Good Times(US:GTIM)2023-08-06 06:20Financial Data and Key Metrics Changes - Total revenues decreased by 2.4% to $35.6 million for the quarter [12] - Total restaurant sales decreased by $0.9 million to $35.4 million for the quarter [12] - Adjusted EBITDA for the quarter was $2.1 million compared to $1.7 million for the third quarter of 2022 [17] - Net income to common shareholders for the quarter was $0.8 million or income of $0.07 per share versus net income of $0.4 million or $0.04 per share in the second quarter last year [22] Business Line Data and Key Metrics Changes - Total restaurant sales for Bad Daddy's decreased by $1.1 million to $26.1 million for the quarter [12] - Restaurant-level operating profit for Bad Daddy's was approximately $3.5 million for the quarter or 13.3% of sales compared to $3.6 million or 13.3% of sales last year [19] - Restaurant-level operating profit at Good Times increased by $0.3 million for the quarter to $1.8 million [21] Market Data and Key Metrics Changes - Sales have softened considerably in the Atlanta market and at the Seaboard Station restaurant in Raleigh due to construction affecting access and parking [4][10] - Same-store sales for Bad Daddy's declined by 1.4% during the quarter [12] - Same-store sales at Good Times increased by 2.1% for the quarter [19] Company Strategy and Development Direction - The company is evaluating future development opportunities for Bad Daddy's, with negotiations ongoing for new locations in North Carolina and Birmingham [26][27] - The company plans to shift investment focus from existing units to growth starting in late fiscal 2024 [41] - A new mobile app iteration with a loyalty program is set to launch, aimed at enhancing customer engagement [50][51] Management Comments on Operating Environment and Future Outlook - Management expects same-store sales to continue in the flat to low single-digit negative range for the fourth quarter [7] - There is some upward pressure on beef prices, but overall stability in the commodity basket is anticipated [18] - Management expressed optimism about the sales performance at Good Times despite unfavorable weather conditions [20] Other Important Information - The company recorded impairment charges of approximately $1.0 million primarily related to one restaurant in the Atlanta market [22] - G&A expenses were relatively flat in nominal terms compared to last year, expected to run at approximately 7% to 7.5% of sales on a full-year basis [24] Q&A Session Summary Question: Future development opportunities for Bad Daddy's - Management noted some landlord flexibility on rents and is negotiating for new locations in North Carolina and Birmingham, with openings expected in early fiscal 2025 [26][27][28] Question: Capital allocation strategy regarding franchise buybacks and new openings - Management sees the recent franchise buyback as a unique opportunity and is considering options opportunistically, with a focus on favorable rent situations [32][36] Question: Update on the ongoing Good Times legal case - The matter is in the appeals process, with both parties having filed briefings; specifics can be found in the recent 10-Q filing [34]