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Good Times Restaurants Reports Q3 Results

August 9, 2018

DENVER--(BUSINESS WIRE)--Aug 9, 2018--Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Good Times Burgers & Frozen Custard, a regional quick service restaurant chain focused on fresh, high quality, all natural products and Bad Daddy’s Burger Bar, a full service, upscale concept, today announced its preliminary unaudited financial results for the third fiscal quarter ended June 26, 2018.

Key highlights of the Company’s financial results include:

Same store sales for company-owned Good Times restaurants increased 3.8% for the quarter on top of last year’s increase of 3.7%. Year to date, same store sales increased 4.9% versus last year’s increase of 1.2% Bad Daddy’s same store sales increased 0.5% during the quarter over the prior year’s increase of 0.1%. Year to date, same store sales increased 0.5% versus last year’s increase of 1.7%. Same store sales exclude the weeks during which the original Bad Daddy’s in Charlotte, NC was closed for remodeling. Total revenues increased 20% to $26,175,000 for the quarter The Company opened two new Bad Daddy’s restaurants during the quarter for a total of five new restaurants opened through the third quarter of 2018. Subsequent to the end of the quarter, the Company opened an additional two restaurants and expects to open two more before the end of the fiscal year for a total of nine new restaurants in fiscal 2018 Sales for the Bad Daddy’s restaurants for the quarter increased 37% versus last year to $17,765,000 Restaurant Level Operating Profit (a non-GAAP measure) increased 26.8% to $4,779,000 (18.4% as a percent of sales) from $3,770,000 (17.5% as a percent of sales)* Adjusted EBITDA (a non-GAAP measure) for the quarter increased 36.6% to $1,907,000 from $1,396,000 last year* The Company ended the quarter with $3.2 million in cash and $5.1 million of long-term debt

Boyd Hoback, President & CEO, said, “We are very pleased with our continued growth in same store sales at both brands as well as our improved operating margins. Our class of 2018 Bad Daddy’s openings have been very strong on average and we anticipate they will be settling into a sales trend post-honeymoon at or above our system average. We are now operating in seven different metropolitan areas and are on track to enter three to four additional new areas in fiscal 2019, as we continue our expansion focused primarily on the Southeast.”

Regarding initial fiscal 2019 guidance, Ryan Zink, Chief Financial Officer, commented, “The strength of our new Bad Daddy’s restaurants opened during the 2018 fiscal year has generated cash for development which has limited our need to incur any significant incremental debt, and that has created a strong foundation on which to continue development in 2019. With this growth, we expect Adjusted EBITDA of between $7.6 and $8.1 million for the 2019 fiscal year, with an estimated run rate at the end of the fiscal year that approaches $10 million, consistent with our prior commentary projecting continued 40% annual growth in our Adjusted EBITDA.”

Fiscal 2018 Outlook:

The Company provided the following guidance for fiscal 2018:

Total revenues of approximately $99 million to $100 million with a year-end revenue run rate of approximately $110 million Total revenue estimates assume same store sales of approximately +1% for Good Times and flat to slightly positive for Bad Daddy’s in Q4 General and administrative expenses of approximately $7.9 million, including approximately $500,000 of non-cash equity compensation expense The opening of a total of 4 new Bad Daddy’s restaurants (including 1 joint venture unit) in Q4, for a total of 9 new restaurants during the full fiscal year Total Adjusted EBITDA* of approximately $5.4 million to $5.6 million Restaurant pre-opening expenses of approximately $2.7 million Capital expenditures (net of tenant improvement allowances and sale-leaseback proceeds) of approximately $8.5 to $9.0 million including approximately $0.6 million related to fiscal 2019 development Fiscal year-end long term debt of approximately $9.0 to $9.5 million

Fiscal 2019 Outlook:

The Company provided the following initial guidance for fiscal 2019:

Total revenues of approximately $120 million to $123 million with a year-end revenue run rate of approximately $130 million Total revenue estimates assume same store sales of approximately +2% for Good Times, excluding Q2 where we project flat comparable sales, and assumes +1% for Bad Daddy’s General and administrative expenses of approximately $8.7 to $9.0 million, including approximately $600,000 of non-cash equity compensation expense The opening of a total of 7 - 9 new company-owned Bad Daddy’s restaurants Total Adjusted EBITDA* of approximately $7.6 million to $8.1 million Restaurant pre-opening expenses of approximately $2.5 million to $3.0 million Capital expenditures (net of tenant improvement allowances) of approximately $11.0 – $11.5 million Fiscal year-end long term debt of approximately $13.0 - $13.5 million

*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 third quarter 2018 financial results on Thursday, August 9, 2018 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Boyd Hoback, President and Chief Executive Officer, and Ryan Zink, Chief Financial Officer.

The conference call can be accessed live over the phone 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 under the Investor section. 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) operates Good Times Burgers & Frozen Custard, a regional chain of quick service restaurants located primarily in Colorado, through its wholly-owned subsidiary, Good Times Drive Thru Inc. Good Times provides a menu of high quality all-natural hamburgers, 100% all-natural chicken tenderloins, fresh frozen custard, natural cut fries, fresh lemonades and other unique offerings. Good Times currently operates and franchises a total of 36 restaurants.

GTIM also owns, operates, franchises and licenses 31 Bad Daddy’s Burger Bar restaurants through its wholly-owned subsidiaries. Bad Daddy’s Burger Bar is a full service, upscale, “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.

Good Times Forward Looking Statements: 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 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 26, 2017 filed with the SEC. Although Good Times may from time to time voluntarily update its forward-looking statements, it disclaims any commitment to do so except as required by securities laws.

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