Boyd Hoback - President and CEO Scott LeFever - Chief Operating Officer Susan Knutson - Controller.

Alex Fuhrman - Craig-Hallum Capital Group Tony Brenner - ROTH Capital Partners Unidentified Analyst - Dorothy and Company John Ziegelman - Wolverine Asset Management.

Good morning ladies and gentlemen. Welcome to the Good Times Restaurants, Inc. Fourth Quarter and Fiscal Yearend 2014 Earnings Call. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of the federal securities laws.

These statements are commonly identified by words such as "anticipate," "continue," "plan," "expect," "intend," "should," "will," and other terms with similar meanings. These statements include but will not be limited to statements that reflect the company's current expectations with respect to the macroeconomic and competitive environment.

The financial conditions of the company, results of operations, plans, objectives, future performance including the company's initiatives and strategy, sales growth, operating margins, cost, expenses, the point (ph) of capital, restaurant development and their remodels, new market development, franchise development, and other expectations, within the course of this call.

Although the company believes the assumptions upon which preliminary or initial results, financial information and forward-looking statements are based are reasonable as of today's date, these forward-looking statements are not guarantees of future performance and therefore investors should not place undue reliance on them.

Also these statements are based on facts known and expected as of the date of this conference call, and the company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call.

Participants on the call today should refer to the company's Form 10-K and other filings with the SEC for a more detailed discussion of risk, uncertainties and other factors that could impact the company's future operating results and financial conditions.

The company has posted it's fiscal fourth quarter and yearend 2014 press release and supplemental financial information related to the quarter's results on this website at www.goodtimesburgers.com in the investor section. And now I would like to turn the call over to Mr. Boyd Hoback, President and CEO of Good Times. Please go ahead, sir..

Thank you, Shannon and thanks everyone for joining us this morning. With me today are Su Knutson, our Controller and Scott LeFever, our Chief Operating Officer for Good Times. After we deliver our prepared remarks, we will be available for questions.

As I stated in my shareholder letter of January 8th earlier this year we believe we are at a historic inflection point as we continue our transition to a more broadly held emerging growth company and we continue to make significant progress in 2014 with both our fundamental financial performance as well as setting the stage for what we believe will be accelerated growth in fiscal 2015 and beyond.

Our restaurant level sales, margins and unit economics are performing well. We've successfully curbed a unique niche for our Good Times concept in one of the most competitive markets in the country. And our goal now is to accelerate our unit level growth in both of our concepts.

We are continuing to put in place the requisite management and overhead structure to manage that growth. Almost a 100% of our series A and B warrants were exercised. So we've got a very strong balance sheet with cash representing approximately 20% of our total market cap and a clean capital structure with minimal long-term debt.

We continue to see very robust same-store sales growth in Good Times. This was our 17th consecutive quarter of same-store sales growth with double-digit increases on top of double-digit prior year increases in the fourth quarter.

During our first quarter of fiscal 2015 we continued to see double-digit comps in October but those decreased to single-digit in November primarily due to the impact of eight days of the polar plunge when sales were off by over 20% for those eight days. Those have rebounded subsequent to that.

We also see continued growth in both transactions and our average check. We anticipate or estimate that our fourth quarter sales growth was comprised of about 3.2% transaction growth, 4.4% pricing, and 4.3% growth in our check for MenuMax. We began to lap our double-digit upon double-digit same-store sales growth in our third fiscal 2015 quarter.

So we certainly anticipate that we will begin to moderate to single-digit same-store sales growth on Good Times. Our average store volume at Good Times is now over 1.1 million and our more recent dining room store's average over $1.2 million in sales.

Our newest store that opened at the end of November opened with very high volume approximately double our store weekly average and while it's still in its honeymoon period, we anticipate that it will be an above average volume store for us.

Our sales growth in fiscal 2014 was the result of continued core brand, communications around our fresh or natural handcrafted umbrella supported by specific product introductions with four distinct television windows.

We plan to continue our cable TV marketing campaign featuring our illustrated animated story board elements with additional new product support, and we've got a good pipeline of product development for the next year.

We focused our new product development on ideas that both fit our brand umbrella but that are also unique to Good Times in the quick service restaurant category. In addition to four television windows we have plan for fiscal 2015.

We are also expanding our social, media and digital presence to include YouTube pre-rolls and Hulu ads, and we continue to see a tremendous growth in our social media metrics and our customer online engagement with about 60% increase in our Facebook likes from prior year.

We are also rapidly developing a good online following for Bad Daddy's in Colorado. I would like to turn it over to Scott LeFever for a few minutes to review our quarter Good Times initiatives for 2015..

Thanks Boyd. This year our primary goals for Good Times are to maintain our same-store sales growth, complete most of our remodeling of older restaurants and build new Good Times in Colorado market. I will speak briefly to each of these.

This summer we instituted a new feedback mechanism from newBrandAnalytics that gives us the capability to aggregate all customer comments being made on social media, not just on review sites. It allows us to identify themes for areas of improvement and where we can develop more significant competitive advantage in both execution and product quality.

We augmented the social media feedback tool, the new customer survey tool that's provided us with a new level of detail on daily executive at every restaurant.

Surveys inherently tend towards both extremes of good and bad feedback which allows us to identify where we are at developing a true brand avocacy as well as where we have gaps in our execution.

This tool augments our secret shopper program whereby we shop every store seven times per month for the very diagnostic analysis of execution of what we believe are the core drivers of excellence. Food quality and temperature, speed of service and employee friendliness and cleanliness.

With these combined tools, we think we can identify ways to continue to grow our same-store sales simply through improved day-to-day execution.

We continue to make good progress on our remodeling and re-imaging of older stores to bring all of them up to current brand standards in the market most of which to-date have been on upgrading our older double drive-through stores. We spend approximately 500,000 during 2014 on recurring and remodel CapEx.

We anticipate we will spend approximately 1.7 million on recurring and remodel CapEx during 2015, which includes equipment upgrades to our grills and fryers which helps to improve the quality of our core products as well as additional exterior and interior imaging and remodeling.

We opened our newest restaurant on November 21st with a new design that includes white wash barn wood, stain concrete floors, industrial metal and lighting and décor elements that welcome back to our brand platform of fresh all natural hand-crafted food, the territorial internal strategic initiative of taking a better food stand.

We plan to use this interior design platform and scheme as a remodel as we remodel our older dining room stores in 2015 and 2016.

We believe we are fairly early on in the general customer audience really grasping and understanding our fresh handcrafted all natural platform, and there is a good opportunity to be much more direct in the communication of that platform at the store level.

Therefore we plan to augment the physical design elements with more overt messaging inside the stores, and the dry few lanes communicating our all natural brand partners which are Meyer All-Natural Beef and Springer Mountain All-Natural Chicken, and the attributes of no hormones, no steroids, no antibiotics, vegetarian fed, humanely raised proteins.

We also plan to heighten specific messages of our fresh hand-crafted product support. A few examples of that are unique to Good Times are our Frozen Custard which we make every few hours, Real Madagascar Vanilla, fresh cut fries, Hand-breaded Chicken Tenders, fresh lemonade, Hatch Valley New Mexico Green Chile.

There's some very interesting products in test and development that further support the brand position but we continue to believe the core differentiator for good times is our all natural positioning, which anecdotally appears to be resonating strongly with women, and those consumers that are concerned about where their food comes from.

We hear over and over again that Good Times is the only fast food that many of our customers will use. That said, we still have to remain relevant to the wider quick serve restaurant customer. So our taste profiles and offerings have to have wide appeal and attractive price points.

While we are at the top of the -- top end of the QSR category, we are not fast casual and most of our business still being transacted through the drive-through which drives our product design price points and operational considerations.

In addition to our product development and marketing plan for 2015, our core initiatives are around improving our speed of service, reducing our total average transaction time as measured from the point of order to the point of delivery by approximately 6% to 8%.

This increases throughput at peak times completing most of our store remodels, evaluating the quality of few of our core products where we believe we can improve consistency of that product, continue to grow our breakfast day part and improving our dining room service profile.

We implemented several pieces of the dining room profile in addition to an entirely new décor package in our most recent store opening that includes new service ware, product presentation, new uniforms, and new delivery system for the product and added labor to maintain the dining into a high level of cleanliness and service.

Just as we've experienced in the last three years, we do not believe in a silver bullet approach to continue our sales momentum, but in the synergistic effect of taking each element of our brand execute it deep as we possibly can where Good Times concept can be even larger growth vehicle for us. I will now turn it over to Boyd..

Thank you Scott. In addition to the new Good Times that opened on November 21st this year we have another restaurant scheduled to open in early spring 2015 and we are working actively on other sites in the front range of Colorado for Good Times.

Our limitation in Colorado is the availability of prime real estates in the key trade areas we've identified. But we estimate that approximately 8 to 10 additional trade areas for development along the front range on top of the 35 stores that we have opened in Colorado.

And our objective is to develop 2 to 3 stores a year based on the availability of high quality sites. And return on investment profile for Good Times is very attractive with the sales of 1.2 million.

While we are not an owner of real estate, we can purchase the land and develop a store, our plan is to sell off that real estate into a sale leaseback and that leaves us with a net operating investment of approximately of $300,000 with 60,000 of pre-open cost.

With a store level cash flow margin in the high teens at that sales level, a new Good Times developed under the sale leaseback model should produce a restaurant 4-wall level cash-on-cash return on investment of over 50% in the stores second year. In fiscal 2014, we've been focused on setting the stage for Bad Daddy's expansion.

We are also evaluating the feasibility of a larger platform for Good Times our of Colorado as the concept continues to perform and as we continue to deepen its differentiating brand attributes that we think can be exported to new markets where we don't have the brand equity and awareness we have in Colorado.

I will take a minute now and turn the discussion over to Bad Daddy's. We opened our second Bad Daddy's restaurant in Colorado that included a rooftop bar and patio in late July that opened to record sales volume.

The store continues to be the highest volume store in the system averaging 60,000 to 65,000 a week so far in the first quarter of fiscal 2015 which seasonally is not our highest sales period. The rooftop patio, that's a part of that store provides a whole another level of sales opportunity and seating capacity.

So we anticipate the nice weather months will be materially higher in sales on that store. The construction disruption that we've experienced around our first restaurant in Cherry Creek North is beginning to moderate somewhat. However we anticipate there will be another six to nine months of infrastructure work going on immediately around that store.

That said we've been working hard on fine tuning the labor model and operating expenses and we believe we have the store close to the breakeven level. When the approximately $500 million of office, residential and retail development is complete in the immediate trade area, it should be a tremendous site for us.

We currently operate at the highest and the lowest volume stores in the Bad Daddy's system which is good-new-bad-news, but it's provided us good learning on developing of flexible labor model that's adaptable to the varying sales volumes.

Consumer acceptance of Bad Daddy's in Colorado has been overwhelmingly positive and we continue to work collaboratively with the founders of Bad Daddy's on menu evolution and innovation that includes a rotation of expanded chef specials featuring local ingredients and local brand partners to continue to anchor the brand here in Colorado.

Bad Daddy's is a culinary-driven concept and while its core differentiation is principally around the quality and uniqueness of the food, it also offers a lot more energetic edge to your customer experience and traditionally founding casual theme stores and concepts.

That's resonated particularly well in that second suburban location that we opened which competes directly with several casual theme concepts, and the words of one of our customers, 'he brought cool for the suburbs;' that's a phrase we continue to use.

The impact of Colorado's tip credit minimum wage that goes to $5.21 per hour in 2015 is approximately an additional 3.5% of sales labor burden based on our current front of the house labor model as compared to federal tip credit minimum wage states at 2.13 an hour, it's significant.

We are hopeful that we can continue to make up some of that margin loss in higher sales volume and more efficient scheduling. But we are looking to expand outside of Colorado later in 2015.

We have swapped our Arizona developer rights as a licensee of Bad Daddy's for Oklahoma development rights and currently we expect Kansas and Oklahoma to be our next development markets based not only on the federal tip credit minimum wage gains but also on our perspective of the relative competitive environments in those states and the core consumer target for Bad Daddy's.

We anticipate opening our third Bad Daddy's in early January in the Southland Shopping Center in Aurora, Colorado, and we expect to open an additional four to five Bad Daddy's in 2015 based on signed leases and letters of intent. Several of these are in new retail development.

So it's difficult to estimate the exact opening dates, but our deals in the pipeline are all for upscale suburban retail locations. We also anticipate hiring a Vice President of Real Estate in fiscal 2015 in order to increase our pipeline of sites for both concepts as we move into 2016.

Each new Bad Daddy's we operate is estimated to cost from $700,000 to $900,000 plus approximately $200,000 in pre-open expenses with a system average of mature stores at approximately $2.5 million in sales. We expect a 4-wall restaurant level operating margin in the mid teens with the biggest variable being those labor costs.

In the federal tip credit wage states that restaurant level operating margin moves into the high-teens, if we can replicate a mid-teens operating margin on our stores, we can meet or exceed our goal of over 35% for the second year restaurant level return on invested capital which is a very compelling model for expansion.

In addition to our development of new restaurants in our BD of Colorado subsidiary, Bad Daddy's International has another site under development in Charlotte, North Carolina that's expected to open around the 1st of the year.

Our franchisee and Greenville, South Carolina has signed a franchise development agreement for Knoxville, Tennessee site and we continue to expect that Bad Daddy's franchise development will have additional multi-unit franchisee openings in 2015.

We firmly believe the greatest near-term value for our shareholders will be from the development of company-owned restaurants as we continue to develop the platform for future franchise expansion. Now I'd like to take just a minute to turn it over to Su to discuss in more detail our financial performance during the fourth quarter..

Thank you Boyd. We are primarily focused on our restaurant level performance while we add infrastructure, and general and administrative expenses to support expanded growth in new restaurants. Good Times same-store sales increased 11.9% for the fourth quarter on top of 18.2% last year.

And as Boyd mentioned that double-digit trend continued into our first fiscal 2015 quarter until the cold weather hit. We do anticipate a mid-single-digit same-store sales increase in our first fiscal quarter of 2015.

Restaurant level operating profit as disclosed in the supplemental information in our fourth quarter press release increased 208,000 over the prior year to 1,172,000 for Good Times and 108,000 for Bad Daddy's. Our pre-open expenses for the initial Bad Daddy's development have been very high.

But we expect those to begin to moderate as we have a larger base of stores in which to develop management and train team members. The largest component of pre-open expenses is crew and management training. We are carrying some excess management so that we have seasoned managers for our new stores.

The growth in same-store sales continues to translate into expanding operating margins for our good times locations. The non-GAAP presentation of our restaurant level operating profit margin increased 170 basis points in the fourth quarter to 16.7 from the prior year of 15% despite food cost increasing by 80 basis points in that same period.

For the fiscal year Good Times restaurant level operating profit margin expanded 450 basis points from 12% to 16.5%, and the restaurant level operating profit increased by $1.5 million over the prior year.

We are facing continued commodity cost pressures primarily from beef costs and expect to show higher food costs to our first quarter of fiscal 2015 as a percentage of sales.

Bacon and dairy costs have begun to moderate significantly and we have planned an additional price increase of approximately 1.6% in January 2015 in addition to a 1% increase that we took this last October. In fiscal 2014, we took total price increases of 4.4% after a 2.2% increase in fiscal 2013.

We have not seen any negative impact to customer transaction during that time by taking smaller price increments more frequently. Beef costs remain at record highs particularly for the trim and ground beef market which has increased by over 30% from a year ago.

For every $0.10 per pound increase in our cost of beef, it has an approximate 25 basis point impact on our cost of sales. The net loss for the fourth quarter decreased to 58,000 from 85,000 last year.

However this year the loss included an increase in G&A expenses of 248,000 related to expenses for Bad Daddy's development, one-time management bonuses, non-cash stock compensation expense, and increase in investor relations' expenses and 150,000 in higher pre-opening expenses compared to the prior year.

The segmentation of Bad Daddy's operating results is shown in the supplemental information in our fourth quarter press release showing the impact on profitability from the second store that was only opened for slightly over two months with 103,000 of restaurant level profit.

Labor margins reflect very high labor cost at the Cherry Creek store and are not representative of our expectations for the future. We are working in collaboration with Bad Daddy's International and the new Executive Chef Tim Kast, to reduce our future cost of sales to purchasing menu engineering, product development, and store level systems.

Tim came from Seasons 52 at Darden and brings not only good culinary skills but a very systematic approach to operations. We anticipate that our BD of Colorado entity will be cash flow and income positive by the end of fiscal 2015 with the addition of new restaurants and after the associated pre-open expenses.

We are anticipating a fairly nominal effect from the affordable KREC requirements on Good Times in fiscal 2015. We have planned on a total expense of approximately 130,000 based on our employee census, survey data, and a plan of resign we've completed.

We do not expect to have to offer insurance to our BD of Colorado employees until the fourth or fifth restaurant is open in fiscal 2015 based on the number of employees as a percentage of our total employee base.

We are working on keeping front of the house work schedules to under 30 hours per week where part-time hours are more easily accommodated and do not expect greater than half a point impact to Bad Daddy's operating margins as a result of ACA primarily for our full-time back of house staff.

In terms of our balance sheet and liquidity, we have ended fiscal 2014 with 9.9 million in cash, minimal long-term debt. However that does not include the proceeds from the balance of worn exercises that were completed in November as a result of our redemption of all outstanding series A warrants and exercise of the underwriter warrants.

These warrant exercises provide an additional cash and equity of approximately 3.25 million and as of the end of November we have approximately 12.2 million of cash and approximately 9.43 million of total outstanding shares. We have not other outstanding warrants or derivative equity securities other than stock options and restricted stock awards.

We also have $2.1 million debt facility available through United Capital and expect to fully draw those proceeds over the next six to nine months for our new Good Times point of sale system, store remodeling and new store development.

With the proceeds from that debt facility and internally generated cash flow from operations, we anticipate that Good Times will be able to provide most if not all of its capital expenditure needs with our balance sheet cash allocated primarily to the development of the new Bad Daddy's stores. Now I would like to turn the call back over to Boyd..

Thank you Su. I will get to questions here in just a minute. We are very exited about the future of the company, our continued momentum at Good Times and laying the foundation for accelerated new store growth in both concepts. We will be adding some key people in key roles this year and are focused on execution of the growth plan.

We have approximately 12 million in cash, minimal long-term debt, two brands that are performing well and a new pipeline of new sites developing and we look forward to reporting our progress in fiscal 2015.

With valuations in the restaurant industry, what they are for emerging growth concepts, and with our return on investment model and growth prospects, we believe there's opportunity to create significant added shareholder value as we move forward.

If we can position the company to access the capital markets for a larger, more accelerated growth platform, we would certainly like to put those strategic pieces in place this year. This is our first earnings call and it coincided with the end of our fiscal year, so the call is necessarily a little bit later than it will be as a matter of course.

We plan to schedule our quarterly earnings calls to coincide with our quarterly earnings releases and our Form 10-Q filings.

We just presented at the LD Micro Conference in LA, and we plan to present at the ICR conference in Orlando in January as well as continuing to tell our story to other institutional investors and continue to increase liquidity for the stock. We appreciate your time with us today. With that operator, we will open the call for questions..

Thank you. (Operator Instructions) Our first question is from Alex Fuhrman of Craig-Hallum Capital Group. You may begin..

Great, thanks for taking my question and congratulations on a really fantastic quarter and fiscal year. Wanted to touch on -- little bit on both concepts on the Good Times side, particularly interested in what you are talking about in terms of adding more messaging around the all-natural menu and communicating that better.

Can you give us a little bit more sense on what you've done so far with that and what we should expect to see in the future? Is it mostly in-store, signage and messaging, or is it playing a larger role in your external advertising and is that something we might see more off in the future?.

Yes, Alex, thanks for the question. We are -- most of that's going to be at the store level. We feel like, particularly for new customers to Good Times, they maybe not get that -- they don't get that message as quickly as we would like, and it's not as big an impact at the unit level.

So we've got some plans both in our lobby remodels that we are doing as well as through the drive-through lane as Scott mentioned to be just a lot more specific and a lot more alert in the all-natural positioning. I think that's been a big core driver of our sales momentum over the last three years.

We've included it in our television advertising, but we feel like we've been a little understated and it may be a little bit too clever in our messaging at the unit level, and we could be a little bit more in your face with that message..

That's great, and just real quick follow-up on Good Times. What do you attribute the recent strength of some of the new openings at Good Times.

Is it better site selection, is it just the matter of having more of your existing units remodeled and with better marketing that they are just keyed up to open stronger? Or is there something more about the site selection or the approach of the real estate that has really been helping that as well?.

So this last one we opened, we knew it's going to be a good trader for us. We've been trying to get into that area for probably the last 10 years. Demographically it's a great match with higher incomes. We tend to index pretty well against Chick-fil-A, and we know they've got a very-very high volume store basically across the street.

So we anticipated that would be a good one.

I think we are seeing the benefit of all the things that you just mentioned, the heightened brand positioning that we've been banging on for the last couple of years, a brand new design that we think is pretty compelling that really takes us almost out of the kid fast food category from a perception standpoint and yet we still have a fast food price point and I think then the overall imaging or re-imaging of the stores which were really only about half way through, that's been helping our presence in the market overall..

Great, thank. And then if I can just switch quickly over to Bad Daddy's, would it be curious to the extent you are willing to size up the relative performance of the two units.

I mean in total clearly very strong results for the quarter and then given everything that's been going on in the Cherry Creek neighborhood with traffic and construction, you would have to think that that Northglenn property was really performing off the chart.

I mean I am thinking about future opening and considering I would imagine the construction and Cherry Creek is certainly specific to that location.

It there anything you are seeing in your internal metrics in terms of average check or anything like that? Do you think that Cherry Creek store could get up to the Northglenn level a year from now and that construction has abated and how should we think about potentially the productivity of future units for that concept?.

I think Northglenn was a little bit unusual because we had the opportunity to do the rooftop, and that's, I think, added incremental volume. Our expectation is not for Cherry Creek to get to that sales level.

Our expectation is for Cherry Creek to be able to get up to the system average but I think we've got more brows to hold there before that happens.

So fundamentally I think the difference that we are seeing is that the Northglenn trade area is middle and upper-middle income whereas Cherry Creek North is extremely high income, and we think that the Bad Daddy's concept, the sweet spot for it is that upper-middle income suburban consumer, they are kind of tired of casual theme.

They can go and get cool concepts if they want to go into Downtown Denver or the Highlands or float hours (ph) or even Cherry Creek. But it's really not available in a lot of these suburban markets.

And so we think fundamentally from a site selection standpoint that's given some pretty good guidance it's perhaps not as much an urban concept as it is a suburban concept.

And so as we move forward, if we have the opportunity to do small rooftops, we will certainly take advantage of that because we think it's a great set for the concept and has resonated really well in Northglenn. But overall the small box, 3,600 square foot prototype is still the model.

And if we can crank out $2.5 million out of those, it's a great return model for us..

That's really helpful. Thank Boyd and good luck to the whole team..

Thanks Alex..

Thank you. Our next question is from Tony Brenner of ROTH Capital Partners. You may begin..

Thank you, good morning. Boyd you mentioned that you are about half way done with the Good Times Burgers' remodel program.

I wonder if you could indicate how many of the company stores will be re-imaged in 2015 and what typically sort of sales bump you are getting from the re-image stores when they reopen?.

Hey, Tony, it's a good question. So far we've remodeled about 10 of our stores. All of those have been our older double-drive-through stores, and frankly it's been impossible to parse out the results of that just because we've been on such a steep growth curve. That said, we have about another 10 stores planned for 2015.

But included in that is some major remodels meaning that they are not just exterior spiffs but some very old stores that need more major work done to them and we are anticipating that we will hopefully see a 10% plus pump from the investment in those major remodels.

In addition to the major remodels we do have some more drive-through exterior re-images, and again we think there's been kind of a synergistic effect as well as what's happening at each individual location as we bring all stores up to the current brand image..

Okay.

And franchisees are proceeding at a slower pace for remodels' point?.

Yeah, we've -- in the last couple of years we actually bought back a few franchise stores which have been great transactions for us and we've remodeled those stores.

The franchisees, we still have in the system, have more recent stores and they are not in as high need for remodeling, but we are planning on having them remodel alongside ours here over the next two fiscal years.

And particularly as we move to the dining room stores which are newer stores we wanted to get this new store opened with its new designs so that we can then work backwards to the system with a consistent platform on a new lobby design. And as we do that those franchisees will participate..

Okay, question on Bad Daddy's. I know that Cherry Creek obviously is skewing the margin for the Bad Daddy's concept but just taking Northglenn as a standalone, I assume that start-up costs, high labor, expenses and so on have accepted margins.

How long do you think just for the Northglenn store, it would take to get up to that objective mid-teens 4-wall margin?.

We are already there. I mean what's impacting the way that we segment the data in our release is really Cherry Creek, and some of the extra management that we are carrying but the 4-wall margins of Northglenn are already there where we talked about in the high teens..

Okay, that's it for me. Thank you..

Okay, thanks Tony..

Thank you. (Operator Instructions) Our next question is from Andrew Groin of Dorothy and Company. You many begin..

Thanks guys, congrats on the great quarter..

Thank you Andrew..

First question for you just in regards to the Good Times concept. So there seems to have been a possible shift in your mindset about potential expansion for this concept. I know initially you had just discussed a potential 8 to 10 new locations within Colorado which would all be company owned locations.

But with the stores producing cash and cash returns, where they are at right now, I think if you actually talk out the number you gave, it actually is north of 60% even.

Can you speak to maybe where you see new market potential and maybe the approach you are taking to evaluate that, either you or potential franchisees?.

Yes, it's a great question, and I don't want to overstate that just because we are really on again. Our strategic plan has been around continue to grow Good Times in the Colorado market while we lay the platform for Bad Daddy's growth. Good Times is performing, I think, beyond our expectations and ahead of our expectations.

And as a result we are evaluating its expansion potential out of market. I think in QSR Burgers there's two components; there's the free standing real estate component which is a little bit different animal and then there's also just the positioning of the concept.

But we are looking at other markets that demographically and psychographically match up to Denver, and if there's an opportunity for us to go in and seed a market or two with our own capital, that may be one option, or to go in and develop with the franchisee is another option.

I don't want to misrepresent that that we do not have anything that is on the boards definitively yet but strategically our board is looking at that and what the opportunities to expand Good Times potentially out of Colorado might be..

That's helpful. Thank you, and moving over to the Bad Daddy's concept. So with beef pricing where it's at, I think our index shot an all-time high last week. You mentioned price increases over at Good Times in January. And you briefly mentioned menu engineering that might be going on.

And I am wondering if you can maybe provide any color on what you are doing at the Bad Daddy's locations maybe in terms of menu engineering or just promotions, shifting focus away from beef items?.

Yes, Bad Daddy's is a little bit less beef intensive in terms of it's overall cost structure than Good Times is just because it has a broader menu. But we are working with Tim Kast and with Frank Scibelli and Bad Daddy's on not only menu engineering from a cost standpoint, but really optimizing the menu in each one of the categories.

So we've taken a couple of high cost of sales items off. We've put some lower cost items on.

Probably most importantly is we are developing a calendar of local chef specials that will be over the roll-through and our plan is on a bi-weekly basis, and as a part of that chef special strategy, is to focus on as we move sales away from core menu items to move into the chef specials that may have a better margin structure.

There's not a menu overhaul in plan in any means. We run about a 30% higher bar mixture in Colorado than what they do in North Carolina so that actually helps our margin structure on cost of sales. We also have a happy hour menu that they don't have and can't do in North Carolina.

So there's some things that we are doing but we are really trying to just parse down category by category, what's working and what's not working and where are the opportunities for us to move cost of sales and average check. And we look at it two ways; we look at it both from a margin standpoint and what our percentage cost of sales are.

We also look at it as penny profit standpoint and it certainly makes sense sometimes to have some prior cost items if we are gaining a bigger check and a bigger gross profit, penny profit contribution..

Okay, great. I am not sure if this is a data point that you have available or could share, but do you have any same-store sales data from with NBDI's core base that I think last time -- last quarter there were three within their same-store sales base.

Are there any updated numbers that you could provide on that?.

I don't want to -- we don't report their sales, so I don't -- I can't tell you definitively what they are other than that they continue on a really strong trend.

The first Riley stores, as soon as they had lapped its first year and a second store opened in the Riley market over in Carrie (ph), the first store bumped up significantly to the tune of 20% or 30% and it's maintained that. The other core stores in Charlotte continue to have single digit same-store sales growth..

Okay, I appreciate that. And then last question for me. Just in terms of overall G&A spending, I think we had talked previously about G&A peaking this year and then potentially going down a little bit in fiscal '15. So obviously G&A was fairly high this quarter.

I am wondering if maybe any at all of it was kind of a one-time spend or how you are thinking about G&A heading into 15 if it's a targeted percent of sales rates or what not?.

Yeah. As Su mentioned there were some one-time hits in our fourth quarter related to some stock compensation expense and some on-time bonus and to some investor relations expense and then the pre-open cost on Bad Daddy's.

Obviously we will continue to have relatively the small size of Bad Daddy's fairly high pre-open cost as a percentage of total sales. But G&A by the end of 2015 we do anticipate will begin to come down as a percentage of our overall sales.

That is somewhat dependent on the pace of development and as we add a couple of key roles particularly a CFO and a vice president of real estate development, there maybe some near-term increase in G&A but we anticipate as we move into 2016 that it will continue to come down as a percentage of our revenue..

Thank you very much Boyd..

Thank you..

Thank you. Our next question is from John Ziegelman of Wolverine Asset Management. You may begin..

Hey Boyd. Hey guys..

Hi John..

How is everything going?.

Good..

Great, excellent quarter.

I missed the first 20 minutes so if you gave guidance, could you just quickly re-give it?.

Sure. We didn't give hard revenue or earnings guidance. The guidance that we did give was on store development. We got an edition of the Good Times store that just opened. We have another one that will open in early spring.

We have our third Bad Daddy's that will open in January, and we expect to open another four to five Bad Daddy's on top of that this fiscal year, and we have other good times that we are looking at putting in the pipeline, the difference being the lead time on free standing real estate development is significantly longer than in-line for Bad Daddy's.

And so not sure exactly how those new stores will fall. We are also the tail on the dog on a lot of those new developments for Bad Daddy's meaning that that development is not up to us, it's up to new shopping center development and remodels that were in line for.

So we haven't given, and it's particularly difficult after really small base that we've got factoring in the timing of when those openings will be. But I think we are comfortable in saying that we will have another good times and another four to five Bad Daddy's open..

Excellent. I get totally that there's a ton of moving part.

So I guess the follow on question and really probably should have asked this first that I know you didn't was when do you think you will start to have enough visibility to not give quarterly guidance but say annual guidance with some margin expectations as well?.

I think as we move -- as we get a couple of stores open particularly on the Bad Daddy's side, I think we are very comfortable on where we are in projecting forward on the Good Times piece.

I think by mid-fiscal year this year as we have a little bit harder timeline on the development pipeline, we can start giving a little bit firmer guidance as we look to the fiscal 2016..

Got it. Okay, the other question I had has already been answered, so I will jump off. Thank you..

Hey, thanks John..

Thank you. I am showing no further questions at this time. Ladies and gentlemen this concludes today's conference. Thanks for you participation, and have a wonderful day..

Thank you all..