Good Times Restaurants Inc. (NASDAQ:GTIM) Q1 2020 Earnings Conference Call - Final Transcript

Feb 11, 2020 • 05:00 pm ET


Good Times Restaurants Inc. (NASDAQ:GTIM) Q1 2020 Earnings Conference Call - Final Transcript


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Good afternoon, ladies and gentlemen. Welcome to the Good Times Restaurants Incorporated Fiscal 2020 First Quarter Earnings Conference Call. By now, everyone should have access to the Company's first quarter's earnings release. If not, it can be found at in the Investors section.

As a reminder, a part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, investors should not place undue reliance on them, and the Company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call. The Company refers you to their recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions.

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

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

Ryan M. Zink

Thank you, Sean, and thanks, everyone, for joining us on the call today.

I'll begin with a high level summary of the business and then review the financial performance for the quarter. We opened two new Bad Daddy's burger bars during the fourth fiscal quarter in Greater Charleston, South Carolina, and one in Columbia, South Carolina, bringing our total restaurants to 39, including our franchisee in South Carolina and our licensee at the Charlotte Airport.

We're pleased with the performance of the new restaurants we opened at the end of fiscal 2019 and early fiscal 2020, and given the performance of these restaurants, have added one unit to our development schedule for 2020 and expect that restaurant to open in the mid to late fourth fiscal quarter.

Comparable sales for Bad Daddy's decreased 3.4% for the quarter, which when adjusted for holiday shifts, was relatively consistent throughout the quarter. Our Good Times restaurants posted 5.8% comparable sales growth for the quarter. We closed one Good Times Restaurant at the end of the quarter that has been subleased to an unrelated party.

As we indicated in our call in December, our high level organizational focus has temporarily shifted from restaurant growth to stabilization of margins, with the intention of driving earnings growth by improving restaurant-level performance at our existing Bad Daddy's and Good Times. During the quarter, we made some tough decisions and adjusted our multiunit spans [Indecipherable]. In the Southeast, Bad Daddy's, specifically, at the beginning of the quarter, we had spans of approximately four restaurants per district but, by the end of the quarter, had approximately