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 financial results for the fourth fiscal quarter and fiscal year ended September 30, 2013.
Key highlights of the Company’s report include:
- Same store sales for company-owned restaurants increased 18.2% for the quarter and 11.9% for the fiscal year, including an 8.5% sales mix from the new breakfast daypart during the quarter, which was the thirteenth consecutive quarter of increasing same store sales
- Restaurant Level Operating Profit (see schedule below) increased 49% or $316,000 over last year during the quarter
- The restaurant level operating margin increased by 190 basis points from last year during the quarter (see schedule below)
- The Company had $6.1 million in cash and minimal long term debt as of the end of the fiscal year after the completion of its recent secondary offering of its common stock with a planned use of proceeds 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.
“Our sales trends continue to significantly exceed our industry peers, with most of the increase coming from increased transactions which is fueling the acceleration of the profitability of our core business in Good Times,” said President and CEO Boyd Hoback. “We anticipate that our cash flow from operations from Good Times in fiscal 2014 will be significantly higher than in fiscal 2013, including further acceleration in the first quarter of fiscal 2014 based on our current run rate and trends.”
Regarding Bad Daddy’s development, Hoback added, “We had $149,000 of expenses during the fourth quarter related to the development of our first Colorado Bad Daddy’s restaurant and from our 48% ownership in Bad Daddy’s Franchise Development LLC as we develop the platform for accelerated franchise growth. We plan to open our first Bad Daddy’s in Colorado the last week of January with the second store by early summer and we are working to finalize several other new store leases, which we anticipate will add incremental cash flow from operations later this year. We also anticipate that we will have several multi-unit development agreements for Bad Daddy’s franchise development signed with sophisticated, experienced operators of other concepts in early 2014 and we are excited about the initial responses we are getting for its longer term potential for super regional and national expansion.”
Hoback concluded, “Our Bad Daddy’s operating team has been working on developing the support systems and processes for scalable franchise expansion while we put new store development into the pipeline for our own restaurants in Colorado for fiscal 2014 and 2015. Good Times is hitting on all cylinders and we have a solid product and marketing plan in place for fiscal 2014 that we believe will continue our momentum, all of which can build significant value for our shareholders in both near term growth in our cash flow from operations and in our longer term strategic growth plan.”
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 38 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||Twelve Months Ended|
|Statement of Operations||30-Sept-13||30-Sept-12||30-Sept-13||30-Sept-12|
|Area development and franchise fees||0||0||0||0|
|Total net revenues||6,534||5,042||22,892||19,706|
|Restaurant Operating Costs:|
|Food and packaging costs||2,152||1,631||7,655||6,592|
|Payroll and other employee benefit costs||2,126||1,699||7,809||6,691|
|Restaurant occupancy costs||910||717||3,333||2,999|
|Other restaurant operating costs||279||240||1,012||940|
|New store preopening costs||70||0||99||0|
|Depreciation and amortization||182||188||719||795|
|Total restaurant operating costs||5,719||4,475||20,627||18,017|
|General and administrative||532||331||1,703||1,358|
|Loss (Gain) on disposal of restaurants and equipment||68||(24)||(18)||(51)|
|Income (loss) from Operations||(5)||84||(392)||(474)|
|Other Income (Expenses):|
|Interest expense, net||(1)||(45)||(44)||(199)|
|Other income (expense)||(2)||(1)||(6)||(15)|
|Affiliate investment loss||(79)||0||(102)||0|
|Unrealized gain (loss) on interest rate swap||0||4||0||20|
|Total other expenses, net||(80)||(42)||(152)||(194)|
|Net Income (loss)||(85)||42||(544)||(668)|
|Income attributable to non-controlling interest||(78)||(43)||(143)||(109)|
|Net Income (Loss) attributable to Good Times Rest Inc||(163)||(1)||(687)||(777)|
|Preferred stock dividends||(30)||0||(120)||0|
|Net Income (Loss) attributable to common shareholders||($193)||($1)||($807)||($777)|
|Basic and diluted income (loss) per share:|
|Net Income (Loss) attributable to common shareholders||($0.05)||$0.00||($0.23)||($0.28)|
|Weighted Average Common Shares Outstanding:|
|Basic and Diluted||3,683||2,726||2,967||2,726|
|Sept 30,||Sept 30,|
|Balance Sheet Data||2013||2012|
|Cash & cash equivalents||$6,143||$616|
|Property and Equipment, net||2,851||3,082|
|Current liabilities, including capital lease obligations and long-term debt due within one year||1,805||3,010|
|Long-term debt due after one year||20||37|
|Capital lease obligations due after one year||76||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 September 30, 2013 and September 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|
|Sept 30, 2013||Sept 30, 2012|
Restaurant Operating Costs
|Food and packaging costs||2,152||33.5%||1,631||33.0%|
|Payroll and other employee benefit costs||2,126||33.1%||1,699||34.4%|
|Restaurant occupancy costs||910||14.2%||717||14.5%|
|Other restaurant operating costs||279||4.3%||240||4.9%|
|Restaurant-level operating profit||964||15.0%||648||13.1%|
|Add - Franchise royalties and fees||103||1.6%||107||2.1%|
|Deduct - Other operating:|
|Depreciation and amortization||182||2.8%||188||3.7%|
|General and administrative||532||8.1%||331||6.6%|
|Loss (Gain) on disposal of restaurants and equipment||68||1.0%||(24)||(0.5%)|
|Income (loss) from Operations||(5)||(0.1%)||84||1.7%|
|Interest expense, net||(1)||0.0%||(45)||(0.9%)|
|Other income (expense)||(2)||0.0%||(1)||0.0%|
|Affiliate investment loss||(79)||(1.2%)||0||0.0%|
|Unrealized gain (loss) on interest rate swap||0||0.0%||4||0.1%|
|Net Income (Loss)||($85)||(1.3%)||$42||0.8%|
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.
Boyd E. Hoback, 303-384-1411
President and CEO
Christi Pennington, 303-384-1440
Gary Heller, 914-813-8547
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