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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)

May 9, 2019

 

(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.

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class  

Trading

Symbol(s)

 

Name of each exchange on which

registered

Common Stock, $0.001 par value   GTIM   Nasdaq Stock Exchange

 

 

   
 

 

Item 2.02Results of Operations and Financial Condition.

 

On May 9, 2019 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter ended March 26, 2019 and that management would review these results in a conference call on Thursday, May 9, 2019 at 5:00 p.m. ET.

 

Item 7.01.Regulation FD Disclosure.

 

On May 9, 2019 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter ended March 26, 2019.

 

The information contained in, or incorporated into, this Item 7.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or otherwise subject to the liabilities of that section, nor expressly set forth by specific reference to such filing. This Item 7.01 will not be deemed an admission as to the materiality of any information in the Report that is required to be disclosed solely by Regulation FD.

 

 

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 May 9, 2019

 

  
 

 

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:  May 9, 2019   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 May 9, 2019

 

 

4

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE  
May 9, 2019 Nasdaq Capital Markets - GTIM

 

GOOD TIMES RESTAURANTS REPORTS Q2 RESULTS

Total Revenues increased 15% to $27.2 million in Q2

Conference Call Thursday, May 9, 2019, at 3:00 p.m. MT/5:00 p.m. ET

 

(DENVER, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad Daddy’s Burger Bar, a full-service, upscale burger bar concept, and Good Times Burgers & Frozen Custard, a regional quick-service restaurant chain focused on fresh, high quality, all natural products, today announced its preliminary unaudited financial results for the second fiscal quarter ended March 26, 2019.

 

Key highlights of the Company’s financial results include:

 

·Total revenues increased 15% to $27,172,000 for the quarter

 

·Total Restaurant Sales for Bad Daddy’s restaurants increased 27.8% to $20,384,000 and Bad Daddy’s Restaurant Level Operating Profit* (a non-GAAP measure) was $3,322,000 or 16.3% as a percent of sales

 

·Same store sales for company-owned Bad Daddy’s restaurants increased 1.3% for the quarter on top of last year’s increase of 0.2%

 

·The Company opened one new Bad Daddy’s restaurant during the quarter

 

·Total Restaurant Sales for Good Times restaurants were $6,570,000 and Good Times Restaurant Level Operating Profit* (a non-GAAP measure) was $509,000 or 7.7% as a percent of sales

 

·Net Loss Attributable to Common Shareholders was $450,000 for the quarter

 

·Adjusted EBITDA* (a non-GAAP measure) for the quarter was $1,148,000

 

·The Company ended the quarter with $3.4 million in cash and $12.3 million drawn against its senior credit facility

 

Boyd Hoback, President and CEO, said “Similar to our first quarter’s results, we continued to post favorable same-store sales results for Bad Daddy’s but our Good Times same-store sales were significantly impacted by more inclement weather compared to the prior year and were down 5.9% during the second quarter, adjusted for the impact of store closures on March 13th. However, subsequent to the end of the quarter we have returned to more seasonable weather and our same-store sales at Good Times have rebounded, up more than 4% so far in the third quarter, validating our assertion that the first and second quarter sales comps were largely the result of weather compared to the prior year. We opened one new Bad Daddy’s during the quarter which continues to post sales significantly ahead of our system average, even as it moves out of its honeymoon period. We have three additional Bad Daddy’s under development that we expect to open this fiscal year and one that we expect to open shortly after the end of the fiscal year.”

 

Commenting on the Company’s earnings guidance, Ryan Zink, Chief Financial Officer, stated “We are reaffirming our guidance from the prior quarter, which calls for Adjusted EBITDA of approximately $6.0 to $6.5 million and the opening of five new Bad Daddy’s restaurants for the 2019 fiscal year. We have updated our same-store sales assumptions at Good Times to reflect a return to positive same-store-sales.”

 

   
 

 

Fiscal 2019 Outlook:

 

The Company reiterated its guidance for fiscal 2019:

 

·Total revenues of approximately $112 million to $114 million with a year-end revenue run rate of approximately $120 million

 

·Total revenue estimates assume same-store sales of approximately +1% to +2% for the balance of the year for Good Times and Bad Daddy’s

 

·General and administrative expenses of approximately $8.4 million to $8.6 million, including approximately $500,000 of non-cash equity compensation expense

 

·The opening of five new Bad Daddy’s restaurants

 

·Net loss of approximately $1.0 million including pre-opening expenses of approximately $1.7 million

 

·Total Adjusted EBITDA* of approximately $6.0 million to $6.5 million

 

·Capital expenditures (net of tenant improvement allowances) of approximately $7.0 to $7.5 million including approximately $0.6 million related to fiscal 2020 development. This does not include the use of approximately $3.0 million of cash in the previously disclosed acquisition of the non-controlling interest in three Bad Daddy’s restaurants.

 

·Fiscal year-end long-term debt of approximately $13.5 to $14.0 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 second quarter 2019 financial results on Thursday, May 9, 2019 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) owns, operates, franchises and licenses 35 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. Additionally, through its wholly-owned subsidiaries, Good Times Restaurants Inc. operates and franchises a regional quick service restaurant chain consisting of 35 Good Times Burgers & Frozen Custard restaurants, located primarily in Colorado.

 

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 25, 2018 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 CONTACTS:

Boyd E. Hoback, President and Chief Executive Officer (303) 384-1411

Ryan 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)

 

   Fiscal Quarter Ended   Year-To-Date 
Statement of Operations  March 26,
2019
   March 27,
2018
   March 26,
2019
   March 27,
2018
 
Net revenues:                    
Restaurant sales  $26,954   $23,342   $52,101   $45,939 
Franchise revenues   218    254    441    505 
Total net revenues   27,172    23,596    52,542    46,444 
                     
Restaurant operating costs:                    
Food and packaging costs   7,903    7,118    15,426    14,321 
Payroll and other employee benefit costs   10,228    8,642    19,781    16,921 
Restaurant occupancy costs   2,165    1,788    4,130    3,428 
Other restaurant operating costs   2,829    2,137    5,412    4,253 
Preopening costs   193    496    820    1,073 
Depreciation and amortization   1,089    882    2,123    1,728 
Total restaurant operating costs   24,407    21,063    47,692    41,724 
                     
General and administrative costs   2,193    1,898    4,254    3,815 
Advertising costs   547    602    1,175    1197 
Franchise costs   16    11    23    21 
Asset impairment charge   -    72    -    72 
Gain on disposal of restaurants and equipment   (9)   (9)   (39)   (17)
Income/(Loss) from operations   18    (41)   (563)   (368)
                     
Other income (expense):                    
Interest income (expense), net   (199)   (91)   (359)   (174)
Other income   1    -    -    - 
Total other income (expense), net   (198)   (91)   (359)   (174)
Net loss   (180)   (132)   (922)   (542)
Income attributable to non-controlling interests   (270)   (299)   (579)   (472)
Net loss attributable to common shareholders  $(450)  $(431)  $(1,501)  $(1,014)
                     
Basic and diluted loss per share  $(0.04)  $(0.03)  $(0.12)  $(0.08)
                     
Basic and diluted weighted average common
shares outstanding
   12,523    12,468    12,514    12,456 

 

  
 

 

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands)

 

   March 26,
2019
   September 25,
2018
 
Balance Sheet Data          
Cash & cash equivalents  $3,399   $3,477 
           
Current assets   5,695    6,381 
Property and equipment, net   35,821    35,245 
Other assets   19,361    19,324 
Total assets  $60,877   $60,950 
           
Current liabilities, including capital lease obligations and
long-term debt due within one year
  $7,638   $8,335 
Long-term debt due after one year   12,300    7,472 
Other liabilities   8,260    7,922 
Total liabilities   28,198    23,729 
           
Stockholders’ equity  $32,679   $37,221 

 

 

   Bad Daddy’s
Burger Bar
   Good Times Burgers &
Frozen Custard
 
   --------------------------- Fiscal Quarter Ended --------------------------- 
   2019   2018   2019   2018 
                 
Restaurant sales (in thousands)  $20,384   $15,954   $6,570   $7,388 
Restaurants opened during period   1    1    -    - 
Restaurants closed during period   -    -    -    1 
Restaurants open at period end   33    25    26    27 
                     
Restaurant operating weeks   428.0    323.3    336.3    356.0 
                     
Average weekly sales per restaurant (in
thousands)
  $47.6   $49.3   $19.4   $20.8 

 

 

   Bad Daddy’s
Burger Bar
   Good Times Burgers &
Frozen Custard
 
   --------------------------- Year-To-Date Period Ended --------------------------- 
   2019   2018   2019   2018 
                 
Restaurant sales (in thousands)  $38,634   $30,941   $13,467   $14,998 
Restaurants opened during period   2    3    -    - 
Restaurants closed during period   -    -    -    1 
Restaurants open at period end   33    25    26    27 
                     
Restaurant operating weeks   838.3    632.9    674.3    720.0 
                     
Average weekly sales per restaurant (in
thousands)
  $46.1   $48.9   $20.0   $20.8 

 

  
 

 

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

 

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

(In thousands, except percentage data)

 

 
  

Bad Daddy’s Burger Bar

  

Good Times Burgers & Frozen Custard

  

Good Times
Restaurants Inc.

 
  

------------------------------------------------------ Fiscal Quarter Ended ------------------------------------------------------

 
   March 26, 2019   March 27, 2018   March 26, 2019   March 27, 2018  

Mar. 26,

2019

   Mar. 27,
2018
 
                                         
Restaurant sales  $20,384    100.0%  $15,954    100.0%  $6,570    100.0%  $7,388    100.0%  $26,954   $23,342 
Restaurant operating costs
(exclusive of depreciation and
amortization shown separately
below):
                                                  
Food and packaging costs   5,804    28.5%   4,727    29.6%   2,099    31.9%   2,391    32.4%   7,903    7,118 

Payroll and other employee

 benefit costs

   7,669    37.6%   5,969    37.4%   2,559    39.0%   2,673    36.2%   10,228    8,642 
Restaurant occupancy costs   1,354    6.6%   1,018    6.4%   811    12.3%   770    10.4%   2,165    1,788 
Other restaurant operating costs   2,237    11.0%   1,541    9.7%   592    9.0%   596    8.1%   2,829    2,137 
Restaurant-level operating profit  $3,320    16.3%  $2,699    16.9%  $509    7.7%  $958    13.0%  $3,829    3,657 
                                                   
Franchise advertising
contributions and net royalty
income
                                           218    254 
Deduct - Other operating:                                                  
Depreciation and amortization                                           1,089    882 
General and administrative                                           2,193    1,898 
Advertising costs                                           547    602 
Franchise costs                                           16    11 
Gain on restaurant asset sale                                           (9)   (9)
Asset impairment charge                                           -    72 
Preopening costs                                           193    496 
Total other operating                                           4,029    3,952 
                                                  
Income / (loss) from operations                                          $18   $(41)

 

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

 

  
 

 

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

 

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

(In thousands, except percentage data)

 

   Bad Daddy’s Burger Bar   Good Times Burgers & Frozen Custard   Good Times
Restaurants Inc.
 
  ------------------------------------------------------ Year-To-Date ------------------------------------------------------
   March 26, 2019   March 27, 2018   March 26, 2019   March 27, 2018   Mar. 26,
2019
   Mar. 27,
2018
 
                                         
Restaurant sales  $38,634    100.0%  $30,941    100.0%  $13,467    100.0%  $14,998    100.0%  $52,101   $45,939 
                                                   
Restaurant operating costs (exclusive of
depreciation and amortization shown
separately below):
                                                  
Food and packaging costs   11,073    28.7%   9,360    30.3%   4,353    32.3%   4,961    33.1%   15,426    14,321 
Payroll and other employee benefit costs   14,651    37.9%   11,563    37.4%   5,130    38.1%   5,358    35.7%   19,781    16,921 
Restaurant occupancy costs   2,632    6.8%   1,958    6.3%   1,498    11.1%   1,470    9.8%   4,130    3,428 
Other restaurant operating costs   4,220    10.9%   3,008    9.7%   1,192    8.9%   1,245    8.3%   5,412    4,253 
Restaurant-level operating profit  $6,058    15.7%  $5,052    16.3%  $1,294    9.6%  $1,964    13.1%   7,352    7,016 
                                                   
Franchise royalty income, net                                           441    505 
Deduct - Other operating:                                                  
Depreciation and amortization                                           2,123    1,728 
General and administrative                                           4,254    3,815 
Advertising costs                                           1,175    1,197 
Franchise costs                                           23    21 
Gain on restaurant asset sale                                           (39)   (17)
Asset impairment charge                                           -    72 
Preopening costs                                           820    1,073 
Total other operating                                           8,356    7,889 
                                                   
Loss from operations                                          $(563)  $(368)

 

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

 

  
 

 

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 second quarters and year-to-date periods for fiscal 2019 and fiscal 2018, 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

 

   Fiscal Quarter Ended   Year-to-Date 
   March 26,
2019
   March 27,
2018
   March 26,
2019
   March 27,
2018
 
Adjusted EBITDA:                    
Net loss, as reported  $(450)  $(431)  $(1,501)  $(1,014)
Depreciation and amortization   1,068    845    2,061    1,653 
Interest expense, net   199    91    359    175 
EBITDA   817    505    919    814 
Preopening expense   193    491    799    976 
Non-cash stock-based compensation   109    97    221    215 
GAAP rent-cash cash difference   37    11    (6)   (16)
Gain on disposal of assets   (9)   (9)   (39)   (17)
Asset impairment charge   -    72    -    72 
Adjusted EBITDA  $1,147   $1,167   $1,894   $2,044 

 

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.

 

 

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