Good Times Restaurants Inc. Q3 FY2025 earnings call

• Mixed Q3 results with Bad Daddy's same-store sales improving and restaurant level operating profit up 10 basis points, while Good Times saw declines. • Hired new marketing leader Jason Murphy for both brands. • Good Times made operational improvements like closer to cook to order, new burger builds, and successful Fried Ice Cream LTO. • Focus on quality over discounting; both brands to launch new campaigns. • Craig Soto improved Good Times operations, including schedule adjustments.

Bad Daddy's: Total restaurant sales decreased $0.8 million to $26.5 million. Same-store sales decreased 1.4%. Restaurant-level operating profit was approximately $3.8 million, 14.4% of sales. Good Times: Total restaurant sales decreased approximately $0.1 million to $10.4 million. Same-store sales decreased 9%. Restaurant-level operating profit decreased to $1.2 million, 11.2% of sales.

• General and administrative costs expected to be between 6% and 7% full year. • Focus on cash accumulation, with reduced share repurchases. • Maintenance CapEx roughly 1% of sales. • Special projects in fiscal 2026 including finalizing Good Times remodel and signage, replacing Bad Daddy's point-of-sale system, and potential new unit development.

• Market price of stock, other investment opportunities. • Disruption from pandemics/public health emergencies. • Staffing constraints, supply chain constraints/inflation. • Uncertainty in restaurant development plans. • Increased competition, cost/ingredient shortages. • Economic/operating conditions, share repurchase risks. • Acquisition risks, cash flow adequacy, capital/credit facility risks. • Changes in laws/regulations affecting restaurants.

Q: The CapEx for the quarter in the Q says it's $469,000. Are we entering a phase where the EBITDA could roughly be running $2 million, $2.2 million a quarter and maybe maintenance CapEx at $0.5 million and then the investment CapEx is another discussion?

A: We are in our higher indexing quarters. $2.2 million for this quarter is among the highest quarters throughout the year. We're not providing forward guidance on EBITDA. Typically budget ~1% of sales for maintenance CapEx. Priority is building cash reserves. Interest in share repurchases, but priority is cash accumulation. Some projects in fiscal 2026.

Q: The Good Times concept underperformance in the third quarter. Can you elaborate a bit on that? Are there specific issues you've identified?

A: There are multiple factors. Some macro factors affecting both us and competitors. Large competitors spending on marketing and discounting. We operate all but 3 restaurants, focus on preserving margins by not discounting. Looking at ways to provide value through brand communication and advertising without deep discounts.

Q: Do you have a plan on sort of when you think you'd be able to accelerate the share repurchases given the current share price?

A: We will continue to selectively buy shares. Likely into fiscal 2026 and possibly the second quarter of fiscal 2026 before accelerating purchases. Subject to change based on macro factors and internal forecasting.

Q: You mentioned special projects for fiscal '26 for both the concepts. Could you just talk about that a bit?

A: Special projects include finalizing Good Times remodel and signage (already underway for three years), replacing Bad Daddy's legacy point-of-sale system in fiscal 2026, and potential new unit development as real estate market loosens.