Bad Daddy’s restaurants. Additionally, although no other states
have at this time similarly restricted inside dining where the
Company has Bad Daddy’s restaurants, the possibility remains that
such restrictions might be put in place with limited notice. At the
current time, the Company is therefore still unable to reasonably
estimate the full impact of the continuing pandemic and, beyond
providing the below updates on October and November sales and a
projection of Net Income and Adjusted EBITDA for the first fiscal
quarter, is unable to provide a financial outlook for fiscal
2021.
The following information represents unaudited actual sales data
for the first two fiscal periods of fiscal 2021:
Good Times Burgers &
Frozen Custard
Bad Daddy’s Burger Bar
Fiscal Period
Same Store Sales1
Average Weekly Sales2
Same Store Sales1
Average Weekly Sales2
October (4 weeks)
15.0%
25,750
-2.7%
41,782
November (4 weeks)
22.4%
27,185
-8.2%
39,903
1 Same store sales include all restaurants
open at least 18 full fiscal months. 2 Average weekly sales include
all company-owned restaurants.
Consolidated net income and adjusted EBITDA for the first fiscal
quarter 2021 are projected to be between $0.4 million and $0.6
million, and between $1.5 million and $1.7 million, respectively.
The estimate for Adjusted EBITDA includes assumptions of
approximately $1.0 million of depreciation and amortization
expense, $0.1 million of interest expense, $0.1 million of non-cash
stock compensation expense, and ($0.1) million of non-cash rent
expense, to be used in reconciling to consolidated net income.
*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 2020 and fiscal year ended September
29, 2020 financial results on Tuesday, December 15, 2020 at 3:00
p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its
Chief Executive Officer and Principal Financial Officer.
The conference call can be accessed live 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
32 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)
Fiscal Quarter Ended
Year-To-Date
Statement of Operations
September 29, 2020
September 24, 2019
September 29, 2020
September 24, 2019
Net revenues:
Restaurant sales
$
28,297
$
28,519
$
109,078
$
109,800
Franchise revenues
208
254
780
955
Total net revenues
28,505
28,773
109,858
110,755
Restaurant operating costs:
Food and packaging costs
8,019
8,516
31,395
32,471
Payroll and other employee benefit
costs
9,360
10,763
38,442
41,221
Restaurant occupancy costs
2,138
2,132
8,877
8,353
Other restaurant operating costs
3,678
3,154
13,351
11,862
Preopening costs
39
825
1,031
1,774
Depreciation and amortization
954
1,118
4,129
4,345
Total restaurant operating costs
24,188
26,508
97,225
100,026
General and administrative costs
1,562
2,980
7,100
9,071
Advertising costs
422
525
1,993
2,349
Franchise costs
6
7
20
38
Goodwill impairment charge
-
-
10,000
-
Asset impairment charge
315
2,771
5,606
2,771
Gain on disposal of restaurants and
equipment
(9
)
(10
)
(45
)
(5
)
Income (loss) from operations
2,021
(4,008
)
(12,041
)
(3,495
)
Other income (expense):
Interest income (expense), net
(115
)
(192
)
(753
)
(753
)
Other income (expense)
0
1
-
-
Total other expense
(115
)
(191
)
(753
)
(753
)
Net income (loss)
1,906
(4,199
)
(12,794
)
(4,248
)
Loss (income) attributable to
non-controlling interests
(384
)
23
(1,122
)
(889
)
Net Income (loss) attributable to common
shareholders
$
1,522
$
(4,176
)
$
(13,916
)
$
(5,137
)
Basic and diluted income (loss) per
share
$
0.12
$
(0.33
)
$
(1.10
)
$
(0.41
)
Basic and diluted weighted average common
shares outstanding
12,601
12,540
12,595
12,523
Good Times Restaurants
Inc.
Unaudited Supplemental
Information
(In thousands)
Balance Sheet Data
September 29, 2020
September 24, 2019
Cash and cash equivalents
$
11,454
$
2,745
Current assets
13,491
4,915
Total assets1
$
99,693
$
59,905
Current maturities of long-term debt
$
6,242
$
-
Long-term debt due after one year
10,903
12,850
Stockholders’ equity
$
14,983
$
28,920
1 Includes approximately $49.3 million of operating lease right
of use assets recorded during 2020 as a result of the adoption of
Accounting Standards Update 2016-02, Leases (Topic 842).
Supplemental Information (dollars in thousands):
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
-------------------------- Fiscal
Fourth Quarter---------------------------
2020
2019
2020
2019
Restaurant sales
$
19,287
$
20,039
$
9,010
$
8,480
Restaurants opened during period
-
2
-
-
Restaurants closed during period
-
-
-
-
Restaurants open at period end
37
35
25
26
Restaurant operating weeks
481
432
325
338
Average weekly sales per restaurant
$
40.1
$
46.4
$
27.7
$
25.1
Bad Daddy’s Burger Bar
Good Times Burgers &
Frozen Custard
---------------------------------Fiscal
Year------------------------------------
2020
2019
2020
2019
Restaurant sales
$
76,315
$
79,753
$
32,763
$
30,047
Restaurants opened during period
2
4
-
-
Restaurants closed during period
-
-
1
-
Restaurants open at period end
37
35
25
26
Restaurant operating weeks
1,952
1,699
1,339
1,352
Average weekly sales per restaurant
$
39.1
$
46.9
$
24.5
$
22.2
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.
---------------------------------------------------------------------------
Fiscal Quarter
Ended-----------------------------------------------------------------------------------
September 29, 2020
September 24, 2019
September 29, 2020
September 24, 2019
Sept 29, 2020
Sept 24, 2019
Restaurant sales
$
19,287
100.0
%
$
20,040
100.0
%
$
9,010
100.0
%
$
8,480
100.0
%
$
28,297
$
28,520
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
5,215
27.0
%
5,869
29.3
%
2,805
31.1
%
2,647
31.2
%
8,020
8,516
Payroll and benefits costs
6,491
33.7
%
7,721
38.5
%
2,868
31.8
%
3,042
35.9
%
9,359
10,763
Restaurant occupancy costs
1,424
7.4
%
1,391
6.9
%
713
7.9
%
742
8.7
%
2,137
2,133
Other restaurant operating costs
2,860
14.8
%
2,391
11.9
%
819
9.1
%
763
9.0
%
3,679
3,154
Restaurant-level operating profit
$
3,297
17.1
%
$
2,668
13.3
%
$
1,805
20.0
%
$
1,286
15.2
%
$
5,102
$
3,954
Franchise royalty income, net
208
254
Deduct - Other operating:
Depreciation and amortization
954
1,118
General and administrative
1,562
2,980
Advertising costs
422
525
Franchise costs
6
7
Gain on restaurant asset sale
(9
)
(10
)
Impairment of long-lived assets
315
2,771
Pre-opening costs
39
825
Total other operating
3,289
8,216
Income (loss) from operations
$
2,021
$
(4,008
)
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 (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----------------------------------------------------------------------------------------------------
September 29, 2020
September 24, 2019
September 29, 2020
September 24, 2019
Sept 29, 2020
Sept 24, 2019
Restaurant sales
$
76,315
100.0
%
$
79,753
100.0
%
$
32,763
100.0
%
$
30,047
100.0
%
$
109,078
$
109,800
Restaurant operating costs (exclusive of
depreciation and amortization shown separately below):
Food and packaging costs
21,323
27.9
%
23,006
28.8
%
10,072
30.7
%
9,465
31.5
%
31,395
32,471
Payroll and other employee benefit
costs
27,465
36.0
%
30,224
37.9
%
10,977
33.5
%
10,997
36.6
%
38,442
41,221
Restaurant occupancy costs
6,025
7.9
%
5,413
6.8
%
2,852
8.7
%
2,940
9.8
%
8,877
8,353
Other restaurant operating costs
10,409
13.6
%
9,161
11.5
%
2,942
9.0
%
2,701
9.0
%
13,351
11,862
Restaurant-level operating profit
$
11,093
14.5
%
$
11,949
15.0
%
$
5,920
18.1
%
$
3,944
13.1
%
$
17,013
$
15,893
Franchise royalty income, net
780
955
Deduct - Other operating:
Depreciation and amortization
4,129
4,345
General and administrative
7,100
9,071
Advertising costs
1,993
2,349
Franchise costs
20
38
Gain on restaurant asset sale
(45
)
(5
)
Impairment of goodwill
10,000
-
Impairment of long-lived assets
5,606
2,771
Pre-opening costs
1,031
1,774
Total other operating
29,834
20,343
Loss from operations
$
(12,041
)
$
(3,495
)
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 includes 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 2020 and fiscal 2019,
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 29, 2020
Sept 24, 2019
Sept 29, 2020
Sept 24, 2019
Adjusted EBITDA:
Net income (loss), as reported
$
1,522
$
(4,176
)
$
(13,916
)
$
(5,137
)
Depreciation and amortization 1
942
1,105
4,082
4,262
Interest expense, net
115
191
753
753
EBITDA
2,579
(2,880
)
(9,081
)
(122
)
Pre-opening expense 1
40
824
1,032
1,752
Non-cash stock-based compensation
60
388
283
719
Non-recurring severance costs
-
731
-
731
GAAP rent-cash rent difference
(88
)
(61
)
(207
)
(111
)
Gain on disposal of assets
(9
)
(9
)
(45
)
(5
)
Goodwill impairment charge
-
-
10,000
-
Asset impairment charge 1
315
2,476
5,606
2,476
Adjusted EBITDA
$
2,897
$
1,469
$
7,588
$
5,440
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 (loss) 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, preopening 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/20201215005077/en/
Ryan M. Zink, President and Chief Executive Officer (303)
384-1432 Christi Pennington (303) 384-1440
Good Times Restaurants (NASDAQ:GTIM)
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