Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 29, 2020 | Feb. 05, 2021 | |
Document And Entity Information | ||
Entity Registrant Name | Good Times Restaurants Inc. | |
Entity Central Index Key | 0000825324 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 29, 2020 | |
Current Fiscal Year End Date | --09-28 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,660,332 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Code | NV | |
Entity File Number | 0-18590 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,015 | $ 11,454 |
Receivables, net of allowance for doubtful accounts of $0 | 711 | 656 |
Prepaid expenses and other | 882 | 275 |
Inventories | 1,087 | 1,093 |
Notes receivable | 10 | 13 |
Total current assets | 12,705 | 13,491 |
PROPERTY AND EQUIPMENT: | ||
Land and building | 4,704 | 4,704 |
Leasehold improvements | 33,403 | 33,280 |
Fixtures and equipment | 28,820 | 28,593 |
Total property and equipment | 66,927 | 66,577 |
Less accumulated depreciation and amortization | (39,861) | (38,908) |
Total net property and equipment | 27,066 | 27,669 |
OTHER ASSETS: | ||
Operating lease right-of-use assets, net | 48,208 | 49,252 |
Deposits and other assets | 202 | 209 |
Trademarks | 3,900 | 3,900 |
Other intangibles, net | 18 | 22 |
Goodwill | 5,150 | 5,150 |
Total other assets | 57,478 | 58,533 |
TOTAL ASSETS: | 97,249 | 99,693 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 7,693 | 6,242 |
Accounts payable | 1,108 | 2,581 |
Deferred income | 63 | 69 |
Operating lease liabilities, current | 4,771 | 4,689 |
Other accrued liabilities | 5,205 | 5,055 |
Total current liabilities | 18,840 | 18,636 |
LONG-TERM LIABILITIES: | ||
Maturities of long-term debt due after one year | 7,952 | 10,903 |
Operating lease liabilities, net of current portion | 52,524 | 53,731 |
Deferred and other liabilities | 2,030 | 1,440 |
Total long-term liabilities | 62,506 | 66,074 |
Good Times Restaurants Inc. stockholders' equity: | ||
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of 12/29/20 and 9/29/20 | ||
Common stock, $.001 par value; 50,000,000 shares authorized, 12,637,384 and 12,612,852 shares issued and outstanding as of 12/29/20 and 09/29/20, respectively | 13 | 13 |
Capital contributed in excess of par value | 58,293 | 58,219 |
Treasury stock-at cost-shares 43,110 and 43,110, respectively | (75) | (75) |
Accumulated deficit | (43,665) | (44,467) |
Total Good Times Restaurants Inc. stockholders' equity | 14,566 | 13,690 |
Non-controlling interests | 1,337 | 1,293 |
Total stockholders' equity | 15,903 | 14,983 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 97,249 | $ 99,693 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 0 | $ 0 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 12,637,384 | 12,612,852 |
Common stock, shares outstanding | 12,637,384 | 12,612,852 |
Treasury stock at cost, shares | 43,110 | 43,110 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
NET REVENUES: | ||
Total net revenues | $ 27,296 | $ 30,814 |
RESTAURANT OPERATING COSTS: | ||
Food and packaging costs | 7,841 | 9,306 |
Payroll and other employee benefit costs | 8,881 | 11,979 |
Restaurant occupancy costs | 2,195 | 2,438 |
Other restaurant operating costs | 3,469 | 3,002 |
Preopening costs | 39 | 802 |
Depreciation and amortization | 929 | 1,079 |
Total restaurant operating costs | 23,354 | 28,606 |
General and administrative costs | 2,174 | 2,053 |
Advertising costs | 509 | 546 |
Franchise costs | 5 | |
Gain on restaurant asset sale | (9) | (19) |
INCOME (LOSS) FROM OPERATIONS | 1,263 | (372) |
Interest expense, net | (98) | (227) |
NET INCOME (LOSS) | 1,165 | (599) |
Income attributable to non-controlling interests | (363) | (212) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 802 | $ (811) |
BASIC AND DILUTED INCOME (LOSS) PER SHARE: | ||
Net income (loss) attributable to Common Shareholders | $ .06 | $ (.06) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic | 12,622,178 | 12,596,960 |
Diluted | 12,698,284 | |
Restaurant sales [Member] | ||
NET REVENUES: | ||
Total net revenues | $ 27,081 | $ 30,593 |
Franchise revenues [Member] | ||
NET REVENUES: | ||
Total net revenues | $ 215 | $ 221 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Treasury Stock | Common Stock [Member] | Capital Contributed in Excess of Par Value [Member] | Non-Controlling Interest In Partnerships [Member] | Accumulated Deficit [Member] | Total |
BALANCES at Sep. 24, 2019 | $ 13 | $ 57,936 | $ 1,522 | $ (30,551) | $ 28,920 | |
BALANCES, shares at Sep. 24, 2019 | 12,541,082 | |||||
Stock-based compensation cost | 74 | 74 | ||||
Restricted stock unit vesting | ||||||
Restricted stock grant vesting, shares | 76,643 | |||||
Stock option exercise | ||||||
Stock option exercise, shares | 2,413 | 15,646 | ||||
Treasury shares purchased | $ (75) | $ (75) | ||||
Treasury shares purchased, shares | 43,110 | (43,110) | ||||
Non-controlling interests: | ||||||
Income | 212 | 212 | ||||
Contributions | 22 | 22 | ||||
Distributions | (291) | (291) | ||||
Net Income (Loss) attributable to common shareholders and comprehensive income (loss) | (811) | (811) | ||||
BALANCES at Dec. 31, 2019 | $ (75) | $ 13 | 58,010 | 1,465 | (31,362) | 28,051 |
BALANCES, shares at Dec. 31, 2019 | 43,110 | 12,577,028 | ||||
BALANCES at Sep. 29, 2020 | $ (75) | $ 13 | 58,219 | 1,293 | (44,467) | 14,983 |
BALANCES, shares at Sep. 29, 2020 | 43,110 | 12,612,852 | ||||
Stock-based compensation cost | 61 | 61 | ||||
Restricted stock unit vesting | ||||||
Restricted stock grant vesting, shares | 16,548 | |||||
Stock option exercise | 13 | $ 13 | ||||
Stock option exercise, shares | 7,984 | 7,984 | ||||
Non-controlling interests: | ||||||
Income | 363 | $ 363 | ||||
Distributions | (319) | (319) | ||||
Net Income (Loss) attributable to common shareholders and comprehensive income (loss) | 802 | 802 | ||||
BALANCES at Dec. 29, 2020 | $ (75) | $ 13 | $ 58,293 | $ 1,337 | $ (43,665) | $ 15,903 |
BALANCES, shares at Dec. 29, 2020 | 43,110 | 12,637,384 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 1,165 | $ (599) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 967 | 1,126 |
Amortization of operating lease assets | 1,055 | 1,097 |
Stock-based compensation expense | 61 | 74 |
Recognition of deferred gain on sale of restaurant building | (9) | (9) |
Changes in operating assets and liabilities: | ||
Receivables and other | (55) | 135 |
Inventories | 6 | (77) |
Deposits and other | (610) | (668) |
Accounts payable | (1,340) | (99) |
Lease incentives receivable | 338 | |
Operating lease liabilities | (1,136) | (951) |
Accrued and other liabilities | 743 | 632 |
Net cash provided by operating activities | 847 | 999 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for the purchase of property and equipment | (483) | (1,613) |
Payments for the purchase of treasury stock | (75) | |
Proceeds from the sale of fixed assets | 2 | |
Payments received from franchisees and others | 3 | 3 |
Net cash used in investing activities | (480) | (1,683) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on notes payable and long-term debt | 2,000 | |
Principal payments on notes payable and long-term debt | (1,500) | (500) |
Proceeds from stock option exercise | 13 | |
Contributions from non-controlling interests | 22 | |
Distributions to non-controlling interests | (319) | (291) |
Net cash (used in) provided by financing activities | (1,806) | 1,231 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,439) | 547 |
CASH AND CASH EQUIVALENTS, beginning of period | 11,454 | 2,745 |
CASH AND CASH EQUIVALENTS, end of period | 10,015 | 3,292 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 59 | 253 |
Change in accounts payable attributable to the purchase of property and equipment | $ (133) | $ (599) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Good Times Restaurants Inc. and its wholly-owned subsidiaries, Bad Daddy’s International, LLC (“BDI”), BD of Colorado, LLC (“BDC”), Bad Daddy’s Franchise Development, LLC (“BDFD”), and Good Times Drive Thru, Inc. (“Drive Thru”), (together referred to as the “Company”, “we” or “us”). All significant intercompany balances and transactions have been eliminated in consolidation. BDC was formed by Good Times Restaurants Inc. in 2013 to develop Bad Daddy’s Burger Bar restaurants in the state of Colorado. Subsequently, BDI and BDFD were acquired by Good Times Restaurants Inc. on May 7, 2015. Combined, these entities compose our Bad Daddy’s operating segment, which as of December 29, 2020, operates thirty-two company-owned and five joint-venture full-service small-box casual dining restaurants under the name Bad Daddy’s Burger Bar, primarily located in Colorado and in the Southeast region of the United States, franchises one restaurant in South Carolina, and licenses the Bad Daddy’s brand for use at an airport Bad Daddy’s restaurant under third-party operations and ownership. Drive Thru commenced operations in 1986 and as of December 29, 2020, operates seventeen Company-owned and seven joint-venture drive-thru fast food hamburger restaurants under the name Good Times Burgers & Frozen Custard, all of which are located in Colorado. In addition, Drive Thru has eight franchisee-owned restaurants, with six operating in Colorado and two in Wyoming. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and practices of the United States of America (“GAAP”) for interim financial information. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position of the Company as of December 29, 2020 and the results of its operations and its cash flows for the fiscal quarters ended December 29, 2020 and December 31, 2019. Operating results for the fiscal quarter ended December 29, 2020 are not necessarily indicative of the results that may be expected for the year ending September 28, 2021. The condensed consolidated balance sheet as of September 29, 2020 is derived from the audited financial statements but does not include all disclosures required by generally accepted accounting principles. As a result, these condensed consolidated financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 29, 2020. Fiscal Year Advertising Costs Reclassification COVID-19 The global crisis resulting from the spread of COVID-19 had a substantial impact on our restaurant operations for the quarter ended December 29, 2020. During portions of the month of November 2020 through early January 2021, all of the Company’s Bad Daddy’s Burger Bar restaurants in Colorado were open only for limited outdoor dining, delivery and carry-out service, with indoor dining rooms closed by government orders. Beginning in early January 2021, we began to re-open Colorado dining rooms at Bad Daddy’s, with limited occupancy, as local regulations allowed. Our dining rooms in all other states in which Bad Daddy’s has operations were open during this time. Although certain dining rooms were open, all were operating at some reduction of capacity, whether driven by explicit capacity reductions under government orders, or due to social distancing protocols that are either mandated by the same government orders, or which we abide by as under our own internal protocols designed to maintain a safe foodservice environment, both for our employees and for our customers. Our operating results substantially depend upon our ability to drive traffic to our restaurants, and for our Bad Daddy’s Burger Bar restaurants, to serve guests in our dining rooms. We cannot currently estimate the duration of the impact of the COVID-19 pandemic on our business; neither are we able to predict how the pandemic will evolve nor how various government entities will respond to its evolution. Should additional dining room closures occur, our business would be adversely affected. Even without government orders, customers may choose to reduce or eliminate in-restaurant dining because of increasing numbers of COVID-19 cases, hospitalizations, or deaths. Furthermore, although the development of certain vaccines that are currently being administered may reduce the risk of further government restrictions, there is no guarantee that the vaccine will be effective in eradicating the virus, additional mutations of the virus may be resistant to any vaccine, and the length of the ongoing pandemic may change consumer behavior such that potential customers may still choose to reduce or eliminate in-restaurant dining. Additionally, in connection with spread of COVID-19, there have been disruptions in various food supply chains in the United States. Our operating results substantially depend upon our ability to obtain sufficient quantities of products such as beef, bacon, and other products used in the production of items served and sold to our guests. Ongoing impacts of the COVID-19 pandemic could result in product shortages and in-turn could require us to serve a limited menu, restrict number of items purchased per guest, or close some or all of our restaurants for an indeterminate period of time. Ongoing material adverse impacts from the COVID-19 pandemic could result in reduced revenue and cash flow and could affect our assessments of impairment of intangible assets, long-lived assets, or goodwill. We took extraordinary actions to increase our liquidity in response to COVID-19 during fiscal 2020, including temporarily reducing employee pay, reductions in workforce, and obtaining Paycheck Protection Program (the “PPP”) loans. The PPP is sponsored by the Small Business Administration (the “SBA”). The PPP is part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). We have since significantly increased employment levels and restored pay to employees. Although we currently have a meaningful cash balance and generated significant cash flow from operations during this quarter, should business decline significantly as a result of the pandemic we would not likely be able to take some of the same actions without negatively impacting the long-term viability of the business. The COVID-19 pandemic is adversely affecting the availability of liquidity generally in the credit markets, and there can be no guarantee that additional liquidity will be available on favorable terms, or at all, especially the longer the COVID-19 pandemic lasts. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 29, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements ASU No. 2019-12, Simplifying the Accounting for Income Taxes The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the Company’s consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Dec. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3. Revenue Revenue Recognition Revenues consist primarily of sales from restaurant operations; franchise revenue, which includes franchisee contributions to advertising funds. Revenues associated with gift card breakage are immaterial to our financials. The Company recognizes revenue, pursuant to the new and updated standards, when it satisfies a performance obligation by transferring control over a product or service to a customer, typically a restaurant customer or a franchisee/licensee. The Company recognizes revenues in the form of restaurant sales at the time of the sale when payment is made by the customer, as the Company has completed its performance obligation, namely the provision of food and beverage, and the accompanying customer service, during the customer’s visit to the restaurant. The Company sells gift cards to customers and recognizes revenue from gift cards primarily in the form of restaurant revenue. Gift Card breakage, which is recognized when the likelihood of a gift card being redeemed is remote, is determined based upon the Company’s historic redemption patterns, and is immaterial to our overall financial statements. Revenues we receive from our franchise and license agreements include sales-based royalties, and from our franchise agreements also may include advertising fund contributions, area development fees, and franchisee fees. We recognize sales-based royalties from franchisees and licensees as the underlying sales occur. We similarly recognize advertising fund contributions from franchisees as the underlying sales occur. The Company also provides its franchisees with services associated with opening new restaurants and operating them under franchise and development agreements in exchange for area development and franchise fees. The Company would capitalize these fees upon receipt from the franchisee and then would amortize those over the contracted franchise term as the services comprising the performance obligations are satisfied. We have not received material development or franchise fees in the years presented, and the primary performance obligations under existing franchise and development agreements have been satisfied prior to the earliest period presented in our financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 4. Goodwill and Intangible Assets The following table presents goodwill and intangible assets as of December 29, 2020 and September 29, 2020 (in thousands): December 29, 2020 September 29, 2020 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Intangible assets subject to Non-compete agreements $ 50 $ (32 ) $ 18 $ 50 $ (28 ) $ 22 Indefinite-lived intangible Trademarks 3,900 - 3,900 3,900 - 3,900 Intangible assets, net $ 3,950 $ (32 ) $ 3,918 $ 3,950 $ (28 ) $ 3,922 Goodwill $ 5,150 $ - $ 5,150 $ 5,150 $ - $ 5,150 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Dec. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 5. Stock-Based Compensation The Company has traditionally maintained incentive compensation plans that include provision for the issuance of equity-based awards. The Company established the 2008 Omnibus Equity Incentive Compensation Plan in 2008 (the “2008 Plan”) and has outstanding awards that were issued under the 2008 Plan. Subsequently, the 2008 Plan expired in 2018 and the Company established a new plan, the 2018 Omnibus Equity Incentive Plan (the “2018 Plan”) during the third fiscal quarter of 2018, pursuant to shareholder approval. Future awards will be issued under the 2018 plan. Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the grant). The Company recognizes the impact of forfeitures as forfeitures occur. Our net income (loss) for the quarters ended December 29, 2020 and December 31, 2019 includes $61,000 and $75,000, respectively, of compensation costs related to our stock-based compensation arrangements. Stock Option awards The Company measures the compensation cost associated with stock option awards by estimating the fair value of the award as of the grant date using the Black-Scholes pricing model. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options and stock awards granted during the quarter ended December 29, 2020. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards. During the quarter ended December 29, 2020, the Company granted 90,000 incentive stock options to its Chief Executive Officer, from available shares under its 2018 Plan, with an exercise price of $2.33 per share and a per share weighted average fair value of $1.24. These options were granted pursuant to the Chief Executive Officer’s Second Amended and Restated Employment Agreement dated December 24, 2020. During the quarter ended December 31, 2019, there were no incentive stock options granted. In addition to the exercise and grant date prices of the stock option awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants are listed in the following table: Quarter Ended December 29, 2020 Expected term (years) 4.5 Expected volatility 67.6% Risk-free interest rate 0.3% Expected dividends - We estimate expected volatility based on historical weekly price changes of our common stock for a period equal to the current expected term of the options. The risk-free interest rate is based on the United States treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns. The following table summarizes stock option activity for the quarter ended December 29, 2020 under all plans: Shares Weighted Weighted Avg. Outstanding at beginning of year 630,268 $ 3.56 Options granted 90,000 $ 2.33 Options exercised (7,984 ) $ 1.56 Forfeited (6,492 ) $ 3.54 Expired (20,629 ) $ 1.56 Outstanding December 29, 2020 685,163 $ 3.48 5.3 Exercisable December 29, 2020 479,127 $ 3.56 4.5 As of December 29, 2020, the aggregate intrinsic value of the outstanding and exercisable options was $63,000 and $43,000, respectively. Only options whose exercise price is below the current market price of the underlying stock are included in the intrinsic value calculation. As of December 29, 2020, the total remaining unrecognized compensation cost related to non-vested stock options was $271,000 and is expected to be recognized over a weighted average period of approximately 1.6 years. There were 7,984 stock options exercised during the quarter ended December 29, 2020 with proceeds of approximately $12,000. There were 15,646 stock options exercised that resulted in an issuance of 2,413 shares during the quarter ended December 31, 2019 with no proceeds in conjunction with the termination of the Company’s former CEO pursuant to a severance and separation agreement. Restricted Stock Units During the quarter ended December 29, 2020, there were no restricted stock units granted. During the quarter ended December 31, 2019, the Company granted a total of 46,336 restricted stock units from available shares under its 2018 Plan. The shares were issued with a grant date fair market value of $1.54 which is equal to the closing price of the stock on the date of the grant. The restricted stock units vest three years following the grant date. A summary of the status of non-vested restricted stock as of December 29, 2020 is presented below. Shares Grant Date Fair Non-vested shares at beginning of year 92,604 $1.54 to $3.95 Vested (17,546 ) $3.95 Non-vested shares at December 29, 2020 75,058 $1.54 to $3.95 As of December 29, 2020, there was $129,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 0.8 years. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 3 Months Ended |
Dec. 29, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | Note 6. Notes Payable and Long-Term Debt Cadence Credit Facility The Company maintains a credit agreement with Cadence Bank (“Cadence”) pursuant to which, as amended, Cadence agreed to loan the Company up to $17,000,000 with a maturity date of December 31, 2021 (the “Cadence Credit Facility”). On February 21, 2019 the Cadence Credit Facility was amended, in connection with the repurchase of minority interests related to three Bad Daddy’s restaurants, to retroactively attribute EBITDA previously attributed to non-controlling interests to the Company for purposes of certain financial covenants. On December 9, 2019 the Cadence Credit Facility was amended in connection with the separation of the Company’s former CEO, to amend the definition of “Consolidated EBITDA” for the purposes of financial covenants, to require certain installment payments, and to permit the company to make certain “Restricted Payments” (as defined in the Cadence Credit Facility). Subsequent to December 29, 2020, on January 8, 2021, the Cadence Credit Facility was amended to eliminate certain installment payments; reduce the commitment immediately to $11.0 million with reductions to $10.0 million and $8.0 million on March 31, 2021, and July 1, 2021, respectively; revise certain financial covenants; provide a mechanism for a transition from LIBOR to an alternate benchmark rate; and extend the maturity date to January 31, 2023. As amended by the various amendments, the Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. As of December 29, 2020, all borrowings under the Cadence Credit Facility, as amended, bear interest at a variable rate based upon the Company’s election of (i) 2.5% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.250% floor, plus 3.5%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. As of December 29, 2020, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 3.75%. Principal payments on the Cadence Credit Facility were required beginning on March 31, 2020 in $250,000 installments on the last business day each of March, June, September, and December in each calendar year. The total loan commitment was permanently reduced by the corresponding amount of each such repayment on such date. New borrowings were permitted up to the amount of the loan commitment. The note was set to mature on December 31, 2021. Subsequent to December 29, 2020 per the January 8, 2021 amendment, the quarterly principal payment requirement and associated commitment reduction was eliminated, and the maturity date was extended to January 31, 2023. As of December 29, 2020, the Cadence Credit Facility, as amended, contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum leverage ratio of 5.35:1, a minimum pre-distribution fixed charge coverage ratio of 1.25:1, a minimum post-distribution fixed charge coverage ratio of 1.10:1 and minimum liquidity of $2.0 million. As of December 29, 2020, the Company was in compliance with all covenants under the Cadence Credit Facility. Subsequent to December 29, 2020 per the January 8, 2021 amendment, certain financial covenants were amended. As a result of entering into the Cadence Credit Facility and the various amendments, the Company paid loan origination costs including professional fees of approximately $292,000 and is amortizing these costs over the term of the credit agreement. The obligations under the Cadence Credit Facility are collateralized by a first-priority lien on substantially all of the Company’s assets. As of December 29, 2020, the outstanding balance on borrowings against the facility was $4,000,000. Availability of the Cadence Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of December 29, 2020, the outstanding face value of such letters of credit was $157,500. Paycheck Protection Program Loans On May 7, 2020, Good Times and three of its wholly-owned subsidiaries, BDI, Drive Thru, and BD Colo (each a “Borrower”), entered into unsecured loans in the aggregate principal amount of $11,645,000 (the “Loans”) with Cadence Bank, N.A. (the “Lender”) pursuant to the PPP. The Loans are evidenced by individual promissory notes of each of the Borrowers dated April 29, 2020 executed by each Borrower on May 7, 2020 (together, the “Notes”) in favor of the Lender which Notes bear interest at the rate of 1.00% per annum. All or a portion of the Loans may be forgiven by the SBA upon application by the Borrowers accompanied by documentation of expenditures in accordance with SBA requirements under the PPP, which includes employees being kept on the payroll for twenty-four weeks after the date of the Loans and the proceeds of such Loans being used for payroll, rent, mortgage interest or utilities. Congress subsequently passed the PPP Flexibility Act which modified certain provisions of the PPP program, including expanding the original eight-week covered period to a period of twenty-four weeks (the “Covered Period”). The SBA and the Treasury continue to develop and issue new and updated guidance regarding the PPP loan application process, including guidance regarding required borrower certifications and requirements for forgiveness of loans made under the PPP. The Company continues to track the guidance as it is released and assess and re-assess various aspects of its application as necessary based on the guidance. The Company believes it qualifies for the PPP and is compliant in all aspects with its use of PPP funds, and expects to apply for forgiveness during 2021. However, in the absence of definitive guidance or regulations the Company cannot give any assurance that the Loans will be forgivable in whole or in part. In the event that any portion of the Loans are not forgiven in accordance with the PPP, the Company will be required to pay the Lender monthly payments of principal and interest in an aggregate amount of $489,000 to repay the PPP Loans in full on or before April 29, 2022. The SBA has deferred loan payments to either (1) the date the SBA remits our forgiveness to the lender, or (2) 10 months after the end of the Covered Period, which would be in August 2021. However, as of the date of this report we have not yet received a decision from the SBA regarding forgiveness of our PPP loans or communication regarding the official end date of our deferral period. The Loans may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The Notes contain certifications and agreements related to the PPP, as well as customary default and other provisions. We reflect the full principal amount of the PPP loans as debt, accounting for such loans under ASC 470, with current maturities of approximately $6.7 million pursuant to the current payment amortization schedule. We intend to account for the forgiveness of such loans at the time such forgiveness is granted. Components of Long-Term Debt The components of long-term debt as reflected on our consolidated balance sheet are as follows: Current Maturities Cadence Credit Facility $ 1,000 PPP Loans 6,693 Total Current Maturities 7,693 Maturities due after One Year Cadence Credit Facility $ 3,000 PPP Loans 4,952 Total Maturities after One Year $ 7,952 |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 3 Months Ended |
Dec. 29, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | Note 7. Net Income (Loss) per Common Share Our basic earnings per share calculation is computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive securities for this calculation consist of in-the-money outstanding stock options, restricted stock units and warrants (which were assumed to have been exercised at the average market price of the common shares during the reporting period). The treasury stock method is used to measure the dilutive impact of in-the-money stock options. The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding: Quarter Ended December 29, 2020 December 31, 2019 Weighted-average shares outstanding basic 12,622,178 12,596,960 Effect of potentially dilutive securities: Stock options 1,048 - Restricted stock units 75,058 - Weighted-average shares outstanding diluted 12,698,284 12,596,960 Excluded from diluted weighted-average Antidilutive 684,114 804,051 |
Contingent Liabilities and Liqu
Contingent Liabilities and Liquidity | 3 Months Ended |
Dec. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Liquidity | Note 8. Contingent Liabilities and Liquidity We remain contingently liable on various leases underlying restaurants that were previously sold to franchisees. We have never experienced any losses related to these contingent lease liabilities, however if a franchisee defaults on the payments under the leases, we would be liable for the lease payments as the assignor or sub-lessor of the lease. Currently we have not been notified nor are we aware of any leases in default by the franchisees, however there can be no assurance that there will not be in the future which could have a material effect on our future operating results. Additionally, in the normal course of business, there may be various claims in process, matters in litigation, and other contingencies brought against the company by employees, vendors, customers, franchisees, or other parties. Evaluating these contingencies is a complex process that may involve substantial judgment on the potential outcome of such matters, and the ultimate outcome of such contingencies may differ from our current analysis. We review the adequacy of accruals and disclosures related to such contingent liabilities in consultation with legal counsel. While it is not possible to predict the outcome of these claims with certainty, it is management’s opinion that potential losses associated with such contingencies would be immaterial to our financial statements. |
Leases
Leases | 3 Months Ended |
Dec. 29, 2020 | |
Lessee Disclosure [Abstract] | |
Leases | Note 9. Leases The Company determines if a contract contains a lease at inception. The Company's material long-term operating lease agreements are for the land and buildings for our restaurants as well as our corporate office. The initial lease terms range from 10 years to 20 years, most of which include renewal options of 10 to 15 years. The lease term is generally the minimum of the noncancelable period or the lease term including renewal options which are reasonably certain of being exercised up to a term of approximately 20 years. Operating lease assets and liabilities are recognized at the lease commencement date for material leases with a term of greater than 12 months. Operating lease liabilities represent the present value of future minimum lease payments. Since our leases do not provide an implicit rate, our operating lease liabilities are calculated using our estimated incremental borrowing rate based on a collateralized borrowing over the term of each individual lease. Minimum lease payments include only fixed lease components of the agreement, as well as variable rate payments that depend on an index, initially measured using the index at the lease commencement date. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs and lease incentives. Lease incentives are recognized when earned and reduce our operating lease asset related to the lease. They are amortized through the operating lease assets as reductions of rent expense over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. Certain of the Company’s operating leases contain clauses that provide for contingent rent based on a percentage of sales greater than certain specified target amounts. Variable lease payments that do not depend on a rate or index, escalation in the index subsequent to the initial measurement, payments associated with non-lease components such as common area maintenance, real estate taxes and insurance, and short-term lease payments (leases with a term with 12 months or less) are expensed as incurred or when the achievement of the specified target that triggers the contingent rent is considered probable. Some of the leases provide for base rent, plus additional rent based on gross sales, as defined in each lease agreement. The Company is also generally obligated to pay certain real estate taxes, insurance and common area maintenance charges, and various other expenses related to properties, which are expensed as incurred. Components of operating lease costs are as follows for the fiscal quarter ended December 29, 2020: Lease cost Classification Total Operating lease cost Occupancy, Other restaurant operating costs and General and administrative expenses, net $ 1,757 Variable lease cost Occupancy 20 Sublease income Occupancy (129 ) $ 1,648 Weighted average lease term and discount rate are as follows: December 29, 2020 Weighted average remaining lease term (in years) 10.2 Weighted average discount rate 5.0 % Supplemental cash flow disclosures for the fiscal quarter ended December 29, 2020: December 29, 2020 Cash paid for operating lease liabilities $ 1,723 Non-cash operating lease assets obtained in exchange for $ 11 Supplemental balance sheet disclosures: December 29, 2020 Right-of-use assets Operating lease assets $ 48,208 Current lease liabilities Operating lease liability $ 4,771 Non-current lease liabilities Operating lease liability, less current portion 52,524 Total lease liabilities $ 57,295 Future minimum rent payments for our operating leases for each of the next five years as of December 29, 2020 are as follows: Fiscal year ending: Total Remainder of 2021 $ 5,706 2022 7,489 2023 7,534 2024 7,383 2025 7,483 Thereafter 38,764 Total minimum lease payments 74,359 Less: imputed interest (17,064 ) Present value of lease liabilities $ 57,295 The above future minimum rental amounts exclude the amortization of deferred lease incentives, renewal options that are not reasonably assured of renewal, and contingent rent. The Company generally has escalating rents over the term of the leases and records rent expense on a straight-line basis. |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets and Goodwill | 3 Months Ended |
Dec. 29, 2020 | |
Goodwill and Intangible Asset Impairment [Abstract] | |
Impairment of Long-Lived Assets and Goodwill | Note 10. Impairment of Long-Lived Assets and Goodwill Long-Lived Assets. There were no impairments in the fiscal quarters ended December 29, 2020 and December 31, 2019. Trademarks. Goodwill. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes We account for income taxes using the liability method, whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The deferred tax assets are reviewed periodically for recoverability and valuation allowances are adjusted as necessary. Although the Company had net income in the quarter ended December 29, 2020, we have significant net operating loss carryforwards from prior years and incurred additional net operating losses during the quarter ended and December 31, 2019. Full valuation allowances were made to reduce any deferred tax assets incurred to zero; therefore, no income tax provision or benefit was recognized for the quarters ended December 29, 2020 and December 31, 2019 resulting in an effective income tax rate of 0% for both periods. The Company is subject to taxation in various jurisdictions within the U.S. The Company continues to remain subject to examination by U.S. federal authorities for the years 2017 through 2020. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of December 29, 2020. |
Non-controlling Interests
Non-controlling Interests | 3 Months Ended |
Dec. 29, 2020 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Note 12. Non-controlling Interests Non-controlling interests are presented as a separate item in the stockholders’ equity section of the condensed consolidated balance sheet. The amount of consolidated net income or loss attributable to non-controlling interests is presented on the face of the condensed consolidated statement of operations. Changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions, while changes in ownership interest that do result in deconsolidation of a subsidiary require gain or loss recognition based on the fair value on the deconsolidation date. The equity interests of the unrelated limited partners and members are shown on the accompanying consolidated balance sheet in the stockholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partners’ and members’ share of the net income or loss as well as any cash contributions or distributions to or from the limited partners and members for the period. The limited partners’ and members’ share of the net income or loss in the subsidiary is shown as non-controlling interest income or expense in the accompanying consolidated statement of operations. All inter-company accounts and transactions are eliminated. The following table summarizes the activity in non-controlling interests during the quarter ended December 29, 2020 (in thousands): Bad Daddy’s Good Times Total Balance at September 29, 2020 $ 1,023 $ 270 $ 1,293 Income 180 183 363 Distributions (121 ) (198 ) (319 ) Balance at December 29, 2020 $ 1,082 $ 255 $ 1,337 Our non-controlling interests consist of one joint-venture partnership involving seven Good Times restaurants and five joint-venture partnerships involving five Bad Daddy’s restaurants. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 29, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events COVID-19 In early January 2021 all of our Bad Daddy’s dining rooms in Colorado, which were closed for the majority of the quarter ended December 29, 2020, were reopened at a limited capacity. Additionally, in connection with spread of COVID-19, new variants of the virus have been identified. These variants pose many of the same risks that the original strain manifested. There have been disruptions in various food supply chains in the United States as a result of the COVID-19 pandemic. Our operating results substantially depend upon our ability to obtain sufficient quantities of products such as beef, bacon and other products used in the production of items served and sold to our guests. Ongoing impacts of the COVID-19 pandemic could result in product shortages and in-turn could require us to serve a limited menu, restrict number of items purchased per guest, or close some or all of our restaurants for an indeterminate period of time. Ongoing material adverse impacts from the COVID-19 pandemic could result in reduced revenue and cash flow and could affect our assessments of impairment of intangible assets, long-lived assets or goodwill. Amendment to the Cadence Credit Agreement On January 8, 2021 the Cadence Credit Facility was amended to eliminate certain installment payments, reduce the borrowing capacity over time, revise certain financial covenants, amend the variable interest rate calculation to replace LIBOR with an alternate benchmark rate, and extend the maturity date to January 31, 2023, see Note 6. above. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Dec. 29, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 14. Segment Reporting All of our Bad Daddy’s Burger Bar restaurants (Bad Daddy’s) compete in the full-service segment of the restaurant industry while our Good Times Burgers and Frozen Custard restaurants (Good Times) compete in the quick-service segment of the dining industry. We believe that providing this additional financial information for each of our brands will provide a better understanding of our overall operating results. Income (loss) from operations represents revenues less restaurant operating costs and expenses, directly allocable general and administrative expenses, and other restaurant-level expenses directly associated with each brand including depreciation and amortization, pre-opening costs and losses or gains on disposal of property and equipment. Unallocated corporate capital expenditures are presented below as reconciling items to the amounts presented in the consolidated financial statements. The following tables present information about our reportable segments for the respective periods (in thousands): Quarter Ended December 29, 2020 December 31, 2019 Revenues Bad Daddy’s $ 18,816 $ 22,902 Good Times 8,480 7,912 $ 27,296 $ 30,814 Income (loss) from operations Bad Daddy’s $ 226 $ (485 ) Good Times 1,085 164 Corporate (48 ) (51 ) $ 1,263 $ (372 ) Capital expenditures Bad Daddy’s $ 322 $ 1,577 Good Times 113 15 Corporate 48 21 $ 483 $ 1,613 December 29, 2020 September 29, 2020 Property and equipment, net Bad Daddy’s $ 23,065 $ 23,586 Good Times 3,773 3,874 Corporate 228 209 $ 27,066 $ 27,669 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | The following table presents goodwill and intangible assets as of December 29, 2020 and September 29, 2020 (in thousands): December 29, 2020 September 29, 2020 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Intangible assets subject to Non-compete agreements $ 50 $ (32 ) $ 18 $ 50 $ (28 ) $ 22 Indefinite-lived intangible Trademarks 3,900 - 3,900 3,900 - 3,900 Intangible assets, net $ 3,950 $ (32 ) $ 3,918 $ 3,950 $ (28 ) $ 3,922 Goodwill $ 5,150 $ - $ 5,150 $ 5,150 $ - $ 5,150 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants | In addition to the exercise and grant date prices of the stock option awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants are listed in the following table: Quarter Ended December 29, 2020 Expected term (years) 4.5 Expected volatility 67.6% Risk-free interest rate 0.3% Expected dividends - |
Summary of Stock Option Activity Under Share Based Compensation Plan | The following table summarizes stock option activity for the quarter ended December 29, 2020 under all plans: Shares Weighted Weighted Avg. Outstanding at beginning of year 630,268 $ 3.56 Options granted 90,000 $ 2.33 Options exercised (7,984 ) $ 1.56 Forfeited (6,492 ) $ 3.54 Expired (20,629 ) $ 1.56 Outstanding December 29, 2020 685,163 $ 3.48 5.3 Exercisable December 29, 2020 479,127 $ 3.56 4.5 |
Schedule of Non-vested Restricted Stock Activity | A summary of the status of non-vested restricted stock as of December 29, 2020 is presented below. Shares Grant Date Fair Non-vested shares at beginning of year 92,604 $1.54 to $3.95 Vested (17,546 ) $3.95 Non-vested shares at December 29, 2020 75,058 $1.54 to $3.95 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt Maturity | The components of long-term debt as reflected on our consolidated balance sheet are as follows: Current Maturities Cadence Credit Facility $ 1,000 PPP Loans 6,693 Total Current Maturities 7,693 Maturities due after One Year Cadence Credit Facility $ 3,000 PPP Loans 4,952 Total Maturities after One Year $ 7,952 |
Net Income (Loss) per Common _2
Net Income (Loss) per Common Share (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Reconciles Basic and Diluted Weighted-Average Shares Outstanding | The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding: Quarter Ended December 29, 2020 December 31, 2019 Weighted-average shares outstanding basic 12,622,178 12,596,960 Effect of potentially dilutive securities: Stock options 1,048 - Restricted stock units 75,058 - Weighted-average shares outstanding diluted 12,698,284 12,596,960 Excluded from diluted weighted-average Antidilutive 684,114 804,051 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Components of Lease Expense | Components of operating lease costs are as follows for the fiscal quarter ended December 29, 2020: Lease cost Classification Total Operating lease cost Occupancy, Other restaurant operating costs and General and administrative expenses, net $ 1,757 Variable lease cost Occupancy 20 Sublease income Occupancy (129 ) $ 1,648 |
Schedule of Weighted Average Lease Term and Discount Rate | Weighted average lease term and discount rate are as follows: December 29, 2020 Weighted average remaining lease term (in years) 10.2 Weighted average discount rate 5.0 % |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow disclosures for the fiscal quarter ended December 29, 2020: December 29, 2020 Cash paid for operating lease liabilities $ 1,723 Non-cash operating lease assets obtained in exchange for $ 11 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet disclosures: December 29, 2020 Right-of-use assets Operating lease assets $ 48,208 Current lease liabilities Operating lease liability $ 4,771 Non-current lease liabilities Operating lease liability, less current portion 52,524 Total lease liabilities $ 57,295 |
Schedule of Future Minimum Rent Payments Related to Operating Leases | Future minimum rent payments for our operating leases for each of the next five years as of December 29, 2020 are as follows: Fiscal year ending: Total Remainder of 2021 $ 5,706 2022 7,489 2023 7,534 2024 7,383 2025 7,483 Thereafter 38,764 Total minimum lease payments 74,359 Less: imputed interest (17,064 ) Present value of lease liabilities $ 57,295 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of Noncontrolling Interest | The following table summarizes the activity in non-controlling interests during the quarter ended December 29, 2020 (in thousands): Bad Daddy’s Good Times Total Balance at September 29, 2020 $ 1,023 $ 270 $ 1,293 Income 180 183 363 Distributions (121 ) (198 ) (319 ) Balance at December 29, 2020 $ 1,082 $ 255 $ 1,337 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Dec. 29, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | The following tables present information about our reportable segments for the respective periods (in thousands): Quarter Ended December 29, 2020 December 31, 2019 Revenues Bad Daddy’s $ 18,816 $ 22,902 Good Times 8,480 7,912 $ 27,296 $ 30,814 Income (loss) from operations Bad Daddy’s $ 226 $ (485 ) Good Times 1,085 164 Corporate (48 ) (51 ) $ 1,263 $ (372 ) Capital expenditures Bad Daddy’s $ 322 $ 1,577 Good Times 113 15 Corporate 48 21 $ 483 $ 1,613 December 29, 2020 September 29, 2020 Property and equipment, net Bad Daddy’s $ 23,065 $ 23,586 Good Times 3,773 3,874 Corporate 228 209 $ 27,066 $ 27,669 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advertising Costs | $ 67 | $ 58 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization of Intangible Assets | $ 4 |
Impairment of goodwill |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Intangible Assets Subject to Amortization) (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (32) | $ (28) |
Net Carrying Amount | 18 | |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50 | 50 |
Accumulated Amortization | (32) | (28) |
Net Carrying Amount | $ 18 | $ 22 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Indefinite-lived Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 3,900 | $ 3,900 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, gross carrying amount | $ 3,950 | $ 3,950 |
Accumulated Amortization | (32) | (28) |
Intangible Assets, net carrying amount | 3,918 | 3,922 |
Goodwill, gross carrying amount | 5,150 | 5,150 |
Goodwill, Accumulated Amortization | ||
Goodwill, net carrying amount | $ 5,150 | $ 5,150 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets (Estimated Aggregate Future Amortization Expense) (Details) $ in Thousands | Dec. 29, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2021 | $ 12 |
2022 | 6 |
Net Carrying Amount | $ 18 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Dec. 29, 2020 | Dec. 31, 2019 | Dec. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense | $ 61 | $ 74 | |
Stock options granted, shares | 90,000 | ||
Stock options granted, exercise price | $ 2.33 | ||
Stock options exercised, shares | 7,984 | 15,646 | |
Proceeds from stock option exercises | $ 13 | ||
Stock issued against stock options exercised | 12,000 | 2,413 | |
Incentive Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted, exercise price | $ 2.33 | ||
Stock options granted, per-share weighted average fair value | $ 1.24 | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate Intrinsic Value, Outstanding | $ 63 | ||
Aggregate Intrinsic Value, Exercisable | 43 | ||
Remaining total unrecognized compensation cost related to unvested stock-based arrangements | $ 271 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining total unrecognized compensation cost related to unvested stock-based arrangements | $ 129 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 9 months 18 days | ||
Restricted Stock One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock granted, shares | 46,336 | ||
Restricted stock granted, weighted average grant date fair value per share | $ 1.54 | ||
Vesting period | 3 years | ||
Chief Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted, shares | 90,000 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants) (Details) - Incentive and Non-Statutory Stock Options [Member] | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 4 years 6 months |
Expected volatility | 67.60% |
Risk-free interest rate | 0.30% |
Expected dividends |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Stock Option Activity under Share Based Compensation Plan) (Details) - $ / shares | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
Shares | ||
Outstanding at beginning of year | 630,268 | |
Options granted | 90,000 | |
Options exercised | (7,984) | (15,646) |
Forfeited | (6,492) | |
Expired | (20,629) | |
Outstanding December 29, 2020 | 685,163 | |
Exercisable December 29, 2020 | 479,127 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of year | $ 3.56 | |
Options granted | 2.33 | |
Options exercised | 1.56 | |
Forfeited | 3.54 | |
Expired | 1.56 | |
Outstanding December 29, 2020 | 3.48 | |
Exercisable December 29, 2020 | $ 3.56 | |
Weighted Avg. Remaining Contractual Life (Yrs.) | ||
Outstanding December 29, 2020 | 5 years 3 months 19 days | |
Exercisable December 29, 2020 | 4 years 6 months |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary of Non-vested Restricted Stock Activity) (Details) - Restricted Stock [Member] | 3 Months Ended |
Dec. 29, 2020$ / sharesshares | |
Shares | |
Non-vested shares at beginning of year | shares | 92,604 |
Vested | shares | (17,546) |
Non-vested shares at December 29, 2020 | shares | 75,058 |
Minimum [Member] | |
Grant Date Fair Value Per Share | |
Non-vested shares at beginning of year | $ 1.54 |
Vested | 3.95 |
Non-vested shares at December 29, 2020 | 1.54 |
Maximum [Member] | |
Grant Date Fair Value Per Share | |
Non-vested shares at beginning of year | 3.95 |
Vested | 3.95 |
Non-vested shares at December 29, 2020 | $ 3.95 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt (Narrative) (Details) - USD ($) | Jan. 08, 2021 | Dec. 29, 2020 | Jul. 01, 2021 | Mar. 31, 2021 | May 20, 2020 |
Cadence Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan agreement, increase amount | $ 17,000,000 | ||||
Interest rate | 0.25% | ||||
Weighted average interest rate | 3.75% | ||||
Interest rate description | As of December 29, 2020, all borrowings under the Cadence Credit Facility, as amended, bear interest at a variable rate based upon the Company’s election of (i) 2.5% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.250% floor, plus 3.5%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. | ||||
Payment of debt issuance costs | $ 292,000 | ||||
Maturity date | Dec. 31, 2021 | ||||
Minimum liquidity amount | $ 2,000,000 | ||||
Letters of credit outstanding, amount | 4,000,000 | ||||
Letters of credit outstanding face value | 157,500 | ||||
Periodic principal payment amount | 250,000 | ||||
Cadence Credit Facility [Member] | Subsequent Event[Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Jan. 31, 2023 | ||||
Reduce commitment amount | $ 11,000,000 | $ 8,000,000 | $ 10,000,000 | ||
Paycheck Protection Program [Member] | Cadence Bank, N.A. [Member] | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 1.00% | ||||
Unsecured loan aggregate principal amount | 6,700,000 | $ 11,645,000 | |||
Monthly payments installment | $ 489,000 |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt (Summary of Long-term Debt Maturity) (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Total Current Maturities | $ 7,693 | $ 6,242 |
Total Maturities after One Year | 7,952 | $ 10,903 |
Cadence Credit Facility [Member] | ||
Total Current Maturities | 1,000 | |
Total Maturities after One Year | 3,000 | |
PPP Loans [Member] | ||
Total Current Maturities | 6,693 | |
Total Maturities after One Year | $ 4,952 |
Net Income (Loss) per Common _3
Net Income (Loss) per Common Share (Summary of Reconciles Basic and Diluted Weighted-Average Shares Outstanding) (Details) - shares | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted-average shares outstanding-basic | 12,622,178 | 12,596,960 |
Effect of potentially dilutive securities | ||
Stock options | 1,048 | |
Restricted stock units | 75,058 | |
Weighted-average shares outstanding-diluted | 12,698,284 | 12,596,960 |
Excluded from diluted weighted-average shares outstanding: | ||
Antidilutive | 684,114 | 804,051 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 3 Months Ended |
Dec. 29, 2020 | |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 10 years |
Lease renewal term | 10 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 20 years |
Lease renewal term | 15 years |
Remaining lease term | 20 years |
Leases (Schedule of Components
Leases (Schedule of Components of Lease Expense) (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2020USD ($) | |
Lessee Disclosure [Abstract] | |
Operating lease cost | $ 1,757 |
Variable lease cost | 20 |
Sublease income | (129) |
Lease cost, Total | $ 1,648 |
Leases (Schedule of Weighted Av
Leases (Schedule of Weighted Average Lease Term and Discount Rate) (Details) | Dec. 29, 2020 |
Lessee Disclosure [Abstract] | |
Weighted average remaining lease term (in years) | 10 years 2 months 12 days |
Weighted average discount rate | 5.00% |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2020USD ($) | |
Lessee Disclosure [Abstract] | |
Cash paid for operating lease liabilities | $ 1,723 |
Non-cash operating lease assets obtained in exchange for operating lease liabilities | $ 11 |
Leases (Schedule of Supplemen_2
Leases (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 29, 2020 |
Lessee Disclosure [Abstract] | ||
Right-of-use assets | $ 48,208 | $ 49,252 |
Current lease liabilities | 4,771 | 4,689 |
Non-current lease liabilities | 52,524 | $ 53,731 |
Total lease liabilities | $ 57,295 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Rent Payments Related to Operating Leases) (Details) $ in Thousands | Dec. 29, 2020USD ($) |
Fiscal year ending: | |
Remainder of 2021 | $ 5,706 |
2022 | 7,489 |
2023 | 7,534 |
2024 | 7,383 |
2025 | 7,483 |
Thereafter | 38,764 |
Total minimum lease payments | 74,359 |
Less: imputed interest | (17,064) |
Present value of lease liabilities | $ 57,295 |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets and Goodwill (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020USD ($)restaurants | Sep. 29, 2020USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Number of restaurants impaired | restaurants | 2 | |
Goodwill | $ 5,150 | $ 5,150 |
Good Times Drive Thru Inc. [Member] | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Goodwill | 96 | |
Bad Daddy's [Member] | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Goodwill | $ 5,054 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
Income Tax Examination [Line Items] | ||
Deferred tax assets | $ 0 | |
Income tax provision or benefit | $ 0 | $ 0 |
Effective income tax rate | 0.00% | 0.00% |
Reserves for uncertain tax positions | $ 0 | |
Accrual for interest and penalties | $ 0 | |
Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Years subject to income tax examination | 2017 | |
Maximum [Member] | ||
Income Tax Examination [Line Items] | ||
Years subject to income tax examination | 2020 |
Non-controlling Interests (Sche
Non-controlling Interests (Schedule of Noncontrolling Interests) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2020 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | ||
Balance at September 29, 2020 | $ 1,293 | |
Income | 363 | $ 212 |
Contributions | 22 | |
Distributions | (319) | $ (291) |
Balance at December 29, 2020 | 1,337 | |
Bad Daddy's [Member] | ||
Noncontrolling Interest [Line Items] | ||
Balance at September 29, 2020 | 1,023 | |
Income | 180 | |
Distributions | (121) | |
Balance at December 29, 2020 | 1,082 | |
Good Times [Member] | ||
Noncontrolling Interest [Line Items] | ||
Balance at September 29, 2020 | 270 | |
Income | 183 | |
Distributions | (198) | |
Balance at December 29, 2020 | $ 255 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 27,296 | $ 30,814 | |
Income (loss) from operations | 1,263 | (372) | |
Capital expenditures | 483 | 1,613 | |
Property and equipment, net | 27,066 | $ 27,669 | |
Bad Daddys [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 18,816 | 22,902 | |
Income (loss) from operations | 226 | (485) | |
Capital expenditures | 322 | 1,577 | |
Property and equipment, net | 23,065 | 23,586 | |
Good Times [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 8,480 | 7,912 | |
Income (loss) from operations | 1,085 | 164 | |
Capital expenditures | 113 | 15 | |
Property and equipment, net | 3,773 | 3,874 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (48) | (51) | |
Capital expenditures | 48 | $ 21 | |
Property and equipment, net | $ 228 | $ 209 |