8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

August 8, 2019

(Exact name of registrant as specified in its charter)

Nevada	000-18590	84-1133368
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

141 Union Boulevard, #400, Lakewood, CO 80228

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (303) 384-1400

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	GTIM	Nasdaq Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On August 8, 2019 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter ended June 25, 2019 and that management would review these results in a conference call on Thursday, August 8, 2019 at 5:00 p.m. ET.

Item 7.01. Regulation FD Disclosure.

On August 8, 2019 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter ended June 25, 2019.

The information contained in, or incorporated into, this Item 7.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or otherwise subject to the liabilities of that section, nor expressly set forth by specific reference to such filing. This Item 7.01 will not be deemed an admission as to the materiality of any information in the Report that is required to be disclosed solely by Regulation FD.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed as part of this report.

Exhibit Number	Description
99.1	Press Release, dated August 8, 2019

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GOOD TIMES RESTAURANTS INC.
Date:      August 8, 2019	By:
		Boyd E. Hoback
		President and Chief Executive Officer

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EXHIBIT INDEX

The following exhibits are furnished as part of this report:

Exhibit Number	Description
99.1	Press Release, dated August 8, 2019

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

August 8, 2019 Nasdaq Capital Markets - GTIM        

GOOD TIMES RESTAURANTS REPORTS Q3 RESULTS

Total Revenues Increased 12% to $29.5 Million in Q3
Consolidated Net Income Increases to $540,000 for the Quarter

Conference Call Thursday, August 8, 2019, at 3:00 p.m. MT/5:00 p.m. ET

(DENVER, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad Daddy’s Burger Bar, a full-service, upscale burger bar concept, and Good Times Burgers & Frozen Custard, a regional quick-service restaurant chain focused on fresh, high quality, all natural products, today announced its preliminary unaudited financial results for the third fiscal quarter ended June 25, 2019.

Key highlights of the Company’s financial results include:

· Total revenues increased 12% to $29.5 million for the quarter

· Total Restaurant Sales for Bad Daddy’s restaurants increased 18.7% to $21.1 million and Bad Daddy’s Restaurant Level Operating Profit* (a non-GAAP measure) was $3.4 million or 16.3% of sales

· Same store sales for company-owned Bad Daddy’s restaurants decreased 0.7% and for Good Times restaurants increased 2.8%

· Total Restaurant Sales for Good Times restaurants were $8.1 million and Good Times Restaurant Level Operating Profit* (a non-GAAP measure) was $1.5 million or 18.0% as a percent of sales

· Net Income Attributable to Common Shareholders was $540,000 for the quarter

· Adjusted EBITDA* (a non-GAAP measure) for the quarter was $2.1 million

· The Company ended the quarter with $2.6 million in cash and $11.2 million drawn against its senior credit facility

Boyd Hoback, President and CEO, said “We’ve seen a strong turnaround in our Good Times sales trends once we returned to normal year over year weather patterns, which has accelerated subsequent to the end of the quarter. Bad Daddy’s same store sales were impacted by some competitive intrusion around two restaurants as well as minor remodeling of another restaurant. We have four additional Bad Daddy’s currently under construction in the Nashville, TN; Huntsville, AL; Charleston, SC; and Columbia, SC markets. We expect two of those to open prior to the end of fiscal 2019, and two to open shortly after the end of our fiscal year.”

Commenting on the Company’s earnings guidance, Ryan Zink, Chief Financial Officer, stated “Our updated guidance for the year calls for Adjusted EBITDA of approximately $5.2 to $5.4 million, reflecting margin compression from wage inflation and delivery commissions on stronger-than expected delivery sales, coupled with reduced on-premise revenue expectations. We anticipate we will provide guidance for fiscal 2020 prior to the end of our fiscal year as we finalize our pace of growth, but we expect the development of at least five new Bad Daddy’s during fiscal 2020.”

Fiscal 2019 Outlook:

The Company updated its guidance for fiscal 2019 to reflect adjustments to expected store openings and unit volumes through the balance of the year:

· Total revenues of approximately $110 million

· Total revenue estimates assume same-store sales decreases of approximately 1% for the balance of the year for Bad Daddy’s

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· General and administrative expenses of approximately $8.6 million including approximately $450,000 of non-cash equity compensation expense

· The opening of two additional Bad Daddy’s restaurants before the end of fiscal 2019

· Net loss of approximately $1.6 to $1.8 million, including approximately $1.7 million of pre-opening costs

· Total Adjusted EBITDA* between $5.2 and $5.4 million

· Capital expenditures (net of tenant improvement allowances) of approximately $6.9 to $7.2 million including approximately $2.0 million related to fiscal 2020 development, primarily two stores expected to open in October 2019. This does not include the use of approximately $3.0 million of cash in the previously disclosed acquisition of the non-controlling interest in three Bad Daddy’s restaurants.

· Fiscal year-end long-term debt of approximately $13.0 to $13.3 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.

Conference Call: Management will host a conference call to discuss its third quarter 2019 financial results on Thursday, August 8, 2019 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Boyd Hoback, President and Chief Executive Officer, and Ryan Zink, Chief Financial Officer.

The conference call can be accessed live over the phone by dialing (888) 339-0806 and requesting the Good Times Restaurants (GTIM) call. The conference call will also be webcast live from the Company's corporate website www.goodtimesburgers.com. An archive of the webcast will be available at the same location on the corporate website shortly after the call has concluded.

About Good Times Restaurants Inc.: Good Times Restaurants Inc. (GTIM) owns, operates, franchises and licenses 35 Bad Daddy’s Burger Bar restaurants through its wholly-owned subsidiaries. Bad Daddy’s Burger Bar is a full service, upscale, “small box” restaurant concept featuring a chef-driven menu of gourmet signature burgers, chopped salads, appetizers and sandwiches with a full bar and a focus on a selection of craft microbrew beers in a high energy atmosphere that appeals to a broad consumer base. Additionally, through its wholly-owned subsidiaries, Good Times Restaurants Inc. operates and franchises a regional quick service restaurant chain consisting of 34 Good Times Burgers & Frozen Custard restaurants, located primarily in Colorado.

Good Times Forward Looking Statements: This press release contains forward looking statements within the meaning of federal securities laws. The words “intend,” “may,” “believe,” “will,” “should,” “anticipate,” “expect,” “seek” and similar expressions are intended to identify forward looking statements. These statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from results expressed or implied by the forward-looking statements. These risks include such factors as the uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants, delays in developing and opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or shortages in raw food products, and other matters discussed under the Risk Factors section of Good Times’ Annual Report on Form 10-K for the fiscal year ended September 25, 2018 filed with the SEC. Although Good Times may from time to time voluntarily update its forward-looking statements, it disclaims any commitment to do so except as required by securities laws.

Good Times Restaurants Inc CONTACTS:

Boyd E. Hoback, President and Chief Executive Officer (303) 384-1411

Ryan Zink, Chief Financial Officer (303) 384-1432

Christi Pennington (303) 384-1440

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Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands, except per share amounts)

	Fiscal Quarter Ended						Year-To-Date
Statement of Operations	June 25, 2019			June 26, 2018			June 25, 2019			June 26, 2018
Net revenues:
Restaurant sales	$	29,180		$	25,990		$	81,281		$	71,929
Franchise revenues		277			273			718			778
Total net revenues		29,457			26,263			81,999			72,707
Restaurant operating costs:
Food and packaging costs		8,529			7,833			23,955			22,154
Payroll and other employee benefit costs		10,677			9,155			30,458			26,076
Restaurant occupancy costs		2,091			1,850			6,221			5,278
Other restaurant operating costs		2,989			2,373			8,401			6,626
Preopening costs		129			610			949			1,683
Depreciation and amortization		1,104			937			3,227			2,665
Total restaurant operating costs		25,519			22,758			73,211			64,482
General and administrative costs		2,144			2,069			6,398			5,884
Advertising costs		666			653			1,841			1,850
Franchise costs		8			11			31			32
Asset impairment charge		-			-			-			72
Gain on disposal of restaurants and equipment		44			(9	)		5			(26	)
Income from operations		1,076			781			513			413
Other income (expense):
Interest income (expense), net		(202	)		(96	)		(561	)		(270	)
Other income		(1	)		-			(1	)		-
Total other income (expense), net		(203	)		(96	)		(562	)		(270	)
Net income (loss)		873			685			(49	)		143
Income attributable to non-controlling interests		(333	)		(381	)		(912	)		(853	)
Net income (loss) attributable to common shareholders	$	540		$	304		$	(961	)	$	(710	)
Basic and diluted income (loss) per share	$	0.04		$	0.02		$	(0.08	)	$	(0.06	)
Basic weighted average common shares outstanding		12,523			12,468			12,517			12,460
Diluted weighted average common shares outstanding		12,723			12,665			12,517			12,460

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Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands)

	June 25, 2019		September 25, 2018
Balance Sheet Data
Cash and cash equivalents	$	2,619	$	3,477
Current assets	$	4,560	$	6,381
Property and equipment, net		36,666		35,245
Other assets		19,330		19,324
Total assets	$	60,556	$	60,950
Current liabilities, including capital lease obligations and long-term debt due within one year	$	7,801	$	8,335
Long-term debt due after one year		11,150		7,472
Other liabilities		8,290		7,922
Total liabilities	$	27,241	$	23,729
Stockholders’ equity	$	33,315	$	37,221

	Bad Daddy’s Burger Bar				Good Times Burgers & Frozen Custard
	--------------------------------Fiscal Quarter Ended--------------------------------
	2019		2018		2019		2018
Restaurant sales (in thousands)	$	21,080	$	17,765	$	8,100	$	8,225
Restaurants opened during period		-		2		-		0
Restaurants closed during period		-		-		-		1
Restaurants open at period end		33		27		26		26
Restaurant operating weeks		429.0		337.6		338		342.0
Average weekly sales per restaurant (in thousands)	$	49.1	$	52.6	$	24.0	$	24.0

	Bad Daddy’s Burger Bar				Good Times Burgers & Frozen Custard
	--------------------------------Year-To-Date Period Ended--------------------------------
	2019		2018		2019		2018
Restaurant sales (in thousands)	$	59,714	$	48,706	$	21,567	$	23,223
Restaurants opened during period		2		5		-		0
Restaurants closed during period		-		-		-		2
Restaurants open at period end		33		27		26		26
Restaurant operating weeks		1,267.3		970.4		1,053.0		1,062.0
Average weekly sales per restaurant (in thousands)	$	47.1	$	50.2	$	20.5	$	21.9

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Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income from Operations

(In thousands, except percentage data)

	Bad Daddy’s Burger Bar								Good Times Burgers & Frozen Custard								Good Times Restaurants Inc.
	-----------------------------------------------------------------------------------Fiscal Quarter Ended-----------------------------------------------------------------------------------
	June 25, 2019				June 26, 2018				June 25, 2019				June 26, 2018				June 25, 2019		June 26, 2018
Restaurant sales	$	21,080	100.0	%	$	17,765	100.0	%	$	8,100	100.0	%	$	8,225	100.0	%	$	29,180	$	25,990
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food and packaging costs		6,063	28.8	%		5,179	29.2	%		2,466	30.4	%		2,654	32.3	%		8,529		7,833
Payroll and benefits costs		7,851	37.2	%		6,439	36.2	%		2,826	34.9	%		2,716	33.0	%		10,677		9,155
Restaurant occupancy costs		1,391	6.6	%		1,156	6.5	%		700	8.6	%		694	8.4	%		2,091		1,850
Other restaurant operating costs		2,339	11.1	%		1,725	9.7	%		650	8.0	%		648	7.9	%		2,989		2,373
Restaurant-level operating profit	$	3,436	16.3	%		3,266	18.4	%	$	1,458	18.0	%	$	1,513	18.4	%	$	4,894		4,779
Franchise advertising contributions and net royalty income																		277		273
Deduct - Other operating:
Depreciation and amortization																		1,104		937
General and administrative																		2,144		2,069
Advertising costs																		666		653
Franchise costs																		8		11
Gain (Loss) on restaurant asset sale																		44		(9	)
Asset impairment charge																		-		-
Preopening costs																		129		610
Total other operating																		4,095		4,271
Income from operations																	$	1,076	$	781

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

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Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income from Operations

(In thousands, except percentage data)

	Bad Daddy’s Burger Bar								Good Times Burgers & Frozen Custard								Good Times Restaurants Inc.
	---------------------------------------------------------------------------------------------------Year-To-Date---------------------------------------------------------------------------------------------
	June 25, 2019				June 26, 2018				June 25, 2019				June 26, 2018				June 26, 2019		June 25, 2018
Restaurant sales	$	59,714	100.0	%	$	48,706	100.0	%	$	21,567	100.0	%	$	23,223	100.0	%	$	81,281	$	71,929
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food and packaging costs		17,136	28.7	%		14,539	29.9	%		6,819	31.6	%		7,615	32.8	%		23,955		22,154
Payroll and other employee benefit costs		22,502	37.7	%		18,002	37.0	%		7,956	36.9	%		8,074	34.8	%		30,458		26,076
Restaurant occupancy costs		4,022	6.7	%		3,114	6.4	%		2,199	10.2	%		2,164	9.3	%		6,221		5,278
Other restaurant operating costs		6,560	11.0	%		4,735	9.7	%		1,841	8.5	%		1,891	8.1	%		8,401		6,626
Restaurant-level operating profit	$	9,494	15.9	%		8,316	17.1	%	$	2,752	12.8	%		3,479	15.0	%		12,246		11,795
Franchise royalty income, net																		718		778
Deduct - Other operating:
Depreciation and amortization																		3,227		2,665
General and administrative																		6,398		5,884
Advertising costs																		1,841		1,850
Franchise costs																		31		32
Gain (Loss) on restaurant asset sale																		5		(26	)
Asset impairment charge																		-		72
Preopening costs																		949		1,683
Total other operating																		12,451		12,160
Income from operations																	$	513	$	413

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

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The Company believes that restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant-level occupancy costs, which include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation. The measure excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes selling, general and administrative costs, and therefore excludes occupancy costs associated with selling, general and administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do not represent a component of the efficiency of continuing operations. Restaurant impairment costs are excluded, because similar to depreciation and amortization, they represent a non-cash charge for the Company’s investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with generally accepted accounting principles (“GAAP”) and should not be considered in isolation, or as an alternative, to income from operations or net income as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The tables above set forth certain unaudited information for the current and prior year fiscal quarters and year-to-date periods for fiscal 2019 and fiscal 2018, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA

	Fiscal Quarter Ended						Year-to-Date
	June 25, 2019			June 26, 2018			June 25, 2019			June 26, 2018
Adjusted EBITDA:
Net Income (Loss), as reported	$	540		$	304		$	(961	)	$	(710	)
Depreciation and amortization		1,096			897			3,157			2,550
Interest expense, net		202			97			561			272
EBITDA		1,838		$	1,298			2,757		$	2,112
Preopening expense		128			565			928			1,541
Non-cash stock-based compensation		110			88			331			303
GAAP rent-cash cash difference		(44	)		(35	)		(50	)		(51	)
Gain (Loss) on disposal of assets		44			(9	)		5			(26	)
Asset impairment charge		-			0			-			72
Adjusted EBITDA	$	2,076		$	1,907		$	3,971		$	3,951

Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by GAAP, and our calculation thereof may not be comparable to that reported by other companies. This measure is presented because we believe that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for evaluating our ongoing results of operations.

Adjusted EBITDA is calculated as net income before interest expense, provision for income taxes and depreciation and amortization and further adjustments to reflect the additions and eliminations presented in the table above.

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Adjusted EBITDA is presented because: (i) we believe it is a useful measure for investors to assess the operating performance of our business without the effect of non-cash charges such as depreciation and amortization expenses and asset disposals, closure costs and restaurant impairments, and (ii) we use adjusted EBITDA internally as a benchmark for certain of our cash incentive plans and to evaluate our operating performance or compare our performance to that of our competitors. The use of adjusted EBITDA as a performance measure permits a comparative assessment of our operating performance relative to our performance based on our GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structures and cost of capital (which affect interest expense and income tax rates) and differences in book depreciation of property, plant and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management believes that adjusted EBITDA facilitates company-to-company comparisons within our industry by eliminating some of these foregoing variations. Adjusted EBITDA, as presented, may not be comparable to other similarly-titled measures of other companies, and our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by excluded or unusual items.

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