Good Times Restaurants (GTIM) Q3 2024 earnings summary

Executive summary

• Total revenues for Q3 2024 increased 6.5% year-over-year to $37.9 million, driven by higher sales at both Bad Daddy's and Good Times, with menu price increases and additional company-owned restaurants offsetting reduced franchise revenues.

• Net income attributable to common shareholders rose to $1.32 million, or $0.12 per share, up from $0.8 million, or $0.07 per share, in the prior year, reflecting improved operating income and lower impairment charges.

• Same-store sales grew 5.8% at Good Times and 1.2% at Bad Daddy's for the quarter, supported by increased customer traffic and pricing.

• Adjusted EBITDA remained steady at $2.1 million compared to the same quarter last year.

• Completed a significant remodel, acquired a franchisee-owned restaurant, and repurchased 263,516 shares, including a large privately negotiated transaction.

Financial highlights

• Restaurant sales reached $37.7 million, up from $35.4 million in Q3 2023, with Bad Daddy's at $27.3 million and Good Times at $10.4 million.

• Restaurant-level operating profit for Bad Daddy's was $3.9 million (14.3% of sales), up from $3.5 million (13.3%), while Good Times' profit decreased by $0.1 million to $1.7 million, with margin dropping to 16.5%.

• Income from operations was $1.2 million, up from $0.4 million year-over-year.

• Cash and cash equivalents at quarter end were $4.8 million, with $0.8 million in credit facility borrowings and $1.1 million in long-term debt.

• Weighted average diluted shares outstanding Q3 2024: 11.03 million.

Outlook and guidance

• Next menu price increase for both brands is targeted for the end of fiscal Q1, with continued use of pricing to offset inflation, though competitive pricing may limit further increases.

• Store-level margins are expected to see slight compression in Q4 due to seasonality and elevated costs.

• Management expects G&A costs to be 7.0%-7.5% of total revenues for the remainder of fiscal 2024.

• Company anticipates sufficient capital to meet working capital and recurring capex needs in fiscal 2024, with funding from cash and available credit.

• One new store opening expected in late fiscal Q2 or early Q3 2025, with a conservative development pipeline.