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GTIM - Good Times Restaurants


keerthiprasad
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Curious if anyone here was looking at GTIM.

 

GTIM owns two restaurant brands, Good Times Burgers and Bad Daddy's Burger Bar. Restaurants based in CO and SE USA. Good Times brand is pretty stable in this environment. Bad Daddy’s Burgers is hurting. Negative income (but positive cash flow) for several years due to heavy expansion of the Bad Daddys brand. Company owns 63 restaurants and franchises a few.

14M in debt. ~$10M Mkt cap. 6M+ Operating cash flow. Bank debt in forebearance now.

 

New CEO has stated that margin improvement will be the priority rather than expansion.

 

I own some shares. They are in a tough situation but its priced in.

 

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You sure about this one? Even if we look past the bank loan, Good Times has $2.8M in capex and $.4M of share comp that should be subtracted from pre-pandemic ebitda.

 

And Big Daddy's sounds like a pre-pandemic concept for people who want to pay $12 for a burger: "Bad Daddy’s Burger Bar is a full-service “small box” restaurant concept featuring a chef-driven menu of gourmet signature burgers, chopped salads, appetizers and sandwiches with a full bar and a focus on a selection of craft microbrew beers in a high-energy atmosphere that appeals to a broad consumer base."

 

These burgers look like fast food burgers:

 

GT_burgers_big_daddy_cheese_burger_square.jpg

 

COBF needs more people proposing new ideas but this one looks headed for bankruptcy. Maybe there's something I'm missing.

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Thanks for the feedback. I am definitely not sure about it. Its priced for BK. Little margin of safety. SE states seem to be reopening soon, but with limitations. Lots of uncertainty in this sector for the near future... Limited seating for the next several months with reopening? Ability to decrease staffing aggressively?

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  • 3 weeks later...
  • 3 months later...

an update in case anyone is paying attention... stock is up 100%. they made money q2, mostly due to growth in the legacy brand (good times). good times is very similar to Freddys or Culvers, which are private and showing healthy growth. I've been out of this one for a couple months so just following peripherally.

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