Good Times Increases Net Income Five Fold for Its Third Fiscal Quarter

  Good Times Increases Net Income Five Fold for Its Third Fiscal Quarter

Business Wire

GOLDEN, Colo. -- August 12, 2013

Good Times Restaurants Inc. (Nasdaq: GTIM), a regional quick service
restaurant chain focused on fresh, high quality, all natural products today
announced its financial results for the third fiscal quarter ended June 30,

Key highlights of the Company’s third quarter report include:

  *Same store sales for Company owned restaurants increased 15.2% for the
    quarter, including 7.2% from the new breakfast day-part introduced in
    November, 2012, the twelfth consecutive quarter of increasing same store
  *Income from restaurant operations (see schedule below) increased 44% or
    $309,000 over last year
  *The restaurant level operating margin increased by 210 basis points from
    last year (see schedule below)
  *Net Income increased to $208,000 from $37,000 last year, including
    expenses and investment losses totaling $52,000 this year related to the
    start-up of the Bad Daddy’s Burger Bar subsidiary and franchise company
  *The Company has registered for a public offering of its common stock with
    a use of proceeds planned for the acceleration of remodeling older Good
    Times Burgers & Frozen Custard restaurants and the development of
    Company-owned and franchised Bad Daddy’s Burger Bar restaurants.

“This is the first full quarter this year that we’ve been able to realize the
full profit flow through on the significant same store sales increases we’ve
had the last several months, including our new breakfast day-part that is
performing above expectations,” said President and CEO Boyd Hoback. “It is
particularly important that most of our sales increases are coming from
increased traffic and not pricing or an increased average check as we continue
to compound our growth year over year.

“Our operating team has refined the labor model for the breakfast day-part, we
have significantly increased our chicken category sales with the introduction
of our hand-breaded, all natural chicken platform, the new television
marketing campaign is resonating with our customers and our cost of sales has
improved from our new distribution agreement, purchasing improvements and
further menu engineering. Our goal is to continue to drive top line sales
increases while optimizing the profitability of those incremental sales.

“We will experience some start up expenses and losses as we gear up for the
expansion of the Bad Daddy’s Franchise Development LLC franchise program and
the development of our first Colorado stores in our wholly owned subsidiary,
BD of Colorado LLC that are projected to open at the beginning of next year.
However, we expect our earnings from our core Good Times’ business to continue
to show substantial increases over the prior year in our fourth quarter and
for the fiscal year.”

About Good Times Restaurants Inc.

Good Times Restaurants Inc. (GTIM) operates Good Times Burgers & Frozen
Custard, a regional chain of quick service restaurants located primarily in
Colorado, in its wholly owned subsidiary, Good Times Drive Thru Inc. Good
Times provides a menu of high quality all natural hamburgers, 100% all natural
chicken tenderloins, fresh frozen custard, fresh cut fries, fresh lemonades
and other unique offerings. Good Times currently operates and franchises 39

GTIM will also own and operate Bad Daddy’s Burger Bar restaurants through its
wholly owned subsidiary, BD of Colorado LLC and will franchise Bad Daddy’s
Burger Bar restaurants through its 48% ownership of Bad Daddy’s Franchise
Development LLC. Bad Daddy’s Burger Bar is a full service, upscale, “small
box” restaurant concept featuring a chef driven menu of gourmet signature
burgers, chopped salads, appetizers and sandwiches with a full bar and a focus
on a selection of craft microbrew beers in a high energy atmosphere that
appeals to a broad consumer base.

Good Times Forward Looking Statements

This press release contains forward looking statements within the meaning of
federal securities laws. The words “intend,” “may,” “believe,” “will,”
“should,” “anticipate,” “expect,” “seek” and similar expressions are intended
to identify forward looking statements. These statements involve known and
unknown risks, which may cause the Company’s actual results to differ
materially from results expressed or implied by the forward looking
statements. These risks include such factors as the uncertain nature of
current restaurant development plans and the ability to implement those plans,
delays in developing and opening new restaurants because of weather, local
permitting or other reasons, increased competition, cost increases or
shortages in raw food products, and other matters discussed under the “Risk
Factors” section of Good Times’ Annual Report on Form 10-K for the fiscal year
ended September 30, 2012 filed with the SEC. Although Good Times may from time
to time voluntarily update its forward looking statements, it disclaims any
commitment to do so except as required by securities laws.

Good Times Restaurants Inc.
Unaudited Supplemental Information
(In thousands, except per share amounts)
                                 Three Months Ended     Nine Months Ended
Statement of Operations          30-Jun-13  30-Jun-12   30-Jun-13  30-Jun-12
Net Revenues:                                                     
Restaurant sales                 $6,394      $5,123      $16,092     $14,339
Area development and franchise   0           0           0           0
Franchise revenues               93        125        266       325     
Total net revenues               6,487       5,248       16,358      14,664
Restaurant Operating Costs:
Food and packaging costs         2,149       1,748       5,503       4,961
Payroll and other employee       2,104       1,685       5,683       4,992
benefit costs
Restaurant occupancy costs       865         747         2,423       2,282
Other restaurant operating       261         237         733         700
New store preopening costs       29          0           29          0
Depreciation and amortization    169       201        537       607     
Total restaurant operating       5,577       4,618       14,908      13,542
General and administrative       390         333         1,171       1,027
Advertising costs                275         205         704         638
Franchise costs                  17          14          48          42
Loss (Gain) on disposal of       (6      )  (6      )   (86     )  (27     )
restaurants and equipment
Income (loss) from Operations    234         84          (387    )   (558    )
Other Income (Expenses):
Interest expense, net            (2      )   (50     )   (45     )   (154    )
Other income (expense)           (1      )   (1      )   (4      )   (14     )
Affiliate investment loss        (23     )   0           (23     )   0
Unrealized gain (loss) on        0         4          0         16      
interest rate swap
Total other expenses, net        (26     )  (47     )   (72     )  (152    )
Net Income (loss)                208       37         (459    )  (710    )
Income attributable to           (67     )   (50     )   (65     )   (66     )
non-controlling interest
Net Income (Loss) attributable   141       (13     )   (524    )  (776    )
to Good Times Rest Inc
Preferred stock dividends        (30     )   0           (90     )   0
Net Income (Loss) attributable   $111      ($13    )   ($614   )  ($776   )
to common shareholders
Basic and diluted income
(loss) per share:
Net Income (Loss) attributable   $0.04       $0.00       ($0.23  )   ($0.28  )
to common shareholders
Weighted Average Common Shares
Basic                            2,726       2,726       2,726       2,726
Diluted                          2,801       N/A         N/A         N/A

                                                          June 30,  Sept 30,
Balance Sheet Data                                         2013      2012
                                                           (In thousands)
Cash & cash equivalents                                    $1,324     $616
Current assets                                             1,966      3,858
Property and Equipment, net                                2,889      3,082
Total assets                                               5,335      7,061
Current liabilities, including capital lease obligations   1,848      3,010
and long-term debt due within one year
Long-term debt due after one year                          25         37
Capital lease obligations due after one year               80         102
Total liabilities                                          2,606      3,801
Stockholders’ equity                                       $2,729     $3,260

    Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income
                        from Operations and Net Income
                    (In thousands, except percentage data)

The Company believes that restaurant-level operating profit is an important
measure for management and investors because it is widely regarded in the
restaurant industry as a useful metric by which to evaluate restaurant-level
operating efficiency and performance. The Company defines restaurant-level
operating profit to be restaurant revenues minus restaurant-level operating
costs, excluding restaurant closures and impairment costs. The measure
includes restaurant level occupancy costs, which include fixed rents,
percentage rents, common area maintenance charges, real estate and personal
property taxes, general liability insurance and other property costs, but
excludes depreciation. The measure excludes depreciation and amortization
expense, substantially all of which is related to restaurant level assets,
because such expenses represent historical sunk costs which do not reflect
current cash outlay for the restaurants. The measure also excludes selling,
general and administrative costs, and therefore excludes occupancy costs
associated with selling, general and administrative functions, and pre-opening
costs. The Company excludes restaurant closure costs as they do not represent
a component of the efficiency of continuing operations. Restaurant impairment
costs are excluded, because, similar to depreciation and amortization, they
represent a non-cash charge for the Company’s investment in its restaurants
and not a component of the efficiency of restaurant operations.
Restaurant-level operating profit is not a measurement determined in
accordance with generally accepted accounting principles (“GAAP”) and should
not be considered in isolation, or as an alternative, to income from
operations or net income as indicators of financial performance.
Restaurant-level operating profit as presented may not be comparable to other
similarly titled measures of other companies. The table below sets forth
certain unaudited information for the three months ended June 30, 2013 and
June 30, 2012, expressed as a percentage of total revenues, except for the
components of restaurant operating costs, which are expressed as a percentage
of restaurant revenues.

                                       Three Months Ended
                                       June 30, 2013        June 30, 2012
Restaurant revenues                    $6,394    98.6 %    $5,123    97.6 %
Restaurant Operating Costs

(exclusive of depreciation and

shown separately below):
Food and packaging costs               2,149      33.6 %      1,748      34.1 %
Payroll and other employee benefit     2,104      32.9 %      1,685      32.9 %
Restaurant occupancy costs             865        13.5 %      747        14.6 %
Other restaurant operating costs       261      4.1  %    237      4.6  %
Restaurant-level operating profit      1,015      15.9 %      706        13.8 %
Add - Franchise royalties and fees     93         0.0  %      125        0.0  %
Deduct - Other operating:
Depreciation and amortization          169        2.6  %      201        3.8  %
General and administrative             390        6.0  %      333        6.3  %
Advertising costs                      275        4.2  %      205        3.9  %
Franchise costs                        17         0.3  %      14         0.3  %
Loss (Gain) on disposal of             (6     )   (0.1 %)     (6     )   (0.1 %)
restaurants and equipment
Preopening costs                       29       0.4  %    0        0.0  %
                                       874        13.5 %      747        14.2 %
Income (loss) from Operations          234        3.6  %      84         1.6  %
Interest expense, net                  (2     )   0.0  %      (50    )   (1.0 %)
Other income (expense)                 (1     )   0.0  %      (1     )   0.0  %
Affiliate investment loss              (23    )   (0.4 %)     0          0.0  %
Unrealized gain (loss) on interest     0        0.0  %    4        0.1  %
rate swap
Total other                            (26    )   (0.4 %)     (47    )   (0.9 %)
Net Income                             $208       3.2  %      $37        0.7  %

Certain percentage amounts in the table above do not total due to rounding as
well as the fact that restaurant operating costs are expressed as a percentage
of restaurant revenues, as opposed to total revenues.


Investor Relations Contacts:
Good Times Restaurants Inc.
Boyd E. Hoback, 303-384-1411
President and CEO
Christi Pennington, 303-384-1440
Booke & Co.
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