Good Times Restaurants Reports Results for the Fourth Quarter and Year Ended September 28, 2021

Rhea-AI Summary

Good Times Restaurants reported a 12.8% revenue increase, totaling $124.0 million for the fiscal year ending September 28, 2021. Restaurant sales for the fourth quarter rose 17.6% to $33.5 million. Bad Daddy's sales surged 16.1% year-over-year, while Good Times saw a 0.2% decline in same-store sales for Q4 but a 10.5% annual increase. Net income reached $1.3 million for Q4 and $16.8 million for the year. The company faces challenges from inflation and supply chain issues but remains optimistic without fiscal guidance for 2022.

Positive

• Total Revenues increased 12.8% to $124.0 million for the year.
• Total Restaurant Sales rose 17.6% to $33.5 million for the fourth quarter.
• Bad Daddy’s restaurant sales increased 16.1% to $88.6 million for the year.
• Same Store Sales for Bad Daddy's increased 22.8% for Q4.

Negative

• Same Store Sales for Good Times restaurants decreased 0.2% for Q4.
• The company faces increasing inflationary pressures and supply chain constraints.

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 year ended September 28, 2021.

Key highlights of the Company’s financial results include:

• Total Revenues increased 12.8% to $124.0 million for the year compared to fiscal 2020
• Total Restaurant Sales increased 17.6% to $33.5 million for the quarter compared to the same prior-year quarter and 12.8% to $123.1 million for the year
• Total Restaurant Sales for Bad Daddy’s restaurants increased $5.2 million to $24.5 million for the quarter compared to the same prior-year quarter and 16.1% to $88.6 million for the year
• Same Store Sales¹ for company-owned Bad Daddy’s restaurants increased 22.8% for the quarter and 18.2% for the fiscal year
• Total Restaurant Sales for Good Times restaurants were $8.8 million for the quarter and $34.5 million for the year
• Same Store Sales for company-owned Good Times restaurants decreased 0.2% for the quarter and increased 10.5% for the fiscal year
• The Company opened one traditional Bad Daddy’s restaurant and one non-traditional location (Bad Daddy’s at Tivoli) during the quarter
• Net Income Attributable to Common Shareholders was $1.3 million for the quarter
• Net Income Attributable to Common Shareholders was $16.8 million for the year
• Adjusted EBITDA² (a non-GAAP measure) for the quarter was $2.5 million and $9.6 million for the year
• The Company ended the quarter with $8.9 million in cash and no borrowings outstanding under its senior credit facility

Ryan M. Zink, the Company’s President and Chief Executive Officer, said, “We concluded our fiscal year with record sales at both of our brands and for the Company as a whole. This sales strength, particularly at Bad Daddy’s, has continued into the first quarter of fiscal 2022. I am extremely proud of our team for successfully battling through the varied challenges that our industry has faced in the wake of the pandemic. In addition to generating record sales, through strong operations, we have also achieved record profitability in fiscal 2021.“

Mr. Zink continued, “We expect 2022 to be equally challenging. The industry faces increasing inflationary pressure, supply chain constraints, and an extremely tight staffing market. As consistent in the industry, we have raised prices and expect to increase prices in the future, however, we will be disciplined in doing so, expecting some margin compression as menu price increases occur at a slower rate than our input prices are increasing. We remain committed to the long-term success of both of our brands and all decisions we make will support that commitment. I have continued confidence in our strong team that has proven itself adaptable and capable of navigating an unpredictable operating environment.”

Fiscal 2022 Outlook:

In light of the ongoing uncertainty surrounding COVID-19, impacts of supply chain constraints and the current inflationary environment, the Company is not, at this point, providing a financial forecast for fiscal 2022.

Although all Bad Daddy’s dining rooms are currently open and capacity restrictions have been lifted in most locations, the possibility remains that temporary closures and/or capacity restrictions might be put in place with limited notice. Should such restrictions be mandated or should customer behaviors be altered by changing public health guidance or perceptions related to COVID-19, the Company could adjust financial performance expectations.

Conference Call: Management will host a conference call to discuss its 2021 fourth quarter and fiscal year end financial results on Thursday, December 16, 2021 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its President and Chief Executive Officer.

The conference call can be accessed live over the phone by dialing 844-200-6205 and entering Participant access code 827058. 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 42 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 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 impact and duration of staffing constraints at our restaurants, 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 28, 2021, 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.

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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.

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 28, 2021				September 29, 2020				September 28, 2021				September 29, 2020
Net revenues:
Restaurant sales		$	33,281			$	28,297			$	123,058			$	109,078
Franchise revenues			238				208				895				780
Total net revenues			33,519				28,505				123,953				109,858
Restaurant operating costs:
Food and packaging costs			10,127				8,350				36,164				32,599
Payroll and other employee benefit costs			11,262				9,465				41,049				38,762
Restaurant occupancy costs			2,282				2,136				8,815				8,875
Other restaurant operating costs			4,070				3,349				14,911				12,148
Preopening costs			346				39				766				1,031
Depreciation and amortization			1,045				954				3,842				4,129
Total restaurant operating costs			29,132				24,293				105,547				97,544
General and administrative costs			2,340				1,457				9,437				6,781
Advertising costs			466				422				2,082				1,993
Franchise costs			5				6				27				20
Goodwill impairment charge			-				-				-				10,000
Asset impairment charge			-				315				-				5,606
Gain on disposal of restaurants and equipment			(9	)			(9	)			(37	)			(45	)
Income (loss) from operations			1,585				2,021				6,897				(12,041	)
Other income (expense):
Interest income (expense), net			(25	)			(115	)			(269	)			(753	)
Gain on debt extinguishment			-				-				11,778				-
Total other expense			(25	)			(115	)			11,509				(753	)
Net income (loss) before income taxes			1,560				1,906				18,406				(12,794	)
Provision for income taxes			6				-				6				-
Net income (loss)			1,554				1,906				18,400				(12,794	)
Loss (income) attributable to non-controlling interests			(300	)			(384	)			(1,613	)			(1,122	)
Net Income (loss) attributable to common shareholders		$	1,254			$	1,522			$	16,787			$	(13,916	)
Basic income (loss) per share		$	0.10			$	0.12			$	1.32			$	(1.10	)
Diluted income (loss) per share		$	0.10			$	0.12			$	1.31			$	(1.10	)
Basic weighted average common shares outstanding			12,778				12,601				12,677				12,595
Diluted weighted average common shares outstanding			13,085				12,601				12,828				12,595

Good Times Restaurants Inc.
Unaudited Supplemental Information
(In thousands)
Balance Sheet Data		September 28, 2021			September 29, 2020
Cash and cash equivalents		$	8,856		$	11,454
Current assets			11,444			13,491
Total assets1		$	93,681		$	99,693
Current maturities of long-term debt		$	-		$	-
Long-term debt due after one year			-			10,903
Stockholders’ equity		$	30,870		$	14,983
1 Includes operating lease right-of-use assets.

Supplemental Information# (dollars in thousands):
		Bad Daddy’s Burger Bar						Good Times Burgers & Frozen Custard
		-------------------------- Fiscal Fourth Quarter ---------------------------
		2021			2020			2021			2020
Restaurant sales		$	24,447		$	19,287		$	8,768		$	9,010
Restaurants opened during period			2			-			-			-
Restaurants closed during period			-			-			-			-
Restaurants open at period end			39			37			24			25
Restaurant operating weeks			496			481			312			325
Average weekly sales per restaurant		$	49.3		$	40.1		$	28.1		$	27.7

		Bad Daddy’s Burger Bar						Good Times Burgers & Frozen Custard
		-------------------------------- Fiscal Year ------------------------------------
		2021			2020			2021			2020
Restaurant sales		$	88,529		$	76,315		$	34,463		$	32,763
Restaurants opened during period			2			2			-			-
Restaurants closed during period			-			-			1			1
Restaurants open at period end			39			37			24			25
Restaurant operating weeks			1,943			1,952			1,254			1,339
Average weekly sales per restaurant		$	45.6		$	39.1		$	27.5		$	24.5

^*Information in the above tables exclude the non-traditional Bad Daddy’s at Tivoli restaurant.

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 Quarter Ended ----------------------------------------------------------------------
		September 28, 2021						September 29, 2020						September 28, 2021						September 29, 2020						Sept 29, 2021				Sept 29, 2020
Restaurant sales		$	24,513		100.0	%		$	19,287		100.0	%		$	8,768		100.0	%		$	9,010		100.0	%		$	33,281			$	28,297
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food and packaging costs			7,629		31.1	%			5,545		28.7	%			2,498		28.5	%			2,805		31.1	%			10,127				8,350
Payroll and benefits costs			8,414		34.3	%			6,597		34.2	%			2,848		32.5	%			2,868		31.8	%			11,262				9,465
Restaurant occupancy costs			1,608		6.6	%			1,423		7.4	%			674		7.7	%			713		7.9	%			2,282				2,136
Other restaurant operating costs			3,195		13.0	%			2,530		13.1	%			875		10.0	%			819		9.1	%			4,070				3,349
Restaurant-level operating profit		$	3,667		15.0	%		$	3,192		17.1	%		$	1,873		21.4	%		$	1,805		20.0	%		$	5,540			$	4,997
Franchise royalty income, net																											238				208
Deduct - Other operating:
Depreciation and amortization																											1,045				954
General and administrative																											2,340				1,457
Advertising costs																											466				422
Franchise costs																											5				6
Gain on restaurant asset sale																											(9	)			(9	)
Impairment of long-lived assets																											-				315
Pre-opening costs																											346				39
Total other operating																											4,193				3,184
Income from operations																										$	1,585			$	2,021

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 28, 2021						September 29, 2020						September 28, 2021						September 29, 2020						Sept 29, 2021				Sept 29, 2020
Restaurant sales		$	88,595		100.0	%		$	76,315		100.0	%		$	34,463		100.0	%		$	32,763		100.0	%		$	123,058			$	109,078
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food and packaging costs			26,123		29.5	%			22,527		29.5	%			10,041		29.1	%			10,072		30.7	%			36,164				32,599
Payroll and other employee benefit costs			30,058		33.9	%			27,790		36.4	%			10,991		31.9	%			10,972		33.5	%			41,049				38,762
Restaurant occupancy costs			5,960		6.7	%			6,023		7.9	%			2,855		8.3	%			2,852		8.7	%			8,815				8,875
Other restaurant operating costs			11,643		13.1	%			9,208		12.1	%			3,268		9.5	%			2,940		9.0	%			14,911				12,148
Restaurant-level operating profit		$	14,811		16.7	%		$	10,767		14.1	%		$	7,308		21.2	%		$	5,927		18.1	%		$	22,119			$	16,694
Franchise royalty income, net																											895				780
Deduct - Other operating:
Depreciation and amortization																											3,842				4,129
General and administrative																											9,437				6,781
Advertising costs																											2,082				1,993
Franchise costs																											27				20
Gain on restaurant asset sale																											(37	)			(45	)
Impairment of goodwill																											-				10,000
Impairment of long-lived assets																											-				5,606
Pre-opening costs																											766				1,031
Total other operating																											16,117				29,834
Income (loss) from operations																										$	6,897			$	(12,041	)

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 2021 and fiscal 2020, 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 28, 2021				Sept 29, 2020				Sept 28, 2021				Sept 29, 2020
Adjusted EBITDA:
Net income (loss), as reported		$	1,254			$	1,522			$	16,787			$	(13,916	)
Depreciation and amortization 1			1,025				942				3,770				4,082
Provision for income taxes			6				-				6				-
Interest expense, net			24				115				269				753
EBITDA			2,309				2,579				20,832				(9,081	)
Pre-opening expense			346				40				766				1,032
Non-cash stock-based compensation			36				60				362				283
GAAP rent-cash rent difference			(228	)			(88	)			(508	)			(207	)
Gain on disposal of assets			(9	)			(9	)			(37	)			(45	)
Goodwill impairment charge			-				-				-				10,000
Gain on debt extinguishment			-				-				(11,778	)			-
Asset impairment charge 1			-				315				-				5,606
Adjusted EBITDA		$	2,454			$	2,897			$	9,637			$	7,588

_____________________

¹ Depreciation and amortization, and asset impairment charge have been reduced by any amounts attributable to non-controlling interests.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211216005229/en/

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

Christi Pennington (303) 384-1440

Source: Good Times Restaurants Inc.

FAQ

What were the financial results for Good Times Restaurants for the fourth quarter of 2021?

Good Times Restaurants reported a 12.8% increase in total revenues, totaling $124.0 million, with fourth-quarter restaurant sales up 17.6% to $33.5 million.

What is the stock symbol for Good Times Restaurants?

The stock symbol for Good Times Restaurants is GTIM.

How did Bad Daddy's perform in fiscal year 2021?

Bad Daddy's sales grew by 16.1% to $88.6 million for the year, with same store sales increasing by 22.8% for the fourth quarter.

Is Good Times Restaurants providing a financial forecast for fiscal 2022?

No, Good Times Restaurants is not providing a financial forecast for fiscal 2022 due to ongoing uncertainties related to COVID-19 and inflation.

When is the conference call to discuss the financial results of Good Times Restaurants?

The conference call is scheduled for Thursday, December 16, 2021, at 3:00 p.m. MT.