Good Times(US:GTIM)2023-08-03 20:10Revenue Performance - Net revenues for the fiscal quarter ended June 27, 2023 decreased by $877,000 or 2.4% to $35,620,000 from $36,497,000 for the same quarter in 2022[103]. - Net revenues for the three quarters ended June 27, 2023 increased by $789,000, or 0.8%, to $103,799,000 from $103,010,000 for the same period in 2022[139]. Restaurant Sales - Bad Daddy's restaurant sales decreased by $1,087,000 to $26,085,000, negatively affected by the closure of the Cherry Creek location and reduced customer traffic[104]. - Good Times restaurant sales increased by $198,000 to $9,291,000, driven by an average menu price increase of approximately 10.5%[105]. - Bad Daddy's restaurant sales increased by $382,000 to $77,592,000 for the three quarters ended June 27, 2023, primarily due to a 4.4% increase in average menu prices[140]. - Good Times restaurant sales increased by $436,000 to $25,531,000 for the three quarters ended June 27, 2023, driven by a 9.6% increase in average menu prices[141]. Same Store Sales - Same store sales for Bad Daddy's decreased by 1.4%, primarily due to weaker traffic, while Good Times saw an increase of 2.1%[108][109]. - Same store sales for Bad Daddy's increased by 1.8% during the three quarters ended June 27, 2023, while Good Times saw a 4.1% increase[145][146]. Costs and Expenses - Food and packaging costs decreased to $10,923,000, representing 30.9% of restaurant sales, down from 32.4% in the prior year[110]. - Payroll and other employee benefit costs decreased to $11,940,000, accounting for 33.8% of restaurant sales, slightly down from 33.9%[113]. - Occupancy costs increased to $2,432,000, representing 6.9% of restaurant sales, up from 6.6% in the prior year[116]. - Payroll and other employee benefit costs increased by $450,000 to $35,477,000, representing 34.4% of restaurant sales for the three quarters ended June 27, 2023[150]. - Other operating costs increased by $571,000 to $14,129,000, representing 13.7% of restaurant sales for the three quarters ended June 27, 2023[155]. - General and administrative costs decreased by $19,000 to $2,365,000, representing 6.6% of total revenues for the fiscal quarter ended June 27, 2023[124]. - General and administrative costs decreased by $621,000 to $7,040,000 (6.8% of total revenues) for the three quarters ended June 27, 2023, compared to $7,661,000 (7.4% of total revenue) for the same period in 2022[161]. Net Income and Profitability - Net income for the fiscal quarter ended June 27, 2023, was $977,000, compared to $138,000 for the same quarter in 2022[134]. - Net income for the three quarters ended June 27, 2023, was $11,815,000, a significant increase from $147,000 in the same period of 2022[172]. - Income from operations rose to $1,368,000 for the three quarters ended June 27, 2023, compared to $188,000 for the same period in 2022[167]. - Adjusted EBITDA for the three quarters ended June 27, 2023, was $4,353,000, up from $3,980,000 in the same period of 2022[179]. Cash Flow and Financing - Net cash provided by operating activities increased by $289,000 to $4,707,000 for the year-to-date period ended June 27, 2023, compared to $4,418,000 for the same period in 2022[186][187]. - Net cash used in investing activities was $7,572,000 for the three quarters ended June 27, 2023, primarily due to property and equipment purchases of $3,178,000 and net purchases of non-controlling interests of $4,394,000[188]. - Net cash used in financing activities was $2,357,000 for the three quarters ended June 27, 2023, including $1,720,000 for treasury stock purchases and $563,000 in distributions to non-controlling interests[191]. Future Outlook and Growth - The company anticipates opening one new restaurant in August 2023 and is developing a pipeline for growth in 2024 and beyond[97]. - As of June 27, 2023, the company operated a total of 40 Bad Daddy's restaurants and 31 Good Times restaurants[98]. Financial Condition and Ratios - The company had a working capital deficit of $6,421,000 as of June 27, 2023, but expects sufficient capital to meet operational needs throughout fiscal 2023[180]. - The company is required to maintain various financial condition ratios under the Cadence Credit Facility, including a minimum liquidity and an amended maximum leverage ratio[184]. Inflation and Economic Factors - The company experienced significant inflationary pressures, particularly in commodity prices and labor costs, impacting profitability management strategies[193][194][195]. - The company has historically used menu price increases to manage profitability during inflationary periods, but current inflation rates exceed what can be reasonably passed to customers[195]. - Seasonal fluctuations in revenues are expected, particularly affecting restaurant sales in Colorado during December to March[196]. Other Costs - Preopening costs for the fiscal quarter ended June 27, 2023, were $80,000, compared to no preopening costs for the same quarter in 2022[121]. - Depreciation and amortization costs decreased by $74,000 to $919,000 for the fiscal quarter ended June 27, 2023, from $993,000 in the same quarter of 2022[122]. - Advertising costs increased to $2,423,000 (2.3% of sales) for the three quarters ended June 27, 2023, compared to $2,260,000 (2.2% of total revenue) for the same period in 2022[162]. - The gain on restaurant asset sales and lease termination was $32,000 for the three quarters ended June 27, 2023, down from $666,000 in the same period of 2022[165]. - Impairment costs for long-lived assets were $1,041,000 for the three quarters ended June 27, 2023, compared to $2,056,000 for the same period in 2022[166]. - Interest expense increased to $56,000 during the three quarters ended June 27, 2023, from $41,000 in the same period of 2022[169]. - The interest rate applicable to borrowings under the Cadence Credit Facility was 8.07% as of June 27, 2023[185].