Document and Entity Information
Document and Entity Information - shares | 4 Months Ended | |
Apr. 16, 2017 | May 16, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | RED ROBIN GOURMET BURGERS INC | |
Entity Central Index Key | 1,171,759 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 16, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 12,869,719 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 16, 2017 | Dec. 25, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 22,239 | $ 11,732 |
Accounts receivable, net | 14,239 | 24,166 |
Inventories | 29,736 | 29,899 |
Prepaid expenses and other current assets | 16,586 | 27,049 |
Total current assets | 82,800 | 92,846 |
Property and equipment, net | 656,418 | 656,439 |
Goodwill | 95,935 | 95,935 |
Intangible assets, net | 41,708 | 42,270 |
Other assets, net | 31,301 | 31,055 |
Total assets | 908,162 | 918,545 |
Current liabilities: | ||
Trade accounts payable | 19,257 | 13,740 |
Construction related payables | 15,923 | 12,862 |
Accrued payroll and payroll-related liabilities | 38,156 | 34,703 |
Unearned revenue | 37,612 | 50,199 |
Accrued liabilities and other | 39,741 | 29,505 |
Total current liabilities | 150,689 | 141,009 |
Deferred rent | 73,191 | 72,431 |
Long-term debt | 300,875 | 336,375 |
Long-term portion of capital lease obligations | 10,633 | 10,805 |
Other non-current liabilities | 11,150 | 9,872 |
Total liabilities | 546,538 | 570,492 |
Stockholders’ equity: | ||
Common stock, $0.001 par value: 45,000 shares authorized; 17,851 and 17,851 shares issued; 12,872 and 12,828 shares outstanding | 18 | 18 |
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Treasury stock 4,979 and 5,023 shares, at cost | (205,881) | (207,720) |
Paid-in capital | 207,975 | 208,022 |
Accumulated other comprehensive loss, net of tax | (4,796) | (5,008) |
Retained earnings | 364,308 | 352,741 |
Total stockholders’ equity | 361,624 | 348,053 |
Total liabilities and stockholders’ equity | $ 908,162 | $ 918,545 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 16, 2017 | Dec. 25, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 17,851,000 | 17,851,000 |
Common stock, shares outstanding | 12,872,000 | 12,828,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 4,979,000 | 5,023,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Revenues: | ||
Restaurant revenue | $ 413,451 | $ 396,770 |
Franchise royalties, fees, and other revenues | 5,106 | 5,356 |
Total revenues | 418,557 | 402,126 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||
Cost of sales | 94,607 | 92,325 |
Labor | 145,519 | 132,984 |
Other operating | 54,680 | 49,708 |
Occupancy | 33,119 | 32,498 |
Depreciation and amortization | 28,044 | 23,951 |
Selling, general, and administrative expenses | 43,275 | 43,388 |
Pre-opening and acquisition costs | 1,855 | 2,372 |
Other charges | 0 | 4,725 |
Total costs and expenses | 401,099 | 381,951 |
Income from operations | 17,458 | 20,175 |
Other expense: | ||
Interest expense, net and other | 2,984 | 1,638 |
Income before income taxes | 14,474 | 18,537 |
Provision for income taxes | 2,907 | 4,312 |
Net income | $ 11,567 | $ 14,225 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.90 | $ 1.04 |
Diluted (in dollars per share) | $ 0.89 | $ 1.03 |
Weighted average shares outstanding: | ||
Basic (in shares) | 12,853 | 13,635 |
Diluted (in shares) | 12,953 | 13,783 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 11,567 | $ 14,225 |
Foreign currency translation adjustment | 212 | 1,480 |
Other comprehensive income, net of tax | 212 | 1,480 |
Total comprehensive income | $ 11,779 | $ 15,705 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 11,567 | $ 14,225 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 28,044 | 23,951 |
Other charges | 0 | 825 |
Stock-based compensation expense | 886 | 2,090 |
Other, net | (435) | (1,201) |
Changes in operating assets and liabilities, net of business acquisition: | ||
Accounts receivable and other current assets | 21,212 | 14,286 |
Trade accounts payable and accrued liabilities | 19,279 | 174 |
Unearned revenue | (11,219) | (12,702) |
Other operating assets and liabilities, net | 621 | 852 |
Net cash provided by operating activities | 69,955 | 42,500 |
Cash flows from investing activities: | ||
Purchases of property, equipment, and intangible assets | (24,548) | (52,149) |
Acquisition of franchise restaurants, net of cash acquired | 0 | (39,984) |
Other investing activities | 113 | 0 |
Net cash used in investing activities | (24,435) | (92,133) |
Cash flows from financing activities: | ||
Borrowings of long-term debt | 44,500 | 137,000 |
Payments of long-term debt and capital leases | (80,163) | (85,671) |
Debt issuance costs | (664) | 0 |
Tax benefit from exercise of stock options | 0 | 94 |
Proceeds from exercise of stock options and employee stock purchase plan | 1,212 | 592 |
Net cash provided by financing activities | (35,115) | 52,015 |
Effect of exchange rate changes on cash | 102 | 80 |
Net change in cash and cash equivalents | 10,507 | 2,462 |
Cash and cash equivalents, beginning of period | 11,732 | 22,705 |
Cash and cash equivalents, end of period | 22,239 | 25,167 |
Supplemental disclosure of cash flow information | ||
Income taxes paid | 116 | 1,046 |
Interest paid, net of amounts capitalized | 3,127 | 1,484 |
Change in construction related payables | $ 3,061 | $ 7,768 |
Basis of Presentation and Recen
Basis of Presentation and Recent Accounting Pronouncements | 4 Months Ended |
Apr. 16, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recent Accounting Pronouncements | Basis of Presentation and Recent Accounting Pronouncements Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries (“Red Robin” or the “Company”), primarily develops, operates, and franchises full-service restaurants in North America. As of April 16, 2017 , the Company owned and operated 469 restaurants located in 39 states and two Canadian provinces. The Company also had 87 franchised full-service restaurants in 15 states as of April 16, 2017 . The Company operates its business as one operating and one reportable segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Red Robin and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements of Red Robin have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of December 25, 2016 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim condensed consolidated financial statements in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2016 , filed with the SEC on February 21, 2017. The Company’s quarter that ended April 16, 2017 is referred to as first quarter 2017, or the sixteen weeks ended April 16, 2017 ; the quarter ended April 17, 2016 is referred to as first quarter 2016, or the sixteen weeks ended April 17, 2016 . The quarter ended December 25, 2016 is referred to as fourth quarter 2016, or the twelve weeks ended December 25, 2016. The Company’s fiscal year 2017 comprises 53 weeks and will end on December 31, 2017 . Reclassifications Certain amounts presented in prior periods have been reclassified to conform with the current period presentation. For the first quarter of 2016, the Company reclassified litigation contingencies of $3.9 million from Selling, general, and administrative expenses and impairment charges of $0.8 million from Asset impairment to Other charges on the condensed consolidated statement of operations. Management believes separating irregular items on the condensed consolidated statement of operations provides more clarity for readers of these financial statements. See Note 5, Other Charges . Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for leases. This guidance requires the recognition of liabilities for lease obligations and corresponding right-of-use assets on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. Early adoption is permitted. We are evaluating the full impact this guidance will have on our consolidated financial statements but expect this adoption will result in a significant increase in the assets and liabilities on our consolidated balance sheet. In May 2014, the FASB issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) that amends the principal versus agent guidance in the new revenue recognition standard. In April 2016, the FASB issued an ASU to clarify the guidance on accounting for licenses or intellectual property and identifying performance obligations in the new revenue recognition standard. In addition, in May 2016, the FASB issued an ASU that clarifies several narrow-scope improvements and practical expedients for adopting the new revenue guidance. We have determined the new revenue recognition standard will not have an impact on our recognition of food and beverage sales from Company-owned restaurants or our recognition of royalty fees from franchisees. The Company does not expect the impact of recognizing initial franchise fees over the franchise agreement period and recognizing advertising expense upon adoption of this standard to have a material effect on our consolidated financial statements. The Company will adopt this guidance beginning with its fiscal first quarter 2018 and will apply the guidance retrospectively to each prior period presented. Recently Adopted Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step 2 of the goodwill impairment test. When performing the annual goodwill impairment test, an impairment charge should be recognized if the carrying amount of a reporting unit exceeds the reporting unit’s fair value. The Company adopted this standard in the first quarter of 2017, and does not expect the adoption will have a material impact on our financial statements when we perform our annual impairment test later this fiscal year. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which changes the accounting for, and classification of, excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. In the first quarter of 2017, the Company adopted this standard on a prospective basis (prior periods have not been restated) which did not have a material impact on our financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 4 Months Ended |
Apr. 16, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets There were no changes in the carrying amount of goodwill during the sixteen weeks ended April 16, 2017 . Additionally, the Company recorded no goodwill impairment losses during the sixteen weeks ended April 16, 2017 or any prior periods. The following table presents intangible assets as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 December 25, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 55,902 $ (28,445 ) $ 27,457 $ 55,902 $ (27,306 ) $ 28,596 Favorable leases 13,931 (7,622 ) 6,309 13,931 (7,400 ) 6,531 Liquor licenses 10,338 (9,882 ) 456 10,253 (9,857 ) 396 $ 80,171 $ (45,949 ) $ 34,222 $ 80,086 $ (44,563 ) $ 35,523 Indefinite-lived intangible assets: Liquor licenses and other $ 7,486 $ — $ 7,486 $ 6,747 $ — $ 6,747 Intangible assets, net $ 87,657 $ (45,949 ) $ 41,708 $ 86,833 $ (44,563 ) $ 42,270 There were no impairments to intangible assets during the sixteen weeks ended April 16, 2017 and April 17, 2016 . The aggregate amortization expense related to intangible assets subject to amortization was $1.6 million and $1.5 million for the sixteen weeks ended April 16, 2017 and April 17, 2016 . The estimated aggregate future amortization expense as of April 16, 2017 is as follows (in thousands): Remainder of 2017 $ 3,091 2018 4,264 2019 4,217 2020 3,696 2021 3,264 Thereafter 15,690 $ 34,222 |
Stock Incentive Plans
Stock Incentive Plans | 4 Months Ended |
Apr. 16, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans Under the Company’s Second Amended and Restated 2007 Performance Incentive Plan (the “2007 Stock Plan”), various stock options and stock awards may be granted to employees of the Company and any of its subsidiaries, directors of the Company, and certain consultants and advisors to the Company or any of its subsidiaries. Stock options are granted with an exercise price equal to the fair market value of shares of the Company’s common stock at the grant date. We account for stock-based compensation in accordance with fair value recognition provisions, calculated using the Black-Scholes option pricing model (the “pricing model”). The weighted-average fair value of non-qualified stock options and the related assumptions used in the pricing model for periods in which options were granted were as follows: Sixteen Weeks Ended April 16, 2017 April 17, 2016 Risk-free interest rate 1.8 % 1.2 % Expected years until exercise 5.0 4.7 Expected stock volatility 37.9 % 39.3 % Dividend yield — % — % Weighted average Black-Scholes fair value per share at date of grant $ 17.11 $ 21.93 The following table presents a summary of the Company’s stock-based compensation activity for the sixteen weeks ended April 16, 2017 (in thousands): Stock Options Restricted Stock Units Outstanding, December 25, 2016 408 82 Granted 145 58 Forfeited/expired (13 ) (3 ) Exercised/vested (24 ) (17 ) Outstanding, April 16, 2017 516 120 We recognized stock-based compensation expense of $0.9 million and $2.1 million for the sixteen weeks ended April 16, 2017 and April 17, 2016 . |
Earnings Per Share
Earnings Per Share | 4 Months Ended |
Apr. 16, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share amounts are calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share amounts are calculated based upon the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. Diluted earnings per share reflect the potential dilution that could occur if holders of options exercised their options into common stock. During the sixteen weeks ended April 16, 2017 and April 17, 2016 , weighted average stock options outstanding of 261 thousand shares and 193 thousand shares were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented. The Company uses the treasury stock method to calculate the effect of outstanding stock options. The computations for basic and diluted earnings per share are as follows (in thousands, except per share data): Sixteen Weeks Ended April 16, 2017 April 17, 2016 Net income $ 11,567 $ 14,225 Basic weighted average shares outstanding 12,853 13,635 Dilutive effect of stock options and awards 100 148 Diluted weighted average shares outstanding 12,953 13,783 Earnings per share: Basic $ 0.90 $ 1.04 Diluted $ 0.89 $ 1.03 |
Other Charges
Other Charges | 4 Months Ended |
Apr. 16, 2017 | |
Other Income and Expenses [Abstract] | |
Other Charges | Other Charges Other charges consist of the following (in thousands): Sixteen Weeks Ended April 16, 2017 April 17, 2016 Litigation contingencies — 3,900 Asset impairment — 825 Other charges — 4,725 In the first quarter of 2016, the Company recorded $3.9 million of litigation contingencies for employment-related claims. In the first quarter of 2016, the Company relocated one restaurant and recognized a $0.8 million asset impairment charge due to the relocation. |
Borrowings
Borrowings | 4 Months Ended |
Apr. 16, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Borrowings as of April 16, 2017 and December 25, 2016 are summarized below (in thousands): April 16, 2017 December 25, 2016 Revolving credit facility and other long-term debt $ 300,875 $ 336,375 Capital lease obligations 11,300 11,463 Total debt 312,175 347,838 Less: Current portion (667 ) (658 ) Long-term debt $ 311,508 $ 347,180 On June 30, 2016 , the Company replaced its existing credit facility (“Previous Credit Facility”) with a new credit facility (the “New Credit Facility”). The New Credit Facility provides for a $400 million revolving line of credit with a sublimit for the issuance of up to $25 million in letters of credit and swingline loans up to $15 million and includes an option to increase the amount available under the credit facility up to an additional $100 million in the aggregate, subject to the lenders’ participation. The New Credit Facility also provides a Canadian Dollar borrowing sublimit equivalent to $20 million . Borrowings under the New Credit Facility, if denominated in U.S. Dollars, are subject to rates based on the London Interbank Offered Rate (“LIBOR”) plus a spread based on leverage or a base rate plus a spread based on leverage. The base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) LIBOR for an Interest Period of one month plus 1% . Borrowings under the New Credit Facility, if denominated in Canadian Dollars, are subject to rates based on LIBOR plus a spread based on leverage or a base rate plus a spread based on leverage. The base rate for these purposes is the highest of (a) the Canadian Prime Rate and (b) the Canadian Dealer Offered Rate (“CDOR Rate”) for an interest period of one month plus 1% . On April 13, 2017, the Company entered into a first amendment (the “Amendment”) to the New Credit Facility. The Amendment increases the lease adjusted leverage ratio to 5.25 x through October 1, 2017 before stepping down to 5.0 x through July 15, 2018 and returning to 4.75 x thereafter. The Amendment also provides for additional pricing tiers that increase LIBOR spread rates and commitment fees to the extent the Company’s lease adjusted leverage ratio exceeds 4.75 x, in addition to revising terms for permitted acquisitions and investments under the New Credit Facility. The Amendment is effective through October 7, 2018 and is cancelable at the Company’s discretion. A copy of the Amendment is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. The New Credit Facility matures on June 30, 2021 . Borrowings under the New Credit Facility are secured by first priority liens and security interests in substantially all of the Company’s assets, including the capital stock of certain Company subsidiaries. Borrowings are available for financing activities including restaurant construction costs, working capital, and general corporate purposes, including, among other uses, to refinance certain indebtedness, permitted acquisitions, and redemption of capital stock. As of April 16, 2017 , the Company had outstanding borrowings under the New Credit Facility of $300.0 million , in addition to amounts issued under letters of credit of $7.4 million , which reduced the amount available under the facility but were not recorded as debt. As of December 25, 2016 , the Company had outstanding borrowings under the New Credit Facility of $335.5 million , in addition to amounts issued under letters of credit of $8.8 million . Loan origination costs associated with the New Credit Facility are included as deferred costs in Other assets, net in the accompanying condensed consolidated balance sheets. In the first quarter of 2017, the Company recorded $0.7 million in debt issuance costs related to the Amendment to the New Credit Facility. Unamortized debt issuance costs were $2.8 million and $2.3 million as of April 16, 2017 and December 25, 2016 . |
Fair Value Measurements
Fair Value Measurements | 4 Months Ended |
Apr. 16, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short term nature or maturity of the instruments. The following tables present the Company’s assets measured at fair value on a recurring basis as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 9,243 $ 9,243 $ — $ — Total assets measured at fair value $ 9,243 $ 9,243 $ — $ — December 25, 2016 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 9,165 $ 9,165 $ — $ — Total assets measured at fair value $ 9,165 $ 9,165 $ — $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired. As of April 16, 2017 , the Company had no non-financial assets or liabilities that were measured using level 3 inputs. As of December 25, 2016 , the Company measured non-financial assets for impairment using continuing and projected future cash flows, which were based on significant inputs not observable in the market and thus represented a level 3 fair value measurement. Disclosures of Fair Value of Other Assets and Liabilities The Company’s liabilities under the New Credit Facility and capital leases are carried at historical cost in the accompanying condensed consolidated balance sheets. For disclosure purposes, the Company estimated the fair value of the New Credit Facility and capital lease obligations using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt. Both the New Credit Facility and the Company’s capital lease obligations are considered to be level 2 instruments. The following table presents the carrying value and estimated fair value of the Company’s New Credit Facility and capital lease obligations as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 December 25, 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 300,000 $ 299,554 $ 335,500 $ 335,611 Capital lease obligations 11,300 12,184 11,463 12,917 Total $ 311,300 $ 311,738 $ 346,963 $ 348,528 |
Commitments and Contingencies
Commitments and Contingencies | 4 Months Ended |
Apr. 16, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include employment-related claims and claims alleging illness, injury, or other food quality, health, or operational issues. Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. We review the adequacy of accruals and disclosures pertaining to litigation matters each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the consolidated financial statements. While it is not possible to predict the outcome of these claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements. Law enforcement officials have made the Company aware that cyber criminals are actively targeting restaurant companies, including Red Robin. The Company is investigating whether Red Robin guests have been impacted. The Company’s practice, which has been published in the Privacy Policy on Red Robin’s website, is to share information about security incidents impacting Red Robin guests only when the Company has complete and accurate information. |
Basis of Presentation and Rec15
Basis of Presentation and Recent Accounting Pronouncements (Policies) | 4 Months Ended |
Apr. 16, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Red Robin and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year. The accompanying condensed consolidated financial statements of Red Robin have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of December 25, 2016 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim condensed consolidated financial statements in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2016 , filed with the SEC on February 21, 2017. The Company’s quarter that ended April 16, 2017 is referred to as first quarter 2017, or the sixteen weeks ended April 16, 2017 ; the quarter ended April 17, 2016 is referred to as first quarter 2016, or the sixteen weeks ended April 17, 2016 . The quarter ended December 25, 2016 is referred to as fourth quarter 2016, or the twelve weeks ended December 25, 2016. The Company’s fiscal year 2017 comprises 53 weeks and will end on December 31, 2017 . |
Recently Issued Accounting Standards & Recently Adopted Accounting Standards | Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for leases. This guidance requires the recognition of liabilities for lease obligations and corresponding right-of-use assets on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective adoption method. Early adoption is permitted. We are evaluating the full impact this guidance will have on our consolidated financial statements but expect this adoption will result in a significant increase in the assets and liabilities on our consolidated balance sheet. In May 2014, the FASB issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) that amends the principal versus agent guidance in the new revenue recognition standard. In April 2016, the FASB issued an ASU to clarify the guidance on accounting for licenses or intellectual property and identifying performance obligations in the new revenue recognition standard. In addition, in May 2016, the FASB issued an ASU that clarifies several narrow-scope improvements and practical expedients for adopting the new revenue guidance. We have determined the new revenue recognition standard will not have an impact on our recognition of food and beverage sales from Company-owned restaurants or our recognition of royalty fees from franchisees. The Company does not expect the impact of recognizing initial franchise fees over the franchise agreement period and recognizing advertising expense upon adoption of this standard to have a material effect on our consolidated financial statements. The Company will adopt this guidance beginning with its fiscal first quarter 2018 and will apply the guidance retrospectively to each prior period presented. Recently Adopted Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step 2 of the goodwill impairment test. When performing the annual goodwill impairment test, an impairment charge should be recognized if the carrying amount of a reporting unit exceeds the reporting unit’s fair value. The Company adopted this standard in the first quarter of 2017, and does not expect the adoption will have a material impact on our financial statements when we perform our annual impairment test later this fiscal year. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which changes the accounting for, and classification of, excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. In the first quarter of 2017, the Company adopted this standard on a prospective basis (prior periods have not been restated) which did not have a material impact on our financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets subject to amortization | The following table presents intangible assets as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 December 25, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 55,902 $ (28,445 ) $ 27,457 $ 55,902 $ (27,306 ) $ 28,596 Favorable leases 13,931 (7,622 ) 6,309 13,931 (7,400 ) 6,531 Liquor licenses 10,338 (9,882 ) 456 10,253 (9,857 ) 396 $ 80,171 $ (45,949 ) $ 34,222 $ 80,086 $ (44,563 ) $ 35,523 Indefinite-lived intangible assets: Liquor licenses and other $ 7,486 $ — $ 7,486 $ 6,747 $ — $ 6,747 Intangible assets, net $ 87,657 $ (45,949 ) $ 41,708 $ 86,833 $ (44,563 ) $ 42,270 |
Schedule of intangible assets not subject to amortization | The following table presents intangible assets as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 December 25, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 55,902 $ (28,445 ) $ 27,457 $ 55,902 $ (27,306 ) $ 28,596 Favorable leases 13,931 (7,622 ) 6,309 13,931 (7,400 ) 6,531 Liquor licenses 10,338 (9,882 ) 456 10,253 (9,857 ) 396 $ 80,171 $ (45,949 ) $ 34,222 $ 80,086 $ (44,563 ) $ 35,523 Indefinite-lived intangible assets: Liquor licenses and other $ 7,486 $ — $ 7,486 $ 6,747 $ — $ 6,747 Intangible assets, net $ 87,657 $ (45,949 ) $ 41,708 $ 86,833 $ (44,563 ) $ 42,270 |
Schedule of estimated aggregate future amortization expense | The estimated aggregate future amortization expense as of April 16, 2017 is as follows (in thousands): Remainder of 2017 $ 3,091 2018 4,264 2019 4,217 2020 3,696 2021 3,264 Thereafter 15,690 $ 34,222 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of average assumptions used in estimation of fair value of options | The weighted-average fair value of non-qualified stock options and the related assumptions used in the pricing model for periods in which options were granted were as follows: Sixteen Weeks Ended April 16, 2017 April 17, 2016 Risk-free interest rate 1.8 % 1.2 % Expected years until exercise 5.0 4.7 Expected stock volatility 37.9 % 39.3 % Dividend yield — % — % Weighted average Black-Scholes fair value per share at date of grant $ 17.11 $ 21.93 |
Summary of status of the Company's stock option plans | The following table presents a summary of the Company’s stock-based compensation activity for the sixteen weeks ended April 16, 2017 (in thousands): Stock Options Restricted Stock Units Outstanding, December 25, 2016 408 82 Granted 145 58 Forfeited/expired (13 ) (3 ) Exercised/vested (24 ) (17 ) Outstanding, April 16, 2017 516 120 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computations for basic and diluted earnings per share | The computations for basic and diluted earnings per share are as follows (in thousands, except per share data): Sixteen Weeks Ended April 16, 2017 April 17, 2016 Net income $ 11,567 $ 14,225 Basic weighted average shares outstanding 12,853 13,635 Dilutive effect of stock options and awards 100 148 Diluted weighted average shares outstanding 12,953 13,783 Earnings per share: Basic $ 0.90 $ 1.04 Diluted $ 0.89 $ 1.03 |
Other Charges (Tables)
Other Charges (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Other Income and Expenses [Abstract] | |
Summary of other charges | Other charges consist of the following (in thousands): Sixteen Weeks Ended April 16, 2017 April 17, 2016 Litigation contingencies — 3,900 Asset impairment — 825 Other charges — 4,725 |
Borrowings (Tables)
Borrowings (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | Borrowings as of April 16, 2017 and December 25, 2016 are summarized below (in thousands): April 16, 2017 December 25, 2016 Revolving credit facility and other long-term debt $ 300,875 $ 336,375 Capital lease obligations 11,300 11,463 Total debt 312,175 347,838 Less: Current portion (667 ) (658 ) Long-term debt $ 311,508 $ 347,180 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 4 Months Ended |
Apr. 16, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on recurring basis | The following tables present the Company’s assets measured at fair value on a recurring basis as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 9,243 $ 9,243 $ — $ — Total assets measured at fair value $ 9,243 $ 9,243 $ — $ — December 25, 2016 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 9,165 $ 9,165 $ — $ — Total assets measured at fair value $ 9,165 $ 9,165 $ — $ — |
Summary of fair value of debt | The following table presents the carrying value and estimated fair value of the Company’s New Credit Facility and capital lease obligations as of April 16, 2017 and December 25, 2016 (in thousands): April 16, 2017 December 25, 2016 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 300,000 $ 299,554 $ 335,500 $ 335,611 Capital lease obligations 11,300 12,184 11,463 12,917 Total $ 311,300 $ 311,738 $ 346,963 $ 348,528 |
Basis of Presentation and Rec22
Basis of Presentation and Recent Accounting Pronouncements - Additional Information (Details) | 4 Months Ended |
Apr. 16, 2017stateprovincerestaurantsegment | |
Franchisor Disclosure [Line Items] | |
Number of operating segments | segment | 1 |
Number of reportable segments | segment | 1 |
Company-owned operated restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 469 |
Number of states in which restaurants are located | state | 39 |
Number of Canadian provinces in which restaurants are located | province | 2 |
Franchised restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 87 |
Number of states in which restaurants are located | state | 15 |
Goodwill and Intangible Asset23
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Details) - USD ($) | 4 Months Ended | ||
Apr. 16, 2017 | Apr. 17, 2016 | Dec. 25, 2016 | |
Schedule of Intangible Assets [Line Items] | |||
Impairment to goodwill | $ 0 | $ 0 | |
Impairment to intangible assets | 0 | 0 | |
Intangible Assets | |||
Gross Carrying Amount | 80,171,000 | $ 80,086,000 | |
Accumulated Amortization | (45,949,000) | (44,563,000) | |
Net Carrying Amount | 34,222,000 | 35,523,000 | |
Intangible assets, Gross Carrying Amount | 87,657,000 | 86,833,000 | |
Intangible assets, Accumulated Amortization | (45,949,000) | (44,563,000) | |
Intangible assets, Net Carrying Amount | 41,708,000 | 42,270,000 | |
Aggregate amortization expense | 1,600,000 | $ 1,500,000 | |
Liquor licenses and other | |||
Intangible Assets | |||
Gross Carrying Amount, Indefinite-lived intangible assets | 7,486,000 | 6,747,000 | |
Accumulated Amortization, Indefinite-lived intangible assets | 0 | 0 | |
Net Carrying Amount, Indefinite-lived intangible assets | 7,486,000 | 6,747,000 | |
Franchise rights | |||
Intangible Assets | |||
Gross Carrying Amount | 55,902,000 | 55,902,000 | |
Accumulated Amortization | (28,445,000) | (27,306,000) | |
Net Carrying Amount | 27,457,000 | 28,596,000 | |
Favorable leases | |||
Intangible Assets | |||
Gross Carrying Amount | 13,931,000 | 13,931,000 | |
Accumulated Amortization | (7,622,000) | (7,400,000) | |
Net Carrying Amount | 6,309,000 | 6,531,000 | |
Liquor licenses and other | |||
Intangible Assets | |||
Gross Carrying Amount | 10,338,000 | 10,253,000 | |
Accumulated Amortization | (9,882,000) | (9,857,000) | |
Net Carrying Amount | $ 456,000 | $ 396,000 |
Goodwill and Intangible Asset24
Goodwill and Intangible Assets - Summary of Future Amortization (Details) - USD ($) $ in Thousands | Apr. 16, 2017 | Dec. 25, 2016 |
Estimated aggregate future amortization expense | ||
Remainder of 2017 | $ 3,091 | |
2,018 | 4,264 | |
2,019 | 4,217 | |
2,020 | 3,696 | |
2,021 | 3,264 | |
Thereafter | 15,690 | |
Net Carrying Amount | $ 34,222 | $ 35,523 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Fair Value Assumptions and Stock-Based Compensation Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Stock-based compensation expense recognized | ||
Stock-based compensation expense | $ 0.9 | $ 2.1 |
Stock Options | ||
Weighted average assumptions used in estimation of fair value of options | ||
Risk-free interest rate (as a percent) | 1.80% | 1.20% |
Expected years until exercise | 5 years | 4 years 8 months 12 days |
Expected stock volatility (as a percent) | 37.90% | 39.30% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Weighted average Black-Scholes fair value per share at date of grant (in dollars per share) | $ 17.11 | $ 21.93 |
Stock Options | ||
Outstanding, Beginning of period (in shares) | 408 | |
Granted (in shares) | 145 | |
Forfeited/expired (in shares) | (13) | |
Exercised/vested (in shares) | (24) | |
Outstanding, End of period (in shares) | 516 | |
Restricted Stock Units | ||
Restricted Stock Units | ||
Outstanding, Beginning of period (in shares) | 82 | |
Granted (in shares) | 58 | |
Forfeited/expired (in shares) | (3) | |
Exercised/vested (in shares) | (17) | |
Outstanding, End of period (in shares) | 120 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Earnings Per Share [Abstract] | ||
Weighted average stock options outstanding (in shares) | 261 | 193 |
Earnings Per Share Reconciliation [Abstract] | ||
Net income | $ 11,567 | $ 14,225 |
Basic weighted average shares outstanding (in shares) | 12,853 | 13,635 |
Dilutive effect of stock options and awards (in shares) | 100 | 148 |
Diluted weighted average shares outstanding (in shares) | 12,953 | 13,783 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.90 | $ 1.04 |
Diluted (in dollars per share) | $ 0.89 | $ 1.03 |
Other Charges - Summary of Othe
Other Charges - Summary of Other Charges (Details) - USD ($) $ in Thousands | 4 Months Ended | |
Apr. 16, 2017 | Apr. 17, 2016 | |
Other Income and Expenses [Abstract] | ||
Litigation contingencies | $ 0 | $ 3,900 |
Asset impairment | 0 | 825 |
Other charges | $ 0 | $ 4,725 |
Other Charges - Additional Info
Other Charges - Additional Information (Details) $ in Thousands | 4 Months Ended | |
Apr. 16, 2017USD ($) | Apr. 17, 2016USD ($)restaurant | |
Loss Contingencies [Line Items] | ||
Litigation contingencies | $ 0 | $ 3,900 |
Asset impairment | $ 0 | $ 825 |
Number of restaurants relocated | restaurant | 1 | |
Compensation-related Claims [Member] | ||
Loss Contingencies [Line Items] | ||
Litigation contingencies | $ 3,900 |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Thousands | Apr. 16, 2017 | Dec. 25, 2016 |
Debt Instrument [Line Items] | ||
Total debt | $ 312,175 | $ 347,838 |
Less: Current portion | (667) | (658) |
Long-term debt | 311,508 | 347,180 |
Revolving line of credit | Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 300,875 | 336,375 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Total debt | $ 11,300 | $ 11,463 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) | Jun. 30, 2016USD ($) | Apr. 16, 2017USD ($) | Apr. 17, 2016USD ($) | Apr. 13, 2017 | Dec. 25, 2016USD ($) |
Borrowings | |||||
Debt issuance costs | $ 664,000 | $ 0 | |||
Loan origination costs | 2,800,000 | $ 2,300,000 | |||
New Credit Facility | Revolving line of credit | |||||
Borrowings | |||||
Maximum borrowing capacity | $ 400,000,000 | ||||
Additional borrowing capacity subject to lender participation | 100,000,000 | ||||
Additional pricing tiers, lease adjusted leverage ratio threshold | 4.75 | ||||
Debt issuance costs | 700,000 | ||||
New Credit Facility | Revolving line of credit | Through October 1, 2017 | |||||
Borrowings | |||||
Covenant compliance, lease adjusted leverage ratio | 5.25 | ||||
New Credit Facility | Revolving line of credit | October 2, 2017 through July 15, 2018 | |||||
Borrowings | |||||
Covenant compliance, lease adjusted leverage ratio | 5 | ||||
New Credit Facility | Revolving line of credit | July 16, 2018 and Thereafter | |||||
Borrowings | |||||
Covenant compliance, lease adjusted leverage ratio | 4.75 | ||||
New Credit Facility | Letter of credit | Line of credit | |||||
Borrowings | |||||
Maximum borrowing capacity | 25,000,000 | ||||
New Credit Facility | Swingline loans | Line of credit | |||||
Borrowings | |||||
Maximum borrowing capacity | 15,000,000 | ||||
New Credit Facility | Canadian dollar borrowing equivalent | Line of credit | |||||
Borrowings | |||||
Maximum borrowing capacity | $ 20,000,000 | ||||
Credit Facility | Revolving line of credit | |||||
Borrowings | |||||
Amounts outstanding | 335,500,000 | ||||
Credit Facility | Revolving line of credit | Federal Funds Rate | |||||
Borrowings | |||||
Interest rate margin (as a percent) | 0.50% | ||||
Credit Facility | Revolving line of credit | LIBOR | |||||
Borrowings | |||||
Interest rate margin (as a percent) | 1.00% | ||||
Credit Facility | Revolving line of credit | Canadian Dealer Offered Rate (CDOR) | |||||
Borrowings | |||||
Interest rate margin (as a percent) | 1.00% | ||||
Credit Facility | Letter of credit | |||||
Borrowings | |||||
Amounts outstanding | $ 8,800,000 | ||||
Credit Facility | Line of credit | |||||
Borrowings | |||||
Amounts outstanding | 300,000,000 | ||||
Credit Facility | Letter of credit | Line of credit | |||||
Borrowings | |||||
Amounts outstanding | $ 7,400,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Apr. 16, 2017 | Dec. 25, 2016 |
Assets: | ||
Investments in rabbi trust | $ 9,243 | $ 9,165 |
Total assets measured at fair value | 9,243 | 9,165 |
Level 1 | ||
Assets: | ||
Investments in rabbi trust | 9,243 | 9,165 |
Total assets measured at fair value | 9,243 | 9,165 |
Level 2 | ||
Assets: | ||
Investments in rabbi trust | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Level 3 | ||
Assets: | ||
Investments in rabbi trust | 0 | 0 |
Total assets measured at fair value | $ 0 | $ 0 |
Fair Value Measurements - Sum32
Fair Value Measurements - Summary of Carrying Value and Estimated Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Apr. 16, 2017 | Dec. 25, 2016 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility | $ 300,000 | $ 335,500 |
Capital lease obligations | 11,300 | 11,463 |
Total | 311,300 | 346,963 |
Estimated Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Credit facility | 299,554 | 335,611 |
Capital lease obligations | 12,184 | 12,917 |
Total | $ 311,738 | $ 348,528 |