Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Good Times Burgers & Frozen Custard, a regional quick service restaurant chain focused on fresh, high-quality, all-natural products and Bad Daddy’s Burger Bar, a full service, upscale concept today announced its preliminary unaudited financial results for the fourth fiscal quarter ended September 30, 2015.

Key highlights of the Company’s financial results vs prior year include:

  • Same store sales for company-owned Good Times restaurants increased 6.8% for the quarter and 6.9% for the year on top of last year’s increase of 11.9% for the quarter and 14.6% for the year, which makes over five years of consecutive quarterly same store sales growth
  • Same store sales for company-owned Bad Daddy’s restaurants increased 6.8% for the quarter
  • Total revenues increased 77% to $14,551,000 for the quarter and increased 59% to $44,057,000 for the year, which reflects the acquisition of Bad Daddy’s International on May 7, 2015
  • Restaurant Level Operating Profit (a non-GAAP measure) for Good Times restaurants increased $80,000 or 6.4% over last year during the quarter and increased $470,000 or 10.3% for the year*
  • Sales for the Bad Daddy’s restaurants for the quarter were $6,636,000 and Bad Daddy’s Restaurant Level Operating Profit (a non-GAAP measure) was $994,000 or 15.0% as a percent of sales*
  • Total Restaurant Level Operating Profit (a non-GAAP measure) increased 63% to $2,331,000 for the quarter*
  • Net Loss for the quarter was $52,000 versus $150,000 last year, including an increase in general and administrative expenses of $316,000 from last year and a total of $87,000 in one-time acquisition costs related to the acquisition of Bad Daddy’s International
  • Adjusted EBITDA (a non-GAAP measure) for the quarter increased 150% to $876,000 from $350,000 and increased 200% to $2,503,000 from $836,000 for the fiscal year*
  • The Company ended the quarter with $13.8 million in cash

*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.

Boyd Hoback, President & CEO, said, “We are pleased with our results from both brands in the fourth quarter and look forward to another year of robust growth for the company in fiscal 2016. We are absorbing some excess labor costs on Bad Daddy’s right now as we ramp up for our new store openings that are on a fairly tightly compressed timetable and we continue to invest in training and staffing in the North Carolina restaurants. Our same store sales trends so far in the first quarter of fiscal 2016 have continued to increase in the mid-single digits for both brands. Our focus is on executing on our new Bad Daddy’s openings, continuing to increase our same store sales and building a high quality team to support our growth.”

Hoback concluded, “Subsequent to the fiscal year end we opened one Bad Daddy’s restaurant in late October, will open one on December 8 and are on track for one in each of January, February and March with additional stores during the remainder of fiscal 2016. We are working on our development for fiscal 2017, which we anticipate will include new stores in Colorado, North Carolina and additional new markets.”

Preliminary 2016 Outlook:

The Company currently anticipates the following for fiscal 2016:

  • Total revenues of approximately $67 million to $69 million
  • Total revenue estimates assume same store sales growth of approximately 4% for the Good Times concept and low single digits for the Bad Daddy’s concept
  • General and administrative expenses of approximately $6.1 million to $6.2 million, including approximately $800,000 of non-cash equity compensation expense
  • The opening of 1 new Good Times restaurant
  • The opening of 8 new Bad Daddy’s restaurants (two signed leases on new developments originally planned for fiscal 2016 won’t be delivered by the landlords until later in fiscal 2016)
  • Total Adjusted EBITDA* of approximately $4.2 million to $4.5 million (versus a previous range of $4.8 million to $5.5 million with the adjustment weighted toward the first 6 months of the fiscal year due to the timing of new Bad Daddy’s restaurant development)
  • Restaurant pre-opening expenses of approximately $2.6 million to $2.7 million
  • Capital expenditures (net of tenant improvement allowances) of approximately $10 million to $11 million

Conference Call: Management will host a conference call to discuss its fourth quarter and fiscal 2015 financial results on Tuesday, December 8, 2015 at 3:00 p.m. MST/5:00 p.m. EST. Hosting the call will be Boyd Hoback, President and Chief Executive Officer, and Jim Zielke, Chief Financial Officer.

The conference call can be accessed live over the phone by dialing (866) 209-0088, conference code 79858905. The conference call will also be webcast live from the Company's corporate website www.goodtimesburgers.com under the Investor Homepage “Events & Presentations” section. 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) operates Good Times Burgers & Frozen Custard, a regional chain of quick service restaurants located primarily in Colorado, in its wholly owned subsidiary, Good Times Drive Thru Inc. Good Times provides a menu of high-quality all-natural hamburgers, 100% all-natural chicken tenderloins, fresh frozen custard, fresh-cut fries, fresh lemonades and other unique offerings. Good Times currently operates and franchises 38 restaurants.

GTIM owns and operates Bad Daddy’s Burger Bar restaurants. Bad Daddy’s Burger Bar is a full service, upscale, “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.

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, 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/A for the fiscal year ended September 30, 2014 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)

 
Three Months Ended
September 30,
Twelve Months Ended
September 30,
Statement of Operations 2015     2014 2015     2014
Net revenues:
Restaurant sales $ 14,353 $ 8,142 $ 43,517 $ 27,368
Area development and franchise fees 0 0 0 6
Franchise revenues   198     101     540     369  
Total net revenues 14,551 8,243 44,057 27,743
 
Restaurant Operating Costs:
Food and packaging costs 4,807 2,800 14,567 9,273
Payroll and other employee benefit costs 4,834 2,632 14,387 8,915
Restaurant occupancy costs 1,045 635 3,359 2,379
Other restaurant operating costs 1,336 646 3,696 2,165
Royalty expense 0 36 123 54
New store preopening costs 206 220 784 669
Depreciation and amortization   433     188     1,246     636  
Total restaurant operating costs 12,661 7,157 38,162 24,091
 
General and administrative costs 1,226 910 4,102 2,803
Advertising costs 367 209 1,264 988
Acquisition costs 87 0 648 0
Franchise costs 26 32 111 96
Loss (gain) on disposal of restaurants and equipment   27     3     9     (16 )
Income (loss) from operations 157 (68 ) (239 ) (219 )
 
Other income (expense):
Interest income (expense), net (27 ) 0 (49 ) 5
Other expense (2 ) (2 ) (7 ) (10 )
Affiliate investment income (loss)   0     11     (5 )   (146 )
Total other income (expenses), net   (29 )   9     (61 )   (151 )
Net income (loss) $ 128 ($59 ) ($300 ) ($370 )
Income attributable to non-controlling interest   (180 )   (91 )   (491 )   (320 )
Net loss attributable to Good Times Restaurants Inc.   ($52 )   ($150 )   ($791 )   ($690 )
Preferred stock dividends 0 0 0 59
Net loss attributable to common shareholders   ($52 )   ($150 )   ($791 )   ($749 )
 
Basic and diluted loss per share ($0.00 ) ($0.02 ) ($0.08 ) ($0.12 )
 
Basic and diluted weighted average common shares
outstanding
12,249 7,643 10,510 6,152
 
   

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands, except per share amounts)

 
September 30,
Balance Sheet Data 2015     2014
(In thousands)
Cash & cash equivalents $ 13,809 $ 9,894
Current assets 14,728 10,391
Property and Equipment, net 14,222 5,754
Other assets 19,278 736
Total assets $ 48,228 $ 16,881
 
Current liabilities, including capital lease obligations and
long-term debt due within one year
7,258 2,550
Long-term debt due after one year 1,093 177
Capital lease obligations due after one year 11 42
Other liabilities 1,609 791
Total liabilities $ 9,971 $ 3,560

Stockholders’ equity

$ 38,257 $ 13,321
 
       

Supplemental Information:

 
Good Times Burgers & Frozen Custard Bad Daddy’s Burger Bar
Three Months Ended     Twelve Months Ended Three Months Ended     Twelve Months Ended
September 30, September 30, September 30, September 30,
2015     20142015     20142015     20142015     2014
Restaurant Sales (in thousands) $ 7,717 $ 6,936 $ 28,521 $ 25,566 $ 6,636 $ 1,206 $ 14,996 $ 1,802
Restaurants open during period - - 2 - - - 1 1
Restaurants acquired on May 7, 2015 - - - - - - 7 -
Restaurants open at period end 27 25 27 25 10 2 10 2
 
Restaurant operating weeks 349.9 328.6 1,358.1 1,303.6 131.4 22.4 289.4 43.6
 
Average weekly sales per restaurant
(in thousands)
22.1 21.1 21.0 19.6 50.5 53.8 51.8 41.4
 

Reconciliation of Non-GAAP Measurements to US GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income (Loss) from Operations

(In thousands, except percentage data)

         
Good Times Burgers & Frozen Custard Bad Daddy’s Burger Bar Good Times Restaurants Inc
Three Months Ended Three Months Ended Three Months Ended
September 30, September 30, September 30,
2015     20142015     2014     2015     2014
Restaurant Sales $ 7,717     100.0 % $ 6,936     100.0 % $ 6,636     100.0 % $ 1,206     100.0 % $ 14,353 $ 8,142
Restaurant Operating Costs (exclusive
of depreciation and amortization
shown separately below):
Food and packaging costs 2,632 34.1 % 2,403 34.6 % 2,175 32.8 % 397 32.9 % 4,807 2,800
Payroll and other employee
benefit costs
2,447 31.7 % 2,155 31.1 % 2,387 36.0 % 477 39.6 % 4,834 2,632
Restaurant occupancy costs 661 8.6 % 564 8.1 % 384 5.8 % 71 5.9 % 1,045 635
Other restaurant operating costs   640 8.3 %   557 8.0 %   696 10.5 %   89 7.4 %   1,336   646  
Restaurant-level operating profit 1,337 17.3 % 1,257 18.1 % 994 15.0 % 172 14.3 % 2,331 1,429
 
Franchise royalty income and
expense, net
198 65
 
Deduct - Other operating:
Depreciation and amortization 433 188
General and administrative 1,226 910
Advertising costs 367 209
Acquisition costs 87 0
Franchise costs 26 32
Loss on disposal of restaurants
and equipment
27 3
Preopening costs   206   220  
Total other operating   2,372   1,562  
 
Income (loss) from Operations   157   (68 )

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 US GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Loss from Operations

(In thousands, except percentage data)

       
Good Times Burgers & Frozen Custard Bad Daddy’s Burger Bar Good Times Restaurants Inc
Twelve Months Ended Twelve Months Ended Twelve Months Ended
September 30, September 30, September 30,
2015     2014   2015   2014     2015     2014
Restaurant Sales $ 28,521     100.0 % $ 25,566     100.0 % $ 14,996     100.0 % $ 1,802     100.0 % $ 43,517 $ 27,368
Restaurant Operating Costs
(exclusive of depreciation and
amortization shown separately
below):
Food and packaging costs 9,734 34.1 % 8,655 33.9 % 4,833 32.2 % 618 34.3 % 14,567 9,273
Payroll and other employee
benefit costs
8,967 31.4 % 8,092 31.7 % 5,420 36.1 % 823 45.7 % 14,387 8,915
Restaurant occupancy costs 2,503 8.8 % 2,236 8.7 % 856 5.7 % 143 7.9 % 3,359 2,379
Other restaurant operating costs   2,264 7.9 %   2,000 7.8 %   1,432 9.5 %   165 9.2 %   3,696     2,165  
Restaurant-level operating profit 5,053 17.7 % 4,583 17.9 % 2,455 16.4 % 53 2.9 % 7,508 4,636
 
Franchise royalty income and
expense, net
417 321
 
Deduct - Other operating:
Depreciation and amortization 1,246 636
General and administrative 4,102 2,803
Advertising costs 1,264 988
Acquisition costs 648 0
Franchise costs 111 96
Loss (gain) on disposal of
restaurants and equipment
9 (16 )
Preopening costs   784     669  
Total other operating   8,164     5,176  
 
Income (Loss) from Operations   ($239 )   ($219 )

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 three and twelve months ended September 30, 2015 and September 30, 2014, 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 Loss to Non-GAAP Adjusted EBITDA

(In thousands)

Good Times Restaurants Inc.

Three Months Ended
September 30,
Twelve Months Ended
September 30,
2015     2014 2015     2014
Net loss as reported ($52 ) ($150 ) ($791 ) ($690 )
 
Adjustments to net loss:
Interest expense (income), net 27 0 49 (5 )
Depreciation and amortization 405 201 1,224 683
Preopening expense 206 220 784 669
Non-cash stock based compensation 161 65 478 162
Non-recurring acquisition costs 87 0 648 0
GAAP rent in excess of cash rent 15 11 102 33
Non-cash disposal of assets   27     3     9     (16 )
Adjusted EBITDA $ 876 $ 350 $ 2,503 $ 836
 

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.