Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Feb. 25, 2020 | Jul. 14, 2019 | |
Document and Entity Information | |||
Entity Registrant Name | RED ROBIN GOURMET BURGERS INC | ||
Entity Central Index Key | 0001171759 | ||
Current Fiscal Year End Date | --12-29 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 29, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 12,915,148 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 394.2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 30,045 | $ 18,569 |
Accounts receivable, net | 22,372 | 25,034 |
Inventories | 26,424 | 27,370 |
Prepaid expenses and other current assets | 26,646 | 27,576 |
Total current assets | 105,487 | 98,549 |
Property and equipment, net | 518,013 | 565,142 |
Right of use assets, net | 426,248 | 0 |
Goodwill | 96,397 | 95,838 |
Intangible assets, net | 29,975 | 34,609 |
Other assets, net | 61,460 | 49,803 |
Total assets | 1,237,580 | 843,941 |
Current liabilities: | ||
Accounts payable | 33,040 | 39,024 |
Accrued payroll and payroll-related liabilities | 35,221 | 37,922 |
Unearned revenue | 54,223 | 55,360 |
Short-term portion of lease obligations | 42,699 | 786 |
Accrued liabilities and other current liabilities | 29,403 | 38,057 |
Total current liabilities | 194,586 | 171,149 |
Deferred rent | 0 | 75,675 |
Long-term debt | 206,875 | 193,375 |
Long-term portion of lease obligations | 465,435 | 9,414 |
Other non-current liabilities | 10,164 | 11,523 |
Total liabilities | 877,060 | 461,136 |
Stockholders’ equity: | ||
Common stock; $0.001 par value: 45,000 shares authorized; 17,851 shares issued; 12,923 and 12,971 shares outstanding | 18 | 18 |
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Treasury stock 4,928 and 4,880 shares, at cost | (202,313) | (201,505) |
Paid-in capital | 213,922 | 212,752 |
Accumulated other comprehensive loss, net of tax | (4,373) | (4,801) |
Retained earnings | 353,266 | 376,341 |
Total stockholders’ equity | 360,520 | 382,805 |
Total liabilities and stockholders’ equity | $ 1,237,580 | $ 843,941 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 29, 2019 | Dec. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares issued (in shares) | 17,851,000 | 17,851,000 |
Common stock, shares outstanding (in shares) | 12,923,000 | 12,971,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock, shares (in shares) | 4,928,000 | 4,880,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Revenues | $ 1,315,014 | $ 1,338,563 | $ 1,387,566 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | |||
Cost of sales | 303,404 | 313,504 | 320,355 |
Labor (includes $161, $245, and $346 of stock-based compensation) | 456,778 | 456,262 | 475,432 |
Other operating | 186,476 | 182,084 | 178,309 |
Occupancy | 111,798 | 114,146 | 112,753 |
Depreciation and amortization | 91,790 | 95,371 | 92,545 |
Selling, general, and administrative expenses (includes $3,103, $3,803, and $4,442 of stock-based compensation) | 155,978 | 146,458 | 156,656 |
Pre-opening costs | 319 | 2,092 | 5,570 |
Other charges | 21,598 | 39,131 | 6,914 |
Total costs and expenses | 1,328,141 | 1,349,048 | 1,348,534 |
(Loss) income from operations | (13,127) | (10,485) | 39,032 |
Other expense (income): | |||
Interest expense and other | 10,178 | 10,704 | 10,955 |
Interest (income) and other, net | (1,068) | 221 | (943) |
Total other expenses | 9,110 | 10,925 | 10,012 |
(Loss) income before income taxes | (22,237) | (21,410) | 29,020 |
Income tax benefit | (14,334) | (14,991) | (999) |
Net (loss) income | $ (7,903) | $ (6,419) | $ 30,019 |
(Loss) earnings per share: | |||
Basic (in dollars per share) | $ (0.61) | $ (0.49) | $ 2.33 |
Diluted (in dollars per share) | $ (0.61) | $ (0.49) | $ 2.31 |
Weighted average shares outstanding: | |||
Basic (in shares) | 12,959 | 12,976 | 12,899 |
Diluted (in shares) | 12,959 | 12,976 | 12,998 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | $ 428 | $ (1,235) | $ 1,442 |
Other comprehensive income (loss), net of tax | 428 | (1,235) | 1,442 |
Total comprehensive (loss) income | (7,475) | (7,654) | 31,461 |
Restaurant revenue | |||
Revenues: | |||
Revenues | 1,289,521 | 1,316,209 | 1,365,060 |
Franchise revenue | |||
Revenues: | |||
Revenues | 17,497 | 17,409 | 17,681 |
Other revenue | |||
Revenues: | |||
Revenues | $ 7,996 | $ 4,945 | $ 4,825 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Labor, stock-based compensation | $ 161 | $ 245 | $ 346 |
Selling, general, and administrative, stock-based compensation | $ 3,103 | $ 3,803 | $ 4,442 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings |
Beginning balance (in shares) at Dec. 25, 2016 | 17,851,000 | 5,023,000 | ||||
Beginning balance at Dec. 25, 2016 | $ 348,053 | $ 18 | $ (207,720) | $ 208,022 | $ (5,008) | $ 352,741 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan (in shares) | (126,000) | |||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | 3,043 | $ 5,235 | (2,192) | |||
Non-cash stock compensation | 4,878 | 4,878 | ||||
Net income | 30,019 | 30,019 | ||||
Other comprehensive income | 1,442 | 1,442 | ||||
Ending balance (in shares) at Dec. 31, 2017 | 17,851,000 | 4,897,000 | ||||
Ending balance at Dec. 31, 2017 | 387,435 | $ 18 | $ (202,485) | 210,708 | (3,566) | 382,760 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan (in shares) | (60,000) | |||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | 447 | $ 2,454 | (2,007) | |||
Non-cash stock compensation | 4,051 | 4,051 | ||||
Net income | (6,419) | (6,419) | ||||
Other comprehensive income | (1,235) | (1,235) | ||||
Acquisition of treasury stock (in shares) | 43,000 | |||||
Acquisition of treasury stock | (1,474) | $ (1,474) | ||||
Ending balance (in shares) at Dec. 30, 2018 | 17,851,000 | 4,880,000 | ||||
Ending balance at Dec. 30, 2018 | 382,805 | $ 18 | $ (201,505) | 212,752 | (4,801) | 376,341 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan (in shares) | (64,000) | |||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | 462 | $ 2,642 | (2,180) | |||
Non-cash stock compensation | (3,350) | 3,350 | ||||
Topic 842 transition impairment, net of tax | (15,172) | (15,172) | ||||
Net income | (7,903) | (7,903) | ||||
Other comprehensive income | $ 428 | 428 | ||||
Acquisition of treasury stock (in shares) | 111,800 | 112,000 | ||||
Acquisition of treasury stock | $ (3,450) | $ (3,450) | ||||
Ending balance (in shares) at Dec. 29, 2019 | 17,851,000 | 4,928,000 | ||||
Ending balance at Dec. 29, 2019 | $ 360,520 | $ 18 | $ (202,313) | $ 213,922 | $ (4,373) | $ 353,266 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities: | |||
Net income | $ (7,903) | $ (6,419) | $ 30,019 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 91,790 | 95,371 | 92,545 |
Gift card breakage | (6,776) | (3,898) | (4,026) |
Other charges - asset impairment and unpaid other charges | 1,473 | 35,715 | 6,914 |
Deferred income tax benefit | (9,640) | (18,613) | (6,478) |
Stock-based compensation expense | 3,344 | 4,048 | 4,788 |
Other, net | 678 | 1,052 | 1,043 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,766 | 2,922 | (609) |
Prepaid expenses and other current assets | (8,240) | 5,918 | (4,105) |
Trade accounts payable and accrued liabilities | (15,490) | 5,685 | 21,022 |
Unearned revenue | 5,632 | 3,397 | 9,701 |
Other operating assets and liabilities, net | 281 | 1,117 | 5,793 |
Net cash provided by operating activities | 57,915 | 126,295 | 156,607 |
Cash Flows From Investing Activities: | |||
Purchases of property, equipment and intangible assets | (57,309) | (50,271) | (83,531) |
Proceeds from sales of real estate and property, plant, and equipment and other | 279 | 435 | 241 |
Net cash used in investing activities | (57,030) | (49,836) | (83,290) |
Cash Flows From Financing Activities: | |||
Borrowings of long-term debt | 273,500 | 215,500 | 186,550 |
Repayment Of Long Term Debt And Finance Lease Obligations | (261,063) | ||
Payments of long-term debt and finance leases | (289,238) | (257,215) | |
Purchase of treasury stock | (3,450) | (1,474) | 0 |
Debt issuance costs | (33) | 0 | (664) |
Proceeds from exercise of stock options and employee stock purchase plan | 724 | 914 | 3,405 |
Net cash provided by (used in) financing activities | 9,678 | (74,298) | (67,924) |
Effect of Currency Translation on Cash | 913 | (1,306) | 589 |
Net increase in cash and cash equivalents | 11,476 | 855 | 5,982 |
Cash and cash equivalents, beginning of period | 18,569 | 17,714 | 11,732 |
Cash and cash equivalents, end of period | 30,045 | 18,569 | 17,714 |
Supplemental disclosure of cash flow information | |||
Income taxes paid | 3,237 | 2,486 | 3,999 |
Interest paid, net of amounts capitalized | 9,750 | 10,013 | 10,372 |
Change in accrued capital expenditures | (3,910) | $ (507) | $ (5,951) |
Right of use assets obtained in exchange for finance lease obligations following the adoption of Topic 842 (Leases) | $ 1,606 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries (“Red Robin,” “we,” “us,” “our”, or the “Company”), primarily operates, franchises, and develops casual-dining restaurants in North America. As of December 29, 2019 , the Company owned and operated 454 restaurants located in 38 states. The Company also had 102 casual-dining restaurants operated by franchisees in 16 states and one Canadian province. The Company operates its business as one operating and one reportable segment. Basis of Presentation and Principles of Consolidation - The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States and include the accounts of Red Robin and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions. The Company’s fiscal year is 52 or 53 weeks ending the last Sunday of the calendar year. Year end dates and the number of weeks in each fiscal year are shown in the table below for periods presented in this Form 10-K and for the upcoming fiscal year. Fiscal Year Year End Date Number of Weeks in Fiscal Year Current and Prior Fiscal Years: 2019 December 29, 2019 52 2018 December 30, 2018 52 2017 December 31, 2017 53 Upcoming Fiscal Year 2020 December 27, 2020 52 Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 periods. The areas that require management’s most significant estimates are impairment of long-lived assets, goodwill, lease accounting, insurance/self-insurance reserves, estimating fair value, income taxes, unearned revenue, and stock-based compensation expense. Actual results could differ from those estimates. Reclassifications - Certain amounts presented in prior periods have been reclassified to conform with the current period presentation. For the fiscal year ended December 30, 2018, the Company reclassified unfavorable lease rights of $1.4 million from Deferred rent to Other non-current liabilities and reclassified the short-term portion of our lease obligations totaling $0.8 million from Accrued liabilities and other to its own line item on the consolidated balance sheets. Management believes this presentation better reflects the nature of these liabilities subsequent to the adoption of Topic 842 (Leases), as defined in Note 10, Leases . For the fiscal years ended December 30, 2018 and December 31, 2017 , the Company reclassified gift card breakage of $3.9 million and $4.0 million , respectively, from Other, net to its own line item presented in the adjustments to reconcile net (loss) income to net cash provided by operating activities on the consolidated statements of cash flows. Cash Equivalents - The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the “FDIC”) and sometimes invests excess cash in money market funds not insured by the FDIC. Accounts Receivable - Accounts receivable consists primarily of third-party gift card receivables, tenant improvement allowances, and trade receivables due from franchisees for royalties. At the end of 2019, there was approximately $13.3 million of gift cards in transit in accounts receivable related to gift cards that were sold by third-party retailers compared to $13.8 million at the end of 2018. At the end of 2019, there was also approximately $0.6 million related to tenant improvement allowances in accounts receivable compared to $ 2.4 million at the end of 2018. Inventories - Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value. At the end of 2019 and 2018, food and beverage inventories were $ 8.1 million and $ 8.7 million , respectively, and supplies inventories were $ 18.3 million and $ 18.6 million , respectively. Property and Equipment - Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. Depreciation is computed on the straight-line method, based on the shorter of the estimated useful lives or the terms of the underlying leases of the related assets. Interest incurred on funds used to construct Company-owned restaurants is capitalized and amortized over the estimated useful life of the related assets. The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures and equipment 5 to 20 years Computer equipment 2 to 5 years The Company capitalizes certain overhead related to the development and construction of its new restaurants as well as certain information technology infrastructure upgrades. Costs incurred for the potential development of restaurants that are subsequently terminated are expensed. Goodwill and Intangible Assets, net - Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Intangible assets comprise primarily leasehold interests, acquired franchise rights, and the costs of purchased liquor licenses. Leasehold interests primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Acquired franchise rights, which represent the acquired value of franchise contracts, are amortized over the term of the franchise agreements. The costs of obtaining non-transferable liquor licenses from local government agencies are capitalized and generally amortized over a period of up to 20 years . The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Goodwill, which is not subject to amortization, is evaluated for impairment annually as of the end of the Company’s third fiscal quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of restaurant closures, that would indicate an impairment may exist. Goodwill is evaluated at the level of the Company’s single operating segment, which also represents the Company’s only reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we perform a quantitative assessment and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the price of our common stock. The Company performed a qualitative assessment for the 2019 annual impairment evaluation at the end of the third fiscal quarter and determined goodwill was not impaired. No indicators of impairment were identified from the date of our impairment test through the end of 2019. By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections and prior actual financial results, other relevant entity-specific events, and changes in share price, we determined it was not more likely than not that the fair value of the reporting unit was less than its carrying amount. The Company performed a quantitative assessment and determined that goodwill was not impaired as of October 7, 2018. No indicators of impairment were identified from the date of our impairment test through the end of 2018. Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Fair value is measured using a combination of the market capitalization method, the income approach, and the market approach. The market capitalization method uses the Company’s stock price to derive fair value. The income approach consists of utilizing the discounted cash flow method that incorporates the Company’s estimates of future revenues and costs, discounted using a risk-adjusted discount rate. The Company’s estimates used in the income approach are consistent with the plans and estimates used to manage operations. The market approach utilizes multiples of profit measures in order to estimate the fair value of the assets. The Company evaluates all methods to ensure reasonably consistent results. Additionally, the Company evaluates the key input factors in the models used to determine whether a moderate change in any input factor or combination of factors would significantly change the results of the tests. Liquor licenses with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on prices in the open market for license in same or similar jurisdictions. No impairment charges were recorded in 2019, 2018, or 2017. Impairment of Long-Lived Assets - The Company reviews its long-lived assets, including restaurant sites, leasehold improvements, information technology systems, and other fixed assets, and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If the assets are determined to be impaired, the amount of impairment recognized is the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined using forecasted cash flows discounted using an estimated weighted average cost of capital. Management may also utilize other market information to determine fair value when relevant information is available. Restaurant sites and other assets to be disposed of are reported at the lower of their carrying amount or fair value, less estimated costs to sell. Information technology systems, such as internal-use computer software, are reviewed and tested for recoverability if the internal-use computer software is not expected to provide substantive service potential, a significant change occurs in the extent or manner in which the software is used or is expected to be used, a significant change is made or will be made to the software program, or costs of developing or modifying internal-use software significantly exceed the amount originally expected to develop or modify the software. Other Assets, net - Other assets, net consist primarily of assets related to various deposits, the employee deferred compensation plan and unamortized debt issuance costs on revolving credit facilities. Debt issuance costs are capitalized and amortized to interest expense on a straight-line basis which approximates the effective interest rate method over the term of the Company’s long-term debt. Advertising - Under the Company’s franchise agreements, both the Company and the franchisees must contribute up to 3.0% of revenues to two national media advertising funds (the “Advertising Funds”). These Advertising Funds are used to build the Company’s brand equity and awareness primarily through a national marketing strategy, including national television advertising, digital media, social media programs, email, loyalty, and public relations initiatives. Contributions to these Advertising Funds from franchisees are recorded as revenue under Franchise revenue in the consolidated statements of operations and comprehensive (loss) income in accordance with Topic 606 (Revenue from Contracts with Customers). Total advertising costs were $ 44.3 million , $ 44.3 million , and $ 48 million in 2019, 2018, and 2017, respectively, and were included in Selling, general, and administrative expenses. Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. Self-Insurance Programs - The Company utilizes a self-insurance plan for health, general liability, and workers’ compensation coverage. Predetermined loss limits have been arranged with insurance companies to limit the Company’s per occurrence cash outlay. Accrued liabilities and accrued payroll and payroll-related liabilities include the estimated cost to settle reported claims and incurred but unreported claims. Legal Contingencies - In the normal course of business, we are subject to various legal proceedings and claims, the outcomes of which are uncertain. We record an accrual for legal contingencies when we determine it is probable that we have incurred a liability and we can reasonably estimate the amount of the loss. In making such determinations we evaluate, among other things, the probability of an unfavorable outcome and, when we believe it probable that a liability has been incurred, our ability to make a reasonable estimate of the loss. Pre-opening Costs - Pre-opening costs are expensed as incurred. Pre-opening costs include rental expenses through the date of opening for each restaurant, travel expenses, wages and benefits for the training and opening teams, as well as food, beverage, and other restaurant opening costs incurred prior to a restaurant opening for business. Costs related to preparing restaurants to introduce Donatos® will be expensed as incurred and included in pre-opening costs. Income Taxes - Deferred tax liabilities are recognized for the estimated effects of all taxable temporary differences, and deferred tax assets are recognized for the estimated effects of all deductible temporary differences and net operating losses, if any, and tax credit carryforwards. Realization of net deferred tax assets is dependent upon profitable operations and future reversals of existing taxable temporary differences. However, the amount of the deferred tax assets considered realizable could be adjusted if estimates of future taxable income during the carry forward period are increased or reduced or if there are differences in the timing or amount of future reversals of existing taxable temporary differences. We do not provide for deferred taxes on the excess of the financial reporting basis over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration. We intend to reinvest earnings from our foreign subsidiaries, if any, in those operations for the foreseeable future. We have not, nor do we anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs and, accordingly, we do not provide for U.S. federal income and foreign withholding tax on these earnings. While we do not expect to repatriate cash to the U.S., if these funds were distributed to the U.S., in the form of dividends or otherwise, we would be subject to additional U.S. income taxes. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs. Pursuant to the guidance for uncertain tax positions, a taxpayer must be able to more likely than not sustain a position to recognize a tax benefit, and the measurement of the benefit is calculated as the largest amount that is more than 50 percent likely to be realized upon resolution of the benefit. The Company has analyzed filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The only periods subject to examination for the Company’s federal and state returns are the 2014 through 2018 tax years. The Company records interest and penalties associated with audits as a component of income before taxes. Penalties are recorded in Interest income and other, net, and interest paid or received is recorded in Interest expense and other in the consolidated statements of operations and comprehensive (loss) income. The Company recorded immaterial interest expense on the identified tax liabilities in 2019, 2018, and 2017. Earnings Per Share - Basic earnings per share amounts are calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share amounts are calculated based upon the weighted average number of common and potentially dilutive common shares outstanding during the year. 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 holdings into common stock. The Company uses the treasury stock method to calculate the impact of outstanding stock options. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 as follows (in thousands): 2019 2018 2017 Basic weighted average shares outstanding 12,959 12,976 12,899 Dilutive effect of stock options and awards — — 99 Diluted weighted average shares outstanding 12,959 12,976 12,998 Awards excluded due to anti-dilutive effect on diluted earnings per share 378 427 329 Comprehensive (Loss) Income - Comprehensive (loss) income consists of the net income or loss and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income. Other comprehensive (loss) income as presented in the Consolidated Statements of Stockholders’ Equity for 2019, 2018, and 2017 consisted of the foreign currency translation adjustment resulting from the Company's Canadian restaurant operations. Stock-Based Compensation - The Company maintains several equity incentive plans under which it may grant stock options, stock appreciation rights, restricted stock, stock variable compensation or other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash variable compensation awards to employees, non-employees, directors, and consultants. The Company also maintains an employee stock purchase plan. The Company issues shares relating to stock-based compensation plans and the employee stock purchase plan from treasury shares. Deferred Compensation (Income) Expense - The Company has assets and liabilities related to a deferred compensation plan. The assets of the deferred compensation plan are held in a rabbi trust, where they are invested in certain mutual funds that cover an investment spectrum range from equities to money market instruments. Increases in the market value of the investments held in the trust result in the recognition of deferred compensation expense reported in Selling, general, and administrative expenses and recognition of investment gain reported in Interest income and other, net, in the consolidated statements of operations and comprehensive income (loss). Decreases in the market value of the investments held in the trust result in the recognition of a reduction to deferred compensation expense and recognition of investment loss reported in Interest income and other, net, in the consolidated statements of operations and comprehensive income (loss). Foreign Currency Translation - The Canadian Dollar is the functional currency for our Canadian restaurant operations. Assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at exchange rates in effect as of the balance sheet date. Income and expense accounts are translated using the average exchange rates prevailing throughout the period. The resulting translation adjustment is recorded as a separate component of Other comprehensive (loss) income. Gain or loss from foreign currency transactions is recognized in our consolidated statements of operations and comprehensive (loss) income. |
Revenue
Revenue | 12 Months Ended |
Dec. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition Revenues consist of sales from restaurant operations, franchise revenue, and other revenue including gift card breakage and miscellaneous revenue. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a restaurant Guest, franchisee, or other customer. Restaurant revenue The Company recognizes revenues from restaurant sales when payment is tendered at the point of sale, as the Company’s performance obligation to provide food and beverage to the customer has been satisfied. The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. We recognize revenue from gift cards as either: (i) Restaurant revenue, when the Company’s performance obligation to provide food and beverage to the customer is satisfied upon redemption of the gift card, or (ii) gift card breakage, as discussed in Other revenue below. Red Robin Royalty™ deferred revenue primarily relates to a program in which registered members earn an award for a free entrée for every nine entrées purchased. We recognize the current sale of an entrée and defer a portion of the revenue to reflect partial pre-payment for the future entrée the member is entitled to receive. We estimate the future value of the award based on the historical average value of redemptions. We also estimate what portion of registered members are not likely to reach the ninth purchase based on historical activity and recognize the deferred revenue related to those purchases. We recognize the deferred revenue in restaurant revenue on earned rewards when the Company satisfies its performance obligation at redemption, or upon expiration. We compare the estimate of the value of future awards to historical redemptions to evaluate the reasonableness of the deferred amount. Franchise revenue Revenues we receive from our franchise arrangements include sales-based royalties, advertising fund contributions, area development fees, and franchise fees. Red Robin franchisees are required to remit 4.0% to 5.0% of their revenues as royalties to the Company and contribute up to 3.0% of revenues to two national advertising funds. The Company recognizes these sales-based royalties and advertising fund contributions as the underlying franchisee sales occur. The Company also provides its franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for area development fees and franchise fees. The Company capitalizes these fees upon collection from the franchisee, which then amortize over the contracted franchise term as the services comprising the performance obligation are satisfied. The Company typically grants franchise rights to franchisees for a term of 20 years , with the right to extend the term for an additional ten years if various conditions are satisfied by the franchisee. Other revenue Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption. Other revenue also consists of miscellaneous revenues considered insignificant to the Company’s business. Disaggregation of Revenue In the following table, revenue is disaggregated by type of good or service (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Restaurant revenue $ 1,289,521 $ 1,316,209 $ 1,365,060 Franchise revenue 17,497 17,409 17,681 Other revenue 7,996 4,945 4,825 Total revenues $ 1,315,014 $ 1,338,563 $ 1,387,566 Contract Liabilities Unearned gift card revenue at December 29, 2019 and December 30, 2018 was $43.5 million and $45.3 million . Deferred loyalty revenue, which was also included in Unearned revenue in the accompanying consolidated balance sheets, was $10.7 million and $10.0 million at December 29, 2019 and December 30, 2018 . Revenue recognized in the consolidated statements of operations and comprehensive (loss) income for the redemption of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Gift card revenue $ 19,941 $ 17,487 $ 16,337 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 29, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Current Expected Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Update 2016-13, Financial Instruments - Credit Losses (“Topic 326”), subsequently amended by various standard updates. This guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information when determining credit loss estimates and requires financial assets to be measured net of expected credit losses at the time of initial recognition. This guidance is effective for annual and interim reporting periods beginning after December 15, 2019 using a modified retrospective adoption method. Early adoption is permitted. We evaluated the guidance by reviewing our trade and other receivable balances and grouping them into asset pools based on similar risk characteristics. We then reviewed our asset pools for collectibility using a broad range of factors including historical collections data as well as qualitative analysis of both historical and prospective factors to develop an expected loss rate. We then applied the expected loss rate to the asset pools to determine the expected impact of our adoption of the standard. Based on our analysis, we do not expect to recognize a material impact upon adoption in the first quarter of 2020. Income Taxes In December 2019, the Financial Accounting Standards Board ("FASB") issued Update 2019-12, Income Taxes ("Topic 740") as part of its Simplification Initiative. This guidance provides amendments to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. We are currently evaluating the full impact this guidance will have on our consolidated financial statements. We reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a significant impact on the Company's consolidated financial statements. |
Other Charges
Other Charges | 12 Months Ended |
Dec. 29, 2019 | |
Other Income and Expenses [Abstract] | |
Other Charges | Other Charges Other charges consist of the following (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Asset impairment $ 15,094 $ 28,127 $ 6,914 Executive transition and severance 3,450 — — Board and stockholder matter costs 3,261 — — Executive retention 980 — — Restaurant closures and refranchising (1,187 ) — — Litigation contingencies — 4,795 — Reorganization costs — 3,273 — Smallwares disposal — 2,936 — Other charges $ 21,598 $ 39,131 $ 6,914 Asset Impairment During 2019, the Company determined long-lived assets at 29 Company-owned restaurants were impaired and recognized a non-cash impairment charge of $15.1 million . During 2018 and 2017, the Company impaired long-lived assets of 41 and 13 Company-owned restaurants and recognized non-cash impairment charges of $ 28.1 million and $ 6.9 million , respectively. 19 of the 41 restaurants impaired in 2018 had immaterial impairments. The Company recognized the asset impairment charges resulting from the continuing and projected future results of these restaurants, primarily through projected cash flows. The fair value measurement for asset impairment is based on significant inputs not observed in the market and thus represents a level 3 fair value measurement. Each restaurant’s past and present operating performance was reviewed in combination with projected future results, primarily through projected undiscounted cash flows. The Company compared the carrying amount of each restaurant’s assets to its fair value as estimated by management. The fair value of the long-lived assets is generally determined using a discounted cash flow projection model. In certain cases, management uses other market information, when available, to estimate the fair value of a restaurant. The impairment charges represent the excess of each restaurant’s carrying amount over its estimated fair value. Executive Transition and Severance During 2019, the Company recorded $3.5 million of executive transition and severance costs primarily related to the transition and realignment of our executive team, including the appointment of a new CEO in the third quarter of 2019. Board and Stockholder Matter Costs During 2019, the Company recorded $3.3 million of board and stockholder matter costs primarily related to the recruitment and appointment of the three new board members and the adoption of a shareholder rights plan. Executive Retention During 2019, the Company recorded $1.0 million of executive retention costs related to payments made to retain executive leadership believed to be critical to the ongoing operation of the Company during the uncertainty created following the retirement of our CEO in early April 2019 and throughout the subsequent transition period. The retention agreement is filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on April 21, 2019. Restaurant Closures and Refranchising During 2019, the Company closed 18 restaurants resulting in a gain of $1.2 million . The gain on restaurant closures was driven by favorable lease terminations at the closed restaurant locations. Non-cash impairment charges relating to restaurant closures are included in Restaurant Closures and Refranchising component of other charges. During 2018 and 2017, the Company closed four and three restaurants, respectively. The related restaurant closure costs were immaterial. The Company evaluates restaurants that are sold or closed and allocates goodwill based on the relative fair value of the disposal restaurants to the Company’s reporting unit. Since restaurant operations are typically valued based on cash flow from operations, the Company compares the historical cash flow from the closed restaurants to the cash flow from the reporting unit to determine the relative value. The goodwill allocated to the restaurants closed in 2019, 2018, and 2017 was immaterial. Litigation Contingencies In 2018, the Company recorded $ 4.8 million of litigation contingencies for employment-related claims. Smallwares Disposal During 2018, the Company recorded $2.9 million of costs related to the disposal of smallwares. Reorganization Costs During 2018, the Company recorded $ 3.3 million of severance costs related to the reorganization in first quarter 2018. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table presents goodwill as of December 29, 2019 and December 30, 2018 (in thousands): 2019 2018 Balance, beginning $ 95,838 $ 96,979 Foreign currency translation adjustment 559 (1,141 ) Balance, end $ 96,397 $ 95,838 The Company recorded no goodwill impairment losses in the period presented in the table above or any prior periods. The following table presents intangible assets as of December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 53,336 $ (35,896 ) $ 17,440 $ 54,404 $ (33,160 ) $ 21,244 Leasehold interests 13,001 (8,794 ) 4,207 13,001 (8,136 ) 4,865 Liquor licenses and other 10,737 (9,869 ) 868 10,810 (9,770 ) 1,040 $ 77,074 $ (54,559 ) $ 22,515 $ 78,215 $ (51,066 ) $ 27,149 Indefinite-lived intangible assets: Liquor licenses and other $ 7,460 $ — $ 7,460 $ 7,460 $ — $ 7,460 Intangible assets, net $ 84,534 $ (54,559 ) $ 29,975 $ 85,675 $ (51,066 ) $ 34,609 No impairment charges were recorded related to indefinite-lived intangibles in 2019, 2018, and 2017. There were immaterial impairments of franchise rights and liquor licenses subject to amortization related to the 29 restaurants impaired in 2019, immaterial impairments of franchise rights, leasehold interests, and liquor licenses subject to amortization related to the 41 restaurants impaired in 2018, and immaterial impairments of franchise rights and liquor licenses subject to amortization related to the 13 restaurants impaired in 2017, which are discussed in Note 4, Other Charges. There were no other impairments of intangible assets subject to amortization in 2019, 2018, or 2017. The aggregate amortization expense related to intangible assets subject to amortization for 2019, 2018, and 2017 was $4.4 million , $4.3 million , and $4.9 million , respectively. The estimated aggregate future amortization expense as of December 29, 2019 is as follows (in thousands): 2020 $ 3,684 2021 3,258 2022 2,830 2023 2,593 2024 2,300 Thereafter 7,850 $ 22,515 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Land $ 41,850 $ 41,850 Buildings 96,944 110,050 Leasehold improvements 708,954 706,648 Furniture, fixtures, and equipment 411,874 395,438 Construction in progress 13,697 8,731 Property and equipment, at cost 1,273,319 1,262,717 Accumulated depreciation and amortization (755,306 ) (697,575 ) Property and equipment, net $ 518,013 $ 565,142 Depreciation and amortization expense on property and equipment was $ 87.4 million in 2019, $ 91.0 million in 2018, and $ 87.6 million in 2017. |
Accrued Payroll and Payroll-rel
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities | 12 Months Ended |
Dec. 29, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities | Accrued Payroll and Payroll-Related Liabilities, and Accrued Liabilities and Other Current Liabilities Accrued payroll and payroll-related liabilities consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Payroll and payroll-related taxes $ 16,736 $ 18,192 Workers compensation insurance 5,720 6,825 Accrued vacation 5,451 5,753 Corporate and restaurant incentive compensation 5,397 4,227 Other 1,917 2,925 Accrued payroll and payroll-related liabilities $ 35,221 $ 37,922 Accrued liabilities and other current liabilities consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 State and city sales tax payable $ 6,776 $ 5,798 General liability insurance 6,622 6,826 Legal 4,290 4,910 Utilities 2,791 2,915 Real estate, personal property, state income, and other taxes payable 1,135 4,522 Other 7,789 13,086 Accrued liabilities and other current liabilities $ 29,403 $ 38,057 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Borrowings as of December 29, 2019 and December 30, 2018 are summarized below (in thousands): December 29, 2019 December 30, 2018 Borrowings Weighted Average Interest Rate Borrowings Weighted Average Interest Rate Revolving credit facility and other long-term debt $ 206,875 5.10 % $ 193,375 4.20 % Total Debt 206,875 193,375 Less: Current portion — — Long-term debt $ 206,875 $ 193,375 Maturities of long-term debt as of December 29, 2019 are as follows (in thousands): 2020 $ — 2021 206,000 2022 — 2023 — 2024 — Thereafter 875 $ 206,875 Revolving Credit Facility On June 30, 2016 , the Company entered into a credit facility (the “Credit Facility”), which 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 . The Credit Facility also 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 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 (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 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 (base rate 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 August 19, 2019, the Company entered into a second amendment (the “Amendment”) to the Credit Facility. The Amendment increases the lease adjusted leverage ratio to 5.0 through December 29, 2019 . In addition, the Amendment revises the definition of permitted acquisitions under the Credit Facility to correspond with the change to the lease adjusted leverage ratio and clarifies the classification of existing capital and operating leases. The Company's lease adjusted leverage ratio was 4.72 as of December 29, 2019 . The Credit Facility matures on June 30, 2021 . Borrowings under the 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, and 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 December 29, 2019 , the Company had outstanding borrowings under the Credit Facility of $206.0 million , in addition to amounts issued under letters of credit of $7.5 million . As of December 30, 2018 , the Company had outstanding borrowings under the Credit Facility of $192.5 million , in addition to amounts issued under letters of credit of $7.8 million . The amounts issued under letters of credit reduce the amount available under the Credit Facility but were not recorded as debt. No outstanding borrowings were considered short-term as of December 29, 2019 and December 30, 2018 . Loan origination costs associated with the Credit Facility are included as deferred costs in Other assets, net in the accompanying consolidated balance sheets, except for the current portion of these costs which is included in Prepaid expenses and other current assets. Unamortized debt issuance costs were $1.0 million and $1.7 million as of December 29, 2019 and December 30, 2018 , respectively. The Company is subject to a number of customary covenants under its Credit Facility, including limitations on additional borrowings, acquisitions, capital expenditures, share repurchases, lease commitments, dividend payments, and requirements to maintain certain financial ratios. The Company was in compliance with such covenants as of December 29, 2019 . New Credit Facility On January 10, 2020, the Company replaced its prior Credit Facility with a new Amended and Restated Credit Agreement (the "New Credit Facility") which provides for a $161.5 million revolving line of credit and a $138.5 million term loan for a total borrowing capacity of $300 million . In addition, the New Credit Facility allows for the issuance of $25 million in letters of credit, swingline loans up to $15 million , and the option to increase the borrowing capacity by up to an additional $100 million subject to lenders' participation. The New Credit Facility also provides for a Canadian Dollar borrowing sublimit equivalent to $20 million and limits sale leasebacks transactions to $50 million . In connection with the termination of the Credit Facility and new borrowings under the New Credit Facility, the Company paid off all outstanding borrowings, accrued interest, and fees under the Credit Facility. Borrowings refinanced under the New Credit Facility totaled $186.6 million , net of loan origination fees. The New Credit Facility will mature on January 10, 2025. No amortization is required with respect to the revolving line of credit, and the term loans require quarterly principal payments at a rate of 7.0% per annum of the original principal balance. Borrowings under the revolving line of credit and term loans 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 (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 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 (base rate 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% ). The publication of LIBOR is expected to discontinue in December 2021, however, we anticipate an amended credit agreement will be executed at the new applicable interest rate. Borrowings under the New Credit Facility are secured by substantially all of the assets of the Company and are available to: (i) refinance certain existing indebtedness of the Company and its subsidiaries, (ii) finance restaurant construction costs, (iii) pay costs, fees, and expenses in connection with such new restaurant construction, (iv) pay any fees and expenses in connection with the New Credit Facility, and (v) provide for the working capital and general corporate requirements of the Company, including permitted acquisitions and the redemption of capital stock. The Company will continue to be subject to a number of customary covenants under the New Credit Facility, including limitations on additional borrowings, acquisitions, capital expenditures, share repurchases, lease commitments, dividend payments, and requirements to maintain certain financial ratios including the lease adjusted leverage ratio. From the closing date of the New Credit Facility to the end of the Company's fiscal year 2020, the maximum allowed lease adjusted leverage ratio is 5.0 . The maximum allowable lease adjusted leverage ratio then decreases to 4.75 during fiscal year 2021 and decreases again to 4.50 during fiscal year 2022 and thereafter. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are made under a three-tier fair value hierarchy, which prioritizes the inputs used in the measuring of fair value: Level 1: Observable inputs that reflect unadjusted quote prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate fair value due to the short-term nature or maturity of the instruments. The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. See Note 15, Employee Benefit Programs. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value, and are included in Other assets, net in the accompanying consolidated balance sheets. Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets). The value of the deferred compensation plan liability is dependent upon the fair value of the assets held in the rabbi trust and therefore is not measured at fair value. The following tables present the Company’s assets measured at fair value on a recurring basis as of December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 7,337 $ 7,337 $ — $ — Total assets measured at fair value $ 7,337 $ 7,337 $ — $ — December 30, 2018 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,198 $ 8,198 $ — $ — Total assets measured at fair value $ 8,198 $ 8,198 $ — $ — 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. During 2019 and 2018, the Company measured non-financial assets for impairment semi-annually using continuing and projected future cash flows, as discussed in Note 4 , Other Charges , which were based on significant inputs not observable in the market and thus represented a level 3 fair value measurement. Based on our 2019 and 2018 semi-annual impairment analyses, we impaired long-lived assets at 29 and 41 company-owned restaurants with carrying values of $17.3 million and $34.1 million , respectively. 19 of the 41 restaurants impaired in 2018 has immaterial impairments. We determined the fair value of these long-lived assets in 2019 and 2018 to be $2.2 million and $6.0 million , respectively, based on level 3 fair value measurements. Disclosures of Fair Value of Other Assets and Liabilities The Company’s liability under its Credit Facility is carried at historical cost in the accompanying consolidated balance sheets. The carrying value of the Credit Facility approximates fair value as the interest rate on this instrument approximates current market rates. The interest rate on the Credit Facility represents a level 2 fair value input. |
Leases
Leases | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Leases | Leases Adoption of FASB Accounting Standards Update ("ASU") 2016-02 On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) ("Topic 842") along with related clarifications and improvements using the modified retrospective approach without application to prior periods. 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. We applied the practical expedients that do not require us to reassess existing contracts for embedded leases, to separate lease and non-lease components for our population of real estate assets, or to reassess lease classification or initial direct costs. The effect of the changes made to our consolidated December 31, 2018 balance sheet as a result of the adoption of Topic 842 was as follows (in thousands): Balance at December 30, 2018 Adjustments due to Topic 842 Balance at December 31, 2018 Balance sheet Non-current assets Right of use assets, net $ — $ 478,268 $ 478,268 Prepaid expenses and other current assets 27,576 (6,592 ) 20,984 Current liabilities Short-term portion of lease obligations 786 40,606 41,392 Non-current liabilities Deferred Rent 75,675 (75,675 ) — Long-term portion of lease obligations 9,414 506,745 516,159 Stockholders’ equity: Retained earnings $ 376,341 $ (15,172 ) $ 361,169 This change did not have any impact on our consolidated statement of operations or consolidated statement of cash flows. Leases The Company leases land, buildings, and equipment used in its operations under operating and finance leases. Our leases generally have remaining terms of 1 - 15 years, most of which include options to extend the leases for additional 5 -year periods. Generally, the lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years. We determine if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Some of our leases include rent escalations based on inflation indexes and fair market value adjustments. Certain leases contain contingent rental provisions that include a fixed base rent plus an additional percentage of the restaurant’s sales in excess of stipulated amounts. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases are included in right-of-use assets, net, short-term portion of lease obligations, and long-term portion of lease liabilities on our consolidated balance sheet as of December 29, 2019 as follows (in thousands): Finance Operating Total Right of use assets, net $ 7,552 $ 418,696 $ 426,248 Short-term portion of lease obligations 725 41,974 42,699 Long-term portion of lease obligations 8,822 456,613 465,435 Total $ 9,547 $ 498,587 $ 508,134 We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in occupancy on our consolidated statement of operations as follows (in thousands): Year Ended December 29, 2019 Operating lease cost $ 75,496 Finance lease cost: Amortization of right of use assets 793 Interest on lease liabilities 544 Total finance lease cost 1,337 Variable lease cost 29,300 Total lease costs $ 106,133 Maturities of our lease liabilities as of December 29, 2019 were as follows (in thousands): Finance Leases Operating Leases Total 2020 $ 1,065 $ 70,303 $ 71,368 2021 1,133 75,990 77,123 2022 979 73,702 74,681 2023 916 71,670 72,586 2024 932 68,468 69,400 Thereafter 7,506 379,644 387,150 Total future lease liability 12,531 739,777 752,308 Less imputed interest 2,984 241,190 244,174 Present value of lease liability $ 9,547 $ 498,587 $ 508,134 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting guidance, maturities of lease liabilities were as follows as of December 30, 2018 (in thousands): Capital Leases Operating Leases 2019 $ 1,234 $ 80,367 2020 1,242 76,936 2021 1,240 70,419 2022 1,063 61,649 2023 1,019 54,121 Thereafter 7,552 206,879 Total 13,350 $ 550,371 Less amount representing interest (3,150 ) Present value of future minimum lease payments 10,200 Less current portion (786 ) Long-term capital lease obligations $ 9,414 Supplemental cash flow information in thousands (except other information) related to leases is as follows: Year Ended December 29, 2019 Cash flows from operating activities Cash paid related to lease liabilities Operating leases $ 78,260 Finance leases 512 Cash flows from financing activities Cash paid related to lease liabilities Finance leases 817 Cash paid for amounts included in the measurement of lease liabilities $ 79,589 Right of use assets obtained in exchange for operating lease obligations following the adoption of Topic 842 (Leases) $ 12,580 Right of use assets obtained in exchange for finance lease obligations following the adoption of Topic 842 (Leases) $ 1,606 Other information related to operating leases as follows: Weighted average remaining lease term 10.7 years Weighted average discount rate 7.4 % Other information related to financing leases as follows: Weighted average remaining lease term 12.4 years Weighted average discount rate 4.9 % |
Leases | Leases Adoption of FASB Accounting Standards Update ("ASU") 2016-02 On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) ("Topic 842") along with related clarifications and improvements using the modified retrospective approach without application to prior periods. 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. We applied the practical expedients that do not require us to reassess existing contracts for embedded leases, to separate lease and non-lease components for our population of real estate assets, or to reassess lease classification or initial direct costs. The effect of the changes made to our consolidated December 31, 2018 balance sheet as a result of the adoption of Topic 842 was as follows (in thousands): Balance at December 30, 2018 Adjustments due to Topic 842 Balance at December 31, 2018 Balance sheet Non-current assets Right of use assets, net $ — $ 478,268 $ 478,268 Prepaid expenses and other current assets 27,576 (6,592 ) 20,984 Current liabilities Short-term portion of lease obligations 786 40,606 41,392 Non-current liabilities Deferred Rent 75,675 (75,675 ) — Long-term portion of lease obligations 9,414 506,745 516,159 Stockholders’ equity: Retained earnings $ 376,341 $ (15,172 ) $ 361,169 This change did not have any impact on our consolidated statement of operations or consolidated statement of cash flows. Leases The Company leases land, buildings, and equipment used in its operations under operating and finance leases. Our leases generally have remaining terms of 1 - 15 years, most of which include options to extend the leases for additional 5 -year periods. Generally, the lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years. We determine if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Some of our leases include rent escalations based on inflation indexes and fair market value adjustments. Certain leases contain contingent rental provisions that include a fixed base rent plus an additional percentage of the restaurant’s sales in excess of stipulated amounts. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases are included in right-of-use assets, net, short-term portion of lease obligations, and long-term portion of lease liabilities on our consolidated balance sheet as of December 29, 2019 as follows (in thousands): Finance Operating Total Right of use assets, net $ 7,552 $ 418,696 $ 426,248 Short-term portion of lease obligations 725 41,974 42,699 Long-term portion of lease obligations 8,822 456,613 465,435 Total $ 9,547 $ 498,587 $ 508,134 We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in occupancy on our consolidated statement of operations as follows (in thousands): Year Ended December 29, 2019 Operating lease cost $ 75,496 Finance lease cost: Amortization of right of use assets 793 Interest on lease liabilities 544 Total finance lease cost 1,337 Variable lease cost 29,300 Total lease costs $ 106,133 Maturities of our lease liabilities as of December 29, 2019 were as follows (in thousands): Finance Leases Operating Leases Total 2020 $ 1,065 $ 70,303 $ 71,368 2021 1,133 75,990 77,123 2022 979 73,702 74,681 2023 916 71,670 72,586 2024 932 68,468 69,400 Thereafter 7,506 379,644 387,150 Total future lease liability 12,531 739,777 752,308 Less imputed interest 2,984 241,190 244,174 Present value of lease liability $ 9,547 $ 498,587 $ 508,134 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting guidance, maturities of lease liabilities were as follows as of December 30, 2018 (in thousands): Capital Leases Operating Leases 2019 $ 1,234 $ 80,367 2020 1,242 76,936 2021 1,240 70,419 2022 1,063 61,649 2023 1,019 54,121 Thereafter 7,552 206,879 Total 13,350 $ 550,371 Less amount representing interest (3,150 ) Present value of future minimum lease payments 10,200 Less current portion (786 ) Long-term capital lease obligations $ 9,414 Supplemental cash flow information in thousands (except other information) related to leases is as follows: Year Ended December 29, 2019 Cash flows from operating activities Cash paid related to lease liabilities Operating leases $ 78,260 Finance leases 512 Cash flows from financing activities Cash paid related to lease liabilities Finance leases 817 Cash paid for amounts included in the measurement of lease liabilities $ 79,589 Right of use assets obtained in exchange for operating lease obligations following the adoption of Topic 842 (Leases) $ 12,580 Right of use assets obtained in exchange for finance lease obligations following the adoption of Topic 842 (Leases) $ 1,606 Other information related to operating leases as follows: Weighted average remaining lease term 10.7 years Weighted average discount rate 7.4 % Other information related to financing leases as follows: Weighted average remaining lease term 12.4 years Weighted average discount rate 4.9 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) before income taxes includes the following components for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 (in thousands): 2019 2018 2017 U.S. $ (14,549 ) $ (16,045 ) $ 32,208 Foreign (7,688 ) (5,365 ) (3,188 ) $ (22,237 ) $ (21,410 ) $ 29,020 The benefit for income taxes for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 consist of the following (in thousands): 2019 2018 2017 Current: Federal $ (3,054 ) $ 2,043 $ 2,304 State (1,687 ) 1,579 3,175 Foreign — — — Total current income tax (benefit) expense $ (4,741 ) $ 3,622 $ 5,479 Deferred: Federal $ (10,994 ) $ (16,688 ) $ (6,045 ) State 1,354 (2,068 ) (680 ) Foreign 47 143 247 Total deferred income tax benefit (9,593 ) (18,613 ) (6,478 ) Income tax benefit $ (14,334 ) $ (14,991 ) $ (999 ) The Company had net operating loss carryforwards for tax purposes of $4.7 million as of December 29, 2019. We expect to utilize all net operating loss carryforwards for federal tax purposes, but state tax carryforwards may begin to expire between 2024 and 2039. The reconciliation between the income tax provision and the amount of income tax computed by applying the U.S. federal statutory rate to income (loss) before the provision for income taxes as shown in the accompanying consolidated statements of operations and comprehensive (loss) income, for fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 is as follows: 2019 2018 2017 Tax provision at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State income taxes 2.2 2.9 5.0 FICA tip tax credits 46.0 49.9 (32.4 ) Foreign taxes versus U.S statutory rate 0.8 0.9 0.7 Valuation allowance on deferred income tax assets (9.1 ) (7.5 ) 4.5 Deferred tax remeasurement due to the Tax Act — — (9.7 ) Other tax credits 6.1 7.1 (6.5 ) Meals and entertainment (0.7 ) (0.8 ) 0.9 Excess stock options (2.9 ) (0.6 ) (1.0 ) Employee travel (0.1 ) (2.1 ) — Other 1.2 (0.8 ) — Effective tax rate 64.5 % 70.0 % (3.5 )% The Company had a tax benefit in all three years presented above, but due to the mathematical computation of tax benefit to book loss the effective tax rate in 2019 and 2018 are represented as a positive percentage. During 2017, the Company had a tax benefit with book income, which presents the effective tax rate as a negative percentage. The decrease in the Company’s effective tax benefit in 2019 is primarily attributable to a decrease in tax credits, and an increase in the valuation allowance for Canada. The increase in the Company’s effective tax benefit in 2018 is primarily attributable to the decrease in earnings before income tax, as well as the decrease in the federal statutory rate from 35% to 21% beginning in 2018. The Company’s federal and state deferred taxes at December 29, 2019 and December 30, 2018 are as follows (in thousands): 2019 2018 Deferred tax assets and (liabilities), net: Leasing transactions $ 18,913 $ 14,603 Stock-based compensation 4,920 5,434 General business and other tax credits 40,409 25,872 Accrued compensation and related costs 5,970 5,938 Advanced payments 3,597 3,783 Other non-current deferred tax assets 7,584 5,412 Other non-current deferred tax liabilities (1,680 ) (2,605 ) Goodwill and other amortization, net (12,138 ) (11,003 ) Property and equipment (757 ) 3,698 Prepaid expenses (3,387 ) (3,600 ) Supplies inventory (4,611 ) (4,514 ) Subtotal 58,820 43,018 Valuation allowance (7,293 ) (5,177 ) Net deferred tax asset 51,527 37,841 Non-current deferred tax asset 52,438 38,688 Non-current deferred tax liability (911 ) (847 ) Total $ 51,527 $ 37,841 As of December 29, 2019, the Company had a deferred tax asset of $39 million related to federal tax credits, which expire at various dates between 2037 and 2039. We currently expect to realize the benefit of this deferred tax asset over the next 5 years based on current projections of future taxable income. Based on the Company’s evaluation of its other deferred tax assets, a valuation allowance of approximately $7.3 million has been recorded against the deferred tax asset for state income tax credits and the deferred taxes of our foreign subsidiary, including the net operating loss carry forward, in order to measure only the portion of the deferred tax assets that more likely than not will be realized. The following table summarizes the Company’s unrecognized tax benefits at December 29, 2019 and December 30, 2018 (in thousands): 2019 2018 Beginning of year $ 304 $ 287 Increase due to current year tax positions 52 82 Due to decrease to a position taken in a prior year (170 ) (7 ) Settlements (16 ) (21 ) Reductions related to lapses (66 ) (37 ) End of year $ 104 $ 304 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $0.1 million . The Company does not anticipate significant changes in the aggregate amount of unrecognized tax benefits within the next 12 months, other than nominal tax settlements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 29, 2019 | |
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 consolidated financial statements. Amounts recorded in the periods presented for litigation contingencies related to employment claims are disclosed in Note 4, Other Charges . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 29, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On August 9, 2018, the Company’s board of directors authorized an increase to the Company’s share repurchase program of approximately $21 million to a total of $75 million of the Company’s common stock. The increased share repurchase authorization became effective on August 9, 2018 and will terminate upon completing repurchases of $75 million of common stock unless otherwise terminated by the board. Purchases under the repurchase program may be made in open market or privately negotiated transactions. Purchases may be made from time to time at the Company’s discretion and the timing and amount of any share repurchases will be determined based on share price, market conditions, legal requirements, and other factors. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and the Company may suspend or discontinue the repurchase program at any time. In 2019, the Company purchased 111,800 shares with an average purchase price of $30.86 per share for a total of $3.4 million . |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans In May 2017, the Company’s stockholders approved the 2017 Performance Incentive Plan (the “2017 Stock Plan”). Following the date of approval, all grants are made under the 2017 Stock Plan and no new awards may be granted under the Second Amended and Restated 2007 Performance Plan (the “2007 Stock Plan”). The 2017 Stock Plan authorizes the issuance of stock options, stock appreciation rights (SARs), and other forms of awards granted or denominated in the Company common stock or unit of the Company's common stock, as well as cash performance awards pursuant to the plan. Persons eligible to receive awards under the 2017 Stock Plan include officers, employees, directors, consultants, and other service providers or any affiliate of the Company. The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2017 Stock Plan was 630,182 shares. The 2017 stock plan was amended in May 2019 to add an additional 660,000 shares, bringing the total to 1,290,182 as of December 29, 2019 . Vesting of the awards under the 2017 Stock Plan is determined at the date of grant by the plan administrator. Each award granted under the 2017 Stock Plan and 2007 Stock Plan fully vests, becomes exercisable and/or payable, as applicable, upon a change in control event. However, unless the individual award agreement provides otherwise, with respect to executive and certain other high level officers, upon the occurrence of a change in control, no award will vest unless such officers’ employment with the Company is terminated by the Company without cause during the two -year period following such change in control event. Each award expires on such date as shall be determined at the date of grant; however, the maximum term of options, SARs, and other rights to acquire common stock under the plan is ten years after the initial date of the award, subject to provisions for further deferred payment in certain circumstances. Vesting of awards under these plans were generally time based over a period of one to four years. As of December 29, 2019 , 242,579 options to acquire the Company’s common stock remained outstanding under the 2007 Stock Plan and under the 2017 stock plan. Stock-based compensation costs recognized in 2019 , 2018 , and 2017 were $3.3 million , $4.0 million , and $4.8 million , respectively, with related income tax benefits of $0.3 million , $0.5 million , and $1.5 million , respectively. As of December 29, 2019 , there was $5.9 million of unrecognized compensation cost, excluding estimated forfeitures. Unrecognized compensation costs are expected to be recognized over the weighted average remaining vesting period of approximately 0.88 years for stock options, 1.77 years for the restricted stock units, and 1.81 years for the performance stock units. Stock Options The tables below summarize the status of the Company’s stock option plans (in thousands, except per share data and exercise price): Stock Options Shares Weighted Average Exercise Price Outstanding, December 30, 2018 483 $ 56.62 Granted — — Forfeited/expired (193 ) 55.39 Exercised (2 ) 21.10 Outstanding, December 29, 2019 288 $ 58.33 Shares Weighted Average Exercise Price Weighted Average Remaining Years of Contractual Life Aggregate Intrinsic Value Outstanding as of December 29, 2019 288 $ 58.33 4.73 $ 70,458 Vested and expected to vest as of December 29, 2019 (1) 281 58.34 4.72 70,458 Exercisable as of December 29, 2019 219 58.47 4.60 70,458 ___________________________________ (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. The Company applies estimated forfeiture rates that are derived from our historical forfeitures of similar awards. The estimated fair value of each option granted is calculated using the Black-Scholes multiple option-pricing model. No options were granted during 2019. The average assumptions used in the model for the fiscal years ended December 30, 2018 and December 31, 2017 were as follows: 2019 2018 2017 Risk-free interest rate — % 2.5 % 1.8 % Expected years until exercise 0 years 3.2 years 5.0 years Expected stock volatility — % 43.4 % 37.9 % Dividend yield — % — % — % Weighted average Black-Scholes fair value per share at date of grant $ — $ 16.56 $ 17.11 Total intrinsic value of options exercised (in thousands) $ 20 $ 390 $ 1,676 The risk-free interest rate was based on the rate for zero coupon U.S. Government issues with a remaining term similar to the expected life. The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends and Team Member exercise patterns. The expected stock price volatility represents an average of the Company’s historical volatility measured over a period approximating the expected life. The dividend yield assumption is based on the Company’s history and expectations of dividend payouts. Time-Based RSUs During 2019 , 2018 , and 2017 , the Company issued time-based restricted stock units (“RSUs”) to certain employees as permitted under the 2017 and 2007 Stock Plans. The Company can grant RSUs to its directors, executive officers and other key employees. The RSUs granted to employees typically vest in equal installments over four years. For the Company’s board of directors, RSUs vest in full on the earlier of the one -year anniversary of the grant date or the next annual stockholder meeting. Upon vesting, one share of the Company’s common stock is issued for each RSU. The fair value of each RSU granted is equal to the market price of the Company’s stock at the date of grant. The table below summarizes the status of the Company’s time-based RSUs under the 2017 and 2007 Stock Plans (shares in thousands): Restricted Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 30, 2018 119 $ 53.13 Awarded 211 30.16 Forfeited (71 ) 37.50 Vested (41 ) 55.43 Outstanding, December 29, 2019 218 $ 35.62 Performance Stock Units During 2019, 2018, and 2017, the Company granted performance stock unit awards (“PSUs”) to certain employees as permitted under the 2017 Stock Plan. Each PSU represents the right to receive one share of the Company’s common stock on the payment date, subject to the achievement of the applicable performance goals at target and applicable vesting conditions. Each PSU is divided into three equal tranches with applicable performance periods, typically consisting of a fiscal year. PSUs remain unvested until the last day of the third performance period and are forfeited in the event of termination of employment of a grantee prior to the last day of the third performance period. The table below summarizes the status of the Company’s performance stock units under the 2017 Stock Plan (shares in thousands: Performance Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 30, 2018 63 $ 55.35 Awarded 141 29.40 Forfeited (96 ) 37.43 Vested — — Outstanding, December 29, 2019 108 $ 37.25 Long-Term Cash Incentive Plan Beginning in 2017, the long-term cash incentive plan is based on operational metrics with three one -year performance periods. Prior to 2017, the long-term cash incentive plan was based on operational metrics with one three -year performance period. Compensation expense is recognized over the performance period based on the plan-to-date performance achievement. The awards cliff vest at the end of each three -year performance cycle. In 2019 , 2018 and 2017 , the Company recorded $0.2 million , $0.7 million and $0.4 million , respectively, in compensation expense related to the 2017 long-term cash incentive plan. No long-term cash incentive plan payouts occurred during 2019 or 2018. At December 29, 2019 and December 30, 2018 , a $1.1 million and $0.7 million long-term cash incentive plan liability was included in Accrued payroll and payroll-related liabilities in the consolidated balance sheets. |
Employee Benefit Programs
Employee Benefit Programs | 12 Months Ended |
Dec. 29, 2019 | |
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Employee Benefit Programs | Employee Benefit Programs Employee Deferred Compensation Plan The Company offers a deferred compensation plan that permits key employees and other members of management defined as highly compensated employees under the IRS code to defer portions of their compensation in a pre-tax savings vehicle that allows for retirement savings above 401(k) limits. Under this plan, eligible Team Members may elect to defer up to 75% of their base salary and up to 100% of variable compensation and commissions each plan year. Beginning in 2019, the Company did not make matching contributions under the deferred compensation plan because the Company amended its 401(k) plan to allow a broader group, including highly compensated employees, to participate and receive matching contributions under the 401(k) plan. Prior to 2019, the board of directors authorized matching contributions equal to 50% of the first 4% of compensation that was deferred by the participant. The Company recognized immaterial matching contribution expenses in 2018 and 2017 related to the deferred compensation plan. The assets of the deferred compensation plan are held in a rabbi trust, where they are invested in certain mutual funds that cover an investment spectrum ranging from equities to money market instruments and are available to satisfy the claims of the Company’s creditors in the event of bankruptcy or insolvency. These mutual funds have published market prices and are reported at fair value. See Note 9, Fair Value Measurements . Changes in the market value of the investments held in the trust result in the recognition of a corresponding gain or loss reported in Interest income and other, net in the consolidated statements of operations and comprehensive income (loss). A corresponding change in the liability associated with the deferred compensation plan results in an offsetting deferred compensation expense, or reduction of expense, reported in Selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income (loss). The Company recognized $1.1 million of deferred compensation expense in 2019 , an immaterial amount of deferred compensation expense in 2018 , and $1.0 million in 2017 . As of December 29, 2019 and December 30, 2018 , $7.3 million and $8.2 million , respectively, of deferred compensation asset is included in Other assets, net and $7.3 million and $8.2 million , respectively, of deferred compensation plan liability is included in Other non-current liabilities in the accompanying consolidated balance sheets. Employee Stock Purchase Plan In July 2017, the Company adopted the Amended and Restated Employee Stock Purchase Plan (the “New Plan”). The New Plan authorized 100,000 shares of the Company’s common stock for issuance. Under the New Plan, eligible Team Members may voluntarily contribute up to 15% of their salary, subject to limitations, to purchase common stock at a price equal to 85% of the fair market value of a share of the Company’s common stock on the first day of each offering period or 85% of the fair market value of a share of the Company’s common stock on the last day of each offering period, whichever amount is less. In general, all of the Company’s officers and Team Members who have been employed by the Company for at least one year and who are regularly scheduled to work more than 20 hours per week are eligible to participate in this plan which operates in successive six month periods commencing on each January 1 and July 1 of each fiscal year. During 2019, the Company issued a total of 29,582 shares under the New Plan with 52,451 shares available for future issuance. During 2018, the Company issued a total of 10,360 shares under the New Plan. For 2019 , in accordance with the guidance for accounting for stock compensation, the Company estimated the fair value of the awards granted pursuant to the stock purchase plan using the Black-Scholes multiple-option pricing model. The average assumptions used in the model included 1.51% risk-free interest rate, 0.5 year expected life, expected volatility of 41.82% , and 0% dividend yield. The weighted average fair value per share at grant date was $7.56 . For 2018 , the average assumptions used in the model included 2.05% risk-free interest rate, 0.5 year expected life, expected volatility of 39.92% , and 0% dividend yield. The weighted average fair value per share at grant date was $5.19 . The Company recognized $0.2 million of compensation expense related to this plan in fiscal year 2019 , $0.1 million in fiscal year 2018 , and $0.2 million in fiscal year 2017 . Employee Defined Contribution Plan The Company maintains a 401(k) Savings Plan (“401K Plan”) which covers eligible Team Members who have satisfied the service requirements and reached 21 years of age. The 401K Plan, which qualifies under Section 401(k) of the Internal Revenue Code, allows Team Members to defer specified percentages of their compensation on a pre-tax basis. The Company may make matching contributions in an amount determined by the board of directors. In addition, the Company may contribute each period, at its discretion, an additional amount from profits. In 2019, the board of directors authorized an increase to employer matching contributions equal to 100% of the first 3% of compensation and 50% on the next 2% of compensation. The Company matches contributions when the employee contribution is made, and the employer matching contributions are not subject to a vesting schedule. Prior to 2019, the Company matched employee contributions equal to 50% of the first 4% of compensation that was deferred by the participant consistent with the Company's vesting schedule. The Company recognized matching contribution expense of $3.0 million in 2019 , $0.9 million in 2018 , and $0.7 million in 2017 . |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) The following tables summarize the unaudited consolidated quarterly financial information for fiscal years 2019 and 2018 (in thousands, except per share data): 2019 Q1 Q2 Q3 Q4 2019 Total revenues $ 409,866 $ 307,981 $ 294,222 $ 302,945 $ 1,315,014 Income (loss) from operations $ 3,401 $ (12,852 ) $ (5,223 ) $ 1,547 $ (13,127 ) Net income (loss) $ 639 $ 981 $ (1,821 ) $ (7,702 ) $ (7,903 ) Basic earnings (loss) per share $ 0.05 $ 0.08 $ (0.14 ) $ (0.60 ) $ (0.61 ) Diluted earnings (loss) per share $ 0.05 $ 0.08 $ (0.14 ) $ (0.60 ) $ (0.61 ) 2018 Q1 Q2 Q3 Q4 2018 Total revenues $ 421,519 $ 315,388 $ 294,877 $ 306,779 $ 1,338,563 Income (loss) from operations $ 7,019 $ (4,214 ) $ 1,805 $ (15,095 ) $ (10,485 ) Net income (loss) $ 4,380 $ (1,874 ) $ 1,709 $ (10,634 ) $ (6,419 ) Basic earnings (loss) per share $ 0.34 $ (0.14 ) $ 0.13 $ (0.82 ) $ (0.49 ) Diluted earnings (loss) per share $ 0.34 $ (0.14 ) $ 0.13 $ (0.82 ) $ (0.49 ) |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation - The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States and include the accounts of Red Robin and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions. The Company’s fiscal year is 52 or 53 weeks ending the last Sunday of the calendar year. Year end dates and the number of weeks in each fiscal year are shown in the table below for periods presented in this Form 10-K and for the upcoming fiscal year. Fiscal Year Year End Date Number of Weeks in Fiscal Year Current and Prior Fiscal Years: 2019 December 29, 2019 52 2018 December 30, 2018 52 2017 December 31, 2017 53 Upcoming Fiscal Year 2020 December 27, 2020 52 |
Use of Estimates | Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 periods. The areas that require management’s most significant estimates are impairment of long-lived assets, goodwill, lease accounting, insurance/self-insurance reserves, estimating fair value, income taxes, unearned revenue, and stock-based compensation expense. Actual results could differ from those estimates. |
Cash Equivalents | Cash Equivalents - The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the “FDIC”) and sometimes invests excess cash in money market funds not insured by the FDIC. |
Accounts Receivable | Accounts Receivable - Accounts receivable consists primarily of third-party gift card receivables, tenant improvement allowances, and trade receivables due from franchisees for royalties. |
Inventories | Inventories - Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value. |
Property and Equipment | Property and Equipment - Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. Depreciation is computed on the straight-line method, based on the shorter of the estimated useful lives or the terms of the underlying leases of the related assets. Interest incurred on funds used to construct Company-owned restaurants is capitalized and amortized over the estimated useful life of the related assets. The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures and equipment 5 to 20 years Computer equipment 2 to 5 years The Company capitalizes certain overhead related to the development and construction of its new restaurants as well as certain information technology infrastructure upgrades. Costs incurred for the potential development of restaurants that are subsequently terminated are expensed. |
Goodwill and Intangible Assets net | Goodwill and Intangible Assets, net - Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Intangible assets comprise primarily leasehold interests, acquired franchise rights, and the costs of purchased liquor licenses. Leasehold interests primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Acquired franchise rights, which represent the acquired value of franchise contracts, are amortized over the term of the franchise agreements. The costs of obtaining non-transferable liquor licenses from local government agencies are capitalized and generally amortized over a period of up to 20 years . The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Goodwill, which is not subject to amortization, is evaluated for impairment annually as of the end of the Company’s third fiscal quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of restaurant closures, that would indicate an impairment may exist. Goodwill is evaluated at the level of the Company’s single operating segment, which also represents the Company’s only reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we perform a quantitative assessment and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the price of our common stock. The Company performed a qualitative assessment for the 2019 annual impairment evaluation at the end of the third fiscal quarter and determined goodwill was not impaired. No indicators of impairment were identified from the date of our impairment test through the end of 2019. By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections and prior actual financial results, other relevant entity-specific events, and changes in share price, we determined it was not more likely than not that the fair value of the reporting unit was less than its carrying amount. The Company performed a quantitative assessment and determined that goodwill was not impaired as of October 7, 2018. No indicators of impairment were identified from the date of our impairment test through the end of 2018. Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Fair value is measured using a combination of the market capitalization method, the income approach, and the market approach. The market capitalization method uses the Company’s stock price to derive fair value. The income approach consists of utilizing the discounted cash flow method that incorporates the Company’s estimates of future revenues and costs, discounted using a risk-adjusted discount rate. The Company’s estimates used in the income approach are consistent with the plans and estimates used to manage operations. The market approach utilizes multiples of profit measures in order to estimate the fair value of the assets. The Company evaluates all methods to ensure reasonably consistent results. Additionally, the Company evaluates the key input factors in the models used to determine whether a moderate change in any input factor or combination of factors would significantly change the results of the tests. Liquor licenses with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on prices in the open market for license in same or similar jurisdictions. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets - The Company reviews its long-lived assets, including restaurant sites, leasehold improvements, information technology systems, and other fixed assets, and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If the assets are determined to be impaired, the amount of impairment recognized is the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined using forecasted cash flows discounted using an estimated weighted average cost of capital. Management may also utilize other market information to determine fair value when relevant information is available. Restaurant sites and other assets to be disposed of are reported at the lower of their carrying amount or fair value, less estimated costs to sell. Information technology systems, such as internal-use computer software, are reviewed and tested for recoverability if the internal-use computer software is not expected to provide substantive service potential, a significant change occurs in the extent or manner in which the software is used or is expected to be used, a significant change is made or will be made to the software program, or costs of developing or modifying internal-use software significantly exceed the amount originally expected to develop or modify the software. |
Other Assets, Net | Other Assets, net - Other assets, net consist primarily of assets related to various deposits, the employee deferred compensation plan and unamortized debt issuance costs on revolving credit facilities. Debt issuance costs are capitalized and amortized to interest expense on a straight-line basis which approximates the effective interest rate method over the term of the Company’s long-term debt. |
Advertising | Advertising - Under the Company’s franchise agreements, both the Company and the franchisees must contribute up to 3.0% of revenues to two national media advertising funds (the “Advertising Funds”). These Advertising Funds are used to build the Company’s brand equity and awareness primarily through a national marketing strategy, including national television advertising, digital media, social media programs, email, loyalty, and public relations initiatives. Contributions to these Advertising Funds from franchisees are recorded as revenue under Franchise revenue in the consolidated statements of operations and comprehensive (loss) income in accordance with Topic 606 (Revenue from Contracts with Customers). Total advertising costs were $ 44.3 million , $ 44.3 million , and $ 48 million in 2019, 2018, and 2017, respectively, and were included in Selling, general, and administrative expenses. Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. |
Self-Insurance Programs | Self-Insurance Programs - The Company utilizes a self-insurance plan for health, general liability, and workers’ compensation coverage. Predetermined loss limits have been arranged with insurance companies to limit the Company’s per occurrence cash outlay. Accrued liabilities and accrued payroll and payroll-related liabilities include the estimated cost to settle reported claims and incurred but unreported claims. |
Legal Contingencies | Legal Contingencies - In the normal course of business, we are subject to various legal proceedings and claims, the outcomes of which are uncertain. We record an accrual for legal contingencies when we determine it is probable that we have incurred a liability and we can reasonably estimate the amount of the loss. In making such determinations we evaluate, among other things, the probability of an unfavorable outcome and, when we believe it probable that a liability has been incurred, our ability to make a reasonable estimate of the loss. |
Pre-opening Costs | Pre-opening Costs - Pre-opening costs are expensed as incurred. Pre-opening costs include rental expenses through the date of opening for each restaurant, travel expenses, wages and benefits for the training and opening teams, as well as food, beverage, and other restaurant opening costs incurred prior to a restaurant opening for business. |
Income Taxes | Income Taxes - Deferred tax liabilities are recognized for the estimated effects of all taxable temporary differences, and deferred tax assets are recognized for the estimated effects of all deductible temporary differences and net operating losses, if any, and tax credit carryforwards. |
Earnings Per Share | Earnings Per Share - Basic earnings per share amounts are calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share amounts are calculated based upon the weighted average number of common and potentially dilutive common shares outstanding during the year. 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 holdings into common stock. The Company uses the treasury stock method to calculate the impact of outstanding stock options. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income - Comprehensive (loss) income consists of the net income or loss and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income. Other comprehensive (loss) income as presented in the Consolidated Statements of Stockholders’ Equity for 2019, 2018, and 2017 consisted of the foreign currency translation adjustment resulting from the Company's Canadian restaurant operations. |
Stock-Based Compensation and Deferred Compensation (Income) Expense | Stock-Based Compensation - The Company maintains several equity incentive plans under which it may grant stock options, stock appreciation rights, restricted stock, stock variable compensation or other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash variable compensation awards to employees, non-employees, directors, and consultants. The Company also maintains an employee stock purchase plan. The Company issues shares relating to stock-based compensation plans and the employee stock purchase plan from treasury shares. Deferred Compensation (Income) Expense - The Company has assets and liabilities related to a deferred compensation plan. The assets of the deferred compensation plan are held in a rabbi trust, where they are invested in certain mutual funds that cover an investment spectrum range from equities to money market instruments. Increases in the market value of the investments held in the trust result in the recognition of deferred compensation expense reported in Selling, general, and administrative expenses and recognition of investment gain reported in Interest income and other, net, in the consolidated statements of operations and comprehensive income (loss). Decreases in the market value of the investments held in the trust result in the recognition of a reduction to deferred compensation expense and recognition of investment loss reported in Interest income and other, net, in the consolidated statements of operations and comprehensive income (loss). |
Foreign Currency Translation | Foreign Currency Translation - The Canadian Dollar is the functional currency for our Canadian restaurant operations. Assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at exchange rates in effect as of the balance sheet date. Income and expense accounts are translated using the average exchange rates prevailing throughout the period. The resulting translation adjustment is recorded as a separate component of Other comprehensive (loss) income. Gain or loss from foreign currency transactions is recognized in our consolidated statements of operations and comprehensive (loss) income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Current Expected Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Update 2016-13, Financial Instruments - Credit Losses (“Topic 326”), subsequently amended by various standard updates. This guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information when determining credit loss estimates and requires financial assets to be measured net of expected credit losses at the time of initial recognition. This guidance is effective for annual and interim reporting periods beginning after December 15, 2019 using a modified retrospective adoption method. Early adoption is permitted. We evaluated the guidance by reviewing our trade and other receivable balances and grouping them into asset pools based on similar risk characteristics. We then reviewed our asset pools for collectibility using a broad range of factors including historical collections data as well as qualitative analysis of both historical and prospective factors to develop an expected loss rate. We then applied the expected loss rate to the asset pools to determine the expected impact of our adoption of the standard. Based on our analysis, we do not expect to recognize a material impact upon adoption in the first quarter of 2020. Income Taxes In December 2019, the Financial Accounting Standards Board ("FASB") issued Update 2019-12, Income Taxes ("Topic 740") as part of its Simplification Initiative. This guidance provides amendments to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. We are currently evaluating the full impact this guidance will have on our consolidated financial statements. We reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a significant impact on the Company's consolidated financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fiscal Year | Year end dates and the number of weeks in each fiscal year are shown in the table below for periods presented in this Form 10-K and for the upcoming fiscal year. Fiscal Year Year End Date Number of Weeks in Fiscal Year Current and Prior Fiscal Years: 2019 December 29, 2019 52 2018 December 30, 2018 52 2017 December 31, 2017 53 Upcoming Fiscal Year 2020 December 27, 2020 52 |
Schedule of estimated useful lives for property and equipment | The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures and equipment 5 to 20 years Computer equipment 2 to 5 years |
Schedule of computations for basic and diluted earnings per share | Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 as follows (in thousands): 2019 2018 2017 Basic weighted average shares outstanding 12,959 12,976 12,899 Dilutive effect of stock options and awards — — 99 Diluted weighted average shares outstanding 12,959 12,976 12,998 Awards excluded due to anti-dilutive effect on diluted earnings per share 378 427 329 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue disaggregated by type of good or service | In the following table, revenue is disaggregated by type of good or service (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Restaurant revenue $ 1,289,521 $ 1,316,209 $ 1,365,060 Franchise revenue 17,497 17,409 17,681 Other revenue 7,996 4,945 4,825 Total revenues $ 1,315,014 $ 1,338,563 $ 1,387,566 |
Schedule of revenue recognized that were included in liability balances at the beginning of the fiscal year | Revenue recognized in the consolidated statements of operations and comprehensive (loss) income for the redemption of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Gift card revenue $ 19,941 $ 17,487 $ 16,337 |
Other Charges (Tables)
Other Charges (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Other Income and Expenses [Abstract] | |
Summary of other charges | Other charges consist of the following (in thousands): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Asset impairment $ 15,094 $ 28,127 $ 6,914 Executive transition and severance 3,450 — — Board and stockholder matter costs 3,261 — — Executive retention 980 — — Restaurant closures and refranchising (1,187 ) — — Litigation contingencies — 4,795 — Reorganization costs — 3,273 — Smallwares disposal — 2,936 — Other charges $ 21,598 $ 39,131 $ 6,914 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table presents goodwill as of December 29, 2019 and December 30, 2018 (in thousands): 2019 2018 Balance, beginning $ 95,838 $ 96,979 Foreign currency translation adjustment 559 (1,141 ) Balance, end $ 96,397 $ 95,838 |
Schedule of intangible assets subject to amortization | The following table presents intangible assets as of December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 53,336 $ (35,896 ) $ 17,440 $ 54,404 $ (33,160 ) $ 21,244 Leasehold interests 13,001 (8,794 ) 4,207 13,001 (8,136 ) 4,865 Liquor licenses and other 10,737 (9,869 ) 868 10,810 (9,770 ) 1,040 $ 77,074 $ (54,559 ) $ 22,515 $ 78,215 $ (51,066 ) $ 27,149 Indefinite-lived intangible assets: Liquor licenses and other $ 7,460 $ — $ 7,460 $ 7,460 $ — $ 7,460 Intangible assets, net $ 84,534 $ (54,559 ) $ 29,975 $ 85,675 $ (51,066 ) $ 34,609 |
Schedule of intangible assets not subject to amortization | The following table presents intangible assets as of December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 53,336 $ (35,896 ) $ 17,440 $ 54,404 $ (33,160 ) $ 21,244 Leasehold interests 13,001 (8,794 ) 4,207 13,001 (8,136 ) 4,865 Liquor licenses and other 10,737 (9,869 ) 868 10,810 (9,770 ) 1,040 $ 77,074 $ (54,559 ) $ 22,515 $ 78,215 $ (51,066 ) $ 27,149 Indefinite-lived intangible assets: Liquor licenses and other $ 7,460 $ — $ 7,460 $ 7,460 $ — $ 7,460 Intangible assets, net $ 84,534 $ (54,559 ) $ 29,975 $ 85,675 $ (51,066 ) $ 34,609 |
Schedule of estimated aggregate future amortization expense | The estimated aggregate future amortization expense as of December 29, 2019 is as follows (in thousands): 2020 $ 3,684 2021 3,258 2022 2,830 2023 2,593 2024 2,300 Thereafter 7,850 $ 22,515 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | Property and equipment consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Land $ 41,850 $ 41,850 Buildings 96,944 110,050 Leasehold improvements 708,954 706,648 Furniture, fixtures, and equipment 411,874 395,438 Construction in progress 13,697 8,731 Property and equipment, at cost 1,273,319 1,262,717 Accumulated depreciation and amortization (755,306 ) (697,575 ) Property and equipment, net $ 518,013 $ 565,142 |
Accrued Payroll and Payroll-r_2
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued payroll and payroll-related liabilities | Accrued payroll and payroll-related liabilities consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 Payroll and payroll-related taxes $ 16,736 $ 18,192 Workers compensation insurance 5,720 6,825 Accrued vacation 5,451 5,753 Corporate and restaurant incentive compensation 5,397 4,227 Other 1,917 2,925 Accrued payroll and payroll-related liabilities $ 35,221 $ 37,922 |
Schedule of accrued liabilities | Accrued liabilities and other current liabilities consist of the following at December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 December 30, 2018 State and city sales tax payable $ 6,776 $ 5,798 General liability insurance 6,622 6,826 Legal 4,290 4,910 Utilities 2,791 2,915 Real estate, personal property, state income, and other taxes payable 1,135 4,522 Other 7,789 13,086 Accrued liabilities and other current liabilities $ 29,403 $ 38,057 |
Borrowings Borrowings (Tables)
Borrowings Borrowings (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | Borrowings as of December 29, 2019 and December 30, 2018 are summarized below (in thousands): December 29, 2019 December 30, 2018 Borrowings Weighted Average Interest Rate Borrowings Weighted Average Interest Rate Revolving credit facility and other long-term debt $ 206,875 5.10 % $ 193,375 4.20 % Total Debt 206,875 193,375 Less: Current portion — — Long-term debt $ 206,875 $ 193,375 |
Schedule of maturities of long-term debt and capital lease obligations | Maturities of long-term debt as of December 29, 2019 are as follows (in thousands): 2020 $ — 2021 206,000 2022 — 2023 — 2024 — Thereafter 875 $ 206,875 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
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 December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 7,337 $ 7,337 $ — $ — Total assets measured at fair value $ 7,337 $ 7,337 $ — $ — December 30, 2018 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,198 $ 8,198 $ — $ — Total assets measured at fair value $ 8,198 $ 8,198 $ — $ — |
Schedule of fair value liabilities measured on a recurring basis | The following tables present the Company’s assets measured at fair value on a recurring basis as of December 29, 2019 and December 30, 2018 (in thousands): December 29, 2019 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 7,337 $ 7,337 $ — $ — Total assets measured at fair value $ 7,337 $ 7,337 $ — $ — December 30, 2018 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 8,198 $ 8,198 $ — $ — Total assets measured at fair value $ 8,198 $ 8,198 $ — $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Asset and Balance Sheet effects of adoption of 2016-02 | Leases are included in right-of-use assets, net, short-term portion of lease obligations, and long-term portion of lease liabilities on our consolidated balance sheet as of December 29, 2019 as follows (in thousands): Finance Operating Total Right of use assets, net $ 7,552 $ 418,696 $ 426,248 Short-term portion of lease obligations 725 41,974 42,699 Long-term portion of lease obligations 8,822 456,613 465,435 Total $ 9,547 $ 498,587 $ 508,134 The effect of the changes made to our consolidated December 31, 2018 balance sheet as a result of the adoption of Topic 842 was as follows (in thousands): Balance at December 30, 2018 Adjustments due to Topic 842 Balance at December 31, 2018 Balance sheet Non-current assets Right of use assets, net $ — $ 478,268 $ 478,268 Prepaid expenses and other current assets 27,576 (6,592 ) 20,984 Current liabilities Short-term portion of lease obligations 786 40,606 41,392 Non-current liabilities Deferred Rent 75,675 (75,675 ) — Long-term portion of lease obligations 9,414 506,745 516,159 Stockholders’ equity: Retained earnings $ 376,341 $ (15,172 ) $ 361,169 |
Lease cost | The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in occupancy on our consolidated statement of operations as follows (in thousands): Year Ended December 29, 2019 Operating lease cost $ 75,496 Finance lease cost: Amortization of right of use assets 793 Interest on lease liabilities 544 Total finance lease cost 1,337 Variable lease cost 29,300 Total lease costs $ 106,133 Supplemental cash flow information in thousands (except other information) related to leases is as follows: Year Ended December 29, 2019 Cash flows from operating activities Cash paid related to lease liabilities Operating leases $ 78,260 Finance leases 512 Cash flows from financing activities Cash paid related to lease liabilities Finance leases 817 Cash paid for amounts included in the measurement of lease liabilities $ 79,589 Right of use assets obtained in exchange for operating lease obligations following the adoption of Topic 842 (Leases) $ 12,580 Right of use assets obtained in exchange for finance lease obligations following the adoption of Topic 842 (Leases) $ 1,606 Other information related to operating leases as follows: Weighted average remaining lease term 10.7 years Weighted average discount rate 7.4 % Other information related to financing leases as follows: Weighted average remaining lease term 12.4 years Weighted average discount rate 4.9 % |
Schedule of operating lease maturities | Maturities of our lease liabilities as of December 29, 2019 were as follows (in thousands): Finance Leases Operating Leases Total 2020 $ 1,065 $ 70,303 $ 71,368 2021 1,133 75,990 77,123 2022 979 73,702 74,681 2023 916 71,670 72,586 2024 932 68,468 69,400 Thereafter 7,506 379,644 387,150 Total future lease liability 12,531 739,777 752,308 Less imputed interest 2,984 241,190 244,174 Present value of lease liability $ 9,547 $ 498,587 $ 508,134 |
Schedule of finance lease maturities | Maturities of our lease liabilities as of December 29, 2019 were as follows (in thousands): Finance Leases Operating Leases Total 2020 $ 1,065 $ 70,303 $ 71,368 2021 1,133 75,990 77,123 2022 979 73,702 74,681 2023 916 71,670 72,586 2024 932 68,468 69,400 Thereafter 7,506 379,644 387,150 Total future lease liability 12,531 739,777 752,308 Less imputed interest 2,984 241,190 244,174 Present value of lease liability $ 9,547 $ 498,587 $ 508,134 |
Schedule of lease payments under previous guidance | As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting guidance, maturities of lease liabilities were as follows as of December 30, 2018 (in thousands): Capital Leases Operating Leases 2019 $ 1,234 $ 80,367 2020 1,242 76,936 2021 1,240 70,419 2022 1,063 61,649 2023 1,019 54,121 Thereafter 7,552 206,879 Total 13,350 $ 550,371 Less amount representing interest (3,150 ) Present value of future minimum lease payments 10,200 Less current portion (786 ) Long-term capital lease obligations $ 9,414 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income tax | Income (loss) before income taxes includes the following components for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 (in thousands): 2019 2018 2017 U.S. $ (14,549 ) $ (16,045 ) $ 32,208 Foreign (7,688 ) (5,365 ) (3,188 ) $ (22,237 ) $ (21,410 ) $ 29,020 |
Schedule of provision (benefit) for income taxes | The benefit for income taxes for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 consist of the following (in thousands): 2019 2018 2017 Current: Federal $ (3,054 ) $ 2,043 $ 2,304 State (1,687 ) 1,579 3,175 Foreign — — — Total current income tax (benefit) expense $ (4,741 ) $ 3,622 $ 5,479 Deferred: Federal $ (10,994 ) $ (16,688 ) $ (6,045 ) State 1,354 (2,068 ) (680 ) Foreign 47 143 247 Total deferred income tax benefit (9,593 ) (18,613 ) (6,478 ) Income tax benefit $ (14,334 ) $ (14,991 ) $ (999 ) |
Schedule of reconciliation of income tax provision that would result from applying the federal statutory rate to income tax provision | The reconciliation between the income tax provision and the amount of income tax computed by applying the U.S. federal statutory rate to income (loss) before the provision for income taxes as shown in the accompanying consolidated statements of operations and comprehensive (loss) income, for fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 is as follows: 2019 2018 2017 Tax provision at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State income taxes 2.2 2.9 5.0 FICA tip tax credits 46.0 49.9 (32.4 ) Foreign taxes versus U.S statutory rate 0.8 0.9 0.7 Valuation allowance on deferred income tax assets (9.1 ) (7.5 ) 4.5 Deferred tax remeasurement due to the Tax Act — — (9.7 ) Other tax credits 6.1 7.1 (6.5 ) Meals and entertainment (0.7 ) (0.8 ) 0.9 Excess stock options (2.9 ) (0.6 ) (1.0 ) Employee travel (0.1 ) (2.1 ) — Other 1.2 (0.8 ) — Effective tax rate 64.5 % 70.0 % (3.5 )% |
Schedule of the Company's total deferred tax assets and liabilities | The Company’s federal and state deferred taxes at December 29, 2019 and December 30, 2018 are as follows (in thousands): 2019 2018 Deferred tax assets and (liabilities), net: Leasing transactions $ 18,913 $ 14,603 Stock-based compensation 4,920 5,434 General business and other tax credits 40,409 25,872 Accrued compensation and related costs 5,970 5,938 Advanced payments 3,597 3,783 Other non-current deferred tax assets 7,584 5,412 Other non-current deferred tax liabilities (1,680 ) (2,605 ) Goodwill and other amortization, net (12,138 ) (11,003 ) Property and equipment (757 ) 3,698 Prepaid expenses (3,387 ) (3,600 ) Supplies inventory (4,611 ) (4,514 ) Subtotal 58,820 43,018 Valuation allowance (7,293 ) (5,177 ) Net deferred tax asset 51,527 37,841 Non-current deferred tax asset 52,438 38,688 Non-current deferred tax liability (911 ) (847 ) Total $ 51,527 $ 37,841 |
Schedule of the Company's unrecognized tax benefits | The following table summarizes the Company’s unrecognized tax benefits at December 29, 2019 and December 30, 2018 (in thousands): 2019 2018 Beginning of year $ 304 $ 287 Increase due to current year tax positions 52 82 Due to decrease to a position taken in a prior year (170 ) (7 ) Settlements (16 ) (21 ) Reductions related to lapses (66 ) (37 ) End of year $ 104 $ 304 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of status of the Company's stock option plans | The tables below summarize the status of the Company’s stock option plans (in thousands, except per share data and exercise price): Stock Options Shares Weighted Average Exercise Price Outstanding, December 30, 2018 483 $ 56.62 Granted — — Forfeited/expired (193 ) 55.39 Exercised (2 ) 21.10 Outstanding, December 29, 2019 288 $ 58.33 Shares Weighted Average Exercise Price Weighted Average Remaining Years of Contractual Life Aggregate Intrinsic Value Outstanding as of December 29, 2019 288 $ 58.33 4.73 $ 70,458 Vested and expected to vest as of December 29, 2019 (1) 281 58.34 4.72 70,458 Exercisable as of December 29, 2019 219 58.47 4.60 70,458 ___________________________________ (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. The Company applies estimated forfeiture rates that are derived from our historical forfeitures of similar awards. |
Schedule of average assumptions used in estimation of fair value of options | The estimated fair value of each option granted is calculated using the Black-Scholes multiple option-pricing model. No options were granted during 2019. The average assumptions used in the model for the fiscal years ended December 30, 2018 and December 31, 2017 were as follows: 2019 2018 2017 Risk-free interest rate — % 2.5 % 1.8 % Expected years until exercise 0 years 3.2 years 5.0 years Expected stock volatility — % 43.4 % 37.9 % Dividend yield — % — % — % Weighted average Black-Scholes fair value per share at date of grant $ — $ 16.56 $ 17.11 Total intrinsic value of options exercised (in thousands) $ 20 $ 390 $ 1,676 |
Summary of the status of the Company's restricted stock units | The table below summarizes the status of the Company’s time-based RSUs under the 2017 and 2007 Stock Plans (shares in thousands): Restricted Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 30, 2018 119 $ 53.13 Awarded 211 30.16 Forfeited (71 ) 37.50 Vested (41 ) 55.43 Outstanding, December 29, 2019 218 $ 35.62 |
Summary of status of Company's performance based stock units | The table below summarizes the status of the Company’s performance stock units under the 2017 Stock Plan (shares in thousands: Performance Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 30, 2018 63 $ 55.35 Awarded 141 29.40 Forfeited (96 ) 37.43 Vested — — Outstanding, December 29, 2019 108 $ 37.25 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Consolidated Quarterly Financial Information | The following tables summarize the unaudited consolidated quarterly financial information for fiscal years 2019 and 2018 (in thousands, except per share data): 2019 Q1 Q2 Q3 Q4 2019 Total revenues $ 409,866 $ 307,981 $ 294,222 $ 302,945 $ 1,315,014 Income (loss) from operations $ 3,401 $ (12,852 ) $ (5,223 ) $ 1,547 $ (13,127 ) Net income (loss) $ 639 $ 981 $ (1,821 ) $ (7,702 ) $ (7,903 ) Basic earnings (loss) per share $ 0.05 $ 0.08 $ (0.14 ) $ (0.60 ) $ (0.61 ) Diluted earnings (loss) per share $ 0.05 $ 0.08 $ (0.14 ) $ (0.60 ) $ (0.61 ) 2018 Q1 Q2 Q3 Q4 2018 Total revenues $ 421,519 $ 315,388 $ 294,877 $ 306,779 $ 1,338,563 Income (loss) from operations $ 7,019 $ (4,214 ) $ 1,805 $ (15,095 ) $ (10,485 ) Net income (loss) $ 4,380 $ (1,874 ) $ 1,709 $ (10,634 ) $ (6,419 ) Basic earnings (loss) per share $ 0.34 $ (0.14 ) $ 0.13 $ (0.82 ) $ (0.49 ) Diluted earnings (loss) per share $ 0.34 $ (0.14 ) $ 0.13 $ (0.82 ) $ (0.49 ) |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 29, 2019stateprovincerestaurantsegment | |
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 | 454 |
Number of states in which restaurants are located | state | 38 |
Franchised restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | restaurant | 102 |
Number of states in which restaurants are located | state | 16 |
Number of Canadian provinces in which restaurants are located | province | 1 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred rent | $ 0 | $ 75,675 | $ 0 | |
Other non-current liabilities | 10,164 | 11,523 | ||
Operating and finance lease liability, current | 42,699 | 786 | 41,392 | |
Gift card breakage | $ (6,776) | (3,898) | $ (4,026) | |
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred rent | 1,400 | (75,675) | ||
Other non-current liabilities | 1,400 | |||
Accrued liabilities | 800 | |||
Operating and finance lease liability, current | 800 | $ 40,606 | ||
Gift card breakage | $ (3,900) | $ (4,000) |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Accounts Receivable | |||
Gift cards in transit in accounts receivable | $ 13,300 | $ 13,800 | |
Allowance for Tenant Improvements | 600 | 2,400 | |
Gift Card Breakage | 6,776 | 3,898 | $ 4,026 |
Food and beverage inventories | 8,100 | 8,700 | |
Supplies inventories | $ 18,300 | $ 18,600 | |
Minimum | |||
Cash Equivalents | |||
Period for conversion of amounts receivable from credit card issuers into cash | 2 days | ||
Maximum | |||
Cash Equivalents | |||
Period for conversion of amounts receivable from credit card issuers into cash | 4 days |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies (Details 4) | 12 Months Ended |
Dec. 29, 2019 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Furniture, fixtures, and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture, fixtures, and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Description of Business and S_8
Description of Business and Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Dec. 29, 2019 | |
Liquor licenses and other | Maximum | |
Goodwill and intangible assets, net | |
Amortization period of non-transferable liquor licenses | 20 years |
Description of Business and S_9
Description of Business and Summary of Significant Accounting Policies (Details 6) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 29, 2019USD ($)fundshares | Dec. 30, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | |
Advertising | |||
Required percentage of revenues contributed to national media funds | 3.00% | ||
Number of marketing and national media funds to which the entity and franchisees must contribute a minimum percentage of revenue | fund | 2 | ||
Marketing and Advertising Expense | $ | $ 44.3 | $ 44.3 | $ 48 |
Earnings Per Share | |||
Basic weighted average shares outstanding (in shares) | 12,959 | 12,976 | 12,899 |
Dilutive effect of stock options and awards (in shares) | 0 | 0 | 99 |
Diluted weighted average shares outstanding (in shares) | 12,959 | 12,976 | 12,998 |
Awards excluded due to anti-dilutive effect on diluted earnings per share (in shares) | 378 | 427 | 329 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Dec. 29, 2019USD ($) | Oct. 06, 2019USD ($) | Jul. 14, 2019USD ($) | Dec. 30, 2018USD ($) | Oct. 07, 2018USD ($) | Jul. 15, 2018USD ($) | Apr. 21, 2019USD ($) | Apr. 22, 2018USD ($) | Dec. 29, 2019USD ($)fundentree | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Number of marketing and national media funds to which the entity and franchisees must contribute a minimum percentage of revenue | fund | 2 | ||||||||||
Franchise and other revenues | $ 302,945 | $ 294,222 | $ 307,981 | $ 306,779 | $ 294,877 | $ 315,388 | $ 409,866 | $ 421,519 | $ 1,315,014 | $ 1,338,563 | |
Selling, general and administrative expense | $ 155,978 | $ 146,458 | $ 156,656 | ||||||||
Number of entrees to be purchased for each free entree | entree | 9 | ||||||||||
Required percentage of revenues contributed to national media funds | 3.00% | ||||||||||
Term of franchise rights | 20 years | ||||||||||
Additional term of franchise rights | 10 years | ||||||||||
Minimum | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Royalties as percentage of franchised adjusted gross sales | 4.00% | ||||||||||
Maximum | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Royalties as percentage of franchised adjusted gross sales | 5.00% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 1,315,014 | $ 1,338,563 | $ 1,387,566 |
Restaurant revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,289,521 | 1,316,209 | 1,365,060 |
Franchise revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 17,497 | 17,409 | 17,681 |
Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 7,996 | $ 4,945 | $ 4,825 |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Unearned gift card revenues | |||
Disaggregation of Revenue [Line Items] | |||
Unearned gift card and loyalty revenue | $ 43,500 | $ 45,300 | |
Unearned loyalty rewards | |||
Disaggregation of Revenue [Line Items] | |||
Unearned gift card and loyalty revenue | 10,700 | 10,000 | |
Products and services, gift card | |||
Disaggregation of Revenue [Line Items] | |||
Gift card revenue | $ 19,941 | $ 17,487 | $ 16,337 |
Other Charges - Summary of Othe
Other Charges - Summary of Other Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Asset impairment | $ 15,094 | $ 28,127 | $ 6,914 |
Executive transition and severance | 3,450 | 0 | 0 |
Board and stockholder matter costs | 3,261 | 0 | 0 |
Executive retention | 980 | 0 | 0 |
Litigation contingencies | 0 | 4,795 | 0 |
Reorganization costs | 0 | 3,273 | 0 |
Other charges | 21,598 | 39,131 | 6,914 |
Smallwares disposal | |||
Property, Plant and Equipment [Line Items] | |||
Restaurant closure and smallwares disposal costs | 0 | 2,936 | 0 |
Restaurant closures and refranchising | |||
Property, Plant and Equipment [Line Items] | |||
Restaurant closure and smallwares disposal costs | $ (1,187) | $ 0 | $ 0 |
Other Charges - Additional Info
Other Charges - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 14, 2019restaurant | Dec. 29, 2019USD ($)restaurant | Dec. 30, 2018USD ($)restaurant | Dec. 31, 2017USD ($)restaurant | |
Property, Plant and Equipment [Line Items] | ||||
Executive transition and severance | $ 3,450 | $ 0 | $ 0 | |
Number of restaurants impaired | restaurant | 29 | 41 | 13 | |
Asset impairment | 15,094 | $ 28,127 | $ 6,914 | |
Number of restaurants with immaterial impairments | restaurant | 19 | |||
Litigation contingencies | 0 | $ 4,795 | 0 | |
Reorganization costs | 0 | 3,273 | 0 | |
Executive retention | $ 980 | $ 0 | $ 0 | |
Number of restaurants closed | restaurant | 18 | 4 | 3 | |
Board and stockholder matter costs | $ 3,261 | $ 0 | $ 0 | |
Smallwares disposal | ||||
Property, Plant and Equipment [Line Items] | ||||
Smallwares disposal costs | 0 | 2,936 | 0 | |
Restaurant closures and refranchising | ||||
Property, Plant and Equipment [Line Items] | ||||
Smallwares disposal costs | $ (1,187) | $ 0 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) | 3 Months Ended | 12 Months Ended | ||||
Dec. 29, 2019USD ($) | Jul. 14, 2019restaurant | Dec. 30, 2018USD ($) | Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($)restaurant | Dec. 31, 2017USD ($)restaurant | |
Goodwill | ||||||
Beginning balance | $ 95,838,000 | $ 96,979,000 | ||||
Foreign currency translation adjustment | 559,000 | (1,141,000) | ||||
Ending balance | $ 96,397,000 | $ 95,838,000 | 96,397,000 | 95,838,000 | $ 96,979,000 | |
Goodwill impairment losses | 0 | 0 | 0 | 0 | ||
Intangible assets subject to amortization: | ||||||
Gross Carrying Amount | 77,074,000 | 78,215,000 | 77,074,000 | 78,215,000 | ||
Accumulated Amortization | (54,559,000) | (51,066,000) | (54,559,000) | (51,066,000) | ||
Net Carrying Amount | 22,515,000 | 27,149,000 | 22,515,000 | 27,149,000 | ||
Intangible assets, net (excluding goodwill) | ||||||
Gross Carrying Amount | 84,534,000 | 85,675,000 | 84,534,000 | 85,675,000 | ||
Accumulated Amortization | 54,559,000 | 51,066,000 | 54,559,000 | 51,066,000 | ||
Net Carrying Amount | 29,975,000 | 34,609,000 | 29,975,000 | 34,609,000 | ||
Impairment of indefinite-lived intangible assets | 0 | $ 0 | $ 0 | |||
Number of restaurants impaired | restaurant | 29 | 41 | 13 | |||
Amortization of intangible assets | 4,400,000 | $ 4,300,000 | $ 4,900,000 | |||
Liquor licenses and other | ||||||
Indefinite-lived intangible assets: | ||||||
Gross Carrying Amount | 7,460,000 | 7,460,000 | 7,460,000 | 7,460,000 | ||
Accumulated Amortization | 0 | 0 | 0 | 0 | ||
Net Carrying Amount | 7,460,000 | 7,460,000 | 7,460,000 | 7,460,000 | ||
Franchise rights | ||||||
Intangible assets subject to amortization: | ||||||
Gross Carrying Amount | 53,336,000 | 54,404,000 | 53,336,000 | 54,404,000 | ||
Accumulated Amortization | (35,896,000) | (33,160,000) | (35,896,000) | (33,160,000) | ||
Net Carrying Amount | 17,440,000 | 21,244,000 | 17,440,000 | 21,244,000 | ||
Leasehold interests | ||||||
Intangible assets subject to amortization: | ||||||
Gross Carrying Amount | 13,001,000 | 13,001,000 | 13,001,000 | 13,001,000 | ||
Accumulated Amortization | (8,794,000) | (8,136,000) | (8,794,000) | (8,136,000) | ||
Net Carrying Amount | 4,207,000 | 4,865,000 | 4,207,000 | 4,865,000 | ||
Liquor licenses and other | ||||||
Intangible assets subject to amortization: | ||||||
Gross Carrying Amount | 10,737,000 | 10,810,000 | 10,737,000 | 10,810,000 | ||
Accumulated Amortization | (9,869,000) | (9,770,000) | (9,869,000) | (9,770,000) | ||
Net Carrying Amount | $ 868,000 | $ 1,040,000 | $ 868,000 | $ 1,040,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Property and equipment | |||
Property and equipment, gross | $ 1,273,319 | $ 1,262,717 | |
Accumulated depreciation and amortization | (755,306) | (697,575) | |
Property and equipment, net | 518,013 | 565,142 | |
Depreciation and amortization expense | 87,400 | 91,000 | $ 87,600 |
Land | |||
Property and equipment | |||
Property and equipment, gross | 41,850 | 41,850 | |
Buildings | |||
Property and equipment | |||
Property and equipment, gross | 96,944 | 110,050 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 708,954 | 706,648 | |
Furniture, fixtures, and equipment | |||
Property and equipment | |||
Property and equipment, gross | 411,874 | 395,438 | |
Construction in progress | |||
Property and equipment | |||
Property and equipment, gross | $ 13,697 | $ 8,731 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Estimated aggregate future amortization expense | ||
2020 | $ 3,684 | |
2021 | 3,258 | |
2022 | 2,830 | |
2024 | 2,593 | |
2025 | 2,300 | |
Thereafter | 7,850 | |
Net Carrying Amount | $ 22,515 | $ 27,149 |
Accrued Payroll and Payroll-r_3
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Accrued payroll and payroll-related liabilities | ||
Payroll and payroll-related taxes | $ 16,736 | $ 18,192 |
Workers compensation insurance | 5,720 | 6,825 |
Accrued vacation | 5,451 | 5,753 |
Corporate and restaurant incentive compensation | 5,397 | 4,227 |
Other | 1,917 | 2,925 |
Accrued payroll and payroll-related liabilities | 35,221 | 37,922 |
Accrued liabilities | ||
State and city sales tax payable | 6,776 | 5,798 |
General liability insurance | 6,622 | 6,826 |
Legal | 4,290 | 4,910 |
Utilities | 2,791 | 2,915 |
Real estate, personal property, state income, and other taxes payable | 1,135 | 4,522 |
Other | 7,789 | 13,086 |
Accrued liabilities and other current liabilities | $ 29,403 | $ 38,057 |
Borrowings - Summary of Long-te
Borrowings - Summary of Long-term debt (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Borrowings | ||
Total Debt | $ 206,875 | $ 193,375 |
Less: Current portion | 0 | 0 |
Long-term debt | 206,875 | 193,375 |
Revolving credit facility | Credit facility | ||
Borrowings | ||
Total Debt | $ 206,875 | $ 193,375 |
Weighted Average Interest Rate | 5.10% | 4.20% |
Borrowings Borrowings - Maturit
Borrowings Borrowings - Maturities of Long-term debt (Details) $ in Thousands | Dec. 29, 2019USD ($) |
Maturities of long-term debt and capital lease obligations | |
2020 | $ 0 |
2021 | 206,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 875 |
Debt and Lease Obligation | $ 206,875 |
Borrowings Borrowings - Additio
Borrowings Borrowings - Additional Information (Details) | Jan. 10, 2020USD ($) | Jun. 30, 2016USD ($) | Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($) |
Additional disclosure | ||||
Short-term debt | $ 0 | $ 0 | ||
Credit facility | ||||
Additional disclosure | ||||
Current borrowing capacity | $ 20,000,000 | |||
Additional borrowing capacity subject to lender participation | $ 100,000,000 | |||
Credit facility | Revolving credit facility | ||||
Additional disclosure | ||||
Amounts outstanding | 206,000,000 | 192,500,000 | ||
Credit facility | Revolving credit facility | Federal Funds Rate | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 0.50% | |||
Credit facility | Revolving credit facility | LIBOR | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 1.00% | |||
Credit facility | Revolving credit facility | Canadian Dealer Offered Rate (CDOR) | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 1.00% | |||
Credit facility | Letter of credit | ||||
Additional disclosure | ||||
Amounts outstanding | $ 7,500,000 | 7,800,000 | ||
Unamortized Debt Issuance Expense | $ 1,700,000 | |||
Credit facility | Swingline loans | ||||
Additional disclosure | ||||
Current borrowing capacity | $ 15,000,000 | |||
Revolving credit facility | Credit facility | ||||
Additional disclosure | ||||
Lease adjusted leverage ration during fiscal year 2020 | 4.72 | |||
Revolving credit facility | Credit facility | Line of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | 400,000,000 | |||
Letter of credit | Credit facility | Line of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | $ 25,000,000 | |||
Unamortized Debt Issuance Expense | $ 1,000,000 | |||
Subsequent event | ||||
Additional disclosure | ||||
Lease adjusted leverage ration during fiscal year 2020 | 5 | |||
Lease adjusted leverage ratio during fiscal year 2021 | 4.75 | |||
Lease adjusted leverage ration during fiscal year 2022 and thereafter | 4.50 | |||
Subsequent event | New credit facility | ||||
Additional disclosure | ||||
Additional borrowing capacity subject to lender participation | $ 100,000,000 | |||
Proceeds from long-term lines of credit | $ 186,600,000 | |||
Line of credit facility, periodic payment, principal, percentage | 7.00% | |||
Subsequent event | New credit facility | Revolving credit facility | Federal Funds Rate | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 0.50% | |||
Subsequent event | New credit facility | Revolving credit facility | LIBOR | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 1.00% | |||
Subsequent event | New credit facility | Revolving credit facility | Canadian Dealer Offered Rate (CDOR) | ||||
Additional disclosure | ||||
Interest rate margin (as a percent) | 1.00% | |||
Subsequent event | New credit facility | Line of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | $ 300,000,000 | |||
Maximum sale leaseback transactions | 50,000,000 | |||
Subsequent event | New credit facility | Letter of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | 25,000,000 | |||
Subsequent event | New credit facility | Swingline loans | ||||
Additional disclosure | ||||
Current borrowing capacity | 15,000,000 | |||
Subsequent event | Revolving credit facility | New credit facility | Line of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | 161,500,000 | |||
Subsequent event | Term loan | New credit facility | Line of credit | ||||
Additional disclosure | ||||
Current borrowing capacity | 138,500,000 | |||
Subsequent event | Foreign line of credit | New credit facility | Revolving credit facility | ||||
Additional disclosure | ||||
Current borrowing capacity | $ 20,000,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of assets measured at fair value on a recurring basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Assets: | ||
Investments in rabbi trust | $ 7,337 | $ 8,198 |
Total assets measured at fair value | 7,337 | 8,198 |
Level 1 | ||
Assets: | ||
Investments in rabbi trust | 7,337 | 8,198 |
Total assets measured at fair value | 7,337 | 8,198 |
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 - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 14, 2019restaurant | Dec. 30, 2018USD ($)restaurant | Dec. 31, 2017restaurant | Dec. 29, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Number of restaurants impaired | restaurant | 29 | 41 | 13 | |
Number of restaurants with immaterial impairments | restaurant | 19 | |||
Fair Value, Nonrecurring | Level 3 | Restaurants | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying value of restaurants before impairment | $ | $ 34.1 | $ 17.3 | ||
Fair value of impaired restaurants | $ | $ 6 | $ 2.2 |
Leases Effect on Balance Sheet
Leases Effect on Balance Sheet of Adoption of New Accounting Standard (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 31, 2018 | Dec. 30, 2018 |
Non-current assets | |||
Right of use assets, net | $ 426,248 | $ 478,268 | $ 0 |
Prepaid expenses and other current assets | 26,646 | 20,984 | 27,576 |
Current liabilities | |||
Short-term portion of lease obligations | 42,699 | 41,392 | 786 |
Non-current liabilities | |||
Deferred rent | 0 | 0 | 75,675 |
Long-term portion of lease obligations | 465,435 | 516,159 | 9,414 |
Stockholders’ equity: | |||
Retained earnings | $ 353,266 | 361,169 | 376,341 |
Accounting Standards Update 2016-02 | |||
Non-current assets | |||
Right of use assets, net | 478,268 | ||
Prepaid expenses and other current assets | (6,592) | ||
Current liabilities | |||
Short-term portion of lease obligations | 40,606 | 800 | |
Non-current liabilities | |||
Deferred rent | (75,675) | $ 1,400 | |
Long-term portion of lease obligations | 506,745 | ||
Stockholders’ equity: | |||
Retained earnings | $ (15,172) |
Leases Narrative (Details)
Leases Narrative (Details) | 12 Months Ended |
Dec. 29, 2019 | |
Lessee, Lease, Description [Line Items] | |
Term of lease extension | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 15 years |
Maximum renewal term | 20 years |
Leases Additional Balance Sheet
Leases Additional Balance Sheet information (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 31, 2018 | Dec. 30, 2018 |
Finance | |||
Right of use assets, net | $ 7,552 | ||
Finance Lease Liabilities | |||
Short-term portion of lease obligations | 725 | ||
Long-term portion of lease obligations | 8,822 | ||
Total | 9,547 | ||
Operating | |||
Right of use assets, net | 418,696 | ||
Operating Lease Liabilities | |||
Short-term portion of lease obligations | 41,974 | ||
Long-term portion of lease obligations | 456,613 | ||
Total | 498,587 | ||
Total | |||
Right of use assets, net | 426,248 | $ 478,268 | $ 0 |
Total | |||
Short-term portion of lease obligations | 42,699 | 41,392 | 786 |
Long-term portion of lease obligations | 465,435 | $ 516,159 | $ 9,414 |
Total | $ 508,134 |
Leases Lease Cost (Details)
Leases Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 75,496 |
Finance lease cost: | |
Amortization of right of use assets | 793 |
Interest on lease liabilities | 544 |
Total finance lease cost | 1,337 |
Variable lease cost | 29,300 |
Total lease costs | $ 106,133 |
Leases Schedules of Lease Matur
Leases Schedules of Lease Maturities (Details) $ in Thousands | Dec. 29, 2019USD ($) |
Finance Leases | |
2020 | $ 1,065 |
2021 | 1,133 |
2022 | 979 |
2023 | 916 |
2024 | 932 |
Thereafter | 7,506 |
Total future lease liability | 12,531 |
Less imputed interest | 2,984 |
Total | 9,547 |
Operating Leases | |
2020 | 70,303 |
2021 | 75,990 |
2022 | 73,702 |
2023 | 71,670 |
2024 | 68,468 |
Thereafter | 379,644 |
Total future lease liability | 739,777 |
Less imputed interest | 241,190 |
Present value of lease liability | 498,587 |
Total | |
2020 | 71,368 |
2021 | 77,123 |
2022 | 74,681 |
2023 | 72,586 |
2024 | 69,400 |
Thereafter | 387,150 |
Total future lease liability | 752,308 |
Less imputed interest | 244,174 |
Total | $ 508,134 |
Leases Schedule of lease maturi
Leases Schedule of lease maturities under previous guidance (Details) $ in Thousands | Dec. 30, 2018USD ($) |
Capital Leases | |
2019 | $ 1,234 |
2020 | 1,242 |
2021 | 1,240 |
2022 | 1,063 |
2023 | 1,019 |
Thereafter | 7,552 |
Total | 13,350 |
Less amount representing interest | (3,150) |
Present value of future minimum lease payments | 10,200 |
Less current portion | (786) |
Long-term capital lease obligations | 9,414 |
Operating Leases | |
2019 | 80,367 |
2020 | 76,936 |
2021 | 70,419 |
2022 | 61,649 |
2023 | 54,121 |
Thereafter | 206,879 |
Total | $ 550,371 |
Leases Supplemental Cash Flow I
Leases Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Cash paid related to lease liabilities | |
Operating leases | $ 78,260 |
Finance leases | 512 |
Cash paid related to lease liabilities | |
Finance leases | 817 |
Cash paid for amounts included in the measurement of lease liabilities | 79,589 |
Right of use assets obtained in exchange for operating lease obligations following the adoption of Topic 842 (Leases) | 12,580 |
Right of use assets obtained in exchange for finance lease obligations following the adoption of Topic 842 (Leases) | $ 1,606 |
Other information related to operating leases as follows: | |
Weighted average remaining lease term | 10 years 8 months 12 days |
Weighted average discount rate | 7.40% |
Other information related to financing leases as follows: | |
Weighted average remaining lease term | 12 years 4 months 13 days |
Weighted average discount rate | 4.90% |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
U.S. | $ (14,549) | $ (16,045) | $ 32,208 |
Foreign | (7,688) | (5,365) | (3,188) |
(Loss) income before income taxes | $ (22,237) | $ (21,410) | $ 29,020 |
Income Taxes Income Taxes - Com
Income Taxes Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ (3,054) | $ 2,043 | $ 2,304 |
State | (1,687) | 1,579 | 3,175 |
Foreign | 0 | 0 | 0 |
Total current income tax (benefit) expense | (4,741) | 3,622 | 5,479 |
Deferred: | |||
Federal | (10,994) | (16,688) | (6,045) |
State | 1,354 | (2,068) | (680) |
Foreign | 47 | 143 | 247 |
Total deferred income tax benefit | (9,593) | (18,613) | (6,478) |
Income tax benefit | $ (14,334) | $ (14,991) | $ (999) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax provision at U.S. federal statutory rate | 21.00% | 21.00% | 35.00% |
State income taxes | 2.20% | 2.90% | 5.00% |
FICA tip tax credits | 46.00% | 49.90% | (32.40%) |
Foreign taxes versus U.S statutory rate | 0.80% | 0.90% | 0.70% |
Valuation allowance on deferred income tax assets | (9.10%) | (7.50%) | 4.50% |
Deferred tax remeasurement due to the Tax Act | 0.00% | 0.00% | (9.70%) |
Other tax credits | 6.10% | 7.10% | (6.50%) |
Meals and entertainment | (0.70%) | (0.80%) | 0.90% |
Excess stock options | (2.90%) | (0.60%) | (1.00%) |
Employee travel | (0.10%) | (2.10%) | 0.00% |
Other | 1.20% | (0.80%) | 0.00% |
Effective tax rate | 64.50% | 70.00% | (3.50%) |
Income Taxes - Federal and Stat
Income Taxes - Federal and State Deferred income taxes (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Deferred tax assets and (liabilities), net: | ||
Leasing transactions | $ 18,913 | |
Leasing transactions | $ 14,603 | |
Stock-based compensation | 4,920 | 5,434 |
General business and other tax credits | 40,409 | 25,872 |
Accrued compensation and related costs | 5,970 | 5,938 |
Advanced payments | 3,597 | 3,783 |
Other non-current deferred tax assets | 7,584 | 5,412 |
Other non-current deferred tax liabilities | (1,680) | (2,605) |
Goodwill and other amortization, net | (12,138) | (11,003) |
Property and equipment | (757) | |
Property and equipment | 3,698 | |
Prepaid expenses | (3,387) | (3,600) |
Supplies inventory | (4,611) | (4,514) |
Subtotal | 58,820 | 43,018 |
Valuation allowance | (7,293) | (5,177) |
Net deferred tax asset | 51,527 | 37,841 |
Non-current deferred tax asset | 52,438 | 38,688 |
Non-current deferred tax liability | $ (911) | $ (847) |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning of year | $ 304 | $ 287 |
Increase due to current year tax positions | 52 | 82 |
Due to decrease to a position taken in a prior year | (170) | (7) |
Settlements | (16) | (21) |
Reductions related to lapses | (66) | (37) |
End of year | $ 104 | $ 304 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Operating loss carryforwards | $ 4,700 | ||
Deferred tax assets, tax credit carryforwards | 39,000 | ||
Valuation allowance | (7,293) | $ (5,177) | |
Unrecognized tax benefits | $ 104 | $ 304 | $ 287 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Aug. 09, 2018 | |
Stockholders' Equity Note [Abstract] | |||
Increase in amount authorized under sock repurchase program | $ 21,000,000 | ||
Amount authorized for repurchase of common stock | $ 75,000,000 | ||
Acquisition of treasury stock (in shares) | 111,800 | ||
Average purchase price (in dollars per share) | $ 30.86 | ||
Aggregate price of shares repurchased | $ 3,450,000 | $ 1,474,000 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2019shares | Dec. 29, 2019USD ($)shares | Dec. 30, 2018USD ($)shares | Dec. 31, 2017USD ($)Periodshares | Dec. 25, 2016Period | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation cost | $ | $ 3.3 | $ 4 | $ 4.8 | ||
Income tax benefits from stock-based compensation cost | $ | 0.3 | $ 0.5 | $ 1.5 | ||
Total unrecognized compensation cost | $ | $ 5.9 | ||||
Number of performance periods | Period | 3 | 1 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares outstanding | 288,000 | 483,000 | |||
Weighted average remaining vesting period | 10 months 17 days | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average remaining vesting period | 1 year 9 months 8 days | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average remaining vesting period | 1 year 9 months 22 days | ||||
Number of common shares issued per RSU or PSU (in shares) | 1 | ||||
Amended 2017 Performance Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares of the company's common stock that may be issued or transferred (in shares) | 630,182 | ||||
2017 and 2007 Performance Incentive Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period following the change in control during which termination of an individual without cause will trigger vesting of award | 2 years | ||||
Other Stock Based Compensation Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration Term | 10 years | ||||
2017 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares of the company's common stock that may be issued or transferred (in shares) | 1,290,182 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 660,000 | ||||
2007 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares outstanding | 242,579 | ||||
Long-term cash incentive plan | Deferred compensation, excluding share-based payments and retirement benefits | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance and vesting period | 3 years | 1 year | 3 years | ||
Compensation expense | $ | $ 0.2 | $ 0.7 | $ 0.4 | ||
Long-term cash incentive plan | Deferred compensation, excluding share-based payments and retirement benefits | Accrued payroll liabilities and payroll-related liabilities | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Long-term cash incentive plan liability | $ | $ 1.1 | $ 0.7 | |||
Minimum | 2007 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Maximum | 2007 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Share-based Payment Arrangement, Employee | 2007 Stock Plan | Time Based RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Share-based Payment Arrangement, Nonemployee | 2007 Stock Plan | Time Based RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year |
Stock Incentive Plans Stock Inc
Stock Incentive Plans Stock Incentive Plans - Summary of Options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Shares | ||
Outstanding, Beginning of period (in shares) | 483 | |
Granted (in shares) | 0 | |
Forfeited/expired (in shares) | (193) | |
Exercised/vested (in shares) | (2) | |
Outstanding, End of period (in shares) | 288 | 483 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 56.62 | |
Granted (in dollars per share) | $ 0 | |
Forfeited/expired (in dollars per share) | 55.39 | |
Exercised (in dollars per share) | 21.10 | |
Outstanding, end of period (in dollars per share) | $ 58.33 | $ 56.62 |
Vested and expected to vest as of current year end (in shares) | 281 | |
Exercisable as of current year end (in share) | 219 | |
Weighted average exercise price, vested and expected to vest as of current year end (in dollars per share) | $ 58.34 | |
Weighted average exercise price, exercisable as of current year end (in dollars per share) | $ 58.47 | |
Weighted average remaining years of contractual life, outstanding as of current year end | 4 years 8 months 23 days | |
Weighted average remaining years of contractual life, vested and expected to vest as of current year end | 4 years 8 months 19 days | |
Weighted average remaining years of contractual life, exercisable as of current year end | 4 years 7 months 6 days | |
Aggregate intrinsic value, outstanding as of current year end | $ 70,458 | |
Aggregate intrinsic value, vested and expected to vest as of current year end | 70,458 | |
Aggregate intrinsic value, exercisable as of current year end | $ 70,458 |
Stock Incentive Plans Stock I_2
Stock Incentive Plans Stock Incentive Plans - Summary of Weighted Average Assumptions (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 0.00% | 2.50% | 1.80% |
Expected years until exercise | 0 years | 3 years 2 months | 5 years |
Expected stock volatility (as a percent) | 0.00% | 43.40% | 37.90% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Weighted average Black-Scholes fair value per share at date of grant (in dollars per share) | $ 0 | $ 16.56 | $ 17.11 |
Total intrinsic value of options exercised | $ 20 | $ 390 | $ 1,676 |
Stock Incentive Plans Stock I_3
Stock Incentive Plans Stock Incentive Plans - Summary of Time-Based RSUs and Performance Stock Units (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
2017 and 2007 Performance Incentive Plans | Time Based RSUs | ||
Shares | ||
Outstanding, Beginning of period (in shares) | 119 | |
Awarded (in shares) | 211 | |
Forfeited (in shares) | (71) | |
Vested (in shares) | (41) | |
Outstanding, End of period (in shares) | 218 | 119 |
Weighted Average Grant-Date Fire Value (per share) | ||
Outstanding, beginning of period (in dollars per share) | $ 53.13 | |
Awarded (in dollars per share) | $ 30.16 | |
Forfeited (in dollars per share) | 37.50 | |
Vested (in dollars per share) | 55.43 | |
Outstanding, end of period (in dollars per share) | $ 35.62 | $ 53.13 |
2017 Stock Plan | Performance Stock Units | ||
Shares | ||
Outstanding, Beginning of period (in shares) | 63 | |
Awarded (in shares) | 141 | |
Forfeited (in shares) | (96) | |
Vested (in shares) | 0 | |
Outstanding, End of period (in shares) | 108 | 63 |
Weighted Average Grant-Date Fire Value (per share) | ||
Outstanding, beginning of period (in dollars per share) | $ 55.35 | |
Awarded (in dollars per share) | 29.40 | |
Forfeited (in dollars per share) | 37.43 | |
Vested (in dollars per share) | 0 | |
Outstanding, end of period (in dollars per share) | $ 37.25 | $ 55.35 |
Employee Benefit Programs (Deta
Employee Benefit Programs (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017Hourshares | Dec. 29, 2019USD ($)$ / sharesshares | Dec. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | |
Employee Stock Purchase Plan | ||||
Compensation expense | $ 3.3 | $ 4 | $ 4.8 | |
Employee Defined Contribution Plan | ||||
Minimum age of employees to be eligible to participate in defined contribution plan | 21 years | |||
Percentage of matching contribution | 100.00% | 50.00% | 50.00% | |
Percentage of maximum compensation matched by employer | 3.00% | 2.00% | 4.00% | |
Matching contribution expense | $ 3 | $ 0.9 | $ 0.7 | |
Employee Deferred Compensation Plan | Deferred compensation, excluding share-based payments and retirement benefits | ||||
Employee Deferred Compensation Plan | ||||
Deferred payment, participant limit per calendar year as a percentage of base salary | 75.00% | |||
Deferred payment, participant limit per calendar year as a percentage of variable compensation and commissions | 100.00% | |||
Deferred payment, maximum employer match | 50.00% | |||
Deferred payment, maximum matching contribution percentage | 4.00% | |||
Deferred compensation expense | 1.1 | 1 | ||
Employee Deferred Compensation Plan | Deferred compensation, excluding share-based payments and retirement benefits | Other assets, net | ||||
Employee Deferred Compensation Plan | ||||
Deferred compensation assets | 7.3 | $ 8.2 | ||
Employee Deferred Compensation Plan | Deferred compensation, excluding share-based payments and retirement benefits | Other non-current liability | ||||
Employee Deferred Compensation Plan | ||||
Liability for participant contributions and investment income | $ 7.3 | $ 8.2 | ||
Amended And Restated Employee Stock Purchase Plan | ||||
Employee Stock Purchase Plan | ||||
Number of shares outstanding (in shares) | shares | 100,000 | |||
Maximum percentage of base compensation that can be contributed by the eligible team members | 15.00% | |||
Estimated subscription date fair value (as a percent) | 85.00% | |||
Requisite employment period to be eligible to participate in the plan | 1 year | |||
Requisite working hours per week to be eligible to participate in the plan | Hour | 20 | |||
Operational period of the plan | 6 months | |||
Number of shares issued under the plan (in shares) | shares | 29,582 | 10,360 | ||
Number of shares available for future issuance under the plan (in shares) | shares | 52,451 | |||
Risk-free interest rate (as a percent) | 1.51% | 2.05% | ||
Expected life | 6 months | 6 months | ||
Expected volatility (as a percent) | 41.82% | 39.92% | ||
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Weighted average fair value per share at grant date (in dollars per share) | $ / shares | $ 7.56 | $ 5.19 | ||
Compensation expense | $ 0.2 | $ 0.1 | $ 0.2 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Dec. 29, 2019 | Oct. 06, 2019 | Jul. 14, 2019 | Dec. 30, 2018 | Oct. 07, 2018 | Jul. 15, 2018 | Apr. 21, 2019 | Apr. 22, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 302,945 | $ 294,222 | $ 307,981 | $ 306,779 | $ 294,877 | $ 315,388 | $ 409,866 | $ 421,519 | $ 1,315,014 | $ 1,338,563 | |
Income (loss) from operations | 1,547 | (5,223) | (12,852) | (15,095) | 1,805 | (4,214) | 3,401 | 7,019 | (13,127) | (10,485) | $ 39,032 |
Net income (loss) | $ (7,702) | $ (1,821) | $ 981 | $ (10,634) | $ 1,709 | $ (1,874) | $ 639 | $ 4,380 | $ (7,903) | $ (6,419) | |
Basic earning (loss) per share (in dollars per share) | $ (0.60) | $ (0.14) | $ 0.08 | $ (0.82) | $ 0.13 | $ (0.14) | $ 0.05 | $ 0.34 | $ (0.61) | $ (0.49) | $ 2.33 |
Diluted earning (loss) per share (in dollars per share) | $ (0.60) | $ (0.14) | $ 0.08 | $ (0.82) | $ 0.13 | $ (0.14) | $ 0.05 | $ 0.34 | $ (0.61) | $ (0.49) | $ 2.31 |