Segment Reporting

9 Months Ended

Sep. 03, 2013

Segment Reporting [Abstract]

Segment Reporting

9. SEGMENT REPORTING

The Company operates 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 the Company does 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 for the 12 and 36 weeks ended September 3, 2013 and September 4, 2012 and as of September 3, 2013 and September 4, 2012, respectively. (in thousands):

	12 Weeks Ended September 3, 2013
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	28,786	$	16,061	$	9,336	$	—	$	54,183
Restaurant-level EBITDA		7,799		1,605		1,563		—		10,967
Capital expenditures		867		537		5,883		280		7,567
Property and equipment		72,572		43,662		39,517		1,722		157,473
	12 Weeks Ended September 4, 2012
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	25,188	$	17,174	$	5,525	$	—	$	47,887
Restaurant-level EBITDA		6,711		2,480		876		—		10,067
Capital expenditures		3,282		477		3,122		160		7,041
Property and equipment		61,042		41,470		21,734		1,365		125,611
	36 Weeks Ended September 3, 2013
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	93,685	$	54,146	$	26,514	$	—	$	174,345
Restaurant-level EBITDA		26,134		7,819		4,932		—		38,885
Capital expenditures		2,287		1,488		13,695		327		17,797
Property and equipment		72,572		43,662		39,517		1,722		157,473
	36 Weeks Ended September 4, 2012
	Del Frisco's		Sullivan's		Grille		Corporate		Consolidated
Revenues	$	81,288	$	56,468	$	13,809	$	—	$	151,565
Restaurant-level EBITDA		22,766		10,261		2,971		—		35,998
Capital expenditures		4,623		2,781		11,763		308		19,475
Property and equipment		61,042		41,470		21,734		1,365		125,611

In addition to using consolidated results in evaluating the Company’s performance and allocating its resources, the Company’s chief operating decision maker uses restaurant-level EBITDA, which is not a measure defined by GAAP. The Company defines restaurant-level EBITDA as operating income before pre-opening costs, general and administrative expenses, management and accounting fees paid to related party, asset advisory agreement termination fees, secondary public offering costs, public offering transaction bonuses, and depreciation and amortization. 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 expenses and management and accounting fees paid to related party are only included in the Company’s consolidated financial results as they are generally not specifically identifiable to individual operating segments as these costs relate to supporting all of the restaurant operations of the Company and the extension of the Company’s concepts into new markets. Public offering costs, transaction bonuses, and depreciation and amortization 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 the Company’s chief operating decision maker in allocating resources. See table below (in thousands) for a reconciliation of restaurant-level EBITDA to operating income from continuing operations.

	12 Weeks Ended				36 Weeks Ended
	September 3, 2013		September 4, 2012		September 3, 2013		September 4, 2012
Restaurant-level EBITDA	$	10,967	$	10,067	$	38,885	$	35,998
Less:
Pre-opening costs		835		1,129		1,754		2,031
General and administrative		4,174		3,292		12,112		8,692
Management and accounting fees paid to related party		—		56		—		1,252
Asset advisory agreement termination fee		—		3,000		—		3,000
Public offering costs		381		—		793		—
Public offering transaction bonuses		3,705		1,462		5,510		1,462
Depreciation and amortization		2,631		2,051		7,637		5,622
Operating income (loss)	$	(759)	$	(923)	$	11,079	$	13,939