Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 25, 2019 | Feb. 20, 2020 | Jun. 26, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 25, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 0-18051 | ||
Entity Registrant Name | DENNY’S CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-3487402 | ||
Entity Address, Address Line One | 203 East Main Street | ||
Entity Address, City or Town | Spartanburg, | ||
Entity Address, State or Province | SC | ||
Entity Address, Postal Zip Code | 29319-9966 | ||
City Area Code | 864 | ||
Local Phone Number | 597-8000 | ||
Title of 12(b) Security | $.01 Par Value, Common Stock | ||
Trading Symbol | DENN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 962,693,982 | ||
Entity Common Stock, Shares Outstanding | 56,020,287 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0000852772 | ||
Current Fiscal Year End Date | --12-25 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,372 | $ 5,026 |
Investments | 3,649 | 1,709 |
Receivables, net | 27,488 | 26,283 |
Inventories | 1,325 | 2,993 |
Assets held for sale | 1,925 | 723 |
Prepaid and other current assets | 14,974 | 10,866 |
Total current assets | 52,733 | 47,600 |
Property, net of accumulated depreciation of $147,445 and $226,620, respectively | 97,626 | 117,251 |
Financing lease right-of-use assets, net of accumulated amortization of $8,468 and $15,526, respectively | 11,720 | |
Financing lease right-of-use assets, net of accumulated amortization of $8,468 and $15,526, respectively | 22,753 | |
Operating lease right-of-use assets, net | 158,550 | |
Goodwill | 36,832 | 39,781 |
Intangible assets, net | 53,956 | 59,067 |
Deferred financing costs, net | 1,727 | 2,335 |
Deferred income taxes, net | 14,718 | 17,333 |
Other noncurrent assets | 32,525 | 29,229 |
Total assets | 460,387 | 335,349 |
Current liabilities: | ||
Current finance lease liabilities | 1,674 | |
Current finance lease liabilities | 3,410 | |
Current operating lease liabilities | 16,344 | |
Accounts payable | 20,256 | 29,527 |
Other current liabilities | 57,307 | 61,790 |
Total current liabilities | 95,581 | 94,727 |
Long-term liabilities: | ||
Long-term debt | 240,000 | 286,500 |
Noncurrent finance lease liabilities | 14,779 | |
Noncurrent finance lease liabilities | 27,181 | |
Noncurrent operating lease liabilities | 152,750 | |
Liability for insurance claims, less current portion | 11,454 | 12,199 |
Other noncurrent liabilities | 83,887 | 48,087 |
Total long-term liabilities | 502,870 | 373,967 |
Total liabilities | 598,451 | 468,694 |
Commitments and contingencies | ||
Shareholders’ deficit | ||
Common stock $0.01 par value; shares authorized - 135,000; December 25, 2019: 109,415 shares issued and 57,095 shares outstanding; December 26, 2018: 108,585 shares issued and 61,533 shares outstanding | 1,094 | 1,086 |
Paid-in capital | 603,980 | 592,944 |
Deficit | (189,398) | (306,414) |
Accumulated other comprehensive loss, net of tax | (33,960) | (4,146) |
Treasury stock, at cost, 52,320 and 47,052 shares, respectively | (519,780) | (416,815) |
Total shareholders’ deficit | (138,064) | (133,345) |
Total liabilities and shareholders’ deficit | $ 460,387 | $ 335,349 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 147,445 | $ 226,620 |
Accumulated amortization | $ 8,468 | |
Accumulated amortization | $ 15,526 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 135,000,000 | 135,000,000 |
Common stock, issued (in shares) | 109,415,000 | 108,585,000 |
Common stock, outstanding (in shares) | 57,095,000 | 61,533,000 |
Treasury stock, at cost (in shares) | 52,320,000 | 47,052,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue: | |||
Revenue | $ 541,389 | $ 630,179 | $ 529,169 |
Costs of company restaurant sales: | |||
Product costs | 74,720 | 100,532 | 97,825 |
Payroll and benefits | 118,806 | 164,314 | 153,037 |
Occupancy | 18,613 | 23,228 | 20,802 |
Other operating expenses | 46,257 | 60,708 | 53,049 |
Total costs of company restaurant sales | 258,396 | 348,782 | 324,713 |
Costs of franchise and license revenue | 120,326 | 114,296 | 39,294 |
General and administrative expenses | 69,018 | 63,828 | 66,415 |
Depreciation and amortization | 19,846 | 27,039 | 23,720 |
Operating (gains), losses and other charges, net | (91,180) | 2,620 | 4,329 |
Total operating costs and expenses, net | 376,406 | 556,565 | 458,471 |
Operating income | 164,983 | 73,614 | 70,698 |
Interest expense, net | 18,547 | 20,745 | 15,640 |
Other nonoperating (income) expense, net | (2,763) | 619 | (1,743) |
Net income before income taxes | 149,199 | 52,250 | 56,801 |
Provision for income taxes | 31,789 | 8,557 | 17,207 |
Net income | $ 117,410 | $ 43,693 | $ 39,594 |
Basic net income per share (in dollars per share) | $ 1.96 | $ 0.69 | $ 0.58 |
Diluted net income per share (in dollars per share) | $ 1.90 | $ 0.67 | $ 0.56 |
Basic weighted average shares outstanding | 59,944 | 63,364 | 68,077 |
Diluted weighted average shares outstanding | 61,833 | 65,562 | 70,403 |
Company restaurant sales | |||
Revenue: | |||
Revenue | $ 306,377 | $ 411,932 | $ 390,352 |
Franchise and license revenue | |||
Revenue: | |||
Revenue | $ 235,012 | $ 218,247 | $ 138,817 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 117,410 | $ 43,693 | $ 39,594 |
Other comprehensive income (loss), net of tax: | |||
Minimum pension liability adjustment, net of tax of $15, $53 and $(22), respectively | 46 | 155 | (37) |
Changes in the effective portion of the fair value of derivatives, net of tax of $(10,410), $(339) and $(579), respectively | (30,076) | (2,256) | |
Changes in the effective portion of the fair value of derivatives, net of tax of $(10,410), $(339) and $(579), respectively | (924) | ||
Reclassification of derivatives to interest expense, net of tax of $75, $36 and $20, respectively | 216 | 271 | |
Reclassification of derivatives to interest expense, net of tax of $75, $36 and $20, respectively | 52 | ||
Other comprehensive loss | (29,814) | (1,830) | (909) |
Total comprehensive income | $ 87,596 | $ 41,863 | $ 38,685 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Minimum pension liability adjustment, net of tax of $15, $53 and $(22), respectively | $ 15 | $ 53 | $ (22) |
Changes in the effective portion of the fair value of derivatives, net of tax of $(10,410), $(339) and $(579), respectively | (10,410) | (339) | |
Changes in the effective portion of the fair value of derivatives, net of tax of $(10,410), $(339) and $(579), respectively | (579) | ||
Reclassification of derivatives to interest expense, net of tax of $75, $36 and $20, respectively | $ (75) | $ 36 | |
Reclassification of derivatives to interest expense, net of tax of $75, $36 and $20, respectively | $ 20 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | (Deficit) | Accumulated Other Comprehensive Loss, Net | Accelerated Share Repurchase 2016 | Accelerated Share Repurchase 2016Treasury Stock | Accelerated Share Repurchase 2018 | Accelerated Share Repurchase 2018Treasury Stock |
Balance as of beginning period (in shares) at Dec. 28, 2016 | 107,115 | |||||||||
Balance as of beginning period at Dec. 28, 2016 | $ (71,112) | $ 1,071 | $ (265,884) | $ 577,951 | $ (382,843) | $ (1,407) | ||||
Balance as of beginning of period, treasury stock (in shares) at Dec. 28, 2016 | (35,757) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 39,594 | 39,594 | ||||||||
Other comprehensive loss | (909) | (909) | ||||||||
Share-based compensation on equity classified awards, net | $ 8,131 | 8,131 | ||||||||
Purchase of treasury stock (in shares) | (6,800) | (6,840) | (500) | (554) | ||||||
Purchase of treasury stock | $ (82,858) | $ (82,858) | $ (6,900) | |||||||
Equity forward contract settlement | (6,884) | 6,884 | ||||||||
Issuance of common stock for share-based compensation (in shares) | 398 | |||||||||
Issuance of common stock for share-based compensation | $ 4 | (4) | ||||||||
Exercise of common stock options (in shares) | 227 | |||||||||
Exercise of common stock options | 655 | $ 2 | 653 | |||||||
Balance as of ending period at Dec. 27, 2017 | (97,360) | $ 1,077 | $ (355,626) | 594,166 | (334,661) | (2,316) | ||||
Balance as of end of period (in shares) at Dec. 27, 2017 | 107,740 | |||||||||
Balance as of end of period, treasury stock (in shares) at Dec. 27, 2017 | (43,151) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 43,693 | 43,693 | ||||||||
Other comprehensive loss | (1,830) | (1,830) | ||||||||
Share-based compensation on equity classified awards, net | $ 4,325 | 4,325 | ||||||||
Purchase of treasury stock (in shares) | (3,900) | (3,901) | ||||||||
Purchase of treasury stock | $ (61,189) | $ (61,189) | ||||||||
Equity forward contract settlement | (6,763) | (6,763) | ||||||||
Issuance of common stock for share-based compensation (in shares) | 447 | |||||||||
Issuance of common stock for share-based compensation | $ 5 | (5) | ||||||||
Exercise of common stock options (in shares) | 398 | |||||||||
Exercise of common stock options | 1,225 | $ 4 | 1,221 | |||||||
Balance as of ending period at Dec. 26, 2018 | $ (133,345) | $ 1,086 | $ (416,815) | 592,944 | (306,414) | (4,146) | ||||
Balance as of end of period (in shares) at Dec. 26, 2018 | 108,585 | 108,585 | ||||||||
Balance as of end of period, treasury stock (in shares) at Dec. 26, 2018 | (47,052) | (47,052) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | $ 117,410 | 117,410 | ||||||||
Other comprehensive loss | (29,814) | (29,814) | ||||||||
Share-based compensation on equity classified awards, net | 3,310 | 3,310 | ||||||||
Purchase of treasury stock (in shares) | (4,879) | (400) | (389) | |||||||
Purchase of treasury stock | (96,202) | $ (96,202) | $ (6,800) | |||||||
Equity forward contract settlement | (6,763) | 6,763 | ||||||||
Issuance of common stock for share-based compensation (in shares) | 468 | |||||||||
Issuance of common stock for share-based compensation | $ 5 | (5) | ||||||||
Exercise of common stock options (in shares) | 362 | |||||||||
Exercise of common stock options | 971 | $ 3 | 968 | |||||||
Balance as of ending period at Dec. 25, 2019 | $ (138,064) | $ 1,094 | $ (519,780) | $ 603,980 | $ (189,398) | $ (33,960) | ||||
Balance as of end of period (in shares) at Dec. 25, 2019 | 109,415 | 109,415 | ||||||||
Balance as of end of period, treasury stock (in shares) at Dec. 25, 2019 | (52,320) | (52,320) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 117,410 | $ 43,693 | $ 39,594 |
Adjustments to reconcile net income to cash flows provided by operating activities: | |||
Depreciation and amortization | 19,846 | 27,039 | 23,720 |
Operating (gains), losses and other charges, net | (91,180) | 2,620 | 4,329 |
Amortization of deferred financing costs | 608 | 607 | 596 |
Gains on investments | (180) | (9) | 0 |
(Gains) losses on early extinguishments of debt and leases | (4) | (171) | 130 |
Deferred income tax expense | 16,005 | 6,193 | 10,271 |
(Decrease) increase of tax valuation allowance | (2,935) | 121 | 216 |
Share-based compensation | 6,694 | 6,038 | 8,541 |
Changes in assets and liabilities: | |||
Receivables | (2,030) | (4,722) | (807) |
Inventories | 1,668 | 141 | (192) |
Other current assets | (4,108) | 921 | (2,380) |
Other assets | (4,581) | 2 | (6,327) |
Operating lease assets/liabilities | (601) | ||
Accounts payable | (5,170) | (5,147) | 10,025 |
Accrued salaries and vacations | (3,826) | 2,175 | (6,446) |
Accrued taxes | (2,043) | 283 | (23) |
Other accrued liabilities | (4,144) | (1,676) | 135 |
Other noncurrent liabilities | 1,898 | (4,418) | (3,113) |
Net cash flows provided by operating activities | 43,327 | 73,690 | 78,269 |
Cash flows from investing activities: | |||
Capital expenditures | (13,975) | (22,025) | (18,811) |
Acquisition of restaurants and real estate | (11,320) | (10,416) | (12,353) |
Proceeds from disposition of property | 129,721 | 3,052 | 2,318 |
Investment purchases | (1,760) | (1,700) | 0 |
Collections on notes receivable | 3,654 | 2,740 | 4,405 |
Issuance of notes receivable | (1,351) | (3,668) | (2,706) |
Net cash flows provided by (used in) investing activities | 104,969 | (32,017) | (27,147) |
Cash flows from financing activities: | |||
Revolver borrowings | 164,400 | 136,000 | 391,900 |
Revolver payments | (210,900) | (108,500) | (351,400) |
Long-term debt payments | (2,464) | (3,181) | (3,322) |
Tax withholding on share-based payments | (3,206) | (1,714) | 0 |
Deferred financing costs | 0 | 0 | (1,602) |
Purchase of treasury stock | (94,459) | (61,237) | (83,050) |
Purchase of equity forward contract | 0 | (6,763) | 0 |
Proceeds from exercise of stock options | 971 | 1,225 | 655 |
Net bank overdrafts | (4,292) | 2,540 | (1,912) |
Net cash flows used in financing activities | (149,950) | (41,630) | (48,731) |
(Decrease) increase in cash and cash equivalents | (1,654) | 43 | 2,391 |
Cash and cash equivalents at beginning of period | 5,026 | 4,983 | 2,592 |
Cash and cash equivalents at end of period | $ 3,372 | $ 5,026 | $ 4,983 |
Introduction and Basis of Repor
Introduction and Basis of Reporting | 12 Months Ended |
Dec. 25, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction and Basis of Reporting | Introduction and Basis of Reporting Denny’s Corporation, or Denny’s, is one of America’s largest franchised full-service restaurant chains based on number of restaurants. Denny’s restaurants are operated in all 50 states, the District of Columbia, two U.S. territories and 12 foreign countries with principal concentrations in California ( 23% of total restaurants), Texas ( 12% ) and Florida ( 8% ). At December 25, 2019 , the Denny’s brand consisted of 1,703 restaurants, 1,635 of which were franchised/licensed restaurants and 68 of which were company restaurants. Changes in restaurant counts are as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 Company restaurants, beginning of period 173 178 169 Units opened — 1 3 Units acquired from franchisees — 6 10 Units sold to franchisees (105 ) (8 ) (4 ) Units closed — (4 ) — End of period 68 173 178 Franchised and licensed restaurants, beginning of period 1,536 1,557 1,564 Units opened 30 29 36 Units purchased from Company 105 8 4 Units acquired by Company — (6 ) (10 ) Units closed (36 ) (52 ) (37 ) End of period 1,635 1,536 1,557 Total restaurants, end of period 1,703 1,709 1,735 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 25, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The following accounting policies significantly affect the preparation of our Consolidated Financial Statements: Use of Estimates . In preparing our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates. Consolidation Policy . Our Consolidated Financial Statements include the financial statements of Denny’s Corporation and its wholly-owned subsidiaries: Denny’s, Inc., DFO, LLC, Denny’s Realty, LLC and East Main Insurance Company. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Year . Our fiscal year ends on the last Wednesday in December. As a result, a fifty-third week is added to a fiscal year every five or six years. Fiscal 2019 , 2018 and 2017 each included 52 weeks of operations. Our next 53-week year will be fiscal 2020. Cash and Cash Equivalents. Our policy is to invest cash in excess of operating requirements in short-term highly liquid investments with an original maturity of three months or less, which we consider to be cash equivalents. Cash and cash equivalents include short-term investments of $0.4 million at December 25, 2019 and December 26, 2018 . Receivables. Receivables, which are recorded at net realizable value, primarily consist of trade accounts receivables and financing receivables from franchisees, vendor receivables and credit card receivables. Trade accounts receivables from franchisees consist of royalties, advertising and rent. Financing receivables from franchisees primarily consist of notes from franchisees related to the roll-out of equipment. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on pre-defined criteria and management’s judgment of existing receivables. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. Inventories. Inventories consist of food and beverages and are valued at the lower of cost and net realizable value. Property and Depreciation. Owned property is stated at cost. Property under finance leases are stated at the lesser of its fair value or the net present value of the related minimum lease payments at the lease inception. Maintenance and repairs are expensed as incurred. We depreciate owned property over its estimated useful life using the straight-line method. We amortize property held under finance leases (at capitalized value) over the lesser of its estimated useful life or the lease term. Building assets are assigned estimated useful lives that range from five to 30 years . Equipment assets are assigned lives that range from two to ten years . Leasehold improvements are generally assigned lives between five and 15 years limited by the expected lease term. Goodwill. Amounts recorded as goodwill primarily represent excess reorganization value recognized as a result of our 1998 bankruptcy. We also record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurant operations to franchisees, goodwill is decremented. We test goodwill for impairment at each fiscal year end and more frequently if circumstances indicate impairment may exist. Such indicators include, but are not limited to, a significant decline in our expected future cash flows, a significant adverse decline in our stock price, significantly adverse legal developments and a significant change in the business climate. Intangible Assets . Intangible assets consist primarily of trade names and reacquired franchise rights. Trade names are considered indefinite-lived intangible assets and are not amortized. Reacquired franchise rights are amortized using the straight-line basis over the term of the related franchise agreement. Reacquired franchise rights resulting from acquisitions are accounted for using the purchase method of accounting and are estimated by management based on the fair value of the assets received. We test trade name assets for impairment at each fiscal year end, and more frequently if circumstances indicate impairment may exist. We assess impairment of reacquired franchise rights whenever changes or events indicate that the carrying value may not be recoverable. Costs incurred to renew or extend the term of recognized intangible assets are recorded in general and administrative expenses in our Consolidated Statements of Income. Marketable Securities. Marketable securities included in investments consist of available for sale equity instruments and are recorded at fair market value in our Consolidated Balance Sheets. The aggregate cost and fair value of these marketable securities was $3.5 million and $3.6 million , respectively, at December 25, 2019 and $1.7 million and $1.7 million , respectively, at December 26, 2018. Unrealized gains included in fair value were $0.2 million and less than $0.1 million at December 25, 2019 and December 26, 2018, respectively. Marketable securities included in other noncurrent assets consist of trading debt and equity mutual funds and are recorded at fair market value in our Consolidated Balance Sheets. These securities represent the plan assets of our nonqualified deferred compensation plan (the “plan assets”). The plan assets are held in a rabbi trust. Each plan participant’s account is comprised of their contribution, our matching contribution (made prior to 2016) and each participant’s share of earnings or losses in the plan. We have recorded offsetting deferred compensation liabilities as a component of other noncurrent liabilities in our Consolidated Balance Sheets. The realized and unrealized holding gains and losses related to marketable securities are recorded in other income (expense) with an offsetting amount recorded in general and administrative expenses related to deferred compensation plan liabilities. During 2019 , 2018 and 2017 , we incurred a net gain of $3.0 million , a net loss of $1.0 million and a net gain of $1.6 million , respectively, related to marketable securities. Deferred Financing Costs. Costs related to the issuance of debt are deferred and amortized as a component of interest expense using the effective interest method over the terms of the respective debt issuances. Self-insurance Liabilities. We record liabilities for insurance claims during periods in which we have been insured under large deductible programs or have been self-insured for our medical claims and workers’ compensation, general, product and automobile insurance liabilities. The liabilities for prior and current estimated incurred losses are discounted to their present value based on expected loss payment patterns determined by independent actuaries using our actual historical payments. These estimates include assumptions regarding claims frequency and severity as well as changes in our business environment, medical costs and the regulatory environment that could impact our overall self-insurance costs. Total discounted workers’ compensation, general, product and automobile insurance liabilities at December 25, 2019 and December 26, 2018 were $16.1 million , reflecting a 2.0% discount rate, and $17.0 million , reflecting a 2.5% discount rate, respectively. The related undiscounted amounts at such dates were $16.9 million and $18.2 million , respectively. Income Taxes. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. All deferred taxes are reported as noncurrent in our Consolidated Balance Sheets. A valuation allowance reduces our net deferred tax asset to the amount that is more likely than not to be realized. We make certain estimates and judgments in the calculation of our provision for incomes taxes, in the resulting tax liabilities, and in the recoverability of deferred tax assets. We record a liability for unrecognized tax benefits resulting from more likely than not tax positions taken, or expected to be taken, in an income tax return. We recognize any interest and penalties related to unrecognized tax benefits in income tax expense. Assessment of uncertain tax positions requires judgments relating to the amounts, timing and likelihood of resolution. Leases and Subleases. Effective December 27, 2018, the first day of fiscal 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. See the “Newly Adopted Accounting Standards” section of this Note 2 for further information on our adoption and Note 3 for further information about our transition to Topic 842 and the newly required disclosures. Lessee We lease certain real estate and equipment for our restaurants and support facilities. At contract inception, we determine whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. We recognize a lease liability and a right-of-use (“ROU”) asset at the lease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases, and is subsequently measured at amortized cost using the effective interest method. Operating lease ROU assets are initially and subsequently measured throughout the lease term at the carrying amount of the lease liability adjusted for initial direct costs, prepayments, accrued payments and lease incentives, if any. Lease cost is recognized on a straight-line basis over the lease term. Operating lease payments are classified as cash flows for operating activities with ROU asset amortization and the change in the lease liability combined as "Operating lease assets/liabilities" in the reconciliation of net income to net cash flows provided by operating activities in the Consolidated Statement of Cash Flows. Finance lease ROU assets are initially measured at cost and subsequently amortized on a straight-line basis over the lesser of the useful life or the lease term. Finance lease payments are classified as cash flows used in financing activities in the Consolidated Statement of Cash Flows. Operating and finance lease ROU assets are assessed for impairment using the long-lived assets impairment guidance. We use a consistent lease term for calculating the depreciation period for the related assets, classifying the lease and computing periodic rent expense where the lease terms include escalations in rent over the lease term. The new lease guidance provides practical expedients and accounting elections for our ongoing accounting after adoption. We elected the practical expedient to not separate nonlease components (such as common area maintenance) from lease components in regard to all leases and the portfolio approach in applying the discount rate to our leases. Key estimates and judgments include how we determine (1) lease payments, (2) lease term and (3) the discount rate used to discount the unpaid lease payments to present value. We have certain lease agreements structured with both a fixed base rent and a contingent rent based on a percentage of sales over contractual levels, others with only contingent rent based on a percentage of sales and some with a fixed base rent adjusted periodically for inflation or changes in the fair market rent rate. Contingent rent is recognized as sales occur. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The exercise of lease renewal options is at our sole discretion, except in certain sublease situations in which we have determined that it is reasonably certain that one or more options will be exercised, including where the exercise of a sublease option compels us to exercise the renewal option of the underlying master lease. Renewal option periods are included in the measurement of lease ROU asset and lease liability where the exercise is reasonably certain to occur. The discount rate used to determine the present value of the lease payments is our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as we generally cannot determine the interest rate implicit in the lease. Lessor We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are the same as the lessee leases described above. Contingent rental income is recognized when earned. Similar to our lessee accounting, we elected the lessor practical expedient to not separate nonlease components from lease components in regard to all leases. Employee Benefit Plans. Each year we measure and recognize the funded status of our defined benefit plans in our Consolidated Balance Sheets as of December 31. That date represents the month-end that is closest to our fiscal year-end. The funded status is adjusted for any contributions or significant events (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) that occurs between our fiscal year-end and December 31. Derivative Instruments. We use derivative financial instruments to manage our exposure to interest rate risk. We do not enter into derivative instruments for trading or speculative purposes. All derivatives are recognized on our Consolidated Balance Sheets at fair value. Changes in the fair values of derivatives are recorded in earnings or other comprehensive income ( “ OCI ” ), based on whether the instrument is designated as a hedge transaction. Gains or losses on derivative instruments reported in OCI are classified to earnings in the period the hedged item affects earnings. If the underlying hedge transaction ceases to exist, any associated amounts reported in OCI are reclassified to earnings at that time. By entering into derivative instruments, we are exposed to counterparty credit risk. When the fair value of a derivative instrument is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We manage our exposure to this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. Contingencies and Litigation. We are subject to legal proceedings involving ordinary and routine claims incidental to our business, as well as legal proceedings that are nonroutine and include compensatory or punitive damage claims. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs as other operating expenses in our Consolidated Statements of Income as those costs are incurred. Comprehensive Income. Comprehensive income includes net income and OCI items that are excluded from net income under U.S. generally accepted accounting principles. OCI items include additional minimum pension liability adjustments and the effective unrealized portion of changes in the fair value of cash flow hedges. Segment. Denny’s operates in only one segment. All significant revenues and pre-tax earnings relate to retail sales of food and beverages to the general public through either company or franchised restaurants. Revenues. Effective December 28, 2017, the first day of fiscal 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASUs that modified Topic 606. We elected to apply the modified retrospective method of adoption to those contracts which were not completed as of December 28, 2017. In doing so, we applied the practical expedient to aggregate all contract modifications that occurred before December 28, 2017 in determining the satisfied and unsatisfied performance obligations, the transaction price and the allocation of the transaction price to the satisfied and unsatisfied performance obligations. Results for reporting periods beginning after December 28, 2017 are presented under Topic 606. Prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Accounting Standards Codification (“ASC”) 605 “Revenue Recognition (Topic 605)”. Company Restaurant Revenue. Company restaurant revenue is recognized at the point in time when food and beverage products are sold at company restaurants. We present company restaurant sales net of sales-related taxes collected from customers and remitted to governmental taxing authorities. Franchise Revenue. Franchise and license revenues consist primarily of royalties, advertising revenue, initial and other fees and occupancy revenue. Under franchise agreements we provide franchisees with a license of our brand’s symbolic intellectual property, administration of advertising programs (including local co-operatives), and other ongoing support functions. These services are highly interrelated so we do not consider them to be individually distinct performance obligations, and therefore account for them as a single performance obligation. Revenue from franchise agreements is recognized evenly over the term of the agreement with the exception of sales-based royalties. Royalty and advertising revenues represent sales-based royalties that are recognized in the period in which the sales occur. Sales-based royalties are variable consideration related to our performance obligation to our franchisees to maintain the intellectual property being licensed. Under our franchise agreements, franchisee advertising contributions must be spent on marketing and related activities. Upon adoption of Topic 606, advertising revenues and expenditures are recorded on a gross basis within the Consolidated Statements of Income. Under the previous guidance of Topic 605, we recorded franchise advertising expense net of contributions from franchisees to our advertising programs, including local co-operatives. While this change materially impacts the gross amount of reported franchise and license revenue and costs of franchise and license revenue, the impact is generally an offsetting increase to both revenue and expense with little, if any, impact on operating income and net income. Initial and other fees consist of initial, successor and assignment franchise fees (“initial franchise fees”). Initial franchise fees are billed and received upon the signing of the franchise agreement. Under Topic 606, recognition of these fees is deferred until the commencement date of the agreement and occurs over time based on the term of the underlying franchise agreement. In the event a franchise agreement is terminated, any remaining deferred fees are recognized in the period of termination. Under the previous guidance, initial franchise fees were recognized upon the opening of a franchised restaurant. Initial and other fees also include revenue that are distinct from the franchise agreement and are separate performance obligations. Training and other franchise services fees are billed and recognized at a point in time as services are rendered. Similar to advertising revenue, upon adoption of Topic 606, other franchise services fees are recorded on a gross basis within the Consolidated Statements of Income, whereas, under previous guidance, they were netted against the related expenses. Occupancy revenue results from leasing or subleasing restaurants to franchisees and is recognized over the term of the lease agreement. With the exception of initial and other franchise fees, revenues are typically billed and collected on a weekly basis. For 2019 , 2018 and 2017 , our ten largest franchisees accounted for 35% , 30% and 31% of our franchise revenues, respectively. Gift cards. We sell gift cards which have no stated expiration dates in our company restaurants, franchised restaurants and at certain third party retailers. We recognize revenue when a gift card is redeemed in one of our company restaurants. We maintain a gift card liability for cards sold in our company restaurants and for cards sold by third parties. Upon adoption of Topic 606, gift card breakage is recognized proportionally as redemptions occur. Our gift card breakage primarily relates to cards sold by third parties and is recorded as advertising revenue (included as a component of franchise and license revenue). Under previous guidance, we recorded gift card breakage when the likelihood of redemption was remote. Breakage was recorded as a benefit to our advertising fund or reduction to other operating expenses, depending on where the gift cards were sold. Advertising Costs . We expense production costs for radio and television advertising in the year in which the commercials are initially aired. Advertising costs for company restaurants are recorded as a component of other operating expenses in our Consolidated Statements of Income and were $11.2 million , $15.0 million and $14.3 million for 2019 , 2018 and 2017 , respectively. Advertising costs related to franchised restaurants are recorded as a component of franchise and license costs and were $81.1 million in 2019 and $78.3 million in 2018 . Prior to the adoption of Topic 606, franchise advertising expense was recorded net of contributions from franchisees to our advertising programs, including local co-operatives. Advertising costs were $1.9 million (net of franchise contributions of $79.7 million ) for 2017 . Restructuring and Exit Costs. Restructuring and exit costs are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Restructuring costs consist primarily of severance and other restructuring charges for terminated employees. Prior to the adoption of Topic 842, exit costs consisted primarily of the costs of future obligations related to closed restaurants. Discounted liabilities for future lease costs and the fair value of related subleases of closed restaurants were recorded when the restaurants were closed. All other costs related to closed restaurants were expensed as incurred. As a result of the adoption of Topic 842, exit cost liabilities related to operating lease costs are now included as a component of operating lease liabilities in our Consolidated Balance Sheets. Amounts recorded as exit costs include period costs related to closed units. Disposal or Impairment of Long-lived Assets. We evaluate our long-lived assets for impairment at the restaurant level on a quarterly basis, when assets are identified as held for sale or whenever changes or events indicate that the carrying value may not be recoverable. For assets identified as held for sale, we use the market approach and consider proceeds from similar asset sales. We assess impairment of restaurant-level assets based on the operating cash flows of the restaurant, expected proceeds from the sale of assets and our plans for restaurant closings. Generally, all restaurants with negative cash flows from operations for the most recent twelve months at each quarter end are included in our assessment. For underperforming assets, we use the income approach to determine both the recoverability and estimated fair value of the assets. To estimate future cash flows, we make certain assumptions about expected future operating performance, such as revenue growth, operating margins, risk-adjusted discount rates, and future economic and market conditions. If the long-lived assets of a restaurant are not recoverable based upon estimated future, undiscounted cash flows, we write the assets down to their fair value. If these estimates or their related assumptions change in the future, we may be required to record additional impairment charges. These charges are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Assets held for sale consist of real estate properties and/or restaurant operations that we expect to sell within the next year. The assets are reported at the lower of carrying amount or fair value less costs to sell. We cease recording depreciation on assets that are classified as held for sale. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of held for sale. Discontinued Operations. We evaluate restaurant closures and assets reclassified to assets held for sale for potential disclosure as discontinued operations. Only disposals resulting in a strategic shift that will have a major effect on our operations and financial results are reported as discontinued operations. There were no such disposals, nor any disposals of individually significant components. The gains and losses related to restaurant closures and assets reclassified to assets held for sale are included as a component of operating (gain), losses and other charges, net in our Consolidated Statements of Income. Gains and Losses on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets. Generally, gains and losses on sales of restaurant operations to franchisees (which may include real estate), real estate properties and other assets are recognized when the sales are consummated and certain other gain recognition criteria are met. Total gains and losses are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Share-based Compensation. Share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Share-based compensation expense is included as a component of general and administrative expenses in our Consolidated Statements of Income. Starting in fiscal 2017, in accordance with the adoption of Accounting Standards Update (“ASU”) 2016-09, we elected to account for forfeitures as they occur. Previously, we estimated potential forfeitures of share-based awards and adjusted the forfeiture rate over the requisite service period to the extent that actual forfeitures differed from such estimates. The cumulative-effect adjustment to retained earnings from previously estimated forfeitures resulted in a $0.4 million increase to opening deficit in fiscal 2017, a $0.2 million increase in deferred tax assets and a $0.6 million increase to additional paid-in capital. Also in accordance with ASU 2016-09, starting in 2017, excess tax benefits recognized related to share-based compensation are included as a component of provision for income taxes in our Consolidated Statements of Income and are classified as operating activities in our Consolidated Statements of Cash Flows. The cumulative-effect adjustment to retained earnings from previously unrecognized excess tax benefits resulted in a $9.0 million increase in deferred tax assets and a decrease to opening deficit in fiscal 2017. Generally, compensation expense related to performance share units and restricted stock units for board members is based on the number of units expected to vest, the period over which they are expected to vest and the fair market value of our common stock on the date of the grant. For restricted stock units and performance share units that contain a market condition, compensation expense is based on the Monte Carlo valuation method, which utilizes multiple input variables to determine the probability of the Company achieving the market condition and the fair value of the award. The key assumptions used include expected volatility and risk-free interest rates over the term of the award. Subsequent to the vesting period, earned stock-settled restricted stock units and performance share units (both of which are equity classified) are paid to the holder in shares of our common stock, provided the holder was still employed with Denny’s or an affiliate as of the vesting date. Earnings Per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. Reclassifications. We have reclassified certain prior year amounts to conform to the current year presentation. These reclassifications have not changed the results of operations of prior periods. Newly Adopted Accounting Standards Effective December 27, 2018, the first day of fiscal 2019, we adopted ASU Topic 842 and all subsequent ASUs that modified Topic 842. The new guidance established a ROU model that requires lessees to recognize a ROU asset and a lease liability for all leases with terms greater than 12 months. Lessees classify leases as financing or operating. The guidance requires lessors to classify leases as sales-type, direct financing or operating. We elected to apply the modified retrospective transition approach as the date of initial application without restating comparative period financial statements. Results for reporting periods beginning after December 26, 2018 are presented under Topic 842. Prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 840, “Leases (Topic 840)”. Our transition to Topic 842 represents a change in accounting principle. The new guidance provided a number of optional practical expedients in transition. We elected the package of practical expedients that permitted us not to reassess our prior conclusions regarding lease identification, lease classification or initial direct costs. In addition, we did not elect the practical expedient which would have permitted us to use hindsight in evaluating our leases, nor did we elect the land easement practical expedient. In preparation for adoption, we implemented a new lease management system. Upon adoption of Topic 842, we recorded operating lease liabilities of $101.3 million and ROU assets of $94.2 million related to existing operating leases. In addition, we recorded a cumulative effect adjustment increasing opening deficit by $0.4 million and deferred tax assets by $0.1 million . The lease liabilities were based on the present value of remaining rental payments under previous leasing standards for existing operating leases primarily related to real estate leases. Exit cost and straight-line lease liabilities that existed at the adoption date were reclassified against the ROU assets upon adoption. The amount recorded to opening deficit represents the initial impairment of ROU assets, net of the deferred tax impact. See Note 3 for further information about our transition to Topic 842 and the required disclosures. Additional new accounting guidance became effective for us as of December 27, 2018 that we reviewed and concluded was either not applicable to our operations or had no material effect on our Consolidated Financial Statements and related disclosures. Accounting Standards to be Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform financial statement users of credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 (our fiscal 2020) with early adoption permitted for annual and interim periods beginning after December 15, 2018 (our fiscal 2019). We do not expect the adoption of this guidance to have a material i |
Leases
Leases | 12 Months Ended |
Dec. 25, 2019 | |
Leases [Abstract] | |
Leases | Leases Lessee Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years , exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years . Lessor We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. The components of lease costs were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease costs Finance lease costs: Amortization of right-of-use assets Depreciation and amortization $ 2,991 Interest on lease liabilities Interest expense, net 4,536 Operating lease costs: Operating lease costs - company Occupancy 8,253 Operating lease costs - franchise Costs of franchise and license revenue 17,097 Operating lease costs - general and administrative General and administrative expenses 108 Variable lease costs: Variable lease costs - company Occupancy 5,993 Variable lease costs - franchise Costs of franchise and license revenue 7,001 Variable lease costs - general and administrative General and administrative expenses 41 Variable lease costs - closed stores Restructuring charges and exit costs 49 Sublease income: Sublease income - franchise Franchise and license revenue (28,986 ) Sublease income - closed stores Restructuring charges and exit costs (306 ) Total lease costs $ 16,777 Lease terms and discount rates were as follows: December 25, 2019 Weighted-average remaining lease term (in years): Finance leases 9.7 Operating leases 10.8 Weighted-average discount rate: Finance leases 23.5 % Operating leases 5.9 % The components of lease income were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease income Operating lease income - franchise Franchise and license revenue $ 28,050 Operating lease income - closed stores Restructuring charges and exit costs 255 Variable lease income - franchise Franchise and license revenue 10,464 Variable lease income - closed stores Restructuring charges and exit costs 49 Total lease income $ 38,818 Cash and supplemental noncash amounts were as follows: Fiscal Year Ended December 25, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 4,536 Operating cash flows from operating leases $ 26,329 Financing cash flows from finance leases $ 2,464 Right-of-use assets obtained in exchange for new finance lease liabilities $ 305 Right-of-use assets obtained in exchange for new operating lease liabilities $ 79,534 Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 Rental expense and income in accordance with Topic 840 as of December 26, 2018 and December 27, 2017, respectively, were comprised of the following: Fiscal Year Ended December 26, 2018 December 27, 2017 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 10,272 $ 9,315 Contingent rents 3,074 3,168 Included as a component of costs of franchise and license expense: Base rents 15,108 17,674 Contingent rents 2,629 2,864 Total rental expense $ 31,083 $ 33,021 Rental income: Included as a component of franchise and license revenue: Base rents $ 22,831 $ 25,781 Contingent rents 4,662 5,042 Total rental income $ 27,493 $ 30,823 Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Leases | Leases Lessee Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years , exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years . Lessor We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. The components of lease costs were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease costs Finance lease costs: Amortization of right-of-use assets Depreciation and amortization $ 2,991 Interest on lease liabilities Interest expense, net 4,536 Operating lease costs: Operating lease costs - company Occupancy 8,253 Operating lease costs - franchise Costs of franchise and license revenue 17,097 Operating lease costs - general and administrative General and administrative expenses 108 Variable lease costs: Variable lease costs - company Occupancy 5,993 Variable lease costs - franchise Costs of franchise and license revenue 7,001 Variable lease costs - general and administrative General and administrative expenses 41 Variable lease costs - closed stores Restructuring charges and exit costs 49 Sublease income: Sublease income - franchise Franchise and license revenue (28,986 ) Sublease income - closed stores Restructuring charges and exit costs (306 ) Total lease costs $ 16,777 Lease terms and discount rates were as follows: December 25, 2019 Weighted-average remaining lease term (in years): Finance leases 9.7 Operating leases 10.8 Weighted-average discount rate: Finance leases 23.5 % Operating leases 5.9 % The components of lease income were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease income Operating lease income - franchise Franchise and license revenue $ 28,050 Operating lease income - closed stores Restructuring charges and exit costs 255 Variable lease income - franchise Franchise and license revenue 10,464 Variable lease income - closed stores Restructuring charges and exit costs 49 Total lease income $ 38,818 Cash and supplemental noncash amounts were as follows: Fiscal Year Ended December 25, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 4,536 Operating cash flows from operating leases $ 26,329 Financing cash flows from finance leases $ 2,464 Right-of-use assets obtained in exchange for new finance lease liabilities $ 305 Right-of-use assets obtained in exchange for new operating lease liabilities $ 79,534 Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 Rental expense and income in accordance with Topic 840 as of December 26, 2018 and December 27, 2017, respectively, were comprised of the following: Fiscal Year Ended December 26, 2018 December 27, 2017 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 10,272 $ 9,315 Contingent rents 3,074 3,168 Included as a component of costs of franchise and license expense: Base rents 15,108 17,674 Contingent rents 2,629 2,864 Total rental expense $ 31,083 $ 33,021 Rental income: Included as a component of franchise and license revenue: Base rents $ 22,831 $ 25,781 Contingent rents 4,662 5,042 Total rental income $ 27,493 $ 30,823 Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Leases | Leases Lessee Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years , exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years . Lessor We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. The components of lease costs were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease costs Finance lease costs: Amortization of right-of-use assets Depreciation and amortization $ 2,991 Interest on lease liabilities Interest expense, net 4,536 Operating lease costs: Operating lease costs - company Occupancy 8,253 Operating lease costs - franchise Costs of franchise and license revenue 17,097 Operating lease costs - general and administrative General and administrative expenses 108 Variable lease costs: Variable lease costs - company Occupancy 5,993 Variable lease costs - franchise Costs of franchise and license revenue 7,001 Variable lease costs - general and administrative General and administrative expenses 41 Variable lease costs - closed stores Restructuring charges and exit costs 49 Sublease income: Sublease income - franchise Franchise and license revenue (28,986 ) Sublease income - closed stores Restructuring charges and exit costs (306 ) Total lease costs $ 16,777 Lease terms and discount rates were as follows: December 25, 2019 Weighted-average remaining lease term (in years): Finance leases 9.7 Operating leases 10.8 Weighted-average discount rate: Finance leases 23.5 % Operating leases 5.9 % The components of lease income were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease income Operating lease income - franchise Franchise and license revenue $ 28,050 Operating lease income - closed stores Restructuring charges and exit costs 255 Variable lease income - franchise Franchise and license revenue 10,464 Variable lease income - closed stores Restructuring charges and exit costs 49 Total lease income $ 38,818 Cash and supplemental noncash amounts were as follows: Fiscal Year Ended December 25, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 4,536 Operating cash flows from operating leases $ 26,329 Financing cash flows from finance leases $ 2,464 Right-of-use assets obtained in exchange for new finance lease liabilities $ 305 Right-of-use assets obtained in exchange for new operating lease liabilities $ 79,534 Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 Rental expense and income in accordance with Topic 840 as of December 26, 2018 and December 27, 2017, respectively, were comprised of the following: Fiscal Year Ended December 26, 2018 December 27, 2017 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 10,272 $ 9,315 Contingent rents 3,074 3,168 Included as a component of costs of franchise and license expense: Base rents 15,108 17,674 Contingent rents 2,629 2,864 Total rental expense $ 31,083 $ 33,021 Rental income: Included as a component of franchise and license revenue: Base rents $ 22,831 $ 25,781 Contingent rents 4,662 5,042 Total rental income $ 27,493 $ 30,823 Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Refranchisings and Acquisitions
Refranchisings and Acquisitions | 12 Months Ended |
Dec. 25, 2019 | |
Refranchisings and Acquisitions [Abstract] | |
Refranchisings and Acquisitions | Refranchisings and Acquisitions Refranchisings The following table summarizes the activity related to our refranchising and development strategy. Gains (losses) on the sales of company restaurants and real estate are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. See Note 5 . Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (Dollars in thousands) Restaurants sold to franchisees 105 8 4 Gains (losses) on sales of company restaurants: Cash Proceeds $ 118,964 $ 1,777 $ 751 Receivables 920 — — Less: Property sold (30,511 ) (2,448 ) (996 ) Less: Goodwill (2,897 ) (62 ) (23 ) Less: Intangibles (2,260 ) (13 ) — Less: Deferred gain (1,350 ) — — Total gains (losses) on sales of company restaurants $ 82,866 $ (746 ) $ (268 ) Real estate parcels sold 6 — 3 Gains on sales of real estate: Cash proceeds $ 10,680 $ — $ 3,247 Noncash consideration 3,000 — — Less: Property sold (1,686 ) — (1,103 ) Less: Other assets (120 ) — (226 ) Total gains on sales of real estate $ 11,874 $ — $ 1,918 The majority of gains on sales of real estate qualified for like-kind exchange treatment related to real estate acquired. In addition to the cash proceeds received on the sale of real estate during 2019, we also recorded additional noncash consideration for the fair value of restaurant space we expect to receive within a building being developed by the buyer of the real estate. The fair value of this space was determined using a market approach with Level 2 inputs based on third party appraisals of fair values of other similar properties. The $3.0 million of noncash consideration is recorded as a component of other noncurrent assets in our Consolidated Balance Sheets. As of December 25, 2019 , we have recorded assets held for sale at their carrying amount of $1.9 million (comprised of property of $1.6 million , other assets of $0.2 million and goodwill of $0.1 million ) related to four company restaurants and two pieces of real estate. There were $0.7 million in assets held for sale as of December 26, 2018 related to three company restaurants and one piece of real estate. Acquisitions We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on Level 3 fair value estimates. The following table summarizes our restaurant and real estate acquisition activity. Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (Dollars in thousands) Restaurants acquired from franchisees (1) — 6 11 Purchase price allocation: Reacquired franchise rights $ — $ 5,434 $ 4,476 Property — 1,121 1,293 Goodwill — 1,574 3,022 Total purchase price $ — $ 8,129 $ 8,791 Finance leases recorded $ — $ 2,409 $ 2,321 Real estate parcels acquired 5 1 2 Total purchase price $ 11,320 $ 1,787 $ 4,062 (1) 2017 includes one restaurant acquired from a former franchisee. |
Operating (Gains), Losses and O
Operating (Gains), Losses and Other Charges, Net | 12 Months Ended |
Dec. 25, 2019 | |
Other Income and Expenses [Abstract] | |
Operating (Gains), Losses and Other Charges, Net | Operating (Gains), Losses and Other Charges, Net Operating (gains), losses and other charges, net were comprised of the following: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Gains on sales of assets and other, net $ (93,608 ) $ (513 ) $ (1,729 ) Software implementation costs — — 5,247 Restructuring charges and exit costs 2,428 1,575 485 Impairment charges — 1,558 326 Operating (gains), losses and other charges, net $ (91,180 ) $ 2,620 $ 4,329 Gains on sales of assets and other, net of $93.6 million for the year ended December 25, 2019 were primarily the result of sales of company restaurants and real estate as part of our refranchising and development strategy. See Note 4 for details on refranchisings. Gains on sales of assets and other, net of $0.5 million for the year ended December 26, 2018 primarily related to gains of $1.2 million of insurance settlements on fire-damaged and hurricane-damaged restaurants, partially offset by $0.7 million of losses on sales of company owned units to franchisees. Gains on the sales of assets and other, net of $1.7 million for the year ended December 27, 2017 primarily related to real estate sold to franchisees. Software implementation costs of $5.2 million for the year ended December 27, 2017 were the result of our investment in a new cloud-based Enterprise Resource Planning system. Restructuring charges and exit costs were comprised of the following: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Exit costs $ 272 $ 518 $ 385 Severance and other restructuring charges 2,156 1,057 100 Total restructuring charges and exit costs $ 2,428 $ 1,575 $ 485 Exit costs are primarily comprised of costs related to closed restaurants. Exit cost liabilities were $0.2 million and $1.2 million as of December 25, 2019 and December 26, 2018 , respectively. As a result of the adoption of Topic 842, exit cost liabilities related to lease costs are now included as a component of operating lease liabilities in our Consolidated Balance Sheets. See Note 3 . The components of the change in accrued exit cost liabilities for the fiscal year-ended December 26, 2018 were as follows: Balance, beginning of year $ 1,180 Exit costs (1) 518 Payments, net of sublease receipts (615 ) Interest accretion 72 Balance, end of year 1,155 Less current portion included in other current liabilities 546 Long-term portion included in other noncurrent liabilities $ 609 (1) Included as a component of operating (gains), losses and other charges, net. The increase in severance and other restructuring charges for the years ended December 25, 2019 and December 26, 2018 was primarily the result of positions eliminated as part of our refranchising and development strategy announced during the fourth quarter of 2018. As of December 25, 2019 and December 26, 2018 , we had accrued severance and other restructuring charges of $0.9 million and $0.6 million , respectively. The balance as of December 25, 2019 is expected to be paid during the next 12 months. Impairment charges of $1.6 million for the year ended December 26, 2018 primarily related to the impairment of an underperforming unit. Impairment charges of $0.3 million for the year ended December 27, 2017 related to the relocation of two |
Receivables
Receivables | 12 Months Ended |
Dec. 25, 2019 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables, net were comprised of the following: December 25, 2019 December 26, 2018 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 14,551 $ 11,459 Financing receivables from franchisees 2,230 3,211 Vendor receivables 3,260 4,016 Credit card receivables 6,806 5,955 Other 915 1,942 Allowance for doubtful accounts (274 ) (300 ) Total receivables, net $ 27,488 $ 26,283 Other noncurrent assets: Financing receivables from franchisees $ 364 $ 1,528 During the year ended December 26, 2018, we recorded an allowance for doubtful accounts of $0.2 million of financing receivables from a franchisee. Also, as of December 26, 2018, there were $1.0 million of insurance receivables, which are included as a component of other receivables in the above table, that primarily related to hurricane damages incurred during 2017 and other property damage incurred during 2018. |
Property
Property | 12 Months Ended |
Dec. 25, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property | Property Property, net consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Land $ 39,720 $ 33,566 Buildings and leasehold improvements 172,881 241,990 Other property and equipment 32,470 68,315 Total property owned 245,071 343,871 Less accumulated depreciation 147,445 226,620 Property owned, net $ 97,626 $ 117,251 The following table reflects the property assets, included in the table above, and buildings with finance leases which were leased to franchisees: December 25, 2019 December 26, 2018 (In thousands) Land $ 27,205 $ 16,730 Buildings and leasehold improvements 78,584 53,790 Total property owned, leased to franchisees 105,789 70,520 Less accumulated depreciation 65,476 46,354 Property owned, leased to franchisees, net 40,313 24,166 Buildings held under finance leases, leased to franchisees 8,445 5,776 Less accumulated amortization 3,768 2,746 Property held under finance leases, leased to franchisees, net 4,677 3,030 Total property leased to franchisees, net $ 44,990 $ 27,196 Depreciation expense, including amortization of property under finance leases, for 2019 , 2018 and 2017 was $16.3 million , $23.0 million and $21.2 million , respectively. Substantially all owned property is pledged as collateral for our Credit Facility. See Note 11 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 25, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table reflects the changes in carrying amounts of goodwill: December 25, 2019 December 26, 2018 (In thousands) Balance, beginning of year $ 39,781 $ 38,269 Additions related to acquisitions — 1,574 Adjustments related to the sale of restaurants (2,949 ) (62 ) Balance, end of year $ 36,832 $ 39,781 Intangible assets were comprised of the following: December 25, 2019 December 26, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 166 — Intangible assets with definite lives: Reacquired franchise rights 15,516 5,767 19,933 5,119 Intangible assets $ 59,723 $ 5,767 $ 64,186 $ 5,119 The weighted-average life of the reacquired franchise rights is approximately eight years . The amortization expense for definite-lived intangibles and other assets for 2019 , 2018 and 2017 was $3.6 million , $4.1 million and $2.5 million , respectively. Estimated amortization expense for intangible assets with definite lives in the next five years is as follows: (In thousands) 2020 $ 2,289 2021 1,347 2022 1,240 2023 915 2024 845 We performed an annual impairment test as of December 25, 2019 and determined that none of the recorded goodwill or other intangible assets with indefinite lives were impaired. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 25, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Accrued payroll $ 19,689 $ 23,395 Accrued insurance, primarily current portion of liability for insurance claims 6,515 7,323 Accrued taxes 5,624 7,667 Accrued advertising 6,753 7,413 Gift cards 6,469 6,546 Other 12,257 9,446 Other current liabilities $ 57,307 $ 61,790 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 25, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands ) Fair value measurements as of December 25, 2019: Deferred compensation plan investments (1) $ 13,517 $ 13,517 $ — $ — Interest rate swaps, net (2) (44,670 ) — (44,670 ) — Investments (3) 3,649 — 3,649 — Total $ (27,504 ) $ 13,517 $ (41,021 ) $ — Fair value measurements as of December 26, 2018: Deferred compensation plan investments (1) $ 11,235 $ 11,235 $ — $ — Interest rate swaps (2) (4,475 ) — (4,475 ) — Investments (3) 1,709 — 1,709 — Total $ 8,469 $ 11,235 $ (2,766 ) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 11 for details on the interest rate swaps. (3) The fair value of investments is valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments. The carrying amounts of cash and cash equivalents, accounts receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The liabilities under our credit facility are carried at historical cost, which approximates fair value. See Note 4 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 25, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Revolving loans $ 240,000 $ 286,500 Finance lease obligations 16,453 30,591 Total long-term debt 256,453 317,091 Less current maturities 1,674 3,410 Noncurrent portion of long-term debt $ 254,779 $ 313,681 There are no future maturities of our revolving loans due in 2020 through 2021. The $240.0 million of revolving loans are due October 26, 2022 . Denny’s Corporation and certain of its subsidiaries have a credit facility consisting of a five -year $400 million senior secured revolver (with a $30 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the revolver to $450 million . As of December 25, 2019 , we had outstanding revolver loans of $240.0 million and outstanding letters of credit under the senior secured revolver of $20.6 million . These balances resulted in availability of $139.4 million under the credit facility. Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 3.47% and 4.43% as of December 25, 2019 and December 26, 2018 , respectively. Taking into consideration the interest rate swaps, the weighted-average interest rate of outstanding revolver loans was 3.99% and 4.48% as of December 25, 2019 and December 26, 2018 , respectively. A commitment fee, which is based on our consolidated leverage ratio, is paid on the unused portion of the credit facility and was 0.25% as of December 25, 2019 . Borrowings under the credit facility bear a tiered interest rate, also based on our leverage ratio, and was set at LIBOR plus 1.75% as of December 25, 2019 . The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than our insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of December 25, 2019 . Interest Rate Hedges We have interest rate swaps to hedge a portion of the forecasted cash flows of our floating rate borrowings. We designated these interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to payments of LIBOR due on forecasted notional debt obligations. Under the interest rate swaps, we pay a fixed rate on the notional amount in addition to the current interest rate as determined by our consolidated leverage ratio in effect at the time. A summary of our interest rate swaps as of December 25, 2019 is as follows: Trade Date Effective Date Maturity Date Notional Amount Fixed Rate (In thousands) March 20, 2015 March 29, 2018 March 31, 2025 $ 120,000 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 2.46 % February 15, 2018 March 31, 2020 December 31, 2033 $ 80,000 (1) 3.19 % (1) The notional amount of the swaps entered into on February 15, 2018 increases annually beginning September 30, 2020 until they reach the maximum notional amount of $425.0 million on September 28, 2029. As of December 25, 2019 , the fair value of the interest rate swaps was a liability of $44.7 million , which is recorded as a component of other noncurrent liabilities in our Consolidated Balance Sheets. See Note 17 for the amounts recorded in accumulated other comprehensive loss related to the interest rate swaps. |
Revenues
Revenues | 12 Months Ended |
Dec. 25, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channels and types of goods or services. Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (1) Company restaurant sales $ 306,377 $ 411,932 $ 390,352 Franchise and license revenue: Royalties 108,813 101,557 100,631 Advertising revenue 81,144 78,308 — Initial and other fees 6,541 6,422 2,466 Occupancy revenue 38,514 31,960 35,720 Franchise and license revenue 235,012 218,247 138,817 Total operating revenue $ 541,389 $ 630,179 $ 529,169 (1) As disclosed in Note 2, prior period amounts have not been adjusted under the modified retrospective method of adoption of Topic 606. Balances related to contracts with customers consists of receivables, deferred franchise revenue and deferred gift card revenue. See Note 6 for details on our receivables. Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that will begin amortizing into revenue when the related restaurants are opened. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising. The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 26, 2018 $ 20,538 Fees received from franchisees 5,634 Revenue recognized (1) (2,916 ) Balance, December 25, 2019 23,256 Less current portion included in other current liabilities 2,235 Deferred franchise revenue included in other noncurrent liabilities $ 21,021 (1) Of this amount $2.5 million was included in the deferred franchise revenue balance as of December 26, 2018. As of December 25, 2019 , the deferred franchise revenue expected to be recognized in the future is as follows: (In thousands) 2020 $ 2,235 2021 2,049 2022 1,940 2023 1,860 2024 1,809 Thereafter 13,363 Deferred franchise revenue $ 23,256 Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The balance of deferred gift card liabilities as of December 25, 2019 and December 26, 2018 was $6.5 million and $6.5 million , respectively. During the year ended December 25, 2019 , we recognized revenue of $1.4 million from gift card redemptions at company restaurants. Financial Statement Impact of Adoption The following tables summarize the impact of adopting Topic 606 on our financial statement line items as of December 26, 2018 and for the quarter and year ended December 26, 2018 . Year ended December 26, 2018 Consolidated Balance Sheet As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Prepaid and other current assets $ 10,866 $ 509 $ 11,375 Deferred income taxes 17,333 (4,988 ) 12,345 Other current liabilities 61,790 (407 ) 61,383 Other noncurrent liabilities 48,087 (18,370 ) 29,717 Deficit (306,414 ) 14,298 (292,116 ) Quarter ended December 26, 2018 Year ended December 26, 2018 Consolidated Statement of Income As Reported Adjustments Amounts without adoption of Topic 606 As Reported Adjustments Amounts without adoption of Topic 606 (In thousands, except per share amounts) Franchise and license revenue $ 55,160 $ (21,162 ) $ 33,998 $ 218,247 $ (82,815 ) $ 135,432 Costs of franchise and license revenue 28,517 (20,962 ) 7,555 114,296 (81,268 ) 33,028 Provision for income taxes 1,340 (52 ) 1,288 8,557 (400 ) 8,157 Net income 11,503 (148 ) 11,355 43,693 (1,147 ) 42,546 Basic net income per share 0.19 (0.01 ) 0.18 0.69 (0.02 ) 0.67 Diluted net income per share 0.18 — 0.18 0.67 (0.02 ) 0.65 Quarter ended December 26, 2018 Year ended December 26, 2018 Consolidated Statement of Comprehensive Income As Reported Adjustments Amounts without adoption of Topic 606 As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Net income $ 11,503 $ (148 ) $ 11,355 $ 43,693 $ (1,147 ) $ 42,546 Total comprehensive income 4,816 (148 ) 4,668 41,863 (1,147 ) 40,716 Year ended December 26, 2018 Consolidated Statement of Cash Flow As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Net income $ 43,693 $ (1,147 ) $ 42,546 Deferred income tax expense 6,193 (400 ) 5,793 Changes in assets and liabilities: Other current assets 921 (509 ) 412 Other accrued liabilities (1,676 ) 573 (1,103 ) Other noncurrent liabilities (4,418 ) 1,483 (2,935 ) Net cash flows provided by operating activities 73,690 — 73,690 The following significant changes impacted our financial statement line items as of December 26, 2018 and for the quarter and year ended December 26, 2018 : • Upon adoption of Topic 606, we recorded a cumulative effect adjustment related to previously recognized initial franchise fees resulting in a $21.0 million increase to deferred franchise revenue, a $15.6 million increase to opening deficit and a $5.4 million increase to deferred tax assets. The deferred franchise revenue resulting from the cumulative effect adjustment will be amortized over the remaining lives of the individual franchise agreements. Also upon adoption, we recorded a cumulative effect adjustment to recognize breakage in proportion to redemptions that occurred prior to December 28, 2017 resulting in a decrease of $0.6 million to gift card liability (a component of other current liabilities), a $0.5 million increase to accrued advertising (a component of other current liabilities) and a $0.1 million decrease to opening deficit. • We recognized franchise and license revenue and costs of franchise and license revenue of $19.9 million for the quarter and $78.3 million year-to-date resulting from the recording of advertising revenues and expenditures on a gross basis under Topic 606 versus recording these amounts on a net basis under Topic 605. • We recognized additional franchise and license revenue of $0.2 million for the quarter and $1.5 million year-to-date under Topic 606 than we would have recognized under Topic 605, resulting from the timing of recognition of initial franchise fees. • We recognized franchise and license revenue and costs of franchise and license revenue of $1.0 million for the quarter and $3.0 million year-to-date resulting from the recording of other franchise services fees on a gross basis under Topic 606 versus recording these amount on a net basis under Topic 605. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 25, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We maintain defined contribution plans and defined benefit plans which cover a substantial number of employees. Defined Contribution Plans Eligible employees can elect to contribute up to 25% of their compensation to our 401(k) plan. Effective January 1, 2016, the plan was amended and restated to incorporate Safe Harbor Plan design features which included changes to participant eligibility, company contribution amounts and vesting. As a result, we match up to a maximum of 4% of compensation deferred by the participant. In addition, a non-qualified deferred compensation plan is offered to certain employees. This plan allows participants to defer up to 50% of annual salary and up to 75% of bonuses and incentive compensation awards, on a pre-tax basis. There are no matching contributions made under this plan. We made total contributions of $1.9 million , $2.2 million and $2.0 million for 2019 , 2018 and 2017 , respectively, under these plans. Defined Benefit Plans Benefits under our defined benefit plans are based upon each employee’s years of service and average salary. The following table provides a reconciliation of the changes in the benefit obligations, plan assets, and funded status of our defined benefit plans: December 25, 2019 December 26, 2018 (In thousands) Change in Benefit Obligation: Benefit obligation at beginning of year $ 2,393 $ 2,608 Interest cost 81 76 Actuarial losses (gains) 25 (96 ) Benefits paid (162 ) (195 ) Benefit obligation at end of year $ 2,337 $ 2,393 Accumulated benefit obligation $ 2,337 $ 2,393 Change in Plan Assets: Fair value of plan assets at beginning of year $ — $ — Employer contributions 162 195 Benefits paid (162 ) (195 ) Fair value of plan assets at end of year $ — $ — Unfunded status at end of year $ (2,337 ) $ (2,393 ) Amounts recognized on the balance sheet: Other current liabilities $ (662 ) $ (584 ) Other noncurrent liabilities (1,675 ) (1,809 ) Net amount recognized $ (2,337 ) $ (2,393 ) Amounts in accumulated other comprehensive loss not yet reflected in net period benefit cost: Unamortized actuarial losses, net $ (823 ) $ (885 ) Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: Benefit obligation actuarial (loss) gain $ (25 ) $ 96 Amortization of net loss 86 112 Other comprehensive income $ 61 $ 208 The components of net periodic benefit cost were as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Interest cost $ 81 $ 76 $ 83 Amortization of net loss 86 112 92 Settlement loss recognized — — 21 Net periodic benefit cost $ 167 $ 188 $ 196 Assumptions The discount rates used to determine the benefit obligations as of December 25, 2019 and December 26, 2018 were 2.56% and 3.83% , respectively. The discount rates used to determine net period pension costs for 2019 , 2018 and 2017 were 3.83% , 3.08% and 3.31% , respectively. In determining the discount rate, we have considered long-term bond indices of bonds having similar timing and amounts of cash flows as our estimated defined benefit payments. We use a yield curve based on high quality, long-term corporate bonds to calculate the single equivalent discount rate that results in the same present value as the sum of each of the plan’s estimated benefit payments discounted at their respective spot rates. Contributions and Expected Future Benefit Payments We made contributions of $0.2 million to our defined benefit plans during each of the years ended December 25, 2019 and December 26, 2018 . We expect to contribute $0.7 million to our defined benefit plans during 2020 . Benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2025 through 2029 are as follows: Defined Benefit Plans (In thousands) 2020 $ 662 2021 223 2022 327 2023 418 2024 132 2025 through 2029 640 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 25, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Compensation Plans We maintain four share-based compensation plans under which stock options and other awards granted to our employees and directors are outstanding. Currently, the Denny’s Corporation 2017 Omnibus Incentive Plan (the “2017 Omnibus Plan”) is used to grant share-based compensation to selected employees, officers and directors of Denny’s and its affiliates. However, we reserve the right to pay discretionary bonuses, or other types of compensation, outside of this plan. At December 25, 2019 , there were 2.6 million shares available for grant under the 2017 Omnibus Plan. In addition, we have 0.7 million shares available to be issued outside of the 2017 Omnibus Plan pursuant to the grant or exercise of employment inducement awards of stock options and restricted stock units in accordance with NASDAQ Listing Rule 5635(c)(4). Share-Based Compensation Expense Total share-based compensation expense included as a component of net income was as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Performance share awards $ 5,765 $ 5,039 $ 7,838 Restricted stock units for board members 929 999 703 Total share-based compensation $ 6,694 $ 6,038 $ 8,541 The income tax benefits recognized as a component of the provision for income taxes in our Consolidated Statements of Income related to share-based compensation expense were approximately $1.7 million , $1.6 million and $3.3 million during the years ended December 25, 2019 , December 26, 2018 and December 27, 2017 , respectively. Performance Share Units We primarily grant performance share units containing a market condition based on the total shareholder return of our stock compared with the returns of a group of peer companies and performance share units containing a performance condition based on the Company’s achievement of certain operating metrics. The number of shares that are ultimately issued is dependent upon the level of obtainment of the market and performance conditions. The following table summarizes the performance share units activity during the year ended December 25, 2019 : Units Weighted Average Grant Date Fair Value (In thousands) Outstanding, beginning of year 1,688 $ 12.65 Granted 631 $ 19.02 Vested (631 ) $ 9.48 Forfeited (7 ) $ 14.48 Outstanding, end of year 1,681 $ 16.22 Convertible, end of year 586 $ 12.59 During the year ended December 25, 2019 , and included in the performance share units activity table above, we granted certain employees approximately 0.3 million performance shares that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and 0.3 million performance shares that vest based on our Adjusted EPS growth rate, as defined under the terms of the award. As the TSR based performance shares contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value of $20.47 per share. The performance shares based on the Adjusted EPS growth rate have a grant date fair value of $17.58 per share, the market value of our stock on the date of grant. The awards granted to our named executive officers also contain a performance condition based on the attainment of an operating measure for the fiscal year ended December 25, 2019 . The performance period for these performance shares is the three year fiscal period beginning December 27, 2018 and ending December 29, 2021. The performance shares will vest and be earned (from 0% to 150% of the target award for each such increment) at the end of the performance period. For 2019 , 2018 and 2017 , the weighted average grant date fair value of awards granted was $19.02 , $16.97 and $12.59 , respectively. We made payments of $0.4 million , $0.2 million and $3.9 million in cash during 2019 , 2018 and 2017 , respectively, related to converted performance share units. Payments in 2019 and 2018 relate to the payment of payroll taxes. The intrinsic value of units converted was $16.9 million , $9.8 million and $5.0 million during 2019 , 2018 and 2017 , respectively. As of December 25, 2019 and December 26, 2018 , we had accrued compensation of $0.1 million and $0.4 million , respectively, included as a component of other current liabilities and $0.2 million and $0.2 million , respectively, included as a component of other noncurrent liabilities in our Consolidated Balance Sheets, which represents future estimated payroll taxes. As of December 25, 2019 , we had $8.8 million of unrecognized compensation cost related to unvested performance share unit awards granted, which is expected to be recognized over a weighted average of 1.7 years . Restricted Stock Units During the year ended December 25, 2019 , we granted approximately 0.1 million restricted stock units (which are equity classified) with a weighted average grant date fair value of $19.44 per unit to non-employee members of our Board of Directors. The restricted stock units vest after a one year service period. A director may elect to convert these awards into shares of common stock on a specific date in the future (while still serving as a member of our Board of Directors), upon termination as a member of our Board of Directors or in three equal annual installments commencing after termination of service as a member of our Board. During the year ended December 25, 2019 , 0.1 million restricted stock units were converted into shares of common stock. There were 0.7 million and 0.8 million restricted stock units outstanding as of December 25, 2019 and December 26, 2018 , respectively. As of December 25, 2019 , we had approximately $0.3 million of unrecognized compensation cost related to all unvested restricted stock unit awards outstanding, which is expected to be recognized over a weighted average of 0.4 years . Stock Options Prior to 2012, stock options were granted that vest evenly over three years , have a 10 -year contractual life and are issued at the market value at the date of grant. There were no options granted in 2019 , 2018 or 2017 . The following table summarizes information about stock options outstanding and exercisable at December 25, 2019 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (In thousands, except per share amounts) Outstanding, beginning of year 502 $ 3.02 Exercised (362 ) $ 2.68 Outstanding, end of year 140 $ 3.89 1.1 $ 2,284 Exercisable, end of year 140 $ 3.89 1.1 $ 2,284 The total intrinsic value of the options exercised was $6.6 million , $4.9 million and $2.3 million during the years ended December 25, 2019 , December 26, 2018 and December 27, 2017 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 25, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provisions for income taxes were as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Current: Federal $ 12,421 $ (632 ) $ 3,688 State and local 5,156 1,833 2,071 Foreign 1,142 1,042 961 Deferred: Federal 9,944 5,432 10,075 State and local 6,061 761 196 (Decrease) increase of valuation allowance (2,935 ) 121 216 Total provision for income taxes $ 31,789 $ 8,557 $ 17,207 The reconciliation of income taxes at the U.S. federal statutory tax rate to our effective tax rate was as follows: December 25, 2019 December 26, 2018 December 27, 2017 Statutory provision rate 21 % 21 % 35 % State and local taxes, net of federal income tax benefit 8 6 5 Reduction in state valuation allowance (2 ) — — Wage addback on income tax credits earned — — 2 General business credits generated (2 ) (5 ) (5 ) Foreign tax credits generated (1 ) (2 ) (2 ) Share-based compensation (3 ) (3 ) (3 ) Impact of tax reform — — (3 ) Other — (1 ) 1 Effective tax rate 21 % 16 % 30 % On December 22, 2017, The Tax Cut and Jobs Act of 2017 (the “Tax Act”) was signed into law. The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, we revalued our deferred taxes as of December 27, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are realized. The net tax benefit recognized in 2017 related to the Tax Act was $1.6 million . For 2019, there was no significant difference between our effective tax rate and the statutory tax rate of 21%. The impact of state taxes on the statutory rate was partially offset by the generation of employment and foreign tax credits. In addition, the 2019 rate benefited $2.0 million related to share-based compensation and $2.0 million related to the completion of an Internal Revenue Service federal income audit of the 2016 tax year. The 2018 rate was primarily impacted by the Tax Act statutory tax rate reduction, state taxes and the generation of employment and foreign tax credits. In addition, the 2018 rate benefited $1.4 million from items related to share-based compensation. For the 2017 period, the difference in the overall effective rate from the U.S. statutory rate was primarily due to state taxes and the generation of employment and foreign tax credits. The 2017 rate also benefited $1.7 million from share-based compensation and $1.6 million from the revaluing of deferred tax assets and liabilities required under the Tax Act. The following table represents the approximate tax effect of each significant type of temporary difference that resulted in deferred income tax assets or liabilities. December 25, 2019 December 26, 2018 (In thousands) Deferred tax assets: Self-insurance accruals $ 4,202 $ 4,647 Finance lease liabilities 1,263 2,045 Operating lease liabilities 43,497 — Accrued exit cost 48 445 Interest rate swaps 11,491 1,157 Pension, other retirement and compensation plans 10,549 10,568 Deferred income 4,688 5,099 Other accruals — 633 Alternative minimum tax credit carryforwards — 928 General business and foreign tax credit carryforwards - state and federal 2,945 11,061 Net operating loss carryforwards - state 9,621 13,899 Total deferred tax assets before valuation allowance 88,304 50,482 Less: valuation allowance (10,264 ) (13,199 ) Total deferred tax assets 78,040 37,283 Deferred tax liabilities: Intangible assets (14,858 ) (14,631 ) Deferred finance costs (211 ) (286 ) Operating lease right-of-use assets (40,751 ) — Fixed assets (6,711 ) (5,033 ) Other accruals (791 ) — Total deferred tax liabilities (63,322 ) (19,950 ) Net deferred tax asset $ 14,718 $ 17,333 The Company’s state net operating loss tax asset of approximately $9.6 million includes $8.3 million related to South Carolina. The $2.9 million change in the valuation allowance primarily relates to the expiration of $3.6 million of South Carolina net operating loss carryforwards, partially offset by additional valuation allowances of $0.7 million on state enterprise zone credits and foreign tax credits that will never be utilized. Of the $10.3 million of the valuation allowance, $8.1 million related to South Carolina net operating loss carryforwards, $1.1 million related to state enterprise zone credits and $0.7 million related to foreign tax credit carryforwards, all of which will never be utilized. It is more likely than not that we will be able to utilize all of our existing temporary differences and most of our remaining state tax net operating losses and state credit tax carryforwards prior to their expiration. The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits: December 25, 2019 December 26, 2018 (In thousands) Balance, beginning of year $ 2,940 $ 1,469 Increase related to current-year tax positions — 941 (Decrease) increase related to prior-year tax positions (1,893 ) 530 Balance, end of year $ 1,047 $ 2,940 There was no interest expense associated with unrecognized tax benefits for the years ended December 25, 2019 and December 26, 2018 , respectively. We file income tax returns in the U.S. federal jurisdictions and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016. We completed our federal audit by the Internal Revenue Service for tax year 2016 during 2019. We remain subject to examination for U.S. federal taxes for 2017, 2018 and 2019 and in the following major state jurisdictions: California (2015-2019), Florida (2016-2019) and Texas (2015-2019). |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 25, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The amounts used for the basic and diluted net income per share calculations are summarized below: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands, except per share amounts) Net income $ 117,410 $ 43,693 $ 39,594 Weighted average shares outstanding - basic 59,944 63,364 68,077 Effect of dilutive share-based compensation awards 1,889 2,198 2,326 Weighted average shares outstanding - diluted 61,833 65,562 70,403 Basic net income per share $ 1.96 $ 0.69 $ 0.58 Diluted net income per share $ 1.90 $ 0.67 $ 0.56 Anti-dilutive share-based compensation awards 270 — 606 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 25, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Share Repurchases Our credit facility permits the purchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Over the past several years, our Board of Directors has approved share repurchase programs authorizing us to repurchase up to a set amount of shares or dollar amount of our common stock. Under the programs, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. During 2019, 2017 and 2016, the Board approved share repurchase programs for $250 million , $200 million and $100 million of our common stock, respectively. In recent years, as part of our previously authorized share repurchase programs, we have entered into variable term, capped accelerated share repurchase (“ASR”) agreements to repurchase our common stock. Pursuant to the terms of these ASR agreements, we pay cash, receive an initial delivery of shares of our common stock (which represents the minimum shares to be delivered based on the cap price) and record treasury stock related to these shares. The remaining balance is recorded as an equity forward contract. When settled, the final delivery of shares is received and treasury stock is recorded related to the additional shares. The total number of shares repurchased is based on a combined discounted volume-weighted average price (“VWAP”) per share, which is determined based on the average of the daily VWAP of our common stock, less a fixed discount, over the term of the ASR agreement. In November 2016, we entered into a $25 million ASR agreement with MUFG Securities EMEA plc (“MUFG”) (the “2016 ASR”). We paid $25 million in cash and received approximately 1.5 million shares of our common stock (which represents the minimum shares to be delivered based on the cap price) and recorded $18.1 million of treasury stock related to these shares. The remaining balance of $6.9 million was recorded as additional paid-in capital in shareholders’ deficit as of December 28, 2016 as an equity forward contract. During 2017, we settled the 2016 ASR agreement, recording $6.9 million of treasury stock related to the final delivery of an additional 0.5 million shares of our common stock based on a combined discounted VWAP of $12.36 per share. In November 2018, we entered into a $25 million ASR agreement with MUFG (the “2018 ASR”). We paid $25 million in cash and received approximately 1.1 million shares of our common stock (which represents the minimum shares to be delivered based on the cap price) and recorded $18.2 million of treasury stock related to these shares. The remaining balance of $6.8 million was recorded as additional paid-in capital in shareholders’ deficit as of December 26, 2018 as an equity forward contract. During 2019, we settled the 2018 ASR agreement, recording $6.8 million of treasury stock related to the final delivery of an additional 0.4 million shares of our common stock based on a combined discounted VWAP of $17.04 per share. During 2019, including the settlement of the 2018 ASR agreement, we repurchased a total of 5.3 million shares of our common stock for approximately $103.0 million . During 2018, including shares repurchased under the 2018 ASR, we repurchased a total of 3.9 million shares of our common stock for $61.2 million . In addition to the settlement of the 2016 ASR agreement, during 2017, we repurchased a total of 6.8 million shares for $82.9 million , thus completing the 2016 repurchase program. As of December 25, 2019 , there was $282.2 million remaining under the 2017 and 2019 repurchase programs. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statements of Shareholders’ Deficit. Accumulated Other Comprehensive Loss The components of the change in accumulated other comprehensive loss were as follows: Pensions Derivatives Accumulated Other Comprehensive Loss (In thousands) Balance as of December 28, 2016 $ (945 ) $ (462 ) $ (1,407 ) Benefit obligation actuarial loss (172 ) — (172 ) Amortization of net loss (1) 92 — 92 Settlement loss recognized 21 — 21 Net change in fair value of derivatives — (1,359 ) (1,359 ) Reclassification of derivatives to interest expense (2) — (72 ) (72 ) Income tax benefit 22 559 581 Balance as of December 27, 2017 $ (982 ) $ (1,334 ) $ (2,316 ) Benefit obligation actuarial gain 96 — 96 Amortization of net loss (1) 112 — 112 Net change in fair value of derivatives — (2,595 ) (2,595 ) Reclassification of derivatives to interest expense (2) — 307 307 Income tax (expense) benefit (53 ) 303 250 Balance as of December 26, 2018 $ (827 ) $ (3,319 ) $ (4,146 ) Benefit obligation actuarial loss (25 ) — (25 ) Amortization of net loss (1) 86 — 86 Net change in fair value of derivatives — (40,486 ) (40,486 ) Reclassification of derivatives to interest expense (2) — 291 291 Income tax (expense) benefit (15 ) 10,335 10,320 Balance as of December 25, 2019 $ (781 ) $ (33,179 ) $ (33,960 ) (1) Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Income. See Note 13 for additional details. (2) Amounts reclassified from accumulated other comprehensive loss into income represent payments made to the counterparty for the effective portions of the interest rate swaps. These amounts are included as a component of interest expense in our Consolidated Statements of Income. We expect to reclassify approximately $1.2 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 11 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 25, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have guarantees related to certain franchisee loans with terms extending from one to four years . Payments under these guarantees would result from the inability of a franchisee to fund required payments when due. Through December 25, 2019 , no events had occurred that caused us to make payments under the guarantees. There were $0.6 million and $2.5 million of loans outstanding under these programs as of December 25, 2019 and December 26, 2018 , respectively. As of December 25, 2019 , the maximum amount payable under the loan guarantees was $0.5 million . As a result of these guarantees, we have recorded liabilities of less than $0.1 million as of December 25, 2019 and December 26, 2018 , which are included as a component of other noncurrent liabilities in our Consolidated Balance Sheets and other nonoperating expense in our Consolidated Statements of Income. There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect the Company’s consolidated results of operations or financial position. We have amounts payable under purchase contracts for food and non-food products. Many of these agreements do not obligate us to purchase any specific volumes and include provisions that would allow us to cancel such agreements with appropriate notice. Our future purchase obligation payments due by period for both company and franchised restaurants at December 25, 2019 consist of the following: (In thousands) Less than 1 year $ 193,494 1-2 years — 3-4 years — 5 years and thereafter — Total $ 193,494 For agreements with cancellation provisions, amounts included in the table above represent our estimate of purchase obligations during the periods presented if we were to cancel these contracts with appropriate notice. We would likely take delivery of goods under such circumstances. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 25, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Income taxes paid, net $ 24,147 $ 3,254 $ 6,367 Interest paid $ 17,792 $ 19,447 $ 14,636 Noncash investing and financing activities: Noncash consideration received in connection with the sale of real estate $ 3,000 $ — $ — Notes received in connection with disposition of property $ 920 $ — $ 1,750 Property acquisition payable $ — $ — $ 500 Accrued purchase of property $ 1,791 $ 178 $ 531 Insurance proceeds receivable $ 48 $ 653 $ 364 Issuance of common stock, pursuant to share-based compensation plans $ 7,522 $ 4,671 $ 4,961 Execution of finance leases $ 305 $ 3,623 $ 6,573 Treasury stock payable $ 1,816 $ 72 $ 120 |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 25, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data (Unaudited) | Quarterly Data (Unaudited) The results for each quarter include all adjustments which, in our opinion, are necessary for a fair presentation of the results for interim periods. All adjustments are of a normal and recurring nature. Selected consolidated financial data for each quarter of fiscal 2019 and 2018 are set forth below: Fiscal Year Ended December 25, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales (1) $ 98,545 $ 95,447 $ 63,582 $ 48,803 Franchise and licensing revenue (1) 52,866 56,437 60,676 65,033 Total operating revenue (1) 151,411 151,884 124,258 113,836 Total operating costs and expenses (1) 127,280 105,769 56,084 87,273 Operating income (1) $ 24,131 $ 46,115 $ 68,174 $ 26,563 Net income (1) $ 15,490 $ 34,239 $ 49,122 $ 18,559 Basic net income per share (1)(2) $ 0.25 $ 0.57 $ 0.83 $ 0.32 Diluted net income per share (1)(2) $ 0.24 $ 0.55 $ 0.80 $ 0.31 Fiscal Year Ended December 26, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 101,193 $ 102,741 $ 103,609 $ 104,389 Franchise and licensing revenue 54,080 54,593 54,414 55,160 Total operating revenue 155,273 157,334 158,023 159,549 Total operating costs and expenses 138,848 138,374 139,554 139,789 Operating income $ 16,425 $ 18,960 $ 18,469 $ 19,760 Net income $ 9,759 $ 11,626 $ 10,805 $ 11,503 Basic net income per share (2) $ 0.15 $ 0.18 $ 0.17 $ 0.19 Diluted net income per share (2) $ 0.15 $ 0.18 $ 0.16 $ 0.18 (1) During 2019 , the Company migrated from a 90% franchised business model to one that is 96% franchised by selling company owned restaurants to franchisees which resulted in, among other items, a reduction in revenues and the recording of approximately $82.9 million of gains. In addition, the Company also recorded an additional $11.9 million of gains related to the sale of real estate. See Note 4 and Note 5 for details. (2) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 25, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We performed an evaluation of subsequent events and determined that no events required disclosure. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 25, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates . In preparing our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, management is required to make certain assumptions and estimates that affect reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingencies. In making these assumptions and estimates, management may from time to time seek advice and consider information provided by actuaries and other experts in a particular area. Actual amounts could differ materially from these estimates. |
Consolidation Policy | Consolidation Policy . Our Consolidated Financial Statements include the financial statements of Denny’s Corporation and its wholly-owned subsidiaries: Denny’s, Inc., DFO, LLC, Denny’s Realty, LLC and East Main Insurance Company. All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year . |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Receivables | Receivables. Receivables, which are recorded at net realizable value, primarily consist of trade accounts receivables and financing receivables from franchisees, vendor receivables and credit card receivables. Trade accounts receivables from franchisees consist of royalties, advertising and rent. Financing receivables from franchisees primarily consist of notes from franchisees related to the roll-out of equipment. We accrue interest on notes receivable based on the contractual terms. The allowance for doubtful accounts is based on pre-defined criteria and management’s judgment of existing receivables. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. |
Inventories | Inventories. Inventories consist of food and beverages and are valued at the lower of cost and net realizable value. |
Property and Depreciation | Property and Depreciation. Owned property is stated at cost. Property under finance leases are stated at the lesser of its fair value or the net present value of the related minimum lease payments at the lease inception. Maintenance and repairs are expensed as incurred. We depreciate owned property over its estimated useful life using the straight-line method. We amortize property held under finance leases (at capitalized value) over the lesser of its estimated useful life or the lease term. Building assets are assigned estimated useful lives that range from five to 30 years . Equipment assets are assigned lives that range from two to ten years . Leasehold improvements are generally assigned lives between five and 15 years limited by the expected lease term. |
Goodwill | Goodwill. Amounts recorded as goodwill primarily represent excess reorganization value recognized as a result of our 1998 bankruptcy. We also record goodwill in connection with the acquisition of restaurants from franchisees. Likewise, upon the sale of restaurant operations to franchisees, goodwill is decremented. We test goodwill for impairment at each fiscal year end and more frequently if circumstances indicate impairment may exist. Such indicators include, but are not limited to, a significant decline in our expected future cash flows, a significant adverse decline in our stock price, significantly adverse legal developments and a significant change in the business climate. |
Intangible Assets | Intangible Assets . Intangible assets consist primarily of trade names and reacquired franchise rights. Trade names are considered indefinite-lived intangible assets and are not amortized. Reacquired franchise rights are amortized using the straight-line basis over the term of the related franchise agreement. Reacquired franchise rights resulting from acquisitions are accounted for using the purchase method of accounting and are estimated by management based on the fair value of the assets received. We test trade name assets for impairment at each fiscal year end, and more frequently if circumstances indicate impairment may exist. We assess impairment of reacquired franchise rights whenever changes or events indicate that the carrying value may not be recoverable. Costs incurred to renew or extend the term of recognized intangible assets are recorded in general and administrative expenses in our Consolidated Statements of Income. |
Marketable Securities | Marketable Securities. Marketable securities included in other noncurrent assets consist of trading debt and equity mutual funds and are recorded at fair market value in our Consolidated Balance Sheets. These securities represent the plan assets of our nonqualified deferred compensation plan (the “plan assets”). The plan assets are held in a rabbi trust. Each plan participant’s account is comprised of their contribution, our matching contribution (made prior to 2016) and each participant’s share of earnings or losses in the plan. We have recorded offsetting deferred compensation liabilities as a component of other noncurrent liabilities in our Consolidated Balance Sheets. |
Deferred Financing Costs | Deferred Financing Costs. Costs related to the issuance of debt are deferred and amortized as a component of interest expense using the effective interest method over the terms of the respective debt issuances. |
Self-insurance Liabilities | Self-insurance Liabilities. We record liabilities for insurance claims during periods in which we have been insured under large deductible programs or have been self-insured for our medical claims and workers’ compensation, general, product and automobile insurance liabilities. The liabilities for prior and current estimated incurred losses are discounted to their present value based on expected loss payment patterns determined by independent actuaries using our actual historical payments. These estimates include assumptions regarding claims frequency and severity as well as changes in our business environment, medical costs and the regulatory environment that could impact our overall self-insurance costs. |
Income Taxes | Income Taxes. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. All deferred taxes are reported as noncurrent in our Consolidated Balance Sheets. A valuation allowance reduces our net deferred tax asset to the amount that is more likely than not to be realized. We make certain estimates and judgments in the calculation of our provision for incomes taxes, in the resulting tax liabilities, and in the recoverability of deferred tax assets. |
Leases and Subleases, Lessee | Leases and Subleases. Effective December 27, 2018, the first day of fiscal 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. See the “Newly Adopted Accounting Standards” section of this Note 2 for further information on our adoption and Note 3 for further information about our transition to Topic 842 and the newly required disclosures. Lessee We lease certain real estate and equipment for our restaurants and support facilities. At contract inception, we determine whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. We recognize a lease liability and a right-of-use (“ROU”) asset at the lease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases, and is subsequently measured at amortized cost using the effective interest method. Operating lease ROU assets are initially and subsequently measured throughout the lease term at the carrying amount of the lease liability adjusted for initial direct costs, prepayments, accrued payments and lease incentives, if any. Lease cost is recognized on a straight-line basis over the lease term. Operating lease payments are classified as cash flows for operating activities with ROU asset amortization and the change in the lease liability combined as "Operating lease assets/liabilities" in the reconciliation of net income to net cash flows provided by operating activities in the Consolidated Statement of Cash Flows. Finance lease ROU assets are initially measured at cost and subsequently amortized on a straight-line basis over the lesser of the useful life or the lease term. Finance lease payments are classified as cash flows used in financing activities in the Consolidated Statement of Cash Flows. Operating and finance lease ROU assets are assessed for impairment using the long-lived assets impairment guidance. We use a consistent lease term for calculating the depreciation period for the related assets, classifying the lease and computing periodic rent expense where the lease terms include escalations in rent over the lease term. The new lease guidance provides practical expedients and accounting elections for our ongoing accounting after adoption. We elected the practical expedient to not separate nonlease components (such as common area maintenance) from lease components in regard to all leases and the portfolio approach in applying the discount rate to our leases. Key estimates and judgments include how we determine (1) lease payments, (2) lease term and (3) the discount rate used to discount the unpaid lease payments to present value. We have certain lease agreements structured with both a fixed base rent and a contingent rent based on a percentage of sales over contractual levels, others with only contingent rent based on a percentage of sales and some with a fixed base rent adjusted periodically for inflation or changes in the fair market rent rate. Contingent rent is recognized as sales occur. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The exercise of lease renewal options is at our sole discretion, except in certain sublease situations in which we have determined that it is reasonably certain that one or more options will be exercised, including where the exercise of a sublease option compels us to exercise the renewal option of the underlying master lease. Renewal option periods are included in the measurement of lease ROU asset and lease liability where the exercise is reasonably certain to occur. The discount rate used to determine the present value of the lease payments is our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as we generally cannot determine the interest rate implicit in the lease. |
Leases and Subleases, Lessor | Lessor We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are the same as the lessee leases described above. Contingent rental income is recognized when earned. Similar to our lessee accounting, we elected the lessor practical expedient to not separate nonlease components from lease components in regard to all leases. |
Employee Benefit Plans | Employee Benefit Plans. Each year we measure and recognize the funded status of our defined benefit plans in our Consolidated Balance Sheets as of December 31. That date represents the month-end that is closest to our fiscal year-end. The funded status is adjusted for any contributions or significant events (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) that occurs between our fiscal year-end and December 31. |
Derivative Instruments | Derivative Instruments. We use derivative financial instruments to manage our exposure to interest rate risk. We do not enter into derivative instruments for trading or speculative purposes. All derivatives are recognized on our Consolidated Balance Sheets at fair value. Changes in the fair values of derivatives are recorded in earnings or other comprehensive income ( “ OCI ” |
Contingencies and Litigation | Contingencies and Litigation. We are subject to legal proceedings involving ordinary and routine claims incidental to our business, as well as legal proceedings that are nonroutine and include compensatory or punitive damage claims. Our ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. When the reasonable estimate is a range, the recorded loss will be the best estimate within the range. We record legal settlement costs as other operating expenses in our Consolidated Statements of Income as those costs are incurred. |
Comprehensive Income | Comprehensive Income. Comprehensive income includes net income and OCI items that are excluded from net income under U.S. generally accepted accounting principles. OCI items include additional minimum pension liability adjustments and the effective unrealized portion of changes in the fair value of cash flow hedges. |
Segment | Segment. Denny’s operates in only one segment. All significant revenues and pre-tax earnings relate to retail sales of food and beverages to the general public through either company or franchised restaurants. |
Revenues | Revenues. Effective December 28, 2017, the first day of fiscal 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASUs that modified Topic 606. We elected to apply the modified retrospective method of adoption to those contracts which were not completed as of December 28, 2017. In doing so, we applied the practical expedient to aggregate all contract modifications that occurred before December 28, 2017 in determining the satisfied and unsatisfied performance obligations, the transaction price and the allocation of the transaction price to the satisfied and unsatisfied performance obligations. Results for reporting periods beginning after December 28, 2017 are presented under Topic 606. Prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Accounting Standards Codification (“ASC”) 605 “Revenue Recognition (Topic 605)”. Company Restaurant Revenue. Company restaurant revenue is recognized at the point in time when food and beverage products are sold at company restaurants. We present company restaurant sales net of sales-related taxes collected from customers and remitted to governmental taxing authorities. Franchise Revenue. Franchise and license revenues consist primarily of royalties, advertising revenue, initial and other fees and occupancy revenue. Under franchise agreements we provide franchisees with a license of our brand’s symbolic intellectual property, administration of advertising programs (including local co-operatives), and other ongoing support functions. These services are highly interrelated so we do not consider them to be individually distinct performance obligations, and therefore account for them as a single performance obligation. Revenue from franchise agreements is recognized evenly over the term of the agreement with the exception of sales-based royalties. Royalty and advertising revenues represent sales-based royalties that are recognized in the period in which the sales occur. Sales-based royalties are variable consideration related to our performance obligation to our franchisees to maintain the intellectual property being licensed. Under our franchise agreements, franchisee advertising contributions must be spent on marketing and related activities. Upon adoption of Topic 606, advertising revenues and expenditures are recorded on a gross basis within the Consolidated Statements of Income. Under the previous guidance of Topic 605, we recorded franchise advertising expense net of contributions from franchisees to our advertising programs, including local co-operatives. While this change materially impacts the gross amount of reported franchise and license revenue and costs of franchise and license revenue, the impact is generally an offsetting increase to both revenue and expense with little, if any, impact on operating income and net income. Initial and other fees consist of initial, successor and assignment franchise fees (“initial franchise fees”). Initial franchise fees are billed and received upon the signing of the franchise agreement. Under Topic 606, recognition of these fees is deferred until the commencement date of the agreement and occurs over time based on the term of the underlying franchise agreement. In the event a franchise agreement is terminated, any remaining deferred fees are recognized in the period of termination. Under the previous guidance, initial franchise fees were recognized upon the opening of a franchised restaurant. Initial and other fees also include revenue that are distinct from the franchise agreement and are separate performance obligations. Training and other franchise services fees are billed and recognized at a point in time as services are rendered. Similar to advertising revenue, upon adoption of Topic 606, other franchise services fees are recorded on a gross basis within the Consolidated Statements of Income, whereas, under previous guidance, they were netted against the related expenses. Occupancy revenue results from leasing or subleasing restaurants to franchisees and is recognized over the term of the lease agreement. Gift cards. We sell gift cards which have no stated expiration dates in our company restaurants, franchised restaurants and at certain third party retailers. We recognize revenue when a gift card is redeemed in one of our company restaurants. We maintain a gift card liability for cards sold in our company restaurants and for cards sold by third parties. Upon adoption of Topic 606, gift card breakage is recognized proportionally as redemptions occur. Our gift card breakage primarily relates to cards sold by third parties and is recorded as advertising revenue (included as a component of franchise and license revenue). Under previous guidance, we recorded gift card breakage when the likelihood of redemption was remote. Breakage was recorded as a benefit to our advertising fund or reduction to other operating expenses, depending on where the gift cards were sold. |
Advertising Costs | Advertising Costs . |
Restructuring and Exit Costs | Restructuring and Exit Costs. Restructuring and exit costs are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Restructuring costs consist primarily of severance and other restructuring charges for terminated employees. Prior to the adoption of Topic 842, exit costs consisted primarily of the costs of future obligations related to closed restaurants. Discounted liabilities for future lease costs and the fair value of related subleases of closed restaurants were recorded when the restaurants were closed. All other costs related to closed restaurants were expensed as incurred. As a result of the adoption of Topic 842, exit cost liabilities related to operating lease costs are now included as a component of operating lease liabilities in our Consolidated Balance Sheets. Amounts recorded as exit costs include period costs related to closed units. |
Disposal or Impairment of Long-lived Assets | Disposal or Impairment of Long-lived Assets. We evaluate our long-lived assets for impairment at the restaurant level on a quarterly basis, when assets are identified as held for sale or whenever changes or events indicate that the carrying value may not be recoverable. For assets identified as held for sale, we use the market approach and consider proceeds from similar asset sales. We assess impairment of restaurant-level assets based on the operating cash flows of the restaurant, expected proceeds from the sale of assets and our plans for restaurant closings. Generally, all restaurants with negative cash flows from operations for the most recent twelve months at each quarter end are included in our assessment. For underperforming assets, we use the income approach to determine both the recoverability and estimated fair value of the assets. To estimate future cash flows, we make certain assumptions about expected future operating performance, such as revenue growth, operating margins, risk-adjusted discount rates, and future economic and market conditions. If the long-lived assets of a restaurant are not recoverable based upon estimated future, undiscounted cash flows, we write the assets down to their fair value. If these estimates or their related assumptions change in the future, we may be required to record additional impairment charges. These charges are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. Assets held for sale consist of real estate properties and/or restaurant operations that we expect to sell within the next year. The assets are reported at the lower of carrying amount or fair value less costs to sell. We cease recording depreciation on assets that are classified as held for sale. If the determination is made that we no longer expect to sell an asset within the next year, the asset is reclassified out of held for sale. |
Discontinued Operations | Discontinued Operations. We evaluate restaurant closures and assets reclassified to assets held for sale for potential disclosure as discontinued operations. Only disposals resulting in a strategic shift that will have a major effect on our operations and financial results are reported as discontinued operations. There were no such disposals, nor any disposals of individually significant components. The gains and losses related to restaurant closures and assets reclassified to assets held for sale are included as a component of operating (gain), losses and other charges, net in our Consolidated Statements of Income. |
Gains and Losses on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets | Gains and Losses on Sales of Restaurants Operations to Franchisees, Real Estate and Other Assets. Generally, gains and losses on sales of restaurant operations to franchisees (which may include real estate), real estate properties and other assets are recognized when the sales are consummated and certain other gain recognition criteria are met. Total gains and losses are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. |
Share-based Compensation | Also in accordance with ASU 2016-09, starting in 2017, excess tax benefits recognized related to share-based compensation are included as a component of provision for income taxes in our Consolidated Statements of Income and are classified as operating activities in our Consolidated Statements of Cash Flows. Share-based Compensation. Generally, compensation expense related to performance share units and restricted stock units for board members is based on the number of units expected to vest, the period over which they are expected to vest and the fair market value of our common stock on the date of the grant. For restricted stock units and performance share units that contain a market condition, compensation expense is based on the Monte Carlo valuation method, which utilizes multiple input variables to determine the probability of the Company achieving the market condition and the fair value of the award. The key assumptions used include expected volatility and risk-free interest rates over the term of the award. Subsequent to the vesting period, earned stock-settled restricted stock units and performance share units (both of which are equity classified) are paid to the holder in shares of our common stock, provided the holder was still employed with Denny’s or an affiliate as of the vesting date. |
Earnings Per Share | Earnings Per Share . Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period. |
Reclassifications | Reclassifications. We have reclassified certain prior year amounts to conform to the current year presentation. These reclassifications have not changed the results of operations of prior periods. |
Newly Adopted Accounting Standards and Accounting Standards to be Adopted | Newly Adopted Accounting Standards Effective December 27, 2018, the first day of fiscal 2019, we adopted ASU Topic 842 and all subsequent ASUs that modified Topic 842. The new guidance established a ROU model that requires lessees to recognize a ROU asset and a lease liability for all leases with terms greater than 12 months. Lessees classify leases as financing or operating. The guidance requires lessors to classify leases as sales-type, direct financing or operating. We elected to apply the modified retrospective transition approach as the date of initial application without restating comparative period financial statements. Results for reporting periods beginning after December 26, 2018 are presented under Topic 842. Prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 840, “Leases (Topic 840)”. Our transition to Topic 842 represents a change in accounting principle. The new guidance provided a number of optional practical expedients in transition. We elected the package of practical expedients that permitted us not to reassess our prior conclusions regarding lease identification, lease classification or initial direct costs. In addition, we did not elect the practical expedient which would have permitted us to use hindsight in evaluating our leases, nor did we elect the land easement practical expedient. In preparation for adoption, we implemented a new lease management system. Upon adoption of Topic 842, we recorded operating lease liabilities of $101.3 million and ROU assets of $94.2 million related to existing operating leases. In addition, we recorded a cumulative effect adjustment increasing opening deficit by $0.4 million and deferred tax assets by $0.1 million . The lease liabilities were based on the present value of remaining rental payments under previous leasing standards for existing operating leases primarily related to real estate leases. Exit cost and straight-line lease liabilities that existed at the adoption date were reclassified against the ROU assets upon adoption. The amount recorded to opening deficit represents the initial impairment of ROU assets, net of the deferred tax impact. See Note 3 for further information about our transition to Topic 842 and the required disclosures. Additional new accounting guidance became effective for us as of December 27, 2018 that we reviewed and concluded was either not applicable to our operations or had no material effect on our Consolidated Financial Statements and related disclosures. Accounting Standards to be Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform financial statement users of credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 (our fiscal 2020) with early adoption permitted for annual and interim periods beginning after December 15, 2018 (our fiscal 2019). We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our Consolidated Financial Statements as a result of future adoption. |
Introduction and Basis of Rep_2
Introduction and Basis of Reporting (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of changes in restaurant counts | Changes in restaurant counts are as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 Company restaurants, beginning of period 173 178 169 Units opened — 1 3 Units acquired from franchisees — 6 10 Units sold to franchisees (105 ) (8 ) (4 ) Units closed — (4 ) — End of period 68 173 178 Franchised and licensed restaurants, beginning of period 1,536 1,557 1,564 Units opened 30 29 36 Units purchased from Company 105 8 4 Units acquired by Company — (6 ) (10 ) Units closed (36 ) (52 ) (37 ) End of period 1,635 1,536 1,557 Total restaurants, end of period 1,703 1,709 1,735 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Leases [Abstract] | |
Schedule of components of lease costs and lease terms and discount rates | The components of lease costs were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease costs Finance lease costs: Amortization of right-of-use assets Depreciation and amortization $ 2,991 Interest on lease liabilities Interest expense, net 4,536 Operating lease costs: Operating lease costs - company Occupancy 8,253 Operating lease costs - franchise Costs of franchise and license revenue 17,097 Operating lease costs - general and administrative General and administrative expenses 108 Variable lease costs: Variable lease costs - company Occupancy 5,993 Variable lease costs - franchise Costs of franchise and license revenue 7,001 Variable lease costs - general and administrative General and administrative expenses 41 Variable lease costs - closed stores Restructuring charges and exit costs 49 Sublease income: Sublease income - franchise Franchise and license revenue (28,986 ) Sublease income - closed stores Restructuring charges and exit costs (306 ) Total lease costs $ 16,777 Lease terms and discount rates were as follows: December 25, 2019 Weighted-average remaining lease term (in years): Finance leases 9.7 Operating leases 10.8 Weighted-average discount rate: Finance leases 23.5 % Operating leases 5.9 % Cash and supplemental noncash amounts were as follows: Fiscal Year Ended December 25, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 4,536 Operating cash flows from operating leases $ 26,329 Financing cash flows from finance leases $ 2,464 Right-of-use assets obtained in exchange for new finance lease liabilities $ 305 Right-of-use assets obtained in exchange for new operating lease liabilities $ 79,534 |
Schedule of components of lease income | The components of lease income were as follows: Fiscal Year Ended Classification December 25, 2019 (In thousands) Lease income Operating lease income - franchise Franchise and license revenue $ 28,050 Operating lease income - closed stores Restructuring charges and exit costs 255 Variable lease income - franchise Franchise and license revenue 10,464 Variable lease income - closed stores Restructuring charges and exit costs 49 Total lease income $ 38,818 |
Schedule of finance lease liability maturity | Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 |
Schedule of lessee lease liability maturity | Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 |
Schedule of lessor operating lease payments to be received maturity | Maturities of lease liabilities and receipts in accordance with Topic 842 as of December 25, 2019 were as follows: Lease Liabilities Lease Receipts Finance Operating Operating (In thousands) 2020 $ 4,654 $ 26,148 $ 32,435 2021 4,413 24,097 30,711 2022 4,208 21,972 29,182 2023 3,693 20,185 27,113 2024 3,162 18,693 25,610 Thereafter 22,510 123,693 207,063 Total undiscounted cash flows 42,640 234,788 $ 352,114 Less: interest 26,187 65,694 Present value of lease liabilities 16,453 169,094 Less: current lease liabilities 1,674 16,344 Long-term lease liabilities $ 14,779 $ 152,750 |
Schedule of rental expense and income | Rental expense and income in accordance with Topic 840 as of December 26, 2018 and December 27, 2017, respectively, were comprised of the following: Fiscal Year Ended December 26, 2018 December 27, 2017 (In thousands) Rental expense: Included as a component of occupancy: Base rents $ 10,272 $ 9,315 Contingent rents 3,074 3,168 Included as a component of costs of franchise and license expense: Base rents 15,108 17,674 Contingent rents 2,629 2,864 Total rental expense $ 31,083 $ 33,021 Rental income: Included as a component of franchise and license revenue: Base rents $ 22,831 $ 25,781 Contingent rents 4,662 5,042 Total rental income $ 27,493 $ 30,823 |
Schedule of future minimum lease payments for capital leases | Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Schedule of future minimum rental payments for operating leases | Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Schedule of operating leases future minimum payments receivable | Maturities of lease liabilities and amounts to be received as lessor or sublessor under non-cancelable leases in accordance with Topic 840 as of December 26, 2018 were as follows: Commitments Lease Receipts Capital Operating Operating (In thousands) 2019 $ 9,271 $ 23,504 $ 21,001 2020 8,664 20,161 18,493 2021 8,010 17,316 16,573 2022 7,320 14,646 14,887 2023 6,451 11,881 12,932 Thereafter 33,670 49,004 65,273 Total 73,386 $ 136,512 $ 149,159 Less imputed interest 42,795 Present value of capital lease obligations $ 30,591 |
Refranchisings and Acquisitio_2
Refranchisings and Acquisitions (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Refranchisings and Acquisitions [Abstract] | |
Schedule of activity related to our refranchising and development strategy | The following table summarizes the activity related to our refranchising and development strategy. Gains (losses) on the sales of company restaurants and real estate are included as a component of operating (gains), losses and other charges, net in our Consolidated Statements of Income. See Note 5 . Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (Dollars in thousands) Restaurants sold to franchisees 105 8 4 Gains (losses) on sales of company restaurants: Cash Proceeds $ 118,964 $ 1,777 $ 751 Receivables 920 — — Less: Property sold (30,511 ) (2,448 ) (996 ) Less: Goodwill (2,897 ) (62 ) (23 ) Less: Intangibles (2,260 ) (13 ) — Less: Deferred gain (1,350 ) — — Total gains (losses) on sales of company restaurants $ 82,866 $ (746 ) $ (268 ) Real estate parcels sold 6 — 3 Gains on sales of real estate: Cash proceeds $ 10,680 $ — $ 3,247 Noncash consideration 3,000 — — Less: Property sold (1,686 ) — (1,103 ) Less: Other assets (120 ) — (226 ) Total gains on sales of real estate $ 11,874 $ — $ 1,918 |
Schedule restaurant and real estate acquisition activity | The following table summarizes our restaurant and real estate acquisition activity. Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (Dollars in thousands) Restaurants acquired from franchisees (1) — 6 11 Purchase price allocation: Reacquired franchise rights $ — $ 5,434 $ 4,476 Property — 1,121 1,293 Goodwill — 1,574 3,022 Total purchase price $ — $ 8,129 $ 8,791 Finance leases recorded $ — $ 2,409 $ 2,321 Real estate parcels acquired 5 1 2 Total purchase price $ 11,320 $ 1,787 $ 4,062 (1) 2017 includes one restaurant acquired from a former franchisee. |
Operating (Gains), Losses and_2
Operating (Gains), Losses and Other Charges, Net (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of operating (gains) losses and other charges net | Operating (gains), losses and other charges, net were comprised of the following: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Gains on sales of assets and other, net $ (93,608 ) $ (513 ) $ (1,729 ) Software implementation costs — — 5,247 Restructuring charges and exit costs 2,428 1,575 485 Impairment charges — 1,558 326 Operating (gains), losses and other charges, net $ (91,180 ) $ 2,620 $ 4,329 |
Schedule of restructuring charges and exit costs | Restructuring charges and exit costs were comprised of the following: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Exit costs $ 272 $ 518 $ 385 Severance and other restructuring charges 2,156 1,057 100 Total restructuring charges and exit costs $ 2,428 $ 1,575 $ 485 |
Components of change in accrued exit cost liabilities | The components of the change in accrued exit cost liabilities for the fiscal year-ended December 26, 2018 were as follows: Balance, beginning of year $ 1,180 Exit costs (1) 518 Payments, net of sublease receipts (615 ) Interest accretion 72 Balance, end of year 1,155 Less current portion included in other current liabilities 546 Long-term portion included in other noncurrent liabilities $ 609 (1) Included as a component of operating (gains), losses and other charges, net. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Receivables [Abstract] | |
Schedule of receivables, net | Receivables, net were comprised of the following: December 25, 2019 December 26, 2018 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 14,551 $ 11,459 Financing receivables from franchisees 2,230 3,211 Vendor receivables 3,260 4,016 Credit card receivables 6,806 5,955 Other 915 1,942 Allowance for doubtful accounts (274 ) (300 ) Total receivables, net $ 27,488 $ 26,283 Other noncurrent assets: Financing receivables from franchisees $ 364 $ 1,528 |
Property (Tables)
Property (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, net | Property, net consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Land $ 39,720 $ 33,566 Buildings and leasehold improvements 172,881 241,990 Other property and equipment 32,470 68,315 Total property owned 245,071 343,871 Less accumulated depreciation 147,445 226,620 Property owned, net $ 97,626 $ 117,251 The following table reflects the property assets, included in the table above, and buildings with finance leases which were leased to franchisees: December 25, 2019 December 26, 2018 (In thousands) Land $ 27,205 $ 16,730 Buildings and leasehold improvements 78,584 53,790 Total property owned, leased to franchisees 105,789 70,520 Less accumulated depreciation 65,476 46,354 Property owned, leased to franchisees, net 40,313 24,166 Buildings held under finance leases, leased to franchisees 8,445 5,776 Less accumulated amortization 3,768 2,746 Property held under finance leases, leased to franchisees, net 4,677 3,030 Total property leased to franchisees, net $ 44,990 $ 27,196 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amounts of goodwill | The following table reflects the changes in carrying amounts of goodwill: December 25, 2019 December 26, 2018 (In thousands) Balance, beginning of year $ 39,781 $ 38,269 Additions related to acquisitions — 1,574 Adjustments related to the sale of restaurants (2,949 ) (62 ) Balance, end of year $ 36,832 $ 39,781 |
Schedule of indefinite-lived intangible assets | Intangible assets were comprised of the following: December 25, 2019 December 26, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 166 — Intangible assets with definite lives: Reacquired franchise rights 15,516 5,767 19,933 5,119 Intangible assets $ 59,723 $ 5,767 $ 64,186 $ 5,119 |
Schedule of finite-lived intangible assets | Intangible assets were comprised of the following: December 25, 2019 December 26, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 166 — Intangible assets with definite lives: Reacquired franchise rights 15,516 5,767 19,933 5,119 Intangible assets $ 59,723 $ 5,767 $ 64,186 $ 5,119 |
Schedule of estimated amortization expense for intangible assets with definite lives | Estimated amortization expense for intangible assets with definite lives in the next five years is as follows: (In thousands) 2020 $ 2,289 2021 1,347 2022 1,240 2023 915 2024 845 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Other current liabilities consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Accrued payroll $ 19,689 $ 23,395 Accrued insurance, primarily current portion of liability for insurance claims 6,515 7,323 Accrued taxes 5,624 7,667 Accrued advertising 6,753 7,413 Gift cards 6,469 6,546 Other 12,257 9,446 Other current liabilities $ 57,307 $ 61,790 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (In thousands ) Fair value measurements as of December 25, 2019: Deferred compensation plan investments (1) $ 13,517 $ 13,517 $ — $ — Interest rate swaps, net (2) (44,670 ) — (44,670 ) — Investments (3) 3,649 — 3,649 — Total $ (27,504 ) $ 13,517 $ (41,021 ) $ — Fair value measurements as of December 26, 2018: Deferred compensation plan investments (1) $ 11,235 $ 11,235 $ — $ — Interest rate swaps (2) (4,475 ) — (4,475 ) — Investments (3) 1,709 — 1,709 — Total $ 8,469 $ 11,235 $ (2,766 ) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 11 for details on the interest rate swaps. (3) The fair value of investments is valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: December 25, 2019 December 26, 2018 (In thousands) Revolving loans $ 240,000 $ 286,500 Finance lease obligations 16,453 30,591 Total long-term debt 256,453 317,091 Less current maturities 1,674 3,410 Noncurrent portion of long-term debt $ 254,779 $ 313,681 |
Schedule of interest rate swaps | A summary of our interest rate swaps as of December 25, 2019 is as follows: Trade Date Effective Date Maturity Date Notional Amount Fixed Rate (In thousands) March 20, 2015 March 29, 2018 March 31, 2025 $ 120,000 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 2.46 % February 15, 2018 March 31, 2020 December 31, 2033 $ 80,000 (1) 3.19 % (1) The notional amount of the swaps entered into on February 15, 2018 increases annually beginning September 30, 2020 until they reach the maximum notional amount of $425.0 million on September 28, 2029. |
Revenues Revenues (Tables)
Revenues Revenues (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table disaggregates our revenue by sales channels and types of goods or services. Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (1) Company restaurant sales $ 306,377 $ 411,932 $ 390,352 Franchise and license revenue: Royalties 108,813 101,557 100,631 Advertising revenue 81,144 78,308 — Initial and other fees 6,541 6,422 2,466 Occupancy revenue 38,514 31,960 35,720 Franchise and license revenue 235,012 218,247 138,817 Total operating revenue $ 541,389 $ 630,179 $ 529,169 (1) As disclosed in Note 2, prior period amounts have not been adjusted under the modified retrospective method of adoption of Topic 606. |
Components of the change in deferred franchise revenue | The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 26, 2018 $ 20,538 Fees received from franchisees 5,634 Revenue recognized (1) (2,916 ) Balance, December 25, 2019 23,256 Less current portion included in other current liabilities 2,235 Deferred franchise revenue included in other noncurrent liabilities $ 21,021 (1) Of this amount $2.5 million was included in the deferred franchise revenue balance as of December 26, 2018. |
Schedule of deferred franchise revenue recognition | As of December 25, 2019 , the deferred franchise revenue expected to be recognized in the future is as follows: (In thousands) 2020 $ 2,235 2021 2,049 2022 1,940 2023 1,860 2024 1,809 Thereafter 13,363 Deferred franchise revenue $ 23,256 |
Financial statement impact of adoption | The following tables summarize the impact of adopting Topic 606 on our financial statement line items as of December 26, 2018 and for the quarter and year ended December 26, 2018 . Year ended December 26, 2018 Consolidated Balance Sheet As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Prepaid and other current assets $ 10,866 $ 509 $ 11,375 Deferred income taxes 17,333 (4,988 ) 12,345 Other current liabilities 61,790 (407 ) 61,383 Other noncurrent liabilities 48,087 (18,370 ) 29,717 Deficit (306,414 ) 14,298 (292,116 ) Quarter ended December 26, 2018 Year ended December 26, 2018 Consolidated Statement of Income As Reported Adjustments Amounts without adoption of Topic 606 As Reported Adjustments Amounts without adoption of Topic 606 (In thousands, except per share amounts) Franchise and license revenue $ 55,160 $ (21,162 ) $ 33,998 $ 218,247 $ (82,815 ) $ 135,432 Costs of franchise and license revenue 28,517 (20,962 ) 7,555 114,296 (81,268 ) 33,028 Provision for income taxes 1,340 (52 ) 1,288 8,557 (400 ) 8,157 Net income 11,503 (148 ) 11,355 43,693 (1,147 ) 42,546 Basic net income per share 0.19 (0.01 ) 0.18 0.69 (0.02 ) 0.67 Diluted net income per share 0.18 — 0.18 0.67 (0.02 ) 0.65 Quarter ended December 26, 2018 Year ended December 26, 2018 Consolidated Statement of Comprehensive Income As Reported Adjustments Amounts without adoption of Topic 606 As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Net income $ 11,503 $ (148 ) $ 11,355 $ 43,693 $ (1,147 ) $ 42,546 Total comprehensive income 4,816 (148 ) 4,668 41,863 (1,147 ) 40,716 Year ended December 26, 2018 Consolidated Statement of Cash Flow As Reported Adjustments Amounts without adoption of Topic 606 (In thousands) Net income $ 43,693 $ (1,147 ) $ 42,546 Deferred income tax expense 6,193 (400 ) 5,793 Changes in assets and liabilities: Other current assets 921 (509 ) 412 Other accrued liabilities (1,676 ) 573 (1,103 ) Other noncurrent liabilities (4,418 ) 1,483 (2,935 ) Net cash flows provided by operating activities 73,690 — 73,690 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of pension and other defined benefit plan obligations and funded status | The following table provides a reconciliation of the changes in the benefit obligations, plan assets, and funded status of our defined benefit plans: December 25, 2019 December 26, 2018 (In thousands) Change in Benefit Obligation: Benefit obligation at beginning of year $ 2,393 $ 2,608 Interest cost 81 76 Actuarial losses (gains) 25 (96 ) Benefits paid (162 ) (195 ) Benefit obligation at end of year $ 2,337 $ 2,393 Accumulated benefit obligation $ 2,337 $ 2,393 Change in Plan Assets: Fair value of plan assets at beginning of year $ — $ — Employer contributions 162 195 Benefits paid (162 ) (195 ) Fair value of plan assets at end of year $ — $ — Unfunded status at end of year $ (2,337 ) $ (2,393 ) Amounts recognized on the balance sheet: Other current liabilities $ (662 ) $ (584 ) Other noncurrent liabilities (1,675 ) (1,809 ) Net amount recognized $ (2,337 ) $ (2,393 ) Amounts in accumulated other comprehensive loss not yet reflected in net period benefit cost: Unamortized actuarial losses, net $ (823 ) $ (885 ) Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: Benefit obligation actuarial (loss) gain $ (25 ) $ 96 Amortization of net loss 86 112 Other comprehensive income $ 61 $ 208 |
Components of net periodic benefit cost | The components of net periodic benefit cost were as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Interest cost $ 81 $ 76 $ 83 Amortization of net loss 86 112 92 Settlement loss recognized — — 21 Net periodic benefit cost $ 167 $ 188 $ 196 |
Schedule of expected benefit payments | Benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2025 through 2029 are as follows: Defined Benefit Plans (In thousands) 2020 $ 662 2021 223 2022 327 2023 418 2024 132 2025 through 2029 640 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of total share-based compensation | Total share-based compensation expense included as a component of net income was as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Performance share awards $ 5,765 $ 5,039 $ 7,838 Restricted stock units for board members 929 999 703 Total share-based compensation $ 6,694 $ 6,038 $ 8,541 |
Schedule of restricted stock units activity | The following table summarizes the performance share units activity during the year ended December 25, 2019 : Units Weighted Average Grant Date Fair Value (In thousands) Outstanding, beginning of year 1,688 $ 12.65 Granted 631 $ 19.02 Vested (631 ) $ 9.48 Forfeited (7 ) $ 14.48 Outstanding, end of year 1,681 $ 16.22 Convertible, end of year 586 $ 12.59 |
Schedule of stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at December 25, 2019 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (In thousands, except per share amounts) Outstanding, beginning of year 502 $ 3.02 Exercised (362 ) $ 2.68 Outstanding, end of year 140 $ 3.89 1.1 $ 2,284 Exercisable, end of year 140 $ 3.89 1.1 $ 2,284 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provisions for income taxes | The provisions for income taxes were as follows: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Current: Federal $ 12,421 $ (632 ) $ 3,688 State and local 5,156 1,833 2,071 Foreign 1,142 1,042 961 Deferred: Federal 9,944 5,432 10,075 State and local 6,061 761 196 (Decrease) increase of valuation allowance (2,935 ) 121 216 Total provision for income taxes $ 31,789 $ 8,557 $ 17,207 |
Schedule of reconciliation of income taxes U.S. federal statutory tax rate | The reconciliation of income taxes at the U.S. federal statutory tax rate to our effective tax rate was as follows: December 25, 2019 December 26, 2018 December 27, 2017 Statutory provision rate 21 % 21 % 35 % State and local taxes, net of federal income tax benefit 8 6 5 Reduction in state valuation allowance (2 ) — — Wage addback on income tax credits earned — — 2 General business credits generated (2 ) (5 ) (5 ) Foreign tax credits generated (1 ) (2 ) (2 ) Share-based compensation (3 ) (3 ) (3 ) Impact of tax reform — — (3 ) Other — (1 ) 1 Effective tax rate 21 % 16 % 30 % |
Schedule of deferred income tax assets or liabilities | The following table represents the approximate tax effect of each significant type of temporary difference that resulted in deferred income tax assets or liabilities. December 25, 2019 December 26, 2018 (In thousands) Deferred tax assets: Self-insurance accruals $ 4,202 $ 4,647 Finance lease liabilities 1,263 2,045 Operating lease liabilities 43,497 — Accrued exit cost 48 445 Interest rate swaps 11,491 1,157 Pension, other retirement and compensation plans 10,549 10,568 Deferred income 4,688 5,099 Other accruals — 633 Alternative minimum tax credit carryforwards — 928 General business and foreign tax credit carryforwards - state and federal 2,945 11,061 Net operating loss carryforwards - state 9,621 13,899 Total deferred tax assets before valuation allowance 88,304 50,482 Less: valuation allowance (10,264 ) (13,199 ) Total deferred tax assets 78,040 37,283 Deferred tax liabilities: Intangible assets (14,858 ) (14,631 ) Deferred finance costs (211 ) (286 ) Operating lease right-of-use assets (40,751 ) — Fixed assets (6,711 ) (5,033 ) Other accruals (791 ) — Total deferred tax liabilities (63,322 ) (19,950 ) Net deferred tax asset $ 14,718 $ 17,333 |
Summary of unrecognized tax benefits | The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits: December 25, 2019 December 26, 2018 (In thousands) Balance, beginning of year $ 2,940 $ 1,469 Increase related to current-year tax positions — 941 (Decrease) increase related to prior-year tax positions (1,893 ) 530 Balance, end of year $ 1,047 $ 2,940 |
Net Income Per Share Net Income
Net Income Per Share Net Income Per Share (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income per share | The amounts used for the basic and diluted net income per share calculations are summarized below: Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands, except per share amounts) Net income $ 117,410 $ 43,693 $ 39,594 Weighted average shares outstanding - basic 59,944 63,364 68,077 Effect of dilutive share-based compensation awards 1,889 2,198 2,326 Weighted average shares outstanding - diluted 61,833 65,562 70,403 Basic net income per share $ 1.96 $ 0.69 $ 0.58 Diluted net income per share $ 1.90 $ 0.67 $ 0.56 Anti-dilutive share-based compensation awards 270 — 606 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Equity [Abstract] | |
Components of accumulated other comprehensive loss | The components of the change in accumulated other comprehensive loss were as follows: Pensions Derivatives Accumulated Other Comprehensive Loss (In thousands) Balance as of December 28, 2016 $ (945 ) $ (462 ) $ (1,407 ) Benefit obligation actuarial loss (172 ) — (172 ) Amortization of net loss (1) 92 — 92 Settlement loss recognized 21 — 21 Net change in fair value of derivatives — (1,359 ) (1,359 ) Reclassification of derivatives to interest expense (2) — (72 ) (72 ) Income tax benefit 22 559 581 Balance as of December 27, 2017 $ (982 ) $ (1,334 ) $ (2,316 ) Benefit obligation actuarial gain 96 — 96 Amortization of net loss (1) 112 — 112 Net change in fair value of derivatives — (2,595 ) (2,595 ) Reclassification of derivatives to interest expense (2) — 307 307 Income tax (expense) benefit (53 ) 303 250 Balance as of December 26, 2018 $ (827 ) $ (3,319 ) $ (4,146 ) Benefit obligation actuarial loss (25 ) — (25 ) Amortization of net loss (1) 86 — 86 Net change in fair value of derivatives — (40,486 ) (40,486 ) Reclassification of derivatives to interest expense (2) — 291 291 Income tax (expense) benefit (15 ) 10,335 10,320 Balance as of December 25, 2019 $ (781 ) $ (33,179 ) $ (33,960 ) (1) Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Income. See Note 13 for additional details. (2) Amounts reclassified from accumulated other comprehensive loss into income represent payments made to the counterparty for the effective portions of the interest rate swaps. These amounts are included as a component of interest expense in our Consolidated Statements of Income. We expect to reclassify approximately $1.2 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 11 for additional details. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future commitments under contracts for food and non-food products | Our future purchase obligation payments due by period for both company and franchised restaurants at December 25, 2019 consist of the following: (In thousands) Less than 1 year $ 193,494 1-2 years — 3-4 years — 5 years and thereafter — Total $ 193,494 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | Fiscal Year Ended December 25, 2019 December 26, 2018 December 27, 2017 (In thousands) Income taxes paid, net $ 24,147 $ 3,254 $ 6,367 Interest paid $ 17,792 $ 19,447 $ 14,636 Noncash investing and financing activities: Noncash consideration received in connection with the sale of real estate $ 3,000 $ — $ — Notes received in connection with disposition of property $ 920 $ — $ 1,750 Property acquisition payable $ — $ — $ 500 Accrued purchase of property $ 1,791 $ 178 $ 531 Insurance proceeds receivable $ 48 $ 653 $ 364 Issuance of common stock, pursuant to share-based compensation plans $ 7,522 $ 4,671 $ 4,961 Execution of finance leases $ 305 $ 3,623 $ 6,573 Treasury stock payable $ 1,816 $ 72 $ 120 |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 25, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected consolidated financial data | Selected consolidated financial data for each quarter of fiscal 2019 and 2018 are set forth below: Fiscal Year Ended December 25, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales (1) $ 98,545 $ 95,447 $ 63,582 $ 48,803 Franchise and licensing revenue (1) 52,866 56,437 60,676 65,033 Total operating revenue (1) 151,411 151,884 124,258 113,836 Total operating costs and expenses (1) 127,280 105,769 56,084 87,273 Operating income (1) $ 24,131 $ 46,115 $ 68,174 $ 26,563 Net income (1) $ 15,490 $ 34,239 $ 49,122 $ 18,559 Basic net income per share (1)(2) $ 0.25 $ 0.57 $ 0.83 $ 0.32 Diluted net income per share (1)(2) $ 0.24 $ 0.55 $ 0.80 $ 0.31 Fiscal Year Ended December 26, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Company restaurant sales $ 101,193 $ 102,741 $ 103,609 $ 104,389 Franchise and licensing revenue 54,080 54,593 54,414 55,160 Total operating revenue 155,273 157,334 158,023 159,549 Total operating costs and expenses 138,848 138,374 139,554 139,789 Operating income $ 16,425 $ 18,960 $ 18,469 $ 19,760 Net income $ 9,759 $ 11,626 $ 10,805 $ 11,503 Basic net income per share (2) $ 0.15 $ 0.18 $ 0.17 $ 0.19 Diluted net income per share (2) $ 0.15 $ 0.18 $ 0.16 $ 0.18 (1) During 2019 , the Company migrated from a 90% franchised business model to one that is 96% franchised by selling company owned restaurants to franchisees which resulted in, among other items, a reduction in revenues and the recording of approximately $82.9 million of gains. In addition, the Company also recorded an additional $11.9 million of gains related to the sale of real estate. See Note 4 and Note 5 for details. (2) Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
Introduction and Basis of Rep_3
Introduction and Basis of Reporting (Narrative) (Details) | 12 Months Ended | |||
Dec. 25, 2019countryterritoryrestaurantstate | Dec. 26, 2018restaurant | Dec. 27, 2017restaurant | Dec. 28, 2016restaurant | |
Franchisor Disclosure [Line Items] | ||||
Number of states in which entity operates | state | 50 | |||
Number of territories in which entity operates | territory | 2 | |||
Number of foreign countries in which entity operates | country | 12 | |||
Number of restaurants | 1,703 | 1,709 | 1,735 | |
California | ||||
Franchisor Disclosure [Line Items] | ||||
Percentage of restaurants operated by geographic region | 23.00% | |||
Texas | ||||
Franchisor Disclosure [Line Items] | ||||
Percentage of restaurants operated by geographic region | 12.00% | |||
Florida | ||||
Franchisor Disclosure [Line Items] | ||||
Percentage of restaurants operated by geographic region | 8.00% | |||
Franchise | ||||
Franchisor Disclosure [Line Items] | ||||
Number of restaurants | 1,635 | 1,536 | 1,557 | 1,564 |
Company-owned restaurants | ||||
Franchisor Disclosure [Line Items] | ||||
Number of restaurants | 68 | 173 | 178 | 169 |
Introduction and Basis of Rep_4
Introduction and Basis of Reporting (Schedule of Change in Restaurants Counts) (Details) - restaurant | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Change in Restaurants Counts [Roll Forward] | |||
Number of restaurants, beginning of period | 1,709 | 1,735 | |
Number of restaurants, end of period | 1,703 | 1,709 | 1,735 |
Company-owned restaurants | |||
Change in Restaurants Counts [Roll Forward] | |||
Number of restaurants, beginning of period | 173 | 178 | 169 |
Units opened | 0 | 1 | 3 |
Units acquired from franchisees | 0 | 6 | 10 |
Units sold to franchisees | (105) | (8) | (4) |
Units closed | 0 | (4) | 0 |
Number of restaurants, end of period | 68 | 173 | 178 |
Franchise | |||
Change in Restaurants Counts [Roll Forward] | |||
Number of restaurants, beginning of period | 1,536 | 1,557 | 1,564 |
Units opened | 30 | 29 | 36 |
Units purchased from Company | 105 | 8 | 4 |
Units acquired by Company | 0 | (6) | (10) |
Units closed | (36) | (52) | (37) |
Number of restaurants, end of period | 1,635 | 1,536 | 1,557 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Cash and Cash Equivalents) (Details) - USD ($) $ in Millions | Dec. 25, 2019 | Dec. 26, 2018 |
Accounting Policies [Abstract] | ||
Short-term investments, included as cash and cash equivalents | $ 0.4 | $ 0.4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | Dec. 25, 2019USD ($) | Dec. 26, 2018USD ($) | Dec. 25, 2019USD ($) | Sep. 25, 2019USD ($) | Jun. 26, 2019USD ($) | Mar. 27, 2019USD ($) | Dec. 26, 2018USD ($) | Sep. 26, 2018USD ($) | Jun. 27, 2018USD ($) | Mar. 28, 2018USD ($) | Dec. 25, 2019USD ($)segment | Dec. 26, 2018USD ($) | Dec. 27, 2017USD ($) | Dec. 27, 2018USD ($) | Dec. 28, 2017USD ($) | Dec. 29, 2016USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Advertising expense | $ 11,200 | $ 15,000 | $ 14,300 | |||||||||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | $ 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | 541,389 | 630,179 | 529,169 | |||||
Discounted insurance liabilities | $ 16,100 | $ 17,000 | $ 16,100 | $ 17,000 | $ 16,100 | $ 17,000 | ||||||||||
Self insurance liabilities, discount rate | 2.00% | 2.50% | 2.00% | 2.50% | 2.00% | 2.50% | ||||||||||
Undiscounted insurance liabilities | $ 16,900 | $ 18,200 | ||||||||||||||
Number of operating segments | segment | 1 | |||||||||||||||
Operating lease liabilities | 169,094 | $ 169,094 | $ 169,094 | $ 101,300 | ||||||||||||
Operating lease ROU assets | $ 158,550 | 158,550 | 158,550 | 94,200 | ||||||||||||
Cumulative effect adjustment | (394) | $ (15,446) | $ 9,139 | |||||||||||||
(Deficit) | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | (400) | |||||||||||||||
Deferred Tax Asset | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | $ 100 | |||||||||||||||
Estimated Forfeitures | (Deficit) | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | (400) | |||||||||||||||
Estimated Forfeitures | Other Noncurrent Assets | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | (200) | |||||||||||||||
Estimated Forfeitures | Additional Paid-in Capital | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | 600 | |||||||||||||||
Excess Tax Benefits | (Deficit) | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cumulative effect adjustment | $ 9,000 | |||||||||||||||
Franchise and license revenue | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Advertising expense | 81,100 | $ 78,300 | 1,900 | |||||||||||||
Revenue | $ 65,033 | $ 60,676 | $ 56,437 | $ 52,866 | $ 55,160 | $ 54,414 | $ 54,593 | $ 54,080 | $ 235,012 | $ 218,247 | $ 138,817 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Property and Depreciation) (Details) | 12 Months Ended |
Dec. 25, 2019 | |
Building Assets | Minimum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 5 years |
Building Assets | Maximum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 30 years |
Equipment | Minimum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 2 years |
Equipment | Maximum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 10 years |
Leasehold Improvements | Minimum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 5 years |
Leasehold Improvements | Maximum | |
Property, Plant and Equipment | |
Property and equipment, useful life | 15 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Marketable Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Investment [Line Items] | |||
Marketable securities | $ 3,649 | $ 1,709 | |
Marketable securities, gain (loss) | 3,000 | (1,000) | $ 1,600 |
Aggregated Cost | |||
Investment [Line Items] | |||
Marketable securities | 3,500 | 1,700 | |
Estimate of Fair Value Measurement | |||
Investment [Line Items] | |||
Marketable securities | 3,600 | 1,700 | |
Investments | |||
Investment [Line Items] | |||
Marketable securities, gain (loss) | $ 200 | $ 100 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Concentration Risk) (Details) | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue from franchises and licenses risk | |||
Concentration Risk | |||
Franchise revenue, percentage | 35.00% | 30.00% | 31.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Advertising Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Franchisor Disclosure [Line Items] | |||||||||||
Advertising expense | $ 11,200 | $ 15,000 | $ 14,300 | ||||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | $ 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | 541,389 | 630,179 | 529,169 |
Advertising contributions from franchisees | 79,700 | ||||||||||
Advertising revenue | |||||||||||
Franchisor Disclosure [Line Items] | |||||||||||
Revenue | $ 81,144 | $ 78,308 | $ 0 |
Leases - General (Details)
Leases - General (Details) | Dec. 25, 2019 |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term | 5 years |
Real Estate | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 10 years |
Real Estate | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 20 years |
Equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 3 years |
Equipment | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 5 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2019USD ($) | |
Finance lease costs: | |
Amortization of right-of-use assets | $ 2,991 |
Interest on lease liabilities | 4,536 |
Total lease costs | 16,777 |
Occupancy | |
Finance lease costs: | |
Operating lease costs | 8,253 |
Variable lease costs | 5,993 |
Costs of franchise and license revenue | |
Finance lease costs: | |
Operating lease costs | 17,097 |
Variable lease costs | 7,001 |
General and administrative expenses | |
Finance lease costs: | |
Operating lease costs | 108 |
Variable lease costs | 41 |
Restructuring charges and exit costs | |
Finance lease costs: | |
Variable lease costs | 49 |
Sublease income | (306) |
Franchise and license revenue | |
Finance lease costs: | |
Sublease income | $ (28,986) |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Dec. 25, 2019 |
Weighted-average remaining lease term (in years): | |
Finance leases | 9 years 8 months 12 days |
Operating leases | 10 years 9 months 18 days |
Weighted-average discount rate: | |
Finance leases | 23.50% |
Operating leases | 5.90% |
Leases - Lease Income (Details)
Leases - Lease Income (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2019USD ($) | |
Lease income | |
Total lease income | $ 38,818 |
Restructuring charges and exit costs | |
Lease income | |
Operating lease income | 255 |
Variable lease income | 49 |
Franchise and license revenue | |
Lease income | |
Operating lease income | 28,050 |
Variable lease income | $ 10,464 |
Leases - Cash and Supplemental
Leases - Cash and Supplemental Noncash (Details) $ in Thousands | 12 Months Ended |
Dec. 25, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from finance leases | $ 4,536 |
Operating cash flows from operating leases | 26,329 |
Financing cash flows from finance leases | 2,464 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 305 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 79,534 |
Leases - Maturities of Lease La
Leases - Maturities of Lease Labilities Per Topic 842 (Details) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 27, 2018 |
Lease Liabilities, Finance | ||
2020 | $ 4,654 | |
2021 | 4,413 | |
2022 | 4,208 | |
2023 | 3,693 | |
2024 | 3,162 | |
Thereafter | 22,510 | |
Total undiscounted cash flows | 42,640 | |
Less: interest | 26,187 | |
Present value of lease liabilities | 16,453 | |
Less: current lease liabilities | 1,674 | |
Long-term lease liabilities | 14,779 | |
Lease Liabilities, Operating | ||
2020 | 26,148 | |
2021 | 24,097 | |
2022 | 21,972 | |
2023 | 20,185 | |
2024 | 18,693 | |
Thereafter | 123,693 | |
Total undiscounted cash flows | 234,788 | |
Less: interest | 65,694 | |
Present value of lease liabilities | 169,094 | $ 101,300 |
Less: current lease liabilities | 16,344 | |
Long-term lease liabilities | 152,750 | |
Lease Receipts, Operating | ||
2020 | 32,435 | |
2021 | 30,711 | |
2022 | 29,182 | |
2023 | 27,113 | |
2024 | 25,610 | |
Thereafter | 207,063 | |
Total undiscounted cash flows | $ 352,114 |
Leases - Rental Expenses and In
Leases - Rental Expenses and Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 26, 2018 | Dec. 27, 2017 | |
Rental expense: | ||
Total rental expense | $ 31,083 | $ 33,021 |
Rental income: | ||
Base rents | 22,831 | 25,781 |
Contingent rents | 4,662 | 5,042 |
Total rental income | 27,493 | 30,823 |
Included as a component of occupancy: | ||
Rental expense: | ||
Base rents | 10,272 | 9,315 |
Contingent rents | 3,074 | 3,168 |
Included as a component of costs of franchise and license expense: | ||
Rental expense: | ||
Base rents | 15,108 | 17,674 |
Contingent rents | $ 2,629 | $ 2,864 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities Per Topic 840 (Details) $ in Thousands | Dec. 26, 2018USD ($) |
Commitments, Capital | |
2019 | $ 9,271 |
2020 | 8,664 |
2021 | 8,010 |
2022 | 7,320 |
2023 | 6,451 |
Thereafter | 33,670 |
Total | 73,386 |
Less imputed interest | 42,795 |
Present value of capital lease obligations | 30,591 |
Commitments, Operating | |
2019 | 23,504 |
2020 | 20,161 |
2021 | 17,316 |
2022 | 14,646 |
2023 | 11,881 |
Thereafter | 49,004 |
Total | 136,512 |
Lease Receipts Operating | |
2019 | 21,001 |
2020 | 18,493 |
2021 | 16,573 |
2022 | 14,887 |
2023 | 12,932 |
Thereafter | 65,273 |
Total | $ 149,159 |
Refranchisings and Acquisitio_3
Refranchisings and Acquisitions (Refranchising and Development Strategy) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019USD ($)parcelrestaurant | Dec. 26, 2018USD ($)parcelrestaurant | Dec. 27, 2017USD ($)parcelrestaurant | |
Gains (losses) on sales of company restaurants: | |||
Total gains (losses) on sales of company restaurants | $ 93,608 | $ 513 | $ 1,729 |
Noncash consideration | 3,000 | 0 | 0 |
Real Estate | |||
Gains (losses) on sales of company restaurants: | |||
Cash proceeds | 10,680 | 0 | 3,247 |
Less: Property sold | (1,686) | 0 | (1,103) |
Total gains (losses) on sales of company restaurants | $ 11,874 | $ 0 | $ 1,918 |
Real estate parcels sold | parcel | 6 | 0 | 3 |
Noncash consideration | $ 3,000 | $ 0 | $ 0 |
Less: Other assets | $ (120) | $ 0 | $ (226) |
Company restaurant sales | |||
Franchisor Disclosure [Line Items] | |||
Restaurants sold to franchisees | restaurant | 105 | 8 | 4 |
Gains (losses) on sales of company restaurants: | |||
Cash proceeds | $ 118,964 | $ 1,777 | $ 751 |
Receivables | 920 | 0 | 0 |
Less: Property sold | (30,511) | (2,448) | (996) |
Less: Goodwill | (2,897) | (62) | (23) |
Less: Intangibles | (2,260) | (13) | 0 |
Less: Deferred gain | (1,350) | 0 | 0 |
Total gains (losses) on sales of company restaurants | $ 82,866 | $ (746) | $ (268) |
Refranchisings and Acquisitio_4
Refranchisings and Acquisitions (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019USD ($)real_estaterestaurant | Dec. 26, 2018USD ($)real_estaterestaurant | Dec. 27, 2017USD ($)restaurant | |
Franchisor Disclosure [Line Items] | |||
Noncash consideration | $ 3,000 | $ 0 | $ 0 |
Assets held for sale | $ 1,925 | $ 723 | |
Number of restaurants | restaurant | 1,703 | 1,709 | 1,735 |
Real Estate | |||
Franchisor Disclosure [Line Items] | |||
Noncash consideration | $ 3,000 | $ 0 | $ 0 |
Held-for-sale | |||
Franchisor Disclosure [Line Items] | |||
Assets held for sale, property | 1,600 | $ 700 | |
Other assets held for sale | 200 | ||
Assets held for sale, goodwill | $ 100 | ||
Number of restaurants | restaurant | 4 | 3 | |
Number of real estate properties | real_estate | 2 | 1 |
Refranchisings and Acquisitio_5
Refranchisings and Acquisitions (Acquisition Activity) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019USD ($)parcelrestaurant | Dec. 26, 2018USD ($)parcelrestaurant | Dec. 27, 2017USD ($)parcelrestaurant | |
Business Acquisition [Line Items] | |||
Restaurants acquired from franchisees | restaurant | 0 | 6 | 11 |
Purchase price allocation: | |||
Reacquired franchise rights | $ 0 | $ 5,434 | $ 4,476 |
Property | 0 | 1,121 | 1,293 |
Goodwill | 0 | 1,574 | 3,022 |
Total purchase price | 0 | 8,129 | 8,791 |
Finance leases recorded | 0 | 2,409 | 2,321 |
Real Estate | |||
Purchase price allocation: | |||
Total purchase price | $ 11,320 | $ 1,787 | $ 4,062 |
Real estate parcels acquired | parcel | 5 | 1 | 2 |
Former Franchise | |||
Business Acquisition [Line Items] | |||
Restaurants acquired from franchisees | restaurant | 1 |
Operating (Gains), Losses and_3
Operating (Gains), Losses and Other Charges, Net (Details) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019USD ($) | Dec. 26, 2018USD ($) | Dec. 27, 2017USD ($)restaurant | |
Other Income and Expenses [Abstract] | |||
Gains on sales of assets and other, net | $ (93,608) | $ (513) | $ (1,729) |
Software implementation costs | 0 | 0 | 5,247 |
Restructuring charges and exit costs | 2,428 | 1,575 | 485 |
Impairment charges | 0 | 1,558 | 326 |
Operating (gains), losses and other charges, net | (91,180) | 2,620 | 4,329 |
Gain on insurance settlements | 1,200 | ||
Loss on sale of restaurants | 700 | ||
Restructuring charges and exit costs [Abstract] | |||
Exit costs | 272 | 518 | 385 |
Severance and other restructuring charges | 2,156 | 1,057 | 100 |
Total restructuring charges and exit costs | 2,428 | 1,575 | 485 |
Components of change in accrued exit cost liabilities [Roll Forward] | |||
Balance, beginning of year | 1,155 | 1,180 | |
Exit costs | 272 | 518 | 385 |
Payments, net of sublease receipts | (615) | ||
Interest accretion | 72 | ||
Balance, end of year | 200 | 1,155 | 1,180 |
Less current portion included in other current liabilities | 546 | ||
Long-term portion included in other noncurrent liabilities | 609 | ||
Accrued severance and other restructuring charges | 900 | 600 | |
Impairment charges | $ 0 | $ 1,558 | $ 326 |
Number of restaurants relocated, resulting in impairment charges | restaurant | 2 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 26, 2018 | Dec. 25, 2019 | |
Receivables, net: | ||
Trade accounts receivable from franchisees | $ 11,459 | $ 14,551 |
Financing receivables from franchisees | 3,211 | 2,230 |
Allowance for doubtful accounts | (300) | (274) |
Total receivables, net | 26,283 | 27,488 |
Other noncurrent assets: | ||
Financing receivables from franchisees | 1,528 | 364 |
Write-off of financing receivables from a franchisee | 200 | |
Insurance receivable, current | 1,000 | |
Vendor receivables | ||
Receivables, net: | ||
Other receivable, gross, current | 4,016 | 3,260 |
Credit card receivables | ||
Receivables, net: | ||
Other receivable, gross, current | 5,955 | 6,806 |
Other | ||
Receivables, net: | ||
Other receivable, gross, current | $ 1,942 | $ 915 |
Property (Details)
Property (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Property, Plant and Equipment | |||
Total property owned | $ 245,071 | $ 343,871 | |
Less accumulated depreciation | 147,445 | 226,620 | |
Property owned, net | 97,626 | 117,251 | |
Property held under finance leases, leased to franchisees, net | 11,720 | ||
Property held under finance leases, leased to franchisees, net | 22,753 | ||
Depreciation expense, including amortization of property under capital leases | 16,300 | 23,000 | $ 21,200 |
Franchise | |||
Property, Plant and Equipment | |||
Total property owned | 105,789 | 70,520 | |
Less accumulated depreciation | 65,476 | 46,354 | |
Property owned, net | 40,313 | 24,166 | |
Buildings held under finance leases, leased to franchisees | 8,445 | ||
Buildings held under finance leases, leased to franchisees | 5,776 | ||
Less accumulated amortization | 3,768 | ||
Less accumulated amortization | 2,746 | ||
Property held under finance leases, leased to franchisees, net | 4,677 | ||
Property held under finance leases, leased to franchisees, net | 3,030 | ||
Total property leased to franchisees, net | 44,990 | ||
Total property leased to franchisees, net | 27,196 | ||
Land | |||
Property, Plant and Equipment | |||
Total property owned | 39,720 | 33,566 | |
Land | Franchise | |||
Property, Plant and Equipment | |||
Total property owned | 27,205 | 16,730 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment | |||
Total property owned | 172,881 | 241,990 | |
Buildings and leasehold improvements | Franchise | |||
Property, Plant and Equipment | |||
Total property owned | 78,584 | 53,790 | |
Other property and equipment | |||
Property, Plant and Equipment | |||
Total property owned | $ 32,470 | $ 68,315 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Schedule of Changes in Carrying Amount of Goodwill and Schedule of Intanbiels Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Goodwill [Roll Forward] | |||
Balance, end of year | $ 39,781 | $ 38,269 | |
Additions related to acquisitions | 0 | 1,574 | $ 3,022 |
Adjustments related to the sale of restaurants | (2,949) | (62) | |
Balance, end of year | 36,832 | 39,781 | 38,269 |
Intangible Assets | |||
Gross Carring Amount - Trade names | 44,087 | 44,087 | |
Gross Carring Amount - Liquor licenses | 120 | 166 | |
Gross Carring Amount - Intangible assets with definite lives | 15,516 | 19,933 | |
Accumulated Amortization - Intangible assets with definite lives | 5,767 | 5,119 | |
Intangible assets | 59,723 | 64,186 | |
Amortization expense of definite-lived intangible assets and other assets | $ 3,600 | $ 4,100 | $ 2,500 |
Reacquired Franchise Rights | |||
Intangible Assets | |||
Weighted-average life of reacquired franchise rights | 8 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Estimated Amortization Expense) (Details) $ in Thousands | Dec. 25, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 2,289 |
2021 | 1,347 |
2022 | 1,240 |
2023 | 915 |
2024 | $ 845 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued payroll | $ 19,689 | $ 23,395 |
Accrued insurance, primarily current portion of liability for insurance claims | 6,515 | 7,323 |
Accrued taxes | 5,624 | 7,667 |
Accrued advertising | 6,753 | 7,413 |
Gift cards | 6,469 | 6,546 |
Other | 12,257 | 9,446 |
Other current liabilities | $ 57,307 | $ 61,790 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Interest rate swaps, net | $ (44,700) | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Deferred compensation plan investments | 13,517 | $ 11,235 |
Interest rate swaps, net | (44,670) | (4,475) |
Investments | 3,649 | 1,709 |
Total, assets | 8,469 | |
Total, liabilities | (27,504) | |
Recurring | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Deferred compensation plan investments | 13,517 | 11,235 |
Interest rate swaps, net | 0 | 0 |
Investments | 0 | 0 |
Total, assets | 13,517 | 11,235 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Deferred compensation plan investments | 0 | 0 |
Interest rate swaps, net | (44,670) | (4,475) |
Investments | 3,649 | 1,709 |
Total, liabilities | (41,021) | (2,766) |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Deferred compensation plan investments | 0 | 0 |
Interest rate swaps, net | 0 | 0 |
Investments | 0 | 0 |
Total, assets | $ 0 | $ 0 |
Long-term Debt (Schedule of Lon
Long-term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Debt Disclosure [Abstract] | ||
Revolving loans | $ 240,000 | $ 286,500 |
Finance lease obligations | 16,453 | |
Finance lease obligations | 30,591 | |
Total long-term debt | 256,453 | 317,091 |
Less current maturities | 1,674 | 3,410 |
Noncurrent portion of long-term debt | $ 254,779 | $ 313,681 |
Long-Term Debt (Aggregate Annua
Long-Term Debt (Aggregate Annual Maturities of Long-Term Debt, Excluding Capital Lease Obligations) (Details) $ in Millions | Dec. 25, 2019USD ($) |
Debt Disclosure [Abstract] | |
Balance outstanding | $ 240 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 25, 2019 | Dec. 25, 2019 | Dec. 26, 2018 | |
Line of Credit Facility [Line Items] | |||
Debt instrument, term | 5 years | ||
Senior secured revolver | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 400,000,000 | ||
Accordian feature that allows increase in size of facility | 450,000,000 | ||
Outstanding amount under credit facility | 240,000,000 | ||
Availability under the revolving facility | $ 139,400,000 | ||
Weighted-average interest rate | 3.47% | 4.43% | |
Commitment fee for unused portion of revolving credit facility | 0.25% | ||
Senior secured revolver | Interest rate swaps, net | |||
Line of Credit Facility [Line Items] | |||
Weighted-average interest rate | 3.99% | 4.48% | |
Letter of credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 30,000,000 | ||
Outstanding amount under letter of credit | $ 20,600,000 | ||
LIBOR | Senior secured revolver | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate debt | 1.75% |
Long-Term Debt (Schedule of Int
Long-Term Debt (Schedule of Interest Rate Swaps) (Details) | Dec. 25, 2019USD ($) |
Derivative [Line Items] | |
Interest rate swaps liability | $ 44,700,000 |
Interest Rate Swaps Maturity 2025 | |
Derivative [Line Items] | |
Notional Amount | $ 120,000,000 |
Fixed Rate | 2.44% |
Interest Rate Swaps Maturity 2026 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000,000 |
Fixed Rate | 2.46% |
Interest Rate Swaps Maturity 2033 | |
Derivative [Line Items] | |
Notional Amount | $ 80,000,000 |
Fixed Rate | 3.19% |
Maximum | |
Derivative [Line Items] | |
Notional Amount | $ 425,000,000 |
Revenues Disaggregation of Reve
Revenues Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | $ 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | $ 541,389 | $ 630,179 | $ 529,169 |
Company restaurant sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 48,803 | 63,582 | 95,447 | 98,545 | 104,389 | 103,609 | 102,741 | 101,193 | 306,377 | 411,932 | 390,352 |
Royalties | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 108,813 | 101,557 | 100,631 | ||||||||
Advertising revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 81,144 | 78,308 | 0 | ||||||||
Initial and other fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 6,541 | 6,422 | 2,466 | ||||||||
Occupancy revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 38,514 | 31,960 | 35,720 | ||||||||
Franchise and license revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 65,033 | $ 60,676 | $ 56,437 | $ 52,866 | $ 55,160 | $ 54,414 | $ 54,593 | $ 54,080 | $ 235,012 | $ 218,247 | $ 138,817 |
Revenues Contract Balance (Deta
Revenues Contract Balance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2019 | Dec. 26, 2018 | |
Contract With Customer Liability [Roll Forward] | ||
Balance, December 26, 2018 | $ 20,538 | |
Fees received from franchisees | 5,634 | |
Revenue recognized | (2,916) | |
Balance, December 25, 2019 | 23,256 | $ 20,538 |
Less current portion included in other current liabilities | 2,235 | |
Deferred franchise revenue included in other noncurrent liabilities | 21,021 | |
Revenue recognized included in beginning deferred franchise revenue balance | 2,500 | |
Gift Card Redemption | ||
Contract With Customer Liability [Roll Forward] | ||
Less current portion included in other current liabilities | 6,500 | $ 6,500 |
Revenue recognized included in beginning deferred franchise revenue balance | $ 1,400 |
Revenues Deferred Revenue (Deta
Revenues Deferred Revenue (Details) $ in Thousands | Dec. 25, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-26 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 2,235 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-31 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 2,049 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-30 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 1,940 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-29 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 1,860 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-28 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 1,809 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-26 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Deferred franchise revenue expencted to be recognized | $ 13,363 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Deferred franchise revenue expencted to be recognized | $ 23,256 |
Revenues Impact of Adoption on
Revenues Impact of Adoption on Balance Sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Prepaid and other current assets | $ 14,974 | $ 10,866 | $ 14,974 | $ 10,866 | |||||||
Deferred income taxes | 14,718 | 17,333 | 14,718 | 17,333 | |||||||
Other current liabilities | 57,307 | 61,790 | 57,307 | 61,790 | |||||||
Other noncurrent liabilities | 83,887 | 48,087 | 83,887 | 48,087 | |||||||
Deficit | (189,398) | (306,414) | (189,398) | (306,414) | |||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | $ 541,389 | 630,179 | $ 529,169 |
Adjustments | Adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Prepaid and other current assets | 509 | 509 | |||||||||
Deferred income taxes | (4,988) | (4,988) | |||||||||
Other current liabilities | (407) | (407) | |||||||||
Other noncurrent liabilities | (18,370) | (18,370) | |||||||||
Deficit | 14,298 | 14,298 | |||||||||
Amounts without adoption of Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Prepaid and other current assets | 11,375 | 11,375 | |||||||||
Deferred income taxes | 12,345 | 12,345 | |||||||||
Other current liabilities | 61,383 | 61,383 | |||||||||
Other noncurrent liabilities | 29,717 | 29,717 | |||||||||
Deficit | $ (292,116) | $ (292,116) |
Revenues Impact of Adoption o_2
Revenues Impact of Adoption on Consolidated Statement of Income (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | $ 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | $ 541,389 | $ 630,179 | $ 529,169 |
Costs of franchise and license revenue | 28,517 | 120,326 | 114,296 | 39,294 | |||||||
Provision for income taxes | 1,340 | 31,789 | 8,557 | 17,207 | |||||||
Net income | $ 18,559 | $ 49,122 | $ 34,239 | $ 15,490 | $ 11,503 | $ 10,805 | $ 11,626 | $ 9,759 | $ 117,410 | $ 43,693 | $ 39,594 |
Basic net income per share (in dollars per share) | $ 0.32 | $ 0.83 | $ 0.57 | $ 0.25 | $ 0.19 | $ 0.17 | $ 0.18 | $ 0.15 | $ 1.96 | $ 0.69 | $ 0.58 |
Diluted net income per share (in dollars per share) | $ 0.31 | $ 0.80 | $ 0.55 | $ 0.24 | $ 0.18 | $ 0.16 | $ 0.18 | $ 0.15 | $ 1.90 | $ 0.67 | $ 0.56 |
Adjustments | Adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Costs of franchise and license revenue | $ (20,962) | $ (81,268) | |||||||||
Provision for income taxes | (52) | (400) | |||||||||
Net income | $ (148) | $ (1,147) | |||||||||
Basic net income per share (in dollars per share) | $ (0.01) | $ (0.02) | |||||||||
Diluted net income per share (in dollars per share) | $ 0 | $ (0.02) | |||||||||
Amounts without adoption of Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Costs of franchise and license revenue | $ 7,555 | $ 33,028 | |||||||||
Provision for income taxes | 1,288 | 8,157 | |||||||||
Net income | $ 11,355 | $ 42,546 | |||||||||
Basic net income per share (in dollars per share) | $ 0.18 | $ 0.67 | |||||||||
Diluted net income per share (in dollars per share) | $ 0.18 | $ 0.65 | |||||||||
Franchise and license revenue | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue | $ 65,033 | $ 60,676 | $ 56,437 | $ 52,866 | $ 55,160 | $ 54,414 | $ 54,593 | $ 54,080 | $ 235,012 | $ 218,247 | $ 138,817 |
Franchise and license revenue | Adjustments | Adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue | (21,162) | (82,815) | |||||||||
Franchise and license revenue | Amounts without adoption of Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue | $ 33,998 | $ 135,432 |
Revenues Impact of Adoption o_3
Revenues Impact of Adoption on Consolidated Statement of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | $ 18,559 | $ 49,122 | $ 34,239 | $ 15,490 | $ 11,503 | $ 10,805 | $ 11,626 | $ 9,759 | $ 117,410 | $ 43,693 | $ 39,594 |
Total comprehensive income | 4,816 | $ 87,596 | 41,863 | $ 38,685 | |||||||
Adjustments | Adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | (148) | (1,147) | |||||||||
Total comprehensive income | (148) | (1,147) | |||||||||
Amounts without adoption of Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | 11,355 | 42,546 | |||||||||
Total comprehensive income | $ 4,668 | $ 40,716 |
Revenues Impact of Adoption o_4
Revenues Impact of Adoption on Consolidated Statement of Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | $ 18,559 | $ 49,122 | $ 34,239 | $ 15,490 | $ 11,503 | $ 10,805 | $ 11,626 | $ 9,759 | $ 117,410 | $ 43,693 | $ 39,594 |
Deferred income tax expense | 16,005 | 6,193 | 10,271 | ||||||||
Other current assets | (4,108) | 921 | (2,380) | ||||||||
Other accrued liabilities | (4,144) | (1,676) | 135 | ||||||||
Other noncurrent liabilities | 1,898 | (4,418) | (3,113) | ||||||||
Net cash flows provided by operating activities | $ 43,327 | 73,690 | $ 78,269 | ||||||||
Adjustments | Adjustments | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | (148) | (1,147) | |||||||||
Deferred income tax expense | (400) | ||||||||||
Other current assets | (509) | ||||||||||
Other accrued liabilities | 573 | ||||||||||
Other noncurrent liabilities | 1,483 | ||||||||||
Net cash flows provided by operating activities | 0 | ||||||||||
Amounts without adoption of Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net income | $ 11,355 | 42,546 | |||||||||
Deferred income tax expense | 5,793 | ||||||||||
Other current assets | 412 | ||||||||||
Other accrued liabilities | (1,103) | ||||||||||
Other noncurrent liabilities | (2,935) | ||||||||||
Net cash flows provided by operating activities | $ 73,690 |
Revenues Impact of Adoption (De
Revenues Impact of Adoption (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | Dec. 28, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Deferred franchise revenue included in other noncurrent liabilities | $ 21,021 | $ 21,021 | ||||||||||
Other current liabilities | (57,307) | $ (61,790) | (57,307) | $ (61,790) | ||||||||
Deferred income taxes, net | 14,718 | 17,333 | 14,718 | 17,333 | ||||||||
Shareholders’ deficit | (138,064) | (133,345) | (138,064) | (133,345) | $ (97,360) | $ (71,112) | ||||||
Revenue | 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | 541,389 | 630,179 | 529,169 | |
Franchise and license revenue | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | $ 65,033 | $ 60,676 | $ 56,437 | $ 52,866 | 55,160 | $ 54,414 | $ 54,593 | $ 54,080 | 235,012 | 218,247 | 138,817 | |
Advertising | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | $ 81,144 | 78,308 | 0 | |||||||||
Adjustments | Adjustments | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Other current liabilities | 407 | 407 | ||||||||||
Accrued advertising | 500 | |||||||||||
Deferred income taxes, net | (4,988) | (4,988) | ||||||||||
Adjustments | Adjustments | Franchise and license revenue | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Deferred franchise revenue included in other noncurrent liabilities | 21,000 | 21,000 | ||||||||||
Deferred income taxes, net | 5,400 | 5,400 | ||||||||||
Shareholders’ deficit | 15,600 | 15,600 | 100 | |||||||||
Revenue | (21,162) | (82,815) | ||||||||||
Adjustments | Adjustments | Gift Card Redemption | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Other current liabilities | $ 600 | |||||||||||
Adjustments | Adjustments | Advertising | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | 19,900 | 78,300 | ||||||||||
Adjustments | Adjustments | Franchise Fees Gross | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | 1,000 | 3,000 | ||||||||||
Pro Forma | Adjustments | Adjustments | Franchise and license revenue | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | $ 200 | $ 1,500 |
Employee Benefit Plans (Defined
Employee Benefit Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions | $ 1.9 | $ 2.2 | $ 2 |
Qualified Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee | 25.00% | ||
Employer matching contribution | 4.00% | ||
Nonqualified Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee | 50.00% | ||
Maximum incentive compensation deferral | 75.00% |
Employee Benefit Plans (Change
Employee Benefit Plans (Change in Benefit Obligation and Plan Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 2,393 | $ 2,608 | |
Interest cost | 81 | 76 | $ 83 |
Actuarial losses (gains) | 25 | (96) | |
Benefits paid | (162) | (195) | |
Benefit obligation at end of year | 2,337 | 2,393 | 2,608 |
Accumulated benefit obligation | 2,337 | 2,393 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Employer contributions | 162 | 195 | |
Benefits paid | (162) | (195) | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Unfunded status at end of year | (2,337) | (2,393) | |
Amounts recognized on the balance sheet: | |||
Other current liabilities | (662) | (584) | |
Other noncurrent liabilities | (1,675) | (1,809) | |
Net amount recognized | (2,337) | (2,393) | |
Amounts in accumulated other comprehensive loss not yet reflected in net period benefit cost: | |||
Unamortized actuarial losses, net | (823) | (885) | |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss: | |||
Benefit obligation actuarial (loss) gain | (25) | 96 | |
Amortization of net loss | 86 | 112 | |
Other comprehensive income | $ 61 | $ 208 |
Employee Benefit Plans (Compone
Employee Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Components of net periodic benefit cost [Abstract] | |||
Interest cost | $ 81 | $ 76 | $ 83 |
Amortization of net loss | 86 | 112 | 92 |
Settlement loss recognized | 0 | 0 | 21 |
Net periodic benefit cost | $ 167 | $ 188 | $ 196 |
Employee Benefit Plans (Assumpt
Employee Benefit Plans (Assumptions) (Details) | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Retirement Benefits [Abstract] | |||
Discount rate used to determine the benefit obligations | 2.56% | 3.83% | |
Discount rate used to determine net period pension costs | 3.83% | 3.08% | 3.31% |
Employee Benefit Plans (Benefit
Employee Benefit Plans (Benefits Expected to be Paid in Future Years) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2019 | Dec. 26, 2018 | |
Retirement Benefits [Abstract] | ||
Employer contributions | $ 162 | $ 195 |
Estimated employer contributions during 2020 | 700 | |
Benefits expected to be paid: | ||
2020 | 662 | |
2021 | 223 | |
2022 | 327 | |
2023 | 418 | |
2024 | 132 | |
2025 through 2029 | $ 640 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 25, 2019USD ($)plan$ / sharesshares | Dec. 26, 2018USD ($)$ / sharesshares | Dec. 27, 2017USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of share-based compensation plans | plan | 4 | ||
Shares available for grant (in shares) | 700 | ||
Income tax benefits recognized related to share-based compensation | $ | $ 1.7 | $ 1.6 | $ 3.3 |
Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 19.02 | $ 16.97 | $ 12.59 |
Performance period | 3 years | ||
Cash payments | $ | $ 0.4 | $ 0.2 | $ 3.9 |
Intrinsic value of units converted | $ | 16.9 | 9.8 | $ 5 |
Accrued compensation included as a component of other current liabilities | $ | 0.1 | 0.4 | |
Accrued compensation included as a component of other noncurrent liabilities | $ | 0.2 | $ 0.2 | |
Unrecognized compensation cost related to unvested awards outstanding | $ | $ 8.8 | ||
Unrecognized compensation cost, expected weighted average period | 1 year 8 months 12 days | ||
Stock units outstanding (in shares) | 1,681 | 1,688 | |
Restricted stock units for board members | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted (in shares) | 100 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 19.44 | ||
Performance period | 1 year | ||
Unrecognized compensation cost related to unvested awards outstanding | $ | $ 0.3 | ||
Unrecognized compensation cost, expected weighted average period | 4 months 24 days | ||
Stock units converted into common stock | 100 | ||
Stock units outstanding (in shares) | 700 | 800 | |
Minimum | Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target award to be earned | 0.00% | ||
Maximum | Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target award to be earned | 150.00% | ||
Performance shares that vest based on TSR | Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted (in shares) | 300 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 20.47 | ||
Performance shares that vest based on EBITDA growth | Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards granted (in shares) | 300 | ||
Weighted average grant date fair value (US$ per share) | $ / shares | $ 17.58 | ||
2017 Omnibus Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant (in shares) | 2,600 |
Share-Based Compensation (Compo
Share-Based Compensation (Component of Net Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | $ 6,694 | $ 6,038 | $ 8,541 |
Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | 5,765 | 5,039 | 7,838 |
Restricted stock units for board members | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation | $ 929 | $ 999 | $ 703 |
Share-Based Compensation (Perfo
Share-Based Compensation (Performance Share Units) (Details) - Performance share awards - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Units | |||
Outstanding, beginning of year (in shares) | 1,688 | ||
Granted (in shares) | 631 | ||
Vested (in shares) | (631) | ||
Forfeited (in shares) | (7) | ||
Outstanding, end of year (in shares) | 1,681 | 1,688 | |
Weighted Average Grant Date Fair Value | |||
Outstanding, beginning of year (in dollars per share) | $ 12.65 | ||
Granted (in dollars per share) | 19.02 | $ 16.97 | $ 12.59 |
Vested (in dollars per share) | 9.48 | ||
Forfeited (in dollars per share) | 14.48 | ||
Outstanding, end of year (in dollars per share) | $ 16.22 | $ 12.65 | |
Convertible, end of year (in shares) | 586 | ||
Convertible, end of year, weighted-average grant date fair value (in dollars per share) | $ 12.59 |
Share-Based Compensation (Stock
Share-Based Compensation (Stock Options) (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Contractual life | P10Y | ||
Options granted | 0 | 0 | 0 |
Intrinsic value of the options exercised | $ 6,600 | $ 4,900 | $ 2,300 |
Options | |||
Outstanding, beginning of year (in shares) | 502,000 | ||
Exercised (in shares) | (362,000) | ||
Outstanding, end of year (in shares) | 140,000 | 502,000 | |
Exercisable, end of year (in shares) | 140,000 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning of year (in dollars per share) | $ 3.02 | ||
Exercised (in dollars per share) | 2.68 | ||
Outstanding, end of year (in dollars per share) | 3.89 | $ 3.02 | |
Exercisable, end of year (in dollars per share) | $ 3.89 | ||
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value | |||
Outstanding, end of year, Weighted Average Remaining Contractual Life | 1 year 1 month 6 days | ||
Exercisable, end of year, Weighted Average Remaining Contractual Life | 1 year 1 month 6 days | ||
Outstanding, end of year, Aggregate Intrinsic Value | $ 2,284 | ||
Exercisable, end of year, Aggregate Intrinsic Value | $ 2,284 |
Income Taxes (Provisions) (Deta
Income Taxes (Provisions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 26, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Current: | ||||
Federal | $ 12,421 | $ (632) | $ 3,688 | |
State and local | 5,156 | 1,833 | 2,071 | |
Foreign | 1,142 | 1,042 | 961 | |
Deferred: | ||||
Federal | 9,944 | 5,432 | 10,075 | |
State and local | 6,061 | 761 | 196 | |
(Decrease) increase of valuation allowance | (2,935) | 121 | 216 | |
Total provision for income taxes | $ 1,340 | $ 31,789 | $ 8,557 | $ 17,207 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Taxes) (Details) | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Reconciliation of income taxes at the U.S. federal statutory tax rate to effective tax rate: | |||
Statutory provision rate | 21.00% | 21.00% | 35.00% |
State and local taxes, net of federal income tax benefit | 8.00% | 6.00% | 5.00% |
Reduction in state valuation allowance | (2.00%) | 0.00% | 0.00% |
Wage addback on income tax credits earned | 0.00% | 0.00% | 2.00% |
General business credits generated | (2.00%) | (5.00%) | (5.00%) |
Foreign tax credits generated | (1.00%) | (2.00%) | (2.00%) |
Share-based compensation | (3.00%) | (3.00%) | (3.00%) |
Impact of tax reform | 0.00% | 0.00% | (3.00%) |
Other | 0.00% | (1.00%) | 1.00% |
Effective tax rate | 21.00% | 16.00% | 30.00% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Valuation Allowance [Line Items] | |||
Net tax benefit recognized related to the Tax Act | $ 1,600,000 | ||
Tax benefit recognized related to share-based compensation | $ 2,000,000 | $ 1,400,000 | 1,700,000 |
Liability for income tax examination | 2,000,000 | ||
Net operating loss carryforwards - state | 9,621,000 | 13,899,000 | |
Increase (decrease) of tax valuation allowance | (2,935,000) | 121,000 | $ 216,000 |
Valuation allowance | 10,264,000 | 13,199,000 | |
Interest and penalties recognized on unrecognized tax benefits | 0 | $ 0 | |
South Carolina NOL Carryforwards | |||
Valuation Allowance [Line Items] | |||
Net operating loss carryforwards - state | 8,300,000 | ||
Increase (decrease) of tax valuation allowance | 3,600,000 | ||
Valuation allowance | 8,100,000 | ||
State Enterprise Zone Credits | |||
Valuation Allowance [Line Items] | |||
Increase (decrease) of tax valuation allowance | (700,000) | ||
Valuation allowance | 1,100,000 | ||
Foreign Tax Credit Carryforward | |||
Valuation Allowance [Line Items] | |||
Valuation allowance | $ 700,000 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 25, 2019 | Dec. 26, 2018 |
Deferred tax assets: | ||
Self-insurance accruals | $ 4,202 | $ 4,647 |
Finance lease liabilities | 1,263 | |
Finance lease liabilities | 2,045 | |
Operating lease liabilities | 43,497 | |
Accrued exit cost | 48 | 445 |
Interest rate swaps | 11,491 | 1,157 |
Pension, other retirement and compensation plans | 10,549 | 10,568 |
Deferred income | 4,688 | 5,099 |
Other accruals | 0 | 633 |
Alternative minimum tax credit carryforwards | 0 | 928 |
General business and foreign tax credit carryforwards - state and federal | 2,945 | 11,061 |
Net operating loss carryforwards - state | 9,621 | 13,899 |
Total deferred tax assets before valuation allowance | 88,304 | 50,482 |
Less: valuation allowance | (10,264) | (13,199) |
Total deferred tax assets | 78,040 | 37,283 |
Deferred tax liabilities: | ||
Intangible assets | (14,858) | (14,631) |
Deferred finance costs | (211) | (286) |
Operating lease right-of-use assets | (40,751) | |
Fixed assets | (6,711) | (5,033) |
Other accruals | (791) | 0 |
Total deferred tax liabilities | (63,322) | (19,950) |
Net deferred tax asset | $ 14,718 | $ 17,333 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2019 | Dec. 26, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 2,940 | $ 1,469 |
Increase related to current-year tax positions | 0 | 941 |
(Decrease) increase related to prior-year tax positions | (1,893) | |
(Decrease) increase related to prior-year tax positions | 530 | |
Balance, end of year | $ 1,047 | $ 2,940 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 18,559 | $ 49,122 | $ 34,239 | $ 15,490 | $ 11,503 | $ 10,805 | $ 11,626 | $ 9,759 | $ 117,410 | $ 43,693 | $ 39,594 |
Weighted average shares outstanding - basic | 59,944 | 63,364 | 68,077 | ||||||||
Effect of dilutive share-based compensation awards | 1,889 | 2,198 | 2,326 | ||||||||
Weighted average shares outstanding - diluted | 61,833 | 65,562 | 70,403 | ||||||||
Basic net income per share (in dollars per share) | $ 0.32 | $ 0.83 | $ 0.57 | $ 0.25 | $ 0.19 | $ 0.17 | $ 0.18 | $ 0.15 | $ 1.96 | $ 0.69 | $ 0.58 |
Diluted net income per share (in dollars per share) | $ 0.31 | $ 0.80 | $ 0.55 | $ 0.24 | $ 0.18 | $ 0.16 | $ 0.18 | $ 0.15 | $ 1.90 | $ 0.67 | $ 0.56 |
Anti-dilutive share-based compensation awards (in shares) | 270 | 0 | 606 |
Shareholders' Equity (Share Rep
Shareholders' Equity (Share Repurchases) (Details) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Nov. 30, 2016 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | Dec. 28, 2016 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Purchase of treasury stock | $ 96,202,000 | $ 61,189,000 | $ 82,858,000 | |||
Purchase of treasury stock (in shares) | 3,900 | 6,800 | ||||
Stock repurchased during period (in shares) | 5,300 | |||||
Stock repurchased during period | $ 103,000,000 | |||||
Share Repurchase Program 2019 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase, authorized amount | 250,000,000 | |||||
Share Repurchase Program 2017 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase, authorized amount | $ 200,000,000 | |||||
Share Repurchase Program 2016 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase, authorized amount | $ 100,000,000 | |||||
Accelerated Share Repurchase 2016 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase, authorized amount | $ 25,000,000 | |||||
Purchase of equity forward contract | $ 25,000,000 | |||||
Purchase of treasury stock | $ 6,900,000 | |||||
Purchase of treasury stock (in shares) | 1,500 | 500 | ||||
Volume-weighted average price (in usd per share) | $ 12.36 | |||||
Accelerated Share Repurchase 2018 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase, authorized amount | $ 25,000,000 | |||||
Purchase of equity forward contract | $ 25,000,000 | |||||
Purchase of treasury stock | $ 6,800,000 | |||||
Purchase of treasury stock (in shares) | 1,100 | 400 | ||||
Volume-weighted average price (in usd per share) | $ 17.04 | |||||
Share Repurchase Program 2017 And 2019 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Remaining shares to be repurchased amount | $ 282,200,000 | |||||
Treasury Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Purchase of treasury stock | $ 96,202,000 | $ 61,189,000 | $ 82,858,000 | |||
Purchase of treasury stock (in shares) | 4,879 | 3,901 | 6,840 | |||
Treasury Stock | Accelerated Share Repurchase 2016 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Purchase of treasury stock | $ 18,100,000 | |||||
Purchase of treasury stock (in shares) | 554 | |||||
Treasury Stock | Accelerated Share Repurchase 2018 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Purchase of treasury stock | $ 18,200,000 | |||||
Purchase of treasury stock (in shares) | 389 | |||||
Additional Paid-in Capital | Accelerated Share Repurchase 2016 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Remaining shares to be repurchased amount | $ 6,900,000 | |||||
Additional Paid-in Capital | Accelerated Share Repurchase 2018 | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Remaining shares to be repurchased amount | $ 6,800,000 |
Shareholders' Equity (Component
Shareholders' Equity (Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Balance as of beginning period | $ (133,345) | $ (97,360) | $ (71,112) |
Income tax (expense) benefit | 10,320 | 250 | 581 |
Net change in fair value of derivatives | (40,486) | (2,595) | (1,359) |
Balance as of ending period | (138,064) | (133,345) | (97,360) |
Estimated reclassification from other comprehensive loss to interest expense related to the interest rate swaps over the next 12 months | 1,200 | ||
Pensions | |||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Balance as of beginning period | (827) | (982) | (945) |
Other comprehensive gain (loss) before reclassification and tax | (25) | 96 | (172) |
Reclassification | 21 | ||
Income tax (expense) benefit | (15) | (53) | 22 |
Balance as of ending period | (781) | (827) | (982) |
Derivatives | |||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Balance as of beginning period | (1,334) | (462) | |
Reclassification | (72) | ||
Income tax (expense) benefit | 559 | ||
Net change in fair value of derivatives | (1,359) | ||
Balance as of ending period | (1,334) | ||
Derivatives | |||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Balance as of beginning period | (3,319) | ||
Reclassification | 291 | 307 | |
Income tax (expense) benefit | 10,335 | 303 | |
Net change in fair value of derivatives | (40,486) | (2,595) | |
Balance as of ending period | (33,179) | (3,319) | |
Net income (loss) | |||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Reclassification | 86 | 112 | 92 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable To Parent, Net Of Tax [Roll Forward] | |||
Balance as of beginning period | (4,146) | (2,316) | (1,407) |
Balance as of ending period | $ (33,960) | $ (4,146) | $ (2,316) |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 25, 2019 | Dec. 26, 2018 | |
Guarantor Obligations [Line Items] | ||
Loan amounts outstanding under the loan pools | $ 0.6 | $ 2.5 |
Maximum payments guaranteed | 0.5 | |
Liabilities included as a component of other noncurrent liabilities and deferred credits (less than) | $ 0.1 | $ 0.1 |
Minimum | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations, term | P1Y | |
Maximum | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations, term | P4Y |
Commitments and Contingencies_3
Commitments and Contingencies (Future Commitments) (Details) $ in Thousands | Dec. 25, 2019USD ($) |
Payments due by period: | |
Less than 1 year | $ 193,494 |
1-2 years | 0 |
3-4 years | 0 |
5 years and thereafter | 0 |
Total | $ 193,494 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Supplemental Cash Flow Information [Abstract] | |||
Income taxes paid, net | $ 24,147 | $ 3,254 | $ 6,367 |
Interest paid | 17,792 | 19,447 | 14,636 |
Noncash investing and financing activities: | |||
Noncash consideration received in connection with the sale of real estate | 3,000 | 0 | 0 |
Notes received in connection with disposition of property | 920 | 0 | 1,750 |
Property acquisition payable | 0 | 0 | 500 |
Accrued purchase of property | 1,791 | 178 | 531 |
Insurance proceeds receivable | 48 | 653 | 364 |
Issuance of common stock, pursuant to share-based compensation plans | 7,522 | 4,671 | 4,961 |
Execution of finance leases | 305 | ||
Execution of finance leases | 3,623 | 6,573 | |
Treasury stock payable | $ 1,816 | $ 72 | $ 120 |
Quarterly Data (Unaudited) (Det
Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 25, 2019 | Sep. 25, 2019 | Jun. 26, 2019 | Mar. 27, 2019 | Dec. 26, 2018 | Sep. 26, 2018 | Jun. 27, 2018 | Mar. 28, 2018 | Dec. 25, 2019 | Dec. 26, 2018 | Dec. 27, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 113,836 | $ 124,258 | $ 151,884 | $ 151,411 | $ 159,549 | $ 158,023 | $ 157,334 | $ 155,273 | $ 541,389 | $ 630,179 | $ 529,169 |
Total operating costs and expenses | 87,273 | 56,084 | 105,769 | 127,280 | 139,789 | 139,554 | 138,374 | 138,848 | 376,406 | 556,565 | 458,471 |
Operating income | 26,563 | 68,174 | 46,115 | 24,131 | 19,760 | 18,469 | 18,960 | 16,425 | 164,983 | 73,614 | 70,698 |
Net income | $ 18,559 | $ 49,122 | $ 34,239 | $ 15,490 | $ 11,503 | $ 10,805 | $ 11,626 | $ 9,759 | $ 117,410 | $ 43,693 | $ 39,594 |
Basic net income per share (in dollars per share) | $ 0.32 | $ 0.83 | $ 0.57 | $ 0.25 | $ 0.19 | $ 0.17 | $ 0.18 | $ 0.15 | $ 1.96 | $ 0.69 | $ 0.58 |
Diluted net income per share (in dollars per share) | $ 0.31 | $ 0.80 | $ 0.55 | $ 0.24 | $ 0.18 | $ 0.16 | $ 0.18 | $ 0.15 | $ 1.90 | $ 0.67 | $ 0.56 |
Total gains (losses) on sales of company restaurants | $ 93,608 | $ 513 | $ 1,729 | ||||||||
Real Estate | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total gains (losses) on sales of company restaurants | $ 11,874 | $ 0 | 1,918 | ||||||||
Franchised Risk Type | Revenue Benchmark | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise revenue, percentage | 96.00% | 90.00% | |||||||||
Company restaurant sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total gains (losses) on sales of company restaurants | $ 82,866 | $ (746) | (268) | ||||||||
Company restaurant sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 48,803 | $ 63,582 | $ 95,447 | $ 98,545 | $ 104,389 | $ 103,609 | $ 102,741 | $ 101,193 | 306,377 | 411,932 | 390,352 |
Franchise and license revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 65,033 | $ 60,676 | $ 56,437 | $ 52,866 | $ 55,160 | $ 54,414 | $ 54,593 | $ 54,080 | $ 235,012 | $ 218,247 | $ 138,817 |
Uncategorized Items - q4201910-
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (15,446,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 8,588,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (394,000) |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 551,000 |