Good Times' Sales Rise 5.9 Percent in 1Q

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 26, 2017.

Key highlights of the company’s financial results include:

• Same store sales for company-owned Good Times restaurants increased 5.9 percent for the quarter
• Same store sales for company-owned Bad Daddy’s restaurants increased 0.7 percent for the quarter on top of last year’s increase of 2 percent
• Total revenues increased 37 percent to $22,760,000 for the quarter
• The company opened two new Bad Daddy’s restaurants during the quarter
• Sales for the Bad Daddy’s restaurants for the quarter were $14,987,000 and Bad Daddy’s Restaurant Level Operating Profit (a non-GAAP measure) was $2,355,000 or 15.7 percent as a percent of sales
• Adjusted EBITDA (a non-GAAP measure) for the quarter increased 86% percent to $877,000 from $472,000 for the same quarter last year
• The company ended the quarter with $3.3 million in cash and $4.8 million drawn against its senior credit facility

Boyd Hoback, President & CEO, says, “During our first quarter, we continued to post very favorable same store sales results for both brands. Additionally, our new Bad Daddy’s stores that opened in fiscal 2017 and so far in fiscal 2018 are performing very well, averaging $54,000 per week during the quarter, or 12.3 percent above the system average with the two new North Carolina stores opening very strong in October. Our same store sales have remained on track so far during our second quarter and in addition to the two new Bad Daddy’s opened in October, we opened our first store in the Atlanta market in Chamblee, Georgia in early January. We have two more Bad Daddy’s under construction, one in Chattanooga, Tennessee, and a second Atlanta-area location, with three more expected to begin construction in the next couple of months. We have three additional leases signed awaiting landlord turnover with an additional five in the late stages of lease negotiation, all of which are in North Carolina, South Carolina, Georgia, Tennessee and Oklahoma. While labor is an industry pressure point, our Good Times labor as a percentage of sales only increased .4% and Bad Daddy’s labor decreased by .5 percent during the quarter compared to the prior year, reflecting the impact of additional Bad Daddy’s development in the southeast.”

Commenting on the company’s guidance for fiscal 2018, Ryan Zink, Chief Financial Officer, stated “We are reiterating our prior guidance for fiscal 2018 which calls for 2018 revenues of approximately $100 million, and adjusted EBITDA of between $5.0 and $5.5 million. We have slightly shifted our new store opening projections towards the back half of the year, and subsequent to the end of the quarter, we closed our lowest-volume Good Times restaurant, but strong unit-level performance during the first quarter and second quarter to-date have enabled us to retain our revenue and Adjusted EBITDA projections.”

Fiscal 2018 Outlook:

• The company provides the following guidance for fiscal 2018:
• Total revenues of approximately $100 million to $102 million with a year-end revenue run rate of approximately $109 million to $111 million
• Total revenue estimates assume same store sales of approximately +3.5 percent for Good Times for the balance of the year, and approximately 4.1 percent for FY2018 in total. We expect same store sales of 1.3 percent for the year for Bad Daddy’s, including a three-week closure of the original Bad Daddy’s for building renovations. We expect comparable sales of 2.1 percent, 0.3 percent, and 2 percent for Q2, Q3, and Q4 respectively.
• General and administrative expenses of approximately $7.7 million to $7.9 million, including approximately $600,000 of non-cash equity compensation expense
• The opening of 6 additional new Bad Daddy’s restaurants (including 1 joint venture unit)
• Total Adjusted EBITDA of approximately $5.0 million to $5.5 million
• Restaurant pre-opening expenses of approximately $2.6 – $2.7 million
• Capital expenditures (net of tenant improvement allowances) of approximately $9.5 - 10 million including approximately $1.2 million related to fiscal 2019 development
• Fiscal year end long term debt of approximately $10.5 to $11.0 million