Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 04, 2021 | Aug. 13, 2021 | |
Document and entity information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 4, 2021 | |
Entity File Number | 001-39053 | |
Entity Registrant Name | BBQ HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 83-4222776 | |
Entity Address, Address Line One | 12701 Whitewater Drive, Suite 100 | |
Entity Address, City or Town | Minnetonka | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55343 | |
City Area Code | 952 | |
Local Phone Number | 294-1300 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | BBQ | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 10,358,450 | |
Current Fiscal Year End Date | --01-02 | |
Document Fiscal Year Focus | 2021 | |
Document Period Focus | Q2 | |
Entity Central Index Key | 0001021270 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 38,358 | $ 18,101 |
Restricted cash | 824 | 1,502 |
Accounts receivable, net of allowance for doubtful accounts of $259,000 and $132,000, respectively | 4,966 | 4,823 |
Inventories. | 2,433 | 2,271 |
Prepaid expenses and other current assets | 2,881 | 1,252 |
Assets held for sale | 1,024 | 1,070 |
Total current assets | 50,486 | 29,019 |
Property, equipment and leasehold improvements, net | 31,112 | 32,389 |
Other assets: | ||
Operating lease right-of-use assets | 60,787 | 61,634 |
Goodwill | 601 | 601 |
Intangible assets, net | 9,733 | 9,967 |
Deferred tax asset, net | 4,623 | 4,934 |
Other assets | 1,660 | 1,724 |
Total assets | 159,002 | 140,268 |
Current liabilities: | ||
Accounts payable | 7,050 | 6,385 |
Current portion of lease liabilities | 6,844 | 6,185 |
Current portion of long-term debt | 2,165 | 2,111 |
Accrued compensation and benefits | 6,313 | 2,390 |
Other current liabilities | 8,814 | 9,766 |
Total current liabilities | 31,186 | 26,837 |
Long-term liabilities: | ||
Lease liabilities, less current portion | 61,839 | 63,105 |
Long-term debt, less current portion | 7,131 | 22,169 |
Other liabilities | 1,376 | 1,224 |
Total liabilities | 101,532 | 113,335 |
Shareholders' equity: | ||
Common stock, $.01 par value, 100,000 shares authorized, 10,357 and 9,307 shares issued and outstanding at July 4, 2021 and January 3, 2021, respectively | 104 | 93 |
Additional paid-in capital | 22,147 | 8,748 |
Retained earnings | 35,955 | 19,370 |
Total shareholders' equity | 58,206 | 28,211 |
Non-controlling interest | (736) | (1,278) |
Total equity | 57,470 | 26,933 |
Total liabilities and shareholders' equity | $ 159,002 | $ 140,268 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Accounts receivable, Allowance for doubtful accounts | $ 259 | $ 132 |
Common stock, Par value | $ 0.01 | $ 0.01 |
Common stock, Shares authorized | 100,000 | 100,000 |
Common stock, Shares issued | 10,357 | 9,307 |
Common stock, Shares outstanding | 10,357 | 9,307 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Revenue: | ||||
Revenue | $ 45,520 | $ 27,762 | $ 82,839 | $ 51,617 |
Costs and expenses: | ||||
Food and beverage costs | 11,932 | 7,717 | 21,989 | 14,471 |
Labor and benefits costs | 12,429 | 8,066 | 22,683 | 15,787 |
Operating expenses | 11,594 | 9,104 | 21,843 | 15,730 |
Depreciation and amortization expenses | 1,433 | 1,378 | 2,985 | 2,423 |
General and administrative expenses | 4,544 | 3,803 | 8,582 | 6,835 |
National advertising fund expenses | 421 | 242 | 749 | 524 |
Asset impairment, estimated lease termination charges and other closing costs, net | 25 | 4,779 | 37 | 4,952 |
Pre-opening expenses | 92 | 2 | 120 | 27 |
Gain on disposal of property, net | 143 | (100) | 135 | (577) |
Total costs and expenses | 42,613 | 34,991 | 79,123 | 60,172 |
Loss from operations | 2,907 | (7,229) | 3,716 | (8,555) |
Other income (expense): | ||||
Interest expense | (261) | (237) | (315) | (356) |
Interest income | 74 | 59 | 98 | 102 |
Gain upon debt extinguishment | 14,109 | 14,109 | ||
Gain on bargain purchase | (689) | |||
Gain on bargain purchase | 13,675 | |||
Total other income (expense) | 13,922 | (867) | 13,892 | 13,421 |
Income (loss) before income taxes | 16,829 | (8,096) | 17,608 | 4,866 |
Income tax benefit | (399) | 1,897 | (481) | 2,246 |
Net income (loss) | 16,430 | (6,199) | 17,127 | 7,112 |
Net (income) loss attributable to non-controlling interest | (644) | (53) | (542) | 343 |
Net income (loss) attributable to shareholders | $ 15,786 | $ (6,252) | $ 16,585 | $ 7,455 |
Basic net income (loss) per share attributable to shareholders | $ 1.70 | $ (0.68) | $ 1.79 | $ 0.82 |
Diluted net income (loss) per share attributable to shareholders | $ 1.64 | $ (0.68) | $ 1.73 | $ 0.82 |
Weighted average shares outstanding - basic | 9,304 | 9,138 | 9,256 | 9,132 |
Weighted average shares outstanding - diluted | 9,615 | 9,138 | 9,567 | 9,132 |
Restaurant sales, net | ||||
Revenue: | ||||
Revenue | $ 41,205 | $ 24,989 | $ 74,808 | $ 45,692 |
Franchise royalty and fee revenue | ||||
Revenue: | ||||
Revenue | 2,946 | 1,951 | 5,320 | 4,475 |
Franchisee national advertising fund contributions | ||||
Revenue: | ||||
Revenue | 421 | 242 | 749 | 524 |
Licensing and other revenue | ||||
Revenue: | ||||
Revenue | $ 948 | $ 580 | $ 1,962 | $ 926 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - 6 months ended Jul. 04, 2021 - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Total Shareholders' Equity | Non-controlling Interest | Total |
Balance (in shares) at Jan. 03, 2021 | 9,307 | |||||
Balance at Jan. 03, 2021 | $ 93 | $ 8,748 | $ 19,370 | $ 28,211 | $ (1,278) | $ 26,933 |
Issuance of common stock pursuant to PIPE (in shares) | 1,000 | |||||
Issuance of common stock pursuant to PIPE | $ 10 | 12,452 | 12,462 | $ 12,462 | ||
Exercise of stock options (in shares) | 50 | 50 | ||||
Exercise of stock options | $ 1 | 309 | 310 | $ 310 | ||
Stock-based compensation | 638 | 638 | 638 | |||
Net income (loss) | 16,585 | 16,585 | 542 | 17,127 | ||
Balance (in shares) at Jul. 04, 2021 | 10,357 | |||||
Balance at Jul. 04, 2021 | $ 104 | $ 22,147 | $ 35,955 | $ 58,206 | $ (736) | $ 57,470 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 17,127 | $ 7,112 |
Adjustments to reconcile net income to cash flows provided by operations: | ||
Depreciation and amortization | 2,985 | 2,423 |
Stock-based compensation | 638 | 248 |
Net gain on disposal | 135 | (577) |
Asset impairment, estimated lease termination charges and other closing costs, net | 4,710 | |
Gain on forgiveness of debt | (14,109) | |
Gain on bargain purchase | (13,675) | |
Deferred income taxes | 481 | (2,295) |
Other non-cash items | 168 | 547 |
Accounts receivable, net | (188) | (240) |
Prepaid expenses and other assets | (2,479) | (1,991) |
Accounts payable | 665 | 2,292 |
Accrued and other liabilities | 3,461 | 964 |
Cash flows provided by (used for) operating activities | 8,884 | (482) |
Cash flows from investing activities: | ||
Purchases of property, equipment and leasehold improvements | (1,114) | (2,000) |
Payments for acquired restaurants | (4,952) | |
Transfer from HFS | 46 | |
Payments received on note receivable | 23 | 12 |
Cash flows provided by (used for) investing activities | (1,045) | (6,940) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 22,058 | |
Payments for debt issuance costs | (45) | |
Payments for debt issuance costs | 10 | |
Payments on long-term debt | (1,042) | |
Proceeds from sale of common stock, net of offering costs | 12,462 | |
Proceeds from exercise of stock options | 310 | |
Cash (used for) provided by financing activities | 11,740 | 22,013 |
Increase (decrease) in cash, cash equivalents and restricted cash | 19,579 | 14,591 |
Cash, cash equivalents and restricted cash, beginning of period | 19,603 | 6,086 |
Cash, cash equivalents and restricted cash, end of period | 39,182 | 20,677 |
Supplemental Disclosures | ||
Cash paid (received) for interest, net | $ 587 | 47 |
Non-cash investing and financing activities: | ||
Gift card liability assumed pursuant to acquisitions | $ 3,968 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jul. 04, 2021 | |
Nature of Business and Significant Accounting Policies | |
Basis of Presentation | (1) Basis of Presentation Basis of Presentation In September 2019 a holding company reorganization was completed in which Famous Dave’s of America, Inc. (“FDA”) became a wholly owned subsidiary of the new parent holding company named BBQ Holdings, Inc. (“BBQ Holdings”). As used in this Form 10-K, “Company”, “we” and “our” refer to BBQ Holdings and its wholly owned subsidiaries. BBQ Holdings was incorporated on March 29, 2019 under the laws of the State of Minnesota, while FDA was incorporated in Minnesota on March 14, 1994. The Company develops, owns and operates restaurants under the name “Famous Dave’s”, “Clark Crew BBQ”, “Granite City Food & Brewery”, “Real Urban Barbecue”, “Village Inn” and “ Bakers Square.” Additionally, the Company franchises restaurants under the name “Famous Dave’s”. As of July 4, 2021, there were 127 Famous Dave’s restaurants operating in three countries, including 27 Company-owned restaurants and 100 franchise-operated restaurants. The first Clark Crew BBQ restaurant opened in December 2019 in Oklahoma City, Oklahoma. BBQ Holdings has a 20 % ownership in this venture. In March 2020, the Company purchased 18 Granite City Food & Brewery restaurants located throughout the Midwest and one Real Urban Barbecue restaurant located in Vernon Hills, Illinois. On July 30, 2021, the Company completed the purchase of the Village Inn family restaurant concept with 21 Company-owned restaurants and 114 franchised restaurants, and the Bakers Square pie and comfort food concept currently with 13 Company-owned restaurants. These accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) Rules and Regulations. The information furnished in these condensed consolidated financial statements include normal recurring adjustments and reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited financial statements represent the condensed consolidated financial statements of the Company and its subsidiaries as of July 4, 2021 and January 3, 2021, and for the three and six months ended July 4, 2021 and June 28, 2020. The results for the three and six months ended July 4, 2021 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in BBQ Holding, Inc.’s Annual Report on Form 10-K for the fiscal year ended January 3, 2021 as filed with the SEC on April 2, 2021. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic and the United States declared a National Public Health Emergency. As a result, public health measures were taken to minimize exposure to the virus. These measures, some of which are government-mandated, have been implemented globally resulting in a dramatic decrease in economic activity. During the first quarter of 2021, mandated restrictions began to ease in a number of the markets in which the Company operates. Although the Company has experienced some recovery from the initial impact of COVID-19, the long-term impact of COVID-19 on the economy and on its business remains uncertain, the duration and scope of which cannot currently be predicted. As new variants of COVID-19 are being discovered and cases in unvaccinated people rise throughout the markets in which the Company does business, the Company cannot predict the severity of another surge, what additional restrictions may be enacted, to what extent it can maintain off-premise sales volumes, whether it can maintain sufficient staffing levels, or if individuals will be comfortable returning to its dining rooms during or following social distancing protocols, and what long-lasting effects the COVID-19 pandemic may have on the restaurants industry as a whole. The extent of the reopening process, along with the potential impact of the COVID-19 pandemic on consumer spending behavior, which may be a function of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses, will determine the significance of the impact to the Company’s operating results and financial position. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. The duration of the disruption on global, national, and local economies cannot be reasonably estimated at this time due to the ongoing effects of this situation. Management is continually evaluating the impact of this global crisis on its financial condition, liquidity, operations, suppliers, industry, and workforce and will take additional actions as necessary. Reclassifications Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications did not have an impact on the reported net income for any of the periods presented. Income Taxes The Company maintains a federal deferred tax asset (“DTA”) which was in the amount of $4.6 million as of July 4, 2021 and $4.9 million as of January 3, 2021. The Company evaluates the DTA on a quarterly basis to determine whether current facts and circumstances indicate that the DTA may not be fully realizable. As of July 4, 2021, the Company concluded that the DTA is fully realizable and that no further valuation allowance was necessary; however, the Company will continue to evaluate the DTA on a quarterly basis until the DTA has been fully utilized. The following table presents the Company’s effective tax rates for the periods presented: Three Months Ended Six Months Ended July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Effective tax rate 2.4 % 23.4 % 2.7 % (46.2) % The Company uses the discrete method to calculate the quarterly tax provision due to its inability to reliably estimate annual ordinary income (loss). The Company provides for income taxes based on its estimate of federal and state income tax liabilities. These estimates include, among other items, effective rates for state and local income taxes, allowable tax credits for items such as taxes paid on reported tip income, estimates related to depreciation and amortization expense allowable for tax purposes, and the tax deductibility of certain other items. The Company’s estimates are based on the information available at the time that the Company prepares the income tax provision. The Company generally files its annual income tax returns several months after its fiscal year-end. Income tax returns are subject to audit by federal, state, and local governments, generally years after the tax returns are filed. These returns could be subject to material adjustments due to differing interpretations of the tax laws. Cash and cash equivalents On May 14, 2020, the Company invested $3.5 million in a certificate of deposit (CD) through Choice Bank. The interest rate on this CD is 3.0 %. Interest is compounded every 30 days and the CD automatically renews monthly. This balance is included with cash and cash equivalents on the Company’s balance sheet. Restricted cash and marketing fund The Company has a Marketing Development Fund, to which Company-owned Famous Dave’s restaurants, in addition to the majority of franchise-operated restaurants, contribute a percentage of net sales, for use in public relations and marketing development efforts. The funds held in this account are used in part to reimburse the Company for its marketing and digital services activities on behalf of the Famous Dave’s brand. The Company also receives funds from its suppliers to be used exclusively for point-of-sale equipment purchases for its own stores as well as its franchisees. As the assets held by these funds are considered to be restricted, the Company reflects the cash related to these funds within restricted cash and reflect the liability within accrued expenses on its consolidated balance sheets. The Company had approximately $824,000 and $1.5 million in these funds as of July 4, 2021 and January 3, 2021, respectively. Assets Held for Sale As of July 4, 2021, the Company had assets held for sale of approximately $1.0 million related to an owned property for which it has entered into agreements to sell for a contract purchase price of $2.5 million. Net income per common share Basic net income (loss) per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted EPS equals net income divided by the sum of the weighted average number of shares of common stock outstanding plus all additional common stock equivalents, such as stock options and restricted stock units, when dilutive. Three Months Ended Six Months Ended (in thousands, except per share data) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Net income (loss) per share – basic: Net income (loss) attributable to shareholders $ 15,786 $ (6,252) $ 16,585 $ 7,455 Weighted average shares outstanding - basic 9,304 9,138 9,256 9,132 Basic net income (loss) per share attributable to shareholders $ 1.70 $ (0.68) $ 1.79 $ 0.82 Net income per share – diluted: Net income (loss) attributable to shareholders $ 15,786 $ (6,252) $ 16,585 $ 7,455 Weighted average shares outstanding - diluted 9,615 9,138 9,567 9,132 Diluted net income (loss) per share attributable to shareholders $ 1.64 $ (0.68) $ 1.73 $ 0.82 There were approximately 250 and 299,617 stock options outstanding as of July 4, 2021 and June 28, 2020, respectively, that were not included in the computation of diluted EPS because they were anti-dilutive. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jul. 04, 2021 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | (2) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following at: (in thousands) July 4, 2021 January 3, 2021 Prepaid expenses and deferred costs $ 2,212 $ 950 Prepaid insurance 669 302 Prepaid expenses and other current assets $ 2,881 $ 1,252 |
PROPERTY, EQUIPMENT, AND LEASEH
PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET | 6 Months Ended |
Jul. 04, 2021 | |
Property, Equipment, And Leasehold Improvements, Net | |
Property, Equipment, And Leasehold Improvements, Net | (3) Property, Equipment and Leasehold Improvements, net Property, equipment and leasehold improvements, net, consisted of the following: (in thousands) July 4, 2021 January 3, 2021 Land, buildings, and improvements $ 31,867 $ 31,731 Furniture, fixtures, equipment and software 28,201 28,373 Décor 425 475 Construction in progress 968 1,121 Accumulated depreciation and amortization (30,349) (29,311) Property, equipment and leasehold improvements, net $ 31,112 $ 32,389 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 6 Months Ended |
Jul. 04, 2021 | |
Intangible Assets, net | |
Intangible Assets, net | (4) Intangible Assets, net The Company has intangible assets that consist of liquor licenses, database, trademarks and patents, and reacquired franchise rights, net. The liquor licenses and trademarks/logos are indefinite-lived assets and are not subject to amortization. Reacquired franchise rights are amortized to depreciation and amortization expense on a straight-line basis over the remaining life of the reacquired franchise agreement. The database is amortized over three years . Intangible assets consisted of the following: (in thousands) July 4, 2021 January 3, 2021 Reacquired franchise rights, net 1,050 1,246 Liquor licenses 868 868 Trademark/Logos/Patents 7,688 7,688 Database 127 165 Intangible assets, net $ 9,733 $ 9,967 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jul. 04, 2021 | |
Other Current Liabilities | |
Other Current Liabilities | (5) Other Current Liabilities Other current liabilities consisted of the following at: (in thousands) July 4, 2021 January 3, 2021 Gift cards payable $ 5,584 $ 6,553 Sales tax payable 1,305 1,286 Other accrued expense 1,381 1,394 Accrued interest — 115 Accrued utilities 230 199 Deferred revenue, other 230 124 Deferred franchise fees 84 95 Other current liabilities $ 8,814 $ 9,766 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jul. 04, 2021 | |
Long-term Debt and Financing Lease Obligations | |
Long-term Debt | (6) Long-Term Debt On June 20, 2019, the Company entered into a Loan Agreement among the Company and Choice Financial Group. The Loan Agreement provides for a term loan in the principal amount of up to $24.0 million and is evidenced by a promissory note. The note has a maturity date of June 20, 2025. The first year of the note provided for payments of interest only, with the remaining five years requiring payments of interest and principal based on a 60 month amortization period. Interest is payable in an amount equal to the Wall Street Journal Prime Rate, but in no circumstances shall the rate of interest be less than 5.00%. The note may be prepaid, partially or in full, at any time and for no prepayment penalty. The Company is subject to various financial and non-financial covenants on this debt, including a debt-service coverage ratio. As of July 4, 2021, the note balance was $9.4 million, and the Company was compliant with all of its covenants. In fiscal year 2020, the Company received funds of approximately $14.0 million in aggregate in connection with “Small Business Loans” under the Paycheck Protection Program (“PPP Loans”). These amounts were borrowed pursuant to the terms of the PPP Loans, in favor of Choice Financial Group. On June 11, 2020, the Company received a notification from Choice Financial Group that the Small Bussiness Administration approved the Company’s loan forgiveness applications for the entire $14.0 million balance of the PPP Loans and that the remaining balance of the PPP Loans is zero . As such, the Company wrote of the debt balance and related accrued interest of $14.1 million. Such amount was included in the Company’s income statement in the second quarter of 2021. Debt outstanding under the above referenced promissory notes consisted of the following as of the periods presented: (in thousands) July 4, 2021 January 3, 2021 Term Loan $ 9,361 $ 10,403 PPP Loans — 13,957 Less: deferred financing costs (65) (80) Less: current portion of long-term debt (2,165) (2,111) Long-term debt, less current portion $ 7,131 $ 22,169 |
LEASES
LEASES | 6 Months Ended |
Jul. 04, 2021 | |
Leases | |
Leases | (7) Leases The Company leases the property for its corporate headquarters, most of its Company-owned stores, and certain office and restaurant equipment. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities in its consolidated balance sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term and is included in operating expenses and general and administrative expenses on the statement of operations. The components of lease expense for the period presented is as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Operating lease cost $ 2,527 $ 2,352 $ 4,969 $ 3,948 Short-term lease cost 166 106 262 137 Variable lease cost 130 194 498 194 Sublease income (30) - (74) - Total lease cost $ 2,793 $ 2,652 $ 5,655 $ 4,279 Supplemental cash flow information related to leases for the period presented is as follows: Six Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,517 $ 3,774 Right-of-use assets obtained in exchange for new operating lease liabilities 1,163 51,682 Weighted-average remaining lease term of operating leases (in years) 10.0 11.0 Weighted-average discount rate of operating leases 5.31 % 5.24 % |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jul. 04, 2021 | |
Revenue Recognition | |
Revenue Recognition | (8) Revenue Recognition Deferred franchise fee revenue included in other liabilities consist primarily of franchise fees which are recognized straight-line over the life of the agreements, and area development fees which are deferred until a new restaurant is opened pursuant to the agreement. The following table illustrates estimated revenues expected to be recognized in the future related to unsatisfied performance obligations as of July 4, 2021: (in thousands) Fiscal Year 2021 $ 42 2022 84 2023 84 2024 84 2025 80 Thereafter 460 Total $ 834 The following table reflects the change in contract liabilities between July 4, 2021 and January 3, 2021: (in thousands) July 4, 2021 Beginning Balance $ 901 Revenue recognized (67) Ending Balance $ 834 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jul. 04, 2021 | |
Stock-based Compensation | |
Stock-Based Compensation | (9) Stock-based Compensation Effective May 5, 2015, the Company adopted the 2015 Equity Plan (the “2015 Plan”), pursuant to which it may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other stock and cash awards to eligible participants. The number of common stock reserved for issuance is 2,000,000 . The Company also maintains an Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). The 2005 Plan expired in 2015 and no additional options may be granted. Nonetheless, the 2005 Plan will remain in effect until all outstanding incentives granted thereunder have either been satisfied or terminated. As of July 4, 2021, there were 685,324 shares available for grant pursuant to the 2015 Plan. Stock options granted to employees and directors generally vest over two The Company utilizes the Black-Scholes option pricing model when determining the compensation cost associated with stock options issued using the following significant assumptions: ● Stock price – Published trading market values of the Company’s common stock as of the date of grant. ● Exercise price – The stated exercise price of the stock option. ● Expected life – The simplified method as outlined in ASC 718. ● Expected dividend – The rate of dividends that the Company expects to pay over the term of the stock option. ● Volatility – Actual volatility over the most recent historical period equivalent to the expected life of the option. ● Risk-free interest rate – The daily United States Treasury yield curve rate. The Company recognized stock-based compensation expense in its consolidated statements of operations for the three and six months ended July 4, 2021 and June 28, 2020, respectively, as follows: Three Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Stock options $ 94 $ 44 $ 183 $ 125 Restricted stock 226 67 455 123 $ 320 $ 111 $ 638 $ 248 Information regarding the Company’s stock options is summarized below: Weighted Average Remaining Number of Weighted Average Contractual (number of options in thousands) Options Exercise Price Life in Years Options outstanding at January 3, 2021 557 $ 4.53 Granted 24 9.63 Exercised (50) 6.20 Canceled, forfeited or expired (22) 3.97 Options outstanding at July 4, 2021 509 $ 4.62 6.3 Six Months Ended July 4, 2021 June 28, 2020 Weighted-average fair value of options granted during the period $ 5.17 $ 1.81 Expected life (in years) 4.0 5.4 Expected dividend $ — $ — Expected stock volatility 71.12 % 53.64 % Risk-free interest rate 0.6 % 1.1 % Information regarding the Company’s restricted stock is summarized below: Weighted Average Remaining Number of Weighted Average Contractual (number of awards in thousands) Awards Award Date Fair Value Life in Years Unvested at January 3, 2021 475 $ 4.43 Granted — — Exercised/Released (25) 4.84 Unvested at July 4, 2021 450 $ 4.41 1.5 |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 6 Months Ended |
Jul. 04, 2021 | |
Shareholders Equity | |
Shareholders' Equity | (10) Shareholders’ Equity On June 24, 2021, the Company entered into two separate Securities Purchase Agreements (each, a “Securities Purchase Agreement”) with institutional investors pursuant to which the Company raised (i) gross proceeds of $10,000,000, pursuant to an agreement to sell 800,000 shares of the Company’s common stock , and (ii) gross proceeds of $3,000,000 pursuant to an agreement to sell 200,000 shares of the Company’s common stock (such shares of common stock collectively referred to herein as the “Securities”, and the aggregate sale of 1,000,000 Securities referred to herein as the “Offering”). The Company used the net proceeds of the Offering for the acquisition described in Note 11 Acquisitions As part of each Securities Purchase Agreement, the Company agreed to register the Securities sold in the Offering (the “Registrable Securities”) for resale or other disposition, pursuant to a Registration Rights Agreement with each investor (each, a “Registration Rights Agreement”). On August 4, 2021, the Company filed with the Securities and Exchange Commission (the “SEC”) a shelf registration statement with respect to the resale of the Registrable Securities. The Company agreed to use commercially reasonable efforts to have the shelf registration statement declared effective by the SEC as soon as possible after the initial filing, and in any event no later than September 9, 2021 (or October 9, 2021 in the event of a full review of the shelf registration statement by the SEC). Additionally, the Company agreed to keep the shelf registration statement effective until such time as all Registrable Securities may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) without the need for current public information or other restrictions. If the Company is unable to comply with any of the above covenants, it will be required to pay liquidated damages to the investors in the amount of 1% of the investors’ purchase price for every month until such non-compliance is cured (subject to a 6% cap), with such liquidated damages payable in cash. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jul. 04, 2021 | |
Acquisitions | |
Acquisitions | (11) Acquisitions On June 24, 2021, the Company entered in to a Membership Interest Purchase Agreement (the “MIPA”) with VIBSQ Holdco, LLC, a Company. The purchase price of the Transaction was approximately $13.0 million and subject to certain purchase price adjustments. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jul. 04, 2021 | |
Variable Interest Entities | |
Variable Interest Entities | (12) Variable Interest Entities A variable interest holder is considered to be the primary beneficiary of a variable interest entity (“VIE”) if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Once an entity is determined to be a VIE, the primary beneficiary is required to consolidate the entity. The Company has an installment agreement with one of its franchisees as a result of refranchising its Lincoln, Nebraska restaurant. This franchisee is a VIE; however, the owners of the franchise operations are the primary beneficiaries of the entities, not the Company. Therefore, the franchise operations are not required to be consolidated in the Company’s consolidated financial statements. On July 18, 2018, the Company and Clark Championship Products LLC (“Clark”), an entity owned by Travis Clark, became members of Mercury BBQ LLC (“Mercury”) for the purposes of building out and operating the inaugural Clark Crew BBQ restaurant in Oklahoma City, Oklahoma (the “Restaurant”). Clark will own 80% of the units outstanding of Mercury and the Company will own 20% of the units outstanding of Mercury. Because the Company has provided more than half of the subordinated financial support of Mercury and control Mercury via its representation on the board of managers, the Company has concluded that Mercury is a VIE, of which the Company is the primary beneficiary and must consolidate Mercury. Mercury generated net income of approximately $678,000 during the first half of fiscal year 2021, of which $542,000 was recorded as non-controlling interest on our condensed consolidated financial statements. During the first half of fiscal year 2020, Mercury generated a net loss of $429,000, of which $343,000 was recorded as non-controlling interest on our condensed consolidated financial statements. As of July 4, 2021, Mercury’s assets included approximately $2.8 million of property, equipment and leasehold improvements, net, a $1.8 million ROU asset and $111,000 of inventory. The liabilities recognized as a result of consolidating Mercury BBQ’s results of operations do not represent additional claims on the general assets of BBQ Holdings, Inc.; rather, they represent claims against the specific assets of the Mercury BBQ’s. Conversely, assets recognized as a result of consolidating the Mercury BBQ’s results of operations do not represent additional assets that could be used to satisfy claims against the general assets of BBQ Holdings. |
LITIGATION
LITIGATION | 6 Months Ended |
Jul. 04, 2021 | |
Litigation | |
Litigation | (13) Litigation In the normal course of business, the Company is involved in a number of litigation matters that are incidental to the operation of the business. These matters generally include, among other things, matters with regard to employment, leases and general business-related issues. The Company currently believes that the resolution of any of these pending matters will not have a material adverse effect on its financial position or liquidity, but an adverse decision in more than one of the matters could be material to its consolidated results of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jul. 04, 2021 | |
Related Party Transactions | |
Related Party Transactions | (14) Related Party Transactions Charles Davidson, a franchisee of the Company, currently serves as a director of the Company and is the beneficial owner of approximately 16.3% of the Company’s common stock as of the date that these financial statements were available to be issued, by virtue of his ownership interest in Wexford Capital. The following table outlines amounts received from related parties during the three months ended July 4, 2021 and June 28, 2020: Three Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Revenues and NAF contributions - Charles Davidson 179 252 316 292 The following table outlines accounts receivable from related parties as of July 4, 2021 and January 3, 2021: (in thousands) July 4, 2021 January 3, 2021 Accounts receivable, net - Charles Davidson 70 52 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jul. 04, 2021 | |
Subsequent Events | |
Subsequent Events | (15) Subsequent Events On July 12, 2021, the Company completed of the acquisition of the assets and certain liabilities of four Famous Dave’s restaurants, the combined purchase price of which was $1.1 million. Three of these restaurants are located in Tennessee and one is located in Kentucky. On July 30, 2021, the Company closed on the Membership Interest Purchase Agreement (the “MIPA”) described in Note 11 Acquisitions . As a result of this transaction, the Company acquired Bakers Square restaurants. Additionally, the Company acquired the franchise rights to Village Inn restaurants. The cash purchase price was approximately |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Nature of Business and Significant Accounting Policies | |
Schedule of reconciliation from statutory tax rate to effective tax rate | Three Months Ended Six Months Ended July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Effective tax rate 2.4 % 23.4 % 2.7 % (46.2) % |
Schedule of reconciliation of basic and diluted net (loss) income per common share | Three Months Ended Six Months Ended (in thousands, except per share data) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Net income (loss) per share – basic: Net income (loss) attributable to shareholders $ 15,786 $ (6,252) $ 16,585 $ 7,455 Weighted average shares outstanding - basic 9,304 9,138 9,256 9,132 Basic net income (loss) per share attributable to shareholders $ 1.70 $ (0.68) $ 1.79 $ 0.82 Net income per share – diluted: Net income (loss) attributable to shareholders $ 15,786 $ (6,252) $ 16,585 $ 7,455 Weighted average shares outstanding - diluted 9,615 9,138 9,567 9,132 Diluted net income (loss) per share attributable to shareholders $ 1.64 $ (0.68) $ 1.73 $ 0.82 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | (in thousands) July 4, 2021 January 3, 2021 Prepaid expenses and deferred costs $ 2,212 $ 950 Prepaid insurance 669 302 Prepaid expenses and other current assets $ 2,881 $ 1,252 |
PROPERTY, EQUIPMENT, AND LEAS_2
PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Property, Equipment, And Leasehold Improvements, Net | |
Schedule of property, equipment, and leasehold improvements, net | (in thousands) July 4, 2021 January 3, 2021 Land, buildings, and improvements $ 31,867 $ 31,731 Furniture, fixtures, equipment and software 28,201 28,373 Décor 425 475 Construction in progress 968 1,121 Accumulated depreciation and amortization (30,349) (29,311) Property, equipment and leasehold improvements, net $ 31,112 $ 32,389 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Intangible Assets, net | |
Schedule of intangible assets | (in thousands) July 4, 2021 January 3, 2021 Reacquired franchise rights, net 1,050 1,246 Liquor licenses 868 868 Trademark/Logos/Patents 7,688 7,688 Database 127 165 Intangible assets, net $ 9,733 $ 9,967 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Other Current Liabilities | |
Schedule of other current liabilities | (in thousands) July 4, 2021 January 3, 2021 Gift cards payable $ 5,584 $ 6,553 Sales tax payable 1,305 1,286 Other accrued expense 1,381 1,394 Accrued interest — 115 Accrued utilities 230 199 Deferred revenue, other 230 124 Deferred franchise fees 84 95 Other current liabilities $ 8,814 $ 9,766 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Long-term Debt and Financing Lease Obligations | |
Schedule of long-term debt | (in thousands) July 4, 2021 January 3, 2021 Term Loan $ 9,361 $ 10,403 PPP Loans — 13,957 Less: deferred financing costs (65) (80) Less: current portion of long-term debt (2,165) (2,111) Long-term debt, less current portion $ 7,131 $ 22,169 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Leases | |
Schedule of lease cost | Three Months Ended Three Months Ended Six Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Operating lease cost $ 2,527 $ 2,352 $ 4,969 $ 3,948 Short-term lease cost 166 106 262 137 Variable lease cost 130 194 498 194 Sublease income (30) - (74) - Total lease cost $ 2,793 $ 2,652 $ 5,655 $ 4,279 |
Schedule of Supplemental Cash Flow Information Of Leases | Six Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,517 $ 3,774 Right-of-use assets obtained in exchange for new operating lease liabilities 1,163 51,682 Weighted-average remaining lease term of operating leases (in years) 10.0 11.0 Weighted-average discount rate of operating leases 5.31 % 5.24 % |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Revenue Recognition | |
Schedule of estimated revenues expected to be recognized in the future related to unsatisfied performance obligations | (in thousands) Fiscal Year 2021 $ 42 2022 84 2023 84 2024 84 2025 80 Thereafter 460 Total $ 834 |
Schedule of change in contract liabilities | (in thousands) July 4, 2021 Beginning Balance $ 901 Revenue recognized (67) Ending Balance $ 834 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Stock-based Compensation | |
Schedule of recognized stock-based compensation expense | Three Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Stock options $ 94 $ 44 $ 183 $ 125 Restricted stock 226 67 455 123 $ 320 $ 111 $ 638 $ 248 |
Schedule of stock option activity | Weighted Average Remaining Number of Weighted Average Contractual (number of options in thousands) Options Exercise Price Life in Years Options outstanding at January 3, 2021 557 $ 4.53 Granted 24 9.63 Exercised (50) 6.20 Canceled, forfeited or expired (22) 3.97 Options outstanding at July 4, 2021 509 $ 4.62 6.3 |
Schedule of stock option valuation assumptions | Six Months Ended July 4, 2021 June 28, 2020 Weighted-average fair value of options granted during the period $ 5.17 $ 1.81 Expected life (in years) 4.0 5.4 Expected dividend $ — $ — Expected stock volatility 71.12 % 53.64 % Risk-free interest rate 0.6 % 1.1 % |
Schedule of unvested restricted stock activity | Weighted Average Remaining Number of Weighted Average Contractual (number of awards in thousands) Awards Award Date Fair Value Life in Years Unvested at January 3, 2021 475 $ 4.43 Granted — — Exercised/Released (25) 4.84 Unvested at July 4, 2021 450 $ 4.41 1.5 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Related Party Transactions | |
Schedules of related party transactions | The following table outlines amounts received from related parties during the three months ended July 4, 2021 and June 28, 2020: Three Months Ended Six Months Ended (in thousands) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Revenues and NAF contributions - Charles Davidson 179 252 316 292 The following table outlines accounts receivable from related parties as of July 4, 2021 and January 3, 2021: (in thousands) July 4, 2021 January 3, 2021 Accounts receivable, net - Charles Davidson 70 52 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Thousands | Jul. 30, 2021restaurant | Jul. 30, 2021item | May 14, 2020USD ($) | Jul. 18, 2018 | Mar. 29, 2020restaurant | Dec. 29, 2019 | Jul. 04, 2021USD ($)restaurantcountry | Jun. 28, 2020 | Jul. 04, 2021USD ($)restaurantcountry | Jun. 28, 2020 | Jan. 03, 2021USD ($) |
Business information | |||||||||||
Number of restaurants | 127 | 127 | |||||||||
Number of countries in which entity operates | country | 3 | 3 | |||||||||
Deferred tax asset, net | $ | $ 4,600 | $ 4,600 | $ 4,900 | ||||||||
Effective tax rate | 2.40% | 23.40% | 2.70% | (46.20%) | |||||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||||||||
Certificate of deposit | $ | $ 3,500 | ||||||||||
CD interest rate | 3.00% | ||||||||||
Frequency of compounding interest on a CD | 30 days | ||||||||||
Restricted cash and marketing fund | |||||||||||
Restricted cash | $ | $ 824 | $ 824 | 1,502 | ||||||||
Assets held for sale | |||||||||||
Assets held for sale | $ | 1,024 | 1,024 | 1,070 | ||||||||
Contract sale price for assets held for sale | $ | $ 2,500 | $ 2,500 | |||||||||
Mercury | |||||||||||
Business information | |||||||||||
Ownership percentage in VIE | 20.00% | 20.00% | |||||||||
Entity Operated Units | |||||||||||
Business information | |||||||||||
Number of restaurants | 27 | 27 | |||||||||
Franchised Units | |||||||||||
Business information | |||||||||||
Number of restaurants | 100 | 100 | |||||||||
Marketing Development Fund | |||||||||||
Restricted cash and marketing fund | |||||||||||
Restricted cash | $ | $ 824 | $ 824 | $ 1,500 | ||||||||
Real Urban Barbecue Restaurant | |||||||||||
Business information | |||||||||||
Number of restaurants acquired | 1 | ||||||||||
Granite City Food & Brewery Restaurants | |||||||||||
Business information | |||||||||||
Number of restaurants acquired | 18 | ||||||||||
Village Inn Restaurants | Entity Operated Units | Subsequent Event | |||||||||||
Business information | |||||||||||
Number of restaurants acquired | 21 | ||||||||||
Village Inn Restaurants | Franchised Units | Subsequent Event | |||||||||||
Business information | |||||||||||
Number of restaurants acquired | 114 | 114 | |||||||||
Bakers Square Restaurants | Entity Operated Units | Subsequent Event | |||||||||||
Business information | |||||||||||
Number of restaurants acquired | 13 |
BASIS OF PRESENTATION - Net Inc
BASIS OF PRESENTATION - Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 15,786 | $ (6,252) | $ 16,585 | $ 7,455 |
Weighted average shares outstanding - basic | 9,304,000 | 9,138,000 | 9,256,000 | 9,132,000 |
Weighted average shares outstanding - diluted | 9,615,000 | 9,138,000 | 9,567,000 | 9,132,000 |
Basic net income per common share | $ 1.70 | $ (0.68) | $ 1.79 | $ 0.82 |
Earnings Per Share, Diluted | $ 1.64 | $ (0.68) | $ 1.73 | $ 0.82 |
Anti-dilutive shares excluded from computation of diluted net income per share | 250 | 299,617 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Prepaid expenses and other current assets | ||
Prepaid expenses and deferred costs | $ 2,212 | $ 950 |
Prepaid insurance | 669 | 302 |
Prepaid expenses and other current assets | $ 2,881 | $ 1,252 |
PROPERTY, EQUIPMENT, AND LEAS_3
PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Property, Equipment, And Leasehold Improvements, Net | ||
Land, buildings, and improvements | $ 31,867 | $ 31,731 |
Furniture, fixtures, equipment and software | 28,201 | 28,373 |
Decor | 425 | 475 |
Construction in progress | 968 | 1,121 |
Accumulated depreciation and amortization | (30,349) | (29,311) |
Property, equipment and leasehold improvements, net | $ 31,112 | $ 32,389 |
INTANGIBLE ASSETS - Carrying Am
INTANGIBLE ASSETS - Carrying Amounts (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 04, 2021 | Jan. 03, 2021 | |
Intangible assets | ||
Intangible assets, net | $ 9,733 | $ 9,967 |
Liquor Licenses | ||
Intangible assets | ||
Indefinite lived assets | 868 | 868 |
Trademarks, Logos, and Patents | ||
Intangible assets | ||
Indefinite lived assets | 7,688 | 7,688 |
Franchise Rights | ||
Intangible assets | ||
Finite lived intangible assets, net | $ 1,050 | 1,246 |
Database | ||
Intangible assets | ||
Estimated useful life | 3 years | |
Finite lived intangible assets, net | $ 127 | $ 165 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Other current liabilities | ||
Gift cards payable | $ 5,584 | $ 6,553 |
Sales tax payable | 1,305 | 1,286 |
Other accrued expenses | 1,381 | 1,394 |
Accrued interest | 115 | |
Accrued utilities | 230 | 199 |
Total other current liabilities | 8,814 | 9,766 |
Customer loyalty program | ||
Other current liabilities | ||
Deferred revenue | 230 | 124 |
Franchise royalty and fee revenue | ||
Other current liabilities | ||
Deferred revenue | $ 84 | $ 95 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - Term Loan - USD ($) $ in Thousands | Jun. 20, 2019 | Jul. 04, 2021 | Jan. 03, 2021 |
Long-term debt | |||
Maximum borrowing capacity | $ 24,000 | ||
Period of time, after the first year of the draw period, during which both principal and interest payments are due | 5 years | ||
Debt principal amortization period | 60 months | ||
Outstanding balance | $ 9,361 | $ 10,403 | |
Prepayment penalty | $ 0 | ||
Minimum | Prime Rate | |||
Long-term debt | |||
Rate of interest | 5.00% |
LONG-TERM DEBT - PPP Loans (Det
LONG-TERM DEBT - PPP Loans (Details) - PPP Loans - USD ($) $ in Thousands | Jun. 11, 2021 | Jul. 04, 2021 | Jan. 03, 2021 |
Long-term debt | |||
Loan amount | $ 14,000 | ||
Loan forgiveness | $ 14,000 | ||
Outstanding balance | $ 0 | $ 13,957 | |
Debt writeoff including accrued interest from loan forgiveness | $ 14,100 |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt and Financing Lease (Details) - USD ($) $ in Thousands | Jul. 04, 2021 | Jan. 03, 2021 |
Long-term debt | ||
Less: deferred financing costs | $ (65) | $ (80) |
Less: current portion of long-term debt | (2,165) | (2,111) |
Long-term debt, less current portion | 7,131 | 22,169 |
Term Loan | ||
Long-term debt | ||
Debt Instrument Carrying Amount | 9,361 | 10,403 |
PPP Loans | ||
Long-term debt | ||
Debt Instrument Carrying Amount | $ 0 | $ 13,957 |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Lease expense | ||||
Operating lease cost | $ 2,527 | $ 2,352 | $ 4,969 | $ 3,948 |
Short-term lease cost | 166 | 106 | 262 | 137 |
Variable lease cost | 130 | 194 | 498 | 194 |
Sublease income | (30) | (74) | ||
Total lease cost | $ 2,793 | $ 2,652 | $ 5,655 | $ 4,279 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 4,517 | $ 3,774 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,163 | $ 51,682 |
Weighted-average remaining lease term of operating leases (in years) | 10 years | 11 years |
Weighted-average discount rate of operating leases | 5.31% | 5.24% |
REVENUE RECOGNITION - Estimated
REVENUE RECOGNITION - Estimated Revenues Expected And Change In Contract Liabilities Default (Details) $ in Thousands | 6 Months Ended |
Jul. 04, 2021USD ($) | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 834 |
Change in contract liabilities | |
Beginning balance | 901 |
Revenue recognized | (67) |
Ending balance | 834 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-05 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 42 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-03 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 84 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-02 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 84 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 84 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-30 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 80 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-12-29 | |
Estimated future revenues expected to be recognized for performance obligations | |
Revenue expected to be recognized | $ 460 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | Jun. 28, 2015 | |
Stock-based compensation | |||||
Stock-based compensation expense | $ 320 | $ 111 | $ 638 | $ 248 | |
Stock Options | |||||
Stock-based compensation | |||||
Stock-based compensation expense | 94 | 44 | 183 | 125 | |
Restricted Stock | |||||
Stock-based compensation | |||||
Stock-based compensation expense | $ 226 | $ 67 | $ 455 | $ 123 | |
Employees and Directors | Stock Options | |||||
Stock-based compensation | |||||
Expiration period | 10 years | ||||
Employees and Directors | Minimum | Stock Options | |||||
Stock-based compensation | |||||
Vesting period | 2 years | ||||
Employees and Directors | Maximum | Stock Options | |||||
Stock-based compensation | |||||
Vesting period | 5 years | ||||
2015 Plan | |||||
Stock-based compensation | |||||
Shares authorized for issuance | 2,000,000 | ||||
Shares available for grant | 685,324 | 685,324 | |||
2005 Plan | |||||
Stock-based compensation | |||||
Shares available for grant | 0 | 0 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options (Details) shares in Thousands | 6 Months Ended |
Jul. 04, 2021$ / sharesshares | |
Number of Options | |
Options outstanding at beginning of period | shares | 557 |
Granted | shares | 24 |
Exercised | shares | (50) |
Cancelled, forfeited or expired | shares | (22) |
Options outstanding at end of period | shares | 509 |
Weighted Average Exercise Price | |
Options outstanding at beginning of period | $ / shares | $ 4.53 |
Granted | $ / shares | 9.63 |
Exercised | $ / shares | 6.20 |
Cancelled, forfeited or expired | $ / shares | 3.97 |
Options outstanding at end of period | $ / shares | $ 4.62 |
Weighted Average Remaining Contractual Life | |
Options outstanding | 6 years 3 months 18 days |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - $ / shares | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
Valuation Assumptions | ||
Weighted-average fair value of options granted during the period | $ 5.17 | $ 1.81 |
Expected life (in years) | 4 years | 5 years 4 months 24 days |
Expected dividend | 0.00% | 0.00% |
Expected stock volatility | 71.12% | 53.64% |
Risk-free interest rate | 0.60% | 1.10% |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock (Details) - Restricted Stock shares in Thousands | 6 Months Ended |
Jul. 04, 2021$ / sharesshares | |
Number of Awards | |
Unvested at beginning of period | shares | 475 |
Exercised/Released | shares | (25) |
Unvested at end of period | shares | 450 |
Weighted Average Award Date Fair Value | |
Unvested at beginning of period | $ / shares | $ 4.43 |
Exercised/Released | $ / shares | 4.84 |
Unvested at end of period | $ / shares | $ 4.41 |
Weighted Average Remaining Contractual Life | |
Unvested at end of period | 1 year 6 months |
SHAREHOLDERS EQUITY (Details)
SHAREHOLDERS EQUITY (Details) | Jun. 24, 2021USD ($)agreementshares | Jul. 04, 2021USD ($)shares | Jan. 03, 2021shares |
Subsidiary, Sale of Stock [Line Items] | |||
Proceeds from Issuance of Common Stock | $ | $ 12,462,000 | ||
Common stock issued (in shares) | shares | 10,357,000 | 9,307,000 | |
Private Placement | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of stock purchase agreements | agreement | 2 | ||
Common stock issued (in shares) | shares | 1,000,000 | ||
Stock issuance expense paid | $ | $ 500,000 | ||
Percent of investor purchase price due monthly as liquidated damages if covenants are not met | 1.00% | ||
Private Placement One | |||
Subsidiary, Sale of Stock [Line Items] | |||
Proceeds from Issuance of Common Stock | $ | $ 10,000,000 | ||
Common stock issued (in shares) | shares | 800,000 | ||
Private Placement Two | |||
Subsidiary, Sale of Stock [Line Items] | |||
Proceeds from Issuance of Common Stock | $ | $ 3,000,000 | ||
Common stock issued (in shares) | shares | 200,000 | ||
Maximum | Private Placement | |||
Subsidiary, Sale of Stock [Line Items] | |||
Percent of investor purchase price due monthly as liquidated damages if covenants are not met | 6.00% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Jul. 30, 2021 | Jun. 28, 2020 |
Acquisitions | ||
Cash purchase price | $ 4,952 | |
Subsequent Event | VIBSQ Target Companies | ||
Acquisitions | ||
Cash purchase price | $ 13,000 |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details) $ in Thousands | Jul. 18, 2018 | Dec. 29, 2019 | Jul. 04, 2021USD ($) | Jun. 28, 2020USD ($) | Jul. 04, 2021USD ($)agreement | Jun. 28, 2020USD ($) | Jan. 03, 2021USD ($) |
Variable Interest Entities | |||||||
Number of installment agreements with franchisees | agreement | 1 | ||||||
Net income (loss) | $ 16,430 | $ (6,199) | $ 17,127 | $ 7,112 | |||
Net income (loss) attributable to noncontrolling interest | 644 | $ 53 | 542 | (343) | |||
Non-controlling interest | 736 | 736 | $ 1,278 | ||||
Property, equipment and leasehold improvements, net | 31,112 | 31,112 | 32,389 | ||||
Operating lease right-of-use assets | 60,787 | 60,787 | 61,634 | ||||
Inventory | 2,433 | 2,433 | $ 2,271 | ||||
Mercury | |||||||
Variable Interest Entities | |||||||
Ownership percentage in VIE | 20.00% | 20.00% | |||||
Clark | Mercury | |||||||
Variable Interest Entities | |||||||
Ownership percentage | 80.00% | ||||||
Mercury | |||||||
Variable Interest Entities | |||||||
Net income (loss) | 678 | $ (429) | |||||
Property, equipment and leasehold improvements, net | 2,800 | 2,800 | |||||
Operating lease right-of-use assets | 1,800 | 1,800 | |||||
Inventory | $ 111 | $ 111 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Beneficial Owner - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | Jan. 03, 2021 | |
Related Party Transactions | |||||
Revenues and NAF contributions | $ 179 | $ 252 | $ 316 | $ 292 | |
Accounts receivable from related parties | $ 70 | $ 70 | $ 52 | ||
Beneficial ownership percentage | 16.30% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | Jul. 30, 2021USD ($) | Jul. 30, 2021restaurant | Jul. 30, 2021item | Jul. 12, 2021USD ($)restaurant | Jun. 28, 2020USD ($) |
Subsequent event line items | |||||
Cash purchase price | $ | $ 4,952 | ||||
Subsequent Event | Famous Daves Restaurants | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 4 | ||||
Cash purchase price | $ | $ 1,100 | ||||
Subsequent Event | Famous Daves Restaurants - Tennessee | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 3 | ||||
Subsequent Event | Famous Daves Restaurants, Kentucky | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 1 | ||||
Subsequent Event | VIBSQ Target Companies | |||||
Subsequent event line items | |||||
Cash purchase price | $ | $ 13,000 | ||||
Subsequent Event | Village Inn Restaurants | Entity Operated Units | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 21 | ||||
Subsequent Event | Village Inn Restaurants | Franchised Units | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 114 | 114 | |||
Subsequent Event | Bakers Square Restaurants | Entity Operated Units | |||||
Subsequent event line items | |||||
Number of restaurants acquired | 13 |