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

GOLDEN, Colo.--()--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.


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.

Contacts

Ryan M. Zink, President and Chief Executive Officer (303) 384-1432
Christi Pennington (303) 384-1440

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Contacts

Ryan M. Zink, President and Chief Executive Officer (303) 384-1432
Christi Pennington (303) 384-1440