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Good Times Restaurants Inc. Reports Operating Results (10-Q)

August 14, 2009 | About:

Good Times Restaurants Inc. (GTIM) filed Quarterly Report for the period ended 2009-06-30.

Good Times Restaurants Inc. is a holding company. Through its wholly-owned subsidiary they are engaged in the business of developing owning operating and franchising restaurants under the name Good Times Drive Thru Burgers. Good Times DriveThru Burgers restaurants are owned operated and franchised by their subsidiary Good Times Drive Thru Inc. Good Times Drive Thru Burgers restaurants feature a limited menu for drive-through and walk-up customers. Good Times Restaurants Inc. has a market cap of $5.6 million; its shares were traded at around $1.45 with and P/S ratio of 0.2.

Highlight of Business Operations:

Net revenues for the three months ended June 30, 2009 decreased $665,000 (9.5%) to $6,331,000 from $6,996,000 for the three months ended June 30, 2008. Same store restaurant sales decreased $699,000 (12.5%) during the three months ended June 30, 2009 for the restaurants that were open for the full periods ending June 30, 2009 and June 30, 2008. Restaurants are included in same store sales after they have been open a full fifteen months and only Good Times restaurants are included with dual branded restaurants excluded. Restaurant sales had a net increase of $119,000 due to six company-owned restaurants not included in same store sales. Three are dual branded restaurants, two were purchased from a franchisee in March 2008 and one opened in October 2008. Restaurant sales decreased $54,000 due to one non-traditional company-owned restaurant not included in same store sales.

Net revenues for the nine months ended June 30, 2009 decreased $1,704,000 (8.9%) to $17,532,000 from $19,236,000 for the nine months ended June 30, 2008. Same store restaurant sales decreased $2,141,000 (13.8%) during the nine months ended June 30, 2009 for the restaurants that were open for the full periods ending June 30, 2009 and June 30, 2008. Restaurants are included in same store sales after they have been open a full fifteen months and only Good Times restaurants are included with dual branded restaurants excluded. Restaurant sales had a net increase of $761,000 due to six company-owned restaurants not included in same store sales. Three are dual branded restaurants, two were purchased from a franchisee in March 2008 and one opened in October 2008. Restaurant sales decreased $235,000 due to one non-traditional company-owned restaurant not included in same store sales.

Franchise revenues decreased $79,000 to $412,000 from $491,000 for the nine months ended June 30, 2009 due to a decrease in franchise royalties of $92,000 offset by an increase in franchise fee income of $12,000. Same store Good Times franchise restaurant sales decreased 15.7% during the nine months ended June 30, 2009 for the franchise restaurants that were open for the full periods ending June 30, 2009 and June 30, 2008. Total dual branded franchise restaurant sales decreased 3.5% during the nine months ended June 30, 2009, compared to the same prior year period, primarily due to the closure of two restaurants in January 2008, offset by the opening of one new dual branded restaurant in December 2008.

For the three months ended June 30, 2009, our depreciation and amortization decreased $15,000 to $317,000 (5.1% of restaurant sales) from $332,000 (4.8% of restaurant sales) compared to the same prior year period. The $15,000 decrease in depreciation and amortization for the three months ended June 30, 2009 is due to $11,000 of depreciation expense in the new company-owned restaurant that opened in October 2008, offset by declining depreciation expense in our aging company-owned restaurants.

For the nine months ended June 30, 2009, our depreciation and amortization decreased $11,000 to $944,000 (5.5% of restaurant sales) from $955,000 (5.1% of restaurant sales) compared to the same prior year period. The $11,000 decrease in depreciation and amortization for the nine months ended June 30, 2009 is due to $62,000 of depreciation expense in the three acquired and new company-owned restaurants, offset by declining depreciation expense in our aging company-owned restaurants.

The net loss was ($180,000) for the three months ended June 30, 2009 compared to a net loss of ($121,000) for the same prior year period. The change from the three month period ended June 30, 2008 to June 30, 2009 was primarily attributable to the increase in loss from operations for the three months ended June 30, 2009, as well as: 1) a decrease in minority interest expense of $53,000 compared to the same prior year period, 2) an increase in net interest expense of $70,000 compared to the same prior year period, which is primarily related to the $2,500,000 PFGI II line of credit and 3) a $29,000 unrealized gain in the current period related to our interest rate swap liability.

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Rating: 3.3/5 (4 votes)

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