Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 29, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-37425 | |
Entity Registrant Name | WINGSTOP INC. | |
Entity Central Index Key | 0001636222 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3494862 | |
Entity Address, Address Line One | 5501 LBJ Freeway | |
Entity Address, Address Line Two | 5th Floor | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75240 | |
City Area Code | 972 | |
Local Phone Number | 686-6500 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | WING | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,453,374 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets | ||
Cash and cash equivalents | $ 9,472,000 | $ 12,493,000 |
Restricted cash | 4,842,000 | 4,462,000 |
Accounts receivable, net | 5,859,000 | 5,764,000 |
Prepaid expenses and other current assets | 3,540,000 | 2,056,000 |
Advertising fund assets, restricted | 8,470,000 | 5,131,000 |
Total current assets | 32,183,000 | 29,906,000 |
Property and equipment, net | 27,291,000 | 8,338,000 |
Goodwill | 50,172,000 | 49,655,000 |
Trademarks | 32,700,000 | 32,700,000 |
Other non-current assets | 12,480,000 | 4,917,000 |
Total assets | 168,067,000 | 139,749,000 |
Current liabilities | ||
Accounts payable | 2,359,000 | 2,750,000 |
Other current liabilities | 17,962,000 | 16,201,000 |
Current portion of debt | 8,200,000 | 2,400,000 |
Advertising fund liabilities | 8,470,000 | 5,131,000 |
Total current liabilities | 36,991,000 | 26,482,000 |
Long-term debt, net | 308,081,000 | 309,374,000 |
Deferred revenues, net of current | 22,058,000 | 21,885,000 |
Deferred income tax liabilities, net | 4,355,000 | 4,866,000 |
Other non-current liabilities | 8,157,000 | 1,972,000 |
Total liabilities | 379,642,000 | 364,579,000 |
Commitments and contingencies (see Note 9) | ||
Stockholders' deficit | ||
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,453,374 and 29,296,939 shares issued and outstanding as of September 28, 2019 and December 29, 2018, respectively | 295,000 | 293,000 |
Additional paid-in-capital | 337,000 | 1,036,000 |
Accumulated deficit | (212,207,000) | (226,159,000) |
Total stockholders' deficit | (211,575,000) | (224,830,000) |
Total liabilities and stockholders' deficit | 168,067,000 | 139,749,000 |
Customer Relationships [Member] | ||
Customer relationships, net | $ 13,241,000 | $ 14,233,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 29,453,374 | 29,296,939 |
Common stock, shares outstanding | 29,453,374 | 29,296,939 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | ||
Revenue: | |||||
Advertising fees and related income | $ 14,056 | $ 8,614 | $ 40,753 | $ 25,574 | |
Total revenue | 49,875 | 38,246 | 146,490 | 112,672 | |
Costs and expenses: | |||||
Cost of sales (1) | [1] | 10,339 | 8,040 | 30,642 | 23,182 |
Advertising Expense | 12,652 | 8,431 | 38,359 | 25,283 | |
Selling, general and administrative | 13,527 | 10,285 | 39,463 | 31,196 | |
Depreciation and amortization | 1,408 | 1,134 | 4,019 | 3,163 | |
Total costs and expenses | 37,926 | 27,890 | 112,483 | 82,824 | |
Operating income | 11,949 | 10,356 | 34,007 | 29,848 | |
Interest expense, net | 4,243 | 2,545 | 12,952 | 6,623 | |
Income before income tax expense | 7,706 | 7,811 | 21,055 | 23,225 | |
Income tax expense | 1,801 | 1,518 | 3,626 | 3,925 | |
Net income | $ 5,905 | $ 6,293 | $ 17,429 | $ 19,300 | |
Earnings per share | |||||
Basic | $ 0.20 | $ 0.21 | $ 0.59 | $ 0.66 | |
Diluted | $ 0.20 | $ 0.21 | $ 0.59 | $ 0.65 | |
Weighted average shares outstanding | |||||
Basic | 29,449 | 29,284 | 29,401 | 29,210 | |
Diluted | 29,696 | 29,584 | 29,667 | 29,561 | |
Dividends per share | $ 0.11 | $ 0.09 | $ 0.29 | $ 3.40 | |
Franchise | |||||
Revenue: | |||||
Royalty revenue, franchise fees and other | $ 21,876 | $ 17,787 | $ 64,391 | $ 52,772 | |
Franchisor Owned Outlet | |||||
Revenue: | |||||
Total revenue | $ 13,943 | $ 11,845 | $ 41,346 | $ 34,326 | |
[1] | Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, and excludes depreciation and amortization, which are presented separately. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit Statement - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance (shares) at Dec. 30, 2017 | 29,092,669 | |||
Balance at Dec. 30, 2017 | $ (58,418) | $ 291 | $ 262 | $ (58,971) |
Net income | 6,168 | 6,168 | ||
Issuance of common stock (shares) | 41,159 | |||
Issuance of common stock, net | $ 1 | (1) | ||
Exercise of stock options (shares) | 25,182 | |||
Exercise of stock options | 165 | 165 | ||
Tax payments for restricted stock upon vesting (shares) | (3,187) | |||
Tax payments for restricted stock upon vesting | (142) | (142) | ||
Stock-based compensation expense | 514 | 514 | ||
Dividends paid | (94,797) | (895) | (93,902) | |
Balance (shares) at Mar. 31, 2018 | 29,155,823 | |||
Balance at Mar. 31, 2018 | (146,510) | $ 292 | 45 | (146,847) |
Balance (shares) at Dec. 30, 2017 | 29,092,669 | |||
Balance at Dec. 30, 2017 | (58,418) | $ 291 | 262 | (58,971) |
Net income | 19,300 | |||
Tax payments for restricted stock upon vesting | (182) | |||
Balance (shares) at Sep. 29, 2018 | 29,296,047 | |||
Balance at Sep. 29, 2018 | (136,259) | $ 293 | 100 | (136,652) |
Balance (shares) at Mar. 31, 2018 | 29,155,823 | |||
Balance at Mar. 31, 2018 | (146,510) | $ 292 | 45 | (146,847) |
Net income | 6,839 | 6,839 | ||
Issuance of common stock (shares) | 5,105 | |||
Exercise of stock options (shares) | 110,615 | |||
Exercise of stock options | 290 | $ 1 | 289 | |
Stock-based compensation expense | 742 | 742 | ||
Dividends paid | (2,058) | (1,038) | (1,020) | |
Balance (shares) at Jun. 30, 2018 | 29,271,543 | |||
Balance at Jun. 30, 2018 | (140,697) | $ 293 | 38 | (141,028) |
Net income | 6,293 | 6,293 | ||
Issuance of common stock (shares) | 4,178 | |||
Exercise of stock options (shares) | 21,130 | |||
Exercise of stock options | 51 | 51 | ||
Tax payments for restricted stock upon vesting (shares) | (804) | |||
Tax payments for restricted stock upon vesting | (40) | (40) | ||
Stock-based compensation expense | 756 | 756 | ||
Dividends paid | (2,622) | (745) | (1,877) | |
Balance (shares) at Sep. 29, 2018 | 29,296,047 | |||
Balance at Sep. 29, 2018 | $ (136,259) | $ 293 | 100 | (136,652) |
Balance (shares) at Dec. 29, 2018 | 29,296,939 | 29,296,939 | ||
Balance at Dec. 29, 2018 | $ (224,830) | $ 293 | 1,036 | (226,159) |
Net income | 6,606 | 6,606 | ||
Issuance of common stock (shares) | 60,683 | |||
Issuance of common stock, net | $ 1 | (1) | ||
Exercise of stock options (shares) | 54,253 | |||
Exercise of stock options | 158 | 158 | ||
Tax payments for restricted stock upon vesting (shares) | (12,469) | |||
Tax payments for restricted stock upon vesting | (833) | (833) | ||
Stock-based compensation expense | 838 | 838 | ||
Dividends paid | (2,571) | (1,825) | (746) | |
Balance (shares) at Mar. 30, 2019 | 29,399,406 | |||
Balance at Mar. 30, 2019 | $ (220,478) | $ 294 | 206 | (220,978) |
Balance (shares) at Dec. 29, 2018 | 29,296,939 | 29,296,939 | ||
Balance at Dec. 29, 2018 | $ (224,830) | $ 293 | 1,036 | (226,159) |
Net income | $ 17,429 | |||
Exercise of stock options (shares) | 97,000 | |||
Tax payments for restricted stock upon vesting | $ (1,143) | |||
Balance (shares) at Sep. 28, 2019 | 29,453,374 | 29,453,374 | ||
Balance at Sep. 28, 2019 | $ (211,575) | $ 295 | 337 | (212,207) |
Balance (shares) at Mar. 30, 2019 | 29,399,406 | |||
Balance at Mar. 30, 2019 | (220,478) | $ 294 | 206 | (220,978) |
Net income | 4,918 | 4,918 | ||
Issuance of common stock (shares) | 12,339 | |||
Exercise of stock options (shares) | 33,439 | |||
Exercise of stock options | 148 | $ 1 | 147 | |
Tax payments for restricted stock upon vesting (shares) | (2,456) | |||
Tax payments for restricted stock upon vesting | (226) | (226) | ||
Stock-based compensation expense | 1,928 | 1,928 | ||
Dividends paid | (2,658) | (1,389) | (1,269) | |
Balance (shares) at Jun. 29, 2019 | 29,442,728 | |||
Balance at Jun. 29, 2019 | (216,368) | $ 295 | 892 | (217,555) |
Net income | 5,905 | 5,905 | ||
Issuance of common stock (shares) | 2,733 | |||
Exercise of stock options (shares) | 8,827 | |||
Exercise of stock options | 174 | 174 | ||
Tax payments for restricted stock upon vesting (shares) | (914) | |||
Tax payments for restricted stock upon vesting | (84) | (84) | ||
Stock-based compensation expense | 2,043 | 2,043 | ||
Dividends paid | $ (3,245) | (2,772) | (473) | |
Balance (shares) at Sep. 28, 2019 | 29,453,374 | 29,453,374 | ||
Balance at Sep. 28, 2019 | $ (211,575) | $ 295 | $ 337 | $ (212,207) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Operating activities | ||
Net income | $ 17,429 | $ 19,300 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 4,019 | 3,163 |
Deferred income taxes | (555) | (278) |
Stock-based compensation expense | 4,809 | 2,012 |
Amortization of debt issuance costs | 1,179 | 265 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (188) | 649 |
Prepaid expenses and other assets | (979) | (280) |
Advertising fund assets and liabilities, net | 3,164 | 4,457 |
Accounts payable and other current liabilities | (1,014) | 587 |
Deferred revenue | 528 | 877 |
Other non-current liabilities | 194 | (129) |
Cash provided by operating activities | 28,586 | 30,623 |
Investing activities | ||
Purchases of property and equipment | (21,082) | (2,883) |
Acquisition of restaurant from franchisee | (1,229) | (5,996) |
Cash used in investing activities | (22,311) | (8,879) |
Financing activities | ||
Proceeds from exercise of stock options | 480 | 506 |
Borrowings of long-term debt | 5,000 | 231,108 |
Repayments of long-term debt | (1,600) | (149,500) |
Payment of deferred financing costs | (15) | (782) |
Tax payments for restricted stock upon vesting | (1,143) | (182) |
Dividends paid | (8,474) | (99,476) |
Cash used in financing activities | (5,752) | (18,326) |
Net change in cash, cash equivalents, and restricted cash | 523 | 3,418 |
Cash, cash equivalents, and restricted cash at beginning of period | 20,940 | 6,392 |
Cash, cash equivalents, and restricted cash at end of period | $ 21,463 | $ 9,810 |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants. As of September 28, 2019 , 1,169 franchised restaurants were in operation domestically, and 141 franchised restaurants were in operation internationally. As of September 28, 2019 , the Company owned and operated 30 restaurants. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Balance sheet amounts are as of September 28, 2019 and December 29, 2018 , and operating results are for the thirteen and thirty-nine weeks ended September 28, 2019 and September 29, 2018 . In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 . The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2019 and 2018 have 52 weeks. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of September 28, 2019 and December 29, 2018 were as follows (in thousands): September 28, 2019 December 29, 2018 Cash and cash equivalents $ 9,472 $ 12,493 Restricted cash 4,842 4,462 Restricted cash, included in Advertising fund assets, restricted 7,149 3,985 Total cash, cash equivalents, and restricted cash $ 21,463 $ 20,940 Advertising Fund The Company administers the Wingstop Restaurants Advertising Fund (“Ad Fund”), for which a percentage of gross sales is collected from Wingstop restaurant franchisees and company-owned restaurants to be used for various forms of advertising for the Wingstop brand. Beginning in fiscal year 2019, the Ad Fund contribution collected from domestic Wingstop restaurant franchisees and company-owned restaurants increased from 3% to 4% of gross sales. The Company consolidates and reports all assets and liabilities of the Ad Fund as restricted assets and liabilities of the Ad Fund within current assets and current liabilities, respectively, in the Consolidated Balance Sheets. Ad Fund contributions, which were equal to 4% of gross sales for the thirty-nine weeks ended September 28, 2019 and 3% of gross sales for the thirty-nine weeks ended September 29, 2018 , and Ad Fund expenditures are reported on a gross basis in the Consolidated Statements of Operations, which are largely offsetting and therefore do not impact our reported net income. Company-operated restaurants’ Ad Fund contributions are included in cost of sales in the Consolidated Statements of Operations. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new guidance also requires additional disclosures about leases. The Company adopted the requirements of the new standard as of the first day of fiscal year 2019 using the modified retrospective approach without restating comparative periods. As part of our adoption, we elected the package of practical expedients, as well as the hindsight practical expedient, permitted under the new guidance, which, among other things, allowed the Company to continue utilizing historical classification of leases. In addition, we elected not to separate non-lease components for our real estate leases. The adoption of the new standard resulted in the recording of a right-of-use asset of approximately $8.5 million and lease liabilities of approximately $10.3 million , and had an immaterial impact on retained earnings as of the beginning of fiscal year 2019. The standard did not materially impact our Consolidated Statements of Operations and had no impact on cash flows. |
Earnings per Share (Notes)
Earnings per Share (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Earnings per Share Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities convertible into, or other contracts to issue, common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of the exercise and vesting of stock options and restricted stock units, respectively, determined using the treasury stock method. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, Basic weighted average shares outstanding 29,449 29,284 29,401 29,210 Dilutive shares 247 300 266 351 Diluted weighted average shares outstanding 29,696 29,584 29,667 29,561 For the thirteen weeks ended September 28, 2019 and September 29, 2018 , equity awards representing approximately 100 and 1,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive. For the thirty-nine weeks ended September 28, 2019 and September 29, 2018 , equity awards representing approximately 2,000 and 4,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive. |
Dividends (Notes)
Dividends (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Dividends [Abstract] | |
Dividends Disclosure [Text Block] | Dividends The Company’s Board of Directors declared a quarterly dividend of $0.09 per share of common stock in each of the first two quarters, and a quarterly dividend of $0.11 per share of common stock in the third quarter, resulting in aggregate dividends of $8.5 million , or $0.29 per share of common stock, being paid during the thirty-nine weeks ended September 28, 2019 . Subsequent to the end of the third quarter, on October 29, 2019 , the Company’s Board of Directors declared a quarterly dividend of $0.11 per share of common stock for stockholders of record as of November 29, 2019 , to be paid on December 13, 2019 , totaling approximately $3.2 million . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows: Level 1 — Unadjusted quoted prices for identical instruments traded in active markets. Level 2 — Observable market-based inputs or unobservable inputs corroborated by market data. Level 3 — Unobservable inputs reflecting management’s estimates and assumptions. The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy September 28, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2018-1 Class A-2 Senior Secured Notes (1) Level 2 $ 318,400 $ 334,629 $ 320,000 $ 320,000 2018-1 Class A-1 Variable Funding Senior Notes (2) Level 2 $ 5,000 $ 5,000 $ — $ — (1) The fair value of the 2018-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value of the 2018-1 Class A-1 Variable Funding Senior Notes was estimated based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions and approximated the book value of such 2018-1 Class A-1 Variable Funding Senior Notes. The Company also measures certain non-financial assets (primarily long-lived assets, intangible assets, and goodwill) at fair value on a non-recurring basis in connection with its periodic evaluations of such assets for potential impairment. |
Property and Equipment (Notes)
Property and Equipment (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Asset Acquisition | Property and Equipment On June 19, 2019, the Company entered into an agreement to purchase an office building for a purchase price of $18.3 million , which closed in the third quarter of 2019 and was funded with cash on hand. The building will be used for the Company’s headquarters and is in Addison, Texas. The building is included in construction in process within Property and equipment, net on the Consolidated Balance Sheet and will begin depreciating when the build out of the headquarters is complete and the assets are ready for their intended use, which we currently estimate to be at the beginning of fiscal year 2021. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense and the effective tax rate were $1.8 million and 23.4% , respectively, for the thirteen weeks ended September 28, 2019 , and $1.5 million and 19.4% , respectively, for the thirteen weeks ended September 29, 2018 . Income tax expense and the effective tax rate were $3.6 million and 17.2% , respectively, for the thirty-nine weeks ended September 28, 2019 , and $3.9 million and 16.9% , respectively, for the thirty-nine weeks ended September 29, 2018 . Income tax expense for the thirteen and thirty-nine weeks ended September 28, 2019 includes $0.1 million and $1.9 million , respectively, in tax benefits resulting from the recognition of excess tax benefits from stock-based compensation, compared to $0.3 million and $1.8 million of tax benefits recognized in the thirteen and thirty-nine weeks ended September 29, 2018 , respectively. |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations On November 14, 2018, Wingstop Funding LLC (the “Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of Wingstop Inc., issued $320 million of its Series 2018-1 4.97% Fixed Rate Senior Secured Notes, Class A-2 (the “Class A-2 Notes”). Interest and principal are payable on a quarterly basis, and the Class A-2 Notes have an anticipated repayment date of December 2023. In addition, the Issuer issued Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”), which permit borrowings of up to a maximum principal amount of $20 million , which may be used to borrow amounts on a revolving basis and to issue letters of credit. As of September 28, 2019 , there were borrowings of $5.0 million under the Variable Funding Notes, which were used for general corporate purposes. There were no borrowings outstanding under the Variable Funding Notes as of December 29, 2018 . Further, as of September 28, 2019 and December 29, 2018 , $4.0 million of letters of credit were outstanding against the Variable Funding Notes, which relate primarily to interest reserves required under the base indenture and related supplemental indenture. There were no amounts drawn down on the letter of credit as of September 28, 2019 or December 29, 2018 . Borrowings under the Variable Funding Notes accrue interest at a variable rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin, as more fully set forth in the Variable Funding Note Purchase Agreement, dated November 14, 2018. There is a commitment fee on the unused portion of the Variable Funding Notes facility, which is 50 basis points, based on the utilization under the Variable Funding Notes facility. Interest is payable on a quarterly basis and accrues on a weekly basis. The weighted average interest rate for the Variable Funding Notes was 4.35% as of September 28, 2019 . The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes” and were issued in a securitization transaction pursuant to which certain of the Company’s domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements and intellectual property, were contributed or otherwise transferred to the Issuer and certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as guarantors of the Notes and that have pledged substantially all of their assets as collateral securing the Notes. The Notes are subject to a series of financial and non-financial covenants and restrictions. As of September 28, 2019 , the Company was in compliance with all such financial covenants. As of September 28, 2019 , the scheduled principal payments on the Class A-2 Notes were as follows (in thousands): Remainder of fiscal year 2019 $ 5,800 Fiscal year 2020 3,200 Fiscal year 2021 3,200 Fiscal year 2022 3,200 Fiscal year 2023 308,000 Total $ 323,400 |
Leases (Notes)
Leases (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | Leases The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office and retail space, as well as equipment. Our leases have remaining terms of one year to eight years , some of which include options to extend the lease term for up to ten years . Lease terms may include options to renew when it is reasonably certain that the Company will exercise that option. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance). Components of lease expense are as follows (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 28, Operating lease cost (a) $ 532 $ 1,561 Variable lease cost (b) 127 378 Total lease cost $ 659 $ 1,939 (a) Includes short-term leases, which are immaterial. (b) Primarily related to adjustments for inflation, common area maintenance, and property tax. Supplemental cash flow information related to leases is as follows (dollar amounts in thousands): Thirty-Nine Weeks Ended September 28, Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 1,658 Non-cash activity: Right-of-use assets obtained in exchange for new operating lease liabilities $ 832 Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification September 28, 2019 Right-of-use assets Other non-current assets $ 8,137 Current lease liabilities Other current liabilities 1,933 Non-current lease liabilities Other non-current liabilities 7,910 Weighted average lease term and discount rate information related to leases is as follows: Thirty-Nine Weeks Ended September 28, 2019 Weighted average remaining lease term of operating leases 5.3 years Weighted average discount rate of operating leases 4.82 % Maturities of lease liabilities by fiscal year are as follows (in thousands): Remainder of fiscal year 2019 $ 586 Fiscal year 2020 2,351 Fiscal year 2021 2,145 Fiscal year 2022 1,943 Fiscal year 2023 1,666 Thereafter 2,447 Total lease payments 11,138 Less: imputed interest (1,295 ) Present value of lease liabilities $ 9,843 As of December 29, 2018 , minimum lease payments under non-cancelable operating leases by period were expected to be as follows (in thousands): Fiscal year 2019 $ 2,181 Fiscal year 2020 2,214 Fiscal year 2021 2,005 Fiscal year 2022 1,800 Fiscal year 2023 1,523 Thereafter 2,145 Total $ 11,868 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to legal proceedings, claims, and liabilities, such as employment-related claims and premises-liability cases, which arise in the ordinary course of business and are generally covered by insurance. In the opinion of management, the amount of ultimate liability with respect to such actions is not likely to have a material adverse impact on the Company’s financial position, results of operations, or cash flows. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the date of grant, based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period (generally the vesting period of the grant). The Company recognized $4.8 million in stock-based compensation expense for the thirty-nine weeks ended September 28, 2019 , with a corresponding increase to additional paid-in-capital. Stock-based compensation expense is included in selling, general and administrative expense in the Consolidated Statements of Operations. Stock Options The following table summarizes stock option activity (in thousands, except term and per share data): Stock Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term Outstanding - December 29, 2018 236 $ 6.04 $ 13,848 4.8 Options granted — — Options exercised (97 ) 4.97 Options canceled (4 ) 26.21 Outstanding - September 28, 2019 135 $ 5.78 $ 10,979 4.0 The total grant-date fair value of stock options vested during the thirty-nine weeks ended September 28, 2019 was $0.5 million . The total intrinsic value of stock options exercised during the thirty-nine weeks ended September 28, 2019 was $6.7 million . As of September 28, 2019 , total unrecognized compensation expense related to unvested stock options was $0.1 million , which is expected to be recognized over a weighted-average period of 0.4 years. During the thirty-nine weeks ended September 28, 2019 , there was a modification to certain awards resulting in additional compensation expense of $0.2 million . Restricted Stock Units and Performance Stock Units The following table summarizes activity related to restricted stock units (“RSUs”) and performance stock units (“PSUs”) (in thousands, except per share data): Restricted Stock Units Weighted Average Grant Date Fair Value Performance Stock Units Weighted Average Grant Date Fair Value Outstanding - December 29, 2018 103 $ 36.18 130 $ 40.46 Units granted 47 68.40 46 67.96 Units vested (45 ) 39.61 (26 ) 44.15 Units canceled (22 ) 47.70 (21 ) 50.48 Outstanding - September 28, 2019 83 $ 52.78 129 $ 50.01 The fair value of the Company’s RSUs and PSUs is based on the closing market price of the stock on the date of grant. The RSUs granted during the thirty-nine weeks ended September 28, 2019 vest over a three-year service period. As of September 28, 2019 , total unrecognized compensation expense related to unvested RSUs was $3.3 million , which is expected to be recognized over a weighted-average period of 1.7 years. The PSUs vest based on the outcome of certain performance criteria. For the PSUs granted during the thirty-nine weeks ended September 28, 2019 , the amount of units that can be earned range from 0% to 100% of the number of PSUs granted based on a service condition and a performance vesting condition based on the achievement of certain adjusted EBITDA targets, as defined by the Company’s Omnibus Incentive Compensation Plan, over a performance period of one to three years . The compensation expense related to these PSUs is recognized over the vesting period when the achievement of the performance conditions becomes probable. The total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest. As of September 28, 2019 , total unrecognized compensation expense related to unvested PSUs was $3.9 million . During the thirty-nine weeks ended September 28, 2019 , there was a modification to certain awards resulting in additional compensation expense of $0.7 million . Restricted Stock Awards The fair value of the unvested restricted stock awards is based on the closing price of the Company’s common stock on the date of grant. As of September 28, 2019 , total unrecognized compensation expense related to unvested restricted stock awards was $0.6 million , which will be recognized over a weighted average period of approximately 1.6 years . |
Business Segments
Business Segments | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company’s business operates in two segments: the “Franchise” segment and the “Company” segment. The Franchise segment consists of domestic and international franchise restaurants, which represent the majority of our system-wide restaurants. As of September 28, 2019 , the Franchise segment consisted of 1,310 restaurants operated by Wingstop franchisees in the United States and international markets, compared to 1,189 franchised restaurants in operation as of September 29, 2018 . Franchise segment revenue consists primarily of franchise royalty revenue, advertising fee revenue, franchise and development fees revenue, and international territory fees. As of September 28, 2019 , the Company segment consisted of 30 company-owned restaurants located in the United States, compared to 26 company-owned restaurants as of September 29, 2018 . Company segment revenue is comprised of food and beverage sales at company-owned restaurants. Company segment expenses consist of operating expenses at company-owned restaurants and include food, beverage, labor, benefits, utilities, rent, and other operating costs. The following table reflects revenue and profit information with respect to each segment and reconciles segment profits to income before taxes (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, Revenue: Franchise segment $ 35,932 $ 26,401 $ 105,144 $ 78,346 Company segment 13,943 11,845 41,346 34,326 Total segment revenue $ 49,875 $ 38,246 $ 146,490 $ 112,672 Segment Profit: Franchise segment $ 9,631 $ 7,663 $ 27,107 $ 23,418 Company segment 2,318 2,693 6,900 7,892 Total segment profit 11,949 10,356 34,007 31,310 Corporate and other (1) — — — 1,462 Interest expense, net 4,243 2,545 12,952 6,623 Income before taxes $ 7,706 $ 7,811 $ 21,055 $ 23,225 (1) Corporate and other includes corporate related items not allocated to reportable segments and consists primarily of transaction costs associated with the refinancings of our credit agreement and payment of a special dividend. |
Restaurant Acquisition (Notes)
Restaurant Acquisition (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Restaurant Acquisition On August 22, 2019 , the Company acquired one existing restaurant from a franchisee. The total purchase price was $1.2 million , which was funded by cash flows from operations. The following table summarizes the preliminary allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands): Purchase Price Allocation Working capital $ 3 Property and equipment 99 Reacquired franchise rights 610 Goodwill 517 Total purchase price $ 1,229 The estimates of fair value are preliminary, and are therefore subject to further refinement. The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill and is attributable to the benefits expected as a result of the acquisition, including sales and unit growth opportunities. As of September 28, 2019 , $0.5 million of the goodwill from the acquisition is expected to be deductible for federal income tax purposes. Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquired restaurant on our consolidated financial statements. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 fair value measurement. Fair value measurements for reacquired franchise rights were determined using the income approach. Fair value measurements for property and equipment were determined using the cost approach. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Notes) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue from Contracts with Customers Revenue from contracts with customers consists primarily of royalties, Ad Fund contributions, initial and renewal franchise fees, and upfront fees from development agreements and international territory agreements. The performance obligations under franchise agreements consist of (a) a franchise license, (b) pre-opening services, such as training, and (c) ongoing services, such as management of the Ad Fund, development of training materials and menu items, and restaurant monitoring. These performance obligations are highly interrelated, so they are not considered to be individually distinct and therefore are accounted for as a single performance obligation, which is satisfied by providing a right to use our intellectual property over the term of each franchise agreement. Royalties and franchisee contributions to the Ad Fund, are calculated as a percentage of franchise restaurant sales over the term of the franchise agreement. Initial and renewal franchise fees are payable by the franchisee prior to the restaurant opening or at the time of a renewal of an existing franchise agreement. Franchise agreement royalties and Ad Fund contributions represent sales-based royalties that are related entirely to the performance obligation under the franchise agreement and are recognized as franchise sales occur. Additionally, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement. The performance obligation under development agreements and international territory agreements generally consists of an obligation to grant exclusive development rights over a stated term. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for development rights are deferred and apportioned to each franchise restaurant opened by the franchisee. The pro rata amount apportioned to each restaurant is accounted for as an initial franchise fee. The following table represents a disaggregation of revenue from contracts with customers for the thirteen and thirty-nine weeks ended September 28, 2019 and September 29, 2018 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Royalty revenue $ 19,065 $ 15,461 $ 55,409 $ 45,797 Advertising fees and related income 14,056 8,614 40,753 25,574 Franchise fees 875 656 3,396 1,959 Franchise fee, development fee, and international territory fee payments received by the Company are recorded as deferred revenue on the Consolidated Balance Sheets, which represents a contract liability. Deferred revenue is reduced as fees are recognized in revenue over the term of the franchise license for the respective restaurant. As the term of the franchise license is typically ten years, substantially all of the franchise fee revenue recognized in the thirteen and thirty-nine weeks ended September 28, 2019 was included in the deferred revenue balance as of December 29, 2018 . Approximately $8.5 million and $9.2 million of deferred revenue as of September 28, 2019 and December 29, 2018 , respectively, relates to restaurants that have not yet opened, so the fees are not yet being amortized. The weighted average remaining amortization period for deferred franchise and renewal fees related to open restaurants is 7.3 years . The Company does not have any material contract assets as of September 28, 2019 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Fiscal Year End | The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2019 and 2018 |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of September 28, 2019 and December 29, 2018 were as follows (in thousands): September 28, 2019 December 29, 2018 Cash and cash equivalents $ 9,472 $ 12,493 Restricted cash 4,842 4,462 Restricted cash, included in Advertising fund assets, restricted 7,149 3,985 Total cash, cash equivalents, and restricted cash $ 21,463 $ 20,940 |
Advertising Fund | Advertising Fund The Company administers the Wingstop Restaurants Advertising Fund (“Ad Fund”), for which a percentage of gross sales is collected from Wingstop restaurant franchisees and company-owned restaurants to be used for various forms of advertising for the Wingstop brand. Beginning in fiscal year 2019, the Ad Fund contribution collected from domestic Wingstop restaurant franchisees and company-owned restaurants increased from 3% to 4% of gross sales. The Company consolidates and reports all assets and liabilities of the Ad Fund as restricted assets and liabilities of the Ad Fund within current assets and current liabilities, respectively, in the Consolidated Balance Sheets. Ad Fund contributions, which were equal to 4% of gross sales for the thirty-nine weeks ended September 28, 2019 and 3% of gross sales for the thirty-nine weeks ended September 29, 2018 , and Ad Fund expenditures are reported on a gross basis in the Consolidated Statements of Operations, which are largely offsetting and therefore do not impact our reported net income. Company-operated restaurants’ Ad Fund contributions are included in cost of sales in the Consolidated Statements of Operations. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new guidance also requires additional disclosures about leases. The Company adopted the requirements of the new standard as of the first day of fiscal year 2019 using the modified retrospective approach without restating comparative periods. As part of our adoption, we elected the package of practical expedients, as well as the hindsight practical expedient, permitted under the new guidance, which, among other things, allowed the Company to continue utilizing historical classification of leases. In addition, we elected not to separate non-lease components for our real estate leases. The adoption of the new standard resulted in the recording of a right-of-use asset of approximately $8.5 million and lease liabilities of approximately $10.3 million , and had an immaterial impact on retained earnings as of the beginning of fiscal year 2019. The standard did not materially impact our Consolidated Statements of Operations and had no impact on cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of September 28, 2019 and December 29, 2018 were as follows (in thousands): September 28, 2019 December 29, 2018 Cash and cash equivalents $ 9,472 $ 12,493 Restricted cash 4,842 4,462 Restricted cash, included in Advertising fund assets, restricted 7,149 3,985 Total cash, cash equivalents, and restricted cash $ 21,463 $ 20,940 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic Shares Outstanding to Diluted Shares Outstanding | Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, Basic weighted average shares outstanding 29,449 29,284 29,401 29,210 Dilutive shares 247 300 266 351 Diluted weighted average shares outstanding 29,696 29,584 29,667 29,561 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Nonrecurring | Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy September 28, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2018-1 Class A-2 Senior Secured Notes (1) Level 2 $ 318,400 $ 334,629 $ 320,000 $ 320,000 2018-1 Class A-1 Variable Funding Senior Notes (2) Level 2 $ 5,000 $ 5,000 $ — $ — (1) The fair value of the 2018-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value of the 2018-1 Class A-1 Variable Funding Senior Notes was estimated based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions and approximated the book value of such 2018-1 Class A-1 Variable Funding Senior Notes. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt [Table Text Block] | As of September 28, 2019 , the scheduled principal payments on the Class A-2 Notes were as follows (in thousands): Remainder of fiscal year 2019 $ 5,800 Fiscal year 2020 3,200 Fiscal year 2021 3,200 Fiscal year 2022 3,200 Fiscal year 2023 308,000 Total $ 323,400 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Lease cost | Components of lease expense are as follows (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 28, Operating lease cost (a) $ 532 $ 1,561 Variable lease cost (b) 127 378 Total lease cost $ 659 $ 1,939 (a) Includes short-term leases, which are immaterial. (b) Primarily related to adjustments for inflation, common area maintenance, and property tax. Supplemental cash flow information related to leases is as follows (dollar amounts in thousands): Thirty-Nine Weeks Ended September 28, Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 1,658 Non-cash activity: Right-of-use assets obtained in exchange for new operating lease liabilities $ 832 |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification September 28, 2019 Right-of-use assets Other non-current assets $ 8,137 Current lease liabilities Other current liabilities 1,933 Non-current lease liabilities Other non-current liabilities 7,910 |
Operating lease weighted average information | Weighted average lease term and discount rate information related to leases is as follows: Thirty-Nine Weeks Ended September 28, 2019 Weighted average remaining lease term of operating leases 5.3 years Weighted average discount rate of operating leases 4.82 % |
Maturities of lease liabilities | Maturities of lease liabilities by fiscal year are as follows (in thousands): Remainder of fiscal year 2019 $ 586 Fiscal year 2020 2,351 Fiscal year 2021 2,145 Fiscal year 2022 1,943 Fiscal year 2023 1,666 Thereafter 2,447 Total lease payments 11,138 Less: imputed interest (1,295 ) Present value of lease liabilities $ 9,843 |
Future minimum rental payments (ASC 840) | As of December 29, 2018 , minimum lease payments under non-cancelable operating leases by period were expected to be as follows (in thousands): Fiscal year 2019 $ 2,181 Fiscal year 2020 2,214 Fiscal year 2021 2,005 Fiscal year 2022 1,800 Fiscal year 2023 1,523 Thereafter 2,145 Total $ 11,868 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity (in thousands, except term and per share data): Stock Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Term Outstanding - December 29, 2018 236 $ 6.04 $ 13,848 4.8 Options granted — — Options exercised (97 ) 4.97 Options canceled (4 ) 26.21 Outstanding - September 28, 2019 135 $ 5.78 $ 10,979 4.0 |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes activity related to restricted stock units (“RSUs”) and performance stock units (“PSUs”) (in thousands, except per share data): Restricted Stock Units Weighted Average Grant Date Fair Value Performance Stock Units Weighted Average Grant Date Fair Value Outstanding - December 29, 2018 103 $ 36.18 130 $ 40.46 Units granted 47 68.40 46 67.96 Units vested (45 ) 39.61 (26 ) 44.15 Units canceled (22 ) 47.70 (21 ) 50.48 Outstanding - September 28, 2019 83 $ 52.78 129 $ 50.01 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table reflects revenue and profit information with respect to each segment and reconciles segment profits to income before taxes (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, Revenue: Franchise segment $ 35,932 $ 26,401 $ 105,144 $ 78,346 Company segment 13,943 11,845 41,346 34,326 Total segment revenue $ 49,875 $ 38,246 $ 146,490 $ 112,672 Segment Profit: Franchise segment $ 9,631 $ 7,663 $ 27,107 $ 23,418 Company segment 2,318 2,693 6,900 7,892 Total segment profit 11,949 10,356 34,007 31,310 Corporate and other (1) — — — 1,462 Interest expense, net 4,243 2,545 12,952 6,623 Income before taxes $ 7,706 $ 7,811 $ 21,055 $ 23,225 (1) Corporate and other includes corporate related items not allocated to reportable segments and consists primarily of transaction costs associated with the refinancings of our credit agreement and payment of a special dividend. |
Restaurant Acquisition (Tables)
Restaurant Acquisition (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the preliminary allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands): Purchase Price Allocation Working capital $ 3 Property and equipment 99 Reacquired franchise rights 610 Goodwill 517 Total purchase price $ 1,229 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table represents a disaggregation of revenue from contracts with customers for the thirteen and thirty-nine weeks ended September 28, 2019 and September 29, 2018 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Royalty revenue $ 19,065 $ 15,461 $ 55,409 $ 45,797 Advertising fees and related income 14,056 8,614 40,753 25,574 Franchise fees 875 656 3,396 1,959 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Disaggregation of Revenue [Line Items] | |||||
Royalty revenue | $ 49,875 | $ 38,246 | $ 146,490 | $ 112,672 | |
Advertising fees and related income | 14,056 | 8,614 | 40,753 | 25,574 | |
Contract with Customer, Portion of Liability not yet being Amortized | $ 8,500 | $ 8,500 | $ 9,200 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 7 years 3 months 18 days | 7 years 3 months 18 days | |||
Franchise | Transferred over Time | |||||
Disaggregation of Revenue [Line Items] | |||||
Initial Franchise Fees | $ 875 | 656 | $ 3,396 | 1,959 | |
Franchise | Transferred at Point in Time | |||||
Disaggregation of Revenue [Line Items] | |||||
Advertising fees and related income | 14,056 | 8,614 | 40,753 | 25,574 | |
Royalty | Transferred at Point in Time | |||||
Disaggregation of Revenue [Line Items] | |||||
Royalty revenue | $ 19,065 | $ 15,461 | $ 55,409 | $ 45,797 |
Basis of Presentation - Overvie
Basis of Presentation - Overview (Details) - restaurant | Sep. 28, 2019 | Sep. 29, 2018 |
Franchised Units | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 1,310 | 1,189 |
Franchised Units | United States | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 1,169 | |
Franchised Units | Non-US | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 141 | |
Entity Operated Units | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 30 | 26 |
Basis of Presentation - Cash,
Basis of Presentation - Cash, cash equivalent, and restricted cash (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Dec. 30, 2017 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 9,472 | $ 12,493 | ||
Restricted cash | 4,842 | 4,462 | ||
Restricted cash, included in Advertising Fund assets, restricted | 7,149 | 3,985 | ||
Total cash, cash equivalents, and restricted cash | $ 21,463 | $ 20,940 | $ 9,810 | $ 6,392 |
Basis of Presentation - Advert
Basis of Presentation - Advertising Expenses (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Percentage of Revenue Collected for Advertising Fund | 4.00% | 3.00% | |
Cost of Sales | |||
Percentage of Revenue Collected for Advertising Fund | 4.00% | 3.00% |
Basis of Presentation - New Ac
Basis of Presentation - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 30, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 8,137 | |
Operating Lease, Liability | $ 9,843 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 8,500 | |
Operating Lease, Liability | $ 10,300 |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 29,449,000 | 29,284,000 | 29,401,000 | 29,210,000 |
Dilutive shares | 247,000 | 300,000 | 266,000 | 351,000 |
Diluted weighted average shares outstanding | 29,696,000 | 29,584,000 | 29,667,000 | 29,561,000 |
Antidilutive securities excluded from computation of earnings per share, amount | 100 | 1,000 | 2,000 | 4,000 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 29, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 |
Dividends Payable [Line Items] | |||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.11 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.29 | $ 3.40 | |
Dividends paid | $ (8,474) | $ (99,476) | |||||
Subsequent Event | |||||||
Dividends Payable [Line Items] | |||||||
Common Stock, Dividends, Per Share, Declared | $ 0.11 | ||||||
Dividends Payable, Current | $ (3,200) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 | Nov. 14, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes | $ 320,000 | |||
Line of Credit, Current | $ 5,000 | |||
Reported Value Measurement | Nonrecurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes | 318,400 | $ 320,000 | ||
Line of Credit, Current | 5,000 | |||
Estimate of Fair Value Measurement | Nonrecurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Loans Payable, Fair Value Disclosure | [1] | 334,629 | $ 320,000 | |
Lines of Credit, Fair Value Disclosure | [2] | $ 5,000 | ||
[1] | The fair value of the 2018-1 Class A-2 Senior Secured Notes was estimated using available market information. | |||
[2] | The fair value of the 2018-1 Class A-1 Variable Funding Senior Notes was estimated based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions and approximated the book value of such 2018-1 Class A-1 Variable Funding Senior Notes. |
Property and Equipment (Details
Property and Equipment (Details) $ in Millions | Sep. 28, 2019USD ($) |
Land and Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Purchase Price | $ 18.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,801 | $ 1,518 | $ 3,626 | $ 3,925 |
Effective income tax rate | 23.40% | 19.40% | 17.20% | 16.90% |
Excess Tax Benefit from Share-based Compensation | $ 100 | $ 300 | $ 1,900 | $ 1,800 |
Debt Obligations - Securitized
Debt Obligations - Securitized Financing Facility (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Nov. 14, 2018 | |
Debt Disclosure [Abstract] | ||
Senior Notes | $ 320 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.97% | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 20 | |
Line of Credit, Current | $ 5 | |
Letters of Credit Outstanding, Amount | $ 4 | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | |
Debt, Weighted Average Interest Rate | 4.35% |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Maturities (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remainder of fiscal year 2019 | $ 5,800 |
Fiscal year 2020 | 3,200 |
Fiscal year 2021 | 3,200 |
Fiscal year 2022 | 3,200 |
Fiscal year 2023 | 308,000 |
Total | $ 323,400 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | |||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost (a) | $ 532 | [1] | $ 1,561 | [1] |
Variable lease cost (b) | 127 | [2] | 378 | [2] |
Total lease cost | $ 659 | 1,939 | ||
Cash paid for amounts included in the measurement of lease liabilities | 1,658 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 832 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 1 year | 1 year | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 8 years | 8 years | ||
Renewal term | 10 years | 10 years | ||
[1] | Includes short-term leases, which are immaterial. | |||
[2] | Primarily related to adjustments for inflation, common area maintenance, and property tax. |
Leases - Supplemental Balance
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Leases [Abstract] | |
Right-of-use assets | $ 8,137 |
Current lease liabilities | 1,933 |
Non-current lease liabilities | $ 7,910 |
Leases - Weighted Average Info
Leases - Weighted Average Information (Details) | Sep. 28, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term of operating leases | 5 years 3 months 18 days |
Weighted average discount rate of operating leases | 4.82% |
Leases - Maturities of Lease L
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Leases [Abstract] | |
Remainder of fiscal year 2019 | $ 586 |
Fiscal year 2020 | 2,351 |
Fiscal year 2021 | 2,145 |
Fiscal year 2022 | 1,943 |
Fiscal year 2023 | 1,666 |
Thereafter | 2,447 |
Total lease payments | 11,138 |
Less: imputed interest | (1,295) |
Present value of lease liabilities | $ 9,843 |
Leases - Future Minimum Lease
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Leases [Abstract] | |
Fiscal year 2019 | $ 2,181 |
Fiscal year 2020 | 2,214 |
Fiscal year 2021 | 2,005 |
Fiscal year 2022 | 1,800 |
Fiscal year 2023 | 1,523 |
Thereafter | 2,145 |
Total | $ 11,868 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Dec. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Stock options outstanding, beginning of period (in shares) | 236 | |
Stock options granted (in shares) | 0 | |
Stock options exercised (in shares) | (97) | |
Stock options forfeited (in shares) | (4) | |
Stock options outstanding, end of period (in shares) | 135 | 236 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Stock options outstanding, weighted average exercise price, beginning of period (in usd per share) | $ 6.04 | |
Stock options granted, weighted average exercise price (in usd per share) | 0 | |
Stock options exercised, weighted average exercise price (in usd per share) | 4.97 | |
Stock options forfeited, weighted average exercise price (in usd per share) | 26.21 | |
Stock options outstanding, weighted average exercise price, end of period (in usd per share) | $ 5.78 | $ 6.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Stock options outstanding, aggregate intrinsic value, beginning of period | $ 13,848 | |
Stock options outstanding, aggregate intrinsic value, end of period | $ 10,979 | $ 13,848 |
Stock options outstanding, weighted average remaining term | 4 years | 4 years 9 months 18 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Plan (Details) $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date fair value of stock options, vested | $ 0.5 |
Intrinsic value of stock options exercised | 6.7 |
Stock-based compensation expense, unrecognized | $ 0.1 |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation expense, recognition period | 4 months 24 days |
Award Modification, Incremental Compensation Cost | $ 0.2 |
Additional Paid-In Capital | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation expense | $ 4.8 |
Stock-Based Compensation - Sch
Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($)$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock units and performance stock units outstanding, beginning of period (in shares) | shares | 103 |
Restricted stock units and performance stock units granted (in shares) | shares | 47 |
Restricted stock units and performance stock units released (in shares) | shares | (45) |
Restricted stock units and performance stock units canceled (in shares) | shares | (22) |
Restricted stock units and performance stock units outstanding, end of period (in shares) | shares | 83 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Restricted stock units and performance stock units outstanding, weighted average grant date fair value, beginning of period (in usd per share) | $ / shares | $ 36.18 |
Restricted stock units and performance stock units granted, weighted average grant date fair value (in usd per share) | $ / shares | 68.40 |
Restricted stock units and performance stock units released, weighted average grant date fair value (in usd per share) | $ / shares | 39.61 |
Restricted stock units and performance stock units canceled, weighted average grant date fair value (in usd per share) | $ / shares | 47.70 |
Restricted stock units and performance stock units outstanding, weighted average grant date fair value, end of period (in usd per share) | $ / shares | $ 52.78 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ | $ 3.3 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock units and performance stock units outstanding, beginning of period (in shares) | shares | 130 |
Restricted stock units and performance stock units granted (in shares) | shares | 46 |
Restricted stock units and performance stock units released (in shares) | shares | (26) |
Restricted stock units and performance stock units canceled (in shares) | shares | (21) |
Restricted stock units and performance stock units outstanding, end of period (in shares) | shares | 129 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Restricted stock units and performance stock units outstanding, weighted average grant date fair value, beginning of period (in usd per share) | $ / shares | $ 40.46 |
Restricted stock units and performance stock units granted, weighted average grant date fair value (in usd per share) | $ / shares | 67.96 |
Restricted stock units and performance stock units released, weighted average grant date fair value (in usd per share) | $ / shares | 44.15 |
Restricted stock units and performance stock units canceled, weighted average grant date fair value (in usd per share) | $ / shares | 50.48 |
Restricted stock units and performance stock units outstanding, weighted average grant date fair value, end of period (in usd per share) | $ / shares | $ 50.01 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ | $ 3.9 |
Award Modification, Incremental Compensation Cost | $ | $ 0.7 |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ | $ 0.6 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days |
Business Segments Restaurant Co
Business Segments Restaurant Counts (Details) - restaurant | Sep. 28, 2019 | Sep. 29, 2018 |
Franchised Units | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 1,310 | 1,189 |
Entity Operated Units | ||
Franchisor Disclosure [Line Items] | ||
Number of Restaurants | 30 | 26 |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 49,875 | $ 38,246 | $ 146,490 | $ 112,672 | |
Operating income | 11,949 | 10,356 | 34,007 | 29,848 | |
Interest expense, net | 4,243 | 2,545 | 12,952 | 6,623 | |
Income before taxes | 7,706 | 7,811 | 21,055 | 23,225 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 49,875 | 38,246 | 146,490 | 112,672 | |
Operating income | 11,949 | 10,356 | 34,007 | 31,310 | |
Corporate, Non-Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Corporate and other | [1] | 0 | 0 | 0 | 1,462 |
Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest expense, net | (4,243) | (2,545) | (12,952) | (6,623) | |
Franchise Segment [Member] | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 35,932 | 26,401 | 105,144 | 78,346 | |
Operating income | 9,631 | 7,663 | 27,107 | 23,418 | |
Franchisor Owned Outlet | Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 13,943 | 11,845 | 41,346 | 34,326 | |
Operating income | $ 2,318 | $ 2,693 | $ 6,900 | $ 7,892 | |
[1] | Corporate and other includes corporate related items not allocated to reportable segments and consists primarily of transaction costs associated with the refinancings of our credit agreement and payment of a special dividend. |
Restaurant Acquisition (Details
Restaurant Acquisition (Details) - USD ($) | Aug. 22, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 |
Business Combinations [Abstract] | ||||
Acquisition of restaurant from franchisee | $ 1,200,000 | $ 1,229,000 | $ 5,996,000 | |
Working capital | 3,000 | |||
Property and equipment | 99,000 | |||
Reacquired franchise rights | 610,000 | |||
Goodwill | 517,000 | 50,172,000 | $ 49,655,000 | |
Total purchase price | $ 1,229,000 | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 500,000 |
Uncategorized Items - a10-qq320
Label | Element | Value |
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | us-gaap_NewAccountingPronouncementOrChangeInAccountingPrincipleCumulativeEffectOfChangeOnEquityOrNetAssets1 | $ 154,000 |
Retained Earnings [Member] | ||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | us-gaap_NewAccountingPronouncementOrChangeInAccountingPrincipleCumulativeEffectOfChangeOnEquityOrNetAssets1 | $ 154,000 |