ruth-10q_20180401.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to                      

Commission File Number 000-51485

 

Ruth’s Hospitality Group, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

72-1060618

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

1030 W. Canton Avenue, Suite 100,

Winter Park, FL

32789

(Address of principal executive offices)

(Zip code)

(407) 333-7440

Registrant’s telephone number, including area code

None

Former name, former address and former fiscal year, if changed since last report

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “accelerated filer,” “large accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

The number of shares outstanding of the registrant’s common stock as of April 27, 2018 was 30,939,408, which includes 1,135,300 shares of unvested restricted stock.

 

 

 

 

 


TABLE OF CONTENTS

 

 

 

 

Page

Part I — Financial Information

 

3

 

 

 

 

Item 1

Financial Statements:

 

3

 

 

 

 

 

Condensed Consolidated Balance Sheets as of April 1, 2018 and December 31, 2017

 

3

 

 

 

 

 

Condensed Consolidated Statements of Income for the Thirteen Week Periods ended April 1, 2018 and March 26, 2017

 

4

 

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the Thirteen Week Periods ended April 1, 2018 and March 26, 2017

 

5

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Thirteen Week Periods ended April 1, 2018 and March 26, 2017

 

6

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

 

 

 

 

Item 3

Quantitative and Qualitative Disclosures about Market Risk

 

23

 

 

 

 

Item 4

Controls and Procedures

 

24

 

 

 

Part II — Other Information

 

24

 

 

 

 

Item 1

Legal Proceedings

 

24

 

 

 

 

Item 1A

Risk Factors

 

24

 

 

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

24

 

 

 

 

Item 3

Defaults Upon Senior Securities

 

24

 

 

 

 

Item 4

Mine Safety Disclosures

 

24

 

 

 

 

Item 5

Other Information

 

25

 

 

 

 

Item 6

Exhibits

 

25

 

 

 

 

Signatures

 

26

 

2


PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets—Unaudited

(Amounts in thousands, except share and per share data)

 

 

 

April 1,

 

 

December 31,

 

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,168

 

 

$

4,051

 

Accounts receivable, less allowance for doubtful accounts 2018 - $392; 2017 - $361

 

 

13,127

 

 

 

21,626

 

Inventory

 

 

8,368

 

 

 

8,688

 

Prepaid expenses and other

 

 

2,476

 

 

 

2,680

 

Total current assets

 

 

26,139

 

 

 

37,045

 

Property and equipment, net of accumulated depreciation 2018 - $148,338; 2017 -

   $144,373

 

 

112,474

 

 

 

112,212

 

Goodwill

 

 

36,522

 

 

 

36,522

 

Franchise rights, net of accumulated amortization 2018 - $858; 2017 - $396

 

 

46,360

 

 

 

46,822

 

Other intangibles, net of accumulated amortization 2018 - $1,235; 2017 - $1,181

 

 

3,850

 

 

 

3,904

 

Deferred income taxes

 

 

5,843

 

 

 

4,947

 

Other assets

 

 

623

 

 

 

644

 

Total assets

 

$

231,811

 

 

$

242,096

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,384

 

 

$

10,510

 

Accrued payroll

 

 

13,018

 

 

 

15,903

 

Accrued expenses

 

 

8,687

 

 

 

11,203

 

Deferred revenue

 

 

36,579

 

 

 

42,596

 

Other current liabilities

 

 

8,100

 

 

 

8,313

 

Total current liabilities

 

 

73,768

 

 

 

88,525

 

Long-term debt

 

 

43,000

 

 

 

50,000

 

Deferred rent

 

 

22,406

 

 

 

21,993

 

Unearned franchise fees

 

 

3,034

 

 

 

 

Other liabilities

 

 

2,014

 

 

 

2,074

 

Total liabilities

 

 

144,222

 

 

 

162,592

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $.01 per share; 100,000,000 shares authorized, 29,789,715

   shares issued and outstanding at April 1, 2018, 29,645,790 shares issued and

   outstanding at December 31, 2017

 

 

298

 

 

 

296

 

Additional paid-in capital

 

 

77,169

 

 

 

77,017

 

Retained earnings

 

 

10,122

 

 

 

2,191

 

Treasury stock, at cost; 71,950 shares at April 1, 2018 and December 31, 2017

 

 

 

 

 

 

Total shareholders' equity

 

 

87,589

 

 

 

79,504

 

Total liabilities and shareholders' equity

 

$

231,811

 

 

$

242,096

 

 

See accompanying notes to condensed consolidated financial statements.

 

3


RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income—Unaudited

(Amounts in thousands, except share and per share data)

 

 

 

13 Weeks Ended

 

 

 

April 1,

 

 

March 26,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Restaurant sales

 

$

110,364

 

 

$

99,455

 

Franchise income

 

 

4,417

 

 

 

4,390

 

Other operating income

 

 

1,745

 

 

 

1,693

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

116,526

 

 

 

105,538

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Food and beverage costs

 

 

31,405

 

 

 

28,579

 

Restaurant operating expenses

 

 

51,679

 

 

 

45,447

 

Marketing and advertising

 

 

3,477

 

 

 

2,446

 

General and administrative costs

 

 

8,976

 

 

 

8,137

 

Depreciation and amortization expenses

 

 

4,461

 

 

 

3,505

 

Pre-opening costs

 

 

140

 

 

 

1,179

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

 

100,138

 

 

 

89,293

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

16,388

 

 

 

16,245

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(380

)

 

 

(179

)

Other

 

 

12

 

 

 

24

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

 

16,020

 

 

 

16,090

 

Income tax expense

 

 

2,384

 

 

 

5,005

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

13,636

 

 

 

11,085

 

Income (loss) from discontinued operations, net of income taxes

 

 

10

 

 

 

(37

)

 

 

 

 

 

 

 

 

 

Net income

 

$

13,646

 

 

$

11,048

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.46

 

 

$

0.36

 

Discontinued operations

 

 

 

 

 

 

Basic earnings per share

 

$

0.46

 

 

$

0.36

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.45

 

 

$

0.35

 

Discontinued operations

 

 

 

 

 

 

Diluted earnings per share

 

$

0.45

 

 

$

0.35

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

 

29,689,870

 

 

 

30,575,224

 

Diluted

 

 

30,384,180

 

 

 

31,253,186

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.11

 

 

$

0.09

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity—Unaudited  

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Retained Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

(Accumulated

 

 

Treasury Stock

 

 

Shareholders'

 

 

 

Shares

 

 

Value

 

 

Capital

 

 

Deficit)

 

 

Shares

 

 

Value

 

 

Equity

 

Balance at December 31, 2017

 

 

29,646

 

 

$

296

 

 

$

77,017

 

 

$

2,191

 

 

 

72

 

 

$

 

 

$

79,504

 

Net income

 

 

 

 

 

 

 

 

 

 

 

13,646

 

 

 

 

 

 

 

 

 

13,646

 

Cash dividends

 

 

 

 

 

 

 

 

 

 

 

(3,390

)

 

 

 

 

 

 

 

 

(3,390

)

Shares issued under stock compensation plan net

   of shares withheld for tax effects

 

 

146

 

 

 

2

 

 

 

(1,689

)

 

 

 

 

 

 

 

 

 

 

 

(1,687

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,841

 

 

 

 

 

 

 

 

 

 

 

 

1,841

 

Cumulative effect of a change in accounting principle (Note 2)

 

 

 

 

 

 

 

 

 

 

 

(2,324

)

 

 

 

 

 

 

 

 

(2,324

)

Balance at April 1, 2018

 

 

29,792

 

 

$

298

 

 

$

77,169

 

 

$

10,122

 

 

 

72

 

 

$

 

 

$

87,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 25, 2016

 

 

30,549

 

 

$

305

 

 

$

95,266

 

 

$

(16,562

)

 

 

72

 

 

$

 

 

$

79,009

 

Net income

 

 

 

 

 

 

 

 

 

 

 

11,048

 

 

 

 

 

 

 

 

 

11,048

 

Cash dividends

 

 

 

 

 

 

 

 

 

 

 

(2,862

)

 

 

 

 

 

 

 

 

(2,862

)

Shares issued under stock compensation plan net

   of shares withheld for tax effects

 

 

137

 

 

 

2

 

 

 

(999

)

 

 

 

 

 

 

 

 

 

 

 

(997

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,558

 

 

 

 

 

 

 

 

 

 

 

 

1,558

 

Balance at March 26, 2017

 

 

30,686

 

 

$

307

 

 

$

95,825

 

 

$

(8,376

)

 

 

72

 

 

$

 

 

$

87,756

 

 

See accompanying notes to condensed consolidated financial statements.

 

5


RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows—Unaudited

(Amounts in thousands)

 

 

 

13 Weeks Ended

 

 

 

April 1,

 

 

March 26,

 

 

 

2018

 

 

2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

13,646

 

 

$

11,048

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,461

 

 

 

3,505

 

Deferred income taxes

 

 

(150

)

 

 

542

 

Non-cash interest expense

 

 

21

 

 

 

56

 

Debt issuance costs written-off

 

 

 

 

 

16

 

Amortization of below market lease

 

 

20

 

 

 

 

Stock-based compensation expense

 

 

1,841

 

 

 

1,558

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

8,500

 

 

 

10,991

 

Inventories

 

 

320

 

 

 

(173

)

Prepaid expenses and other

 

 

204

 

 

 

244

 

Other assets

 

 

 

 

 

328

 

Accounts payable and accrued expenses

 

 

(8,771

)

 

 

(3,992

)

Deferred revenue

 

 

(6,055

)

 

 

(6,750

)

Deferred rent

 

 

355

 

 

 

232

 

Other liabilities

 

 

1,307

 

 

 

4,098

 

Net cash provided by operating activities

 

 

15,699

 

 

 

21,703

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(5,505

)

 

 

(7,170

)

Net cash used in investing activities

 

 

(5,505

)

 

 

(7,170

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal borrowings on long-term debt

 

 

2,000

 

 

 

8,000

 

Principal repayments on long-term debt

 

 

(9,000

)

 

 

(19,000

)

Cash dividend payments

 

 

(3,390

)

 

 

(2,862

)

Tax payments from the vesting of restricted stock and option exercises

 

 

(1,696

)

 

 

(1,055

)

Proceeds from the exercise of stock options

 

 

9

 

 

 

57

 

Deferred financing costs

 

 

 

 

 

(413

)

Net cash used in financing activities

 

 

(12,077

)

 

 

(15,273

)

Net decrease in cash and cash equivalents

 

 

(1,883

)

 

 

(740

)

Cash and cash equivalents at beginning of period

 

 

4,051

 

 

 

3,788

 

Cash and cash equivalents at end of period

 

$

2,168

 

 

$

3,048

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest, net of capitalized interest

 

$

375

 

 

$

141

 

Income taxes

 

$

971

 

 

$

195

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Accrued acquisition of property and equipment

 

$

1,278

 

 

$

1,962

 

 

See accompanying notes to condensed consolidated financial statements.

 

6


RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements—Unaudited

(1) The Company and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ruth’s Hospitality Group, Inc. and its subsidiaries (collectively, the Company) as of April 1, 2018 and December 31, 2017 and for the thirteen week periods ended April 1, 2018 and March 26, 2017 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). The condensed consolidated financial statements include the financial statements of Ruth’s Hospitality Group, Inc. and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Ruth’s Hospitality Group, Inc. is a restaurant company focused on the upscale dining segment. Ruth’s Hospitality Group, Inc. operates Company-owned Ruth’s Chris Steak House restaurants and sells franchise rights to Ruth’s Chris Steak House franchisees giving the franchisees the exclusive right to operate similar restaurants in a particular area designated in the franchise agreement. As of April 1, 2018, there were 153 Ruth’s Chris Steak House restaurants, including 77 Company-owned restaurants, two restaurants operating under contractual agreements and 74 franchisee-owned restaurants, including 20 international franchisee-owned restaurants in Aruba, Canada, China, Hong Kong, Indonesia, Japan, Mexico, Panama, Singapore and Taiwan. All Company-owned restaurants are located in the United States.  The Company terminated the franchise agreement of one of the international franchisee-owned Ruth’s Chris Steak House restaurants in the first quarter of fiscal year 2018.  A franchisee-owned Ruth’s Chris Steak House restaurant was closed permanently in Ridgeland, MS in March 2018.  

The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. The interim results of operations for the periods ended April 1, 2018 and March 26, 2017 are not necessarily indicative of the results that may be achieved for the full year. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the SEC’s rules and regulations. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

The Company operates on a 52- or 53-week fiscal year ending on the last Sunday in December. The fiscal quarters ended April 1, 2018 and March 26, 2017 each contained thirteen weeks and are referred to herein as the first quarter of fiscal year 2018 and the first quarter of fiscal year 2017, respectively. Fiscal year 2018 is a 52-week year.  Fiscal year 2017 was a 53-week year.

Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these condensed consolidated financial statements in conformity with GAAP. Significant items subject to such estimates and assumptions include the carrying amounts of property and equipment, goodwill, franchise rights, and obligations related to gift cards, incentive compensation, workers’ compensation and medical insurance. Actual results could differ from those estimates.

Recent Adopted Accounting Standard

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, and replaces most existing revenue recognition guidance in GAAP.  The Company adopted this new revenue recognition standard on January 1, 2018.  See Note 2 for further information about our transition to this new revenue recognition standard.

Recent Accounting Pronouncements for Future Application

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset.  The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases.  This update is effective for annual and interim periods beginning after December 15, 2018, which will require the Company to adopt these provisions in the first quarter of fiscal year 2019 using a modified retrospective approach.  The Company’s restaurants operate under facility lease agreements that provide for material future lease payments.  The restaurant facility leases comprise the majority of the Company’s material lease agreements.  The Company is currently evaluating the effect of the standard on its ongoing financial reporting, but expects that the adoption of ASU 2016-02 will have a material effect on its consolidated financial statements.  The Company expects that the most

7


significant changes relate to 1) the recognition of new right–of–use assets and lease liabilities on the consolidated balance sheet for restaurant facility operating leases; and 2) the derecognition of existing lease liabilities on the consolidated balance sheet related to scheduled rent increases.

(2) Revenue

The Company adopted FASB Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606) with an initial date of application of January 1, 2018.  As a result, the Company has changed its accounting policy for revenue recognition.  The Company applied Topic 606 using the cumulative effect method to contracts that were not completed at January 1, 2018, which resulted in the recognition of the cumulative effect of initially adopting Topic 606 as an adjustment to the opening balance of shareholders’ equity at January 1, 2018.  Therefore, the comparative information has not been adjusted and continues to be reported under the Company’s revenue recognition policy in effect prior to the adoption of Topic 606.  The Company adopted Topic 606 using the practical expedient in paragraph 606-10-65-1(f)(4), under which the Company aggregated all contract modifications that occurred before January 1, 2018 to identify the satisfied and unsatisfied performance obligations; determine the transaction price, and allocate the transaction price to the satisfied and unsatisfied performance obligations.  The details of the significant changes as a result of adopting Topic 606 are provided below.

Franchise Income.  Prior to the adoption of Topic 606, the Company recognized franchise development and opening fees when a franchisee-owned restaurant opened.  Under Topic 606, the Company now recognizes franchise development and opening specific fees over the life of the applicable franchise agreements.  The Company increased its deferred revenue liability by $3.1 million, increased its deferred tax assets by $746 thousand and decreased the opening balance of shareholders’ equity by $2.3 million for previously recognized franchise development and opening fees that will now be recognized over the life of the applicable franchise agreements.  The $3.1 million increase in deferred revenue is included in the following lines of the consolidated balance sheet:  $3.0 million in unearned franchise fees and $36 thousand in deferred revenue.  The adoption of Topic 606 also impacts the classification of advertising contributions from franchisees.  Prior to the adoption of Topic 606, the Company recorded advertising contributions from franchisees as a liability against which specific marketing and advertising costs were charged, which reduced the Company’s marketing expense on the consolidated statements of income.  Under Topic 606, advertising contributions from franchisees are classified as franchise income on the consolidated statements of income in fiscal year 2018.  The Company recognized $381 thousand of advertising contributions from franchisees in the first quarter of fiscal year 2018.  Because of the offsetting adjustments, the reclassification of advertising contributions from franchisees will have no impact to the Company’s net income for fiscal year 2018.

Gift Cards.  Under Topic 606, the Company now reclassifies certain discounts recognized on the sale of gift cards, historically recognized as marketing expense, as a reduction to restaurant sales on the consolidated statements of income.  The reclassification of discounts recognized on the sale of gift cards from marketing expense to restaurant sales on the consolidated statements of income totaled $226 thousand in the first quarter of fiscal year 2018.  Because of the offsetting adjustments, the reclassification of discounts recognized on the sale of gift cards will have no impact to the Company’s net income for fiscal year 2018.

Impacts on Financial Statements

The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the first quarter of fiscal year 2018.

8


 

 

As Reported

 

 

Adjustments

 

 

 

Balances without adoption of Topic 606

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,168

 

 

$

 

 

 

$

2,168

 

Accounts receivable, less allowance for doubtful accounts 2018 - $392; 2017 - $361

 

 

13,127

 

 

 

 

 

 

 

13,127

 

Inventory

 

 

8,368

 

 

 

 

 

 

 

8,368

 

Prepaid expenses and other

 

 

2,476

 

 

 

 

 

 

 

2,476

 

Total current assets

 

 

26,139

 

 

 

 

 

 

 

26,139

 

Property and equipment, net of accumulated depreciation 2018 - $148,338; 2017 -

   $144,373

 

 

112,474

 

 

 

 

 

 

 

112,474

 

Goodwill

 

 

36,522

 

 

 

 

 

 

 

36,522

 

Franchise rights, net of accumulated amortization 2018 - $858; 2017 - $396

 

 

46,360

 

 

 

 

 

 

 

46,360

 

Other intangibles, net of accumulated amortization 2018 - $1,235; 2017 - $1,181

 

 

3,850

 

 

 

 

 

 

 

3,850

 

Deferred income taxes

 

 

5,843

 

 

 

(746

)

 

 

 

5,097

 

Other assets

 

 

623

 

 

 

 

 

 

 

623

 

Total assets

 

$

231,811

 

 

$

(746

)

 

 

$

231,065

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,384

 

 

$

 

 

 

$

7,384

 

Accrued payroll

 

 

13,018

 

 

 

 

 

 

 

13,018

 

Accrued expenses

 

 

8,687

 

 

 

 

 

 

 

8,687

 

Deferred revenue

 

 

36,579

 

 

 

(36

)

 

 

 

36,543

 

Other current liabilities

 

 

8,100

 

 

 

 

 

 

 

8,100

 

Total current liabilities

 

 

73,768

 

 

 

(36

)

 

 

 

73,732

 

Long-term debt

 

 

43,000

 

 

 

 

 

 

 

43,000

 

Deferred rent

 

 

22,406

 

 

 

 

 

 

 

22,406

 

Unearned franchise fees

 

 

3,034

 

 

 

(3,034

)

 

 

 

 

Other liabilities

 

 

2,014

 

 

 

 

 

 

 

2,014

 

Total liabilities

 

 

144,222

 

 

 

(3,070

)

 

 

 

141,152

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $.01 per share; 100,000,000 shares authorized, 29,789,715

   shares issued and outstanding at April 1, 2018, 30,549,283 shares issued and

   outstanding at December 31, 2017

 

 

298

 

 

 

 

 

 

 

298

 

Additional paid-in capital

 

 

77,169

 

 

 

 

 

 

 

77,169

 

Retained earnings

 

 

10,122

 

 

 

2,324

 

 

 

 

12,446

 

Treasury stock, at cost; 71,950 shares at April 1, 2018 and December 31, 2017

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

87,589

 

 

 

2,324

 

 

 

 

89,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

231,811

 

 

$

(746

)

 

 

$

231,065

 

 

 

9


 

 

 

 

 

 

 

 

 

 

 

 

Balances without

 

 

 

As Reported

 

 

Adjustments

 

 

 

adoption of Topic 606

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

110,364

 

 

$

226

 

(1)

 

$

110,590

 

Franchise income

 

 

4,417

 

 

 

(439

)

(2)

 

 

3,978

 

Other operating income

 

 

1,745

 

 

 

 

 

 

 

1,745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

116,526

 

 

 

(213

)

 

 

 

116,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage costs

 

 

31,405

 

 

 

 

 

 

 

31,405

 

Restaurant operating expenses

 

 

51,679

 

 

 

 

 

 

 

51,679

 

Marketing and advertising

 

 

3,477

 

 

 

(155

)

(3)

 

 

3,322

 

General and administrative costs

 

 

8,976

 

 

 

 

 

 

 

8,976

 

Depreciation and amortization expenses

 

 

4,461

 

 

 

 

 

 

 

4,461

 

Pre-opening costs

 

 

140

 

 

 

 

 

 

 

140

 

Total costs and expenses

 

 

100,138

 

 

 

(155

)

 

 

 

99,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

16,388

 

 

 

(58

)

 

 

 

16,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(380

)

 

 

 

 

 

 

(380

)

Other

 

 

12