Good Times Restaurants (GTIM) Q3 2025 Earnings Call August 07, 2025 05:00 PM ET Speaker0Good afternoon, ladies and gentlemen, and welcome to the Good Times Restaurants Inc. Fiscal twenty twenty five third quarter earnings call. I am Carrie August, the company's Senior Vice President of Finance and Accounting. By now, everyone should have access to the company's earnings release, which is available in the Investors section of the company's website. As a reminder, a part of today's discussion will include for ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-18590 Good Times Restaurants Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) 651 CORPORATE ...

Exhibit 99.1 Conference Call: Management will host a conference call to discuss its fiscal 2025 third quarter financial results on Thursday, August 7, 2025 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its Chief Executive Officer and Keri A. August, its Senior Vice President of Finance and Accounting. The conference call can be accessed live over the phone by dialing (888) 210-2831, participant code 3024033. The conference call will also be webcast live from the Company's corporate we ...

Core Viewpoint - Good Times Restaurants Inc. is conducting its Q2 2025 earnings call, indicating a focus on financial performance and future outlook [1]. Financial Performance - The earnings release for Q2 2025 is available on the company's investor website, highlighting the importance of transparency in financial reporting [2]. Forward-Looking Statements - The company will discuss forward-looking statements that are not guarantees of future performance, emphasizing the need for caution in interpreting these statements [2]. Risks and Uncertainties - Various risks and uncertainties are acknowledged, including market price fluctuations, staffing constraints, supply chain issues, inflation, and competition, which could impact the company's performance [3]. - Specific risks include disruptions from public health emergencies, challenges in restaurant development, and changes in laws and regulations affecting operations [3].

Financial Data and Key Metrics Changes - Same store sales decreased slightly more than 3.5 points at each brand, indicating a challenging operating environment [4] - Total restaurant sales for Bad Daddy's decreased by $1.6 million to $24.8 million, primarily due to reduced customer traffic and a negative mix shift [17] - Good Times total restaurant sales increased by approximately $500,000 to $9.3 million, with same store sales decreasing by 3.6% [20] - Net loss to common shareholders for the quarter was $600,000, compared to net income of $600,000 in the same quarter last year [23] - Adjusted EBITDA for the quarter was $1 million, down from $1.5 million in the second quarter of the previous year [24] Business Line Data and Key Metrics Changes - Bad Daddy's average menu price increased by 4.7% compared to the previous year, while same store sales decreased by 3.7% [18] - Good Times' average menu price remained the same as the prior year, with food and packaging costs at 30.7%, an increase of 160 basis points [21] - Good Times restaurant level operating profit decreased by $300,000 to $700,000, with a profit margin of 8% [23] Market Data and Key Metrics Changes - The company noted a shift towards a more value-oriented customer, aligning menu and promotions accordingly [4] - Colorado-specific trends negatively affected sales performance, particularly for Bad Daddy's in Colorado [13] Company Strategy and Development Direction - The company is focusing on improving kitchen execution, consistency, and product quality, with a new Director of Operations for Good Times [5][6] - Menu changes include rolling out new burger builds and condensing the menu to focus on core items [9][10] - Marketing efforts are shifting towards social and digital media, with promising results from Connected TV and video streaming tests [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough quarter and expects the operating environment in the third fiscal quarter to remain challenging [28] - The focus is on improving execution and value perception through quality and service, aiming to create memorable guest experiences [28] Other Important Information - The company has temporarily paused share repurchases to redirect cash flow towards cash accumulation, debt repayment, and restaurant remodels [24] - Leadership changes include the retirement of the supply chain leader, with a new internal replacement expected to enhance operational efficiency [15] Q&A Session Summary Question: Were there any questions from participants? - There were no questions during the call, and the operator handed the call back for closing remarks [27]

Financial Data and Key Metrics Changes - Same store sales decreased slightly more than 3.5 points at each brand, indicating a challenging operating environment [4] - Total restaurant sales for Bad Daddy's decreased by $1.6 million to $24.8 million for the quarter, primarily due to reduced customer traffic and a negative mix shift [17] - Good Times total restaurant sales increased by approximately $500,000 to $9.3 million for the quarter, with same store sales decreasing by 3.6% [20] - Net loss to common shareholders for the quarter was $600,000, compared to net income of $600,000 in the same quarter last year [24] Business Line Data and Key Metrics Changes - Bad Daddy's average menu price increased by 4.7% compared to Q2 of the previous year, while same store sales decreased by 3.7% [18] - Good Times experienced a 30.7% food and beverage cost for the quarter, an increase of 160 basis points compared to the prior year [21] - Good Times restaurant level operating profit decreased by $300,000 to $700,000, with a profit margin of 8% [24] Market Data and Key Metrics Changes - The company noted a shift towards a more value-oriented customer, aligning menu and promotions accordingly [4] - Colorado-specific trends negatively affected sales performance, particularly for Bad Daddy's in Colorado [12] Company Strategy and Development Direction - The company is focusing on improving kitchen execution, consistency, and product quality, with a new Director of Operations for Good Times [5][6] - Menu changes include rolling out new burger builds and condensing the menu to focus on core items [8][9] - Marketing efforts are shifting towards social and digital media, with promising results from Connected TV and video streaming tests [13][14] Management Comments on Operating Environment and Future Outlook - Management acknowledged a tough quarter and expects the operating environment in the third fiscal quarter to remain challenging [29] - The focus is on improving execution and value perception through quality and service, aiming for long-term sales and profitability gains [29] Other Important Information - The company has temporarily paused share repurchases to redirect cash flow towards cash accumulation, debt repayment, and remodels [25] - A new supply chain leader will be appointed, expected to enhance leadership and cost reduction [15] Q&A Session Summary Question: Are there any questions today? - There were no questions during the call, and the session was handed back for closing remarks [28]

Revenue Performance - Net revenues for the quarter ended April 1, 2025 decreased by $1,169,000 or 3.3% to $34,279,000 from $35,448,000 for the quarter ended March 26, 2024[81]. - Net revenues for the two quarters ended April 1, 2025 increased by $2,007,000, or 2.9%, to $70,612,000 from $68,605,000 for the two quarters ended March 26, 2024[114]. Restaurant Sales - Bad Daddy's restaurant sales decreased by $1,631,000 to $24,817,000 for the quarter ended April 1, 2025, primarily due to reduced customer traffic and the closure of one restaurant[82]. - Good Times restaurant sales increased by $506,000 to $9,323,000 for the quarter ended April 1, 2025, driven by the acquisition of two restaurants[83]. - Bad Daddy's restaurant sales increased by $327,000 to $50,895,000 for the two quarters ended April 1, 2025, from $50,568,000 for the two quarters ended March 26, 2024[115]. - Good Times restaurant sales increased by $1,567,000 to $19,210,000 for the two quarters ended April 1, 2025, from $17,643,000 for the two quarters ended March 26, 2024[117]. Same Store Sales - Same store sales for Bad Daddy's decreased by 3.7% during the quarter ended April 1, 2025, primarily due to reduced customer traffic[86]. - Same store sales for Good Times decreased by 3.6% during the quarter ended April 1, 2025, primarily due to unfavorable weather conditions[87]. - Same store sales for Bad Daddy's decreased by 1.1% during the two quarters ended April 1, 2025, compared to the same two quarters ended March 26, 2024[120]. - Same store sales for Good Times decreased by 1.9% during the two quarters ended April 1, 2025, compared to the same two quarters ended March 26, 2024[121]. Costs and Expenses - Food and packaging costs for the quarter ended April 1, 2025 decreased by $122,000 to $10,477,000, representing 30.7% of restaurant sales[89]. - Payroll and other employee benefit costs decreased by $440,000 to $11,826,000, representing 34.6% of restaurant sales[92]. - General and administrative costs increased by $14,000 to $2,578,000, representing 7.5% of total revenues[101]. - Advertising costs decreased by $119,000 to $705,000, representing 2.1% of total revenues[103]. - Food and packaging costs for the two quarters ended April 1, 2025 increased by $914,000 to $21,840,000 (31.2% of restaurant sales) from $20,926,000 (30.7% of restaurant sales) for the two quarters ended March 26, 2024[122]. - Payroll and other employee benefit costs for the two quarters ended April 1, 2025 increased by $719,000 to $24,609,000 (35.1% of restaurant sales) from $23,890,000 (35.0% of restaurant sales) for the two quarters ended March 26, 2024[125]. Advertising Costs - Bad Daddy's advertising costs decreased to $336,000 (1.3% of total revenues) for the quarter ended April 1, 2025, down from $539,000 (2.0% of total revenues) for the quarter ended March 26, 2024[104]. - Good Times advertising costs increased to $369,000 (3.9% of total revenues) for the quarter ended April 1, 2025, compared to $285,000 (3.2% of total revenues) for the quarter ended March 26, 2024[105]. - Bad Daddy's advertising costs decreased to $957,000 (1.9% of total revenues) for the two quarters ended April 1, 2025, down from $1,269,000 (2.5% of total revenues) for the same period in 2024[138]. - Good Times advertising costs were $612,000 (3.2% of total revenues) for the two quarters ended April 1, 2025, compared to $647,000 (3.6% of total revenues) for the two quarters ended March 26, 2024[140]. Net Income and Loss - Net loss was $627,000 for the quarter ended April 1, 2025, compared to net income of $680,000 in the quarter ended March 26, 2024[110]. - Net loss was $453,000 for the two quarters ended April 1, 2025, compared to net income of $197,000 for the two quarters ended March 26, 2024[147]. - Adjusted EBITDA for the two quarters ended April 1, 2025, was $1,021,000, compared to $1,458,000 for the two quarters ended March 26, 2024[155]. Cash Flow - Net cash provided by operating activities decreased by $1,319,000 to $196,000 for the year-to-date period ended April 1, 2025, compared to $1,515,000 for the same period in 2024[162]. - Net cash used in investing activities increased to $2,662,000 for the two quarters ended April 1, 2025, from $1,063,000 for the same period in 2024[163]. - Net cash provided by financing activities was $1,325,000 for the two quarters ended April 1, 2025, compared to net cash used of $634,000 for the same period in 2024[164]. Operational Overview - The company operates a total of 40 Bad Daddy's restaurants and 30 Good Times restaurants as of April 1, 2025[77]. - The working capital deficit as of April 1, 2025, was $9,504,000, influenced by short-term lease liabilities and payment terms with vendors[158]. - The company anticipates that ground beef costs will continue to increase throughout fiscal year 2025 due to tightening supply and inflationary pressures[166].

Financial Performance - Total revenues for the quarter decreased 3.3% to $34.3 million compared to the fiscal 2024 second quarter [7] - Net loss attributable to common shareholders was $0.6 million for the quarter [7] - Adjusted EBITDA was $1.0 million for the quarter [7] - Cash and cash equivalents decreased from $3,853 million on September 24, 2024, to $2,712 million on April 1, 2025, representing a decline of 29.5% [18] - Total assets slightly decreased from $87,118 million to $86,928 million, a reduction of 0.2% [18] - Adjusted EBITDA for Q2 2025 was reported at $1,021 million, compared to $1,458 million in Q2 2024, indicating a decrease of 30% [23] - The company reported a net loss of $624 million for Q2 2025, compared to a net income of $618 million in Q2 2024 [23] Sales Performance - Same store sales for Bad Daddy's restaurants decreased 3.7% and Good Times restaurants decreased 3.6% for the quarter compared to the fiscal 2024 second quarter [7] - Same store sales year-to-date for Bad Daddy's and Good Times brands were -1.1% and -1.9%, respectively [7] - Bad Daddy's restaurant sales increased from $24,817 million in Q2 2024 to $26,448 million in Q2 2025, reflecting a growth of 6.6% [19] - Good Times restaurant sales rose from $8,817 million in Q2 2024 to $9,323 million in Q2 2025, an increase of 5.7% [19] - Average weekly sales per restaurant for Bad Daddy's increased from $48.9 million to $50.9 million, while Good Times saw an increase from $26.6 million to $27.1 million [18] Operational Metrics - Restaurant level operating profit margin for Bad Daddy's brand was 13.6%, matching the prior year [4] - Restaurant-level operating profit for Bad Daddy's was $3,378 million in Q2 2025, accounting for 13.6% of sales, compared to $3,607 million and 13.6% in Q2 2024 [19] - Total restaurant-level operating profit decreased from $4,682 million in Q2 2024 to $4,126 million in Q2 2025, a decline of 11.8% [21] - The number of restaurants open at the end of the period remained stable for Bad Daddy's at 39, while Good Times increased from 25 to 27 [18] Strategic Initiatives - The company is testing a new side-included pricing model with strong initial results and plans to roll it out to all stores by the end of the June quarter [5] - The company is expanding its advertising strategy to include connected TV and streaming video, which showed promising results in initial tests [5] - The company repurchased 54,835 shares of its common stock during the quarter [7]

Financial Data and Key Metrics Changes - Total restaurant sales for Bad Daddy's increased by $2 million to $26.1 million for the quarter, primarily due to an additional week in the current fiscal quarter and menu price increases [26][64] - Same-store sales for Bad Daddy's increased by 1.5%, while Good Times' same-store sales remained flat compared to the prior year [6][12] - Good Times' total restaurant sales increased by approximately $1.1 million to $9.9 million for the quarter [32][69] - Net income to common shareholders for the quarter was $0.2 million or $0.02 per share, compared to a net loss of $0.6 million or $0.05 per share in the first quarter last year [37][75] - Adjusted EBITDA for the quarter was $1.2 million compared to $0.5 million for the first quarter of 2024 [37][75] Business Line Data and Key Metrics Changes - Bad Daddy's food and beverage costs were 31.5%, unchanged from the previous year, while Good Times' food and packaging costs increased to 31.8%, a 100 basis point increase [27][70] - Labor costs for Bad Daddy's decreased by 70 basis points to 35.1%, while Good Times' total labor cost increased to 36.7%, a 290 basis point increase from the prior year [28][73] - Restaurant-level operating profit for Bad Daddy's was approximately $3.3 million or 12.6% of sales, compared to $2.6 million or 10.7% last year [31][68] - Good Times' restaurant-level operating profit decreased by $0.3 million to $0.9 million, with a decrease in profit margin to 8.6% [36][74] Market Data and Key Metrics Changes - Same-store sales at Bad Daddy's were down approximately 5.5% during the first four weeks of the second fiscal quarter, and down more than 7% at Good Times due to adverse weather conditions [61] - The average menu price during the quarter for Bad Daddy's was 4.5% higher than the same quarter in 2024, while Good Times had an average menu price increase of approximately 3.9% [26][70] Company Strategy and Development Direction - The company is focusing on product quality and menu rationalization to drive purchasing behavior towards better margin products [107] - There is an ongoing effort to renovate the Good Times brand to keep it competitive, with recent remodels and acquisitions of previously franchised restaurants [87][39] - The company is exploring new locations for Bad Daddy's but is being selective about site choices [81][83] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from higher costs and intense competition, particularly for the Good Times brand [11][50] - The company expects ground beef costs to continue to increase throughout fiscal year 2025 due to tightening supply [66][71] - Management expressed optimism about improving trends following a difficult January, emphasizing the focus on operational initiatives to enhance customer experiences [118] Other Important Information - The company finished the quarter with $3 million in cash and $2.6 million of long-term debt, and repurchased 59,125 shares during the quarter [38][76] - The company incurred $0.9 million of CapEx during the first fiscal quarter related to remodels and acquisitions [39][76] Q&A Session Summary Question: Plans for new locations for Bad Daddy's - Management is actively looking for new locations but is selective about site choices, with a successful location in Madison, Alabama serving as a model [81][83] Question: Capital allocation plan and share buyback - Management plans to continue share repurchases and invest in renovations for the Good Times brand, with a strong appetite for share buybacks at current valuations [85][88] Question: Update on the legal case - There has been no movement since the last call, and the case is currently awaiting a decision from the district court [90] Question: Insights on seasonality and weather impact - Management noted that January was particularly challenging due to adverse weather, but February is expected to improve [96][97] Question: Customer demographics for both brands - Good Times tends to attract a slightly older demographic, while Bad Daddy's appeals to a broader age range, with efforts to modernize the brand to attract younger customers [100][102] Question: Menu adjustments to offset cost increases - Management is focusing on product quality and menu rationalization to drive sales and improve margins without resorting to discounting [107][108] Question: Future of comp sales announcements - Management is evaluating the practice of pre-releasing comp sales based on industry trends and may return to it if deemed beneficial [112][114]

Revenue Performance - Net revenues for the quarter ended December 31, 2024 increased by $3,176,000 or 9.6% to $36,333,000 from $33,157,000 for the quarter ended December 26, 2023[77]. - Bad Daddy's restaurant sales increased by $1,958,000 to $26,078,000 for the quarter ended December 31, 2024, with an average menu price increase of approximately 4.5%[78]. - Good Times restaurant sales increased by $1,061,000 to $9,887,000 for the quarter ended December 31, 2024, with an average menu price increase of approximately 3.9%[79]. - Same store sales for Bad Daddy's increased by 1.5% during the fiscal quarter ended December 31, 2024, with 38 restaurants included in the same store sales base[82]. - Same store sales for Good Times remained unchanged during the quarter ended December 31, 2024, with 27 restaurants included in the same store sales base[83]. Cost and Expense Analysis - Food and packaging costs for the quarter ended December 31, 2024 increased by $1,036,000 to $11,363,000, representing 31.6% of restaurant sales[84]. - Payroll and other employee benefit costs increased by $1,159,000 to $12,783,000, representing 35.5% of restaurant sales[87]. - Occupancy costs increased by $178,000 to $2,683,000, representing 7.5% of restaurant sales[90]. - Depreciation and amortization costs increased by $91,000 to $1,018,000 for the quarter ended December 31, 2024, from $927,000 in the prior year[95]. - General and administrative costs rose by $250,000 to $2,588,000, maintaining 7.1% of total revenues for both quarters[97]. - Advertising costs decreased by $228,000 to $864,000, representing 2.4% of total revenues for the quarter ended December 31, 2024, down from 3.3%[98]. Profitability Metrics - Net income for the quarter ended December 31, 2024, was $174,000, a significant improvement from a net loss of $483,000 in the same quarter of 2023[105]. - Adjusted EBITDA for the quarter ended December 31, 2024, was $1,209,000, compared to $510,000 for the quarter ended December 26, 2023[111]. Cash Flow and Capital Management - Net cash used in operating activities was $(518,000) for the quarter ended December 31, 2024, compared to $(252,000) in the prior year[117]. - Net cash used in investing activities increased to $(1,846,000) for the quarter ended December 31, 2024, from $(448,000) in the same quarter of 2023[119]. - The working capital deficit as of December 31, 2024, was $9,223,000, influenced by short-term lease liabilities[114]. - The company anticipates sufficient capital to meet working capital and recurring capital expenditure needs in fiscal 2025[114]. Growth and Expansion - The company acquired two Denver metro area Good Times restaurants from a franchisee during the quarter ended December 31, 2024[76]. - The company continues to pursue unit growth opportunities with a more conservative approach to leverage due to higher costs and volatile inflation[72]. - Preopening costs for the quarter ended December 31, 2024, were $8,000, compared to no preopening costs for the same quarter in 2023[95].