8-K
Good Times Restaurants Inc. (GTIM)
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 16, 2021
(Exact name of registrant as specified in its charter)
| Nevada | 000-18590 | 84-1133368 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 651 Corporate Circle, Suite 200, Golden, CO 80401 | ||
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| (Address of principal executive offices including zip code) | ||
| Registrant’s telephone number, including area code: (303) 384-1400 | ||
| Not applicable | ||
| (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchangeon which registered |
|---|---|---|
| Common Stock, $0.001 par value | GTIM | Nasdaq Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
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On December 16, 2021 Good Times Restaurants Inc. issued a press release announcing earnings and other financial results for its fiscal quarter and year ended September 28, 2021 and that management would review these results in a conference call on December 16, 2021 at 5:00 p.m. ET.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report.
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release dated December 16, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GOOD TIMES RESTAURANTS INC. | |||
|---|---|---|---|
| Date: | December 16, 2021 | By: |  |
| Ryan M. Zink | |||
| Chief Executive Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
| December 16, 2021 | Nasdaq Capital Markets - GTIM |
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GOOD TIMES RESTAURANTS REPORTS RESULTS FOR
THE FOURTH QUARTER AND YEAR ENDED SEPTEMBER 28, 2021
(GOLDEN, CO) Good Times Restaurants Inc. (Nasdaq: GTIM), operator of Bad Daddy’s Burger Bar and Good Times Burgers & Frozen Custard, today reported financial results for the fiscal fourth quarter and year ended September 28, 2021.
Key highlights of the Company’s financial results include:
| · | Total Revenues increased 12.8% to $124.0 million<br>for the year compared to fiscal 2020 |
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| · | Total Restaurant Sales increased 17.6% to $33.5<br>million for the quarter compared to the same prior-year quarter and 12.8% to $123.1 million for the year |
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| · | Total Restaurant Sales for Bad Daddy’s<br>restaurants increased $5.2 million to $24.5 million for the quarter compared to the same prior-year quarter and 16.1% to $88.6 million<br>for the year |
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| · | Same Store Sales^1^<br>for company-owned Bad Daddy’s restaurants increased 22.8% for the quarter and 18.2% for the fiscal year |
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| · | Total Restaurant Sales for Good Times restaurants<br>were $8.8 million for the quarter and $34.5 million for the year |
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| · | Same Store Sales for company-owned Good Times<br>restaurants decreased 0.2% for the quarter and increased 10.5% for the fiscal year |
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| · | The Company opened one traditional Bad Daddy’s<br>restaurant and one non-traditional location (Bad Daddy’s at Tivoli) during the quarter |
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| · | Net Income Attributable to Common Shareholders<br>was $1.3 million for the quarter |
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| · | Net Income Attributable to Common Shareholders<br>was $16.8 million for the year |
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| · | Adjusted EBITDA^2^<br>(a non-GAAP measure) for the quarter was $2.5 million and $9.6 million for the year |
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| · | The Company ended the quarter with $8.9 million<br>in cash and no borrowings outstanding under its senior credit facility |
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Ryan M. Zink, the Company’s President and Chief Executive Officer, said, “We concluded our fiscal year with record sales at both of our brands and for the Company as a whole. This sales strength, particularly at Bad Daddy’s, has continued into the first quarter of fiscal 2022. I am extremely proud of our team for successfully battling through the varied challenges that our industry has faced in the wake of the pandemic. In addition to generating record sales, through strong operations, we have also achieved record profitability in fiscal 2021.”
Mr. Zink continued, “We expect 2022 to be equally challenging. The industry faces increasing inflationary pressure, supply chain constraints, and an extremely tight staffing market. As consistent in the industry, we have raised prices and expect to increase prices in the future, however, we will be disciplined in doing so, expecting some margin compression as menu price increases occur at a slower rate than our input prices are increasing. We remain committed to the long-term success of both of our brands and all decisions we make will support that commitment. I have continued confidence in our strong team that has proven itself adaptable and capable of navigating an unpredictable operating environment.”
^1^ Same store sales are a metric used in evaluating the performance of established restaurants and is a commonly used metric in the restaurant industry. Same store sales for our brands are calculated using all units open for at least 18 full fiscal months and use the comparable operating weeks from the prior year to the current year quarter’s operating weeks.
^2^ For a reconciliation of 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.
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Fiscal 2022 Outlook:
In light of the ongoing uncertainty surrounding COVID-19, impacts of supply chain constraints and the current inflationary environment, the Company is not, at this point, providing a financial forecast for fiscal 2022.
Although all Bad Daddy’s dining rooms are currently open and capacity restrictions have been lifted in most locations, the possibility remains that temporary closures and/or capacity restrictions might be put in place with limited notice. Should such restrictions be mandated or should customer behaviors be altered by changing public health guidance or perceptions related to COVID-19, the Company could adjust financial performance expectations.
Conference Call: Management will host a conference call to discuss its 2021 fourth quarter and fiscal year end financial results on Thursday, December 16, 2021 at 3:00 p.m. MT/5:00 p.m. ET. Hosting the call will be Ryan M. Zink, its President and Chief Executive Officer.
The conference call can be accessed live over the phone by dialing 844-200-6205 and entering Participant access code 827058. 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 42 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 beers in a high-energy atmosphere that appeals to a broad consumer base. Additionally, through its wholly-owned subsidiaries, Good Times Restaurants Inc. owns, 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 impact and duration of staffing constraints at our restaurants, 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 28, 2021, 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.
**Good Times Restaurants Inc.**CONTACTS:
Ryan M. Zink, President and Chief Executive Officer (303) 384-1432
Christi Pennington (303) 384-1440
Category: Financial
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Good Times Restaurants Inc.
Unaudited Supplemental Information
(In thousands, except per share amounts)
| Fiscal Quarter Ended | Year-To-Date | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Statement of Operations | September 28,<br> 2021 | September 29,<br> 2020 | September 28,<br> 2021 | September 29,<br> 2020 | ||||||||
| Net revenues: | ||||||||||||
| Restaurant sales | $ | 33,281 | $ | 28,297 | $ | 123,058 | $ | 109,078 | ||||
| Franchise revenues | 238 | 208 | 895 | 780 | ||||||||
| Total net revenues | 33,519 | 28,505 | 123,953 | 109,858 | ||||||||
| Restaurant operating costs: | ||||||||||||
| Food and packaging costs | 10,127 | 8,350 | 36,164 | 32,599 | ||||||||
| Payroll and other employee benefit costs | 11,262 | 9,465 | 41,049 | 38,762 | ||||||||
| Restaurant occupancy costs | 2,282 | 2,136 | 8,815 | 8,875 | ||||||||
| Other restaurant operating costs | 4,070 | 3,349 | 14,911 | 12,148 | ||||||||
| Preopening costs | 346 | 39 | 766 | 1,031 | ||||||||
| Depreciation and amortization | 1,045 | 954 | 3,842 | 4,129 | ||||||||
| Total restaurant operating costs | 29,132 | 24,293 | 105,547 | 97,544 | ||||||||
| General and administrative costs | 2,340 | 1,457 | 9,437 | 6,781 | ||||||||
| Advertising costs | 466 | 422 | 2,082 | 1,993 | ||||||||
| Franchise costs | 5 | 6 | 27 | 20 | ||||||||
| Goodwill impairment charge | - | - | - | 10,000 | ||||||||
| Asset impairment charge | - | 315 | - | 5,606 | ||||||||
| Gain on disposal of restaurants and equipment | (9 | ) | (9 | ) | (37 | ) | (45 | ) | ||||
| Income (loss) from operations | 1,585 | 2,021 | 6,897 | (12,041 | ) | |||||||
| Other income (expense): | ||||||||||||
| Interest income (expense), net | (25 | ) | (115 | ) | (269 | ) | (753 | ) | ||||
| Gain on debt extinguishment | - | - | 11,778 | - | ||||||||
| Total other expense | (25 | ) | (115 | ) | 11,509 | (753 | ) | |||||
| Net income (loss) before income taxes | 1,560 | 1,906 | 18,406 | (12,794 | ) | |||||||
| Provision for income taxes | 6 | - | 6 | - | ||||||||
| Net income (loss) | 1,554 | 1,906 | 18,400 | (12,794 | ) | |||||||
| Loss (income) attributable to non-controlling interests | (300 | ) | (384 | ) | (1,613 | ) | (1,122 | ) | ||||
| Net Income (loss) attributable to common shareholders | $ | 1,254 | $ | 1,522 | $ | 16,787 | $ | (13,916 | ) | |||
| Basic income (loss) per share | $ | 0.10 | $ | 0.12 | $ | 1.32 | $ | (1.10 | ) | |||
| Diluted income (loss) per share | $ | 0.10 | $ | 0.12 | $ | 1.31 | $ | (1.10 | ) | |||
| Basic weighted average common shares outstanding | 12,778 | 12,601 | 12,677 | 12,595 | ||||||||
| Diluted weighted average common shares outstanding | 13,085 | 12,601 | 12,828 | 12,595 |
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Good Times Restaurants Inc.
Unaudited Supplemental Information
(In thousands)
| Balance Sheet Data | September 28, 2021 | September 29, 2020 | ||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 8,856 | $ | 11,454 |
| Current assets | 11,444 | 13,491 | ||
| Total assets^1^ | $ | 93,681 | $ | 99,693 |
| Current maturities of long-term debt | $ | - | $ | - |
| Long-term debt due after one year | - | 10,903 | ||
| Stockholders’ equity | $ | 30,870 | $ | 14,983 |
^1^Includes operating lease right-of-use assets.
Supplemental Information^#^ (dollars in thousands):
| Bad Daddy’s Burger Bar | Good Times Burgers &<br> Frozen Custard | |||||||
|---|---|---|---|---|---|---|---|---|
| -----------------------------------Fiscal Fourth Quarter----------------------------------- | ||||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Restaurant sales | $ | 24,447 | $ | 19,287 | $ | 8,768 | $ | 9,010 |
| Restaurants opened during period | 2 | - | - | - | ||||
| Restaurants closed during period | - | - | - | - | ||||
| Restaurants open at period end | 39 | 37 | 24 | 25 | ||||
| Restaurant operating weeks | 496 | 481 | 312 | 325 | ||||
| Average weekly sales per restaurant | $ | 49.3 | $ | 40.1 | $ | 28.1 | $ | 27.7 |
| Bad Daddy’s Burger Bar | Good Times Burgers &<br> Frozen Custard | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| -----------------------------------Fiscal Year----------------------------------- | ||||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Restaurant sales | $ | 88,529 | $ | 76,315 | $ | 34,463 | $ | 32,763 |
| Restaurants opened during period | 2 | 2 | - | - | ||||
| Restaurants closed during period | - | - | 1 | 1 | ||||
| Restaurants open at period end | 39 | 37 | 24 | 25 | ||||
| Restaurant operating weeks | 1,943 | 1,952 | 1,254 | 1,339 | ||||
| Average weekly sales per restaurant | $ | 45.6 | $ | 39.1 | $ | 27.5 | $ | 24.5 |
^*^Information in the above tables exclude the non-traditional Bad Daddy’s at Tivoli restaurant.
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Reconciliation of Non-GAAP Measurements to U.S. GAAP Results
Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Income from Operations
(In thousands, except percentage data)
| Bad<br> Daddy’s Burger Bar | Good<br> Times Burgers & Frozen Custard | Good<br> Times <br> Restaurants Inc. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ---------------------------------------------------------Fiscal Quarter Ended--------------------------------------------------------- | ||||||||||||||||||||||
| September<br> 28, <br><br>2021 | September<br> 29, <br><br>2020 | September<br> 28, <br><br>2021 | September<br> 29, <br><br>2020 | Sept<br> 29,<br> 2021 | Sept<br> 29,<br> 2020 | |||||||||||||||||
| Restaurant sales | $ | 24,513 | 100.0 | % | $ | 19,287 | 100.0 | % | $ | 8,768 | 100.0 | % | $ | 9,010 | 100.0 | % | $ | 33,281 | $ | 28,297 | ||
| Restaurant operating costs <br><br>(exclusive of depreciation and<br> amortization<br> shown separately<br> below): | ||||||||||||||||||||||
| Food and packaging costs | 7,629 | 31.1 | % | 5,545 | 28.7 | % | 2,498 | 28.5 | % | 2,805 | 31.1 | % | 10,127 | 8,350 | ||||||||
| Payroll and benefits costs | 8,414 | 34.3 | % | 6,597 | 34.2 | % | 2,848 | 32.5 | % | 2,868 | 31.8 | % | 11,262 | 9,465 | ||||||||
| Restaurant occupancy costs | 1,608 | 6.6 | % | 1,423 | 7.4 | % | 674 | 7.7 | % | 713 | 7.9 | % | 2,282 | 2,136 | ||||||||
| Other restaurant operating costs | 3,195 | 13.0 | % | 2,530 | 13.1 | % | 875 | 10.0 | % | 819 | 9.1 | % | 4,070 | 3,349 | ||||||||
| Restaurant-level operating<br> profit | $ | 3,667 | 15.0 | % | $ | 3,192 | 17.1 | % | $ | 1,873 | 21.4 | % | $ | 1,805 | 20.0 | % | $ | 5,540 | $ | 4,997 | ||
| Franchise royalty income, net | 238 | 208 | ||||||||||||||||||||
| Deduct - Other operating: | ||||||||||||||||||||||
| Depreciation and amortization | 1,045 | 954 | ||||||||||||||||||||
| General and administrative | 2,340 | 1,457 | ||||||||||||||||||||
| Advertising costs | 466 | 422 | ||||||||||||||||||||
| Franchise costs | 5 | 6 | ||||||||||||||||||||
| Gain on restaurant asset sale | (9 | ) | (9 | ) | ||||||||||||||||||
| Impairment of long-lived assets | - | 315 | ||||||||||||||||||||
| Pre-opening costs | 346 | 39 | ||||||||||||||||||||
| Total other operating | 4,193 | 3,184 | ||||||||||||||||||||
| Income from operations | $ | 1,585 | $ | 2,021 |
Certain percentage amounts in the table abovedo 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).
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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<br> Daddy’s Burger Bar | Good Times Burgers & Frozen Custard | Good Times Restaurants Inc. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ---------------------------------------------------------Year<br> to Date--------------------------------------------------------- | ||||||||||||||||||||||
| September<br> 28, <br><br>2021 | September<br> 29, <br><br>2020 | September<br> 28, <br><br>2021 | September<br> 29, <br><br>2020 | Sept<br> 29,<br> 2021 | Sept<br> 29,<br> 2020 | |||||||||||||||||
| Restaurant sales | $ | 88,595 | 100.0 | % | $ | 76,315 | 100.0 | % | $ | 34,463 | 100.0 | % | $ | 32,763 | 100.0 | % | $ | 123,058 | $ | 109,078 | ||
| Restaurant operating costs (exclusive of<br> depreciation and amortization<br> shown<br> separately below): | ||||||||||||||||||||||
| Food and packaging costs | 26,123 | 29.5 | % | 22,527 | 29.5 | % | 10,041 | 29.1 | % | 10,072 | 30.7 | % | 36,164 | 32,599 | ||||||||
| Payroll and other employee benefit<br> costs | 30,058 | 33.9 | % | 27,790 | 36.4 | % | 10,991 | 31.9 | % | 10,972 | 33.5 | % | 41,049 | 38,762 | ||||||||
| Restaurant occupancy costs | 5,960 | 6.7 | % | 6,023 | 7.9 | % | 2,855 | 8.3 | % | 2,852 | 8.7 | % | 8,815 | 8,875 | ||||||||
| Other restaurant operating costs | 11,643 | 13.1 | % | 9,208 | 12.1 | % | 3,268 | 9.5 | % | 2,940 | 9.0 | % | 14,911 | 12,148 | ||||||||
| Restaurant-level operating<br> profit | $ | 14,811 | 16.7 | % | $ | 10,767 | 14.1 | % | $ | 7,308 | 21.2 | % | $ | 5,927 | 18.1 | % | $ | 22,119 | $ | 16,694 | ||
| Franchise royalty income, net | 895 | 780 | ||||||||||||||||||||
| Deduct - Other operating: | ||||||||||||||||||||||
| Depreciation and amortization | 3,842 | 4,129 | ||||||||||||||||||||
| General and administrative | 9,437 | 6,781 | ||||||||||||||||||||
| Advertising costs | 2,082 | 1,993 | ||||||||||||||||||||
| Franchise costs | 27 | 20 | ||||||||||||||||||||
| Gain on restaurant asset sale | (37 | ) | (45 | ) | ||||||||||||||||||
| Impairment of goodwill | - | 10,000 | ||||||||||||||||||||
| Impairment of long-lived assets | - | 5,606 | ||||||||||||||||||||
| Pre-opening costs | 766 | 1,031 | ||||||||||||||||||||
| Total other operating | 16,117 | 29,834 | ||||||||||||||||||||
| Income (loss) from operations | $ | 6,897 | $ | (12,041 | ) |
Certain percentage amounts in the table abovedo 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).
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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 2021 and fiscal 2020, 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-GAAPAdjusted EBITDA (Thousands of US Dollars)
| Fiscal Quarter Ended | Year-to-Date | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sept 28,<br> 2021 | Sept 29,<br> 2020 | Sept 28,<br> 2021 | Sept 29,<br> 2020 | |||||||||
| Adjusted EBITDA: | ||||||||||||
| Net income (loss), as reported | $ | 1,254 | $ | 1,522 | $ | 16,787 | $ | (13,916 | ) | |||
| Depreciation and amortization ^1^ | 1,025 | 942 | 3,770 | 4,082 | ||||||||
| Provision for income taxes | 6 | - | 6 | - | ||||||||
| Interest expense, net | 24 | 115 | 269 | 753 | ||||||||
| EBITDA | 2,309 | 2,579 | 20,832 | (9,081 | ) | |||||||
| Pre-opening expense | 346 | 40 | 766 | 1,032 | ||||||||
| Non-cash stock-based compensation | 36 | 60 | 362 | 283 | ||||||||
| GAAP rent-cash rent difference | (228 | ) | (88 | ) | (508 | ) | (207 | ) | ||||
| Gain on disposal of assets | (9 | ) | (9 | ) | (37 | ) | (45 | ) | ||||
| Goodwill impairment charge | - | - | - | 10,000 | ||||||||
| Gain on debt extinguishment | - | - | (11,778 | ) | - | |||||||
| Asset impairment charge ^1^ | - | 315 | - | 5,606 | ||||||||
| Adjusted EBITDA | $ | 2,454 | $ | 2,897 | $ | 9,637 | $ | 7,588 |
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.
^1^ Depreciation and amortization, and asset impairment charge have been reduced by any amounts attributable to non-controlling interests.
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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.
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