Good Times(GTIM) - 2025 Q3 - Quarterly Results

Executive Summary & Business Update CEO's Commentary & Strategic Initiatives CEO Ryan Zink reported disappointing Q3 FY2025 sales, particularly for Good Times, but Bad Daddy's improved, with profitability maintained and a new marketing strategy launched to address traffic and unit economics - Sales results for Q3 FY2025 were disappointing for both brands, with Good Times significantly missing prior year's comparable sales[4] - Bad Daddy's sales improved in May and June, with bottom-line results strengthened by good controls and reduced general and administrative costs[4] - The company is revisiting its strategy to address sales declines, including hiring Jason Murphy as Senior Director of Marketing[4] - A new 'Colorado Native Burgers' brand campaign for Good Times will launch, focusing on Colorado roots with various advertising elements, a fresh website, and mobile app redesign[4] - Key priorities include addressing traffic trends, improving unit-level economics, and ensuring reasonable overhead costs, while balancing cost reduction with guest experience[4] Key Financial Highlights Q3 FY2025 total revenues decreased 2.4% to $37.0 million, with same-store sales down for both brands, but net income reached $1.5 million and Adjusted EBITDA $2.2 million Fiscal 2025 Third Quarter Key Financial Highlights | Metric | Value (Millions) | | :---------------------------------- | :--------------- | | Total Revenues | $37.0 | | Net Income Attributable to Common Shareholders | $1.5 | | Adjusted EBITDA (non-GAAP) | $2.2 | | Cash and cash equivalents | $3.1 | | Long-term debt | $2.3 | - Total Revenues for the quarter decreased 2.4% to $37.0 million compared to the fiscal 2024 third quarter[9] - Same-store sales for company-owned Bad Daddy's restaurants decreased 1.4% for the quarter[9] - Same-store sales for Good Times restaurants decreased 9.0% for the quarter[9] - Year-to-date same-store sales decreased 1.2% for Bad Daddy's and 4.4% for Good Times[9] Company Overview Business Description Good Times Restaurants Inc. operates and licenses Bad Daddy's Burger Bar (40 full-service) and Good Times Burgers & Frozen Custard (30 quick-service) restaurants, offering distinct dining experiences - Good Times Restaurants Inc. operates 40 Bad Daddy's Burger Bar and 30 Good Times Burgers & Frozen Custard restaurants[10] - Bad Daddy's Burger Bar is a full-service concept offering gourmet burgers, salads, appetizers, and sandwiches, with a full bar focusing on craft beers[10] - Good Times Burgers & Frozen Custard is a regional quick-service concept in Colorado, known for 100% all-natural burgers, chicken sandwiches, and frozen custard desserts[10] Forward-Looking Statements & Risks The report contains forward-looking statements, cautioning that actual results may differ due to risks like market fluctuations, business disruptions, supply chain issues, inflation, competition, and regulatory changes - This press release contains forward-looking statements, and actual results may differ materially due to known and unknown risks[11] - Risks include market price fluctuations, business disruptions from pandemics, staffing and supply chain constraints, inflation, tariffs, and increased competition[11] - Further risks encompass general economic conditions, share repurchase and acquisition risks, liquidity, and changes in laws and regulations[11] Consolidated Financial Performance Income Statement Analysis Q3 FY2025 total net revenues decreased to $37.0 million, driven by lower restaurant sales, yet income from operations slightly increased, and net income rose to $1.49 million due to cost controls Consolidated Income Statement Highlights (Fiscal Third Quarter, in thousands) | Metric | FY2025 (13 Weeks) | FY2024 (13 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $36,869 | $37,742 | -$873 | -2.31% | | Franchise and other revenues | $156 | $208 | -$52 | -25.00% | | Total net revenues | $37,025 | $37,950 | -$925 | -2.44% | | Total restaurant operating costs | $32,881 | $33,068 | -$187 | -0.57% | | General and administrative costs | $2,174 | $2,688 | -$514 | -19.12% | | Income from operations | $1,233 | $1,228 | $5 | 0.41% | | Net income attributable to common shareholders | $1,487 | $1,321 | $166 | 12.57% | | Basic EPS | $0.14 | $0.12 | $0.02 | 16.67% | | Diluted EPS | $0.14 | $0.12 | $0.02 | 16.67% | Consolidated Income Statement Highlights (Year-to-Date, in thousands) | Metric | FY2025 (40 Weeks) | FY2024 (39 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $106,974 | $105,953 | $1,021 | 0.96% | | Franchise and other revenues | $663 | $601 | $62 | 10.32% | | Total net revenues | $107,637 | $106,554 | $1,083 | 1.02% | | Total restaurant operating costs | $96,752 | $94,688 | $2,064 | 2.18% | | General and administrative costs | $7,340 | $7,824 | -$484 | -6.19% | | Income from operations | $796 | $1,498 | -$702 | -46.86% | | Net income attributable to common shareholders | $1,027 | $1,383 | -$356 | -25.74% | | Basic EPS | $0.10 | $0.12 | -$0.02 | -16.67% | | Diluted EPS | $0.10 | $0.12 | -$0.02 | -16.67% | Balance Sheet Overview As of July 1, 2025, cash decreased to $3.1 million, total assets declined to $85.8 million, current liabilities reduced to $15.0 million, and shareholders' equity increased to $33.8 million Selected Balance Sheet Data (in thousands) | Metric | July 1, 2025 | September 24, 2024 | Change ($) | Change (%) | | :---------------------- | :------------- | :----------------- | :--------- | :--------- | | Cash and cash equivalents | $3,138 | $3,853 | -$715 | -18.56% | | Current assets | $6,499 | $6,557 | -$58 | -0.88% | | Total assets | $85,750 | $87,118 | -$1,368 | -1.57% | | Current liabilities | $14,956 | $15,687 | -$731 | -4.66% | | Shareholders' equity | $33,810 | $33,088 | $722 | 2.18% | Brand-Level Performance & Margin Analysis Bad Daddy's Burger Bar Performance Q3 FY2025 Bad Daddy's Burger Bar sales decreased to $26.5 million, with average weekly sales slightly down, but operating profit margin improved to 14.4% due to reduced food and packaging costs Bad Daddy's Burger Bar Key Performance (Fiscal Third Quarter, in thousands) | Metric | FY2025 (13 Weeks) | FY2024 (13 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $26,513 | $27,327 | -$814 | -2.98% | | Restaurants open at period end | 39 | 40 | -1 | -2.50% | | Average weekly sales per restaurant | $52.3 | $52.6 | -$0.3 | -0.57% | | Food and packaging costs (% of sales) | 30.6% | 31.2% | -0.6% | N/A | | Payroll and benefits costs (% of sales) | 34.3% | 33.8% | +0.5% | N/A | | Restaurant-level operating profit | $3,813 | $3,911 | -$98 | -2.51% | | Restaurant-level operating profit margin | 14.4% | 14.3% | +0.1% | N/A | Bad Daddy's Burger Bar Key Performance (Year-to-Date, in thousands) | Metric | FY2025 (40 Weeks) | FY2024 (39 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $77,408 | $77,896 | -$488 | -0.63% | | Average weekly sales per restaurant | $49.6 | $49.9 | -$0.3 | -0.60% | | Food and packaging costs (% of sales) | 30.9% | 31.0% | -0.1% | N/A | | Payroll and benefits costs (% of sales) | 34.6% | 34.7% | -0.1% | N/A | | Restaurant-level operating profit | $10,472 | $10,091 | $381 | 3.78% | | Restaurant-level operating profit margin | 13.5% | 13.0% | +0.5% | N/A | Good Times Burgers & Frozen Custard Performance Q3 FY2025 Good Times Burgers & Frozen Custard sales slightly decreased to $10.356 million, with average weekly sales declining, and operating profit margin falling to 11.2% due to increased operating costs Good Times Burgers & Frozen Custard Key Performance (Fiscal Third Quarter, in thousands) | Metric | FY2025 (13 Weeks) | FY2024 (13 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $10,356 | $10,415 | -$59 | -0.57% | | Restaurants open at period end | 27 | 26 | +1 | 3.85% | | Average weekly sales per restaurant | $29.5 | $32.1 | -$2.6 | -8.09% | | Food and packaging costs (% of sales) | 31.5% | 30.5% | +1.0% | N/A | | Payroll and benefits costs (% of sales) | 34.2% | 32.7% | +1.5% | N/A | | Other restaurant operating costs (% of sales) | 14.6% | 12.0% | +2.6% | N/A | | Restaurant-level operating profit | $1,157 | $1,723 | -$566 | -32.85% | | Restaurant-level operating profit margin | 11.2% | 16.5% | -5.3% | N/A | Good Times Burgers & Frozen Custard Key Performance (Year-to-Date, in thousands) | Metric | FY2025 (40 Weeks) | FY2024 (39 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Restaurant sales | $29,566 | $28,057 | $1,509 | 5.38% | | Average weekly sales per restaurant | $27.7 | $28.8 | -$1.1 | -3.82% | | Food and packaging costs (% of sales) | 31.3% | 30.2% | +1.1% | N/A | | Payroll and benefits costs (% of sales) | 35.5% | 33.8% | +1.7% | N/A | | Other restaurant operating costs (% of sales) | 14.5% | 12.9% | +1.6% | N/A | | Restaurant-level operating profit | $2,754 | $3,987 | -$1,233 | -30.93% | | Restaurant-level operating profit margin | 9.3% | 14.2% | -4.9% | N/A | Total Restaurant-Level Operating Profit Q3 FY2025 total restaurant-level operating profit (non-GAAP) decreased to $4.97 million (13.5% margin), with year-to-date profit also declining to $13.23 million (12.4% margin) Total Restaurant-Level Operating Profit (Non-GAAP) (Fiscal Third Quarter, in thousands) | Metric | FY2025 (13 Weeks) | FY2024 (13 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Total restaurant-level operating profit | $4,970 | $5,634 | -$664 | -11.79% | | Total restaurant-level operating profit margin | 13.5% | 14.9% | -1.4% | N/A | Total Restaurant-Level Operating Profit (Non-GAAP) (Year-to-Date, in thousands) | Metric | FY2025 (40 Weeks) | FY2024 (39 Weeks) | Change ($) | Change (%) | | :---------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Total restaurant-level operating profit | $13,226 | $14,078 | -$852 | -6.05% | | Total restaurant-level operating profit margin | 12.4% | 13.3% | -0.9% | N/A | Non-GAAP Financial Measures Reconciliation Restaurant-Level Operating Profit Reconciliation Q3 FY2025 Restaurant-Level Operating Profit (non-GAAP) was $4.97 million, reconciled from Income from Operations by adjusting for non-restaurant specific costs, providing insight into operating efficiency Reconciliation of Income from Operations to Restaurant-Level Operating Profit (Fiscal Third Quarter, in thousands) | Item | FY2025 (13 Weeks) | FY2024 (13 Weeks) | | :---------------------------------- | :---------------- | :---------------- | | Income from operations | $1,233 | $1,228 | | Less: Franchise and other revenues | $156 | $208 | | Add: General and administrative | $2,174 | $2,688 | | Add: Depreciation and amortization | $982 | $960 | | Add: Advertising costs | $741 | $749 | | Add: Impairment of long-lived assets | $0 | $199 | | Restaurant-level operating profit | $4,970 | $5,634 | - Restaurant-level operating profit is a non-GAAP measure used to evaluate restaurant-level operating efficiency and performance[19] - This measure excludes non-cash items and costs not reflecting current cash outlay or efficiency of continuing operations, such as depreciation, G&A, and impairment costs[19] Adjusted EBITDA Reconciliation Q3 FY2025 Adjusted EBITDA (non-GAAP) was $2.17 million, derived from net income by adjusting for non-cash and non-recurring items, providing a clearer view of operating performance and industry comparability Reconciliation of Net Income to Adjusted EBITDA (Fiscal Third Quarter, in thousands) | Item | FY2025 (13 Weeks) | FY2024 (13 Weeks) | | :---------------------------------- | :---------------- | :---------------- | | Net Income, as reported | $1,487 | $1,321 | | Depreciation and amortization | $976 | $959 | | Interest expense, net | $51 | $27 | | Provision for income taxes | -$363 | -$197 | | EBITDA | $2,151 | $2,110 | | Non-cash stock-based compensation | $25 | $28 | | Asset impairment | $0 | $199 | | (Gain) loss on restaurant and equipment asset sales | -$5 | $18 | | Adjusted EBITDA | $2,171 | $2,355 | - Adjusted EBITDA is a supplemental non-GAAP measure, calculated from net income by adjusting for interest, taxes, D&A, non-cash stock compensation, asset impairment, and asset sales gains/losses[21][22] - This measure assesses operating performance by excluding non-cash and non-core items, facilitating company-to-company comparisons within the industry[23]