UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~September 27, 2022~~July 4, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______

Commission file number 0-21423

BJ’S RESTAURANTS, INC.

(Exact name of registrant as specified in its charter)

California

33-0485615

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

7755 Center Avenue, Suite 300

Huntington Beach, California92647

~~(714)~~ (714) 500-2400

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol

Name of each exchange on which registered

Common Stock, No Par Value

BJRI

NASDAQ Global Select Market

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☑☐	Large accelerated filer	☐☑	Accelerated filer
☐	Non-accelerated filer	☐	Smaller reporting company
☐	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of ~~October 28, 2022,~~August 4, 2023, there were ~~23,392,092~~23,573,109 shares of Common Stock of the Registrant outstanding.

BJ’S RESTAURANTS, INC.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements	1

	Consolidated Balance Sheets – ~~September 27, 2022~~July 4, 2023 (Unaudited) and ~~December 28, 2021~~January 3, 2023	1

	Unaudited Consolidated Statements of Operations – Thirteen and ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~September 27,~~July 4, 2023 and June 28, 2022 ~~and September 28, 2021~~	2
	Unaudited Consolidated Statements of Shareholders’ Equity – Thirteen and ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~September 27,~~July 4, 2023 and June 28, 2022 ~~and September 28, 2021~~	3
	Unaudited Consolidated Statements of Cash Flows – Thirteen and ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~September 27,~~July 4, 2023 and June 28, 2022 ~~and September 28, 2021~~	4

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	1918

Item 4.	Controls and Procedures	1918

Item 5.	Other Information	19
~~PART II.~~
PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	2019

Item 1A.	Risk Factors	2019

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2019

Item 6.	Exhibits	2120


	SIGNATURES	2221

PART I. FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

BJ’S RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)


	September 27, 2022		December 28, 2021		July 4, 2023		January 3, 2023
	(unaudited)				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	19,179	$	38,527	$	6,053	$	24,873
Accounts and other receivables, net		19,874		29,055		33,091		28,593
Inventories, net		11,760		11,579		11,994		11,887
Prepaid expenses and other current assets		10,984		11,654		14,636		16,905
Total current assets		61,797		90,815		65,774		82,258

Property and equipment, net		505,247		506,111		522,610		507,116
Operating lease assets		368,001		365,244		361,494		368,784
Goodwill		4,673		4,673		4,673		4,673
Deferred income taxes		37,805		24,902
Equity method investment						4,900		5,000
Deferred income taxes, net						41,969		38,312
Other assets, net		40,023		43,421		39,841		39,779
Total assets	$	1,017,546	$	1,035,166	$	1,041,261	$	1,045,922

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	51,088	$	48,840	$	53,816	$	59,563
Accrued expenses		93,657		112,354		98,111		97,258
Current operating lease obligations		40,100		39,240		31,954		40,037
Total current liabilities		184,845		200,434		183,881		196,858

Long-term operating lease obligations		433,095		436,016		427,609		432,676
Long-term debt		50,000		50,000		53,000		60,000
Other liabilities		10,592		14,945		10,725		10,873
Total liabilities		678,532		701,395		675,215		700,407

Commitments and contingencies

Shareholders’ equity:
Preferred stock, 5,000 shares authorized, none issued or outstanding		—		—		—		—
Common stock, no par value, 125,000 shares authorized and 23,363 and 23,304 shares issued and outstanding as of September 27, 2022 and December 28, 2021, respectively		—		—
Common stock, no par value, 125,000 shares authorized and 23,544 and 23,392 shares issued and outstanding as of July 4, 2023 and January 3, 2023, respectively						—		—
Capital surplus		72,861		72,513		73,407		74,459
Retained earnings		266,153		261,258		292,639		271,056
Total shareholders’ equity		339,014		333,771		366,046		345,515
Total liabilities and shareholders’ equity	$	1,017,546	$	1,035,166	$	1,041,261	$	1,045,922

See accompanying notes to unaudited consolidated financial statements.

BJ’S RESTAURANTS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)


	For the Thirteen Weeks Ended						For the Twenty-Six Weeks Ended
	July 4, 2023			June 28, 2022			July 4, 2023			June 28, 2022
Revenues	$	349,670		$	329,697		$	690,950		$	628,426
Restaurant operating costs (excluding depreciation and amortization):
Cost of sales		90,614			90,928			181,491			172,394
Labor and benefits		126,522			123,111			254,855			239,397
Occupancy and operating		81,912			76,560			161,058			148,261
General and administrative		21,194			16,905			40,900			35,158
Depreciation and amortization		17,708			17,565			35,320			35,541
Restaurant opening		378			1,045			1,222			1,628
Loss on disposal and impairment of assets, net		1,130			438			3,276			595
Total costs and expenses		339,458			326,552			678,122			632,974
Income (loss) from operations		10,212			3,145			12,828			(4,548	)

Other income (expense):
Interest expense, net		(1,108	)		(436	)		(2,229	)		(1,070	)
Other income (expense), net (1)		622			(187	)		818			(575	)
Total other expense		(486	)		(623	)		(1,411	)		(1,645	)
Income (loss) before income taxes		9,726			2,522			11,417			(6,193	)

Income tax (benefit) expense		(2,206	)		2,225			(3,996	)		(7,950	)
Net income	$	11,932		$	297		$	15,413		$	1,757

Net income per share:
Basic	$	0.51		$	0.01		$	0.66		$	0.08
Diluted	$	0.50		$	0.01		$	0.64		$	0.07

Weighted average number of shares outstanding:
Basic		23,539			23,434			23,510			23,405
Diluted		23,971			23,576			23,961			23,658

For the Thirteen Weeks Ended

For the Thirty-Nine Weeks Ended

September 27, 2022

September 28,
2021

September 27, 2022

September 28,
2021

Revenues

$
311,348

$
282,180

$
939,774

$
795,770

Restaurant operating costs (excluding depreciation and amortization):

Cost of sales

85,010

76,647

257,404

208,382

Labor and benefits

117,476

105,023

356,873

290,921

Occupancy and operating

76,931

68,876

225,192

196,271

General and administrative

18,885

17,293

54,043

49,586

Depreciation and amortization

17,356

18,224

52,897

54,660

Restaurant opening

482

375

2,110

1,224

Loss on disposal and impairment of assets

379

2,700

974

3,225

Total costs and expenses

316,519

289,138

949,493

804,269

Loss from operations

(5,171
)

(6,958
)

(9,719
)

(8,499
)

Other (expense) income:

Interest expense, net

(645
)

(1,047
)

(1,715
)

(4,043
)
Other income (expense), net

57

446

(518
)

748

Total other expense

(588
)

(601
)

(2,233
)

(3,295
)
Loss before income taxes

(5,759
)

(7,559
)

(11,952
)

(11,794
)

Income tax benefit

(4,117
)

(5,383
)

(12,067
)

(12,846
)
Net (loss) income

$
(1,642
)

$
(2,176
)

$
115

$
1,052

Net (loss) income per share:

Basic

$
(0.07
)

$
(0.09
)

$
0.00

$
0.05

Diluted

$
(0.07
)

$
(0.09
)

$
0.00

$
0.04

Weighted average number of shares outstanding:

Basic

23,427

23,290

23,413

23,154

Diluted

23,427

23,290

23,628

24,054

(1)

For the thirteen weeks ended July 4, 2023 and June 28, 2022, related party costs included in other income (expense), net was an equity method investment loss of $60,000 and zero, respectively. For the twenty-six weeks ended July 4, 2023 and June 28, 2022, related party costs included in other income (expense), net was an equity method investment loss of $100,000 and zero, respectively. See Note 10 for further information.

See accompanying notes to unaudited consolidated financial statements.

BJ’S RESTAURANTS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands)

	For the Thirteen Weeks Ended
	Common Stock						Capital			Retained						For the Thirteen Weeks Ended
	Shares			Amount			Surplus			Earnings			Total			Common Stock					Capital			Retained
Balance, June 29, 2021		23,267		$	—		$	68,713		$	266,421		$	335,134
																Shares		Amount			Surplus			Earnings		Total
Balance, March 29, 2022																	23,416	$	—		$	69,326		$	268,336	$	337,662
Issuance of restricted stock units		29			1,233			(1,233	)		—			—			23		978			(978	)		—		—
Reclassification of common stock		—			(1,233	)		—			1,233			—			—		(978	)		—			978		—
Stock-based compensation		—			—			2,500			—			2,500			—		—			2,380			—		2,380
Adjustment to dividends previously accrued		—			—			—			4			4			—		—			—			5		5
Net loss		—			—			—			(2,176	)		(2,176	)
Balance, September 28, 2021		23,296		$	—		$	69,980		$	265,482		$	335,462
Net income																	—		—			—			297		297
Balance, June 28, 2022																	23,439	$	—		$	70,728		$	269,616	$	340,344

Balance, June 28, 2022		23,439		$	—		$	70,728		$	269,616		$	340,344
Balance, April 4, 2023																	23,529	$	—		$	71,035		$	280,199	$	351,234
Exercise of stock options																	—		8			(2	)		—		6
Issuance of restricted stock units		15			563			(567	)		—			(4	)		15		500			(500	)		—		—
Repurchase, retirement and reclassification of common stock		(91	)		(563	)		—			(1,822	)		(2,385	)		—		(508	)		—			508		—
Stock-based compensation		—			—			2,700			—			2,700			—		—			2,874			—		2,874
Adjustment to dividends previously accrued		—			—			—			1			1
Net loss		—			—			—			(1,642	)		(1,642	)
Balance, September 27, 2022		23,363		$	—		$	72,861		$	266,153		$	339,014
Net income																	—		—			—			11,932		11,932
Balance, July 4, 2023																	23,544	$	—		$	73,407		$	292,639	$	366,046

	For the Thirty-Nine Weeks Ended															For the Twenty-Six Weeks Ended
	Common Stock						Capital			Retained						Common Stock					Capital			Retained
	Shares			Amount			Surplus			Earnings			Total			Shares		Amount			Surplus			Earnings		Total
Balance, December 29, 2020		22,318		$	—		$	71,722		$	222,066		$	293,788
Exercise of stock options		122			6,394			(1,883	)		—			4,511
Issuance of common stock		704			28,907			—			—			28,907
Balance, December 28, 2021																	23,304	$	—		$	72,513		$	261,258	$	333,771
Issuance of restricted stock units		152			7,049			(7,514	)		—			(465	)		135		6,593			(6,953	)		—		(360	)
Reclassification of common stock		—			(42,350	)		—			42,350			—			—		(6,593	)		—			6,593		—
Stock-based compensation		—			—			7,655			—			7,655			—		—			5,168			—		5,168
Adjustment to dividends previously accrued		—			—			—			14			14			—		—			—			8		8
Net Income		—			—			—			1,052			1,052
Balance, September 28, 2021		23,296		$	—		$	69,980		$	265,482		$	335,462
Net income																	—		—			—			1,757		1,757
Balance, June 28, 2022																	23,439	$	—		$	70,728		$	269,616	$	340,344

Balance, December 28, 2021		23,304		$	—		$	72,513		$	261,258		$	333,771
Balance, January 3, 2023																	23,392	$	—		$	74,459		$	271,056	$	345,515
Exercise of stock options																	—		8			(2	)		—		6
Issuance of restricted stock units		150			7,156			(7,520	)		—			(364	)		152		6,161			(6,659	)		—		(498	)
Repurchase, retirement and reclassification of common stock		(91	)		(7,156	)		—			4,771			(2,385	)		—		(6,169	)		—			6,169		—
Stock-based compensation		—			—			7,868			—			7,868			—		—			5,609			—		5,609
Adjustment to dividends previously accrued		—			—			—			9			9			—		—			—			1		1
Net income		—			—			—			115			115			—		—			—			15,413		15,413
Balance, September 27, 2022		23,363		$	—		$	72,861		$	266,153		$	339,014
Balance, July 4, 2023																	23,544	$	—		$	73,407		$	292,639	$	366,046

See accompanying notes to unaudited consolidated financial statements.

BJ’S RESTAURANTS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	For the Thirty-Nine Weeks Ended						For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021			July 4, 2023			June 28, 2022
Cash flows from operating activities:
Net income	$	115		$	1,052		$	15,413		$	1,757
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		52,897			54,660			35,320			35,541
Non-cash lease expense		25,030			23,383			16,310			16,585
Amortization of financing costs		163			429			109			109
Deferred income taxes		(12,903	)		(13,139	)		(3,657	)		(8,273	)
Stock-based compensation expense		7,608			7,432			5,420			4,999
Loss on disposal and impairment of assets		974			3,225
Loss on disposal and impairment of assets, net								3,276			595
Equity method investment								100			—
Changes in assets and liabilities:
Accounts and other receivables		10,931			1,297			(2,898	)		7,557
Inventories, net		262			(172	)		186			95
Prepaid expenses and other current assets		128			2,750			1,796			2,052
Other assets, net		479			(1,359	)		(1,638	)		(810	)
Accounts payable		(132	)		5,976			(5,093	)		(5	)
Accrued expenses		(17,246	)		(7,595	)		874			(8,596	)
Operating lease obligations		(30,163	)		(32,342	)		(23,770	)		(20,099	)
Other liabilities		(4,353	)		645			(148	)		(1,295	)
Net cash provided by operating activities		33,790			46,242			41,600			30,212

Cash flows from investing activities:
Purchases of property and equipment		(50,959	)		(25,166	)		(52,912	)		(31,119	)
Proceeds from sale of assets		650			21			4			566
Net cash used in investing activities		(50,309	)		(25,145	)		(52,908	)		(30,553	)

Cash flows from financing activities:
Borrowings on line of credit		470,000			913,000			355,000			320,000
Payments on line of credit		(470,000	)		(958,000	)		(362,000	)		(320,000	)
Payments of debt issuance costs		(3	)		(315	)		—			(3	)
Proceeds from issuance of common stock, net		—			28,907
Taxes paid on vested stock units under employee plans		(364	)		(938	)		(498	)		(360	)
Proceeds from exercise of stock options		—			4,511			6			—
Cash dividends accrued under stock compensation plans		(77	)		(111	)		(20	)		(62	)
Repurchase of common stock		(2,385	)		—
Net cash used in financing activities		(2,829	)		(12,946	)		(7,512	)		(425	)

Net (decrease) increase in cash and cash equivalents		(19,348	)		8,151
Net decrease in cash and cash equivalents								(18,820	)		(766	)
Cash and cash equivalents, beginning of period		38,527			51,664			24,873			38,527
Cash and cash equivalents, end of period	$	19,179		$	59,815		$	6,053		$	37,761

See accompanying notes to unaudited consolidated financial statements.

BJ’S RESTAURANTS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


		For the Thirty-Nine Weeks Ended					For the Twenty-Six Weeks Ended
		September 27, 2022		September 28, 2021			July 4, 2023		June 28, 2022
Supplemental disclosure of cash flow information:
Cash paid for income taxes		$	493	$	386		$	345	$	469
Cash paid for interest, net of capitalized interest		$	909	$	3,207		$	1,669	$	631
Cash paid for operating lease obligations		$	49,939	$	53,743		$	31,559	$	33,238
Supplemental disclosure of non-cash operating, investing and financing activities:	Supplemental disclosure of non-cash operating, investing and financing activities:					Supplemental disclosure of non-cash operating, investing and financing activities:
Operating lease assets obtained in exchange for operating lease obligations		$	29,207	$	19,965		$	9,020	$	22,118
Tenant improvement allowance receivable		$	2,000	$	2,100		$	1,600	$	1,600
Property and equipment acquired and included in accounts payable		$	10,601	$	1,844		$	14,234	$	7,260
Stock-based compensation capitalized		$	260	$	223		$	189	$	169

See accompanying notes to unaudited consolidated financial statements.

BJ’S RESTAURANTS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of BJ’s Restaurants, Inc. (referred to herein as the “Company,” “we,” “us” and “our”) and our wholly owned subsidiaries. The consolidated financial statements presented herein include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of our financial condition, results of operations, shareholders’ equity and cash flows for the periods presented. Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures normally included in consolidated financial statements in accordance with U.S. GAAP have been omitted pursuant to the U.S. Securities and Exchange Commission (“SEC”) rules.

The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates. Our operating results for the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022~~July 4, 2023 may not be indicative of operating results for the entire year.

A description of our accounting policies and other financial information is included in our audited consolidated financial statements filed with the SEC on Form 10-K for the fiscal year ended ~~December 28, 2021.~~January 3, 2023. The disclosures included in our accompanying interim consolidated financial statements and footnotes should be read in conjunction with our consolidated financial statements and notes thereto included in the Annual Report on Form 10-K and our other reports filed from time to time with the Securities and Exchange Commission.

~~COVID-19 Pandemic and Other Impacts to our Operating Environment~~

Our operating results were impacted by the COVID-19 pandemic and operating challenges that followed, including lower availability of workers and supply chain disruptions, which increased costs to operate restaurants. The ongoing effects of the COVID-19 pandemic and the impacts to the operating environment could lead to further inflation, staffing challenges, disruptions in the supply chain and even a return of safety restrictions, including limits to in-restaurant dining. For more information regarding the risks to our business relating to the COVID-19 pandemic, see “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2021.

2. REVENUE RECOGNITION

Our revenues are comprised of food and beverage sales from our restaurants. Revenues from restaurant sales are recognized when payment is tendered. Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor. We sell gift cards which do not have an expiration date, and we do not deduct non-usage fees from outstanding gift card balances. Gift card sales are recorded as a liability and recognized as revenues upon redemption in our restaurants. Based on historical redemption rates, a portion of our gift card sales are not expected to be redeemed and ~~are~~will be recognized as gift card “breakage.” Estimated gift card breakage is recorded as revenue and recognized in proportion to our historical redemption pattern, unless there is a legal obligation to remit the unredeemed gift cards to government authorities. ~~The estimated gift card breakage is based on when the likelihood of redemption becomes remote, which has typically been approximately 24 months after the original gift card issuance date.~~

Our “BJ’s Premier Rewards Plus” ~~customer~~guest loyalty program enables participants to earn points for qualifying purchases that can be redeemed for food and beverages in the future. We allocate the transaction price between the goods delivered and the future goods that will be delivered on a relative standalone selling price basis, and defer the revenues allocated to the points, less expected expirations, until such points are redeemed.

The liability related to our gift card and loyalty program, included in “Accrued expenses” on our Consolidated Balance Sheets is as follows (in thousands):


	July 4, 2023		January 3, 2023
Gift card liability	$	9,262	$	14,417
Deferred loyalty revenue	$	3,274	$	3,129

September 27, 2022

December 28, 2021

Gift card liability

$
13,313

$
19,499

Deferred loyalty revenue

$
3,192

$
3,949

Revenue recognized for the redemption of gift cards and loyalty rewards deferred at the beginning of each respective fiscal year is as follows (in thousands):


	For the Thirteen Weeks Ended				For the Twenty-Six Weeks Ended
	July 4, 2023		June 28, 2022		July 4, 2023		June 28, 2022
Revenue recognized from gift card liability	$	2,186	$	1,887	$	8,430	$	8,568
Revenue recognized from guest loyalty program	$	1,227	$	1,209	$	5,309	$	5,314

For the Thirteen Weeks Ended

For the Thirty-Nine Weeks Ended

September 27, 2022

September 28,
2021

September 27, 2022

September 28,
2021

Revenue recognized from gift card liability

$
1,278

$
1,305

$
9,846

$
8,049

Revenue recognized from customer loyalty program

$
1,271

$
1,014

$
6,584

$
7,940

3. LEASES

We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space. U.S. GAAP requires that our leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date, and the lease term used in the evaluation includes the non-cancellable period for which we have the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of our restaurant ~~leases~~ and office

space leases are classified as operating leases. We have elected to account for lease and non-lease components as a single lease component for office and beverage gas equipment. We do not have any finance leases.

Lease costs included in “Occupancy &and operating” on the Consolidated Statements of Operations consisted of the following (in thousands):


	For the Thirteen Weeks Ended				For the Twenty-Six Weeks Ended
	July 4, 2023		June 28, 2022		July 4, 2023		June 28, 2022
Lease cost	$	14,788	$	14,827	$	29,684	$	29,662
Variable lease cost		1,417		1,037		2,407		1,745
Total lease costs	$	16,205	$	15,864	$	32,091	$	31,407

For the Thirteen Weeks Ended

For the Thirty-Nine Weeks Ended

September 27, 2022

September 28,
2021

September 27, 2022

September 28,
2021

Lease cost

$
15,043

$
14,615

$
44,705

$
43,202

Variable lease cost

751

544

2,496

1,146

Total lease costs

$
15,794

$
15,159

$
47,201

$
44,348

4. LONG-TERM DEBT

Line of Credit

On November 3, 2021, we entered into a Fourth Amended and Restated Credit Agreement (“Credit Facility”) with Bank of America, N.A. (“BofA”), JPMorgan Chase Bank, N.A., and certain other parties to amend and restate our revolving line of credit (the “Line of Credit”) to improve the pricing, extend the maturity date, change the interest reference rate, eliminate certain financial covenants and conditions, and reset other financial covenants starting with the fourth quarter of 2021.

Our Credit Facility matures on November 3, 2026, and provides us with revolving loan commitments totaling ~~$215~~$215 million, which may be increased up to ~~$315~~$315 million, of which ~~$50~~$50 million may be used for the issuance of letters of credit. Availability under the Credit Facility is reduced by outstanding letters of credit, which are used to support our self-insurance programs. On ~~September 27, 2022,~~July 4, 2023, there were borrowings of ~~$50.0~~$53.0 million and letters of credit of ~~$17.1~~$16.2 million outstanding, leaving ~~$147.9~~$145.8 million available to borrow.

Borrowings under the Line of Credit bear interest at an annual rate equal to either (a) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus a percentage not to exceed ~~2.00%~~2.00% (with a floor on BSBY of 0.00%), or (b) a percentage not to exceed ~~1.00%~~1.00% above a Base Rate equal to the highest of (i) the Federal Funds Rate plus 1/2 of 1.00%, (ii) BofA’s Prime Rate, (iii) the BSBY rate plus 1.00%, and (iv) 1.00%, in either case depending on the level of lease and debt obligations of the Company as compared to EBITDA plus lease expenses. The weighted average interest rate during the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022 was approximately ~~2.7%.~~6.6% and 2.2%, respectively.

The Credit Facility is secured by the Company’s assets and contains provisions requiring us to maintain compliance with certain covenants, including a Fixed Charge Coverage Ratio and a Lease Adjusted Leverage Ratio. ~~At September 27, 2022,~~ On July 4, 2023, we were in compliance with these covenants.

Pursuant to the Line of Credit, we are required to pay certain customary fees and expenses associated with maintenance and use of the Line of Credit, including letter of credit issuance fees, unused commitment fees and interest, which are payable monthly. Interest expense and commitment fees under the Credit Facility were approximately ~~$1.7~~$2.2 million and ~~$4.0~~$1.1 million, for the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ respectively. We also capitalized approximately ~~$174,000~~$0.3 million and ~~$70,000~~$0.1 million of interest expense related to new restaurant construction during each of the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ respectively.

5. NET ~~(LOSS)~~ INCOME PER SHARE

Basic and diluted net ~~(loss)~~ income per share is calculated by dividing net ~~(loss)~~ income by the weighted average number of common shares outstanding during the period. Potentially dilutive shares are excluded from the computation of diluted net (loss) per share since they have an anti-dilutive effect, yet potentially dilutive shares are included in the computation of diluted net income per share. The number of diluted shares reflects the potential dilution that could occur if holders of in-the-money options and warrants were to exercise their right to convert these instruments into common stock and the restrictions on restricted stock units (“RSUs”) were to lapse. Additionally, performance-based RSUs are considered contingent shares; therefore, at each reporting date we determine the probable number of shares that will vest and include these contingently issuable shares in our diluted share calculation unless they are ~~antidilutive.~~anti-dilutive. Once these performance-based RSUs vest, they are included in our basic net ~~(loss)~~ income per share calculation.

The following table presents a reconciliation of basic and diluted net ~~(loss)~~ income per share, including the number of dilutive equity awards ~~that were~~ included in the dilutive net income per share computation (in thousands):


	For the Thirteen Weeks Ended						For the Thirty-Nine Weeks Ended				For the Thirteen Weeks Ended				For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021			September 27, 2022		September 28, 2021		July 4, 2023		June 28, 2022		July 4, 2023		June 28, 2022
Numerator:
Net (loss) income	$	(1,642	)	$	(2,176	)	$	115	$	1,052
Net income											$	11,932	$	297	$	15,413	$	1,757
Denominator:
Weighted-average shares outstanding – basic		23,427			23,290			23,413		23,154		23,539		23,434		23,510		23,405
Dilutive effect of equity awards		—			—			215		900		432		142		451		253
Weighted-average shares outstanding – diluted		23,427			23,290			23,628		24,054		23,971		23,576		23,961		23,658

Net (loss) income per share:
Net income per share:
Basic	$	(0.07	)	$	(0.09	)	$	0.00	$	0.05	$	0.51	$	0.01	$	0.66	$	0.08
Diluted	$	(0.07	)	$	(0.09	)	$	0.00	$	0.04	$	0.50	$	0.01	$	0.64	$	0.07

For the thirteen weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ there were approximately ~~2.1~~0.9 million and ~~0.5~~2.2 million ~~shares~~ of equity awards, ~~and warrants,~~ respectively, that were excluded from the calculation of diluted net income per share because they are anti-dilutive. For the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ there were approximately ~~2.0~~0.9 million and ~~0.2~~2.0 million ~~shares~~ of equity awards, ~~and warrants,~~ respectively, that were excluded from the calculation of diluted net income per share because they are anti-dilutive.

6. STOCK-BASED COMPENSATION

Our current shareholder approved stock-based compensation plan is the BJ’s Restaurants, Inc. Equity Incentive Plan, (as amended from time to time, “the Plan”). Under the Plan, we may issue shares of our common stock to team members, officers, directors and consultants. We have historically granted incentive stock options, non-qualified stock options, restricted stock and performance and time-based restricted stock units. Stock options are charged against the Plan share reserve on the basis of one share for each share of common stock issuable upon exercise of options granted. All options granted under the Plan expire within 10 years of their date of grant. Grants of restricted stock, RSUs, performance shares and performance units, if any, are currently charged against the Plan share reserve on the basis of 1.5 shares for each share granted. The Plan also contains other limits on the terms of incentive grants such as ~~limits on~~ the maximum number that can be granted to a team member during any fiscal year.

Under the Plan, we issue time-based and performance-based RSUs and non-qualified stock options to senior vice presidents and above on an annual ~~basis, as well as new~~basis. We issue time-based RSUs and non-qualified stock options to vice presidents on an annual basis. New hires ~~who~~ are given the option between receiving their full grant as a time-based RSU or split evenly between non-qualified stock options and time-based RSUs. We issue time-based RSUs to other select support team members, and we issue time-based RSUs to non-employee members of our Board of Directors. We also issue time-based RSUs ~~and previously issued non-qualified stock options,~~ in connection with the BJ’s Gold Standard Stock Ownership Program (the “GSSOP”). The GSSOP is a long-term equity incentive program for our restaurant general managers, executive kitchen managers, directors of operations and directors of kitchen operations. ~~GSSOP grants are dependent on the length of each participant’s service with us and position.~~ All GSSOP participants are required to remain in good standing during their vesting period.

The Plan permits our Board of Directors to set the vesting terms and exercise period for awards at their discretion; however, the grant of awards with no minimum vesting period or a vesting period less than one year may not exceed 5% of the total number of shares authorized under the Plan. Stock options and time-based RSUs vest ratably over one, three or five years for non-GSSOP participants and either cliff vest at ~~three or~~ five years or cliff vest at ~~33%~~33% on the third anniversary and ~~67%~~67% on the fifth anniversary for GSSOP participants. Performance-based RSUs ~~generally~~ cliff vest on the third anniversary of the grant date in an amount from 0%0% to ~~225%~~225% of the grant quantity, dependent on the level of performance target achievement.

On January 15, 2021, our Board of Directors approved special fully-vested restricted stock grants, in lieu of cash bonuses to Restaurant Support Center team members at the Vice President and Director levels. These grants were in amounts designed to approximate a portion of their potential incentive compensation, which was approximately $0.5 million.

The following table presents the stock-based compensation recognized within our consolidated financial statements (in thousands):


	For the Thirteen Weeks Ended				For the Twenty-Six Weeks Ended
	July 4, 2023		June 28, 2022		July 4, 2023		June 28, 2022
Labor and benefits	$	410	$	640	$	1,276	$	1,390
General and administrative	$	2,368	$	1,648	$	4,144	$	3,609
Capitalized (1)	$	95	$	93	$	189	$	169
Total stock-based compensation	$	2,873	$	2,381	$	5,609	$	5,168

For the Thirteen Weeks Ended

For the Thirty-Nine Weeks Ended

September 27, 2022

September 28,
2021

September 27, 2022

September 28,
2021

Labor and benefits

$
653

$
641

$
2,043

$
2,171

General and administrative

$
1,957

$
1,808

$
5,565

$
5,261

Capitalized (1)

$
90

$
66

$
260

$
223

(1)

Capitalized stock-based compensation relates to our restaurant development personnel and is included in “Property and equipment, net” on the Consolidated Balance Sheets.

~~(1)~~

~~Capitalized stock-based compensation relates to our restaurant development personnel and is included in “Property and equipment, net” on the Consolidated Balance Sheets.~~

Stock Options

The fair value of each stock option was estimated on the grant date using the Black‑Scholes option-pricing model with the following weighted average assumptions:


	For the Thirty-Nine Weeks Ended						For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021			July 4, 2023			June 28, 2022
Expected volatility		63.2	%		60.7	%		66.9	%		63.2	%
Risk-free interest rate		1.6	%		0.5	%		3.5	%		1.6	%
Expected option life	5 years			5 years			5 years			5 years
Dividend yield		—	%		—	%		0.0	%		0.0	%
Fair value of options granted	$	17.35		$	23.54		$	18.29		$	17.35

U.S. GAAP requires us to make certain assumptions and estimates regarding the grant date fair value. These include expected volatility, risk-free interest rate, expected option life, and dividend yield. These assumptions and estimates are determined using inputs that, in many cases, are outside of our control. Changes in these assumptions and estimates, including stock price volatility, dividend yield and risk-free interest rate, may significantly impact the fair value of future grants resulting in a significant impact to our financial results.

Under our stock-based compensation plan, the exercise price of a stock option is required to equal or exceed the fair value of our common stock at market close on the option grant date or the ~~most recent~~last trading day prior to the date of grant when grants take place on a day when the market ~~holidays.~~is closed. The following table presents stock option activity:

	Options Outstanding					Options Exercisable
	Shares (in thousands)			Weighted Average Exercise Price		Shares (in thousands)		Weighted Average Exercise Price		Options Outstanding					Options Exercisable
Outstanding at December 28, 2021		775		$	41.77		519	$	41.02
										Shares (in thousands)			Weighted Average Exercise Price		Shares (in thousands)		Weighted Average Exercise Price
Outstanding at January 3, 2023											824		$	40.48		601	$	41.57
Granted		100			32.19						121			31.29
Exercised		—			—						—			29.88
Forfeited		(35	)		40.84						(36	)		36.73
Outstanding at September 27, 2022		840		$	40.68		624	$	41.58
Outstanding at July 4, 2023											909		$	39.41		686	$	41.19

As of ~~September 27, 2022,~~ July 4, 2023, total unrecognized stock-based compensation expense related to non-vested stock options was approximately ~~$2.3~~$2.9 million, which is ~~generally~~ expected to be recognized over the next three ~~years.~~years.

Restricted Stock Units

Time-Based Restricted Stock Units

The following table presents time-based restricted stock unit activity:

	Shares (in thousands)			Weighted Average Fair Value
Outstanding at December 28, 2021		619		$	39.35
						Shares (in thousands)			Weighted Average Fair Value
Outstanding at January 3, 2023							729		$	34.10
Granted		282			28.98		215			30.54
Released		(135	)		42.54		(127	)		36.12
Forfeited		(71	)		36.06		(44	)		33.67
Outstanding at September 27, 2022		695		$	34.86
Outstanding at July 4, 2023							773		$	32.83

The fair value of time-based RSUs is equal to the fair value of our common stock at market close on the date of grant or the ~~most recent~~last trading day prior to the date of grant when grants take place on a day when the market ~~holidays.~~is closed. The fair value of each time-based RSU is expensed over the vesting period (e.g., one, three or five years). As of ~~September 27, 2022,~~July 4, 2023, total unrecognized stock-based compensation expense related to non-vested RSUs was approximately ~~$11.7~~$12.7 million, which is ~~generally~~ expected to be recognized over the next five ~~years.~~ years.

Performance-Based Restricted Stock Units

The following table presents performance-based restricted stock unit activity:

	Shares (in thousands)			Weighted Average Fair Value
Outstanding at December 28, 2021		112		$	45.60
						Shares (in thousands)			Weighted Average Fair Value
Outstanding at January 3, 2023							123		$	38.89
Granted		52			32.27		52			31.87
Released		(27	)		53.22		(40	)		38.90
Forfeited		(14	)		40.06		(7	)		35.01
Outstanding at September 27, 2022		123		$	38.89
Outstanding at July 4, 2023							128		$	36.24

The fair value of performance-based RSUs is equal to the fair value of our common stock at market close on the date of grant or the ~~most recent~~last trading day prior to the date of grant when grants take place on a day when the market ~~holidays.~~is closed. The fair value of each performance-based RSU is expensed, based on management’s current estimate of the level that the performance goal will be achieved. As of ~~September 27, 2022,~~July 4, 2023, based on the target level of performance, the total unrecognized stock-based compensation expense related to non-vested performance-based RSUs was approximately ~~$2.6~~$2.5 million, which is ~~generally~~ expected to be recognized over the next three ~~years.~~

7years.

7. INCOME TAXES

We calculate our interim income tax provision in accordance with ASC Topic 270, “Interim Reporting” and ASC Topic 740, “Accounting for Income Taxes.” The related tax expense or benefit is recognized in the interim period in which it occurs. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain significant estimates and ~~significant~~ judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets. The accounting estimates used to compute income tax expense may change as new events occur, additional information is obtained or the tax environment changes.

Our effective income tax benefit rate for the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022~~July 4, 2023 was ~~101.0%~~a benefit of 35.0% compared to a benefit rate of ~~108.9%~~128.4% for the comparable ~~thirty-nine~~twenty-six week period of ~~2021.~~2022. The effective tax rate benefit for the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ was different from the statutory tax rate primarily as a result of significant ~~FICA~~Federal Insurance Contributions Act (“FICA”) tax tip credits.

As of ~~September 27, 2022,~~July 4, 2023, we had unrecognized tax benefits of approximately ~~$1.3~~$1.0 million, of which approximately ~~$1.1~~$0.9 million, if reversed, would impact our effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is the following (in thousands):


	For the Thirty-Nine Weeks Ended					For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021		July 4, 2023			June 28, 2022
Beginning gross unrecognized tax benefits	$	1,198		$	1,333	$	1,249		$	1,198
Increases for tax positions taken in prior years		3			—		—			3
Decreases for tax positions taken in prior years		(1	)		—		—			(1	)
Increases for tax positions taken in the current year		74			35		22			22
Decreases due to lapse of statute of limitations							(236	)		—
Ending gross unrecognized tax benefits	$	1,274		$	1,368	$	1,035		$	1,222

Our uncertain tax positions are related to tax years that remain subject to examination by tax agencies. As of ~~September 27, 2022,~~July 4, 2023, the earliest tax year still subject to examination by the Internal Revenue Service is ~~2015.~~2015. The earliest year still subject to examination by a significant state or local taxing ~~jurisdiction~~authority is ~~2017.~~2018.

8. LEGAL PROCEEDINGS

We are subject to lawsuits, administrative proceedings and demands that arise in the ordinary course of our business and which typically involve claims from guests, team members and others related to operational, employment, real estate and intellectual property issues common to the foodservice industry. A number of these claims may exist at any given time. We are self-insured for a portion of our general liability, team member workers’ compensation and employment practice liability insurance requirements. We maintain coverage with a third-party insurer to limit our total exposure. We believe that most of our ~~team member~~ claims will be covered by our ~~general liability~~

insurance, subject to coverage limits and the portion of such claims that are ~~self-insured. Punitive~~self-insured; however, punitive damages awards ~~and team member unfair practice claims, however,~~ are not covered by our ~~general liability~~ insurance. To date, we have not been ordered to pay punitive damages with respect to any claims, but there can be no assurance that punitive damages will not be awarded with respect to any future claims. We could be affected by adverse publicity resulting from allegations in lawsuits, claims and proceedings, regardless of whether these allegations are valid or whether we are ultimately determined to be liable. We currently believe that the final disposition of these ~~type~~types of lawsuits, proceedings and claims will not have a material adverse effect on our financial position, results of operations or liquidity. It is possible, however, that our future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, proceedings or claims.

9. SHAREHOLDERS’ EQUITY

~~At-the-Market Offering~~

~~On January 21, 2021,~~Stock Repurchases

During the twenty-six weeks ended July 4, 2023, we ~~sold 703,399~~did not repurchase shares of our common stock at $42.65 per share for cash proceeds of $30.0 million (before commission and other fees) through an “at-the market” (“ATM”) offering program. As a result of the anti-dilution provisions contained in ACT III’s warrant, the number of shares issuable upon exercise of such warrant was adjusted to 876,949 and the exercise price was adjusted to $26.94.

~~Stock Repurchases~~

During the thirty-nine weeks ended September 27, 2022, we repurchased and retired approximately 91,000 shares of our common stock at an average price of $26.12 per share for a total of $2.4 million, which is recorded as a reduction in common stock, with any excess charged to retained earnings. These repurchases are the first since the program was suspended in the first quarter of 2020.stock. As of ~~September 27, 2022,~~July 4, 2023, we have approximately ~~$22.1~~$22.1 million remaining under the current ~~$500~~$500 million share repurchase plan approved by our Board of Directors. Repurchases may be made at any time.

Cash Dividends

Due to the COVID-19 pandemic, we suspended quarterly cash dividends until such time as the Board of Directors determines that resumption of dividend payments is in the best interest of the Company and its shareholders. The only cash dividends paid during the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022~~July 4, 2023 were related to dividends (declared prior to fiscal 2020) on restricted stock grants, which vested under our stock compensation plans.

10. RELATED PARTY TRANSACTIONS

BJ's Act III, LLC

We entered into a consulting agreement for defined services with Act III Management, LLC, an affiliate of BJ’s Act III, LLC, one of our beneficial stockholders, and Act III Holdings, LLC, of which one current member and one former member of the Board of Directors are partners, for $145,000. The services were completed, and the agreement expired on December 31, 2022.

Equity Method Investment

During fiscal 2022, we contributed internally developed software valued at $5.0 million to a company, of which our retired Chief Executive Officer and a member of our Board of Directors has a less than 1% interest. We recorded this non-cash contribution, in exchange for a 20% ownership of the company, as an investment within “Equity method investment” on our Consolidated Balance Sheets, and the related gain within “Loss on disposal and impairment of assets, net” on our Consolidated Statements of Operations. For the twenty-six weeks ended July 4, 2023 and June 28, 2022, we recorded a net loss related to the investment of $100,000 and zero, respectively, within “Other income (expense), net,” and accordingly adjusted the investment carrying amount on our Consolidated Balance Sheets.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

Certain information included in this Form 10-Q and other filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers may contain “forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters.

Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to ~~time (the “Act”).~~time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2021,~~January 3, 2023, as updated in our Form 10-Q for the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022~~July 4, 2023 and in other reports filed subsequently with the SEC.

~~GENERAL~~11

AsGENERAL

BJ’s Restaurants is a leading casual dining restaurant brand differentiated by a high-quality, varied menu with compelling value, and a dining experience that offers our customers (referred to as “guests”) best-in-class service, hospitality and enjoyment, in a high-energy, welcoming and approachable atmosphere. BJ’s is a national restaurant chain that, as of ~~October 31, 2022, we own~~August 7, 2023, owns and ~~operate 214~~operates 215 restaurants located in 2930 states. ~~Our proprietary craft beer is produced at several of our locations, our Temple, Texas brewpub locations and by independent third-party brewers using our proprietary recipes.~~

The first BJ’s restaurant ~~which~~ opened in 1978 in Orange County, California, and was a small sit-down pizzeria that featured Chicago style deep-dish pizza with a unique California twist. Our goal today is to be a leading, varied menu casual dining restaurant brand that focuses on delivering high quality menu options at a compelling value, a dining experience that exceeds our guests’ expectations for service, hospitality and enjoyment, and an atmosphere that is always welcoming and approachable.

In 1996, we introduced our ~~own~~ proprietary craft beers and expanded the BJ’s concept ~~from its beginnings as a small pizzeria~~ to a full-service, high-energy casual dining restaurant when we opened our first large format restaurant with ~~our own internal~~an on-site brewing ~~operations~~operation in Brea, California. Today our restaurants feature a broad menu with over 100 menu items designed to offer something for everyone including: slow roasted entrees such as prime rib, EnLIGHTened Entrees® such as our Cherry Chipotle Glazed Salmon, our original signature deep-dish pizza, the world-famous Pizookie® dessert, and our award-winning BJ’s ~~proprietary~~ craft beers. Our craft beer is produced at four in-restaurant brewing facilities, our Texas brewpub locations and by independent third-party brewers using our proprietary recipes.

Our revenues are comprised of food and beverage sales from our restaurants. Revenues from restaurant sales are recognized when payment is tendered. Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor. We sell gift cards which do not have an expiration date, and we do not deduct non-usage fees from outstanding gift card balances. Gift card sales are recorded as a liability and recognized as revenues upon redemption in our restaurants. Based on historical redemption rates, a portion of our gift card sales are not expected to be redeemed and will be recognized as gift card “breakage.” Estimated gift card breakage is recorded as revenue and recognized in proportion to our historical redemption pattern, unless there is a legal obligation to remit the unredeemed gift cards to government authorities. ~~The estimated gift card breakage is based on when the likelihood of redemption becomes remote, which has typically been 24 months after the original gift card issuance date.~~

Our guest loyalty program enables participants to earn points for qualifying purchases that can be redeemed for food and beverages in the future. We allocate the transaction price between the goods delivered and the future goods that will be delivered, on a relative standalone selling price basis, and defer the revenues allocated to the points until such points are redeemed.

All of our restaurants are Company-owned. In calculating comparable restaurant sales, we include a restaurant in the comparable base once it has been open for 18 months. Guest traffic for our restaurants is estimated based on the number of guest checks.

Cost of sales is comprised of food and beverage costs, including the cost to produce and distribute our proprietary craft beer, soda and ciders. The components of cost of sales are variable and typically fluctuate directly with sales volumes but also may be impacted by changes in commodity prices, a shift in sales mix to higher cost proteins or other higher cost items, or varying levels of promotional activities.

Labor and benefit costs include direct hourly and management wages, bonuses, payroll taxes, fringe benefits and stock-based compensation and workers’ compensation expense that is directly related to restaurant level team members.

Occupancy and operating expenses include restaurant supplies, credit card fees, third-party delivery company commissions, marketing costs, fixed rent, percentage rent, common area maintenance charges, utilities, real estate taxes, repairs and maintenance and other related restaurant costs.

General and administrative expenses include costs ~~include all~~for our corporate administrative functions that support existing operations and provide infrastructure to facilitate our future growth. Components of this category include corporate management, field supervision and corporate hourly staff salaries and related team member benefits (including stock-based compensation expense and cash-based incentive compensation), travel and relocation costs, information systems, the cost to recruit and train new restaurant management team members, corporate rent, certain brand marketing-related expenses and legal, professional and consulting fees.

Depreciation and amortization are composed primarily of depreciation of capital expenditures for restaurant and brewing equipment and leasehold improvements.

Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period.

RESULTS OF OPERATIONS

The following table provides, for the periods indicated, our unaudited Consolidated Statements of Operations expressed as percentages of total revenues. The results of operations for the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.


	For the Thirteen Weeks Ended						For the Thirty-Nine Weeks Ended						For the Thirteen Weeks Ended						For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021			September 27, 2022			September 28, 2021			July 4, 2023			June 28, 2022			July 4, 2023			June 28, 2022
Revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Restaurant operating costs (excluding depreciation and amortization):
Cost of sales		27.3			27.2			27.4			26.2			25.9			27.6			26.3			27.4
Labor and benefits		37.7			37.2			38.0			36.6			36.2			37.3			36.9			38.1
Occupancy and operating		24.7			24.4			24.0			24.7			23.4			23.2			23.3			23.6
General and administrative		6.1			6.1			5.8			6.2			6.1			5.1			5.9			5.6
Depreciation and amortization		5.6			6.5			5.6			6.9			5.1			5.3			5.1			5.7
Restaurant opening		0.2			0.1			0.2			0.2			0.1			0.3			0.2			0.3
Loss on disposal and impairment of assets		0.1			1.0			0.1			0.4
Loss on disposal and impairment of assets, net														0.3			0.1			0.5			0.1
Total costs and expenses		101.7			102.5			101.0			101.1			97.1			99.0			98.1			100.7
Loss from operations		(1.7	)		(2.5	)		(1.0	)		(1.1	)
Income (loss) from operations														2.9			1.0			1.9			(0.7	)

Other (expense) income:
Other income (expense):
Interest expense, net		(0.2	)		(0.4	)		(0.2	)		(0.5	)		(0.3	)		(0.1	)		(0.3	)		(0.2	)
Other income (expense), net		—			0.2			(0.1	)		0.1
Other income (expense)														0.2			(0.1	)		0.1			(0.1	)
Total other expense		(0.2	)		(0.2	)		(0.2	)		(0.4	)		(0.1	)		(0.2	)		(0.2	)		(0.3	)
Loss before income taxes		(1.8	)		(2.7	)		(1.3	)		(1.5	)
Income (loss) before income taxes														2.8			0.8			1.7			(1.0	)

Income tax benefit		(1.3	)		(1.9	)		(1.3	)		(1.6	)
Net (loss) income		(0.5	)%		(0.8	)%		0.0	%		0.1	%
Income tax (benefit) expense														(0.6	)		0.7			(0.6	)		(1.3	)
Net income														3.4	%		0.1	%		2.2	%		0.3	%

Thirteen Weeks Ended ~~September 27, 2022~~July 4, 2023 Compared to Thirteen Weeks Ended ~~September~~June 28, ~~2021~~2022

Revenues. Total revenues increased by ~~$29.2~~$20.0 million, or ~~10.3%~~6.1%, to ~~$311.3~~$349.7 million during the thirteen weeks ended ~~September 27, 2022,~~July 4, 2023, from ~~$282.2~~$329.7 million during the comparable ~~thirteen week~~thirteen-week period of ~~2021.~~2022. The increase in revenues primarily consisted of ~~an 8.9%~~a 4.7%, or ~~$24.7~~$14.9 million, increase in comparable restaurant sales and a ~~$4.8~~$10.5 million increase in sales from new restaurants not yet in our comparable restaurant sales base. Revenue increases were offset primarily ~~offset~~ by a ~~$0.9~~$2.4 million decrease related to closed restaurants and a $2.8 million decrease related to the ~~closure~~shift in weeks as a result of ~~one restaurant.~~our 53rd week in fiscal 2022. The increase in comparable restaurant sales was the result of an increase in ~~guest traffic of approximately 4.2% and an increase in~~ average check of approximately ~~4.7%~~7.6%, due to menu price increases, ~~partially~~ offset by a decrease in guest traffic of approximately 2.9% coupled with changes in mix.

Cost of Sales. Cost of sales ~~increased~~decreased by ~~$8.4~~$0.3 million, or ~~10.9%~~0.3%, to ~~$85.0~~$90.6 million during the thirteen weeks ended ~~September 27, 2022,~~July 4, 2023, from ~~$76.6~~$90.9 million during the comparable ~~thirteen week~~thirteen-week period of ~~2021.~~2022. This ~~increase~~ was primarily due to lower commodity costs and savings from our cost savings initiatives, offset by the increase in revenue ~~commodity cost increases~~ and associated costs related to ~~our three~~ new restaurants opened since the thirteen weeks ended ~~September~~June 28, ~~2021, offset by the closure of one restaurant at the beginning of the current fiscal year.~~2022. As a percentage of revenues, cost of sales ~~increased~~decreased to ~~27.3%~~25.9% for the current ~~thirteen week~~thirteen-week period from ~~27.2%~~27.6% for the prior year comparable period. This ~~slight increase~~decrease was primarily due to easing of inflationary pressure on food costs, ~~offset by~~coupled with increased revenues from menu price ~~increases.~~increases and the effectiveness of our cost savings initiatives.

Labor and Benefits. Labor and benefit costs for our restaurants increased by ~~$12.5~~$3.4 million, or ~~11.9%~~2.8%, to ~~$117.5~~$126.5 million during the thirteen weeks ended ~~September 27, 2022,~~July 4, 2023, from ~~$105.0~~$123.1 million during the comparable ~~thirteen week~~thirteen-week period of ~~2021.~~2022. This ~~increase~~ was primarily due to ~~additional labor required to support increased revenue, coupled with higher wages, training and overtime costs,~~

~~expenses~~$2.4 million related to the three new restaurants opened since the thirteen weeks ended September 28, 2021, and our $3.1 million Employee Retention Tax Credit in conjunction with the CARES Act recognized during the thirteen weeks ended September 28, 2021. Increases inhigher management labor, and ~~benefit costs were offset in part by the closure of one restaurant at the beginning of the current fiscal year.~~$0.9 million related to taxes and benefits. As a percentage of revenues, labor and benefit costs ~~increased~~decreased to ~~37.7%~~36.2% for the current ~~thirteen week~~thirteen-week period from ~~37.2%~~37.3% for the prior year comparable period. This decrease was primarily due to our ability to leverage certain fixed costs over a higher revenue base and improved labor efficiency, coupled with the effectiveness of our cost savings initiatives. Included in labor and benefits for the thirteen weeks ended July 4, 2023 and June 28, 2022, was approximately $0.4 million and $0.6 million, respectively, or 0.1% and 0.2% of revenues, respectively, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members.

Occupancy and Operating. Occupancy and operating expenses increased by $5.4 million, or 7.0%, to $81.9 million during the thirteen weeks ended July 4, 2023, from $76.6 million during the comparable thirteen-week period of 2022. This was primarily due to increases of $1.5 million in rent related expenses, $1.4 million in marketing expenditures, $1.3 million related to restaurant facilities expenses, and $0.8 million in third-party delivery company fees.As a percentage of revenues, occupancy and operating expenses

increased to 23.4% for the current thirteen-week period from 23.2% for the prior year comparable period. This increase was primarily ~~due~~related to ~~our Employee Retention Tax Credit in conjunction with the CARES Act recognized~~increased marketing expenditures.

General and Administrative. General and administrative expenses increased by $4.3 million, or 25.4%, to $21.2 million during the thirteen weeks ended ~~September~~July 4, 2023, from $16.9 million during the comparable thirteen-week period of 2022. This was primarily due to increases of $3.6 million in personnel costs, including a $2.3 million increase related to our deferred compensation liability and $0.5 million in corporate expenses. Included in general and administrative costs for the thirteen weeks ended July 4, 2023 and June 28, ~~2021,~~2022, was approximately $2.4 million and $1.6 million,or 0.7% and 0.5% of revenues, respectively, of stock-based compensation expense. As a percentage of revenues, general and administrative expenses increased to 6.1% for the current thirteen-week period from 5.1% for the prior year comparable period. This increase was primarily related to our increased deferred compensation liability coupled with higher ~~wages, training~~incentive compensation expense.

Depreciation and ~~overtime hours,~~Amortization. Depreciation and amortization increased by $0.1 million, or 0.8%, to $17.7 million during the thirteen weeks ended July 4, 2023, compared to $17.6 million during the comparable thirteen-week period of 2022. This increase was primarily related to depreciation expense related to our restaurants opened since the thirteen weeks ended June 28, 2022, partially offset by impairment and disposal charges taken in the prior year, and the closure of three restaurants since the thirteen weeks ended June 28, 2022. As a percentage of revenues, depreciation and amortization decreased to 5.1% for the current thirteen-week period from 5.3% for the prior year comparable period. This decrease was primarily due to a higher revenue base.

Restaurant Opening. Restaurant opening expense decreased by $0.7 million, or 63.8%, to $0.4 million during the thirteen weeks ended July 4, 2023, compared to $1.0 million during the comparable thirteen-week period of 2022. This decrease was primarily due to the timing of openings.

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $1.1 million during the thirteen weeks ended July 4, 2023, and $0.4 million during the comparable thirteen-week period of 2022. For the thirteen weeks ended July 4, 2023, these costs primarily relate to disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Interest Expense, Net. Interest expense, net, increased by $0.7 million to $1.1 million during the thirteen weeks ended July 4, 2023, compared to $0.4 million during the comparable thirteen-week period of 2022. This increase was primarily due to the increase in weighted average interest rate year over year, coupled with a slightly higher average outstanding debt balance.

Other Income (Expense), Net. Other income (expense), net, increased by $0.8 million to $0.6 million of income during the thirteen weeks ended July 4, 2023, compared to $0.2 million of expense during the comparable thirteen-week period of 2022. This increase was primarily related to gains associated with the cash surrender value of certain life insurance policies under our deferred compensation plan.

Income Tax (Benefit) Expense. Our effective income tax rate for the thirteen weeks ended July 4, 2023, reflected a 22.7% tax benefit compared to a 88.2% tax expense for the comparable thirteen-week period of 2022. The effective tax rate for the thirteen weeks ended July 4, 2023 and June 28, 2022 was different than the statutory rate primarily due to FICA tax tip credits. Additionally, the thirteen weeks ended June 28, 2022, include a $2.2 million income tax expense, which reflects our estimated annual effective tax rate and offsets a portion of the $10.2 million income tax benefit recorded in the first quarter of fiscal 2022.

Twenty-Six Weeks Ended July 4, 2023 Compared to Twenty-Six-Weeks Ended June 28, 2022

Revenues. Total revenues increased by $62.5 million, or 9.9%, to $691.0 million during the twenty-six weeks ended July 4, 2023, from $628.4 million during the comparable twenty-six week period of 2022. The increase in revenues primarily consisted of a 6.8%, or $42.0 million, increase in comparable restaurant sales, a $22.5 million increase in sales from new restaurants not yet in our comparable restaurant sales base, and a $1.6 million increase related to the shift in weeks as a result of our 53rd week in fiscal 2022. Revenue increases were offset primarily by a $3.1 million decrease related to closed restaurants. The increase in comparable restaurant sales was the result of an increase in average check of approximately 7.2%, due to menu price increases, offset by a decrease in guest traffic of approximately 0.4% coupled with changes in mix.

Cost of Sales. Cost of sales increased by $9.1 million, or 5.3%, to $181.5 million during the twenty-six weeks ended July 4, 2023, from $172.4 million during the comparable twenty-six week period of 2022. This was primarily due to the increase in revenue and costs related to our five new restaurants opened since the twenty-six weeks ended June 28, 2022, partially offset by the closure of three restaurants since the twenty-six weeks ended June 28, 2022. As a percentage of revenues, cost of sales decreased to 26.3% for the current twenty-six week period from 27.4% for the prior year comparable period. This decrease was primarily due to easing of inflationary pressure on food costs, coupled with increased revenues from menu price increases and cost savings benefits resulting from our cost savings initiatives.

Labor and Benefits. Labor and benefit costs for our restaurants increased by $15.5 million, or 6.5%, to $254.9 million during the twenty-six weeks ended July 4, 2023, from $239.4 million during the comparable twenty-six week period of 2022. This was primarily due to $8.1 million related to higher hourly labor, $4.1 million related to higher management labor and incentive compensation, and

$2.7 million related to taxes and benefits as a result of increases in hourly wage rates and the additional labor related to our five new restaurants opened since the twenty-six weeks ended June 28, 2022. As a percentage of revenues, labor and benefit costs decreased to 36.9% for the current twenty-six week period from 38.1% for the prior year comparable period. This decrease was primarily due to our ability to leverage ~~our~~certain fixed costs over a higher revenue base, ~~menu price increases~~improved labor efficiency, and ~~more efficient labor scheduling tools derived from~~team member retention, coupled with the effectiveness of our margin improvement initiative. Excluding the Employee Retention Tax Credit recognized during the thirteen weeks ended September 28, 2021, the change in labor and benefits would have been favorable as a percentage of revenues.cost savings initiatives. Included in labor and benefits for the ~~thirteen~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ was approximately ~~$0.7~~$1.3 million and ~~$0.6~~$1.4 million, respectively, or 0.2% revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members.

Occupancy and Operating. Occupancy and operating expenses increased by ~~$8.1~~$12.8 million, or ~~11.7%~~8.6%, to ~~$76.9~~$161.1 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, from ~~$68.9~~$148.3 million during the comparable ~~thirteen~~twenty-six week period of ~~2021.~~2022. This ~~increase~~ was primarily due to ~~higher~~increases of $3.0 million related to restaurant facilities expenses, $2.8 million in rent related expenses, $1.8 million in marketing expenditures, $1.7 million in utilities, $1.5 million in third-party delivery company fees, and $1.4 million in merchant credit card fees as a result of increased revenues and increased supply costs, janitorial and contract services, marketing expenses and costs related to the three new restaurants opened since the thirteen weeks ended September 28, 2021. fees.As a percentage of revenues, occupancy and operating expenses ~~increased~~decreased to ~~24.7%~~23.3% for the current ~~thirteen~~twenty-six week period from ~~24.4%~~23.6% for the prior year comparable period. This ~~increase~~decrease was primarily related to ~~marketing in certain markets to drive incremental sales, partially offset by~~ our ability to leverage certain fixed operating and occupancy costs over a higher revenue base. ~~Excluding the additional marketing investment, occupancy and operating would have been favorable as a percentage of revenues.~~

General and Administrative. General and administrative expenses increased by ~~$1.6~~$5.7 million, or ~~9.2%~~16.3%, to ~~$18.9~~$40.9 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, from ~~$17.3~~$35.2 million during the comparable ~~thirteen~~twenty-six week period of ~~2021.~~2022. This ~~change~~ was primarily due to ~~increased~~increases of $4.9 million in personnel costs, including a $2.9 million increase related ~~costs.~~to our deferred compensation liability, and $0.9 million in corporate expenses, offset by decreases of $0.2 million in rent related expenses, and $0.3 million in recruiting related expenses. Included in general and administrative costs for the ~~thirteen~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022, ~~and September 28, 2021,~~ was approximately ~~$2.0~~$4.1 million and ~~$1.8~~$3.6 million, or 0.6% of revenues, ~~respectively,~~ of stock-based compensation expense. As a percentage of revenues, general and administrative expenses ~~remained at 6.1%~~increased to 5.9% for the current ~~thirteen~~twenty-six week period ~~and~~from 5.6% for the prior year comparable period. This increase was primarily related to our increased deferred compensation liability.

Depreciation and Amortization. Depreciation and amortization decreased by ~~$0.9~~$0.2 million, or ~~4.8%~~0.6%, to ~~$17.4~~$35.3 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, compared to ~~$18.2~~$35.5 million during the comparable ~~thirteen~~twenty-six week period of ~~2021.~~2022. This decrease was primarily related to impairment and disposal charges taken in ~~fiscal 2021,~~the prior year, including the impairment and reduction of carrying value ~~related to~~for the closure of ~~one restaurant at~~three restaurants since the ~~beginning of the current fiscal year.~~twenty-six weeks ended June 28, 2022. The decrease in depreciation and amortization was partially offset by depreciation expense related to our restaurants opened since the ~~thirteen~~twenty-six weeks ended ~~September~~June 28, ~~2021.~~2022. As a percentage of revenues, depreciation and amortization decreased to ~~5.6%~~5.1% for the current ~~thirteen~~twenty-six week period from ~~6.5%~~5.7% for the prior year comparable period. This decrease was primarily due to a higher revenue base.

Restaurant Opening. Restaurant opening expense ~~increased~~decreased by ~~$0.1~~$0.4 million, or ~~28.5%~~24.9%, to ~~$0.5~~$1.2 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, compared to ~~$0.4~~$1.6 million during the comparable ~~thirteen~~twenty-six week period of ~~2021.~~2022. This increase was primarily due to the timing of openings.

Loss on Disposal and Impairment of ~~Assets.~~ Assets, Net. Loss on disposal and impairment of assets, net, was ~~$0.4~~$3.3 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, and ~~$2.7~~$0.6 million during the comparable ~~thirteen~~twenty-six week period of ~~2021.~~2022. For the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, these costs primarily relate to disposals of assets in conjunction with initiatives to keep our restaurants up to ~~date. For~~date, including the ~~thirteen weeks ended September 28, 2021, these costs~~removal of glass partitions in our dining rooms that were ~~primarily related to the impairment and reduction~~installed early in the ~~carrying value of the long-lived and operating lease assets related to one of our restaurants.~~pandemic.

Interest Expense, Net. Interest expense, net, ~~decreased~~increased by ~~$0.4~~$1.2 million to ~~$0.6~~$2.2 million during the ~~thirteen~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, compared to ~~$1.0~~$1.1 million during the comparable ~~thirteen~~twenty-six week period of ~~2021. This decrease was primarily due to a lower average debt balance during the thirteen weeks ended September 27, 2022, compared to the comparable thirteen week period of 2021.~~

~~Other Income (Expense), Net~~. Other income (expense), net, decreased by $0.4 million to $57,000 of income during the thirteen weeks ended September 27, 2022, compared to $0.4 million of income during the comparable thirteen week period of 2021. This decrease was primarily related to an insurance reimbursement for business interruptions related to the Texas winter storms during the thirteen weeks ended September 28, 2021.

~~Income Tax Expense (Benefit).~~ Our effective income tax rate for the thirteen weeks ended September 27, 2022, reflected a 71.5% tax benefit compared to a 71.2% tax benefit for the comparable thirteen week period of 2021. The effective tax rate for the thirteen weeks ended September 27, 2022 and September 28, 2021, was different than the statutory tax rate primarily due to the benefit from FICA tax tip credits.

~~Thirty-Nine Weeks Ended September 27, 2022 Compared to Thirty-Nine Weeks Ended September 28, 2021~~

~~Revenues~~. Total revenues increased by $144.0 million, or 18.1%, to $939.8 million during the thirty-nine weeks ended September 27, 2022, from $795.8 million during the comparable thirty-nine week period of 2021. The increase in revenues primarily consisted of a 16.9%, or $132.2 million, increase in comparable restaurant sales, and an $13.2 million increase in sales from new restaurants not yet in our comparable restaurant sales base. Revenue increases were partially offset by a $2.3 million decrease related to the closure of one restaurant. The increase in comparable restaurant sales was the result of an increase in guest traffic of approximately 11.9% and an increase in average check of approximately 5.0%, due to menu price increases partially offset by changes in mix. The increase in guest traffic was primarily due to the re-opening of our dining rooms, which were closed or restricted in operation during portions of the same period in 2021.

~~Cost of Sales.~~ ~~Cost of sales increased by $49.0 million, or 23.5%, to $257.4 million during the thirty-nine weeks ended September 27, 2022, from $208.4 million during the comparable thirty-nine week period of 2021.~~2022. This increase was primarily due to the increase in ~~revenue, commodity cost increases and costs related to~~ our three new restaurants opened since the thirty-nine weeks ended September 28, 2021, and one that re-opened in August 2021, partially offset by the closure of one restaurant at the beginning of the current fiscal year. As a percentage of revenues, cost of sales increased to 27.4% for the current thirty-nine week period from 26.2% for the prior year comparable period. This increase was primarily due to inflationary pressure on food costs, partially mitigated by menu price increases.

~~Labor and Benefits.~~ Labor and benefit costs for our restaurants increased by $66.0 million, or 22.7%, to $356.9 million during the thirty-nine weeks ended September 27, 2022, from $290.9 million during the comparable thirty-nine week period of 2021. This increase was primarily due to increased team members and higher wages, training and overtime costs due to the re-opening of our dining rooms, which were closed or had restricted operations during a portion of the same period in 2021, expenses related to the three new restaurants opened since the thirty-nine weeks ended September 28, 2021, and our $3.1 million Employee Retention Tax Credit in conjunction with the CARES Act recognized during the thirty-nine weeks ended September 28, 2021. Increases in labor and benefit costs were offset in part by the closure of one restaurant at the beginning of the current fiscal year. As a percentage of revenues, labor and benefit costs increased to 38.0% for the current thirty-nine week period from 36.6% for the prior year comparable period. This increase was primarily due to our Employee Retention Tax Credit in conjunction with the CARES Act recognized during the thirty-nine weeks ended September 28, 2021, higher wages, training and overtime hours due to increased hiring activities, and the deleveraging impact from the COVID-19 Omicron variant wave in January 2022 when sales were severely impacted, offset by our ability to leverage our fixed costs over a higher revenue base, menu price increases and more efficient labor scheduling tools derived from our margin improvement initiative. Included in labor and benefits for the thirty-nine weeks ended September 27, 2022 and September 28, 2021, was approximately $2.0 million and $2.2 million, or 0.2% and 0.3% of revenues, respectively, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members.

~~Occupancy and Operating.~~ Occupancy and operating expenses increased by $28.9 million, or 14.7%, to $225.2 million during the thirty-nine weeks ended September 27, 2022, from $196.3 million during the comparable thirty-nine week period of 2021. This increase was primarily due to higher merchant credit card fees, supply costs, janitorial services related to the re-opening of our dining rooms, coupled with increased marketing expenses and costs related to the three new restaurants opened since the~~thirty-nine weeks ended September 28, 2021~~, and one restaurant that was re-opened in August 2021. As a percentage of revenues, occupancy and operating expenses decreased to 24.0% for the current thirty-nine week period from 24.7 % for the prior year comparable period. This decrease was primarily due to our ability to leverage certain fixed operating and occupancy costs over a higher revenue base.

~~General and Administrative.~~ General and administrative expenses increased by $4.5 million, or 9.0%, to $54.0 million during the thirty-nine weeks ended September 27, 2022, from $49.6 million during the comparable thirty-nine week period of 2021. This increase was primarily due to increases in personnel, travel, recruiting and outside services as we returned closer to pre-pandemic operations and have invested in growth initiatives, offset by a decrease in our deferred compensation plan liability.~~Included in general and administrative costs for thethirty-nine weeks ended September 27, 2022 and September 28, 2021~~, was approximately $5.6 million and $5.3 million, or 0.6% and 0.7% of revenues, respectively, of stock-based compensation expense. As a percentage of revenues, general and administrative expenses decreased to 5.8% for the current thirty-nine week period from 6.2% for the prior year comparable period. This decrease was primarily due to our ability to leverage our fixed costs over a higher revenue base.

~~Depreciation and Amortization.~~ Depreciation and amortization decreased by $1.8 million, or 3.2%, to $52.9 million during the thirty-nine weeks ended September 27, 2022, compared to $54.7 million during the comparable thirty-nine week period of 2021. This decrease was primarily related to impairment and disposal charges taken in fiscal 2021, including the impairment and reduction of carrying value related to the closure of one restaurant at the beginning of the current fiscal year. The decrease in depreciation and amortization was partially offset by depreciation expense related to our three new restaurants opened since the thirty-nine weeks ended September 28, 2021. As a percentage of revenues, depreciation and amortization decreased to 5.6% for the current thirty-nine week period from 6.9% for the prior year comparable period. This decrease was primarily due to a higher revenue base.

~~Restaurant Opening~~. Restaurant opening expense increased by $0.9 million, or 72.2%, to $2.1 million during the thirty-nine weeks ended September 27, 2022, compared to $1.2 million during the comparable thirty-nine week period of 2021. This increase was primarily due to the timing of our openings and increased costs. We opened three new restaurants during the thirty-nine weeks ended September 27, 2022 and one shortly after the quarter ended, compared to two new restaurants and one re-opening during the thirty-nine weeks ended September 28, 2021.

~~Loss on Disposal and Impairment of Assets.~~ ~~Loss on disposal and impairment of assets was $1.0 million during the thirty-nine weeks ended September 27, 2022, and $3.2 million during the comparable thirty-nine week period of 2021.~~For the thirty-nine weeks ended September 27, 2022, these costs primarily relate to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirty-nine weeks ended September 28, 2021 these costs were primarily related to the impairment and reduction in the carrying value of the long-lived and operating lease assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date and the disposal of certain unproductive restaurant assets.

~~Interest Expense, Net~~. Interest expense, net, decreased by $2.3 million to $1.7 million during the thirty-nine weeks ended September 27, 2022, compared to $4.0 million during the comparable thirty-nine week period of 2021. This decrease was primarily due to a lower average debt balance and weighted average interest rate ~~during the thirty-nine weeks ended September 27, 2022, compared to the comparable thirty-nine week period of 2021.~~year over year, coupled with a slightly higher average outstanding debt balance.

Other ~~(Expense)~~ Income (Expense), Net. Other ~~(expense)~~ income (expense), net, ~~was $0.5~~increased by $1.4 million ~~of expense during the thirty-nine weeks ended September 27, 2022, compared~~ to $0.8 million of income during the twenty-six weeks ended July 4, 2023, compared to $0.6 million of expense during the comparable ~~thirty-nine~~twenty-six week period of ~~2021.~~2022. This increase was primarily ~~due~~related to ~~the change~~gains associated with the cash surrender value of certain life insurance policies under our deferred compensation plan. This change offsets the related deferred compensation income or expense impact included in “General and administrative” expenses on our Unaudited Consolidated Statements of Operations. During the thirty-nine weeks ended September 27, 2022, the impact related to the cash surrender value of certain life insurance policies was partially offset by an insurance reimbursement related to business interruptions due to civil unrest and compensation from the city related to a partial parking lot closure at one of our restaurants.

Income Tax ~~Benefit.~~(Benefit) Expense. Our effective income tax rate for the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, reflected a ~~101.0%~~35.0% tax benefit compared to a ~~108.9%~~128.4% tax benefit for the comparable ~~thirty-nine~~twenty-six week period of ~~2021.~~2022. The effective tax rate benefit for the ~~thirty-nine~~twenty-six weeks ended ~~September 27,~~July 4, 2023 and June 28, 2022 ~~and September 28, 2021,~~ was different than the statutory ~~tax~~ rate primarily due to ~~the benefit from~~significant FICA tax tip credits.

LIQUIDITY AND MATERIAL CASH REQUIREMENTS

The following table provides, for the periods indicated, a summary of our key liquidity measurements (dollars in thousands):


	September 27, 2022			December 28, 2021			July 4, 2023			January 3, 2023
Cash and cash equivalents	$	19,179		$	38,527		$	6,053		$	24,873
Net working capital	$	(123,048	)	$	(109,619	)	$	(118,107	)	$	(114,600	)
Current ratio	0.3:1.0			0.5:1.0			0.4:1.0			0.4:1.0

Our second quarter ended on July 4, 2023, a national banking holiday. As a result and per our accounting policy, $19.2 million of ~~uncertainties in the near-term macro environment caused by the COVID-19 pandemic, including supply chain challenges,~~credit card revenues was recorded as accounts and ~~commodity and labor inflation, we continue to~~other receivables on July 4, 2023. These in-transit funds were subsequently received. We focus on cash flow generation and maintaining a solid and flexible financial position to execute our long-term strategy of investing in our business and opening new restaurants. We continue to monitor the macro environment and will review and, when appropriate, adjust our overall approach to capital allocation, including share repurchases and dividends, as the ~~post-pandemic recovery unfolds.~~ environment changes.

~~We are taking what we believe to be reasonably necessary and appropriate measures to control costs and maximize liquidity.~~ Based on ~~the~~ current ~~level of~~ operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our credit agreement will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months. Our future operating performance will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Similar to many restaurant chains, we typically utilize operating lease arrangements (principally ground leases) for the majority of our restaurant locations. We believe our operating lease arrangements provide appropriate leverage for our capital structure in a financially efficient manner. However, we are not limited to the use of lease arrangements as our only method of opening new restaurants and from time to time have purchased the underlying land for new restaurants. We typically lease our restaurant locations for periods of 10 to 20 years under operating lease arrangements. Our rent structures vary from lease to lease, but generally provide for the payment of both minimum and contingent (percentage) rent based on sales, as well as other expenses related to the leases (for example, our pro-rata share of common area maintenance, property tax and insurance expenses). Many of our lease arrangements include the opportunity to secure tenant improvement allowances to partially offset the cost of developing and opening the related restaurants. Generally, landlords recover the cost of such allowances from increased minimum rents. There can be no assurance that such allowances will be available to us on each project. From time to time, we may also decide to purchase the underlying land for a new restaurant if that is the only way to secure a highly desirable site. Currently, we own the underlying land for ~~one of our restaurants that~~

~~will be opened in fiscal 2022 and~~ our Texas brewpub locations. We also own ~~two~~ parcels of land adjacent to two of our restaurants. It is not our current strategy to own a large number of land parcels that underlie our restaurants. Therefore, in many cases we have subsequently entered into sale-leaseback arrangements for land parcels that we previously purchased. We disburse cash for certain site-related work, buildings, leasehold improvements, furnishings, fixtures and equipment to build our leased and owned premises. We own substantially all of the equipment, furniture and trade fixtures in our restaurants and currently plan to do so in the future.

CASH FLOWS

The following tables set forth, for the periods indicated, our cash flows from operating, investing, and financing activities (in thousands):


	For the Thirty-Nine Weeks Ended						For the Twenty-Six Weeks Ended
	September 27, 2022			September 28, 2021			July 4, 2023			June 28, 2022
Net cash provided by operating activities	$	33,790		$	46,242		$	41,600		$	30,212
Net cash used in investing activities		(50,309	)		(25,145	)		(52,908	)		(30,553	)
Net cash used in financing activities		(2,829	)		(12,946	)		(7,512	)		(425	)
Net (decrease) increase in cash and cash equivalents	$	(19,348	)	$	8,151
Net decrease in cash and cash equivalents							$	(18,820	)	$	(766	)

Operating Cash Flows

Net cash provided by operating activities was ~~$33.8~~$41.6 million during the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, representing a ~~$12.5~~$11.4 million ~~decrease~~increase from the ~~$46.2~~$30.2 million provided by during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 28, ~~2021.~~2022. The ~~decrease~~increase over the prior year is primarily due to the timing of payments for ~~accounts payable~~accrued expenses, the change in deferred income taxes and ~~accrued expenses,~~improved net income. This increase was offset by the ~~collection~~timing of accounts and other ~~receivable.~~ receivable receipts, including in transit credit card deposits due to the national banking holiday.

Investing Cash Flows

Net cash used in investing activities was ~~$50.3~~$52.9 million during the ~~thirty-nine~~ twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, representing a ~~$25.2~~$22.4 million increase from the ~~$25.1~~$30.6 million used during the ~~thirty-nine~~ twenty-six weeks ended ~~September~~June 28,~~, 2021.~~ 2022. The increase over prior year is primarily due to ~~an increase in the number of~~ new ~~restaurant openings, new~~restaurants opened, restaurants under construction, and ~~key productivity initiatives.~~an increase in restaurant remodel activity.

The following table provides, for the periods indicated, the components of capital expenditures (in thousands):


	For the Thirty-Nine Weeks Ended				For the Twenty-Six Weeks Ended
	September 27, 2022		September 28, 2021		July 4, 2023		June 28, 2022
New restaurants	$	27,102	$	11,706	$	20,970	$	18,168
Restaurant maintenance and key productivity initiatives		21,396		11,871
Restaurant maintenance and remodels, and key productivity initiatives						31,050		11,899
Restaurant and corporate systems		2,461		1,589		892		1,052
Total capital expenditures	$	50,959	$	25,166	$	52,912	$	31,119

AsYear to date as of ~~October 31, 2022,~~August 7, 2023, we have opened ~~four~~two new restaurants and closed ~~two.~~three restaurants. We currently plan to open as many as ~~six~~five restaurants in fiscal ~~2022,~~2023, and we have entered into signed leases, land purchase agreements or letters of intent for all of our ~~2022~~2023 new restaurant locations. ~~Our new restaurant unit economics continue to warrant an appropriate allocation of capital.~~

We currently anticipate our total capital expenditures for fiscal ~~2022~~2023 to be approximately $90 million to $95 million. This estimate includes costs to open ~~six~~five new restaurants and remodel ~~several~~35 to 40 existing locations. Total capital expenditures exclude anticipated proceeds from tenant improvement ~~allowances and sale-leasebacks.~~allowances. We expect to fund our net capital expenditures with our current cash balance on hand, cash flows from operations and our line of credit. Our future cash requirements will depend on many factors, including the pace of our expansion, conditions in the retail property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords.

Financing Cash Flows

Net cash used in financing activities was ~~$2.8~~$7.5 million during the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, representing a ~~$10.1~~$7.1 million ~~decrease~~increase from the ~~$12.9~~$0.4 million used during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 28, ~~2021.~~2022. This ~~decrease~~increase was primarily due

to ~~repurchases of common stock, coupled with no common stock issuances or stock option exercises, offset by higher~~ payments on our line of credit during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 28, ~~2021~~.2022.

OFF-BALANCE SHEET ARRANGEMENTS

We do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities (“VIEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow limited purposes. As of ~~September 27, 2022,~~July 4, 2023, we are not involved in any off-balance sheet arrangements.

IMPACT OF INFLATION

Our country is currently experiencing multi-decade high inflation. Inflation on food, labor, energy and occupancy and operating costs is currently impacting the profitability of our restaurant operations compared to historical trends. Our profitability is dependent, among other things,Heightened inflation has had a material impact on our ~~ability to anticipate~~operations, new restaurant construction and react to changes in the cost of key operating resources, including food and other raw materials, labor, energy and other supplies and services. While we have taken steps to enter into agreements for some of the commodities used in our restaurant operations, there can be no assurance that future supplies and costs for such commodities will not fluctuate due to weather or other market conditions outside of our control. We are currently unable to contract for certain commodities, such as fluid dairy, fresh meat or seafood, and most fresh produce items, for long periods of time. Consequently, such commodities can be subject to unforeseen supply and cost fluctuations. ~~While we have not had material disruptions in our supply chain, we have experienced some product shortages and higher costs for many of our commodities.~~

A general shortage in the availability of qualified restaurant managers and hourly workers in certain geographic areas in which we operate, which has been exacerbated by continuing effects of the COVID-19 pandemiccorresponding return on the labor market, has caused increases in the costs of recruiting and compensating such team members. Many of our restaurant team members are paid hourly rates subject to federal, state or local minimum wage requirements. Numerous state and local governments have their own minimum wage and other regulatory requirements for team members that are generally greater than the federal minimum wage and are subject to annual increases based on changes in their local consumer price indices. Additionally, certain operating and other costs, including health benefits in compliance with the Patient Protection and Affordable Care Act, taxes, insurance, COVID-19 pandemic related benefits, and other outside services continue to increase with the general level of inflation and may also be subject to other cost and supply fluctuations outside of our control.

invested capital. While we have been able to partially offset inflation and other changes in the costs of key operating ~~resources~~inputs by gradually increasing ~~prices of our~~ menu ~~items,~~prices, coupled with cost savings initiatives, more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. Increases in inflation could have a severe impact on the United States and global economies, which will have an adverse impact on our business, financial condition and results of operations. From time to time, competitive conditions will limit our menu pricing flexibility. In addition, macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent. There can be no assurance that all of our future cost increases can be offset by higher menu prices or that higher menu prices will be accepted by our restaurant guests without any resulting changes in their visit frequencies or purchasing patterns. Many of the leases for our restaurants provide for contingent rent obligations based on a percentage of sales. As a result, rent expense will absorb a proportionate share of any menu price increases in our restaurants. There can be no assurance that we will continue to generate increases in comparable restaurant sales in amounts sufficient to offset inflationary or other cost pressures.

SEASONALITY AND ADVERSE WEATHER

Our business is impacted by weather and other seasonal factors that typically impact other restaurant operations. Holidays (and shifts in the holiday calendar) and severe weather including hurricanes, tornados, thunderstorms, snow and ice storms, prolonged extreme temperatures and similar conditions may impact restaurant sales volumes in some of the markets where we operate. Many of our restaurants are located in or near shopping centers and malls that typically experience seasonal fluctuations in sales. Quarterly results have been and will continue to be significantly impacted by the timing of new restaurant openings and their associated restaurant opening expenses. As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for a full fiscal year.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses in the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. We continually review the estimates and underlying assumptions to ensure they are appropriate for the circumstances. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates.

A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2021.~~January 3, 2023. During the ~~thirty-nine~~twenty-six weeks ended ~~September 27, 2022,~~July 4, 2023, there were no significant changes in our critical accounting policies.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion of market risks contains “forward-looking” statements. Actual results may differ materially from the following discussion based on general conditions in the financial and commodity markets.

Interest Rate Risk

We have a $215 million Credit Facility, of which ~~$50.0~~$53.0 million is currently outstanding and carries interest at a floating rate. We utilize the Credit Facility principally for letters of credit that are required to support our self-insurance programs, to fund a portion of our announced share repurchase program, and for working capital and construction requirements, as needed. We are exposed to interest rate risk through fluctuations in interest rates on our obligations under the Credit Facility. Based on our current outstanding balance, a hypothetical 1% change in the interest rates under our Credit Facility would have an approximate $0.4 million annual impact on our net income.

Food, Supplies and Commodity Price Risks

We purchase food, supplies and other commodities for use in our operations based upon market prices established with our suppliers. Our business is dependent on frequent and consistent deliveries of these items. We may experience shortages, delays or interruptions due to inclement weather, natural disasters, labor issues or other operational disruptions or other conditions beyond our control such as cyber breaches or ransomware attacks at our suppliers, distributors or transportation providers. Additionally, many of the commodities purchased by us can be subject to volatility due to market supply and demand factors outside of our control, whether contracted for or not. Costs can also fluctuate due to government regulation. As a result of the lingering effects of the COVID-19 pandemic, we ~~have experienced and expect to~~ continue to experience distribution disruptions, commodity cost inflation and certain food and supply shortages. To manage this risk in part, we attempt to enter into fixed-price purchase commitments, with terms typically up to one year, for some of our commodity requirements. However, it may not be possible for us to enter into fixed-price contracts for certain commodities or we may choose not to enter into fixed-price contracts for certain commodities. We believe that substantially all of our food and supplies are available from several sources, which helps to diversify our overall commodity cost risk. We also believe that we have some flexibility and ability to increase certain menu prices, or vary certain menu items offered or promoted, in response to food commodity price increases. Some of our commodity purchase arrangements may contain contractual features that limit the price paid by establishing certain price floors or caps. We do not use financial instruments to hedge commodity prices, since our purchase arrangements with suppliers, to the extent that we can enter into such arrangements, help control the ultimate cost that we pay.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 promulgated under the Securities Exchange Act of 1934 as amended, as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September 27, 2022,~~July 4, 2023, our disclosure controls and procedures are designed and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our ~~third~~second fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 5. OTHER INFORMATION

None.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

See Note 8 of Notes to Unaudited Consolidated Financial Statements in Part I, Item 1 of this report for a summary of legal proceedings.

Item 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended ~~December 28, 2021.~~January 3, 2023.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As of ~~September 27, 2022,~~July 4, 2023, we have cumulatively repurchased shares valued at approximately $477.9 million in accordance with our approved share repurchase plan. We repurchased shares valued at approximately $2.4 million during the thirty-nine weeks ended September 27, 2022. The share repurchases were executed through open market purchases, and future share repurchases may be completed through a combination of individually negotiated transactions, accelerated share buyback, and/or open market purchases. As of ~~September 27, 2022,~~July 4, 2023, we have approximately $22.1 million available under our share repurchase plan.

~~The following table sets forth information with respect to the repurchase of common shares during the thirty-nine weeks ended September 27, 2022:~~19

Period (1)

Total
Number
of Shares
Purchased

Average
Price
Paid Per
Share

Total
Number of
Shares
Purchased as
Part of the
Publicly
Announced
Plans

Increase in
Dollars for
Share
Repurchase
Authorization

Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Plans or
Programs

12/29/22 - 01/25/22

—

$
—

—

$
—

$
24,438,776

01/26/22 – 02/22/22

—

$
—

—

$
—

$
24,438,776

02/23/22 – 03/29/22

—

$
—

—

$
—

$
24,438,776

03/30/22 – 04/26/22

—

$
—

—

$
—

$
24,438,776

04/27/22 – 05/24/22

—

$
—

—

$
—

$
24,438,776

05/25/22 – 06/28/22

—

$
—

—

$
—

$
24,438,776

06/29/22 – 07/26/22

—

$
—

—

$
—

$
24,438,776

07/27/22 – 08/23/22

13,211

$
27.51

13,211

$
—

$
24,075,364

08/24/22 – 09/27/22

78,091

$
25.89

78,091

$
—

$
22,053,808

Total

91,302

$
26.12

91,302

~~(1)~~

~~Period information is presented in accordance with our fiscal months during the thirty-nine weeks ended September 27, 2022.~~

Item 6. EXHIBITS


Exhibit Number		Description
3.1		Amended and Restated Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.1 of the Annual Report on Form 10-K for fiscal 2017.

3.2		Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.1 of the Form 8-K filed on August 14, 2020.

3.3		Certificate of Amendment of Articles of Incorporation, incorporated by reference to Exhibit 3.3 of the Annual Report on Form 10-K for fiscal 2004.

3.4		Certificate of Amendment of Articles of Incorporation, incorporated by reference to Exhibit 3.4 of the Annual Report on Form 10-K for fiscal 2010.

4.1		Specimen Common Stock Certificate of the Company, incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form SB‑2A filed with the Securities and Exchange Commission on August 22, 1996 (File No. 3335182‑LA).

3110.1		Investor Rights Termination Agreement, dated April 13, 2023, by and among the Company, SC 2018 Trust LLC and BJ's Act III, LLC, incorporated by reference to Exhibit 10.1 of the Form 8-K filed April 18, 2023.

31		Section 302 Certification of Chief Executive Officer and Chief Financial ~~Officer~~Officer..
32		Section 906 Certification of Chief Executive Officer and Chief Financial ~~Officer~~Officer.
.
101.INS
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~~SIGNATURES~~20

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		BJ’S RESTAURANTS, INC.
		(Registrant)


~~October 31, 2022~~August 7, 2023	By:	/s/ GREGORY S. LEVIN
		Gregory S. Levin
		Chief Executive Officer and President
		(Principal Executive Officer)


		By:	/s/ THOMAS A. HOUDEK
			Thomas A. Houdek
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)


		By:	/s/ JACOB J. GUILD
			Jacob J. Guild
			Senior Vice President and Chief Accounting Officer
			(Principal Accounting Officer)

2221

Period (1)	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Plans		Increase in Dollars for Share Repurchase Authorization		Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
12/29/22 - 01/25/22		—	$	—		—	$	—	$	24,438,776
01/26/22 – 02/22/22		—	$	—		—	$	—	$	24,438,776
02/23/22 – 03/29/22		—	$	—		—	$	—	$	24,438,776
03/30/22 – 04/26/22		—	$	—		—	$	—	$	24,438,776
04/27/22 – 05/24/22		—	$	—		—	$	—	$	24,438,776
05/25/22 – 06/28/22		—	$	—		—	$	—	$	24,438,776
06/29/22 – 07/26/22		—	$	—		—	$	—	$	24,438,776
07/27/22 – 08/23/22		13,211	$	27.51		13,211	$	—	$	24,075,364
08/24/22 – 09/27/22		78,091	$	25.89		78,091	$	—	$	22,053,808
Total		91,302	$	26.12		91,302