GTIM - Earnings call transcript Q4 2019 | Good Times Restaurants Inc.

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Operator

Good afternoon ladies and gentlemen. Welcome to the Good Times Restaurants Inc. Fiscal 2019 Fourth Quarter Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. everyone release. access now, fourth the By earnings quarter Instructions] should to have company's [Operator it be not, If can Investors in section. the found at www.goodtimesburgers.com

therefore include you meaning reminder, statements not These guarantees a a performance of put are discussion subject As results and undue reliance future therefore on we investors part cause and forward-looking actual to uncertainties statements within reliance materially risks not on not Federal expect them. These of will the of should and to statements undue place that numerous are Securities what differ should laws. today's also from them. forward-looking could

And the impact to our SEC the financial filings that to circumstances might could statements company arise detailed and conditions. risks for after that a their these recent more The undertakes discussion you obligation update this of future the refers or to reflect results events call. operating no company

the GAAP note in during performance. being this company as useful and isolation to a be will call, measures or of substitute in believe be can non-GAAP earnings discuss this event our considered should additional evaluating results comparable with in in Lastly, GAAP available accordance Please not today's reconciliation information prepared which recorded. measures our for is release. presentation The they that

sir. I And ahead to to go turn would Please like Ryan now the call Zink. over

Ryan Zink

Daddy's will each and our a begin Bars one the high-level the thanks one of suburb Tennessee those Ben during review and We Nashville, opened the in two for a everyone DMAs. for bad today. fourth joining with in Burger Alabama, new in you, first quarter. I Huntsville, the of Thank quarter and Bad performance of on Daddy's the fiscal us summary financial then business call

in including one South first total South bad opened franchisee to In four Daddy's Carolina, Burger Greater opened And Columbia, this past Daddy's we Bar. our in Carolina our restaurants Bad October, Carolina. in our Monday, just Charleston, South our first we bringing owned

our quarter All targets Bad the and at $X.X and the restaurant. performing million above adjusted seasonally are or for at four for opened sales X.X% currently X.X% for Daddy's decreased year. for sales volumes Comparable

Our Good the X.X% net all the for DoorDash with We fourth same-store in rolled and the sales decline year of our quarter, rolled growth Drive-Thru delivery the bringing posted to in quarter for the sales Bad at four DoorDash out restaurants. our comparable of end X.X%. Times such have out Daddy's of final

-- delivery in delivery but We strong and growth growth in have see off-premise seen in both sales. total sales, moderation see continue to generally

and -- and our patty grilled Head [indiscernible] beef smoked Pastrami, of an Bad Shortly with and house-made the grilled crema; out Applewood three bacon, and avocado Bad after Chicken, house-made the arugula, end mango thinly new our onion, and Bistro year, elevated which Boar's California Pastrami chipotle our Burger both finally, Swiss is jalapeno, with bacon, Burger at with sandwich smoked we the pickled chicken arugula, sauce. jalapenos, Angus rolled made cheese, Daddy's house-made avocado, salsa; Daddy's, products sliced our

items in execute. to products our replace performed other and menu relative restaurant the on to lower menu for team and These feedback at items challenging more customer were sales other

the mix our in the same quality focused that at building and while our evolution for teams menu culinary the Bad preserve of execute. Daddy's to menu for We're our efficient on is to options customers, more of elevate relevance our time and a

Times. Daddy's stabilization restaurant our release, existing growth with high to As level organizational of temporarily to indicated growth earnings level at improving has in Good shifted and our restaurant press drive the from intent Bad our margins, by focus performance

should drive we're to measured wage the convenience, increases we to developing have place Daddy's, sales specific third at Daddy's, fourth achieve at in labor and employees. tipped throughput address restaurant and Good quartile economics, At rates in initiatives Times as drive-through focusing growing the improvements are for Bad strategies statutory demand turn operational improving efficiency. in caused by Given in consumer and for that, Bad on by to level the particularly improve which wage pressure

the committed continued remain hospitality guests, the brand of progress differentiation Bad theme by compromising casual food, We Daddy's the concept. to otherwise by dining or such without our we can reducing integrity the of from and believe the quality the genuine other make of received

restaurants approximately Bad million, had Let's increase the Daddy's, review during fourth were quarter more the quarter. lower due year, by - last At last versus of quarter of year's an restaurant overall end the this sales volumes. versus store same opened year, million the quarter during unit this quarter's average $XX.X partially XXX lower offset new weeks X.X% since fiscal We results. to four $XX.X last

entire first offset X.X% quarter. base Sales the comp quarter Bad the joining in one sales Daddy's for the the two XX the quarter Daddy's included growth in quarter, was base base same-store will of fiscal partially the XXXX. comp additional the comp by the with during decline Daddy's during Bad were during Bad enter

XX.X% sales quarter, of points quarter. approximately for basis fourth Cost last versus at decrease of XX Bad the a year's Daddy's was

approximately for by costs We quarter quarter. XX.X% the to of a maintain expect basis fiscal sales the roughly increased to compared XXXX. to flat labor percent cost Bad XXX sales for year points as prior of Daddy's

approximately and unit due where front house lower increasing wage entire of statutory a is management throughout the the top year-over-year employees, wage on the wage in levels up system. This was basis, increases the increase inflation effect for with staffing Colorado, back volumes of higher of of year-over-year X.X% average house rate on coupled to deleveraging of

of A level million for million restaurant $X.X compared for XX.X% year's quarter, overall profit, quarter, XX.X% a as to Daddy's last reduced than measure, or sales, offset margins was the $X.X compared or increases. non-GAAP net Overall, $X.X million of to bad restaurant decrease fourth more last sales year.

as continued this impacted was labor, versus we the $XXX,XXX the fees caused on same prior incurred margins delivery by of further incremental sales, to the reduction by addition year quarter. In delivery in significant pressure increase

costs Good sales. a comparable Food compared points at basis million, of Times and year's approximately X.X% Times decrease $XXX,XXX XXX quarter, the to positive to XX.X% by fourth packaging for the Sales was last increased Good for by quarter. $X.X driven

wage certain from the we've labor by year. The We quarter result the menu from This quarter labor lineup our Good in made to Colorado. Total Times benefited and last approximately market elevated the in improved for tweaks pricing, last wage XX.X% of and rate same average costs minimum during year. waste. increased quarter the again versus Custard is XX.X% have some competitive the increased improvements to XX.X% for product

profit for million quarter. operating Restaurant-level increased slightly Times $X.X to Good the

to percent cost higher increased the the to of by basis points by cost partially offset volumes. by a labor versus sales, restaurant-level sales, As leveraging average of year due of and enhanced operating primarily last XX.X% higher profit further lower XX

the accrued administrative million incurred Chief compensation $X.X during and or a of separation $X.X the compensation cash and $X.X were as General company's of expenses expenses percent were with million Included million quarter's revenues. approximately quarter former in both Officer. cost the total of XX.X% stock Executive cost connection of this G&A in non-cash

of $X.X $X.X of million the associated of $X.X southeast recognized Good charges million and Of of Colorado, was million We asset charges approximately which two which one with impairment drive during Bad country. additionally were approximately asset region Daddy's, of recorded related this in quarter. in throughs. impairment to three two We the the Times

is million preopening loss driven separation year. the fourth offset to profit, related by net of last Our net $X.X $X.X costs. quarter for former million partially impairment incurred significantly to shareholders lesser quarter the the the decrease loss This and attributable common was lower versus of operating the a company's CEO restaurant-level asset of a by charges, amount in costs

was the year for approximately loss million. net $X.X Our

quarter cash reported million year the adjusted for was finished credit $X.X $X.X $XX.X facility and Cadence against million drawn our and year was We Our million the EBITDA with in for Bank. the with million. $X.X

earnings Times. of published estimate assumptions to million. revenues with for same-store The year the $XXX the XXXX release, includes approximately full In approximately revenue million X.X% we for guidance sales for Good $XXX of fiscal

sales the restaurants date not single guidance. EBITDA adjusted million of declines. in our projecting generally full range for the the projecting although exhibit to any flat comparable digit development in we the Daddy's, $X.X are We low year We're expect included for first to opened quarter to beyond million. Bad We've $X.X

for both turnaround foundation resume for unit To year recap, challenging the focus was a excellence, fiscal us. indeed XXXX. concepts, XXXX with with development laying during the new our But to operations integrity in we're fiscal while all fiscal commitment to solid retaining a the of our a on intention new XXXX discipline fiscal preserving of

open that call the With we for will questions. Ben,

Operator

Thank you.

question comes We session. [Operator will Stephens. with Instructions] now Slabaugh question-and-answer the Please Will go from Our ahead. first begin

Sean Cuskley

on Thanks Sean questions. actually for It's Hey guys. the taking for Will.

quarter-to-date Good First Times' Bad us more for would the Any color some on October, on and sales throughout November? trends could the be update quarter? great give you Daddy's color

Ryan Zink

Sure.

the I the for of end just say quarter quarter they Good consistent trends if So I Times. that throughout would towards quarter, the the fairly slightly mean grew the were stronger ended, anything, at

reducing quarter-to-date, the and of for will of holiday impact on Christmas same us. between holiday first the will -- downward of the have impact in Daddy's At slightly shift the -- this would Thanksgiving to I Bad the say the worse definitely Thanksgiving the a we're at number have weekends quarter

Sean Cuskley

guess the at And house labor the improvements And costs? Times might some more Good you. Can those? mention give be having mitigating drive-thru Thank I what they on at Bad you Awesome. then impact us you and on detail of improvements. actually any Daddy’s rising did back

Ryan Zink

Yes.

we'd menu the throughput of the Good service a doing say is are prepare take may to what most our carefully improving think that changes through enable quickly. I will side probably that is our long our at speed us focused be really well more much looking initiative service looking on combination beginning some process So, would low-performing these as unit we're be But these, very at that drive-thru I of as on items Times for implementing to very customers within characterize of these QX. customers. the and And drive-thru I'd as

I couple Bad that think a there's we highlight. to the on of related And labor things Daddy's side,

the I models what think look management important think our in the employed we've models maybe say tweaked is and taken concepts industry. I staffing I'd staffing between managers for And bit. similar staffing the a level And reach for for based full compare needs against we level the allocation on staffing that think most models. prior our did that is of the at a and we one management staffing hourly staffing kind other

that we're I would looking of one at so biggest I labor say costs. combating the that's think ways And that

management between labor, in management, terms more data hourly opportunities job as a good our just the I at terms allocation would productivity. of I shows say labor lie looking of think overall pretty of our in and done we've rate that but workers as well in

Sean Cuskley

Awesome. you. Thank

Operator

[Operator Group. question Instructions] Our next Maxim comes Please go Stephen with Anderson from ahead.

Stephen Anderson

Yes, good afternoon.

existing development all, the tackle last of had call, in the wanted follow-up. markets the are a of some First you to about franchise -- for of about that wanted development ask I progress ago, unit question. quarters And couple a for adjacent A new mentioned conference to they're time say the Bad have I to markets. Daddy's I just you your that. company-owned potential

Ryan Zink

up Sure, we excellent disclosure concept you that restaurant keep say, as we that. now, initiatives have question. out tightening term, at actively would really in would right market hold opportunity to still marketing the of franchise to on I us. do have an our comment document. likely But before around we prepared go level And we want It's I focus Stephen. tell operations that that franchise kind of to the all development an for current. terms our that intent did We we long the the vision

Stephen Anderson

Okay.

Bad at separating have realization the of the Times Daddy's Now, from you any looked value kind also Good operations? from

Ryan Zink

commented whether have that to said my that same we at think before as as relates concept, think, the and And be it that what in at that looking can divesting best before. create way it, whether comments the or would I might from that and looking related concept, form. on I be by is, we that we've it to be always by are value basically operating some that holding we that

We look to that. have active at no process

which term However, options it. look multiple again, having the in I from unlock to guess, could long different continue as that value at we we

Stephen Anderson

in flat wanted inflation, also on food you going terms wanted also to to concepts? you at a And drill mostly looking are you're I mentioned I you well, as that that? just Okay. maybe both for little at costs bit -- what looking of is more down be

Ryan Zink

Yes.

Good the maintain for of rather side, able I we're And on to flat be flat I as to Times. rather at Bad for sales actually on Times I expect based from QX, we we're think, well. we'd in Good cost think, -- able maintain from be where Daddy's, would at where to think

the inflationary some think I commodities. there creep has for model in

think, we just flat. menu Bad we the be to expected maintain menu be our some that we'll through also and engineering menu opportunities I able temper that mix think However, on will able pricing. to through that rather there's Daddy's management But side,

Stephen Anderson

Okay.

Now, with traffic Good regard did get menu was to price what some the But can them? a Times, realize for comp increases. at you sense we of

Ryan Zink

Times Good specifically? For

Stephen Anderson

For Good Times, for Bad also Daddy's but as well.

Ryan Zink

on, roughly X.X% sitting for the quarter, price. were We

that X.X%, up traffic than we were a approximately out quarter, mix, and then, Daddy's, break separately -- terms I didn't and at traffic combined would bit I so, And little mix. sitting entirely And Times, But the for on concept. better in either at on were between say, Good sitting approximately of mix maybe we X.X%. Bad for

so, X% decline traffic. Daddy's. about would there have mix imply And that in at I not Bad a shift been much would expect

Stephen Anderson

having there. regard a discrepancies or prior -- But the of is be unit And Cherry past with a we you've of of actually years I done other changes Daddy's in closed. quarter there to issues some Okay. And the the at the traffic quarters, of Bad any issues aware ago having think -- locations? couple regards should any high-volume pointing good any an out look with Creek of job overall we've at to

Ryan Zink

sales. of Cherry I continues one it it to Creek relative Creek also is inflation. the been the seen labor some where to quarter, strongest performed through -- Cherry locations well has mean, the we've of

profitability that from a has continued standpoint be so unit And challenge. location a to

those to negative impairment rent. would Generally breakeven different the cash we recorded I the say say Most slightly we in them for. of at we with What them of in restaurants to -- being are three spoke Creek Cherry the release contribute as flow. all about that exception comments and I'd charges relative only or least

rather be role, for some so And out the of, to there can and are those. at generate those? am future my business our on kind own assessment improve individual assessing look being path and immediate new And, judgments of of cash ways doing are the what in of right to particular plans I really making flow each we site this might each

Stephen Anderson

your enough Thank new and you fair response. luck role. on That’s good

Ryan Zink

Thanks, Stephen.

Operator

concludes our any session. to like I conference over This question-and-answer would turn remarks. closing the back for to Ryan zinc

Ryan Zink

today's thank Ben. that joining Thanks, conclude I'd you like of questions With today. no to all will further for call. us

Operator

now for Thank presentation. today's attending conference The has you concluded.

You disconnect. may now

Good Times Restaurants (GTIM) 12 Dec 192019 Q4 Earnings call transcript