Good Times Restaurants Inc.
Q2 2020 Earnings Call Transcript

Published: 14 May 2020

[Operator:]

Good afternoon, ladies and gentlemen. Welcome to the Good Times Restaurants Inc. Fiscal 2020 Second Quarter Earnings Call. By now, everyone should have access to the company’s earnings release, which is available in the Investors section of the company’s website. As a reminder, a part of today’s discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, investors should not place undue reliance on them, and the company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call.

[Ryan Zink:]

Thank you, Chad. I would like to thank you all for joining us on the call today. Our earnings release contained a letter from me provided an update on our business and our response to the COVID-19 pandemic. At the onset of this pandemic, there was tremendous lack of visibility to what the future might hold, we took immediate action to ensure survival. Our actions included the reduction of pay of all management-level team members with greater reductions in pay for our senior leaders. It also included initially reducing staffing at our restaurants to nearly bare bones at Bad Daddy’s as we did not know whether or not to expect an increase in our off-premise sales. Our Board members waived their fees, we requested longer payment terms from our vendors, which were almost universally granted, and we’ve had productive discussions with many of our landlords in deferral or abatement of rents. We drew down our credit facility to provide immediate liquidity in what we believed would be a rapid cash burn environment. We are fortunate to have two brands with different service models in times like these. As our portfolio of restaurants have some balance and resilience as people shift dining behavior. And although initially, we saw sharp declines in our Good Times Restaurants’ sales, we have recently seen a return to positive comps and are encouraged by operating trends that are drive-through concept, which is well positioned for a market already focused on convenience, but now with greater interest in social distancing and a service model with quick limited interaction with others. At Bad Daddy’s, we closed our dining rooms as a result of both state orders and our guest expectations. And under a delivery and carryout model have grown sales from a near $15,000 per week at the outset of the pandemic to nearly $25,000 per week at the end of April, and have restaurants doing in excess of $35,000 per week, exclusively in off-premise business. We have since opened dining rooms in 10 company-owned restaurants and are looking forward to opening the remaining ones in Colorado and North Carolina.

[Operator:]

Certainly, thank you, sir. We will now begin the question-and-answer session.

[:]

[:]

[Operator:]

At this time, I’m showing no questions. So I’d like to turn the conference back over to you, Ryan, for any concluding remarks.

[Ryan Zink:]

Thank you, Chad. I cannot thank our team members enough for their grit and their determination during the past eight weeks. We’ve endured a storm unlike any of us have ever seen before, and we’ve survived. We look forward not just to surviving though, but learning and adapting and ultimately thriving as we continue to provide great food and genuine hospitality to customers of both of our brands in a rapidly changing environment. It is not any one individual, but the collective team that has made it happen and will continue to do so. I am honored to work with each and every one of you. We will now conclude today’s call. Thank you all for joining us today.

[Operator:]

And thank you, sir. The conference has concluded. You may now disconnect your lines. Take care.