Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the restaurant industry? Good Times Restaurants Inc. (GTIM) has recently seen its stock dip to a 52-week low at $1.82, even with a market capitalization of $20.1 million and $145.5 million in revenue over the last twelve months. The company reported a net income of $200,000, translating to earnings per share of $0.02 for the fourth quarter of 2024. With a challenging year and a 1-year change showing a decline of 17.38%, is this a buying opportunity or a sign of deeper issues? Read on to explore key financial insights and understand what's driving GTIM's performance.

Good Times Restaurants Inc. (GTIM) Revenue Analysis

Good Times Restaurants Inc. (GTIM) primarily generates revenue through its operation of fast-casual restaurants. These restaurants focus on serving high-quality, fresh, and natural menu items, distinguishing themselves through a commitment to premium ingredients and sustainable practices. The company operates through two reportable business segments: Good Times Burgers & Frozen Custard and Bad Daddy's Burger Bar.

For the fiscal year ended September 24, 2024, Good Times Restaurants Inc. reported a 3.0% increase in total revenues, reaching $142.3 million compared to $138.16 million in the previous fiscal year. This increase was attributed to several factors, including a late fiscal 2023 Bad Daddy's restaurant opening and the acquisition of Good Times restaurants from franchisees.

Here's a breakdown of the primary revenue sources:

• Bad Daddy's Burger Bar: This segment contributed $103.5 million to the total revenue.
• Good Times Burgers & Frozen Custard: This segment added $38.0 million.

Same-store sales provide further insight into the performance of each segment:

• Bad Daddy's: Showed recovery with 3.2% growth in Q4 2024, despite a yearly decline of -1.2%.
• Good Times: Saw flat Q4 performance but a 2.9% annual growth.

The following table summarizes the revenue contributions from each segment:

In fiscal year 2024, Good Times Restaurants acquired one previously franchised Good Times restaurant in the third quarter. The company ended the fiscal year with $3.9 million in cash and $0.8 million in long-term debt.

The company's strategy includes a focus on organic sales growth and operational efficiencies, as well as disciplined unit growth of Bad Daddy's Burger Bar restaurants. Despite facing challenges such as competitive pressures and high input costs, Good Times Restaurants Inc. maintains a long-term focus on brand value and customer experience.

Find more insights on GTIM's financial health: Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors

Good Times Restaurants Inc. (GTIM) Profitability Metrics

Assessing the profitability of Good Times Restaurants Inc. (GTIM) involves examining several key metrics, including gross profit, operating profit, and net profit margins. These figures provide insights into the company's efficiency in generating earnings relative to its revenue and costs.

Based on the latest available information, Good Times Restaurants Inc. (GTIM) reported a total revenue of $148.5 million for fiscal year 2024. This figure sets the stage for understanding the context of their profitability margins. The company's financial performance can be further understood by analyzing the trends in profitability over time, which reflect the impact of operational strategies and market conditions. For additional insights into the company's strategic direction, refer to: Mission Statement, Vision, & Core Values of Good Times Restaurants Inc. (GTIM).

Here’s a detailed look at GTIM’s profitability metrics:

• Gross Profit: In fiscal year 2024, Good Times Restaurants Inc. (GTIM) achieved a gross profit of $25.7 million. This represents the revenue remaining after deducting the cost of goods sold (COGS), showcasing the company's efficiency in managing production costs.
• Operating Profit: The operating profit for the same period stood at $2.4 million. This metric reflects the earnings from the company's core business operations after accounting for operating expenses, providing insight into operational efficiency.
• Net Profit Margin: Good Times Restaurants Inc. (GTIM) reported a net loss of $0.8 million, translating to a net profit margin of -0.5%. This indicates the percentage of revenue remaining after all expenses, including taxes and interest, have been deducted.

To provide a clearer picture, here's a summary of Good Times Restaurants Inc. (GTIM)'s key profitability figures for fiscal year 2024:

When evaluating Good Times Restaurants Inc. (GTIM)'s financial health, it's also crucial to compare its profitability ratios with industry averages. While specific industry averages can fluctuate, this comparison helps benchmark the company's performance against its peers. Furthermore, analyzing operational efficiency, such as cost management and gross margin trends, offers deeper insights into the sustainability of their profitability.

Good Times Restaurants Inc. (GTIM) Debt vs. Equity Structure

Understanding how Good Times Restaurants Inc. (GTIM) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and recent financing activities to assess its financial stability and risk profile.

As of the fiscal year 2024, Good Times Restaurants Inc. (GTIM) exhibits the following debt characteristics:

• Long-term Debt: As of September 26, 2023, Good Times Restaurants Inc. had total debt of $27.4 million, consisting of the term loan and PPP loan.
• Short-term Debt: Included in the total debt is a term loan balance of $26.9 million and a PPP loan balance of $0.5 million.

The debt-to-equity ratio is a key metric in evaluating a company's financial leverage. It indicates the proportion of debt and equity a company uses to finance its assets. A higher ratio suggests a more aggressive financing strategy, which can amplify both profits and losses.

As of September 26, 2023, Good Times Restaurants Inc. (GTIM) reported a total stockholders' equity of $13.978 million. Given the total debt of $27.4 million, we can estimate the debt-to-equity ratio. The debt-to-equity ratio is calculated by dividing total liabilities by total equity. For Good Times Restaurants Inc., this calculation would be $27.4 million (Total Debt) / $13.978 million (Total Equity) = approximately 1.96. This suggests that GTIM's debt is about 1.96 times its equity.

Monitoring recent debt issuances, credit ratings, and refinancing activities provides insights into Good Times Restaurants Inc.'s (GTIM) financial strategy and creditworthiness. Although specific credit ratings and detailed terms of debt refinancing are not available in the provided search results, keeping an eye on these factors in future financial reports is advisable.

Balancing debt and equity is vital for sustainable growth. While debt can provide leverage and potentially increase returns, it also introduces financial risk. Good Times Restaurants Inc. (GTIM) must strategically manage its debt levels in relation to its equity to ensure long-term financial health.

Here is a summary of Good Times Restaurants Inc.'s (GTIM) debt and equity structure:

For further insights into the investors of Good Times Restaurants Inc. (GTIM), explore: Exploring Good Times Restaurants Inc. (GTIM) Investor Profile: Who’s Buying and Why?

Good Times Restaurants Inc. (GTIM) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Good Times Restaurants Inc. (GTIM), analyzing these metrics provides insights into its financial stability and operational efficiency.

Assessing Good Times Restaurants Inc. (GTIM)'s Liquidity:

Analyzing GTIM's liquidity involves examining key ratios and working capital trends to gauge its ability to cover short-term liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets.
  • The current ratio for GTIM was 1.01 as of September 26, 2023.
  • The quick ratio, which excludes inventories, was 0.52 for the same period.
• Working Capital Trends: Monitoring the trend in working capital (current assets minus current liabilities) helps assess GTIM's operational efficiency and short-term financial health.
• Cash Flow Statements Overview: Analyzing cash flow trends from operating, investing, and financing activities provides a comprehensive view of GTIM's liquidity.

Here's an overview of the cash flow activities based on the latest available data:

• Net cash provided by operating activities: For the year ended September 26, 2023, GTIM reported $5.98 million in net cash from operating activities, compared to $2.46 million the previous year.
• Net cash used in investing activities: GTIM used $1.76 million in investing activities for the year ended September 26, 2023, primarily for property and equipment purchases.
• Net cash used in financing activities: Financing activities resulted in a cash outflow of $0.37 million for the same period.

Potential Liquidity Concerns or Strengths:

While a current ratio above 1.0 generally indicates good liquidity, GTIM's current ratio of 1.01 suggests a borderline position. The quick ratio of 0.52 indicates a more constrained immediate liquidity position since it excludes inventory, which might not be quickly convertible to cash. However, the positive trend in net cash from operating activities, increasing from $2.46 million to $5.98 million, signals improved operational cash generation, which strengthens GTIM's liquidity position.

For further insights, you might find this resource helpful: Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors

Good Times Restaurants Inc. (GTIM) Valuation Analysis

Determining whether Good Times Restaurants Inc. (GTIM) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Let's delve into these aspects to provide a clearer picture for investors.

To assess Good Times Restaurants Inc.'s valuation, several key ratios are essential:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value. It can help determine if the stock price is justified by the company's net asset value. A lower P/B ratio may suggest undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares the company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure, especially useful for comparing companies with different capital structures.

Analyzing Good Times Restaurants Inc.'s stock price trends over the past year (or longer) can reveal investor sentiment and market perception. Here's what to consider:

• Stock Price Movement: Upward trends may reflect positive investor sentiment and growth expectations, while downward trends could signal concerns about the company's performance or industry challenges.
• Volatility: High volatility might indicate uncertainty or speculative trading, whereas low volatility could suggest a more stable and predictable investment.
• Comparison to Benchmarks: Comparing Good Times Restaurants Inc.'s stock performance to relevant market indices or industry peers can provide insights into its relative strength or weakness.

As of the latest information available, Good Times Restaurants Inc. does not offer dividends. Therefore, dividend yield and payout ratios are not applicable in this valuation analysis.

It's valuable to consider analyst consensus on Good Times Restaurants Inc.'s stock valuation. Analyst ratings typically fall into three categories:

• Buy: Analysts believe the stock is undervalued and expect it to outperform the market.
• Hold: Analysts have a neutral outlook, suggesting the stock is fairly valued.
• Sell: Analysts consider the stock overvalued and anticipate underperformance.

The consensus rating, along with price targets, provides a summarized view of professional analysts' expectations for the stock's future performance.

For additional insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Good Times Restaurants Inc. (GTIM).

Good Times Restaurants Inc. (GTIM) Risk Factors

Several risk factors, both internal and external, can significantly impact the financial health of Good Times Restaurants Inc. (GTIM). These risks span industry competition, regulatory changes, market conditions, and the company's specific operational and strategic challenges.

Industry Competition: The restaurant industry is intensely competitive. Success depends on factors such as:

• Effective marketing
• Menu innovation
• Maintaining brand reputation
• Adapting to changing consumer preferences

Larger chains often possess greater financial and marketing resources, creating a challenging environment for smaller companies like Good Times Restaurants Inc.

Regulatory Changes: Compliance with health regulations, labor laws (including minimum wage), and food safety standards can increase operating costs. Changes in these regulations could adversely affect profitability. For example, increases in the minimum wage in key markets could significantly impact labor expenses.

Market Conditions: Economic downturns can reduce consumer discretionary spending, impacting restaurant sales. Fluctuations in commodity prices, particularly beef and other food costs, can affect profit margins. Additionally, changing consumer preferences towards healthier or more sustainable options require continuous menu adjustments and innovations.

Operational Risks: These include supply chain disruptions, food safety incidents, and challenges in managing franchise operations. Any disruption to the supply chain, whether due to weather events, supplier issues, or other factors, can lead to increased costs and potential revenue loss. Maintaining consistent quality and service across all franchised locations is also critical for brand reputation and financial performance.

Financial and Strategic Risks: Expansion plans may require significant capital investment, and there is no guarantee that new locations will be successful. Debt financing used for expansion can increase financial leverage and reduce financial flexibility. Furthermore, the company's strategic decisions, such as menu changes or marketing campaigns, may not always achieve the desired results.

While specific mitigation strategies are not detailed here, companies often employ various tactics to address these risks, such as:

• Diversifying supply chains
• Implementing robust food safety protocols
• Hedging commodity prices
• Carefully evaluating expansion opportunities
• Maintaining strong relationships with franchisees

Investors can gain further insights into Good Times Restaurants Inc.'s risk profile and strategic responses by reviewing the company's filings. For more information, explore Exploring Good Times Restaurants Inc. (GTIM) Investor Profile: Who’s Buying and Why?.

Good Times Restaurants Inc. (GTIM) Growth Opportunities

Good Times Restaurants Inc. (GTIM) has several avenues for future growth, stemming from strategic initiatives and market positioning. Key growth drivers include menu innovation, expansion of its dual-brand concept, and leveraging technology to enhance customer experience.

Analyzing Good Times Restaurants Inc.'s growth prospects involves considering several factors that influence its potential for expansion and increased profitability.

Here's a breakdown of the key elements:

• Product Innovations: Good Times Restaurants Inc. can drive growth through continuous menu enhancements and introductions of innovative offerings that cater to changing consumer preferences.
• Market Expansions: Expanding the restaurant's footprint into new geographic areas or untapped markets can significantly increase revenue.
• Acquisitions: Strategic acquisitions of complementary businesses or brands can broaden the company's portfolio and market reach.

Future revenue growth projections and earnings estimates often depend on the company's ability to execute its strategic plans effectively. Analysts' estimates can provide insights into expected financial performance, although these are subject to change based on market conditions and company performance.

Strategic initiatives and partnerships play a crucial role in driving future growth for Good Times Restaurants Inc.

• Technology Integration: Implementing advanced technologies such as online ordering systems, mobile apps, and data analytics can improve operational efficiency and customer engagement.
• Brand Partnerships: Collaborating with complementary brands or businesses can create synergies and expand market reach.

Competitive advantages that position Good Times Restaurants Inc. for growth include its unique brand positioning, customer loyalty, and operational expertise. These factors can differentiate the company from competitors and drive sustainable growth.

Assessing these advantages requires a comprehensive understanding of the competitive landscape and the company's ability to maintain its edge.

While specific revenue growth projections and earnings estimates for Good Times Restaurants Inc. are subject to market dynamics and company-specific factors, monitoring analyst reports and financial news can provide valuable insights into potential future performance. Keep in mind that these projections are based on current information and assumptions, which may change over time.

More insights about Good Times Restaurants Inc. (GTIM) can be found here: Exploring Good Times Restaurants Inc. (GTIM) Investor Profile: Who’s Buying and Why?