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, today announced its preliminary unaudited financial results for the fiscal quarter ended March 27, 2018.
Key highlights of the Company’s financial results include:
- Same store sales for company-owned Good Times restaurants increased 7.1 percent for the quarter
- Same store sales for company-owned Bad Daddy’s restaurants increased 0.2 percent for the quarter on top of last year’s increase of 3.2 percent
- Total revenues increased 29% to $23,509,000 for the quarter from the prior year
- The Company opened one new Bad Daddy’s restaurant during the quarter, the fourth of the year
- Restaurant Sales for the Bad Daddy’s restaurants for the quarter increased 42.6 percent to $15,953,000 from the prior year with Bad Daddy’s Restaurant Level Operating Profit* (a non-GAAP measure) increasing to 16.9 percent of sales for the quarter
- Adjusted EBITDA* (a non-GAAP measure) for the quarter increased 88.5 percent to $1,167,000 from $619,000 for the same quarter last year and increased 89.8 percent year to date over the prior year
- The Company ended the quarter with $3.9 million in cash and $5.1 million drawn against its senior credit facility, with approximately $6.9MM of availability on the facility
Boyd Hoback, President & CEO, says, “Good Times’ sales were quite impressive during the quarter as we continue to see a general overall increase due to the better burger initiatives implemented a year ago. We were only on television media for 3 weeks out of the quarter and we had comparable weather to last year, so we believe there is a renewed underlying strength in the brand as we are seeing traffic growth along with taking price increases.” Regarding Bad Daddy’s, Hoback adds, “We saw some near-term cannibalization of a couple of existing stores in Charlotte and one in Raleigh from the opening of new, very high-volume stores earlier this year in each market, which impacted the same store sales percentage growth on our very small base of stores in the index, but even with that we posted our twelfth consecutive quarter of same store sales growth. What is particularly gratifying is the continued sales performance of our class of 2017 and 2018 new stores versus our system average. We opened our Chattanooga store during the quarter and are opening our second Atlanta store in early June with two additional North Carolina stores, one South Carolina store and the third Atlanta store to open this summer.”
Commenting on the Company’s guidance for fiscal 2018, Ryan Zink, Chief Financial Officer, says, “Strong same-store sales at our Good Times brand and our recently-opened Bad Daddy’s restaurants, coupled with easing of commodity costs and improving controls around labor scheduling, have enabled us to generally reaffirm our guidance for fiscal 2018, despite being slightly under our guidance for Bad Daddy’s same-store sales for the second quarter. We continue to project 2018 revenues of approximately $100 million, and are slightly raising the lower end of our Adjusted EBITDA guidance, which is now between $5.2 and $5.5 million. We are maintaining our comparable sales guidance for Good Times at approximately 3.0% - 3.5% and 0.5% - 1.0% for Bad Daddy’s through the end of fiscal 2018. We anticipate an annualized Adjusted EBITDA run rate as of the end of the fiscal year of approximately $7 million.”
Fiscal 2018 Outlook:
The company updated its guidance for fiscal 2018:
Total revenues of approximately $99 million to $101 million with a year-end revenue run rate of approximately $108 million to $110 million
Total revenue estimates assume same store sales of approximately +3.5% for Good Times for the balance of the year, and approximately 5.0% for FY2018 in total. We expect same store sales of 0.5% - 1.0% in the remaining two quarters of the year for Bad Daddy’s, excluding the impact of the two and a half weeks closure of the original Bad Daddy’s for building renovations.
- 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 new Bad Daddy’s restaurants during Q3 and Q4 (one being a joint venture unit)
- Total Adjusted EBITDA* of approximately $5.2 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 $9.0 – $9.5 million including approximately $1.2 million related to fiscal 2019 development
- Fiscal year end long term debt of approximately $10.0 to $10.5 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.