UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended: December 31, 1999
_________________
Commission file number: 0-18590
_______
GOOD TIMES RESTAURANTS INC.
___________________________
(Exact name of small business issuer as specified in its charter)
NEVADA
______
(State or other jurisdiction of incorporation or organization)
84-1133368
__________
(I.R.S. Employer Identification No.)
601 CORPORATE CIRCLE, GOLDEN, CO 80401
________________________________________
(Address of principal executive offices)
(303) 384-1400
______________
(Issuer's telephone number)
________________________________________
(Former name, former address and former fiscal year, since last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
Total number of shares of common stock outstanding at February 4, 2000.
2,226,995 SHARES OF COMMON STOCK, .001 PAR VALUE
___________________________________________________
Transitional Small Business Disclosure Format (check one):
[ ]Yes [X ] No
Form 10-QSB
Quarter Ended December 31, 1999
EXPLANATORY NOTE: The sole purpose for this amendment to the original
Form 10-QSB is a restatement of the net loss for the three months ended
December 31, 1999 due to an adjustment to selling, general & administrative
expenses and minority expenses. The Company has historically recorded
advertising expenses to an advertising cooperative which reflected a percentage
of sales. During the process of preparing the Form 10-QSB for the quarter
ended March 31, 2000, the Company determined that an additional $102,000 in
advertising expenses incurred through the Company's advertising cooperative
should be recorded in the quarter ended December 31, 1999.
INDEX PAGE
PART I - FINANCIAL INFORMATION
1. Financial Statements
Consolidated Balance Sheets - 3
December 31, 1999 and September 30, 1999
Consolidated Statements of Operations - 5
For the three months ended December 31, 1999
and 1998
Consolidated Statements of Cash Flow - 6
For the three months ended December 31, 1999
1998
Notes to Financial Statements 7
2. Management's Discussion and Analysis 8
PART II - OTHER INFORMATION
1 through 6 12
SIGNATURES 14
GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
December 31, September 30,
1999 1999
____ ____
<C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalent $ 745,000 $1,748,000
Investments, at fair value 299,000 299,000
Receivables 305,000 192,000
Inventories 72,000 55,000
Prepaid expenses and other 45,000 37,000
Notes receivable 49,000 48,000
_________ _________
Total current assets 1,515,000 2,379,000
PROPERTY AND EQUIPMENT, at cost:
Land and building 3,530,000 3,340,000
Leasehold improvements 2,450,000 2,349,000
Fixtures and equipment 3,306,000 3,039,000
_________ _________
9,286,000 8,728,000
Less accumulated depreciation
and amortization (3,242,000) (3,080,000)
_________ _________
6,044,000 5,648,000
OTHER ASSETS:
Notes receivable 437,000 435,000
Deposits & other 71,000 75,000
_________ _________
508,000 510,000
TOTAL ASSETS $8,067,000 $8,537,000
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
debt and capital lease $ 422,000 $ 399,000
Accounts payable 201,000 607,000
Lease obligations, RTC
and Las Vegas 202,000 202,000
Accrued liabilities - other 613,000 607,000
_________ _________
Total current
liabilities 1,438,000 1,815,000
LONG-TERM LIABILITIES:
Debt and capitalized
leases, net of current
portion 950,000 747,000
Lease obligations, RTC and
Las Vegas, net of current
portion 229,000 260,000
Deferred liabilities 319,000 313,000
_________ _________
Total long-term
liabilities 1,498,000 1,320,000
MINORITY INTERESTS IN PARTNERSHIPS 1,272,000 1,310,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
5,000,000 shares authorized,
None issued and outstanding
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GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Cont.)
<TABLE>
December 31, September 30,
1999 1999
____ ____
<C> <C> <C>
Common stock, $.001 par value;
50,000,000 shares authorized,
2,226,995 shares issued and
outstanding as of December 31,
1999 and 2,221,507 shares
issued and outstanding as
of September 30, 1999 2,000 2,000
Capital contributed in excess
of par value 13,221,000 13,203,000
Accumulated deficit (9,364,000) (9,113,000)
__________ __________
Total stockholders' equity 3,859,000 4,092,000
__________ __________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 8,067,000 $ 8,537,000
========== ==========
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GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended
December 31,
1999 1998
____ ____
<C> <C> <C>
NET REVENUES:
Restaurant sales, net $3,277,000 $3,432,000
Franchise revenues, net 52,000 67,000
_________ _________
Total revenues 3,329,000 3,499,000
RESTAURANT OPERATING EXPENSES:
Food & paper costs 1,144,000 1,283,000
Labor, occupancy & other 1,376,000 1,345,000
Opening expenses 49,000 -0-
Accretion of deferred rent 6,000 7,000
Depreciation & amortization 169,000 154,000
_________ _________
Total restaurant operating
costs 2,744,000 2,789,000
INCOME FROM RESTAURANT OPERATIONS 585,000 710,000
OTHER OPERATING EXPENSES:
Selling, general &
administrative expenses 820,000 569,000
Loss (Income) from operating
RTC stores 8,000 4,000
________ _________
Total other operating costs 828,000 573,000
INCOME (LOSS) FROM OPERATIONS (243,000) 137,000
OTHER INCOME & (EXPENSES)
Minority income (expense), net (6,000) (92,000)
Interest, net (2,000) (2,000)
Other, net (1,000) (7,000)
________ ________
Total other income
& (expenses) (9,000) (87,000)
NET INCOME (LOSS) $ (252,000) $ 50,000
========= ========
BASIC AND DILUTED NET INCOME (LOSS)
PER COMMON SHARE $ (.11) $ .03
========= ========
WEIGHTED AVERAGE COMMON SHARES AND
EQUIVALENTS USED IN PER SHARE CALCULATION:
BASIC 2,222,521 1,751,071
========= =========
DILUTED N/A 1,770,593
========= =========
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GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Three Months Ended
December 31,
1999 1998
<C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $(252,000) $ 50,000
Depreciation and amortization 181,000 163,000
Changes in operating assets
& liabilities --
(Increase) decrease in:
Prepaids & receivables (121,000) (108,000)
Inventories (17,000) (14,000)
Other assets 1,000 (1,000)
(Decrease) increase in:
Accounts payable (406,000) (34,000)
Accrued interest 1,000 -0-
Accrued property taxes 37,000 30,000
Accrued payroll & P/R taxes 3,000 (9,000)
Other accrued liabilities/
deferred income (60,000) (91,000)
Net cash provided by (used in)
operating activities (633,000) (14,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) sale - FF&E, land,
building and improvements (576,000) (21,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt incurred (paid) 226,000 (36,000)
Minority interest (37,000) (37,000)
Paid in capital activity 17,000 16,000
_________ _________
Net cash provided by (used in)
financing activities 206,000 (57,000)
INCREASE (DECREASE) IN CASH $(1,003,000) $ (92,000)
========== =========
GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. UNAUDITED FINANCIAL STATEMENTS:
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all of the normal recurring adjustments
necessary to present fairly the financial position of the Company as of
December 31, 1999, the results of its operations and its cash flow for the
three month period ended December 31, 1999. Operating results for the three
month period ended December 31, 1999 are not necessarily indicative of the
results that may be expected for the year ending September 30, 2000.
The consolidated balance sheet as of September 30, 1999 is derived from the
audited financial statements, but does not include all disclosures required
by generally accepted accounting principles. As a result, these financial
statements should be read in conjunction with the Company's Form 10-KSB for
the fiscal year ended September 30, 1999.
2. REVERSE STOCK SPLIT:
On February 12, 1998, the shareholders approved a one-for-five reverse
stock split of the Company's Common Stock. All references to number of
shares, except shares authorized, and to per share information in the
consolidated financial statements have been adjusted to reflect the reverse
stock split on a retroactive basis.
3. CONTINGENT LIABILITY
The Company remains contingently liable on several leases of restaurants that
were previously sold. The Company is also a guarantor on a Small Business
Administration loan to a franchisee.
4. STOCK TRANSACTIONS
During the three months ended December 31, 1999 Good Times Restaurants
issued 5,488 shares of its Common Stock to the Company's 401(k) profit
sharing plan, this represented a 25% matching of employee contributions for the
twelve months ended September 30, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE COMPANY
General
This Form 10-QSB contains or incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended. Also, documents subsequently filed by the Company with the SEC
and incorporated herein by reference may contain forward-looking statements.
The Company cautions investors that any forward-looking statements made by
the Company are not guarantees of future performance and that actual results
could differ materially from those in the forward-looking various factors,
including but not limited to the following:
(I) The Company competes with numerous well established competitors who
have substantially greater financial resources and longer operating histories
than the Company. Competitors have increasingly offered selected food items
and combination meals, including hamburgers, at discounted prices, and
continued discounting by competitors may adversely affect revenues and
profitability of Company restaurants.
(II) The Company may be negatively impacted if the Company experiences
consistent same store sales declines. Same store sales comparisons will be
dependent, among other things, on the success of Company advertising and
promotion of new and existing menu items. No assurances can be given that
such advertising and promotions will in fact be successful.
The Company may also be negatively impacted by other factors common to the
restaurant industry such as: changes in consumer tastes away from red meat
and fried foods; increases in the cost of food, paper, labor, health care,
workers' compensation or energy; an inadequate number of hourly paid
employees; and/or decreases in the availability of affordable capital
resources. The Company cautions the reader that such risk factors are not
exhaustive, particularly with respect to future filings.
The Company had thirty-two restaurants open at December 31, 1999, of
which fifteen were franchised restaurants, nine joint-venture restaurants
and eight company-owned restaurants compared to twenty-nine restaurants
open at December 31, 1998, of which fourteen were franchised restaurants,
nine joint-venture restaurants and six company-owned restaurants. Management
anticipates that the Company and its existing franchisees will develop a
total of two to four Good Times restaurants in the Denver ADI in 2000.
The following presents certain historical financial information of the
operations of the Company. This financial information includes the results
of the Company for the three months ended December 31, 1998 and the results
of the Company for the three months ended December 31, 1999.
RESULTS OF OPERATIONS
NET REVENUES. Net restaurant sales for the three months ended December
31, 1999, decreased $155,000 (-4.5%) to $3,277,000 from $3,432,000 for the
same prior year period. Net restaurant sales increased $202,000 from two
company-owned restaurants that opened in October and December 1999.
Same store net revenues for company-owned and joint-venture restaurants
decreased $357,000 (-10.4%) for the three months ended December 31, 1999
from the same prior year period. In the three months ended December 31,
d 20.6% due to the introduction of a new product in September 1998.
Franchise revenue decreased $15,000 for the three months ended December 31,
1999 due to a decrease in franchise royalty income from the same prior year
period.
FOOD AND PAPER COSTS. Food and paper costs decreased to 34.9% of net
restaurant sales for the three months ended December 31, 1999, compared
to 37.4% for the same prior year period. A price increase of approximately
5.3% was implemented February 1, 1999 reducing the cost of sales as a
percentage of net restaurant sales. Additionally, the cost of sales for the
three months ended December 31, 1998 was high due to the addition of a new
onion ring product introduced in September 1998 and the product's
disproportionate sales. Management has since reduced the cost of sales on
the onion ring product.
LABOR, OCCUPANCY AND OTHER EXPENSES. For the three months ended December
31, 1999 the Company's labor, occupancy and other expenses increased $31,000
from $1,345,000 (39.2% of net restaurant revenues) to $1,376,000 (41.9% of
net restaurant revenues) compared to the same prior year period.
The increase in labor, occupancy and other expenses for the three months
ended December 31, 1999 is attributable to 1) the current year period
expenses include two additional restaurants that opened in the period;
and 2) a decrease in same store net restaurant sales, which causes restaurant
expenses to increase as a percentage of net restaurant sales.
DEPRECIATION AND AMORTIZATION EXPENSES. For the three months ended
December 31, 1999 the Company's depreciation and amortization expenses
increased $15,000, from $154,000 to $169,000 compared to the same prior year
period. The increase in depreciation and amortization expenses for the three
months ended December 31, 1999 is attributable to the two new company-owned
restaurants that opened in October and December 1999.
INCOME FROM RESTAURANT OPERATIONS. For the three months ended December 31,
1999, income from restaurant operations decreased to $585,000 (17.9% of net
restaurant sales) from $710,000 (20.7% of net restaurant sales) for the same
prior year period.
Cash flow from restaurant operations (income from restaurant operations
plus depreciation and amortization) decreased to 23.0% of net restaurant
sales for the three months ended December 31, 1999 from 25.2% for the same
prior year period.
The decrease in both income and cash flow from restaurants as a
percentage of net restaurant sales is a direct result of a decrease in same
store net restaurant sales, which causes restaurant expenses to increase as
a percentage of net restaurant sales. Additionally, the current year period
includes new store pre-opening expenses of $49,000 compared to $0 for the
same prior year period.
INCOME (LOSS) FROM OPERATIONS. The Company had a loss from operations
of ($243,000) in the three months ended December 31, 1999 compared to income
from operations of $137,000 for the same prior year period. The reduction in
income from operations of $380,000 is primarily attributable to a decrease in
income from restaurant operations of $125,000, an increase in advertising
expenses of $214,000, an increase in the loss from operating RTC stores of
$4,000, and an increase in general and administrative expenses compared to the
same prior year period.
The increase in advertising expenses for the three months ended December 31,
1999 is attributable to increased costs in the advertising cooperative due to
increased media levels and production costs compared to the same prior year
period. The increase in general and administrative expenses for the three
months ended December 31, 1999 is primarily attributable to an increase in
corporate salaries and benefits expense as well as an increase in
depreciation expense compared to the same prior year period.
NET INCOME (LOSS). The net loss for the Company was ($252,000) for the
three months ended December 31, 1999 compared to net income for the Company
of $50,000 for the same prior year period. Minority interest expense
decreased ($86,000) in the three months ended December 31, 1999 from the
same prior year period. This decrease was attributable to the reduced income
from restaurant operations and increased advertising costs for the
joint-venture restaurants compared to the same prior year period.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1999, the Company had $745,000 cash and cash
equivalents and $299,000 in marketable securities on hand. The Company's
cash balance and cash generated from operations will be used for the
development of Company operated restaurants and other general corporate
purposes. The Company had a working capital surplus of $77,000 as of
December 31, 1999.
Management believes the current cash on hand, cash generated from
operations, and existing financing commitments will be sufficient to fund
the Company's working capital and capital expenditure requirements.
Management anticipates developing one new franchised restaurant and one to
three new company-owned restaurants during the balance of 2000.
Cash flow used in operating activities for the three months ended
December 31, 1999 of $633,000 includes a reduction in accounts payable of
$406,000, a decrease in other accrued liabilities of $60,000 and an increase
in prepaids and receivables of $121,000. Accounts payable at September 30,
1999 included $260,000 of new store construction billings that were paid in
October 1999. The decrease in other accrued liabilities included payments
on the RTC and Las Vegas lease liabilities of $89,000, payments leases, and
an increase of $102,000 in the payable due the advertising cooperative.
Cash flow used in investing activities for the three months ended
December 31, 1999 of $576,000 includes $52,000 of recurring restaurant
related capital expenditures and $524,000 for new restaurant development.
Cash provided by financing activities for the three months ended
December 31, 1999 includes $232,000 in debt financing proceeds for one
new restaurant. As of December 31, 1999 the Company had made capital
expenditures of $487,000 for two new restaurants. Management estimates the
total capital expenditure for the two new restaurants will be $1,100,000 of
which $600,000 will be funded through a $1.5 million debt financing commitment.
The Company has remaining debt financing commitments of $2,000,000 for
the purchase of land and restaurant development and $1.5 million for the
development of new restaurants on leased land.
IMPACT OF INFLATION
The Company has not experienced a significant impact from inflation.
It is anticipated any operating expense increases will be recovered by
increasing menu prices to the extent that is prudent considering competition.
SEASONALITY
Revenues of the Company are subject to seasonal fluctuation based
primarily on weather conditions adversely affecting restaurant sales in
January, February and March.
GOOD TIMES RESTAURANTS INC. & SUBSIDIARIES
Part II. - Other Information
Item 1. - Legal Proceedings
The Company is subject to legal proceedings which are incidental to its
business. These legal proceedings are not expected to have a material impact
on The Company.
The Company has been involved in condemnation proceedings with
Westminster Plaza LLC and the Westminster Economic Development Association
as a result of one of its restaurants being part of a condemnation of a
larger development on which it leased land from Westminster Plaza LLC.
In June, 1999 the court ruled against the Company's claim for compensation
for its leasehold improvements and value of its lease. The Company has
appealed the court's decision.
Item 2. - Changes in Securities and Use of Proceeds
None.
Item 3. - Defaults Upon Senior Securities
None.
Item 4. - Submission of Matters to a Vote of Security Holders
None.
Item 5. - Other Information
None.
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are furnished as part
of this report:
Exhibit No. Description
27.1 Financial Data Schedule.*
(b) Form 8-K: None filed in this quarter.
*filed herewith
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, therein
to duly authorized.
GOOD TIMES RESTAURANTS INC.
DATE: May 15, 2000 BY:/s/ Boyd E. Hoback
________________ ___________________________
Boyd E. Hoback, President
and Chief Executive Officer
BY:/s/ Susan Knutson
___________________________
Susan Knutson, Controller
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