Good Times(US:GTIM)2024-05-02 20:08Revenue Performance - Net revenues for the fiscal quarter ended March 26, 2024, increased by $653,000 or 1.9% to $35,438,000 compared to $34,785,000 for the same quarter in 2023[78]. - Bad Daddy's restaurant sales increased by $106,000 to $26,448,000, while Good Times restaurant sales increased by $591,000 to $8,817,000 for the fiscal quarter ended March 26, 2024[79][80]. - Same store sales for Bad Daddy's decreased by 3.2%, while Good Times increased by 0.9% during the fiscal quarter ended March 26, 2024[83][85]. - Bad Daddy's restaurant sales decreased by $939,000 to $50,568,000 for the two quarters ended March 26, 2024, compared to $51,507,000 for the same period in 2023[116]. - Good Times restaurant sales increased by $1,403,000 to $17,643,000 for the two quarters ended March 26, 2024, compared to $16,240,000 for the same period in 2023[117]. - Same store sales for Bad Daddy's decreased by 4.7% during the two quarters ended March 26, 2024, while Good Times saw an increase of 2.5%[120][121]. Cost Analysis - Food and packaging costs decreased to $10,599,000 (30.1% of restaurant sales) from $10,655,000 (30.8% of restaurant sales) for the fiscal quarter ended March 26, 2024[86]. - Payroll and other employee benefit costs increased by $277,000 to $12,266,000 (34.8% of restaurant sales) for the fiscal quarter ended March 26, 2024[89]. - Occupancy costs increased by $185,000 to $2,613,000 (7.4% of restaurant sales) for the fiscal quarter ended March 26, 2024[92]. - Food and packaging costs for the two quarters ended March 26, 2024, decreased to $20,926,000 (30.7% of restaurant sales) from $21,262,000 (31.4% of restaurant sales) for the same period in 2023[122]. - Payroll and other employee benefit costs increased to $23,890,000 (35.0% of restaurant sales) for the two quarters ended March 26, 2024, up from $23,537,000 (34.7% of restaurant sales) for the same period in 2023[126]. - General and administrative costs increased to $4,867,000 (7.1% of total revenues) for the two quarters ended March 26, 2024, from $4,675,000 (6.9% of total revenues) for the same period in 2023[136]. Advertising and Marketing - Bad Daddy's advertising costs increased to $539,000 (2.0% of total revenues) for the quarter ended March 26, 2024, up from $422,000 (1.6% of total revenues) for the same quarter in 2023[102]. - Good Times advertising costs decreased to $285,000 (3.2% of total revenues) for the quarter ended March 26, 2024, down from $356,000 (4.2% of total revenues) for the same quarter in 2023[103]. - Advertising costs for the two quarters ended March 26, 2024, increased to $1,916,000 (2.8% of total revenues) from $1,672,000 (2.5% of total revenues) for the same period in 2023[137]. - Bad Daddy's advertising costs increased to $1,269,000 (2.5% of total revenues) for the two quarters ended March 26, 2024, up from $1,031,000 (2.0% of total revenues) for the same period in 2023[138]. - Good Times advertising costs were $647,000 (3.6% of total revenues) for the two quarters ended March 26, 2024, compared to $641,000 (3.9% of total revenues) in the prior year[139]. Income and Profitability - Net income for the quarter ended March 26, 2024, was $680,000, a significant decrease from $10,743,000 for the same quarter in 2023[109]. - Income from operations decreased to $270,000 for the two quarters ended March 26, 2024, down from $924,000 for the same period in 2023[143]. - Net income fell to $197,000 for the two quarters ended March 26, 2024, compared to $10,838,000 in the prior year[144]. - Adjusted EBITDA for the two quarters ended March 26, 2024, was $1,295,000, down from $1,531,000 for the same period in 2023[154]. Financial Position - As of March 26, 2024, the company had a working capital deficit of $8,515,000, influenced by short-term lease liabilities[156]. - The Cadence Credit Facility allows for loans up to $8,000,000, with a weighted average interest rate of 8.42% as of March 26, 2024[158][162]. - The company had $1,250,000 of borrowings against the Cadence Credit Facility, classified as a long-term liability[164]. Cash Flow - Net cash provided by operating activities decreased by $2,643,000 to $1,515,000 for the year-to-date period ended March 26, 2024, compared to $4,158,000 for the same period in 2023[166]. - Net cash used in investing activities was $1,063,000 for the two quarters ended March 26, 2024, significantly lower than $5,817,000 for the same period in 2023, primarily due to property and equipment purchases[167]. - Net cash used in financing activities decreased to $634,000 for the two quarters ended March 26, 2024, from $1,880,000 in the prior year, reflecting changes in long-term debt and treasury stock purchases[168][169]. Market Conditions - Commodity prices, especially for key proteins, remain high and volatile, with ground beef costs expected to increase in the second half of fiscal 2024[170]. - The company has faced increased labor costs due to wage pressures from inflation-indexed statutory wage rate increases in Colorado[171]. - Menu price increases have historically been used to manage profitability during inflation, but consumer preferences may limit the ability to raise prices sufficiently to offset labor cost increases[172]. - Seasonal fluctuations in revenues are observed, particularly affecting restaurant sales in Colorado during December to March, with Good Times restaurants being more sensitive to weather conditions[174].