Segment Reporting

6 Months Ended

Jun. 13, 2017

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

We operate the Del Frisco’s, Sullivan’s, and Grille brands as operating segments. The restaurant concepts operate solely in the U.S. within the full-service dining industry, providing similar products to similar customers. Sales from external customers are derived principally from food and beverage sales, and we do not rely on any major customers as a source of sales. The restaurant concepts also possess similar economic characteristics, resulting in similar long-term expected financial performance characteristics. However, as Del Frisco’s restaurants typically have higher revenues, driven by their larger physical presence and higher average check, the Del Frisco’s, Sullivan’s, and Grille operating segments have varying operating income and restaurant-level EBITDA margins due to the leveraging of higher revenues on certain fixed operating costs such as management labor, rent, utilities, and building maintenance.

The following tables present information about reportable segments (in thousands):

	12 Weeks Ended June 13, 2017
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	40,194	$	15,620	$	26,487	$	—	$	82,301
Restaurant-level EBITDA	10,909		2,102		3,851		—		16,862
Capital expenditures	2,588		2,457		5,065		33		10,143
Property and equipment	122,925		52,179		124,784		2,566		302,454

	12 Weeks Ended June 14, 2016
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	37,945	$	17,575	$	24,396	$	—	$	79,916
Restaurant-level EBITDA	10,692		2,642		3,795		—		17,129
Capital expenditures	3,898		388		4,356		40		8,682
Property and equipment	109,652		48,156		104,997		2,498		265,303

	24 Weeks Ended June 13, 2017
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	79,955	$	33,402	$	52,834	$	—	$	166,191
Restaurant-level EBITDA	21,607		5,559		7,613		—		34,779
Capital expenditures	7,063		6,373		8,352		140		21,928
Property and equipment	122,925		52,179		124,784		2,566		302,454

	24 Weeks Ended June 14, 2016
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	76,288	$	36,476	$	48,346	$	—	$	161,110
Restaurant-level EBITDA	21,405		6,190		7,563		—		35,158
Capital expenditures	5,182		596		5,626		47		11,451
Property and equipment	109,652		48,156		104,997		2,498		265,303

In addition to using consolidated results in evaluating our performance and allocating our resources, our chief operating decision maker uses restaurant-level EBITDA, which is not a measure defined by GAAP. Management also uses restaurant-level EBITDA to gauge the overall profitability of our core restaurant operations and believes this information is therefore also useful to investors. Restaurant-level EBITDA on a consolidated basis should not be considered a substitute for, or superior to, net income, which is calculated in accordance with GAAP, and the reconciliations to net income set forth below should be carefully evaluated.

We define restaurant-level EBITDA as income before income taxes, other income (expenses), net, pre-opening costs, general and administrative costs, consulting project costs, reorganization severance costs, lease termination and closing costs, depreciation and amortization, and insurance settlements. Pre-opening costs are excluded because they vary in timing and magnitude and are not related to the health of ongoing operations. General and administrative costs are only included in our consolidated financial results as they are generally not specifically identifiable to individual operating segments as these costs relate to supporting all of the our restaurant operations of and the extension of our concepts into new markets. Lease termination and closing costs, consulting project costs, reorganization severance costs, depreciation and amortization, and insurance settlements are excluded because they are not ongoing controllable cash expenses, and they are not related to the health of ongoing operations. Property and equipment is the only balance sheet measure used by our chief operating decision maker in allocating resources.

The following table reconciles net income to restaurant-level EBITDA (in thousands):

	12 Weeks Ended					24 Weeks Ended
	June 13, 2017			June 14, 2016		June 13, 2017			June 14, 2016
Net income	$	2,090		$	4,444	$	5,400		$	9,855
Income tax expense	824			1,852		1,910			4,289
Net income before income taxes	2,914			6,296		7,310			14,144
Interest expense, net of capitalized interest	9			24		19			55
Other	10			5		11			5
Operating income	2,933			6,325		7,340			14,204
Pre-opening costs	1,619			591		2,008			685
General and administrative costs	5,921			6,030		12,076			11,780
Consulting project costs	597			—		2,633			—
Reorganization severance	563			—		719			—
Lease termination and closing costs	540			20		538			41
Depreciation and amortization	4,997			4,163		9,813			8,448
Insurance settlements	(308		)	—		(348		)	—
Restaurant-level EBITDA	$	16,862		$	17,129	$	34,779		$	35,158