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 of Bad Daddy’s Burger Bar, a full service, upscale concept today announced its unaudited financial results for the first fiscal quarter ended December 31, 2013.
Key highlights of the Company’s report include:
- Same store sales for company-owned restaurants increased 17.4% for the quarter, which was the fourteenth consecutive quarter of increasing same store sales
- Restaurant-Level Operating Profit (see schedule below) increased 112% or $466,000 over last year during the quarter
- The restaurant level operating margin increased by 610 basis points to 14.9% from 8.8% last year during the quarter (see schedule below)
- Preopen costs related to the development of the first Colorado Bad Daddy Burger Bar restaurants were $148,000 during the quarter
- The Affiliate Investment Loss from the Company’s 48% ownership of Bad Daddy’s Franchise Development LLC was $72,000 during the quarter related to initial development costs for the Bad Daddy’s franchise program
- Loss from Operations decreased to ($86,000) from ($297,000) in the prior year, including an increase in General & Administrative expenses this year related to the Company’s expanded Investor Relations expenses and Bad Daddy’s of Colorado administrative expenses
“We are very pleased with our continuing sales trends and the dramatic increases we’ve had over the last two years and we’re are now seeing a corresponding increase in our profitability,” said Boyd Hoback, Good Times Restaurants Inc. President and CEO. “We’re still relatively early in our reimaging and remodeling process of older restaurants which we believe will provide additional sales momentum this year. Our operations, marketing and product development initiatives have come together in a powerful way, heightening our competitive differences that we believe the large quick service hamburger chains can’t and won’t match.”
Hoback added, “We have a firm date of February 3, 2014 for the opening of our first Bad Daddy’s Burger Bar in Colorado with one additional store under development and other leases in negotiation. We hope to have four open in 2014 with several more committed for 2015 as we lay the foundation for accelerated franchise development with multi-unit operators in Bad Daddy’s Franchise Development LLC. There are seven traditional Bad Daddy’s restaurants open today in North and South Carolina with one licensed restaurant in the Charlotte airport and we plan to have several franchise development agreements signed early in 2014 for development of restaurants late in 2014, accelerating into 2015 as we continue to build our own company owned restaurants.”
About Good Times Restaurants Inc.
Good Times Restaurants Inc. (NASDAQ: 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 37 restaurants.
GTIM will also own and operate Bad Daddy’s Burger Bar restaurants through its wholly owned subsidiary, BD of Colorado LLC and will franchise Bad Daddy’s Burger Bar restaurants through its 48% ownership of Bad Daddy’s Franchise Development LLC. 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.
Good Times 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 for the fiscal year ended September 30, 2013 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. | ||||||||
Three Months Ended | ||||||||
| Statement of Operations | 2013 | 2012 | ||||||
| Net Revenues: | ||||||||
| Restaurant sales | $ | 5,906 | $ | 4,722 | ||||
| Area development and franchise fees | 0 | 0 | ||||||
| Franchise revenues | 82 | 95 | ||||||
| Total net revenues | 5,988 | 4,817 | ||||||
| Restaurant Operating Costs: | ||||||||
| Food and packaging costs | 1,939 | 1,600 | ||||||
| Payroll and other employee benefit costs | 1,982 | 1,738 | ||||||
| Restaurant occupancy costs | 830 | 740 | ||||||
| Other restaurant operating costs | 274 | 229 | ||||||
| New store preopening costs | 148 | 0 | ||||||
| Depreciation and amortization | 143 | 202 | ||||||
| Total restaurant operating costs | 5,316 | 4,509 | ||||||
| General and administrative costs | 508 | 386 | ||||||
| Advertising costs | 234 | 210 | ||||||
| Franchise costs | 22 | 15 | ||||||
| Loss (Gain) on disposal of restaurants and equipment | (6 | ) | (6 | ) | ||||
| Loss from Operations | (86 | ) | (297 | ) | ||||
| Other Income (Expenses): | ||||||||
| Interest expense, net | 2 | (32 | ) | |||||
| Other income (expense) | (3 | ) | (1 | ) | ||||
| Affiliate investment loss | (72 | ) | 0 | |||||
| Total other expenses, net | (73 | ) | (33 | ) | ||||
| Net Loss | (159 | ) | (330 | ) | ||||
| Income attributable to non-controlling interest | (64 | ) | (10 | ) | ||||
| Net Loss attributable to Good Times Rest Inc | (223 | ) | (340 | ) | ||||
| Preferred stock dividends | (30 | ) | (30 | ) | ||||
| Net Loss attributable to common shareholders | ($253 | ) | ($370 | ) | ||||
| Basic and diluted income (loss) per share: | ||||||||
| Net Loss attributable to common shareholders | ($0.05 | ) | ($0.14 | ) | ||||
| Weighted Average Common Shares Outstanding: | ||||||||
| Basic and Diluted | 4,926 | 2,726 | ||||||
| Dec 31, | Sept 30, | ||||||||
| Balance Sheet Data | 2013 | 2012 | |||||||
| (In thousands) | |||||||||
| Cash & cash equivalents | $ | 5,206 | $ | 6,143 | |||||
| Current assets | 5,601 | 6,641 | |||||||
| Property and Equipment, net | 3,476 | 2,851 | |||||||
| Total assets | $ | 9,792 | $ | 9,875 | |||||
| Current liabilities, including capital lease obligations and long-term debt due within one year | 1,948 | 1,807 | |||||||
| Long-term debt due after one year | 17 | 20 | |||||||
| Capital lease obligations due after one year | 66 | 74 | |||||||
| Total liabilities | $ | 2,681 | $ | 2,554 | |||||
| Stockholders’ equity | $ | 7,111 | $ | 7,321 | |||||
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income
from
Operations and Net Income
(In thousands, except percentage
data)
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 table below sets forth certain unaudited information for the three months ended December 31, 2013 and December 31, 2012, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.
| Three Months Ended | |||||||||||||||||
| December 31, 2013 | December 31, 2012 | ||||||||||||||||
| Restaurant revenues | $ | 5,906 | 98.6 | % | $ | 4,722 | 98.0 | % | |||||||||
Restaurant Operating Costs | |||||||||||||||||
| Food and packaging costs | 1,939 | 32.8 | % | 1,600 | 33.9 | % | |||||||||||
| Payroll and other employee benefit costs | 1,982 | 33.6 | % | 1,738 | 36.8 | % | |||||||||||
| Restaurant occupancy costs | 830 | 14.1 | % | 740 | 15.7 | % | |||||||||||
| Other restaurant operating costs | 274 | 4.6 | % | 229 | 4.8 | % | |||||||||||
| Restaurant-level operating profit | 881 | 14.9 | % | 415 | 8.8 | % | |||||||||||
| Add - Franchise royalties and fees | 82 | 1.4 | % | 95 | 2.0 | % | |||||||||||
| Deduct - Other operating: | |||||||||||||||||
| Depreciation and amortization | 143 | 2.4 | % | 202 | 4.2 | % | |||||||||||
| General and administrative | 508 | 8.5 | % | 386 | 8.0 | % | |||||||||||
| Advertising costs | 234 | 3.9 | % | 210 | 4.4 | % | |||||||||||
| Franchise costs | 22 | 0.4 | % | 15 | 0.3 | % | |||||||||||
| Gain on disposal of restaurants and equipment | (6 | ) | (.1 | %) | (6 | ) | (0.1 | %) | |||||||||
| Preopening costs | 148 | 2.5 | % | 0 | 0.0 | % | |||||||||||
| Total other operating | 1,049 | 17.5 | % | 807 | 16.8 | % | |||||||||||
| Loss from Operations | (86 | ) | (1.4 | %) | (297 | ) | (6.2 | %) | |||||||||
| Interest income (expense), net | 2 | 0.0 | % | (32 | ) | (0.7 | %) | ||||||||||
| Other income (expense) | (3 | ) | 0.0 | % | (1 | ) | 0.0 | % | |||||||||
| Affiliate investment loss | (72 | ) | (1.2 | %) | 0 | 0.0 | % | ||||||||||
| Total other | (73 | ) | (1.2 | %) | (33 | ) | (0.7 | %) | |||||||||
| Net Loss | ($159 | ) | (2.7 | %) | ($330 | ) | (6.9 | %) | |||||||||
| ____________________________________ | |||||||||||||||||
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.
Contacts:
INVESTOR RELATIONS CONTACTS:
Boyd
E. Hoback, 303-384-1411
President and CEO
or
Christi
Pennington, 303-384-1440
or
Gary Heller, 914-813-8547
or
Porter,
LeVay & Rose
Mike Porter, 212-546-4700
