Good Times Restaurants Reports Results for the Fourth Quarter and Fiscal Year Ended September 27, 2022

Rhea-AI Summary

Good Times Restaurants Inc. (GTIM) announced its fiscal fourth quarter and year results for 2022, showing a 11.5% increase in total revenues to $138.2 million year-over-year. Bad Daddy's reported a 3.7% increase in same-store sales in Q4, totaling $26 million for the quarter. Good Times also saw a 5.9% increase in same-store sales but a decline in total sales for the year. The company recorded a net loss of $1.3 million for Q4 and $2.6 million for the year, while ending the quarter with $8.9 million in cash and no long-term debt.

Positive

• Total revenues increased by 11.5% to $138.2 million year-over-year.
• Same-store sales for Bad Daddy's increased by 11.2% for the year.
• Good Times' same-store sales increased by 5.9% in Q4.
• The company ended Q4 with $8.9 million in cash and no long-term debt.

Negative

• Net loss attributable to common shareholders was $1.3 million for Q4 and $2.6 million for the year.
• Total sales for Good Times decreased by $0.4 million to $34 million for the year.

GOLDEN, Colo.--(BUSINESS WIRE)-- Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad Daddy’s Burger Bar and Good Times Burgers & Frozen Custard, today reported financial results for the fiscal fourth quarter and fiscal year ended September 27, 2022.

Key highlights of the Company’s financial results include:

• Total Revenues increased 11.5% to $138.2 million for the year compared to the 2021 fiscal year
• Total Restaurant Sales for Bad Daddy’s restaurants increased $1.5 million to $26.0 million for the fourth quarter compared to the prior year fourth quarter and increased $14.6 million to $103.2 million for the year compared to the 2021 fiscal year
• Same Store Sales¹ for company-owned Bad Daddy’s restaurants increased 3.7% for the fourth quarter compared to the prior year fourth quarter and increased 11.2% for the year compared to the 2021 fiscal year
• Total Restaurant Sales for Good Times restaurants increased $0.2 million to $8.9 million for the fourth quarter compared to the same prior year fourth quarter and decreased $0.4 million to $34.0 million for the year compared to the 2021 fiscal year
• Same Store Sales for company-owned Good Times restaurants increased 5.9% for the fourth quarter compared to the prior year fourth quarter and increased 1.1% for the year compared to the 2021 fiscal year
• Net Loss Attributable to Common Shareholders was $1.3 million for the fourth quarter and was $2.6 million for the year
• Adjusted EBITDA² (a non-GAAP measure) was $0.9 million for the fourth quarter and was $4.8 million for the year
• The Company ended the fourth quarter with $8.9 million in cash and no long-term debt

Ryan M. Zink, the Company’s Chief Executive Officer, said, “Fiscal 2022 was an exciting year from a top-line standpoint, as we grew same store sales at both brands for the full year. During the fourth quarter, our Good Times brand grew same store sales by nearly 6%, which included approximately 7.7% year over year price increases. The minimal traffic declines at our primarily drive-thru brand are encouraging as consumers seem to be resuming their pre-pandemic behaviors. Bad Daddy’s has also benefitted from this shift in behavior as seen in the 11% same store sales increase this year. Both brands have started fiscal 2023 with positive same store sales.”

“Profitability, however, has suffered as we have prioritized preservation of food quality, portion sizes, reasonable pricing and restaurant staffing over a single year’s profitability. We believe that long-term profitability is driven by loyal customers, and that loyal customers are created through consistent brand execution. Building on customer loyalty, we are offering gift cards at large box retailers which drives direct sales through gift card redemption and is increasing brand awareness outside our four walls. Although this program caused additional advertising costs, primarily through commissions incurred, we believe that there is significant long-term value through the new customers reached,” Zink continued.

Mr. Zink concluded, “In the first quarter of fiscal 2023, we have completed deployment of new digital menu boards and lane timer systems at Good Times and are actively developing the next generation mobile app for Good Times which will include loyalty and in-restaurant payment functionality, providing greater incentive for loyal customers to engage with this app. Our signage projects at Good Times are underway with completion expected of a third to half of our system in fiscal 2023. At Bad Daddy’s, we intend to resume expansion with the opening of one restaurant in Huntsville, Alabama. Additionally, we are in active negotiation on multiple sites in the Raleigh, North Carolina and Birmingham, Alabama markets.”

Conference Call: Management will host a conference call to discuss its fiscal fourth quarter and year ended September 27, 2022 financial results on Thursday, December 15, 2022 at 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 844-200-6205, access code 930485. 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 41 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 31 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. 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, 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 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. Good Times disclaims any obligation or duty to update or modify these forward-looking statements.

Category: Financial

_____________________

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.

Good Times Restaurants Inc. Unaudited Supplemental Information (In thousands, except per share amounts
	Fiscal Quarter Ended								Fiscal Year Ended
	September 27, 2022				September 28, 2021				September 27, 2022				September 28, 2021
NET REVENUES:
Restaurant sales	$	34,945			$	33,281			$	137,250			$	123,058
Franchise revenues		245				238				950				895
Total net revenues		35,190				33,519				138,200				123,953
RESTAURANT OPERATING COSTS:
Food and packaging costs		11,427				10,127				43,877				36,164
Payroll and other employee benefit costs		11,488				11,262				46,515				41,049
Restaurant occupancy costs		2,352				2,282				9,440				8,815
Other restaurant operating costs		4,957				4,070				18,515				14,911
Preopening costs		1				346				51				766
Depreciation and amortization		905				1,045				3,895				3,842
Total restaurant operating costs		31,130				29,132				122,293				105,547
General and administrative costs		2,845				2,340				10,506				9,437
Advertising costs		904				466				3,164				2,082
Franchise costs		6				5				22				27
Impairment of long-lived assets		1,381				-				3,437				-
Gain on restaurant asset sale and lease termination		(10	)			(9	)			(676	)			-
Litigation contingencies		-				-				332				(37	)
(LOSS) INCOME FROM OPERATIONS:		(1,066	)			1,585				(878	)			6,897
Other Expenses:
Interest and other expense, net		(13	)			(25	)			(54	)			(25	)
Gain on debt extinguishment		-				-				-				11,778
NET (LOSS) INCOME BEFORE INCOME TAXES:		(1,079	)			1,560				(932	)			18,406
Provision for income taxes		14				(6	)			5				(6	)
NET (LOSS) INCOME:	$	(1,065	)		$	1,554			$	(927	)		$	18,400
Income attributable to non-controlling interests		(225	)			(300	)			(1,714	)			(1,613	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(1,290	)		$	1,254			$	(2,641	)		$	16,787
NET (LOSS) INCOME PER SHARE, ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Basic	$	(0.10	)		$	0.10			$	(0.21	)		$	1.32
Diluted	$	(0.10	)		$	0.10			$	(0.21	)		$	1.31
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		12,350				12,778				12,464				12,677
Diluted		12,350				13,085				12,464				12,828

Good Times Restaurants Inc. Unaudited Supplemental Information (In thousands)
	September 27, 2022					September 28, 2021
Selected Balance Sheet Data
Cash and cash equivalents		$	8,906				$	8,856
Current Assets		$	11,875				$	11,444
Total assets1		$	86,388				$	93,681
Current Liabilities		$	12,897				$	12,886
Stockholders’ equity		$	27,788				$	30,870

¹Includes operating lease right-of-use assets.

Supplemental Information for Company-Owned Restaurants (dollars in thousands):
	Bad Daddy’s Burger Bar												Good Times Burgers & Frozen Custard
	Fourth Fiscal Quarter						Fiscal Year Ended						Fourth Fiscal Quarter						Fiscal Year Ended
	2022 (13 weeks)			2021 (13 weeks)			2022 (52 weeks)			2021 (52 weeks)			2022 (13 weeks)			2021 (13 weeks)			2022 (52 weeks)			2021 (52 weeks)
Restaurant sales	$	25,971		$	24,447		$	103,216		$	88,595		$	8,939		$	8,768			34,034		$	34,463
Restaurants opened or acquired during period		-			2			1			2			-			-			-			-
Restaurants closed during period		-			-			-			-			-			-			1			1
Restaurants open at period end		40			39			40			39			23			24			23			24
Restaurant operating weeks		520			496			2,054			1,943			299			312			1,226			1,254
Average weekly sales per restaurant	$	49.9		$	49.3		$	50.3		$	45.6		$	29.9		$	28.1		$	27.8		$	27.5

Information in the above tables excludes the non-traditional Bad Daddy’s at Tivoli restaurant which was open from August 2021 to July 2022 and excludes the restaurant at Charlotte International Airport operated by a licensee.

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results
Reconciliation of Non-GAAP Restaurant-Level Operating Loss 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 (13 weeks) -----------------------------------------------------------------------
	September 27, 2022						September 28, 2021						September 27, 2022						September 28, 2021						Sept. 27, 2022				Sept. 28, 2021
Restaurant sales	$	26,006		100.0	%		$	24,513		100.0	%		$	8,939		100.0	%		$	8,768		100.0	%		$	34,945			$	33,281
Restaurant operating costs (exclusive of depreciation and amortization and preopening, shown separately below):
Food and packaging costs		8,540		32.8	%			7,629		31.1	%			2,887		32.3	%			2,498		28.5	%			11,427				10,127
Payroll and benefits costs		8,635		33.2	%			8,414		34.3	%			2,853		31.9	%			2,848		32.5	%			11,488				11,262
Restaurant occupancy costs		1,657		6.4	%			1,608		6.6	%			695		7.8	%			674		7.7	%			2,352				2,282
Other restaurant operating costs		3,823		14.7	%			3,195		13.0	%			1,134		12.7	%			875		10.0	%			4,957				4,070
Restaurant-level operating profit	$	3,351		12.9	%		$	3,667		15.0	%		$	1,370		15.3	%		$	1,873		21.4	%		$	4,721			$	5,540
Franchise revenues																										245				238
Deduct - Other operating:
Depreciation and amortization																										905				1,045
General and administrative																										2,845				2,340
Advertising costs																										904				466
Litigation Contingencies																										-				-
Franchise costs																										6				5
Impairment of long-lived assets																										1,381				-
Gain on restaurant asset sale																										(10	)			(9	)
Pre-opening costs																										1				346
Total other operating																										6,032				4,193
(Loss) Income from operations																									$	(1,066	)		$	1,585

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.
	------------------------------------------------------------------------ Fiscal Year Ended--------------------------------------------------------------------------------
	September 27, 2022							September 28, 2021							September 27, 2022							September 28, 2021								Sept. 27, 2022				Sept. 28, 2021
Restaurant sales	$	103,216			100.0	%		$	88,595			100.0	%		$	34,034			100.0	%		$	34,463				100.0	%		$	137,250			$	123,058
Restaurant operating costs (exclusive of depreciation and amortization, and preopening, shown separately below):
Food and packaging costs		33,155			32.1	%			26,123			29.5	%			10,722			31.5	%			10,041				29.1	%			43.877				36,164
Payroll and benefits costs		35,085			34.0	%			30,058			33.9	%			11,430			33.6	%			10,991				31.9	%			46,515				41,049
Restaurant occupancy costs		6.668			6.5	%			5,959			6.7	%			2,772			8.1	%			2,856				8.3	%			9,440				8,815
Other restaurant operating costs		14,519			14.1	%			11,647			13.1	%			3,996			11.7	%			3,264				9.5	%			18,515				14,911
Restaurant-level operating profit	$	13,789			13.4	%		$	14,808			16.7	%		$	5,114			15.0	%		$	7,311				21.2	%		$	18,903			$	22,119
Franchise revenues																															950				895
Deduct - Other operating:
Depreciation and amortization																															3,895				3,842
General and administrative																															10,506				9,437
Advertising costs																															3,164				2,082
Litigation Contingencies																															332				-
Franchise costs																															22				-
Impairment of long-lived assets																															3,437				27
Gain on restaurant asset sale																															(676	)			766
Pre-opening costs																															51				(37	)
Total other operating																															20,731				16,117
(Loss) Income from operations																														$	(878	)		$	6,897

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 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 (loss) 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 2022 and fiscal 2021, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

	Quarter Ended												Fiscal Year Ended
	Sept. 27, 2022 (13 Weeks)						Sept. 28, 2021 (13 Weeks)						Sept. 27, 2022 (52 Weeks)						Sept. 28, 2021 (52 Weeks)
Adjusted EBITDA:
Net (Loss) Income, as reported		$	(1,290	)				$	1,254					$	(2,641	)				$	16,787
Depreciation and amortization			863						1,025						3,796						3,770
Interest expense, net			13						24						54						269
Provision for income taxes			(14	)					6						(5	)					6
EBITDA			(428	)					2,309						1,204						20,832
Preopening expense			1						346						51						766
Non-cash stock-based compensation			43						36						250						362
Asset Impairment			1,381						-						3,437						-
GAAP rent-cash rent difference			(117	)					(228	)					(403	)					(508	)
(Gain) Loss on restaurant asset sales and lease termination			(10	)					(9	)					(538	)					(37	)
Litigation Contingencies			-						-						332						-
One-time special allocation to Bad Daddy's partnerships			-						-						516						-
Gain on debt extinguishments			-						-						-						(11,778	)
Adjusted EBITDA		$	870					$	2,454					$	4,849					$	9,637

Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered as an alternative to net (loss) 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 (loss) 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221215005234/en/

GOOD TIMES RESTAURANTS INC.

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

Christi Pennington (303) 384-1440

Source: Good Times Restaurants Inc.

FAQ

What are the financial results for GTIM for the fiscal year ended September 27, 2022?

GTIM reported total revenues of $138.2 million for the fiscal year, with a net loss of $2.6 million.

How did same-store sales perform for Good Times and Bad Daddy's in Q4 2022?

Bad Daddy's same-store sales increased by 3.7% in Q4, while Good Times reported a 5.9% increase.

What was the net loss for Good Times Restaurants in Q4 2022?

The net loss for Q4 2022 was $1.3 million.

What is the future outlook for Good Times Restaurants following the recent financial results?

The company plans to continue expansion and enhance customer engagement with new digital initiatives.