QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
x | Accelerated filer | ¨ | ||||||||||||
Non-accelerated filer | ¨ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
PART I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
June 27, 2020 | December 28, 2019 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Advertising fund assets, restricted | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Trademarks | |||||||||||
Customer relationships, net | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders' deficit | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Other current liabilities | |||||||||||
Current portion of debt | |||||||||||
Advertising fund liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net | |||||||||||
Deferred revenues, net of current | |||||||||||
Deferred income tax liabilities, net | |||||||||||
Other non-current liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (see Note 7) | |||||||||||
Stockholders' deficit | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in-capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' deficit | ( | ( | |||||||||
Total liabilities and stockholders' deficit | $ | $ |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Royalty revenue, franchise fees and other | $ | $ | $ | $ | |||||||||||||||||||
Advertising fees and related income | |||||||||||||||||||||||
Company-owned restaurant sales | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales (1) | |||||||||||||||||||||||
Advertising expenses | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Dividends per share | $ | $ | $ | $ |
Common Stock | |||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Balance at December 29, 2018 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Adjustment for ASC 842 adoption | — | — | — | ||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock plans | — | ||||||||||||||||||||||||||||
Tax payments for restricted stock upon vesting | ( | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Dividends paid | — | — | ( | ( | ( | ||||||||||||||||||||||||
Balance at March 30, 2019 | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock plans | — | ||||||||||||||||||||||||||||
Tax payments for restricted stock upon vesting | ( | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Dividends paid | — | — | ( | ( | ( | ||||||||||||||||||||||||
Balance at June 29, 2019 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Balance at December 28, 2019 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock plans | — | ||||||||||||||||||||||||||||
Tax payments for restricted stock upon vesting | ( | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Dividends paid | — | — | ( | ( | ( | ||||||||||||||||||||||||
Balance at March 28, 2020 | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Shares issued under stock plans | — | — | |||||||||||||||||||||||||||
Tax payments for restricted stock upon vesting | ( | — | — | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Dividends paid | — | — | ( | ( | ( | ||||||||||||||||||||||||
Balance at June 27, 2020 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Twenty-Six Weeks Ended | |||||||||||
June 27, 2020 | June 29, 2019 | ||||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Deferred income taxes | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Gain on disposal of assets | ( | ||||||||||
Amortization of debt issuance costs | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Advertising fund assets and liabilities, net | ( | ||||||||||
Accounts payable and other current liabilities | ( | ( | |||||||||
Deferred revenue | ( | ||||||||||
Other non-current liabilities | ( | ||||||||||
Cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sales of assets | |||||||||||
Cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Proceeds from exercise of stock options | |||||||||||
Borrowings of long-term debt | |||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Tax payments for restricted stock upon vesting | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Cash provided by (used in) financing activities | ( | ||||||||||
Net increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ |
June 27, 2020 | December 28, 2019 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Restricted cash, included in Advertising fund assets, restricted | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Dilutive shares | |||||||||||||||||||||||
Diluted weighted average shares outstanding |
Fair Value Hierarchy | June 27, 2020 | December 28, 2019 | |||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||||
Securitized Financing Facility: | |||||||||||||||||||||||||||||
2018-1 Class A-2 Senior Secured Notes (1) | Level 2 | $ | $ | $ | $ | ||||||||||||||||||||||||
2018-1 Class A-1 Variable Funding Senior Notes (2) | Level 2 | $ | $ | $ | $ |
June 27, 2020 | December 28, 2019 | ||||||||||
2018-1 Class A-2 Senior Secured Notes | $ | $ | |||||||||
2018-1 Class A-1 Variable Funding Senior Notes | |||||||||||
Debt issuance costs, net of amortization | ( | ( | |||||||||
Total debt | |||||||||||
Less: current portion of debt | ( | ( | |||||||||
Long-term debt, net | $ | $ |
Stock Options | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value | Weighted Average Remaining Term | ||||||||||||||||||||
Outstanding - December 28, 2019 | $ | $ | |||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Outstanding - June 27, 2020 | $ | $ |
Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | Performance Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
Outstanding - December 28, 2019 | $ | $ | |||||||||||||||||||||
Units granted | |||||||||||||||||||||||
Units vested | ( | ( | |||||||||||||||||||||
Units canceled | ( | ( | |||||||||||||||||||||
Outstanding - June 27, 2020 | $ | $ |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Royalty revenue | $ | $ | $ | $ | |||||||||||||||||||
Advertising fees and related income | |||||||||||||||||||||||
Franchise fees |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Domestic Franchised Activity: | |||||||||||||||||||||||
Beginning of period | 1,221 | 1,112 | 1,200 | 1,095 | |||||||||||||||||||
Openings | 23 | 29 | 45 | 49 | |||||||||||||||||||
Closures | (2) | (2) | (3) | (5) | |||||||||||||||||||
Re-franchised by Company | 2 | — | 2 | — | |||||||||||||||||||
Restaurants end of period | 1,244 | 1,139 | 1,244 | 1,139 | |||||||||||||||||||
Domestic Company-Owned Activity: | |||||||||||||||||||||||
Beginning of period | 32 | 29 | 31 | 29 | |||||||||||||||||||
Openings | — | — | 1 | — | |||||||||||||||||||
Closures | — | — | — | — | |||||||||||||||||||
Re-franchised to franchisees | (2) | — | (2) | — | |||||||||||||||||||
Restaurants end of period | 30 | 29 | 30 | 29 | |||||||||||||||||||
Total Domestic Restaurants | 1,274 | 1,168 | 1,274 | 1,168 | |||||||||||||||||||
International Franchised Activity: | |||||||||||||||||||||||
Beginning of period | 160 | 132 | 154 | 128 | |||||||||||||||||||
Openings | 2 | 5 | 8 | 11 | |||||||||||||||||||
Closures | — | (2) | — | (4) | |||||||||||||||||||
Restaurants end of period | 162 | 135 | 162 | 135 | |||||||||||||||||||
Total System-wide Restaurants | 1,436 | 1,303 | 1,436 | 1,303 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Number of system-wide restaurants open at end of period | 1,436 | 1,303 | 1,436 | 1,303 | |||||||||||||||||||
System-wide sales (1) | $ | 509,045 | $ | 371,505 | $ | 938,952 | $ | 733,865 | |||||||||||||||
Domestic restaurant AUV | $ | 1,366 | $ | 1,189 | $ | 1,366 | $ | 1,189 | |||||||||||||||
Domestic same store sales growth | 31.9 | % | 12.8 | % | 21.0 | % | 9.9 | % | |||||||||||||||
Company-owned domestic same store sales growth | 24.7 | % | 13.8 | % | 15.7 | % | 9.1 | % | |||||||||||||||
Total revenue | $ | 66,105 | $ | 48,562 | $ | 121,541 | $ | 96,615 | |||||||||||||||
Net income | $ | 11,539 | $ | 4,918 | $ | 19,635 | $ | 11,524 | |||||||||||||||
Adjusted EBITDA (2) | $ | 20,888 | $ | 13,549 | $ | 37,245 | $ | 27,435 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||||||||||
Net income | $ | 11,539 | $ | 4,918 | $ | 19,635 | $ | 11,524 | |||||||||||||||
Interest expense, net | 4,214 | 4,299 | 8,359 | 8,709 | |||||||||||||||||||
Income tax expense | 3,784 | 1,070 | 5,014 | 1,825 | |||||||||||||||||||
Depreciation and amortization | 1,398 | 1,335 | 2,953 | 2,611 | |||||||||||||||||||
EBITDA | $ | 20,935 | $ | 11,622 | $ | 35,961 | $ | 24,669 | |||||||||||||||
Additional adjustments: | |||||||||||||||||||||||
Gain on disposal of assets (a) | (2,016) | — | (2,016) | — | |||||||||||||||||||
Stock-based compensation expense (b) | 1,969 | 1,927 | 3,300 | 2,766 | |||||||||||||||||||
Adjusted EBITDA | $ | 20,888 | $ | 13,549 | $ | 37,245 | $ | 27,435 |
Thirteen Weeks Ended | Increase / (Decrease) | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | $ | % | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Royalty revenue, franchise fees and other | $ | 27,858 | $ | 21,187 | $ | 6,671 | 31.5 | % | |||||||||||||||
Advertising fees and related income | 19,923 | 13,487 | 6,436 | 47.7 | % | ||||||||||||||||||
Company-owned restaurant sales | 18,324 | 13,888 | 4,436 | 31.9 | % | ||||||||||||||||||
Total revenue | 66,105 | 48,562 | 17,543 | 36.1 | % | ||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales (1) | 13,387 | 10,573 | 2,814 | 26.6 | % | ||||||||||||||||||
Advertising expenses | 18,589 | 12,973 | 5,616 | 43.3 | % | ||||||||||||||||||
Selling, general and administrative | 13,194 | 13,394 | (200) | (1.5) | % | ||||||||||||||||||
Depreciation and amortization | 1,398 | 1,335 | 63 | 4.7 | % | ||||||||||||||||||
Total costs and expenses | 46,568 | 38,275 | 8,293 | 21.7 | % | ||||||||||||||||||
Operating income | 19,537 | 10,287 | 9,250 | 89.9 | % | ||||||||||||||||||
Interest expense, net | 4,214 | 4,299 | (85) | (2.0) | % | ||||||||||||||||||
Income before income tax expense | 15,323 | 5,988 | 9,335 | 155.9 | % | ||||||||||||||||||
Income tax expense | 3,784 | 1,070 | 2,714 | 253.6 | % | ||||||||||||||||||
Net income | $ | 11,539 | $ | 4,918 | $ | 6,621 | 134.6 | % |
Thirteen Weeks Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | ||||||||||||||||||||||
In dollars | As a % of company-owned restaurant sales | In dollars | As a % of company-owned restaurant sales | ||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Food, beverage and packaging costs | $ | 5,954 | 32.5 | % | $ | 5,205 | 37.5 | % | |||||||||||||||
Labor costs | 4,687 | 25.6 | % | 3,193 | 23.0 | % | |||||||||||||||||
Other restaurant operating expenses | 3,086 | 16.8 | % | 2,556 | 18.4 | % | |||||||||||||||||
Vendor rebates | (340) | (1.9) | % | (381) | (2.7) | % | |||||||||||||||||
Total cost of sales | $ | 13,387 | 73.1 | % | $ | 10,573 | 76.1 | % |
Twenty-Six Weeks Ended | Increase / (Decrease) | ||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | $ | % | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Royalty revenue, franchise fees and other | $ | 52,057 | $ | 42,515 | $ | 9,542 | 22.4 | % | |||||||||||||||
Advertising fees and related income | 35,937 | 26,697 | 9,240 | 34.6 | % | ||||||||||||||||||
Company-owned restaurant sales | 33,547 | 27,403 | 6,144 | 22.4 | % | ||||||||||||||||||
Total revenue | 121,541 | 96,615 | 24,926 | 25.8 | % | ||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales (1) | 24,563 | 20,303 | 4,260 | 21.0 | % | ||||||||||||||||||
Advertising expenses | 33,513 | 25,707 | 7,806 | 30.4 | % | ||||||||||||||||||
Selling, general and administrative | 27,504 | 25,936 | 1,568 | 6.0 | % | ||||||||||||||||||
Depreciation and amortization | 2,953 | 2,611 | 342 | 13.1 | % | ||||||||||||||||||
Total costs and expenses | 88,533 | 74,557 | 13,976 | 18.7 | % | ||||||||||||||||||
Operating income | 33,008 | 22,058 | 10,950 | 49.6 | % | ||||||||||||||||||
Interest expense, net | 8,359 | 8,709 | (350) | (4.0) | % | ||||||||||||||||||
Income before income tax expense | 24,649 | 13,349 | 11,300 | 84.7 | % | ||||||||||||||||||
Income tax expense | 5,014 | 1,825 | 3,189 | 174.7 | % | ||||||||||||||||||
Net income | $ | 19,635 | $ | 11,524 | $ | 8,111 | 70.4 | % |
Twenty-Six Weeks Ended | |||||||||||||||||||||||
June 27, 2020 | June 29, 2019 | ||||||||||||||||||||||
In dollars | As a % of company-owned restaurant sales | In dollars | As a % of company-owned restaurant sales | ||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Food, beverage and packaging costs | $ | 11,431 | 34.1 | % | $ | 10,022 | 36.6 | % | |||||||||||||||
Labor costs | 8,211 | 24.5 | % | 6,217 | 22.7 | % | |||||||||||||||||
Other restaurant operating expenses | 5,652 | 16.8 | % | 4,833 | 17.6 | % | |||||||||||||||||
Vendor rebates | (731) | (2.2) | % | (769) | (2.8) | % | |||||||||||||||||
Total cost of sales | $ | 24,563 | 73.2 | % | $ | 20,303 | 74.1 | % |
Twenty-Six Weeks Ended | |||||||||||
June 27, 2020 | June 29, 2019 | ||||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 25,612 | $ | 10,491 | |||||||
Investing activities | (370) | (1,442) | |||||||||
Financing activities | 9,021 | (6,782) | |||||||||
Net change in cash and cash equivalents | $ | 34,263 | $ | 2,267 |
Exhibit No. | Description | ||||
3.1* | |||||
3.2 | |||||
31.1* | |||||
31.2* | |||||
32.1** | |||||
32.2** | |||||
101 INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101 SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||
101 CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101 DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
101 LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101 PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and Contained in Exhibit 101) |
Wingstop Inc. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | July 29, 2020 | By: | /s/ Charles R. Morrison | |||||||||||
Chairman and Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) | ||||||||||||||
Date: | July 29, 2020 | By: | /s/ Michael J. Skipworth | |||||||||||
Chief Financial Officer | ||||||||||||||
(Principal Financial and Accounting Officer) |
i. | 100,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), and |
ii. | 15,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”). |
i. | Voting. Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other series, to vote thereon pursuant to this Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL. There shall be no cumulative voting in the election of directors. |
ii. | Dividends. Dividends may be declared and paid on Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend rights of any then outstanding Preferred Stock. Except as otherwise provided by the DGCL or this Certificate of Incorporation, the holders of record of Common Stock shall share ratably in all dividends payable in cash, stock or otherwise and other distributions, whether in respect of liquidation or dissolution (voluntary or involuntary) or otherwise. |
iii. | No Preemptive Rights. The holders of Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of the Corporation whether now or hereafter authorized. |
iv. | No Conversion Rights. Common Stock shall not be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same class of the Corporation’s capital stock. |
v. | Liquidation Rights. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of Common Stock held by them, subject to any preferential rights of any then outstanding Preferred Stock. A merger or consolidation of the Corporation with or into any other corporation or other entity or a sale or conveyance of all or any part of the assets of the Corporation, in any such case which shall not in fact result in the liquidation of the Corporation and the distribution of assets to its stockholders, shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Article IV(b)(v). |
i. | prior to such time, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, or |
ii. | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least eighty-five percent (85%) of the Voting Stock outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers of the Corporation and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or |
iii. | at or subsequent to that time, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding Voting Stock that is not owned by the interested stockholder. |
i. | “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person. |
ii. | “associate,” when used to indicate a relationship with any person, means: (A) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent (20%) or more of any class of Voting Stock; (B) any trust or other estate in which such person has at least a twenty percent (20%) beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (C) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person. |
iii. | “business combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means: |
A. | any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (1) with the interested stockholder, or (2) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation Article (VIII)(b) is not applicable to the surviving entity; |
B. | any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to ten percent (10%) or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation; |
C. | any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (1) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (2) pursuant to a merger under Section 251(g) of the DGCL; (3) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all stockholders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (4) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all stockholders of said stock; or (5) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (3)-(5) of this subsection (C) shall there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments); |
D. | any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or |
E. | any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (A)-(D) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary. |
iv. | “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of twenty percent (20%) or more of the voting power of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article VIII, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity. |
v. | Reserved. |
vi. | “interested stockholder” means any person (other than the Corporation and its subsidiaries) that (A) is the owner of fifteen percent (15%) or more of the Voting Stock of the Corporation, or (B) is an affiliate or associate of the Corporation and was the owner of fifteen percent (15%) or more of the Voting Stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of such person; but “interested stockholder” shall not include any person whose ownership of shares in excess of the fifteen percent (15%) limitation set forth herein is the result of any action taken solely by the Corporation; provided that such person shall be an interested stockholder if thereafter such person acquires additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. |
vii. | “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its affiliates or associates: |
A. | beneficially owns such stock, directly or indirectly; or |
B. | has (1) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (2) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more persons; or |
C. | has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in Article VIII(c)(vii)(B)(2) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock. |
viii. | “person” means any individual, corporation, partnership, unincorporated association or other entity. |
ix. | “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest. |
Date: | July 29, 2020 | ||||
By: | /s/ Charles R. Morrison | ||||
Chairman and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Date: | July 29, 2020 | ||||
By: | /s/ Michael J. Skipworth | ||||
Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |
Date: | July 29, 2020 | ||||
By: | /s/ Charles R. Morrison | ||||
Chairman and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Date: | July 29, 2020 | ||||
By: | /s/ Michael J. Skipworth | ||||
Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) | |||||
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
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Revenue: | ||||||
Royalty revenue, franchise fees and other | $ 27,858 | $ 21,187 | $ 52,057 | $ 42,515 | ||
Advertising fees and related income | 19,923 | 13,487 | 35,937 | 26,697 | ||
Total revenue | 66,105 | 48,562 | 121,541 | 96,615 | ||
Costs and expenses: | ||||||
Cost of sales (1) | [1] | 13,387 | 10,573 | 24,563 | 20,303 | |
Advertising expenses | 18,589 | 12,973 | 33,513 | 25,707 | ||
Selling, general and administrative | 13,194 | 13,394 | 27,504 | 25,936 | ||
Depreciation and amortization | 1,398 | 1,335 | 2,953 | 2,611 | ||
Total costs and expenses | 46,568 | 38,275 | 88,533 | 74,557 | ||
Operating income | 19,537 | 10,287 | 33,008 | 22,058 | ||
Interest expense, net | 4,214 | 4,299 | 8,359 | 8,709 | ||
Income before income tax expense | 15,323 | 5,988 | 24,649 | 13,349 | ||
Income tax expense | 3,784 | 1,070 | 5,014 | 1,825 | ||
Net income | $ 11,539 | $ 4,918 | $ 19,635 | $ 11,524 | ||
Earnings per share | ||||||
Basic | $ 0.39 | $ 0.17 | $ 0.66 | $ 0.39 | ||
Diluted | $ 0.39 | $ 0.17 | $ 0.66 | $ 0.39 | ||
Weighted average shares outstanding | ||||||
Basic | 29,588 | 29,418 | 29,538 | 29,377 | ||
Diluted | 29,793 | 29,667 | 29,751 | 29,650 | ||
Dividends per share | $ 0.11 | $ 0.09 | $ 0.22 | $ 0.18 | ||
Franchisor Owned Outlet | ||||||
Revenue: | ||||||
Total revenue | $ 18,324 | $ 13,888 | $ 33,547 | $ 27,403 | ||
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Basis of Presentation (Notes) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation and Update to Significant Accounting Policies Basis of Presentation Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants. As of June 27, 2020, the Company had 1,244 domestic franchised restaurants, and 162 international franchised restaurants. As of June 27, 2020, the Company owned and operated 30 restaurants. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Balance sheet amounts are as of June 27, 2020 and December 28, 2019, and operating results are for the thirteen and twenty-six weeks ended June 27, 2020 and June 29, 2019. In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019. The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2020 and 2019 each have 52 weeks. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
Segment Reporting Historically, the Company had two reporting segments: franchise operations and company restaurant operations. In accordance with Accounting Standards Codification 280 “Segment Reporting”, the Company uses the management approach for determining its reportable segments. The management approach is based upon the way management reviews performance and allocates resources. Due to changes in how the Company’s chief operating decision maker assesses the Company’s performance and allocates resources, the Company reevaluated its operating segments and has determined it has one operating segment and one reporting segment. Recently Issued Accounting Pronouncements In December 2019, the Financial Accounting Standards Board issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company is currently assessing the impact of adopting this standard but does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
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Earnings per Share (Notes) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Earnings per Share Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities convertible into, or other contracts to issue, common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of the exercise and vesting of stock options and restricted stock units, respectively, as determined using the treasury stock method. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):
For the thirteen weeks ended June 27, 2020 and June 29, 2019, equity awards representing approximately 1,000 and 6,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive. For the twenty-six weeks ended June 27, 2020 and June 29, 2019, equity awards representing approximately 1,000 and 18,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.
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Dividends (Notes) |
6 Months Ended |
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Jun. 27, 2020 | |
Dividends [Abstract] | |
Dividends Disclosure [Text Block] | Dividends In each of the first two quarters of 2020, the Company’s Board of Directors declared a quarterly dividend of $0.11 per share of common stock, which, in the aggregate, totaled $6.5 million, or $0.22 per share of common stock, and which was paid during the twenty-six weeks ended June 27, 2020. Subsequent to the second quarter, on July 28, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.14 per share of common stock for stockholders of record as of August 28, 2020, to be paid on September 11, 2020, totaling approximately $4.1 million.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows: Level 1 — Unadjusted quoted prices for identical instruments traded in active markets. Level 2 — Observable market-based inputs or unobservable inputs corroborated by market data. Level 3 — Unobservable inputs reflecting management’s estimates and assumptions. The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands):
(1) The fair value of the 2018-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value of the 2018-1 Class A-1 Variable Funding Senior Notes was estimated based on the borrowing rates currently available for variable rate loans obtained from third-party lending institutions and approximated the book value of such 2018-1 Class A-1 Variable Funding Senior Notes. The Company also measures certain non-financial assets (primarily long-lived assets, intangible assets, and goodwill) at fair value on a non-recurring basis in connection with its periodic evaluations of such assets for potential impairment.
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Income Taxes |
6 Months Ended |
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Jun. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense and the effective tax rate were $3.8 million and 24.7%, respectively, for the thirteen weeks ended June 27, 2020, and $1.1 million and 17.9%, respectively, for the thirteen weeks ended June 29, 2019. Income tax expense and the effective tax rate were $5.0 million and 20.3%, respectively, for the twenty-six weeks ended June 27, 2020, and $1.8 million and 13.7%, respectively, for the twenty-six weeks ended June 29, 2019. Income tax expense for the thirteen and twenty-six weeks ended June 27, 2020 included $0.2 million and $1.5 million, respectively, in tax benefits resulting from the recognition of excess tax benefits from stock-based compensation, as compared to $0.6 million and $1.8 million in tax benefits for the thirteen and twenty-six weeks ended June 29, 2019, respectively.
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Debt Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | Debt Obligations Long-term debt consists of the following components (in thousands):
The Company's outstanding debt consists of (i) Series 2018-1 4.97% Fixed Rate Senior Secured Notes, Class A-2 (the “Class A-2 Notes”) issued by Wingstop Funding LLC (the “Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of Wingstop Inc. and (ii) Series 2018-1 Variable Funding Senior Notes, Class A-1, which permit borrowings of up to a maximum principal amount of $20 million, which may be used to borrow amounts on a revolving basis and to issue letters of credit (the “Variable Funding Notes,” and together with the Class A-2 Notes, the “Notes”). As of June 27, 2020, we had $316.8 million of Class A-2 Notes outstanding and $16.0 million of Variable Funding Notes outstanding. The Variable Funding Notes were issued in the first quarter of 2020 as a precautionary measure to improve the Company's cash position. The Variable Funding Notes had a weighted average interest rate of 2.72% during the twenty-six weeks ended June 27, 2020 and are classified as current debt. There were no borrowings outstanding under the Variable Funding Notes as of December 28, 2019. Further, as of June 27, 2020 and December 28, 2019, $4.0 million of letters of credit were outstanding against the Variable Funding Notes, which relate primarily to interest reserves required under the base indenture and related supplemental indenture. There were no amounts drawn down on the letters of credit as of June 27, 2020 or December 28, 2019. During the first fiscal quarter of 2020, the Company had a leverage ratio under the Class A-2 Notes of less than 5.0x. Per the terms of the Company’s debt agreements, principal payments on the Class A-2 Notes are not due until the repayment date as long as the Company maintains a leverage ratio of less than 5.0x. As such, the Company ceased making principal payments beginning in the second quarter of 2020. Accordingly, the entire outstanding balance of the Class A-2 Notes has been classified as long-term debt. The Class A-2 Notes and the Variable Funding Notes were each issued in a securitization transaction pursuant to which certain of the Company’s domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements and intellectual property, were contributed or otherwise transferred to the Issuer and certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as guarantors of the Notes and that have pledged substantially all of their assets.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe Company is subject to legal proceedings, claims, and liabilities, such as employment-related claims and premises-liability cases, which arise in the ordinary course of business and are generally covered by insurance. In the opinion of management, the amount of ultimate liability with respect to such actions is not likely to have a material adverse impact on the Company’s financial position, results of operations, or cash flows. |
Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the date of grant, based on the calculated fair value of the award, and is recognized as expense over the requisite employee service period (generally the vesting period of the award). The Company recognized $3.3 million in stock-based compensation expense for the twenty-six weeks ended June 27, 2020, with a corresponding increase to additional paid-in-capital. Stock-based compensation expense is included in selling, general and administrative expense in the Consolidated Statements of Operations. Stock Options The following table summarizes stock option activity (in thousands, except term and per share data):
The total grant-date fair value of stock options vested during the twenty-six weeks ended June 27, 2020 was $0.2 million. The total intrinsic value of stock options exercised during the twenty-six weeks ended June 27, 2020 was $2.8 million. As of June 27, 2020, total unrecognized compensation expense related to unvested stock options was $1.4 million, which is expected to be recognized over a weighted-average period of 2.7 years. During the twenty-six weeks ended June 27, 2020, there was a modification to certain awards resulting in additional compensation expense of $0.4 million. Restricted Stock Units and Performance Stock Units The following table summarizes activity related to restricted stock units (“RSUs”) and performance stock units (“PSUs”) (in thousands, except per share data):
The fair value of the Company’s RSUs and PSUs is based on the closing market price of the stock on the date of grant. The RSUs granted during the twenty-six weeks ended June 27, 2020 vest over a three-year service period. As of June 27, 2020, total unrecognized compensation expense related to unvested RSUs was $3.4 million, which is expected to be recognized over a weighted-average period of 1.9 years. The Company granted 40,529 PSUs during the twenty-six weeks ended June 27, 2020 that are based on a service condition and a performance vesting condition based on the achievement of certain adjusted EBITDA targets over a performance period of three years. The maximum vesting percentage that could be realized for each of the PSUs is 250% based on the level of performance achieved for the respective awards, as well as a market vesting condition linked to the level of total stockholder return received by the Company’s stockholders during the performance period measured against the companies in the S&P 600 Restaurant Index (“TSR PSUs”). The TSR PSUs were valued based on a Monte Carlo simulation model to reflect the impact of the total stockholder return market condition, resulting in a grant-date fair value range of $0.00 to $157.96 per unit based on the outcome of the performance condition. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for TSR PSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. The compensation expense related to the PSUs is recognized over the vesting period when the achievement of the performance conditions becomes probable. The total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest. As of June 27, 2020, total unrecognized compensation expense related to unvested PSUs was $5.8 million.
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Property, Plant, and Equipment |
6 Months Ended |
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Jun. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment Transactions | Company-owned Restaurant Transactions During the Company’s fiscal quarter ended June 27, 2020, the Company sold two company-owned restaurants in the Houston market to an existing franchisee for proceeds of $2.3 million. In connection with the sale of the restaurants, the Company recorded a $2.0 million pre-tax gain on the sale of the related assets and liabilities, which was net of a $28,000 reduction in goodwill. The net gain on these restaurants was recorded in Selling, general and administrative expense on our Consolidated Statements of Operations. Subsequent to the end of the Company’s fiscal quarter ended June 27, 2020, the Company completed the sale of five company-owned restaurants in the Kansas City market to an existing franchisee for proceeds of $2.5 million. The total assets associated with these restaurants held for sale totaled $1.9 million and were included in Prepaid expenses and other current assets on the Consolidated Balance Sheet as of June 27, 2020.
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Revenue from Contracts with Customers (Notes) |
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue from Contracts with Customers The following table represents a disaggregation of revenue from contracts with customers for the thirteen and twenty-six weeks ended June 27, 2020 and June 29, 2019 (in thousands):
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Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 27, 2020 | |
Accounting Policies [Abstract] | |
Fiscal Year End | The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2020 and 2019 each have 52 weeks |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In December 2019, the Financial Accounting Standards Board issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company is currently assessing the impact of adopting this standard but does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
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Segment Reporting | Segment ReportingHistorically, the Company had two reporting segments: franchise operations and company restaurant operations. In accordance with Accounting Standards Codification 280 “Segment Reporting”, the Company uses the management approach for determining its reportable segments. The management approach is based upon the way management reviews performance and allocates resources. Due to changes in how the Company’s chief operating decision maker assesses the Company’s performance and allocates resources, the Company reevaluated its operating segments and has determined it has one operating segment and one reporting segment. |
Basis of Presentation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 27, 2020 and December 28, 2019 were as follows (in thousands):
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Earnings per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Basic Shares Outstanding to Diluted Shares Outstanding | Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):
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Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements, Nonrecurring | Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands):
(1) The fair value of the 2018-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value of the 2018-1 Class A-1 Variable Funding Senior Notes was estimated based on the borrowing rates currently available for variable rate loans obtained from third-party lending institutions and approximated the book value of such 2018-1 Class A-1 Variable Funding Senior Notes.
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Debt Obligations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt consists of the following components (in thousands):
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | The following table summarizes stock option activity (in thousands, except term and per share data):
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Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes activity related to restricted stock units (“RSUs”) and performance stock units (“PSUs”) (in thousands, except per share data):
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Revenue from Contracts with Customers (Tables) |
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Jun. 27, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table represents a disaggregation of revenue from contracts with customers for the thirteen and twenty-six weeks ended June 27, 2020 and June 29, 2019 (in thousands):
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Basis of Presentation - Overview (Details) |
Jun. 27, 2020
restaurant
|
---|---|
Franchised Units | United States | |
Franchisor Disclosure [Line Items] | |
Number of Restaurants | 1,244 |
Franchised Units | Non-US | |
Franchisor Disclosure [Line Items] | |
Number of Restaurants | 162 |
Entity Operated Units | |
Franchisor Disclosure [Line Items] | |
Number of Restaurants | 30 |
Basis of Presentation - Cash, cash equivalent, and restricted cash (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
Jun. 29, 2019 |
Dec. 29, 2018 |
---|---|---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 45,766 | $ 12,849 | ||
Restricted cash | 4,132 | 4,790 | ||
Restricted cash, included in Advertising Fund assets, restricted | 5,540 | 3,536 | ||
Total cash, cash equivalents, and restricted cash | $ 55,438 | $ 21,175 | $ 23,207 | $ 20,940 |
Earnings per Share (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 29,588,000 | 29,418,000 | 29,538,000 | 29,377,000 |
Dilutive shares | 205,000 | 249,000 | 213,000 | 273,000 |
Diluted weighted average shares outstanding | 29,793,000 | 29,667,000 | 29,751,000 | 29,650,000 |
Antidilutive securities excluded from computation of earnings per share, amount | 1,000 | 6,000 | 1,000 | 18,000 |
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 28, 2020 |
Jun. 27, 2020 |
Mar. 28, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Dividends Payable [Line Items] | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.11 | $ 0.11 | $ 0.09 | $ 0.22 | $ 0.18 | |
Dividends paid | $ (6,500) | $ (5,229) | ||||
Subsequent Event | ||||||
Dividends Payable [Line Items] | ||||||
Common Stock, Dividends, Per Share, Declared | $ 0.14 | |||||
Dividends Payable, Current | $ (4,100) |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
||||
---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
2018-1 Class A-2 Senior Secured Notes | $ 316,800 | $ 317,600 | ||||
2018-1 Class A-1 Variable Funding Senior Notes | 16,000 | 0 | ||||
Level 2 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Loans Payable, Fair Value Disclosure | [1] | 314,395 | 331,247 | |||
Lines of Credit, Fair Value Disclosure | [2] | $ 16,000 | $ 0 | |||
|
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2020 |
Jun. 29, 2019 |
Jun. 27, 2020 |
Jun. 29, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 3,784 | $ 1,070 | $ 5,014 | $ 1,825 |
Effective income tax rate | 24.70% | 17.90% | 20.30% | 13.70% |
Excess Tax Benefit from Share-based Compensation | $ 200 | $ 600 | $ 1,500 | $ 1,800 |
Debt (Details) - USD ($) $ in Thousands |
Jun. 27, 2020 |
Dec. 28, 2019 |
---|---|---|
Long-term Debt, by Type Alternative [Abstract] | ||
2018-1 Class A-2 Senior Secured Notes | $ 316,800 | $ 317,600 |
2018-1 Class A-1 Variable Funding Senior Notes | 16,000 | 0 |
Debt issuance costs, net of amortization | (5,954) | (6,731) |
Total debt | 326,846 | 310,869 |
Less: current portion of debt | (16,000) | (3,200) |
Long-term debt, net | $ 310,846 | $ 307,669 |
Debt Obligations - Securitized Financing Facility (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 27, 2020 |
Dec. 28, 2019 |
Nov. 14, 2018 |
|
Debt Disclosure [Abstract] | |||
2018-1 Class A-2 Senior Secured Notes | $ 316,800 | $ 317,600 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.97% | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000 | ||
2018-1 Class A-1 Variable Funding Senior Notes | 16,000 | 0 | |
Letters of Credit Outstanding, Amount | $ 4,000 | $ 4,000 | |
Debt, Weighted Average Interest Rate | 2.72% | ||
Debt Instrument, Covenant Description | 5.0 |
Stock-Based Compensation - Stock Option Plan (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 27, 2020
USD ($)
|
Jun. 27, 2020
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant date fair value of stock options, vested | $ 200 | |
Intrinsic value of stock options exercised | 2,800 | |
Stock-based compensation expense, unrecognized | $ 1,400 | $ 1,400 |
Award Modification, Incremental Compensation Cost | $ 400 | |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense, recognition period | 2 years 8 months 12 days | |
Additional Paid-In Capital | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3,300 |
Property, Plant, and Equipment (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Jul. 13, 2020
USD ($)
restaurant
|
Jun. 27, 2020
USD ($)
|
|
Property, Plant and Equipment [Line Items] | ||
Proceeds from Sale of Productive Assets | $ 2,300 | |
Goodwill, Written off Related to Sale of Business Unit | 28 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 2,000 | |
Subsequent Event | ||
Property, Plant and Equipment [Line Items] | ||
Proceeds from Sale of Productive Assets | $ 2,500 | |
Significant Changes, Franchises Sold | restaurant | 5 | |
Assets Held-for-sale, Not Part of Disposal Group, Current, Other | $ 1,900 |
Label | Element | Value |
---|---|---|
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Retained Earnings (Accumulated Deficit) | us-gaap_RetainedEarningsAccumulatedDeficit | $ 154,000 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member] | ||
Retained Earnings (Accumulated Deficit) | us-gaap_RetainedEarningsAccumulatedDeficit | $ 154,000 |
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