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Good Times(GTIM) - 2025 Q1 - Quarterly Results
2025-02-06 21:05
Financial Performance - Total revenues for the first fiscal quarter increased by 9.6% to $36.3 million compared to $33.2 million in the same quarter of fiscal 2024[11] - Net income attributable to common shareholders was $0.2 million, a significant improvement from a net loss of $0.6 million in the same quarter of the previous year[11] - Adjusted EBITDA for the quarter was $1.2 million, reflecting positive operational performance[11] - Restaurant-level operating profit for Q1 2025 was $4,130,000, up from $3,762,000 in Q1 2024, representing a 9.8% increase[21] - Adjusted EBITDA for Q1 2025 was $1,209,000, compared to $510,000 in Q1 2024, indicating a significant increase of 136.1%[22] - Net income for Q1 2025 was reported at $164,000, a turnaround from a net loss of $556,000 in Q1 2024[22] Operational Metrics - Same store sales for Bad Daddy's restaurants increased by 1.5%, while Good Times restaurants remained unchanged compared to the first quarter of fiscal 2024[11] - Bad Daddy's restaurant operating profit margin improved to 12.6% from 10.7% year-over-year, driven by better labor productivity and lower beef costs[19] - Good Times restaurant operating profit margin decreased to 8.6% from 13.5% year-over-year, primarily due to increased staffing costs[19] Revenue Sources - Franchise and other revenues increased to $368,000 in Q1 2025 from $211,000 in Q1 2024, marking a growth of 74.5%[21] Expenses - General and administrative expenses rose to $2,588,000 in Q1 2025, compared to $2,338,000 in Q1 2024, reflecting an increase of 10.7%[21] - Depreciation and amortization expenses for Q1 2025 were $1,016,000, slightly higher than $929,000 in Q1 2024[22] - Interest expense for Q1 2025 was $46,000, up from $32,000 in Q1 2024, which is a 43.8% increase[22] Future Outlook - The company plans to introduce new menu items and improvements, maintaining a strong product pipeline for both brands[6] - The second fiscal quarter has faced challenges due to unfavorable weather conditions affecting sales[5] Financial Position - Cash and cash equivalents as of December 31, 2024, were $3.0 million, down from $3.9 million at the end of the previous fiscal year[18] - Total assets increased to $89.5 million from $87.1 million as of September 24, 2024[18] Adjusted Metrics - The company emphasizes that Adjusted EBITDA is a useful measure for assessing operating performance without the impact of non-cash charges[25] - The company excludes restaurant closure costs and impairment costs from restaurant-level operating profit to better reflect ongoing operational efficiency[21] - The financial metrics presented may not be comparable to those of other companies due to variations in capital structures and accounting practices within the industry[25]
Good Times(GTIM) - 2024 Q4 - Earnings Call Transcript
2024-12-12 23:57
Financial Data and Key Metrics Changes - Total revenues increased approximately 4.3% for the quarter to $35.8 million and increased approximately 3% compared to fiscal 2023 to $142.3 million, marking a new all-time record for the company [31][91] - Net income to common shareholders for the quarter was $0.2 million or income of $0.02 per share versus a net loss of $0.3 million, $0.02 per share in the fourth quarter last year [52][110] - Adjusted EBITDA for the quarter was $1.3 million compared to $1.4 million for the fourth quarter of 2023 [53][111] Business Line Data and Key Metrics Changes Bad Daddy's - Total restaurant sales increased $1 million to $25.6 million for the quarter and increased $1.3 million to $103.8 million for the full year, primarily driven by additional sales from the Madison, Alabama restaurant [32][91] - Same-store sales increased 3.2% for the quarter with 38 Bad Daddy's in the comp base at quarter end [34][93] - Overall restaurant-level operating profit for Bad Daddy's was approximately $3.5 million for the quarter, or 13.6% of sales compared to $2.6 million or 10.6% last year [41][100] Good Times - Total restaurant sales for company-owned restaurants increased approximately $0.5 million to $10 million for the quarter and increased $3 million to $38 million for the year compared to the 2023 fiscal year [42][101] - Same-store sales decreased 0.1% for the quarter with 25 Good Times restaurants in the comp base at quarter end [43][102] - Good Times restaurant-level operating profit decreased by $0.3 million for the quarter to $1.2 million, with a decrease in profit margin to 12.2% due to elevated costs [49][108] Market Data and Key Metrics Changes - The company experienced negative same-store sales in the Good Times brand, attributed to intense discounting by competitors and escalating beef prices [5][16] - Labor costs for Good Times increased to 33.9%, an 80 basis point increase from the prior year quarter due to higher average wage rates [47][106] - Food and packaging costs for Good Times were 30.9% for the quarter, an increase of 40 basis points compared to last year's quarter [45][104] Company Strategy and Development Direction - The company is focusing on product improvement and innovation rather than deep discounting, with new menu items and seasonal promotions planned [20][79] - The company has remodeled one Good Times location and purchased two others, aiming to ensure operational excellence and continuity of brand presence [82][83] - Future investments will focus on remodels, signage, and opportunistic limited new unit development as franchisee consolidation is nearly complete [86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Bad Daddy's brand despite challenges faced by Good Times, emphasizing operational improvements and a focus on guest experience [5][62] - The company is monitoring competitive pricing and plans to respond rapidly based on market actions [44][102] - Management highlighted the importance of engaging with a new generation of customers through increased digital and social initiatives [29][89] Other Important Information - The company announced an expansion of its share repurchase program, providing an additional $2 million of authorized share repurchases [55][113] - The company has been experimenting with a shift in marketing spend from traditional audio-based advertising to digital initiatives [27][88] Q&A Session Summary Question: Are there any questions from the audience? - There were no questions from the audience during the Q&A session [116] Closing Remarks - Management expressed optimism about the future for both Bad Daddy's and Good Times, highlighting the importance of operational excellence and guest experience [117][119]
Good Times(GTIM) - 2024 Q4 - Annual Report
2024-12-12 21:08
Financial Performance - Net revenues for fiscal 2024 increased by $4,155,000 (3.0%) to $142,315,000 from $138,160,000 in fiscal 2023[16] - Total interest expense on notes payable was $108,000 for fiscal 2024[33] - Same store sales increased by 2.9% in fiscal 2024 and 3.7% in fiscal 2023, with a compound annual growth rate of 4.4% from fiscal 2015 to 2024[47] - Good Times same store sales increased for fiscal 2024, primarily due to price increases, with a compound annual growth rate of approximately 4.4% over the past ten years[59] - Same store sales decreased by 1.2% at the Bad Daddy's brand during fiscal 2024[17] Cash and Debt Management - The company ended fiscal 2024 with $3.9 million in cash and $0.8 million in long-term debt[20] - As of September 24, 2024, the interest rate applicable to borrowings under the Cadence Credit Facility was 8.41%[29] - The Cadence Credit Facility allows for loans up to $8,000,000, maturing on April 20, 2028[27] - The company maintains approximately $7,490,000 of committed funds available under the Cadence Credit Facility, with $500,000 currently borrowed against it[31] - The company has repurchased a total of 1,670,718 shares at an aggregate cost of approximately $4,650,000 as of September 24, 2024[26] Restaurant Operations - Good Times operates 30 restaurants, having acquired one and closed one during fiscal 2024, while Bad Daddy's operates 39 locations, closing one during the same period[72] - The company operates 30 Good Times restaurants, with 28 located in Colorado[13] - The company owns and operates or licenses 40 Bad Daddy's restaurants across seven states[12] - Bad Daddy's Burger Bar offers a customizable menu with over sixty topping options for burgers and salads, enhancing customer experience[75] - Good Times Burgers & Frozen Custard focuses on fresh, all-natural ingredients, including beef from Meyer Natural Foods and chicken from Springer Mountain Farms[79] Growth Strategy - The company plans to pursue disciplined unit growth for Bad Daddy's, focusing on urban and suburban areas with median household incomes over $90,000[65] - The company aims to primarily grow the Bad Daddy's brand, focusing on contiguous expansion from existing restaurants to maximize brand awareness and operational efficiencies[56] - The company has identified potential new restaurant locations in the southeast U.S. market for Bad Daddy's, with a disciplined growth strategy[65] - Good Times does not have explicit plans for new restaurant development but may consider opportunistic growth in Colorado and surrounding states[68] Marketing and Customer Engagement - The marketing strategy for Bad Daddy's focuses on local store marketing and community events rather than traditional advertising, supplemented by social media investments[82] - Good Times focuses on driving same store sales by attracting new customers and increasing visit frequency, utilizing audio advertising and social media for brand awareness[84] - Customer feedback is gathered through various channels, including surveys and social media, to improve service execution[90] Operational Efficiency - The company aims to enhance operational capabilities while managing expenses, particularly in cost of sales and labor[62] - The company utilizes a cloud-based back-office solution for real-time sales, labor, and cash data collection, enhancing operational efficiency[99] - The company has implemented a new cloud-based point of sale system across all company-owned Good Times restaurants, with plans for Bad Daddy's in the next eighteen months[98] - The cloud-based back-office solution provides near real-time data on sales, labor, and inventory, interfacing with financial accounting systems for comprehensive reporting[99] Employee Management - As of September 24, 2024, the company had approximately 2,110 active employees, with 1,879 being hourly team members and 231 salaried managers or professional staff[102] - Managers undergo an eight-week training program and are closely supervised before managing independently, ensuring high standards in service and food preparation[91] - Good Times restaurants employ a general manager and up to four shift managers, with most management positions filled by promoting from within[88] - Bad Daddy's Burger Bar operates with a team of three to four managers per restaurant, each responsible for specific areas and participating in a bonus pool based on sales and operational objectives[86] Compliance and Regulations - The company is subject to various health, sanitation, safety, and fire regulations for its restaurants[108] - The company actively monitors franchise operations to ensure compliance with systems and procedures, advising on menu, management training, and marketing[97]
Good Times(GTIM) - 2024 Q4 - Annual Results
2024-12-12 21:06
Financial Performance - Good Times Restaurants Inc. reported same store sales for the fourth fiscal quarter ended September 24, 2024[2]. - The press release regarding the financial results was issued on October 15, 2024[2]. - The report is part of the requirements under the Securities Exchange Act of 1934[5]. Company Information - The company is listed on the Nasdaq Capital Market under the symbol GTIM[2]. - Ryan M. Zink serves as the Chief Executive Officer of Good Times Restaurants Inc.[6].
Good Times(GTIM) - 2024 Q3 - Earnings Call Transcript
2024-08-02 07:24
Financial Data and Key Metrics Changes - Total revenues increased approximately 6.5% for the quarter to $37.9 million [17] - Net income to common shareholders for the quarter was $1.3 million or income of $0.12 per share compared to $0.8 million or $0.07 per share in the third quarter last year [22] Business Line Data and Key Metrics Changes - Bad Daddy's restaurant sales increased $1.2 million to $27.3 million for the quarter, with same-store sales increasing 1.2% [17][19] - Good Times restaurant sales increased approximately $1.1 million to $10.4 million for the quarter, with same-store sales increasing 5.8% [20][22] Market Data and Key Metrics Changes - Sales growth at Good Times was significantly weighted to dinner and late-night sales, supported by strong trends at recently purchased and remodeled restaurants [11] - The Atlanta market has shown sales recovery, although individual store performance has varied [7] Company Strategy and Development Direction - The company is focusing on enhancing guest experience and hospitality, particularly at Bad Daddy's, by investing in front-of-house labor [5] - The company is evaluating underperforming restaurants for potential closure as part of smart real estate management [9][32] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges in the labor market, with increased wage pressures despite a rise in applicant quality [8] - The company expects continued pressure on food prices, particularly beef, and is considering price adjustments in the future [24] Other Important Information - The company repurchased 92,240 shares during the quarter and executed a privately negotiated purchase of approximately 171,000 shares at an average price of $2.60 per share [15] - The company completed the remodel of a Good Times restaurant in Lakewood, Colorado, resulting in a significant turnaround in sales [13] Q&A Session Summary Question: Will menu prices need to be raised due to rising beef prices? - Management indicated that while they evaluate prices based on competitor actions and customer demand for value, a price increase is not immediately planned [23][24] Question: What was the advertising expense for the quarter? - Advertising expense was 2% of revenues for the quarter, amounting to $749,000 [25][26] Question: What is the status of the development pipeline? - Management is in the final stages of negotiating a lease in the Greater Charlotte DMA, with potential openings expected in late fiscal Q2 or early Q3 of 2025 [30][31] Question: Are the lowest performing stores currently unprofitable? - Yes, some stores under consideration for closure are negative contributors to restaurant level cash flow [33]
Good Times(GTIM) - 2024 Q3 - Quarterly Results
2024-08-01 20:05
Exhibit 99.1 FOR IMMEDIATE RELEASE August 1, 2024 Nasdaq Capital Markets - GTIM (DENVER, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of the Bad Daddy's Burger Bar and Good Times Burgers & Frozen Custard restaurant brands, today reported financial results for the 2024 third fiscal quarter. Key highlights of the Company's financial results include: · Total Revenues for the quarter increased 6.5% to $37.9 million compared to the third quarter of fiscal 2023 · Same Store Sales for company-owned Bad ...
Good Times(GTIM) - 2024 Q2 - Quarterly Report
2024-05-02 20:08
Table of Contents 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 March 26, 2024 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 Organiz ...
Good Times(GTIM) - 2024 Q2 - Quarterly Results
2024-05-02 20:05
Exhibit 99.1 FOR IMMEDIATE RELEASE May 2, 2024 Nasdaq Capital Markets - GTIM GOOD TIMES RESTAURANTS REPORTS RESULTS FOR THE 2024 SECOND FISCAL QUARTER ENDED MARCH 26, 2024 (DENVER, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of the Bad Daddy's Burger Bar and Good Times Burgers & Frozen Custard restaurant brands, today reported financial results for the 2024 second fiscal quarter. Key highlights of the Company's financial results include: Ryan M. Zink, the Company's Chief Executive Officer, said ...
Good Times(GTIM) - 2024 Q1 - Quarterly Report
2024-01-31 22:07
PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements and notes, covering balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) Table: Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | December 26, 2023 | September 26, 2023 | | :-------------------- | :------------------ | :------------------- | | Total current assets | $6,978 | $6,521 | | Total net property and equipment | $22,553 | $23,036 | | Total assets | $90,121 | $91,088 | | Total current liabilities | $15,478 | $14,890 | | Total long-term liabilities | $42,561 | $43,204 | | Total shareholders' equity | $32,082 | $32,994 | - The company's total assets decreased from **$91,088,000 to $90,121,000**, while total current liabilities increased from **$14,890,000 to $15,478,000**, contributing to a working capital deficit[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) Table: Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :-------------------- | :------------------------- | :------------------------- | | Total net revenues | $33,132 | $33,394 | | Total restaurant operating costs | $30,111 | $30,015 | | (Loss) Income from Operations | $(374) | $107 | | NET (LOSS) INCOME | $(483) | $95 | | NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $(556) | $(127) | | Basic and Diluted EPS | $(0.05) | $(0.01) | - Total net revenues slightly decreased by **0.8% YoY**. The company shifted from an income from operations of **$107,000 to a loss of $374,000**, resulting in a net loss of **$483,000** for the quarter, compared to a net income of **$95,000** in the prior year[13](index=13&type=chunk) [Consolidated Statements of Shareholders' Equity (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Unaudited%29) Table: Consolidated Statements of Shareholders' Equity (in thousands) | Metric (in thousands) | September 26, 2023 | December 26, 2023 | | :-------------------- | :----------------- | :---------------- | | Treasury Stock, at cost | $(4,908) | $(5,346) | | Capital Contributed in Excess of Par Value | $56,701 | $56,739 | | Accumulated Deficit | $(19,235) | $(19,791) | | Total Good Times Restaurants Inc. shareholders' equity | $32,571 | $31,615 | - Shareholders' equity decreased from **$32,994,000 to $32,082,000**, primarily due to a net loss attributable to common shareholders of **$556,000** and treasury shares purchased for **$438,000**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Table: Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :-------------------------------- | :------------------------- | :------------------------- | | Net cash used in operating activities | $(252) | $(154) | | Net cash used in investing activities | $(448) | $(719) | | Net cash provided by (used in) financing activities | $33 | $(1,119) | | (DECREASE) IN CASH AND CASH EQUIVALENTS | $(667) | $(1,992) | | CASH AND CASH EQUIVALENTS, end of period | $3,515 | $6,914 | - Net cash used in operating activities increased to **$252,000** from **$154,000 YoY**. Net cash provided by financing activities significantly improved to **$33,000** from a usage of **$1,119,000**, primarily due to borrowings against the credit facility[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) - The company operates and licenses full-service Bad Daddy's Burger Bar restaurants and operates and franchises drive-thru Good Times Burgers & Frozen Custard restaurants[19](index=19&type=chunk) - The fiscal year is a 52/53-week year ending on the last Tuesday of September, with quarters ended December 26, 2023, and December 27, 2022, each consisting of 13 weeks[21](index=21&type=chunk) Table: Receivables (in thousands) | Receivables (in thousands) | December 26, 2023 | September 26, 2023 | | :------------------------- | :------------------ | :------------------- | | Large box retail partners | $638 | $291 | | Vendor rebates and incentives | $341 | $185 | | Third party delivery partners | $308 | $269 | | Franchise and other | $47 | $24 | | Total | $1,334 | $769 | [Note 2. Recent Accounting Pronouncements](index=10&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) - The company expects to retrospectively implement ASU 2023-07 (Segment Reporting) in fiscal year 2025, with no anticipated material effect on its consolidated financial statements[26](index=26&type=chunk) [Note 3. Revenue](index=11&type=section&id=Note%203.%20Revenue) - Revenues primarily consist of restaurant sales and franchise revenue, recognized when performance obligations are satisfied, typically at the time of sale for food and beverage[28](index=28&type=chunk) - Sales-based royalties and advertising fund contributions from franchisees are recognized as underlying sales occur, with new GT Rewards loyalty program activity being immaterial for the quarter[30](index=30&type=chunk)[29](index=29&type=chunk) [Note 4. Goodwill and Intangible Assets](index=11&type=section&id=Note%204.%20Goodwill%20and%20Intangible%20Assets) Table: Goodwill and Intangible Assets (in thousands) | Asset Type (in thousands) | December 26, 2023 Net Carrying Amount | September 26, 2023 Net Carrying Amount | | :------------------------ | :------------------------------------ | :------------------------------------- | | Intangible assets subject to amortization | $48 | $51 | | Trademarks (indefinite-lived) | $3,900 | $3,900 | | Goodwill | $5,713 | $5,713 | - The company reported no goodwill impairment losses in the periods presented, with aggregate amortization expense for intangible assets at **$3,000** for the quarter, up from **$2,000** in the prior year[32](index=32&type=chunk) [Note 5. Stock-Based Compensation](index=11&type=section&id=Note%205.%20Stock-Based%20Compensation) - Stock-based compensation expense for the quarter ended December 26, 2023, was **$38,000**, a decrease from **$46,000** in the prior year[34](index=34&type=chunk) - **38,000** incentive stock options were awarded with an exercise price of **$2.51** per share and a fair value of **$1.58**, with **$123,000** in unrecognized compensation cost expected over **3.2 years**[36](index=36&type=chunk)[39](index=39&type=chunk) - **34,000** restricted stock units were granted, with **$149,000** in unrecognized compensation cost expected over **2.2 years**[40](index=40&type=chunk)[44](index=44&type=chunk) [Note 6. Gain on Sale of Assets](index=15&type=section&id=Note%206.%20Gain%20on%20Sale%20of%20Assets) - The company recognized **$10,000** in deferred gains on prior sale-leaseback transactions for the quarter, compared to a net **$0** in the prior year[46](index=46&type=chunk) [Note 7. Prepaid expense and other current assets](index=15&type=section&id=Note%207.%20Prepaid%20expense%20and%20other%20current%20assets) Table: Prepaid Expenses and Other Current Assets (in thousands) | Prepaid Expenses and Other Current Assets (in thousands) | December 26, 2023 | September 26, 2023 | | :--------------------------------------- | :------------------ | :------------------- | | Prepaid Insurance | $474 | $0 | | Other | $231 | $163 | | Total | $705 | $163 | [Note 8. Other Accrued Liabilities](index=15&type=section&id=Note%208.%20Other%20Accrued%20Liabilities) Table: Other Accrued Liabilities (in thousands) | Other Accrued Liabilities (in thousands) | December 26, 2023 | September 26, 2023 | | :------------------------------------- | :------------------ | :------------------- | | Wages and other employee benefits | $2,442 | $2,892 | | Taxes, other than income taxes | $1,396 | $1,275 | | Gift card liability, net of breakage | $1,907 | $1,108 | | General expense accrual and other | $1,129 | $1,176 | | Total | $6,874 | $6,451 | [Note 9. Notes Payable and Long-Term Debt](index=15&type=section&id=Note%209.%20Notes%20Payable%20and%20Long-Term%20Debt) - The company maintains an **$8 million** Cadence Credit Facility maturing April 20, 2028, with **$1,250,000** borrowed and **$6,740,000** of committed funds available as of December 26, 2023[49](index=49&type=chunk)[54](index=54&type=chunk) - The weighted average interest rate on borrowings under the Cadence Credit Facility was **8.45%** for the quarter, and the company was in compliance with all covenants[52](index=52&type=chunk)[51](index=51&type=chunk) - Interest expense on notes payable increased to **$26,000** for the quarter ended December 26, 2023, from **$0** in the prior year[55](index=55&type=chunk) [Note 10. Earnings (Loss) per Common Share](index=17&type=section&id=Note%2010.%20Earnings%20%28Loss%29%20per%20Common%20Share) Table: Earnings (Loss) per Common Share | Metric | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :-------------------------------- | :------------------------- | :------------------------- | | Weighted-average shares outstanding basic | 11,377,579 | 12,041,628 | | Weighted-average shares outstanding diluted | 11,377,579 | 12,041,628 | | Antidilutive shares excluded | 435,900 | 527,658 | - Basic and diluted weighted-average shares outstanding were identical for both periods, indicating no dilutive impact from stock options or restricted stock units due to the net loss[57](index=57&type=chunk) [Note 11. Contingent Liabilities and Liquidity](index=17&type=section&id=Note%2011.%20Contingent%20Liabilities%20and%20Liquidity) - The company is a defendant in a lawsuit regarding failed negotiations for the sale of the Good Times Drive Thru subsidiary, with an ongoing appeal by plaintiffs despite a successful trial for the company[59](index=59&type=chunk) - The company maintains a **$332,000** accrual for contingent litigation expense, acknowledging potential losses exceeding this amount[61](index=61&type=chunk) [Note 12. Leases](index=18&type=section&id=Note%2012.%20Leases) - The company's material long-term operating leases are for restaurant land and buildings, with initial terms of **10-20 years**, often including renewal options[62](index=62&type=chunk) Table: Lease Metrics | Lease Metric | December 26, 2023 | December 27, 2022 | | :------------------------------------------ | :------------------ | :------------------ | | Operating lease cost (in thousands) | $1,901 | $1,825 | | Weighted average remaining lease term (years) | 7.75 | 8.49 | | Weighted average discount rate | 5.0% | 5.0% | | Total lease liabilities (in thousands) | $47,104 | $49,240 | Table: Future Minimum Rent Payments (in thousands) | Future Minimum Rent Payments (in thousands) | Total | | :---------------------------------------- | :---- | | Remainder of 2024 | $6,130 | | 2025 | $8,219 | | 2026 | $7,791 | | 2027 | $7,494 | | 2028 | $6,733 | | Thereafter | $20,858 | | Total minimum lease payments | $57,225 | | Less: imputed interest | $(10,121) | | Present value of lease liabilities | $47,104 | [Note 13. Impairment of Long-Lived Assets and Goodwill](index=19&type=section&id=Note%2013.%20Impairment%20of%20Long-Lived%20Assets%20and%20Goodwill) - No impairments of long-lived assets or trademarks were recorded for the fiscal quarters ended December 26, 2023, and December 27, 2022[70](index=70&type=chunk)[72](index=72&type=chunk) - Goodwill is tested annually for impairment, with **$96,000** attributable to Good Times and **$5,617,000** to Bad Daddy's reporting units as of December 26, 2023[73](index=73&type=chunk) [Note 14. Income Taxes](index=21&type=section&id=Note%2014.%20Income%20Taxes) - The effective income tax rate for the three months ended December 26, 2023, was **(14.04%)**, a decrease from **0.0%** in the prior year, due to the release of the company's valuation allowance during fiscal year 2023[75](index=75&type=chunk) - The company believes its income tax filing positions will be sustained upon audit and has not recorded reserves for uncertain income tax positions[76](index=76&type=chunk) [Note 15. Non-controlling Interests](index=21&type=section&id=Note%2015.%20Non-controlling%20Interests) Table: Non-controlling Interests Activity (in thousands) | Non-controlling Interests Activity (in thousands) | Total | | :---------------------------------------------- | :---- | | Balance at September 26, 2023 | $423 | | Income | $73 | | Distributions | $(29) | | Balance at December 26, 2023 | $467 | - Non-controlling interests increased to **$467,000** as of December 26, 2023, primarily due to **$73,000** in income attributable to non-controlling interests, mainly from Good Times joint-venture restaurants[79](index=79&type=chunk)[126](index=126&type=chunk) [Note 16. Segment Reporting](index=21&type=section&id=Note%2016.%20Segment%20Reporting) - The company operates two reportable segments: Bad Daddy's Burger Bar (full-service) and Good Times Burgers and Frozen Custard (quick-service)[80](index=80&type=chunk) Table: Segment Performance (in thousands) | Segment Performance (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :--------------------------------- | :------------------------- | :------------------------- | | **Revenues:** | | | | Bad Daddy's | $24,193 | $25,226 | | Good Times | $8,939 | $8,168 | | **(Loss) Income from Operations:** | | | | Bad Daddy's | $(763) | $(7) | | Good Times | $389 | $114 | | **Capital Expenditures:** | | | | Bad Daddy's | $132 | $726 | | Good Times | $330 | $884 | Table: Segment Assets (in thousands) | Segment Assets (in thousands) | December 26, 2023 | September 26, 2023 | | :---------------------------- | :---------------- | :----------------- | | **Property and equipment, net:** | | | | Bad Daddy's | $18,468 | $18,053 | | Good Times | $4,085 | $4,983 | | **Total assets:** | | | | Bad Daddy's | $66,614 | $67,720 | | Good Times | $23,507 | $23,368 | [Note 17. Subsequent Events](index=23&type=section&id=Note%2017.%20Subsequent%20Events) - There were no subsequent events to report[82](index=82&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Analyzes operations, growth strategies, and financial performance, highlighting revenue changes, operating loss, inflation, and liquidity [Overview](index=24&type=section&id=Overview) - Good Times Restaurants Inc. operates and franchises Bad Daddy's Burger Bar (full-service) and Good Times Burgers & Frozen Custard (drive-through)[86](index=86&type=chunk) - The company focuses on targeted unit growth for Bad Daddy's and improving same-store sales and profitability for both concepts[87](index=87&type=chunk) [Growth Strategies and Outlook](index=24&type=section&id=Growth%20Strategies%20and%20Outlook) - The company evaluates unit growth in light of inflationary impacts on the restaurant industry, despite opportunities for customer traffic and brand awareness growth[88](index=88&type=chunk) [Restaurant locations](index=24&type=section&id=Restaurant%20locations) - As of December 26, 2023, the company operated, franchised, or licensed **41** Bad Daddy's restaurants and **31** Good Times restaurants[89](index=89&type=chunk) Table: Restaurant Locations | Restaurant Type | 2023 | 2022 | | :---------------- | :--- | :--- | | Company-Owned/Co-Developed/Joint-Venture: | | | | Bad Daddy's Burger Bar | 40 | 40 | | Good Times Burgers & Frozen Custard | 25 | 23 | | Total Company-Owned | 65 | 63 | | Franchise/License: | | | | Bad Daddy's Burger Bar | 1 | 1 | | Good Times Burgers & Frozen Custard | 6 | 8 | | Total Franchise/License | 7 | 9 | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) [Net Revenues](index=26&type=section&id=Net%20Revenues) Table: Net Revenues (in thousands) | Revenue Type (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | Change ($) | Change (%) | | :-------------------------- | :------------------------- | :------------------------- | :--------- | :--------- | | Restaurant sales | $32,946 | $33,179 | $(233) | -0.7% | | Franchise revenues | $186 | $215 | $(29) | -13.5% | | Total net revenues | $33,132 | $33,394 | $(262) | -0.8% | - Bad Daddy's restaurant sales decreased by **$1,045,000** due to a prior-year closure and reduced customer traffic, partially offset by a **4.2%** menu price increase and sales from a new Madison, Alabama restaurant[95](index=95&type=chunk) - Good Times restaurant sales increased by **$812,000**, primarily due to the acquisition of two franchised restaurants, increased customer traffic, and a **4.6%** menu price increase[96](index=96&type=chunk) [Same Store Sales](index=26&type=section&id=Same%20Store%20Sales) - Bad Daddy's same-store sales decreased by **6.2%** due to general weakness in casual dining and weaker traffic in key markets, partially offset by menu price increases[99](index=99&type=chunk) - Good Times same-store sales increased by **4.1%**, driven by increased customer traffic and menu price increases[100](index=100&type=chunk) [Restaurant Operating Costs](index=28&type=section&id=Restaurant%20Operating%20Costs) Table: Restaurant Operating Costs (in thousands) | Cost Category (in thousands) | Dec 26, 2023 | % of Sales | Dec 27, 2022 | % of Sales | Change ($) | Change (%) | | :--------------------------- | :----------- | :--------- | :----------- | :--------- | :--------- | :--------- | | Food and Packaging Costs | $10,327 | 31.3% | $10,607 | 32.0% | $(280) | -2.6% | | Payroll and Other Employee Benefit Costs | $11,624 | 35.3% | $11,548 | 34.8% | $76 | 0.7% | | Restaurant Occupancy Costs | $2,505 | 7.6% | $2,458 | 7.4% | $47 | 1.9% | | Other Restaurant Operating Costs | $4,728 | 14.4% | $4,492 | 13.5% | $236 | 5.3% | | Depreciation and Amortization | $927 | 2.8% | $910 | 2.7% | $17 | 1.9% | | Total Restaurant Operating Costs | $30,111 | 91.4% | $30,015 | 90.4% | $96 | 0.3% | - Food and packaging costs decreased due to lower sales and purchase prices, while payroll costs increased due to higher average pay rates despite lower Bad Daddy's sales[104](index=104&type=chunk)[107](index=107&type=chunk) - Other operating costs increased for both brands, driven by higher repair and maintenance, technology, utility expenses, and increased delivery sales commissions for Good Times[112](index=112&type=chunk)[113](index=113&type=chunk) [General and Administrative Costs](index=29&type=section&id=General%20and%20Administrative%20Costs) - General and administrative costs decreased by **$65,000** to **$2,313,000 (7.0% of total revenues)** from **$2,378,000 (7.1% of total revenues)** in the prior year[116](index=116&type=chunk) - The decrease was primarily due to reductions in professional services, office lease/equipment, general travel, recruiting/training, and health insurance costs, partially offset by increases in home office payroll and multi-unit supervisory roles[126](index=126&type=chunk) [Advertising Costs](index=30&type=section&id=Advertising%20Costs) - Advertising costs increased to **$1,092,000 (3.3% of total revenues)** from **$894,000 (2.7% of total revenues)** in the prior year[117](index=117&type=chunk) - Bad Daddy's advertising costs increased due to commissions on gift cards sold through large-box retailers, while Good Times advertising costs increased due to radio advertising and loyalty program expenses[118](index=118&type=chunk)[119](index=119&type=chunk) [Gain on Restaurant Asset and Equipment Sales](index=30&type=section&id=Gain%20on%20Restaurant%20Asset%20and%20Equipment%20Sales) - A gain of **$10,000** was recognized from restaurant asset and equipment sales for the quarter ended December 26, 2023, compared to **$0** in the prior year[121](index=121&type=chunk) [(Loss) Income from Operations](index=30&type=section&id=%28Loss%29%20Income%20from%20Operations) - The company reported a loss from operations of **$374,000** for the quarter, a significant decline from an income of **$107,000** in the prior year[121](index=121&type=chunk) [Interest Expense](index=30&type=section&id=Interest%20Expense) - Interest expense increased to **$32,000** for the quarter ended December 26, 2023, from **$12,000** in the prior year[122](index=122&type=chunk) [Provision for Income Taxes](index=30&type=section&id=Provision%20for%20Income%20Taxes) - A provision for income taxes of **$77,000** was recorded for the quarter, compared to **$0** in the prior year, due to the release of the valuation allowance[123](index=123&type=chunk)[75](index=75&type=chunk) [Net (Loss) Income](index=30&type=section&id=Net%20%28Loss%29%20Income) - The company incurred a net loss of **$483,000** for the quarter, a reversal from a net income of **$95,000** in the prior year[123](index=123&type=chunk) [Income Attributable to Non-Controlling Interests](index=30&type=section&id=Income%20Attributable%20to%20Non-Controlling%20Interests) - Income attributable to non-controlling interests decreased to **$73,000** from **$222,000** in the prior year, primarily due to the acquisition of interests in Bad Daddy's joint-venture restaurants by the company[124](index=124&type=chunk)[125](index=125&type=chunk) [Adjusted EBITDA](index=31&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is a non-GAAP measure used by management and investors to evaluate performance, excluding non-cash items like stock-based compensation, preopening expenses, and GAAP rent differences[129](index=129&type=chunk)[130](index=130&type=chunk) Table: Adjusted EBITDA (in thousands) | Metric (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :-------------------- | :------------------------- | :------------------------- | | Net loss, as reported | $(556) | $(127) | | EBITDA | $482 | $752 | | Adjusted EBITDA | $347 | $674 | - Adjusted EBITDA decreased to **$347,000** from **$674,000** in the prior year, reflecting the decline in net income and other adjustments[132](index=132&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash and Working Capital](index=33&type=section&id=Cash%20and%20Working%20Capital) - As of December 26, 2023, the company had a working capital deficit of **$8.5 million**, primarily influenced by short-term lease liabilities[135](index=135&type=chunk) - Management believes existing cash and future borrowings from the Cadence Credit Facility will be sufficient to meet working capital and recurring capital expenditure needs in fiscal 2024[135](index=135&type=chunk) [Financing](index=33&type=section&id=Financing) - The company has a **$5.0 million** share repurchase program authorized in February 2022, with **$1,343,000** remaining available for repurchases as of December 26, 2023[136](index=136&type=chunk)[160](index=160&type=chunk) - The Cadence Credit Facility provides up to **$8 million**, maturing April 20, 2028, with **$1,250,000** borrowed and **$6,740,000** available as of December 26, 2023, at a weighted average interest rate of **8.45%**[137](index=137&type=chunk)[142](index=142&type=chunk)[140](index=140&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) Table: Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Quarter Ended Dec 26, 2023 | Quarter Ended Dec 27, 2022 | | :-------------------------------- | :------------------------- | :------------------------- | | Net cash used in operating activities | $(252) | $(154) | | Net cash used in investing activities | $(448) | $(719) | | Net cash provided by (used in) financing activities | $33 | $(1,119) | | Net change in cash and cash equivalents | $(667) | $(1,992) | - Operating cash flow usage increased by **$98,000**. Investing cash flow usage decreased by **$271,000** due to lower property and equipment purchases. Financing cash flow shifted from a usage of **$1,119,000** to a provision of **$33,000**, driven by credit facility borrowings[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [Impact of Inflation and Wage Increases at Both Concepts](index=35&type=section&id=Impact%20of%20Inflation%20and%20Wage%20Increases%20at%20Both%20Concepts) - Commodity prices, especially for key proteins, remain high and volatile, with ground beef costs projected to increase in the second half of fiscal 2024, alongside elevated costs for paper, packaging, and energy[150](index=150&type=chunk) - The company faces significant wage increases, particularly in Colorado, and while menu price increases are used, consumer preferences and competitor pricing may limit their effectiveness[151](index=151&type=chunk)[152](index=152&type=chunk) [Seasonality](index=35&type=section&id=Seasonality) - Revenues are subject to seasonal fluctuations, with adverse weather in December-March affecting Colorado restaurant sales, especially Good Times, and Bad Daddy's experiencing reductions from November-January[153](index=153&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) States that quantitative and qualitative disclosures about market risk are not required for this filing - Quantitative and qualitative disclosures about market risk are not required for this report[154](index=154&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective, with no significant changes in internal control over financial reporting - The company's Chief Executive Officer and Senior Vice President of Finance and Accounting concluded that disclosure controls and procedures were effective as of December 26, 2023[156](index=156&type=chunk) - There were no significant changes in internal control over financial reporting during the fiscal quarter ended December 26, 2023[157](index=157&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Refers to Note 11 for material legal proceedings, including an ongoing appeal in a lawsuit regarding a failed subsidiary sale - For a discussion of material legal proceedings, refer to Note 11 to the unaudited, consolidated financial statements[158](index=158&type=chunk) [ITEM 1A. RISK FACTORS](index=37&type=section&id=ITEM%201A.%20RISK%20FACTORS) States no material changes to risk factors previously disclosed in the company's Form 10-K - There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the company's Form 10-K for the fiscal year ended September 26, 2023[159](index=159&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Details the company's **$5.0 million** share repurchase program, with **$1,343,000** remaining available as of December 26, 2023 - The company has a **$5.0 million** share repurchase program, effective February 7, 2022, with **$1,343,000** remaining available for repurchases as of December 26, 2023[160](index=160&type=chunk) Table: Share Repurchase Activity | Period | Total shares purchased | Average price paid per share | | :--------------------- | :--------------------- | :--------------------------- | | 09/27/2023–10/24/2023 | 41,950 | $2.93 | | 10/25/2023–11/21/2023 | 40,199 | $2.68 | | 11/22/2023–12/26/2023 | 78,623 | $2.59 | | Total | 160,772 | | [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=37&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Indicates no defaults upon senior securities - There were no defaults upon senior securities[162](index=162&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) States that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[163](index=163&type=chunk) [ITEM 5. OTHER INFORMATION](index=37&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Reports no adoption, modification, or termination of Rule 10b5-1 trading arrangements by directors or officers during the quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended December 26, 2023[164](index=164&type=chunk) [ITEM 6. EXHIBITS](index=38&type=section&id=ITEM%206.%20EXHIBITS) Lists exhibits furnished with the report, including certifications and XBRL instance and taxonomy documents Table: Exhibits | Exhibit No. | Description | | :---------- | :----------------------------------------------------------------------- | | *31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | | *31.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 | | *32.1 | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Section 906 | | 101.INS | XBRL Instance Document | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | *104 | Cover Page Interactive Data File (formatted as Inline XBRL) | [SIGNATURES](index=39&type=section&id=SIGNATURES) Contains signatures of authorized officers, including the CEO and SVP of Finance and Accounting, certifying the report - The report is signed by Ryan M. Zink, Chief Executive Officer, and Keri A. August, Senior Vice President of Finance and Accounting, on January 31, 2024[169](index=169&type=chunk)
Good Times(GTIM) - 2023 Q4 - Annual Report
2023-12-14 21:08
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 26, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 000-18590 (Exact name of registrant as specified in its charter) | Nevada | 84-1133368 | | --- | --- | | (State or other jurisdiction of incorporation or organizat ...