Good Times Restaurants Inc., 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 announced its preliminary unaudited financial results for the first fiscal quarter ended December 25, 2018.

Key highlights of the company’s financial results include:

• Total revenues increased 11% to $25,370,000 for the quarter
• Total Restaurant Sales for Bad Daddy’s restaurants increased 21.8% to $18,250,000 and Bad Daddy’s Restaurant Level Operating Profit* (a non-GAAP measure) was $2,738,000 or 15.0% as a percent of sales
• Same store sales for company-owned Bad Daddy’s restaurants increased 0.2% for the quarter on top of last year’s increase of 0.7%
• The company opened one new Bad Daddy’s restaurant during the quarter
• Total Restaurant Sales for Good Times restaurants were $6,897,000 and Good Times Restaurant Level Operating Profit (a non-GAAP measure) was $785,000 or 11.4% as a percent of sales
• Net Loss Attributable to Common Shareholders was $1.1 million for the quarter
• Adjusted EBITDA (a non-GAAP measure) for the quarter was $767,000
• The company ended the quarter with $2.4 million in cash and $10.2 million drawn against its senior credit facility
• Subsequent to the end of the quarter the company announced that it has purchased the non-controlling interests in three existing Bad Daddy’s restaurants in the Raleigh, NC market

Boyd Hoback, president & CEO, says, “During our first quarter, while we continued to post favorable same store sales results for Bad Daddy’s, our Good Times same store sales were significantly impacted by more inclement weather compared to the prior year and were down 5.2% during the quarter. Two Bad Daddy’s restaurants that were opened at the very end of fiscal 2018 and the one opened during the quarter have had slower starts as compared to the bigger honeymoon periods we experienced on new stores in fiscal 2018. However, subsequent to the end of the quarter we opened our fourth store in the Raleigh, North Carolina, market which has again experienced significantly above average weekly sales during its first four weeks. We are also reporting the purchase of the non-controlling interests in the other three restaurants in the Raleigh market, which is our highest average unit sales market in the system. We paid approximately $3 million for the trailing twelve-month cash flow of approximately $600,000 and we believe we can improve that cash flow stream by an additional 25% with more control over the restaurants by the end of the fiscal year, which would equate to an effective multiple of approximately four times cash flow.”

Commenting on the company’s earnings guidance, Ryan Zink, Chief Financial Officer, says, “We are generally reaffirming our guidance, 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. Due to the acquisition of the Raleigh-area non-controlling interests, our expected total capital expenditures and end-of-year balance on our credit facility have each increased by approximately $3 million.”

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 -3% to -4% for the year for Good Times. We expect same store sales of +1% to +2% for the year for 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 5 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 $10.0 to $10.5, $3 million associated with the acquisition of the Raleigh joint venture non-controlling interests, and $7.0 – 7.5 million other capital expenditures, including approximately $0.6 million related to fiscal 2020 development
• Fiscal year-end long-term debt of approximately $13.5 to $14.0 million