x | ANNUAL 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 |
Delaware | 16-1287774 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
968 James Street, Syracuse, New York | 13203 |
(Address of principal executive offices) | (Zip Code) |
Title of each class: | Name of each exchange on which registered: |
Common Stock, par value $.01 per share | The NASDAQ Global Market |
Large accelerated filer | o | Accelerated filer | x |
Non-accelerated filer | o | Smaller reporting company | o |
Page | ||
• | Effectiveness of the Burger King® advertising programs and the overall success of the Burger King® brand; |
• | Increases in food costs and other commodity costs; |
• | Competitive conditions, including pricing pressures, couponing, aggressive marketing and the potential impact of competitors’ new unit openings on sales of our restaurants; |
• | Our ability to integrate any restaurants we acquire; |
• | Regulatory factors; |
• | Environmental conditions and regulations; |
• | General economic conditions, particularly in the retail sector; |
• | Weather conditions; |
• | Fuel prices; |
• | Significant disruptions in service or supply by any of our suppliers or distributors; |
• | Changes in consumer perception of dietary health and food safety; |
• | Labor and employment benefit costs, including the effects of minimum wage increases, healthcare reform and changes in the Fair Labor Standards Act; |
• | The outcome of pending or future legal claims or proceedings; |
• | Our ability to manage our growth and successfully implement our business strategy; |
• | Our inability to service our indebtedness; |
• | Our borrowing costs and credit ratings, which may be influenced by the credit ratings of our competitors; |
• | The availability and terms of necessary or desirable financing or refinancing and other related risks and uncertainties; |
• | Factors that affect the restaurant industry generally, including recalls if products become adulterated or misbranded, liability if our products cause injury, ingredient disclosure and labeling laws and regulations, reports of cases of food borne illnesses such as “mad cow” disease, and the possibility that consumers could lose confidence in the safety and quality of certain food products, as well as negative publicity regarding food quality, illness, injury or other health concerns; and |
• | Other factors discussed under Item 1A - "Risk Factors" and elsewhere herein. |
• | Products. The strength of the BKC menu has been built on a distinct flame-grilled cooking platform to make better tasting hamburgers. We believe that BKC intends to continue to optimize the menu by focusing on core products, such as the flagship Whopper® sandwich, while maintaining a balance between value promotions and premium limited time offerings to drive sales and traffic. Recent product innovation has included a multi-tier balanced marketing approach with value and premium offerings, pairing value promotions, such as the $1.00 10-piece chicken nugget promotion with premium limited time Burger offerings, such as the Sourdough King sandwiches and Crispy Chicken. Promotional initiatives in 2018 included the 2 for $6 Mix and Match and 2 for $10 Meal Deal featuring the Whopper and Crispy Chicken sandwich. There have also been a number of enhancements to food preparation procedures to improve the quality of BKC's existing products. These new menu platforms and quality improvements form the backbone of BKC's strategy to appeal to a broader consumer base and to increase restaurant sales. |
• | Image. We believe that re-imaged restaurants increase curb appeal and result in increased restaurant sales. BKC's current restaurant image features a fresh, sleek, eye-catching design which incorporates easy-to-navigate digital menu boards in the dining room, streamlined merchandising at the drive-thru and flat screen televisions in the dining area. We believe that restaurant remodeling has improved our guests' dining experience and increased customer traffic. As of December 30, 2018 a total of 681 of our restaurants had the BKC 20/20 restaurant image, which includes restaurants re-imaged prior to our acquisition. We believe the customer experience will be further enhanced from the upgrades to the Burger King of Tomorrow image that include a double drive-thru (where applicable), certain modifications to the exterior image and the installation of exterior digital menu boards as well as remodels that include the exterior design elements and an interior that creates a warm and welcoming restaurant designed to bring the outdoors inside. |
• | Advertising and Promotion. We believe that we will continue to benefit from BKC's advertising support of its menu items, product enhancement and re-imaging initiatives. BKC has established a data driven marketing process which has focused on driving restaurant sales and traffic, while targeting a broad consumer base with inclusive messaging. This strategy uses multiple touch points to advertise our products, including digital advertising, social media and on-line video in addition to traditional television advertising. BKC has a food-centric marketing strategy which focuses consumers on the food offerings, the core asset, and balances value promotions and premium limited time offerings to drive profitable restaurant sales and traffic. |
• | Operations. We believe that improving restaurant operations and enhancing the customer experience are key components to increasing the profitability of our restaurants. We believe we will benefit from BKC's ongoing initiatives to improve food quality, simplify restaurant level execution and monitor operational performance, all of which are designed to improve the customer experience and increase customer traffic. |
Year Ended | |||||||||||
January 1, 2017 | December 31, 2017 | December 30, 2018 | |||||||||
Average annual sales per restaurant (1) | $ | 1,311,516 | $ | 1,387,850 | $ | 1,449,047 | |||||
Average sales transaction | $ | 6.85 | $ | 7.15 | $ | 7.37 | |||||
Drive-through sales as a percentage of total sales | 67.0 | % | 67.9 | % | 68.4 | % | |||||
Day-part sales percentages: | |||||||||||
Breakfast | 13.8 | % | 13.7 | % | 13.5 | % | |||||
Lunch | 32.4 | % | 32.3 | % | 31.9 | % | |||||
Dinner | 20.4 | % | 20.6 | % | 20.9 | % | |||||
Afternoon and late night | 33.4 | % | 33.4 | % | 33.6 | % |
(1) | Average annual sales per restaurant are derived by dividing restaurant sales by the average number of restaurants operating during the period on a 52-week basis. |
State | Total Restaurants | |
Georgia | 2 | |
Illinois | 18 | |
Indiana | 88 | |
Kentucky | 36 | |
Maine | 15 | |
Maryland | 17 | |
Massachusetts | 1 | |
Michigan | 56 | |
New Jersey | 10 | |
New York | 128 | |
North Carolina | 152 | |
Ohio | 118 | |
Pennsylvania | 62 | |
South Carolina | 40 | |
Tennessee | 31 | |
Vermont | 5 | |
Virginia | 66 | |
West Virginia | 4 | |
Total | 849 |
• | monitor labor utilization and sales trends on a real-time basis at each restaurant, enabling the restaurant manager to effectively manage to our established labor standards on a timely basis; |
• | reduce inventory shrinkage using restaurant-level inventory management systems and daily reporting of inventory variances; |
• | analyze sales and product mix data to help restaurant managers forecast production levels throughout the day; |
• | monitor day-part drive-thru speed of service at each of our restaurants; |
• | allow the restaurant manager to produce day-part labor schedules based on the restaurant's historical sales patterns; |
• | systematically communicate human resource and payroll data to our administrative offices for efficient centralized management of labor costs and payroll processing; |
• | employ centralized control over pricing, menu and inventory management activities at the restaurant utilizing the remote management capabilities of our systems; |
• | take advantage of electronic commerce including our ability to place orders with suppliers and to integrate detailed invoice, receiving and product data with our inventory and accounting systems; |
• | provide analyses, reporting and tools to enable all levels of management to review a wide-range of financial, product mix and operational data; and |
• | systematically analyze and report on detailed transactional data to help detect and identify potential theft. |
• | product quality and taste; |
• | brand recognition; |
• | convenience of location; |
• | speed of service; |
• | menu variety; |
• | price; and |
• | ambiance |
• | changes in local, regional or national economic conditions; |
• | changes in demographic trends; |
• | changes in consumer tastes; |
• | changes in traffic patterns; |
• | increases in fuel prices and utility costs; |
• | consumer concerns about health, diet and nutrition; |
• | increases in the number of, and particular locations of, competing restaurants; |
• | changes in discretionary consumer spending; |
• | inflation; |
• | increases in the cost of food, such as beef, chicken, produce and packaging; |
• | increased labor costs, including healthcare, unemployment insurance and minimum wage requirements; |
• | the availability of experienced management and hourly-paid employees; and |
• | regional weather conditions. |
• | coordinating and consolidating geographically separated systems and facilities; |
• | integrating the management and personnel of the acquired restaurants, maintaining employee morale and retaining key employees; |
• | implementing our management information systems; and |
• | implementing operational procedures and disciplines to control costs and increase profitability. |
• | zoning; |
• | requirements relating to labeling of caloric and other nutritional information on menu boards, advertising and food packaging; |
• | the preparation and sale of food; |
• | employer/employee relationships, including minimum wage requirements, overtime, mandatory paid and unpaid leave, working and safety conditions, and citizenship requirements; |
• | health care; and |
• | federal and state laws that prohibit discrimination and laws regulating design and operation of, and access to, facilities, such as the Americans With Disabilities Act of 1990. |
• | price and volume fluctuations in the overall stock market from time to time; |
• | significant volatility in the market price and trading volume of companies generally or restaurant companies; |
• | actual or anticipated variations in the earnings or operating results of our company or our competitors; |
• | actual or anticipated changes in financial estimates by us or by any securities analysts who might cover our stock or the stock of other companies in our industry; |
• | market conditions or trends in our industry and the economy as a whole; |
• | announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures and our ability to complete any such transaction; |
• | announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; |
• | capital commitments; |
• | changes in accounting principles; |
• | additions or departures of key personnel; |
• | sales of our common stock, including sales of large blocks of our common stock or sales by our directors and officers; and |
• | events that affect BKC. |
• | require that special meetings of our stockholders be called only by our board of directors or certain of our officers, thus prohibiting our stockholders from calling special meetings; |
• | deny holders of our common stock cumulative voting rights in the election of directors, meaning that stockholders owning a majority of our outstanding shares of common stock will be able to elect all of our directors; |
• | authorize the issuance of “blank check” preferred stock that our board could issue to dilute the voting and economic rights of our common stock and to discourage a takeover attempt; |
• | provide that approval of our board of directors or a supermajority of stockholders is necessary to make, alter or repeal our amended and restated bylaws and that approval of a supermajority of stockholders is necessary to amend, alter or change certain provisions of our restated certificate of incorporation; |
• | establish advance notice requirements for stockholder nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings; |
• | divide our board into three classes of directors, with each class serving a staggered 3-year term, which generally increases the difficulty of replacing a majority of the directors; |
• | provide that directors only may be removed for cause by a majority of the board or by a supermajority of our stockholders; and |
• | require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing. |
• | make it more difficult for us to satisfy our obligations with respect to the Notes and our other debt; |
• | increase our vulnerability to general adverse economic and industry conditions; |
• | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, including indebtedness we may incur in the future, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; |
• | restrict our ability to acquire additional restaurants; |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | increase our cost of borrowing; |
• | place us at a competitive disadvantage compared to our competitors that may have less debt; and |
• | limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes. |
• | incur additional debt; |
• | pay dividends and make other distributions on, redeem or repurchase, capital stock; |
• | make investments or other restricted payments; |
• | enter into transactions with affiliates; |
• | engage in sale and leaseback transactions; |
• | sell all, or substantially all, of our assets; |
• | create liens on assets to secure debt; or |
• | effect a consolidation or merger. |
12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | |||||||||||||
Carrols Restaurant Group, Inc. | $ | 100.00 | $ | 115.43 | $ | 177.61 | $ | 230.71 | $ | 183.81 | $ | 148.87 | ||||||
NASDAQ Composite | $ | 100.00 | $ | 114.62 | $ | 122.81 | $ | 133.19 | $ | 172.11 | $ | 165.84 | ||||||
S&P SmallCap 600 Restaurants | $ | 100.00 | $ | 117.34 | $ | 105.44 | $ | 112.22 | $ | 107.66 | $ | 117.68 |
Year Ended | |||||||||||||||||||
December 28, 2014 | January 3, 2016 | January 1, 2017 | December 31, 2017 | December 30, 2018 | |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
Statements of operations data: | |||||||||||||||||||
Restaurant sales | $ | 692,755 | $ | 859,004 | $ | 943,583 | $ | 1,088,532 | $ | 1,179,307 | |||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 209,664 | 240,322 | 250,112 | 304,593 | 326,308 | ||||||||||||||
Restaurant wages and related expenses | 219,718 | 267,950 | 297,766 | 350,054 | 382,829 | ||||||||||||||
Restaurant rent expense | 48,865 | 58,096 | 64,814 | 75,948 | 81,409 | ||||||||||||||
Other restaurant operating expenses | 113,586 | 135,874 | 148,946 | 166,786 | 178,750 | ||||||||||||||
Advertising expense | 27,961 | 32,242 | 41,299 | 44,677 | 48,340 | ||||||||||||||
General and administrative (1)(2) | 40,001 | 50,515 | 54,956 | 60,348 | 66,587 | ||||||||||||||
Depreciation and amortization | 36,923 | 39,845 | 47,295 | 54,159 | 58,468 | ||||||||||||||
Impairment and other lease charges | 3,541 | 3,078 | 2,355 | 2,827 | 3,685 | ||||||||||||||
Other expense (income) (3) | 47 | (126 | ) | 338 | (333 | ) | (424 | ) | |||||||||||
Total operating expenses | 700,306 | 827,796 | 907,881 | 1,059,059 | 1,145,952 | ||||||||||||||
Income (loss) from operations | (7,551 | ) | 31,208 | 35,702 | 29,473 | 33,355 | |||||||||||||
Interest expense | 18,801 | 18,569 | 18,315 | 21,710 | 23,638 | ||||||||||||||
Loss on extinguishment of debt | — | 12,635 | — | — | — | ||||||||||||||
Gain on bargain purchase | — | — | — | — | (230 | ) | |||||||||||||
Income (loss) before income taxes | (26,352 | ) | 4 | 17,387 | 7,763 | 9,947 | |||||||||||||
Provision (benefit) for income taxes | 11,765 | — | (28,085 | ) | 604 | (157 | ) | ||||||||||||
Net income (loss) | $ | (38,117 | ) | $ | 4 | $ | 45,472 | $ | 7,159 | $ | 10,104 | ||||||||
Per share data: | |||||||||||||||||||
Basic and diluted net income (loss) per share: | $ | (1.23 | ) | $ | 0.00 | $ | 1.01 | $ | 0.16 | $ | 0.22 | ||||||||
Weighted average shares used in computing net income (loss) per share: | |||||||||||||||||||
Basic | 30,885,275 | 34,958,847 | 35,178,329 | 35,416,531 | 35,715,372 | ||||||||||||||
Diluted | 30,885,275 | 44,623,251 | 44,851,345 | 44,976,514 | 45,319,971 |
Year Ended | |||||||||||||||||||
December 28, 2014 | January 3, 2016 | January 1, 2017 | December 31, 2017 | December 30, 2018 | |||||||||||||||
(In thousands, except restaurant weekly sales data) | |||||||||||||||||||
Other financial data: | |||||||||||||||||||
Net cash provided by operating activities | $ | 14,707 | $ | 70,702 | $ | 62,288 | $ | 72,783 | $ | 80,769 | |||||||||
Total capital expenditures | 52,010 | 56,848 | 94,099 | 73,516 | 75,735 | ||||||||||||||
Net cash used for investing activities | 68,003 | 103,429 | 96,221 | 108,105 | 106,894 | ||||||||||||||
Net cash provided by financing activities | 66,215 | 33,780 | 13,661 | 62,732 | 727 | ||||||||||||||
Operating Data: | |||||||||||||||||||
Restaurants (at end of period) | 674 | 705 | 753 | 807 | 849 | ||||||||||||||
Average number of restaurants | 581.9 | 662.1 | 719.5 | 784.3 | 813.9 | ||||||||||||||
Average annual sales per restaurant (4) | 1,190,505 | 1,274,372 | 1,311,516 | 1,387,850 | 1,449,047 | ||||||||||||||
Adjusted EBITDA (5) | 36,008 | 76,737 | 89,505 | 91,408 | 102,341 | ||||||||||||||
Adjusted net income (loss) (5) | (10,408 | ) | 13,429 | 17,860 | 9,037 | 13,587 | |||||||||||||
Restaurant-Level EBITDA (5) | 72,961 | 124,520 | 140,646 | 146,474 | 161,671 | ||||||||||||||
Change in comparable restaurant sales (6) | 0.6 | % | 7.4 | % | 2.3 | % | 5.2 | % | 3.8 | % | |||||||||
Balance sheet data (at end of period): | |||||||||||||||||||
Total assets | $ | 364,573 | $ | 427,256 | $ | 490,155 | $ | 581,514 | $ | 600,251 | |||||||||
Working capital | (13,554 | ) | (26,259 | ) | (39,231 | ) | (19,514 | ) | (47,461 | ) | |||||||||
Debt: | |||||||||||||||||||
Senior and senior subordinated debt | 150,000 | 200,000 | 213,500 | 275,000 | 275,000 | ||||||||||||||
Capital leases | 8,694 | 8,006 | 7,039 | 5,681 | 3,941 | ||||||||||||||
Lease financing obligations | 1,202 | 1,203 | 3,020 | 1,203 | 1,201 | ||||||||||||||
Total debt | $ | 159,896 | $ | 209,209 | $ | 223,559 | $ | 281,884 | $ | 280,142 | |||||||||
Stockholders’ equity | $ | 106,535 | $ | 107,999 | $ | 154,656 | $ | 169,060 | $ | 185,540 |
Year Ended | |||||||||||||||||||
December 28, 2014 | January 3, 2016 | January 1, 2017 | December 31, 2017 | December 30, 2018 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA (5): | |||||||||||||||||||
Net income (loss) | $ | (38,117 | ) | $ | 4 | $ | 45,472 | $ | 7,159 | $ | 10,104 | ||||||||
Provision (benefit) for income taxes | 11,765 | — | (28,085 | ) | 604 | (157 | ) | ||||||||||||
Interest expense | 18,801 | 18,569 | 18,315 | 21,710 | 23,638 | ||||||||||||||
Depreciation and amortization | 36,923 | 39,845 | 47,295 | 54,159 | 58,468 | ||||||||||||||
EBITDA | 29,372 | 58,418 | 82,997 | 83,632 | 92,053 | ||||||||||||||
Impairment and other lease charges | 3,541 | 3,078 | 2,355 | 2,827 | 3,685 | ||||||||||||||
Acquisition costs (7) | 1,915 | 1,168 | 1,853 | 1,793 | 1,445 | ||||||||||||||
Gain on partial condemnation and fires (3) | — | — | (1,603 | ) | (362 | ) | (424 | ) | |||||||||||
Litigation settlement (3) | — | — | 1,850 | — | — | ||||||||||||||
Stock compensation expense | 1,180 | 1,438 | 2,053 | 3,518 | 5,812 | ||||||||||||||
Gain on bargain purchase | — | — | — | — | (230 | ) | |||||||||||||
Loss on extinguishment of debt | — | 12,635 | — | — | — | ||||||||||||||
Adjusted EBITDA | $ | 36,008 | $ | 76,737 | $ | 89,505 | $ | 91,408 | $ | 102,341 |
Reconciliation of Restaurant-Level EBITDA (5): | |||||||||||||||||||
Income (loss) from operations | $ | (7,551 | ) | $ | 31,208 | $ | 35,702 | $ | 29,473 | $ | 33,355 | ||||||||
Add: | |||||||||||||||||||
General and administrative expenses | 40,001 | 50,515 | 54,956 | 60,348 | 66,587 | ||||||||||||||
Depreciation and amortization | 36,923 | 39,845 | 47,295 | 54,159 | 58,468 | ||||||||||||||
Impairment and other lease charges | 3,541 | 3,078 | 2,355 | 2,827 | 3,685 | ||||||||||||||
Other expense (income), net (3) | 47 | (126 | ) | 338 | (333 | ) | (424 | ) | |||||||||||
Restaurant-Level EBITDA | $ | 72,961 | $ | 124,520 | $ | 140,646 | $ | 146,474 | $ | 161,671 |
Year Ended | |||||||||||||||||||
December 28, 2014 | January 3, 2016 | January 1, 2017 | December 31, 2017 | December 30, 2018 | |||||||||||||||
Reconciliation of Adjusted net income (loss) (5): | |||||||||||||||||||
Net income (loss) | $ | (38,117 | ) | $ | 4 | $ | 45,472 | $ | 7,159 | $ | 10,104 | ||||||||
Add: | |||||||||||||||||||
Loss on extinguishment of debt | — | 12,635 | — | — | — | ||||||||||||||
Impairment and other lease charges | 3,541 | 3,078 | 2,355 | 2,827 | 3,685 | ||||||||||||||
Acquisition costs (7) | 1,915 | 1,168 | 1,853 | 1,793 | 1,445 | ||||||||||||||
Gain on partial condemnation and fires (3) | — | — | (1,603 | ) | (362 | ) | (424 | ) | |||||||||||
Litigation settlement (3) | — | — | 1,850 | — | — | ||||||||||||||
Income tax effect of above adjustments (8) | (2,073 | ) | (6,415 | ) | (1,693 | ) | (1,618 | ) | (993 | ) | |||||||||
Adjustments to income tax benefit (9) | 24,326 | 2,959 | (30,374 | ) | (762 | ) | — | ||||||||||||
Adjusted net income (loss) | $ | (10,408 | ) | $ | 13,429 | $ | 17,860 | $ | 9,037 | $ | 13,587 | ||||||||
Adjusted diluted net income (loss) per share (10) | $ | (0.34 | ) | $ | 0.30 | $ | 0.40 | $ | 0.20 | $ | 0.30 |
(2) | General and administrative expenses include stock-based compensation expense for the years ended December 28, 2014, January 3, 2016, January 1, 2017, December 31, 2017 and December 30, 2018 of $1.2 million, $1.4 million, $2.1 million, $3.5 million and $5.8 million, respectively. |
(3) | In fiscal 2018 and 2017, the Company recorded net gains of $0.4 million and $0.3 million, respectively, primarily related to insurance recoveries from fires at two restaurants. In fiscal 2016, the Company recorded gains of $1.2 million related to property insurance recoveries from fires at two restaurants, a gain of $0.5 million related to a settlement for a partial condemnation on one of its operating restaurant properties and expense of $1.85 million related to a settlement of litigation. |
(4) | Average annual sales per restaurant are derived by dividing restaurant sales by the average number of restaurants operating during the period. |
(5) | EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss) are non-GAAP financial measures. EBITDA represents net income or loss before income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and other lease charges, acquisition costs, EEOC litigation and settlement costs, stock compensation expense, loss on extinguishment of debt and other income or expense. Restaurant-Level EBITDA represents income or loss from operations adjusted to exclude general and administrative expenses, depreciation and amortization, impairment and other lease charges, and other expense (income). Adjusted net income (loss) represents net income or loss as adjusted to exclude loss on extinguishment of debt, impairment and other lease charges, acquisition costs, gain on bargain purchase, the related income tax effect of these adjustments and the establishment or reversal of a valuation allowance on our net deferred income tax assets. |
• | EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment; |
• | EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect the interest expense or the cash requirements necessary to service principal or interest payments on our debt; |
• | Although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect the cash required to fund such replacements; and |
• | EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss) do not reflect the effect of earnings or charges resulting from matters that our management does not consider to be indicative of our ongoing operations. However, some of these charges (such as impairment and other lease charges and acquisition and integration costs) have recurred and may reoccur. |
(6) | Restaurants are included in comparable restaurant sales after they have been open or owned for 12 months. Comparable restaurant sales are on a 53-week basis for the year ended January 3, 2016. |
(7) | Acquisition costs for the periods presented include primarily legal and professional fees incurred in connection with acquisitions. |
(8) | The income tax effect related to all adjustments, other than the deferred income tax valuation allowance provision (benefit), was calculated using an effective income tax rate of 22.2% in fiscal 2018 and 38% in all other years presented. |
(9) | The benefit for income taxes in fiscal 2018 contains net discrete tax adjustments of $0.1 million of income tax expense. The provision for income taxes in fiscal 2017 contains a $0.8 million discrete tax benefit recorded in the fourth quarter to remeasure our net deferred taxes due to the lowering of the Federal income tax rate to 21% under the Tax Cuts and Jobs Act signed into law in the fourth quarter of 2017. The benefit for income taxes in 2016 reflects a $30.4 million income tax benefit recorded in the fourth quarter of 2016 to reverse the previously recorded valuation allowance on net deferred income tax assets as well as the full year deferred income tax provision of $2.3 million which was recorded in the fourth quarter of 2016. For comparability, when presenting 2016 Adjusted net income, the provision (benefit) for income taxes for each respective period is adjusted as if such valuation allowance had been reversed prior to 2016. The adjustment for the year ended December 28, 2014 of $24.3 million reflects the removal of the income tax provision recorded for the establishment of the valuation allowance on all our net deferred income tax assets. |
(10) | Adjusted diluted net income (loss) per share is calculated based on Adjusted net income (loss) and the dilutive weighted average common shares outstanding for each respective period. |
• | Restaurant sales consist of food and beverage sales at our restaurants, net of discounts and excluding sales tax collected. Restaurant sales are influenced by changes in comparable restaurant sales, menu price increases, new restaurant development, acquisition of restaurants, and the closures of restaurants. Restaurants, including restaurants we acquire, are included in comparable restaurant sales after they have been open or owned for 12 months and immediately after they open from being remodeled. For comparative purposes, where applicable, the calculation of the changes in comparable restaurant sales is based either on a 53-week or 52-week year. |
• | Cost of sales consists of food, paper and beverage costs including packaging costs, less purchase discounts. Cost of sales is generally influenced by changes in commodity costs, the mix of items sold and the level of promotional discounting and the effectiveness of our restaurant-level controls to manage food and paper costs. |
• | Restaurant wages and related expenses include all restaurant management and hourly productive labor costs and related benefits, employer payroll taxes and restaurant-level bonuses. Payroll and related benefits are subject to inflation, including minimum wage increases and increased costs for health insurance, workers’ compensation insurance and federal and state unemployment insurance. |
• | Restaurant rent expense includes base rent and contingent rent on our leases characterized as operating leases and the amortization of favorable and unfavorable leases, reduced by the amortization of deferred gains on sale-leaseback transactions. |
• | Other restaurant operating expenses include all other restaurant-level operating costs, the major components of which are royalty expenses paid to BKC, utilities, repairs and maintenance, real estate taxes and credit card fees. |
• | Advertising expense includes advertising payments to BKC based on a percentage of sales as required under our franchise and operating agreements and additional marketing and promotional expenses in certain of our markets. |
• | General and administrative expenses are comprised primarily of salaries and expenses associated with corporate and administrative functions that support the development and operations of our restaurants, legal, auditing and other professional fees, acquisition costs and stock-based compensation expense. |
• | EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income. EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income are non-GAAP financial measures. EBITDA represents net income before income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted to exclude impairment and other lease charges, acquisition costs, loss on extinguishment of debt, stock compensation expense and other income or expense. Restaurant-Level EBITDA represents income from operations adjusted to exclude general and administrative expenses, depreciation and amortization, impairment and other lease charges and other income or expense. Adjusted net income represents net income adjusted to exclude loss on extinguishment of debt, impairment and other lease charges, acquisition costs, other income and expense, the related income tax effect of these adjustments and the reversal in 2016 of a valuation allowance on all of our net deferred income tax assets. Adjusted net income |
• | We are presenting Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income because we believe that they provide a more meaningful comparison than EBITDA and net income of our core business operating results, as well as with those of other similar companies. Additionally, we present Restaurant-Level EBITDA because it excludes the impact of general and administrative expenses and other income or expense, which are not directly related to restaurant-level operations. Management believes that Adjusted EBITDA and Restaurant-Level EBITDA, when viewed with our results of operations in accordance with GAAP and the accompanying reconciliations on page 50, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that Adjusted EBITDA and Restaurant-Level EBITDA permit investors to gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. |
• | EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment; |
• | EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect the interest expense or the cash requirements necessary to service principal or interest payments on our debt; |
• | Although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and EBITDA, Adjusted EBITDA and Restaurant-Level EBITDA do not reflect the cash required to fund such replacements; and |
• | EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income do not reflect the effect of earnings or charges resulting from matters that our management does not consider to be indicative of our ongoing operations. However, some of these charges (such as impairment and other lease charges and acquisition costs) have recurred and may reoccur. |
• | Depreciation and amortization primarily includes the depreciation of fixed assets, including equipment, owned buildings and leasehold improvements utilized in our restaurants, the amortization of franchise rights from our acquisitions of Burger King® restaurants and the amortization of franchise fees paid to BKC. |
• | Impairment and other lease charges are determined through our assessment of the recoverability of property and equipment and intangible assets by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. A potential impairment charge is evaluated whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Losses on sale-leaseback transactions are recognized when they are incurred. Lease charges are recorded for our obligations under the related leases for closed locations net of estimated sublease recoveries. |
• | Interest expense consists primarily of interest expense associated with our $275.0 million of 8% Senior Secured Second Lien Notes due 2022 (the "8% Notes"), our prior 11.25% Senior Secured Second Lien Notes due 2018 (the "11.25% Notes"), amortization of deferred financing costs, amortization of bond premium and interest on revolving credit borrowings under our senior credit facility. |
Closing Date | Number of Restaurants | Purchase Price | Number of Fee-Owned Restaurants | Market Location | ||||||||
2016 Acquisitions: | ||||||||||||
February 23, 2016 | (1) | 12 | 7,127 | Scranton/Wilkes-Barre, Pennsylvania | ||||||||
May 25, 2016 | 6 | 12,080 | 5 | Detroit, Michigan | ||||||||
July 14, 2016 | (1) | 4 | 5,445 | 3 | Detroit, Michigan | |||||||
August 23, 2016 | 7 | 8,755 | 6 | Portland, Maine | ||||||||
October 4, 2016 | 3 | 1,623 | Raleigh, North Carolina | |||||||||
November 15, 2016 | 17 | 7,251 | Pittsburgh and Johnstown, Pennsylvania | |||||||||
December 1, 2016 | 7 | 5,807 | 1 | Columbus, Ohio | ||||||||
56 | 48,088 | 15 | ||||||||||
2017 Acquisitions: | ||||||||||||
February 28, 2017 | 43 | 20,366 | Cincinnati, Ohio | |||||||||
June 5, 2017 | (1) | 17 | 16,355 | Baltimore, Maryland and Washington, DC | ||||||||
November 28, 2017 | 4 | 1,202 | Maine | |||||||||
64 | 37,923 | — | ||||||||||
2018 Acquisitions: | ||||||||||||
February 13, 2018 | 1 | — | New York | |||||||||
August 21, 2018 | 2 | 1,666 | Detroit, Michigan | |||||||||
September 5, 2018 | (1 | ) | 31 | 25,930 | Western Virginia | |||||||
October 2, 2018 | 10 | 10,506 | South Carolina and Georgia | |||||||||
44 | 38,102 | — | ||||||||||
Total | 164 | $ | 124,113 | 15 |
(1) | Acquisitions resulting from the exercise of our ROFR. |
Year Ended | |||
December 30, 2018 | |||
Restaurant sales | $ | 1,217,891 | |
Income from operations | $ | 38,128 | |
Pro Forma Adjusted EBITDA | $ | 109,261 |
Year ended | |||||||||||||
December 31, 2018 | December 31, 2017 | January 1, 2017 | |||||||||||
(in thousands of dollars) | |||||||||||||
Restaurant Sales | $ | 1,179,307 | $ | 1,088,532 | $ | 943,583 | |||||||
Change in Comparable Restaurant Sales % | 3.8 | % | 5.2 | % | 2.3 | % | |||||||
Restaurants operating at beginning of year | 807 | 753 | 705 | ||||||||||
New restaurants opened, including relocations | (1) | 8 | 11 | 4 | |||||||||
Restaurants acquired | 44 | 64 | 56 | ||||||||||
Restaurants closed | (1) | (10 | ) | (21 | ) | (12 | ) | ||||||
Restaurants operating at end of year | 849 | 807 | 753 |
Year Ended | ||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | ||||||
Costs and expenses (all restaurants): | ||||||||
Cost of sales | 27.7 | % | 28.0 | % | 26.5 | % | ||
Restaurant wages and related expenses | 32.5 | % | 32.2 | % | 31.6 | % | ||
Restaurant rent expense | 6.9 | % | 7.0 | % | 6.9 | % | ||
Other restaurant operating expenses | 15.2 | % | 15.3 | % | 15.8 | % | ||
Advertising expense | 4.1 | % | 4.1 | % | 4.4 | % | ||
General and administrative expenses | 5.6 | % | 5.5 | % | 5.8 | % |
Year Ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Reconciliation of EBITDA and Adjusted EBITDA: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Provision (benefit) for income taxes | (157 | ) | 604 | (28,085 | ) | ||||||
Interest expense | 23,638 | 21,710 | 18,315 | ||||||||
Depreciation and amortization | 58,468 | 54,159 | 47,295 | ||||||||
EBITDA | 92,053 | 83,632 | 82,997 | ||||||||
Impairment and other lease charges | 3,685 | 2,827 | 2,355 | ||||||||
Acquisition costs (1) | 1,445 | 1,793 | 1,853 | ||||||||
Gains on partial condemnation and fires (2) | (424 | ) | (362 | ) | (1,603 | ) | |||||
Litigation settlement (3) | — | — | 1,850 | ||||||||
Gain on bargain purchase | (230 | ) | — | — | |||||||
Stock compensation expense | 5,812 | 3,518 | 2,053 | ||||||||
Loss on extinguishment of debt | — | — | — | ||||||||
Adjusted EBITDA | $ | 102,341 | $ | 91,408 | $ | 89,505 |
Reconciliation of Restaurant-Level EBITDA: | |||||||||||
Income from operations | $ | 33,355 | $ | 29,473 | $ | 35,702 | |||||
Add: | |||||||||||
General and administrative expenses | 66,587 | 60,348 | 54,956 | ||||||||
Depreciation and amortization | 58,468 | 54,159 | 47,295 | ||||||||
Impairment and other lease charges | 3,685 | 2,827 | 2,355 | ||||||||
Other expense (income) | (424 | ) | (333 | ) | 338 | ||||||
Restaurant-Level EBITDA | $ | 161,671 | $ | 146,474 | $ | 140,646 |
Reconciliation of Adjusted net income: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Add: | |||||||||||
Impairment and other lease charges | 3,685 | 2,827 | 2,355 | ||||||||
Acquisition costs (1) | 1,445 | 1,793 | 1,853 | ||||||||
Gain on bargain purchase | (230 | ) | — | — | |||||||
Gains on partial condemnation and fires (2) | (424 | ) | (362 | ) | (1,603 | ) | |||||
Litigation settlement (3) | — | — | 1,850 | ||||||||
Income tax effect on above adjustments (4) | (993 | ) | (1,618 | ) | (1,693 | ) | |||||
Adjustments to income tax benefit (5) | — | (762 | ) | (30,374 | ) | ||||||
Adjusted net income | $ | 13,587 | $ | 9,037 | $ | 17,860 | |||||
Adjusted diluted net income per share (6) | $ | 0.30 | $ | 0.20 | $ | 0.40 |
(1) | Acquisition costs included in general and administrative expense primarily include legal and professional fees incurred in connection with restaurant acquisitions, and in 2017, certain payroll and other costs associated with the wind-down of the corporate headquarters from the acquisition of Republic Foods, Inc. |
(2) | The year ended December 30, 2018 includes a gain of $0.4 million related to an insurance recovery from a fire at one of our restaurants. The year ended December 31, 2017 includes a gain of $0.4 million related to an insurance recovery from a fire at one of our restaurants. The year ended January 1, 2017 includes gains of $1.2 million related to insurance recoveries from fires at two of our restaurants and a gain of $0.5 million related to a settlement for a partial condemnation on one of our operating restaurant properties. |
(3) | Includes an expense of $1.85 million related to a litigation settlement. |
(4) | The income tax effect related to the adjustments (other than the deferred income tax adjustment) was calculated using an effective income tax rate of 22.2% for the year ended December 30, 2018 and 38% for the years ended December 31, 2017 and January 1, 2017. |
(5) | The provision (benefit) for income taxes in 2017 reflects a $0.8 million discrete tax benefit recorded in the fourth quarter to to remeasure our net deferred taxes due to the lowering of the Federal income tax rate to 21% under the Tax Cuts and Jobs Act signed into law in the fourth quarter of 2017. The benefit for income taxes in 2016 reflects a $30.4 million income tax benefit recorded in the fourth quarter of 2016 to reverse the previously recorded valuation allowance on net deferred income tax assets as well as the full year deferred income tax provision of $2.3 million which was recorded in the fourth quarter of 2016. |
(6) | Adjusted diluted net income per share is calculated based on Adjusted net income and the diluted weighted average common shares outstanding for the respective periods. |
• | restaurant operations are primarily conducted on a cash basis; |
• | rapid turnover results in a limited investment in inventories; and |
• | cash from restaurant sales is usually received before related liabilities for food, supplies and payroll become due. |
Year Ended December 30, 2018: | ||||
New restaurant development | $ | 23,171 | ||
Restaurant remodeling | 31,951 | |||
Other restaurant capital expenditures | 15,726 | |||
Corporate and restaurant information systems | 4,887 | |||
Total capital expenditures | $ | 75,735 | ||
Number of new restaurant openings including relocations | 8 | |||
Year Ended December 31, 2017: | ||||
New restaurant development | $ | 14,759 | ||
Restaurant remodeling | 33,504 | |||
Other restaurant capital expenditures | 18,926 | |||
Corporate and restaurant information systems | 6,327 | |||
Total capital expenditures | $ | 73,516 | ||
Number of new restaurant openings including relocations | 11 | |||
Year Ended January 1, 2017: | ||||
New restaurant development | $ | 8,228 | ||
Restaurant remodeling | 65,767 | |||
Other restaurant capital expenditures | 15,168 | |||
Corporate and restaurant information systems | 4,936 | |||
Total capital expenditures | $ | 94,099 | ||
Number of new restaurant openings including relocations | 4 |
Payments due by period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1 – 3 Years | 3 – 5 Years | More than 5 Years | |||||||||||||||
Long-term debt obligations, including interest (1) | $ | 352,000 | $ | 22,000 | $ | 44,000 | $ | 286,000 | $ | — | ||||||||||
Capital lease obligations, including interest (2) | 4,366 | 2,180 | 1,799 | 258 | 129 | |||||||||||||||
Operating lease obligations (3) | 995,849 | 73,304 | 142,371 | 139,381 | 640,793 | |||||||||||||||
Lease financing obligations, including interest (4) | 1,667 | 108 | 219 | 1,340 | — | |||||||||||||||
Total contractual obligations | $ | 1,353,882 | $ | 97,592 | $ | 188,389 | $ | 426,979 | $ | 640,922 |
(1) | Our long term debt at December 30, 2018 included $275.0 million of 8% Notes. Total interest payments on our Notes of $77.0 million for all years presented are included at the coupon rate of 8%. |
(2) | Includes total interest of $0.4 million for all years presented. |
(3) | Represents the aggregate minimum lease payments under operating leases. Many of our leases also require contingent rent based on a percentage of sales in addition to the minimum base rent and require expenses incidental to the use of the property all of which have been excluded from this table. |
(4) | Includes total interest of $0.5 million for all years presented. |
/s/ Deloitte & Touche LLP |
Rochester, New York |
March 7, 2019 |
• | Class I director, whose term will expire at the Annual Meeting of Stockholders to be held in 2019 and when his successor is duly elected and qualify; |
• | Class II directors, whose term will expire at the Annual Meeting of Stockholders to be held in 2020 and when their successors are duly elected and qualify; and |
• | Class III directors whose term will expire at the Annual Meeting of Stockholders to be held in 2021 and when their successors are duly elected and qualify. |
Name | Age | Year Became a Director | Year Term Expires and Class | |||
Daniel T. Accordino | 68 | 1993 | 2019 Class I | |||
Hannah S. Craven (1) (2) (3) | 53 | 2015 | 2020 Class II | |||
Lawrence E. Hyatt (1) (3) (4) | 64 | 2017 | 2020 Class II | |||
David S. Harris (1) (2) (3) (4) | 59 | 2012 | 2021 Class III | |||
Deborah M. Derby (2) | 55 | 2018 | 2021 Class III | |||
Jose E. Cil | 49 | 2015 | 2019 Class B | |||
Matthew Dunnigan | 35 | 2018 | 2019 Class B |
Name | Age | Position | ||
Daniel T. Accordino | 68 | Chairman of the Board of Directors, Chief Executive Officer and President | ||
Hannah S. Craven | 53 | Director | ||
Lawrence E. Hyatt | 64 | Director | ||
David S. Harris | 59 | Director | ||
Deborah M. Derby | 55 | Director | ||
José E. Cil | 49 | Director | ||
Matthew Dunnigan | 35 | Director |
Name | Target EBITDA Bonus % (1) | Maximum Objectives Bonus % (1) | Total Target Bonus % (1) | EBITDA Bonus Rate per 1% Attainment (2) | EBITDA Bonus Rate per 1% Attainment (3) | Earned EBITDA Bonus % (1)(4) | Earned Objectives Bonus % (1) | Total Earned 2018 Bonus(5) | ||||||||||
Daniel T. Accordino | 75% | 25% | 100% | 5.00% | 3.75% | 83.3% | 25.0% | $ | 901,622 | |||||||||
Paul R. Flanders | 55% | 35% | 90% | 3.67% | 2.75% | 61.1% | 35.0% | 410,848 | ||||||||||
Richard G. Cross | 30% | 30% | 60% | 2.00% | 1.50% | 33.3% | 29.1% | 192,923 | ||||||||||
William E. Myers | 30% | 30% | 60% | 2.00% | 1.50% | 33.3% | 30.0% | 163,091 | ||||||||||
Gerald J. DiGenova | 30% | 30% | 60% | 2.00% | 1.50% | 33.3% | 28.5% | 143,305 |
(1) | Bonus percentages stated as a percentage of individuals' base salary at targeted attainment of 100% of budgeted EBITDA. |
(2) | Rate, as a percentage of individual's salary, at which EBITDA bonus is earned for each 1% increase in attainment of EBITDA over minimum of 85% up to 100% of budgeted EBITDA. |
(3) | Rate, as a percentage of individual's salary, at which EBITDA bonus is earned for each 1% increase in attainment of EBITDA over minimum of 100% up to 120% of budgeted EBITDA. |
(4) | Based on actual attainment percentage of 91.4% to budgeted EBITDA (as adjusted). |
(5) | Mr. Accordino received $554,842 in cash and 38,318 restricted stock units, Mr. Flanders received $280,230 in cash and 14,433 restricted stock units, Mr. Cross received $141,421 in cash and 5,691 restricted stock units, Mr. Myers received $120,172 in cash and 4,742 restricted stock units and Mr. DiGenova received $104,678 in cash and 4,268 restricted stock units. All restricted stock units vest annually in equal installments over three years with accelerated vesting for any event of termination other than for cause. |
Net income | $ | 10,104 | |
Benefit for income taxes | (157 | ) | |
Gain on bargain purchase | (230 | ) | |
Interest expense | 23,638 | ||
Depreciation and amortization | 58,468 | ||
EBITDA | 91,823 | ||
Adjustments: | |||
Impairment expense | 3,685 | ||
Stock compensation expense | 5,812 | ||
Acquisition costs | 1,445 | ||
Gain on fire insurance | (424 | ) | |
EBITDA, as adjusted | 102,341 | ||
Budgeted EBITDA | 100,074 | ||
EBITDA Attainment % | 102.3 | % |
Compensation Committee |
David S. Harris, Chair |
Hannah S. Craven |
Deborah M. Derby |
• | We identified the median employee using our employee population as of the final day of our payroll year, December 30, 2018. |
• | We utilized a consistently applied compensation measure (“CACM”) across our employee population to calculate the median employee compensation. For our CACM, we used total gross taxable earnings from our payroll records. Given our workforce and the high turnover rates inherent in the restaurant industry, our methodology included annualizing the compensation for all full-time and part-time employees who did not work a full calendar year to properly reflect their compensation levels. We did not perform any full-time equivalency adjustments or annualize the compensation for temporary or seasonal positions. We did not make any cost-of-living adjustments or use any statistical sampling. |
• | After identifying the median employee, we calculated this employee’s total annual compensation in the same manner as the Chief Executive Officer’s compensation, which is described in the Summary Compensation Table. |
Name and Principal Position | Year | Salary ($) | Stock Awards (1)($) | Option Awards ($) | Non- Equity Incentive Plan Compensation (2)($) | Change in Nonqualified Deferred Compensation Earnings (3) ($) | All Other Compensation (4) ($) | Total ($) | ||||||||||||||||||||||
Daniel T. Accordino | 2018 | $ | 837,624 | $ | 1,921,250 | $ | — | $ | 554,842 | $ | 55,814 | $ | 357,691 | $ | 3,727,221 | |||||||||||||||
President, Chief | 2017 | $ | 813,420 | $ | 2,182,250 | $ | — | $ | 257,450 | $ | 52,385 | $ | 79,173 | $ | 3,384,678 | |||||||||||||||
Executive Officer and Director | 2016 | $ | 617,427 | $ | 1,228,000 | $ | — | $ | 603,779 | $ | 18,744 | $ | 17,520 | $ | 2,485,470 | |||||||||||||||
Paul R. Flanders | 2018 | $ | 427,464 | $ | 596,250 | $ | — | $ | 280,230 | $ | — | $ | 130,618 | $ | 1,434,562 | |||||||||||||||
Vice President, Chief | 2017 | $ | 415,008 | $ | 677,250 | $ | — | $ | 165,101 | $ | — | $ | 25,659 | $ | 1,283,018 | |||||||||||||||
Financial Officer and Treasurer | 2016 | $ | 349,056 | $ | 614,000 | $ | — | $ | 308,777 | $ | — | $ | — | $ | 1,271,833 | |||||||||||||||
Richard G. Cross | 2018 | $ | 309,000 | $ | 265,000 | $ | — | $ | 141,421 | $ | — | $ | 51,502 | $ | 766,923 | |||||||||||||||
Vice President, | 2017 | $ | 300,000 | $ | 225,750 | $ | — | $ | 97,417 | $ | — | $ | 10,117 | $ | 633,284 | |||||||||||||||
Real Estate | 2016 | $ | 240,000 | $ | 307,000 | $ | — | $ | 143,697 | $ | — | $ | — | $ | 690,697 | |||||||||||||||
William E. Myers | 2018 | $ | 257,508 | $ | 198,750 | $ | — | $ | 120,172 | $ | — | $ | 42,919 | $ | 619,349 | |||||||||||||||
Vice President, | 2017 | $ | 250,008 | $ | 225,750 | $ | — | $ | 81,934 | $ | — | $ | 8,431 | $ | 566,123 | |||||||||||||||
General Counsel | 2016 | $ | 218,556 | $ | 221,040 | $ | — | $ | 128,891 | $ | — | $ | — | $ | 568,487 | |||||||||||||||
Gerald J. DiGenova | 2018 | $ | 231,756 | $ | 198,750 | $ | — | $ | 104,678 | $ | 6,307 | $ | 38,627 | $ | 580,118 | |||||||||||||||
Vice President, | 2017 | $ | 225,000 | $ | 225,750 | $ | — | $ | 64,963 | $ | 6,559 | $ | 7,588 | $ | 529,860 | |||||||||||||||
Human Resources |
(1) | The amounts shown represent the aggregate grant date fair value of restricted stock granted and approved by the Compensation Committee in each of the fiscal years presented and is consistent with the grant date fair value of the award computed in accordance with FASB ASC Topic 718. These amounts reflect the grant date fair value for these awards and do not correspond to the actual value that will be recognized. The actual value, if any, that a named executive officer may realize will depend on the stock price at the date of vesting. |
(2) | We provide incentive compensation to our executive officers based on an individual’s achievement of certain specified objectives and our achievement of specified EBITDA levels. See “Compensation Discussion and Analysis” above for a discussion of our Executive Bonus Plan. Amounts include cash bonuses paid in fiscal year 2019, 2018 and 2017 with respect to services rendered in fiscal year 2018, 2017 and 2016, respectively. |
(3) | These amounts represent the above-market portion of earnings on compensation deferred by the Named Executive Officers under our nonqualified Deferred Compensation Plan. Earnings on deferred compensation are considered to be above-market to the extent that the rate of interest exceeds 120% of the applicable federal long-term rate. At December 30, 2018, 120% of the federal long-term rate was 4.0% per annum and the interest rate paid to participants was 8% per annum. |
(4) | All other compensation in 2018 includes the value of each Named Executive Officer's restricted stock units earned under the incentive bonus plan and granted in 2019. Mr. Accordino received 38,318 restricted stock units, Mr. Flanders received 14,433 restricted stock units, Mr. Cross received 5,691 restricted stock units, Mr. Myers received 4,742 restricted stock units and Mr. DiGenova received 4,268 restricted stock units. All restricted stock units vest annually in equal installments over three years with accelerated vesting for any event of termination other than for cause. |
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) (1) | Grant Date Fair Value of Stock Awards ($) (2) | ||||||
Daniel T. Accordino | 1/15/2018 | 145,000 | $ | 1,921,250 | |||||
Paul R. Flanders | 1/15/2018 | 45,000 | $ | 596,250 | |||||
Richard G. Cross | 1/15/2018 | 20,000 | $ | 265,000 | |||||
William E. Myers | 1/15/2018 | 15,000 | $ | 198,750 | |||||
Gerald J. DiGenova | 1/15/2018 | 15,000 | $ | 198,750 |
(1) | Amounts shown in this column reflect the number of restricted stock awards granted to each Named Executive Officer pursuant to Carrols plan during 2018. All of such restricted stock vests over a period of three years, with one-third of such restricted stock vesting on the first anniversary of the grant date and one-third of such restricted stock vesting on each subsequent anniversary of the grant date. |
(2) | The value of the restricted stock awards granted in 2018 is calculated by multiplying the number of restricted stock awarded by the market closing price of our common stock on the grant date. The grant date fair value on January 12, 2018 was $13.25 (the last preceding trading day before January 15, 2018). |
Option Awards | Stock Awards | |||||||||||||||||||
Name | Number of Securities Underlying Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | Equity Incentive Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||
Daniel T. Accordino (1) | — | — | — | — | — | 311,961 | $ | 2,926,194 | — | — | ||||||||||
Paul R. Flanders (1) | — | — | — | — | — | 110,336 | $ | 1,034,952 | — | — | ||||||||||
Richard G. Cross (1) | — | — | — | — | — | 46,661 | $ | 437,680 | — | — | ||||||||||
William E. Myers (1) | — | — | — | — | — | 38,161 | $ | 357,950 | — | — | ||||||||||
Gerald J. DiGenova (1) | — | — | — | — | — | 38,161 | $ | 357,950 | — | — |
(1) | In January 2016, we granted restricted stock awards to each Named Executive Officer pursuant to the 2006 Stock Incentive Plan, as amended. All such restricted stock awards vest over periods of four years with one-fourth of such restricted shares vesting on the first anniversary of the grant date and annually on the anniversary of the grant date thereafter. We also granted restricted stock awards to each Named Executive Officer in January 2017 and January 2018, pursuant to the 2016 Stock Incentive Plan. These restricted stock awards vest over periods of three years with one-third of such restricted shares vesting on the first anniversary of the grant date and annually on the anniversary of the grant date thereafter. |
(2) | The market value of the restricted stock awards was determined based on the closing price of our common stock on the last trading day of the 2018 fiscal year, December 28, 2018, which was $9.38. |
Option Awards | Stock Awards | ||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | |||||||||
Daniel T. Accordino | — | — | 95,563 | $ | 1,266,210 | ||||||||
Paul R. Flanders | — | — | 38,438 | $ | 509,304 | ||||||||
Richard G. Cross | — | — | 15,613 | $ | 206,872 | ||||||||
William E. Myers | — | — | 13,863 | $ | 183,685 | ||||||||
Gerard J. DiGenova | — | — | 13,863 | $ | 183,685 |
Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) (1) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||
Daniel T. Accordino | — | — | 111,073 | — | 1,449,310 | |||||||||||
Paul R. Flanders | — | — | — | — | — | |||||||||||
Richard G. Cross | — | — | — | — | — | |||||||||||
William E. Myers | — | — | — | — | — | |||||||||||
Gerald J. DiGenova | 12,000 | — | 12,551 | — | 169,340 |
Non-renewal of Employment Agreement Without Cause ($) | Terminated Without Cause or by Employee for Good Reason Within 12 Months of a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason More than 12 Months following a Change in Control (2)($) | Terminated For Cause or by Employee Without Good Reason ($) | Disability ($) | Death ($) | ||||||||||||||||||
Severance | $ | 837,624 | $ | 3,256,524 | (1) | $ | 2,178,276 | (2) | $ | — | $ | 2,512,872 | (3) | $ | — | ||||||||
Bonus (4) | 554,842 | 554,842 | 554,842 | — | 554,842 | — | |||||||||||||||||
Accrued Vacation (5) | 64,433 | 64,433 | 64,433 | 64,433 | — | — | |||||||||||||||||
Welfare Benefits (6) | 454,793 | 454,793 | 454,793 | — | 454,793 | 245,588 | |||||||||||||||||
Deferred Compensation Plan | 1,449,310 | 1,449,310 | 1,449,310 | 1,449,310 | 1,449,310 | 1,449,310 | |||||||||||||||||
Equity (7) | — | 3,336,025 | 3,336,025 | — | — | 3,336,025 | |||||||||||||||||
Total | $ | 3,361,002 | $ | 9,115,927 | $ | 8,037,679 | $ | 1,513,743 | $ | 4,971,817 | $ | 5,030,923 |
(1) | Reflects a lump sum cash payment in an amount equal to 2.99 multiplied by the average of the sum of the base salary and the annual bonus paid under the Executive Bonus Plan or deferred in accordance with the Deferred Compensation Plan in the five calendar years prior to the date of termination, which we refer to as the “Five-Year Compensation Average”. |
(2) | Reflects a lump sum cash payment in an amount equal to 2.00 multiplied by Mr. Accordino's Five Year Compensation Average. |
(3) | Such amounts based on the base salary in effect at December 30, 2018 of $837,624 for Mr. Accordino, for a period of three years. |
(4) | Reflects a lump sum cash payment in an amount equal to the pro rata portion of Mr. Accordino’s annual bonus under our Executive Bonus Plan for the year in which his employment is terminated. Amount represents the bonus earned by Mr. Accordino for the fiscal year ended December 30, 2018. |
(5) | Amount represents four weeks of accrued but unpaid vacation as of December 30, 2018 based on the annual salary of $837,624 in effect at December 30, 2018 for Mr. Accordino. |
(6) | Mr. Accordino's employment agreement requires continued coverage under our welfare and benefits plans for him and his eligible dependents for the remainder of their respective lives. The amount included in this table was actuarially determined based on the present value of future health care premiums paid for by us discounted at a rate of 4.17%. |
(7) | The amount represents vesting of the outstanding shares of restricted stock and restricted stock units held at December 30, 2018 based upon the closing price of our common stock on the last trading day of our 2018 fiscal year, December 28, 2018, which was $9.38. |
Paul R. Flanders | Richard G. Cross | William E. Myers | Gerald J. DiGenova | |||||||||||||||||||||||||||||
Terminated Without Cause or by Employee for Good Reason Within 12 Months of a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Prior to a Change in Control or More Than One Year After a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Within 12 Months of a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Prior to a Change in Control or More Than One Year After a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Within 12 Months of a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Prior to a Change in Control or More Than One Year After a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Within 12 Months of a Change in Control ($) | Terminated Without Cause or by Employee for Good Reason Prior to a Change in Control or More Than One Year After a Change in Control ($) | |||||||||||||||||||||||||
Severance | $ | 667,645 | (1) | $ | 445,118 | (3) | $ | 482,643 | (1) | $ | 321,762 | (3) | $ | 402,215 | (1) | $ | 268,143 | (3) | $ | 361,991 | (1) | $ | 241,328 | (3) | ||||||||
Bonus | 280,230 | (2) | 280,230 | (4) | 141,421 | (2) | 141,421 | (4) | 120,172 | (2) | 120,172 | (4) | 104,678 | (2) | 104,678 | (4) | ||||||||||||||||
Welfare Benefits (5) | 14,727 | 14,727 | 9,177 | 9,177 | 11,565 | 11,565 | 11,565 | 11,565 | ||||||||||||||||||||||||
Deferred Compensation Plan | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Equity (6) | 1,034,952 | 1,189,516 | 437,680 | 498,622 | 357,950 | 408,733 | 357,950 | 403,659 | ||||||||||||||||||||||||
Total | $ | 1,997,554 | $ | 1,929,591 | $ | 1,070,921 | $ | 970,982 | $ | 891,902 | $ | 808,613 | $ | 836,184 | $ | 761,230 |
(1) | Reflects a cash lump sum payment in an amount equal to 18 multiplied by the amount of the Named Executive Officer’s monthly base salary in effect at December 30, 2018 plus interest of 8.25% per annum (determined as the prime commercial rate established by the principal lending bank at December 30, 2018 of 5.25% plus 3%) until the time of payment which would be the fifth business day following the six month anniversary of termination. |
(2) | Reflects an amount equal to the aggregate bonus payment for the year in which the Named Executive Officer incurs a termination of employment to which he would otherwise have been entitled had his employment not terminated under the Executive Bonus Plan in effect at December 30, 2018. Such payment would be made no later than March 15th of the calendar year following the calendar year the Named Executive Officer’s employment is terminated. |
(3) | Reflects a cash lump sum payment in the amount equal to one year of base salary in effect at December 30, 2018 plus interest of 8.25% per annum (determined as the prime commercial rate established by the principal lending bank at December 30, 2018 of 5.25% plus 3%) until the time of payment which would be the fifth business day following the six month anniversary of termination. |
(4) | Reflects an amount equal to the pro-rata portion of the aggregate bonus payment for the year in which the Named Executive Officer incurs a termination of employment to which the Named Executive Officer would otherwise have been entitled had his employment not terminated under the Executive Bonus Plan in effect at December 30, 2018. |
(5) | Reflects continued coverage of group term life and disability insurance and group health and dental plan coverage for such Named Executive Officer and his dependents for a period of 18 months based on rates in effect at December 30, 2018 without discounting. |
(6) | All unvested shares of stock and unvested restricted stock units held by the Named Executive Officer will automatically vest. Unlike other payments in this table, the shares vest in accordance with the Carrols plan even if the Named Executive Officer’s employment is not terminated following a change of control (i.e. it is a “single trigger”). The amount is based on the unvested shares held by each Named Executive Officer at December 30, 2018 and the closing price of our common stock on the last trading day of our 2018 fiscal year, December 28, 2018, which was $9.38. |
• | Annual retainer of $60,000 year for serving as a director. |
• | The chairperson of the Audit Committee receives an additional fee of $18,000 per year and each other member of the Audit Committee receives an additional fee of $7,500 per year. The chairman of the Compensation Committee receives an additional fee of $10,000 per year and each other member of the Compensation Committee receives an additional fee of $5,000 per year. The chairman of the Corporate Governance and Nominating Committee receives an additional fee of $5,000 per year and each other member of the Corporate Governance and Nominating Committee receives an additional fee of $3,000 per year. All directors will be reimbursed for all reasonable expenses they incur while acting as directors, including as members of any committee of the board of directors. |
• | Pursuant to our 2016 Stock Incentive Plan, in January of each year members of our board of directors, (except for any member who is an executive officer or employee and except for our two Class B directors) will receive an annual restricted stock award with an aggregate “fair market value” (as such term is defined in the Carrols plan) of $100,000 on the date of grant. |
Name | Fees Earned or Paid in Cash (1) ($) | Stock Award ($) (2) | Option Award ($) | Non-Equity Incentive Plan Compensation ($) | Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||
José E. Cil (3) | 60,000 | — | — | — | — | — | 60,000 | ||||||||||||||
Hannah S. Craven | 76,889 | 100,011 | — | — | — | — | 176,900 | ||||||||||||||
Deborah M. Derby (5) | 36,786 | — | — | — | — | — | 36,786 | ||||||||||||||
Manuel A. Garcia III (4) | 28,393 | 257,595 | — | — | — | — | 285,988 | ||||||||||||||
David S. Harris | 80,500 | 100,011 | — | — | — | — | 180,511 | ||||||||||||||
Lawrence E. Hyatt | 81,000 | 100,011 | — | — | — | — | 181,011 | ||||||||||||||
Alexandre Macedo (3) | — | — | — | — | — | — | — | ||||||||||||||
Matthew Dunnigan (3) | 60,000 | — | — | — | — | — | 60,000 |
(1) | The amounts listed in this column include the payment of annual retainers, additional fees for committee service, and attendance fees. |
(2) | On January 15, 2018, Ms. Craven and Messrs. Garcia, Harris and Hyatt were each granted 7,548 restricted shares of common stock valued at $13.25 per share under the Carrols plan. The restricted shares of common stock vest and becomes non-forfeitable and one-third on the each anniversary of the award date, provided that, the participant has continuously remained a director of Carrols Restaurant Group. The amounts shown in this column represent the aggregate fair value of restricted common stock granted and approved by the Compensation Committee and is consistent with the grant date fair value of the award computed in accordance with FASB ASC Topic 718. See Notes 1 and 11 of the consolidated financial statements for the year ended December 30, 2018 for the fiscal year ended December 30, 2018. |
(3) | Mr. Cil and Mr. Dunnigan are Class B director designees of BKC pursuant to the terms of the Series B Preferred Stock. Prior to the Exchange, Mr. Macedo resigned as a Class A director and Mr. Dunnigan was appointed as a Class A director designee of BKC on February 5, 2018. Amounts for our Class B directors are paid directly to BKC. |
(4) | Mr. Garcia retired from our board of directors, effective June 7, 2018. The Compensation Committee approved the acceleration of vesting of 19,589 shares of restricted stock held by Mr. Garcia as of the date of his retirement from our board of directors. |
(5) | Ms. Derby was elected to our board of directors at our annual meeting of shareholders held on June 7, 2018 and her compensation represents a prorated payment for the period June 7, 2018 through December 30, 2018. |
Name | Outstanding Stock Awards | ||
José E. Cil | — | ||
Hannah S. Craven | 18,880 | ||
Manuel A. Garcia III | — | ||
Deborah M. Derby | — | ||
David S. Harris | 14,818 | ||
Lawrence E. Hyatt | 7,548 | ||
Alexandre Macedo | — | ||
Matthew Dunnigan | — |
• | each stockholder known by us to beneficially own more than 5% of our outstanding shares of common stock; |
• | each of our directors, nominees for director and Named Executive Officers (as defined in “Executive Compensation—Compensation Discussion and Analysis” herein) individually; and |
• | all directors and executive officers as a group. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | Percent of Class Giving Effect to the Conversion of Series B Preferred Stock (1) | ||||||
Restaurant Brands International, Inc. (2) | 9,414,580 | — | 20.3 | % | |||||
Restaurant Brands International Limited Partnership | |||||||||
BlackRock, Inc. (3) | 2,942,825 | 8.0 | % | 6.3 | % | ||||
Dimensional Fund Advisors LP (4) | 2,355,229 | 6.4 | % | 5.1 | % | ||||
Private Capital Management, LLC (5) | 2,278,462 | 6.2 | % | 4.9 | % | ||||
Brown Advisory Incorporated (6) | 2,202,867 | 6.0 | % | 4.7 | % | ||||
Brown Investment Advisory & Trust Company | |||||||||
Brown Advisory LLC | |||||||||
Daniel T. Accordino | 1,433,332 | 3.9 | % | 3.1 | % | ||||
Paul R. Flanders | 364,844 | * | * | ||||||
Richard G. Cross | 186,199 | * | * | ||||||
Gerald J. DiGenova | 166,401 | * | * | ||||||
William E. Myers | 92,163 | * | * | ||||||
David S. Harris | 64,115 | * | * | ||||||
Hannah Craven | 41,091 | * | * | ||||||
Lawrence E. Hyatt | 18,097 | * | * | ||||||
Deborah M. Derby | 15,823 | * | * | ||||||
José E. Cil (7) | — | * | * | ||||||
Matthew Dunnigan (7) | — | — | — | ||||||
All directors and executive officers as a group | 2,397,065 | 6.5 | % | 5.2 | % |
* | Less than 1.0%. |
(1) | Percentages calculated based on the addition of 9,414,580 shares of common stock, which represents the shares of common stock issuable upon the conversion of shares of Series B Preferred Stock, to the outstanding common stock as of February 26, 2019. |
(2) | Information was obtained from a Schedule 13D/A filed on December 6, 2018 with the SEC. BKC and an affiliate of RBI beneficially own an aggregate of 9,414,580 shares of Carrols Restaurant Group Common Stock issuable upon the conversion of shares of Carrols Restaurant Group Series B Preferred Stock. RBI and RBI LP each has sole voting power over 9,414,580 shares, sole dispositive power over 9,414,580 shares and shared voting and shared dispositive power over 0 shares. The address for RBI and RBI LP is 130 King Street West, Suite 300, P.O. Box 399, Toronto, Ontario M5X 1E1 Canada. |
(3) | Information was obtained from a Schedule 13G/A (Amendment No. 2) filed on February 4, 2019 with the SEC. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. BlackRock, Inc. has sole voting power over 2,763,726 shares, sole dispositive power over 2,942,825 shares and shared voting and shared dispositive power over 0 shares. |
(4) | Information was obtained from a Schedule 13G/A (Amendment No. 1) filed on February 8, 2019 with the SEC. The address for Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas, 78746. Dimensional Fund Advisors LP has sole voting power over 2,244,748 shares, sole dispositive power over 2,355,229 shares and shared voting and shared dispositive over 0 shares. |
(5) | Information was obtained from a Schedule 13G/A (Amendment No. 2) filed on February 8, 2019 with the SEC. The address for Private Capital Management, LLC is 8889 Pelican Bay Boulevard, Suite 500, Naples, Florida 34108. Private Capital Management, LLC has sole voting power and dispositive power over 609,538 shares and shared voting power and dispositive power over 1,668,924 shares. |
(6) | Information was obtained from a Schedule 13G/A (Amendment No. 2) filed on February 11, 2019 with the SEC. The address for Brown Advisory Incorporated, Brown Investment Advisory & Trust Company and Brown Advisory LLC is 901 South Bond Street, Suite 400, Baltimore, Maryland 21231. Brown Advisory Incorporated has sole voting power over 1,845,777 shares, shared voting power over 0 shares, sole dispositive power over 0 shares and shared dispositive power over 2,202,867 shares. Brown Investment Advisory & Trust Company has sole voting power and shared dispositive power over 26,812 shares and shared voting and sole dispositive power over 0 shares. Brown Advisory LLC has sole voting power over 1,818,965 shares, shared voting and sole dispositive power over 0 shares and shared dispositive power over 2,176,055 shares. |
(7) | The address of Mr. Cil and Mr. Dunnigan is 130 King Street West, Suite 300, P.O. Box 399, Toronto, ON M5X1E1, Canada. |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | ||||||
Equity compensation plans approved by security holders | — | — | 3,664,567 | |||||
Equity compensation plans not approved by security holders | — | — | — | |||||
Total | — | — | 3,664,567 |
Year Ended | ||||||||
December 30, 2018 | December 31, 2017 | |||||||
(Amounts in thousands) | ||||||||
Audit Fees (1) | $ | 975 | $ | 978 | ||||
Audit-Related Fees (2) | 72 | 82 | ||||||
Total Audit and Audit-Related Fees | 1,047 | 1,060 | ||||||
Tax Fees (3) | 26 | 26 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 1,073 | $ | 1,086 |
(1) | Audit fees consist of fees and related expenses for the annual audit of the Company's consolidated financial statements included in its annual report on Form 10-K, the quarterly reviews of the Company's interim financial statements included in its quarterly reports on Form 10-Q, and for the annual audit of the Company's internal controls over financial reporting. |
(2) | Audit related fees shown include fees for assurance and related services that are traditionally performed by independent auditors. These fees include due diligence related to mergers and acquisitions, and consulting on financial accounting/reporting standards. |
(3) | Tax fees consist of the aggregate fees for tax compliance and tax advisory and consulting services. |
Page | ||
CARROLS RESTAURANT GROUP, INC. AND SUBSIDIARY | ||
Financial Statements: | ||
Schedule | Description | Page | |
II |
Exhibit | |
Number | Description |
2.1 | |
2.2 | |
3.1 | |
3.2 | |
3.3 | |
3.4 | |
3.5 | |
3.6 |
3.7 | |
3.8 | |
3.9 | |
4.1 | |
Exhibit | |
Number | Description |
4.2 | |
4.3 | |
4.4 | |
4.5 | |
4.6 | |
4.7 | |
4.8 | |
4.9 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
10.5 |
10.6 | |
10.7 | |
10.8 | |
10.9 | |
10.10 | |
10.11 | |
Exhibit | |
Number | Description |
10.12 | |
10.13 | |
10.14 | |
10.15 | |
10.16 | |
10.17 | |
10.18 | |
10.19 | |
10.20 | |
10.21 |
10.22 | |
10.23 | |
10.24 | |
10.25 | |
10.26 | |
Exhibit | |
Number | Description |
10.27 | |
10.28 | |
10.29 | |
10.30 | |
10.31 | |
10.32 | |
10.33 | |
10.34 | |
10.35 |
10.36 | |
10.37 | |
10.38 | |
10.39 | |
14.1 | |
21.1 | |
23.1 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
# | Filed herewith. |
† | Compensatory plan or arrangement |
/s/ Deloitte & Touche LLP |
Rochester, New York |
March 7, 2019 |
December 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,014 | $ | 29,412 | |||
Trade and other receivables | 11,693 | 9,420 | |||||
Inventories | 10,396 | 9,373 | |||||
Prepaid rent | 1,880 | 5,134 | |||||
Prepaid expenses and other current assets | 6,695 | 6,622 | |||||
Refundable income taxes | — | 54 | |||||
Total current assets | 34,678 | 60,015 | |||||
Property and equipment, net (Note 3) | 289,817 | 274,098 | |||||
Franchise rights, net (Note 4) | 175,897 | 152,028 | |||||
Goodwill (Note 4) | 38,469 | 36,792 | |||||
Franchise agreements, at cost less accumulated amortization of $12,022 and $11,028, respectively | 24,414 | 23,192 | |||||
Favorable leases, net (Note 4) | 5,892 | 5,862 | |||||
Deferred income taxes, net (Note 10) | 28,291 | 27,647 | |||||
Other assets | 2,793 | 1,880 | |||||
Total assets | $ | 600,251 | $ | 581,514 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt (Note 8) | $ | 1,948 | $ | 1,808 | |||
Accounts payable | 29,143 | 29,245 | |||||
Accrued interest | 3,818 | 3,672 | |||||
Accrued payroll, related taxes and benefits | 28,719 | 26,635 | |||||
Accrued real estate taxes | 5,910 | 5,269 | |||||
Other current liabilities | 12,601 | 12,900 | |||||
Total current liabilities | 82,139 | 79,529 | |||||
Long-term debt, net of current portion and deferred financing costs (Note 8) | 276,823 | 278,519 | |||||
Lease financing obligations | 1,196 | 1,196 | |||||
Deferred income—sale-leaseback of real estate (Note 7) | 10,073 | 11,451 | |||||
Accrued postretirement benefits (Note 17) | 4,320 | 4,838 | |||||
Unfavorable leases, net (Note 4) | 12,348 | 13,111 | |||||
Other liabilities (Note 6) | 27,812 | 23,810 | |||||
Total liabilities | 414,711 | 412,454 | |||||
Commitments and contingencies (Note 14) | |||||||
Stockholders’ equity (Note 12): | |||||||
Preferred stock, par value $.01; authorized 20,000,000 shares, issued and outstanding—100 shares | — | — | |||||
Voting common stock, par value $.01; authorized—100,000,000 shares, issued—36,538,903 and 36,158,711 shares, respectively, and outstanding—35,742,427 and 35,436,252 shares, respectively | 357 | 354 | |||||
Additional paid-in capital | 150,459 | 144,650 | |||||
Retained earnings | 35,511 | 25,407 | |||||
Accumulated other comprehensive loss (Note 17) | (646 | ) | (1,210 | ) | |||
Treasury stock, at cost | (141 | ) | (141 | ) | |||
Total stockholders’ equity | 185,540 | 169,060 | |||||
Total liabilities and stockholders’ equity | $ | 600,251 | $ | 581,514 |
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Restaurant sales | $ | 1,179,307 | $ | 1,088,532 | $ | 943,583 | |||||
Costs and expenses: | |||||||||||
Cost of sales | 326,308 | 304,593 | 250,112 | ||||||||
Restaurant wages and related expenses | 382,829 | 350,054 | 297,766 | ||||||||
Restaurant rent expense (Note 7) | 81,409 | 75,948 | 64,814 | ||||||||
Other restaurant operating expenses | 178,750 | 166,786 | 148,946 | ||||||||
Advertising expense | 48,340 | 44,677 | 41,299 | ||||||||
General and administrative (including stock-based compensation expense of $5,812, $3,518 and $2,053, respectively) | 66,587 | 60,348 | 54,956 | ||||||||
Depreciation and amortization | 58,468 | 54,159 | 47,295 | ||||||||
Impairment and other lease charges (Note 5) | 3,685 | 2,827 | 2,355 | ||||||||
Other expense (income) (Notes 9 and 14) | (424 | ) | (333 | ) | 338 | ||||||
Total operating expenses | 1,145,952 | 1,059,059 | 907,881 | ||||||||
Income from operations | 33,355 | 29,473 | 35,702 | ||||||||
Interest expense | 23,638 | 21,710 | 18,315 | ||||||||
Gain on bargain purchase (Note 2) | (230 | ) | — | — | |||||||
Income before income taxes | 9,947 | 7,763 | 17,387 | ||||||||
Provision (benefit) for income taxes (Note 10) | (157 | ) | 604 | (28,085 | ) | ||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Basic and diluted net income per share (Note 13) | $ | 0.22 | $ | 0.16 | $ | 1.01 | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 35,715,372 | 35,416,531 | 35,178,329 | ||||||||
Diluted | 45,319,971 | 44,976,514 | 44,851,345 | ||||||||
Comprehensive income, net of tax: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Other comprehensive income (loss) | 564 | (7 | ) | (868 | ) | ||||||
Comprehensive income | $ | 10,668 | $ | 7,152 | $ | 44,604 |
Retained | Accumulated | |||||||||||||||||||||||||||||
Additional | Earnings | Other | Total | |||||||||||||||||||||||||||
Common Stock | Preferred | Paid-In | (Accumulated | Comprehensive | Treasury | Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Stock | Capital | Deficit) | Income (Loss) | Stock | Equity | |||||||||||||||||||||||
Balance at January 3, 2016 | 35,039,890 | $ | 350 | $ | — | $ | 139,083 | $ | (30,958 | ) | $ | (335 | ) | $ | (141 | ) | $ | 107,999 | ||||||||||||
Stock-based compensation | — | — | — | 2,053 | — | — | — | 2,053 | ||||||||||||||||||||||
Vesting of non-vested shares and excess tax benefits | 218,689 | 3 | — | (3 | ) | — | — | — | — | |||||||||||||||||||||
Net income | — | — | — | — | 45,472 | — | — | 45,472 | ||||||||||||||||||||||
Change in postretirement benefit obligations, net of income tax benefit of $541 (Note 17) | — | — | — | — | — | (868 | ) | — | (868 | ) | ||||||||||||||||||||
Balance at January 1, 2017 | 35,258,579 | 353 | — | 141,133 | 14,514 | (1,203 | ) | (141 | ) | 154,656 | ||||||||||||||||||||
Cumulative-effect adjustment from adoption of ASU 2016-09 | — | — | — | — | 3,734 | — | — | 3,734 | ||||||||||||||||||||||
Stock-based compensation | — | — | — | 3,518 | — | — | — | 3,518 | ||||||||||||||||||||||
Vesting of non-vested shares and excess tax benefits | 177,673 | 1 | — | (1 | ) | — | — | — | — | |||||||||||||||||||||
Net income | — | — | — | — | 7,159 | — | — | 7,159 | ||||||||||||||||||||||
Change in postretirement benefit obligations, net of income tax benefit of $4 (Note 17) | — | — | — | — | — | (7 | ) | — | (7 | ) | ||||||||||||||||||||
Balance at December 31, 2017 | 35,436,252 | 354 | — | 144,650 | 25,407 | (1,210 | ) | (141 | ) | 169,060 | ||||||||||||||||||||
Stock-based compensation | — | — | — | 5,812 | — | — | — | 5,812 | ||||||||||||||||||||||
Vesting of non-vested shares | 306,175 | 3 | — | (3 | ) | — | — | — | — | |||||||||||||||||||||
Net income | — | — | — | — | 10,104 | — | — | 10,104 | ||||||||||||||||||||||
Change in postretirement benefit obligations, net of income tax of $186 (Note 17) | — | — | — | — | — | 564 | — | 564 | ||||||||||||||||||||||
Balance at December 30, 2018 | 35,742,427 | $ | 357 | $ | — | $ | 150,459 | $ | 35,511 | $ | (646 | ) | $ | (141 | ) | $ | 185,540 |
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Loss (gain) on disposals of property and equipment | 312 | 521 | (549 | ) | |||||||
Stock-based compensation | 5,812 | 3,518 | 2,053 | ||||||||
Gain on bargain purchase (Note 2) | (230 | ) | — | — | |||||||
Impairment and other lease charges | 3,685 | 2,827 | 2,355 | ||||||||
Depreciation and amortization | 58,468 | 54,159 | 47,295 | ||||||||
Amortization of deferred financing costs | 1,202 | 1,035 | 791 | ||||||||
Amortization of bond premium | (913 | ) | (459 | ) | — | ||||||
Amortization of deferred gains from sale-leaseback transactions | (1,584 | ) | (1,626 | ) | (1,788 | ) | |||||
Deferred income taxes | (483 | ) | 574 | (28,085 | ) | ||||||
Changes in other operating assets and liabilities: | |||||||||||
Refundable income taxes | 55 | 99 | (153 | ) | |||||||
Trade and other receivables | (2,275 | ) | (1,310 | ) | (1,462 | ) | |||||
Accounts payable | (926 | ) | 3,084 | 1,686 | |||||||
Accrued interest | 146 | 996 | 4 | ||||||||
Accrued payroll, related taxes and benefits | 2,084 | 336 | (1,553 | ) | |||||||
Other | 5,312 | 1,870 | (3,778 | ) | |||||||
Net cash provided by operating activities | 80,769 | 72,783 | 62,288 | ||||||||
Cash flows used for investing activities: | |||||||||||
Capital expenditures: | |||||||||||
New restaurant development | (23,171 | ) | (14,759 | ) | (8,228 | ) | |||||
Restaurant remodeling | (31,951 | ) | (33,504 | ) | (65,767 | ) | |||||
Other restaurant capital expenditures | (15,726 | ) | (18,926 | ) | (15,168 | ) | |||||
Corporate and restaurant information systems | (4,887 | ) | (6,327 | ) | (4,936 | ) | |||||
Total capital expenditures | (75,735 | ) | (73,516 | ) | (94,099 | ) | |||||
Acquisition of restaurants, net of cash acquired (Note 2) | (38,102 | ) | (37,923 | ) | (48,088 | ) | |||||
Proceeds from insurance recoveries | 642 | 481 | 1,413 | ||||||||
Properties purchased for sale-leaseback | (2,123 | ) | (1,404 | ) | (9,046 | ) | |||||
Proceeds from sale-leaseback transactions | 8,424 | 4,257 | 53,599 | ||||||||
Net cash used for investing activities | (106,894 | ) | (108,105 | ) | (96,221 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of 8% senior secured second lien notes | — | 79,875 | — | ||||||||
Borrowings under senior credit facility | 17,000 | 183,250 | 129,000 | ||||||||
Repayments under senior credit facility | (17,000 | ) | (196,750 | ) | (115,500 | ) | |||||
Principal payments on capital leases | (1,811 | ) | (1,651 | ) | (1,480 | ) | |||||
Proceeds from lease financing obligations | 2,692 | — | 1,816 | ||||||||
Financing costs associated with issuance of debt and lease financing obligations | (154 | ) | (1,992 | ) | (175 | ) | |||||
Net cash provided by financing activities | 727 | 62,732 | 13,661 | ||||||||
Net increase (decrease) in cash and cash equivalents | (25,398 | ) | 27,410 | (20,272 | ) | ||||||
Cash and cash equivalents, beginning of period | 29,412 | 2,002 | 22,274 | ||||||||
Cash and cash equivalents, end of period | $ | 4,014 | $ | 29,412 | $ | 2,002 |
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Supplemental disclosures: | |||||||||||
Interest paid on long-term debt | $ | 23,098 | $ | 20,885 | $ | 17,415 | |||||
Interest paid on lease financing obligations | $ | 105 | $ | 119 | $ | 105 | |||||
Accruals for capital expenditures | $ | 7,605 | $ | 6,839 | $ | 4,032 | |||||
Non-cash reduction of lease financing obligations | $ | 2,538 | $ | 1,744 | $ | — | |||||
Income taxes paid (refunded), net | $ | (270 | ) | $ | (63 | ) | $ | 153 | |||
Capital lease obligations acquired or incurred | $ | 49 | $ | 316 | $ | 583 |
Owned buildings | 9 | to | 30 years |
Equipment | 3 | to | 7 years |
Computer hardware and software | 3 | to | 7 years |
Assets subject to capital leases | Shorter of useful life or lease term |
Closing Date | Number of Restaurants | Purchase Price | Market Location | |||||
February 13, 2018 | (1) | 1 | $ | — | New York | |||
August 21, 2018 | (2) | 2 | 1,666 | Detroit, Michigan | ||||
September 5, 2018 | (2) | 31 | 25,930 | Western Virginia | ||||
October 2, 2018 | 10 | 10,506 | South Carolina and Georgia | |||||
44 | $ | 38,102 |
(1) | This acquisition resulted in a bargain purchase gain because the fair value of net assets acquired, largely representing a franchise right asset of $0.3 million, exceeded the total fair value of consideration paid by $0.2 million. The Company recognized this gain and recorded it as "Gain on bargain purchase" in the consolidated statements of comprehensive income. |
(2) | Acquisitions resulting from the exercise of the ROFR. |
Inventory | $ | 401 | |
Restaurant equipment | 2,092 | ||
Restaurant equipment - subject to capital lease | 43 | ||
Leasehold improvements | 1,329 | ||
Franchise fees | 1,264 | ||
Franchise rights (Note 4) | 31,275 | ||
Favorable leases (Note 4) | 587 | ||
Deferred taxes | 346 | ||
Goodwill (Note 4) | 1,677 | ||
Capital lease obligations for restaurant equipment | (49 | ) | |
Unfavorable leases (Note 4) | (624 | ) | |
Accounts payable | (9 | ) | |
Net assets acquired | $ | 38,332 |
Year Ended | |||||||
December 30, 2018 | December 31, 2017 | ||||||
Restaurant sales | $ | 1,217,891 | $ | 1,170,627 | |||
Net income | $ | 13,684 | $ | 12,464 | |||
Basic and diluted net income per share | $ | 0.30 | $ | 0.28 |
Closing Date | Number of Restaurants | Purchase Price | Market Location | ||||||
February 28, 2017 | 43 | $ | 20,366 | Cincinnati, Ohio | |||||
June 5, 2017 | (1) | 17 | 16,355 | Baltimore, Maryland and Washington, DC | |||||
November 28, 2017 | 4 | 1,202 | Maine | ||||||
64 | $ | 37,923 |
Trade and other receivables | $ | 486 | |
Inventory | 616 | ||
Prepaid expenses | 192 | ||
Other assets | 52 | ||
Restaurant equipment | 3,290 | ||
Restaurant equipment - subject to capital lease | 264 | ||
Leasehold improvements | 2,496 | ||
Franchise fees | 1,315 | ||
Franchise rights (Note 4) | 24,691 | ||
Favorable leases (Note 4) | 1,100 | ||
Deferred taxes | (4,357 | ) | |
Goodwill (Note 4) | 13,923 | ||
Capital lease obligations for restaurant equipment | (316 | ) | |
Unfavorable leases (Note 4) | (2,997 | ) | |
Accounts payable | (880 | ) | |
Accrued payroll, related taxes and benefits | (270 | ) | |
Other liabilities | (1,682 | ) | |
Net assets acquired | $ | 37,923 |
Year Ended | ||||||||
December 31, 2017 | January 1, 2017 | |||||||
Restaurant sales | $ | 1,114,642 | $ | 1,071,437 | ||||
Net income | $ | 9,546 | $ | 52,730 | (1) | |||
Basic and diluted net income per share | $ | 0.21 | $ | 1.18 |
Closing Date | Number of Restaurants | Purchase Price | Number of Fee-Owned Restaurants (1) | Market Location | |||||||
February 23, 2016 | (2) | 12 | $ | 7,127 | Scranton/Wilkes-Barre, Pennsylvania | ||||||
May 25, 2016 | 6 | 12,080 | 5 | Detroit, Michigan | |||||||
July 14, 2016 | (2) | 4 | 5,445 | 3 | Detroit, Michigan | ||||||
August 23, 2016 | 7 | 8,755 | 6 | Portland, Maine | |||||||
October 4, 2016 | 3 | 1,623 | Raleigh, North Carolina | ||||||||
November 15, 2016 | 17 | 7,251 | Pittsburgh and Johnstown, Pennsylvania | ||||||||
December 1, 2016 | 7 | 5,807 | 1 | Columbus, Ohio | |||||||
56 | $ | 48,088 | 15 |
(1) | The 2016 acquisitions included the purchase of 15 fee-owned properties of which fourteen were sold in sale-leaseback transactions during 2016 for net proceeds of $19.1 million. |
(2) | Acquisitions resulting from the exercise of the ROFR. |
Inventory | $ | 558 | |
Land and buildings | 19,387 | ||
Restaurant equipment | 1,599 | ||
Restaurant equipment - subject to capital lease | 435 | ||
Leasehold improvements | 2,464 | ||
Franchise fees | 1,121 | ||
Franchise rights | 21,202 | ||
Favorable leases | 390 | ||
Deferred taxes | 216 | ||
Goodwill | 2,431 | ||
Capital lease obligations for restaurant equipment | (492 | ) | |
Unfavorable leases | (1,152 | ) | |
Other liabilities | (71 | ) | |
Net assets acquired | $ | 48,088 |
Year ended | ||||
January 1, 2017 | ||||
Restaurant sales | $ | 984,164 | ||
Net income | $ | 48,264 | (1) | |
Basic and diluted net income per share | $ | 1.07 |
2018 Acquisitions | 2017 Acquisitions | 2016 Acquisitions | |||
Favorable leases | 17.2 | 15.2 | 15.4 | ||
Unfavorable leases | 18.3 | 14.3 | 12.0 | ||
Franchise rights | 31.6 | 27.9 | 28.0 |
December 30, 2018 | December 31, 2017 | |||||||
Land | $ | 8,779 | $ | 8,659 | ||||
Owned buildings | 9,488 | 9,950 | ||||||
Leasehold improvements | 339,180 | 301,091 | ||||||
Equipment | 244,446 | 227,284 | ||||||
Assets subject to capital leases | 16,797 | 16,874 | ||||||
618,690 | 563,858 | |||||||
Less accumulated depreciation and amortization | (328,873 | ) | (289,760 | ) | ||||
$ | 289,817 | $ | 274,098 |
Goodwill at January 1, 2017 | $ | 22,869 | |
Acquisitions of restaurants (Note 2) | 13,923 | ||
Goodwill at December 31, 2017 | 36,792 | ||
Acquisitions of restaurants (Note 2) | 1,677 | ||
Goodwill at December 30, 2018 | $ | 38,469 |
December 30, 2018 | December 31, 2017 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Franchise rights | $ | 283,918 | $ | 108,021 | $ | 252,643 | $ | 100,615 |
December 30, 2018 | December 31, 2017 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Favorable leases | $ | 8,148 | $ | 2,256 | $ | 7,805 | $ | 1,943 | ||||||||
Unfavorable leases | $ | 18,423 | $ | 6,075 | $ | 18,164 | $ | 5,053 |
December 30, 2018 | December 31, 2017 | ||||||
Balance, beginning of year | $ | 2,028 | $ | 1,513 | |||
Provisions for closures | 249 | 1,174 | |||||
Changes in estimates of accrued costs | (147 | ) | 81 | ||||
Payments, net | (889 | ) | (862 | ) | |||
Other adjustments, including the effect of discounting future obligations | 111 | 122 | |||||
Balance, end of year | $ | 1,352 | $ | 2,028 |
December 30, 2018 | December 31, 2017 | ||||||
Deferred rent | $ | 16,610 | $ | 14,040 | |||
Other accrued occupancy costs | 3,074 | 3,189 | |||||
Accrued workers’ compensation and general liability claims | 4,398 | 3,353 | |||||
Deferred compensation | 3,610 | 3,053 | |||||
Other | 120 | 175 | |||||
$ | 27,812 | $ | 23,810 |
Fiscal year ending: | Capital | Operating | |||||
December 29, 2019 | $ | 2,180 | $ | 73,304 | |||
January 3, 2021 | 1,454 | 71,764 | |||||
January 2, 2022 | 345 | 70,607 | |||||
January 1, 2023 | 190 | 70,160 | |||||
December 31, 2023 | 68 | 69,221 | |||||
Thereafter | 129 | 640,793 | |||||
Total minimum lease payments | 4,366 | $ | 995,849 | ||||
Less amount representing interest | (425 | ) | |||||
Total obligations under capital leases | 3,941 | ||||||
Less current portion | (1,948 | ) | |||||
Long-term obligations under capital leases | $ | 1,993 |
Year ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Minimum rent on real property | $ | 72,206 | $ | 68,329 | $ | 59,076 | |||||
Contingent rent on real property | 9,203 | 7,619 | 5,738 | ||||||||
Restaurant rent expense | 81,409 | 75,948 | 64,814 | ||||||||
Administrative and equipment rent | 273 | 328 | 267 | ||||||||
$ | 81,682 | $ | 76,276 | $ | 65,081 |
December 30, 2018 | December 31, 2017 | ||||||
Collateralized: | |||||||
Carrols Restaurant Group 8% Senior Secured Second Lien Notes | $ | 275,000 | $ | 275,000 | |||
Capital leases | 3,941 | 5,681 | |||||
278,941 | 280,681 | ||||||
Less: current portion of capital leases | (1,948 | ) | (1,808 | ) | |||
Less: deferred financing costs | (3,673 | ) | (4,770 | ) | |||
Add: bond premium | 3,503 | 4,416 | |||||
Total Long-term Debt | $ | 276,823 | $ | 278,519 |
Fiscal year ending: | |||
December 29, 2019 | $ | 1,948 | |
January 3, 2021 | 1,357 | ||
January 2, 2022 | 301 | ||
January 1, 2023 | 275,169 | ||
December 31, 2023 | 56 | ||
Thereafter | 110 | ||
$ | 278,941 |
Year ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 326 | 30 | — | ||||||||
326 | 30 | — | |||||||||
Deferred: | |||||||||||
Federal | (598 | ) | (219 | ) | 1,297 | ||||||
State | 115 | 793 | 992 | ||||||||
(483 | ) | 574 | 2,289 | ||||||||
Change in valuation allowance | — | — | (30,374 | ) | |||||||
Provision (benefit) for income taxes | $ | (157 | ) | $ | 604 | $ | (28,085 | ) |
December 30, 2018 | December 31, 2017 | ||||||
Deferred income tax assets: | |||||||
Deferred income on sale-leaseback of certain real estate | $ | 2,505 | $ | 2,848 | |||
Lease financing obligations | 182 | 173 | |||||
Postretirement benefit obligations | 935 | 877 | |||||
Stock-based compensation expense | 1,326 | 827 | |||||
Federal net operating loss carryforwards | 18,955 | 17,730 | |||||
State net operating loss carryforwards | 3,902 | 4,095 | |||||
Goodwill and other intangibles, net | 1,301 | 1,590 | |||||
Occupancy costs | 6,091 | 5,863 | |||||
Tax credit carryforwards | 28,827 | 24,982 | |||||
Accrued vacation benefits | 2,060 | 1,851 | |||||
Accrued workers compensation | 1,189 | 1,141 | |||||
Accumulated other comprehensive income-postretirement benefits | 140 | 326 | |||||
Other | 1,983 | 1,706 | |||||
Net deferred income tax assets | $ | 69,396 | $ | 64,009 | |||
Deferred income tax liabilities: | |||||||
Inventory and other reserves | (167 | ) | (116 | ) | |||
Property and equipment depreciation | (19,870 | ) | (15,701 | ) | |||
Franchise rights | (21,068 | ) | (20,545 | ) | |||
Total deferred income tax liabilities | $ | (41,105 | ) | $ | (36,362 | ) | |
Carrying value of net deferred income tax assets | $ | 28,291 | $ | 27,647 |
Year ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Statutory federal income tax provision | $ | 2,089 | $ | 2,717 | $ | 6,085 | |||||
State income taxes, net of federal benefit | 325 | 572 | 403 | ||||||||
Change in valuation allowance | — | — | (30,374 | ) | |||||||
Employment tax credits | (3,059 | ) | (1,947 | ) | (5,408 | ) | |||||
Non-deductible expenses | 415 | 336 | 965 | ||||||||
Federal rate change | — | (762 | ) | — | |||||||
Miscellaneous | 73 | (312 | ) | 244 | |||||||
Provision (benefit) for income taxes | $ | (157 | ) | $ | 604 | $ | (28,085 | ) |
Shares | Weighted Average Grant Date Price | |||||
Non-vested at December 31, 2017 | 722,459 | $ | 12.76 | |||
Granted | 380,192 | $ | 13.25 | |||
Vested | (306,175 | ) | $ | 12.43 | ||
Non-vested at December 30, 2018 | 796,476 | $ | 13.12 |
Year ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Basic net income per share: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Less: Income attributable to non-vested shares | (178 | ) | (118 | ) | (616 | ) | |||||
Less: Income attributable to preferred stock | (2,071 | ) | (1,479 | ) | (9,461 | ) | |||||
Net income available to common stockholders | $ | 7,855 | $ | 5,562 | $ | 35,395 | |||||
Weighted average common shares outstanding | 35,715,372 | 35,416,531 | 35,178,329 | ||||||||
Basic net income per share | $ | 0.22 | $ | 0.16 | $ | 1.01 | |||||
Diluted net income per share: | |||||||||||
Net income | $ | 10,104 | $ | 7,159 | $ | 45,472 | |||||
Weighted average common shares outstanding | 35,715,372 | 35,416,531 | 35,178,329 | ||||||||
Dilutive effect of preferred stock and non-vested shares | 9,604,599 | 9,559,983 | 9,673,016 | ||||||||
Dilutive weighted average common shares outstanding | 45,319,971 | 44,976,514 | 44,851,345 | ||||||||
Diluted net income per share (1) | $ | 0.22 | $ | 0.16 | $ | 1.01 |
(1) | Diluted net income per share is equal to basic net income per share for the periods presented due to the allocation of earnings to participating securities under the two-class method of calculating basic net income per share causing basic net income per share to be lower than diluted net income per share calculated under the treasury-stock method. |
December 30, 2018 | December 31, 2017 | ||||||
Change in benefit obligation: | |||||||
Benefit obligation at beginning of year | $ | 4,838 | $ | 4,566 | |||
Service cost | 196 | 192 | |||||
Interest cost | 178 | 191 | |||||
Plan participants' contributions | 97 | 88 | |||||
Actuarial gain | (894 | ) | (122 | ) | |||
Benefits paid | (99 | ) | (115 | ) | |||
Medicare part D prescription drug subsidy | 4 | 38 | |||||
Benefit obligation at end of year | $ | 4,320 | $ | 4,838 | |||
Change in plan assets: | |||||||
Fair value of plan assets at beginning of year | $ | — | $ | — | |||
Employer refunds | (2 | ) | (11 | ) | |||
Plan participants' contributions | 97 | 88 | |||||
Benefits paid | (99 | ) | (115 | ) | |||
Medicare part D prescription drug subsidy | 4 | 38 | |||||
Fair value of plan assets at end of year | — | — | |||||
Funded status | $ | (4,320 | ) | $ | (4,838 | ) | |
Weighted average assumptions: | |||||||
Discount rate used to determine benefit obligations | 4.17 | % | 3.60 | % | |||
Discount rate used to determine net periodic benefit cost | 3.60 | % | 4.11 | % |
Year ended | |||||||||||
December 30, 2018 | December 31, 2017 | January 1, 2017 | |||||||||
Service cost | $ | 196 | $ | 192 | $ | 150 | |||||
Interest cost | 178 | 191 | 165 | ||||||||
Amortization of net loss | 208 | 222 | 197 | ||||||||
Amortization of prior service credit | (352 | ) | (355 | ) | (355 | ) | |||||
Net periodic postretirement benefit expense | $ | 230 | $ | 250 | $ | 157 |
Year ended | |||||||
December 30, 2018 | December 31, 2017 | ||||||
Prior service credit | $ | 1,265 | $ | 1,617 | |||
Net loss | (1,826 | ) | (2,928 | ) | |||
Deferred income taxes | (85 | ) | 101 | ||||
Accumulated other comprehensive loss | $ | (646 | ) | $ | (1,210 | ) |
Year ended | |||||||
December 30, 2018 | December 31, 2017 | ||||||
Actuarial gain | $ | (894 | ) | $ | (122 | ) | |
Amortization of net loss | (208 | ) | (222 | ) | |||
Amortization of prior service credit | 352 | 355 | |||||
Deferred income taxes | 186 | (4 | ) | ||||
Total recognized in accumulated other comprehensive loss | $ | (564 | ) | $ | 7 |
December 30, 2018 | December 31, 2017 | January 1, 2017 | ||||||
Medical benefits cost trend rate assumed for the following year pre-65 | 7.00 | % | 7.25 | % | 7.50 | % | ||
Medical benefits cost trend rate assumed for the following year post-65 | 5.00 | % | 6.25 | % | 6.50 | % | ||
Prescription drug cost trend rate assumed for the following year | 9.50 | % | 10.50 | % | 10.50 | % | ||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 3.78 | % | 3.89 | % | 3.89 | % | ||
Year that the rate reaches the ultimate trend rate | 2075 | 2075 | 2075 |
1% Point Increase | 1% Point Decrease | ||||||
Effect on total of service and interest cost | $ | 103 | $ | 75 | |||
Effect on postretirement benefit obligation | $ | 846 | $ | 649 |
Year Ended December 30, 2018 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Restaurant sales | $ | 271,586 | (1) | $ | 303,050 | $ | 296,917 | (1) | $ | 307,754 | (1) | |||||
Income from operations | 2,664 | (1)(2) | 13,833 | (1)(2) | 9,668 | (1)(2) | 7,190 | (1)(2) | ||||||||
Net income | (3,102) | 7,788 | 3,611 | 1,807 | ||||||||||||
Basic and diluted net income per share | (0.09 | ) | 0.17 | 0.08 | 0.04 | |||||||||||
Restaurants at end of period | 807 | 807 | 838 | 849 | ||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Restaurant sales | $ | 239,852 | (3) | $ | 279,478 | (3) | $ | 285,235 | $ | 283,967 | (3) | |||||
Income from operations | (1,406) | (3)(4) | 12,335 | (3)(4) | 8,684 | (3)(4) | 9,860 | (3)(4) | ||||||||
Net income | (5,596) | 6,039 | 2,795 | 3,921 | ||||||||||||
Basic and diluted net income per share | (0.16 | ) | 0.13 | 0.06 | 0.09 | |||||||||||
Restaurants at end of period | 788 | 799 | 798 | 807 |
(1) | In fiscal 2018 the Company acquired one restaurant in the first quarter in a bargain purchase, 33 restaurants in the third quarter, and ten restaurants in the fourth quarter (See Note 2). In fiscal 2018 the Company recorded acquisition costs related to the 2018 acquisitions of $0.1 million in the first quarter, $0.1 million in the second quarter, $0.8 million in the third quarter and $0.4 million in the fourth quarter (See Note 2). |
(2) | In fiscal 2018 the Company recorded impairment and other lease charges of $0.3 million in the first quarter, $2.9 million in the second quarter, $0.2 million in the third quarter and $0.3 million in the fourth quarter (See Note 5). |
(3) | In fiscal 2017 the Company acquired 43 restaurants in the first quarter, 17 restaurants in the second quarter, and four restaurants in the fourth quarter (See Note 2). In fiscal 2017 the Company recorded acquisition costs related to the 2017 and 2016 acquisitions of $0.7 million in the first quarter, $0.5 million in the second quarter, $0.5 million in the third quarter and $0.1 million in the fourth quarter (See Note 2). |
(4) | In fiscal 2017 the Company recorded impairment and other lease charges of $0.5 million in the first quarter, $0.4 million in the second quarter, $1.0 million in the third quarter and $0.8 million in the fourth quarter (See Note 5). |
Column B | Column C | Column D | Column E | |||||||||||||||||
Description | Balance at Beginning of Period | Charged to Costs and Expenses | Charged to other accounts | Deductions | Balance at End of Period | |||||||||||||||
Year Ended December 30, 2018 | ||||||||||||||||||||
Deferred income tax valuation allowance | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||
Deferred income tax valuation allowance | — | — | — | — | — | |||||||||||||||
Year Ended January 1, 2017 | ||||||||||||||||||||
Deferred income tax valuation allowance | 30,374 | — | — | (30,374 | ) | — |
CARROLS RESTAURANT GROUP, INC. | |
/s/ Daniel T. Accordino | |
(Signature) | |
Daniel T. Accordino Chief Executive Officer |
Signature | Title | Date | ||
/s/ Daniel T. Accordino | President, Chief Executive Officer and Chairman of the Board of Directors | March 7, 2019 | ||
Daniel T. Accordino | ||||
/s/ Paul R. Flanders | Vice President, Chief Financial Officer and Treasurer | March 7, 2019 | ||
Paul R. Flanders | ||||
/s/ Jose E. Cil | Director | March 7, 2019 | ||
Jose E. Cil | ||||
/s/ Hannah S. Craven | Director | March 7, 2019 | ||
Hannah S. Craven | ||||
/s/ Deborah M. Derby | Director | March 7, 2019 | ||
Deborah M. Derby | ||||
/s/ Matthew Dunnigan | Director | March 7, 2019 | ||
Matthew Dunnigan | ||||
/s/ Lawrence E. Hyatt | Director | March 7, 2019 | ||
Lawrence E. Hyatt | ||||
/s/ David S. Harris | Director | March 7, 2019 | ||
David S. Harris | ||||
WELLS FARGO BANK, NATIONAL ASSOCIATION 1808 Aston Avenue, Suite 250 Carlsbad, CA 92008 WELLS FARGO SECURITIES, LLC 550 South Tryon Street Charlotte, North Carolina 28202 | COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH 245 Park Avenue, 37th Floor New York, New York 10167 |
MANUFACTURERS AND TRADERS TRUST COMPANY 1 Light St, 13th Floor Baltimore, MD 21202 | SUNTRUST ROBINSON HUMPHREY, INC. SUNTRUST BANK 3333 Peachtree Road Atlanta, Georgia 30326 |
3. | Conditions to Commitment. |
4. | Syndication. |
5. | Information. |
8. | Confidentiality. |
9. | PATRIOT Act Notification. The Commitment Parties hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each of them is required to obtain, verify and record information that identifies you and any additional Credit Parties, which information includes your and their respective names, addresses, tax identification numbers and other information (including, for the avoidance of doubt, a certification regarding beneficial ownership as required by 31 C.F.R. §1010.230 (the “Beneficial Ownership Regulation”)) that will allow the Commitment Parties and the other prospective Lenders to identify you and such other parties in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for each of us and the prospective Lenders. |
10. | Other Services. |
11. | Acceptance/Expiration of Commitments. |
By: | /s/ Eric J. Rogowski Name: Eric J. Rogowski Title: Executive Director |
By: | /s/ Pieter van der Werff Name: Pieter van der Werff Title: Vice President |
By: | /s/ Timothy P. McDevitt Name: Timothy P. McDevitt Title: Vice President |
By: | /s/ Ron Caldwell Name: Ron Caldwell Title: Managing Director |
By: | /s/ Ron Caldwell Name: Ron Caldwell Title: Managing Director |
Borrower: | Carrols Holdco Inc., a Delaware corporation (the “Borrower”). |
Joint Lead Arrangers and Joint Bookrunners: | Wells Fargo Securities, LLC, Rabobank, M&T Bank and STRH will act as lead arrangers and bookrunners (in such capacities, the “Lead Arrangers”). |
Lenders: | Wells Fargo Bank, National Association, Rabobank, M&T Bank, SunTrust Bank and a syndicate of financial institutions and other entities (each a “Lender” and, collectively, the “Lenders”). |
Administrative Agent and Issuing Banks: | Wells Fargo Bank, National Association will act as sole administrative agent for the Senior Credit Facilities (in such capacity, the “Administrative Agent”). Letters of Credit (as defined below) under the Revolving Credit Facility (as defined below) will be issued by Wells Fargo Bank, National Association and any Lender identified by the Borrower and reasonably acceptable to the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) who agrees to issue Letters of Credit (each an “Issuing Bank”). |
Senior Credit Facilities: | Senior secured credit facilities (the “Senior Credit Facilities”) in an aggregate principal amount of $500.0 million, such Senior Credit Facilities to consist of: Revolving Credit Facility. A revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Credit Facility”) (with a subfacility for standby letters of credit (each, a “Letter of Credit”) in a maximum amount to be mutually determined and on customary terms and conditions). Letters of Credit will be issued by the Issuing Banks and each Lender with a commitment under the Revolving Credit Facility will purchase an irrevocable and unconditional participation in each Letter of Credit. Letters of Credit may be issued on the Closing Date in the ordinary course of business and to replace or provide credit support for any existing letters of credit (including by “grandfathering” such existing letters of credit into the Revolving Credit Facility). Term Loan B Facility. A term loan facility in an aggregate principal amount of $400.0 million (the “Term Loan B Facility”). |
Use of Proceeds: | The proceeds of the Term Loan B Facility will be used to finance (a) the Refinancing and (b) the payment of fees and expenses incurred in connection with the Transactions. The proceeds of the Revolving Credit Facility will be used to finance (a) the Refinancing, (b) the payment of fees and expenses incurred in connection with the Transactions, and (c) ongoing working capital and for other general corporate purposes of the Borrower and its subsidiaries, including permitted acquisitions, and required expenditures under development agreements (including those with Burger King and Popeye’s). |
Availability: | The Revolving Credit Facility will be available on a revolving basis from and after the Closing Date until the Revolving Credit Maturity Date (as defined below). The Term Loan B Facility will be available only in a single draw of the full amount of the Term Loan B Facility on the Closing Date. |
Incremental Term Loans/ Revolving Facility Increases: | After the Closing Date, the Borrower will be permitted to incur (a) additional term loans under a new term facility that will be included in the Term Loan B Facility (each, an “Incremental Term Loan”) and/or (b) increases in the Revolving Credit Facility (each, a “Revolving Facility Increase”; the Incremental Term Loans and any Revolving Facility Increase are collectively referred to as “Incremental Facilities”), in an aggregate principal amount for all such Incremental Term Loans and Revolving Facility Increases not to exceed the sum of (a) the greater of (i) $135.0 million and (ii) 100% of Consolidated EBITDA (as defined in accordance with the Documentation Principles) of the Borrower and its subsidiaries for the four consecutive fiscal quarters most recently ended for which financial statements have been delivered to the Lenders (“LTM Consolidated EBITDA”) less any amount applied pursuant to clause (a)(v) under “Negative Covenants”, (b) all voluntary prepayments, repurchases, redemptions and other retirements of the Term Loan B Facility, any Incremental Term Loans, any Incremental Equivalent Debt (as defined below) secured on a pari passu basis with the Term Loan B Facility made prior to such date of occurrence (other than voluntary prepayments, repurchases, redemptions and other retirements and voluntary commitment reductions to the extent funded by a refinancing with long-term funded indebtedness (other than revolving loans)) and (c) an unlimited amount at any time (including at any time prior to utilization of amounts set forth in clause (a) and (b) above), subject to, in the case of this clause (c) only, (1) in the case of indebtedness secured on a pari passu lien basis with the Term Loan B Facility, pro forma compliance with a First Lien Net Leverage Ratio (as defined below) of not greater than 3.00 to 1.00, (2) in the case of indebtedness secured on a junior lien basis to the Term Loan B Facility, pro forma compliance with a Secured Net Leverage Ratio (as defined below) of not greater than 4.25 to 1.00 and (3) in the case of unsecured indebtedness, pro forma compliance with a Total Net Leverage Ratio (as defined below) of not greater than 4.75 to 1.00, in each case of this clause (c), after giving pro forma effect to any acquisition, investment or other specified transaction consummated in connection therewith and all other permitted pro forma adjustment (the amounts under the foregoing clauses (a) and (b), the “Free and Clear Incremental Amount” and the amounts under the foregoing clause (c) (the “Incurrence-Based Incremental Amount”, and together with the Free and Clear Incremental Amount, the “Available Incremental Amount”). The Borrower may elect to use the Incurrence-Based Incremental Amount prior to the Free and Clear Incremental Amount or any combination thereof, and any portion of any Incremental Facility incurred in reliance on the Free and Clear Incremental Amount may be reclassified, as the Borrower may elect from time to time, as incurred under the Incurrence-Based Incremental Amount if the Borrower meets the applicable ratio for the Incurrence Based Incremental Amount at such time on a pro forma basis. provided that (i) subject to clause (v) below, no event of default exists immediately prior to or after giving effect thereto, (ii) no Lender will be required or otherwise obligated to provide any portion of such Incremental Term Loan or Revolving Facility Increase, (iii) the maturity date of any such Incremental Term Loan shall be no earlier than the then latest Term Loan B Maturity Date (as defined below), the weighted average life of such Incremental Term Loan shall be no shorter than the then remaining weighted average life of the last maturing loans under the Term Loan B Facility and any such Incremental Term Loans that are secured on a pari passu basis with respect to the Term Loan B Facility may participate on a pro rata or less than pro rata (but not greater than pro rata) basis with respect to mandatory prepayments, (iv) the interest rate margins and (subject to clause (iii)) amortization schedule applicable to any Incremental Term Loan shall be determined by the Borrower and the lenders thereunder; provided that in the event that the interest rate margins for any Incremental Term Loan secured on a pari passu lien basis with the initial Term Loan B Facility established on or prior to the date that is 12 months after the Closing Date is higher than the interest rate margins for the Term Loan B Facility (as determined by the Administrative Agent) by more than 50 basis points, then the interest rate margins for the Term Loan B Facility shall be increased to the extent necessary so that such interest rate margins is equal to the interest rate margins for such Incremental Term Loan minus 50 basis points; provided, further, that in determining the interest rate margins applicable to the Incremental Term Loan and the Term Loan B Facility, (x) original issue discount (“OID”) or upfront fees (which shall be deemed to constitute like amounts of OID, with OID being equated to interest based on assumed four-year life to maturity) payable by the Borrower to the Lenders under the Term Loan B Facility or any Incremental Term Loan in the initial primary syndication thereof shall be included and the effect of any and all interest rate floors shall be included and (y) customary arrangement or commitment fees payable to the Lead Arrangers (or their affiliates) in connection with the Term Loan B Facility or to one or more arrangers (or their affiliates) of any Incremental Term Loan shall be excluded, (v) in connection with any acquisition, investment or irrevocable repayment, repurchase or redemption there shall be no requirement for the Borrower to satisfy any of the conditions listed under “Conditions to all other Borrowings” below (including the absence of any default or event of default or the bring-down of the representations and warranties) or clause (i) above, instead the conditions may be limited to (A) absence of payment or bankruptcy event of default and (B) accuracy of customary “specified representations” (in an acquisition or investment, conformed as necessary to apply only to such acquisition or investment and the acquired business), in each case, subject to the provisions set forth below in connection with Limited Condition Acquisitions, and, in the case of clause (B), as may be waived or modified in scope by the lenders providing the Incremental Facilities, (vi) the other terms and documentation in respect of any Incremental Term Loans, to the extent not consistent with the Term Loan B Facility, will be reasonably satisfactory to the Administrative Agent and the Borrower, and (vii) each such Revolving Facility Increase shall have the same terms, other than interest rate, unused fees and upfront fees, as the Revolving Credit Facility; provided that in the event that the interest rate margins or unused fees for any Revolving Facility Increase (as determined by the Administrative Agent) are higher than the interest rate margins or unused fees for the Revolving Credit Facility (as determined by the Administrative Agent), then the interest rate margins or unused fees for the Revolving Credit Facility shall be increased to the extent necessary so that such interest rate margins or unused fees, as applicable, are equal to the interest rate margins or unused fees, as applicable, for such Revolving Facility Increase; provided, further, that in determining the interest rate margins applicable to the Revolving Facility Increase and the Revolving Credit Facility (x) upfront fees payable by the Borrower to the Lenders under the Revolving Credit Facility or any Revolving Facility Increase in the initial primary syndication thereof (with such upfront fees being equated to interest based on assumed four-year life to maturity) shall be included and the effects of any and all interest rate floors shall be included and (y) all customary arrangement or commitment fees payable to the Lead Arrangers (or their affiliates) in connection with the Revolving Credit Facility or to one or more arrangers (or their affiliates) of any Revolving Facility Increase shall be excluded. Incremental Term Loans and Revolving Facility Increases will have the same Guarantees (if any) from the Guarantors and will be unsecured or secured on a pari passu or junior basis by the same Collateral as the other Senior Credit Facilities and, if junior lien or unsecured, will be incurred as Incremental Equivalent Debt (as defined below) pursuant to a separate facility. The proceeds of any Incremental Term Loans and Revolving Facility Increases will be as agreed between the Borrower and the lenders providing such Incremental Facility and may be used for general corporate purposes of the Borrower and its subsidiaries (including permitted acquisitions and any other purpose not prohibited by the Financing Documentation). In addition, the Borrower may, in lieu of adding Incremental Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Debt. “Incremental Equivalent Debt” means indebtedness in an amount not to exceed the then Available Incremental Amount incurred by the Borrower or any Guarantor consisting of the issuance or incurrence of senior secured first lien or junior lien loans or notes, subordinated loans or notes or senior unsecured loans or notes, in each case in respect of the issuance of notes issued in a public offering, Rule 144A or other private placement or bridge financing in lieu of the foregoing, or secured or unsecured “mezzanine” debt in each case, to the extent secured, subject to customary intercreditor terms to be consistent with the Documentation Principles and to be set forth in the Financing Documentation; provided that (a) such Incremental Equivalent Debt shall not be subject to the requirements set forth in clauses (iv) (other than Incremental Equivalent Debt consisting of term loans secured on a pari passu lien basis with the initial Term Loan B Facility), (v) (other than the absence of an event of default), (vi) and (vii) and (b) clause (iii) shall not apply to any Incremental Equivalent Debt consisting of a customary bridge facility so long as the long-term debt into which any such customary bridge facility is to be converted satisfies such clause. In the case of the incurrence of any indebtedness or liens or the making of any investments, restricted payments or fundamental changes or the designation of any restricted subsidiaries or unrestricted subsidiaries in connection with a permitted acquisition (a “Limited Condition Acquisition”), at the Borrower’s option, the relevant ratios and baskets shall be determined as of the date the definitive acquisition agreements for such Limited Condition Acquisition are entered into and calculated as if the Limited Condition Acquisition and other pro forma events in connection therewith were consummated on such date; provided that if the Borrower has made such an election, in connection with determining whether the calculation of any ratio or basket with respect to the incurrence of any debt or liens, or the making of any investments, restricted payments, prepayments of subordinated debt, asset sales, fundamental changes or the designation of a restricted subsidiary or unrestricted subsidiary in connection with such Limited Condition Acquisition is permitted on or following such date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the definitive agreement for such acquisition is terminated, any such ratio or basket shall be calculated on a pro forma basis assuming such Limited Condition Acquisition and other pro forma events in connection therewith (including any incurrence of indebtedness) have been consummated as if they occurred at the beginning of the applicable test period; provided further that, notwithstanding the foregoing, any calculation of a ratio or basket not in connection with such Limited Condition Acquisition that is made prior to the earlier of the date on which such Limited Condition Acquisition is consummated and the date the definitive agreement for such acquisition is terminated in connection with (x) determining whether or not the Borrower is in compliance with the financial covenants shall be calculated assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of indebtedness) have not been consummated, (y) determining whether the Borrower or its restricted subsidiaries may make a restricted payment shall be calculated (and required to comply with each of the following) (1) on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of indebtedness and the use of proceeds thereof) have been consummated and (2) assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of indebtedness and the use of proceeds thereof) have not been consummated and (z) calculating restricted payments, the Consolidated Net Income and Consolidated EBITDA (or similar metric) of the target of any such acquisition shall not be included. For the avoidance of doubt, if any of such ratios are exceeded as a result of fluctuations in such ratio including due to fluctuations in Consolidated EBITDA of the Borrower or the person subject to such acquisition or investment, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the relevant transaction or action is permitted to be consummated or taken; provided that if such ratios improve as a result of such fluctuations, such improved ratios may be utilized. In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of determining compliance with any provision which requires that no default, event of default or specified event of default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Borrower, be deemed satisfied, so long as no default, event of default or specified event of default, as applicable, exists on the date the definitive agreements for such Limited Condition Acquisition are entered into. “First Lien Net Leverage Ratio” shall mean the ratio of (i) consolidated indebtedness for borrowed money, capitalized lease obligations and purchase money debt as reflected on the balance sheet of the Borrower and its restricted subsidiaries, in each case solely to the extent secured, in whole or in part, by first priority liens pari passu with the initial Term Loan B Facility on the Collateral, minus unrestricted cash and cash equivalents, to (ii) LTM Consolidated EBITDA. “Secured Net Leverage Ratio” shall mean the ratio of (i) consolidated indebtedness for borrowed money, capitalized lease obligations and purchase money debt as reflected on the balance sheet of the Borrower and its restricted subsidiaries, in each case solely to the extent secured, in whole or in part, by liens on the Collateral, minus unrestricted cash and cash equivalents, to (ii) LTM Consolidated EBITDA. “Total Net Leverage Ratio” shall mean the ratio of (i) consolidated indebtedness for borrowed money, capitalized lease obligations and purchase money debt as reflected on the balance sheet of the Borrower and its restricted subsidiaries, minus unrestricted cash and cash equivalents, to (ii) LTM Consolidated EBITDA. “Interest Coverage Ratio” shall mean ratio of (i) LTM Consolidated EBITDA to (ii) (A) consolidated interest expense (excluding (1) amortization of deferred financing fees, (2) expenses arising from financing fees, (3) expenses arising from the discounting of indebtedness in connection with the application of recapitalization and/or acquisition accounting, (4) penalties and interest relating to taxes and (5) non-cash interest expense attributable to movements in the mark-to-market valuation of hedging or other derivative obligations and/or any payment obligation arising under any hedge agreement or other derivative instrument (other than interest rate hedge agreements or other derivative instruments)) minus (B) interest income. |
Documentation: | The documentation for the Senior Credit Facilities will include, among other items, a credit agreement, guarantees and appropriate pledge, security and other collateral documents (collectively, the “Financing Documentation”), and shall: (a) be negotiated in good faith to finalize the Financing Documentation, giving effect to the Limited Conditionality Provision and be based on the form of the Existing Credit Agreement; provided that (i) except as may be set forth herein and as adjusted for customary term loan B transactions, the financial and accounting definitions, the basket sizes, the materiality thresholds and qualifiers in the Financing Documentation shall be no worse, taken as a whole, than the corresponding provisions in the Existing Credit Agreement and the other provisions shall give due regard to the Existing Credit Agreement and (ii) such Financing Documentation shall contain the terms and conditions set forth in this Term Sheet and, to the extent any terms are not set forth in this Term Sheet, shall otherwise contain such other terms as are usual and customary for credit facilities for comparably rated companies in a similar industry, consistent with the operational requirements of the Borrower and its subsidiaries in light of their size, cash flow, industry business, business practices, capital structure and shall contain such modifications as the Borrower and the Lead Arrangers shall mutually agree; (b) contain only those payments, conditions to borrowing, mandatory prepayments, representations, warranties, covenants and events of default and other terms and conditions expressly set forth in this Term Sheet (subject only to the exercise of any “market flex” expressly provided for in the Fee Letter), in each case, applicable to the Borrower and its restricted subsidiaries, with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods consistent with the Documentation Principles; (c) with respect to certain exceptions and thresholds to be agreed that are subject to a monetary cap and certain “baskets” to be agreed that specify a dollar-denominated amount, include a “grower” component (a “Grower Component”) (regardless of whether any such exceptions, thresholds or “baskets” specified in this Term Sheet refer to Grower Components) based on, at the election of the Borrower prior to the launch of general retail syndication, a percentage of consolidated total assets or a percentage of LTM Consolidated EBITDA, in each case, that is substantially equivalent to the initial monetary cap; (d) in the event that any action or transaction meets the criteria of one or more than one of the categories of exceptions, thresholds or baskets pursuant to any applicable negative covenants (to the extent relating to indebtedness, liens and investments) or the Incremental Facilities provisions, permit such action or transaction (or portion thereof) to be divided and classified under one or more of such exceptions, thresholds or baskets as the Borrower may elect, including classifying any utilization of fixed (subject to Grower Components) exceptions, thresholds or baskets (“fixed baskets”) as incurred under any available incurrence-based exception, threshold or basket (“incurrence-based baskets”) (including reclassifying amounts under the Free and Clear Incremental Amount to the Incurrence-Based Incremental Amount); and (e) in the event any fixed baskets are intended to be utilized together with any incurrence-based baskets in a single transaction or series of related transactions (including utilization of the Free and Clear Incremental Amount and the Incurrence-Based Incremental Amount), provide that (i) compliance with or satisfaction of any applicable financial ratios or tests for the portion of such indebtedness or other applicable transaction or action to be incurred under any incurrence-based baskets shall first be calculated without giving effect to amounts being utilized pursuant to any fixed baskets, but giving full pro forma effect to all applicable and related transactions (including, subject to the foregoing with respect to fixed baskets, any incurrence and repayments of indebtedness) and all other permitted pro forma adjustments, and (ii) thereafter, incurrence of the portion of such indebtedness or other applicable transaction or action to be incurred under any fixed baskets shall be calculated. The foregoing provisions are collectively referred to as the “Documentation Principles.” |
Guarantors: | The obligations of (a) the Borrower under the Senior Credit Facilities and (b) any Credit Party (as defined below) under any hedging agreements and under any treasury management arrangements entered into between such Credit Party and any counterparty that is a Lead Arranger, the Administrative Agent or a Lender (or any affiliate thereof) at the time such hedging agreement or treasury management arrangement is executed (collectively, the “Secured Obligations”) will be unconditionally guaranteed, on a joint and several basis, by the Borrower (other than with respect to its direct Secured Obligations as a primary obligor (as opposed to a guarantor) under the Financing Documents) and, except to the extent and for so long as prohibited or restricted by applicable law whether on the Closing Date or thereafter, or would require or be subject to any governmental authority or regulatory third party consent or approval, or would be prohibited or restricted by contract permitted by the Financing Documents existing on the Closing Date or, with respect to subsidiaries acquired after the Closing Date, by contract permitted by the Financing Documents existing when such subsidiary was acquired and not in contemplation of such acquisition, in each case, so long as the prohibition has been identified to the Administrative Agent in writing, prior to the Closing Date (or, with respect to subsidiaries acquired after the Closing Date, promptly following the acquisition thereof), each existing and subsequently acquired or formed direct and indirect domestic restricted subsidiary of the Borrower, including Carrols Restaurant Group, Inc. and the Acquired Company (each a “Guarantor”; such guarantee being referred to as a “Guarantee”); provided that Guarantees will not be required by (i) any domestic subsidiary of a foreign subsidiary of the Borrower that is a “controlled foreign corporation” for U.S. federal income tax purposes (a “CFC”), (ii) any subsidiary that owns no material assets other than equity interests of foreign subsidiaries that are CFCs (a “FSHCO”), (iii) any unrestricted subsidiaries, (iv) captive insurance companies, (v) not-for-profit subsidiaries, (vi) certain special purpose entities to be agreed by the Borrower and the Administrative Agent, (vii) immaterial subsidiaries (to be defined in a manner to be agreed), (viii) any subsidiary where the Administrative Agent and the Borrower agree the cost of obtaining a guarantee by such subsidiary would be excessive in light of the practical benefit to the Lenders afforded thereby and (ix) any other subsidiary mutually agreed by the Borrower and the Administrative Agent). The Borrower and the Guarantors are herein referred to as the “Credit Parties”. |
Security: | The Secured Obligations will be secured by valid and perfected first priority (subject to certain customary exceptions satisfactory to the Administrative Agent and set forth in the Financing Documentation) security interests in and liens on all of the following (collectively, the “Collateral”): 100% of the equity interests of all present and future subsidiaries of any Credit Party; provided that the equity interests of any subsidiary that is a CFC or a FSHCO will be limited to 65% of the voting equity interests and 100% of any non-voting equity interests of any such subsidiary that is a first-tier subsidiary of any Credit Party; All of the tangible and intangible personal property and assets of the Credit Parties (including, without limitation, all equipment, inventory and other goods, accounts, licenses, contracts, intercompany loans, intellectual property and other general intangibles, deposit accounts, securities accounts and other investment property and cash); If the aggregate fair market value of all fee-owned real property (not including properties that are excluded in the Existing Credit Agreement (the “Excluded Properties”)) consisting of restaurants in operation for at least 12 months (the “Development Period”) exceeds $5.0 million (the “Subject Properties”), then mortgages and related deliverables will be provided on terms to be agreed; it being understood that, in the event such threshold is exceeded, the Borrower may choose which Subject Properties shall become subject to such mortgages and related deliverables, upon reasonable approval by the Administrative Agent, so long as, after giving effect thereto, the aggregate fair market value of all Subject Properties shall be less than or equal to $5.0 million; and All products, profits and proceeds of the foregoing. Notwithstanding the foregoing, (a) the Collateral shall not include: (i) any leasehold interest in real property (it being understood there shall be no requirement to obtain any landlord waivers, estoppels or collateral access letters), (ii) any motor vehicles and other assets subject to certificates of title, except to the extent perfected by filing of a Uniform Commercial Code financing statement (iii) all commercial tort claims below a threshold to be agreed, (iv) any governmental licenses or state or local franchises, charters and authorizations, to the extent a security interest in any such license, franchise, charter or authorization is prohibited or restricted thereby after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code and other applicable law, other than proceeds and receivables thereof, (v) pledges and security interests prohibited or restricted by applicable law (including any requirement to obtain the consent of any governmental authority), after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code and other applicable law, other than proceeds and receivables thereof, (vi) margin stock, (vii) any lease, license or agreement (including any Franchise Agreement (to be defined in the Financing Documentation in a manner consistent with the Documentation Principles) or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement (including any Franchise Agreement) or purchase money arrangement or create a right of termination in favor of any other party thereto (other than a Credit Party or subsidiary thereof) after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code, other than proceeds and receivables thereof, (viii) letter of credit rights, except to the extent constituting a supporting obligation for other Collateral (it being understood that no actions shall be required to perfect a security interest in letter of credit rights, other than the filing of a Uniform Commercial Code financing statement), (ix) any intent-to-use application trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law and (x) assets where the Administrative Agent and the Borrower agree the cost of obtaining a security interest in such assets are excessive in relation to the value afforded thereby. Further, no actions in any non-U.S. jurisdiction shall be required in order to create or perfect any security interests in any assets located or titled outside of the U.S. (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction). Notwithstanding the foregoing, (a) no control agreements or other control arrangements shall be required with respect to cash, deposit accounts or securities accounts, (b) immaterial notes and other evidence of immaterial indebtedness shall not be required to be delivered, (c) the requirements of the preceding two paragraphs as of the Closing Date shall be subject to the Limited Conditionality Provision, and (d) the exercise of certain rights and remedies in respect of the security interests in the Collateral shall be subject to the Burger King Rights (as defined in the Existing Credit Agreement or any security agreement executed in connection therewith) and the Popeye’s Rights (to be defined in a similar manner consistent with the Documentation Principles) similar to the manner set forth in the security agreement executed in connection with the Existing Credit Agreement. |
Final Maturity: | The final maturity of the Revolving Credit Facility will occur on the fifth anniversary of the Closing Date (the “Revolving Credit Maturity Date”) and the commitments with respect to the Revolving Credit Facility will automatically terminate on such date. The final maturity of the Term Loan B Facility will occur on the seventh anniversary of the Closing Date (the “Term Loan B Maturity Date”). |
Amortization: | Revolving Credit Facility: None. Term Loan B Facility: The Term Loan B Facility will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount of the Term Loan B Facility with the remainder due on the Term Loan B Maturity Date. |
Interest Rates and Fees: | Interest rates and fees in connection with the Senior Credit Facilities will be as specified in the Fee Letter and on Schedule I attached hereto. |
Mandatory Prepayments: | Revolving Credit Facility: None, subject to customary prepayment requirements if borrowings under the Revolving Credit Facility exceed the commitments thereunder. Term Loan B Facility: Subject to the next paragraph, the Term Loan B Facility will be required to be prepaid with: 100% of the net cash proceeds of the issuance or incurrence of debt (other than any debt permitted to be issued or incurred pursuant to the terms of the Financing Documentation by the Borrower or any of its restricted subsidiaries); 100% of the net cash proceeds of all asset sales, insurance and condemnation recoveries and other asset dispositions by the Borrower or any of its restricted subsidiaries (including the issuance by any such restricted subsidiary of any of its equity interests) in excess of an amount to be agreed, with step-downs to 50% if the First Lien Net Leverage Ratio is equal to or less than 2.75 to 1.00 and 25% if the First Lien Net Leverage Ratio is equal to or less than 2.50 to 1.00, subject to the right of the Borrower to reinvest if such proceeds are reinvested (or committed to be reinvested) within 15 months and, if so committed to reinvestment, reinvested no later than six months after the end of such 15-month period, and other exceptions to be agreed upon; provided that no event of default has occurred and is continuing; and 50% of Excess Cash Flow (to be defined in the Financing Documentation consistent with the Documentation Principles), for each fiscal year of the Borrower (commencing with the fiscal year ending on or about December 31, 2020) (subject to dollar-for-dollar credit (not to exceed the amount of cash actually spent) for any voluntary prepayments, repurchases or redemptions of the loans under the Term Loan B Facility, the Revolving Credit Facility, any Incremental Facilities, any Incremental Equivalent Debt, and any Refinancing Facilities and any Additional First Lien Debt (accompanied by a corresponding permanent reduction in the aggregate commitment in the case of voluntary prepayments of loans under the Revolving Credit Facility, any revolving Refinancing Facility or any revolving Additional First Lien Debt), in each case, secured on a pari passu basis with the Term Loan B Facility and repurchased or redeemed on a pro rata basis or less than pro rata basis with the Term Loan B Facility (but, in each case, excluding prepayments, repurchases or redemptions to the extent funded with the proceeds of long-term funded indebtedness (other than revolving loans)), will reduce the amount of Excess Cash Flow prepayments required for such fiscal year on a dollar-for-dollar basis; with step-downs to 25% if the First Lien Net Leverage Ratio is equal to or less than 2.75 to 1.00 and 0% if the First Lien Net Leverage Ratio is equal to or less than 2.50 to 1.00. All such mandatory prepayments will be applied as between and within series, classes or tranches of outstanding loans under the Term Loan B Facility and any Incremental Term Loans that are secured on a pari passu basis on a pro rata basis, except that as set forth under “Incremental Term Loans/Revolving Facility Increases,” the lenders under any Incremental Term Loan may elect, as of the time of incurrence thereof, to receive less than their pro rata share thereof. Mandatory prepayments of the term loans shall be applied to scheduled installments thereof in direct order of maturity (without premium or penalty), unless otherwise directed by the Borrower; provided that the Financing Documentation shall provide that in the case of mandatory prepayments pursuant to clauses (a) or (b) above, a ratable portion of such mandatory prepayment may be applied to redeem, prepay or offer to purchase any permitted first lien indebtedness secured on a pari passu lien basis with the Term Loan B Facility (collectively, “Additional First Lien Debt”), in each case if required under the terms of the applicable documents governing such Additional First Lien Debt. Mandatory prepayments in clauses (a) and (b) above shall be subject to limitations to the extent required to be made from cash at non-U.S. restricted subsidiaries, the repatriation of which after use of commercially reasonable efforts would result in material adverse tax consequences to the Borrower, or any of its direct or indirect subsidiaries (as reasonably determined by the Borrower in good faith) or would |
be prohibited or restricted by applicable law (including repatriation of any cash). The Financing Documentation will provide customary provisions pursuant to which any Lender may elect not to accept any mandatory prepayment described in clauses (b) and (c) above, with such amount to be retained by the Borrower and such amount may be applied to increase the cumulative “builder” or “growth” basket component of the Available Amount (as defined below). | |
Optional Prepayments and Commitment Reductions: | Loans under the Senior Credit Facilities may be prepaid and unused commitments under the Revolving Credit Facility may be reduced at any time, in whole or in part, at the option of the Borrower, upon notice and in minimum principal amounts and in multiples to be agreed upon, without premium or penalty (except LIBOR breakage costs and any premium described under the “Call Premium” section below). Any optional prepayment of the Term Loan Facility or any Incremental Term Loan Facility will be applied as directed by the Borrower. |
Call Premium: | If, on or prior to the date that is six months after the Closing Date, a Repricing Transaction (as defined below) occurs, the Borrower will pay a premium (the “Call Premium”) in an amount equal to 1.0% of the principal amount of loans under the Term Loan B Facility subject to such Repricing Transaction. As used herein, the term “Repricing Transaction” shall mean (a) any prepayment or repayment of loans under the Term Loan B Facility with the proceeds of, or any conversion of loans under the Term Loan B Facility into, any new or replacement bank indebtedness bearing interest with an “effective yield” (taking into account, for example, upfront fees, interest rate spreads, interest rate benchmark floors and OID) less than the “effective yield” applicable to the loans under the Term Loan B Facility subject to such event (as such comparative yields are determined by the Administrative Agent) and (b) any repricing of the loans under the Term Loan B Facility (whether pursuant to an amendment, amendment and restatement, mandatory assignment or otherwise) which reduces the “effective yield” applicable to all or a portion of the loans under the Term Loan B Facility (as determined by the Administrative Agent) (it being understood that any prepayment premium with respect to a Repricing Transaction shall apply to any required assignment by a non-consenting Lender in connection with any such amendment pursuant to so-called yank-a-bank provisions), in each case, other than in connection with the consummation of an acquisition not permitted under the Financing Documentation, an initial public offering or the occurrence of a change in control (so long as the primary purpose of the prepayment or repayment of, or amendment to the loans under the Term Loan B Facility in connection therewith is not to reduce the “effective yield” applicable to the loans under the Term Loan B Facility as certified by a financial officer of the Borrower in a certificate to the Administrative Agent (on which the Administrative Agent is expressly permitted to rely)). |
Conditions to All Other Extensions of Credit: | Each extension of credit under the Senior Credit Facilities after the Closing Date, except to the extent otherwise permitted or provided in the “Incremental Term Loans/ Revolving Facility Increases” section above and subject to the provisions in respect of Limited Condition Acquisitions, will be subject to satisfaction of the following conditions precedent: (a) all of the representations and warranties in the Financing Documentation shall be true and correct in all material respects (or if qualified by materiality or material adverse effect, in all respects) as of the date of such extension of credit, or if such representation speaks as of an earlier date, as of such earlier date, and (b) after the initial funding on the Closing Date, no default or event of default under the Senior Credit Facilities shall have occurred and be continuing or would result from such extension of credit. |
Representations and Warranties: | Limited to the following representations and warranties (which will be applicable to the Borrower and its restricted subsidiaries and be subject to materiality thresholds and exceptions consistent with the Documentation Principles): financial statements; absence of any Material Adverse Effect (as defined below); organizational and legal status; capital structure as of the Closing Date; compliance with all applicable laws and regulations; the PATRIOT Act; organizational power and authority; enforceability; no conflict with laws or organizational documents; no default; absence of material litigation; the Investment Company Act; Regulations T, U and X; ERISA; environmental regulations and liabilities; environmental laws; use of proceeds; subsidiaries, joint ventures, partnerships; ownership; necessary consents and approvals; taxes; intellectual property; ownership of properties; solvency of the Borrower and its subsidiaries, taken as a whole, on the Closing Date; FCPA and other anti-corruption laws; brokers’ fees; labor matters; accuracy of disclosure; material contracts; insurance; creation, validity, perfection and priority of liens; classification of senior indebtedness; anti-terrorism laws; OFAC and other sanctions; payment of obligations; franchise agreements; flood hazard determinations and flood hazard insurance; and accuracy of the Beneficial Ownership Certificate (as defined below). The representations and warranties shall be subject to materiality and Material Adverse Effect qualifiers consistent with Documentation Principles. “Material Adverse Effect” means (a) with respect to the Acquired Company and its subsidiaries on the Closing Date, a Material Adverse Effect (as defined in the Acquisition Agreement), (b) with respect to Carrols and its subsidiaries on the Closing Date and the Borrower and its subsidiaries after the Closing Date, a material adverse effect on (i) the business, assets, financial condition or results of operations, in each case, of the Borrower and its Restricted Subsidiaries, taken as a whole, (ii) the rights and remedies (taken as a whole) of the Senior Agent under the Financing Documentation, (iii) the ability of the Loan Parties (taken as a whole) to perform their payment obligations under the Financing Documentation or (iv) the validity or enforceability of the Financing Documentation. |
Affirmative Covenants: | Limited to the following affirmative covenants (which will be applicable to the Borrower and its restricted subsidiaries and be subject to materiality thresholds and exceptions to be mutually agreed and consistent with the Documentation Principles): financial reporting (including annual audited and quarterly (for the first three fiscal quarters of each fiscal year) unaudited financial statements (in each case, accompanied by customary compliance certificates and management discussion and analysis) and annual updated budgets); updated schedules and other information; use of proceeds; payment of taxes and other obligations; continuation of business and maintenance of existence and rights and privileges; maintenance of all material contracts; maintenance of property and insurance (including hazard and business interruption insurance and, as applicable, flood insurance); maintenance of books and records; notices of defaults, litigation and other material events; necessary consents, approvals, licenses and permits; compliance with laws and regulations (including environmental laws, ERISA and the PATRIOT Act); a customary certificate in connection with the Beneficial Ownership Regulation (“Beneficial Ownership Certificate”); management letters; use of commercially reasonable efforts to maintain a public corporate credit rating from S&P and a public corporate family rating from Moody’s, in each case with respect to the Borrower, and a public rating of the Senior Credit Facilities by each of S&P and Moody’s (but, in each case, not to maintain a specific rating); additional Guarantors and Collateral; other collateral matters; further assurances (including, without limitation, with respect to security interests in after-acquired property); right of the Lenders to inspect property and books and records; designation of unrestricted subsidiaries; and new restaurants and franchise agreements. The affirmative covenants shall be subject to materiality and Material Adverse Effect qualifiers consistent with Documentation Principles. |
Negative Covenants: | Limited to the following negative covenants (which will be applicable to the Borrower and its subsidiaries and be subject to materiality thresholds and exceptions to be mutually agreed and consistent with the Documentation Principles): limitation on debt (including disqualified equity interests); limitation on liens; limitation on altering nature of business; limitation on fundamental changes and asset sales and other dispositions; limitation on loans, advances, acquisitions and other investments; limitation on transactions with affiliates; limitation on ownership of subsidiaries; limitation on changes in line of business, fiscal year and accounting practices; limitation on amendment of organizational documents and material contracts; sale-leaseback transactions; limitation on dividends, distributions, redemptions and repurchases of equity interests; limitation on prepayments, redemptions and purchases of debt that is expressly subordinated, junior lien and unsecured debt (collectively, “Junior Debt”); limitation on dividend and other payment restrictions affecting subsidiaries; no further negative pledges; notwithstanding any other exceptions to the lien covenant, no consensual liens on any fee-owned real property during the Development Period; and compliance with OFAC and other sanctions rules and regulations (including no use of proceeds of loans in violation of such rules and regulations). Baskets and exceptions to the foregoing covenants will include (but not be limited to) the following: (a)(i) indebtedness not to exceed the greater of (x) $20.0 million and (y) 15% of LTM Consolidated EBITDA; (ii) secured indebtedness subject to (x) in the case of any first lien indebtedness secured by the Collateral incurred on a pari passu basis with the Senior Credit Facilities, pro forma compliance with a First Lien Net Leverage Ratio of not greater than 3.00 to 1.00 (such indebtedness, “First Lien Ratio Debt”) and (y) in the case of indebtedness secured by the Collateral incurred on a junior lien basis to the Term Facility, pro forma compliance with a Secured Net Leverage Ratio of not greater than the 4.25 to 1.00 (such indebtedness, “Junior Secured Ratio Debt”; together with the First Lien Ratio Debt, the “Secured Ratio Debt”), subject in the case of each of clauses (x) and (y) to (A) no event of default having occurred or continuing after giving effect to such incurrence and the application of proceeds thereof (subject to the provisions in respect of Limited Condition Acquisitions) (B) customary maturity and weighted average life limitations consistent with such restrictions on the Incremental Facilities, (C) such indebtedness shall not be guaranteed by any guarantors that do not guarantee the Senior Credit Facilities and, in the case of secured indebtedness, shall not be secured by any collateral not securing the Senior Credit Facilities, (D) in the case of term loans secured on a pari passu basis with the Term Loan B Facility, subject to the “MFN” provisions applicable to Incremental Facilities and (E) subject to an acceptable intercreditor agreement to be set forth in the Financing Documentation; (iii) unsecured, senior subordinated or subordinated indebtedness, or other indebtedness not secured by all or any portion of the Collateral (such indebtedness, “Unsecured Ratio Debt”; together with the Secured Ratio Debt, “Ratio Debt”), subject to (w) pro forma compliance with a Total Net Leverage Ratio of not greater than 4.75 to 1.00, (x) no event of default having occurred or continuing after giving effect to such incurrence and the application of proceeds thereof (subject to the provisions in respect of Limited Condition Acquisitions), (y) customary maturity and weighted average life limitations and (z) a sublimit to be agreed for non-Guarantor subsidiaries; (iv) purchase money indebtedness and capital leases in an aggregate outstanding principal amount not to exceed the greater of (x) $27.0 million and (y) 20.0% of LTM Consolidated EBITDA; and (v) indebtedness in an amount not greater than the Free and Clear Incremental Amount not used, in each case subject to similar limitations as set forth in clause (a)(i) above; (b)(i) liens not to exceed the greater of (x) $20.0 million and (y) 15% of LTM Consolidated EBITDA; (ii) liens securing (x) indebtedness permitted pursuant to clause (a)(i)(x) above, including, pro forma compliance with a First Lien Net Leverage Ratio of 3.00 to 1.00 or (y) indebtedness permitted pursuant to clause (a)(i)(y) above, including pro forma compliance with a Secured Net Leverage Ratio of not greater than 4.25 to 1.00, in each case subject to the limitations applicable to clause (a)(ii) above; (c)(i) restricted payments not to exceed the greater of (x) $27.0 million and (y) 20% of LTM Consolidated EBITDA (shared with permitted investments and prepayments of Junior Debt under clause (d)(i) and (e)(i), respectively); (ii) unlimited restricted payments (A) subject to pro forma compliance with a Total Net Leverage Ratio of not greater than 2.50 to 1.00 and (B) so long as no event of default has occurred and is continuing (or would result therefrom); (iii) restricted payments consisting of regular quarterly dividends in amount to be agreed; and (iv) restricted payments from a cumulative “builder” or “growth” basket (the “Available Amount”) (shared with permitted investments and prepayments of Junior Debt pursuant to clause (d)(iv) and (e)(iii), respectively, below) of (x) $27.0 million plus (y) retained Excess Cash Flow (to the extent greater than zero) (this clause (y), the “Growth Amount”) plus (z) certain other usual and customary items as set forth in the Financing Documentation; provided that (A) no default or event of default has occurred and is continuing (or would result therefrom) and (B) in the case of the Growth Amount, pro forma compliance with a Total Net Leverage Ratio of not greater than 3.00 to 1.00; (d)(i) permitted investments not to exceed the greater of (x) $27.0 million and (y) 20% of LTM Consolidated EBITDA (shared with restricted payments and prepayments of Junior Debt under clause (c)(i) and (e)(i), respectively); (ii) permitted investments constituting Permitted Acquisitions (to be defined in the Financing Documentation); (iii) unlimited permitted investments (A) subject to pro forma compliance with a Total Net Leverage Ratio of not greater than 3.00 to 1.00 and (B) so long as no event of default has occurred and is continuing (or would result therefrom), subject to the provisions in respect of Limited Condition Acquisitions; and (iv) permitted investments using the Available Amount (shared with the amounts utilized under the Available Amount under for restricted payments and prepayments of Junior Debt under clauses (c)(iv) and (e)(iii), respectively; provided that no default or event of default has occurred and is continuing (or would result therefrom), subject to the provisions in respect of Limited Condition Acquisitions; (e)(i) subject to compliance with the mandatory prepayment requirements with the proceeds thereof, asset sales and other dispositions of property (subject to customary exceptions, thresholds and reinvestment rights) on an unlimited basis for fair market value as long as at least 75% of the consideration in excess of an amount to be determined consists of cash or cash equivalents (subject to customary exceptions to the cash consideration requirement, including a basket for non-cash consideration that may be designated as cash consideration), and (ii) dispositions of non-core after-acquired assets, in each case under this clause (e), so long as no event of default has occurred and is continuing (or would result therefrom); and (f)(i) prepayments of Junior Debt not to exceed the greater of (x) $27.0 million and (y) 20% of LTM Consolidated EBITDA (shared with restricted payments and permitted investments under clause (c)(i) and (d)(i), respectively); (ii) unlimited prepayments of Junior Debt (A) subject to pro forma compliance with a Total Net Leverage Ratio of not greater than 2.50 to 1.00 and (B) so long as no event of default has occurred and is continuing (or would result therefrom); and (iii) prepayments of Junior Debt from the Available Amount (shared with the amounts utilized under the Available Amount under for restricted payments and permitted investments under clauses (c)(iv) and (d)(iv), respectively; provided that (A) no default or event of default has occurred and is continuing (or would result therefrom) and (B) in the case of the Growth Amount, pro forma compliance with a Total Net Leverage Ratio of not greater than 3.00 to 1.00. |
Financial Covenants: | Term Loan B Facility: None Revolving Credit Facility: Maximum Total Net Leverage not to exceed 4.75 to 1.00. The financial covenant will be tested quarterly and apply to the Borrower and its subsidiaries on a consolidated basis, with definitions to be mutually agreed upon. The definition of Consolidated EBITDA shall be defined in a manner consistent with the Documentation Principles and, in any event, shall include, without limitation, (a) usual and customary add-backs with respect to restaurant openings; (b) cost savings, operating expense reductions and synergies related to the Transactions and to mergers and other business combinations, acquisitions, investments, dispositions, divestitures, restructurings, operating improvements, cost savings initiatives and other similar initiatives (including newly completed modifications and renegotiation of contracts and other arrangements) and other “specified transactions” that are reasonably identifiable and factually supportable and projected by the Borrower in good faith to result from actions that have been either taken or initiated or are expected to be taken (in the good faith determination of the Borrower) within 18 months after such transaction, in each case, (i) calculated on a “run rate” basis such that the full recurring benefit associated therewith is taken into account without double counting the amount of actual benefits realized in connection therewith and (ii) subject to an aggregate cap for this clause (b) of 25% of LTM Consolidated EBITDA; (c) restructuring and related charges; (d) costs and expenses incurred in connection with the Transactions, permitted acquisitions and other transactions permitted by the Financing Documentation (whether or not consummated); (e) adjustments, exclusions and add-backs in the Existing Credit Agreement; and (f) such other adjustments, exclusions and add-backs consistent with the Documentation Principles. |
Unrestricted Subsidiaries | The Financing Documentation will contain provisions pursuant to which, subject to customary limitations on investments, loans, advances to, and other investments in, unrestricted subsidiaries, the Borrower will be permitted to designate any existing or subsequently acquired or organized subsidiary as an “unrestricted subsidiary” and subsequently redesignate any such unrestricted subsidiary as a restricted subsidiary; provided that, after giving effect to such designation, no event of default has occurred and is continuing. Unrestricted subsidiaries will not be subject to the representations and warranties, affirmative or negative covenants or event of default provisions of the Financing Documentation and the results of operations and indebtedness of unrestricted subsidiaries will not be taken into account for purposes of determining any financial ratio or covenant contained in the Financing Documentation. |
Events of Default: | Limited to the following events of default (with materiality thresholds, exceptions and cure periods to be mutually agreed consistent with the Documentation Principles): non-payment of obligations; inaccuracy of representation or warranty; non-performance of covenants and obligations; default on other material debt (including hedging agreements); bankruptcy or insolvency; material judgments; impairment of security; ERISA; change of control; actual or asserted invalidity or unenforceability of any Financing Documentation or liens securing obligations under the Financing Documentation; subordinated debt; uninsured loss; and material default under Franchising Agreements; provided that, notwithstanding anything to the contrary in the Financing Documentation, a breach of the Financial Covenant or any financial covenant under any revolving Refinancing Facility will not constitute an Event of Default for purposes of the Term Loan B Facility or any Incremental Term Loan (or any other facility, other than the Revolving Credit Facility or revolving Refinancing Facility, as applicable), and the Lenders under the Term Loan B Facility, any Incremental Term Loan or any other facility (other than the Revolving Credit Facility or revolving Refinancing Facility, as applicable) will not be permitted to exercise any remedies with respect to an uncured breach of the Financial Covenant until the date, if any, on which the commitments under the Revolving Credit Facility or revolving Refinancing Facility, as applicable, have been terminated or the loans thereunder have been accelerated as a result of such breach. |
Defaulting Lender Provisions, Yield Protection and Increased Costs: | Customary for facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, cash collateralization for Letters of Credit in the event any lender under the Revolving Credit Facility becomes a Defaulting Lender (as such term shall be defined in the Financing Documentation), changes in capital adequacy and capital requirements or their interpretation (provided that (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all request, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, shall in each case be deemed to be a change in law, regardless of the date enacted, adopted, issued or implemented), illegality, unavailability, reserves without proration or offset and payments free and clear of withholding or other taxes. |
Assignments and Participations: | Revolving Credit Facility: Subject to the consents described below (which consents will not be unreasonably withheld or delayed), each Lender will be permitted to make assignments to Eligible Assignees (to be defined in the Financing Documentation) in respect of the Revolving Credit Facility in a minimum amount equal to $5 million. Term Loan B Facility: Subject to the consents described below (which consents will not be unreasonably withheld or delayed), each Lender will be permitted to make assignments to Eligible Assignees in respect of the Term Loan Facility and any Incremental Term Loan in a minimum amount equal to $1 million. Consents: The consent of the Borrower will be required for any assignment unless (i) a payment or bankruptcy event of default has occurred and is continuing or (ii) the assignment is to a Lender, an affiliate of a Lender or an Approved Fund (as such term shall be defined in the Financing Documentation in a manner consistent with the Documentation Principles); provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 10 business days after having received notice thereof. The consent of the Administrative Agent will be required for any assignment (i) in respect of the Revolving Credit Facility or an unfunded commitment under the Term Loan Facility, to an entity that is not a Lender with a commitment in respect of the applicable Facility, an affiliate of such Lender or an Approved Fund and (ii) in respect of the Term Loan Facility or any Incremental Term Loan Facility, to an entity that is not a Lender, an affiliate of a Lender or an Approved Fund. The consent of the Issuing Banks will be required for any assignment under the Revolving Credit Facility. Participations will be permitted without the consent of the Borrower or the Administrative Agent. No Assignment or Participation to Certain Persons. No assignment or participation may be made to natural persons, the Borrower or any of its affiliates or subsidiaries. No assignments may be made to any Defaulting Lender. The Senior Credit Facilities will include customary Lender ERISA representations. In addition, the Financing Documentation shall provide that so long as no default or event of default is continuing, loans under the Term Loan B Facility or any Incremental Term Loans may be purchased by and assigned to the Borrower or any of its subsidiaries on a non-pro rata basis through Dutch auctions open to all Lenders on a pro rata basis in accordance with customary procedures to be agreed and/or open-market purchases; provided that any such loans shall be automatically and permanently cancelled immediately upon acquisition thereof by the Borrower or any of its subsidiaries and the Borrower may not use proceeds of the Revolving Credit Facility to purchase loans to the extent such loans are purchased at a discount. |
Required Lenders: | On any date of determination, those Lenders who collectively hold more than 50% of the outstanding loans and unfunded commitments under the Senior Credit Facilities, or if the Senior Credit Facilities have been terminated, those Lenders who collectively hold more than 50% of the aggregate outstandings under the Senior Credit Facilities (the “Required Lenders”); provided that if any Lender shall be a Defaulting Lender (to be defined in the Financing Documentation) at such time, then the outstanding loans and unfunded commitments under the Senior Credit Facilities of such Defaulting Lender shall be excluded from the determination of Required Lenders. |
Amendments and Waivers: | Amendments and waivers of the provisions of the Financing Documentation will require the approval of the Required Lenders, except that (a) the consent of all Lenders directly adversely affected thereby will be required with respect to (i) increases in the commitment of such Lenders, (ii) reductions of principal, interest, fees or other amounts, (iii) extensions of scheduled maturities or times for payment, (iv) reductions in the voting percentages and (v) except with respect to an extension made pursuant to the following paragraph, any pro rata sharing provisions, (b) the consent of all Lenders will be required with respect to releases of all or substantially all of the value of the Collateral or Guarantees and (c) the consent of the Lenders holding more than 50% of the outstanding loans and unfunded commitments under the Revolving Credit Facility (collectively, “Required Revolving Lenders”) shall be required to approve any amendment, waiver or consent for the purpose of satisfying a condition precedent to borrowing under the Revolving Credit Facility that would not be satisfied but for such amendment, waiver or consent. Notwithstanding the foregoing, (i) amendments and waivers of the Financial Covenant (or any of financial definitions included in (and for purposes of) the Financial Covenant) will require only the consent of the Required Revolving Lenders and no other consents or approvals shall be required and (ii) amendments and waivers of the Financing Documentation that affect solely the Lenders under the Revolving Credit Facility or any Incremental Term Loan (including waiver or modification of conditions to extensions of credit under the Revolving Credit Facility, the availability and conditions to funding of any Incremental Term Loan (but not the conditions for implementing any Incremental Term Loan as noted above), pricing and other modifications), will require only the consent of the Required Revolving Lenders or Lenders holding more than 50% of the aggregate commitments or loans, as applicable, under such Incremental Term Loan, as applicable (or if applicable each affected Lender under the applicable Revolving Credit Facility or Incremental Term Loan) and no other consents or approvals shall be required. On or before the final maturity date of each of the Senior Credit Facilities, the Borrower shall have the right to extend the maturity date of all or a portion of the Senior Credit Facilities with only the consent of the Lenders whose loans or commitments are being extended, and otherwise on terms and conditions to be mutually agreed by the Administrative Agent and the Borrower (which may include an increase in the interest rate and/or fees for Lenders providing the extension); it being understood that each Lender under the tranche the maturity date of which is being extended shall have the opportunity to participate in such extension on the same terms and conditions as each other Lender under such tranche; provided that such extensions shall not be subject to any “default stoppers”, financial tests, “most favored nation” pricing or, unless requested by the Borrower, minimum extension condition provisions The Financing Documentation will contain “yank-a-bank” provisions as are usual and customary for financings of this kind. |
Refinancing Facilities: | The Financing Documentation will permit the Borrower to refinance loans under the Term Loan Facility, Revolving Credit Facility or any Incremental Term Loan, from time to time, in whole or part, with one or more new term loan facilities, new revolving credit facilities or one or more series of senior unsecured notes or loans or senior secured notes or loans (collectively, “Refinancing Facilities”) that may be secured by the Collateral on a pari passu basis with the Senior Credit Facilities, in each case on customary terms and conditions. |
Indemnification: | The Credit Parties will indemnify the Lead Arrangers, the Administrative Agent, each of the Lenders and their respective affiliates, partners, directors, officers, agents and advisors (each, an “indemnified person”) and hold them harmless from and against all liabilities, damages, claims, costs and expenses (including reasonable fees, disbursements, settlement costs and other charges of counsel (limited to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to the indemnified persons taken as a whole and, if reasonably necessary, one local counsel in any relevant material jurisdiction, and, solely in the case of an actual conflict of interest, one additional counsel to the affected indemnified persons similarly situated taken as a whole in each relevant material jurisdiction)) relating to the Transactions or any transactions related thereto and the Borrower’s use of the loan proceeds or the commitments; provided that no indemnified person will have any right to indemnification for any of the foregoing to the extent resulting from (a) such indemnified person’s own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable judgment, (b) a claim brought by the Borrower against an indemnified person for material breach in bad faith of the funding obligations of such indemnified person under the Commitment Letter or the Financing Documentation as determined by a court of competent jurisdiction in a final non-appealable judgment, or (c) any dispute solely among indemnified persons, other than any claims against any indemnified person in its respective capacity or in fulfilling its role as an administrative agent or arranger or any similar role hereunder or under the Senior Credit Facilities, and other than any claims arising out of any act or omission on the part of you or your subsidiaries or affiliates. |
Expenses: | The Borrower shall pay (a) all reasonable and documented out-of-pocket expenses (including, without limitation, reasonable fees and expenses of counsel (limited to the reasonable and documented fees and expenses of one counsel to the Administrative Agent and Lead Arrangers taken as a whole and, if necessary, of one local counsel in any relevant material jurisdiction)) of the Administrative Agent and the Lead Arrangers (promptly following written demand therefor) associated with the syndication of the Senior Credit Facilities and the preparation, negotiation, execution, delivery and administration of the Financing Documentation and any amendment or waiver with respect thereto, subject to the provisions of the Fee Letter and (b) all reasonable and documented out-of-pocket expenses (including, without limitation, reasonable fees and expenses of counsel (limited to the reasonable and documented fees, disbursements and other charges of one counsel to the Administrative Agent and the Lenders taken as a whole, and, if necessary, of one local counsel in any relevant material jurisdiction and, solely in the case of an actual conflict of interest, one additional counsel to the affected indemnified persons similarly situated taken as a whole in each relevant material jurisdiction)) of the Administrative Agent and each of the Lenders promptly following written demand therefor in connection with the enforcement of the Financing Documentation or protection of rights thereunder. |
Governing Law; Exclusive Jurisdiction and Forum: | The Financing Documentation will provide that each party thereto will submit to the exclusive jurisdiction and venue of the federal and state courts of the State of New York (except to the extent the Administrative Agent or any Lender requires submission to any other jurisdiction in connection with the exercise of any rights under any security document or the enforcement of any judgment). New York law will govern the Financing Documentation, except with respect to certain security documents where applicable local law is necessary for enforceability or perfection. |
Waiver of Jury Trial and Punitive and Consequential Damages: | All parties to the Financing Documentation shall waive the right to trial by jury and the right to claim punitive or consequential damages. |
Counsel for the Lead Arrangers and the Administrative Agent: | Cahill Gordon & Reindel llp |
Other: | The Financing Documentation shall contain customary EU “bail-in” provisions. |
Interest: | At the Borrower’s option, loans will bear interest based on the Base Rate or LIBOR, as described below: A. Base Rate Option Interest will be at the Base Rate plus the applicable Interest Margin (as defined below). The “Base Rate” is defined as the highest of (a) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1%, (b) the prime commercial lending rate of the Administrative Agent, as established from time to time at its principal U.S. office (which such rate is an index or base rate and will not necessarily be its lowest or best rate charged to its customers or other banks) and (c) the daily LIBOR (as defined below) for a one month Interest Period (as defined below) plus 1%. Interest shall be payable quarterly in arrears on the last day of each calendar quarter and (i) with respect to Base Rate Loans based on the Federal Funds Rate and LIBOR, shall be calculated on the basis of the actual number of days elapsed in a year of 360 days and (ii) with respect to Base Rate Loans based on the prime commercial lending rate of the Administrative Agent, shall be calculated on the basis of the actual number of days elapsed in a year of 365/366 days. Any loan bearing interest at the Base Rate is referred to herein as a “Base Rate Loan”. Base Rate Loans will be made on same business day’s notice and will be in minimum amounts to be agreed upon. B. LIBOR Option Interest will be determined for periods (“Interest Periods”) of one, two, three or six months (or twelve months if available and agreed to by all relevant Lenders) as selected by the Borrower and will be at an annual rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars administered by ICE Benchmark Administration Limited (or any applicable successor quoting service) (“LIBOR”) plus the applicable Interest Margin (as described below). LIBOR will be determined by the Administrative Agent at the start of each Interest Period and, other than in the case of LIBOR used in determining the Base Rate, will be fixed through such period. Interest will be paid on the last day of each Interest Period or, in the case of Interest Periods longer than three months, every three months, and will be calculated on the basis of the actual number of days elapsed in a year of 360 days. LIBOR will be adjusted for maximum statutory reserve requirements (if any), and in no event shall be less than 0%. Any loan bearing interest at LIBOR (other than a Base Rate Loan for which interest is determined by reference to LIBOR) is referred to herein as a “LIBOR Rate Loan”. LIBOR Rate Loans will be made on three business days’ prior notice and, in each case, will be in minimum amounts to be agreed upon. The Financing Documentation will include customary successor LIBOR provisions. |
Default Interest: | 2.00% on overdue amounts. |
Interest Margins: | The applicable interest margins (the “Interest Margins”) will be: (a) in the case of the Revolving Credit Facility, initially, 3.75% for LIBOR Rate Loans and 2.75% for Base Rate Loans; (b) in the case of the Term Loan B Facility, 3.75% for LIBOR Rate Loans and 2.75% for Base Rate Loans. |
Commitment Fee: | A commitment fee (the “Commitment Fee”) will accrue on the unused amounts of the commitments under the Revolving Credit Facility, with exclusions for Defaulting Lenders. Such Commitment Fee will be 0.50% per annum. All accrued Commitment Fees will be fully earned and due and payable quarterly in arrears (calculated on a 360-day basis) for the account of the Lenders under the Revolving Credit Facility and will accrue from the Closing Date. |
Letter of Credit Fees: | The Borrower will pay to the Administrative Agent, for the account of the Lenders under the Revolving Credit Facility, letter of credit participation fees equal to the Interest Margin for LIBOR Rate Loans under the Revolving Credit Facility, in each case, on the undrawn amount of all outstanding Letters of Credit. |
Other Fees: | The Lead Arrangers and the Administrative Agent will receive such other fees as will have been agreed in a fee letter among them and the Borrower. |
1. | I am familiar with the finances, businesses, properties and assets of the Borrower and its subsidiaries, taken as a whole, and am duly authorized to execute this Solvency Certificate on behalf of the Borrower pursuant to the Credit Agreement. I have reviewed the Credit Documents and such other documentation and information and have made such investigation and inquiries as I have deemed necessary and prudent therefor; |
2. | As of the date hereof and immediately after giving effect to the Transactions and the incurrence of the indebtedness and obligations being incurred in connection with the Credit Agreement and the Transactions, that, (i) the sum of the debt (including contingent, subordinated and other liabilities) of the Borrower and its subsidiaries, taken as a whole, does not exceed the fair value of the properties of the Borrower and its subsidiaries, taken as a whole; (ii) the capital of the Borrower and its subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Borrower and its subsidiaries, taken as a whole, engaged in or contemplated as of the date hereof; (iii) the present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is greater than the total amount that will be required to pay the probable liabilities (including contingent, subordinated and other liabilities) of the Borrower and its subsidiaries as they become absolute and matured, (iv) the Borrower and its subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts (including current obligations and contingent, subordinated and other liabilities) beyond their ability to pay such debts as they mature in the ordinary course of business and (v) the Borrower and its subsidiaries, taken as a whole, are able to pay their debts and liabilities and identified contingent obligations as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability; and |
3. | I acknowledge that the Administrative Agent and the Lenders are relying on the truth and accuracy of this Solvency Certificate in connection with the making of Loans and the issuance of Letters of Credit under the Credit Agreement. |
Name | State of Incorporation or Organization | |
Carrols Corporation | Delaware | |
Carrols LLC | Delaware | |
Carrols Holdco Inc. | Delaware | |
GRC MergerSub Inc. | Delaware | |
GRC MergerSub LLC | Delaware | |
Republic Foods, Inc. | Maryland | |
Date: March 7, 2019 | /s/ DANIEL T. ACCORDINO | |
Daniel T. Accordino Chief Executive Officer |
Date: March 7, 2019 | /s/ PAUL R. FLANDERS | |
Paul R. Flanders Vice President, Chief Financial Officer and Treasurer |
/s/ DANIEL T. ACCORDINO | |
Daniel T. Accordino | |
Chief Executive Officer |
/s/ PAUL R. FLANDERS | |
Paul R. Flanders | |
Vice President, Chief Financial Officer and Treasurer |
J:KJW@+3+V
MWN?B ?!'A[Q;IO@&5;W3_&6HZ'J>E:M96/X3ZL,?\'?G@P1% RMKR[AMWD(666WMIY8U.Y8G(VT >2>+O@1X9\9?%WX:?&?4/$7Q"L/$
MWPITWQ5I'AK1]"\;ZMHW@F[L/&R:7%XGB\4>#;/&B^*WU&'1-)CM[C78;RXT
M4V2S:!+I5Q<7DUSP7B[]C#]G_P 5?"K]HGX-6OA*[\$>"/VL/$'C[Q3^T';_
M [UW5?!FK_$K7_BIX9T[P;\1]6U;7]*G75K'4/&/AC2=/T;6;_1KG3KU[6V
M5K:YMIWEFD^'/^"0_P#P5,\3?\%0_A]\??B9KOP,\-? '0?@5\>/$?[/5S80
M?%J^^)6H>(?%OA;2/#>LZGKBW5U\./A]I^DZ!-%XFL[+387:_P!2NKN*=IHK
M2,0B?]@$U+3Y;M+".^M'O9+,:C':) 'Y(
M+B":-UDBFAD>.1(Q!!JUY_B'_H%Z-_X/;[_P"9ROT"$X5(0J4Y1G3G&,X3
M@U*$X22E&49)M2C*+3BTVFFFG8]1--)IIII--.Z:>J::T::V9LUS&N_\ACP7
M_P!A^^_]1/Q)5[S_ !#_ - O1O\ P>WW_P SE NG:/9SWL<%I%/ MVL;U1I^N@M:7(!.AZF!S"XY)M
ML >YK-\+Z[;Q^&O#R&PUMBFAZ0I9=$U)D)73[924=; ((&LK+4_L/VG4?)
MM]%M[NWO([>[N(CJ5U&GVA+7RY##=K^SUE9VVGVEK864$=M9V5O!:6MM"@2&
MWMK:)(+>")!PD4,,:1QJ/NHBC)QFN7\,0/;:KXSA>YN+MEURP)GNFA:9MWAC
M0B Q@AMX\("%7$0.!\Q8\UV-?GWA3X'>&O@MA 'H-<^"=_XIO? OA[XH^%=8\%^-
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MJ.ZU+PS\>]!T.\\)S^)[2-_&G?!C]H
MS]I/QYJ_C/Q3#W3/C)#\)?BC\ ?%7PL\(P?$BZ\ >#]+\'?$[XMW/B7Q!
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M^9=7-Q#_AYX6AN[S4(O#?@;PQH?A'0(K_49C<:A>QZ-X>L-
M-TU+N^N"9[RY6V$]U,3+/)(_S4 ?RB?\$Q?"&K_L%_\ !>O_ (*W?#7]I^XB
M\%W7[>OB'3_V@OV2OB+XSNK;1_"_QG\)VOQ'\>>+M>\%^!/$^I+9:7K7CCPG
M8_%*PT_7O MA=)XALT\#:UJ":1-HUE::C)^AWP1_X*4_'WXR?\%KOVI?^"95
MYH?P'U+X!_L^? ?0OC)+\4?#_AWQK>^.?$#^*M)^#EU;> M9E;X@ZMX"TBZM
M;CXGZQ;WE_)I\L^IV'AHFWT&VDO[TZ9^U7CWX:?#OXIZ)_PC7Q-\!^#/B)X<
M-S%>GP_XZ\+:#XOT0W<*2)#='2?$6GZEI_VF-)9$2X%N)D1V59 K$&OX*^%/
MPP^&VB7?AKX=_#KP)X#\.7V1>^'_ 9X/\.>%M$NP8#:D7.E:#IFGV%P#;$V
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M/P]T_P")^KVS66K?$:Q\$^&+3QYJEF\44#6FH^,;?2H_$=]:M#!#$T%UJE5C&:PQ&&H8JFZ6(I1JPNI)
M2NG"<=85*N?"SX;>(]1N-8U
MWX?>!];U>[>W-WJ>L>$?#FJ:A]N/#SP_\%!?V?=MCK]O?3DZOXG;$$6GZG"<>7X5DPQDN(E!?
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M\/\ S_@CC_TD%_9^_P#!SXB_^9JC_A_Y_P $\ I(+^S]_X.?$7_P S5?K;
M_P (_H?_ $"-+_\ !;8?_(]'_"/Z'_T"-+_\%MA_\CT ?DE_P_\ /^"./_20
M7]G[_P '/B+_ .9JC_A_Y_P1Q_Z2"_L_?^#GQ%_\S5?K;_PC^A_] C2__!;8
M?_(]'_"/Z'_T"-+_ /!;8?\ R/0!^27_ _\_P""./\ TD%_9^_\'/B+_P"9
MJC_A_P"?\$^D@O[/W_ (.?$7_S-5^MO_"/Z'_T"-+_ /!;8?\ R/1_PC^A
M_P#0(TO_ ,%MA_\ (] 'Y)?\/_/^"./_ $D%_9^_\'/B+_YFJ/\ A_Y_P1Q_
MZ2"_L_?^#GQ%_P#,U7ZV_P#"/Z'_ - C2_\ P6V'_P CT?\ "/Z'_P! C2__
M 6V'_R/0!^.&G?\%[?^".]OKOB"^?\ X*"_L^>3J T?R,:OXH##[)92PR[F
M?PJD1^=AM\J23 ^_L;"GHO\ A_Y_P1Q_Z2"_L_?^#GQ%_P#,U7V)\)_@[K_A
MW]IG]JWQ[KWA+3+3P;\1X_@$O@?4RN@7"ZJ?!GP^UG1?% 2PMFFOM._L[5KJ
MWMLW]K:?:Q)YEEY]NKR#ZI_X1_0_^@1I?_@ML/\ Y'H _)+_ (?^?\$^D@
MO[/W_@Y\1?\ S-4?\/\ S_@CC_TD%_9^_P#!SXB_^9JOUM_X1_0_^@1I?_@M
ML/\ Y'H_X1_0_P#H$:7_ ."VP_\ D>@#\DO^'_G_ 1Q_P"D@O[/W_@Y\1?_
M #-4?\/_ #_@CC_TD%_9^_\ !SXB_P#F:K];?^$?T/\ Z!&E_P#@ML/_ )'H
M_P"$?T/_ *!&E_\ @ML/_D>@#\DO^'_G_!''_I(+^S]_X.?$7_S-4?\ #_S_
M ((X_P#207]G[_P<^(O_ )FJ_6W_ (1_0_\ H$:7_P""VP_^1Z/^$?T/_H$:
M7_X+;#_Y'H _)+_A_P"?\$^D@O[/W_ (.?$7_S-4?\/_/^"./_ $D%_9^_
M\'/B+_YFJ_6W_A']#_Z!&E_^"VP_^1Z/^$?T/_H$:7_X+;#_ .1Z /R2_P"'
M_G_!''_I(+^S]_X.?$7_ ,S5'_#_ ,_X(X_])!?V?O\ P<^(O_F:K];?^$?T
M/_H$:7_X+;#_ .1Z/^$?T/\ Z!&E_P#@ML/_ )'H _(J\_X+\?\ !'*:TNHE
M_P""@O[/H:6WFC4G6/$A :2-E!(3PPSD D9VJS8Z*3Q6?X>_X+Y?\$=K+0=%
MLY_^"@G[/RSVFDZ;;3#^V/$HQ+;V4$,@ ?PNC@!T8#
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Feb. 26, 2019 |
Jul. 01, 2018 |
|
Document And Entity Information [Abstract] | |||
Entity Registrant Name | CARROLS RESTAURANT GROUP, INC. | ||
Entity Central Index Key | 0000809248 | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 30, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 37,003,873 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 505,346,703 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Franchise agreements, accumulated amortization | $ 12,022 | $ 11,028 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 100 | 100 |
Preferred stock, shares outstanding | 100 | 100 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,538,903 | 36,158,711 |
Common stock, shares outstanding | 35,742,427 | 35,436,252 |
Consolidated Statements Of Comprehensive Income (Loss) Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Stock-based compensation | $ 5,812 | $ 3,518 | $ 2,053 |
Consolidated Statement of Stockholders' Equity - USD ($) |
Total |
Common Stock [Member] |
Preferred Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Treasury Stock [Member] |
---|---|---|---|---|---|---|---|
Balance at Jan. 03, 2016 | $ 107,999,000 | $ 350,000 | $ 0 | $ 139,083,000 | $ (30,958,000) | $ (335,000) | $ (141,000) |
Common stock, shares outstanding at Jan. 03, 2016 | 35,039,890 | ||||||
Stock-based compensation | 2,053,000 | $ 0 | 0 | 2,053,000 | 0 | 0 | 0 |
Vesting of non-vested shares and excess tax benefits | 0 | $ 3,000 | 0 | (3,000) | 0 | 0 | 0 |
Vesting of non-vested shares, shares | 218,689 | ||||||
Net income (loss) | 45,472,000 | $ 0 | 0 | 0 | 45,472,000 | 0 | 0 |
Change in postretirement benefit obligations | (868,000) | 0 | 0 | 0 | 0 | (868,000) | 0 |
Balance at Jan. 01, 2017 | 154,656,000 | $ 353,000 | 0 | 141,133,000 | 14,514,000 | (1,203,000) | (141,000) |
Common stock, shares outstanding at Jan. 01, 2017 | 35,258,579 | ||||||
Cumulative-effect adjustment from adoption of ASU 2016-09 | 3,734,000 | 3,734,000 | |||||
Stock-based compensation | 3,518,000 | $ 0 | 0 | 3,518,000 | 0 | 0 | 0 |
Vesting of non-vested shares and excess tax benefits | 0 | $ 1,000 | 0 | (1,000) | 0 | 0 | 0 |
Vesting of non-vested shares, shares | 177,673 | ||||||
Net income (loss) | 7,159,000 | $ 0 | 0 | 0 | 7,159,000 | 0 | 0 |
Change in postretirement benefit obligations | (7,000) | 0 | 0 | 0 | 0 | (7,000) | 0 |
Balance at Dec. 31, 2017 | $ 169,060,000 | $ 354,000 | 0 | 144,650,000 | 25,407,000 | (1,210,000) | (141,000) |
Common stock, shares outstanding at Dec. 31, 2017 | 35,436,252 | 35,436,252 | |||||
Stock-based compensation | $ 5,812,000 | $ 0 | 0 | 5,812,000 | 0 | 0 | 0 |
Vesting of non-vested shares and excess tax benefits | 0 | $ 3,000 | 0 | (3,000) | 0 | 0 | 0 |
Vesting of non-vested shares, shares | 306,175 | ||||||
Net income (loss) | 10,104,000 | $ 0 | 0 | 0 | 10,104,000 | 0 | 0 |
Change in postretirement benefit obligations | 564,000 | 0 | 0 | 0 | 0 | 564,000 | 0 |
Balance at Dec. 30, 2018 | $ 185,540,000 | $ 357,000 | $ 0 | $ 150,459,000 | $ 35,511,000 | $ (646,000) | $ (141,000) |
Common stock, shares outstanding at Dec. 30, 2018 | 35,742,427 | 35,742,427 |
Consolidated Statement of Stockholders' Equity Parentheticals - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Accumulated Defined Benefit Plans Adjustment [Member] | |||
Other Comprehensive Income (Loss), Tax | $ (186) | $ 326 | $ 541 |
Basis of Presentation (Notes) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
Basis Of Presentation | Basis of Presentation Business Description. At December 30, 2018 Carrols Restaurant Group, Inc. ("Carrols Restaurant Group") operated, as franchisee, 849 restaurants under the trade name “Burger King®” in 18 Northeastern, Midwestern and Southeastern states. Basis of Consolidation. Carrols Restaurant Group is a holding company and conducts all of its operations through its wholly-owned subsidiary, Carrols Corporation (“Carrols”) and Carrols' wholly-owned subsidiary, Carrols LLC, a Delaware limited liability company, and Carrols LLC's wholly-owned subsidiary Republic Foods, Inc., a Maryland corporation ("Republic Foods"). The consolidated financial statements presented herein include the accounts of Carrols Restaurant Group and its wholly-owned subsidiary Carrols. Unless the context otherwise requires, Carrols Restaurant Group, Carrols and Carrols LLC are collectively referred to as the “Company.” All intercompany transactions have been eliminated in consolidation. Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended December 30, 2018, December 31, 2017, and January 1, 2017 each contained 52 weeks. Use of Estimates. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include: accrued occupancy costs, insurance liabilities, evaluation for impairment of long-lived assets and franchise rights, lease accounting matters, the valuation of acquired assets and liabilities and the valuation of deferred income tax assets. Actual results could differ from those estimates. Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At December 30, 2018 and December 31, 2017, the Company had $2.3 million and $27.6 million respectively, invested in money market funds. Inventories. Inventories, consisting primarily of food, beverages, and paper supplies, are stated at the lower of cost determined on the first-in, first-out method or net realizable value. Net realizable value is determined as the estimated selling price in the normal course of business minus the cost of disposal and transportation. Property and Equipment. Property and equipment is recorded at cost. The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Leasehold improvements are amortized over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or the expected lease term. The expected lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. Building costs incurred for new restaurants on leased land are amortized over the lease term, which is generally a period of twenty years. Business Combinations. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price of an acquired business is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third party valuation specialist to assist with the valuation of certain leasehold improvements, franchise rights and favorable and unfavorable leases. The Company estimates that the seller's carrying value of acquired restaurant equipment, subject to certain adjustments is equivalent to fair value of this equipment at the date of the acquisition. The fair values of assumed franchise agreements are valued as if the remaining term of the agreement is at the market rate. The fair values of acquired land, buildings, certain leasehold improvements, and restaurant equipment subject to capital leases are determined using both the cost approach and market approach. The fair value of the favorable and unfavorable leases acquired, as well as the fair value of land, buildings, leasehold improvements, and restaurant equipment subject to capital leases acquired, is measured using significant inputs observable in the open market. The Company categorizes all such inputs as Level 2 inputs under ASC 820. The fair value of acquired franchise rights is primarily determined using the income approach, and unobservable inputs classified as Level 3 under ASC 820. On May 30, 2012, the Company acquired 278 Burger King® restaurants from Burger King Corporation ("BKC"), including BKC's assignment of its right of first refusal on franchise restaurant transfers in 20 states as follows: Connecticut (except Hartford county), Delaware, Indiana, Kentucky, Maine, Maryland, Massachusetts (except for Middlesex, Norfolk and Suffolk counties), Michigan, New Hampshire, New Jersey, New York (except for Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk and Westchester counties), North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington DC and West Virginia, (the "ROFR") pursuant to an operating agreement with BKC dated May 30, 2012, and as amended on January 26, 2015 and December 17, 2015. See also Note 19 - "Subsequent Events." Franchise Rights. The Company determines the fair value of franchise rights based upon the acquired restaurants' future earnings, discounting those earnings using an appropriate market discount rate and subtracting a contributory charge for net working capital, property and equipment and assembled workforce to determine the fair value attributable to these franchise rights. Amounts allocated to franchise rights for each acquisition are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. Franchise Agreements. Fees for initial franchises and renewals are amortized using the straight-line method over the term of the agreement, which is generally twenty years. Goodwill. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized but is tested for impairment at least annually as of the fiscal year end. Favorable and Unfavorable Leases. Favorable and unfavorable leases are due to the terms of acquired operating lease contracts being favorable or unfavorable relative to market terms of comparable leases on the acquisition date. Favorable and unfavorable leases are amortized as a component of rent expense on a straight-line basis over the remaining lease terms at the time of the acquisition. Impairment of Long-Lived Assets. The Company assesses the recoverability of property and equipment, franchise rights and other intangible assets by determining whether the carrying value of these assets can be recovered over their respective remaining useful lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Deferred Financing Costs. Financing costs incurred in obtaining long-term debt and lease financing obligations are capitalized and amortized over the life of the related obligation as interest expense using the effective interest method. Long-term debt on the consolidated balance sheets is presented net of the unamortized amount of the financing costs related to long-term borrowings. Leases. All leases are reviewed for capital or operating classification at their inception. The majority of the Company’s leases are operating leases. Many of the lease agreements contain rent holidays, rent escalation clauses and/or contingent rent provisions. Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including any option periods included in the determination of the lease term. Contingent rentals are generally based upon a percentage of sales or a percentage of sales in excess of stipulated amounts and are generally not considered minimum rent payments but are recognized as rent expense when incurred. Lease Financing Obligations. Lease financing obligations pertain to real estate sale-leaseback transactions accounted for under the financing method. The assets (land and building) subject to these obligations remain on the Company’s consolidated balance sheets at their historical costs and such assets (excluding land) continue to be depreciated over their remaining useful lives. The proceeds received by the Company from these transactions are recorded as lease financing obligations and the lease payments are applied as payments of principal and interest. The selection of the interest rate on lease financing obligations is evaluated at inception of the lease based on the Company’s incremental borrowing rate adjusted to the rate required to prevent recognition of a non-cash loss or negative amortization of the obligation through the end of the primary lease term. Revenue Recognition. Revenues from Company restaurants, net of sales discounts are recognized when payment is tendered at the time of sale. Revenues are reported net of sales tax collected from customers and remitted to governmental taxing authorities. Gift cards. The Company sells gift cards in its restaurants that are issued under BKC's gift card program. Proceeds from the sale of Burger King® gift cards at the Company’s restaurants are received by BKC. The Company recognizes revenue from gift cards upon redemption by the customer. Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period including any changes in valuation allowances. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to an amount for which realization is likely. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company and its subsidiary file a consolidated federal income tax return. Advertising Costs. All advertising costs are expensed as incurred. Cost of Sales. The Company includes the cost of food, beverage and paper, net of any vendor discounts and rebates, in cost of sales. Pre-opening Costs. The Company’s pre-opening costs generally include payroll costs and travel associated with the opening of a new restaurant, rent and promotional costs. For the years ended December 30, 2018 and December 31, 2017 and January 1, 2017, pre-opening costs were $0.6 million, $0.5 million and $0.3 million. These costs are expensed as incurred prior to a restaurant opening and are included in operating expenses in the accompanying consolidated statements of comprehensive income. Insurance. The Company is self-insured for workers’ compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and in certain cases claims in the aggregate. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims based on Company experience and other methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Fair value is determined based on the following: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. Financial instruments include cash and cash equivalents, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. The fair value of the Carrols Restaurant Group 8.0% Senior Secured Second Lien Notes due 2022 is based on a recent trading value, which is considered Level 2, and at December 30, 2018 and December 31, 2017 was approximately $277.1 million and $290.5 million, respectively. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. As described in Note 5, the Company recorded long-lived asset impairment charges of $2.7 million, $1.7 million and $1.0 million during the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. Stock-Based Compensation. The Company has an incentive stock plan under which incentive stock options, non-qualified stock options and non-vested shares may be granted to employees and non-employee directors. On an annual basis, the Company has granted non-vested shares under this plan. Non-vested shares granted to corporate employees and non-employee directors generally vest on a straight-line basis over three years. For non-vested stock awards, the fair market value of the award, determined based upon the closing value of the Company’s stock price on the grant date, is recorded to compensation expense on a straight-line basis over the requisite service period. See Note 11 to the consolidated financial statements. Concentrations of Credit Risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains its day-to-day operating cash balances in interest-bearing transaction accounts at financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000. Although the Company maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and believes its credit risk to be minimal. Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker in order to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made based on the chief operating decision maker's evaluation of the total Company operations. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its Burger King® restaurants as one reportable segment. Recently Issued Accounting Pronouncements Not Yet Adopted. In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill by eliminating step 2 from the goodwill impairment test. Under the new ASU, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized for the amount by which the carrying amount exceeds its fair value. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company believes that this pronouncement will have no impact on its consolidated financial statements and related disclosures. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by issuing additional ASU's that provide clarification and further guidance around areas identified as potential implementation issues. The new standard requires a lessee to recognize a liability for lease obligations, representing the discounted obligation to make minimum lease payments, and a corresponding right-of-use asset on the balance sheet for all leases with a term longer than 12 months. The Company has adopted the new standard on December 31, 2018, the first day of fiscal 2019. The Company elected the optional transition method to initially apply the new lease standard at the adoption date and not adjust its comparative period consolidated financial statements. The Company will recognize a cumulative-effect adjustment to retained earnings of approximately $10.1 million on the date of adoption to eliminate the deferred gains on qualified sale-leaseback transactions. The Company has elected the package of three practical expedients, which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company has not elected the use-of-hindsight or the practical expedient in determining lease term or impairment of right-of-use assets. In addition, the Company has elected a short-term lease exemption policy that permits the Company to not apply the recognition requirements of the new lease standard to leases with a term of 12 months or less. The Company has also elected an accounting policy to not separate lease and non-lease components for certain classes of leases. The adoption of this ASU will have a material effect on our consolidated balance sheet and will impact the related disclosures. The Company is finalizing the impact of the standard on our accounting policies, processes, disclosures and internal control over financial reporting. Upon adoption, the Company expects to recognize lease liabilities of approximately $500 million to $550 million based on the present value of remaining minimum rental payments using the discount rate as of the effective date and corresponding right-of-use assets based upon the operating lease liabilities adjusted for prepaid and deferred non-level rents, unamortized deferred sale-leaseback gains, unamortized lease acquisition costs and unamortized favorable and unfavorable lease balances. As the impact of the standard is non–cash in nature, the Company does not anticipate its adoption having an impact on the consolidated statements of cash flows. Recently Issued Accounting Pronouncements Adopted. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies certain elements of accounting for employee share-based payment transactions, including income tax consequences, the classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this ASU in the first quarter of 2017. Upon adoption of this ASU, the Company elected to change its accounting policy and account for forfeitures when they occur. The Company recorded a $3.7 million cumulative-effect adjustment in 2017 to increase deferred tax assets and retained earnings as a result of the recognition of excess tax benefits previously unrealized. Prior periods have not been adjusted for the adoption of this ASU. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain cash receipts and payments in the statement of cash flows in order to eliminate diversity in practice. This update was adopted by the Company on January 1, 2018. The new guidance has not impacted the classification of cash receipts and cash payments in the Company's consolidated financial statements and related disclosures. In May 2014, the FASB issued amended guidance for revenue recognition. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance and was adopted by the Company on January 1, 2018. The new guidance has not impacted the Company's recognition of revenue from Company-operated restaurant sales and has no impact on the manner in which the Company recognizes revenue as the Company’s advertising fund and gift card program are run by its franchisor. |
Acquisition |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition [Text Block] | Acquisitions 2018 Acquisitions During the year ended December 30, 2018, the Company acquired a total of 44 restaurants from other franchisees, which are referred to as the "2018 acquired restaurants", in the following transactions:
The Company allocated the aggregate purchase price to the net tangible and intangible assets acquired in the acquisitions at their estimated fair values. The following table summarizes the final allocation of the aggregate purchase price for the four 2018 acquisitions:
The results of operations for the restaurants acquired are included from the closing date of the respective acquisition. The 2018 acquired restaurants contributed restaurant sales of $16.9 million during the year ended December 30, 2018. It is impracticable to disclose net earnings for the post-acquisition periods as net earnings of these restaurants were not tracked on a collective basis due to the integration of administrative functions, including field supervision. The pro forma impact on the results of operations for restaurants acquired in 2018 and 2017 is included below. The pro forma results of operations are not necessarily indicative of the results that would have occurred had the restaurants acquired in 2018 and 2017 been consummated at the beginning of the periods presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited proforma operating results:
This pro forma financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings or any integration costs related to the 2018 acquired restaurants. The proforma results exclude acquisition costs recorded as general and administrative expenses of $1.4 million and $1.8 million during the years ended December 30, 2018 and December 31, 2017, respectively. 2017 Acquisitions During the year ended December 31, 2017, the Company acquired a total of 64 restaurants from other franchisees, which are referred to as the "2017 acquired restaurants", in the following transactions:
(1) Acquisition resulting from the exercise of the ROFR. The Company allocated the aggregate purchase price to the net tangible and intangible assets acquired in the acquisitions at their estimated fair values. The following table summarizes the final allocation of the aggregate purchase price for the three 2017 acquisitions:
The results of operations for the restaurants acquired are included from the closing date of the respective acquisition. The 2017 acquired restaurants contributed restaurant sales of $90.2 million and $64.9 million during the years ended December 30, 2018 and December 31, 2017, respectively. It is impracticable to disclose net earnings for the post-acquisition periods as net earnings of these restaurants were not tracked on a collective basis due to the integration of administrative functions, including field supervision. The pro forma impact on the results of operations for restaurants acquired in 2017 and 2016 is included below. The pro forma results of operations are not necessarily indicative of the results that would have occurred had the restaurants acquired in 2017 and 2016 been consummated at the beginning of the periods presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited proforma operating results:
(1) Includes a tax benefit of $30.4 million for the reversal of the Company's valuation allowance on its net deferred income tax assets (see Note 10). This pro forma financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings or any integration costs related to the 2017 acquired restaurants. The proforma results exclude acquisition costs recorded as general and administrative expenses of $1.8 million and $1.6 million during the years ended December 31, 2017 and January 1, 2017, respectively. 2016 Acquisitions During the year ended January 1, 2017, the Company acquired a total of 56 restaurants from other franchisees, which are referred to as the "2016 acquired restaurants", in the following transactions:
The Company allocated the aggregate purchase price to the net tangible and intangible assets acquired in the acquisitions at their estimated fair values. The following table summarizes the final allocation of the aggregate purchase price for the seven 2016 acquisitions:
The results of operations for the restaurants acquired are included from the closing date of the respective acquisition. The 2016 acquired restaurants contributed restaurant sales of $70.8 million and $28.6 million during the years ended December 31, 2017 and January 1, 2017, respectively. It is impracticable to disclose net earnings for the post-acquisition periods as net earnings of these restaurants were not tracked on a collective basis due to the integration of administrative functions, including field supervision. The pro forma impact on the results of operations for restaurants acquired in 2016 is included below. The pro forma results of operations are not necessarily indicative of the results that would have occurred had the restaurants acquired in 2016 been consummated at the beginning of the period presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited proforma operating results:
(1) Includes a tax benefit of $30.4 million for the reversal of the Company's valuation allowance on its net deferred income tax assets (see Note 10). This pro forma financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings or any integration costs related to the 2016 acquired restaurants. The proforma results exclude acquisition costs recorded as general and administrative expenses of $1.6 million during the year ended January 1, 2017. Acquired Intangible Assets Goodwill recorded in connection with the acquisitions in 2018, 2017 and 2016 represents costs in excess of fair values assigned to the underlying net assets of acquired restaurants. Acquired goodwill that is expected to be deductible for income tax purposes was $0.5 million in 2018, $6.7 million in 2017 and $1.8 million in 2016. The weighted average amortization period of the intangible assets acquired is as follows:
|
Property and Equipment |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment | Property and Equipment Property and equipment at December 30, 2018 and December 31, 2017 consisted of the following:
Assets subject to capital leases primarily pertain to buildings leased for certain restaurant locations and certain leases of restaurant equipment and had accumulated amortization at December 30, 2018 and December 31, 2017 of $13.7 million and $12.2 million, respectively. Depreciation expense for all property and equipment for the years ended December 30, 2018, December 31, 2017 and January 1, 2017 was $49.3 million, $45.7 million and $39.9 million, respectively. |
Intangible Assets (Notes) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Franchise Rights, Favorable and Unfavorable Leases | Intangible Assets Goodwill. The Company is required to review goodwill for impairment annually, or more frequently, when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of the fiscal year. In performing its goodwill impairment test, the Company compared the net book value of its reporting unit to its estimated fair value, the latter determined by employing a combination of a discounted cash flow analysis and a market-based approach. There have been no recorded goodwill impairment losses during the years ended December 30, 2018, December 31, 2017 and January 1, 2017.
Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King® restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. The following is a summary of the Company’s franchise rights as of the respective balance sheet dates:
Amortization expense related to franchise rights for the years ended December 30, 2018, December 31, 2017 and January 1, 2017 was $7.4 million, $6.8 million and $5.9 million, respectively, and the Company expects annual amortization to be $8.1 million in each of the next five fiscal years. No impairment charges were recorded related to the Company’s franchise rights during the years ended December 30, 2018, December 31, 2017 and January 1, 2017. Favorable and Unfavorable Leases. Amounts allocated to favorable and unfavorable leases are being amortized using the straight-line method over the remaining terms of the underlying lease agreements as a net reduction of restaurant rent expense. The following is a summary of the Company’s favorable and unfavorable leases as of the respective balance sheet dates, which are included as assets and liabilities, respectively, on the accompanying consolidated balance sheets:
The net reduction of rent expense related to the amortization of favorable and unfavorable leases for the years ended December 30, 2018, December 31, 2017 and January 1, 2017 was $0.8 million, $0.9 million and $0.9 million, respectively, and the Company expects the net reduction of rent expense to be $0.8 million in 2019, $0.7 million in 2020, $0.6 million in 2021, $0.6 million in 2022 and $0.7 million in 2023. |
Impairment Of Long-Lived Assets And Other Lease Charges |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs and Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment Charges [Text Block] | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of transferring these assets in the operation of its business. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. During the year ended December 30, 2018, the Company recorded impairment and other lease charges of $3.7 million consisting of $0.4 million of capital expenditures at previously impaired restaurants, $0.4 million related to initial impairment charges for six underperforming restaurants, $1.9 million related to the write-off of defective product holding unit kitchen equipment that was replaced, losses of $0.8 million associated with sale-leaseback transactions of four restaurant properties, and other lease charges of $0.2 million. During the year ended December 31, 2017, the Company recorded impairment and other lease charges of $2.8 million including $0.7 million for capital expenditures at previously impaired restaurants, $1.1 million related to initial impairment charges for five underperforming restaurants, $0.9 million of other lease charges primarily due to four restaurants and an acquired administrative office closed during the period and a loss of $0.1 million associated with the sale-leaseback of one restaurant property. During the year ended January 1, 2017, the Company recorded impairment and other lease charges of $2.4 million including $0.9 million for capital expenditures at previously impaired restaurants, $0.2 million related to initial impairment charges for four underperforming restaurants and losses of $1.2 million associated with the sale-leaseback of seven restaurant properties. The following table presents the activity in the accrual for closed restaurant locations:
Changes in estimates of accrued costs primarily relate to revisions of terminations of certain closed restaurant leases, changes in assumptions for sublease income assumptions and other costs. |
Other Liabilities, Long-Term (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Text Block] | Other Liabilities, Long-Term Other liabilities, long-term, at December 30, 2018 and December 31, 2017 consisted of the following:
Other accrued occupancy costs above include long-term obligations pertaining to closed restaurant locations and unamortized lease incentives. |
Leases |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases Disclosure [Text Block] | Leases The Company utilizes land and buildings in its operations under various lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for twenty years and, in many cases, provide for renewal options and in most cases rent escalations. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. During the years ended December 30, 2018, December 31, 2017 and January 1, 2017, the Company sold 5, 3 and 38 restaurant properties, respectively, in sale-leaseback transactions for net proceeds of $8.4 million, $4.3 million and $53.6 million, respectively. These leases have been classified as operating leases and generally contain a twenty-year initial term plus renewal options. Deferred gains from sale-leaseback transactions of restaurant properties of $206, $716 and $1,480 were recognized during the years ended December 30, 2018, December 31, 2017, and January 1, 2017, respectively, and are being amortized over the term of the related leases. The amortization of deferred gains from sale-leaseback transactions were $1.6 million, $1.6 million and $1.8 million for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. Minimum rent commitments under capital and non-cancelable operating leases at December 30, 2018 were as follows:
Total rent expense on operating leases, including contingent rent on both operating and capital leases, was as follows:
|
Long-Term Debt |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-term Debt Long-term debt at December 30, 2018 and December 31, 2017 consisted of the following:
8% Notes. On April 29, 2015, the Company issued $200.0 million of 8.0% Senior Secured Second Lien Notes due 2022 (the "Existing Notes") pursuant to an indenture dated as of April 29, 2015 governing such notes. On June 23, 2017, the Company issued an additional $75.0 million principal amount of 8.0% Senior Secured Second Lien Notes due 2022 (the "Additional Notes" and together with the "Existing Notes", the "8% Notes") for net proceeds of $35.5 million, after repayment of outstanding revolving credit borrowings of $42.6 million and transaction fees of $1.8 million. The 8% Notes mature and are payable on May 1, 2022. Interest is payable semi-annually on May 1 and November 1 commencing November 1, 2015. The 8% Notes are guaranteed by the Company's subsidiaries and are secured by second-priority liens on substantially all of the Company's and its subsidiaries' assets (including a pledge of all of the capital stock and equity interests of its subsidiaries). The 8% Notes are redeemable at the option of the Company in whole or in part at any time after May 1, 2018 at a price of 104% of the principal amount plus accrued and unpaid interest, if any, if redeemed before May 1, 2019, 102% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 1, 2019 but before May 1, 2020 and 100% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 1, 2020. The 8% Notes are jointly and severally guaranteed, unconditionally and in full by the Company's subsidiaries which are directly or indirectly 100% owned by the Company. Separate condensed consolidating information is not included because Carrols Restaurant Group is a holding company that has no independent assets or operations. There are no significant restrictions on its ability or any of the guarantor subsidiaries' ability to obtain funds from its respective subsidiaries. All consolidated amounts in our financial statements are representative of the combined guarantors. The indenture governing the 8% Notes includes certain covenants, including limitations and restrictions on the Company and its subsidiaries who are guarantors under such indenture to, among other things: incur indebtedness or issue preferred stock; incur liens; pay dividends or make distributions in respect of capital stock or make certain other restricted payments or investments; sell assets; agree to payment restrictions affecting certain subsidiaries; enter into transaction with affiliates; or merge, consolidate or sell substantially all of the Company's assets. The indenture governing the 8% Notes and the security agreement provide that any capital stock and equity interests of any of the Company's subsidiaries will be excluded from the collateral to the extent that the par value, book value or market value of such capital stock or equity interests exceeds 20% of the aggregate principal amount of the 8% Notes then outstanding. The indenture governing the 8% Notes contains customary default provisions, including without limitation, a cross default provision pursuant to which it is an event of default under the 8% Notes and the indenture governing the 8% Notes if there is a default under any of the Company's indebtedness having an outstanding principal amount of $20.0 million or more which results in the acceleration of such indebtedness prior to its stated maturity or is caused by a failure to pay principal when due. Senior Credit Facility. On May 30, 2012, the Company entered into a senior credit facility, which has a maturity date of February 12, 2021, and was most recently amended on June 20, 2017 to increase the permitted indebtedness of our second lien notes to a principal amount not to exceed $300.0 million in order to provide for the additional $75.0 million of the 8% Notes issued on June 23, 2017. On January 13, 2017, the senior credit facility was amended to, among other things, provide for maximum revolving credit borrowings of up to $73.0 million (including $20.0 million available for letters of credit). The amended senior credit facility also provides for potential incremental borrowing increases of up to $25.0 million, in the aggregate. As of December 30, 2018, there were no revolving credit borrowings outstanding and $11.6 million of letters of credit were issued under the amended senior credit facility. After reserving for issued letters of credit and outstanding revolving credit borrowings, $61.4 million was available for revolving credit borrowings under the amended senior credit facility. Borrowings under the amended senior credit facility bear interest at a rate per annum, at the Company’s option, based on (all terms as defined in the Company's amended senior credit facility): (i) the Alternate Base Rate plus the applicable margin of 1.75% to 2.75% based on the Company’s Adjusted Leverage Ratio, or (ii) the LIBOR Rate plus the applicable margin of 2.75% to 3.75% based on the Company’s Adjusted Leverage Ratio. At December 30, 2018, the Company's Alternate Base Rate margin was 1.75% and the LIBOR Rate margin was 2.75% based on the Company's Adjusted Leverage Ratio at the end of the third quarter of 2018. The Company’s obligations under the amended senior credit facility are guaranteed by its subsidiaries and are secured by first priority liens on substantially all of the assets of the Company and its subsidiaries, including a pledge of all of the capital stock and equity interests of its subsidiaries. Under the amended senior credit facility, the Company is required to make mandatory prepayments of borrowings in the event of dispositions of assets, debt issuances and insurance and condemnation proceeds (all subject to certain exceptions). The amended senior credit facility contains certain covenants, including without limitation, those limiting the Company’s and its subsidiaries' ability to, among other things, incur indebtedness, incur liens, sell or acquire assets or businesses, change the character of its business in all material respects, engage in transactions with related parties, make certain investments, make certain restricted payments or pay dividends. In addition, the amended senior credit facility requires the Company to meet certain financial ratios, including a Fixed Charge Coverage Ratio, Adjusted Leverage Ratio and First Lien Leverage Ratio (all as defined under the amended senior credit facility). The Company was in compliance with the covenants under its senior credit facility at December 30, 2018. The amended senior credit facility contains customary default provisions, including that the lenders may terminate their obligation to advance and may declare the unpaid balance of borrowings, or any part thereof, immediately due and payable upon the occurrence and during the continuance of customary defaults which include, without limitation, payment default, covenant defaults, bankruptcy type defaults, cross-defaults on other indebtedness, judgments or upon the occurrence of a change of control. At December 30, 2018, principal payments required on long-term debt, including capital leases, were as follows:
The weighted average interest rate on all debt, excluding lease financing obligations, for the years ended December 30, 2018, December 31, 2017 and January 1, 2017 was 7.9%, 7.7% and 7.9%, respectively. Interest expense on the Company’s long-term debt, excluding lease financing obligations, was $23.5 million, $21.6 million and $18.2 million for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. |
Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision (benefit) for income taxes was comprised of the following:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The components of deferred income tax assets and liabilities at December 30, 2018 and December 31, 2017 were as follows:
The Company's federal net operating loss carryforwards generated prior to December 31, 2017 expire beginning in 2033. As of December 30, 2018, the Company had federal net operating loss carryforwards of approximately $89.6 million. The Company's state net operating loss carryforwards expire beginning in 2019 through 2038. In 2014, the Company recorded a valuation allowance on all of its net deferred tax assets. During the fourth quarter of 2016, the Company evaluated evidence to consider the reversal of the valuation allowance on its net deferred income tax assets and determined in the fourth quarter of fiscal 2016 that there was sufficient positive evidence to conclude that it is more likely than not its deferred income tax assets are realizable. In determining the likelihood of future realization of the deferred income tax assets as of January 1, 2017, the Company considered both positive and negative evidence and weighted the effect of such evidence based upon its objectivity as required by ASC 740. As a result, the Company believed that the weight of the positive evidence, including the cumulative income position in the three most recent years as of January 1, 2017 (as adjusted for non-recurring items and permanent differences between book and tax) and forecasts for a sustained level of future taxable income, was sufficient to overcome the weight of the negative evidence, and recorded a $30.4 million tax benefit to release the full valuation allowance against the Company's deferred income tax assets in the fourth quarter of 2016. The Company has performed the required assessment of positive and negative evidence regarding the realization of deferred income tax assets in accordance with ASC 740 at December 31, 2018 and December 31, 2017. In determining the likelihood of future realization of the deferred income tax assets as of December 30, 2018 and December 31, 2017 the Company considered both positive and negative evidence and weighted the effect of such evidence based upon it's objectivity. The Company believes that the weight of the positive evidence, including the cumulative income position in the three most recent years (as adjusted for non-recurring items and permanent differences between book and tax) and forecasts for a sustained level of future taxable income, is sufficient to overcome the weight of the negative evidence and concludes that it does not need to record a valuation allowance against its deferred income tax assets. A reconciliation of the statutory federal income tax provision to the income tax provision (benefit) for the years ended December 30, 2018, December 31, 2017, and January 1, 2017 was as follows:
The Company's policy is to recognize interest and/or penalties related to uncertain tax positions in income tax expense. At December 30, 2018 and December 31, 2017, the Company had no unrecognized tax benefits and no accrued interest related to uncertain tax positions. The tax years 2013 - 2018 remain open to examination by the major taxing jurisdictions to which the Company is subject. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase within the next twelve months due to uncertainties regarding the timing of examinations, the Company does not expect unrecognized tax benefits to significantly change in the next twelve months. On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. The Act reduces the corporate tax rate to 21% from 35% while retaining the employment tax credits the Company is eligible for. In addition, the Act provides for one hundred percent expensing of certain qualified property placed in service after September 27, 2017. The Company recorded a $0.8 million discrete tax benefit in 2017 to remeasure its net deferred taxes due to the lowering of the Federal income tax statutory rate to 21% under the Act. The measurement of general business credits, which are a large component of offsetting deferred tax assets, was not affected by the Act with the exception of making a final determination on whether or not to opt out of the one hundred percent expensing provision. The benefit for income taxes for the year ended December 30, 2018 contains net discrete tax adjustments of $0.1 million of income tax expense. |
Stock-Based Compensation |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation 2016 Stock Incentive Plan. In 2016, the Company adopted a stock plan entitled the 2016 Stock Incentive Plan (the “2016 Plan”) and reserved and authorized a total of 4,000,000 shares of common stock for grant thereunder. As of December 30, 2018, 3,274,873 shares were available for future grant or issuance. On January 15, 2018, the Company granted 350,000 non-vested shares of stock to officers of the Company. These shares vest over their three-year vesting period. In addition, during 2018 the Company issued an aggregate of 30,192 non-vested shares of common stock to non-employee directors. The non-vested stock awards vest over three years, provided that the participant has continuously remained a director of the Company. On January 15, 2017, the Company granted 340,000 non-vested shares of stock to officers of the Company. These shares vest over their three-year vesting period. In addition, during 2017 the Company issued an aggregate of 26,580 non-vested shares of common stock to non-employee directors. The non-vested stock awards vest over three years, provided that the participant has continuously remained a director of the Company. Stock-based compensation expense for the years ended December 30, 2018, December 31, 2017, and January 1, 2017 was $5.8 million, $3.5 million and $2.1 million, respectively. A summary of all non-vested share activity for the year ended December 30, 2018 was as follows:
The fair value of the non-vested shares is based on the closing price of the Company's common stock on the date of grant. As of December 30, 2018, total non-vested stock-based compensation expense was approximately $6.0 million and the remaining weighted average vesting period for non-vested shares was 1.4 years. |
Stockholder's Equity |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Preferred Stock [Text Block] | Stockholders' Equity Preferred Stock. In 2012, Carrols Restaurant Group issued to BKC 100 shares of Series A Convertible Preferred Stock pursuant to a certificate of designation. These shares are convertible into 9,414,580 shares of Carrols Restaurant Group Common Stock ("Carrols Common Stock"). In 2018, Carrols Restaurant Group exchanged the Series A Convertible Preferred Stock for Series B Convertible Preferred Stock, with substantially the same, powers, preferences and rights of the shares of Series A Convertible Preferred Stock, except to provide that such shares will be transferrable by BKC solely to certain of its affiliates or subsidiaries. The Preferred Stock ranks senior to Carrols Common Stock with respect to rights on liquidation, winding-up and dissolution of Carrols Restaurant Group. The Preferred Stock is perpetual, will receive any dividends and amounts upon a liquidation event on an as converted basis, does not pay interest and has no mandatory prepayment features. BKC also has certain approval and voting rights as set forth in the certificate of designation for the Preferred Stock so long as it owns greater than 10.0% of the outstanding shares of Carrols Common Stock (on an as-converted basis). The Preferred Stock will vote with the Company's common stock on an as converted basis and provides for the right of BKC to elect (a) two members to the Company's board of directors until the date on which the number of shares of common stock into which the outstanding shares of the Preferred Stock held by BKC are then convertible constitutes less than 14.5% of the total number of outstanding shares of common stock and (b) one member to the Company's board of directors until BKC owns Preferred Stock (on an as converted basis) of less than 10.0% of the total number of outstanding shares of common stock. |
Net Income (Loss) Per Share |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Per Share | Net Income per Share The Company applies the two-class method to calculate and present net income per share. The Company's non-vested share awards and Series B Convertible Preferred Stock issued to BKC contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net income per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. The following table sets forth the calculation of basic and diluted net income per share:
|
Commitments And Contingencies |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Lease Guarantees. Fiesta Restaurant Group, Inc ("Fiesta"), a former wholly-owned subsidiary of the Company, was spun-off in 2012 to the Company's stockholders. As of December 30, 2018, the Company is a guarantor under 27 Fiesta restaurant property leases, of which all except for one of those restaurants are still operating, with lease terms expiring on various dates through 2030. The Company is also the primary lessee on five Fiesta restaurant property leases, which it subleases to Fiesta. The Company is fully liable for all obligations under the terms of the leases in the event that Fiesta fails to pay any sums due under the lease, subject to indemnification provisions of the Separation and Distribution Agreement entered into in connection with the spin-off of Fiesta. The maximum potential amount of future undiscounted rental payments the Company could be required to make under these leases at December 30, 2018 was $16.3 million. The obligations under these leases will generally continue to decrease over time as these operating leases expire. No payments related to these guarantees have been made by the Company to date and none are expected to be required to be made in the future. The Company has not recorded a liability for these guarantees in accordance with ASC 460 - Guarantees as Fiesta has indemnified the Company for all such obligations and the Company did not believe it was probable it would be required to perform under any of the guarantees or direct obligations. Litigation. On August 21, 2012 Alan Vituli, the Company's former chairman and chief executive officer, filed an action in the Superior Court of the State of Delaware ( the “Court”) against the Company and Carrols. On July 29, 2016 the Company, Carrols, and Mr. Vituli agreed to fully resolve all of Mr. Vituli’s claims in the lawsuit for a total payment by the Company of $2.0 million. Upon the execution of releases and payment of the settlement amount, the litigation was dismissed. Net of a contribution from the Company's insurance carrier, $1.85 million is included in other income (expense) in the accompanying consolidated statements of comprehensive income for the year ended January 1, 2017. The Company is a party to various litigation matters that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of any of these other matters will have a material adverse effect on its consolidated financial statements. |
Related Parties |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Transactions with Related Parties In connection with an acquisition of restaurants from BKC in 2012, the Company issued to BKC 100 shares of Series A Convertible Preferred Stock, which was exchanged for 100 shares of newly issued Series B Convertible Preferred Stock in 2018, and as of December 30, 2018 is convertible into approximately 20.3% of the outstanding shares of the Company's common stock after giving effect to the conversion of the Series B Preferred Stock. See Note 12—Stockholder's Equity for further information. Pursuant to the terms of the Series B Convertible Preferred Stock, BKC also has two representatives on the Company's board of directors. Each of the Company's restaurants operates under a separate franchise agreement with BKC. These franchise agreements generally provide for an initial term of twenty years and currently have an initial franchise fee of $50. Any franchise agreement, including renewals, can be extended at the Company's discretion for an additional 20 year term, with BKC's approval, provided that, among other things, the restaurant meets the current Burger King® image standard and the Company is not in default under terms of the franchise agreement. In addition to the initial franchise fee, the Company generally pays BKC a monthly royalty at a rate of 4.5% of sales. Royalty expense was $50.5 million, $46.4 million, and $40.0 million for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. The Company is also generally required to contribute 4% of restaurant sales from the Company's restaurants to an advertising fund utilized by BKC for its advertising, promotional programs and public relations activities, and amounts for additional local advertising in markets that approve such advertising. Advertising expense associated with these expenditures was $47.0 million, $43.5 million and $40.2 million for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. As of December 30, 2018, December 31, 2017, and January 1, 2017, the Company leased 244, 251 and 275 of its restaurant locations from BKC, respectively. As of December 30, 2018, for 117 of the restaurants, the terms and conditions of the lease with BKC are identical to those between BKC and their third-party lessor. Aggregate rent under these BKC leases for the years ended December 30, 2018, December 31, 2017 and January 1, 2017 was $27.2 million, $27.6 million, and $27.8 million, respectively. The Company believes the related party lease terms have not been significantly affected by the fact that the Company and BKC are deemed to be related parties. As of December 30, 2018, the Company owed BKC $9.3 million related to the payment of advertising, royalties and rent, which is remitted on a monthly basis. The Company has entered into an Area Development and Remodeling Agreement with BKC which will be subject to the closing of the transactions contemplated by the Merger Agreement and will supersede the amended operating agreement. See Note 19 - Subsequent Events for further information. |
Retirement Plans |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Retirement Benefits [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Retirement Plans The Company offers its salaried employees the option to participate in the Carrols Corporation Retirement Savings Plan (the “Retirement Plan”). The Retirement Plan includes a savings option pursuant to section 401(k) of the Internal Revenue Code in addition to a post-tax savings option. Participating employees may contribute up to 50% of their salary annually to either of the savings options, subject to other limitations. The employees may allocate their contributions to various investment options available under a trust established by the Retirement Plan. The Company may elect to contribute to the Retirement Plan on an annual basis. The Company's contribution is equal to 50% of the employee's contribution subject to a maximum annual amount and begins to vest after one year of service and fully vests after five years of service. A year of service is defined as a plan year during which an employee completes at least 1,000 hours of service. Expense recognized for the Company's contributions to the Retirement Plan was $0.7 million, $0.6 million and $0.5 million for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively. The Company also has an Amended and Restated Deferred Compensation Plan which permits employees not eligible to participate in the Retirement Plan because they have been excluded as “highly compensated” employees (as so defined in the Retirement Plan) to voluntarily defer portions of their base salary and annual bonus. All amounts deferred by the participants earn interest at 8% per annum. There is no Company matching on any portion of the funds. At December 30, 2018 and December 31, 2017, a total of $3.6 million and $3.1 million, respectively, was deferred under this plan, including accrued interest and is included in Other liabilities on the consolidated balance sheet.. |
Postretirement Benefits (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure [Text Block] | Postretirement Benefits The Company sponsors a postretirement medical and life insurance plan covering substantially all administrative and restaurant management personnel who retire or terminate after qualifying for such benefits. The following was the change in benefit obligation, plan assets and funded status at December 30, 2018 and December 31, 2017:
The discount rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical and life insurance benefits. The Company has typically used the corporate AA/Aa bond rate for this assumption. Components of net periodic postretirement benefit expense recognized in the consolidated statements of comprehensive income were:
Amounts recognized in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit expense, consisted of:
The estimated net loss that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit expense over the next fiscal year is $0.1 million. The amount of prior service credit for the postretirement benefit plan that will be amortized from accumulated other comprehensive loss into net periodic postretirement benefit expense over the next fiscal year is $0.4 million. The following table reflects the changes in accumulated other comprehensive loss for the years ended December 30, 2018 and December 31, 2017:
Assumed health care cost trend rates at the years ended were as follows:
The assumed healthcare cost trend rate represents the Company's estimate of the annual rates of change in the costs of the healthcare benefits currently provided by the Company's postretirement plan. The healthcare cost trend rate implicitly considers estimates of healthcare inflation, changes in healthcare utilization and delivery patterns, technological advances and changes in the health status of the plan participants. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in the assumed healthcare cost trend rates would have the following effects:
During 2019, the Company expects to contribute approximately $0.1 million to its postretirement benefit plan. The benefits, net of Medicare Part D subsidy receipts, expected to be paid in each year from 2019 through 2023 are $0.1 million, $0.2 million, $0.2 million, $0.2 million and $0.2 million respectively, and for the years 2024-2028 the aggregate amount is $1.2 million. |
Selected Quarterly Financial and Earnings Data (Unaudited) (Notes) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Text Block] | Selected Quarterly Financial Data (Unaudited)
|
Valuation and Qualifying Accounts (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] |
|
Subsequent Events |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent Events. On February 20, 2019, the Company announced entry into a definitive Agreement and Plan of Merger ("Merger Agreement") to acquire 166 Burger King® and 55 Popeyes® restaurants from Cambridge. The transaction will be structured as a tax-free merger. Cambridge will receive approximately 7.36 million shares of the Company's common stock, and at closing will own approximately 16.6% of the Company's outstanding common shares. Cambridge will also receive shares of 9% PIK Series C Convertible Preferred Stock that will be convertible into approximately 7.45 million shares of Carrols common stock at $13.50 per share. The conversion of the preferred stock received by Cambridge will be subject to a vote of the Company's stockholders which will occur at the Company’s 2019 Annual Meeting of Stockholders, and will automatically convert into common stock upon stockholder approval of such conversion. All shares issued to Cambridge are subject to a two year restriction on sale or transfer subject to certain limited exceptions. As part of the transaction, Cambridge will have the right to designate up to two director nominees and two Cambridge executives will join the Company's Board of Directors upon completion of the merger. The Company expects to refinance the existing debt assumed as part of the transaction, along with the Company’s existing debt, through a new senior secured credit facility providing for term loan and revolving credit borrowings under a fully committed financing provided by Wells Fargo Bank, National Association ("Wells Fargo Bank"), Coöperatieve Rabobank U.A., New York Branch (“Rabobank”), Manufacturers and Traders Trust Company (“M&T Bank”) and SunTrust Bank, each as a lender. Wells Fargo Bank will act as the sole administrative agent. Wells Fargo Securities, LLC, Rabobank, M&T Bank and SunTrust Robinson Humphrey, Inc. will act as joint bookrunners and joint lead arrangers. The closing of the merger is not, however, conditioned on financing. The Company, Carrols and Carrols LLC has entered into an Area Development and Remodeling Agreement with BKC which will be subject to and effective upon the closing of the transactions contemplated by the Merger Agreement and have a term commencing on, the date of the closing of the Merger Agreement, and ending on September 30, 2024. Pursuant to the Area Development Agreement, which will supercede the amended operating agreement, BKC will grant the Company franchise pre-approval and assign to its right of first refusal under its franchise agreements with its franchisees to purchase all of the assets of a Burger King restaurant or all or substantially all of the voting stock of the franchisee, whether direct or indirect, on the same terms proposed between such franchisee and a third party purchaser in 16 states until the date that the Company has acquired more than an aggregate of 500 Burger King Restaurants. The Company will pay BKC $3.0 million in equal installment payments in 2019. The Company also will agree to open, build and operate 200 new Burger King restaurants as follows: 7 Burger King restaurants by September 30, 2019, 32 additional Burger King restaurants by September 30, 2020, 41 additional Burger King restaurants by September 30, 2021, 41 additional Burger King restaurants by September 30, 2022, 40 additional Burger King restaurants by September 30, 2023 and 39 additional Burger King restaurants by September 30, 2024 and will agree to remodel or upgrade 748 Burger King restaurants to BKC’s Burger King of Tomorrow restaurant image, including 90 Burger King restaurants by September 30, 2019, 130 additional Burger King restaurants by September 30, 2020, 118 additional Burger King restaurants by September 30, 2021, 131 additional Burger King restaurants by September 30, 2022, 138 additional Burger King restaurants by September 30, 2023 and 141 additional Burger King restaurants by September 30, 2024 and includes a contribution by BKC of $10 million to $12 million for upgrades to approximately 50 to 60 Burger King restaurants in 2019 and 2020 where BKC is the landlord on the lease. |
Basis Of Presentation (Policies) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
Consolidation [Policy Text Block] | Basis of Consolidation. Carrols Restaurant Group is a holding company and conducts all of its operations through its wholly-owned subsidiary, Carrols Corporation (“Carrols”) and Carrols' wholly-owned subsidiary, Carrols LLC, a Delaware limited liability company, and Carrols LLC's wholly-owned subsidiary Republic Foods, Inc., a Maryland corporation ("Republic Foods"). The consolidated financial statements presented herein include the accounts of Carrols Restaurant Group and its wholly-owned subsidiary Carrols. Unless the context otherwise requires, Carrols Restaurant Group, Carrols and Carrols LLC are collectively referred to as the “Company.” All intercompany transactions have been eliminated in consolidation. |
||||||||||||||||||||||||
Fiscal Period [Policy Text Block] | Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended December 30, 2018, December 31, 2017, and January 1, 2017 each contained 52 weeks. |
||||||||||||||||||||||||
Use of Estimates [Policy Text Block] | Use of Estimates. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include: accrued occupancy costs, insurance liabilities, evaluation for impairment of long-lived assets and franchise rights, lease accounting matters, the valuation of acquired assets and liabilities and the valuation of deferred income tax assets. Actual results could differ from those estimates. |
||||||||||||||||||||||||
Cash and Cash Equivalents [Policy Text Block] | Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
||||||||||||||||||||||||
Inventory [Policy Text Block] | Inventories. Inventories, consisting primarily of food, beverages, and paper supplies, are stated at the lower of cost determined on the first-in, first-out method or net realizable value. |
||||||||||||||||||||||||
Property and Equipment [Policy Text Block] | Property and Equipment. Property and equipment is recorded at cost. The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Leasehold improvements are amortized over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or the expected lease term. The expected lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. Building costs incurred for new restaurants on leased land are amortized over the lease term, which is generally a period of twenty years. |
||||||||||||||||||||||||
Business Combinations Policy [Policy Text Block] | Business Combinations. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price of an acquired business is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third party valuation specialist to assist with the valuation of certain leasehold improvements, franchise rights and favorable and unfavorable leases. |
||||||||||||||||||||||||
Intangible Assets [Policy Text Block] | Favorable and Unfavorable Leases. Favorable and unfavorable leases are due to the terms of acquired operating lease contracts being favorable or unfavorable relative to market terms of comparable leases on the acquisition date. Favorable and unfavorable leases are amortized as a component of rent expense on a straight-line basis over the remaining lease terms at the time of the acquisition. Franchise Rights. The Company determines the fair value of franchise rights based upon the acquired restaurants' future earnings, discounting those earnings using an appropriate market discount rate and subtracting a contributory charge for net working capital, property and equipment and assembled workforce to determine the fair value attributable to these franchise rights. Amounts allocated to franchise rights for each acquisition are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. Franchise Agreements. Fees for initial franchises and renewals are amortized using the straight-line method over the term of the agreement, which is generally twenty years. Favorable and Unfavorable Leases. Amounts allocated to favorable and unfavorable leases are being amortized using the straight-line method over the remaining terms of the underlying lease agreements as a net reduction of restaurant rent expense. Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King® restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. |
||||||||||||||||||||||||
Goodwill [Policy Text Block] | Goodwill. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized but is tested for impairment at least annually as of the fiscal year end. Goodwill. The Company is required to review goodwill for impairment annually, or more frequently, when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of the fiscal year. In performing its goodwill impairment test, the Company compared the net book value of its reporting unit to its estimated fair value, the latter determined by employing a combination of a discounted cash flow analysis and a market-based approach. |
||||||||||||||||||||||||
Impairment or Disposal of Long-Lived Assets [Policy Text Block] | Impairment of Long-Lived Assets. The Company assesses the recoverability of property and equipment, franchise rights and other intangible assets by determining whether the carrying value of these assets can be recovered over their respective remaining useful lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. |
||||||||||||||||||||||||
Deferred Financing Costs [Policy Text Block] | Deferred Financing Costs. Financing costs incurred in obtaining long-term debt and lease financing obligations are capitalized and amortized over the life of the related obligation as interest expense using the effective interest method. |
||||||||||||||||||||||||
Leases [Policy Text Block] | Leases. All leases are reviewed for capital or operating classification at their inception. The majority of the Company’s leases are operating leases. Many of the lease agreements contain rent holidays, rent escalation clauses and/or contingent rent provisions. Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including any option periods included in the determination of the lease term. Contingent rentals are generally based upon a percentage of sales or a percentage of sales in excess of stipulated amounts and are generally not considered minimum rent payments but are recognized as rent expense when incurred. The Company utilizes land and buildings in its operations under various lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for twenty years and, in many cases, provide for renewal options and in most cases rent escalations. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. |
||||||||||||||||||||||||
Lease Financing Obligations [Policy Text Block] | Lease Financing Obligations. Lease financing obligations pertain to real estate sale-leaseback transactions accounted for under the financing method. The assets (land and building) subject to these obligations remain on the Company’s consolidated balance sheets at their historical costs and such assets (excluding land) continue to be depreciated over their remaining useful lives. The proceeds received by the Company from these transactions are recorded as lease financing obligations and the lease payments are applied as payments of principal and interest. The selection of the interest rate on lease financing obligations is evaluated at inception of the lease based on the Company’s incremental borrowing rate adjusted to the rate required to prevent recognition of a non-cash loss or negative amortization of the obligation through the end of the primary lease term. |
||||||||||||||||||||||||
Revenue Recognition [Policy Text Block] | Revenue Recognition. Revenues from Company restaurants, net of sales discounts are recognized when payment is tendered at the time of sale. Revenues are reported net of sales tax collected from customers and remitted to governmental taxing authorities. |
||||||||||||||||||||||||
Income Tax [Policy Text Block] | Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period including any changes in valuation allowances. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to an amount for which realization is likely. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company and its subsidiary file a consolidated federal income tax return. |
||||||||||||||||||||||||
Advertising Costs [Policy Text Block] | Advertising Costs. All advertising costs are expensed as incurred. |
||||||||||||||||||||||||
Cost of Sales [Policy Text Block] | Cost of Sales. The Company includes the cost of food, beverage and paper, net of any vendor discounts and rebates, in cost of sales. |
||||||||||||||||||||||||
Pre-opening Costs [Policy Text Block] | Pre-opening Costs. The Company’s pre-opening costs generally include payroll costs and travel associated with the opening of a new restaurant, rent and promotional costs. |
||||||||||||||||||||||||
Insurance [Policy Text Block] | Insurance. The Company is self-insured for workers’ compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and in certain cases claims in the aggregate. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims based on Company experience and other methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. |
||||||||||||||||||||||||
Fair Value of Financial Instruments [Policy Text Block] | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Fair value is determined based on the following: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. Financial instruments include cash and cash equivalents, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. The fair value of the Carrols Restaurant Group 8.0% Senior Secured Second Lien Notes due 2022 is based on a recent trading value, which is considered Level 2, and at December 30, 2018 and December 31, 2017 was approximately $277.1 million and $290.5 million, respectively. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. |
||||||||||||||||||||||||
Stock-based Compensation [Policy Text Block] | Stock-Based Compensation. The Company has an incentive stock plan under which incentive stock options, non-qualified stock options and non-vested shares may be granted to employees and non-employee directors. On an annual basis, the Company has granted non-vested shares under this plan. Non-vested shares granted to corporate employees and non-employee directors generally vest on a straight-line basis over three years. For non-vested stock awards, the fair market value of the award, determined based upon the closing value of the Company’s stock price on the grant date, is recorded to compensation expense on a straight-line basis over the requisite service period. See Note 11 to the consolidated financial statements. |
||||||||||||||||||||||||
Concentrations of Credit Risk [Policy Text Block] | Concentrations of Credit Risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains its day-to-day operating cash balances in interest-bearing transaction accounts at financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000. Although the Company maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and believes its credit risk to be minimal. |
||||||||||||||||||||||||
Segment Information [Policy Text Block] | Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker in order to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made based on the chief operating decision maker's evaluation of the total Company operations. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its Burger King® restaurants as one reportable segment. |
||||||||||||||||||||||||
Subsequent Events [Policy Text Block] | n May 2014, the FASB issued amended guidance for revenue recognition. The new guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The new guidance supersedes most current revenue recognition guidance, including industry-specific guidance and was adopted by the Company on January 1, 2018. The new guidance has not impacted the Company's recognition of revenue from Company-operated restaurant sales and has no impact on the manner in which the Company recognizes revenue as the Company’s advertising fund and gift card program are run by its franchisor. |
Intangible Assets (Policies) |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill [Policy Text Block] | Goodwill. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized but is tested for impairment at least annually as of the fiscal year end. Goodwill. The Company is required to review goodwill for impairment annually, or more frequently, when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of the fiscal year. In performing its goodwill impairment test, the Company compared the net book value of its reporting unit to its estimated fair value, the latter determined by employing a combination of a discounted cash flow analysis and a market-based approach. |
Intangible Assets [Policy Text Block] | Favorable and Unfavorable Leases. Favorable and unfavorable leases are due to the terms of acquired operating lease contracts being favorable or unfavorable relative to market terms of comparable leases on the acquisition date. Favorable and unfavorable leases are amortized as a component of rent expense on a straight-line basis over the remaining lease terms at the time of the acquisition. Franchise Rights. The Company determines the fair value of franchise rights based upon the acquired restaurants' future earnings, discounting those earnings using an appropriate market discount rate and subtracting a contributory charge for net working capital, property and equipment and assembled workforce to determine the fair value attributable to these franchise rights. Amounts allocated to franchise rights for each acquisition are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. Franchise Agreements. Fees for initial franchises and renewals are amortized using the straight-line method over the term of the agreement, which is generally twenty years. Favorable and Unfavorable Leases. Amounts allocated to favorable and unfavorable leases are being amortized using the straight-line method over the remaining terms of the underlying lease agreements as a net reduction of restaurant rent expense. Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King® restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. |
Impairment Of Long-Lived Assets And Other Lease Charges (Policies) |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Impairment or Disposal of Long-Lived Assets [Policy Text Block] | Impairment of Long-Lived Assets. The Company assesses the recoverability of property and equipment, franchise rights and other intangible assets by determining whether the carrying value of these assets can be recovered over their respective remaining useful lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. |
Leases (Policies) |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Leases [Abstract] | |
Leases [Policy Text Block] | Leases. All leases are reviewed for capital or operating classification at their inception. The majority of the Company’s leases are operating leases. Many of the lease agreements contain rent holidays, rent escalation clauses and/or contingent rent provisions. Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including any option periods included in the determination of the lease term. Contingent rentals are generally based upon a percentage of sales or a percentage of sales in excess of stipulated amounts and are generally not considered minimum rent payments but are recognized as rent expense when incurred. The Company utilizes land and buildings in its operations under various lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for twenty years and, in many cases, provide for renewal options and in most cases rent escalations. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. |
Net Income (Loss) Per Share Earnings per share narrative (Policies) |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | The Company applies the two-class method to calculate and present net income per share. The Company's non-vested share awards and Series B Convertible Preferred Stock issued to BKC contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net income per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. |
Basis Of Presentation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment [Table Text Block] | The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Property and equipment at December 30, 2018 and December 31, 2017 consisted of the following:
|
Acquisition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | During the year ended December 30, 2018, the Company acquired a total of 44 restaurants from other franchisees, which are referred to as the "2018 acquired restaurants", in the following transactions:
During the year ended December 31, 2017, the Company acquired a total of 64 restaurants from other franchisees, which are referred to as the "2017 acquired restaurants", in the following transactions:
(1) Acquisition resulting from the exercise of the ROFR. During the year ended January 1, 2017, the Company acquired a total of 56 restaurants from other franchisees, which are referred to as the "2016 acquired restaurants", in the following transactions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation [Table Text Block] | The following table summarizes the final allocation of the aggregate purchase price for the three 2017 acquisitions:
The following table summarizes the final allocation of the aggregate purchase price for the seven 2016 acquisitions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The following table summarizes the Company's unaudited proforma operating results:
The following table summarizes the Company's unaudited proforma operating results:
(1) Includes a tax benefit of $30.4 million for the reversal of the Company's valuation allowance on its net deferred income tax assets (see Note 10). |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The weighted average amortization period of the intangible assets acquired is as follows:
|
Property and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment [Table Text Block] | The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Property and equipment at December 30, 2018 and December 31, 2017 consisted of the following:
|
Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets [Table Text Block] | The following is a summary of the Company’s franchise rights as of the respective balance sheet dates:
The following is a summary of the Company’s favorable and unfavorable leases as of the respective balance sheet dates, which are included as assets and liabilities, respectively, on the accompanying consolidated balance sheets:
|
Impairment Of Long-Lived Assets And Other Lease Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs and Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closed Restaurant Reserve [Table Text Block] | The following table presents the activity in the accrual for closed restaurant locations:
|
Other Liabilities, Long-Term (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Liabilities [Table Text Block] | Other liabilities, long-term, at December 30, 2018 and December 31, 2017 consisted of the following:
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of minimum rent commitments [Table Text Block] | Minimum rent commitments under capital and non-cancelable operating leases at December 30, 2018 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of rent expense [Table Text Block] | otal rent expense on operating leases, including contingent rent on both operating and capital leases, was as follows:
|
Long-Term Debt Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt at December 30, 2018 and December 31, 2017 consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | At December 30, 2018, principal payments required on long-term debt, including capital leases, were as follows:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision (benefit) for income taxes was comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of deferred income tax assets and liabilities at December 30, 2018 and December 31, 2017 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the statutory federal income tax provision to the income tax provision (benefit) for the years ended December 30, 2018, December 31, 2017, and January 1, 2017 was as follows:
|
Stock-based Compensation Stock-Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | A summary of all non-vested share activity for the year ended December 30, 2018 was as follows:
|
Net Income (Loss) Per Share Earnings per Share Table (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the calculation of basic and diluted net income per share:
|
Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Funded Status [Table Text Block] | The following was the change in benefit obligation, plan assets and funded status at December 30, 2018 and December 31, 2017:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs [Table Text Block] | Components of net periodic postretirement benefit expense recognized in the consolidated statements of comprehensive income were:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost Not yet Recognized [Table Text Block] | Amounts recognized in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit expense, consisted of:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | The following table reflects the changes in accumulated other comprehensive loss for the years ended December 30, 2018 and December 31, 2017:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Health Care Cost Trend Rates [Table Text Block] | Assumed health care cost trend rates at the years ended were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates [Table Text Block] | A one-percentage-point change in the assumed healthcare cost trend rates would have the following effects:
|
Selected Quarterly Financial and Earnings Data (Unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] | Selected Quarterly Financial Data (Unaudited)
|
Basis Of Presentation Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 30, 2018 | |
Property and equipment [Line Items] | |
Operating leases, term | 20 years |
Building [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Useful life | 30 years |
Building [Member] | Minimum [Member] | |
Property and equipment [Line Items] | |
Useful life | 9 years |
Equipment [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Useful life | 7 years |
Equipment [Member] | Minimum [Member] | |
Property and equipment [Line Items] | |
Useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Useful life | 7 years |
Computer Equipment [Member] | Minimum [Member] | |
Property and equipment [Line Items] | |
Useful life | 3 years |
Basis Of Presentation Stock-Based Compensation (Details) |
12 Months Ended | |
---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Management [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Award Vesting Period | 3 years | 3 years |
Management [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Award Vesting Period | 3 years | |
Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Award Vesting Period | 3 years | 3 years |
Acquisition Pro Forma Information, 2017 Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 01, 2017 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Business Acquisition [Line Items] | ||||
Income tax expense, valuation allowance | $ (30,400) | $ 0 | $ 0 | $ (30,374) |
2018 Acquisitions [Member] | ||||
Business Acquisition [Line Items] | ||||
Restaurant sales | 1,217,891 | 1,170,627 | ||
Net income | $ 13,684 | $ 12,464 | ||
Basic and diluted net income (loss) per share | $ 0.30 | $ 0.28 | ||
2017 Acquisitions [Member] | ||||
Business Acquisition [Line Items] | ||||
Restaurant sales | $ 1,114,642 | $ 1,071,437 | ||
Net income | $ 9,546 | $ 52,730 | ||
Basic and diluted net income (loss) per share | $ 0.21 | $ 1.18 |
Acquisition Purchase Price Allocation, 2016 Acquisitions (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Inventory | $ 558 | ||
Land and building | 19,387 | ||
Restaurant equipment | 1,599 | ||
Restaurant equipment - subject to capital lease | 435 | ||
Leasehold improvements | 2,464 | ||
Franchise fees | 1,121 | ||
Franchise rights | 21,202 | ||
Favorable leases | 390 | ||
Deferred taxes | 216 | ||
Goodwill | $ 38,469 | 36,792 | $ 22,869 |
Capital lease obligation for restaurant equipment | (492) | ||
Unfavorable leases | (1,152) | ||
Other liabilities | (71) | ||
Purchase price | 48,088 | ||
2016 Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 2,431 |
Acquisition Pro forma information, 2016 acquisitions (Details) - 2016 Acquisitions [Member] $ / shares in Units, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Restaurant sales | $ 984,164 |
Net income (loss) | $ 48,264 |
Basic and diluted net income (loss) per share | $ / shares | $ 1.07 |
Acquisition Table of 2015 Acquisitions (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Apr. 01, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Oct. 01, 2017
USD ($)
|
Jul. 02, 2017
USD ($)
|
Apr. 02, 2017
USD ($)
|
Dec. 30, 2018
USD ($)
restaurant
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
|
Dec. 30, 2012 |
|
Business Acquisition [Line Items] | ||||||||||||
Restaurants Acquired | 10 | 1 | 17 | 44 | 4 | 278 | ||||||
Purchase Price | $ 38,102 | $ 37,923 | $ 48,088 | |||||||||
Proceeds from sale-leaseback transactions | $ 8,424 | 4,257 | $ 53,599 | |||||||||
Land and building | $ 19,387 | 19,387 | ||||||||||
Acquisition-related costs | $ 400 | $ 800 | $ 100 | $ 100 | $ 100 | $ 500 | $ 500 | $ 700 | ||||
2016 Acquisitions [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Restaurants Acquired | 56 | |||||||||||
Purchase Price | $ 48,088 | |||||||||||
Properties purchased for sale-leaseback, number | 15 | |||||||||||
Properties sold in sale-leaseback transactions | 14 | |||||||||||
Proceeds from sale-leaseback transactions | $ 19,100 | |||||||||||
Revenue of acquired restaurants since acquisition | $ 70,800 | $ 28,600 |
Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Property and equipment [Line Items] | |||
Land | $ 8,779 | $ 8,659 | |
Owned buildings | 9,488 | 9,950 | |
Leasehold improvements | 339,180 | 301,091 | |
Equipment | 244,446 | 227,284 | |
Assets subject to capital leases | 16,797 | 16,874 | |
Propert and equipment, gross | 618,690 | 563,858 | |
Less accumulated depreciation and amortization | (328,873) | (289,760) | |
Property and equipment, net | 289,817 | 274,098 | |
Capital leases, accumulated depreciation | 13,725 | 12,245 | |
Depreciation expense | 58,468 | 54,159 | $ 47,295 |
Property and Equipment [Member] | |||
Property and equipment [Line Items] | |||
Depreciation expense | $ 49,336 | $ 45,700 | $ 39,918 |
Intangible Assets Goodwill Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 36,792 | $ 22,869 | |
Goodwill, Acquired During Period | 1,677 | 13,923 | |
Goodwill | 38,469 | 36,792 | $ 22,869 |
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Intangible Assets Franchise Rights Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Franchise Term Renewal Period | 20 years | ||
Franchise Rights, Gross | $ 283,918 | $ 252,643 | |
Franchise Rights, Accumulated Amortization | 108,021 | 100,615 | |
Franchise rights impairment | 0 | 0 | $ 0 |
Franchise Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 7,406 | $ 6,816 | $ 5,930 |
Expected Amortization, next fiscal year | 8,123 | ||
Expected Amortization, year three | 8,123 | ||
Expected Amortization, year four | 8,123 | ||
Expected Amortization, year five | $ 8,123 |
Intangible Assets Favorable and Unfavorable Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Favorable lease, gross | $ 8,148 | $ 7,805 | |
Favorable leases, accumulated amortization | 2,256 | 1,943 | |
Unfavorable leases, gross | 18,423 | 18,164 | |
Unfavorable leases, accumulated amortization | 6,075 | 5,053 | |
Favorable and Unfavorable Leases [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 830 | $ 892 | $ 869 |
Expected Amortization, next fiscal year | 760 | ||
Expected Amortization, year two | 690 | ||
Expected Amortization, year three | 628 | ||
Expected Amortization, year four | 642 | ||
Expected Amortization, year five | $ 662 |
Impairment Of Long-Lived Assets And Other Lease Charges (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Apr. 01, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Oct. 01, 2017
USD ($)
|
Jul. 02, 2017
USD ($)
|
Apr. 02, 2017
USD ($)
|
Dec. 30, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
|
|
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||||
Impairment and other lease charges | $ 300 | $ 200 | $ 2,900 | $ 300 | $ 800 | $ 1,000 | $ 400 | $ 500 | $ 3,685 | $ 2,827 | $ 2,355 |
Impairment charges | 2,700 | 1,700 | 1,000 | ||||||||
Sale Leaseback Transaction Current Period Loss Recognized | $ 800 | $ 100 | $ 1,200 | ||||||||
Sale Leaseback Losses, number of restaurants | 4 | 1 | 7 | ||||||||
Other lease charges | $ 900 | ||||||||||
Asset impairment charges, number of restaurants | 6 | 5 | 4 | ||||||||
Previously Impaired [Member] | |||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||||
Impairment charges | $ 400 | $ 700 | $ 900 | ||||||||
Initial Impairments [Member] | |||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||||
Impairment charges | $ 400 | $ 1,100 | $ 200 |
Impairment Of Long-Lived Assets And Other Lease Charges Closed Restaurant Reserve Activity (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of year | $ 2,028 | $ 1,513 |
Payments, net | (889) | (862) |
Other adjustments | 111 | 122 |
Balance, end of year | 1,352 | 2,028 |
Provisions for closures [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Provisions for restaurant closures | 249 | 1,174 |
Changes in estimates of accrued costs | 249 | 1,174 |
Changes in estimates [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Provisions for restaurant closures | (147) | 81 |
Changes in estimates of accrued costs | $ (147) | $ 81 |
Other Liabilities, Long-Term (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Liabilities, Noncurrent [Abstract] | ||
Deferred rent | $ 16,610 | $ 14,040 |
Accrued Occupancy Costs | 3,074 | 3,189 |
Accrued workers' compensation and general liability claims | 4,398 | 3,353 |
Deferred compensation | 3,610 | 3,053 |
Other Accrued Liabilities, Noncurrent | 120 | 175 |
Other Liabilities, Noncurrent | $ 27,812 | $ 23,810 |
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Leases [Abstract] | |||
Sale leaseback transactions, number | 5 | 3 | 38 |
Proceeds from sale-leaseback transactions | $ 8,424 | $ 4,257 | $ 53,599 |
Operating leases, term | 20 years | ||
Sale leaseback transaction, deferred gains | $ 206 | 716 | 1,480 |
Amortization of deferred gains from sale leaseback transactions | $ 1,584 | $ 1,626 | $ 1,788 |
Leases Minimum Rent Disclosures (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Leases [Abstract] | ||
Capital lease payments due in twelve months | $ 2,180 | |
Capital lease payments due in two years | 1,454 | |
Capital lease payments due in three years | 345 | |
Capital lease payments due in four years | 190 | |
Capital lease payments due in five years | 68 | |
Capital lease payments due thereafter | 129 | |
Capital leases, future minimum payments due | 4,366 | |
Less amount representing interest | (425) | |
Total obligations under capital leases | 3,941 | $ 5,681 |
Less current portion | (1,948) | |
Long-term obligations under capital leases | 1,993 | |
Operating lease payments due in next twelve months | 73,304 | |
Operating lease payments due in two years | 71,764 | |
Operating lease payments due in three years | 70,607 | |
Operating lease payments due in four years | 70,160 | |
Operating lease payments due in five years | 69,221 | |
Operating lease payments due thereafter | 640,793 | |
Operating leases, future minimum payments due | $ 995,849 |
Leases Rent Expense Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Operating Leased Assets [Line Items] | |||
Minimum rent on real property | $ 72,206 | $ 68,329 | $ 59,076 |
Contingent rent on real property | 9,203 | 7,619 | 5,738 |
Restaurant rent expense | 81,409 | 75,948 | 64,814 |
Administrative and equipment rent | 81,682 | 76,276 | 65,081 |
Rent expense on operating leases | 81,682 | 76,276 | 65,081 |
General and Administrative Expense [Member] | |||
Operating Leased Assets [Line Items] | |||
Administrative and equipment rent | 273 | 328 | 267 |
Rent expense on operating leases | $ 273 | $ 328 | $ 267 |
Long-Term Debt Long Term Debt (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jun. 23, 2017 |
---|---|---|---|
Long-term Debt, Unclassified [Abstract] | |||
Carrols Restaurant Group Senior Secured Second Lien Notes | $ 275,000 | $ 275,000 | |
Capital leases | 3,941 | 5,681 | |
Long-term Debt | 278,941 | 280,681 | |
Less: current portion | (1,948) | (1,808) | |
Less: deferred financing costs | 3,673 | 4,770 | $ 1,800 |
Add: bond premium | 3,503 | 4,416 | |
Long-term debt, net of current portion and deferred financing costs | $ 276,823 | $ 278,519 |
Long-Term Debt Senior Secured Second Lien Notes (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 23, 2017 |
Sep. 30, 2018 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
Apr. 29, 2015 |
|
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of senior secured second lien notes | $ 0 | $ 79,875,000 | $ 0 | |||
Interest Rate | 8.00% | |||||
Proceeds from Issuance of Debt | $ 35,500,000 | $ 75,000,000 | ||||
Repayments of Debt | 42,600,000 | |||||
Debt Issuance Costs, Net | $ 1,800,000 | $ 3,673,000 | $ 4,770,000 | |||
Collateral exclusion for material subsidiaries, percentage of Senior Notes | 20.00% | |||||
Senior Notes, Cross Default Provision, Minimum Debt Principal Amount | $ 20,000,000 | |||||
Debt Instrument, Redemption, Period Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes, Redemption Price | 1.04 | |||||
Debt Instrument, Redemption, Period Three [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes, Redemption Price | 1.02 | |||||
Debt Instrument, Redemption, Period Four [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes, Redemption Price | $ 1.00 |
Long-Term Debt Long-Term Debt Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
Apr. 29, 2015 |
|
Debt Disclosure [Abstract] | ||||
Senior Notes | $ 275,000 | $ 275,000 | ||
Interest Rate | 8.00% | |||
Debt, Weighted Average Interest Rate | 7.90% | 7.70% | 7.90% | |
Interest Expense, Debt | $ 23,532 | $ 21,589 | $ 18,208 |
Long-Term Debt Future Maturities (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
Next Twelve Months | $ 1,948 | |
Year Two | 1,357 | |
Year Three | 301 | |
Year Four | 275,169 | |
Year Five | 56 | |
Thereafter | 110 | |
Long-term Debt | $ 278,941 | $ 280,681 |
Other Income (Expense) (Details) $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
restaurant
|
Sep. 30, 2018 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Oct. 01, 2017 |
Jul. 02, 2017 |
Apr. 02, 2017 |
|
Other Income and Expenses [Abstract] | |||||||||
Other Operating Income (Expense), Net | $ 424 | $ 333 | $ (338) | ||||||
Insured Event, Gain (Loss) | $ 1,200 | ||||||||
Properties damaged in fire | restaurant | 2 | ||||||||
Gain (Loss) on Condemnation | $ 500 | ||||||||
Number of Restaurants | 849 | 807 | 838 | 807 | 807 | 798 | 799 | 788 | |
Litigation Settlement, Expense | $ 1,850 |
Income Taxes Schedule of Components of income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 01, 2017 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Federal | $ 0 | $ 0 | $ 0 | |
State | 326 | 30 | 0 | |
Current Income Tax Expense (Benefit) | 326 | 30 | 0 | |
Federal | (598) | (219) | 1,297 | |
State | 115 | 793 | 992 | |
Deferred | (483) | 574 | 2,289 | |
Income tax expense, valuation allowance | $ (30,400) | 0 | 0 | (30,374) |
Provision (benefit) for income taxes | $ (157) | $ 604 | $ (28,085) |
Income Taxes Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 01, 2017 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Federal operating loss carryforwards | $ 89,600 | |||
Income tax expense, valuation allowance | $ (30,400) | 0 | $ 0 | $ (30,374) |
Unrecognized Tax Benefits | 0 | 0 | ||
Change in valuation allowance | $ 30,400 | 0 | 0 | 30,374 |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 0 | 0 | ||
Discrete tax benefit | 800 | |||
Miscellaneous | $ 73 | $ (312) | $ 244 |
Income Taxes Effective Rate Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 01, 2017 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Statutory federal income tax provision (benefit) | $ 2,089 | $ 2,717 | $ 6,085 | |
State income taxes (benefit), net of federal provision (benefit) | 325 | 572 | 403 | |
Change in valuation allowance | $ (30,400) | 0 | 0 | (30,374) |
Employment tax credits | (3,059) | (1,947) | (5,408) | |
Non-deductible expenses | 415 | 336 | 965 | |
Federal rate change | 0 | (762) | 0 | |
Miscellaneous | 73 | (312) | 244 | |
Provision (benefit) for income taxes | $ (157) | $ 604 | $ (28,085) |
Stock-based Compensation Summary of Non-Vested Stock Activity (Details) |
12 Months Ended |
---|---|
Dec. 30, 2018
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested shares at beginning of period | shares | 722,459 |
Nonvested shares, Weighted Average Grant Date Price at beginning of period | $ / shares | $ 12.76 |
Grants in Period | shares | 380,192 |
Grants in Period, Weighted Average Grant Date Price | $ / shares | $ 13.25 |
Vested | shares | (306,175) |
Vested, Weighted Average Grant Date Price | $ / shares | $ 12.43 |
Nonvested shares at end of period | shares | 796,476 |
Nonvested shares, Weighted Average Grant Date Price at end of period | $ / shares | $ 13.12 |
Stockholder's Equity Preferred Stock (Details) |
12 Months Ended | |
---|---|---|
Dec. 30, 2018
Rate
shares
|
Dec. 31, 2017
shares
|
|
Class of Stock [Line Items] | ||
Preferred Stock, Shares Issued | shares | 100 | 100 |
Convertible Preferred Stock, Common Shares Issuable upon Conversion | shares | 9,414,580 | |
Board of directors, number of members | 2 | |
Minimum [Member] | ||
Class of Stock [Line Items] | ||
Common Stock Ownership | Rate | 10.00% | |
Board of directors, number of members | 1 | |
Maximum [Member] | ||
Class of Stock [Line Items] | ||
Common Stock Ownership | Rate | 14.50% | |
Board of directors, number of members | 2 |
Net Income (Loss) Per Share Earnings Per Share Table (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018 |
Sep. 30, 2018 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Dec. 31, 2017 |
Oct. 01, 2017 |
Jul. 02, 2017 |
Apr. 02, 2017 |
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Earnings Per Share, Basic | $ 0.22 | $ 0.16 | $ 1.01 | ||||||||
Net income (loss) | $ 1,807 | $ 3,611 | $ 7,788 | $ (3,102) | $ 3,921 | $ 2,795 | $ 6,039 | $ (5,596) | $ 10,104 | $ 7,159 | $ 45,472 |
Net income available to common stockholders | $ 7,855 | $ 5,562 | $ 35,395 | ||||||||
Basic weighted average common shares outstanding | 35,715,372 | 35,416,531 | 35,178,329 | ||||||||
Basic and diluted net income (loss) per share | $ 0.04 | $ 0.08 | $ 0.17 | $ (0.09) | $ 0.09 | $ 0.06 | $ 0.13 | $ (0.16) | |||
Net income (loss) | $ 1,807 | $ 3,611 | $ 7,788 | $ (3,102) | $ 3,921 | $ 2,795 | $ 6,039 | $ (5,596) | $ 10,104 | $ 7,159 | $ 45,472 |
Basic weighted average common shares outstanding | 35,715,372 | 35,416,531 | 35,178,329 | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 9,604,599 | 9,559,983 | 9,673,016 | ||||||||
Diluted weighted average common shares outstanding | 45,319,971 | 44,976,514 | 44,851,345 | ||||||||
Basic and diluted net income (loss) per share | $ 0.04 | $ 0.08 | $ 0.17 | $ (0.09) | $ 0.09 | $ 0.06 | $ 0.13 | $ (0.16) | |||
Earnings Per Share, Diluted | $ 0.22 | $ 0.16 | $ 1.01 | ||||||||
Restricted Stock [Member] | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Less: income attributable to participating securities | $ (178) | $ (118) | $ (616) | ||||||||
Convertible Preferred Stock | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Less: income attributable to participating securities | $ (2,071) | $ (1,479) | $ (9,461) |
Commitments And Contingencies Lease Guarantees (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 30, 2018
USD ($)
| |
Guarantor Obligations [Line Items] | |
Maximum potential undiscounted rental payments | $ 16.3 |
Loss Contingency Accrual, Payments | $ 0.0 |
Property Lease Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Property Leases | 27 |
Closed Restaurants [Member] | |
Guarantor Obligations [Line Items] | |
Property Leases | 1 |
Performance Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Property Leases | 5 |
Commitments And Contingencies Litigation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jul. 29, 2016 |
Jan. 01, 2017 |
|
Loss Contingencies [Line Items] | ||
Litigation Settlement, Amount (Deprecated 2017-01-31) | $ 2,000 | |
Litigation Settlement, Expense | $ 1,850 | |
Other Operating Income (Expense) [Member] | ||
Loss Contingencies [Line Items] | ||
Litigation Settlement, Amount (Deprecated 2017-01-31) | $ 1,900 |
Retirement Plans (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018
USD ($)
Rate
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
|
|
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Employer Matching Contribution, Percent | Rate | 50.00% | ||
Defined Contribution Plan, Requisite Service Period, Hours of Service | 1,000 | ||
Defined Contribution Plan, Cost | $ 676 | $ 615 | $ 496 |
Deferred Compensation Arrangements, Interest Rate | Rate | 8.00% | ||
Deferred Compensation Arrangement with Individual, Contributions by Employer | $ 0 | ||
Deferred compensation | $ 3,610 | $ 3,053 | |
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Vesting Period of Company Contributions | 1 year | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Vesting Period of Company Contributions | 5 years |
Postretirement Benefits Schedule of Net Funded Status and APBO (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Defined Benefit Plan [Abstract] | |||
Benefit obligation at beginning of year | $ 4,838 | $ 4,566 | |
Service cost | 196 | 192 | $ 150 |
Interest cost | 178 | 191 | 165 |
Plan participants' contributions | 97 | 88 | |
Plan participants' contributions | 97 | 88 | |
Actuarial loss (gain) | (894) | (122) | |
Benefits paid | (99) | (115) | |
Benefits paid | (99) | (115) | |
Medicare part D prescription drug subsidy | 4 | 38 | |
Benefit obligation at end of year | 4,320 | 4,838 | 4,566 |
Fair value of plan assets at beginning of year | 0 | 0 | |
Employer contributions | (2) | (11) | |
Funded status | (4,320) | (4,838) | |
Fair value of plan assets at end of year | $ 0 | $ 0 | $ 0 |
Discount rate used to determine benefit obligations | 4.17% | 3.60% | |
Discount rate used to determine net periodic benefit cost | 3.60% | 4.11% | |
Defined Benefit Plan, Plan Assets, Prescription Drug Subsidy Receipt | $ 4 | $ 38 |
Postretirement Benefits Components of Net Periodic Postretirement Benefit Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Retirement Benefits [Abstract] | |||
Service cost | $ 196 | $ 192 | $ 150 |
Interest cost | 178 | 191 | 165 |
Amortization of net loss | (208) | (222) | (197) |
Amortization of prior service credit | (352) | (355) | (355) |
Net periodic postretirement benefit income | $ 230 | $ 250 | $ 157 |
Postretirement Benefits Amounts Recognized in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Prior service cost | $ 1,265 | $ 1,617 |
Net gain | (1,826) | (2,928) |
Deferred Tax Assets, Other Comprehensive Loss | 140 | 326 |
Accumulated other comprehensive income | (646) | (1,210) |
Accumulated Defined Benefit Plans Adjustment, Net Unamortized Gain (Loss) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Expected Amortization, Next Fiscal Year | 113 | |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Cost (Credit) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Expected Amortization, Next Fiscal Year | (350) | |
Other Comprehensive Income (Loss) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Deferred Tax Assets, Other Comprehensive Loss | $ (85) | $ 101 |
Postretirement Benefits Change in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Retirement Benefits [Abstract] | |||
Net actuarial (gain) loss | $ (894) | $ (122) | |
Amortization of net loss | (208) | (222) | |
Amortization of prior service credit | 352 | 355 | |
Deferred income taxes | (186) | 4 | |
Total recognized in accumulated other comprehensive income | $ (564) | $ 7 | $ 868 |
Postretirement Benefits Assumed Health Care Trend Rates (Details) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 30, 2018
Rate
|
Dec. 31, 2017
Rate
|
Jan. 01, 2017
Rate
|
Jan. 03, 2016
Rate
|
|
Retirement Benefits [Abstract] | ||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year, pre-65 | 7.00% | 7.25% | 7.50% | |
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year, post-65 | 5.00% | 6.25% | 6.50% | |
Prescription drug benefit cost trend rate assumed for the following year | 9.50% | 10.50% | 10.50% | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 3.78% | 3.89% | 3.89% | |
Year that the rate reaches the ultimate trend rate | 2075 | 2075 | 2075 |
Postretirement Benefits Expected Future Benefit Payments (Details) $ in Thousands |
Dec. 30, 2018
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year | $ 149 |
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months | 149 |
Defined Benefit Plan, Expected Future Benefit Payment, Year Two | 169 |
Defined Benefit Plan, Expected Future Benefit Payment, Year Three | 170 |
Defined Benefit Plan, Expected Future Benefit Payment, Year Four | 191 |
Defined Benefit Plan, Expected Future Benefit Payments, Rolling Year Five | 185 |
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter | $ 1,178 |
Postretirement Benefits Postretirement Benefits (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 30, 2018
USD ($)
| |
Retirement Benefits [Abstract] | |
Defined Benefit Plan, Effect of One Percentage Point Increase on Service and Interest Cost Components | $ 103 |
Defined Benefit Plan, Effect of One Percentage Point Decrease on Service and Interest Cost Components | 75 |
Defined Benefit Plan, Effect of One Percentage Point Increase on Accumulated Postretirement Benefit Obligation | 846 |
Defined Benefit Plan, Effect of One Percentage Point Decrease on Accumulated Postretirement Benefit Obligation | $ 649 |
Selected Quarterly Financial and Earnings Data (Unaudited) Quarterly Table (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018
USD ($)
$ / shares
|
Sep. 30, 2018
USD ($)
$ / shares
|
Jul. 01, 2018
USD ($)
$ / shares
|
Apr. 01, 2018
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
$ / shares
|
Oct. 01, 2017
USD ($)
$ / shares
|
Jul. 02, 2017
USD ($)
$ / shares
|
Apr. 02, 2017
USD ($)
$ / shares
|
Dec. 30, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
|
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Restaurant sales | $ 307,754 | $ 296,917 | $ 303,050 | $ 271,586 | $ 283,967 | $ 285,235 | $ 279,478 | $ 239,852 | $ 1,179,307 | $ 1,088,532 | $ 943,583 |
Operating income (loss) | 7,190 | 9,668 | 13,833 | 2,664 | 9,860 | 8,684 | 12,335 | (1,406) | 33,355 | 29,473 | 35,702 |
Net income (loss) | $ 1,807 | $ 3,611 | $ 7,788 | $ (3,102) | $ 3,921 | $ 2,795 | $ 6,039 | $ (5,596) | $ 10,104 | $ 7,159 | $ 45,472 |
Basic and diluted net income (loss) per share | $ / shares | $ 0.04 | $ 0.08 | $ 0.17 | $ (0.09) | $ 0.09 | $ 0.06 | $ 0.13 | $ (0.16) | |||
Restaurants at end of period | 849 | 838 | 807 | 807 | 807 | 798 | 799 | 788 | 849 | 807 |
Selected Quarterly Financial and Earnings Data (Unaudited) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Apr. 01, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Oct. 01, 2017
USD ($)
|
Jul. 02, 2017
USD ($)
|
Apr. 02, 2017
USD ($)
|
Dec. 30, 2018
USD ($)
restaurant
|
Dec. 31, 2017
USD ($)
|
Jan. 01, 2017
USD ($)
|
Dec. 30, 2012 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Restaurants Acquired | 10 | 1 | 17 | 44 | 4 | 278 | ||||||
Acquisition-related costs | $ 400 | $ 800 | $ 100 | $ 100 | $ 100 | $ 500 | $ 500 | $ 700 | ||||
Impairment and other lease charges | $ 300 | $ 200 | $ 2,900 | $ 300 | $ 800 | $ 1,000 | $ 400 | $ 500 | $ 3,685 | $ 2,827 | $ 2,355 | |
Number of Restaurants | 849 | 838 | 807 | 807 | 807 | 798 | 799 | 788 | 849 | 807 | ||
Litigation Settlement, Expense | $ 1,850 |
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2018 |
Dec. 31, 2017 |
Jan. 01, 2017 |
|
Valuation and Qualifying Accounts [Abstract] | |||
Deferred Tax Assets, Valuation Allowance Beginning of Year | $ 0 | $ 0 | $ 30,374 |
Valuation Allowances and Reserves, Charged to Cost and Expense | 0 | 0 | 0 |
Valuation Allowances and Reserves, Charged to Other Accounts | 0 | 0 | 0 |
Valuation Allowances and Reserves, Deductions | 0 | 0 | |
Deferred Tax Assets, Valuation Allowance, End of Year | $ 0 | $ 0 | $ 0 |
<;REY'=S%/7:SWWOB$_H0L0S';[B*:'$]Z;LO^,K)E*N2&2, M R5[W#A0O:3EXD2HO>QG?3Z?
*A@?*!Z(8D=I+$-DEBD(R29!%$?L#Z9] \(+PA2IQ$B4V4&D2)%2BT
M8.YK;CA2)T=J &Y&U[.NE*>J^M[=_+Z[GXM.42SBMNU2Y.GG+:YC4729DHY_AZ3S:YM=X/CZ
M/?N7OOA4S%/>Q'55_'/8M?O[N9_/=O$Y?RW:K]7YMS@49.:SH?H_XELL$MXI
M26ULJZ+I_\ZVKTU;E4.6)*7,?UQ^#\?^]SSD?P_C ^00(*\!8#\-4$. ^AF@
M/PW00X!& =FEE+YO-GF;+Q=U=9[5E]=[RKM1!']/16RLNOZ>Z)48.D5/$E_
MM6S)\X3@DU##3([9V)?&B:#]U'.#N?%7_P!02P,$% @ P(MG3OL;/GR-
M! SQ0 !@ !X;"]W;W)KN4O7&(,"GG3%W!V-L24 6[J@KL62AKBP
M$PW(TE)=TQ_(7)J/&7 )!I< <$4-+@&DT8NP!HF<>2KY?J1+QQA8 H 5-;#$
M\B4&:]FJ0JF?4+9 )07G9A@&E0!0Z2WS6L#NGV
D@IKWTC^8X3M,]7RA9"K^)UQ 8GA0@CE*(UU<2=D[;]3$@E(4?QYWH>,^
MC#=I,L'6 -_6^U=N"E)%=^A'K_P59#0.O"\;,_FWG,9L/I8?E!9/W&U5]02P,$%
M @ P(MG3DV_?&FT 0 T@, !D !X;"]W;W)K C?HE*]_F](Z2"FHQ*/]DQL\PUW-+R5S\5[B"0GC(!&.41KFXDG)PWNA9
M!5/1XF7:91?W<;KAAYFV3> S@2^$NQB'38%BYA^%%T5FS4CLU/M>A"=.CQQ[
M4P9G;$6\P^0=>J\%O[_/V#4(S9C3A.$K3+H@&*HO(?A6B!/_C\ZWZ;O-#'>1
MOEO3DW<$]IL"^RBP7PL
MX6 @Q_DIP+B'NN/+'0SMP_!]P5M+J)M2G=74[\>\S]X ^KZ*K"4T (.RI+-,1\(C .Y)Y*$P\Q#Q2&/%.;_]H5M
M[\\/@-,/@/<9Q*"Y*9U!T!E$GT%>9HB=>I (!E,:K!-G"9'2C-T<9)7WF5@;WE\D_?P:=H?A6UDY\C9>'S9V/_:& \H97>%
M(]3B!UL,!;4/QX]XMM.8388W_?R#V/*-BU]02P,$% @ P(MG3AF\C:FW
M 0 T@, !D !X;"]W;W)KF][+5<+3$]4H)^^\ T@P9W=)7QV-;-SXX6)YVHH9?X']W1XL6FUG*5H%V
MK='$0I71F^W^D(3X&/"GA<$MSB14 F#@L#M"@^@5!#"-'[/FG0)&8CK\ZOZIU@[UG(1#AZ,
M^B4KW^;TCI(*:C$H_V3&SS#7?0E!MT(
,T65+AH.,DK[S+P-YG\4W^
MAD_3_HV;5FA+SNC\R\;^-X@.O)3DRH]0YS_88DAH7#A^\FIL!SA#C=I(5RD\'&$%GS EHPCM.! MS X#("$JU=8Y^)L,)'9ICYKSZVE
M.J1%9>3%Z/D\_YY69XO:^)3
\Y5L*5)U./!'GNWFZY%*M/YM!9'I^Z?N"IM'VQR'ZL'8M5>
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MHGQ9W%(<&PH206,+!4X$)=>[I99UD%[A%H%H8M'!L:$@-G1BHUMNL;)RED.HSO?N8W@@AN2+T[]3#
MLE-[Q%,CYQO9GL;JO.XW2GU#BFK8!'JGG>C\'U!+ P04 " # BV=.*<\K
MDD(" #6!@ &0 'AL+W=O
Z%
Y2
M\(K<(4$Q%L#L(C/E$A=N]<@L$ 8ZW)N0S_IOL4%R!9Y<8237**)YPXA>/^XS
MC'B!0G#M8A#
5VHW3.?ODI#S*BT%E[>BE8.*;U.EM
M[QX/OC@[*?U3;[CV@/X-OZO45XM/\_5%YSDICVE166^4\3.;/%8=*&6$Q^Y^
MX\DY\;M5V\C(@8G7F+^7]0VC;C!Z;BY/3GN#F_P%4$L#!!0 ( ,"+9T[6
M,OIH.0( %(' 9 >&PO=V]R:W-H965T