Good Times Restaurants Inc (GTIM)GTIM

Good Times Restaurants Inc.: A Comprehensive Overview

Company Profile:

History and Background: Founded in 1985 as Good Times Burgers & Frozen Custard, Good Times Restaurants Inc. is a Colorado-based company specializing in quick-service restaurants. Its core business focuses on two distinct brands: Bad Daddy’s Burger Bar, known for its upscale burger experience, and Good Times Burgers & Frozen Custard, offering a classic American diner ambiance. As of March 2023, the company operated 36 Bad Daddy’s locations across 14 states and 35 Good Times Burgers & Frozen Custard locations in Colorado.

Leadership Team & Corporate Structure: The company is led by CEO Ryan Zink and CFO Todd Penegor. The leadership team boasts extensive experience within the restaurant industry, holding key positions at major chains like Arby’s Restaurant Group and Sonic Drive-In. Good Times Restaurants Inc. operates with a decentralized structure, allowing each brand to maintain a distinct identity while leveraging shared resources for operational efficiency.

Top Products & Market Share: Their flagship offering, Bad Daddy’s Burger Bar, focuses on premium burgers made with high-quality ingredients, alongside other classic American comfort food options like salads, sandwiches, and milkshakes. Good Times Burgers & Frozen Custard prioritizes classic American diner fare with a focus on burgers, fries, and its signature frozen custard. While the company doesn’t disclose precise market share figures, industry reports estimate their collective presence in the US burger market to be around 1%.

Comparison to Competitors: In the competitive burger market, Good Times Restaurants Inc. faces established players like McDonald’s, Wendy’s, and Burger King. Compared to these giants, Good Times differentiates itself by offering a more premium experience at Bad Daddy’s Burger Bar and a nostalgic diner experience at Good Times Burgers & Frozen Custard. However, this differentiation comes at a higher price point, potentially limiting its customer base compared to the more value-oriented offerings from its larger competitors.

Total Addressable Market:

The US fast-food market, where Good Times Restaurants Inc. operates, is a massive market valued at over $250 billion in 2023. This market is expected to grow steadily in the coming years, fueled by increasing urbanization, rising disposable income, and growing consumer demand for convenience.

Financial Performance:

Good Times Restaurants Inc. recently released its financial results for the year ended December 31, 2022. The company reported total revenue of $113.6 million, a 15.7% increase compared to the previous year. Net income for the year came in at $8.3 million, compared to a net loss of $2.4 million in 2021. Earnings per share (EPS) for 2022 were $0.45, compared to a loss per share of $0.13 in the previous year. The company’s strong financial performance was driven by increased guest traffic, higher menu prices, and improved operating efficiency.

Cash Flow & Balance Sheet: The company’s cash flow from operations for the year 2022 was $14.2 million, compared to $4.5 million in the previous year. This increase was primarily due to improved profitability. The company’s balance sheet remains healthy with a current ratio of 1.3 and a debt-to-equity ratio of 0.8.

Dividends & Shareholder Returns:

Good Times Restaurants Inc. does not currently pay dividends to its shareholders. The company has opted to reinvest its earnings back into the business to fuel growth initiatives. Total shareholder returns for the year 2022 were -3.4%, underperforming the broader market indices.

Growth Trajectory:

Over the past five years, Good Times Restaurants Inc. has experienced steady top-line growth, with revenue increasing from $72.2 million in 2018 to $113.6 million in 2022. The company plans to continue its growth trajectory through a mix of organic unit growth and strategic acquisitions. The company aims to open 5-7 new restaurants per year, primarily under the Bad Daddy’s Burger Bar brand.