Cover
Cover - shares | 3 Months Ended | |
Apr. 01, 2023 | May 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 01, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37425 | |
Entity Registrant Name | WINGSTOP INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3494862 | |
Entity Address, Address Line One | 15505 Wright Brothers Drive | |
Entity Address, City or Town | Addison | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75001 | |
City Area Code | 972 | |
Local Phone Number | 686-6500 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | WING | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,968,872 | |
Entity Central Index Key | 0001636222 | |
Current Fiscal Year End Date | --12-30 | |
Document Period Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 196,198 | $ 184,496 |
Restricted cash | 13,281 | 13,296 |
Accounts receivable, net | 10,137 | 9,461 |
Prepaid expenses and other current assets | 3,061 | 4,252 |
Advertising fund assets, restricted | 26,725 | 15,167 |
Total current assets | 249,402 | 226,672 |
Property and equipment, net | 71,518 | 66,851 |
Goodwill | 62,514 | 62,514 |
Trademarks | 32,700 | 32,700 |
Other non-current assets | 26,467 | 26,438 |
Total assets | 451,297 | 424,190 |
Current liabilities | ||
Accounts payable | 6,848 | 5,219 |
Other current liabilities | 38,438 | 34,726 |
Current portion of debt | 7,300 | 7,300 |
Advertising fund liabilities | 26,725 | 15,167 |
Total current liabilities | 79,311 | 62,412 |
Long-term debt, net | 705,483 | 706,846 |
Deferred revenues, net of current | 27,667 | 27,052 |
Deferred income tax liabilities, net | 3,380 | 4,180 |
Other non-current liabilities | 15,246 | 14,561 |
Total liabilities | 831,087 | 815,051 |
Commitments and contingencies (see Note 7) | ||
Stockholders' deficit | ||
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,968,872 and 29,932,668 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively | 300 | 300 |
Additional paid-in-capital | 809 | 2,797 |
Retained deficit | (380,409) | (393,321) |
Accumulated other comprehensive loss | (490) | (637) |
Total stockholders' deficit | (379,790) | (390,861) |
Total liabilities and stockholders' deficit | 451,297 | 424,190 |
Customer relationships, net | ||
Current assets | ||
Customer relationships, net | $ 8,696 | $ 9,015 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 01, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 29,968,872 | 29,932,668 |
Common stock, shares outstanding (in shares) | 29,968,872 | 29,932,668 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Apr. 01, 2023 | Mar. 26, 2022 | ||
Revenue: | |||
Total revenue | $ 108,721 | $ 76,205 | |
Costs and expenses: | |||
Cost of sales | [1] | 16,695 | 15,674 |
Advertising expenses | 39,643 | 23,167 | |
Selling, general and administrative | 23,645 | 18,086 | |
Depreciation and amortization | 2,989 | 2,227 | |
Loss on disposal of assets | 77 | 444 | |
Total costs and expenses | 83,049 | 59,598 | |
Operating income | 25,672 | 16,607 | |
Interest expense, net | 4,573 | 4,192 | |
Loss on debt extinguishment | 0 | 814 | |
Other expense | 188 | 65 | |
Income before income tax expense | 20,911 | 11,536 | |
Income tax expense | 5,242 | 2,860 | |
Net income | $ 15,669 | $ 8,676 | |
Earnings per share | |||
Basic (in USD per share) | $ 0.52 | $ 0.29 | |
Diluted (in USD per share) | $ 0.52 | $ 0.29 | |
Weighted average shares outstanding | |||
Basic (in shares) | 29,947 | 29,851 | |
Diluted (in shares) | 30,031 | 29,974 | |
Dividends per share (in USD per share) | $ 0.19 | $ 4.17 | |
Other comprehensive income (loss) | |||
Currency translation adjustment | $ 147 | $ (66) | |
Other comprehensive income (loss) | 147 | (66) | |
Comprehensive income | 15,816 | 8,610 | |
Royalty revenue, franchise fees and other | |||
Revenue: | |||
Total revenue | 48,188 | 35,070 | |
Advertising fees | |||
Revenue: | |||
Total revenue | 37,463 | 22,539 | |
Company-owned restaurant sales | |||
Revenue: | |||
Total revenue | $ 23,070 | $ 18,596 | |
[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 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Deficit | Accumulated Other Comprehensive Loss |
Balance at beginning of period (in shares) at Dec. 25, 2021 | 29,837,454 | ||||
Balance at beginning of period at Dec. 25, 2021 | $ (309,525) | $ 299 | $ 463 | $ (310,031) | $ (256) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 8,676 | 8,676 | |||
Shares issued under stock plans (in shares) | 41,289 | ||||
Shares issued under stock plans | 125 | 125 | |||
Tax payments for restricted stock upon vesting (in shares) | (1,923) | ||||
Tax payments for restricted stock upon vesting | (298) | (298) | |||
Stock-based compensation expense | 2,191 | 2,191 | |||
Dividends declared on common stock and equivalents | (125,330) | (2,370) | (122,960) | ||
Currency translation adjustment | (66) | (66) | |||
Balance at end of period (in shares) at Mar. 26, 2022 | 29,876,820 | ||||
Balance at end of period at Mar. 26, 2022 | $ (424,227) | $ 299 | 409 | (424,613) | (322) |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 29,932,668 | 29,932,668 | |||
Balance at beginning of period at Dec. 31, 2022 | $ (390,861) | $ 300 | 2,797 | (393,321) | (637) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,669 | 15,669 | |||
Shares issued under stock plans (in shares) | 49,817 | ||||
Shares issued under stock plans | 111 | 111 | |||
Tax payments for restricted stock upon vesting (in shares) | (13,613) | ||||
Tax payments for restricted stock upon vesting | (2,292) | (2,292) | |||
Stock-based compensation expense | 3,345 | 3,345 | |||
Dividends declared on common stock and equivalents | (5,909) | (5,444) | (465) | ||
Currency translation adjustment | $ 147 | 147 | |||
Balance at end of period (in shares) at Apr. 01, 2023 | 29,968,872 | 29,968,872 | |||
Balance at end of period at Apr. 01, 2023 | $ (379,790) | $ 300 | $ 809 | $ (380,409) | $ (490) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Operating activities | ||
Net income | $ 15,669 | $ 8,676 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 2,989 | 2,227 |
Deferred income taxes | (800) | (490) |
Stock-based compensation expense | 3,345 | 2,191 |
Loss on disposal of assets | 77 | 444 |
Amortization of debt issuance costs | 515 | 373 |
Loss on debt extinguishment | 0 | 814 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (676) | 608 |
Prepaid expenses and other assets | 1,647 | 263 |
Advertising fund assets and liabilities, net | 9,605 | 9,403 |
Accounts payable and other current liabilities | 2,633 | (2,931) |
Deferred revenue | 654 | (1,125) |
Other non-current liabilities | 40 | (87) |
Cash provided by operating activities | 35,698 | 20,366 |
Investing activities | ||
Purchases of property and equipment | (4,319) | (6,293) |
Proceeds from sales of assets | 0 | 1,479 |
Cash used in investing activities | (4,319) | (4,814) |
Financing activities | ||
Proceeds from exercise of stock options | 111 | 125 |
Borrowings of long-term debt | 0 | 250,000 |
Repayments of long-term debt | (1,825) | 0 |
Payment of deferred financing costs and other debt-related costs | 0 | (5,442) |
Tax payments for restricted stock upon vesting | (2,292) | (298) |
Dividends paid | (6,081) | (5,294) |
Cash provided by (used in) financing activities | (10,087) | 239,091 |
Net increase in cash, cash equivalents, and restricted cash | 21,292 | 254,643 |
Cash, cash equivalents, and restricted cash at beginning of period | 205,715 | 54,906 |
Cash, cash equivalents, and restricted cash at end of period | 227,007 | 309,549 |
Supplemental information: | ||
Accrued capital expenditures | $ 6,668 | $ 5,189 |
Basis of Presentation and Updat
Basis of Presentation and Update to Significant Accounting Policies | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Update to Significant Accounting Policies | Basis of Presentation and Update to Significant Accounting Policies Nature of operations. Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants. As of April 1, 2023, the Company had a total of 1,996 restaurants in its system. The Company’s restaurant base is approximately 98% franchised, with 1,953 franchised locations (including 243 international locations) and 43 company-owned restaurants as of April 1, 2023. Basis of presentation. 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 (“GAAP”) have been condensed or omitted. Balance sheet amounts are as of April 1, 2023 and December 31, 2022, and operating results are for the thirteen weeks ended April 1, 2023 and March 26, 2022. 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 31, 2022. Fiscal year. The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2023 and 2022 have 52 and 53 weeks, respectively. 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 April 1, 2023 and December 31, 2022 were as follows (in thousands): April 1, 2023 December 31, 2022 Cash and cash equivalents $ 196,198 $ 184,496 Restricted cash 13,281 13,296 Restricted cash, included in Advertising fund assets, restricted 17,528 7,923 Total cash, cash equivalents, and restricted cash $ 227,007 $ 205,715 Recently issued accounting pronouncements. We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per ShareBasic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock 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, as 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 April 1, March 26, Basic weighted average shares outstanding 29,947 29,851 Dilutive shares 84 123 Diluted weighted average shares outstanding 30,031 29,974 |
Dividends
Dividends | 3 Months Ended |
Apr. 01, 2023 | |
Dividends [Abstract] | |
Dividends | DividendsIn connection with the Company’s regular dividend program, on February 21, 2023, our Board of Directors declared a quarterly dividend of $0.19 per share of common stock, resulting in a total dividend of approximately $5.7 million. This dividend was paid on March 31, 2023 to stockholders of record as of March 10, 2023.Subsequent to the first quarter, on May 2, 2023, the Company’s Board of Directors declared a quarterly dividend of $0.19 per share of common stock for stockholders of record as of May 19, 2023. The regular quarterly dividend is to be paid on June 9, 2023, totaling approximately $5.7 million. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 01, 2023 | |
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 and the investment in bonds issued by the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy April 1, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 474,000 $ 408,233 $ 475,200 $ 406,462 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 248,750 $ 215,169 $ 249,375 $ 215,709 Investments in bonds of LPH (2) Level 3 $ 3,305 $ 4,030 $ 3,196 $ 3,906 (1) The fair value of the 2020-1 and 2022-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value approximates discounted cash flows using current market rates for debt investments with similar maturities and credit risk. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesIncome tax expense and the effective tax rate were $5.2 million and 25.1%, respectively, for the thirteen weeks ended April 1, 2023, and $2.9 million and 24.8%, respectively, for the thirteen weeks ended March 26, 2022. The effective tax rate remained comparable to the prior fiscal first quarter. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Long-term debt consisted of the following components (in thousands): April 1, 2023 December 31, 2022 2020-1 Class A-2 Senior Secured Notes $ 474,000 $ 475,200 2022-1 Class A-2 Senior Secured Notes 248,750 249,375 Debt issuance costs, net of amortization (9,967) (10,429) Total debt 712,783 714,146 Less: current portion of debt (7,300) (7,300) Long-term debt, net $ 705,483 $ 706,846 The Company’s outstanding debt was issued by Wingstop Funding LLC, a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of Wingstop Inc. and consists of (i) Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”), (ii) Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”), and (iii) a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. No borrowings were outstanding under the 2022 Variable Funding Notes as of April 1, 2023 and December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe 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 | 3 Months Ended |
Apr. 01, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation During the thirteen weeks ended April 1, 2023, the Company granted 38,338 restricted stock units (“RSUs”) to certain employees. The RSUs granted to certain employees generally vest in equal annual amounts over a three-year period, subsequent to the grant date and had a weighted-average grant-date fair value of $170.17 per unit. In addition, the Company granted 34,242 performance stock units (“PSUs”) to certain employees during the thirteen weeks ended April 1, 2023. Of the total PSUs granted, 27,258 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROI PSUs”). The ROI PSUs are generally eligible to cliff-vest approximately three years from the grant date, and the maximum vesting percentage that could be realized for each of the ROI PSUs is 250% based on the level of performance achieved for the awards. The remaining 6,984 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the performance period (“NNR PSUs”). The NNR PSUs vest in equal annual amounts over a three-year period, and the maximum vesting percentage that could be realized for each of the NNR PSUs is 100% based on the level of performance achieved for the awards. The PSUs had a weighted-average grant-date fair value of $169.77 per unit. 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 based on the outcome. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table represents a disaggregation of revenue from contracts with customers for the thirteen weeks ended April 1, 2023 and March 26, 2022 (in thousands): Thirteen Weeks Ended April 1, 2023 March 26, 2022 Royalty revenue $ 43,513 $ 32,204 Advertising fees and related income 37,463 22,539 Franchise fees 1,061 960 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Apr. 01, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventSubsequent to the end of first fiscal quarter 2023, the Company acquired two existing restaurants in the Dallas, TX market from a franchisee. The total purchase price was $4.4 million, funded by cash on hand. The restaurant acquisitions are accounted for as business combinations and the Company is still determining the estimated fair value of assets acquired and liabilities assumed. The excess of the purchase price over the aggregate fair value of assets acquired will be allocated to goodwill. The results of operations of these locations will be included in our Consolidated Statements of Comprehensive Income as of the respective dates of acquisition. |
Basis of Presentation and Upd_2
Basis of Presentation and Update to Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal year. The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2023 and 2022 have 52 and 53 weeks, respectively. |
Basis of presentation | Basis of presentation. 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 (“GAAP”) have been condensed or omitted. Balance sheet amounts are as of April 1, 2023 and December 31, 2022, and operating results are for the thirteen weeks ended April 1, 2023 and March 26, 2022. 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 31, 2022. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements. We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. |
Basis of Presentation and Upd_3
Basis of Presentation and Update to Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Schedule of 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 April 1, 2023 and December 31, 2022 were as follows (in thousands): April 1, 2023 December 31, 2022 Cash and cash equivalents $ 196,198 $ 184,496 Restricted cash 13,281 13,296 Restricted cash, included in Advertising fund assets, restricted 17,528 7,923 Total cash, cash equivalents, and restricted cash $ 227,007 $ 205,715 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
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 April 1, March 26, Basic weighted average shares outstanding 29,947 29,851 Dilutive shares 84 123 Diluted weighted average shares outstanding 30,031 29,974 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements | Fair value of debt and the investment in bonds issued by the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy April 1, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 474,000 $ 408,233 $ 475,200 $ 406,462 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 248,750 $ 215,169 $ 249,375 $ 215,709 Investments in bonds of LPH (2) Level 3 $ 3,305 $ 4,030 $ 3,196 $ 3,906 (1) The fair value of the 2020-1 and 2022-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value approximates discounted cash flows using current market rates for debt investments with similar maturities and credit risk. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following components (in thousands): April 1, 2023 December 31, 2022 2020-1 Class A-2 Senior Secured Notes $ 474,000 $ 475,200 2022-1 Class A-2 Senior Secured Notes 248,750 249,375 Debt issuance costs, net of amortization (9,967) (10,429) Total debt 712,783 714,146 Less: current portion of debt (7,300) (7,300) Long-term debt, net $ 705,483 $ 706,846 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue from contracts with customers for the thirteen weeks ended April 1, 2023 and March 26, 2022 (in thousands): Thirteen Weeks Ended April 1, 2023 March 26, 2022 Royalty revenue $ 43,513 $ 32,204 Advertising fees and related income 37,463 22,539 Franchise fees 1,061 960 |
Basis of Presentation and Upd_4
Basis of Presentation and Update to Significant Accounting Policies - Additional Information (Details) | 3 Months Ended |
Apr. 01, 2023 restaurant | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,996 |
Franchised Units | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,953 |
Proportion of restaurants that are franchised (as a percent) | 98% |
Franchised Units | Non-US | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 243 |
Entity operated units | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 43 |
Basis of Presentation and Upd_5
Basis of Presentation and Update to Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 | Mar. 26, 2022 | Dec. 25, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 196,198 | $ 184,496 | ||
Restricted cash | 13,281 | 13,296 | ||
Restricted cash, included in Advertising fund assets, restricted | 17,528 | 7,923 | ||
Total cash, cash equivalents, and restricted cash | $ 227,007 | $ 205,715 | $ 309,549 | $ 54,906 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Reconciliation of Basic Shares Outstanding to Diluted Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding (in shares) | 29,947 | 29,851 |
Dilutive shares (in shares) | 84 | 123 |
Diluted weighted average shares outstanding (in shares) | 30,031 | 29,974 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Earnings Per Share [Abstract] | ||
Equity awards outstanding (in shares) | 13 | 8 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
May 02, 2023 | Feb. 21, 2023 | Apr. 01, 2023 | Mar. 26, 2022 | May 03, 2023 | |
Dividends Payable [Line Items] | |||||
Dividends paid per share (in USD per share) | $ 0.19 | $ 4.17 | |||
Subsequent event | |||||
Dividends Payable [Line Items] | |||||
Dividends payable per share (in USD per share) | $ 0.19 | ||||
Dividends payable | $ 5.7 | ||||
Dividend paid | |||||
Dividends Payable [Line Items] | |||||
Dividends paid per share (in USD per share) | $ 0.19 | ||||
Dividends paid | $ 5.7 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Nonrecurring - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Level 3 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | $ 3,305 | $ 3,196 |
Level 3 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 4,030 | 3,906 |
2020-1 Class A-2 Senior Secured Note | Level 2 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument at fair value | 474,000 | 475,200 |
2020-1 Class A-2 Senior Secured Note | Level 2 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument at fair value | 408,233 | 406,462 |
2022-1 Class A-2 Senior Secured Note | Level 2 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument at fair value | 248,750 | 249,375 |
2022-1 Class A-2 Senior Secured Note | Level 2 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument at fair value | $ 215,169 | $ 215,709 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 5,242 | $ 2,860 |
Effective income tax rate (as a percent) | 25.10% | 24.80% |
Debt Obligations - Components o
Debt Obligations - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Debt issuance costs, net of amortization | $ (9,967) | $ (10,429) |
Total debt | 712,783 | 714,146 |
Less: current portion of debt | (7,300) | (7,300) |
Long-term debt, net | 705,483 | 706,846 |
2020-1 Class A-2 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Gross debt | 474,000 | 475,200 |
2022-1 Class A-2 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Gross debt | $ 248,750 | $ 249,375 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Details) - USD ($) | Apr. 01, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity for line of credit | $ 200,000,000 | |
2020-1 Class A-2 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Senior secured note fixed interest rate (as a percent) | 2.84% | |
2022-1 Class A-2 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Senior secured note fixed interest rate (as a percent) | 3.734% | |
2020 Variable Funding Notes | Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit | $ 0 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3.3 | $ 2.2 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 38,338 | |
Vesting period (in years) | 3 years | |
Weighted average grant date fair value of RSUs granted (in USD per share) | $ 170.17 | |
Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 34,242 | |
Performance shares | Tranche one | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 27,258 | |
Performance units, service period (in years) | 3 years | |
Performance shares | PSUs based On operational targets | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted (in shares) | 6,984 | |
Performance units, service period (in years) | 3 years | |
Performance shares | PSUs based On operational targets | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
PSU vesting (as a percent) | 250% | |
Performance shares | Market-based vesting | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value of RSUs granted (in USD per share) | $ 169.77 | |
Performance shares | Market-based vesting | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
PSU vesting (as a percent) | 100% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 108,721 | $ 76,205 |
Royalty revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 43,513 | 32,204 |
Advertising fees and related income | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 37,463 | 22,539 |
Franchise fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1,061 | $ 960 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Average franchise license term (in years) | 10 years | |
Deferred revenue not yet being amortized | $ 8.4 | $ 7.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-02 | ||
Disaggregation of Revenue [Line Items] | ||
Remaining amortization period for deferred revenue related to open restaurants (in years) | 7 years 1 month 6 days |
Subsequent Event (Details)
Subsequent Event (Details) - Existing restaurants from franchisees - Subsequent event $ in Millions | 1 Months Ended |
May 03, 2023 USD ($) restaurant | |
Subsequent Event [Line Items] | |
Total purchase price | $ | $ 4.4 |
Entity operated units | |
Subsequent Event [Line Items] | |
Number of restaurants re-franchised | restaurant | 2 |