Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2015 | Feb. 16, 2016 | Jul. 12, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | RED ROBIN GOURMET BURGERS INC | ||
Entity Central Index Key | 1,171,759 | ||
Current Fiscal Year End Date | --12-27 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 27, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 13,630,411 | ||
Entity Public Float | $ 1,294.4 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 22,705 | $ 22,408 |
Accounts receivable, net | 27,760 | 23,740 |
Inventories | 28,223 | 25,947 |
Prepaid expenses and other current assets | 18,052 | 23,160 |
Deferred tax asset | 0 | 4,677 |
Total current assets | 96,740 | 99,932 |
Property and equipment, net | 603,686 | 496,262 |
Goodwill | 81,957 | 84,115 |
Intangible assets, net | 39,573 | 42,479 |
Other assets, net | 18,023 | 13,101 |
Total assets | 839,979 | 735,889 |
Current Liabilities: | ||
Trade accounts payable | 23,392 | 28,522 |
Construction related payables | 28,692 | 15,652 |
Accrued payroll and payroll-related liabilities | 47,587 | 47,362 |
Unearned revenue | 48,392 | 45,049 |
Accrued liabilities and other current liabilities | 29,610 | 27,084 |
Total current liabilities | 177,673 | 163,669 |
Deferred rent | 66,470 | 57,341 |
Long-term debt | 202,875 | 139,375 |
Long-term portion of capital lease obligations | 7,441 | 7,938 |
Other non-current liabilities | 11,209 | 7,795 |
Total liabilities | 465,668 | 376,118 |
Stockholders’ Equity: | ||
Common stock; $0.001 par value: 45,000 shares authorized; 17,851 and 17,851 shares issued; 13,628 and 14,043 shares outstanding | 18 | 18 |
Preferred stock, $0.001 par value: 3,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Treasury stock 4,223 and 3,808 shares, at cost | (167,339) | (132,252) |
Paid-in capital | 205,995 | 200,617 |
Accumulated other comprehensive loss, net of tax | (5,379) | (1,924) |
Retained earnings | 341,016 | 293,312 |
Total stockholders’ equity | 374,311 | 359,771 |
Total liabilities and stockholders’ equity | $ 839,979 | $ 735,889 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 27, 2015 | Dec. 28, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 17,851,000 | 17,851,000 |
Common stock, shares outstanding | 13,628,000 | 14,043,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 4,223,000 | 3,808,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Revenues: | |||
Restaurant revenue | $ 1,238,898 | $ 1,129,135 | $ 1,000,198 |
Franchise royalties and fees | 12,526 | 13,637 | 14,378 |
Other revenue | 6,168 | 3,330 | 2,671 |
Total revenues | 1,257,592 | 1,146,102 | 1,017,247 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | |||
Cost of sales | 304,637 | 287,221 | 250,237 |
Labor (includes $115, $81, and $151 of stock-based compensation) | 403,517 | 372,657 | 335,113 |
Other operating | 154,344 | 140,972 | 123,479 |
Occupancy | 100,007 | 86,734 | 74,079 |
Depreciation and amortization | 77,374 | 64,579 | 58,200 |
Selling, general, and administrative expenses (includes $4,609, $4,089, and $3,672 of stock-based compensation) | 143,079 | 132,158 | 124,278 |
Pre-opening and acquisition costs | 7,008 | 8,264 | 6,530 |
Asset impairment charges | 581 | 8,833 | 1,517 |
Total costs and expenses | 1,190,547 | 1,101,418 | 973,433 |
Income from operations | 67,045 | 44,684 | 43,814 |
Other (income) expense: | |||
Interest expense | 3,680 | 3,045 | 2,692 |
Interest (income) and other, net | 129 | (220) | (127) |
Total other expenses | 3,809 | 2,825 | 2,565 |
Income before income taxes | 63,236 | 41,859 | 41,249 |
Provision for income taxes | 15,532 | 9,298 | 9,010 |
Net income | $ 47,704 | $ 32,561 | $ 32,239 |
Earnings per share: | |||
Basic (in dollars per share) | $ 3.40 | $ 2.29 | $ 2.27 |
Diluted (in dollars per share) | $ 3.36 | $ 2.25 | $ 2.22 |
Weighted average shares outstanding: | |||
Basic (in shares) | 14,042 | 14,237 | 14,225 |
Diluted (in shares) | 14,216 | 14,447 | 14,510 |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Income Statement [Abstract] | |||
Labor, stock-based compensation | $ 115 | $ 81 | $ 151 |
Selling, general, and administrative expenses, stock-based compensation | $ 4,609 | $ 4,089 | $ 3,672 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 47,704 | $ 32,561 | $ 32,239 |
Changes in derivative instruments: | |||
Net change in fair value of interest rate swap | (3) | (94) | (123) |
Net loss reclassified into interest expense | 36 | 95 | 80 |
Tax (expense) benefit | (13) | 0 | 13 |
Net changes in derivative instruments | 20 | 1 | (30) |
Foreign currency translation adjustment | (3,475) | (1,900) | 0 |
Other comprehensive loss, net of tax | (3,455) | (1,899) | (30) |
Total comprehensive income | $ 44,249 | $ 30,662 | $ 32,209 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings |
Balance (in shares) at Dec. 30, 2012 | 17,499,000 | |||||
Balance at Dec. 30, 2012 | $ 306,919 | $ 17 | $ (107,589) | $ 185,974 | $ 5 | $ 228,512 |
Balance (in shares) at Dec. 30, 2012 | 3,500,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan, (in shares) | 352,000 | (68,000) | ||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | 5,807 | $ 1 | $ 2,106 | 3,700 | ||
Excess tax benefit from exercise of stock options | $ 3,481 | 3,481 | ||||
Acquisition of treasury stock (in shares) | 68,816 | 69,000 | ||||
Acquisition of treasury stock | $ (5,003) | $ (5,003) | ||||
Non-cash stock compensation | 3,990 | 3,990 | ||||
Net income | 32,239 | 32,239 | ||||
Other comprehensive loss | (30) | (30) | ||||
Balance (in shares) at Dec. 29, 2013 | 17,851,000 | |||||
Balance at Dec. 29, 2013 | 347,403 | $ 18 | $ (110,486) | 197,145 | (25) | 260,751 |
Balance (in shares) at Dec. 29, 2013 | 3,501,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan, (in shares) | (157,000) | |||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | 2,069 | $ 5,118 | (3,049) | |||
Excess tax benefit from exercise of stock options | $ 2,224 | 2,224 | ||||
Acquisition of treasury stock (in shares) | 463,780 | 464,000 | ||||
Acquisition of treasury stock | $ (26,884) | $ (26,884) | ||||
Non-cash stock compensation | 4,297 | 4,297 | ||||
Net income | 32,561 | 32,561 | ||||
Other comprehensive loss | (1,899) | (1,899) | ||||
Balance (in shares) at Dec. 28, 2014 | 17,851,000 | |||||
Balance at Dec. 28, 2014 | $ 359,771 | $ 18 | $ (132,252) | 200,617 | (1,924) | 293,312 |
Balance (in shares) at Dec. 28, 2014 | 3,808,000 | 3,808,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan, (in shares) | (141,000) | |||||
Exercise of options, issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan | $ 3,407 | $ 4,922 | (1,515) | |||
Excess tax benefit from exercise of stock options | $ 1,980 | 1,980 | ||||
Acquisition of treasury stock (in shares) | 556,049 | 556,000 | ||||
Acquisition of treasury stock | $ (40,009) | $ (40,009) | ||||
Non-cash stock compensation | 4,913 | 4,913 | ||||
Net income | 47,704 | 47,704 | ||||
Other comprehensive loss | (3,455) | (3,455) | ||||
Balance (in shares) at Dec. 27, 2015 | 17,851,000 | |||||
Balance at Dec. 27, 2015 | $ 374,311 | $ 18 | $ (167,339) | $ 205,995 | $ (5,379) | $ 341,016 |
Balance (in shares) at Dec. 27, 2015 | 4,223,000 | 4,223,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Cash Flows From Operating Activities: | |||
Net income | $ 47,704 | $ 32,561 | $ 32,239 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 77,374 | 64,579 | 58,200 |
Gift card breakage | (5,079) | (2,284) | (2,106) |
Provision for deferred income taxes and benefit from exercise of stock options | 2,681 | (1,990) | (1,662) |
Asset impairment charges | 581 | 8,833 | 1,517 |
Stock-based compensation | 4,724 | 4,170 | 3,823 |
Amortization of debt issuance costs and other | 479 | 702 | 449 |
Changes in operating assets and liabilities, net of effects of acquired business: | |||
Accounts receivable and other current assets | 4,272 | (1,279) | (2,334) |
Inventory | (2,375) | (1,949) | (3,621) |
Other assets | (3,055) | (6,466) | (1,816) |
Trade accounts payable, accrued and other liabilities | 1,536 | 12,051 | 17,571 |
Unearned revenue | 7,909 | 8,877 | 7,830 |
Deferred rent | 4,172 | 5,776 | 3,439 |
Net cash provided by operating activities | 140,923 | 123,581 | 113,529 |
Cash Flows From Investing Activities: | |||
Purchases of property, equipment and intangible assets | (166,284) | (107,703) | (78,876) |
Acquisition of franchise restaurants, net of cash acquired | (2,532) | (47,511) | 0 |
Other investing activities | (295) | (64) | 645 |
Net cash used in investing activities | (169,111) | (155,278) | (78,231) |
Cash Flows From Financing Activities: | |||
Borrowings of long-term debt | 415,500 | 231,000 | 141,500 |
Payments of long-term debt and capital leases | (352,550) | (171,817) | (188,783) |
Purchase of treasury stock | (40,009) | (26,884) | (5,003) |
Debt issuance costs | (319) | (690) | 0 |
Tax benefit from exercise of stock options | 1,980 | 2,224 | 3,481 |
Proceeds from exercise of stock options and employee stock purchase plan | 4,165 | 3,218 | 8,175 |
Net cash provided by (used in) financing activities | 28,767 | 37,051 | (40,630) |
Effect of exchange rate changes on cash and cash equivalents | (282) | (54) | 0 |
Net increase (decrease) in cash and cash equivalents | 297 | 5,300 | (5,332) |
Cash and cash equivalents, beginning of year | 22,408 | 17,108 | 22,440 |
Cash and cash equivalents, end of year | $ 22,705 | $ 22,408 | $ 17,108 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Red Robin Gourmet Burgers, Inc., a Delaware corporation, together with its subsidiaries (“Red Robin,” “we,” “us,” “our”, or the “Company”), primarily develops, operates, and franchises casual-dining restaurants and fast-casual restaurants in North America. At December 27, 2015 , the Company owned and operated 439 restaurants located in 38 states, the District of Columbia , and two Canadian provinces, comprised of 429 Red Robin® restaurants and ten Red Robin Burger Works®, a smaller non-traditional prototype with a limited menu and limited service . The Company also had 99 casual-dining restaurants operated by franchisees in 15 states as of December 27, 2015 . The Company operates its business as one operating and one reportable segment. Principles of Consolidation and Fiscal Year —The consolidated financial statements of the Company include the accounts of Red Robin and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions. The Company’s fiscal year is 52 or 53 weeks ending the last Sunday of the calendar year. Fiscal years 2015 , 2014 , and 2013 each included 52 weeks, ending on December 27, 2015 , December 28, 2014 , and December 29, 2013 . Fiscal year 2016 will include 52 weeks and will end on December 25, 2016. We refer to our fiscal years as 2016, 2015, 2014, 2013, 2012, and 2011 throughout this Annual Report on Form 10-K. Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The areas that require management’s most significant estimates are impairment of long lived assets, allocation of purchase price for business combinations, goodwill, lease accounting, insurance/self-insurance reserves, estimating fair value, income taxes, unearned revenue, and stock-based compensation expense. Actual results could differ from those estimates. Change in Accounting Estimates Gift Card Breakage —During the first quarter of 2015, the Company re-evaluated the estimated redemption pattern related to gift cards and aligned the recognition of gift card breakage revenue to the updated estimated redemption pattern. As a result, the Company recognized $2.4 million of additional gift card breakage revenue in 2015 than it would have by using the previous estimated redemption pattern. This change in accounting estimate increased net income by $1.3 million or $0.09 per diluted share for the 52 weeks ended December 27, 2015 . Useful Lives of Assets —During the fourth quarter of 2015, the Company re-evaluated the estimated useful lives for certain property and equipment to align more closely with actual experience and expected results. As a result, the Company recorded $1.0 million less depreciation in 2015 than it would have by using the previous estimated useful lives. This change in accounting estimate increased net income by $0.6 million or $0.04 per diluted share for the 52 weeks ended December 27, 2015 . Cash Equivalents —The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the “FDIC”) and sometimes invests excess cash in money market funds not insured by the FDIC. Accounts Receivable —Accounts receivable consists primarily of trade receivables due from franchisees for royalties, as well as third-party gift card receivables. At the end of 2015 , there was approximately $13.2 million of gift cards in transit in accounts receivable related to gift cards that were sold by third-party retailers, but for which cash settlement occurs anywhere from 15 to 45 days from sale, compared to $12.7 million at the end of 2014 . At the end of 2015 , there was also approximately $6.6 million related to tenant improvement allowances in accounts receivable compared to $3.2 million at the end of 2014 . Inventories —Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value (see Note 2, Recent Accounting Pronouncements for our early adoption of new FASB guidance issued in 2015 for inventory measurement). At the end of 2015 and 2014 , food and beverage inventories were $9.3 million and $8.5 million and supplies inventories were $18.9 million and $17.4 million . Property and Equipment —Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. Depreciation is computed on the straight-line method, based on the shorter of the estimated useful lives or the terms of the underlying leases of the related assets. Interest incurred on funds used to construct Company-owned restaurants is capitalized and amortized over the estimated useful life of the related assets. Capitalized interest totaled $0.2 million in both 2015 and 2014 and $0.3 million in 2013 . The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures, and equipment 5 to 20 years Computer equipment 2 to 5 years The Company capitalizes certain overhead related to the development and construction of its new restaurants, remodeling restaurants to the Company’s new brand standards, as well as certain information technology infrastructure upgrades. Capitalized overhead for the years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 was $4.1 million , $3.8 million , and $3.4 million . Costs incurred for the potential development of restaurants that are subsequently terminated are expensed. No material expense has been incurred in any of the fiscal years presented. Business Combinations —The Company allocates the purchase price of an acquired business to its net identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The Company uses all available information to estimate fair values including the fair value determination of identifiable intangible assets such as reacquired franchise rights, and any other significant assets or liabilities. In making these determinations, the Company may use the assistance of an independent third party valuation group. Goodwill and Intangible Assets, net —Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Intangible assets are comprised primarily of leasehold interests, acquired franchise rights, and the costs of purchased liquor licenses. Leasehold interests primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Acquired franchise rights, which represent the acquired value of franchise contracts, are amortized over the term of the franchise agreements. The costs of obtaining non-transferable liquor licenses from local government agencies are capitalized and generally amortized over a period of up to 20 years . The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Goodwill, which is not subject to amortization, is evaluated for impairment annually during the Company’s fourth fiscal quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of store closures, that would indicate that impairment may exist. Goodwill is evaluated at the level of the Company’s single operating segment, which also represents the Company’s only reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment, or step zero of the impairment test, to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we perform a quantitative assessment and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the date of our acquisitions. The Company performed a qualitative assessment as of December 27, 2015 for the 2015 annual impairment evaluation. By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections, and other relevant entity-specific events, we determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, and therefore concluded that goodwill was not impaired as of December 27, 2015 . The Company performed a quantitative assessment, or the step one of the impairment test, and determined that goodwill was not impaired as of December 28, 2014 . Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Fair value is measured using a combination of the market capitalization method, the income approach, and the market approach. The market capitalization method uses the Company’s stock price to derive fair value. The income approach consists of utilizing the discounted cash flow method that incorporates the Company’s estimates of future revenues and costs, discounted using a risk-adjusted discount rate. The Company’s estimates used in the income approach are consistent with the plans and estimates used to manage operations. The market approach utilizes multiples of profit measures in order to estimate the fair value of the assets. The Company evaluates all methods to ensure reasonably consistent results. Additionally, the Company evaluates the key input factors in the models used to determine whether a moderate change in any input factor or combination of factors would significantly change the results of the tests. Liquor licenses with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on prices in the open market for license in same or similar jurisdictions. No impairment charges were required to be recorded in 2015 , 2014 , or 2013 . Impairment of Long-Lived Assets —The Company reviews its long-lived assets, including restaurant sites, leasehold improvements, information technology systems and other fixed assets, and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If the assets are determined to be impaired, the amount of impairment recognized is the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined using forecasted cash flows discounted using an estimated weighted average cost of capital. Management may also utilize market information to determine fair value when relevant information is available. Restaurant sites and other assets to be disposed of are reported at the lower of their carrying amount or fair value, less estimated costs to sell. Information technology systems, such as internal-use computer software, are reviewed and tested for recoverability if the internal-use computer software is not expected to provide substantive service potential, a significant change occurs in the extent or manner in which the software is used or is expected to be used, a significant change is made or will be made to the software program, or costs of developing or modifying internal-use software significantly exceed the amount originally expected to develop or modify the software. During 2015 , 2014 , and 2013 , the Company recorded impairments of certain long-lived assets. See Note 4, Impairment and Restaurant Closures . Fair Value Measurements —The Company measures certain financial assets and liabilities at fair value in accordance with the accounting guidance for measuring fair value. These assets and liabilities are measured at each reporting period, and certain of these are revalued as required. Refer to Note 10, Fair Value Measurements . Other Assets, net —Other assets, net consist primarily of assets related to various deposits, the employee deferred compensation plan and unamortized debt issuance costs. Debt issuance costs are capitalized and amortized to interest expense on a straight-line basis which approximates the effective interest rate method over the term of the Company’s long term debt. The Company refinanced its credit facility in July 2014 and capitalized $0.7 million of debt issuance costs. The Company amended its credit facility in December 2015 and capitalized an additional $0.3 million of debt issuance costs. Refer to Note 8, Borrowings . Unamortized debt issuance costs at the end of 2015 and 2014 were $1.7 million and $1.8 million . Revenue Recognition —Revenues consist of sales from restaurant operations, gift card breakage, franchise royalties and fees, and other miscellaneous revenue. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. The Company recognizes revenue from gift cards when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer is remote (gift card breakage), and the Company determines that there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption (Refer to Change in Accounting Estimate - Gift Card Breakage in Note 1, Description of Business and Summary of Significant Accounting Policies , of Notes to Consolidated Financial Statements of this report). For the fiscal years ended 2015 , 2014 , and 2013 , the Company recognized $5.1 million , $2.3 million and $2.1 million in revenue related to unredeemed gift card breakage. Gift card breakage is included in Other revenue in the Consolidated Statements of Income. Unearned gift card revenue at the end of 2015 and 2014 was $38.2 million and $36.9 million . The Company typically grants franchise rights to franchisees for a term of 20 years, with the right to extend the term for an additional ten years if various conditions are satisfied by the franchisee. The Company provides management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for area development fees, franchise fees, license fees, and royalties of 3% to 4% of the franchised adjusted gross restaurant sales. The Company recognizes area development fees and franchise fees as income when the Company has performed all material obligations and initial services, which generally occurs upon the opening of the new restaurant. Until earned, these fees are accounted for as an accrued liability. Area development fees are recognized proportionately with the opening of each new restaurant. Royalties are accrued as earned and are calculated each period based on the franchisee’s reported adjusted sales. The Company accounts for its Red Robin Royalty™ loyalty program using a deferred revenue approach in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) related to loyalty programs. Red Robin Royalty™ deferred revenue primarily relates to a program in which registered members earn an award for a free entrée for every nine entrées purchased. We recognize the current sale of an entrée and defer a portion of the revenue to reflect partial pre-payment for the future entrée the member is entitled to receive. We estimate the future value of the award based on the historical average value of redemptions. We also estimate what portion of registered members are not likely to reach the ninth purchase based on historical activity and recognize the deferred revenue related to those purchases. We recognize the deferred revenue in Restaurant revenue on earned rewards when redeemed or upon expiration, which is 60 days after the award is earned. We compare the estimate of the value of future awards to historical redemptions to evaluate the reasonableness of the deferred amount. Deferred loyalty revenue, which was included in Unearned revenue in the accompanying Consolidated Balance Sheets, was $10.2 million and $8.1 million at December 27, 2015 and December 28, 2014 . Advertising —Under the Company’s franchise agreements, both the Company and the franchisees must contribute a minimum percentage of revenues to two national media advertising funds (the “Advertising Funds”). These Advertising Funds are used to build the Company’s brand equity and awareness primarily through a national marketing strategy, including national television advertising, digital media, social media programs, email, loyalty, and public relations initiatives. The Company’s portion of contributions to these Advertising Funds is recorded as advertising costs under Selling, general, and administrative expenses in the Consolidated Statements of Income. Advertising costs related to our local marketing benefit specific restaurants or markets and are recorded as Other operating expenses in the Consolidated Statements of Income. Total advertising costs were $34.8 million , $29.9 million , and $22.4 million in 2015 , 2014 , and 2013 , and were primarily included in Selling, general, and administrative expenses. Prior to 2015, we disclosed both advertising and marketing costs in total. Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. Rent —The Company’s leases generally contain escalating rent payments over the lease term as well as optional renewal periods. The Company accounts for its leases by recognizing rent expense on a straight-line basis over the lease term, which includes reasonably assured renewal periods. The lease term begins when the Company has the right to control the use of the property, which is typically before rent payments are due under the lease agreement. The difference between the rent expense and rent paid is recorded as Deferred rent in the Consolidated Balance Sheet. Rent expense for the period prior to the restaurant opening is expensed in pre-opening costs. Tenant incentives used to fund leasehold improvements are recorded in deferred rent and amortized as reductions of lease rent expense ratably over the lease term. Additionally, certain of the Company’s operating lease agreements contain clauses that provide for additional contingent rent based on a percentage of sales greater than certain specified target amounts. The Company recognizes contingent rent expense prior to the achievement of the specified target that triggers contingent rent, provided the achievement of that target is considered probable. Refer to Note 13 , Commitments and Contingencies. Self-Insurance Programs —The Company utilizes a self-insurance plan for health, general liability, and workers’ compensation coverage. Predetermined loss limits have been arranged with insurance companies to limit the Company’s per occurrence cash outlay. Accrued liabilities and accrued payroll and payroll-related liabilities include the estimated cost to settle reported claims and incurred but unreported claims. Pre-opening Costs —Pre-opening costs are expensed as incurred. Pre-opening costs include rental expenses through the date of opening for each restaurant, travel expenses, wages and benefits for the training and opening teams, and food, beverage and other restaurant opening costs incurred prior to a restaurant opening for business. Income Taxes —Deferred tax liabilities are recognized for the estimated effects of all taxable temporary differences, and deferred tax assets are recognized for the estimated effects of all deductible temporary differences and net operating losses, if any, and tax credit carryforwards. Earnings Per Share —Basic earnings per share amounts are calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share amounts are calculated based upon the weighted average number of common and potentially dilutive common shares outstanding during the year. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. Diluted earnings per share reflect the potential dilution that could occur if holders of options exercised their holdings into common stock. During 2015 , 2014 , and 2013 , a total of 61,000 , 65,000 , and 2,000 weighted average stock options outstanding were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented. The Company uses the treasury stock method to calculate the impact of outstanding stock options. The computations for basic and diluted earnings per share for fiscal year ended December 27, 2015 , December 28, 2014 , and December 29, 2013 are as follows (in thousands, except per share data): 2015 2014 2013 Net income $ 47,704 $ 32,561 $ 32,239 Shares: Basic weighted average shares outstanding 14,042 14,237 14,225 Dilutive effect of stock options and awards 174 210 285 Diluted weighted average shares outstanding 14,216 14,447 14,510 Earnings per share: Basic $ 3.40 $ 2.29 $ 2.27 Diluted $ 3.36 $ 2.25 $ 2.22 Comprehensive Income (loss) —Comprehensive income (loss) consists of the net income or loss and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income. Other comprehensive loss as presented in the Consolidated Statements of Stockholders’ Equity for 2015 , 2014 , and 2013 consisted of the unrealized loss, net of tax, on the Company’s cash flow hedge which expired in June 2015, and the foreign currency translation adjustment. See Note 9, Derivative and Other Comprehensive Income. Stock-Based Compensation —The Company maintains several equity incentive plans under which it may grant stock options, stock appreciation rights, restricted stock, stock variable compensation or other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash variable compensation awards to employees, non-employees, directors, and consultants. The Company also maintains an employee stock purchase plan. See Note 16, Stock Incentive Plans , for additional details. Deferred Compensation (Income) Expense —The Company has assets and liabilities related to a deferred compensation plan. The Company historically purchased Company-owned whole-life insurance contracts on certain team members to offset the deferred compensation plan obligation. In 2013 , the Company liquidated these insurance policies and placed the assets of the deferred compensation plan in a rabbi trust. Assets of the rabbi trust are invested in certain mutual funds that cover an investment spectrum range from equities to money market instruments. Increases in the market value of the investments held in the trust result in the recognition of deferred compensation expense reported in Selling, general, and administrative expenses and recognition of investment gain reported in Interest income and other, net, in the Consolidated Statements of Income. Decreases in the market value of the investments held in the trust result in the recognition of a reduction to deferred compensation expense and recognition of investment loss reported in Interest income and other, net, in the Consolidated Statements of Income. We recognized an immaterial amount of deferred compensation expense and investment income in 2015 , $0.3 million in 2014 , and $0.2 million in 2013. See Note 17, Employee Benefit Programs , for additional details. Foreign Currency Translation —The Canadian Dollar is the functional currency for our Canadian restaurant operations. Assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at exchange rates in effect as of the balance sheet date. Income and expense accounts are translated using the average exchange rates prevailing throughout the period. The resulting translation adjustment is recorded as a separate component of other comprehensive income (loss). Gain or loss from foreign currency transactions is recognized in our Consolidated Statements of Income. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 27, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the financial statement presentation of deferred income taxes. The new guidance requires an entity to present deferred tax assets and liabilities as non-current in a classified balance sheet. Prior to the issuance of this guidance, deferred tax liabilities and assets were required to be separately classified into a current amount and a non-current amount in the balance sheet. The new guidance represents a change in accounting principle and is effective for annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company elected to early adopt this guidance as of December 27, 2015 and to apply it prospectively. Prior period information was not adjusted. Because the application of this guidance affects the balance sheet classification only, adoption of this guidance did not have a material impact on our consolidated financial statements. In September 2015, the FASB issued guidance on the recognition of adjustments to preliminary amounts recognized in a business combination, which removes the requirement to retrospectively account for these adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes. The guidance is effective for reporting periods beginning after December 15, 2015 with early adoption permitted. The Company will apply the guidance prospectively and does not expect the adoption will have a material impact on our consolidated financial statements. In July 2015, the FASB issued guidance on the subsequent measurement of inventory, which changes the measurement from lower of cost or market to lower of cost and net realizable value. The guidance requires prospective application for reporting periods beginning after December 15, 2016 and permits adoption in an earlier period. The early adoption of this guidance in 2015 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, the new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. In July 2015, the FASB approved a one-year deferral of the effective date of the new revenue standard. The guidance is now effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The new guidance may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Based on our preliminary assessment, we determined the adoption of this new guidance may change the timing of recognition of our initial franchise fees. The initial franchise fee is currently recognized when the Company has performed all material obligations and initial services, which generally occurs upon the opening of the new restaurant. The new guidance will require the Company to recognize the initial franchise fees over the franchise period. The adoption of the new guidance may also change the classification of the advertising fund contribution the Company receives from franchisees and the spending from advertising funds. The new guidance will supersede the net reporting requirement on advertising funds. The advertising fund contribution and spending could be reported gross as advertising revenue and advertising expense, and with gross reporting, revenues and expenses could be recognized in different periods. We are continuing our assessment of the overall impact this guidance will have on our consolidated financial statements, as well as the expected timing and method of adoption. |
Acquisitions of Red Robin Franc
Acquisitions of Red Robin Franchised Restaurants | 12 Months Ended |
Dec. 27, 2015 | |
Business Combinations [Abstract] | |
Acquisitions of Red Robin Franchised Restaurants | Acquisitions of Red Robin Franchised Restaurants The Company acquires franchised restaurants from time to time. On August 31, 2015, the Company acquired one restaurant from a franchisee for $2.5 million in cash. The fair value of the net assets acquired on the acquisition date primarily comprised building and land. On March 24, 2014 , the Company acquired four restaurants from one of its U.S. franchisees with a purchase price of $8.0 million in cash. On July 14, 2014 , the Company completed an acquisition of 32 Red Robin franchised restaurants, 14 in the United States and 18 in Canada, from Mach Robin, LLC and its Canadian affiliate, with a purchase price of $39.5 million in cash. During the first two quarters of 2015, the Company finalized the purchase price accounting of the 2014 acquisitions and recorded certain immaterial purchase accounting adjustments. The pro forma impact of above acquisitions and the operating results of the acquired restaurants are not presented as the impact was not material to reported results. The above acquisitions were accounted for using the purchase method as defined in ASC 805, Business Combinations . The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the acquired operations with the Company. The goodwill generated by the acquisitions is not amortizable for book purposes but is amortizable and deductible for tax purposes. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a level 3 fair value measurement. |
Impairment and Restaurant Closu
Impairment and Restaurant Closures | 12 Months Ended |
Dec. 27, 2015 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Restaurant Closures | Impairment and Restaurant Closures Restaurant Impairment During the fourth quarter of 2015 , the Company determined that two Company-owned restaurants were impaired and recognized a non-cash impairment charge of $0.6 million . During 2014 and 2013 , the Company impaired long-lived assets of three and four Company-owned restaurants, and recognized non-cash impairment charges of $1.2 million and $1.5 million . The Company recognized the impairment charges resulting from the continuing and projected future results of these restaurants, primarily through projected cash flows. Each restaurant’s past and present operating performance was reviewed combined with projected future results, primarily through projected undiscounted cash flows, which indicated possible impairment. The Company compared the carrying amount of each restaurant’s assets to its fair value as estimated by management. The fair value of the long-lived assets is generally determined using a discounted cash flow projection model to estimate expected future cash flows. In certain cases, management uses market information, when available, to estimate the fair value of a restaurant. The impairment charges represent the excess of each restaurant’s carrying amount over its estimated fair value. Impairment of Software in Development During the fourth quarter of 2014 , the Company determined that certain software in development related to the supply chain and human resource management modules of an Enterprise Resource Planning (“ERP”) system would not meet the Company’s requirements if they were implemented. As the result, the Company recorded a $7.6 million impairment charge to write down the capitalized costs associated with the supply chain and human resource management system modules. Restaurant Closures During 2015 , the Company closed one restaurant at the end of its lease term. In 2014 , the Company closed three restaurants that operated below acceptable profitability levels and temporarily closed one restaurant due to public construction which reopened in 2015. The three restaurants permanently closed in 2014 had been impaired in 2013 . The Company did not close any restaurants in 2013 . The Company recorded immaterial restaurant closure expenses in 2015 and 2014 . The Company evaluates restaurants that are sold or closed and allocates goodwill based on the relative fair value of the disposal restaurants to the Company’s reporting unit. Since restaurant operations are typically valued based on cash flow from operations, the Company compares the historical cash flow from the closed restaurants to the cash flow from the reporting unit to determine the relative value. The Company allocates goodwill to disposed restaurants, if necessary. No goodwill was allocated to the restaurants that were closed in 2015 or 2014 , because those restaurants did not have positive cash flow and consequently did not have positive fair value. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 27, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following at December 27, 2015 , and December 28, 2014 , (in thousands): 2015 2014 Land $ 34,461 $ 33,896 Buildings 86,229 82,802 Leasehold improvements 658,173 567,303 Furniture, fixtures and equipment 310,668 265,980 Restaurant property leased to others 4,554 4,554 Construction in progress 22,486 9,813 1,116,571 964,348 Accumulated depreciation and amortization (512,885 ) (468,086 ) Property and equipment, net $ 603,686 $ 496,262 Depreciation and amortization expense on property and equipment, including assets under capital lease, was $72.6 million in 2015 , $60.6 million in 2014 , and $54.5 million in 2013 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table presents goodwill as of December 27, 2015 , and December 28, 2014 , (in thousands). 2015 2014 Balance at beginning of year $ 84,115 $ 62,525 Acquisition and adjustment 295 22,953 Foreign currency translation adjustment (2,453 ) (1,363 ) Balance at end of year $ 81,957 $ 84,115 The Company has had no goodwill impairment losses in the periods presented in the above table or any prior periods. During 2015, the Company acquired one restaurant from a franchisee and finalized the purchase price accounting for acquisitions made in 2014, resulting in an immaterial adjustment to goodwill. The following table presents intangible assets as of December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 50,878 $ (23,904 ) $ 26,974 $ 50,826 $ (20,583 ) $ 30,243 Leasehold interests 12,991 (6,643 ) 6,348 12,991 (5,553 ) 7,438 Liquor licenses 10,168 (9,751 ) 417 10,058 (9,548 ) 510 $ 74,037 $ (40,298 ) $ 33,739 $ 73,875 $ (35,684 ) $ 38,191 Indefinite-lived intangible assets: Liquor licenses $ 5,834 $ — $ 5,834 $ 4,288 $ — $ 4,288 Intangible assets, net $ 79,871 $ (40,298 ) $ 39,573 $ 78,163 $ (35,684 ) $ 42,479 No impairment charges were recorded related to indefinite-lived intangibles in 2015 , 2014 , or 2013 . There were insignificant impairments of franchise rights and leasehold interests related to the three restaurants impaired in 2014 and four restaurants impaired in 2013 , which are discussed in Note 4, Impairment and Restaurant Closures. There were no other impairments of intangible assets subject to amortization in 2015 , 2014 , or 2013 . The aggregate amortization expense related to intangible assets subject to amortization for 2015 , 2014 , and 2013 was $4.7 million , $3.9 million , and $3.7 million . The estimated aggregate future amortization expense as of December 27, 2015 is as follows (in thousands): 2016 $ 4,021 2017 3,911 2018 3,701 2019 3,621 2020 3,094 Thereafter 15,391 $ 33,739 |
Accrued Payroll and Payroll-rel
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities | 12 Months Ended |
Dec. 27, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities | Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities Accrued payroll and payroll-related liabilities consist of the following at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Payroll $ 9,768 $ 9,195 Corporate and restaurant variable compensation 16,215 15,077 Workers compensation insurance 7,095 7,563 Accrued vacation 5,085 5,809 Other 9,424 9,718 $ 47,587 $ 47,362 Accrued liabilities and other current liabilities consist of the following at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 State and city sales taxes $ 7,677 $ 6,839 Real estate, personal property, state income and other taxes payable 3,091 2,999 General liability insurance 4,854 3,531 Utilities 2,890 2,938 Other 11,098 10,777 $ 29,610 $ 27,084 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Borrowings as of December 27, 2015 and December 28, 2014 are summarized below (in thousands): 2015 2014 Borrowings Weighted Average Interest Rate Borrowings Weighted Average Interest Rate Revolving credit facility and other long-term debt $ 202,875 1.82 % $ 139,375 1.71 % Capital lease obligations 7,972 4.89 % 8,521 5.11 % Total debt and capital lease obligations 210,847 147,896 Less: Current portion (531 ) (583 ) Long-term debt and capital lease obligations $ 210,316 $ 147,313 Maturities of long-term debt and capital lease obligations as of December 27, 2015 are as follows (in thousands): 2016 $ 531 2017 561 2018 595 2019 202,633 2020 684 Thereafter 5,843 $ 210,847 On July 2, 2014 , the Company replaced its previous credit facility with a new credit facility (the “Credit Facility”) with the same group of lenders which provided for a $250 million revolving line of credit with a sublimit for the issuance of up to $25 million in letters of credit and swingline loans up to $15 million , and included an option to increase the amount available under the credit facility up to an additional $100 million in the aggregate, subject to the lenders’ participation. On December 21, 2015, the Company entered into the First Amendment (the “Amendment”) to the Credit Facility to increase the revolving line of credit available under the Credit Facility from $250 million to $325 million . No other material changes to the terms of the Credit Facility were made pursuant to the Amendment. The Credit Facility also provides a Canadian Dollar borrowing sublimit equivalent to $20 million . Borrowings under the Credit Facility, if denominated in U.S. Dollars, are subject to rates based on the London Interbank Offered Rate (“LIBOR”) plus a spread based on leverage or a base rate plus a spread based on leverage (base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus .50% and (c) LIBOR for an Interest Period of one month plus 1% ). Borrowings under the Credit Facility, if denominated in Canadian Dollars, are subject to rates based on LIBOR plus a spread based on leverage or a base rate plus a spread based on leverage (base rate is the highest of (a) the Canadian Prime Rate and (b) the Canadian Dealer Offered Rate (“CDOR Rate”) for an interest period of one month plus 1% ). The Credit Facility matures on July 2, 2019 . Borrowings under the Credit Facility are secured by first priority liens and security interests in substantially all of the Company’s assets, including the capital stock of certain Company subsidiaries, and are available for financing activities including restaurant construction costs, working capital and general corporate purposes, including, among other uses, to refinance certain indebtedness, permitted acquisitions, and redemption of capital stock. As of December 27, 2015 , the Company had outstanding borrowings under the Credit Facility of $202.0 million , in addition to amounts issued under letters of credit of $7.9 million , which reduced the amount available under the credit facility but were not recorded as debt. Loan origination costs associated with the Amendment to the Credit Facility in December 2015 and the origination of the Credit Facility in July 2014 were $0.3 million and $0.7 million . These costs are included as deferred costs in Other assets, net in the accompanying Consolidated Balance Sheets, except for the current portion of these costs which are included in Prepaid expenses and other current assets. Unamortized debt issuance costs were $1.7 million and $1.8 million as of December 27, 2015 and December 28, 2014 . The Company is subject to a number of customary covenants under its Credit Facility, including limitations on additional borrowings, acquisitions, capital expenditures, share repurchases, lease commitments, dividend payments, and requirements to maintain certain financial ratios. The Company was in compliance with such covenants as of December 27, 2015 . |
Derivative and Other Comprehens
Derivative and Other Comprehensive Income | 12 Months Ended |
Dec. 27, 2015 | |
Derivative and Other Comprehensive Income | |
Derivative and Other Comprehensive Income | Derivative and Other Comprehensive Income From time to time, the Company enters into derivative instruments for risk management purposes only, including a derivative designated as a cash flow hedge under guidance for derivative instruments and hedging activities. The Company uses interest rate-related derivative instruments to manage the exposure to fluctuations in interest rates. By using these instruments, the Company exposes itself, from time to time, to both credit and market risk. Credit risk is the failure of either party to the contract to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, creating credit risk for the Company. The Company minimizes credit risk by entering into transactions with high-quality counterparties whose credit ratings are evaluated on a quarterly basis. Market risk, as it relates to the Company’s interest-rate derivative, is the adverse effect on the value of a financial instrument resulting from changes in interest rates. The Company minimizes market risk by establishing and monitoring parameters that limit the types and degree of market risk that the Company accepts. The Company had one interest rate swap at December 28, 2014 with a remaining notional amount of $54.4 million . The Company entered into this variable-to-fixed interest rate swap agreement with Rabobank in August 2011 with an initial notional amount of $74.1 million to hedge a portion of its floating interest rate borrowings. The notional amount amortized over time from $74.1 million at inception to $50.6 million at its maturity on June 30, 2015. Under the terms of the interest rate swap, the quarterly cash payment or receipt was equal to the net of (1) the fixed interest rate of 1.135% paid by the Company and (2) the 3 month LIBOR rate for the applicable interest period received by the Company multiplied by the remaining notional amount as of the payment date. Changes in fair value of the interest rate swap are recorded, net of tax, as a component of Accumulated other comprehensive loss (“AOCL”), in the accompanying Consolidated Balance Sheets. The Company reclassifies the realized gain or loss from Accumulated other comprehensive loss, net of tax, to Interest expense on the Company’s Consolidated Statements of Income as the interest expense is recognized on the related debt. The ineffective portion of the change in fair value of the interest rate swap, if any, is recognized directly in earnings in Interest expense. The following table presents losses on the interest rate swap designated as a cash flow hedge recognized in the Other comprehensive loss (“OCL”) and reclassifications from AOCL to earnings as of December 27, 2015 and December 28, 2014 (in thousands): Losses recognized in OCL on derivative (effective portion) Losses reclassified from AOCL into income (effective portion) December 27, 2015 December 28, 2014 December 27, 2015 December 28, 2014 Fifty-two Weeks Ended $ (3 ) $ (94 ) $ (36 ) $ (95 ) The following table summarizes the fair value and presentation of the interest rate swap in the accompanying Consolidated Balance Sheets as hedging instruments as of December 27, 2015 and December 28, 2014 (in thousands): Derivative Liability Balance Sheet Location Fair Value at December 27, 2015 Fair Value at Accrued liabilities $ — $ 347 Total derivatives $ — $ 347 The components of accumulated other comprehensive loss related to the interest rate swap being used to hedge cash flows were immaterial as of December 28, 2014 . The interest rate swap was highly effective during 2015 until it matured on June 30, 2015. The Company had no active interest rate swap at December 27, 2015 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are made under a three-tier fair value hierarchy, which prioritizes the inputs used in the measuring of fair value: Level 1: Observable inputs that reflect unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying amounts of the Company’s cash and cash equivalents, accounts receivables, and accounts payables approximate fair value due to the short term nature or maturity of the instruments. The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. See Note 17, Employee Benefit Programs. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value, and are included in Other assets, net in the accompanying Consolidated Balance Sheets. Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets). The value of the deferred compensation plan liability is dependent upon the fair values of the assets held in the rabbi trust and therefore is not measured at fair value. The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 27, 2015 and December 28, 2014 (in thousands): December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ — December 28, 2014 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 5,723 $ 5,723 $ — $ — Total assets measured at fair value $ 5,723 $ 5,723 $ — $ — Liabilities: Derivative—interest rate swap $ 347 $ — 347 $ — Total liabilities measured at fair value $ 347 $ — $ 347 $ — Other than as disclosed in Note 3, Acquisitions of Red Robin Franchised Restaurants , as of December 27, 2015 and December 28, 2014 , the Company had no financial assets or liabilities that were measured using level 3 inputs. The Company also had no non-financial assets or liabilities that were required to be measured on a recurring basis. Disclosures of Fair Value of Other Assets and Liabilities The Company’s liabilities under its credit facility and capital leases are carried at historical cost in the accompanying Consolidated Balance Sheets. For disclosure purposes, the Company estimated the fair value of the credit facility and capital lease obligations using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt. Both the credit facility and the Company’s capital lease obligations are considered to be Level 2 instruments. The following table presents the carrying value and estimated fair value of Company’s credit facility and capital lease obligations as of December 27, 2015 and December 28, 2014 (in thousands): December 27, 2015 December 28, 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 202,000 $ 201,829 $ 138,500 $ 138,397 Capital lease obligations 7,972 9,177 8,521 10,004 Total $ 209,972 $ 211,006 $ 147,021 $ 148,401 Asset Impairment The Company recorded impairment charges for two , three , and four Company-owned restaurants in 2015 , 2014 , and 2013 . In addition, the Company recorded an impairment charge in 2014 related to certain software in development. These assets are considered to be assets that are measured at fair value on a nonrecurring basis. The inputs used for the fair value measurement of the restaurants are considered Level 3. For further information refer to Note 4, Restaurant Impairment and Restaurant Closures . |
Supplemental Disclosures to Con
Supplemental Disclosures to Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 27, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures to Consolidated Statements of Cash Flows | Supplemental Disclosures to Consolidated Statements of Cash Flows (In thousands) 2015 2014 2013 Cash paid during the year for: Income taxes $ 14,346 $ 12,827 $ 7,205 Interest, net of amounts capitalized 3,754 3,370 2,342 Non-cash investing and financing activities: Change in construction related payables 13,040 970 9,988 Capital lease obligations incurred for real estate and equipment purchases — — 126 Note entered for liquor license purchase — — 875 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes includes the following components for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 (in thousands): 2015 2014 2013 U.S. $ 64,668 $ 42,898 $ 41,249 Foreign (1,432 ) (1,039 ) — $ 63,236 $ 41,859 $ 41,249 The provision (benefit) for income taxes for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 consist of the following (in thousands): 2015 2014 2013 Current: Federal $ 6,427 $ 5,169 $ 4,667 State 4,455 3,895 2,525 Foreign — — — Deferred: Federal 4,013 1,146 2,755 State (1 ) (649 ) (937 ) Foreign 638 (263 ) — $ 15,532 $ 9,298 $ 9,010 The reconciliation between the income tax provision and the amount of income tax computed by applying the U.S. federal statutory rate to income before the provision for income taxes as shown in the accompanying Consolidated Statements of Income for fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 is as follows: 2015 2014 2013 Tax provision at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes 4.3 5.1 2.5 FICA tip tax credits (12.8 ) (16.0 ) (14.8 ) Foreign taxes versus U.S statutory rate 0.3 (0.1 ) — Valuation allowance on deferred income tax assets 1.5 — — Other tax credits (3.6 ) (2.3 ) (2.5 ) Other (0.1 ) 0.5 1.6 Effective tax rate 24.6 % 22.2 % 21.8 % The increase in the Company’s effective tax rate in 2015 is primarily attributable to the impact of the FICA tip tax credit to the increase in earnings before income taxes. The increase in the Company’s effective tax rate in 2014 from 2013 is primarily attributable to an increase in state income taxes. The Company’s federal and state deferred taxes at December 27, 2015 and December 28, 2014 are as follows (in thousands): 2015 2014 Current deferred tax assets and (liabilities), net: Accrued compensation and related costs $ — $ 10,941 Advanced payments — 2,764 General business and other tax credits — (275 ) Interest rate swap — 13 Other current deferred tax assets — 3,583 Other current deferred tax liabilities — — Prepaid expenses — (5,426 ) Supplies inventory — (6,923 ) Current deferred tax asset, net — 4,677 Non-current deferred tax assets and (liabilities), net: Deferred rent 17,978 16,900 Stock-based compensation 6,980 6,461 General business and other tax credits 3,275 5,551 Alternative minimum tax credits 1,262 1,262 Accrued compensation and related costs 11,862 2,067 Advanced payments 3,024 — Other non-current deferred tax assets 4,277 413 Other non-current deferred tax liabilities (1,181 ) (789 ) Goodwill (9,572 ) (7,260 ) Property and equipment (24,792 ) (25,369 ) Franchise rights 744 63 Prepaid expenses (4,736 ) — Supplies inventory (7,089 ) — Subtotal 2,032 (701 ) Valuation Allowance (1,910 ) (990 ) Non-current deferred tax asset (liability), net, included in other non-current liabilities 122 (1,691 ) Net deferred tax asset (liability) $ 122 $ 2,986 In 2015, the Company adopted new accounting guidance to present deferred tax assets and liabilities as non-current in the balance sheet and elected to apply the new guidance prospectively. Refer to Note 2, Recent Accounting Pronouncements , for additional information. Realization of net deferred tax assets is dependent upon profitable operations and future reversals of existing taxable temporary differences. Based on the Company’s evaluation of its deferred tax assets, as of December 27, 2015 , a valuation allowance of approximately $1.9 million has been recorded against the deferred tax asset for state income tax credits and the deferred taxes of our foreign subsidiary, including the net operating loss carry forward, in order to measure only the portion of the deferred tax assets that more likely than not will be realized. However, the amount of the deferred tax assets considered realizable could be adjusted if estimates of future taxable income during the carry forward period are increased or reduced or if there are differences in the timing or amount of future reversals of existing taxable temporary differences. We do not provide for deferred taxes on the excess of the financial reporting basis over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration. We intend to reinvest earnings from our foreign subsidiaries, if any, in those operations for the foreseeable future. We have not, nor do we anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs and, accordingly, we do not provide for U.S. federal income and foreign withholding tax on these earnings. While we do not expect to repatriate cash to the U.S., if these funds were distributed to the U.S., in the form of dividends or otherwise, we would be subject to additional U.S. income taxes. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs. The Company has federal alternative minimum tax credits of $1.3 million available with no expiration date. The Company also has general business and other tax credits totaling $3.3 million available to offset future taxes which expire through 2034. Pursuant to the guidance for uncertain tax positions, a taxpayer must be able to more likely than not sustain a position to recognize a tax benefit, and the measurement of the benefit is calculated as the largest amount that is more than 50 percent likely to be realized upon resolution of the benefit. The Company has analyzed filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The only periods subject to examination for the Company’s federal and state returns are the 2011 through 2015 tax years. The following table summarizes the Company’s unrecognized tax benefits at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Beginning of year $ 319 $ 401 Increase due to current year tax positions 57 96 Due to decrease to a position taken in a prior year (100 ) (5 ) Settlements — (122 ) Reductions related to lapses (48 ) (51 ) End of year $ 228 $ 319 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $0.2 million . The Company does not anticipate significant changes in the aggregate amount of unrecognized tax benefits within the next twelve months, other than nominal tax settlements. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties are recorded in Interest income and other, net, and interest paid or received is recorded in Interest expense in the Consolidated Statements of Income. The Company recorded nominal interest expense on the identified tax liabilities in 2015 , 2014 , and 2013 , and no penalties were recorded in those fiscal years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Leasing Activities —The Company leases land, buildings, and equipment used in its operations under operating leases. The Company’s operating leases have remaining non-cancelable terms ranging from less than one year to more than 15 years. These leases generally contain renewal options which permit the Company to renew the leases at defined contractual rates or prevailing market rates. Certain equipment leases also include options to purchase equipment at the end of the lease term. Certain leases provide for contingent rents, which are determined as a percentage of adjusted restaurant sales in excess of specified levels. The Company records a contingent rent liability and the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Certain lease agreements also require the Company to pay maintenance, insurance, and property tax costs. Rental expense related to land, building, and equipment leases for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 are as follows (in thousands): 2015 2014 2013 Minimum rent $ 67,078 $ 58,083 $ 49,206 Contingent rent 2,264 2,239 2,164 Equipment rent under operating leases 791 895 990 $ 70,133 $ 61,217 $ 52,360 The Company leases certain of its owned land, buildings, and equipment to outside parties under non-cancelable operating leases. Cost of the leased land, building, and equipment was $4.6 million at the fiscal years ended December 27, 2015 and December 28, 2014 , and related accumulated depreciation was $2.9 million and $2.8 million , respectively. Rental income was immaterial for 2015 , 2014 , and 2013 . Future minimum lease commitments and minimum rental income under all leases as of December 27, 2015 are as follows (in thousands): Capital Leases Operating Leases Rental Income 2016 $ 905 $ 72,796 $ 131 2017 900 70,786 104 2018 900 66,193 104 2019 900 60,612 104 2020 912 54,818 104 Thereafter 5,712 226,642 82 Total 10,229 $ 551,847 $ 629 Less amount representing interest (2,257 ) Present value of future minimum lease payments 7,972 Less current portion (531 ) Long-term capital lease obligations $ 7,441 At the end of 2015 and 2014 , property and equipment included $19.0 million and $21.7 million of assets under capital lease, and $9.1 million and $10.0 million of related accumulated depreciation. Contingencies In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include claims resulting from “slip and fall” accidents, employment related claims and claims alleging illness, injury or other food quality, health or operational issues. To date, no claims of these types of litigation, certain of which are covered by insurance policies, have had a material effect on the Company. While it is not possible to predict the outcome of these other suits, legal proceedings and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these other matters has been made in the financial statements and that the ultimate resolution of these other matters will not have a material effect on the Company ’ s financial position and results of operations. |
Franchise Operations
Franchise Operations | 12 Months Ended |
Dec. 27, 2015 | |
Franchisors [Abstract] | |
Franchise Operations | Franchise Operations Results of franchise operations included in the Consolidated Statements of Income for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 consist of the following (in thousands): 2015 2014 2013 Franchise royalties and fees: Royalty income $ 12,478 $ 13,540 $ 14,315 Franchise fees 48 97 63 Total franchise royalties and fees $ 12,526 $ 13,637 $ 14,378 The Company provides management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for area development fees, franchise fees, license fees, and royalties of 3% to 4% of the franchised restaurant sales pursuant to the franchise agreements. Franchise fee revenue is recognized when all material obligations and initial services to be provided by the Company have been performed, generally upon the opening of the new restaurant. Until earned, these fees are accounted for as deferred revenue. Area development fees are dependent upon the number of restaurants in the territory as well as the Company’s obligations under the area franchise agreement. Consequently, as the Company’s obligations are met, area development fees are recognized proportionately with the opening of each new restaurant. Royalties are accrued as earned and are calculated each period based on the franchisee’s reported adjusted sales. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 27, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On February 11, 2015, the Company’s board of directors authorized a repurchase of up to $50 million of the Company’s common stock. This authorization became effective on February 11, 2015, and will terminate upon completing the repurchase of $50 million of common stock unless earlier terminated by the Company’s board of directors. Purchases under the repurchase program may be made in open market or privately negotiated transactions. Purchases may be made from time to time at the Company’s discretion and the timing and amount of any share repurchases will be determined based on share price, market conditions, legal requirements and other factors. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or discontinued at any time. In 2015 , the Company purchased 556,049 shares with an average purchase price of $71.93 per share for a total of $40.0 million . On November 15, 2012, the Company’s board of directors authorized a repurchase of up to $50 million of the Company's common stock. In 2014 , the Company purchased 463,780 shares with an average purchase price of $57.97 per share for a total of $26.9 million . In 2013 , the Company purchased 68,816 shares, with an average purchase price of $72.71 per share for a total of $5.0 million . On February 11, 2016, the Company’s board of directors authorized a repurchase of up to $100.0 million of the Company’s common stock. Refer to Note 20, Subsequent Events, for additional information. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans In 2007, the Company’s stockholders approved the 2007 Performance Incentive Plan which was amended and restated in 2008 and 2011 (the “2007 Stock Plan”). The 2007 Stock Plan authorizes the issuance of stock options, stock appreciation rights (SARs), restricted stock, stock variable compensation and other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash variable compensation awards pursuant to the plan. Persons eligible to receive awards under the 2007 Stock Plan include officers and employees of the Company and any of the Company’s subsidiaries, directors of the Company, and certain consultants and advisors to the Company or any of its subsidiaries. The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2007 Stock Plan is 2,074,600 shares. Vesting of the awards under the 2007 Stock Plan is determined at the date of grant by the plan administrator. Each award granted under the 2007 Stock Plan fully vests, becomes exercisable and/or payable, as applicable, upon a change in control event. However, unless the individual award agreement provides otherwise, with respect to executive and certain other high level officers of the Company, upon the occurrence of a change in control, no award will vest unless such officers’ employment with the Company is terminated by the Company without cause during the two -year period following such change in control event. Each award expires on such date as shall be determined at the date of grant; however, the maximum term of options, SARs and other rights to acquire common stock under the plan is ten years after the initial date of the award, subject to provisions for further deferred payment in certain circumstances. The 2007 Stock Plan terminates on April 4, 2021, unless terminated earlier by the Company’s board of directors. As of December 27, 2015 , options to acquire a total of 391,923 shares of the Company’s common stock remained outstanding under this plan of which 227,300 were vested. The Company has four other stock-based compensation plans: the 1996 Stock Option Plan (the 1996 Stock Plan), the 2000 Management Performance Common Stock Option Plan (the 2000 Stock Plan), the 2002 Incentive Stock Option Plan (2002 Stock Plan) and the 2004 Performance Incentive Plan (the 2004 Stock Plan). No further grants can be made under these plans. In general, options granted under these plans were issued at the estimated fair market value at the date of grant. Vesting of awards under these plans were generally time based over a period of one to four years; however, in some cases, options under these plans vested based on the attainment of certain financial results. As of December 27, 2015 , options to acquire a total of 74,530 of the Company’s common stock remain outstanding under these plans of which all are fully vested. Options granted under these plans expire within ten years from the date of grant. Forfeited options revert back to the 2007 Stock Plan for potential reissuance. Total stock-based compensation costs recognized in 2015 , 2014 , and 2013 were $4.7 million , $4.2 million , and $3.8 million , with related income tax benefits of $2.0 million , $1.7 million , and $1.5 million . As of December 27, 2015 , there was $3.4 million of total unrecognized compensation cost, excluding estimated forfeitures, which is expected to be recognized over the weighted average remaining vesting period of approximately 1.2 years for stock options and 1.1 years for the restricted stock units. As of December 27, 2015 , all performance-based stock units and restricted stocks were vested. Stock Options The tables below summarize the status of the Company’s stock option plans (in thousands, except per share data and exercise price): Stock Options Shares Weighted Average Exercise Price Outstanding, December 28, 2014 462 $ 38.83 Granted 72 81.84 Forfeited/expired (44 ) 49.35 Exercised (95 ) 36.49 Outstanding, December 27, 2015 395 $ 46.04 Shares Weighted Average Exercise Price Weighted Average Remaining Years of Contractual Life Aggregate Intrinsic Value Outstanding as of December 27, 2015 395 $ 46.04 6.10 $ 8,155 Vested and expected to vest as of December 27, 2015 (1) 379 $ 44.87 6.00 $ 8,107 Exercisable as of December 27, 2015 230 $ 32.03 4.68 $ 7,013 ___________________________________ (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. The estimated fair value of each option granted is calculated using the Black-Scholes multiple option-pricing model. The average assumptions used in the model for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 were as follows: 2015 2014 2013 Risk-free interest rate 1.4 % 1.7 % 0.7 % Expected years until exercise 4.8 5.7 4.2 Expected stock volatility 40.6 % 44.6 % 44.4 % Dividend yield — % — % — % Weighted average Black-Scholes fair value per share at date of grant $ 29.71 $ 30.70 $ 15.19 Total intrinsic value of options exercised (in thousands) $ 4,414 $ 3,954 $ 8,263 The risk-free interest rate was based on the rate for zero coupon U.S. Government issues with a remaining term similar to the expected life. The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends and team member exercise patterns. The expected stock price volatility represents an average of the Company’s historical volatility measured over a period approximating the expected life. The dividend yield assumption is based on the Company’s history and expectations of dividend payouts. Time-Based RSUs During 2015 , 2014 , and 2013 , the Company issued time-based restricted stock units (RSUs) to certain employees as permitted under the 2007 Stock Plan. The Company can grant RSUs to its directors, executive officers and other key employees. The RSUs granted to employees typically vest in equal installments over four years. For the Company’s Board of Directors, RSUs granted in 2014 and 2013 vest in equal installments over three years , while RSUs granted in 2015 vest in full on the one -year anniversary date of grant date. Upon vesting, one share of the Company’s common stock is issued for each RSU. The fair value of each RSU granted is equal to the market price of the Company’s stock at the date of grant. The table below summarizes the status of the Company’s time-based RSUs under the 2007 Stock Plan (shares in thousands): Restricted Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 28, 2014 101 $ 49.78 Awarded 33 82.52 Forfeited (13 ) 53.79 Vested (46 ) 42.82 Outstanding, December 27, 2015 75 $ 67.74 Long-Term Cash Incentive Plan In 2011, the Company began a long-term cash incentive program. The long-term cash incentive plan is based on operational metrics with a three -year performance period. Compensation expense is recognized over the performance period based on the plan-to-date performance achievement. The awards cliff vest at the end of each three -year performance cycle. In 2015 , 2014 , and 2013 , the Company recorded approximately $3.3 million , $0.8 million , and $4.2 million compensation expenses related to this program. In 2015 , the Company paid out $1.8 million cash awards related to achievement of the performance metrics of 2012 long-term cash incentive plan. In 2014 , the Company paid out $2.4 million cash awards related to achievement of the performance metrics of 2011 long-term cash incentive plan. At December 27, 2015 and December 28, 2014 , $6.3 million and $4.8 million long-term cash incentive plan liability were included in Accrued payroll and payroll-related liabilities in the accompanying Consolidated Balance Sheets. |
Employee Benefit Programs
Employee Benefit Programs | 12 Months Ended |
Dec. 27, 2015 | |
Employee Benefits and Share-based Compensation [Abstract] | |
Employee Benefit Programs | Employee Benefit Programs Employee Deferred Compensation Plan —In 2003, the Company adopted a deferred compensation plan that permits key employees and other members of management not eligible to participate in the Employee Defined Contribution Plan to defer portions of their compensation. Under this plan, eligible team members may elect to defer up to 75% of their base salary and up to 100% of variable compensation and commissions each plan year. The Company may make matching contributions in an amount determined by the board of directors. In 2014, the board of directors authorized matching contributions equal to 25% of the first 4% of compensation that is deferred by the participant. The Company recognized an immaterial matching contribution expense in 2015 and 2014 . There was no matching contribution authorized by the board of directors in 2013 . The Company historically purchased Company-owned whole-life insurance contracts on certain team members to offset the deferred compensation plan obligation. In 2013 , the Company liquidated these insurance policies and invested the deferred compensation plan assets through a rabbi trust. Assets in the rabbi trust are invested in certain mutual funds that cover an investment spectrum ranging from equities to money market instruments and are available to satisfy the claims of the Company’s creditors in the event of bankruptcy or insolvency. These mutual funds have published market prices and are reported at fair value. See Note 10, Fair Value Measurement . Changes in the market value of the investments held in the trust result in the recognition of a corresponding gain or loss reported in Interest income and other, net in the Consolidated Statements of Income. A corresponding change in the liability associated with the deferred compensation plan results in an offsetting deferred compensation expense, or reduction of expense, reported in Selling, general, and administrative expenses in the Consolidated Statements of Income. The Company recognized an immaterial amount of deferred compensation expense in 2015 , $0.3 million in 2014 , and $0.2 million in 2013. As of December 27, 2015 and December 28, 2014 , $6.9 million and $5.7 million of deferred compensation assets is included in Other assets, net and $6.9 million and $5.7 million of deferred compensation plan liability is included in Other non-current liabilities in the accompanying Consolidated Balance Sheets. Employee Stock Purchase Plan —In 2002, the Company adopted an Employee Stock Purchase Plan under which eligible team members may voluntarily contribute up to 15% of their salary, subject to limitations, to purchase common stock at a price equal to 85% of the fair market value of a share of the Company’s common stock on the first day of each offering period or 85% of the fair market value of a share of the Company’s common stock on the last day of each offering period, whichever amount is less. In general, all of the Company’s officers and team members who have been employed by the Company for at least one year and who are regularly scheduled to work more than 20 hours per week are eligible to participate in this plan which operates in successive six month periods commencing on each January 1 and July 1 of each fiscal year. A total of 300,000 shares of common stock are available for issuance under this plan. The Company has issued a total of 251,931 shares under this plan, including 11,361 shares that were issued in 2015 . A total of 48,069 shares remain available for future issuance. For 2015 , in accordance with the guidance for accounting for stock compensation, the Company estimated the fair value of the stock purchase plan using the Black-Scholes multiple-option pricing model. The average assumptions used in the model included a 0.46% risk-free interest rate; 0.5 year expected life; expected volatility of 39.73% ; and a 0% dividend yield. The weighted average fair value per share at grant date was $13.37 . For 2014 , the average assumptions used in the model included a 0.12% risk-free interest rate, 0.5 year expected life, expected volatility of 41.22% , and a 0% dividend yield. The weighted average fair value per share at grant date was $14.42 . The Company recognized $0.2 million compensation expense related to this plan in each of fiscal years 2015 , 2014 , and 2013 . Employee Defined Contribution Plan —The Company maintains a 401(k) Savings Plan (“401K Plan”) which covers eligible team members who have satisfied the service requirements and reached 21 years of age. The 401K Plan, which qualifies under Section 401(k) of the Internal Revenue Code, allows team members to defer specified percentages of their compensation on a pre-tax basis. The Company may make matching contributions in an amount determined by the board of directors. In addition, the Company may contribute each period, at its discretion, an additional amount from profits. In 2006, the board of directors authorized matching contributions equal to 25% of the first 4% of compensation that is deferred by the participant. The Company recognized matching contribution expense of $0.3 million in each of fiscal years 2015 , 2014 , and 2013 . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 27, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The former president and majority owner of one of the Company’s former franchisees served on the Company’s board of directors from 2009 until his retirement in May 2013. The Company purchased 13 Red Robin restaurants in Washington from this former franchisee in 2006. The retired board member is a principal of and holds, directly or indirectly, interests of between 45% and 100% in each of three privately-held entities that hold the leases for three of the acquired Washington restaurants. These leases were assumed by the Company in connection with the acquisition. Under these leases, the Company recognized rent and other related payments in the amounts of $1.3 million , $1.3 million , and $1.2 million for fiscal years 2015 , 2014 , and 2013 . |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 27, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) The following tables summarize the unaudited consolidated quarterly financial information for fiscal years 2015 and 2014 (in thousands, except per share data): Q1 Q2 Q3 Q4 (1) 2015 Total revenues $ 394,901 $ 292,979 $ 283,412 $ 286,300 $ 1,257,592 Income from operations $ 23,845 $ 16,480 $ 11,705 $ 15,015 $ 67,045 Net income $ 16,565 $ 11,166 $ 8,282 $ 11,691 $ 47,704 Basic earnings per share $ 1.18 $ 0.79 $ 0.59 $ 0.85 $ 3.40 Diluted earnings per share $ 1.16 $ 0.78 $ 0.58 $ 0.84 $ 3.36 Q1 Q2 Q3 Q4 (2) (12 weeks) 2014 Total revenues $ 340,484 $ 256,133 $ 267,376 $ 282,109 $ 1,146,102 Income from operations $ 17,042 $ 13,466 $ 9,226 $ 4,950 $ 44,684 Net income $ 11,944 $ 9,470 $ 7,208 $ 3,939 $ 32,561 Basic earnings per share $ 0.83 $ 0.66 $ 0.51 $ 0.28 $ 2.29 Diluted earnings per share $ 0.82 $ 0.65 $ 0.50 $ 0.28 $ 2.25 ___________________________________ (1) During the fourth quarter of 2015, it was determined that two Company-owned restaurants were impaired. The Company recognized a pre-tax non-cash impairment charge of $0.6 million for these restaurants. (2) During the fourth quarter of 2014, it was determined that three Company-owned restaurants and certain software in development related to the supply chain and human resource management modules of Company’s ERP system were impaired. The Company recognized a pre-tax non-cash impairment charge of $8.8 million for these restaurants and software. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 11, 2016, the Company’s board of directors re-authorized the Company’s share repurchase program, which had approximately $10.0 million remaining under the existing board authorization for future stock repurchases. The board has approved the repurchase of up to a total of $100 million of the Company’s common stock. The share repurchase authorization was effective as of February 11, 2016, and will terminate upon completing repurchases of $100 million of common stock unless otherwise terminated by the board. |
Description of Business and S29
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Fiscal Year | Principles of Consolidation and Fiscal Year —The consolidated financial statements of the Company include the accounts of Red Robin and its wholly owned subsidiaries after elimination of all intercompany accounts and transactions. The Company’s fiscal year is 52 or 53 weeks ending the last Sunday of the calendar year. Fiscal years 2015 , 2014 , and 2013 each included 52 weeks, ending on December 27, 2015 , December 28, 2014 , and December 29, 2013 . Fiscal year 2016 will include 52 weeks and will end on December 25, 2016. We refer to our fiscal years as 2016, 2015, 2014, 2013, 2012, and 2011 throughout this Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The areas that require management’s most significant estimates are impairment of long lived assets, allocation of purchase price for business combinations, goodwill, lease accounting, insurance/self-insurance reserves, estimating fair value, income taxes, unearned revenue, and stock-based compensation expense. Actual results could differ from those estimates. |
Cash Equivalents | Cash Equivalents —The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the “FDIC”) and sometimes invests excess cash in money market funds not insured by the FDIC. |
Accounts Receivable | Accounts Receivable —Accounts receivable consists primarily of trade receivables due from franchisees for royalties, as well as third-party gift card receivables. At the end of 2015 , there was approximately $13.2 million of gift cards in transit in accounts receivable related to gift cards that were sold by third-party retailers, but for which cash settlement occurs anywhere from 15 to 45 days from sale, compared to $12.7 million at the end of 2014 . At the end of 2015 , there was also approximately $6.6 million related to tenant improvement allowances in accounts receivable compared to $3.2 million at the end of 2014 . |
Inventories | Inventories —Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value (see Note 2, Recent Accounting Pronouncements for our early adoption of new FASB guidance issued in 2015 for inventory measurement). |
Property and Equipment | Property and Equipment —Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are expensed as incurred. Depreciation is computed on the straight-line method, based on the shorter of the estimated useful lives or the terms of the underlying leases of the related assets. Interest incurred on funds used to construct Company-owned restaurants is capitalized and amortized over the estimated useful life of the related assets. Capitalized interest totaled $0.2 million in both 2015 and 2014 and $0.3 million in 2013 . The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures, and equipment 5 to 20 years Computer equipment 2 to 5 years The Company capitalizes certain overhead related to the development and construction of its new restaurants, remodeling restaurants to the Company’s new brand standards, as well as certain information technology infrastructure upgrades. Capitalized overhead for the years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 was $4.1 million , $3.8 million , and $3.4 million . Costs incurred for the potential development of restaurants that are subsequently terminated are expensed. No material expense has been incurred in any of the fiscal years presented. |
Business Combinations | Business Combinations —The Company allocates the purchase price of an acquired business to its net identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The Company uses all available information to estimate fair values including the fair value determination of identifiable intangible assets such as reacquired franchise rights, and any other significant assets or liabilities. In making these determinations, the Company may use the assistance of an independent third party valuation group. |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net —Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Intangible assets are comprised primarily of leasehold interests, acquired franchise rights, and the costs of purchased liquor licenses. Leasehold interests primarily represent the fair values of acquired lease contracts having contractual rents lower than fair market rents and are amortized on a straight-line basis over the remaining initial lease term. Acquired franchise rights, which represent the acquired value of franchise contracts, are amortized over the term of the franchise agreements. The costs of obtaining non-transferable liquor licenses from local government agencies are capitalized and generally amortized over a period of up to 20 years . The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of authorized liquor licenses are capitalized as indefinite-lived intangible assets. Goodwill, which is not subject to amortization, is evaluated for impairment annually during the Company’s fourth fiscal quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of store closures, that would indicate that impairment may exist. Goodwill is evaluated at the level of the Company’s single operating segment, which also represents the Company’s only reporting unit. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment, or step zero of the impairment test, to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we perform a quantitative assessment and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments, and the date of our acquisitions. The Company performed a qualitative assessment as of December 27, 2015 for the 2015 annual impairment evaluation. By review of macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections, and other relevant entity-specific events, we determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, and therefore concluded that goodwill was not impaired as of December 27, 2015 . The Company performed a quantitative assessment, or the step one of the impairment test, and determined that goodwill was not impaired as of December 28, 2014 . Step one of the impairment test is based upon a comparison of the carrying value of net assets, including goodwill balances, to the fair value of net assets. Fair value is measured using a combination of the market capitalization method, the income approach, and the market approach. The market capitalization method uses the Company’s stock price to derive fair value. The income approach consists of utilizing the discounted cash flow method that incorporates the Company’s estimates of future revenues and costs, discounted using a risk-adjusted discount rate. The Company’s estimates used in the income approach are consistent with the plans and estimates used to manage operations. The market approach utilizes multiples of profit measures in order to estimate the fair value of the assets. The Company evaluates all methods to ensure reasonably consistent results. Additionally, the Company evaluates the key input factors in the models used to determine whether a moderate change in any input factor or combination of factors would significantly change the results of the tests. Liquor licenses with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value. We determine fair value based on prices in the open market for license in same or similar jurisdictions. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —The Company reviews its long-lived assets, including restaurant sites, leasehold improvements, information technology systems and other fixed assets, and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If the assets are determined to be impaired, the amount of impairment recognized is the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined using forecasted cash flows discounted using an estimated weighted average cost of capital. Management may also utilize market information to determine fair value when relevant information is available. Restaurant sites and other assets to be disposed of are reported at the lower of their carrying amount or fair value, less estimated costs to sell. Information technology systems, such as internal-use computer software, are reviewed and tested for recoverability if the internal-use computer software is not expected to provide substantive service potential, a significant change occurs in the extent or manner in which the software is used or is expected to be used, a significant change is made or will be made to the software program, or costs of developing or modifying internal-use software significantly exceed the amount originally expected to develop or modify the software. |
Fair Value Measurements | Fair Value Measurements —The Company measures certain financial assets and liabilities at fair value in accordance with the accounting guidance for measuring fair value. These assets and liabilities are measured at each reporting period, and certain of these are revalued as required. |
Other Assets, net | Other Assets, net —Other assets, net consist primarily of assets related to various deposits, the employee deferred compensation plan and unamortized debt issuance costs. Debt issuance costs are capitalized and amortized to interest expense on a straight-line basis which approximates the effective interest rate method over the term of the Company’s long term debt. |
Revenue Recognition | Revenue Recognition —Revenues consist of sales from restaurant operations, gift card breakage, franchise royalties and fees, and other miscellaneous revenue. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. The Company recognizes revenue from gift cards when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer is remote (gift card breakage), and the Company determines that there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption (Refer to Change in Accounting Estimate - Gift Card Breakage in Note 1, Description of Business and Summary of Significant Accounting Policies , of Notes to Consolidated Financial Statements of this report). For the fiscal years ended 2015 , 2014 , and 2013 , the Company recognized $5.1 million , $2.3 million and $2.1 million in revenue related to unredeemed gift card breakage. Gift card breakage is included in Other revenue in the Consolidated Statements of Income. Unearned gift card revenue at the end of 2015 and 2014 was $38.2 million and $36.9 million . The Company typically grants franchise rights to franchisees for a term of 20 years, with the right to extend the term for an additional ten years if various conditions are satisfied by the franchisee. The Company provides management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for area development fees, franchise fees, license fees, and royalties of 3% to 4% of the franchised adjusted gross restaurant sales. The Company recognizes area development fees and franchise fees as income when the Company has performed all material obligations and initial services, which generally occurs upon the opening of the new restaurant. Until earned, these fees are accounted for as an accrued liability. Area development fees are recognized proportionately with the opening of each new restaurant. Royalties are accrued as earned and are calculated each period based on the franchisee’s reported adjusted sales. The Company accounts for its Red Robin Royalty™ loyalty program using a deferred revenue approach in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) related to loyalty programs. Red Robin Royalty™ deferred revenue primarily relates to a program in which registered members earn an award for a free entrée for every nine entrées purchased. We recognize the current sale of an entrée and defer a portion of the revenue to reflect partial pre-payment for the future entrée the member is entitled to receive. We estimate the future value of the award based on the historical average value of redemptions. We also estimate what portion of registered members are not likely to reach the ninth purchase based on historical activity and recognize the deferred revenue related to those purchases. We recognize the deferred revenue in Restaurant revenue on earned rewards when redeemed or upon expiration, which is 60 days after the award is earned. We compare the estimate of the value of future awards to historical redemptions to evaluate the reasonableness of the deferred amount. |
Advertising | Advertising —Under the Company’s franchise agreements, both the Company and the franchisees must contribute a minimum percentage of revenues to two national media advertising funds (the “Advertising Funds”). These Advertising Funds are used to build the Company’s brand equity and awareness primarily through a national marketing strategy, including national television advertising, digital media, social media programs, email, loyalty, and public relations initiatives. The Company’s portion of contributions to these Advertising Funds is recorded as advertising costs under Selling, general, and administrative expenses in the Consolidated Statements of Income. Advertising costs related to our local marketing benefit specific restaurants or markets and are recorded as Other operating expenses in the Consolidated Statements of Income. Total advertising costs were $34.8 million , $29.9 million , and $22.4 million in 2015 , 2014 , and 2013 , and were primarily included in Selling, general, and administrative expenses. Prior to 2015, we disclosed both advertising and marketing costs in total. Advertising production costs are expensed in the period when the advertising first takes place. Other advertising costs are expensed as incurred. |
Rent | Rent —The Company’s leases generally contain escalating rent payments over the lease term as well as optional renewal periods. The Company accounts for its leases by recognizing rent expense on a straight-line basis over the lease term, which includes reasonably assured renewal periods. The lease term begins when the Company has the right to control the use of the property, which is typically before rent payments are due under the lease agreement. The difference between the rent expense and rent paid is recorded as Deferred rent in the Consolidated Balance Sheet. Rent expense for the period prior to the restaurant opening is expensed in pre-opening costs. Tenant incentives used to fund leasehold improvements are recorded in deferred rent and amortized as reductions of lease rent expense ratably over the lease term. Additionally, certain of the Company’s operating lease agreements contain clauses that provide for additional contingent rent based on a percentage of sales greater than certain specified target amounts. The Company recognizes contingent rent expense prior to the achievement of the specified target that triggers contingent rent, provided the achievement of that target is considered probable. |
Self-Insurance Programs | Self-Insurance Programs —The Company utilizes a self-insurance plan for health, general liability, and workers’ compensation coverage. Predetermined loss limits have been arranged with insurance companies to limit the Company’s per occurrence cash outlay. Accrued liabilities and accrued payroll and payroll-related liabilities include the estimated cost to settle reported claims and incurred but unreported claims. |
Pre-opening Costs | Pre-opening Costs —Pre-opening costs are expensed as incurred. Pre-opening costs include rental expenses through the date of opening for each restaurant, travel expenses, wages and benefits for the training and opening teams, and food, beverage and other restaurant opening costs incurred prior to a restaurant opening for business. |
Income Taxes | Income Taxes —Deferred tax liabilities are recognized for the estimated effects of all taxable temporary differences, and deferred tax assets are recognized for the estimated effects of all deductible temporary differences and net operating losses, if any, and tax credit carryforwards. |
Earnings Per Share | Earnings Per Share —Basic earnings per share amounts are calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share amounts are calculated based upon the weighted average number of common and potentially dilutive common shares outstanding during the year. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. Diluted earnings per share reflect the potential dilution that could occur if holders of options exercised their holdings into common stock. During 2015 , 2014 , and 2013 , a total of 61,000 , 65,000 , and 2,000 weighted average stock options outstanding were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented. The Company uses the treasury stock method to calculate the impact of outstanding stock options. |
Comprehensive Income (loss) | Comprehensive Income (loss) —Comprehensive income (loss) consists of the net income or loss and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income. Other comprehensive loss as presented in the Consolidated Statements of Stockholders’ Equity for 2015 , 2014 , and 2013 consisted of the unrealized loss, net of tax, on the Company’s cash flow hedge which expired in June 2015, and the foreign currency translation adjustment. |
Stock-Based Compensation/Deferred Compensation (Income) Expense | Stock-Based Compensation —The Company maintains several equity incentive plans under which it may grant stock options, stock appreciation rights, restricted stock, stock variable compensation or other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash variable compensation awards to employees, non-employees, directors, and consultants. The Company also maintains an employee stock purchase plan. See Note 16, Stock Incentive Plans , for additional details. Deferred Compensation (Income) Expense —The Company has assets and liabilities related to a deferred compensation plan. The Company historically purchased Company-owned whole-life insurance contracts on certain team members to offset the deferred compensation plan obligation. In 2013 , the Company liquidated these insurance policies and placed the assets of the deferred compensation plan in a rabbi trust. Assets of the rabbi trust are invested in certain mutual funds that cover an investment spectrum range from equities to money market instruments. Increases in the market value of the investments held in the trust result in the recognition of deferred compensation expense reported in Selling, general, and administrative expenses and recognition of investment gain reported in Interest income and other, net, in the Consolidated Statements of Income. Decreases in the market value of the investments held in the trust result in the recognition of a reduction to deferred compensation expense and recognition of investment loss reported in Interest income and other, net, in the Consolidated Statements of Income. |
Foreign Currency Translation | Foreign Currency Translation —The Canadian Dollar is the functional currency for our Canadian restaurant operations. Assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at exchange rates in effect as of the balance sheet date. Income and expense accounts are translated using the average exchange rates prevailing throughout the period. The resulting translation adjustment is recorded as a separate component of other comprehensive income (loss). Gain or loss from foreign currency transactions is recognized in our Consolidated Statements of Income. |
Description of Business and S30
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of estimated useful lives for property and equipment | The estimated useful lives for property and equipment are: Buildings 5 to 20 years Leasehold improvements Shorter of lease term or estimated useful life, not to exceed 20 years Furniture, fixtures, and equipment 5 to 20 years Computer equipment 2 to 5 years |
Schedule of computations for basic and diluted earnings per share | The computations for basic and diluted earnings per share for fiscal year ended December 27, 2015 , December 28, 2014 , and December 29, 2013 are as follows (in thousands, except per share data): 2015 2014 2013 Net income $ 47,704 $ 32,561 $ 32,239 Shares: Basic weighted average shares outstanding 14,042 14,237 14,225 Dilutive effect of stock options and awards 174 210 285 Diluted weighted average shares outstanding 14,216 14,447 14,510 Earnings per share: Basic $ 3.40 $ 2.29 $ 2.27 Diluted $ 3.36 $ 2.25 $ 2.22 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | Property and equipment consist of the following at December 27, 2015 , and December 28, 2014 , (in thousands): 2015 2014 Land $ 34,461 $ 33,896 Buildings 86,229 82,802 Leasehold improvements 658,173 567,303 Furniture, fixtures and equipment 310,668 265,980 Restaurant property leased to others 4,554 4,554 Construction in progress 22,486 9,813 1,116,571 964,348 Accumulated depreciation and amortization (512,885 ) (468,086 ) Property and equipment, net $ 603,686 $ 496,262 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table presents goodwill as of December 27, 2015 , and December 28, 2014 , (in thousands). 2015 2014 Balance at beginning of year $ 84,115 $ 62,525 Acquisition and adjustment 295 22,953 Foreign currency translation adjustment (2,453 ) (1,363 ) Balance at end of year $ 81,957 $ 84,115 |
Schedule of intangible assets subject to amortization | The following table presents intangible assets as of December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 50,878 $ (23,904 ) $ 26,974 $ 50,826 $ (20,583 ) $ 30,243 Leasehold interests 12,991 (6,643 ) 6,348 12,991 (5,553 ) 7,438 Liquor licenses 10,168 (9,751 ) 417 10,058 (9,548 ) 510 $ 74,037 $ (40,298 ) $ 33,739 $ 73,875 $ (35,684 ) $ 38,191 Indefinite-lived intangible assets: Liquor licenses $ 5,834 $ — $ 5,834 $ 4,288 $ — $ 4,288 Intangible assets, net $ 79,871 $ (40,298 ) $ 39,573 $ 78,163 $ (35,684 ) $ 42,479 |
Schedule of intangible assets not subject to amortization | The following table presents intangible assets as of December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Franchise rights $ 50,878 $ (23,904 ) $ 26,974 $ 50,826 $ (20,583 ) $ 30,243 Leasehold interests 12,991 (6,643 ) 6,348 12,991 (5,553 ) 7,438 Liquor licenses 10,168 (9,751 ) 417 10,058 (9,548 ) 510 $ 74,037 $ (40,298 ) $ 33,739 $ 73,875 $ (35,684 ) $ 38,191 Indefinite-lived intangible assets: Liquor licenses $ 5,834 $ — $ 5,834 $ 4,288 $ — $ 4,288 Intangible assets, net $ 79,871 $ (40,298 ) $ 39,573 $ 78,163 $ (35,684 ) $ 42,479 |
Schedule of estimated aggregate future amortization expense | The estimated aggregate future amortization expense as of December 27, 2015 is as follows (in thousands): 2016 $ 4,021 2017 3,911 2018 3,701 2019 3,621 2020 3,094 Thereafter 15,391 $ 33,739 |
Accrued Payroll and Payroll-r33
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accrued payroll and payroll-related liabilities | Accrued payroll and payroll-related liabilities consist of the following at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Payroll $ 9,768 $ 9,195 Corporate and restaurant variable compensation 16,215 15,077 Workers compensation insurance 7,095 7,563 Accrued vacation 5,085 5,809 Other 9,424 9,718 $ 47,587 $ 47,362 |
Schedule of accrued liabilities | Accrued liabilities and other current liabilities consist of the following at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 State and city sales taxes $ 7,677 $ 6,839 Real estate, personal property, state income and other taxes payable 3,091 2,999 General liability insurance 4,854 3,531 Utilities 2,890 2,938 Other 11,098 10,777 $ 29,610 $ 27,084 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | Borrowings as of December 27, 2015 and December 28, 2014 are summarized below (in thousands): 2015 2014 Borrowings Weighted Average Interest Rate Borrowings Weighted Average Interest Rate Revolving credit facility and other long-term debt $ 202,875 1.82 % $ 139,375 1.71 % Capital lease obligations 7,972 4.89 % 8,521 5.11 % Total debt and capital lease obligations 210,847 147,896 Less: Current portion (531 ) (583 ) Long-term debt and capital lease obligations $ 210,316 $ 147,313 |
Schedule of maturities of long-term debt and capital lease obligations | Maturities of long-term debt and capital lease obligations as of December 27, 2015 are as follows (in thousands): 2016 $ 531 2017 561 2018 595 2019 202,633 2020 684 Thereafter 5,843 $ 210,847 |
Derivative and Other Comprehe35
Derivative and Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Derivative and Other Comprehensive Income | |
Schedule of interest rate swaps designated as a cash flow hedge | The following table presents losses on the interest rate swap designated as a cash flow hedge recognized in the Other comprehensive loss (“OCL”) and reclassifications from AOCL to earnings as of December 27, 2015 and December 28, 2014 (in thousands): Losses recognized in OCL on derivative (effective portion) Losses reclassified from AOCL into income (effective portion) December 27, 2015 December 28, 2014 December 27, 2015 December 28, 2014 Fifty-two Weeks Ended $ (3 ) $ (94 ) $ (36 ) $ (95 ) |
Schedule of fair value and presentation of interest rate hedging instruments in condensed consolidated balance sheets | The following table summarizes the fair value and presentation of the interest rate swap in the accompanying Consolidated Balance Sheets as hedging instruments as of December 27, 2015 and December 28, 2014 (in thousands): Derivative Liability Balance Sheet Location Fair Value at December 27, 2015 Fair Value at Accrued liabilities $ — $ 347 Total derivatives $ — $ 347 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on a recurring basis | The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 27, 2015 and December 28, 2014 (in thousands): December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ — December 28, 2014 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 5,723 $ 5,723 $ — $ — Total assets measured at fair value $ 5,723 $ 5,723 $ — $ — Liabilities: Derivative—interest rate swap $ 347 $ — 347 $ — Total liabilities measured at fair value $ 347 $ — $ 347 $ — |
Schedule of fair value liabilities measured on a recurring basis | The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 27, 2015 and December 28, 2014 (in thousands): December 27, 2015 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 6,863 $ 6,863 $ — $ — Total assets measured at fair value $ 6,863 $ 6,863 $ — $ — December 28, 2014 Level 1 Level 2 Level 3 Assets: Investments in rabbi trust $ 5,723 $ 5,723 $ — $ — Total assets measured at fair value $ 5,723 $ 5,723 $ — $ — Liabilities: Derivative—interest rate swap $ 347 $ — 347 $ — Total liabilities measured at fair value $ 347 $ — $ 347 $ — |
Schedule of fair value of debt | The following table presents the carrying value and estimated fair value of Company’s credit facility and capital lease obligations as of December 27, 2015 and December 28, 2014 (in thousands): December 27, 2015 December 28, 2014 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Credit facility $ 202,000 $ 201,829 $ 138,500 $ 138,397 Capital lease obligations 7,972 9,177 8,521 10,004 Total $ 209,972 $ 211,006 $ 147,021 $ 148,401 |
Supplemental Disclosures to C37
Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental disclosures to consolidated statements of cash flows | (In thousands) 2015 2014 2013 Cash paid during the year for: Income taxes $ 14,346 $ 12,827 $ 7,205 Interest, net of amounts capitalized 3,754 3,370 2,342 Non-cash investing and financing activities: Change in construction related payables 13,040 970 9,988 Capital lease obligations incurred for real estate and equipment purchases — — 126 Note entered for liquor license purchase — — 875 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income tax | Income before income taxes includes the following components for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 (in thousands): 2015 2014 2013 U.S. $ 64,668 $ 42,898 $ 41,249 Foreign (1,432 ) (1,039 ) — $ 63,236 $ 41,859 $ 41,249 |
Schedule of provision (benefit) for income taxes | The provision (benefit) for income taxes for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 consist of the following (in thousands): 2015 2014 2013 Current: Federal $ 6,427 $ 5,169 $ 4,667 State 4,455 3,895 2,525 Foreign — — — Deferred: Federal 4,013 1,146 2,755 State (1 ) (649 ) (937 ) Foreign 638 (263 ) — $ 15,532 $ 9,298 $ 9,010 |
Schedule of reconciliation of income tax provision that would result from applying the federal statutory rate to income tax provision | The reconciliation between the income tax provision and the amount of income tax computed by applying the U.S. federal statutory rate to income before the provision for income taxes as shown in the accompanying Consolidated Statements of Income for fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 is as follows: 2015 2014 2013 Tax provision at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes 4.3 5.1 2.5 FICA tip tax credits (12.8 ) (16.0 ) (14.8 ) Foreign taxes versus U.S statutory rate 0.3 (0.1 ) — Valuation allowance on deferred income tax assets 1.5 — — Other tax credits (3.6 ) (2.3 ) (2.5 ) Other (0.1 ) 0.5 1.6 Effective tax rate 24.6 % 22.2 % 21.8 % |
Schedule of the Company's total deferred tax assets and liabilities | The Company’s federal and state deferred taxes at December 27, 2015 and December 28, 2014 are as follows (in thousands): 2015 2014 Current deferred tax assets and (liabilities), net: Accrued compensation and related costs $ — $ 10,941 Advanced payments — 2,764 General business and other tax credits — (275 ) Interest rate swap — 13 Other current deferred tax assets — 3,583 Other current deferred tax liabilities — — Prepaid expenses — (5,426 ) Supplies inventory — (6,923 ) Current deferred tax asset, net — 4,677 Non-current deferred tax assets and (liabilities), net: Deferred rent 17,978 16,900 Stock-based compensation 6,980 6,461 General business and other tax credits 3,275 5,551 Alternative minimum tax credits 1,262 1,262 Accrued compensation and related costs 11,862 2,067 Advanced payments 3,024 — Other non-current deferred tax assets 4,277 413 Other non-current deferred tax liabilities (1,181 ) (789 ) Goodwill (9,572 ) (7,260 ) Property and equipment (24,792 ) (25,369 ) Franchise rights 744 63 Prepaid expenses (4,736 ) — Supplies inventory (7,089 ) — Subtotal 2,032 (701 ) Valuation Allowance (1,910 ) (990 ) Non-current deferred tax asset (liability), net, included in other non-current liabilities 122 (1,691 ) Net deferred tax asset (liability) $ 122 $ 2,986 |
Schedule of the Company's unrecognized tax benefits | The following table summarizes the Company’s unrecognized tax benefits at December 27, 2015 and December 28, 2014 (in thousands): 2015 2014 Beginning of year $ 319 $ 401 Increase due to current year tax positions 57 96 Due to decrease to a position taken in a prior year (100 ) (5 ) Settlements — (122 ) Reductions related to lapses (48 ) (51 ) End of year $ 228 $ 319 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of rental expense related to land, building, and equipment leases | Rental expense related to land, building, and equipment leases for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 are as follows (in thousands): 2015 2014 2013 Minimum rent $ 67,078 $ 58,083 $ 49,206 Contingent rent 2,264 2,239 2,164 Equipment rent under operating leases 791 895 990 $ 70,133 $ 61,217 $ 52,360 |
Schedule of future minimum lease commitments and minimum rental income under all leases | Future minimum lease commitments and minimum rental income under all leases as of December 27, 2015 are as follows (in thousands): Capital Leases Operating Leases Rental Income 2016 $ 905 $ 72,796 $ 131 2017 900 70,786 104 2018 900 66,193 104 2019 900 60,612 104 2020 912 54,818 104 Thereafter 5,712 226,642 82 Total 10,229 $ 551,847 $ 629 Less amount representing interest (2,257 ) Present value of future minimum lease payments 7,972 Less current portion (531 ) Long-term capital lease obligations $ 7,441 |
Franchise Operations (Tables)
Franchise Operations (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Franchisors [Abstract] | |
Schedule of results of franchise operations included in the consolidated statements of income. | Results of franchise operations included in the Consolidated Statements of Income for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 consist of the following (in thousands): 2015 2014 2013 Franchise royalties and fees: Royalty income $ 12,478 $ 13,540 $ 14,315 Franchise fees 48 97 63 Total franchise royalties and fees $ 12,526 $ 13,637 $ 14,378 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of status of the Company's stock option plans | The tables below summarize the status of the Company’s stock option plans (in thousands, except per share data and exercise price): Stock Options Shares Weighted Average Exercise Price Outstanding, December 28, 2014 462 $ 38.83 Granted 72 81.84 Forfeited/expired (44 ) 49.35 Exercised (95 ) 36.49 Outstanding, December 27, 2015 395 $ 46.04 Shares Weighted Average Exercise Price Weighted Average Remaining Years of Contractual Life Aggregate Intrinsic Value Outstanding as of December 27, 2015 395 $ 46.04 6.10 $ 8,155 Vested and expected to vest as of December 27, 2015 (1) 379 $ 44.87 6.00 $ 8,107 Exercisable as of December 27, 2015 230 $ 32.03 4.68 $ 7,013 ___________________________________ (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. |
Schedule of average assumptions used in estimation of fair value of options | The estimated fair value of each option granted is calculated using the Black-Scholes multiple option-pricing model. The average assumptions used in the model for the fiscal years ended December 27, 2015 , December 28, 2014 , and December 29, 2013 were as follows: 2015 2014 2013 Risk-free interest rate 1.4 % 1.7 % 0.7 % Expected years until exercise 4.8 5.7 4.2 Expected stock volatility 40.6 % 44.6 % 44.4 % Dividend yield — % — % — % Weighted average Black-Scholes fair value per share at date of grant $ 29.71 $ 30.70 $ 15.19 Total intrinsic value of options exercised (in thousands) $ 4,414 $ 3,954 $ 8,263 |
Summary of the status of the Company's restricted stock units | The table below summarizes the status of the Company’s time-based RSUs under the 2007 Stock Plan (shares in thousands): Restricted Stock Units Shares Weighted Average Grant-Date Fair Value (per share) Outstanding, December 28, 2014 101 $ 49.78 Awarded 33 82.52 Forfeited (13 ) 53.79 Vested (46 ) 42.82 Outstanding, December 27, 2015 75 $ 67.74 |
Quarterly Results of Operatio42
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Consolidated Quarterly Financial Information | The following tables summarize the unaudited consolidated quarterly financial information for fiscal years 2015 and 2014 (in thousands, except per share data): Q1 Q2 Q3 Q4 (1) 2015 Total revenues $ 394,901 $ 292,979 $ 283,412 $ 286,300 $ 1,257,592 Income from operations $ 23,845 $ 16,480 $ 11,705 $ 15,015 $ 67,045 Net income $ 16,565 $ 11,166 $ 8,282 $ 11,691 $ 47,704 Basic earnings per share $ 1.18 $ 0.79 $ 0.59 $ 0.85 $ 3.40 Diluted earnings per share $ 1.16 $ 0.78 $ 0.58 $ 0.84 $ 3.36 Q1 Q2 Q3 Q4 (2) (12 weeks) 2014 Total revenues $ 340,484 $ 256,133 $ 267,376 $ 282,109 $ 1,146,102 Income from operations $ 17,042 $ 13,466 $ 9,226 $ 4,950 $ 44,684 Net income $ 11,944 $ 9,470 $ 7,208 $ 3,939 $ 32,561 Basic earnings per share $ 0.83 $ 0.66 $ 0.51 $ 0.28 $ 2.29 Diluted earnings per share $ 0.82 $ 0.65 $ 0.50 $ 0.28 $ 2.25 ___________________________________ (1) During the fourth quarter of 2015, it was determined that two Company-owned restaurants were impaired. The Company recognized a pre-tax non-cash impairment charge of $0.6 million for these restaurants. (2) During the fourth quarter of 2014, it was determined that three Company-owned restaurants and certain software in development related to the supply chain and human resource management modules of Company’s ERP system were impaired. The Company recognized a pre-tax non-cash impairment charge of $8.8 million for these restaurants and software. |
Description of Business and S43
Description of Business and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 27, 2015stateprovincerestaurantsegment | |
Description of business and summary of significant accounting policies | |
Number of operating segments | segment | 1 |
Number of reportable segments | segment | 1 |
Company-owned operated restaurants | |
Description of business and summary of significant accounting policies | |
Number of restaurants | 439 |
Number of states in which restaurants are located | state | 38 |
Franchised restaurants | |
Description of business and summary of significant accounting policies | |
Number of restaurants | 99 |
Number of states in which restaurants are located | state | 15 |
Number of Canadian provinces in which restaurants are located | province | 2 |
Red Robin restaurants | Company-owned operated restaurants | |
Description of business and summary of significant accounting policies | |
Number of restaurants | 429 |
Red Robin Burger Works | Company-owned operated restaurants | |
Description of business and summary of significant accounting policies | |
Number of restaurants | 10 |
Description of Business and S44
Description of Business and Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
Dec. 27, 2015 | Oct. 04, 2015 | Jul. 12, 2015 | Dec. 28, 2014 | Oct. 05, 2014 | Jul. 13, 2014 | Apr. 19, 2015 | Apr. 20, 2014 | Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |||
Description of business and summary of significant accounting policies | |||||||||||||
Duration of fiscal period | 84 days | 84 days | 84 days | 84 days | 84 days | 84 days | 112 days | 112 days | 364 days | 364 days | 364 days | ||
Length of next fiscal year | 364 days | ||||||||||||
Revenue related to unredeemed gift card breakage | $ 5,079 | $ 2,284 | $ 2,106 | ||||||||||
Net income | $ 47,704 | $ 32,561 | $ 32,239 | ||||||||||
Diluted (in dollars per share) | $ 0.84 | [1] | $ 0.58 | $ 0.78 | $ 0.28 | [2] | $ 0.50 | $ 0.65 | $ 1.16 | $ 0.82 | $ 3.36 | $ 2.25 | $ 2.22 |
Accounts Receivable | |||||||||||||
Gift cards in transit in accounts receivable | $ 13,200 | $ 12,700 | $ 13,200 | $ 12,700 | |||||||||
Tenant improvement allowances | 6,600 | 3,200 | 6,600 | 3,200 | |||||||||
Inventories | |||||||||||||
Food and beverage inventories | 9,300 | 8,500 | 9,300 | 8,500 | |||||||||
Supplies inventories | $ 18,900 | $ 17,400 | $ 18,900 | $ 17,400 | |||||||||
Minimum | |||||||||||||
Description of business and summary of significant accounting policies | |||||||||||||
Duration of fiscal period | 364 days | ||||||||||||
Cash Equivalents | |||||||||||||
Period for conversion of amounts receivable from credit card issuers into cash | 2 days | ||||||||||||
Accounts Receivable | |||||||||||||
Period for cash settlement of gift cards sold | 15 days | ||||||||||||
Maximum | |||||||||||||
Description of business and summary of significant accounting policies | |||||||||||||
Duration of fiscal period | 371 days | ||||||||||||
Cash Equivalents | |||||||||||||
Period for conversion of amounts receivable from credit card issuers into cash | 4 days | ||||||||||||
Accounts Receivable | |||||||||||||
Period for cash settlement of gift cards sold | 45 days | ||||||||||||
Change in estimate | |||||||||||||
Description of business and summary of significant accounting policies | |||||||||||||
Revenue related to unredeemed gift card breakage | $ 2,400 | ||||||||||||
Net income | $ 1,300 | ||||||||||||
Diluted (in dollars per share) | $ 0.09 | ||||||||||||
Change in useful life | |||||||||||||
Description of business and summary of significant accounting policies | |||||||||||||
Net income | $ 600 | ||||||||||||
Diluted (in dollars per share) | $ 0.04 | ||||||||||||
Depreciation | $ (1,000) | ||||||||||||
[1] | During the fourth quarter of 2015, it was determined that two Company-owned restaurants were impaired. The Company recognized a pre-tax non-cash impairment charge of $0.6 million for these restaurants. | ||||||||||||
[2] | During the fourth quarter of 2014, it was determined that three Company-owned restaurants and certain software in development related to the supply chain and human resource management modules of Company’s ERP system were impaired. The Company recognized a pre-tax non-cash impairment charge of $8.8 million for these restaurants and software. |
Description of Business and S45
Description of Business and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Property and equipment | |||
Capitalized interest | $ 0.2 | $ 0.2 | $ 0.3 |
Capitalized overhead | $ 4.1 | $ 3.8 | $ 3.4 |
Buildings | Minimum | |||
Property and equipment | |||
Estimated useful lives | 5 years | ||
Buildings | Maximum | |||
Property and equipment | |||
Estimated useful lives | 20 years | ||
Leasehold improvements | Maximum | |||
Property and equipment | |||
Estimated useful lives | 20 years | ||
Furniture, fixtures and equipment | Minimum | |||
Property and equipment | |||
Estimated useful lives | 5 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and equipment | |||
Estimated useful lives | 20 years | ||
Computer equipment | Minimum | |||
Property and equipment | |||
Estimated useful lives | 2 years | ||
Computer equipment | Maximum | |||
Property and equipment | |||
Estimated useful lives | 5 years |
Description of Business and S46
Description of Business and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Jul. 31, 2014 | |
Other Assets, net | |||
Capitalized debt issuance costs | $ 0.3 | $ 0.7 | |
Debt issuance costs | $ 1.7 | $ 1.8 | |
Liquor licenses | Maximum | |||
Goodwill and intangible assets, net | |||
Amortization period of non-transferable liquor licenses | 20 years |
Description of Business and S47
Description of Business and Summary of Significant Accounting Policies (Details 5) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
Dec. 27, 2015USD ($)$ / shares | Oct. 04, 2015USD ($)$ / shares | Jul. 12, 2015USD ($)$ / shares | Dec. 28, 2014USD ($)$ / shares | Oct. 05, 2014USD ($)$ / shares | Jul. 13, 2014USD ($)$ / shares | Apr. 19, 2015USD ($)$ / shares | Apr. 20, 2014USD ($)$ / shares | Dec. 27, 2015USD ($)fundentree$ / sharesshares | Dec. 28, 2014USD ($)$ / sharesshares | Dec. 29, 2013USD ($)$ / sharesshares | |||
Revenue Recognition | |||||||||||||
Revenue related to unredeemed gift card breakage | $ 5,079 | $ 2,284 | $ 2,106 | ||||||||||
Unearned gift card revenue | $ 38,200 | $ 36,900 | $ 38,200 | 36,900 | |||||||||
Term of franchise rights | 20 years | ||||||||||||
Additional term of franchise rights | 10 years | ||||||||||||
Number of entrees to be purchased for each free entree | entree | 9 | ||||||||||||
Maximum period over which member may redeem reward after award is earned | 60 days | ||||||||||||
Unearned loyalty revenue | 10,200 | 8,100 | $ 10,200 | 8,100 | |||||||||
Advertising | |||||||||||||
Advertising and marketing costs | $ 34,800 | $ 29,900 | $ 22,400 | ||||||||||
Number of marketing and national media funds to which the entity and franchisees must contribute a minimum percentage of revenue | fund | 2 | ||||||||||||
Earnings Per Share | |||||||||||||
Weighted average stock options outstanding excluded from computation of diluted earnings per share (in shares) | shares | 61 | 65 | 2 | ||||||||||
Net income | $ 11,691 | [1] | $ 8,282 | $ 11,166 | $ 3,939 | [2] | $ 7,208 | $ 9,470 | $ 16,565 | $ 11,944 | $ 47,704 | $ 32,561 | $ 32,239 |
Basic weighted-average shares outstanding | shares | 14,042 | 14,237 | 14,225 | ||||||||||
Dilutive effect of stock options and awards (in shares) | shares | 174 | 210 | 285 | ||||||||||
Diluted weighted average shares outstanding | shares | 14,216 | 14,447 | 14,510 | ||||||||||
Earnings per share: | |||||||||||||
Basic (in dollars per share) | $ / shares | $ 0.85 | [1] | $ 0.59 | $ 0.79 | $ 0.28 | [2] | $ 0.51 | $ 0.66 | $ 1.18 | $ 0.83 | $ 3.40 | $ 2.29 | $ 2.27 |
Diluted (in dollars per share) | $ / shares | $ 0.84 | [1] | $ 0.58 | $ 0.78 | $ 0.28 | [2] | $ 0.50 | $ 0.65 | $ 1.16 | $ 0.82 | $ 3.36 | $ 2.25 | $ 2.22 |
Minimum | |||||||||||||
Revenue Recognition | |||||||||||||
Royalties as a percentage of franchised adjusted gross restaurant sales | 3.00% | ||||||||||||
Maximum | |||||||||||||
Revenue Recognition | |||||||||||||
Royalties as a percentage of franchised adjusted gross restaurant sales | 4.00% | ||||||||||||
[1] | During the fourth quarter of 2015, it was determined that two Company-owned restaurants were impaired. The Company recognized a pre-tax non-cash impairment charge of $0.6 million for these restaurants. | ||||||||||||
[2] | During the fourth quarter of 2014, it was determined that three Company-owned restaurants and certain software in development related to the supply chain and human resource management modules of Company’s ERP system were impaired. The Company recognized a pre-tax non-cash impairment charge of $8.8 million for these restaurants and software. |
Description of Business and S48
Description of Business and Summary of Significant Accounting Policies (Details 6) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 28, 2014 | Dec. 29, 2013 | |
Employee Deferred Compensation Plan | Deferred compensation, excluding share-based payments and retirement benefits | ||
Share-based compensation plan disclosures | ||
Deferred compensation expense | $ 0.3 | $ 0.2 |
Acquisitions of Red Robin Fra49
Acquisitions of Red Robin Franchised Restaurants (Details) $ in Millions | Aug. 31, 2015USD ($)restaurant | Jul. 14, 2014USD ($)restaurant | Mar. 24, 2014USD ($)restaurantfranchisee |
August 2015, acquisition of franchise restaurant | |||
Business Acquisition [Line Items] | |||
Number of restaurants acquired from franchises | 1 | ||
Purchase price, cash | $ | $ 2.5 | ||
March 2014, acquisition of four franchise restaurants | |||
Business Acquisition [Line Items] | |||
Number of restaurants acquired from franchises | 4 | ||
Purchase price, cash | $ | $ 8 | ||
Number of franchisees | franchisee | 1 | ||
July 2014, acquisition of 32 Red Robin franchise restaurants | |||
Business Acquisition [Line Items] | |||
Number of restaurants acquired from franchises | 32 | ||
Purchase price, cash | $ | $ 39.5 | ||
United States | July 2014, acquisition of 32 Red Robin franchise restaurants | |||
Business Acquisition [Line Items] | |||
Number of restaurants acquired from franchises | 14 | ||
Canada | July 2014, acquisition of 32 Red Robin franchise restaurants | |||
Business Acquisition [Line Items] | |||
Number of restaurants acquired from franchises | 18 |
Impairment and Restaurant Clo50
Impairment and Restaurant Closures (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 27, 2015USD ($)restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 27, 2015restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 29, 2013USD ($)restaurant | |
Restructuring Cost and Reserve [Line Items] | |||||
Number of restaurants impaired | 2 | 3 | 2 | 3 | 4 |
Impairment of restaurants impaired | $ | $ 0.6 | $ 1.2 | $ 1.5 | ||
Number of restaurants closed | 1 | 0 | |||
Number of restaurants closed operating below acceptable profitability levels | 3 | ||||
Number of restaurants temporarily closed | 1 | ||||
Software in development, related to supply Chain and human resource management system modules | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Impairment of software in development | $ | $ 7.6 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Property and equipment | |||
Property and equipment, gross | $ 1,116,571 | $ 964,348 | |
Accumulated depreciation and amortization | (512,885) | (468,086) | |
Property and equipment, net | 603,686 | 496,262 | |
Depreciation and amortization expense | 72,600 | 60,600 | $ 54,500 |
Land | |||
Property and equipment | |||
Property and equipment, gross | 34,461 | 33,896 | |
Buildings | |||
Property and equipment | |||
Property and equipment, gross | 86,229 | 82,802 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 658,173 | 567,303 | |
Furniture, fixtures and equipment | |||
Property and equipment | |||
Property and equipment, gross | 310,668 | 265,980 | |
Restaurant property leased to others | |||
Property and equipment | |||
Property and equipment, gross | 4,554 | 4,554 | |
Construction in progress | |||
Property and equipment | |||
Property and equipment, gross | $ 22,486 | $ 9,813 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 27, 2015USD ($)restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 27, 2015USD ($)restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 29, 2013USD ($)restaurant | |
Goodwill | |||||
Balance at beginning of year | $ 84,115,000 | $ 62,525,000 | |||
Acquisition and adjustment | 295,000 | 22,953,000 | |||
Foreign currency translation adjustment | (2,453,000) | (1,363,000) | |||
Balance at end of year | $ 81,957,000 | $ 84,115,000 | 81,957,000 | 84,115,000 | $ 62,525,000 |
Schedule of Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 74,037,000 | 73,875,000 | 74,037,000 | 73,875,000 | |
Accumulated Amortization | (40,298,000) | (35,684,000) | (40,298,000) | (35,684,000) | |
Net Carrying Amount | 33,739,000 | 38,191,000 | 33,739,000 | 38,191,000 | |
Intangible assets, Gross Carrying Amount | 79,871,000 | 78,163,000 | 79,871,000 | 78,163,000 | |
Intangible assets, Accumulated Amortization | (40,298,000) | (35,684,000) | (40,298,000) | (35,684,000) | |
Intangible assets, Net Carrying Amount | $ 39,573,000 | $ 42,479,000 | 39,573,000 | 42,479,000 | |
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 | $ 0 | ||
Number of restaurants impaired | restaurant | 2 | 3 | 2 | 3 | 4 |
Aggregate amortization expense | $ 4,700,000 | $ 3,900,000 | $ 3,700,000 | ||
Liquor licenses | |||||
Schedule of Intangible Assets [Line Items] | |||||
Gross Carrying Amount, Indefinite-lived intangible assets | $ 5,834,000 | $ 4,288,000 | 5,834,000 | 4,288,000 | |
Accumulated Amortization, Indefinite-lived intangible assets | 0 | 0 | 0 | 0 | |
Net Carrying Amount, Indefinite-lived intangible assets | 5,834,000 | 4,288,000 | 5,834,000 | 4,288,000 | |
Franchise rights | |||||
Schedule of Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 50,878,000 | 50,826,000 | 50,878,000 | 50,826,000 | |
Accumulated Amortization | (23,904,000) | (20,583,000) | (23,904,000) | (20,583,000) | |
Net Carrying Amount | 26,974,000 | 30,243,000 | 26,974,000 | 30,243,000 | |
Leasehold interests | |||||
Schedule of Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 12,991,000 | 12,991,000 | 12,991,000 | 12,991,000 | |
Accumulated Amortization | (6,643,000) | (5,553,000) | (6,643,000) | (5,553,000) | |
Net Carrying Amount | 6,348,000 | 7,438,000 | 6,348,000 | 7,438,000 | |
Liquor licenses | |||||
Schedule of Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 10,168,000 | 10,058,000 | 10,168,000 | 10,058,000 | |
Accumulated Amortization | (9,751,000) | (9,548,000) | (9,751,000) | (9,548,000) | |
Net Carrying Amount | $ 417,000 | $ 510,000 | $ 417,000 | $ 510,000 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Estimated aggregate future amortization expense | ||
2,016 | $ 4,021 | |
2,017 | 3,911 | |
2,018 | 3,701 | |
2,019 | 3,621 | |
2,020 | 3,094 | |
Thereafter | 15,391 | |
Net Carrying Amount | $ 33,739 | $ 38,191 |
Accrued Payroll and Payroll-r54
Accrued Payroll and Payroll-related Liabilities, and Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Accrued payroll and payroll-related liabilities | ||
Payroll | $ 9,768 | $ 9,195 |
Corporate and restaurant variable compensation | 16,215 | 15,077 |
Workers compensation insurance | 7,095 | 7,563 |
Accrued vacation | 5,085 | 5,809 |
Other | 9,424 | 9,718 |
Total | 47,587 | 47,362 |
Accrued liabilities | ||
State and city sales taxes | 7,677 | 6,839 |
Real estate, personal property, state income and other taxes payable | 3,091 | 2,999 |
General liability insurance | 4,854 | 3,531 |
Utilities | 2,890 | 2,938 |
Other | 11,098 | 10,777 |
Total | $ 29,610 | $ 27,084 |
Borrowings (Details)
Borrowings (Details) - USD ($) | Jul. 02, 2014 | Dec. 27, 2015 | Dec. 21, 2015 | Dec. 28, 2014 | Jul. 31, 2014 |
Borrowings | |||||
Debt and capital lease obligations | $ 210,847,000 | $ 147,896,000 | |||
Less: Current portion | (531,000) | (583,000) | |||
Long-term debt and capital lease obligations | 210,316,000 | 147,313,000 | |||
Maturities of long-term debt and capital lease obligations | |||||
2,016 | 531,000 | ||||
2,017 | 561,000 | ||||
2,018 | 595,000 | ||||
2,019 | 202,633,000 | ||||
2,020 | 684,000 | ||||
Thereafter | 5,843,000 | ||||
Debt and capital lease obligations | 210,847,000 | 147,896,000 | |||
Additional disclosure | |||||
Loan origination costs | 1,700,000 | 1,800,000 | |||
Capital lease obligations | |||||
Borrowings | |||||
Debt and capital lease obligations | $ 7,972,000 | $ 8,521,000 | |||
Weighted Average Interest Rate | 4.89% | 5.11% | |||
Maturities of long-term debt and capital lease obligations | |||||
Debt and capital lease obligations | $ 7,972,000 | $ 8,521,000 | |||
Previous Credit Facility | Revolving credit facility | |||||
Additional disclosure | |||||
Maximum borrowing capacity | $ 250,000,000 | ||||
Credit Facility | |||||
Additional disclosure | |||||
Maximum borrowing capacity | 20,000,000 | ||||
Additional borrowing capacity subject to lender participation | 100,000,000 | ||||
Credit Facility | Revolving credit facility | |||||
Borrowings | |||||
Debt and capital lease obligations | $ 202,875,000 | $ 139,375,000 | |||
Weighted Average Interest Rate | 1.82% | 1.71% | |||
Maturities of long-term debt and capital lease obligations | |||||
Debt and capital lease obligations | $ 202,875,000 | $ 139,375,000 | |||
Additional disclosure | |||||
Maximum borrowing capacity | $ 325,000,000 | ||||
Amounts outstanding | 202,000,000 | ||||
Credit Facility | Letter of credit | |||||
Additional disclosure | |||||
Maximum borrowing capacity | 25,000,000 | ||||
Amounts outstanding | 7,900,000 | ||||
Credit Facility | Swingline loans | |||||
Additional disclosure | |||||
Maximum borrowing capacity | $ 15,000,000 | ||||
Federal Funds Rate | Credit Facility | Revolving credit facility | |||||
Additional disclosure | |||||
Interest rate margin (as a percent) | 0.50% | ||||
LIBOR | Credit Facility | Revolving credit facility | |||||
Additional disclosure | |||||
Interest rate margin (as a percent) | 1.00% | ||||
Canadian Dealer Offered Rate (CDOR) | Credit Facility | Revolving credit facility | |||||
Additional disclosure | |||||
Interest rate margin (as a percent) | 1.00% | ||||
Other assets, net | Credit Facility | |||||
Additional disclosure | |||||
Loan origination costs | $ 300,000 | $ 700,000 |
Derivative and Other Comprehe56
Derivative and Other Comprehensive Income (Details) $ in Thousands | 12 Months Ended | |||
Dec. 27, 2015USD ($) | Dec. 28, 2014USD ($)interest_rate_swap | Jun. 30, 2015USD ($) | Aug. 31, 2011USD ($) | |
Derivative and other comprehensive income | ||||
Losses recognized in OCL on derivative (effective portion) | $ (3) | $ (94) | ||
Losses reclassified from AOCL into income (effective portion) | $ (36) | $ (95) | ||
Interest Rate Swap | Rabobank | ||||
Derivative and other comprehensive income | ||||
Number of derivative instruments held | interest_rate_swap | 1 | |||
Estimated notional hedge amount on expiration date which is June 30, 2015 | $ 50,600 | |||
Fixed rate of interest on derivative (as a percent) | 1.135% | |||
Cash Flow Hedging | Interest Rate Swap | Rabobank | ||||
Derivative and other comprehensive income | ||||
Notional amount of derivatives | $ 54,400 | $ 74,100 |
Derivative and Other Comprehe57
Derivative and Other Comprehensive Income (Details 2) - Designated as hedging instruments - Interest Rate Swap - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Derivative and other comprehensive income | ||
Accrued liabilities | $ 0 | $ 347 |
Total derivatives | $ 0 | $ 347 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Assets: | ||
Investments in rabbi trust | $ 6,863 | $ 5,723 |
Total assets measured at fair value | 6,863 | 5,723 |
Liabilities: | ||
Derivative—interest rate swap | 347 | |
Total liabilities measured at fair value | 347 | |
Level 1 | ||
Assets: | ||
Investments in rabbi trust | 6,863 | 5,723 |
Total assets measured at fair value | 6,863 | 5,723 |
Liabilities: | ||
Derivative—interest rate swap | 0 | |
Total liabilities measured at fair value | 0 | |
Level 2 | ||
Assets: | ||
Investments in rabbi trust | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative—interest rate swap | 347 | |
Total liabilities measured at fair value | 347 | |
Level 3 | ||
Assets: | ||
Investments in rabbi trust | 0 | 0 |
Total assets measured at fair value | $ 0 | 0 |
Liabilities: | ||
Derivative—interest rate swap | 0 | |
Total liabilities measured at fair value | $ 0 |
Fair Value Measurements (Deta59
Fair Value Measurements (Details 2) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 27, 2015USD ($)restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 27, 2015USD ($)restaurant | Dec. 28, 2014USD ($)restaurant | Dec. 29, 2013restaurant | |
Asset Impairment | |||||
Number of restaurants impaired | restaurant | 2 | 3 | 2 | 3 | 4 |
Carrying Value | |||||
Disclosures of Fair Value of Other Assets and Liabilities | |||||
Credit facility | $ 202,000 | $ 138,500 | $ 202,000 | $ 138,500 | |
Capital lease obligations | 7,972 | 8,521 | 7,972 | 8,521 | |
Total | 209,972 | 147,021 | 209,972 | 147,021 | |
Estimated Fair Value | Level 2 | |||||
Disclosures of Fair Value of Other Assets and Liabilities | |||||
Credit facility | 201,829 | 138,397 | 201,829 | 138,397 | |
Capital lease obligations | 9,177 | 10,004 | 9,177 | 10,004 | |
Total | $ 211,006 | $ 148,401 | $ 211,006 | $ 148,401 |
Supplemental Disclosures to C60
Supplemental Disclosures to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Cash paid during the year for: | |||
Income taxes | $ 14,346 | $ 12,827 | $ 7,205 |
Interest, net of amounts capitalized | 3,754 | 3,370 | 2,342 |
Non-cash investing and financing activities: | |||
Change in construction related payables | 13,040 | 970 | 9,988 |
Capital lease obligations incurred for real estate and equipment purchases | 0 | 0 | 126 |
Note entered for liquor license purchase | $ 0 | $ 0 | $ 875 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
U.S. | $ 64,668 | $ 42,898 | $ 41,249 |
Foreign | (1,432) | (1,039) | 0 |
Income before income taxes | 63,236 | 41,859 | 41,249 |
Current: | |||
Federal | 6,427 | 5,169 | 4,667 |
State | 4,455 | 3,895 | 2,525 |
Foreign | 0 | 0 | 0 |
Foreign | |||
Federal | 4,013 | 1,146 | 2,755 |
State | (1) | (649) | (937) |
Foreign | 638 | (263) | 0 |
Provision (benefit) for income taxes | $ 15,532 | $ 9,298 | $ 9,010 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax provision at U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes | 4.30% | 5.10% | 2.50% |
FICA tip tax credits | (12.80%) | (16.00%) | (14.80%) |
Foreign taxes versus U.S statutory rate | 0.30% | (0.10%) | 0.00% |
Valuation allowance on deferred income tax assets | 1.50% | 0.00% | 0.00% |
Other tax credits | (3.60%) | (2.30%) | (2.50%) |
Other | (0.10%) | 0.50% | 1.60% |
Effective tax rate | 24.60% | 22.20% | 21.80% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 27, 2015 | Dec. 28, 2014 |
Current deferred tax assets and (liabilities), net: | ||
Accrued compensation and related costs | $ 0 | $ 10,941 |
Advanced payments | 0 | 2,764 |
General business and other tax credits | 0 | (275) |
Interest rate swap | 0 | 13 |
Other current deferred tax assets | 0 | 3,583 |
Other current deferred tax liabilities | 0 | 0 |
Prepaid expenses | 0 | (5,426) |
Supplies inventory | 0 | (6,923) |
Current deferred tax asset, net | 0 | 4,677 |
Non-current deferred tax assets and (liabilities), net: | ||
Deferred rent | 17,978 | 16,900 |
Stock-based compensation | 6,980 | 6,461 |
General business and other tax credits | 3,275 | 5,551 |
Alternative minimum tax credits | 1,262 | 1,262 |
Accrued compensation and related costs | 11,862 | 2,067 |
Advanced payments | 3,024 | 0 |
Other non-current deferred tax assets | 4,277 | 413 |
Other non-current deferred tax liabilities | (1,181) | (789) |
Goodwill | (9,572) | (7,260) |
Property and equipment | (24,792) | (25,369) |
Franchise rights | 744 | 63 |
Prepaid expenses | (4,736) | 0 |
Supplies inventory | (7,089) | 0 |
Subtotal | 2,032 | (701) |
Valuation Allowance | (1,910) | (990) |
Non-current deferred tax asset, net, included in other non-current liabilities | 122 | |
Non-current deferred tax liability, net, included in other non-current liabilities | (1,691) | |
Net deferred tax asset | $ 122 | $ 2,986 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning of year | $ 319 | $ 401 |
Increase due to current year tax positions | 57 | 96 |
Due to decrease to a position taken in a prior year | (100) | (5) |
Settlements | 0 | (122) |
Reductions related to lapses | (48) | (51) |
End of year | $ 228 | $ 319 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 1,910,000 | $ 990,000 | |
Federal alternative minimum tax credit | 1,262,000 | 1,262,000 | |
General business and other tax credits | 3,300,000 | ||
Unrecognized tax benefits that would impact effective tax rate if recognized | 200,000 | ||
Income tax penalties recorded | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies65
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Minimum length of remaining non-cancelable terms, high end of range (less than one year) | 1 year | ||
Maximum length of remaining non-cancelable terms, low end of range (more than 15 years) | 15 years | ||
Rental expense related to land, building, and equipment leases | |||
Minimum rent | $ 67,078 | $ 58,083 | $ 49,206 |
Contingent rent | 2,264 | 2,239 | 2,164 |
Equipment rent under operating leases | 791 | 895 | 990 |
Rental expense | 70,133 | 61,217 | $ 52,360 |
Leases of owned land, buildings, and equipment to outside parties under non-cancelable operating leases | |||
Cost of the leased land, building and equipment | 4,600 | 4,600 | |
Accumulated depreciation of the leased land, building and equipment | 2,900 | 2,800 | |
Capital Leases | |||
2,016 | 905 | ||
2,017 | 900 | ||
2,018 | 900 | ||
2,019 | 900 | ||
2,020 | 912 | ||
Thereafter | 5,712 | ||
Total | 10,229 | ||
Less amount representing interest | (2,257) | ||
Present value of future minimum lease payments | 7,972 | ||
Less current portion | (531) | ||
Long-term capital lease obligations | 7,441 | ||
Operating Leases | |||
2,016 | 72,796 | ||
2,017 | 70,786 | ||
2,018 | 66,193 | ||
2,019 | 60,612 | ||
2,020 | 54,818 | ||
Thereafter | 226,642 | ||
Total | 551,847 | ||
Rental Income | |||
2,016 | 131 | ||
2,017 | 104 | ||
2,018 | 104 | ||
2,019 | 104 | ||
2,020 | 104 | ||
Thereafter | 82 | ||
Total | 629 | ||
Assets under capital lease included in property and equipment | |||
Assets under capital lease | 19,000 | 21,700 | |
Accumulated depreciation | $ 9,100 | $ 10,000 |
Franchise Operations (Details)
Franchise Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | |
Franchise royalties and fees: | |||
Royalty income | $ 12,478 | $ 13,540 | $ 14,315 |
Franchise fees | 48 | 97 | 63 |
Total franchise royalties and fees | $ 12,526 | $ 13,637 | $ 14,378 |
Minimum | |||
Franchise royalties and fees: | |||
Royalties as a percentage of franchised adjusted gross restaurant sales | 3.00% | ||
Maximum | |||
Franchise royalties and fees: | |||
Royalties as a percentage of franchised adjusted gross restaurant sales | 4.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |||||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | Feb. 11, 2016 | Feb. 11, 2015 | Nov. 15, 2012 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Amount authorized for repurchase of common stock | $ 50,000,000 | $ 50,000,000 | ||||
Shares repurchased | 556,049 | 463,780 | 68,816 | |||
Average purchase price (in dollars per share) | $ 71.93 | $ 57.97 | $ 72.71 | |||
Aggregate price of shares repurchased | $ 40,009,000 | $ 26,884,000 | $ 5,003,000 | |||
Subsequent event | Share Repurchase Program, February 2016 [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Amount authorized for repurchase of common stock | $ 100,000,000 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | 24 Months Ended | |||||
Dec. 27, 2015USD ($)stock-based_compensation_plan$ / sharesshares | Dec. 28, 2014USD ($)$ / sharesshares | Dec. 29, 2013USD ($)$ / shares | Dec. 25, 2011 | Dec. 28, 2014$ / sharesshares | Dec. 27, 2015USD ($)shares | Dec. 28, 2014USD ($)shares | |
Share-based compensation plan disclosures | |||||||
Expiration from date of grant | 10 years | ||||||
Total stock-based compensation cost | $ | $ 4,700 | $ 4,200 | $ 3,800 | ||||
Income tax benefits from stock-based compensation cost | $ | $ 2,000 | $ 1,700 | $ 1,500 | ||||
Total unrecognized compensation cost | $ | $ 3,400 | ||||||
Number of common shares issued per RSU | 1 | ||||||
Stock Options | |||||||
Share-based compensation plan disclosures | |||||||
Shares outstanding | 462,000 | 462,000 | 462,000 | 395,000 | 462,000 | ||
Weighted average remaining vesting period | 1 year 2 months 12 days | ||||||
Shares | |||||||
Outstanding, beginning of period (in shares) | 462,000 | ||||||
Granted (in shares) | 72,000 | ||||||
Forfeited (in shares) | (44,000) | ||||||
Exercised (in shares) | (95,000) | ||||||
Outstanding, end of period (in shares) | 395,000 | 462,000 | 462,000 | ||||
Weighted Average Exercise Price | |||||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 38.83 | ||||||
Granted (in dollars per share) | $ / shares | 81.84 | ||||||
Forfeited (in dollars per share) | $ / shares | 49.35 | ||||||
Exercised (in dollars per share) | $ / shares | 36.49 | ||||||
Outstanding, end of period (in dollars per share) | $ / shares | $ 46.04 | $ 38.83 | $ 38.83 | ||||
Weighted average assumptions used in estimation of fair value of options | |||||||
Risk-free interest rate (as a percent) | 1.40% | 1.70% | 0.70% | ||||
Expected years until exercise | 4 years 9 months 18 days | 5 years 8 months 12 days | 4 years 2 months | ||||
Expected stock volatility (as a percent) | 40.60% | 44.60% | 44.40% | ||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ||||
Weighted average Black-Scholes fair value per share at date of grant (in dollars per share) | $ / shares | $ 29.71 | $ 30.70 | $ 15.19 | ||||
Total intrinsic value of options exercised | $ | $ 4,414 | $ 3,954 | $ 8,263 | ||||
Restricted Stock | |||||||
Share-based compensation plan disclosures | |||||||
Weighted average remaining vesting period | 1 year 1 month 6 days | ||||||
Restricted Stock | Board of Directors | |||||||
Share-based compensation plan disclosures | |||||||
Vesting period | 1 year | 3 years | |||||
2007 Stock Plan | |||||||
Share-based compensation plan disclosures | |||||||
Maximum number of shares of the company's common stock that may be issued or transferred | 2,074,600 | ||||||
Period following the change in control during which termination of an individual without cause will trigger vesting of award | 2 years | ||||||
Shares outstanding | 391,923 | 391,923 | |||||
Vested (in shares) | 227,300 | ||||||
Shares | |||||||
Outstanding, end of period (in shares) | 391,923 | ||||||
2007 Stock Plan | Time Based RSUs | |||||||
Share-based compensation plan disclosures | |||||||
Vesting period | 4 years | ||||||
Shares | |||||||
Outstanding, beginning of period (in shares) | 101,000 | ||||||
Awarded (in shares) | 33,000 | ||||||
Forfeited (in shares) | (13,000) | ||||||
Vested (in shares) | (46,000) | ||||||
Outstanding, end of period (in shares) | 75,000 | 101,000 | 101,000 | ||||
Weighted Average Grant-Date Fair Value (per share) | |||||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 49.78 | ||||||
Granted (in dollars per share) | $ / shares | 82.52 | ||||||
Cancelled (in dollars per share) | $ / shares | 53.79 | ||||||
Vested (in dollars per share) | $ / shares | 42.82 | ||||||
Outstanding, end of period (in dollars per share) | $ / shares | $ 67.74 | $ 49.78 | $ 49.78 | ||||
Other stock-based compensation plans | |||||||
Share-based compensation plan disclosures | |||||||
Expiration term | 10 years | ||||||
Shares outstanding | 74,530 | 74,530 | |||||
Number of stock-based compensation plans | stock-based_compensation_plan | 4 | ||||||
Shares | |||||||
Outstanding, end of period (in shares) | 74,530 | ||||||
Other stock-based compensation plans | Minimum | |||||||
Share-based compensation plan disclosures | |||||||
Vesting period | 1 year | ||||||
Other stock-based compensation plans | Maximum | |||||||
Share-based compensation plan disclosures | |||||||
Vesting period | 4 years | ||||||
Long-Term Cash Incentive Plan | Deferred compensation, excluding share-based payments and retirement benefits | |||||||
Additional disclosure | |||||||
Performance and vesting period | 3 years | ||||||
Compensation expense | $ | $ 3,300 | $ 800 | $ 4,200 | ||||
Payments of performance stock awards | $ | $ 1,800 | $ 2,400 | |||||
Accrued payroll liabilities and payroll-related liabilities | Long-Term Cash Incentive Plan | Deferred compensation, excluding share-based payments and retirement benefits | |||||||
Additional disclosure | |||||||
Long-term cash incentive plan liability | $ | $ 6,300 | $ 4,800 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | ||
Share-based compensation plan disclosures | |||
Outstanding as of December 27, 2015 (in shares) | 395 | 462 | |
Vested and expected to vest as of December 27, 2015 (in shares) | [1] | 379 | |
Exercisable as of December 27, 2015 (in share) | 230 | ||
Weighted Average Exercise Price, Outstanding as of December 27, 2015 (in dollars per share) | $ 46.04 | $ 38.83 | |
Weighted Average Exercise Price, Vested and expected to vest as of December 27, 2015 (in dollars per share) | [1] | 44.87 | |
Weighted Average Exercise Price, Exercisable as of December 27, 2015 (in dollars per share) | $ 32.03 | ||
Weighted Average Remaining Years of Contractual Life, Outstanding as of December 27, 2015 | 6 years 1 month 6 days | ||
Weighted Average Remaining Years of Contractual Life, Vested and expected to vest as of December 27, 2015 | [1] | 6 years | |
Weighted Average Remaining Years of Contractual Life, Exercisable as of December 27, 2015 | 4 years 8 months 5 days | ||
Aggregate Intrinsic Value, Outstanding as of December 27, 2015 | $ 8,155 | ||
Aggregate Intrinsic Value, Vested and expected to vest as of December 27, 2015 | [1] | 8,107 | |
Aggregate Intrinsic Value, Exercisable as of December 27, 2015 | $ 7,013 | ||
[1] | The expected to vest options are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options. |
Employee Benefit Programs (Deta
Employee Benefit Programs (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 168 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 29, 2013 | Dec. 27, 2015 | |
Employee Stock Purchase Plan | ||||
Compensation expense | $ 4.7 | $ 4.2 | $ 3.8 | |
Employee Defined Contribution Plan | ||||
Minimum age of employees to be eligible to participate in defined contribution plan | 21 years | |||
Percentage of matching contribution | 25.00% | |||
Percentage of maximum compensation matched by employer | 4.00% | |||
Matching contribution expense | $ 0.3 | $ 0.3 | 0.3 | |
Employee Stock Purchase Plan | ||||
Employee Stock Purchase Plan | ||||
Maximum percentage of base compensation that can be contributed by the eligible team members | 15.00% | 15.00% | ||
Estimated subscription date fair value (as a percent) | 85.00% | |||
Requisite employment period to be eligible to participate in the plan | 1 year | |||
Requisite working hours per week to be eligible to participate in the plan | 20 hours | |||
Operational period of the plan | 6 months | |||
Number of shares outstanding | 300,000 | 300,000 | ||
Number of shares issued under the plan | 11,361 | 251,931 | ||
Number of shares available for future issuance under the plan | 48,069 | 48,069 | ||
Risk-free interest rate (as a percent) | 0.46% | 0.12% | ||
Expected life | 6 months | 6 months | ||
Expected volatility (as a percent) | 39.73% | 41.22% | ||
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Weighted average fair value per share at grant date (in dollars per share) | $ 13.37 | $ 14.42 | ||
Compensation expense | $ 0.2 | $ 0.2 | 0.2 | |
Deferred compensation, excluding share-based payments and retirement benefits | Employee Deferred Compensation Plan | ||||
Employee Deferred Compensation Plan | ||||
Deferred payment, participant limit per calendar year as a percentage of base salary | 75.00% | |||
Deferred payment, participant limit per calendar year as a percentage of variable compensation and commissions | 100.00% | |||
Deferred payment, maximum employer match | 25.00% | |||
Deferred payment, maximum matching contribution percentage | 4.00% | |||
Deferred compensation expense | $ 0.3 | $ 0.2 | ||
Other assets, net | Deferred compensation, excluding share-based payments and retirement benefits | Employee Deferred Compensation Plan | ||||
Employee Deferred Compensation Plan | ||||
Deferred compensation assets | $ 6.9 | $ 6.9 | ||
Liability for participant contributions and investment income | 5.7 | |||
Other non-current liability | Deferred compensation, excluding share-based payments and retirement benefits | Employee Deferred Compensation Plan | ||||
Employee Deferred Compensation Plan | ||||
Liability for participant contributions and investment income | $ 6.9 | $ 6.9 | ||
Cash surrender value of company-owned whole-life insurance contracts | $ 5.7 |
Related Party Transactions (Det
Related Party Transactions (Details) - Member and former franchisee appointed as board member $ in Millions | 12 Months Ended | |||
Dec. 27, 2015USD ($)restaurantentity | Dec. 28, 2014USD ($) | Dec. 29, 2013USD ($) | Dec. 31, 2006restaurant | |
Related Party Transactions | ||||
Number of restaurants acquired from member | 13 | |||
Number of privately-held entities | entity | 3 | |||
Minimum | ||||
Related Party Transactions | ||||
Percentage of interests held in privately-held entity that hold leases for restaurants owned by the entity | 45.00% | |||
Maximum | ||||
Related Party Transactions | ||||
Percentage of interests held in privately-held entity that hold leases for restaurants owned by the entity | 100.00% | |||
Three privately-held entities | ||||
Related Party Transactions | ||||
Number of restaurants for which privately-held entities hold leases | 3 | |||
Rent and other related payments | $ | $ 1.3 | $ 1.3 | $ 1.2 |
Quarterly Results of Operatio72
Quarterly Results of Operations (unaudited) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||
Dec. 27, 2015USD ($)restaurant$ / shares | Oct. 04, 2015USD ($)$ / shares | Jul. 12, 2015USD ($)$ / shares | Dec. 28, 2014USD ($)restaurant$ / shares | Oct. 05, 2014USD ($)$ / shares | Jul. 13, 2014USD ($)$ / shares | Apr. 19, 2015USD ($)$ / shares | Apr. 20, 2014USD ($)$ / shares | Dec. 27, 2015USD ($)restaurant$ / shares | Dec. 28, 2014USD ($)restaurant$ / shares | Dec. 29, 2013USD ($)restaurant$ / shares | |||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Total revenues | $ 286,300 | [1] | $ 283,412 | $ 292,979 | $ 282,109 | [2] | $ 267,376 | $ 256,133 | $ 394,901 | $ 340,484 | $ 1,257,592 | $ 1,146,102 | $ 1,017,247 |
Income from operations | 15,015 | [1] | 11,705 | 16,480 | 4,950 | [2] | 9,226 | 13,466 | 23,845 | 17,042 | 67,045 | 44,684 | 43,814 |
Net income | $ 11,691 | [1] | $ 8,282 | $ 11,166 | $ 3,939 | [2] | $ 7,208 | $ 9,470 | $ 16,565 | $ 11,944 | $ 47,704 | $ 32,561 | $ 32,239 |
Basic earning per share (in dollars per share) | $ / shares | $ 0.85 | [1] | $ 0.59 | $ 0.79 | $ 0.28 | [2] | $ 0.51 | $ 0.66 | $ 1.18 | $ 0.83 | $ 3.40 | $ 2.29 | $ 2.27 |
Diluted earning per share (in dollars per share) | $ / shares | $ 0.84 | [1] | $ 0.58 | $ 0.78 | $ 0.28 | [2] | $ 0.50 | $ 0.65 | $ 1.16 | $ 0.82 | $ 3.36 | $ 2.25 | $ 2.22 |
Number of restaurants impaired | restaurant | 2 | 3 | 2 | 3 | 4 | ||||||||
Pre-tax non-cash impairment charge | $ 600 | $ 8,800 | $ 581 | $ 8,833 | $ 1,517 | ||||||||
Duration of fiscal period | 84 days | 84 days | 84 days | 84 days | 84 days | 84 days | 112 days | 112 days | 364 days | 364 days | 364 days | ||
[1] | During the fourth quarter of 2015, it was determined that two Company-owned restaurants were impaired. The Company recognized a pre-tax non-cash impairment charge of $0.6 million for these restaurants. | ||||||||||||
[2] | During the fourth quarter of 2014, it was determined that three Company-owned restaurants and certain software in development related to the supply chain and human resource management modules of Company’s ERP system were impaired. The Company recognized a pre-tax non-cash impairment charge of $8.8 million for these restaurants and software. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 11, 2016 | Feb. 11, 2015 | Nov. 15, 2012 |
Subsequent Event [Line Items] | |||
Amount authorized for repurchase of common stock | $ 50,000,000 | $ 50,000,000 | |
Share Repurchase Program, February 2016 [Member] | Subsequent event | |||
Subsequent Event [Line Items] | |||
Remaining authorized repurchase amount | $ 10,000,000 | ||
Amount authorized for repurchase of common stock | $ 100,000,000 |