Business Wire | Dec 15, 2020 04:05PM EST

Good Times Restaurants Reports Results for the Fiscal Fourth Quarter and Year Ended September 29, 2020

Dec. 15, 2020

DENVER--(BUSINESS WIRE)--Dec. 15, 2020--Good Times Restaurants Inc. (NASDAQ: GTIM), today reported financial results for the fiscal fourth quarter and year ended September 29, 2020.

Key highlights of the Company's financial results include:

* Total Revenues decreased 0.9% to $28.5 million for the quarter and 0.8% to $109.9 million for the year * Total Restaurant Sales for Bad Daddy's restaurants decreased 3.8% to $19.3 million for the quarter and 4.3% to $76.3 million for the year * Total Restaurant Sales for Good Times restaurants increased 6.3% for the quarter to $9.0 million and 9.0% to $32.8 million for the year * Same Store Sales for company-owned Bad Daddy's restaurants decreased 12.2% for the quarter and decreased 17.7% for the year * Same Store Sales for company-owned Good Times restaurants increased 10.0% for the quarter and 7.9% for the year * Net Income Attributable to Common Shareholders was $1.5 million for the quarter including $0.3 million of asset impairment costs * For the year, Net Loss Attributable to Common Shareholders was $13.9 million including $15.6 million of asset impairment costs and $1.0 million of preopening costs * Adjusted EBITDA* (a non-GAAP measure) for the quarter was $2.9 million and $7.6 million for the year * The Company ended the quarter with $11.5 million in cash, a $5.5 million outstanding under its senior credit facility and $11.6 million outstanding in Paycheck Protection Program loans

Ryan M. Zink, the Company's Chief Executive Officer, said, "In spite of very significant concerns about liquidity and operating cash flow at the outset of the COVID-19 pandemic, a combination of quick decision-making, teamwork, and CARES Act relief have enabled us to fight through the initial blows the pandemic hit us with, and conclude fiscal 2020 on a positive note, with improved unit economics, improved camaraderie and culture throughout the organization, and a modestly improved balance sheet compared to the end of fiscal 2019. Both of our concepts continue to outperform their respective segments within the industry, and our leadership team continues be creative and energetic, anticipating and adapting to changes in our business driven by a pandemic that will likely be with us for the foreseeable future. We are doing everything possible to ensure we continue to operate all of our restaurants safely and to the maximum extent allowed under each location's respective regulatory guidance."

"We expect to resume Bad Daddy's development in the second half of fiscal 2021, developing the two remaining Bad Daddy's leases signed in 2019 and beginning the search for our 2022 development pipeline. However, unlike our growth model in the past, we expect our future development rate to be more modest, growing primarily out of operating cash flow and at least initially, developing only a couple of restaurants per year as we make a firm commitment to financial discipline and growing from a strong balance sheet with a minimal debt load."

Fiscal 2021 Outlook:

Due to continuing unprecedented economic conditions associated with the ongoing COVID-19 pandemic and unpredictable nature of COVID-19 and government responses to the evolving situation, the Company had previously withdrawn its prior financial outlook for fiscal 2020 and has not provided a financial outlook for 2021. In late November 2020, all twelve of the Company's Bad Daddy's locations in Colorado had additional restrictions imposed upon them resulting in the closure of dining rooms in those locations. The removal of those restrictions will be dictated by specific metrics related to the pandemic used by the State of Colorado in determining such restrictions. The Company is unable to reasonably predict when inside dining will again be allowed in its Colorado Bad Daddy's restaurants. Additionally, although no other states have at this time similarly restricted inside dining where the Company has Bad Daddy's restaurants, the possibility remains that such restrictions might be put in place with limited notice. At the current time, the Company is therefore still unable to reasonably estimate the full impact of the continuing pandemic and, beyond providing the below updates on October and November sales and a projection of Net Income and Adjusted EBITDA for the first fiscal quarter, is unable to provide a financial outlook for fiscal 2021.

The following information represents unaudited actual sales data for the first two fiscal periods of fiscal 2021:

Good Times Burgers Bad Daddy's Burger Bar & Frozen Custard

Same Average Same AverageFiscal Period Store Sales^ Weekly Sales^ Store Sales^ Weekly Sales^ 1 2 1 2

October (4 weeks) 15.0% 25,750 -2.7% 41,782

November (4 22.4% 27,185 -8.2% 39,903weeks)

^1 Same store sales include all restaurants open at least 18 full fiscalmonths.^2 Average weekly sales include all company-owned restaurants.

Consolidated net income and adjusted EBITDA for the first fiscal quarter 2021 are projected to be between $0.4 million and $0.6 million, and between $1.5 million and $1.7 million, respectively. The estimate for Adjusted EBITDA includes assumptions of approximately $1.0 million of depreciation and amortization expense, $0.1 million of interest expense, $0.1 million of non-cash stock compensation expense, and ($0.1) million of non-cash rent expense, to be used in reconciling to consolidated net income.

*For a reconciliation of restaurant level operating profit and Adjusted EBITDA to the most directly comparable financial measures presented in accordance with GAAP and a discussion of why the Company considers them useful, see the financial information schedules accompanying this release.

Conference Call: Management will host a conference call to discuss its fourth quarter 2020 and fiscal year ended September 29, 2020 financial results on Tuesday, December 15, 2020 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its Chief Executive Officer and Principal Financial Officer.

The conference call can be accessed live by dialing (888) 339-0806 and requesting the Good Times Restaurants (GTIM) call. The conference call will also be webcast live from the Company's corporate website www.goodtimesburgers.com. An archive of the webcast will be available at the same location on the corporate website shortly after the call has concluded.

About Good Times Restaurants Inc.: Good Times Restaurants Inc. (GTIM) owns, operates, franchises and licenses 39 Bad Daddy's Burger Bar restaurants through its wholly owned subsidiaries. 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. Additionally, through its wholly-owned subsidiaries, Good Times Restaurants Inc. operates and franchises a regional quick-service restaurant chain consisting of 32 Good Times Burgers & Frozen Custard restaurants located primarily in Colorado.

Forward-Looking Statements Disclaimer:

This press release contains forward-looking statements within the meaning of federal securities laws. The words "intend," "may," "believe," "will," "should," "anticipate," "expect," "seek" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause the Company's actual results to differ materially from results expressed or implied by the forward-looking statements. These risks include such factors as the disruption to our business from the novel coronavirus (COVID-19) pandemic and the impact of the pandemic on our results of operations, financial condition and prospects which may vary depending on the duration and extent of the pandemic and the impact of federal, state and local governmental actions and customer behavior in response to the pandemic, the lack of assurance that the full amount of the PPP loans will be forgiven, the uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants, delays in developing and opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or shortages in raw food products, and other matters discussed under the Risk Factors section of Good Times' Annual Report on Form 10-K for the fiscal year ended September 24, 2019 filed with the SEC, and other filings with the SEC . Good Times disclaims any obligation or duty to update or modify these forward-looking statements.

Category: Financial

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands, except per share amounts)

Fiscal Quarter Ended Year-To-Date

September September September SeptemberStatement of Operations 29, 24, 29, 24, 2020 2019 2020 2019

Net revenues:

Restaurant sales $ 28,297 $ 28,519 $ 109,078 $ 109,800

Franchise revenues 208 254 780 955

Total net revenues 28,505 28,773 109,858 110,755



Restaurant operating costs:

Food and packaging costs 8,019 8,516 31,395 32,471

Payroll and other employee 9,360 10,763 38,442 41,221 benefit costs

Restaurant occupancy costs 2,138 2,132 8,877 8,353

Other restaurant operating 3,678 3,154 13,351 11,862 costs

Preopening costs 39 825 1,031 1,774

Depreciation and 954 1,118 4,129 4,345 amortization

Total restaurant operating 24,188 26,508 97,225 100,026 costs



General and administrative 1,562 2,980 7,100 9,071 costs

Advertising costs 422 525 1,993 2,349

Franchise costs 6 7 20 38

Goodwill impairment charge - - 10,000 -

Asset impairment charge 315 2,771 5,606 2,771

Gain on disposal of (9 ) (10 ) (45 ) (5 )restaurants and equipment

Income (loss) from 2,021 (4,008 ) (12,041 ) (3,495 )operations



Other income (expense):

Interest income (expense), (115 ) (192 ) (753 ) (753 )net

Other income (expense) 0 1 - -

Total other expense (115 ) (191 ) (753 ) (753 )

Net income (loss) 1,906 (4,199 ) (12,794 ) (4,248 )

Loss (income) attributableto non-controlling (384 ) 23 (1,122 ) (889 )interests

Net Income (loss)attributable to common $ 1,522 $ (4,176 ) $ (13,916 ) $ (5,137 )shareholders



Basic and diluted income $ 0.12 $ (0.33 ) $ (1.10 ) $ (0.41 )(loss) per share



Basic and diluted weightedaverage common shares 12,601 12,540 12,595 12,523outstanding

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands)

Balance Sheet Data

September 29, 2020

September 24, 2019

Cash and cash equivalents

$

11,454

$

2,745

Current assets

13,491

4,915

Total assets1

$

99,693

$

59,905

Current maturities of long-term debt

$

6,242

$

-

Long-term debt due after one year

10,903

12,850

Stockholders' equity

$

14,983

$

28,920

1 Includes approximately $49.3 million of operating lease right of use assets recorded during 2020 as a result of the adoption of Accounting Standards Update 2016-02, Leases (Topic 842).

Supplemental Information (dollars in thousands):

Good Times Restaurants Inc.

Unaudited Supplemental Information

(In thousands)

Balance Sheet Data September 29, 2020 September 24, 2019

Cash and cash equivalents $ 11,454 $ 2,745



Current assets 13,491 4,915



Total assets^1 $ 99,693 $ 59,905



Current maturities of long-term debt $ 6,242 $ -



Long-term debt due after one year 10,903 12,850



Stockholders' equity $ 14,983 $ 28,920

1 Includes approximately $49.3 million of operating lease right of use assets recorded during 2020 as a result of the adoption of Accounting Standards Update 2016-02, Leases (Topic 842).

Supplemental Information (dollars in thousands):

Bad Daddy's Burger Bar Good Times Burgers & Frozen Custard

------------------ Fiscal Fourth Quarter------------------

2020 2019 2020 2019

Restaurant sales $ 19,287 $ 20,039 $ 9,010 $ 8,480

Restaurants opened during - 2 - -period

Restaurants closed during - - - -period

Restaurants open at period 37 35 25 26end



Restaurant operating weeks 481 432 325 338



Average weekly sales per $ 40.1 $ 46.4 $ 27.7 $ 25.1restaurant

Bad Daddy's Burger Bar

Good Times Burgers & Frozen Custard

----------------------Fiscal Year------------------------

2020

2019

2020

2019

Restaurant sales

$

76,315

$

79,753

$

32,763

$

30,047

Restaurants opened during period

2

4

-

-

Restaurants closed during period

-

-

1

-

Restaurants open at period end

37

35

25

26

Restaurant operating weeks

1,952

1,699

1,339

1,352

Average weekly sales per restaurant

$

39.1

$

46.9

$

24.5

$

22.2

Bad Daddy's Burger Bar Good Times Burgers & Frozen Custard

----------------------Fiscal Year------------------------

2020 2019 2020 2019

Restaurant sales $ 76,315 $ 79,753 $ 32,763 $ 30,047

Restaurants opened during 2 4 - -period

Restaurants closed during - - 1 -period

Restaurants open at period 37 35 25 26end



Restaurant operating weeks 1,952 1,699 1,339 1,352



Average weekly sales per $ 39.1 $ 46.9 $ 24.5 $ 22.2restaurant

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income (Loss) from Operations

(In thousands, except percentage data)

Bad Daddy's Burger Bar

Good Times Burgers & Frozen Custard

Good Times Restaurants Inc.

-------------------------------------------------- Fiscal Quarter Ended--------------------------------------------------------

September 29, 2020

September 24, 2019

September 29, 2020

September 24, 2019

Sept 29, 2020

Sept 24, 2019

Restaurant sales

$

19,287

100.0

%

$

20,040

100.0

%

$

9,010

100.0

%

$

8,480

100.0

%

$

28,297

$

28,520

Restaurant operating costs (exclusive of depreciation and amortization shown separately below):

Food and packaging costs

5,215

27.0

%

5,869

29.3

%

2,805

31.1

%

2,647

31.2

%

8,020

8,516

Payroll and benefits costs

6,491

33.7

%

7,721

38.5

%

2,868

31.8

%

3,042

35.9

%

9,359

10,763

Restaurant occupancy costs

1,424

7.4

%

1,391

6.9

%

713

7.9

%

742

8.7

%

2,137

2,133

Other restaurant operating costs

2,860

14.8

%

2,391

11.9

%

819

9.1

%

763

9.0

%

3,679

3,154

Restaurant-level operating profit

$

3,297

17.1

%

$

2,668

13.3

%

$

1,805

20.0

%

$

1,286

15.2

%

$

5,102

$

3,954

Franchise royalty income, net

208

254

Deduct - Other operating:

Depreciation and amortization

954

1,118

General and administrative

1,562

2,980

Advertising costs

422

525

Franchise costs

6

7

Gain on restaurant asset sale

(9

)

(10

)

Impairment of long-lived assets

315

2,771

Pre-opening costs

39

825

Total other operating

3,289

8,216

Income (loss) from operations

$

2,021

$

(4,008

)

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income (Loss)from Operations

(In thousands, except percentage data)

Bad Daddy's Burger Bar Good Times Burgers & Frozen Good Times Custard Restaurants Inc.

-------------------------------------------------- Fiscal Quarter Ended--------------------------------------------------------

September 29, September 24, September 29, September 24, Sept 29, Sept 24, 2020 2019 2020 2019 2020 2019



Restaurant sales $ 19,287 100.0 % $ 20,040 100.0 % $ 9,010 100.0 % $ 8,480 100.0 % $ 28,297 $ 28,520

Restaurantoperating costs(exclusive ofdepreciation and amortizationshown separatelybelow):

Food and 5,215 27.0 % 5,869 29.3 % 2,805 31.1 % 2,647 31.2 % 8,020 8,516 packaging costs

Payroll and 6,491 33.7 % 7,721 38.5 % 2,868 31.8 % 3,042 35.9 % 9,359 10,763 benefits costs

Restaurant 1,424 7.4 % 1,391 6.9 % 713 7.9 % 742 8.7 % 2,137 2,133 occupancy costs

Other restaurant 2,860 14.8 % 2,391 11.9 % 819 9.1 % 763 9.0 % 3,679 3,154 operating costs

Restaurant-level $ 3,297 17.1 % $ 2,668 13.3 % $ 1,805 20.0 % $ 1,286 15.2 % $ 5,102 $ 3,954 operating profit



Franchiseroyalty income, 208 254 net

Deduct - Other operating:

Depreciation and 954 1,118 amortization

General and 1,562 2,980 administrative

Advertising 422 525 costs

Franchise costs 6 7

Gain onrestaurant asset (9 ) (10 )sale

Impairment oflong-lived 315 2,771 assets

Pre-opening 39 825 costs

Total other 3,289 8,216 operating



Income (loss) $ 2,021 $ (4,008 )from operations

Certain percentage amounts in the table above do not total due to rounding aswell as the fact that restaurant operating costs are expressed as a percentageof restaurant revenues (as opposed to total revenues).

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income (Loss) from Operations

(In thousands, except percentage data)

Bad Daddy's Burger Bar

Good Times Burgers & Frozen Custard

Good Times Restaurants Inc.

--------------------------------------------------------------- Year to Date-------------------------------------------------------------------

September 29, 2020

September 24, 2019

September 29, 2020

September 24, 2019

Sept 29, 2020

Sept 24, 2019

Restaurant sales

$

76,315

100.0

%

$

79,753

100.0

%

$

32,763

100.0

%

$

30,047

100.0

%

$

109,078

$

109,800

Restaurant operating costs (exclusive of depreciation and amortization shown separately below):

Food and packaging costs

21,323

27.9

%

23,006

28.8

%

10,072

30.7

%

9,465

31.5

%

31,395

32,471

Payroll and other employee benefit costs

27,465

36.0

%

30,224

37.9

%

10,977

33.5

%

10,997

36.6

%

38,442

41,221

Restaurant occupancy costs

6,025

7.9

%

5,413

6.8

%

2,852

8.7

%

2,940

9.8

%

8,877

8,353

Other restaurant operating costs

10,409

13.6

%

9,161

11.5

%

2,942

9.0

%

2,701

9.0

%

13,351

11,862

Restaurant-level operating profit

$

11,093

14.5

%

$

11,949

15.0

%

$

5,920

18.1

%

$

3,944

13.1

%

$

17,013

$

15,893

Franchise royalty income, net

780

955

Deduct - Other operating:

Depreciation and amortization

4,129

4,345

General and administrative

7,100

9,071

Advertising costs

1,993

2,349

Franchise costs

20

38

Gain on restaurant asset sale

(45

)

(5

)

Impairment of goodwill

10,000

-

Impairment of long-lived assets

5,606

2,771

Pre-opening costs

1,031

1,774

Total other operating

29,834

20,343

Loss from operations

$

(12,041

)

$

(3,495

)

Certain percentage amounts in the table above do not total due to rounding as well as the fact that restaurant operating costs are expressed as a percentage of restaurant revenues (as opposed to total revenues).

The Company believes that restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant-level occupancy costs, which includes fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation. The measure excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes selling, general and administrative costs, and therefore excludes occupancy costs associated with selling, general and administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do not represent a component of the efficiency of continuing operations. Restaurant impairment costs are excluded, because similar to depreciation and amortization, they represent a non-cash charge for the Company's investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with generally accepted accounting principles ("GAAP") and should not be considered in isolation, or as an alternative, to income from operations or net income as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The tables above set forth certain unaudited information for the current and prior year fiscal quarters and year-to-date periods for fiscal 2020 and fiscal 2019, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

Reconciliation of Non-GAAP Measurements to U.S. GAAP Results

Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income (Loss)from Operations

(In thousands, except percentage data)

Bad Daddy's Burger Bar Good Times Burgers & Frozen Custard Good Times Restaurants Inc.

--------------------------------------------------------------- Year to Date-------------------------------------------------------------------

September 29, September 24, September 29, September 24, Sept 29, Sept 24, 2020 2019 2020 2019 2020 2019



Restaurant sales $ 76,315 100.0 % $ 79,753 100.0 % $ 32,763 100.0 % $ 30,047 100.0 % $ 109,078 $ 109,800



Restaurantoperating costs(exclusive ofdepreciation and amortizationshownseparatelybelow):

Food and 21,323 27.9 % 23,006 28.8 % 10,072 30.7 % 9,465 31.5 % 31,395 32,471 packaging costs

Payroll andother employee 27,465 36.0 % 30,224 37.9 % 10,977 33.5 % 10,997 36.6 % 38,442 41,221 benefitcosts

Restaurant 6,025 7.9 % 5,413 6.8 % 2,852 8.7 % 2,940 9.8 % 8,877 8,353 occupancy costs

Other restaurant 10,409 13.6 % 9,161 11.5 % 2,942 9.0 % 2,701 9.0 % 13,351 11,862 operating costs

Restaurant-level $ 11,093 14.5 % $ 11,949 15.0 % $ 5,920 18.1 % $ 3,944 13.1 % $ 17,013 $ 15,893 operating profit



Franchiseroyalty income, 780 955 net

Deduct - Other operating:

Depreciation and 4,129 4,345 amortization

General and 7,100 9,071 administrative

Advertising 1,993 2,349 costs

Franchise costs 20 38

Gain onrestaurant asset (45 ) (5 )sale

Impairment of 10,000 - goodwill

Impairment oflong-lived 5,606 2,771 assets

Pre-opening 1,031 1,774 costs

Total other 29,834 20,343 operating



Loss from $ (12,041 ) $ (3,495 )operations

Certain percentage amounts in the table above do not total due to rounding aswell as the fact that restaurant operating costs are expressed as a percentageof restaurant revenues (as opposed to total revenues).

The Company believes that restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant-level occupancy costs, which includes fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation. The measure excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes selling, general and administrative costs, and therefore excludes occupancy costs associated with selling, general and administrative functions, and pre-opening costs. The Company excludes restaurant closure costs as they do not represent a component of the efficiency of continuing operations. Restaurant impairment costs are excluded, because similar to depreciation and amortization, they represent a non-cash charge for the Company's investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with generally accepted accounting principles ("GAAP") and should not be considered in isolation, or as an alternative, to income from operations or net income as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies. The tables above set forth certain unaudited information for the current and prior year fiscal quarters and year-to-date periods for fiscal 2020 and fiscal 2019, expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenues.

Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA (Thousands ofUS Dollars)

Fiscal Quarter Ended Year-to-Date

Sept 29, Sept 24, Sept 29, Sept 24, 2020 2019 2020 2019

Adjusted EBITDA:

Net income (loss), as reported $ 1,522 $ (4,176 ) $ (13,916 ) $ (5,137 )

Depreciation and amortization ^ 942 1,105 4,082 4,262 1

Interest expense, net 115 191 753 753

EBITDA 2,579 (2,880 ) (9,081 ) (122 )

Pre-opening expense ^1 40 824 1,032 1,752

Non-cash stock-based 60 388 283 719 compensation

Non-recurring severance costs - 731 - 731

GAAP rent-cash rent difference (88 ) (61 ) (207 ) (111 )

Gain on disposal of assets (9 ) (9 ) (45 ) (5 )

Goodwill impairment charge - - 10,000 -

Asset impairment charge ^1 315 2,476 5,606 2,476

Adjusted EBITDA $ 2,897 $ 1,469 $ 7,588 $ 5,440

Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by GAAP, and our calculation thereof may not be comparable to that reported by other companies. This measure is presented because we believe that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for evaluating our ongoing results of operations.

Adjusted EBITDA is calculated as net income (loss) before interest expense, provision for income taxes and depreciation and amortization and further adjustments to reflect the additions and eliminations presented in the table above.

Adjusted EBITDA is presented because: (i) we believe it is a useful measure for investors to assess the operating performance of our business without the effect of non-cash charges such as depreciation and amortization expenses and asset disposals, closure costs and restaurant impairments, and (ii) we use adjusted EBITDA internally as a benchmark for certain of our cash incentive plans and to evaluate our operating performance or compare our performance to that of our competitors. The use of adjusted EBITDA as a performance measure permits a comparative assessment of our operating performance relative to our performance based on our GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. Companies within our industry exhibit significant variations with respect to capital structures and cost of capital (which affect interest expense and income tax rates) and differences in book depreciation of property, plant and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Our management believes that adjusted EBITDA facilitates company-to-company comparisons within our industry by eliminating some of these foregoing variations. Adjusted EBITDA, as presented, may not be comparable to other similarly-titled measures of other companies, and our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by excluded or unusual items.

______________________________________________________

1 Depreciation and amortization, preopening expense, and asset impairment charge have been reduced by any amounts attributable to non-controlling interests.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201215005077/en/

CONTACT: Ryan M. Zink, President and Chief Executive Officer (303) 384-1432 Christi Pennington (303) 384-1440