x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 74-1335253 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
13111 Northwest Freeway, Suite 600 Houston, Texas | 77040 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | Accelerated filer | x |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
Page | |
June 1, 2016 | August 26, 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,409 | $ | 1,501 | |||
Trade accounts and other receivables, net | 6,142 | 5,175 | |||||
Food and supply inventories | 4,495 | 4,483 | |||||
Prepaid expenses | 3,911 | 3,402 | |||||
Assets related to discontinued operations | 1 | 10 | |||||
Deferred income taxes | 581 | 577 | |||||
Total current assets | 16,539 | 15,148 | |||||
Property held for sale | 4,238 | 4,536 | |||||
Assets related to discontinued operations | 3,667 | 3,671 | |||||
Property and equipment, net | 196,008 | 200,202 | |||||
Intangible assets, net | 21,367 | 22,570 | |||||
Goodwill | 1,605 | 1,643 | |||||
Deferred income taxes | 14,896 | 12,917 | |||||
Other assets | 3,452 | 3,571 | |||||
Total assets | $ | 261,772 | $ | 264,258 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 19,677 | $ | 20,173 | |||
Liabilities related to discontinued operations | 411 | 408 | |||||
Accrued expenses and other liabilities | 24,704 | 23,967 | |||||
Total current liabilities | 44,792 | 44,548 | |||||
Credit facility debt | 36,000 | 37,500 | |||||
Liabilities related to discontinued operations | 17 | 182 | |||||
Other liabilities | 7,631 | 7,369 | |||||
Total liabilities | 88,440 | 89,599 | |||||
Commitments and Contingencies | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Common stock, $0.32 par value; 100,000,000 shares authorized; shares issued were 29,420,690 and 29,134,603, respectively; shares outstanding were 28,920,690 and 28,634,603, respectively | 9,414 | 9,323 | |||||
Paid-in capital | 30,133 | 29,006 | |||||
Retained earnings | 138,560 | 141,105 | |||||
Less cost of treasury stock, 500,000 shares | (4,775 | ) | (4,775 | ) | |||
Total shareholders’ equity | 173,332 | 174,659 | |||||
Total liabilities and shareholders’ equity | $ | 261,772 | $ | 264,258 |
Quarter Ended | Three Quarters Ended | ||||||||||||||
June 1, 2016 | May 6, 2015 | June 1, 2016 | May 6, 2015 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (36 weeks) | ||||||||||||
SALES: | |||||||||||||||
Restaurant sales | $ | 86,476 | $ | 88,788 | $ | 286,336 | $ | 254,832 | |||||||
Culinary contract services | 3,892 | 3,624 | 12,726 | 11,993 | |||||||||||
Franchise revenue | 1,586 | 1,578 | 5,411 | 4,764 | |||||||||||
Vending revenue | 143 | 112 | 437 | 355 | |||||||||||
TOTAL SALES | 92,097 | 94,102 | 304,910 | 271,944 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of food | 24,221 | 25,218 | 81,256 | 74,171 | |||||||||||
Payroll and related costs | 30,748 | 29,971 | 100,007 | 88,177 | |||||||||||
Other operating expenses | 13,572 | 14,276 | 45,728 | 42,688 | |||||||||||
Occupancy costs | 5,065 | 4,826 | 17,242 | 14,797 | |||||||||||
Opening costs | 117 | 427 | 688 | 2,022 | |||||||||||
Cost of culinary contract services | 3,534 | 3,232 | 11,476 | 10,809 | |||||||||||
Cost of franchise operations | 441 | 410 | 1,480 | 1,147 | |||||||||||
Depreciation and amortization | 5,304 | 4,759 | 17,538 | 14,608 | |||||||||||
Selling, general and administrative expenses | 9,227 | 8,139 | 32,312 | 26,671 | |||||||||||
Provision for asset impairments | 172 | — | 209 | 218 | |||||||||||
Net loss (gain) on disposition of property and equipment | 42 | (609 | ) | (793 | ) | (1,696 | ) | ||||||||
Total costs and expenses | 92,443 | 90,649 | 307,143 | 273,612 | |||||||||||
INCOME (LOSS) FROM OPERATIONS | (346 | ) | 3,453 | (2,233 | ) | (1,668 | ) | ||||||||
Interest income | — | 1 | 3 | 3 | |||||||||||
Interest expense | (482 | ) | (599 | ) | (1,674 | ) | (1,624 | ) | |||||||
Other income (expense), net | 88 | 24 | (2 | ) | 282 | ||||||||||
Income (loss) before income taxes and discontinued operations | (740 | ) | 2,879 | (3,906 | ) | (3,007 | ) | ||||||||
Provision (benefit) for income taxes | (593 | ) | 395 | (1,438 | ) | (1,326 | ) | ||||||||
Income (loss) from continuing operations | (147 | ) | 2,484 | (2,468 | ) | (1,681 | ) | ||||||||
Income (loss) from discontinued operations, net of income taxes | 13 | (131 | ) | (77 | ) | (344 | ) | ||||||||
NET INCOME (LOSS) | $ | (134 | ) | $ | 2,353 | $ | (2,545 | ) | $ | (2,025 | ) | ||||
Income (loss) per share from continuing operations: | |||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.09 | $ | (0.09 | ) | $ | (0.06 | ) | ||||
Assuming dilution | $ | (0.01 | ) | $ | 0.09 | $ | (0.09 | ) | $ | (0.06 | ) | ||||
Income (loss) per share from discontinued operations: | |||||||||||||||
Basic | $ | 0.00 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Assuming dilution | $ | 0.00 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.08 | $ | (0.09 | ) | $ | (0.07 | ) | ||||
Assuming dilution | $ | (0.01 | ) | $ | 0.08 | $ | (0.09 | ) | $ | (0.07 | ) | ||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 29,259 | 29,009 | 29,207 | 28,940 | |||||||||||
Assuming dilution | 29,259 | 29,111 | 29,207 | 28,940 |
Common Stock | Total | ||||||||||||||||||||||||
Issued | Treasury | Paid-In | Retained | Shareholders’ | |||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Equity | |||||||||||||||||||
Balance at August 26, 2015 | 29,135 | $ | 9,323 | (500 | ) | $ | (4,775 | ) | $ | 29,006 | $ | 141,105 | $ | 174,659 | |||||||||||
Net loss | — | — | — | — | — | (2,545 | ) | (2,545 | ) | ||||||||||||||||
Share-based compensation expense | 50 | 16 | — | — | 1,127 | — | 1,143 | ||||||||||||||||||
Common stock issued under employee benefit plans | 176 | 56 | — | — | 19 | — | 75 | ||||||||||||||||||
Common stock issued under nonemployee benefit plans | 60 | 19 | — | — | (19) | — | — | ||||||||||||||||||
Balance at June 1, 2016 | 29,421 | $ | 9,414 | (500 | ) | $ | (4,775 | ) | $ | 30,133 | $ | 138,560 | $ | 173,332 |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (2,545 | ) | $ | (2,025 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Net gain on disposition of property and equipment | (609 | ) | (1,386 | ) | |||
Depreciation and amortization | 17,555 | 14,624 | |||||
Amortization of debt issuance cost | 255 | 127 | |||||
Share-based compensation expense | 1,143 | 1,102 | |||||
Deferred tax benefit | (1,983 | ) | (1,978 | ) | |||
Cash provided by operating activities before changes in operating assets and liabilities | 13,816 | 10,464 | |||||
Changes in operating assets and liabilities: | |||||||
Increase in trade accounts and other receivables | (967 | ) | (108 | ) | |||
Decrease (Increase) in food and supply inventories | (516 | ) | 1,135 | ||||
Decrease (increase) in prepaid expenses and other assets | (614 | ) | 41 | ||||
Decrease in accounts payable, accrued expenses and other liabilities | (311 | ) | (7,371 | ) | |||
Net cash provided by operating activities | 11,408 | 4,161 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds from disposal of assets and property held for sale | 4,308 | 5,142 | |||||
Decrease in notes receivable | 17 | 50 | |||||
Purchases of property and equipment | (14,358 | ) | (16,429 | ) | |||
Net cash used in investing activities | (10,033 | ) | (11,237 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Credit facility borrowings | 77,900 | 80,100 | |||||
Credit facility repayments | (79,400 | ) | (74,100 | ) | |||
Debt issuance costs | (42 | ) | (253 | ) | |||
Proceeds received on the exercise of employee stock options | 75 | 115 | |||||
Net cash provided by (used in) financing activities | (1,467 | ) | 5,862 | ||||
Net decrease in cash and cash equivalents | (92 | ) | (1,214 | ) | |||
Cash and cash equivalents at beginning of period | 1,501 | 2,788 | |||||
Cash and cash equivalents at end of period | $ | 1,409 | $ | 1,574 | |||
Cash paid for: | |||||||
Income taxes | $ | — | $ | — | |||
Interest | 1,368 | 1,505 |
Quarter Ended | Three Quarters Ended | ||||||||||||||
June 1, 2016 | May 6, 2015 | June 1, 2016 | May 6, 2015 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (36 weeks) | ||||||||||||
(In thousands) | |||||||||||||||
Sales: | |||||||||||||||
Company-owned restaurants (1) | $ | 86,619 | $ | 88,900 | $ | 286,773 | $ | 255,187 | |||||||
Culinary contract services | 3,892 | 3,624 | 12,726 | 11,993 | |||||||||||
Franchise operations | 1,586 | 1,578 | 5,411 | 4,764 | |||||||||||
Total | $ | 92,097 | $ | 94,102 | $ | 304,910 | $ | 271,944 | |||||||
Segment level profit: | |||||||||||||||
Company-owned restaurants | $ | 13,013 | $ | 14,609 | $ | 42,540 | $ | 35,354 | |||||||
Culinary contract services | 358 | 392 | 1,250 | 1,184 | |||||||||||
Franchise operations | 1,145 | 1,168 | 3,931 | 3,617 | |||||||||||
Total | $ | 14,516 | $ | 16,169 | $ | 47,721 | $ | 40,155 | |||||||
Depreciation and amortization: | |||||||||||||||
Company-owned restaurants | $ | 4,386 | $ | 4,047 | $ | 14,512 | $ | 12,538 | |||||||
Culinary contract services | 19 | 28 | 83 | 127 | |||||||||||
Franchise operations | 192 | 177 | 641 | 531 | |||||||||||
Corporate | 707 | 507 | 2,302 | 1,412 | |||||||||||
Total | $ | 5,304 | $ | 4,759 | $ | 17,538 | $ | 14,608 | |||||||
Capital expenditures: | |||||||||||||||
Company-owned restaurants | $ | 3,217 | $ | 5,023 | $ | 13,839 | $ | 15,368 | |||||||
Culinary contract services | — | — | — | — | |||||||||||
Franchise operations | — | — | — | — | |||||||||||
Corporate | 171 | 418 | 519 | 1,061 | |||||||||||
Total | $ | 3,388 | $ | 5,441 | $ | 14,358 | $ | 16,429 | |||||||
Loss before income taxes and discontinued operations: | |||||||||||||||
Segment level profit | $ | 14,516 | $ | 16,169 | $ | 47,721 | $ | 40,155 | |||||||
Opening costs | (117 | ) | (427 | ) | (688 | ) | (2,022 | ) | |||||||
Depreciation and amortization | (5,304 | ) | (4,759 | ) | (17,538 | ) | (14,608 | ) | |||||||
Selling, general and administrative expenses | (9,227 | ) | (8,139 | ) | (32,312 | ) | (26,671 | ) | |||||||
Provision for asset impairments | (172 | ) | — | (209 | ) | (218 | ) | ||||||||
Net loss (gain) on disposition of property and equipment | (42 | ) | 609 | 793 | 1,696 | ||||||||||
Interest income | — | 1 | 3 | 3 | |||||||||||
Interest expense | (482 | ) | (599 | ) | (1,674 | ) | (1,624 | ) | |||||||
Other income (expense), net | 88 | 24 | (2 | ) | 282 | ||||||||||
Income (loss) before income taxes and discontinued operations | $ | (740 | ) | $ | 2,879 | $ | (3,906 | ) | $ | (3,007 | ) |
June 1, 2016 | August 26, 2015 | ||||||
Total assets: | |||||||
Company-owned restaurants(2) | $ | 213,995 | $ | 218,492 | |||
Culinary contract services | 3,560 | 1,644 | |||||
Franchise operations(3) | 12,538 | 13,034 | |||||
Corporate | 31,679 | 31,088 | |||||
Total | $ | 261,772 | $ | 264,258 |
(1) | Includes vending revenue of $143 and $112 thousand for the quarters ended June 1, 2016 and May 6, 2015, respectively, and $437 and $355 thousand for the three quarters ended June 1, 2016 and May 6, 2015, respectively. |
(2) | Company-owned restaurants segment includes $10.0 million of Fuddruckers trade name, Cheeseburger in Paradise liquor licenses, and Jimmy Buffett intangibles. |
(3) | Franchise operations segment includes approximately $11.7 million in royalty intangibles. |
• | Level 1: Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
• | Level 2: Defined as pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. |
• | Level 3: Defined as pricing inputs that are unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
Fair Value Measurement Using | |||||||||||||||||||
Three Quarters Ended June 1, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Impairments | |||||||||||||||
Nonrecurring Fair Value Measurements | (In thousands) | ||||||||||||||||||
Continuing Operations | |||||||||||||||||||
Property and equipment related to company-owned restaurants | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Goodwill (1) | 1,605 | — | — | 1,605 | (38 | ) | |||||||||||||
Total Nonrecurring Fair Value Measurements | $ | 1,605 | $ | — | $ | — | $ | 1,605 | $ | (38 | ) | ||||||||
Discontinued Operations | |||||||||||||||||||
Property and equipment related to company-owned restaurants | $ | — | $ | — | $ | — | $ | — | $ | — |
Fair Value Measurement Using | |||||||||||||||||||
Three Quarters Ended May 6, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Impairments | |||||||||||||||
Nonrecurring Fair Value Measurements | (In thousands) | ||||||||||||||||||
Continuing Operations | |||||||||||||||||||
Property and equipment related to company-owned restaurants (1) | $ | 1,323 | $ | — | $ | — | $ | 1,323 | $ | (180 | ) | ||||||||
Goodwill (2) | 1,643 | — | — | 1,643 | (38 | ) | |||||||||||||
Total Nonrecurring Fair Value Measurements | $ | 2,966 | $ | — | $ | — | $ | 2,966 | $ | (218 | ) | ||||||||
Discontinued Operations | |||||||||||||||||||
Property and equipment related to company-owned restaurants | $ | — | $ | — | $ | — | $ | — | $ | — |
June 1, 2016 | August 26, 2015 | Estimated Useful Lives (years) | |||||||||||
(In thousands) | |||||||||||||
Land | $ | 62,498 | $ | 63,298 | — | ||||||||
Restaurant equipment and furnishings | 74,876 | 85,679 | 3 | to | 15 | ||||||||
Buildings | 157,122 | 159,391 | 20 | to | 33 | ||||||||
Leasehold and leasehold improvements | 25,679 | 29,229 | Lesser of lease term or estimated useful life | ||||||||||
Office furniture and equipment | 3,281 | 3,559 | 3 | to | 10 | ||||||||
Construction in progress | 145 | 810 | — | ||||||||||
323,601 | 341,966 | ||||||||||||
Less accumulated depreciation and amortization | (127,593 | ) | (141,764 | ) | |||||||||
Property and equipment, net | $ | 196,008 | $ | 200,202 | |||||||||
Intangible assets, net | $ | 21,367 | $ | 22,570 | 15 | to | 21 | ||||||
Goodwill | $ | 1,605 | $ | 1,643 | — |
June 1, 2016 | August 26, 2015 | ||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Intangible Assets Subject to Amortization: | |||||||||||||||||||||||
Fuddruckers trade name and franchise agreements | $ | 29,607 | $ | (8,333 | ) | $ | 21,274 | $ | 29,607 | $ | (7,166 | ) | $ | 22,441 | |||||||||
Cheeseburger in Paradise trade name and license agreements | $ | 421 | $ | (328 | ) | $ | 93 | $ | 421 | $ | (292 | ) | $ | 129 | |||||||||
Intangible assets, net | $ | 30,028 | $ | (8,661 | ) | $ | 21,367 | $ | 30,028 | $ | (7,458 | ) | $ | 22,570 |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
(In thousands, except per share data) | |||||||
Provision for asset impairments | $ | 209 | $ | 218 | |||
Net loss (gain) on disposition of property and equipment | (793 | ) | (1,696 | ) | |||
$ | (584 | ) | $ | (1,478 | ) | ||
Effect on EPS: | |||||||
Basic | $ | 0.02 | $ | 0.05 | |||
Assuming dilution | $ | 0.02 | $ | 0.05 |
June 1, 2016 | August 26, 2015 | ||||||
(In thousands) | |||||||
Prepaid expenses | 1 | 10 | |||||
Assets related to discontinued operations—current | $ | 1 | $ | 10 | |||
Property and equipment | 1,872 | 1,872 | |||||
Other assets | 1,795 | 1,799 | |||||
Assets related to discontinued operations—non-current | $ | 3,667 | $ | 3,671 | |||
Deferred income taxes | $ | 343 | $ | 343 | |||
Accrued expenses and other liabilities | 68 | 65 | |||||
Liabilities related to discontinued operations—current | $ | 411 | $ | 408 | |||
Other liabilities | $ | 17 | $ | 182 | |||
Liabilities related to discontinued operations—non-current | $ | 17 | $ | 182 |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
(In thousands, except discontinued locations) | |||||||
Sales | $ | — | $ | — | |||
Pretax loss | (131 | ) | (642 | ) | |||
Income tax benefit from discontinued operations | 54 | 298 | |||||
Income (loss) from discontinued operations, net of income taxes | $ | (77 | ) | $ | (344 | ) | |
Discontinued locations closed during the period | — | — |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
(In thousands, except per share data) | |||||||
Discontinued operating loss | $ | (156 | ) | $ | (550 | ) | |
Impairments | — | (90 | ) | ||||
Net gains (losses) | 25 | (2 | ) | ||||
Pretax loss | $ | (131 | ) | $ | (642 | ) | |
Income tax benefit from discontinued operations | 54 | 298 | |||||
Income (loss) from discontinued operations, net of income taxes | $ | (77 | ) | $ | (344 | ) | |
Effect on EPS from discontinued operations—basic | $ | (0.00 | ) | $ | (0.01 | ) |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
(In thousands, except percentages) | |||||||
AFFILIATED COSTS INCURRED: | |||||||
General and administrative expenses—professional and other costs | $ | — | $ | — | |||
Capital expenditures | — | — | |||||
Other operating expenses, occupancy costs and opening costs, including property leases | 434 | 385 | |||||
Total | $ | 434 | $ | 385 | |||
RELATIVE TOTAL COMPANY COSTS: | |||||||
Selling, general and administrative expenses | $ | 32,312 | $ | 26,671 | |||
Capital expenditures | 14,358 | 16,429 | |||||
Other operating expenses, occupancy costs and opening costs | 63,658 | 59,507 | |||||
Total | $ | 110,328 | $ | 102,607 | |||
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS | 0.39 | % | 0.38 | % |
Shares Under Fixed Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
(Per share) | (In years) | (In thousands) | |||||||||||
Outstanding at August 26, 2015 | 1,288,099 | $ | 4.76 | 6.5 | $ | 460 | |||||||
Granted | 279,944 | 4.89 | — | — | |||||||||
Exercised | (21,249 | ) | 3.51 | — | — | ||||||||
Cancelled | (312,663 | ) | 4.98 | — | — | ||||||||
Forfeited/Expired | (25,541 | ) | 4.34 | — | — | ||||||||
Outstanding at June 1, 2016 | 1,208,590 | $ | 4.76 | 6.8 | $ | 421 | |||||||
Exercisable at June 1, 2016 | 661,099 | $ | 4.76 | 5.2 | $ | 333 |
Restricted Stock Units | Weighted Average Fair Value | Weighted- Average Remaining Contractual Term | |||||||
(Per share) | (In years) | ||||||||
Unvested at August 26, 2015 | 409,417 | $ | 5.98 | 1.6 | |||||
Granted | 172,212 | 4.87 | — | ||||||
Vested | (257,482 | ) | 6.19 | — | |||||
Forfeited | (4,202 | ) | 5.95 | — | |||||
Unvested at June 1, 2016 | 319,945 | $ | 5.22 | 2.1 |
Quarter Ended | Three Quarters Ended | ||||||||||||||
June 1, 2016 | May 6, 2015 | June 1, 2016 | May 6, 2015 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (36 weeks) | ||||||||||||
(In thousands, expect per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Income (loss) from continuing operations | $ | (147 | ) | $ | 2,484 | $ | (2,468 | ) | $ | (1,681 | ) | ||||
Income (loss) from discontinued operations, net of income taxes | 13 | (131 | ) | (77 | ) | (344 | ) | ||||||||
NET INCOME (LOSS) | $ | (134 | ) | $ | 2,353 | $ | (2,545 | ) | $ | (2,025 | ) | ||||
Denominator: | |||||||||||||||
Denominator for basic earnings per share—weighted-average shares | 29,259 | 29,009 | 29,207 | 28,940 | |||||||||||
Effect of potentially dilutive securities: | |||||||||||||||
Employee and non-employee stock options | — | 102 | — | — | |||||||||||
Denominator for earnings per share assuming dilution | 29,259 | 29,111 | 29,207 | 28,940 | |||||||||||
Income (loss) per share from continuing operations: | |||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.09 | $ | (0.09 | ) | $ | (0.06 | ) | ||||
Assuming dilution | $ | (0.01 | ) | $ | 0.09 | $ | (0.09 | ) | $ | (0.06 | ) | ||||
Income (loss) per share from discontinued operations: | |||||||||||||||
Basic | $ | 0.00 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Assuming dilution | $ | 0.00 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.08 | $ | (0.09 | ) | $ | (0.07 | ) | ||||
Assuming dilution | $ | (0.01 | ) | $ | 0.08 | $ | (0.09 | ) | $ | (0.07 | ) |
Quarter Ended | Three Quarters Ended | ||||||||||
June 1, 2016 | May 6, 2015 | June 1, 2016 | May 6, 2015 | ||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (36 weeks) | ||||||||
Restaurant sales | 93.9 | % | 94.4 | % | 93.9 | % | 93.7 | % | |||
Culinary contract services | 4.2 | % | 3.9 | % | 4.2 | % | 4.4 | % | |||
Franchise revenue | 1.7 | % | 1.7 | % | 1.8 | % | 1.8 | % | |||
Vending revenue | 0.2 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||
TOTAL SALES | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
STORE COSTS AND EXPENSES: | |||||||||||
(As a percentage of restaurant sales) | |||||||||||
Cost of food | 28.0 | % | 28.4 | % | 28.4 | % | 29.1 | % | |||
Payroll and related costs | 35.6 | % | 33.8 | % | 34.9 | % | 34.6 | % | |||
Other operating expenses | 15.7 | % | 16.1 | % | 16.0 | % | 16.8 | % | |||
Occupancy costs | 5.9 | % | 5.4 | % | 6.0 | % | 5.8 | % | |||
Vending revenue | (0.2 | )% | (0.1 | )% | (0.2 | )% | (0.1 | )% | |||
Store level profit | 15.0 | % | 16.4 | % | 14.9 | % | 13.9 | % | |||
COMPANY COSTS AND EXPENSES: | |||||||||||
(As a percentage of total sales) | |||||||||||
Opening costs | 0.1 | % | 0.5 | % | 0.2 | % | 0.7 | % | |||
Depreciation and amortization | 5.8 | % | 5.1 | % | 5.8 | % | 5.4 | % | |||
Selling, general and administrative expenses | 10.0 | % | 8.6 | % | 10.6 | % | 9.8 | % | |||
Net loss (gain) on disposition of property and equipment | — | % | (0.6 | )% | (0.3 | )% | (0.6 | )% | |||
Culinary Contract Services Costs | |||||||||||
(As a percentage of Culinary Contract Services sales) | |||||||||||
Cost of culinary contract services | 90.8 | % | 89.2 | % | 90.2 | % | 90.1 | % | |||
Culinary income | 9.2 | % | 10.8 | % | 9.8 | % | 9.9 | % | |||
Franchise Operations Costs | |||||||||||
(As a percentage of Franchise Operations) | |||||||||||
Cost of franchise operations | 27.8 | % | 26.0 | % | 27.4 | % | 24.1 | % | |||
Franchise income | 72.2 | % | 74.0 | % | 72.6 | % | 75.9 | % | |||
(As a percentage of total sales) | |||||||||||
INCOME (LOSS) FROM OPERATIONS | (0.4 | )% | 3.7 | % | (0.7 | )% | (0.6 | )% | |||
Interest income | — | % | — | % | — | % | — | % | |||
Interest expense | (0.5 | )% | (0.6 | )% | (0.5 | )% | (0.6 | )% | |||
Other income (expense), net | 0.1 | % | — | % | — | % | 0.1 | % | |||
Income (loss) before income taxes and discontinued operations | (0.8 | )% | 3.1 | % | (1.2 | )% | (1.1 | )% | |||
Provision (benefit) for income taxes | (0.6 | )% | 0.4 | % | (0.5 | )% | (0.5 | )% | |||
Income (loss) from continuing operations | (0.2 | )% | 2.7 | % | (0.7 | )% | (0.6 | )% | |||
Income (loss) from discontinued operations, net of income taxes | — | % | (0.1 | )% | — | % | (0.1 | )% | |||
NET INCOME (LOSS) | (0.2 | )% | 2.6 | % | (0.7 | )% | (0.7 | )% |
Quarter Ended | Three Quarters Ended | ||||||||||||||
June 1, 2016 | May 6, 2015 | June 1, 2016 | May 6, 2015 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (36 weeks) | ||||||||||||
(In thousands) | (In thousands) | ||||||||||||||
Store level profit | $ | 13,013 | $ | 14,609 | $ | 42,540 | $ | 35,354 | |||||||
Plus: | |||||||||||||||
Sales from culinary contract services | 3,892 | 3,624 | 12,726 | 11,993 | |||||||||||
Sales from franchise operations | 1,586 | 1,578 | 5,411 | 4,764 | |||||||||||
Less: | |||||||||||||||
Opening costs | 117 | 427 | 688 | 2,022 | |||||||||||
Cost of culinary contract services | 3,534 | 3,232 | 11,476 | 10,809 | |||||||||||
Cost of franchise operations | 441 | 410 | 1,480 | 1,147 | |||||||||||
Depreciation and amortization | 5,304 | 4,759 | 17,538 | 14,608 | |||||||||||
Selling, general and administrative expenses | 9,227 | 8,139 | 32,312 | 26,671 | |||||||||||
Provision for asset impairments | 172 | — | 209 | 218 | |||||||||||
Net loss (gain) on disposition of property and equipment | 42 | (609 | ) | (793 | ) | (1,696 | ) | ||||||||
Interest income | — | (1 | ) | (3 | ) | (3 | ) | ||||||||
Interest expense | 482 | 599 | 1,674 | 1,624 | |||||||||||
Other income (expense), net | (88 | ) | (24 | ) | 2 | (282 | ) | ||||||||
Provision (benefit) for income taxes | (593 | ) | 395 | (1,438 | ) | (1,326 | ) | ||||||||
Income (loss) from continuing operations | $ | (147 | ) | $ | 2,484 | $ | (2,468 | ) | $ | (1,681 | ) |
August 26, 2015 | FY16 YTD Q3 Openings | FY16 YTD Q3 Closings | June 1, 2016 | ||||||||
Luby’s Cafeterias | 93 | — | (1 | ) | 92 | ||||||
Fuddruckers Restaurants | 75 | 3 | (1 | ) | 77 | ||||||
Cheeseburger in Paradise | 8 | — | — | 8 | |||||||
Other restaurants(1) | 1 | — | — | 1 | |||||||
Total | 177 | 3 | (2 | ) | 178 |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/ (Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Restaurant sales | $ | 86,476 | $ | 88,788 | $ | 87,805 | (1.5 | )% | ||||||
Culinary contract services | 3,892 | 3,624 | 3,343 | 16.4 | % | |||||||||
Franchise revenue | 1,586 | 1,578 | 1,605 | (1.2 | )% | |||||||||
Vending revenue | 143 | 112 | 116 | 23.3 | % | |||||||||
TOTAL SALES | $ | 92,097 | $ | 94,102 | $ | 92,869 | (0.8 | )% |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/ (Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Restaurant sales | $ | 286,336 | $ | 254,832 | $ | 283,500 | 1.0 | % | ||||||
Culinary contract services | 12,726 | 11,993 | 13,058 | (2.5 | )% | |||||||||
Franchise revenue | 5,411 | 4,764 | 5,309 | 1.9 | % | |||||||||
Vending revenue | 437 | 355 | 398 | 9.8 | % | |||||||||
TOTAL SALES | $ | 304,910 | $ | 271,944 | $ | 302,265 | 0.9 | % |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||||||
Restaurant Brand | June 1, | May 6, | June 3, | Increase/(Decrease) | ||||||||||||||
($000s) | 2016 | 2015 | 2015 | $ Amount | % Change | |||||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||||||
Luby’s Cafeterias | $ | 51,808 | $ | 53,975 | $ | 52,937 | $ | (1,129 | ) | (2.1 | )% | |||||||
Fuddruckers | 24,790 | 24,204 | 24,078 | 712 | 3.0 | % | ||||||||||||
Combo locations | 5,280 | 6,355 | 6,162 | (882 | ) | (14.3 | )% | |||||||||||
Cheeseburger in Paradise | 4,598 | 4,254 | 4,628 | (30 | ) | (0.6 | )% | |||||||||||
Restaurant Sales | $ | 86,476 | $ | 88,788 | $ | 87,805 | $ | (1,329 | ) | (1.5 | )% |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||||||
Restaurant Brand | June 1, | May 6, | June 3, | Increase/(Decrease) | ||||||||||||||
($000s) | 2016 | 2015 | 2015 | $ Amount | % Change | |||||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||||||
Luby’s Cafeterias | $ | 175,628 | $ | 159,099 | $ | 176,191 | $ | (563 | ) | (0.3 | )% | |||||||
Fuddruckers | 80,237 | 68,475 | 76,496 | 3,741 | 4.9 | % | ||||||||||||
Combo locations | 17,595 | 16,349 | 18,298 | (703 | ) | (3.8 | )% | |||||||||||
Cheeseburger in Paradise | 12,876 | 10,909 | 12,515 | 361 | 2.9 | % | ||||||||||||
Total Restaurant Sales | $ | 286,336 | $ | 254,832 | $ | 283,500 | $ | 2,836 | 1.0 | % |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/ (Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Cost of food | $ | 24,221 | $ | 25,218 | $ | 24,935 | (2.9 | )% | ||||||
As a percentage of restaurant sales | 28.0 | % | 28.4 | % | 28.4 | % | (0.4 | )% |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Cost of food | $ | 81,256 | $ | 74,171 | $ | 82,303 | (1.3 | )% | ||||||
As a percentage of restaurant sales | 28.4 | % | 29.1 | % | 29.0 | % | (0.6 | )% |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Payroll and related costs | $ | 30,748 | $ | 29,971 | $ | 29,782 | 3.2 | % | ||||||
As a percentage of restaurant sales | 35.6 | % | 33.8 | % | 33.9 | % | 1.7 | % |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Payroll and related costs | $ | 100,007 | $ | 88,177 | $ | 98,047 | 2.0 | % | ||||||
As a percentage of restaurant sales | 34.9 | % | 34.6 | % | 34.6 | % | 0.3 | % |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Other operating expenses | $ | 13,572 | $ | 14,276 | $ | 14,215 | (4.5 | )% | ||||||
As a percentage of restaurant sales | 15.7 | % | 16.1 | % | 16.2 | % | (0.5 | )% |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Other operating expenses | $ | 45,728 | $ | 42,688 | $ | 47,363 | (3.5 | )% | ||||||
As a percentage of restaurant sales | 16.0 | % | 16.8 | % | 16.7 | % | (0.7 | )% |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Occupancy costs | $ | 5,065 | $ | 4,826 | $ | 4,819 | 5.1 | % | ||||||
As a percentage of restaurant sales | 5.9 | % | 5.4 | % | 5.5 | % | 0.4 | % |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Occupancy costs | $ | 17,242 | $ | 14,797 | $ | 16,413 | 5.1 | % | ||||||
As a percentage of restaurant sales | 6.0 | % | 5.8 | % | 5.8 | % | 0.2 | % |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Franchise revenue | $ | 1,586 | $ | 1,578 | $ | 1,605 | (1.2 | )% | ||||||
Cost of franchise operations | 441 | 410 | 403 | 9.4 | % | |||||||||
Franchise profit | $ | 1,145 | $ | 1,168 | $ | 1,202 | (4.7 | )% | ||||||
Franchise profit as a percentage of franchise revenue | 72.2 | % | 74.0 | % | 74.9 | % | (2.7 | )% |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Franchise revenue | $ | 5,411 | $ | 4,764 | $ | 5,309 | 1.9 | % | ||||||
Cost of franchise operations | 1,480 | 1,147 | 1,283 | 15.4 | % | |||||||||
Franchise profit | $ | 3,931 | $ | 3,617 | $ | 4,026 | (2.4 | )% | ||||||
Franchise profit as a percentage of franchise revenue | 72.6 | % | 75.9 | % | 75.8 | % | (3.2 | )% |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Culinary contract services sales | $ | 3,892 | $ | 3,624 | $ | 3,343 | 16.4 | % | ||||||
Cost of culinary contract services | 3,534 | 3,232 | 3,064 | 15.3 | % | |||||||||
Culinary contract profit | $ | 358 | $ | 392 | $ | 279 | 28.3 | % | ||||||
Culinary contract profit as a percentage of Culinary contract sales | 9.2 | % | 10.8 | % | 8.3 | % | 0.9 | % |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Culinary contract services sales | $ | 12,726 | $ | 11,993 | $ | 13,058 | (2.5 | )% | ||||||
Cost of culinary contract services | 11,476 | 10,809 | 11,771 | (2.5 | )% | |||||||||
Culinary contract profit | $ | 1,250 | $ | 1,184 | $ | 1,287 | (2.9 | )% | ||||||
Culinary contract profit as a percentage of Culinary contract sales | 9.8 | % | 9.9 | % | 9.9 | % | (0.1 | )% |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
Depreciation and amortization | $ | 5,304 | $ | 4,759 | $ | 4,832 | 9.8 | % | ||||||
As a percentage of total sales | 5.8 | % | 5.1 | % | 5.2 | % | 0.6 | % |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
Depreciation and amortization | $ | 17,538 | $ | 14,608 | $ | 16,261 | 7.9 | % | ||||||
As a percentage of total sales | 5.8 | % | 5.4 | % | 5.4 | % | 0.4 | % |
Quarter Ended | Quarter Ended | Comparable Period Ended | Q3FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(12 weeks) | (12 weeks) | (12 weeks) | (12 weeks vs 12 weeks) | |||||||||||
General and administrative expenses | $ | 8,146 | $ | 7,593 | $ | 7,360 | 10.7 | % | ||||||
Marketing and advertising expenses | 1,081 | 546 | 486 | 122.4 | % | |||||||||
Selling, general and administrative expenses | $ | 9,227 | $ | 8,139 | $ | 7,846 | 17.6 | % | ||||||
As a percentage of total sales | 10.0 | % | 8.6 | % | 8.4 | % | 1.6 | % |
Three Quarters Ended | Three Quarters Ended | Comparable Period Ended | YTDQ3 FY2016 vs Comparable Period | |||||||||||
($000s) | June 1, 2016 | May 6, 2015 | June 3, 2015 | Increase/(Decrease) | ||||||||||
(40 weeks) | (36 weeks) | (40 weeks) | (40 weeks vs 40 weeks) | |||||||||||
General and administrative expenses | $ | 27,926 | $ | 24,405 | $ | 26,922 | 3.7 | % | ||||||
Marketing and advertising expenses | 4,386 | 2,266 | 2,386 | 83.8 | % | |||||||||
Selling, general and administrative expenses | $ | 32,312 | $ | 26,671 | $ | 29,308 | 10.2 | % | ||||||
As a percentage of total sales | 10.6 | % | 9.8 | % | 9.7 | % | 0.9 | % |
• | payments to reduce our debt; |
• | capital expenditures for construction, restaurant renovations and upgrades, information technology and culinary contract services development; and |
• | working capital primarily for our Company-owned restaurants and Culinary Contract Services agreements. |
Three Quarters Ended | |||||||
June 1, 2016 | May 6, 2015 | ||||||
(40 weeks) | (36 weeks) | ||||||
(In thousands) | |||||||
Total cash provided by (used in): | |||||||
Operating activities | $ | 11,408 | $ | 4,161 | |||
Investing activities | (10,033 | ) | (11,237 | ) | |||
Financing activities | (1,467 | ) | 5,862 | ||||
Net decrease in cash and cash equivalents | $ | (92 | ) | $ | (1,214 | ) |
• | Debt Service Coverage Ratio of not less than (i) 1.10 to 1.00 at all times during the first, second and third fiscal quarters of the Borrower’s fiscal year 2015, (ii) 1.25 to 1.00 at all times during the fourth fiscal quarter of the Borrower’s fiscal year 2015, and (iii) 1.50 to 1.00 at all times thereafter, |
• | Lease Adjusted Leverage Ratio of not more than (i) 5.75 to 1.00 at all times during the first, second and third fiscal quarters of the Borrower’s fiscal year 2015, (ii) 5.50 to 1.00 at all times during the fourth fiscal quarter of the Borrower’s fiscal year 2015, (iii) 5.25 to 1.00 at all times during the first fiscal quarter of the Borrower’s fiscal year 2016, (iv) 5.00 to 1.00 at all times during the second fiscal quarter of the Borrower’s fiscal year 2016, and (v) 4.75 to 1.00 at all times thereafter, |
• | capital expenditures limited to $25.0 million per year, |
• | restrictions on incurring liens on certain of our property and the property of our subsidiaries, |
• | restrictions on transactions with affiliates and materially changing our business, |
• | restrictions on making certain investments, loans, advances and guarantees, |
• | restrictions on selling assets outside the ordinary course of business, |
• | prohibitions on entering into sale and leaseback transactions, and |
• | restrictions on certain acquisitions of all or a substantial portion of the assets, property and/or equity interests of any person, including share repurchases and dividends. |
• | future operating results, |
• | future capital expenditures and expected sources of funds for capital expenditures, |
• | future debt, including liquidity and the sources and availability of funds related to debt, and expected repayment of debt, as well as our ability to refinance the existing credit facility or enter into a new credit facility on a timely basis, |
• | expected sources of funds for working capital requirements, |
• | plans for our new prototype restaurants, |
• | plans for expansion of our business, |
• | scheduled openings of new units, |
• | closing existing units, |
• | future sales of assets and the gains or losses that may be recognized as a result of any such sales, and |
• | continued compliance with the terms of our 2013 Credit Facility, as amended. |
• | general business and economic conditions, |
• | the impact of competition, |
• | our operating initiatives, changes in promotional, couponing and advertising strategies and the success of management’s business plans, |
• | fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese, oils and produce, |
• | ability to raise menu prices and customer acceptance of changes in menu items, |
• | increases in utility costs, including the costs of natural gas and other energy supplies, |
• | changes in the availability and cost of labor, including the ability to attract qualified managers and team members, |
• | the seasonality of the business, |
• | collectability of accounts receivable, |
• | changes in governmental regulations, including changes in minimum wages and health care benefit regulation, |
• | the effects of inflation and changes in our customers’ disposable income, spending trends and habits, |
• | the ability to realize property values, |
• | the availability and cost of credit, |
• | the ability to effectively integrate and improve the profitability of the acquired Cheeseburger in Paradise restaurants, |
• | effectiveness of the Cheeseburger in Paradise conversions to Fuddruckers restaurants, |
• | the effectiveness of our credit card controls and PCI compliance, |
• | weather conditions in the regions in which our restaurants operate, |
• | costs relating to legal proceedings, |
• | impact of adoption of new accounting standards, |
• | effects of actual or threatened future terrorist attacks in the United States, |
• | unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations, and |
• | the continued service of key management personnel. |
31.1 | Rule 13a-14(a)/15d-14(a) certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Rule 13a-14(a)/15d-14(a) certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Section 1350 certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Section 1350 certification of the Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Schema Document |
101.CAL | XBRL Calculation Linkbase Document |
101.DEF | XBRL Definition Linkbase Document |
101.LAB | XBRL Label Linkbase Document |
101.PRE | XBRL Presentation Linkbase Document |
LUBY’S, INC. (Registrant) | |||
Date: | 7/11/2016 | By: | /s/ Christopher J. Pappas |
Christopher J. Pappas | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | 7/11/2016 | By: | /s/ K. Scott Gray |
K. Scott Gray | |||
Senior Vice President and Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
31.1 | Rule 13a-14(a)/15d-14(a) certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Rule 13a-14(a)/15d-14(a) certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Section 1350 certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Section 1350 certification of the Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Schema Document |
101.CAL | XBRL Calculation Linkbase Document |
101.DEF | XBRL Definition Linkbase Document |
101.LAB | XBRL Label Linkbase Document |
101.PRE | XBRL Presentation Linkbase Document |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: July 11, 2016 | By: | /s/ Christopher J. Pappas |
Christopher J. Pappas | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: July 11, 2016 | By: | /s/ K/ Scott Gray |
K. Scott Gray | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
Date: July 11, 2016 | By: | /s/ Christopher J. Pappas |
Christopher J. Pappas | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
Date: July 11, 2016 | By: | /s/ K. Scott Gray |
K. Scott Gray | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Executive Officer) |
Document And Entity Information - shares |
9 Months Ended | |
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Jun. 01, 2016 |
Jul. 06, 2016 |
|
Document And Entity Information | ||
Entity Registrant Name | LUBYS INC | |
Entity Central Index Key | 0000016099 | |
Trading Symbol | lub | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 28,940,041 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 01, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares |
Jun. 01, 2016 |
Aug. 26, 2015 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.32 | $ 0.32 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 29,420,690 | 29,134,603 |
Common stock, shares outstanding (in shares) | 28,920,690 | 28,634,603 |
Treasury stock, shares (in shares) | 500,000 | 500,000 |
Consolidated Statement of Shareholders' Equity (Unaudited) - 9 months ended Jun. 01, 2016 - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock [Member] |
Treasury Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
---|---|---|---|---|---|
Balance (in shares) at Aug. 26, 2015 | 29,135 | (500) | |||
Balance at Aug. 26, 2015 | $ 174,659 | $ 9,323 | $ (4,775) | $ 29,006 | $ 141,105 |
Net loss | (2,545) | (2,545) | |||
Share-based compensation expense (in shares) | 50 | ||||
Share-based compensation expense | 1,143 | $ 16 | 1,127 | ||
Common stock issued under employee benefit plans (in shares) | 176 | ||||
Common stock issued under employee benefit plans | 75 | $ 56 | 19 | ||
Common stock issued under nonemployee benefit plans (in shares) | 60 | ||||
Common stock issued under nonemployee benefit plans | 0 | $ 19 | (19) | ||
Balance (in shares) at Jun. 01, 2016 | 29,421 | (500) | |||
Balance at Jun. 01, 2016 | $ 173,332 | $ 9,414 | $ (4,775) | $ 30,133 | $ 138,560 |
Basis of Presentation |
9 Months Ended |
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Jun. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated Financial Statements of Luby’s, Inc. (the “Company” or “Luby’s”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements that are prepared for the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarter ended June 1, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2016. The Consolidated Balance Sheet dated August 26, 2015, included in this Quarterly Report on Form 10-Q (this “Form 10-Q”), has been derived from the audited Consolidated Financial Statements as of that date. However, this Form 10-Q does not include all of the information and footnotes required by GAAP for an annual filing of complete financial statements. Therefore, these financial statements should be read in conjunction with the audited Consolidated Financial Statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 26, 2015. |
Accounting Periods |
9 Months Ended |
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Jun. 01, 2016 | |
Accounting Policies [Abstract] | |
Accounting Periods | Accounting Periods The Company’s fiscal year ends on the last Wednesday in August. Accordingly, each fiscal year normally consists of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. However, every fifth or sixth year, we have a fiscal year that consists of 53 weeks, accounting for 371 days in the aggregate; fiscal year 2016 will be such a year. Each of the first three quarters of each fiscal year, prior to fiscal year 2016, consisted of three four-week periods, while the fourth quarter normally consisted of four four-week periods. Beginning in fiscal 2016, we changed our fiscal quarter ending dates with the first fiscal quarter end extended by one accounting period and the fiscal fourth quarter being reduced by one accounting period. The purpose of this change is in part to minimize the Thanksgiving calendar shift by extending the first fiscal quarter until after Thanksgiving. With this change in fiscal quarter ending dates, our first quarter is 16 weeks, and the remaining three quarters will typically be 12 weeks in length. The fourth fiscal quarter will be 13 weeks in certain fiscal years to adjust for our standard 52 week, or 364 day, fiscal year compared to the 365 day calendar year. Fiscal 2016 is such a year where the fourth quarter will have 13 weeks, resulting in a 53 week fiscal year. Comparability between quarters may be affected by varying lengths of the quarters, as well as the seasonality associated with the restaurant business. |
Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments The Company has three reportable segments: Company-owned restaurants, Culinary Contract Services (“CCS”) and Franchise Operations. Company-owned restaurants Company-owned restaurants consists of several brands which are aggregated into one reportable segment because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the nature of the regulatory environment and store level profit margin are similar. The chief operating decision maker analyzes Company-owned restaurants at store level profit which is revenue less cost of food, payroll and related costs, other operating expenses and occupancy costs. The primary brands are Luby’s Cafeterias, Fuddruckers and Cheeseburger in Paradise, with a non-core restaurant location operating under the brand name Bob Luby’s Seafood Grill. All company-owned restaurants are casual dining restaurants. Each restaurant is an operating segment because operating results and cash flow can be determined for each restaurant. The total number of Company-owned restaurants was 178 at June 1, 2016 and 177 at August 26, 2015. Culinary Contract Services CCS, branded as Luby’s Culinary Contract Services, consists of a business line servicing healthcare, higher education and corporate dining clients. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service and retail dining. CCS has contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, behavioral hospitals and business and industry clients. CCS has the unique ability to deliver quality services that include facility design and procurement as well as nutrition and branded food services to our clients. The cost of Culinary Contract Services on the Consolidated Statements of Operations include all food, payroll and related costs and other operating expenses related to CCS sales. The total number of CCS contracts was 26 at June 1, 2016 and 23 at August 26, 2015. Franchise Operations We offer franchises for only the Fuddruckers brand. Franchises are sold in markets where expansion is deemed advantageous to the development of the Fuddruckers concept and system of restaurants. Initial franchise agreements have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area, usually a four-mile radius surrounding the franchised restaurant. Franchisees bear all direct costs involved in the development, construction and operation of their restaurants. In exchange for a franchise fee, the Company provides franchise assistance in the following areas: site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, assistance by a Fuddruckers “opening team” at the time a franchised restaurant opens, and operations and accounting guidelines set forth in various policies and procedures manuals. All franchisees are required to operate their restaurants in accordance with Fuddruckers’ standards and specifications, including controls over menu items, food quality and preparation. The Company requires the successful completion of its training program by a minimum of three managers for each franchised restaurant. In addition, franchised restaurants are evaluated regularly by the Company for compliance with franchise agreements, including standards and specifications through the use of periodic, unannounced, on-site inspections and standard evaluation reports. The number of franchised restaurants was 114 at June 1, 2016 and 106 at August 26, 2015. Licensee In November 1997, a prior owner of the Fuddruckers – World’s Greatest Hamburgers ® brand granted to a licensee the exclusive right to use the Fuddruckers proprietary marks, trade dress and system to develop Fuddruckers restaurants in a territory consisting of certain countries in Africa, the Middle East and parts of Asia. As of July 2016, this licensee operated 35 restaurants that are licensed to use the Fuddruckers Proprietary Marks in Saudi Arabia, Egypt, Lebanon, United Arab Emirates, Qatar, Jordan, Bahrain, Kuwait, Morocco and Malaysia. The Company does not receive revenue or royalties from these restaurants. The table on the following page shows segment financial information. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets and prepaid expenses.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements GAAP establishes a framework for using fair value to measure assets and liabilities. Fair value measurements guidance applies whenever other statements require or permit assets or liabilities to be measured at fair value. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include:
Non-recurring fair value measurements related to impaired property and equipment consisted of the following:
(1) In accordance with Subtopic 360-20, goodwill with a carrying amount of approximately $1.6 million was written down to its implied fair value of approximately $1.6 million, resulting in an impairment charge of $38 thousand, in the quarter ended March 9, 2016.
(1) In accordance with Subtopic 360-10, long-lived assets held and used with a carrying amount of approximately $1.5 million were written down to their fair value of approximately $1.3 million, resulting in an impairment charge of approximately $0.2 million, which was included in earnings for the period. (2) In accordance with Subtopic 360-20, goodwill with a carrying amount of approximately $1.7 million was written down to its implied fair value of approximately $1.6 million, resulting in an impairment charge of $38 thousand. |
Income Taxes |
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Jun. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes No cash payments of estimated federal income taxes were made during the three quarters ended June 1, 2016. Deferred tax assets and liabilities are recorded based on differences between the financial reporting basis and the tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent future taxable income is expected to be sufficient to utilize those assets prior to their expiration. The effective tax rate, (ETR), from continuing operations was 80% and 37% for the quarter and three quarters ended June 1, 2016, respectively. The ETR for the quarter and three quarters ended June 1, 2016 differs from the federal statutory rate of 34% due to the federal jobs credits, state income taxes and other discrete items. The additional deferred income tax benefit recognized in the quarter ended June 1, 2016 was attributable to the increase in the full year estimated pre-tax loss and a discrete deferred income tax benefit concerning the extension of the federal jobs credit. Management believes that adequate provisions for income taxes have been reflected in the financial statements and is not aware of any significant exposure items that have not been reflected in the financial statements. Amounts considered probable of settlement within one year have been included in the accrued expenses and other liabilities in the accompanying Consolidated Balance Sheet. |
Property and Equipment, Intangible Assets and Goodwill |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Intangible Assets and Goodwill | Property and Equipment, Intangible Assets and Goodwill The costs, net of impairment, and accumulated depreciation of property and equipment at June 1, 2016 and August 26, 2015, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:
Intangible assets, net, consist of the Fuddruckers trade name and franchise agreements and will be amortized. The Company believes the Fuddruckers brand name has an expected accounting life of 21 years from the date of acquisition based on the expected use of its assets and the restaurant environment in which it is being used. The trade name represents a respected brand with customer loyalty and the Company intends to cultivate and protect the use of the trade name. The franchise agreements, after considering renewal periods, have an estimated accounting life of 21 years from the date of acquisition and will be amortized over this period of time. Intangible assets, net, also includes the license agreement and trade name related to Cheeseburger in Paradise and the value of the acquired licenses and permits allowing the sales of beverages with alcohol. These assets have an expected accounting life of 15 years from the date of acquisition, December 6, 2012. The aggregate amortization expense related to intangible assets subject to amortization was $1.2 million for the three quarters ended June 1, 2016 and $1.0 million for the three quarters ended May 6, 2015. The aggregate amortization expense related to intangible assets subject to amortization is expected to be $1.4 million in each of the next five successive fiscal years. The following table presents intangible assets as of June 1, 2016 and August 26, 2015:
In fiscal 2010, the Company recorded an intangible asset for goodwill in the amount of approximately $0.2 million related to the acquisition of substantially all of the assets of Fuddruckers. The Company also recorded, in fiscal 2013, an intangible asset for goodwill in the amount of approximately $2.0 million related to the acquisition of Cheeseburger in Paradise. Goodwill is considered to have an indefinite useful life and is not amortized. Management performs its formal annual assessment as of the second quarter each fiscal year. The individual restaurant level is the level at which goodwill is assessed for impairment under ASC 350. In accordance with our understanding of ASC 350, we have allocated the goodwill value to each reporting unit in proportion to each location’s fair value at the date of acquisition. The result of these second quarter fiscal 2016 assessments was impairment of goodwill of $38 thousand. Goodwill impairments in fiscal years 2015 and 2014 were $38 thousand and $0.5 million, respectively. The Company will formally perform additional assessments on an interim basis if an event occurs or circumstances exist that indicate that it is more likely than not that a goodwill impairment exists. As of June 1, 2016, of the 23 locations that were acquired, eight locations remain operating as Cheeseburger in Paradise restaurants, seven locations were closed and converted to Fuddruckers restaurants, three locations where the option to extend the lease was not exercised, two locations subleased to franchisees and three closed and held for future use. Goodwill, net of accumulated impairments of approximately $0.6 million, was approximately $1.6 million as of June 1, 2016 and as of August 26, 2015, and relates to our Company-owned restaurants reportable segment. |
Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale | Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale Impairment of Long-Lived Assets and Store Closings The Company periodically evaluates long-lived assets held for use and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. The Company analyzes historical cash flows of operating locations and compares results of poorer performing locations to more profitable locations. The Company also analyzes lease terms, condition of the assets and related need for capital expenditures or repairs, as well as construction activity and the economic and market conditions in the surrounding area. For assets held for use, the Company estimates future cash flows using assumptions based on possible outcomes of the areas analyzed. If the undiscounted future cash flows are less than the carrying value of the location’s assets, the Company records an impairment loss based on an estimate of discounted cash flows. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s subjective judgments. Assumptions and estimates used include operating results, changes in working capital, discount rate, growth rate, anticipated net proceeds from disposition of the property and, if applicable, lease terms. The span of time for which future cash flows are estimated is often lengthy, increasing the sensitivity to assumptions made. The time span could be 20 to 25 years for newer properties, but only 5 to 10 years for older properties. Depending on the assumptions and estimates used, the estimated future cash flows projected in the evaluation of long-lived assets can vary within a wide range of outcomes. The Company considers the likelihood of possible outcomes in determining the best estimate of future cash flows. The measurement for such an impairment loss is then based on the fair value of the asset as determined by discounted cash flows. The Company recognized the following impairment charges to income from operations:
The $0.2 million impairment charge for the three quarters ended June 1, 2016 is primarily related to goodwill at one underperforming converted Cheeseburger in Paradise leasehold location and approximately $0.2 million in lease termination costs at two property locations. The $0.2 million impairment charge for the three quarters ended May 6, 2015 is related to assets at three Fuddruckers locations and included $38 thousand in goodwill related to one underperforming converted Cheeseburger in Paradise leasehold location. The $0.8 million net gain for the three quarters ended June 1, 2016 is related to the sale of property and equipment. The $1.7 million net gain for the three quarters ended May 6, 2015 is related to the sale of property and equipment. Discontinued Operations On March 21, 2014, the Board of Directors of the Company approved a plan focused on improving cash flow from the acquired Cheeseburger in Paradise leasehold locations. This underperforming Cheeseburger in Paradise leasehold disposal plan called for certain Cheeseburger in Paradise restaurants closure or conversion to Fuddruckers restaurants. As of June 1, 2016, two locations were reclassified to continuing operations. Of the two locations, one location reopened as a Company-owned Fuddruckers restaurant and one location was sub-leased to a Fuddruckers franchisee. Additionally, one lease was terminated and one lease expired during the three quarters ended June 1, 2016. As of June 1, 2016, no locations were classified as discontinued operations in this plan. As a result of the first quarter fiscal year 2010 adoption of the Company’s Cash Flow Improvement and Capital Redeployment Plan, the Company reclassified 24 Luby’s Cafeterias to discontinued operations. As of June 1, 2016, one location remains held for sale. The following table sets forth the assets and liabilities for all discontinued operations:
As of June 1, 2016, under both closure plans, the Company had one property classified as discontinued operations. The asset carrying value of the owned property was $1.9 million and is included in assets related to discontinued operations. The Company is actively marketing this property for sale. The asset carrying values of the ground leases were previously impaired to zero. The following table sets forth the sales and pretax losses reported from discontinued operations:
The following table summarizes discontinued operations for the first three quarters of fiscal 2016 and 2015:
Impairment charges included above relate to properties closed and designated for immediate disposal. The assets of these individual operating units have been written down to their net realizable values. In turn, the related properties have either been sold or are being actively marketed for sale. Dispositions are expected to be completed within one to three years. Within discontinued operations, the Company also recorded the related fiscal year-to-date net operating results, employee terminations and carrying costs of the closed units. Property Held for Sale The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of properties. If the Company decides to dispose of a property, it will be moved to property held for sale, actively marketed and recorded at fair value less transaction costs. The Company analyzes market conditions each reporting period and records additional impairments due to declines in market values of like assets. The fair value of the property is determined by observable inputs such as appraisals and prices of comparable properties in active markets for assets like the Company’s. Gains are not recognized until the properties are sold. Property held for sale includes unimproved land, closed restaurant properties and related equipment for locations not classified as discontinued operations. The specific assets are valued at the lower of net depreciable value or net realizable value. At June 1, 2016, the Company had four owned properties recorded at approximately $4.2 million in property held for sale. At August 26, 2015, the Company had four owned properties recorded at approximately $4.5 million in property held for sale. The Company is actively marketing the locations currently classified as property held for sale |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements, except for operating leases. Pending Claims From time to time, the Company is subject to various private lawsuits, administrative proceedings and claims that arise in the ordinary course of its business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to issues common to the restaurant industry. The Company currently believes that the final disposition of these types of lawsuits, proceedings and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity. It is possible, however, that the Company’s future results of operations for a particular fiscal quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, proceedings or claims. Construction Activity From time to time, the Company enters into non-cancelable contracts for the construction of its new restaurants. This construction activity exposes the Company to the risks inherent in new construction, including but not limited to rising material prices, labor shortages, delays in getting required permits and inspections, adverse weather conditions, and injuries sustained by workers and contract termination expenses. The Company had four non-cancelable contracts as of June 1, 2016. |
Related Parties |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Parties | Related Parties Affiliate Services Christopher J. Pappas, the Company’s Chief Executive Officer, and Harris J. Pappas, director and former Chief Operating Officer of the Company, own two restaurant entities (the “Pappas entities”) that from time to time may provide services to the Company and its subsidiaries, as detailed in the Amended and Restated Master Sales Agreement effective November 8, 2013 among the Company and the Pappas entities. Under the terms of the Amended and Restated Master Sales Agreement, the Pappas entities may provide specialized (customized) equipment fabrication and basic equipment maintenance, including stainless steel stoves, shelving, rolling carts, and chef tables. There were no costs incurred under the Amended and Restated Master Sales Agreement of custom-fabricated and refurbished equipment in the three quarters ended June 1, 2016 and May 6, 2015. Services provided under this agreement are subject to review and approval by the Finance and Audit Committee of the Board of Directors of the Company (the “Board”). Operating Leases In the third quarter of fiscal 2004, Messrs. Pappas became partners in a limited partnership which purchased a retail strip center in Houston, Texas. Messrs. Pappas collectively own a 50% limited partnership interest and a 50% general partnership interest in the limited partnership. A third party company manages the center. One of the Company’s restaurants has rented approximately 7% of the space in that center since July 1969. No changes were made to the Company’s lease terms as a result of the transfer of ownership of the center to the new partnership. On November 22, 2006, the Company executed a new lease agreement with respect to this shopping center. Effective upon the Company’s relocation and occupancy into the new space in July 2008, the new lease agreement provides for a primary term of approximately 12 years with two subsequent five-year options and gives the landlord an option to buy out the tenant on or after the calendar year 2015 by paying the then unamortized cost of improvements to the tenant. The Company is currently obligated to pay rent of $22.00 per square foot plus maintenance, taxes, and insurance during the remaining primary term of the lease. Thereafter, the lease provides for increases in rent at set intervals. The Company made payments of $314,000 and $278,000 in the three quarters ended June 1, 2016 and May 6, 2015, respectively. The new lease agreement was approved by the Finance and Audit Committee. In the third quarter of fiscal year 2014, on March 12, 2014, the Company executed a new lease agreement in which one of the Company’s Houston Fuddruckers locations was purchased from a prior landlord by Pappas Restaurants, Inc., a 100% undivided interest. No changes were made to our lease terms as a result of the transfer of ownership. The lease provides for a primary term of approximately six years with two subsequent five-year options. Pursuant to the new ground lease agreement, the Company is currently obligated to pay $27.56 per square foot plus maintenance, taxes, and insurance from March 12, 2014 until November 30, 2016. Thereafter, the new ground lease agreement provides for increases in rent at set intervals. The Company made payments of $120,000 and $107,000 in the three quarters ended June 1, 2016 and May 6, 2015, respectively
Board of Directors Christopher J. Pappas is a member of the Advisory Board of Amegy Bank, a Division of ZB, N.A. (formerly, Amegy Bank, N.A.), which is a lender and syndication agent under the Company’s 2013 Revolving Credit Facility. Key Management Personnel The Company entered into a new employment agreement with Christopher Pappas on January 24, 2014. The employment agreement was amended on February 4, 2016, to extend the termination date thereof to August 31, 2017, unless earlier terminated. Mr. Pappas continues to devote his primary time and business efforts to the Company while maintaining his role at Pappas Restaurants, Inc. Peter Tropoli, a director of the Company and the Company’s Chief Operating Officer, and formerly the Company’s Senior Vice President, Administration, General Counsel and Secretary, is an attorney and stepson of Frank Markantonis, who is a director of the Company. Paulette Gerukos, Vice President of Human Resources of the Company, is the sister-in-law of Harris J. Pappas, who is a director of the Company. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation We have two active share based stock plans, the Employee Stock Plan and the Nonemployee Director Stock Plan. Both plans authorize the granting of stock options, restricted stock and other types of awards consistent with the purpose of the plans. Of the 1.1 million shares approved for issuance under the Nonemployee Director Stock Plan, 0.9 million options, restricted stock units and restricted stock awards were granted, and 0.1 million options were cancelled or expired and added back into the plan, since the plan’s inception. Approximately 0.3 million shares remain available for future issuance as of June 1, 2016. Compensation cost for share-based payment arrangements under the Nonemployee Director Stock Plan, recognized in selling, general and administrative expenses for the three quarters ended June 1, 2016 and May 6, 2015 were approximately $524,000 and $472,000, respectively. Of the 4.1 million shares approved for issuance under the Employee Stock Plan, 5.7 million options and restricted stock units were granted, and 3.4 million options and restricted stock units were cancelled or expired and added back into the plan, since the plan’s inception. Approximately 1.8 million shares remain available for future issuance as of June 1, 2016. Compensation cost for share-based payment arrangements under the Employee Stock Plan, recognized in selling, general and administrative expenses for the three quarters ended June 1, 2016 and May 6, 2015 were approximately $827,000 and $543,000, respectively. Included in the quarter ended December 16, 2015, share based compensation cost was approximately $252,000, which represented accelerated share-based compensation expense as a result of the cancellation of 312,663 stock options. In 2015, the Company approved a Total Shareholder Return, (TSR), Performance Based Incentive Plan which provides for a right to receive an unspecified number of shares of common stock under the Employee Stock Plan based on the total shareholder return ranking compared to a selection of peer companies over a three-year cycle. The award value varies from 0% to 200% of a base amount, as a result of the Company’s TSR performance in comparison to its peers over the measurement period. The number of shares at the end of the three-year period will be determined as the award value divided by the closing stock price on the last day of each fiscal year accordingly. Since the plan provides for an undeterminable number of shares, the plan is accounted for as a liability based plan. As of June 1, 2016, the estimated fair value of the performance shares liability at the end of fiscal 2017 and fiscal 2018, was $0.5 million for both years. The estimated liability has been determined based on a Monte Carlo simulation model. Based on this estimate, management accrues expense ratably over the three-year service periods. A valuation estimate of the future liability associated with each fiscal year's performance award plan will be performed periodically with adjustments made to the outstanding liability at each reporting period, as appropriate. As of June 1, 2016, the Company has recorded $243,000 in non-cash compensation expense in selling, general and administrative expenses related to its TSR Performance Based Incentive Plans. Stock Options Stock options granted under either the Employee Stock Plan or the Nonemployee Director Stock Plan have exercise prices equal to the market price of the Company’s common stock at the date of the grant. Option awards under the Nonemployee Director Stock Plan generally vest 100% on the first anniversary of the grant date and expire ten years from the grant date. No options were granted under the Nonemployee Director Stock Plan in the three quarters ended June 1, 2016. No options to purchase shares remain outstanding under this plan as of June 1, 2016. Options granted under the Employee Stock Plan generally vest 50% on the first anniversary date of the grant date, 25% on the second anniversary of the grant date and 25% on the third anniversary of the grant date, with all options expiring ten years from the grant date. All options granted in the three quarters ended June 1, 2016 were granted under the Employee Stock Plan. Options to purchase 1,208,590 shares at option prices of $3.44 to $11.10 per share remain outstanding as of June 1, 2016. A summary of the Company’s stock option activity for the three quarters ended June 1, 2016 is presented in the following table:
The intrinsic value for stock options is defined as the difference between the current market value, or closing price on June 1, 2016, and the grant price on the measurement dates in the table above. Restricted Stock Units Grants of restricted stock units consist of the Company’s common stock and generally vest after three years. All restricted stock units are cliff-vested. Restricted stock units are valued at the closing market price of the Company’s common stock at the date of grant. A summary of the Company’s restricted stock unit activity during the three quarters ended June 1, 2016 is presented in the following table:
At June 1, 2016, there was approximately $1.0 million of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.1 years. Restricted Stock Awards Under the Nonemployee Director Stock Plan, directors are granted restricted stock in lieu of cash payments, for all or a portion of their compensation as directors. The number of shares granted is valued at the closing market price of the Company’s stock at the date of the grant. Restricted stock awards vest when granted because they are granted in lieu of a cash payment. However, directors are restricted from selling their shares until after the third anniversary of the date of the grant. Directors may receive a 20% premium of additional restricted stock by opting to receive stock over a minimum required amount of stock, in lieu of cash. |
Earnings Per Share |
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding and unvested restricted stock for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options determined using the treasury stock method. Stock options excluded from the computation of net income per share for the three quarters ended June 1, 2016 include approximately 513,000 shares with exercise prices exceeding market prices and approximately 98,000 shares whose inclusion would also be anti-dilutive. The components of basic and diluted net income per share are as follows:
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Reportable Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
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Reconciliation of Assets from Segment to Consolidated |
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring | Non-recurring fair value measurements related to impaired property and equipment consisted of the following:
(1) In accordance with Subtopic 360-20, goodwill with a carrying amount of approximately $1.6 million was written down to its implied fair value of approximately $1.6 million, resulting in an impairment charge of $38 thousand, in the quarter ended March 9, 2016.
(1) In accordance with Subtopic 360-10, long-lived assets held and used with a carrying amount of approximately $1.5 million were written down to their fair value of approximately $1.3 million, resulting in an impairment charge of approximately $0.2 million, which was included in earnings for the period. (2) In accordance with Subtopic 360-20, goodwill with a carrying amount of approximately $1.7 million was written down to its implied fair value of approximately $1.6 million, resulting in an impairment charge of $38 thousand. |
Property and Equipment, Intangible Assets and Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Equipment Intangible Assets and Goodwill Disclosure | The costs, net of impairment, and accumulated depreciation of property and equipment at June 1, 2016 and August 26, 2015, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:
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Schedule of Intangible Assets and Goodwill | The following table presents intangible assets as of June 1, 2016 and August 26, 2015:
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Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Asset Impairment Charges | The Company recognized the following impairment charges to income from operations:
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Schedule of Assets and Liabilities of Discontinued Operations | The following table sets forth the assets and liabilities for all discontinued operations:
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Schedule of Discontinued Operations Income Statement | The following table sets forth the sales and pretax losses reported from discontinued operations:
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Discontinued Operations | The following table summarizes discontinued operations for the first three quarters of fiscal 2016 and 2015:
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Related Parties (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions |
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Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s stock option activity for the three quarters ended June 1, 2016 is presented in the following table:
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of the Company’s restricted stock unit activity during the three quarters ended June 1, 2016 is presented in the following table:
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted net income per share are as follows:
|
Reportable Segments (Details Textual) |
9 Months Ended | ||
---|---|---|---|
Jun. 01, 2016
contract
segment
restaurant
mi
|
Jul. 31, 2016
restaurant
|
Aug. 26, 2015
contract
restaurant
|
|
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | segment | 3 | ||
Radius of Exclusive Territorial License of Franchisee | mi | 4 | ||
Subsequent Event [Member] | Licensee [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 35 | ||
Company Owned Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 178 | 177 | |
Culinary Contract Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of Contracts | contract | 26 | 23 | |
Franchise [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 114 | 106 | |
Franchise Term | 20 years |
Reportable Segments - Segment Assets (Details) - USD ($) $ in Thousands |
Jun. 01, 2016 |
Aug. 26, 2015 |
---|---|---|
Total assets: | ||
Assets | $ 261,772 | $ 264,258 |
Operating Segments [Member] | Company Owned Restaurants [Member] | ||
Total assets: | ||
Assets | 213,995 | 218,492 |
Operating Segments [Member] | Culinary Contract Services [Member] | ||
Total assets: | ||
Assets | 3,560 | 1,644 |
Operating Segments [Member] | Franchise [Member] | ||
Total assets: | ||
Assets | 12,538 | 13,034 |
Corporate, Non-Segment [Member] | ||
Total assets: | ||
Assets | $ 31,679 | $ 31,088 |
Income Taxes (Details Textual) - USD ($) |
3 Months Ended | 9 Months Ended |
---|---|---|
Jun. 01, 2016 |
Jun. 01, 2016 |
|
Effective Income Tax Rate Reconciliation, Percent | 80.00% | 37.00% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | |
Domestic Tax Authority [Member] | ||
Income Taxes Paid, Net | $ 0 |
Property and Equipment, Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 01, 2016 |
Aug. 26, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 30,028 | $ 30,028 |
Accumulated Amortization | (8,661) | (7,458) |
Net Carrying Amount | 21,367 | 22,570 |
Fuddruckers Trade Name and Franchise Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 29,607 | 29,607 |
Accumulated Amortization | (8,333) | (7,166) |
Net Carrying Amount | 21,274 | 22,441 |
Cheeseburger in Paradise Trade Name and License Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 421 | 421 |
Accumulated Amortization | (328) | (292) |
Net Carrying Amount | $ 93 | $ 129 |
Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale - Impairment Charges to Income from Operations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 8 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Jun. 01, 2016 |
May 06, 2015 |
May 06, 2015 |
Jun. 01, 2016 |
|
Discontinued Operations and Disposal Groups [Abstract] | ||||
Provision for asset impairments | $ 172 | $ 0 | $ 218 | $ 209 |
Net loss (gain) on disposition of property and equipment | $ 42 | $ (609) | (1,696) | (793) |
Total | $ (1,478) | $ (584) | ||
Effect on EPS: | ||||
Basic (in dollars per share) | $ 0.05 | $ 0.02 | ||
Assuming dilution (in dollars per share) | $ 0.05 | $ 0.02 |
Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale - Sales and Pretax Income (Losses) Reported for Discontinued Operations (Details) $ in Thousands |
3 Months Ended | 8 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Jun. 01, 2016
USD ($)
|
May 06, 2015
USD ($)
|
May 06, 2015
USD ($)
location
|
Jun. 01, 2016
USD ($)
location
|
|
Discontinued Operations and Disposal Groups [Abstract] | ||||
Sales | $ 0 | $ 0 | ||
Pretax loss | (642) | (131) | ||
Income tax benefit from discontinued operations | 298 | 54 | ||
Income (loss) from discontinued operations, net of income taxes | $ 13 | $ (131) | $ (344) | $ (77) |
Discontinued locations closed during the period | location | 0 | 0 |
Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale - Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 8 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Jun. 01, 2016 |
May 06, 2015 |
May 06, 2015 |
Jun. 01, 2016 |
|
Discontinued Operations and Disposal Groups [Abstract] | ||||
Discontinued operating loss | $ (550) | $ (156) | ||
Impairments | (90) | 0 | ||
Net gains (losses) | (2) | 25 | ||
Pretax loss | (642) | (131) | ||
Income tax benefit from discontinued operations | 298 | 54 | ||
Income (loss) from discontinued operations, net of income taxes | $ 13 | $ (131) | $ (344) | $ (77) |
Effect on EPS from discontinued operations—basic (in dollars per share) | $ 0.00 | $ (0.01) | $ (0.01) | $ 0.00 |
Commitments and Contingencies (Details Textual) |
Jun. 01, 2016
contract
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Number of Non-cancelable Contracts | 4 |
Related Parties - Affiliated Rents Paid for Restaurant Property Lease (Details) - USD ($) $ in Thousands |
3 Months Ended | 8 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Jun. 01, 2016 |
May 06, 2015 |
May 06, 2015 |
Jun. 01, 2016 |
|
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 9,227 | $ 8,139 | $ 26,671 | $ 32,312 |
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS | 0.39% | 0.38% | 0.38% | 0.39% |
Affiliated Cost Incurred [Member] | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 0 | $ 0 | ||
Capital expenditures | 0 | 0 | ||
Other operating expenses, occupancy costs and opening costs, including property leases | 385 | 434 | ||
Total | 385 | 434 | ||
Relative Company Cost [Member] | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | 26,671 | 32,312 | ||
Capital expenditures | 16,429 | 14,358 | ||
Other operating expenses, occupancy costs and opening costs, including property leases | 59,507 | 63,658 | ||
Total | $ 102,607 | $ 110,328 |
Earnings Per Share (Details Textual) shares in Thousands |
9 Months Ended |
---|---|
Jun. 01, 2016
shares
| |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 98 |
Employee Stock Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 513 |
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