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 third fiscal quarter ended June 26.
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, North Carolina, 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 expects 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, says, “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
