Toggle SGML Header (+)


Section 1: 8-K

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
August 9, 2018
 
(Exact name of registrant as specified in its charter)
 
 
Nevada 000-18590 84-1133368

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 
141 Union Boulevard, #400, Lakewood, CO 80228
(Address of principal executive offices including zip code)
 
Registrant’s telephone number, including area code: (303) 384-1400
 
Not applicable
(Former name or former address, if changed since last report.)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

 

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

   
 

 

Item 2.02Results of Operations and Financial Condition.

 

On August 9, 2018 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter ended June 26, 2018 and that management would review these results in a conference call on Thursday, August 9, 2018 at 5:00 p.m. (ET).

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits. The following exhibits are filed as part of this report.

 

Exhibit Number Description
99.1 Press Release, dated August 9, 2018

 

  
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  

 

    GOOD TIMES RESTAURANTS INC.  
         
         
Date: August 9, 2018 By:  
      Boyd E. Hoback  
      President and Chief Executive Officer  

 

  
 

 

EXHIBIT INDEX

The following exhibits are furnished as part of this report:

 

Exhibit Number Description
99.1 Press Release dated August 9, 2018

 

 

4

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Nasdaq Capital Markets - GTIM

 

GOOD TIMES RESTAURANTS REPORTS Q3 RESULTS

Total Revenues Increase 20%

Consolidated Net Income Increases to $304,000

Initial Fiscal 2019 Guidance Provided

 

Conference Call Thursday, August 9, 2018, at 3:00 p.m. MT/5:00 p.m. ET

 

(DENVER, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Good Times Burgers & Frozen Custard, a regional quick service restaurant chain focused on fresh, high quality, all natural products and Bad Daddy’s Burger Bar, a full service, upscale concept today announced its preliminary unaudited financial results for the third fiscal quarter ended June 26, 2018.

 

Key highlights of the Company’s financial results include:

 

·Same store sales for company-owned Good Times restaurants increased 3.8% for the quarter on top of last year’s increase of 3.7%. Year to date, same store sales increased 4.9% versus last year’s increase of 1.2%

 

·Bad Daddy’s same store sales increased 0.5% during the quarter over the prior year’s increase of 0.1%. Year to date, same store sales increased 0.5% versus last year’s increase of 1.7%. Same store sales exclude the weeks during which the original Bad Daddy’s in Charlotte, NC was closed for remodeling. Total revenues increased 20% to $26,175,000 for the quarter

 

·The Company opened two new Bad Daddy’s restaurants during the quarter for a total of five new restaurants opened through the third quarter of 2018. Subsequent to the end of the quarter, the Company opened an additional two restaurants and expect to open two more before the end of the fiscal year for a total of nine new restaurants in fiscal 2018

 

·Sales for the Bad Daddy’s restaurants for the quarter increased 37% versus last year to $17,765,000

 

·Restaurant Level Operating Profit (a non-GAAP measure) increased 26.8% to $4,779,000 (18.4% as a percent of sales) from $3,770,000 (17.5% as a percent of sales)*

 

·Adjusted EBITDA (a non-GAAP measure) for the quarter increased 36.6% to $1,907,000 from $1,396,000 last year*

 

·The Company ended the quarter with $3.2 million in cash and $5.1 million of long-term debt

 

Boyd Hoback, President & CEO said “We are very pleased with our continued growth in same store sales at both brands as well as our improved operating margins. Our class of 2018 Bad Daddy’s openings have been very strong on average and we anticipate they will be settling into a sales trend post-honeymoon at or above our system average. We are now operating in seven different metropolitan areas and are on track to enter three to four additional new areas in fiscal 2019, as we continue our expansion focused primarily on the Southeast.”

 

Regarding initial fiscal 2019 guidance, Ryan Zink, Chief Financial Officer commented “The strength of our new Bad Daddy’s restaurants opened during the 2018 fiscal year has generated cash for development which has limited our need to incur any significant incremental debt, and that has created a strong foundation on which to continue development in 2019. With this growth, we expect Adjusted EBITDA of between $7.6 and $8.1 million for the 2019 fiscal year, with an estimated run rate at the end of the fiscal year that approaches $10 million, consistent with our prior commentary projecting continued 40% annual growth in our Adjusted EBITDA.”

 

  

 

 

Fiscal 2018 Outlook:

 

The Company provided the following guidance for fiscal 2018:

 

·Total revenues of approximately $99 million to $100 million with a year-end revenue run rate of approximately $110 million

 

·Total revenue estimates assume same store sales of approximately +1% for Good Times and flat to slightly positive for Bad Daddy’s in Q4

 

·General and administrative expenses of approximately $7.9 million, including approximately $500,000 of non-cash equity compensation expense

 

·The opening of a total of 4 new Bad Daddy’s restaurants (including 1 joint venture unit) in Q4, for a total of 9 new restaurants during the full fiscal year

 

·Total Adjusted EBITDA* of approximately $5.4 million to $5.6 million

 

·Restaurant pre-opening expenses of approximately $2.7 million

 

·Capital expenditures (net of tenant improvement allowances and sale-leaseback proceeds) of approximately $8.5 to $9.0 million including approximately $0.6 million related to fiscal 2019 development

 

·Fiscal year-end long term debt of approximately $9.0 to $9.5 million

 

Fiscal 2019 Outlook:

 

The Company provided the following initial guidance for fiscal 2019:

 

·Total revenues of approximately $120 million to $123 million with a year-end revenue run rate of approximately $130 million

 

·Total revenue estimates assume same store sales of approximately +2% for Good Times, excluding Q2 where we project flat comparable sales, and assumes +1% for Bad Daddy’s

 

·General and administrative expenses of approximately $8.7 to $9.0 million, including approximately $600,000 of non-cash equity compensation expense

 

·The opening of a total of 7 - 9 new company-owned Bad Daddy’s restaurants

 

·Total Adjusted EBITDA* of approximately $7.6 million to $8.1 million

 

·Restaurant pre-opening expenses of approximately $2.5 million to $3.0 million

 

·Capital expenditures (net of tenant improvement allowances) of approximately $11.0 – $11.5 million

 

·Fiscal year-end long term debt of approximately $13.0 - $13.5 million

 

*For a reconciliation of restaurant level operating profit and Adjusted EBITDA to the most directly comparable financial measures presented in accordance with GAAP and a discussion of why the Company considers them useful, see the financial information schedules accompanying this release.

 

Conference Call: Management will host a conference call to discuss its third quarter 2018 financial results on Thursday, August 9, 2018 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Boyd Hoback, President and Chief Executive Officer, and Ryan Zink, Chief Financial Officer.

 

The conference call can be accessed live over the phone by dialing (888) 339-0806 and requesting the Good Times Restaurants (GTIM) call. The conference call will also be webcast live from the Company's corporate website www.goodtimesburgers.com under the Investor section. An archive of the webcast will be available at the same location on the corporate website shortly after the call has concluded.

 

  

 

 

About Good Times Restaurants Inc.: Good Times Restaurants Inc. (GTIM) operates Good Times Burgers & Frozen Custard, a regional chain of quick service restaurants located primarily in Colorado, through its wholly-owned subsidiary, Good Times Drive Thru Inc. Good Times provides a menu of high quality all-natural hamburgers, 100% all-natural chicken tenderloins, fresh frozen custard, natural cut fries, fresh lemonades and other unique offerings. Good Times currently operates and franchises a total of 36 restaurants.

 

GTIM also owns, operates, franchises and licenses 31 Bad Daddy’s Burger Bar restaurants through its wholly-owned subsidiaries. Bad Daddy’s Burger Bar is a full service, upscale, “small box” restaurant concept featuring a chef driven menu of gourmet signature burgers, chopped salads, appetizers and sandwiches with a full bar and a focus on a selection of craft microbrew beers in a high-energy atmosphere that appeals to a broad consumer base.

 

Good Times Forward Looking Statements: This press release contains forward looking statements within the meaning of federal securities laws. The words “intend,” “may,” “believe,” “will,” “should,” “anticipate,” “expect,” “seek” and similar expressions are intended to identify forward looking statements. These statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from results expressed or implied by the forward-looking statements. These risks include such factors as the uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants, delays in developing and opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or shortages in raw food products, and other matters discussed under the “Risk Factors” section of Good Times’ Annual Report on Form 10-K for the fiscal year ended September 26, 2017 filed with the SEC. Although Good Times may from time to time voluntarily update its forward-looking statements, it disclaims any commitment to do so except as required by securities laws.

 

Good Times Restaurants Inc. INVESTOR RELATIONS CONTACTS:

Boyd E. Hoback, President and CEO, (303) 384-1411

Ryan M. Zink, Chief Financial Officer (303) 384-1432

Christi Pennington (303) 384-1440

 

  

 

 

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands, except per share amounts)

 

   Third Quarter   Year to Date 
Statement of Operations  2018   2017   2018   2017 
Net revenues:                
Restaurant sales  $25,990   $21,518   $71,929   $55,981 
Franchise Revenues   185    184    515    515 
Total net revenues   26,175    21,702    72,444    56,496 
                     
Restaurant Operating Costs:                    
Food and packaging costs   7,833    6,822    22,154    17,591 
Payroll and other employee benefit costs   9,155    7,546    26,076    20,216 
Restaurant occupancy costs   1,850    1,484    5,278    4,207 
Other restaurant operating costs   2,373    1,896    6,626    5,003 
New store preopening costs   610    819    1,683    1,737 
Depreciation and amortization   937    753    2,665    2,086 
Total restaurant operating costs   22,758    19,320    64,482    50,840 
                     
General and administrative costs   2,069    1,831    5,884    5,222 
Advertising costs   565    514    1,587    1,357 
Franchise costs   11    28    32    80 
Asset Impairment Costs   0    0    72    0 
Loss (gain) on restaurant asset sale   (9)   (6)   (26)   (17)
Income (loss) from operations   781    15    413    (986)
                     
Other income (expense):                    
Interest income (expense), net   (96)   (49)   (270)   (105)
Other income (expense), net   0    (1)   0    (1)
Total other income (expense), net   (96)   (50)   (270)   (106)
                     
Net Income (loss):  $685   $(35)  $143   $(1,092)
Income attributable to non-controlling interest   (381)   (212)   (853)   (499)
Net income (loss) attributable to Good Times
  Restaurants Inc.
  $304   $(247)  $(710)  $(1,591)
                     
Basic and diluted income (loss) per share  $0.02   $(0.02)  $(0.06)  $(0.13)
                     
Weighted average common shares outstanding
  - basic
   12,468,326    12,301,007    12,460,467    12,296,793 
Weighted average common shares outstanding
  - diluted
   12,665,172    N/A     N/A     N/A  

 

 

  

 

 

Good Times Restaurants Inc.

Unaudited Supplemental Information

($ in thousands)

 

   Jun. 26, 2018   Sep. 26, 2017 
Balance Sheet Data:        
Cash & cash equivalents   3,186    4,337 
Current assets   5,120    6,066 
Property and Equipment, net   33,113    29,560 
Other assets   19,359    19,397 
Total assets  $57,592   $55,153 
           
Current liabilities, including capital lease obligations and long-term debt
  due within one year
   7,944    6,916 
Long-term debt due after one year   5,126    5,339 
Other liabilities   7,204    5,614 
Total liabilities  $20,274   $17,869 
Stockholders’ equity  $37,318   $37,284 

 

   Good Times Burgers & Frozen Custard   Bad Daddy’s Burger Bar 
   Third Quarter   Year to Date   Third Quarter   Year to Date 
   2018   2017   2018   2017   2018   2017   2018   2017 
                                 
Restaurant sales  $8,225   $8,546   $23,223   $22,310   $17,765   $12,972   $48,706   $33,671 
Restaurants open during period   0    0    0    1    2    3    5    5 
Restaurants closed during period   1    0    2    0                     
Restaurants open at period end   26    28    26    28    27    21    27    21 
Restaurant operating weeks   342.0    364.0    1,062.0    1,068.3    337.6    249.6    970.4    690.9 
Average weekly sales per restaurant  $24.0   $23.5   $21.9   $20.9   $52.6   $52.0   $50.2   $48.7 

 

  

 

 

Reconciliation of Non-GAAP Measurements to US GAAP Results

 

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Loss from Operations

(In thousands, except percentage data)

 

   Good Times Burgers &
Frozen Custard
   Bad Daddy’s
Burger Bar
   Good Times
Restaurants Inc.
 
   ------------------------------------------------------------------Fiscal Third Quarter---------------------------------------------------------- 
   2018   2017   2018   2017   2018   2017 
                         
Restaurant sales  $8,225    100.0%  $8,546    100.0%  $17,765    100.0%  $12,972    100.0%  $25,990   $21,518 
Restaurant operating costs (exclusive of
depreciation and amortization shown
separately below):
                                                  
Food and packaging costs   2,654    32.3%   2,792    32.7%   5,179    29.2%   4,030    31.1%   7,833    6,822 
Payroll and other employee benefit costs   2,716    33.0%   2,846    33.3%   6,439    36.2%   4,700    36.2%   9,155    7,546 
Restaurant occupancy costs   694    8.4%   693    8.1%   1,156    6.5%   791    6.1%   1,850    1,484 
Other restaurant operating costs   648    7.9%   680    8.0%   1,725    9.7%   1,216    9.4%   2,373    1,896 
Restaurant-level operating profit  $1,513    18.4%  $1,535    18.0%   3,266    18.4%  $2,235    17.2%   4,779    3,770 
                                                   
Franchise royalty income, net                                           185    184 
                                                   
Deduct -  other operating:                                                  
Depreciation and amortization                                           937    753 
General and administrative                                           2,069    1,831 
Advertising costs                                           565    514 
Franchise costs                                           11    28 
Loss (gain) on restaurant asset sale                                           (9)   (6)
Preopening costs                                           610    819 
Total other operating                                           4,183    3,939 
                                                   
Income (loss) from operations                                          $781   $15 

 

Certain percentage amounts in the table above do not total due to rounding

 

  

 

 

Reconciliation of Non-GAAP Measurements to US GAAP Results

 

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Loss from Operations

(In thousands, except percentage data)

 

   Good Times Burgers &
Frozen Custard
   Bad Daddy’s
Burger Bar
   Good Times
Restaurants Inc.
 
   ------------------------------------------------------------------------Year to Date---------------------------------------------------------------- 
   2018   2017   2018   2017   2018   2017 
                         
Restaurant sales  $23,223    100.0%  $22,310    100.0%  $48,706    100.0%  $33,671    100.0%  $71,929   $55,981 
Restaurant operating costs (exclusive of
depreciation and amortization shown
separately below):
                                                  
Food and packaging costs   7,615    32.8%   7,191    32.2%   14,539    29.9%   10,400    30.9%   22,154    17,591 
Payroll and other employee benefit costs   8,074    34.8%   7,706    34.5%   18,002    37.0%   12,510    37.2%   26,076    20,216 
Restaurant occupancy costs   2,164    9.3%   2,075    9.3%   3,114    6.4%   2,132    6.3%   5,278    4,207 
Other restaurant operating costs   1,891    8.1%   1,833    8.2%   4,735    9.7%   3,170    9.4%   6,626    5,003 
Restaurant-level operating profit   3,479    15.0%  $3,505    15.7%   8,316    17.1%  $5,459    16.2%   11,795    8,964 
                                                   
Franchise royalty income, net                                           515    515 
                                                   
Deduct - Other operating:                                                  
Depreciation and amortization                                           2,665    2,086 
General and administrative                                           5,884    5,222 
Advertising costs                                           1,587    1,357 
Franchise costs                                           32    80 
Loss (gain) on restaurant asset sale                                           (26)   (17)
Asset impairment charge                                           72    0 
Preopening costs                                           1,683    1,737 
Total other operating                                           11,897    10,465 
                                                   
Income (loss) from operations                                          $413   $(986)

 

Certain percentage amounts in the table above do not total due to rounding.

 

  

 

 

The Company believes that restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant level occupancy costs, which include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation. The measure excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes selling, general and administrative costs, and therefore excludes occupancy costs associated with selling, general and administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do not represent a component of the efficiency of continuing operations. Restaurant impairment costs are excluded, because, similar to depreciation and amortization, they represent a non-cash charge for the Company’s investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered in isolation, or as an alternative, to income from operations or net income as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The tables above set forth certain unaudited information for the fiscal third quarters and year to date for fiscal 2018 and fiscal 2017, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA

(In thousands)

Good Times Restaurants Inc.

 

   Third Quarter   Year to Date 
   2018   2017   2018   2017 
                 
Net income (loss) as reported  $304   $(247)  $(710)  $(1,591)
                     
Adjustments to net income (loss):                    
Depreciation and amortization   897    727    2,550    2,001 
Interest expense, net   97    50    272    108 
EBITDA  $1,298   $530   $2,112   $518 
Preopening costs   565    685    1,541    1,400 
Non-cash stock-based compensation   88    205    303    609 
GAAP rent in excess of cash rent   (35)   (18)   (51)   (34)
Non-cash disposal of assets   (9)   (6)   (26)   (17)
Asset impairment charge   0    0    72    0 
Adjusted EBITDA  $1,907   $1,396   $3,951   $2,476 

 

Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by GAAP, and our calculation thereof may not be comparable to that reported by other companies. This measure is presented because we believe that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for evaluating our ongoing results of operations.

 

Adjusted EBITDA is calculated as net income before interest expense, provision for income taxes and depreciation and amortization and further adjustments to reflect the additions and eliminations presented in the table above.

 

  

 

 

Adjusted EBITDA is presented because: (i) we believe it is a useful measure for investors to assess the operating performance of our business without the effect of non-cash charges such as depreciation and amortization expenses and asset disposals, closure costs and restaurant impairments and (ii) we use adjusted EBITDA internally as a benchmark for certain of our cash incentive plans and to evaluate our operating performance or compare our performance to that of our competitors. The use of adjusted EBITDA as a performance measure permits a comparative assessment of our operating performance relative to our performance based on our GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structures and cost of capital (which affect interest expense and income tax rates) and differences in book depreciation of property, plant and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management believes that adjusted EBITDA facilitates company-to-company comparisons within our industry by eliminating some of these foregoing variations. Adjusted EBITDA as presented may not be comparable to other similarly-titled measures of other companies, and our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by excluded or unusual items.

 

 

9

 

 

(Back To Top)