Good Times Restaurants Inc. (Nasdaq: GTIM), a regional quick service restaurant chain focused on fresh, high quality, all natural products today announced its financial results for the third fiscal quarter ended June 30, 2013.
Key highlights of the Company’s third quarter report include:
- Same store sales for Company owned restaurants increased 15.2% for the quarter, including 7.2% from the new breakfast day-part introduced in November, 2012, the twelfth consecutive quarter of increasing same store sales
- Income from restaurant operations (see schedule below) increased 44% or $309,000 over last year
- The restaurant level operating margin increased by 210 basis points from last year (see schedule below)
- Net Income increased to $208,000 from $37,000 last year, including expenses and investment losses totaling $52,000 this year related to the start-up of the Bad Daddy’s Burger Bar subsidiary and franchise company
- The Company has registered for a public offering of its common stock with a use of proceeds planned for the acceleration of remodeling older Good Times Burgers & Frozen Custard restaurants and the development of Company-owned and franchised Bad Daddy’s Burger Bar restaurants.
“This is the first full quarter this year that we’ve been able to realize the full profit flow through on the significant same store sales increases we’ve had the last several months, including our new breakfast day-part that is performing above expectations,” said President and CEO Boyd Hoback. “It is particularly important that most of our sales increases are coming from increased traffic and not pricing or an increased average check as we continue to compound our growth year over year.
“Our operating team has refined the labor model for the breakfast day-part, we have significantly increased our chicken category sales with the introduction of our hand-breaded, all natural chicken platform, the new television marketing campaign is resonating with our customers and our cost of sales has improved from our new distribution agreement, purchasing improvements and further menu engineering. Our goal is to continue to drive top line sales increases while optimizing the profitability of those incremental sales.
“We will experience some start up expenses and losses as we gear up for the expansion of the Bad Daddy’s Franchise Development LLC franchise program and the development of our first Colorado stores in our wholly owned subsidiary, BD of Colorado LLC that are projected to open at the beginning of next year. However, we expect our earnings from our core Good Times’ business to continue to show substantial increases over the prior year in our fourth quarter and for the fiscal year.”
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 39 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, 2012 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||Nine Months Ended|
|Statement of Operations||30-Jun-13||30-Jun-12||30-Jun-13||30-Jun-12|
|Area development and franchise fees||0||0||0||0|
|Total net revenues||6,487||5,248||16,358||14,664|
|Restaurant Operating Costs:|
|Food and packaging costs||2,149||1,748||5,503||4,961|
|Payroll and other employee benefit costs||2,104||1,685||5,683||4,992|
|Restaurant occupancy costs||865||747||2,423||2,282|
|Other restaurant operating costs||261||237||733||700|
|New store preopening costs||29||0||29||0|
|Depreciation and amortization||169||201||537||607|
|Total restaurant operating costs||5,577||4,618||14,908||13,542|
|General and administrative||390||333||1,171||1,027|
Loss (Gain) on disposal of restaurants and equipment
|Income (loss) from Operations||234||84||(387||)||(558||)|
|Other Income (Expenses):|
|Interest expense, net||(2||)||(50||)||(45||)||(154||)|
|Other income (expense)||(1||)||(1||)||(4||)||(14||)|
|Affiliate investment loss||(23||)||0||(23||)||0|
|Unrealized gain (loss) on interest rate swap||0||4||0||16|
|Total other expenses, net||(26||)||(47||)||(72||)||(152||)|
|Net Income (loss)||208||37||(459||)||(710||)|
|Income attributable to non-controlling interest||(67||)||(50||)||(65||)||(66||)|
|Net Income (Loss) attributable to Good Times Rest Inc||141||(13||)||(524||)||(776||)|
|Preferred stock dividends||(30||)||0||(90||)|
|Net Income (Loss) attributable to common shareholders||$111||($13||)||($614||)||($776||)|
|Basic and diluted income (loss) per share:|
|Net Income (Loss) attributable to common shareholders||$0.04||$0.00||($0.23||)||($0.28||)|
|Weighted Average Common Shares Outstanding:|
|June 30,||Sept 30,|
|Balance Sheet Data||2013||2012|
|Cash & cash equivalents||$1,324||$616|
Property and Equipment, net
|Current liabilities, including capital lease obligations and long-term debt due within one year||1,848||3,010|
|Long-term debt due after one year||25||37|
|Capital lease obligations due after one year||80||102|
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 June 30, 2013 and June 30, 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|
|June 30, 2013||June 30, 2012|
Restaurant Operating Costs
(exclusive of depreciation and amortization
shown separately below):
|Food and packaging costs||2,149||33.6||%||1,748||34.1||%|
|Payroll and other employee benefit costs||2,104||32.9||%||1,685||32.9||%|
|Restaurant occupancy costs||865||13.5||%||747||14.6||%|
|Other restaurant operating costs||261||4.1||%||237||4.6||%|
|Restaurant-level operating profit||1,015||15.9||%||706||13.8||%|
|Add - Franchise royalties and fees||93||0.0||%||125||0.0||%|
|Deduct - Other operating:|
|Depreciation and amortization||169||2.6||%||201||3.8||%|
|General and administrative||390||6.0||%||333||6.3||%|
Loss (Gain) on disposal of restaurants and equipment
|Income (loss) from Operations||234||3.6||%||84||1.6||%|
|Interest expense, net||(2||)||0.0||%||(50||)||(1.0||%)|
|Other income (expense)||(1||)||0.0||%||(1||)||0.0||%|
|Affiliate investment loss||(23||)||(0.4||%)||0||0.0||%|
|Unrealized gain (loss) on interest rate swap||0||0.0||%||4||0.1||%|
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.
Good Times Restaurants Inc.
Boyd E. Hoback, 303-384-1411
President and CEO
Christi Pennington, 303-384-1440
Booke & Co.
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