Good Times Restaurants Reports Results for the 2025 First Fiscal Quarter Ended December 31, 2024

Rhea-AI Summary

Good Times Restaurants Inc. (GTIM) reported financial results for Q1 FY2025, showing positive growth with total revenues increasing 9.6% to $36.3 million. The company's Bad Daddy's restaurants saw a 1.5% increase in same-store sales, while Good Times restaurants remained unchanged compared to Q1 FY2024.

The company achieved net income attributable to common shareholders of $0.2 million and Adjusted EBITDA of $1.2 million for the quarter. Bad Daddy's experienced improved margins due to increased labor productivity and lower beef costs, while Good Times saw margin declines due to higher staffing levels. The company noted challenges including weather impacts and a shortened holiday shopping season between Thanksgiving and Christmas.

Management highlighted strong product performance, including successful smashed patty burgers at Bad Daddy's and new menu items at Good Times, with plans for continued menu innovation and brand modernization efforts.

Positive

• Revenue growth of 9.6% to $36.3 million
• Bad Daddy's same-store sales increased 1.5%
• Turned net loss into $0.2 million net income
• Bad Daddy's margins improved due to better labor productivity and lower beef costs
• Adjusted EBITDA of $1.2 million

Negative

• Good Times restaurants showed flat same-store sales
• Good Times margins declined due to higher staffing costs
• Weather challenges affecting Q2 performance across both brands

Insights

Financial Analyst

The Q1 FY2025 results demonstrate Good Times Restaurants' resilience in a challenging market environment. The 9.6% revenue growth to $36.3 million is particularly noteworthy given the headwinds in the QSR sector and the compressed holiday shopping season. The company's return to profitability, with $0.2 million in net income, marks a significant turnaround from the previous year's loss.

Bad Daddy's performance stands out with its 1.5% same-store sales growth and improved margins, driven by operational efficiencies and strategic menu engineering. The success of smashed patty burgers and winter promotional items indicates strong product development execution. The margin improvements, despite industry-wide cost pressures, reflect effective cost management and menu pricing strategies.

The Good Times brand's flat same-store sales and margin compression highlight the delicate balance between staffing optimization and operational efficiency. While increased staffing levels may pressure margins in the short term, this investment in human capital could support better service quality and future growth.

Looking ahead, several factors warrant attention:

• The ongoing menu innovation strategy, including the West Slope burger test, shows promise for driving future sales growth
• Weather-related challenges in Q2 may impact near-term results, but underlying business fundamentals appear solid
• The company's focus on brand evolution and modernization at Good Times could help revitalize the concept
• Operational improvements and cost management initiatives position the company well for continued margin expansion

DENVER--(BUSINESS WIRE)-- 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 2025 first fiscal quarter.

Key highlights of the Company’s financial results include:

• Total Revenues for the quarter increased 9.6% to $36.3 million compared to the first quarter of fiscal 2024
• Same Store Sales¹ for company-owned Bad Daddy’s restaurants increased 1.5% for the quarter compared to the first quarter of fiscal 2024 and for Good Times restaurants were unchanged for the quarter compared to the first quarter of fiscal 2024
• Net Income Attributable to Common Shareholders was $0.2 million for the quarter
• Adjusted EBITDA² (a non-GAAP measure) was $1.2 million for the quarter

Ryan M. Zink, the Company’s Chief Executive Officer, said, “I am pleased that our performance this quarter delivered net income compared to a net loss in the same prior year quarter. This improvement in income is in spite of challenges in the QSR environment and the negative impact of the holiday season shift, specifically one fewer shopping week between Thanksgiving and Christmas. Same store sales for the full quarter at Good Times were unchanged, while same store sales at Bad Daddy’s increased again this quarter compared to the same period in the prior year. Margins at Bad Daddy’s improved due to increased labor productivity and better food and beverage cost driven by sequentially lower beef costs, and menu engineering efforts. Margins declined at Good Times, attributable most significantly to higher levels of staffing as the hiring environment has become more favorable.”

“Thus far, the second fiscal quarter has been beset by unfavorable weather affecting both brands, with several weekends affected by snow events in Colorado, and two weeks during which significant snow and extreme cold plagued the entirety of our Bad Daddy’s system throughout the country. Nevertheless, the underlying trends at both concepts remain encouraging and our product pipeline is strong. At Bad Daddy’s, our smashed patty burgers continue to perform extremely well, as have our winter promotional items. At Good Times, we wrapped up the first promotional period for our bambino supremos and introduced the new West Slope burger, initially as a limited time offer, and as a test to potentially replace the existing West Coast burger,” Zink continued.

Mr. Zink concluded, “Beyond the second quarter, our product development lineup at both brands includes new items and improvements to existing menu items. We have strong momentum at Bad Daddy’s and are executing our long-term plan of brand evolution and modernization at Good Times.”

Conference Call: Management will host a conference call to discuss its first quarter 2025 financial results on Thursday, February 6, 2025 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its Chief Executive Officer and Keri A. August, its Senior Vice President of Finance and Accounting.

The conference call can be accessed live over the phone by dialing (888) 210-2831, conference ID: 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. 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 30 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: This press release contains forward-looking statements within the meaning of federal securities laws. The words “intend,” “may,” “believe,” “will,” “should,” “anticipate,” “expect,” “seek”, “plan” 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 disruption to our business from pandemics and other public health emergencies, the impact and duration of staffing constraints 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, other general economic and operating conditions, risks associated with our share repurchase program, risks associated with the acquisition of additional restaurants, the adequacy of cash flows and the cost and availability of capital or credit facility borrowings to provide liquidity, changes in federal, state, or local laws and regulations affecting the operation of our restaurants, including minimum wage and tip credit regulations, 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, 2024 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)
	Fiscal First Quarter
		2025				2024
Statement of Operations	(14 weeks)				(13 weeks)
NET REVENUES:
Restaurant sales	$	35,965			$	32,946
Franchise and other revenues		368				211
Total net revenues		36,333				33,157
RESTAURANT OPERATING COSTS:
Food and packaging costs		11,363				10,327
Payroll and other employee benefit costs		12,783				11,624
Restaurant occupancy costs		2,683				2,505
Other restaurant operating costs		5,006				4,728
Preopening costs		8				-
Depreciation and amortization		1,018				927
Total restaurant operating costs		32,861				30,111
General and administrative costs		2,588				2,338
Advertising costs		864				1,092
Gain on restaurant and equipment asset sales		(57	)			(10	)
INCOME (LOSS) FROM OPERATIONS		77				(374	)
OTHER EXPENSES:
Interest expense, net		(46	)			(32	)
Other income		140				-
NET INCOME (LOSS) BEFORE INCOME TAXES	$	171			$	(406	)
Provision for income taxes		3				(77	)
NET INCOME (LOSS)		174				(483	)
Income attributable to non-controlling interests		(10	)			(73	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	164			$	(556	)
NET INCOME (LOSS) PER SHARE, ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Basic	$	.02			$	(.05	)
Diluted	$	.02			$	(.05	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		10,682,632				11,377,579
Diluted		10,816,596				11,377,579

Good Times Restaurants Inc. Unaudited Supplemental Information (In thousands)
Selected Balance Sheet Data:	December 31, 2024					September 24, 2024
Cash and cash equivalents		$	3,023				$	3,853
Current assets		$	6,575				$	6,557
Total assets		$	89,546				$	87,118
Current liabilities		$	15,798				$	15,687
Shareholders’ equity		$	33,091				$	33,088

Supplemental Information for Company-Owned Restaurants (dollars in thousands):
	Bad Daddy’s Burger Bar						Good Times Burgers & Frozen Custard
	Fiscal First Quarter
	2025 (14 weeks)			2024 (13 weeks)			2025 (14 weeks)			2024 (13 weeks)
Restaurant sales	$	26,078		$	24,120		$	9,887		$	8,826
Restaurants open at beginning of period		39			40			25			25
Restaurants opened or acquired during period		-			-			2			-
Restaurants closed during period		-			-			-			-
Restaurants open at period end		39			40			27			25
Restaurant operating weeks		546.0			520.0			365.5			325.0
Average weekly sales per restaurant	$	47.8		$	46.4		$	27.1		$	27.2

Margin Analysis:
	First Fiscal Quarter
	2025 (14 weeks)						2024 (13 weeks)
Bad Daddy’s Burger Bar
Restaurant sales	$	26,078		100.0	%		$	24,120		100.0	%
Restaurant operating costs (exclusive of depreciation and amortization and pre-opening costs):
Food and packaging costs		8,214		31.5	%			7,608		31.5	%
Payroll and benefits costs		9,156		35.1	%			8,641		35.8	%
Restaurant occupancy costs		1,733		6.6	%			1,719		7.1	%
Other restaurant operating costs		3,697		14.2	%			3,581		14.8	%
Restaurant-level operating profit (a non-GAAP measure)	$	3,278		12.6	%		$	2,571		10.7	%
Good Times Burgers & Frozen Custard
Restaurant sales	$	9,887		100.0	%		$	8,826		100.0	%
Restaurant operating costs (exclusive of depreciation and amortization and pre-opening costs):
Food and packaging costs		3,149		31.8	%			2,719		30.8	%
Payroll and benefits costs		3,627		36.7	%			2,983		33.8	%
Restaurant occupancy costs		950		9.6	%			786		8.9	%
Other restaurant operating costs		1,309		13.2	%			1,147		13.0	%
Restaurant-level operating profit (a non-GAAP measure)	$	852		8.6	%		$	1,191		13.5	%
Total restaurant-level operating profit (a non-GAAP measure)	$	4,130		11.5	%		$	3,762		11.4	%
Certain percentage amounts in the table above do not total due to rounding.

Reconciliation of U.S. GAAP Results to Non-GAAP Measurements
Reconciliation of Income (Loss) from Operations to Non-GAAP Restaurant-Level Operating Profit (In thousands)
	First Fiscal Quarter
	2025 (14 weeks)				2024 (13 weeks)
Income (loss) from operations	$	77			$	(374	)
Less:
Franchise and other revenues		368				211
Add:
General and administrative		2,588				2,338
Depreciation and amortization		1,018				927
Advertising costs		864				1,092
Gain on restaurant asset equipment sales		(57	)			(10	)
Preopening costs		8				-
Restaurant-level operating profit	$	4,130			$	3,762

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 preopening 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 for fiscal 2025 and fiscal 2024, 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 (Thousands of US Dollars)
	Fiscal First Quarter Ended
	December 31, 2024 (14 weeks)						December 26, 2023 (13 weeks)
Calculation of Adjusted EBITDA
Net income (loss), as reported		$	164					$	(556	)
Depreciation and amortization 3			1,016						929
Interest expense, net			46						32
Provision for income taxes			(3	)					77
EBITDA			1,223						482
Non-cash stock-based compensation			35						38
Preopening expense			8						-
Gain on restaurant and equipment asset disposals			(57	)					(10	)
Adjusted EBITDA		$	1,209					$	510

Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered as an alternative to net income (loss) 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.
³ Depreciation and amortization has been reduced by any amounts attributable to non-controlling interests.

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GOOD TIMES RESTAURANTS INC. CONTACTS:

Ryan M. Zink, Chief Executive Officer (303) 384-1432

Christi Pennington (303) 384-1440

Source: Good Times Restaurants Inc.

FAQ

What was Good Times Restaurants (GTIM) revenue growth in Q1 2025?

GTIM reported a 9.6% increase in total revenues to $36.3 million compared to Q1 2024.

How did Bad Daddy's same-store sales perform in Q1 2025?

Bad Daddy's company-owned restaurants saw a 1.5% increase in same-store sales compared to Q1 2024.

What was GTIM's net income for Q1 2025?

GTIM reported net income attributable to common shareholders of $0.2 million for Q1 2025.

How much was Good Times Restaurants' (GTIM) Adjusted EBITDA in Q1 2025?

GTIM reported Adjusted EBITDA of $1.2 million for Q1 2025.

What factors affected GTIM's Bad Daddy's margin improvement in Q1 2025?

Bad Daddy's margins improved due to increased labor productivity, lower beef costs, and menu engineering efforts.