Good Times Restaurants Inc. 2024 Annual Report Review

Introduction

Good Times Restaurants Inc., a Nevada-based corporation, operates two distinct restaurant brands: Bad Daddy’s Burger Bar and Good Times Burgers & Frozen Custard. The company’s fiscal year 2024 10-K filing provides a comprehensive overview of its operations, financial performance, and strategic direction. This review will delve into the key aspects of the report, offering insights into the company’s business model, financial health, and potential investment opportunities.

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Business Overview

Good Times Restaurants Inc. operates in the restaurant industry with two primary segments:

1. Bad Daddy’s Burger Bar: A full-service, casual dining concept known for its specialty burgers and vibrant atmosphere. The brand operates 39 company-owned locations across several states, with a focus on high-quality ingredients and a unique dining experience.
2. Good Times Burgers & Frozen Custard: A quick-service restaurant concept offering drive-thru service with a focus on all-natural beef and chicken. The brand operates 27 company-owned locations, primarily in Colorado, and emphasizes quality and speed of service.

Financial Performance

Revenue and Profitability

For fiscal 2024, Good Times Restaurants reported net revenues of $142.3 million, a 3.0% increase from the previous year. This growth was driven by both segments, with Bad Daddy’s contributing $103.8 million and Good Times $38.5 million. Despite a challenging economic environment, the company achieved a net income of $1.9 million, down from $11.7 million in fiscal 2023, primarily due to a significant tax benefit in the prior year.

Same Store Sales

• Bad Daddy’s: Experienced a 1.2% decrease in same-store sales, attributed to broader industry challenges and reduced customer traffic in certain locations.
• Good Times: Achieved a 2.9% increase in same-store sales, driven by menu price adjustments and increased customer traffic.

Cash Flow and Debt

The company ended fiscal 2024 with $3.9 million in cash and $0.8 million in long-term debt. The Cadence Credit Facility provides up to $8 million in borrowing capacity, supporting future growth initiatives.

Strategic Initiatives

Expansion and Growth

Good Times Restaurants is focused on expanding its Bad Daddy’s brand, with plans to open new locations in high-income areas. The company aims to leverage its strong brand identity and customer loyalty to drive growth.

Operational Efficiency

The company is committed to improving operational efficiency through cost management and strategic investments in technology. This includes enhancing its point-of-sale systems and optimizing supply chain management.

Risk Factors

The 10-K filing highlights several risk factors, including:

• Economic Conditions: Inflation and economic downturns could impact consumer spending and operational costs.
• Labor Market: Challenges in attracting and retaining qualified employees could affect operations.
• Supply Chain: Disruptions in the supply chain could lead to increased costs and reduced product availability.

Conclusion

Good Times Restaurants Inc. presents a compelling investment opportunity with its dual-brand strategy and focus on quality and customer experience. While the company faces challenges related to economic conditions and industry competition, its strategic initiatives and financial stability position it well for future growth. Investors should consider the company’s potential for expansion and its ability to navigate the current economic landscape.

Overall, Good Times Restaurants Inc. demonstrates a solid foundation for growth, making it a viable option for investors seeking exposure to the restaurant industry.