Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document and Entity Information | |
Entity Registrant Name | Country Style Cooking Restaurant Chain Co., Ltd. |
Entity Central Index Key | 1499934 |
Document Type | 20-F |
Document Period End Date | 31-Dec-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 107,352,416 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Current assets: | |||
Cash and cash equivalents | $31,195 | 193,554 | 372,493 |
Short-term investments | 60,734 | 376,831 | 209,381 |
Due from related parties | 58 | ||
Inventories | 8,521 | 52,871 | 52,579 |
Prepaid rent | 2,376 | 14,745 | 14,336 |
Prepaid expenses and other current assets | 4,892 | 30,350 | 22,714 |
Deferred tax assets-current | 150 | 930 | 1,879 |
Total current assets | 107,868 | 669,281 | 673,440 |
Long-term investment | 8,165 | 50,659 | |
Property and equipment, net | 67,334 | 417,778 | 398,555 |
Goodwill | 828 | 5,139 | 5,563 |
Deferred tax assets-non current | 1,421 | 8,814 | 7,592 |
Deposits for leases-non current | 4,847 | 30,075 | 21,286 |
Total assets | 190,463 | 1,181,746 | 1,106,436 |
Current liabilities: | |||
Accounts payable | 8,812 | 54,674 | 54,176 |
Deferred revenue | 2,265 | 14,051 | 6,410 |
Accrued payroll | 4,925 | 30,557 | 27,631 |
Income taxes payable | 823 | 5,104 | 7,911 |
Other current liabilities | 8,367 | 51,914 | 51,240 |
Total current liabilities | 25,192 | 156,300 | 147,368 |
Deferred rent-non current | 4,679 | 29,030 | 23,897 |
Prepaid subscription | 12 | ||
Advance receipts from depositary bank | 363 | 2,253 | 2,702 |
Total liabilities | 30,234 | 187,583 | 173,979 |
Commitments (Note 7) | |||
Equity: | |||
Ordinary shares, par value $0.001, 1,000,000,000 shares authorized, 106,296,674 and 107,352,416 shares issued and outstanding as of December 31, 2013 and 2014, respectively | 123 | 763 | 756 |
Additional paid-in capital | 123,591 | 766,837 | 743,219 |
Retained earnings | 37,967 | 235,572 | 197,618 |
Accumulated other comprehensive loss | -1,452 | -9,009 | -9,136 |
Total equity | 160,229 | 994,163 | 932,457 |
Total liabilities and equity | $190,463 | 1,181,746 | 1,106,436 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares, shares authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued | 107,352,416 | 106,296,674 |
Ordinary shares, shares outstanding | 107,352,416 | 106,296,674 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Revenue - restaurant sales | $235,661 | 1,462,185 | 1,360,086 | 1,188,412 |
Restaurant expenses: | ||||
Food and paper | 106,353 | 659,875 | 624,356 | 538,754 |
Restaurant wages and related expenses | 50,097 | 310,829 | 265,711 | 223,595 |
Restaurant rent expense | 23,568 | 146,231 | 131,327 | 121,520 |
Restaurant utilities expense | 14,064 | 87,263 | 80,928 | 72,188 |
Other restaurant operating expenses | 8,895 | 55,190 | 51,806 | 47,318 |
Selling, general and administrative | 13,383 | 83,038 | 83,639 | 72,178 |
Pre-opening expenses | 1,664 | 10,326 | 9,884 | 11,791 |
Depreciation | 12,666 | 78,585 | 70,008 | 59,411 |
Property and equipment impairment | 1,267 | 7,864 | 8,594 | 13,820 |
Goodwill impairment | 68 | 424 | 0 | 456 |
Total operating expenses | 232,025 | 1,439,625 | 1,326,253 | 1,161,031 |
Income from operations | 3,636 | 22,560 | 33,833 | 27,381 |
Interest income | 4,249 | 26,363 | 27,178 | 21,976 |
Foreign exchange gain (loss) | 11 | 70 | -3,543 | -307 |
Other income, net | 733 | 4,549 | 893 | 19,808 |
Income before income taxes | 8,629 | 53,542 | 58,361 | 68,858 |
Income tax benefit (expenses) | -2,512 | -15,588 | -18,811 | 6,778 |
Net income | 6,117 | 37,954 | 39,550 | 75,636 |
Net income attributable to shareholders | $6,117 | 37,954 | 39,550 | 75,636 |
Basic net income per share (in dollars per share) | $0.06 | 0.36 | 0.38 | 0.73 |
Diluted net income per share (in dollars per share) | $0.06 | 0.35 | 0.37 | 0.72 |
Basic weighted average ordinary shares outstanding (in shares) | 106,603,255 | 106,603,255 | 104,996,276 | 104,115,531 |
Diluted weighted average ordinary shares outstanding (in shares) | 107,961,708 | 107,961,708 | 105,979,373 | 105,040,410 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHESIVE INCOME (LOSS) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
CONSOLIDATED STATEMENTS OF COMPREHESIVE INCOME (LOSS) | ||||
Net income | $6,117 | 37,954 | 39,550 | 75,636 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 20 | 127 | -810 | -62 |
Comprehensive income | $6,137 | 38,081 | 38,740 | 75,574 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | Ordinary Shares | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | Total |
In Thousands, except Share data, unless otherwise specified | CNY | CNY | CNY | CNY | USD ($) | CNY |
Balance at Dec. 31, 2011 | 741 | 702,995 | 82,432 | -8,264 | 777,904 | |
Balance (in shares) at Dec. 31, 2011 | 103,844,239 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 75,636 | 75,636 | ||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 4 | 946 | 950 | |||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares (in shares) | 560,592 | |||||
Share-based compensation | 15,700 | 15,700 | ||||
Foreign currency translation adjustments | -62 | -62 | ||||
Balance at Dec. 31, 2012 | 745 | 719,641 | 158,068 | -8,326 | 870,128 | |
Balance (in shares) at Dec. 31, 2012 | 104,404,831 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 39,550 | 39,550 | ||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 11 | 7,684 | 7,695 | |||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares (in shares) | 1,891,843 | |||||
Share-based compensation | 15,894 | 15,894 | ||||
Foreign currency translation adjustments | -810 | -810 | ||||
Balance at Dec. 31, 2013 | 756 | 743,219 | 197,618 | -9,136 | 932,457 | |
Balance (in shares) at Dec. 31, 2013 | 106,296,674 | 106,296,674 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | 37,954 | 6,117 | 37,954 | |||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 7 | 2,933 | 2,940 | |||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares (in shares) | 1,055,742 | |||||
Share-based compensation | 20,685 | 20,685 | ||||
Foreign currency translation adjustments | 127 | 20 | 127 | |||
Balance at Dec. 31, 2014 | 763 | 766,837 | 235,572 | -9,009 | $160,229 | 994,163 |
Balance (in shares) at Dec. 31, 2014 | 107,352,416 | 107,352,416 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
Cash flows provided by operating activities: | ||||
Net income | $6,117 | 37,954 | 39,550 | 75,636 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Loss on disposals of property and equipment | 640 | 3,969 | 6,298 | 4,374 |
Property and equipment impairment | 1,267 | 7,864 | 8,594 | 13,820 |
Goodwill impairment | 68 | 424 | 0 | 456 |
Depreciation | 12,666 | 78,585 | 70,008 | 61,458 |
Deferred income tax (benefit) | -44 | -274 | -2,675 | 1,300 |
Share-based compensation | 3,334 | 20,685 | 15,894 | 15,700 |
Changes in other operating assets and liabilities: | ||||
Due from related parties | 9 | 58 | -58 | 100 |
Inventories | 502 | 3,118 | -7,889 | 6,283 |
Prepaid rent | -66 | -409 | -1,273 | -2,389 |
Prepaid expense and other current assets | -1,230 | -7,634 | -878 | -6,759 |
Deposits for leases | -1,417 | -8,789 | -3,317 | -1,273 |
Accounts payable | 80 | 498 | 5,037 | 5,437 |
Deferred revenue | 1,232 | 7,642 | 2,866 | -759 |
Due to related parties | -25 | 25 | ||
Accrued payroll | 471 | 2,925 | 3,897 | 970 |
Income taxes payable | -452 | -2,807 | 474 | -10,117 |
Deferred rent | 883 | 5,481 | 2,447 | 6,703 |
Other liabilities | 468 | 2,906 | 2,472 | 2,765 |
Net cash provided by operating activities | 24,528 | 152,196 | 141,422 | 173,730 |
Cash flows used in investing activities: | ||||
Purchase of property and equipment | -18,736 | -116,248 | -116,731 | -142,355 |
Proceeds from disposal of property and equipment | 48 | 297 | 440 | 542 |
Purchase of short-term investment | -186,770 | -1,158,836 | -750,262 | -320,727 |
Purchase of long-term investment | -8,165 | -50,659 | ||
Withdrawal of short-term investment | 159,783 | 991,387 | 861,607 | 190,000 |
Net cash used in investing activities | -53,840 | -334,059 | -4,946 | -272,540 |
Cash flows provided by (used in) financing activities: | ||||
Proceeds from exercise of employee stock options | 451 | 2,796 | 7,467 | 693 |
Net cash provided by financing activities | 451 | 2,796 | 7,467 | 693 |
Effect of exchange rate on cash and cash equivalents | 21 | 128 | -817 | -62 |
Net increase (decrease) in cash and cash equivalents | -28,840 | -178,939 | 143,126 | -98,179 |
Cash and cash equivalents, beginning of year | 60,035 | 372,493 | 229,367 | 327,546 |
Cash and cash equivalents, end of year | 31,195 | 193,554 | 372,493 | 229,367 |
Supplemental disclosure of cash flow information: | ||||
Income taxes paid | 3,009 | 18,669 | 21,012 | 2,039 |
Supplemental schedule of non-cash investing and financing activities: | ||||
Payables for purchase of property and equipment | $2,621 | 16,261 | 19,161 | 17,704 |
Organization_and_Principal_Act
Organization and Principal Activities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Organization and Principal Activities | ||||||||
Organization and Principal Activities | ||||||||
1. Organization and Principal Activities | ||||||||
Country Style Cooking Restaurant Chain Co., Ltd. (the “Company” or “CSC Cayman”) was registered as an exempted company under the Companies Law of the Cayman Islands on August 14, 2007. On September 28, 2010, the Company’s ADSs became listed on the New York Stock Exchange under the ticker symbol “CCSC” and issued 23,000,000 ordinary shares to the public. The Company specializes in serving tasty Sichuan-style fast food over the counter in the People’s Republic of China (the “PRC”). | ||||||||
As of December 31, 2014, the Company’s significant subsidiaries are as follows: | ||||||||
Place of Incorporation | Date of Incorporation | Percentage | ||||||
of Ownership (%) | ||||||||
Country Style Cooking International Restaurant Chain Group Ltd. | Hong Kong | August 23, 2007 | 100 | |||||
Country Style Cooking (Chongqing) Investment Co., Ltd. | Chongqing, PRC | September 24, 2007 | 100 | |||||
Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing, PRC | March 25, 2008 | 100 | |||||
Sichuan Country Style Cooking Restaurant Co., Ltd. | Chengdu, PRC | October 4, 2008 | 100 | |||||
Xi’an Country Style Cooking Restaurant Co., Ltd. | Xi’an, PRC | May 19, 2008 | 100 | |||||
Changsha Country Style Cooking Restaurant Co., Ltd. | Changsha, PRC | October 4, 2009 | 100 | |||||
Shanghai Country Style Cooking Restaurant Co., Ltd. | Shanghai, PRC | September 1, 2009 | 100 | |||||
Guizhou Country Style Cooking Restaurant Co., Ltd. | Guiyang, PRC | September 26, 2010 | 100 | |||||
Beijing Country Style Cooking Restaurant Co., Ltd. | Beijing, PRC | September 27, 2011 | 100 | |||||
Country (Chongqing) Commerce and Trading Co., Ltd. | Chongqing, PRC | May 23, 2012 | 100 | |||||
Yunnan CountryStyle CookingRestaurant Co., Ltd. | Yunnan, PRC | May 28,2012 | 100 | |||||
Wuhan CountryStyle CookingRestaurant Co., Ltd. | Wuhan, PRC | April 8,2014 | 100 | |||||
The Company and its subsidiaries are referred to as the “Group” hereafter. | ||||||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Summary of Significant Accounting Policies | |||
Summary of Significant Accounting Policies | |||
2. Summary of Significant Accounting Policies | |||
Basis of presentation The consolidated financial statement have been prepared in accordance with the recognition, measurement, disclosure and presentation criteria of accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||
Basis of consolidation. All intercompany transactions and balances have been eliminated. | |||
Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and long-lived assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting periods. | |||
The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant items subject to such estimates and assumptions include: impairment of long-lived assets, impairment of goodwill, valuation allowance of deferred tax assets and valuation of share-based compensation including forfeiture rates of stock options. Actual results could differ from those estimates. | |||
Foreign Currency Translation. The reporting currency of the Group is RMB. | |||
The functional currency of CSC Cayman and Country Style Cooking International Restaurant Chain Group Ltd. (Hong Kong) is the United States dollar (“U.S. dollar”). Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into US dollars at the rates of exchange ruling at the balance sheet date. | |||
The financial records of the Company’s PRC subsidiaries are maintained in the local currency, Renminbi (“RMB”), which is their functional currency. Transactions in currencies other than RMB during the year are converted at the applicable rates of exchange prevailing on the day transactions occurred. Transaction gains and losses are recognized in the statements of income. Assets and liabilities are translated into RMB at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, and expenses, gains and losses are translated using the average rate for the year. Translation adjustments gains or losses are recognized as other comprehensive income in the statements of comprehensive income. | |||
Cash and Cash Equivalents. Cash and cash equivalents represent cash on hand and highly-liquid investments with original maturities of three months or less. At December 31, 2013 and 2014, cash equivalents were comprised of bank deposits. | |||
Inventories. Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories are primarily comprised of food and paper. | |||
Short-term Investments and long-term investments. The Group periodically purchases fixed income products from banks for investment purposes and with the intent and ability to hold the investments until maturity. The investments are principal protected and recorded at amortized cost. The investments whose maturity being less than one year are recorded as short-term investments. As of December 31, 2014, long-term investment of RMB50,659 consisted of principle protected and fixed yield investment purchased from a PRC commercial bank. Such investment has a fixed annual yield of 7.4% and a maturity date of October 28, 2016. | |||
The Group reviews its investments for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis, in order to determine whether an other-than-temporary impairment has occurred. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings. If the investment’s fair value is less than its cost and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment. For the three years in the period ended December 31, 2014, the Group did not record an other-than-temporary impairment. | |||
Property and Equipment. The Group capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost less accumulated depreciation. Costs for repair and maintenance activities are expensed as incurred. Depreciation is provided using the straight-line method over the following estimated useful lives: | |||
Buildings | Shorter of 40 years or valid period of property license | ||
Equipment | 3 to 5 years | ||
Office furniture and fixtures | 3 to 5 years | ||
Leasehold improvements | Shorter of estimated useful life of 5 years or lease term | ||
Leasehold improvements are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Group includes those renewal option periods when determining the lease term. For significant leasehold improvements made during the latter part of the lease term, the Group amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. | |||
Goodwill. Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets less liabilities acquired. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group identifies each restaurant as a reporting unit for purpose of goodwill impairment analysis and completes a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The Company recorded goodwill impairment charges of RMB456, nil and RMB424 ($0.1 million) for the years ended December 31, 2012, 2013 and 2014, respectively. See Note 4 “Goodwill” for additional discussion on impairment of goodwill. | |||
Impairment of Long-Lived Assets. Long-lived assets (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Group assesses the recoverability of long-lived assets by determining whether the carrying value of these assets, over their respective remaining lives, can be recovered through undiscounted future operating cash flows. For asset groups, the weighted average remaining useful lives of the assets were used for forecasting the expected undiscounted cash flows. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. Impairment is reviewed whenever events or changes in circumstances indicate the carrying amounts of these assets may not be fully recoverable. The impairment loss on long-lived assets recorded was RMB13,820, RMB8,594 and RMB7,864 ($1.3 million) during the years ended December 31, 2012, 2013 and 2014, respectively. See Note 5 “Impairment Charges of Long-lived Assets” for additional discussion on impairment of long-lived assets. | |||
Leases. All of the Group’s leases are operating leases. Many of the lease agreements contain rent holidays granted by the landlords for pre-operating renovations, rent escalation clauses and/or contingent rent provisions. Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including any option period as well as the rent holidays included in the determination of the lease term. Contingent rentals are generally based upon a percentage of sales or a percentage of sales in excess of stipulated amounts and are not considered minimum rent payments but are recognized when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. | |||
Revenue Recognition. Revenues from Group operated restaurants are recognized when payment is tendered at the time of sale. The Group presents sales net of discounts and sales related taxes. | |||
Income Taxes. Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations. Deferred tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Group recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. | |||
Restaurant expenses. The Group’s restaurant expenses include food and paper, restaurant wages and related expenses, restaurant rental expenses, restaurant utility expenses and other restaurant operating expenses. | |||
Pre-opening expenses. The Group’s pre-opening expenses are expensed as incurred and generally include payroll costs associated with opening the new restaurant and other miscellaneous expenses prior to the openings. | |||
Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Group’s financial instruments mainly consist of cash and cash equivalents, short-term investments, due from related parties, due to related parties and accounts payable. Those current assets and liabilities approximate fair value due to their short-term maturity. | |||
Share-based compensation. The Group accounts for share-based compensation in accordance with ASC 718 “Compensation — Stock Compensation”, which requires the Group to measure at grant date the fair value of the stock-based award and recognize compensation expense, net of estimated forfeitures, on a straight-line basis, over the requisite service period. Forfeitures are estimated at the time of grant and revised annually if actual forfeitures differ from those estimates. The share-based compensation expenses have been categorized as either restaurant wages and related expenses, or selling, general and administrative expenses depending on the job functions of the grantees. | |||
Net Income per Share. Net income per share is computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted net income per share is computed using the more dilutive of the two-class method or the if-converted method. | |||
Segment Reporting. ASC Topic 280, Segment Reporting, establishes standards for companies to report information about operating segments in their financial statements. The method of determining what information to report is based on the way the chief operating decision maker (“CODM”) organizes the Group’s operating segments for making operating decisions and assessing financial performance. The CODM is the chief executive officer (“CEO”) of the Group. Information reported to the CEO for the purpose of resource allocation and performance assessment focuses on the nature of the Group’s business activities. Each restaurant is an operating segment and is aggregated into one reportable segment as these restaurants exhibit similar long-term financial performance and have similar economic characteristics. The Group primarily generates its revenues from customers in the PRC. Accordingly, no geographical segments are presented. Substantially all of the Group’s long-lived assets are located in the PRC. | |||
Comprehensive Income. Comprehensive income includes all changes in equity except those resulting from investment by owners and distribution to owner and is comprised of net income and foreign currency translation adjustments. | |||
Deferred Revenue and Sales Coupon. The Group sells prepaid vouchers and cards to its customers, which comprises deferred revenue. The revenue is recognized when such prepaid vouchers and cards are used or expired. Unused prepaid vouchers have fixed expiration dates and usually expire at the end of the following calendar year after issuance and are not refundable. Revenues from such vouchers are not material to the Group’s consolidated financial statements. | |||
The Group also issues discount coupons to customers in connection with promotional events. The discount against revenue is recognized when such coupons are used in combination with purchases by the customers. | |||
Related Parties. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. | |||
Government Grants. Unrestricted government subsidies from local governmental agencies allowing the Group full discretion to utilize the funds were RMB21,164, RMB2,611 and RMB3,129 ($0.5 million) for the years ended December 31, 2012, 2013 and 2014, respectively, which were recorded as other income in the consolidated statements of income. | |||
Translation into United States Dollars. The financial statements of the Group are stated in RMB. Translation of amounts from RMB into U.S. dollars are solely for the convenience of the readers and were calculated at the rate of US$1.00 =MB6.2046, representing the noon buying rate in the City of New York for cable transfers of Renminbi, as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2014. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on December 31, 2014, or at any other rates. | |||
Recent Accounting Pronouncements. | |||
In May 2014, the FASB and International Accounting Standards Board (“IASB”) issued their converged standard on revenue recognition. The objective of the revenue standard ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. For public companies, the revenue standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Management is in the process of evaluating the impact of the standard on its consolidated financial statements. | |||
On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The ASU shall be applied at the effective date, and management believes the adoption of the ASU will not have material impact on the Group’s financial statements. | |||
In November 2014, the FASB issued a new pronouncement which provides guidance on determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. The new standard requires management to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Management believes the adoption of the guidance will not have material impact on the Group’s financial statements. | |||
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Property and Equipment, Net | ||||||
Property and Equipment, Net | ||||||
3. Property and Equipment, Net | ||||||
Property and equipment, net: | ||||||
December 31, | ||||||
2013 | 2014 | |||||
RMB | ||||||
Cost: | ||||||
Buildings | 172,802 | 235,580 | ||||
Equipment | 143,732 | 164,541 | ||||
Office furniture and fixtures | 28,796 | 31,661 | ||||
Leasehold improvements | 203,456 | 232,889 | ||||
Less: accumulated depreciation | (187,034 | ) | (256,482 | ) | ||
Construction in progress: | 36,803 | 9,589 | ||||
398,555 | 417,778 | |||||
Constructions in progress consist of restaurant properties under construction, as well as renovations for restaurants under development. | ||||||
Depreciation expense for all property and equipment for the years ended December 31, 2012, 2013 and 2014 was RMB59,411, RMB70,008 and RMB78,585 ($12.7 million), respectively. | ||||||
Goodwill
Goodwill | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill | ||||||||
Goodwill | ||||||||
4. Goodwill | ||||||||
In 2008 and 2009, the Group purchased restaurant operating assets from 32 restaurants owned and operated by self-employed owners who were not affiliated with the Group. Such restaurant operating assets primarily consisted of used kitchen equipment and miscellaneous furniture and fixtures. The Group accounted for such purchases as business combinations due to the continuity of the revenue generating activities despite the change in management and upgrade in the renovations and services subsequent to the acquisitions. The excess of the total consideration paid over the fair value of the assets assumed was recorded as goodwill which is not tax deductible. No restaurant operating asset purchases occurred in 2012, 2013 and 2014. In 2014, the impairment charges of goodwill recorded were RMB424 ($0.1 million), representing a decrease in the carrying value of goodwill in one closed restaurant in the first quarter of 2014. | ||||||||
For Years Ended | ||||||||
December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Goodwill as of January 1, | 6,019 | 5,563 | 5,563 | |||||
Goodwill impairment | (456 | ) | — | (424 | ) | |||
Goodwill as of December 31 | 5,563 | 5,563 | 5,139 | |||||
Impairment_of_LongLived_Assets
Impairment of Long-Lived Assets Charges | 12 Months Ended |
Dec. 31, 2014 | |
Impairment Charges of Long-Lived Assets | |
Impairment Charges of Long-Lived Assets | |
5. Impairment Charges of Long-Lived Assets | |
The Group reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. The Group uses one year of operating losses as the primary indicator of potential impairment for the annual impairment testing of these restaurant assets. If an indicator of impairment exists for any of the assets, an estimate of undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Group then determines the fair value of the asset. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. | |
The Group determined the fair value of the impaired long-lived assets at the restaurant level based on current economic conditions and historical experience. For stores that are underperforming but remain in operations, the asset measurements are estimated based on discounted cash flow method using significant unobservable inputs including management forecast of future restaurant sales. For stores which have been closed, the Company typically fully impairs the remaining assets as a result the inability to recover any value from the closed stores assets. The Group recorded RMB13,820, RMB8,594 and RMB7,864 ($1.3 million) of impairment losses for certain long-lived assets from restaurants that were either underperforming or closed during the years ended December 31, 2012, 2013 and 2014, respectively. | |
Other_Current_Liabilities
Other Current Liabilities | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Other Current Liabilities | ||||||
Other Current Liabilities | ||||||
6. Other Current Liabilities | ||||||
December 31, | ||||||
2013 | 2014 | |||||
RMB | ||||||
Payable for property and equipment | 19,161 | 16,261 | ||||
Accrued utility costs | 7,563 | 8,590 | ||||
Other taxes payable | 12,370 | 11,882 | ||||
Accrued professional fees | 2,321 | 2,317 | ||||
Advance receipts from depositary bank | 450 | 451 | ||||
Deferred rent-current | 1,622 | 1,971 | ||||
Reimbursement payable | 4,077 | 6,112 | ||||
Other | 3,676 | 4,330 | ||||
51,240 | 51,914 | |||||
Leases
Leases | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases | ||||||||
Leases | ||||||||
7. Leases | ||||||||
Substantially all of the Group’s restaurants are operated under leased properties. All lease contracts are classified as operating leases. The Group does not consider any one of these individual leases material to the Group’s operations. Initial lease terms are generally for five to ten years and, in many cases, provide for the lessee’s renewal options. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. | ||||||||
Deferred rent represents the differences between actual rental payments and rental expenses recognized on a straight-line basis for lease arrangements that contain scheduled escalated lease payments. The deferred rent balance was RMB26,130 and RMB31,754 ($5.1 million) as of December 31, 2013 and 2014, respectively. Such deferred balances are amortized when actual rental payments exceed the straight-line rental expenses in the later portion of the lease terms. The balances of security deposits for leases were RMB23,196 and RMB36,230 ($5.8 million) as of December 31, 2013 and 2014, respectively and are expected to be fully recovered at the end of leases. The current and non-current portion of security deposits for leases were recorded in prepaid expenses and other current assets and deposits for leases—non-current, respectively. | ||||||||
(a) Minimum rent commitments under non-cancelable operating leases at December 31, 2014 were as follows: | ||||||||
Years Ending December 31, | RMB | |||||||
2015 | 149,146 | |||||||
2016 | 140,095 | |||||||
2017 | 117,514 | |||||||
2018 | 90,447 | |||||||
2019 | 55,833 | |||||||
Thereafter | 69,199 | |||||||
Total minimum lease payments | 622,234 | |||||||
(b) Total rent expense on operating leases, including contingent rent, was as follows: | ||||||||
For Years Ended | ||||||||
December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Minimum rent on real property | 118,219 | 120,141 | 131,901 | |||||
Contingent rent | 5,330 | 11,186 | 14,330 | |||||
Total | 123,549 | 131,327 | 146,231 | |||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Taxes | ||||||||
Income Taxes | ||||||||
8. Income Taxes | ||||||||
Cayman Islands | ||||||||
Under the current tax laws of the Cayman Islands, the Group and its subsidiaries are not subject to tax on their income or capital gains. In addition, upon payment of dividends by the Group to its shareholders, no Cayman Islands withholding tax will be imposed. | ||||||||
Hong Kong | ||||||||
Country Style Cooking International Restaurant Chain Group Ltd. is subject to a profit tax at the rate of 16.5% on assessable profit determined under relevant Hong Kong tax regulations. The Group’s subsidiaries in Hong Kong did not have assessable profits that were derived in Hong Kong during the years ended December 31, 2012, 2013 and 2014. Therefore, no Hong Kong profit tax has been provided for in the years presented. | ||||||||
The PRC | ||||||||
The Group’s subsidiaries in the PRC are subject to Enterprise Income Tax (“EIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the Enterprise Income Tax Law of the People’s Republic of China (“EIT Law”) approved by the National People’s Congress on March 16, 2007. The EIT Law went into effect as of January 1, 2008, which unified the tax rate generally applicable to both domestic and foreign-invested enterprises in the PRC. The Group’s subsidiaries in the PRC are generally subject to EIT at a statutory rate of 25%. However, Chongqing Xinghong Growing Rich Management Co., Ltd. (“Xinghong”) received approval from local Tax Authority to be classified as “Going West” project. This classification entitles Xinghong to enjoy a preferential EIT rate at 15% (the “Preferential Tax Treatment”) for the years from 2008 to 2010. | ||||||||
Nevertheless, in the second quarter of 2011, the PRC National Audit Office issued a letter stating that several restaurant companies, including Xinghong, should not have been granted preferential tax status in 2009. The Company recognized a one-time additional EIT of RMB17,769 ($2.8 million), which related to the change in the tax rate applicable to Xinghong, from the preferential EIT rate of 15%, to the standard EIT rate of 25%, for each of the three years ended December 31, 2008, 2009 and 2010. | ||||||||
In February 2012, the State Tax Bureau in Chongqing issued a written notice to the Company which confirmed that Xinghong would be permitted to apply the Preferential Tax Treatment for each of the three years ended December 31, 2008, 2009 and 2010. The Company believes the determination by the tax authorities, which represents a reversal of an earlier decision taken, is analogous to a settlement of tax position in a tax examination which is a non-recognized subsequent event and has no impact on the 2011 financials. Accordingly, the Company reversed in 2012 the income tax liability of RMB11,362 ($1.8 million) previously accrued in 2011 in connection with the rate change for 2008 and 2010, as well as the additional EIT expense of RMB6,406 ($1.0 million) for 2009. | ||||||||
In June 1, 2012, Xinhong was further granted a preferential tax rate of 15% for the years from 2011 to 2020. The Company recognized a tax benefit of RMB7,693 ($1.2 million) in 2012, as a result of the change in the Preferential Tax Treatment for fiscal year 2011. | ||||||||
In August 2014, National Development and Reform Commission of People’s Republic of China(“NDRC”) issued “Content of Encouraging Industries in Western Region”(“the Content”) approved by State Council, which further clarified the scope of preferential tax rate application in the “Go-West Campaign”. | ||||||||
In December 6, 2014, Xinghong obtained national encouraged industry confirmation issued by Chongqing Commerical Committee, which confirmed that Xinghong`s business was in the scope of “Go West Campaign” and such confirmation is generally followed by the competent authorities, therefore the 15% preferential income tax rate is still applicable till 2020. | ||||||||
According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB100 is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. Based on the aforementioned tax law, the Company’s returns are subject to tax examination from 2009 to 2013. | ||||||||
The Group will recognize a tax benefit associated with an uncertain tax position when, in our judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority, based solely on the technical merits of the position. For a tax position that meets the more-likely-than-not recognition threshold, we will initially and subsequently measure the tax benefit as the largest amount that we judge to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Group will classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. | ||||||||
The Group did not have any unrecognized tax benefits and did not have any interests and penalties recognized on the liability for unrecognized tax benefits as of and for the year ended December 31, 2012, 2013 and 2014. The Group does not anticipate that unrecognized tax benefits will significantly increase within the next twelve months. | ||||||||
According to the EIT Law and Implementation Regulations, dividends distributed from the PRC subsidiaries based on the profits generated from 2008 onwards to non-PRC tax resident shall generally be subject to the withholding income tax at 10% unless otherwise reduced under a double tax agreement or treaty. | ||||||||
The Group did not accrue deferred tax liabilities related to withholding tax for the retained earnings in its PRC subsidiaries for as of December 31, 2014, as the Group plans to indefinitely reinvest undistributed profits earned after December 31, 2008 from its PRC subsidiaries. | ||||||||
The current and deferred portions of income tax expense included in the consolidated statements of income and comprehensive income are as follows: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Income tax benefit (expense), current | 8,078 | (21,486 | ) | (15,861 | ) | |||
Income tax benefit, deferred | 5,961 | 10,176 | 3,888 | |||||
Change in valuation allowance | (7,261 | ) | (7,501 | ) | (3,615 | ) | ||
Total | 6,778 | (18,811 | ) | (15,588 | ) | |||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The components of deferred income tax assets and liabilities at December 31, 2013 and 2014 were as follows: | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
RMB | ||||||||
Deferred tax assets: | ||||||||
Net operating loss carry forward | 20,057 | 24,615 | ||||||
Deferred rent | 5,180 | 6,297 | ||||||
Accrued payroll and other expense | 6,391 | 2,976 | ||||||
Property and equipment impairment | 3,394 | 4,877 | ||||||
Others | 213 | 358 | ||||||
Sub-total | 35,235 | 39,123 | ||||||
Valuation allowance | (25,764 | ) | (29,379 | ) | ||||
Total deferred tax assets | 9,471 | 9,744 | ||||||
Deferred tax assets are analyzed as: | ||||||||
Current | 1,879 | 930 | ||||||
Non-current | 7,592 | 8,814 | ||||||
Total deferred tax assets | 9,471 | 9,744 | ||||||
As of December 31, 2014, the Group had tax loss carry forwards of RMB98,461 ($15.9 million) which will expire between 2015 and 2019 if not used. | ||||||||
The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry-forward periods, the Group’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry-forward periods provided for in the tax law. The Group has considered the possible sources of taxable income and historical operating results when assessing the realization of deferred tax assets: | ||||||||
At December 31, 2013 and 2014, the Group had a valuation allowance of RMB25,764 and RMB29,379 ($4.7million), respectively, against net deferred tax assets primarily due to net operating loss carry forwards and impairment on property and equipment where realization of the related deferred tax asset amounts was not likely, and, to a lesser degree, deferred rent and long-lived assets impairment. | ||||||||
The Group’s effective tax rates were -9.8%, 32.2% and 29.1% for the years ended December 31, 2012, 2013 and 2014, respectively. A reconciliation of the PRC statutory tax rate to the effective tax rate for the years ended December 31, 2012, 2013 and 2014 was as follows: | ||||||||
2012 | 2013 | 2014 | ||||||
PRC statutory tax rate | 25.0 | % | 25.0 | % | 25.0 | % | ||
Effect of different tax rate of Group entities operating in other jurisdictions or under different tax status | 7.1 | % | 7.9 | % | 11.0 | % | ||
Tax effect of non-deductible expenses, net | 1.0 | % | 3.6 | % | 2.3 | % | ||
Effect of tax holidays | (17.4 | )% | (18.7 | )% | (17.7 | )% | ||
Effect of change in valuation allowance | 11.3 | % | 12.9 | % | 6.8 | % | ||
One time tax levy | (37.0 | )% | 1.5 | % | (0.2 | )% | ||
DTA movement due to tax loss expiration | 0.0 | % | 0.0 | % | 1.9 | % | ||
Others | 0.2 | % | 0.0 | % | 0.0 | % | ||
Effective EIT rate | (9.8 | )% | 32.2 | % | 29.1 | % | ||
The aggregate amount and per share effect of the tax holiday are as follows: | ||||||||
2012 | 2013 | 2014 | ||||||
RMB except per share amounts | ||||||||
The aggregate amount effect | 12,020 | 10,894 | 9,448 | |||||
Per share effect — basic | 0.12 | 0.10 | 0.09 | |||||
Per share effect — diluted | 0.11 | 0.10 | 0.09 | |||||
Related_Party_Transactions_and
Related Party Transactions and Balances | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Related Party Transactions and Balances | ||||||
Related Party Transactions and Balances | ||||||
9. Related Party Transactions and Balances | ||||||
During 2012, 2013 and 2014, the Group leased certain properties from the Founders for office space and restaurant operations and incurred rental expenses for these facilities of RMB1,040, RMB1,260 and RMB1,647, respectively. | ||||||
2013 | 2014 | |||||
RMB | ||||||
Related party balances | ||||||
Amount due from related parties | ||||||
— Shareholders and key management personnel | 58 | — | ||||
Mainland_China_Contribution_Pl
Mainland China Contribution Plan And Profit Appropriation | 12 Months Ended |
Dec. 31, 2014 | |
Mainland China Contribution Plan And Profit Appropriation | |
Mainland China Contribution Plan And Profit Appropriation | |
10. Mainland China Contribution Plan And Profit Appropriation | |
Full time employees of the Group in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total accumulated monthly contributions for such employee benefits were RMB44,596 RMB51,875 and RMB60,824 ($9.8 million) for the years ended December 31, 2012, 2013 and 2014, respectively. The Group has no ongoing obligation to its employees subsequent to its contributions to the PRC plan. | |
Restricted_Net_Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Net Assets | |
Restricted Net Assets | |
11. Restricted Net Assets | |
Pursuant to laws applicable to entities incorporated in the PRC, the subsidiaries of the Group in the PRC must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriation of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year end) until the accumulative amount of such reserve fund reaches 50% of their registered capital; the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for specific purposes of enterprise expansion and staff bonus and welfare and are not distributable as cash dividends. The reserve fund was recorded in the retained earnings, while the amounts of which as of December 31, 2013 and 2014 were RMB70, 059 and RMB78, 513 ($12.7 million), respectively. In addition, due to restrictions on the distribution of share capital from the Group’s PRC subsidiaries, the PRC subsidiaries share capital of RMB603,466 ($97.3 million) at December 31, 2014 is also considered restricted and not available for distribution to the Company by its PRC subsidiaries in the form of dividends, loans or advances. | |
Net_Income_Per_Share
Net Income Per Share | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Net Income Per Share | ||||||||
Net Income Per Share | ||||||||
12. Net Income Per Share | ||||||||
The following table is a reconciliation of the net income and share amounts used in the calculation of basic net income per share and diluted net income per share: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB except share amounts and per share amounts | ||||||||
Net income attributable to ordinary shareholders — basic and diluted | 75,636 | 39,550 | 37,954 | |||||
Weighted average ordinary shares outstanding — basic | 104,115,531 | 104,996,276 | 106,603,255 | |||||
Options | 924,879 | 983,097 | 1,358,453 | |||||
Weighted average ordinary shares outstanding — diluted | 105,040,410 | 105,979,373 | 107,961,708 | |||||
Net income per share — basic | 0.73 | 0.38 | 0.36 | |||||
Net income per share — diluted | 0.72 | 0.37 | 0.35 | |||||
For the years ended December 31, 2012, 2013 and 2014, nil, nil and 142,788 shares issuable upon the assumed exercise of options or vesting of restricted shares were not included in the computation of diluted earnings per share as their effects would have been anti-dilutive, respectively. | ||||||||
Sharebased_Compensation
Share-based Compensation | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Share-based Compensation | ||||||||||
Share-based Compensation | ||||||||||
13. Share-based Compensation | ||||||||||
Under the Share Incentive Plan (the “Option Plan”), the Group may offer incentive awards to employees, officers, directors and consultants or advisors (the “Participants”) including the issuance of options to the Participants to purchase not more than 7,720,000 ordinary shares. In August 2011, the Group increased maximum aggregate number of ordinary shares which may be issued pursuant to the Option Plan from 7,720,000 to 10,000,000. Options granted to the employees typically vest over a requisite service period of five years with a 10 year contractual term. Generally, the options allocated to the first year in the service period are vested on the first anniversary of the grant date with the remaining options vesting ratably over the following years in the requisite service period. For example, options with a 5-year vesting period will have 20% vested on the first anniversary of the grant date with the remaining 80% vesting ratably over the following 48 months. As of December 31, 2014, options to purchase 1,293,856 ordinary shares and 1,107,192 non-vested restricted shares were outstanding and options to purchase 3,246,536 ordinary shares were available for future grants under the Option Plan. | ||||||||||
The Group records share-based compensation based on the grant date fair value of the award and recognizes the cost as an expense over the grantee’s requisite service period. The share-based compensation expenses have been categorized as either restaurant wages and related expenses, or selling, general and administrative expenses depending on the job functions of the grantees. | ||||||||||
The share-based compensation has been classified as follows for the year ended December 31, 2012, 2013 and 2014: | ||||||||||
2012 | 2013 | 2014 | ||||||||
Restaurant wages and related expenses | 3,928 | 4,900 | 4,419 | |||||||
Selling, general and administrative | 11,772 | 10,994 | 16,266 | |||||||
Total | 15,700 | 15,894 | 20,685 | |||||||
The weighted-average grant date fair value for options granted during the year ended December 31, 2012, 2013 and 2014 was RMB7.40, RMB4.56 and RMB6.53 ($1.06), respectively, computed using the binomial option pricing model. The binomial model requires the input of highly subjective assumptions including the fair value of the Group’s ordinary shares, the expected stock price volatility and the expected price multiple at which employees are likely to exercise stock options. The Group uses historical data to estimate forfeiture rates. Expected volatilities are based on the average volatility of comparable companies over a time period commensurate with the expected life of the option. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. | ||||||||||
Prior to the public offering, when estimating the fair value of its ordinary shares, the Group utilized appropriate valuation methodologies, including the discounted cash flow approach, which incorporates certain assumptions including the financial results and growth trends of the Group, to derive the total equity value of the Group. The valuation model allocated the equity value between the ordinary shares and the preference shares and determined the fair value of the ordinary shares based on the option pricing model under the enterprise value allocation method. Under this method, the ordinary shares have value only if the funds available for distribution to shareholders exceed the value of the liquidation preference at the time of a liquidity event. | ||||||||||
The fair values of stock options were estimated using the following significant assumptions: | ||||||||||
2012 | 2013 | 2014 | ||||||||
Suboptimal exercise factor | 2.0 to 2.5 | 2.0 to 2.5 | 2 | |||||||
Risk-free interest rate | 3.33%-3.50% | 3.59%-3.69% | 4.34% | |||||||
Volatility | 40.6% to 41.2% | 39.5% to 46.7% | 38.70% | |||||||
Dividend yield | — | — | — | |||||||
Life of option | 10 years | 10 years | 10 years | |||||||
A summary of option activities under the Option Plan for the year ended December 31, 2014 is presented below: | ||||||||||
Weighted | ||||||||||
Weighted | Average | Aggregate | ||||||||
Average | Remaining | Intrinsic | ||||||||
Number of | Exercise | Contractual | Value of | |||||||
Options | Price | Term | Options | |||||||
US$ | US$ | |||||||||
Outstanding, as of January 1, 2014 | 1,582,080 | 1.46 | 6.1years | 2,037 | ||||||
Granted | 35,000 | 2.36 | — | — | ||||||
Cancellation and termination | (22,824 | ) | 1.9 | — | — | |||||
Exercised | (300,400 | ) | 1 | — | — | |||||
Outstanding, as of December 31, 2014 | 1,293,856 | 1.04 | 5.3 years | 592 | ||||||
Vested and expected to vest as of December 31, 2014 | 1,235,435 | 1.04 | 5.3 years | 566 | ||||||
Options exercisable at December 31,2014 | 1,095,520 | 1.01 | 5.1 years | 516 | ||||||
On April 24, 2014, the Group granted 35,000 options to non-executive employees. | ||||||||||
As of December 31, 2014, there was RMB944 ($0.2 million) in total unrecognized compensation expense related to unvested share-based compensation arrangements granted under the option plan, which is expected to be recognized over a weighted-average period of 0.69 years. The total intrinsic value of options exercised during the years ended December 31, 2012, 2013 and 2014 was RMB 928, RMB 8,614 and RMB1,389($0.2 million) respectively. | ||||||||||
The following table summarized the Group’s non-vested restricted shares activity for the year ended December 31, 2014: | ||||||||||
Weighted-Average | ||||||||||
Grant Date | ||||||||||
Fair Value | ||||||||||
US$ | ||||||||||
Non-vested restricted shares outstanding at January 1, 2014 | 1,449,446 | 2.64 | ||||||||
Granted | 521,660 | 3.04 | ||||||||
Vested | (755,342 | ) | 2.83 | |||||||
Cancellation and termination | (108,572 | ) | 2.58 | |||||||
Non-vested restricted shares outstanding at December 31, 2014 | 1,107,192 | 2.71 | ||||||||
On February 26, 2014, the Group granted 328,000 and 193,660 restricted shares to executive and non-executive employees respectively. | ||||||||||
The fair value of non-vested restricted shares was computed based on the fair value of the Group’s ordinary shares on the grant date. The total fair value of restricted shares vested during the year ended December 31, 2012, 2013 and 2014 was RMB4,765, RMB8,001 and RMB8,441($1.4 million), respectively. | ||||||||||
As of December 31, 2014 there was RMB7,651 ($1.2 million) in total unrecognized compensation expense related to such non-vested restricted shares, which is expected to be recognized over a weighted-average period of 0.92 years. | ||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Fair Value Measurements | ||||||||||||
Fair Value Measurements | ||||||||||||
14. Fair Value Measurements | ||||||||||||
In determining fair value, a three level hierarchy is established for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect significant assumptions. | ||||||||||||
Recurring Fair Value Measurements | ||||||||||||
The Company did not have any assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2013 and 2014. | ||||||||||||
Nonrecurring Fair Value Measurements | ||||||||||||
The following table displays assets and liabilities that were measured at fair value on a non-recurring basis after initial recognition. | ||||||||||||
Year ended December 31, 2013 | ||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | Total Losses | |||||||
Active Markets | Other | Unobservable | ||||||||||
for Identical | Observable | Inputs (Level 3) | ||||||||||
Assets (Level 1) | Inputs (Level 2) | |||||||||||
Property and Equipment | 111,587 | 111,587 | 8,594 | |||||||||
Year ended December 31, 2014 | ||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | Total Losses | |||||||
Active Markets | Other | Unobservable | ||||||||||
for Identical | Observable | Inputs (Level 3) | ||||||||||
Assets (Level 1) | Inputs (Level 2) | |||||||||||
Property and Equipment | 105,451 | 105,451 | 7,864 | |||||||||
Goodwill | 5,139 | 5,139 | 424 | |||||||||
During the years ended December 31, 2013 and 2014, property and equipment with a carrying amount of RMB120,181 and RMB113,315 were written down to their fair value of RMB111,587 and RMB105,451, respectively, resulting in an impairment charge of RMB8,594 and RMB7,864, respectively. At the end of each quarter, the Company would perform impairment analysis when an indicator of has occurred for specified assets. Assets not determined to be recoverable, are written down to their fair value. The fair value is estimated using a discounted cash flow model under the income approach. The discounted cash flow method involves forecasting the future cash flows and then discounting them back to a present value at an appropriate discount rate. The discount rate is estimated based on a weighted average cost of capital method, which measures a Company’s cost of debt and equity financing weighted by the percentage of debt and equity in a Company’s target capital structure as determined through reference to the identified guideline companies. The cost of equity was derived from the capital asset pricing model and the cost of debt was benchmarked to the People’s Bank of China’s long term borrowing rate in China. | ||||||||||||
The Company recorded goodwill impairment charges of nil and RMB424 ($0.1 million) for the years ended December 31, 2013 and 2014, respectively. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group identifies each restaurant as a reporting unit for purpose of goodwill impairment qualitative analysis and completes a two-step goodwill impairment test. The fair value is estimated using a discounted cash flow model under the income approach. The discount rate used is the same as the one used in property and equipment impairment analysis. The goodwill impairment charge was due to the closure of one restaurant in the first quarter of 2014. | ||||||||||||
SCHEDULE_I_CONDENSED_FINANCIAL
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (PARENT COMPANY ONLY) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (PARENT COMPANY ONLY) | ||||||||||||||
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (PARENT COMPANY ONLY) | ||||||||||||||
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE | ||||||||||||||
COOKING RESTAURANT CHAIN CO.,LTD | ||||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
(In thousands of RMB | ||||||||||||||
except share and per | ||||||||||||||
share amounts) | ||||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | 33,090 | 31,676 | ||||||||||||
Due from subsidiaries | 2,391 | 3,364 | ||||||||||||
Prepaid expenses and other current assets | 653 | 1,917 | ||||||||||||
Investment in subsidiaries | 908,171 | 968,498 | ||||||||||||
Total assets | 944,305 | 1,005,455 | ||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Due to subsidiaries | 8,322 | 8,322 | ||||||||||||
Prepaid subscription | 153 | 12 | ||||||||||||
Accrued expenses | 3,373 | 2,958 | ||||||||||||
Total liabilities | 11,848 | 11,292 | ||||||||||||
Equity: | ||||||||||||||
Ordinary shares, par value $.001, 1,000,000,000 shares authorized, 106,296,674 and 107,352,416 shares issued and outstanding as of December 31, 2013 and 2014, respectively | 756 | 763 | ||||||||||||
Additional paid-in capital | 743,219 | 766,837 | ||||||||||||
Retained earnings | 197,618 | 235,572 | ||||||||||||
Accumulated other comprehensive loss | (9,136 | ) | (9,009 | ) | ||||||||||
Total equity | 932,457 | 994,163 | ||||||||||||
Total liabilities and equity | 944,305 | 1,005,455 | ||||||||||||
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE | ||||||||||||||
COOKING RESTAURANT CHAIN CO., LTD. | ||||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||||
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | 2014 | ||||||||||||
(In thousands of RMB) | ||||||||||||||
Operating costs and expenses | (19,505 | ) | (18,991 | ) | (23,052 | ) | ||||||||
Loss from operations | (19,505 | ) | (18,991 | ) | (23,052 | ) | ||||||||
Other income | 472 | 956 | 673 | |||||||||||
Equity in earnings of subsidiaries | 94,669 | 57,585 | 60,333 | |||||||||||
Net income attributable to Country Style Cooking Restaurant Chain Co., Ltd. | 75,636 | 39,550 | 37,954 | |||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||
Foreign currency translation adjustments | (69 | ) | (1,977 | ) | 127 | |||||||||
Comprehensive income | 75,567 | 37,573 | 38,081 | |||||||||||
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE | ||||||||||||||
COOKING RESTAURANT CHAIN CO., LTD. | ||||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||||
CONDENSED STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||
Accumulated | ||||||||||||||
Additional | Other | |||||||||||||
Ordinary Shares | Paid in | Retained | Comprehensive | |||||||||||
Shares | Amount | Capital | Earnings | Loss | Total Equity | |||||||||
(In thousands of RMB except share and per share amounts) | ||||||||||||||
Balance at January 1, 2012 | 103,844,239 | 741 | 702,995 | 82,432 | (7,090 | ) | 779,078 | |||||||
Net loss | — | — | — | 75,636 | — | 75,636 | ||||||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 560,592 | 4 | 946 | — | — | 950 | ||||||||
Share-based compensation | — | — | 15,700 | — | — | 15,700 | ||||||||
Foreign currency translation adjustments | — | — | — | — | (69 | ) | (69 | ) | ||||||
Balance at December 31, 2012 | 104,404,831 | 745 | 719,641 | 158,068 | (7,159 | ) | 871,295 | |||||||
Net income | — | — | — | 39,550 | — | 39,550 | ||||||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 1,891,843 | 11 | 7,684 | — | — | 7,695 | ||||||||
Share-based compensation | — | — | 15,894 | — | — | 15,894 | ||||||||
Foreign currency translation adjustments | — | — | — | — | (1,977 | ) | (1,977 | ) | ||||||
Balance at December 31, 2013 | 106,296,674 | 756 | 743,219 | 197,618 | (9,136 | ) | 932,457 | |||||||
Net income | — | — | — | 37,954 | — | 37,954 | ||||||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 1,055,742 | 7 | 2,933 | — | — | 2,940 | ||||||||
Share-based compensation | — | — | 20,685 | — | — | 20,685 | ||||||||
Foreign currency translation adjustments | — | — | — | — | 127 | 127 | ||||||||
Balance at December 31, 2014 | 107,352,416 | 763 | 766,837 | 235,572 | (9,009 | ) | 994,163 | |||||||
SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE | ||||||||||||||
COOKING RESTAURANT CHAIN CO., LTD. | ||||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | 2014 | ||||||||||||
(In thousands of RMB) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income attributable to Country Style Cooking Restaurant Chain Co., Ltd. | 75,636 | 39,550 | 37,954 | |||||||||||
Equity in earnings of subsidiaries | (94,669 | ) | (57,585 | ) | (60,333 | ) | ||||||||
Adjustments to reconcile net income(loss) to net cash used in operating activities: | ||||||||||||||
Share-based compensation | 15,700 | 15,894 | 20,685 | |||||||||||
Decrease (Increase) in due from subsidiaries | (1,477 | ) | (953 | ) | (973 | ) | ||||||||
Increase (Decrease) in due to subsidiaries | (46 | ) | (46 | ) | — | |||||||||
Decrease in prepaid expenses and other current assets | 697 | 1,221 | (1,264 | ) | ||||||||||
Increase (Decrease) in accrued liabilities | (1,368 | ) | (1,929 | ) | (415 | ) | ||||||||
Net cash provided by (used in) operating activities | (5,527 | ) | (3,848 | ) | (4,346 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||
Net cash used in investing activities | — | — | — | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from early exercise of employee stock options | 693 | 7,467 | 2,796 | |||||||||||
Ordinary share issuance costs | — | — | — | |||||||||||
Net cash provided by financing activities | 693 | 7,467 | 2,796 | |||||||||||
Effect of exchange rate change | 388 | 1,300 | 136 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (4,446 | ) | 4,919 | (1,414 | ) | |||||||||
Cash and cash equivalents, beginning of year | 32,617 | 28,171 | 33,090 | |||||||||||
Cash and cash equivalents, end of year | 28,171 | 33,090 | 31,676 | |||||||||||
Note to Schedule I | ||||||||||||||
Schedule I has been provided pursuant to the requirements of Rule 12004(a) and 50040(c) of Regulation S-X, which require condensed financial information as to the financial position, change in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. | ||||||||||||||
The condensed financial information has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. | ||||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Group and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Group. | ||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Summary of Significant Accounting Policies | |||
Basis of presentation | |||
Basis of presentation The consolidated financial statement have been prepared in accordance with the recognition, measurement, disclosure and presentation criteria of accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||
Basis of consolidation | |||
Basis of consolidation. All intercompany transactions and balances have been eliminated. | |||
Use of Estimates | |||
Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and long-lived assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting periods. | |||
The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant items subject to such estimates and assumptions include: impairment of long-lived assets, impairment of goodwill, valuation allowance of deferred tax assets and valuation of share-based compensation including forfeiture rates of stock options. Actual results could differ from those estimates. | |||
Foreign Currency Translation | |||
Foreign Currency Translation. The reporting currency of the Group is RMB. | |||
The functional currency of CSC Cayman and Country Style Cooking International Restaurant Chain Group Ltd. (Hong Kong) is the United States dollar (“U.S. dollar”). Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into US dollars at the rates of exchange ruling at the balance sheet date. | |||
The financial records of the Company’s PRC subsidiaries are maintained in the local currency, Renminbi (“RMB”), which is their functional currency. Transactions in currencies other than RMB during the year are converted at the applicable rates of exchange prevailing on the day transactions occurred. Transaction gains and losses are recognized in the statements of income. Assets and liabilities are translated into RMB at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, and expenses, gains and losses are translated using the average rate for the year. Translation adjustments gains or losses are recognized as other comprehensive income in the statements of comprehensive income. | |||
Cash and Cash Equivalents | |||
Cash and Cash Equivalents. Cash and cash equivalents represent cash on hand and highly-liquid investments with original maturities of three months or less. At December 31, 2013 and 2014, cash equivalents were comprised of bank deposits. | |||
Inventories | |||
Inventories. Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories are primarily comprised of food and paper. | |||
Short-term Investments and long-term investments | |||
Short-term Investments and long-term investments. The Group periodically purchases fixed income products from banks for investment purposes and with the intent and ability to hold the investments until maturity. The investments are principal protected and recorded at amortized cost. The investments whose maturity being less than one year are recorded as short-term investments. As of December 31, 2014, long-term investment of RMB50,659 consisted of principle protected and fixed yield investment purchased from a PRC commercial bank. Such investment has a fixed annual yield of 7.4% and a maturity date of October 28, 2016. | |||
The Group reviews its investments for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis, in order to determine whether an other-than-temporary impairment has occurred. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings. If the investment’s fair value is less than its cost and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment. For the three years in the period ended December 31, 2014, the Group did not record an other-than-temporary impairment. | |||
Property and Equipment | |||
Property and Equipment. The Group capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost less accumulated depreciation. Costs for repair and maintenance activities are expensed as incurred. Depreciation is provided using the straight-line method over the following estimated useful lives: | |||
Buildings | Shorter of 40 years or valid period of property license | ||
Equipment | 3 to 5 years | ||
Office furniture and fixtures | 3 to 5 years | ||
Leasehold improvements | Shorter of estimated useful life of 5 years or lease term | ||
Leasehold improvements are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Group includes those renewal option periods when determining the lease term. For significant leasehold improvements made during the latter part of the lease term, the Group amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. | |||
Goodwill | |||
Goodwill. Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets less liabilities acquired. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group identifies each restaurant as a reporting unit for purpose of goodwill impairment analysis and completes a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The Company recorded goodwill impairment charges of RMB456, nil and RMB424 ($0.1 million) for the years ended December 31, 2012, 2013 and 2014, respectively. See Note 4 “Goodwill” for additional discussion on impairment of goodwill. | |||
Impairment of Long-Lived Assets | |||
Impairment of Long-Lived Assets. Long-lived assets (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Group assesses the recoverability of long-lived assets by determining whether the carrying value of these assets, over their respective remaining lives, can be recovered through undiscounted future operating cash flows. For asset groups, the weighted average remaining useful lives of the assets were used for forecasting the expected undiscounted cash flows. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. Impairment is reviewed whenever events or changes in circumstances indicate the carrying amounts of these assets may not be fully recoverable. The impairment loss on long-lived assets recorded was RMB13,820, RMB8,594 and RMB7,864 ($1.3 million) during the years ended December 31, 2012, 2013 and 2014, respectively. See Note 5 “Impairment Charges of Long-lived Assets” for additional discussion on impairment of long-lived assets. | |||
Leases | |||
Leases. All of the Group’s leases are operating leases. Many of the lease agreements contain rent holidays granted by the landlords for pre-operating renovations, rent escalation clauses and/or contingent rent provisions. Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including any option period as well as the rent holidays included in the determination of the lease term. Contingent rentals are generally based upon a percentage of sales or a percentage of sales in excess of stipulated amounts and are not considered minimum rent payments but are recognized when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. | |||
Revenue Recognition | |||
Revenue Recognition. Revenues from Group operated restaurants are recognized when payment is tendered at the time of sale. The Group presents sales net of discounts and sales related taxes. | |||
Income Taxes | |||
Income Taxes. Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations. Deferred tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Group recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. | |||
Restaurant expenses | |||
Restaurant expenses. The Group’s restaurant expenses include food and paper, restaurant wages and related expenses, restaurant rental expenses, restaurant utility expenses and other restaurant operating expenses. | |||
Pre-opening expenses | |||
Pre-opening expenses. The Group’s pre-opening expenses are expensed as incurred and generally include payroll costs associated with opening the new restaurant and other miscellaneous expenses prior to the openings. | |||
Fair Value of Financial Instruments | |||
Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Group’s financial instruments mainly consist of cash and cash equivalents, short-term investments, due from related parties, due to related parties and accounts payable. Those current assets and liabilities approximate fair value due to their short-term maturity. | |||
Share-based compensation | |||
Share-based compensation. The Group accounts for share-based compensation in accordance with ASC 718 “Compensation — Stock Compensation”, which requires the Group to measure at grant date the fair value of the stock-based award and recognize compensation expense, net of estimated forfeitures, on a straight-line basis, over the requisite service period. Forfeitures are estimated at the time of grant and revised annually if actual forfeitures differ from those estimates. The share-based compensation expenses have been categorized as either restaurant wages and related expenses, or selling, general and administrative expenses depending on the job functions of the grantees. | |||
Net Income per Share | |||
Net Income per Share. Net income per share is computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted net income per share is computed using the more dilutive of the two-class method or the if-converted method. | |||
Segment Reporting | |||
Segment Reporting. ASC Topic 280, Segment Reporting, establishes standards for companies to report information about operating segments in their financial statements. The method of determining what information to report is based on the way the chief operating decision maker (“CODM”) organizes the Group’s operating segments for making operating decisions and assessing financial performance. The CODM is the chief executive officer (“CEO”) of the Group. Information reported to the CEO for the purpose of resource allocation and performance assessment focuses on the nature of the Group’s business activities. Each restaurant is an operating segment and is aggregated into one reportable segment as these restaurants exhibit similar long-term financial performance and have similar economic characteristics. The Group primarily generates its revenues from customers in the PRC. Accordingly, no geographical segments are presented. Substantially all of the Group’s long-lived assets are located in the PRC. | |||
Comprehensive Income | |||
Comprehensive Income. Comprehensive income includes all changes in equity except those resulting from investment by owners and distribution to owner and is comprised of net income and foreign currency translation adjustments. | |||
Deferred Revenue and Sales Coupon | |||
Deferred Revenue and Sales Coupon. The Group sells prepaid vouchers and cards to its customers, which comprises deferred revenue. The revenue is recognized when such prepaid vouchers and cards are used or expired. Unused prepaid vouchers have fixed expiration dates and usually expire at the end of the following calendar year after issuance and are not refundable. Revenues from such vouchers are not material to the Group’s consolidated financial statements. | |||
The Group also issues discount coupons to customers in connection with promotional events. The discount against revenue is recognized when such coupons are used in combination with purchases by the customers. | |||
Related Parties | |||
Related Parties. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. | |||
Government Grants | |||
Government Grants. Unrestricted government subsidies from local governmental agencies allowing the Group full discretion to utilize the funds were RMB21,164, RMB2,611 and RMB3,129 ($0.5 million) for the years ended December 31, 2012, 2013 and 2014, respectively, which were recorded as other income in the consolidated statements of income. | |||
Translation into United States Dollars | |||
Translation into United States Dollars. The financial statements of the Group are stated in RMB. Translation of amounts from RMB into U.S. dollars are solely for the convenience of the readers and were calculated at the rate of US$1.00 =MB6.2046, representing the noon buying rate in the City of New York for cable transfers of Renminbi, as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2014. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on December 31, 2014, or at any other rates. | |||
Recent Accounting Pronouncements | |||
Recent Accounting Pronouncements. | |||
In May 2014, the FASB and International Accounting Standards Board (“IASB”) issued their converged standard on revenue recognition. The objective of the revenue standard ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. For public companies, the revenue standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Management is in the process of evaluating the impact of the standard on its consolidated financial statements. | |||
On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The ASU shall be applied at the effective date, and management believes the adoption of the ASU will not have material impact on the Group’s financial statements. | |||
In November 2014, the FASB issued a new pronouncement which provides guidance on determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. The new standard requires management to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Management believes the adoption of the guidance will not have material impact on the Group’s financial statements. | |||
Organization_and_Principal_Act1
Organization and Principal Activities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Organization and Principal Activities | ||||||||
Schedule of the Company's wholly owned subsidiaries | ||||||||
As of December 31, 2014, the Company’s significant subsidiaries are as follows: | ||||||||
Place of Incorporation | Date of Incorporation | Percentage | ||||||
of Ownership (%) | ||||||||
Country Style Cooking International Restaurant Chain Group Ltd. | Hong Kong | August 23, 2007 | 100 | |||||
Country Style Cooking (Chongqing) Investment Co., Ltd. | Chongqing, PRC | September 24, 2007 | 100 | |||||
Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing, PRC | March 25, 2008 | 100 | |||||
Sichuan Country Style Cooking Restaurant Co., Ltd. | Chengdu, PRC | October 4, 2008 | 100 | |||||
Xi’an Country Style Cooking Restaurant Co., Ltd. | Xi’an, PRC | May 19, 2008 | 100 | |||||
Changsha Country Style Cooking Restaurant Co., Ltd. | Changsha, PRC | October 4, 2009 | 100 | |||||
Shanghai Country Style Cooking Restaurant Co., Ltd. | Shanghai, PRC | September 1, 2009 | 100 | |||||
Guizhou Country Style Cooking Restaurant Co., Ltd. | Guiyang, PRC | September 26, 2010 | 100 | |||||
Beijing Country Style Cooking Restaurant Co., Ltd. | Beijing, PRC | September 27, 2011 | 100 | |||||
Country (Chongqing) Commerce and Trading Co., Ltd. | Chongqing, PRC | May 23, 2012 | 100 | |||||
Yunnan CountryStyle CookingRestaurant Co., Ltd. | Yunnan, PRC | May 28,2012 | 100 | |||||
Wuhan CountryStyle CookingRestaurant Co., Ltd. | Wuhan, PRC | April 8,2014 | 100 | |||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Summary of Significant Accounting Policies | |||
Schedule of useful lives of property and equipment | Buildings | Shorter of 40 years or valid period of property license | |
Equipment | 3 to 5 years | ||
Office furniture and fixtures | 3 to 5 years | ||
Leasehold improvements | Shorter of estimated useful life of 5 years or lease term | ||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Property and Equipment, Net | ||||||
Schedule of property and equipment, net | December 31, | |||||
2013 | 2014 | |||||
RMB | ||||||
Cost: | ||||||
Buildings | 172,802 | 235,580 | ||||
Equipment | 143,732 | 164,541 | ||||
Office furniture and fixtures | 28,796 | 31,661 | ||||
Leasehold improvements | 203,456 | 232,889 | ||||
Less: accumulated depreciation | (187,034 | ) | (256,482 | ) | ||
Construction in progress: | 36,803 | 9,589 | ||||
398,555 | 417,778 | |||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill | ||||||||
Schedule of changes in goodwill | For Years Ended | |||||||
December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Goodwill as of January 1, | 6,019 | 5,563 | 5,563 | |||||
Goodwill impairment | (456 | ) | — | (424 | ) | |||
Goodwill as of December 31 | 5,563 | 5,563 | 5,139 | |||||
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Other Current Liabilities | ||||||
Schedule of other current liabilities | December 31, | |||||
2013 | 2014 | |||||
RMB | ||||||
Payable for property and equipment | 19,161 | 16,261 | ||||
Accrued utility costs | 7,563 | 8,590 | ||||
Other taxes payable | 12,370 | 11,882 | ||||
Accrued professional fees | 2,321 | 2,317 | ||||
Advance receipts from depositary bank | 450 | 451 | ||||
Deferred rent-current | 1,622 | 1,971 | ||||
Reimbursement payable | 4,077 | 6,112 | ||||
Other | 3,676 | 4,330 | ||||
51,240 | 51,914 | |||||
Leases_Tables
Leases (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases | ||||||||
Schedule of minimum rent commitments under non-cancelable operating leases | ||||||||
Minimum rent commitments under non-cancelable operating leases at December 31, 2014 were as follows: | ||||||||
Years Ending December 31, | RMB | |||||||
2015 | 149,146 | |||||||
2016 | 140,095 | |||||||
2017 | 117,514 | |||||||
2018 | 90,447 | |||||||
2019 | 55,833 | |||||||
Thereafter | 69,199 | |||||||
Total minimum lease payments | 622,234 | |||||||
Schedule of total rent expense on operating leases, including contingent rent | ||||||||
For Years Ended | ||||||||
December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Minimum rent on real property | 118,219 | 120,141 | 131,901 | |||||
Contingent rent | 5,330 | 11,186 | 14,330 | |||||
Total | 123,549 | 131,327 | 146,231 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Income Taxes | ||||||||
Schedule of current and deferred portions of income tax expense included in the consolidated statements of income and comprehensive income | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB | ||||||||
Income tax benefit (expense), current | 8,078 | (21,486 | ) | (15,861 | ) | |||
Income tax benefit, deferred | 5,961 | 10,176 | 3,888 | |||||
Change in valuation allowance | (7,261 | ) | (7,501 | ) | (3,615 | ) | ||
Total | 6,778 | (18,811 | ) | (15,588 | ) | |||
Schedule of the components of deferred income tax assets and liabilities | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
RMB | ||||||||
Deferred tax assets: | ||||||||
Net operating loss carry forward | 20,057 | 24,615 | ||||||
Deferred rent | 5,180 | 6,297 | ||||||
Accrued payroll and other expense | 6,391 | 2,976 | ||||||
Property and equipment impairment | 3,394 | 4,877 | ||||||
Others | 213 | 358 | ||||||
Sub-total | 35,235 | 39,123 | ||||||
Valuation allowance | (25,764 | ) | (29,379 | ) | ||||
Total deferred tax assets | 9,471 | 9,744 | ||||||
Deferred tax assets are analyzed as: | ||||||||
Current | 1,879 | 930 | ||||||
Non-current | 7,592 | 8,814 | ||||||
Total deferred tax assets | 9,471 | 9,744 | ||||||
Schedule of a reconciliation of the PRC statutory tax rate to the effective tax rate | ||||||||
2012 | 2013 | 2014 | ||||||
PRC statutory tax rate | 25.0 | % | 25.0 | % | 25.0 | % | ||
Effect of different tax rate of Group entities operating in other jurisdictions or under different tax status | 7.1 | % | 7.9 | % | 11.0 | % | ||
Tax effect of non-deductible expenses, net | 1.0 | % | 3.6 | % | 2.3 | % | ||
Effect of tax holidays | (17.4 | )% | (18.7 | )% | (17.7 | )% | ||
Effect of change in valuation allowance | 11.3 | % | 12.9 | % | 6.8 | % | ||
One time tax levy | (37.0 | )% | 1.5 | % | (0.2 | )% | ||
DTA movement due to tax loss expiration | 0.0 | % | 0.0 | % | 1.9 | % | ||
Others | 0.2 | % | 0.0 | % | 0.0 | % | ||
Effective EIT rate | (9.8 | )% | 32.2 | % | 29.1 | % | ||
Schedule of the aggregate amount and per share effect of the tax holiday | ||||||||
2012 | 2013 | 2014 | ||||||
RMB except per share amounts | ||||||||
The aggregate amount effect | 12,020 | 10,894 | 9,448 | |||||
Per share effect — basic | 0.12 | 0.10 | 0.09 | |||||
Per share effect — diluted | 0.11 | 0.10 | 0.09 | |||||
Related_Party_Transactions_and1
Related Party Transactions and Balances (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Related Party Transactions and Balances | ||||||
Schedule of related party transactions and balances | ||||||
2013 | 2014 | |||||
RMB | ||||||
Related party balances | ||||||
Amount due from related parties | ||||||
— Shareholders and key management personnel | 58 | — | ||||
Net_Income_Loss_Per_Share_Tabl
Net Income (Loss) Per Share (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Net Income Per Share | ||||||||
Schedule of reconciliation of the net income and share amounts used in the calculation of basic net income (loss) per share and diluted net income (loss) per share | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | 2014 | ||||||
RMB except share amounts and per share amounts | ||||||||
Net income attributable to ordinary shareholders — basic and diluted | 75,636 | 39,550 | 37,954 | |||||
Weighted average ordinary shares outstanding — basic | 104,115,531 | 104,996,276 | 106,603,255 | |||||
Options | 924,879 | 983,097 | 1,358,453 | |||||
Weighted average ordinary shares outstanding — diluted | 105,040,410 | 105,979,373 | 107,961,708 | |||||
Net income per share — basic | 0.73 | 0.38 | 0.36 | |||||
Net income per share — diluted | 0.72 | 0.37 | 0.35 | |||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Share-based Compensation | ||||||||||
Schedule of classification of share-based compensation | ||||||||||
2012 | 2013 | 2014 | ||||||||
Restaurant wages and related expenses | 3,928 | 4,900 | 4,419 | |||||||
Selling, general and administrative | 11,772 | 10,994 | 16,266 | |||||||
Total | 15,700 | 15,894 | 20,685 | |||||||
Schedule of significant assumptions used in estimating the fair values of stock options | ||||||||||
2012 | 2013 | 2014 | ||||||||
Suboptimal exercise factor | 2.0 to 2.5 | 2.0 to 2.5 | 2 | |||||||
Risk-free interest rate | 3.33%-3.50% | 3.59%-3.69% | 4.34% | |||||||
Volatility | 40.6% to 41.2% | 39.5% to 46.7% | 38.70% | |||||||
Dividend yield | — | — | — | |||||||
Life of option | 10 years | 10 years | 10 years | |||||||
Schedule of option activities under the Option Plan | ||||||||||
Weighted | ||||||||||
Weighted | Average | Aggregate | ||||||||
Average | Remaining | Intrinsic | ||||||||
Number of | Exercise | Contractual | Value of | |||||||
Options | Price | Term | Options | |||||||
US$ | US$ | |||||||||
Outstanding, as of January 1, 2014 | 1,582,080 | 1.46 | 6.1years | 2,037 | ||||||
Granted | 35,000 | 2.36 | — | — | ||||||
Cancellation and termination | (22,824 | ) | 1.9 | — | — | |||||
Exercised | (300,400 | ) | 1 | — | — | |||||
Outstanding, as of December 31, 2014 | 1,293,856 | 1.04 | 5.3 years | 592 | ||||||
Vested and expected to vest as of December 31, 2014 | 1,235,435 | 1.04 | 5.3 years | 566 | ||||||
Options exercisable at December 31,2014 | 1,095,520 | 1.01 | 5.1 years | 516 | ||||||
Schedule of non-vested restricted shares activity | ||||||||||
Weighted-Average | ||||||||||
Grant Date | ||||||||||
Fair Value | ||||||||||
US$ | ||||||||||
Non-vested restricted shares outstanding at January 1, 2014 | 1,449,446 | 2.64 | ||||||||
Granted | 521,660 | 3.04 | ||||||||
Vested | (755,342 | ) | 2.83 | |||||||
Cancellation and termination | (108,572 | ) | 2.58 | |||||||
Non-vested restricted shares outstanding at December 31, 2014 | 1,107,192 | 2.71 | ||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Fair Value Measurements | ||||||||||||
Schedule of assets and liabilities measured at fair value on non-recurring basis | ||||||||||||
Year ended December 31, 2013 | ||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | Total Losses | |||||||
Active Markets | Other | Unobservable | ||||||||||
for Identical | Observable | Inputs (Level 3) | ||||||||||
Assets (Level 1) | Inputs (Level 2) | |||||||||||
Property and Equipment | 111,587 | 111,587 | 8,594 | |||||||||
Year ended December 31, 2014 | ||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | Total Losses | |||||||
Active Markets | Other | Unobservable | ||||||||||
for Identical | Observable | Inputs (Level 3) | ||||||||||
Assets (Level 1) | Inputs (Level 2) | |||||||||||
Property and Equipment | 105,451 | 105,451 | 7,864 | |||||||||
Goodwill | 5,139 | 5,139 | 424 | |||||||||
Organization_and_Principal_Act2
Organization and Principal Activities (Details) (Ordinary shares.) | 0 Months Ended |
Sep. 28, 2010 | |
Ordinary shares. | |
Organization and Principal Activities | |
Shares issued | 23,000,000 |
Organization_and_Principal_Act3
Organization and Principal Activities (Details 2) | Dec. 31, 2014 |
Country Style Cooking International Restaurant Chain Group Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Country Style Cooking (Chongqing) Investment Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Chongqing Xinghong Growing Rich Management Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Sichuan Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Xi'an Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Changsha Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Shanghai Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Guizhou Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Beijing Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Country (Chongqing) Commerce and Trading Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Yunnan Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Wuhan Country Style Cooking Restaurant Co., Ltd. | |
Organization and Principal Activities | |
Percentage of Ownership | 100.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | CNY | CNY | CNY | Buildings | Equipment | Equipment | Office furniture and fixtures | Office furniture and fixtures | Leasehold improvements | |
segment | Maximum | Minimum | Maximum | Minimum | Maximum | Maximum | ||||
Short-term Investments and long-term investments | ||||||||||
Long-term investment | $8,165,000 | 50,659,000 | ||||||||
Fixed annual yield (as a percent) | 7.40% | 7.40% | ||||||||
Property Plant and Equipment Income Statement Disclosures [Abstract] | ||||||||||
Useful life | 40 years | 3 years | 5 years | 3 years | 5 years | 5 years | ||||
Goodwill | ||||||||||
Goodwill impairment charges | 68,000 | 424,000 | 0 | 456,000 | ||||||
Impairment of Long-Lived Assets | ||||||||||
Impairment loss on long-lived assets | 1,267,000 | 7,864,000 | 8,594,000 | 13,820,000 | ||||||
Segment Reporting | ||||||||||
Number of reportable segments into which restaurants are aggregated | 1 | 1 | ||||||||
Number of geographical segments | 0 | 0 | ||||||||
Government Grants | ||||||||||
Unrestricted government subsidies from local government agencies | 500,000 | 3,129,000 | 2,611,000 | 21,164,000 | ||||||
Translation into United States Dollars | ||||||||||
Translations of amounts from RMB into U.S. dollars at the rate of U.S. $1.00 to RMB | 6.2046 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) | 12 Months Ended | |||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
USD ($) | CNY | CNY | CNY | Buildings | Buildings | Equipment | Equipment | Office furniture and fixtures | Office furniture and fixtures | Leasehold improvements | Leasehold improvements | |
CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | |||||
Property and Equipment, Net | ||||||||||||
Cost: | 235,580 | 172,802 | 164,541 | 143,732 | 31,661 | 28,796 | 232,889 | 203,456 | ||||
Less: accumulated depreciation | -256,482 | -187,034 | ||||||||||
Construction in progress: | 9,589 | 36,803 | ||||||||||
Property and equipment, net | 67,334 | 417,778 | 398,555 | |||||||||
Depreciation | ||||||||||||
Depreciation expense | $12,666 | 78,585 | 70,008 | 59,411 |
Goodwill_Details
Goodwill (Details) | 12 Months Ended | 24 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Mar. 31, 2014 |
USD ($) | CNY | CNY | CNY | item | item | |
item | item | item | ||||
Goodwill | ||||||
Number of restaurants purchased | 0 | 0 | 0 | 0 | 32 | |
Number of restaurants underperforming | 1 | |||||
Changes in goodwill | ||||||
Goodwill at the beginning of period | 5,563 | 5,563 | 6,019 | |||
Goodwill impairment | 68 | 424 | 0 | 456 | ||
Goodwill at the end of period | $828 | 5,139 | 5,563 | 5,563 |
Impairment_Charges_of_LongLive
Impairment Charges of Long-Lived Assets (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
Impairment Charges of Long-Lived Assets | ||||
Number of years of operating losses used as a primary indicator of potential impairment | 1 year | 1 year | ||
Impairment of long-lived assets | $1,267 | 7,864 | 8,594 | 13,820 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Other Current Liabilities | |||
Payable for property and equipment | 16,261 | 19,161 | |
Accrued utility costs | 8,590 | 7,563 | |
Other taxes payable | 11,882 | 12,370 | |
Accrued professional fees | 2,317 | 2,321 | |
Advance receipts from depositary bank | 451 | 450 | |
Deferred rent-current | 1,971 | 1,622 | |
Reimbursement payable | 6,112 | 4,077 | |
Other | 4,330 | 3,676 | |
Other current liabilities | $8,367 | 51,914 | 51,240 |
Leases_Details
Leases (Details) | 12 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 |
CNY | CNY | CNY | USD ($) | Minimum | Maximum | |
Leases | ||||||
Initial lease term | 5 years | 10 years | ||||
Deferred rent balance | 31,754 | 26,130 | $5,100 | |||
Security deposit balance for leases | 36,230 | 23,196 | 5,800 | |||
Minimum rent commitments under non-cancelable operating leases | ||||||
2015 | 149,146 | |||||
2016 | 140,095 | |||||
2017 | 117,514 | |||||
2018 | 90,447 | |||||
2019 | 55,833 | |||||
Thereafter | 69,199 | |||||
Total minimum lease payments | 622,234 | |||||
Total rent expense on operating leases, including contingent rent | ||||||
Minimum rent on real property | 131,901 | 120,141 | 118,219 | |||
Contingent rent | 14,330 | 11,186 | 5,330 | |||
Total | 146,231 | 131,327 | 123,549 |
Income_Taxes_Details
Income Taxes (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 120 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 06, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Jan. 02, 2008 | Jun. 30, 2011 | Jun. 30, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2020 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | CNY | Chongqing Xinghong Growing Rich Management Co., Ltd. | Cayman Islands | Hong Kong | Hong Kong | Hong Kong | Hong Kong | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | |
USD ($) | USD ($) | USD ($) | USD ($) | Country Style Cooking International Restaurant Chain Group Ltd. | Minimum | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | Chongqing Xinghong Growing Rich Management Co., Ltd. | |||||||
CNY | USD ($) | CNY | USD ($) | CNY | Subsequent tax period | Income tax periods for fiscal years ended December 31, 2008 and 2010 | Income tax periods for fiscal years ended December 31, 2008 and 2010 | Income tax period for fiscal year ended December 31, 2009 | Income tax period for fiscal year ended December 31, 2009 | |||||||||||||
USD ($) | CNY | USD ($) | CNY | |||||||||||||||||||
Income Taxes | ||||||||||||||||||||||
Withholding tax imposed upon payment of dividends | $0 | |||||||||||||||||||||
Statutory income tax rate (as a percent) | 16.50% | 25.00% | ||||||||||||||||||||
Standard Enterprise Income Tax rate from 2008 to 2010 (as a percent) | 25.00% | 25.00% | ||||||||||||||||||||
Adjustment to income tax liability for settlement of preferential tax rate | 1,800,000 | 11,362,000 | 1,000,000 | 6,406,000 | ||||||||||||||||||
Preferential income tax rate (as a percent) | 15.00% | 15.00% | ||||||||||||||||||||
Preferential Enterprise Income Tax rate from 2008 to 2010 (as a percent) | 15.00% | |||||||||||||||||||||
One-time adjustment to EIT recognized due to the change in tax rate | 2,800,000 | 17,769,000 | 1,200,000 | 7,693,000 | ||||||||||||||||||
Statute of limitations period for underpayment of income taxes due to computational errors | 3 years | |||||||||||||||||||||
Statute of limitations period under special circumstances | 5 years | |||||||||||||||||||||
Underpayment of income tax liability specifically listed as a special circumstance for extended period of statute of limitations | 100,000 | |||||||||||||||||||||
Statute of limitations period for transfer pricing related adjustment | 10 years | |||||||||||||||||||||
Statute of limitations for tax evasion | 0 years | |||||||||||||||||||||
Withholding tax rate (as a percent) | 10.00% | |||||||||||||||||||||
Current and deferred portions of income tax expense included in the consolidated statements of operations and comprehensive income | ||||||||||||||||||||||
Income tax benefit (expense), current | -15,861,000 | -21,486,000 | 8,078,000 | |||||||||||||||||||
Income tax benefit, deferred | 3,888,000 | 10,176,000 | 5,961,000 | |||||||||||||||||||
Change in valuation allowance | -3,615,000 | -7,501,000 | -7,261,000 | |||||||||||||||||||
Total | ($2,512,000) | -15,588,000 | -18,811,000 | 6,778,000 | $0 | $0 | $0 |
Income_Taxes_Details_2
Income Taxes (Details 2) | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Deferred tax assets: | |||
Net operating loss carry forward | 24,615 | 20,057 | |
Deferred rent | 6,297 | 5,180 | |
Accrued payroll and other expense | 2,976 | 6,391 | |
Property and equipment impairment | 4,877 | 3,394 | |
Others | 358 | 213 | |
Sub-total | 39,123 | 35,235 | |
Valuation allowance | -4,700 | -29,379 | -25,764 |
Total deferred tax assets | 9,744 | 9,471 | |
Deferred tax assets are analyzed as: | |||
Current | 150 | 930 | 1,879 |
Non-current | 1,421 | 8,814 | 7,592 |
Total deferred tax assets | 9,744 | 9,471 |
Income_Taxes_Details_3
Income Taxes (Details 3) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | ||
Income Taxes | ||||
Tax loss carry forwards | $15,900 | 98,461 | ||
Deferred Tax Assets, Valuation Allowance | $4,700 | 29,379 | 25,764 | |
Reconciliation of the PRC statutory tax rate to the effective tax rate | ||||
PRC statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% |
Effect of different tax rate of Group entities operating in other jurisdictions or under different tax status (as a percent) | 11.00% | 11.00% | 7.90% | 7.10% |
Tax effect of non-deductible expenses, net (as a percent) | 2.30% | 2.30% | 3.60% | 1.00% |
Effect of tax holidays (as a percent) | -17.70% | -17.70% | -18.70% | -17.40% |
Effect of change in valuation allowance (as a percent) | 6.80% | 6.80% | 12.90% | 11.30% |
One time tax levy (as a percent) | -0.20% | -0.20% | 1.50% | -37.00% |
DTA movement due to tax loss expiration | 1.90% | 1.90% | 0.00% | 0.00% |
Others (as a percent) | 0.00% | 0.00% | 0.00% | 0.20% |
Effective EIT rate (as a percent) | 29.10% | 29.10% | 32.20% | -9.80% |
Income_Taxes_Details_4
Income Taxes (Details 4) (CNY) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes | |||
The aggregate amount effect | 9,448 | 10,894 | 12,020 |
Per share effect - basic (in RMB per share) | 0.09 | 0.1 | 0.12 |
Per share effect - diluted (in RMB per share) | 0.09 | 0.1 | 0.11 |
Related_Party_Transactions_and2
Related Party Transactions and Balances (Details) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transactions and Balances | |||
Rental expenses | 146,231 | 131,327 | 123,549 |
Amount due from related parties | 58 | ||
Founders | |||
Related Party Transactions and Balances | |||
Rental expenses | 1,647 | 1,260 | 1,040 |
Shareholders and key management personnel | |||
Related Party Transactions and Balances | |||
Amount due from related parties | 58 |
Mainland_China_Contribution_Pl1
Mainland China Contribution Plan And Profit Appropriation (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
Mainland China Contribution Plan And Profit Appropriation | ||||
Total accumulated monthly contributions for employee benefit plan | $9,800 | 60,824 | 51,875 | 44,596 |
Ongoing obligations to the employees subsequent to the contributions to the PRC plan | $0 |
Restricted_Net_Assets_Details
Restricted Net Assets (Details) (PRC subsidiaries) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
USD ($) | CNY | CNY | |
Restricted Net Assets | |||
Allocation of after-tax profits to general reserve fund, percentage | 10.00% | 10.00% | |
Limit of general reserve fund as a percentage of registered capital, after which allocations to general reserve fund are no longer required | 50.00% | 50.00% | |
Reserve funds | $12,700 | 78,513 | 70,059 |
Amount of restricted share capital of subsidiaries | $97,300 | 603,466 |
Net_Income_Per_Share_Details
Net Income Per Share (Details) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | |
Net Income Per Share | ||||
Net income attributable to ordinary shareholders - basic and diluted | $6,117 | 37,954 | 39,550 | 75,636 |
Weighted average ordinary shares outstanding - basic | 106,603,255 | 106,603,255 | 104,996,276 | 104,115,531 |
Options (in shares) | 1,358,453 | 1,358,453 | 983,097 | 924,879 |
Weighted average ordinary shares outstanding - diluted | 107,961,708 | 107,961,708 | 105,979,373 | 105,040,410 |
Net income (loss) per share - basic (in RMB per share) | $0.06 | 0.36 | 0.38 | 0.73 |
Net income (loss) per share - diluted (in RMB per share) | $0.06 | 0.35 | 0.37 | 0.72 |
Net_Income_Loss_Per_Share_Deta
Net Income (Loss) Per Share (Details 2) (Shares issuable upon the assumed exercise of options or vesting of restricted shares) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Shares issuable upon the assumed exercise of options or vesting of restricted shares | |||
Net Income (loss) Per Share | |||
Securities not included in the computation of diluted earnings per share as their effects would have been anti-dilutive (in shares) | 142,788 | 0 | 0 |
Sharebased_Compensation_Detail
Share-based Compensation (Details) (Options) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2011 | |
Options | |||
Share-based Compensation | |||
Shares authorized | 10,000,000 | 7,720,000 | |
Requisite service period | 5 years | ||
Contractual term | 10 years | ||
Vesting period | 5 years | ||
Percentage of awards vesting on the first anniversary | 20.00% | ||
Percentage of awards vesting ratably over the remaining period | 80.00% | ||
Vesting period of remaining awards | 48 months | ||
Options outstanding (in shares) | 1,293,856 | 1,582,080 | |
Non-vested restricted shares outstanding (in shares) | 1,107,192 | ||
Ordinary shares available for future grants | 3,246,536 |
Sharebased_Compensation_Detail1
Share-based Compensation (Details 2) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation | |||
Share-based compensation | 20,685 | 15,894 | 15,700 |
Restaurant wages and related expenses | |||
Share-based Compensation | |||
Share-based compensation | 4,419 | 4,900 | 3,928 |
Selling, general and administrative | |||
Share-based Compensation | |||
Share-based compensation | 16,266 | 10,994 | 11,772 |
Sharebased_Compensation_Detail2
Share-based Compensation (Details 3) | 12 Months Ended | 0 Months Ended | |||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 24, 2014 | Feb. 26, 2014 | Feb. 26, 2014 |
USD ($) | CNY | CNY | CNY | Options | Options | Options | Options | Options | Options | Options | Options | Non-vested restricted shares | Non-vested restricted shares | Non-vested restricted shares | Non-vested restricted shares | Employee Stock Option | Employee Stock Option | Executive Employees Stock Option | |
USD ($) | CNY | CNY | CNY | Minimum | Minimum | Maximum | Maximum | USD ($) | CNY | CNY | CNY | ||||||||
Share-based Compensation | |||||||||||||||||||
Weighted-average grant date fair value (in RMB / dollars per share) | $1.06 | 6.53 | 4.56 | 7.4 | |||||||||||||||
Significant assumptions used in estimating fair values of stock options | |||||||||||||||||||
Suboptimal exercise factor | 2 | 2 | 2 | 2 | 2.5 | 2.5 | |||||||||||||
Risk-free interest rate (as a percent) | 4.34% | 4.34% | 3.59% | 3.33% | 3.69% | 3.50% | |||||||||||||
Volatility (as a percent) | 38.70% | 38.70% | 39.50% | 40.60% | 46.70% | 41.20% | |||||||||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Life of option | 10 years | 10 years | 10 years | 10 years | |||||||||||||||
Summary of option activities | |||||||||||||||||||
Outstanding at the beginning of the period (in shares) | 1,582,080 | 1,582,080 | |||||||||||||||||
Granted (in shares) | 35,000 | 35,000 | 35,000 | ||||||||||||||||
Cancellation and termination (in shares) | -22,824 | -22,824 | |||||||||||||||||
Exercised (in shares) | -300,400 | -300,400 | |||||||||||||||||
Outstanding at the end of the period (in shares) | 1,293,856 | 1,293,856 | |||||||||||||||||
Vested and expected to vest at the end of the period (in shares) | 1,235,435 | 1,235,435 | |||||||||||||||||
Options exercisable at the end of the period (in shares) | 1,095,520 | 1,095,520 | |||||||||||||||||
Weighted Average Exercise Price | |||||||||||||||||||
Outstanding at the beginning of the period (in dollars per share) | $1.46 | ||||||||||||||||||
Granted (in dollars per share) | $2.36 | ||||||||||||||||||
Cancellation and termination (in dollars per share) | $1.90 | ||||||||||||||||||
Exercised (in dollars per share) | $1 | ||||||||||||||||||
Outstanding at the end of the period (in dollars per share) | $1.04 | ||||||||||||||||||
Vested and expected to vest at the end of the period (in dollars per share) | $1.04 | ||||||||||||||||||
Options exercisable at the end of the period (in dollars per share) | $1.01 | ||||||||||||||||||
Weighted Average Remaining Contractual Term | |||||||||||||||||||
Outstanding at the beginning of the period | 5 years 3 months 18 days | 5 years 3 months 18 days | 6 years 1 month 6 days | ||||||||||||||||
Outstanding at the end of the period | 5 years 3 months 18 days | 5 years 3 months 18 days | 6 years 1 month 6 days | ||||||||||||||||
Vested and expected to vest at the end of the period | 5 years 3 months 18 days | 5 years 3 months 18 days | |||||||||||||||||
Options exercisable at the end of the period | 5 years 1 month 6 days | 5 years 1 month 6 days | |||||||||||||||||
Aggregate Intrinsic Value of Options | |||||||||||||||||||
Outstanding at the beginning of the period (in dollars) | $2,037 | ||||||||||||||||||
Outstanding at the end of the period (in dollars) | 592 | ||||||||||||||||||
Vested and expected to vest at the end of the period (in dollars) | 566 | ||||||||||||||||||
Options exercisable at the end of the period (in dollars) | 516 | ||||||||||||||||||
Additional disclosures | |||||||||||||||||||
Unrecognized compensation expense related to unvested share-based compensation arrangements (in dollars) | 200 | 944 | 1,200 | 7,651 | |||||||||||||||
Weighted-average period for recognition of unrecognized compensation expense | 8 months 9 days | 8 months 9 days | 11 months 1 day | 11 months 1 day | |||||||||||||||
Total intrinsic value of options exercised (in dollars) | 200 | 1,389 | 8,614 | 928 | |||||||||||||||
Fair value of shares vested (in dollars) | $1,400 | 8,441 | 8,001 | 4,765 | |||||||||||||||
Summary of non-vested restricted shares activity | |||||||||||||||||||
Non-vested restricted shares outstanding at the beginning of the period (in shares) | 1,449,446 | 1,449,446 | |||||||||||||||||
Granted (in shares) | 521,660 | 521,660 | 193,660 | 328,000 | |||||||||||||||
Vested (in shares) | -755,342 | -755,342 | |||||||||||||||||
Cancellation and termination (in shares) | -108,572 | -108,572 | |||||||||||||||||
Non-vested restricted shares outstanding at the end of the period (in shares) | 1,107,192 | 1,107,192 | 1,107,192 | 1,107,192 | |||||||||||||||
Weighted-Average Grant Date Fair Value | |||||||||||||||||||
Non-vested restricted shares outstanding at the beginning of the period (in dollars per share) | $2.64 | ||||||||||||||||||
Granted (in dollars per share) | $3.04 | ||||||||||||||||||
Vested (in dollars per share) | $2.83 | ||||||||||||||||||
Cancellation and termination (in dollars per share) | $2.58 | ||||||||||||||||||
Non-vested restricted shares outstanding at the end of the period (in dollars per share) | $2.71 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
USD ($) | CNY | CNY | CNY | item | Nonrecurring Fair Value Measurements | Nonrecurring Fair Value Measurements | Nonrecurring Fair Value Measurements | Nonrecurring Fair Value Measurements | Nonrecurring Fair Value Measurements | |
CNY | CNY | item | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | ||||||
CNY | CNY | |||||||||
Fair Value Measurements | ||||||||||
Property and Equipment | 105,451 | 111,587 | 105,451 | 111,587 | ||||||
Fair Value Goodwill | 5,139 | 5,139 | ||||||||
Total Losses | 7,864 | 8,594 | ||||||||
Goodwill-Total losses | 68 | 424 | 0 | 456 | 424 | 0 | ||||
Property and Equipment carrying amount | 113,315 | 120,181 | ||||||||
Asset Impairment Charges | $1,267 | 7,864 | 8,594 | 13,820 | 7,864 | 8,594 | ||||
Number of Restaurants Underperformed Requiring Goodwill Write Down | 1 | 1 |
SCHEDULE_I_CONDENSED_FINANCIAL1
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details) | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | USD ($) | CNY | USD ($) | CNY | CNY | CNY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY |
CNY | CNY | CNY | CNY | |||||||
ASSETS | ||||||||||
Cash and cash equivalents | $31,195 | 193,554 | $60,035 | 372,493 | 229,367 | 327,546 | 31,676 | 33,090 | 28,171 | 32,617 |
Due from subsidiaries | 3,364 | 2,391 | ||||||||
Prepaid expenses and other current assets | 4,892 | 30,350 | 22,714 | 1,917 | 653 | |||||
Investment in subsidiaries | 968,498 | 908,171 | ||||||||
Total assets | 190,463 | 1,181,746 | 1,106,436 | 1,005,455 | 944,305 | |||||
LIABILITIES AND EQUITY | ||||||||||
Due to subsidiaries | 8,322 | 8,322 | ||||||||
Prepaid subscription | 12 | 12 | 153 | |||||||
Accrued expenses | 2,958 | 3,373 | ||||||||
Total liabilities | 30,234 | 187,583 | 173,979 | 11,292 | 11,848 | |||||
Equity: | ||||||||||
Ordinary shares, par value $.001, 1,000,000,000 shares authorized, 106,296,674 and 107,352,416 shares issued and outstanding as of December 31, 2013 and 2014, respectively | 123 | 763 | 756 | 763 | 756 | |||||
Additional paid-in capital | 123,591 | 766,837 | 743,219 | 766,837 | 743,219 | |||||
Retained earnings | 37,967 | 235,572 | 197,618 | 235,572 | 197,618 | |||||
Accumulated other comprehensive loss | -1,452 | -9,009 | -9,136 | -9,009 | -9,136 | |||||
Total equity | 160,229 | 994,163 | 932,457 | 870,128 | 777,904 | 994,163 | 932,457 | 871,295 | 779,078 | |
Total liabilities and equity | $190,463 | 1,181,746 | 1,106,436 | 1,005,455 | 944,305 |
SCHEDULE_I_CONDENSED_FINANCIAL2
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONDENSED FINANCIAL INFORMATION OF PARENT | ||
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares issued | 107,352,416 | 106,296,674 |
Ordinary shares, shares outstanding | 107,352,416 | 106,296,674 |
PARENT COMPANY | ||
CONDENSED FINANCIAL INFORMATION OF PARENT | ||
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares issued | 107,352,416 | 106,296,674 |
Ordinary shares, shares outstanding | 107,352,416 | 106,296,674 |
SCHEDULE_I_CONDENSED_FINANCIAL3
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details 3) | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | |
CNY | CNY | CNY | |||||
CONDENSED FINANCIAL INFORMATION OF PARENT | |||||||
Operating costs and expenses | -23,052 | -18,991 | -19,505 | ||||
Income from operations | 3,636 | 22,560 | 33,833 | 27,381 | -23,052 | -18,991 | -19,505 |
Other income, net | 733 | 4,549 | 893 | 19,808 | 673 | 956 | 472 |
Equity in earnings of subsidiaries | 60,333 | 57,585 | 94,669 | ||||
Net income attributable to Country Style Cooking Restaurant Chain Co., Ltd. | 6,117 | 37,954 | 39,550 | 75,636 | 37,954 | 39,550 | 75,636 |
Other comprehensive income (loss), net of tax: | |||||||
Foreign currency translation adjustments | 20 | 127 | -810 | -62 | 127 | -1,977 | -69 |
Comprehensive income | $6,137 | 38,081 | 38,740 | 75,574 | 38,081 | 37,573 | 75,567 |
SCHEDULE_I_CONDENSED_FINANCIAL4
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details 4) | 12 Months Ended | ||||||||||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | Ordinary Shares | Ordinary Shares | Ordinary Shares | Additional Paid in Capital | Additional Paid in Capital | Additional Paid in Capital | Retained Earnings | Retained Earnings | Retained Earnings | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | |
CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | Ordinary Shares | Ordinary Shares | Ordinary Shares | Additional Paid in Capital | Additional Paid in Capital | Additional Paid in Capital | Retained Earnings | Retained Earnings | Retained Earnings | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | |||||
CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | ||||||||||||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||||||||||||||
Balance | 932,457 | 870,128 | 777,904 | 756 | 745 | 741 | 743,219 | 719,641 | 702,995 | 197,618 | 158,068 | 82,432 | -9,136 | -8,326 | -8,264 | 932,457 | 871,295 | 779,078 | 756 | 745 | 741 | 743,219 | 719,641 | 702,995 | 197,618 | 158,068 | 82,432 | -9,136 | -7,159 | -7,090 | |
Balance (in shares) | 106,296,674 | 106,296,674 | 106,296,674 | 104,404,831 | 103,844,239 | 106,296,674 | 106,296,674 | 104,404,831 | 103,844,239 | ||||||||||||||||||||||
Net income | 6,117 | 37,954 | 39,550 | 75,636 | 37,954 | 39,550 | 75,636 | 37,954 | 39,550 | 75,636 | 37,954 | 39,550 | 75,636 | ||||||||||||||||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares | 2,940 | 7,695 | 950 | 7 | 11 | 4 | 2,933 | 7,684 | 946 | 2,940 | 7,695 | 950 | 7 | 11 | 4 | 2,933 | 7,684 | 946 | |||||||||||||
Issuance of ordinary shares upon exercise of options and vesting of restricted shares (in shares) | 1,055,742 | 1,891,843 | 560,592 | 1,055,742 | 1,891,843 | 560,592 | |||||||||||||||||||||||||
Share-based compensation | 20,685 | 15,894 | 15,700 | 20,685 | 15,894 | 15,700 | 20,685 | 15,894 | 15,700 | 20,685 | 15,894 | 15,700 | |||||||||||||||||||
Foreign currency translation adjustments | 20 | 127 | -810 | -62 | 127 | -810 | -62 | 127 | -1,977 | -69 | 127 | -1,977 | -69 | ||||||||||||||||||
Balance | $160,229 | 994,163 | 932,457 | 870,128 | 763 | 756 | 745 | 766,837 | 743,219 | 719,641 | 235,572 | 197,618 | 158,068 | -9,009 | -9,136 | -8,326 | 994,163 | 932,457 | 871,295 | 763 | 756 | 745 | 766,837 | 743,219 | 719,641 | 235,572 | 197,618 | 158,068 | -9,009 | -9,136 | -7,159 |
Balance (in shares) | 107,352,416 | 107,352,416 | 106,296,674 | 107,352,416 | 106,296,674 | 104,404,831 | 107,352,416 | 106,296,674 | 107,352,416 | 106,296,674 | 104,404,831 |
SCHEDULE_I_CONDENSED_FINANCIAL5
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details 5) | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | PARENT COMPANY | PARENT COMPANY | PARENT COMPANY | |
CNY | CNY | CNY | |||||
Cash flows from operating activities: | |||||||
Net income attributable to Country Style Cooking Restaurant Chain Co., Ltd. | $6,117 | 37,954 | 39,550 | 75,636 | 37,954 | 39,550 | 75,636 |
Equity in earnings of subsidiaries | -60,333 | -57,585 | -94,669 | ||||
Adjustments to reconcile net income(loss) to net cash used in operating activities: | |||||||
Share-based compensation | 3,334 | 20,685 | 15,894 | 15,700 | 20,685 | 15,894 | 15,700 |
Decrease (Increase) in due from subsidiaries | -973 | -953 | -1,477 | ||||
Increase (Decrease) in due to subsidiaries | -46 | -46 | |||||
Decrease in prepaid expenses and other current assets | -1,230 | -7,634 | -878 | -6,759 | -1,264 | 1,221 | 697 |
Increase (Decrease) in accrued liabilities | -415 | -1,929 | -1,368 | ||||
Net cash provided by operating activities | 24,528 | 152,196 | 141,422 | 173,730 | -4,346 | -3,848 | -5,527 |
Cash flows from financing activities: | |||||||
Proceeds from early exercise of employee stock options | 451 | 2,796 | 7,467 | 693 | 2,796 | 7,467 | 693 |
Net cash provided by financing activities | 451 | 2,796 | 7,467 | 693 | 2,796 | 7,467 | 693 |
Effect of exchange rate change | 21 | 128 | -817 | -62 | 136 | 1,300 | 388 |
Net increase (decrease) in cash and cash equivalents | -28,840 | -178,939 | 143,126 | -98,179 | -1,414 | 4,919 | -4,446 |
Cash and cash equivalents, beginning of year | 60,035 | 372,493 | 229,367 | 327,546 | 33,090 | 28,171 | 32,617 |
Cash and cash equivalents, end of year | $31,195 | 193,554 | 372,493 | 229,367 | 31,676 | 33,090 | 28,171 |
SCHEDULE_I_CONDENSED_FINANCIAL6
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF COUNTRY STYLE COOKING RESTAURANT CHAIN CO., LTD. (Details 6) (PARENT COMPANY) | Dec. 31, 2014 |
PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF PARENT | |
Threshold percentage of restricted net assets for disclosure of condensed financial information | 25.00% |