-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WFHGTGvV/CGyl59FLrdSi3wFTqnyaE7ZiWIRC4Hq4CEh5arKLP/EpA8dlWaUskB5 D43VpLdEk4BSUsjqcQQGlQ== 0000825324-00-000002.txt : 20000203 0000825324-00-000002.hdr.sgml : 20000203 ACCESSION NUMBER: 0000825324-00-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOOD TIMES RESTAURANTS INC CENTRAL INDEX KEY: 0000825324 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 841133368 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-18590 FILM NUMBER: 519176 BUSINESS ADDRESS: STREET 1: 601 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 BUSINESS PHONE: 3033841400 MAIL ADDRESS: STREET 1: 601 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 FORMER COMPANY: FORMER CONFORMED NAME: PARAMOUNT VENTURES INC DATE OF NAME CHANGE: 19900205 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarterly period ended: December 31, 1999 _________________ Commission file number: 0-18590 _______ GOOD TIMES RESTAURANTS INC. ___________________________ (Exact name of small business issuer as specified in its charter) NEVADA ______ (State or other jurisdiction of incorporation or organization) 84-1133368 __________ (I.R.S. Employer Identification No.) 601 CORPORATE CIRCLE, GOLDEN, CO 80401 ________________________________________ (Address of principal executive offices) (303) 384-1400 ______________ (Issuer's telephone number) ________________________________________ (Former name, former address and former fiscal year, since last report.) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS Total number of shares of common stock outstanding at February 4, 2000. 2,226,995 SHARES OF COMMON STOCK, .001 PAR VALUE ___________________________________________________ Transitional Small Business Disclosure Format (check one): [ ]Yes [X ] No Form 10-QSB Quarter Ended December 31, 1999 INDEX PAGE PART I - FINANCIAL INFORMATION 1. Financial Statements Consolidated Balance Sheets - 3 December 31, 1999 and September 30, 1999 Consolidated Statements of Operations - 5 For the three months ended December 31, 1999 and 1998 Consolidated Statements of Cash Flow - 6 For the three months ended December 31, 1999 1998 Notes to Financial Statements 7 2. Management's Discussion and Analysis 8 PART II - OTHER INFORMATION 1 through 6 12 SIGNATURES 14 GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 31, September 30, 1999 1999 ____ ____ CURRENT ASSETS: Cash and cash equivalent $ 745,000 $1,748,000 Investments, at fair value 299,000 299,000 Receivables 305,000 192,000 Inventories 72,000 55,000 Prepaid expenses and other 45,000 37,000 Notes receivable 49,000 48,000 _________ _________ Total current assets 1,515,000 2,379,000 PROPERTY AND EQUIPMENT, at cost: Land and building 3,530,000 3,340,000 Leasehold improvements 2,450,000 2,349,000 Fixtures and equipment 3,306,000 3,039,000 _________ _________ 9,286,000 8,728,000 Less accumulated depreciation and amortization (3,242,000) (3,080,000) _________ _________ 6,044,000 5,648,000 OTHER ASSETS: Notes receivable 437,000 435,000 Deposits & other 71,000 75,000 _________ _________ 508,000 510,000 TOTAL ASSETS $8,067,000 $8,537,000 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt and capital leases $ 422,000 $ 399,000 Accounts payable 201,000 607,000 Lease obligations, RTC and Las Vegas 202,000 202,000 Accrued liabilities - other 511,000 607,000 _________ _________ Total current liabilities 1,336,000 1,815,000 LONG-TERM LIABILITIES: Debt and capitalized leases, net of current portion 950,000 747,000 Lease obligations, RTC and Las Vegas, net of current portion 229,000 260,000 Deferred liabilities 319,000 313,000 _________ _________ Total long-term liabilities 1,498,000 1,320,000 MINORITY INTERESTS IN PARTNERSHIPS 1,272,000 1,310,000
STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 5,000,000 shares authorized, None issued and outstanding GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Cont.) December 31, September 30, 1999 1999 ____ ____ Common stock, $.001 par value; 50,000,000 shares authorized, 2,226,995 shares issued and outstanding as of December 31, 1999 and 2,221,507 shares issued and outstanding as of September 30, 1999 2,000 2,000 Capital contributed in excess of par value 13,221,000 13,203,000 Accumulated deficit (9,262,000) (9,113,000) __________ __________ Total stockholders' equity 3,961,000 4,092,000 __________ __________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,067,000 $ 8,537,000 ========== ==========
GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended December 31, 1999 1998 ____ ____ NET REVENUES: Restaurant sales, net $3,277,000 $3,432,000 Franchise revenues, net 52,000 67,000 _________ _________ Total revenues 3,329,000 3,499,000 RESTAURANT OPERATING EXPENSES: Food & paper costs 1,144,000 1,283,000 Labor, occupancy & other 1,376,000 1,345,000 Opening expenses 49,000 -0- Accretion of deferred rent 6,000 7,000 Depreciation & amortization 169,000 154,000 _________ _________ Total restaurant operating costs 2,744,000 2,789,000 INCOME FROM RESTAURANT OPERATIONS 585,000 710,000 OTHER OPERATING EXPENSES: Selling, general & administrative expenses 678,000 569,000 Loss (Income) from operating RTC stores 8,000 4,000 ________ _________ Total other operating costs 686,000 573,000 INCOME (LOSS) FROM OPERATIONS (101,000) 137,000 OTHER INCOME & (EXPENSES) Minority income (expense), net (46,000) (92,000) Interest, net (2,000) (2,000) Other, net (1,000) (7,000) ________ ________ Total other income & (expenses) (49,000) (87,000) NET INCOME (LOSS) $ (150,000) $ 50,000 ========= ======== BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE $ (.07) $ .03 ========= ======== WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS USED IN PER SHARE CALCULATION: BASIC 2,222,521 1,751,071 ========= ========= DILUTED N/A 1,770,593 ========= =========
GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended December 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $(150,000) $ 50,000 Depreciation and amortization 181,000 163,000 Changes in operating assets & liabilities -- (Increase) decrease in: Prepaids & receivables (121,000) (108,000) Inventories (17,000) (14,000) Other assets 1,000 (1,000) (Decrease) increase in: Accounts payable (406,000) (34,000) Accrued interest 1,000 -0- Accrued property taxes 37,000 30,000 Accrued payroll & P/R taxes 3,000 (9,000) Other accrued liabilities/ deferred income (162,000) (91,000) Net cash provided by (used in) operating activities (633,000) (14,000) CASH FLOWS FROM INVESTING ACTIVITIES: (Purchase) sale - FF&E, land, building and improvements (576,000) (21,000) CASH FLOWS FROM FINANCING ACTIVITIES: Debt incurred (paid) 226,000 (36,000) Minority interest (37,000) (37,000) Paid in capital activity 17,000 16,000 _________ _________ Net cash provided by (used in) financing activities 206,000 (57,000) INCREASE (DECREASE) IN CASH $(1,003,000) $ (92,000) ========== =========
GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. UNAUDITED FINANCIAL STATEMENTS: In the opinion of management, the accompanying unaudited consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position of the Company as of December 31, 1999, the results of its operations and its cash flow for the three month period ended December 31, 1999. Operating results for the three month period ended December 31, 1999 are not necessarily indicative of the results that may be expected for the year ending September 30, 2000. The consolidated balance sheet as of September 30, 1999 is derived from the audited financial statements, but does not include all disclosures required by generally accepted accounting principles. As a result, these financial statements should be read in conjunction with the Company's Form 10-KSB for the fiscal year ended September 30, 1999. 2. REVERSE STOCK SPLIT: On February 12, 1998, the shareholders approved a one-for-five reverse stock split of the Company's Common Stock. All references to number of shares, except shares authorized, and to per share information in the consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. 3. CONTINGENT LIABILITY The Company remains contingently liable on several leases of restaurants that were previously sold. The Company is also a guarantor on a Small Business Administration loan to a franchisee. 4. STOCK TRANSACTIONS During the three months ended December 31, 1999 Good Times Restaurants issued 5,488 shares of its Common Stock to the Company's 401(k) profit sharing plan, this represented a 25% matching of employee contributions for the twelve months ended September 30, 1999. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE COMPANY General This Form 10-QSB contains or incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. Also, documents subsequently filed by the Company with the SEC and incorporated herein by reference may contain forward-looking statements. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that actual results could differ materially from those in the forward-looking statements as a result of various factors, including but not limited to the following: (I) The Company competes with numerous well established competitors who have substantially greater financial resources and longer operating histories than the Company. Competitors have increasingly offered selected food items and combination meals, including hamburgers, at discounted prices, and continued discounting by competitors may adversely affect revenues and profitability of Company restaurants. (II) The Company may be negatively impacted if the Company experiences consistent same store sales declines. Same store sales comparisons will be dependent, among other things, on the success of Company advertising and promotion of new and existing menu items. No assurances can be given that such advertising and promotions will in fact be successful. The Company may also be negatively impacted by other factors common to the restaurant industry such as: changes in consumer tastes away from red meat and fried foods; increases in the cost of food, paper, labor, health care, workers' compensation or energy; an inadequate number of hourly paid employees; and/or decreases in the availability of affordable capital resources. The Company cautions the reader that such risk factors are not exhaustive, particularly with respect to future filings. The Company had thirty-two restaurants open at December 31, 1999, of which fifteen were franchised restaurants, nine joint-venture restaurants and eight company-owned restaurants compared to twenty-nine restaurants open at December 31, 1998, of which fourteen were franchised restaurants, nine joint-venture restaurants and six company-owned restaurants. Management anticipates that the Company and its existing franchisees will develop a total of two to four Good Times restaurants in the Denver ADI in 2000. The following presents certain historical financial information of the operations of the Company. This financial information includes the results of the Company for the three months ended December 31, 1998 and the results of the Company for the three months ended December 31, 1999. RESULTS OF OPERATIONS NET REVENUES. Net restaurant sales for the three months ended December 31, 1999, decreased $155,000 (-4.5%) to $3,277,000 from $3,432,000 for the same prior year period. Net restaurant sales increased $202,000 from two company-owned restaurants that opened in October and December 1999. Same store net revenues for company-owned and joint-venture restaurants decreased $357,000 (-10.4%) for the three months ended December 31, 1999 from the same prior year period. In the three months ended December 31, 1998 same store sales increased 20.6% due to the introduction of a new product in September 1998. Franchise revenue decreased $15,000 for the three months ended December 31, 1999 due to a decrease in franchise royalty income from the same prior year period. FOOD AND PAPER COSTS. Food and paper costs decreased to 34.9% of net restaurant sales for the three months ended December 31, 1999, compared to 37.4% for the same prior year period. A price increase of approximately 5.3% was implemented February 1, 1999 reducing the cost of sales as a percentage of net restaurant sales. Additionally, the cost of sales for the three months ended December 31, 1998 was high due to the addition of a new onion ring product introduced in September 1998 and the product's disproportionately high percentage of sales. Management has since reduced the cost of sales on the onion ring product. LABOR, OCCUPANCY AND OTHER EXPENSES. For the three months ended December 31, 1999 the Company's labor, occupancy and other expenses increased $31,000 from $1,345,000 (39.2% of net restaurant revenues) to $1,376,000 (41.9% of net restaurant revenues) compared to the same prior year period. The increase in labor, occupancy and other expenses for the three months ended December 31, 1999 is attributable to 1) the current year period expenses include two additional restaurants that opened in the period; and 2) a decrease in same store net restaurant sales, which causes restaurant expenses to increase as a percentage of net restaurant sales. DEPRECIATION AND AMORTIZATION EXPENSES. For the three months ended December 31, 1999 the Company's depreciation and amortization expenses increased $15,000, from $154,000 to $169,000 compared to the same prior year period. The increase in depreciation and amortization expenses for the three months ended December 31, 1999 is attributable to the two new company-owned restaurants that opened in October and December 1999. INCOME FROM RESTAURANT OPERATIONS. For the three months ended December 31, 1999, income from restaurant operations decreased to $585,000 (17.9% of net restaurant sales) from $710,000 (20.7% of net restaurant sales) for the same prior year period. Cash flow from restaurant operations (income from restaurant operations plus depreciation and amortization) decreased to 23.0% of net restaurant sales for the three months ended December 31, 1999 from 25.2% for the same prior year period. The decrease in both income and cash flow from restaurants as a percentage of net restaurant sales is a direct result of a decrease in same store net restaurant sales, which causes restaurant expenses to increase as a percentage of net restaurant sales. Additionally, the current year period includes new store pre-opening expenses of $49,000 compared to $0 for the same prior year period. INCOME (LOSS) FROM OPERATIONS. The Company had a loss from operations of ($101,000) in the three months ended December 31, 1999 compared to income from operations of $137,000 for the same prior year period. The reduction in income from operations of $238,000 is primarily attributable to a decrease in income from restaurant operations of $125,000, an increase in advertising expenses of $72,000, an increase in the loss from operating RTC stores of $4,000, and an increase in general and administrative expenses of $37,000 compared to the same prior year period. The increase in advertising expenses for the three months ended December 31, 1999 is attributable to increased contributions to the advertising cooperative due to a higher contribution rate of 8.5% of net restaurant sales compared to 6.0% of net restaurant sales in the same prior year period. The increase in general and administrative expenses for the three months ended December 31, 1999 is primarily attributable to an increase in corporate salaries and benefits expense as well as an increase in depreciation expense compared to the same prior year period. NET INCOME (LOSS). The net loss for the Company was ($150,000) for the three months ended December 31, 1999 compared to net income for the Company of $50,000 for the same prior year period. Minority interest expense decreased ($46,000) in the three months ended December 31, 1999 from the same prior year period. This decrease was attributable to the reduced income from restaurant operations from the joint-venture restaurants compared to the same prior year period. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 1999, the Company had $745,000 cash and cash equivalents and $299,000 in marketable securities on hand. The Company's cash balance and cash generated from operations will be used for the development of Company operated restaurants and other general corporate purposes. The Company had a working capital surplus of $179,000 as of December 31, 1999. Management believes the current cash on hand, cash generated from operations, and existing financing commitments will be sufficient to fund the Company's working capital and capital expenditure requirements. Management anticipates developing one new franchised restaurant and one to three new company-owned restaurants during the balance of 2000. Cash flow used in operating activities for the three months ended December 31, 1999 of $633,000 includes a reduction in accounts payable of $406,000, a decrease in other accrued liabilities of $162,000 and an increase in prepaids and receivables of $121,000. Accounts payable at September 30, 1999 included $260,000 of new store construction billings that were paid in October 1999. The decrease in other accrued liabilities included payments on the RTC and Las Vegas lease liabilities of $89,000 and payments of $60,000 against accrued bonuses. Cash flow used in investing activities for the three months ended December 31, 1999 of $576,000 includes $52,000 of recurring restaurant related capital expenditures and $524,000 for new restaurant development. Cash provided by financing activities for the three months ended December 31, 1999 includes $232,000 in debt financing proceeds for one new restaurant. As of December 31, 1999 the Company had made capital expenditures of $487,000 for two new restaurants. Management estimates the total capital expenditure for the two new restaurants will be $1,100,000 of which $600,000 will be funded through a $1.5 million debt financing commitment. The Company has remaining debt financing commitments of $2,000,000 for the purchase of land and restaurant development and $1.5 million for the development of new restaurants on leased land. IMPACT OF INFLATION The Company has not experienced a significant impact from inflation. It is anticipated any operating expense increases will be recovered by increasing menu prices to the extent that is prudent considering competition. SEASONALITY Revenues of the Company are subject to seasonal fluctuation based primarily on weather conditions adversely affecting restaurant sales in January, February and March. GOOD TIMES RESTAURANTS INC. & SUBSIDIARIES Part II. - Other Information Item 1. - Legal Proceedings The Company is subject to legal proceedings which are incidental to its business. These legal proceedings are not expected to have a material impact on The Company. The Company has been involved in condemnation proceedings with Westminster Plaza LLC and the Westminster Economic Development Association as a result of one of its restaurants being part of a condemnation of a larger development on which it leased land from Westminster Plaza LLC. In June, 1999 the court ruled against the Company's claim for compensation for its leasehold improvements and value of its lease. The Company has appealed the court's decision. Item 2. - Changes in Securities and Use of Proceeds None. Item 3. - Defaults Upon Senior Securities None. Item 4. - Submission of Matters to a Vote of Security Holders None. Item 5. - Other Information None. Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits. The following exhibits are furnished as part of this report: Exhibit No. Description 27.1 Financial Data Schedule.* (b) Form 8-K: None filed in this quarter. *filed herewith SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GOOD TIMES RESTAURANTS INC. DATE: February 1, 2000 BY:/s/ Boyd E. Hoback ________________ ___________________________ Boyd E. Hoback, President and Chief Executive Officer BY:/s/ Susan Knutson ___________________________ Susan Knutson, Controller EX-1 2 [ARTICLE] 5 [PERIOD-TYPE] 3-MOS [FISCAL-YEAR-END] SEP-30-2000 [PERIOD-END] DEC-31-1999 [CASH] 745,000 [SECURITIES] 299,000 [RECEIVABLES] 305,000 [ALLOWANCES] 0 [INVENTORY] 72,000 [CURRENT-ASSETS] 1,515,000 [PP&E] 9,286,000 [DEPRECIATION] (3,242,000) [TOTAL-ASSETS] 8,067,000 [CURRENT-LIABILITIES] 1,336,000 [BONDS] 0 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 2,000 [OTHER-SE] 3,961,000 [TOTAL-LIABILITY-AND-EQUITY] 8,067,000 [SALES] 3,277,000 [TOTAL-REVENUES] 3,329,000 [CGS] 1,144,000 [TOTAL-COSTS] 2,744,000 [OTHER-EXPENSES] 686,000 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 2,000 [INCOME-PRETAX] (150,000) [INCOME-TAX] 0 [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (150,000) [EPS-BASIC] (.07) [EPS-DILUTED] (.07)
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