Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 09, 2020 | Jun. 25, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HABT | ||
Entity Registrant Name | Habit Restaurants, Inc. | ||
Entity Central Index Key | 0001617977 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity File Number | 001-36749 | ||
Entity Tax Identification Number | 36-4791171 | ||
Entity Address, Address Line One | 17320 Red Hill Avenue | ||
Entity Address, Address Line Two | Suite 140 | ||
Entity Address, City or Town | Irvine | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 9261 | ||
City Area Code | 949 | ||
Local Phone Number | 851-8881 | ||
Entity Public Float | $ 203 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | DE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE None. | ||
Class A Common Stock [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 20,792,955 | ||
Class B Common Stock [Member] | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,334,681 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 34,104 | $ 24,519 |
Restricted cash | 270 | 375 |
Accounts receivable | 5,422 | 7,648 |
Inventory | 2,186 | 2,019 |
Prepaid expenses and other current assets | 7,489 | 3,383 |
Total current assets | 49,471 | 37,944 |
Property and equipment, net | 151,169 | 160,746 |
Operating lease right-of-use assets | 163,980 | |
Tradenames | 12,500 | 12,500 |
Goodwill | 9,967 | 9,967 |
Deposits and other assets, net | 4,463 | 3,531 |
Deferred tax assets | 86,678 | 87,918 |
Total long-term assets | 428,757 | 274,662 |
Total assets | 478,228 | 312,606 |
Liabilities | ||
Accounts payable | 15,958 | 15,034 |
Employee-related accruals | 19,716 | 12,587 |
Accrued expenses | 7,162 | 5,799 |
Income tax payable | 104 | |
Amounts payable to related parties under Tax Receivable Agreement, current portion | 1,215 | 552 |
Sales taxes payable | 4,041 | 3,072 |
Operating lease liabilities, current portion | 22,799 | |
Deferred rent, current portion | 1,884 | |
Deferred franchise income, current portion | 281 | 230 |
Total current liabilities | 71,172 | 39,262 |
Operating lease liabilities, net of current portion | 166,567 | |
Deferred rent, net of current portion | 20,598 | |
Deemed landlord financing | 19,804 | |
Deferred franchise income, net of current portion | 1,160 | 806 |
Amounts payable to related parties under Tax Receivable Agreement, net of current portion | 81,567 | 82,142 |
Total liabilities | 320,466 | 162,612 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Additional paid-in capital | 120,366 | 117,053 |
Retained earnings | 11,108 | 6,921 |
The Habit Restaurants, Inc. stockholders’ equity | 131,735 | 124,235 |
Non-controlling interests | 26,027 | 25,759 |
Total stockholders’ equity | 157,762 | 149,994 |
Total liabilities and stockholders’ equity | 478,228 | 312,606 |
Class A Common Stock [Member] | ||
Stockholders’ equity | ||
Common stock value | 208 | 207 |
Total stockholders’ equity | 208 | 207 |
Class B Common Stock [Member] | ||
Stockholders’ equity | ||
Common stock value | 53 | 54 |
Total stockholders’ equity | $ 53 | $ 54 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 |
Common stock, shares authorized | 140,000,000 | |||
Class A Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 20,779,567 | 20,667,718 | ||
Common stock, shares outstanding | 20,779,567 | 20,667,718 | 20,378,452 | 20,178,937 |
Class B Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 5,336,807 | 5,381,550 | ||
Common stock, shares outstanding | 5,336,807 | 5,381,550 | 5,646,572 | 5,821,122 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |||
Revenue | $ 466,059 | [1] | $ 402,147 | [1] | $ 331,386 |
Restaurant operating costs (excluding depreciation and amortization) | |||||
Food and paper cost | $ 138,831 | $ 119,543 | $ 101,683 | ||
Type Of Cost Good Or Service Extensible List | us-gaap:FoodAndBeverageMember | us-gaap:FoodAndBeverageMember | us-gaap:FoodAndBeverageMember | ||
Labor and related expenses | $ 155,557 | $ 135,023 | $ 110,785 | ||
Occupancy and other operating expenses | 91,996 | 72,858 | 56,796 | ||
General and administrative expenses | 42,442 | 38,918 | 32,559 | ||
Transaction and exchange related expenses | 269 | 130 | 494 | ||
Depreciation and amortization expense | 27,863 | 24,490 | 18,761 | ||
Pre-opening costs | 2,143 | 2,850 | 3,062 | ||
Asset impairment and restaurant closure charges | 1,001 | 3,082 | |||
Loss on disposal of assets | 210 | 97 | 81 | ||
Total operating expenses | 460,312 | 396,991 | 324,221 | ||
Income from operations | 5,747 | [1] | 5,156 | [1] | 7,165 |
Other (income) expense | |||||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||
Interest (income) expense, net | (263) | 1,018 | 588 | ||
Income before income taxes | 5,638 | 2,583 | 63,808 | ||
Provision (benefit) for income taxes | 961 | (1,057) | 65,388 | ||
Net income (loss) | 4,677 | [1] | 3,640 | [1] | (1,580) |
Less: net income attributable to non-controlling interests | (1,200) | [1] | (863) | [1] | (1,539) |
Net income (loss) attributable to The Habit Restaurants, Inc. | $ 3,477 | [1] | $ 2,777 | [1] | $ (3,119) |
Class A Common Stock [Member] | |||||
Net income (loss) attributable to The Habit Restaurants, Inc. per share Class A common stock: | |||||
Basic | $ 0.17 | [1] | $ 0.14 | [1] | $ (0.15) |
Diluted | $ 0.17 | [1] | $ 0.13 | [1] | $ (0.15) |
Weighted average shares of Class A common stock outstanding: | |||||
Basic | 20,736,551 | 20,538,637 | 20,285,780 | ||
Diluted | 20,786,539 | 20,645,546 | 20,285,780 | ||
[1] | Certain totals may not sum exactly due to rounding. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A Common Stock [Member] | Class B Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Non-controlling Interests [Member] | |
Stockholders' equity at Dec. 27, 2016 | $ 143,753 | $ 202 | $ 58 | $ 110,056 | $ 7,263 | $ 26,174 | |
Stockholders' equity, Shares at Dec. 27, 2016 | 20,178,937 | 5,821,122 | |||||
Net income (loss) | (1,580) | (3,119) | 1,539 | ||||
Deferred tax assets | 568 | 568 | |||||
Tax distributions | (920) | (920) | |||||
Other distributions | (190) | (190) | |||||
Exchanges | $ 2 | $ (2) | |||||
Exchanges, Shares | 169,216 | (169,216) | |||||
Restricted stock units vested, shares | 30,299 | ||||||
Non-controlling interests adjustment | 1,013 | (1,013) | |||||
Forfeiture of Class B common stock | (5,334) | ||||||
Stock-based compensation | 2,518 | 1,838 | 680 | ||||
Stockholders' equity at Dec. 26, 2017 | 144,149 | $ 204 | $ 56 | 113,475 | 4,144 | 26,270 | |
Stockholders' equity, Shares at Dec. 26, 2017 | 20,378,452 | 5,646,572 | |||||
Net income (loss) | 3,640 | [1] | 2,777 | 863 | |||
Deferred tax assets | (89) | (89) | |||||
Tax distributions | (288) | (288) | |||||
Other distributions | (132) | (132) | |||||
Exchanges | $ 2 | $ (2) | |||||
Exchanges, Shares | 232,801 | (232,801) | |||||
Restricted stock units vested | $ 1 | (1) | |||||
Restricted stock units vested, shares | 56,465 | ||||||
Non-controlling interests adjustment | 1,484 | (1,484) | |||||
Forfeiture of Class B common stock | (32,221) | ||||||
Stock-based compensation | 2,714 | 2,184 | 530 | ||||
Stockholders' equity at Dec. 25, 2018 | 149,994 | $ 207 | $ 54 | 117,053 | 6,921 | 25,759 | |
Stockholders' equity, Shares at Dec. 25, 2018 | 20,667,718 | 5,381,550 | |||||
Cumulative effect of accounting changes, net of tax at Dec. 25, 2018 | 965 | 710 | 255 | ||||
Net income (loss) | 4,677 | [1] | 3,477 | 1,200 | |||
Deferred tax assets | (50) | (50) | |||||
Tax distributions | (862) | (862) | |||||
Other distributions | (104) | (104) | |||||
Exchanges, Shares | 43,082 | (43,082) | |||||
Restricted stock units vested, net of shares withheld for tax withholding | (190) | $ 1 | (191) | ||||
Restricted stock units vested, net of shares withheld for tax withholding, shares | 68,767 | ||||||
Non-controlling interests adjustment | 459 | (459) | |||||
Forfeiture of Class B common stock | (1,661) | ||||||
Stock-based compensation | 3,332 | 3,095 | 237 | ||||
Stockholders' equity at Dec. 31, 2019 | $ 157,762 | $ 208 | $ 53 | $ 120,366 | $ 11,108 | $ 26,027 | |
Stockholders' equity, Shares at Dec. 31, 2019 | 20,779,567 | 5,336,807 | |||||
[1] | Certain totals may not sum exactly due to rounding. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |||
Cash flows from operating activities: | |||||
Net income (loss) | $ 4,677 | [1] | $ 3,640 | [1] | $ (1,580) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Depreciation and amortization expense | 27,863 | 24,490 | 18,761 | ||
Amortization of financing fees | 81 | 133 | 53 | ||
Stock-based compensation | 3,332 | 2,714 | 2,518 | ||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||
Asset impairment and restaurant closure charges | 131 | 3,082 | |||
Loss on disposal of assets | 210 | 97 | 81 | ||
Deferred income taxes | 961 | (1,057) | 65,388 | ||
Operating lease right-of-use assets | (14,217) | ||||
Operating lease liabilities | 14,963 | ||||
Deferred rent | (533) | 485 | |||
Changes in assets and liabilities: | |||||
Accounts receivable | 2,200 | 3,322 | 1,484 | ||
Inventory | (168) | (286) | (214) | ||
Prepaid expenses | (4,102) | (1,538) | (190) | ||
Deposits and other assets | (1,012) | (267) | (276) | ||
Accounts payable | 649 | 2,166 | 1,517 | ||
Employee-related accruals | 7,129 | 5,123 | 1,104 | ||
Accrued expenses | 1,395 | (854) | 1,272 | ||
Income taxes payable | (10) | (13) | (1) | ||
Sales taxes payable | 971 | 322 | 436 | ||
Net cash provided by operating activities | 45,425 | 42,096 | 33,607 | ||
Cash flows from investing activities: | |||||
Purchase of property and equipment | (34,360) | (43,399) | (46,037) | ||
Proceeds on sale of assets | 12 | ||||
Net cash used in investing activities | (34,360) | (43,399) | (46,025) | ||
Cash flows from financing activities: | |||||
Tax receivable agreement payments to related parties | (427) | (1,438) | (2,040) | ||
Tax distributions to LLC members | (862) | (288) | (920) | ||
Other distributions to LLC members | (104) | (132) | (190) | ||
Payments on deemed landlord financing | (220) | (82) | |||
Payments of tax withholding related to restricted stock vesting | (191) | ||||
Financing fees on long-term debt | (1) | (2) | (265) | ||
Net cash used in financing activities | (1,585) | (2,080) | (3,497) | ||
Net change in cash and cash equivalents | 9,480 | (3,383) | (15,915) | ||
Cash and cash equivalents and restricted cash, beginning of period | 24,894 | 28,277 | 44,192 | ||
Cash and cash equivalents and restricted cash, end of period | 34,374 | 24,894 | 28,277 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||
Cash paid for interest | 15 | 1,120 | 890 | ||
Cash paid for income taxes, net | 10 | 13 | 1 | ||
NON-CASH FINANCING | |||||
Deemed landlord financing | 6,325 | 7,746 | |||
Right-of-use assets obtained in exchange for operating lease liabilities | 33,283 | ||||
Unpaid purchase of property and equipment | $ 3,295 | $ 2,762 | $ 4,063 | ||
[1] | Certain totals may not sum exactly due to rounding. |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1—Nature of Operations and Basis of Presentation The consolidated financial statements of The Habit Restaurants, Inc. include the accounts of The Habit Restaurants, LLC and its subsidiaries (collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The Habit Restaurants, Inc. was formed as a Delaware corporation on July 24, 2014, as a holding company for the purposes of facilitating an initial public offering (the “IPO”) of shares of Class A common stock. The Company acquired, by merger, entities that were members of The Habit Restaurants, LLC. The Company accounted for the merger as a non-substantive transaction in a manner similar to a transaction between entities under common control pursuant to Accounting Standards Codification (“ASC”) ASC 805-50 Transactions between Entities under Common Control, During fiscal year 2019, 43,082 common units in The Habit Restaurants, LLC (“LLC Units”) were exchanged by the existing owners of The Habit Restaurants, LLC (the “Continuing LLC Owners”), for shares of Class A common stock, and a corresponding number of shares of Class B common stock were then cancelled in connection with such exchanges. In addition, during fiscal year 2019, 86,856 restricted stock units vested, of which 18,089 were withheld to satisfy tax withholding obligations, 1,661 LLC Units were forfeited; and a corresponding number of shares of Class B common stock were then cancelled in connection with the forfeitures. As a result of these exchanges, vesting of restricted stock units, withholdings for tax obligations and forfeitures, as of December 31, 2019, The Habit Restaurants, Inc. directly or indirectly held 20,779,567 LLC Units, representing a 79.6% economic interest in The Habit Restaurants, LLC, and continues to exercise exclusive control over the Habit Restaurants, LLC, as its sole managing member. In connection with the recapitalization and the Company’s IPO, The Habit Restaurants, LLC limited liability company agreement (the “LLC Agreement”) was amended and restated to, among other things, create a single new class of non-voting LLC Units. The existing owners of The Habit Restaurants, LLC continue to hold LLC Units, and such existing owners (other than The Habit Restaurants, Inc. and its wholly-owned subsidiaries) were issued a number of shares of our Class B common stock equal to the number of LLC Units held by them. These LLC Units continue to be subject to any vesting, forfeiture, repurchase or similar provisions pursuant to the Pre-IPO agreement. Each share of Class B common stock provides its holder with no economic rights but entitles the holder to one vote on matters presented to The Habit Restaurants, Inc.’s stockholders. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law. The Class B common stock is not publicly traded and does not entitle its holders to receive dividends or distributions upon a liquidation, dissolution or winding up of The Habit Restaurants, Inc. As the sole managing member of The Habit Restaurants, LLC, the Company has the right to determine when distributions will be made to the unit holders of The Habit Restaurants, LLC, and the amount of any such distributions (in each case subject to the requirements with respect to the tax distributions described below). If The Habit Restaurants, Inc. authorizes a distribution, such distribution will be made to the unit holders of The Habit Restaurants, LLC, including The Habit Restaurants, Inc., pro rata in accordance with their respective ownership of the LLC Units (other than, for clarity, certain non-pro rata distributions to the Company to satisfy certain of the Company’s obligations). Notwithstanding the foregoing, The Habit Restaurants, LLC bears the cost of or reimburses The Habit Restaurants, Inc. for certain expenses incurred by The Habit Restaurants, Inc. The Company also entered into a tax receivable agreement (“TRA”). The Habit Restaurants, LLC is treated by its members as a partnership for federal and applicable state income tax purposes and, as such, generally is not expected to be subject to income tax (except that it may be required to withhold and remit tax as a withholding agent). Instead, taxable income is allocated to holders of LLC Units, including the Company. Accordingly, the Company incurs income taxes on its allocable share of any net taxable income of The Habit Restaurants, LLC and also incurs expenses related to its operations. Pursuant to the LLC Agreement, The Habit Restaurants, LLC is required to make tax distributions to the holders of LLC Units, except that The Habit Restaurants, LLC’s ability to make such distributions may be subject to various limitations and restrictions, including the operating results of its subsidiaries, its cash requirements and financial condition, the applicable provisions of Delaware law that may limit the amount of funds available for distribution to its members, compliance by The Habit Restaurants, LLC and its subsidiaries with restrictions, covenants and financial ratios related to existing or future indebtedness, and other agreements entered into by The Habit Restaurants, LLC or its subsidiaries with third parties. In addition to tax expenses, The Habit Restaurants, Inc. incurs expenses related to its operations, plus payments under the TRA, which the Company expects will be significant. The Company intends to cause The Habit Restaurants, LLC to make distributions or, in the case of certain expenses, payments in an amount sufficient to allow The Habit Restaurants, Inc. to pay its taxes and operating expenses, including distributions to fund any ordinary course payments due under the TRA. Under the terms of the Company’s LLC Agreement, no member shall be obligated personally for any debt, obligation, or liability of the Company. The Company is headquartered in Irvine, California, and managed and operated 241 fast casual restaurants as “The Habit Burger Grill” in California, Arizona, Utah, New Jersey, Florida, Maryland, Idaho, Virginia, North Carolina, South Carolina, Pennsylvania and Nevada and had a total workforce of 6,437 employees as of December 31, 2019. The restaurant’s menu includes charbroiled hamburgers, specialty sandwiches, fresh salads, shakes and malts. Additionally, with the formation of Franchise, the Company began franchising its restaurant concept. Franchise’s future operations are dependent upon the success of the Company’s restaurant concept. The Company had seven licensing and seven franchise agreements as of the period ended December 31, 2019. The Company has seven licensed locations and 23 franchise locations as of December 31, 2019. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company uses a 52- or 53-week fiscal year ending on the last Tuesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. The 2019 fiscal year contained 53 weeks, while all other years presented contain 52 weeks. Fiscal years 2019, 2018 and 2017 ended on December 31, 2019, December 25, 2018 and December 26, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Principles of Consolidation —The accompanying consolidated financial statements include the accounts of the Company, The Habit Restaurants, LLC and Franchise. All significant intercompany balances and transactions have been eliminated in consolidation. The Company had no operations prior to the IPO, other than (i) those incident to its formation, (ii) the merger transactions resulting in it holding interests, indirectly through its wholly-owned subsidiaries, the principal assets of which are equity interests in The Habit Restaurants, LLC (such interests collectively representing, as of December 31, 2019, a less than 20% interest in The Habit Restaurants, LLC) and (iii) the preparation of the IPO registration statement. 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 amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s significant estimates include estimates for impairment of property and equipment, workers’ compensation insurance reserves, stock-based compensation expense, income tax receivable liabilities and lease liabilities which are determined based on the present value of the minimum rental payments using the Company’s incremental borrowing rate in effect at the time of lease commencement. Reclassifications —Certain comparative prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications have no effect on previously reported net income or earnings per share. Segment Information —Management has determined that the Company has one reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer; our CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. Cash and Cash Equivalents —For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of ninety days or less to be cash equivalents. Accounts Receivable —Accounts receivable consist of credit card receivables, amounts due from vendors and landlords, catering events and franchisees/licensees. Amounts are stated at the amounts management expects to collect from balances outstanding at fiscal year-end; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. Inventory —Inventory consists of food, beverage, and paper goods and is stated at the lower of average cost or net realizable value. Concentration of Credit Risk —Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. At December 31, 2019 and December 25, 2018, the Company maintained approximately $9.7 million and $9.5 million, respectively, of its day-to-day operating cash balances with a major financial institution, of which $0.3 million and $0.4 million, respectively, represents restricted cash in an impound account for franchisees developing in states that require segregation of fees paid for stores not opened. At December 31, 2019 and December 25, 2018, the Company maintained approximately $0.4 million and $0.3 million, respectively, at the restaurant level for operating purposes. The remaining $24.3 million and $15.1 million at December 31, 2019 and December 25, 2018, respectively, was invested with a major financial institution and consisted entirely of U.S. Treasury instruments with a maturity of two months or less at the date of purchase. At December 31, 2019 and December 25, 2018 and at various times during the periods then ended, cash and cash equivalents balances were in excess of Federal Depository Insurance Corporation insured limits. While the Company monitors the cash balances in its operating accounts on a daily basis and adjusts the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Purchasing Concentration —The Company had four distributors covering different markets in fiscal year 2019. One of those distributors accounted for 45% of purchases for the fiscal year 2019. This vendor represented approximately 60% of accounts payable at December 31, 2019. That vendor accounted for 39% of purchases and 59% of accounts payable for the year ended December 25, 2018. The Company believes there are other available alternatives to the current vendors; however, the philosophy of the Company is to concentrate its purchases over a limited number of distributors in order to maintain quality, consistency, delivery requirements and cost controls and to increase the distributor’s commitment to the Company. The Company relies upon, and expects to continue to rely upon, several single source suppliers; however, management believes sufficient alternative suppliers exist in the marketplace. Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these instruments. Property and Equipment —Property and equipment is generally carried at cost, less accumulated depreciation. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included in our consolidated statement of operations. Depreciation on property and equipment is determined using the straight-line method over the assets’ estimated useful lives, ranging from three to 10 years. Leasehold improvements are amortized using the straight-line method over the shorter of the term of the lease, including reasonably assured extensions, or their estimated useful lives. Maintenance and repairs are charged against income as incurred and additions, renewals, and improvements are capitalized. Smallwares which consist of pots, pans and other cooking utensils are carried at cost and any replacements are expensed when acquired. Goodwill —Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Under Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other, goodwill and indefinite lived intangible assets are not amortized but tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. For purposes of applying ASC 350, management has determined that the Company has one reporting unit for the analysis. As of September of 2011, the Financial Accounting Standards Board issued an amendment of the FASB Accounting Standards Codification 350 that has been coined the ASC 350 Impairment Analysis – “Step 0.” Step 0 allows for an entity to first assess qualitative factors to determine whether it is necessary to perform further analysis. If determined necessary after the qualitative test, the Company would assess if the carrying amount exceeds the reporting unit’s fair value and the Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Accordingly, the Company has not recorded any impairment charges related to goodwill. Tradenames —Tradenames acquired in a business combination and determined to have an indefinite useful life are not amortized because there is no foreseeable limit to the cash flows generated by the intangible asset, and have no legal, contractual, regulatory, economic or competitive limiting factors. Tradenames are evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. The Company also annually evaluates any tradenames that are not being amortized to determine whether events and circumstances continue to support an indefinite useful life. If a tradename that is not being amortized is determined to have a finite useful life, the asset will be amortized prospectively over the estimated remaining useful life and tested for impairment in the same manner as a long-lived asset. Accordingly, the Company has not recorded any impairment charges related to tradenames. Impairment of Long-lived Assets —The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related assets to its estimated fair value. Fair value is generally based on a discounted cash flow analysis. Based on its review for fiscal year 2019, the Company does not believe that any indicators of impairment of its long-lived assets has occurred and accordingly no such write-downs have been recorded. The Company recorded a non-cash impairment charge of $3.1 million in fiscal year 2018 for three restaurants in the Orlando, Florida market. Restaurant Closure Charges —During fiscal year 2019, the Company closed three restaurants in the Orlando, Florida market, all of which were previously impaired during fiscal year 2018, and also decided not to move forward with the development of two restaurants. The Company recorded restaurant closure charges of $1.0 million during fiscal year 2019. Restaurant closure charges consist primarily of lease termination costs, rent expense related to closed restaurants, severance and other direct costs related to closed restaurants. Leases and Tenant Improvement Allowances — In fiscal year 2019 we adopted ASC 842 Leases which required lessees to recognize a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with an expected term greater than 12 months on its balance sheet. Operating lease ROU assets and liabilities are recognized on our consolidated balance sheet at commencement date, which is the date we gain access to the property. The lease liability is determined based on the present value of the minimum rental payments using our incremental borrowing rate in effect at the time of lease commencement. The ROU asset is determined based on the lease liability adjusted for lease incentives received. Lease expense is recognized on a straight-line bases over the lease term. Certain leases require contingent rent above the minimum lease payments based on a percentage of sales, these contingent amounts are excluded in determining the lease liability and ROU asset and are accounted for as period expense. The option periods are not included in the determination of the lease liability and ROU asset as we are not reasonably certain if we will extend at the time of lease commencement. Lease expenses for the period prior to the restaurant opening are reported as pre-opening expense in the consolidated statements of operations. Lease expenses for the period after a restaurant opens are reported on the occupancy and other operating expenses line of the consolidated statements of operations. Asset Retirement Obligations (AROs) —The Company has AROs arising from contractual obligations under certain leases to perform certain asset retirement activities at the time that certain leasehold improvements are disposed of. At the inception of a lease with such conditions, the Company records an AROs liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability was initially measured at fair value and subsequently is adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The Company’s AROs is $0.2 million and $0.2 million at December 31, 2019 and December 25, 2018, respectively. Self-insurance Program —Beginning in fiscal year 2018, the Company began a modified self-insurance workers’ compensation program. In order to minimize the exposure under the self-insurance program, the Company purchased stop-loss coverage both on a per-occurrence and on an aggregate basis. The self-insured losses under the program are accrued based on the Company’s estimate of the expected liability for both claims incurred and incurred but not reported basis. The accruals for the modified self-insurance program involve certain management judgments and assumptions regarding the frequency and severity of claims, recent historical patterns of claim development, independent actuarial assessments, and the Company’s experience with claim-reserve management and settlement practices. These accruals are included in employee-related accruals in the accompanying condensed consolidated balance sheet. As of December 31, 2019 and December 25, 2018, the accruals related to the self-insurance workers’ compensation program were $5.5 million and $3.1 million, respectively. The Company’s actual losses may be significantly different than the estimates currently recorded. Revenue Recognition —The Company recognizes revenue when products are delivered to the customers or meals are served. Revenue recognized excludes sales taxes. Franchise/License Fee Revenue —Franchise/license fee revenue consists of fees charged to franchise/license owners who enter into a franchise/license agreement with the Company. Initial franchise/license fees are recognized as revenue as the performance obligations of the contract are satisfied. The Company has identified separate performance obligations over the term of the contract and recognizes revenue as those performance obligations are satisfied. These performance obligations include rights to use trademarks and intellectual property, initial training and other operational support visits. There was franchise/license fee revenue of $0.1 million, $0.2 million and $0.1 million recognized in fiscal years 2019, 2018 and 2017, respectively. Royalty Revenue —Royalty revenue represents royalties earned from each of the franchisees in accordance with the financial disclosure document and the franchise agreement for use of the “The Habit Burger Grill” name, menus, processes, and procedures. The royalty rate in the franchise agreement is typically 5% of the gross sales of each restaurant operated by each franchisee. Such revenue is recognized when earned and is payable to the Company monthly before the sixth business day of the subsequent month. There was royalty revenue of $2.0 million, $1.5 million and $0.9 million recognized in fiscal years 2019, 2018 and 2017, respectively. Franchise Area Development Fees —The Company receives area development fees from franchisees and licensees when they execute multi-unit area development agreements. The Company does not recognize revenue from the agreements until the related restaurants open or, in certain circumstances, the fees are applied to satisfy other obligations of the franchisee or licensee. In the event of a termination of a franchise/license agreement these fees may be recognized as revenue at the time of termination. There were franchise area development fees of $0.4 million, $1.2 million and $0.1 million recognized in fiscal years 2019, 2018 and 2017, respectively. Included in fiscal year 2019 is $0.3 million related to the termination of two agreements in fiscal year 2019 and included in fiscal year 2018 amount is $1.1 million related to the termination of two franchise agreements in fiscal year 2018. Sales Tax —Sales tax collected from customers and remitted to governmental authorities is accounted for on a net basis and therefore is excluded from net revenue in the consolidated statements of operations. This obligation is included in sales taxes payable until the taxes are remitted to the appropriate taxing authorities. Gift Cards —Revenue related to the sale of gift cards is deferred until the gift card is redeemed. Outstanding gift cards are tracked by a third-party administrator. The balance of unredeemed gift cards was $2.2 million and $2.1 million at December 31, 2019 and December 25, 2018, respectively, and is included in accrued expenses in the accompanying consolidated balance sheets. Gift cards do not carry an expiration date; therefore, customers can redeem their gift cards for products indefinitely and the Company does not deduct non-usage fees from outstanding gift card balances. A certain amount of gift cards will not be redeemed and may become breakage income or may need to be remitted to the various states. To date, the Company has not recognized breakage income of gift cards or remitted any amounts to the various states. Advertising Costs —Advertising and promotional costs are expensed as incurred. Advertising and promotions expense totaled $4.7 million, $3.6 million and $3.2 million for the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively, and is included in occupancy and other operating expenses, pre-opening costs and general and administrative expenses in the consolidated statements of operations. Pre-opening Costs —Pre-opening costs are costs incurred in connection with the hiring and training of personnel, as well as occupancy, which can include the amortization of lease expenses, and other operating expenses during the build-out period of new restaurant openings. Pre-opening costs are expensed as incurred. Income Taxes —The Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company may record a valuation allowance, if conditions are applicable, to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes. ASC 740 prescribes a recognition threshold and measurement process for accounting for uncertain tax positions and also provides guidance on various related matters such as derecognition, interest, penalties, and required disclosures. The Company has no uncertain tax liabilities at December 31, 2019. In the future, if an uncertain tax position arises, interest and penalties will be accrued and included on the provision for income taxes line of the Statements of Consolidated Income. The Company files tax returns in the U.S. federal and state jurisdictions. Generally, the Company is subject to examination by U.S. federal (or state and local) income tax authorities for three to four years from the filing of a tax return. Non-controlling Interest —The non-controlling interest on the consolidated statement of operations represents the portion of earnings or loss before income taxes attributable to the economic interest in the Company’s subsidiary, The Habit Restaurants, LLC, held by the non-controlling Continuing LLC Owners. Non-controlling interest on the consolidated balance sheet represents the portion of net assets of the Company attributable to the non-controlling Continuing LLC Owners, based on the portion of the LLC Units owned by such unit holders. As of December 31, 2019 and December 25, 2018, the non-controlling interest was 20.4% and 20.7%, respectively. Management Incentive Plans —Prior to the completion of the Company’s IPO, the board of directors adopted The Habit Restaurants, Inc. 2014 Omnibus Incentive Plan which was amended and restated in April 2019. The provisions to this plan are detailed in Note 11-Management Incentive Plans. The Habit Restaurants, LLC maintained a management incentive plan that provided for the grant of Class C units. Class C units were intended to be “profits interests” for U.S. federal income tax purposes. The Class C units participated in distributions and, if vested, could have been converted to Class A units. Because of the ability of the Class C Unit-holder to convert his or her Class C units to Class A units, the Class C units were accounted for as equity classified awards. In conjunction with the Company’s IPO, all vested and unvested units issued under this plan were exchanged for Common Units of The Habit Restaurants, LLC. The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the award using the straight-line method. Comprehensive Income —Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is the same as net income for all periods presented. Therefore, a separate statement of comprehensive income is not included in the accompanying consolidated financial statements. Earnings Per Share —Basic earnings per share (“basic EPS”) is computed by dividing net income attributable to the Habit Restaurants, Inc. by the weighted average number of shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect during the reporting period to all dilutive potential shares outstanding resulting from employee stock-based awards. The following table sets forth the calculation of basic and diluted earnings per share for fiscal years 2019, 2018 and 2017: Fiscal Years Ended December 31, December 25, December 26, (amounts in thousands, except share and per share data) 2019 2018 2017 Numerator: Net income (loss) attributable to controlling and non-controlling interests $ 4,677 $ 3,640 $ (1,580 ) Less: net income attributable to non-controlling interests $ (1,200 ) $ (863 ) $ (1,539 ) Net income (loss) attributable to The Habit Restaurants, Inc. $ 3,477 $ 2,777 $ (3,119 ) Denominator: Weighted average shares of Class A common stock outstanding Basic 20,736,551 20,538,637 20,285,780 Diluted 20,786,539 20,645,546 20,285,780 Net income (loss) attributable to The Habit Restaurants, Inc. per share Class A common stock Basic $ 0.17 $ 0.14 $ (0.15 ) Diluted $ 0.17 $ 0.13 $ (0.15 ) Below is a reconciliation of basic and diluted share counts Basic 20,736,551 20,538,637 20,285,780 Dilutive effect of stock options and restricted stock units 49,988 106,909 — Diluted 20,786,539 20,645,546 20,285,780 Diluted earnings per share of Class A common stock is computed similarly to basic earnings per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury method, if dilutive. The Company’s Class B common stock represent voting interests and do not participate in the earnings of the Company. Accordingly, there is no earnings per share related to the Company’s Class B common stock. The Company’s LLC Units are considered common stock equivalents for this purpose. The number of additional shares of Class A common stock related to these common stock equivalents is calculated using the if-converted method. The potential impact of the exchange of the 5,336,807 LLC Units on the diluted EPS had no impact and were therefore excluded from the calculation. As of December 31, 2019, there were 3,525,275 options authorized under our Amended and Restated 2014 Omnibus Incentive Plan of which 2,536,077, 1,950,726, and 1,296,513 had been granted as of December 31, 2019, December 25, 2018 and December 26, 2017, respectively. The number of dilutive shares of Class A common stock related to these options was calculated using the treasury stock method and 1,689,884, 5,576 and 56,782 shares have been excluded from the diluted EPS for fiscal years 2019, 2018 and 2017, respectively, because they were anti-dilutive. Recent Accounting Pronouncements — In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the standard on January 1, 2020. We do not expect the adoption of ASU 2018-15 to result in a material change to our consolidated financial statements. The Company has reviewed Recently Adopted Accounting Pronouncements — In February 2016, the FASB issued ASU No. 2016-02 Leases, which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases. This update requires lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with an expected term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. This transition method option is in addition to the existing transition method of using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company adopted this ASU in the beginning of the first quarter of fiscal year 2019 and used the cumulative-effect transition method. The Company elected the available practical expedient options which allows an entity to not reassess whether any existing or expired contracts contain leases, not reassess lease classifications for existing or expired leases, and an entity does not need to reassess initial direct costs for any existing leases. Upon transition, the Company recorded an increase to opening equity of $1.0 million, net of tax, of which $0.7 million was recognized in retained earnings and $0.3 million in non-controlling interests, with a corresponding decrease of $18.6 million in property and equipment, net, a decrease in deemed landlord financing of $19.8 million and a decrease of $0.2 million in deferred tax assets, related to the derecognition of the buildings that the Company had determined that it was the accounting owner of under build to suit lease guidance contained in ASC 840 Leases. The leases where the Company had previously determined that it was the accounting owner are now accounted for as operating leases under the new standard which will result in an increase in occupancy and other operating expenses and a decrease in depreciation and amortization expense and interest expense, net on its consolidated statement of operations. The new standard will not have a material impact on the Company’s consolidated statement of operations for its existing operating leases. In addition, upon transition, the Company also recognized $174.4 million for operating lease liabilities based on the present value of the remaining minimum rental payments using discount rates based on the Company’s borrowing rate as of the effective date and $149.8 million for right-of-use assets based upon the lease liabilities adjusted for deferred rent and lease incentives balances of $24.6 million at adoption. See Note 8—Leases for additional information. |
Non-controlling Interests
Non-controlling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Note 3—Non-controlling Interests Pursuant to the LLC Agreement, the Continuing LLC Owners have the right to exchange their LLC Units, together with a corresponding number of shares of Class B common stock (which will be cancelled in connection with any such exchange) for, generally, at the option of the Company (such determination to be made by the disinterested members of our board of directors), (i) shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications or (ii) cash consideration. At any time that an effective registration statement is on file with the SEC with respect to the shares of Class A Common Stock to be issued upon an exchange, The Habit Restaurants, Inc. may not provide cash consideration upon an exchange to a Continuing LLC Owner without the Continuing LLC Owner’s prior consent. The Company amended its LLC Agreement in May 2016, pursuant to which the Company processed exchange requests every other week, rather than weekly, effective in June 2016. The Company further amended its LLC Agreement in March 2017, pursuant to which the Company processes exchange request monthly, effective in May 2017. The non-controlling interests represents the portion of earnings or loss attributable to the economic interest held by the non-controlling Continuing LLC Owners. Prior to the completion of the IPO, all earnings or losses were attributed to the Continuing LLC Owners. The non-controlling interests upon the completion of the IPO was 65.5%. Upon completion of the follow-on offering in April 2015, the non-controlling interests portion was 47.1%. The non-controlling interests portion changes as Continuing LLC Owners exchange their LLC Units, together with a corresponding number of shares of Class B common stock, for Class A common stock. The non-controlling interests on the consolidated balance sheet were adjusted to reflect the non-controlling interests portion as of December 31, 2019 and December 25, 2018, which was 20.4% and 20.7%, respectively. The amounts of these changes are reflected in the consolidated statements of stockholders’ equity. The amount recorded in equity for fiscal years 2019 2018 was $0.5 million and $1.5 million, respectively. Net income attributable to non-controlling interests is calculated based on the non-controlling interests ownership percentage in effect at that time. The table below represents the weighted average non-controlling interests for the periods presented (dollar amounts in thousands): Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Income before income taxes of The Habit Restaurants, LLC and its subsidiaries $ 5,861 $ 4,067 $ 6,609 Weighted average non-controlling interests ownership percentage 20.5 % 21.2 % 23.3 % Net income attributable to non-controlling interests $ 1,200 $ 863 $ 1,539 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4—Fair Value Measurements Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The fair values of the Company’s investments in marketable securities are based on quoted prices in active markets for identical assets. The fair value of the investments in marketable securities at December 31, 2019 and December 25, 2018 was approximately $24.3 million and $15.1 million, respectively, and the Company classified such investments as Level 1. These investments consist entirely of U.S. Treasury instruments with a maturity of two months or less at the date of purchase and the interest income received from these instruments is included in interest expense, net in the consolidated statements of operations. These amounts are included in cash and cash equivalents in the accompanying consolidated balance sheets. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | Note 5—Property and Equipment, net Property and equipment consists of the following: (amounts in thousands) Fiscal Year Ended December 31, December 25, 2019 2018 Leasehold improvements $ 139,749 $ 120,890 Equipment 83,406 68,532 Furniture and fixtures 30,966 28,487 Buildings under deemed landlord financing — 19,566 Smallwares 2,540 2,260 Vehicles 2,462 2,392 Construction in progress 7,279 8,370 266,402 250,497 Less: Accumulated depreciation and amortization (115,233 ) (89,751 ) $ 151,169 $ 160,746 Depreciation and amortization expenses were $27.9 million, $24.5 million and $18.8 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. As a result of the application of build-to-suit lease guidance contained in ASC 840-40-55, the Company had determined that it is the accounting owner of a total of 31 buildings under deemed landlord financing as of December 25, 2018, and they are included in the Company’s property and equipment. Included in the buildings under deemed landlord financing is the estimated construction costs of the landlord for the shell building. The Company has determined that these locations will be accounted for as operating leases under ASC 842 Leases, and these amounts were derecognized with the adoption of ASC 842 at the beginning of the first quarter of fiscal year 2019. See Note 8—Leases for additional information. We capitalize internal payroll, payroll related and other costs directly related to the successful development, design and construction of our new restaurants. Capitalized internal payroll and other costs related to the new restaurants were $1.5 million, $1.9 million and $2.0 million for the years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6—Income Taxes The Habit Restaurants, Inc. is subject to U.S. federal and state income taxation on its allocable portion of the income of The Habit Restaurants, LLC. The “Provision for income taxes” in the accompanying consolidated statements of operations for fiscal years ended December 31, 2019, December 25, 2018, and December 26, 2017 is based on an estimate of the Company’s annualized effective income tax rate. The Habit Restaurants, LLC operates as a limited liability company which is not itself subject to federal income tax. Accordingly, the portion of the Company’s subsidiary earnings attributable to the non-controlling interests are subject to tax when reported as a component of the non-controlling interests’ taxable income. As a result of the recapitalization and the IPO that occurred in fiscal year 2014, the portion of The Habit Restaurants, LLC’s income attributable to The Habit Restaurants Inc. is now subject to U.S. federal, state and local income taxes and is taxed at the prevailing corporate tax rates. The income tax provision reflects a tax rate of 17.0%, (40.9)% and 102.5% for fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. The effective tax rate varies significantly from the federal statutory rate due to the income attributable to the non-controlling interests which is not taxed at the entity level. The change in tax rate for fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017 is a result of the changes in annual taxable income and related state income taxes (and forecasts thereof which are used to calculate the tax provision during interim periods), and the deferred remeasurement for tax reform rate change in 2017. The income tax provision would reflect an effective tax rate of 28.8%, 28.8% and 42.5% for fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively, if all of the income was taxed at Habit Restaurants, Inc. and the impact of non-recurring and discrete items and the non-controlling interests was disregarded. Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is all domestic and is as follows (in thousands): Fiscal Year Ended 2019 2018 2017 Income before provision for income taxes $ 5,638 $ 2,583 $ 63,808 Components of the provision for income taxes consist of the following (in thousands): Fiscal Year Ended 2019 2018 2017 Current Federal $ — $ — $ — State and local 5 13 8 Total current expense $ 5 $ 13 $ 8 Deferred expense Federal $ 1,075 $ 850 $ 58,778 State and local (119 ) (1,920 ) 6,602 Total deferred expense $ 956 $ (1,070 ) $ 65,380 Provision (benefit) for income taxes $ 961 $ (1,057 ) $ 65,388 Prior to July 24, 2014, The Habit Restaurants, LLC had not been subject to U.S federal income taxes as it is organized as a limited liability company, and is treated as a partnership for federal and state income tax purposes. As a result of the recapitalization, IPO, April follow-on offering and exchanges, the portion of The Habit Restaurants, LLC’s income attributable to The Habit Restaurants Inc. is subject to U.S federal, state and local income taxes and is taxed at the prevailing corporate tax rates. The Habit Restaurants, Inc. and its corporate subsidiaries will file its federal income tax return on a consolidated basis. A reconciliation of the U.S. statutory income tax rate to The Habit Restaurants, Inc. effective tax rate is as follows: Fiscal Year Ended 2019 2018 2017 U.S. statutory tax rate 21.0 % 21.0 % 35.0 % State and local taxes, net of federal effect 4.3 % 4.7 % 4.8 % Permanent differences 1.0 % 4.1 % 0.4 % Shortfall from restricted stock units 1.5 % 5.8 % 0.2 % Remeasurement of deferred tax assets in connection with federal rate changes — — (6.8 )% Remeasurement of deferred tax assets in connection with state rate changes (5.3 )% (66.4 )% 5.7 % Hiring credits (0.8 )% (3.2 )% (0.1 )% Remeasurement of deferred tax assets in connection with the enactment of the Tax Cuts and Jobs Act — — 75.9 % Remeasurement of liabilities under Tax Receivable Agreement with the enactment of the Tax Cuts and Jobs Act — — (11.8 )% Income passed through to non-controlling interests (4.7 )% (6.9 )% (0.8 )% Effective tax rate 17.0 % (40.9 )% 102.5 % The effective tax rate includes a rate benefit attributable to the fact that The Habit Restaurants, LLC operates as a limited liability company that is treated as a partnership for federal and state income tax purposes and is not itself subject to federal and state income tax. Accordingly, the portion of The Habit Restaurants, LLC earnings attributable to the non-controlling interest are subject to tax when reported as a component of the non-controlling interests’ taxable income. Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the accompanying consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. Details of The Habit Restaurants, Inc. deferred tax assets and liabilities are summarized as follows (in thousands): Fiscal Year Ended December 31, 2019 December 25, 2018 Deferred tax assets Deferred income $ 2,440 $ 2,417 Deferred lease liability 41,460 1,874 Tax Receivable Agreement - imputed interest 5,022 4,999 Tax goodwill and intangibles 68,568 73,243 Net operating losses 15,146 11,792 Other 3,108 4,653 Total deferred tax assets 135,744 98,978 Deferred tax liabilities Property and equipment (11,939 ) (10,149 ) Prepaids (300 ) (163 ) Lease right-of-use assets (35,902 ) — Other (925 ) (748 ) Total deferred tax liabilities (49,066 ) (11,060 ) Net deferred tax assets $ 86,678 $ 87,918 The net decrease in deferred tax assets was primarily due to an increase in the tax basis of certain assets resulting from The Habit Restaurants, Inc.’s investment in The Habit Restaurants, LLC. The Habit Restaurants, Inc.’s acquisitions of interests in The Habit Restaurants, LLC (including transactions treated as “sales or exchanges” for U.S. federal income tax purposes) from the Continuing LLC Owners for shares of our Class A common stock or cash resulted in favorable tax attributes for The Habit Restaurants, Inc. In connection with the IPO, we entered into a TRA. Under the TRA, we generally will be required to pay to the Continuing LLC Owners 85% of the amount of cash savings, if any, in U.S. federal, state or local tax that we actually realize directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes created as a result of the IPO and any sales or exchanges (as determined for U.S. federal income tax purposes) to or with us of their interests in The Habit Restaurants, LLC for shares of our Class A common stock or cash, including any basis adjustment relating to the assets of The Habit Restaurants, LLC and (ii) tax benefits attributable to payments made under the TRA (including imputed interest). The Habit Restaurants, Inc. generally will retain 15% of the applicable tax savings. The tax effects of the increase in tax attributes that were created as a result of the secondary offering and the exchanges are included in the table of deferred tax assets and liabilities. The amount payable to the Continuing LLC Owners under the TRA is disclosed on the accompanying consolidated balance sheets. Net deferred tax assets are also recorded related to differences between the financial reporting basis and the tax basis of The Habit Restaurants, Inc.’s proportionate share of the net assets of The Habit Restaurants, LLC. Based on the Company’s historical taxable income and its expected future earnings, management evaluates the uncertainty associated with booking tax benefits and determined that the deferred tax assets are more likely than not to be realized, including evaluation of deferred tax liabilities and the expectation of future taxable income. As of December 31, 2019, the Company had federal, California and other state net operating loss carry forwards of $61.2 million, $26.6 million, and $8.7 million, respectively. The federal net operating loss carry forwards will begin to expire in 2032 and the California and other states net operating loss carry forwards will begin to expire in 2036. Included in the balance of unrecognized tax benefits as of December 31, 2019 and December 25, 2018 are $0 and $103,000, respectively, of tax benefits, which if recognized, would affect the effective tax rate. The change in the balance of unrecognized tax benefits for fiscal year 2019 was due to statute expiration. The Habit Restaurants, Inc. recognizes interest and penalties, if any, related to unrecognized tax positions in the provision for income taxes in the accompanying consolidated statement of operations. No interest or penalties were accrued as of December 31, 2019 and December 25, 2018 as the Company believes the amounts would be immaterial. The Habit Restaurants, Inc. does not anticipate that the unrecognized tax benefits will significantly increase or decrease within the next twelve months of the reporting date. The Company and its subsidiaries file, or will file, income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Habit Restaurants, Inc. will file its Federal income tax return by October 15, 2020. The Habit Restaurants, LLC is not subject to federal income taxes as it is a flow-through entity. With respect to U.S. federal and state and local jurisdictions, the Company and its subsidiaries are typically subject to examination for three to four years after filing of a tax return. Effects of the Tax Cuts and Jobs Act Tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Act”), was enacted on December 22, 2017. ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions was for tax years beginning after December 31, 2017. Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Act. As of September 25, 2018, the Company’s accounting for the Act was complete. As noted at the fiscal year ended December 26, 2017, the Company was able to reasonably estimate certain effects related to the reduction in the U.S. corporate income tax rate to 21%, including the impact of the Company’s assessment of 100% bonus depreciation for qualified assets placed in service after September 27, 2017 and the inclusion of performance based compensation in determining the excessive compensation limitation. Therefore, the Company recorded provisional adjustments associated with these items during the fiscal year ended December 26, 2017. The Company updated its provision adjustments as related to the bonus depreciation for qualified assets and the impact related to the TRA payments during the first quarter of fiscal 2018, within the prescribed measurement period. The Company finalized the impacts of the Act in 2018 and there were no further changes to the estimates recorded in the second and third quarters of 2018 income tax provision within the prescribed measurement period of SAB 118. The Company finalized the tax returns related to tax year 2018 by its extended due date of October 15, 2019. Tax Receivable Agreement In connection with the IPO that occurred in fiscal year 2014, the Company entered into a TRA. Under the TRA, the Company generally will be required to pay to the Continuing LLC Owners 85% of the amount of cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes created as a result of the IPO and any sales or exchanges (as determined for U.S. federal income tax purposes) to or with the Company of their interests in The Habit Restaurants, LLC for shares of our Class A common stock or cash, including any basis adjustment relating to the assets of The Habit Restaurants, LLC and (ii) tax benefits attributable to payments made under the TRA (including imputed interest). The Habit Restaurants, Inc. generally will retain 15% of the applicable tax savings. The amount payable to the Continuing LLC Owners under the TRA is disclosed in the accompanying consolidated balance sheets. In addition, the TRA provides for interest, at a rate equal to one year LIBOR, accrued from the due date (without extensions) of the corresponding tax return to the date of payment specified by the TRA. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments will be deferred and will accrue interest at a rate equal to one year LIBOR plus 200 basis points until paid (although a rate equal to one year LIBOR will apply if the inability to make payments under the TRA is due to limitations imposed on the Company or any of our subsidiaries by a debt agreement in effect on the date of the IPO). The Company’s ability to make payments under the TRA and to pay its tax liabilities to taxing authorities generally will depend on our receipt of cash distributions from The Habit Restaurants, LLC. Pursuant to the LLC Agreement, the Continuing LLC Owners have the right to exchange their LLC Units, together with a corresponding number of shares of Class B common stock (which will be cancelled in connection with any such exchange) for, at the option of The Habit Restaurants, Inc. (such determination to be made by the disinterested members of our board of directors), (i) shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications or (ii) cash consideration (generally calculated based on the volume-weighted average price of the Class A common stock of The Habit Restaurants, Inc., as displayed under the heading Bloomberg VWAP on the Bloomberg page designated for the Class A common stock of The Habit Restaurants, Inc. for the 15 trading days immediately prior to the delivery date of a notice of exchange). At any time that an effective registration statement is on file with the SEC with respect to the shares of Class A common stock to be issued upon an exchange, The Habit Restaurants, Inc. may not provide cash consideration upon an exchange to a Continuing LLC Owner without the Continuing LLC Owner’s prior consent. These exchanges are expected to result in increases in the tax basis of the assets of The Habit Restaurants, LLC that otherwise would not have been available. Increases in tax basis resulting from such exchanges may reduce the amount of tax that The Habit Restaurants, Inc. would otherwise be required to pay in the future. This tax basis may also decrease gains (or increase losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets. If the IRS or a state or local taxing authority challenges the tax basis adjustments that give rise to payments under the TRA and the tax basis adjustments are subsequently disallowed, the recipients of payments under the agreement will not reimburse any payments the Company previously made to them. Any such disallowance would be taken into account in determining future payments under the TRA and would, therefore, reduce the amount of any such future payments. Nevertheless, if the claimed tax benefits from the tax basis adjustments are disallowed, the Company’s payments under the TRA could exceed its actual tax savings, and the Company may not be able to recoup payments under the TRA that were calculated on the assumption that the disallowed tax savings were available. The TRA provides that (i) in the event that the Company materially breaches the TRA, (ii) if, at any time, the Company elects an early termination of the TRA, or (iii) upon certain mergers, asset sales, other forms of business combinations or other changes of control, the Company’s (or our successor’s) obligations under the TRA (with respect to all LLC Units, whether or not LLC Units have been exchanged or acquired before or after such transaction) would accelerate and become payable in a lump sum amount equal to the present value of the anticipated future tax benefits calculated based on certain assumptions, including that the Company would have sufficient taxable income to fully utilize the deductions arising from the tax deductions, tax basis and other tax attributes subject to the TRA. The Company’s payment obligations under the TRA with respect to interests in The Habit Restaurants, LLC treated as sold for U.S. federal income tax purposes to the Company in connection with the IPO are calculated based on the IPO price of our Class A common stock net of underwriting discounts. The TRA was amended January 5, 2020 in connection with the Merger Agreement (as defined below), with the parties agreeing that the consummation of the transactions contemplated by the Merger Agreement will give rise to a Change in Control as defined in the TRA, furthermore, the TRA shall be terminated in its entirety upon payment of the Early Termination Payment. As a result of the foregoing, (i) the Company could be required to make payments under the TRA that are greater than or less than the specified percentage of the actual tax savings the Company realizes in respect of the tax attributes subject to the agreements and (ii) the Company may be required to make an immediate lump sum payment equal to the present value of the anticipated future tax savings, which payment may be made years in advance of the actual realization of such future benefits, if any of such benefits are ever realized. In these situations, the Company’s obligations under the TRA could have a substantial negative impact on its liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. There can be no assurance that the Company will be able to finance its obligations under the TRA in a manner that does not adversely affect its working capital and growth requirements. Payments under the TRA are intended to be treated as additional consideration for the applicable interests in The Habit Restaurants, LLC treated as sold or exchanged (as determined for U.S. federal income tax purposes) to or with the Company, except with respect to certain actual or imputed interest amounts payable under the TRA. In December 2019, the Company made TRA payments, including accrued interest, of $0.4 million to related parties. As of December 31, 2019, the Company recorded a liability of $82.8 million, representing the payments due to the Continuing LLC Owners under the TRA. As of December 31, 2019, $1.2 million of the liability is classified as a current liability. As part of the TRA, there are adjustments associated with revisions to the expected TRA liability as a result of updated estimated future tax savings at the federal, state and local level. The amounts of these adjustments were $0.4 million in fiscal year 2019 and $1.6 million in fiscal year 2018 and are reflected in the consolidated statements of operations. The amounts of these adjustments resulted in other income of $57.2 million for fiscal year 2017 and are reflected in the consolidated statements of operations. This adjustment was primarily attributed to the U.S. corporate income tax rate effective in 2018 under the Tax Cuts and Jobs Act. In addition, from time to time we may have adjustments to deferred tax assets as a result of changes in the tax basis associated with the TRA. The amounts of these changes are reflected in the consolidated statements of stockholders’ equity. The amount recorded in equity for fiscal year 2019 due to changes of the deferred tax assets associated with the tax basis increase was $0.1 million. Payments are due under the TRA for a given year if the Company has a net realized tax benefit. The realized tax benefit is intended to measure the decrease or increase in the actual tax liability of the Company attributable to the tax benefits defined in the TRA (i.e., basis adjustments and imputed interest), using a “with and without” methodology. Payments are anticipated to be made under the TRA for approximately 20-25 years, with a payment due after the filing of the Company’s federal income tax return, which is due on October 15th of any given year (including extensions). The payments are to be made in accordance with the terms of the TRA. The Company shall pay or cause to be paid within five business days after the obligations became due (i.e. payable within 95-125 calendar days after the due date of the federal income tax return (taking into account valid extensions) dependent upon the type of holder of the TRA). The timing of the payments are subject to certain contingencies including whether the Company will have sufficient taxable income to utilize all of the tax benefits defined in the TRA. Obligations pursuant to the TRA are obligations of the Company. They do not impact the non-controlling interest. These obligations are not income tax obligations and have no impact on the tax provision or the allocation of taxes. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 7—Long-Term Debt On August 2, 2017, The Habit Restaurants, LLC executed a $20 million credit facility with Bank of the West (the “Credit Facility”) with a maturity date of August 2, 2019. In October 2018 and September 2019, the Company extended the maturity date on the Credit Facility to August 1, 2020 and August 1, 2021, respectively. All borrowings under the Credit Facility will bear interest at a variable rate based upon LIBOR plus the applicable margin for LIBOR loans (as defined in the Credit Facility). The Credit Facility has no unused commitment fees. As part of the initial execution of the Credit Facility, the Company incurred $0.3 million in deferred financing fees that will be amortized over the length of the agreement. That amortization expense is included in interest expense, net on the accompanying consolidated statements of operations. As of December 31, 2019, The Habit Restaurants, LLC had no borrowings outstanding against the Credit Facility. Interest related to the Credit Facility, if applicable, is due monthly. The Credit Facility is secured by substantially all the assets of The Habit Restaurants, LLC, and the Company is required to comply with certain financial covenants therein. The Credit Facility contains customary representations, warranties, negative and affirmative covenants, including a maximum lease adjusted leverage ratio of 4.00 to 1.00 and a minimum EBITDA of $21.4 million for the twelve-month period then ended at the end of each fiscal quarter. As of December 31, 2019, The Company and The Habit Restaurants, LLC were in compliance with all covenants. Interest expense for the Credit Facility and prior credit facilities amounted to $0.1 million, $0.2 million and $0.1 million for fiscal year ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively, and consisted of amortization of deferred financing fees and unused commitment fees from the prior credit facility. On January 4, 2018 the Company executed an irrevocable standby letter of credit for $1.5 million related to the Company’s self-insured workers’ compensation coverage. In conjunction with the renewal of the Company’s self-insured workers’ compensation coverage in October 2018, the Company increased its irrevocable standby letter of credit to $3.25 million. The increased standby letter of credit expires on January 5, 2021. In conjunction with the renewal of the Company’s self-insured workers’ compensation coverage in October 2019, the Company executed an additional standby letter of credit for $1.4 million which expires on October 31, 2020. These letters of credit are a reduction of the borrowing capacity or our Credit Facility. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 8—Leases The Company leases its restaurant facilities and corporate offices under non-cancelable operating leases. Our restaurant leases generally have terms ranging from 10 to 20 years with renewal options ranging from five to 20 years. The Company currently has no The following table represents the lease costs for fiscal year 2019 (amounts in thousands): Fiscal year ended December 31, 2019 Operating lease cost 27,555 Contingent rent 999 Total lease cost $ 28,554 Supplemental cash flow information related to leases (amounts in thousands): Fiscal year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28,663 Supplemental balance sheet information related to leases: Fiscal year ended December 31, 2019 Weighted Average Remaining Lease Term Operating leases 8.5 Weighted Average Discount Rate Operating leases 4.6% Maturities of lease liabilities (amounts in thousands): Fiscal year end Operating Leases 2020 $ 31,087 2021 31,093 2022 29,723 2023 28,180 2024 25,730 2025 and thereafter 85,641 Total lease payments 231,454 Less: imputed interest (42,088 ) Lease liabilities as of December 31, 2019 $ 189,366 As of December 31, 2019, we have additional leases that have not yet commenced of $34.1 million that are expected to commence during fiscal year 2020 and fiscal year 2021 with lease terms ranging from 10 to 15 years |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9—Commitments and Contingencies Future commitments —The Company’s growth strategy includes new restaurant openings during fiscal year 2020 and beyond. In connection with the build out of the restaurants, the Company may be obligated for a portion of the start-up and/or construction costs. As of December 31, 2019, the Company had approximately $3.0 million in such commitments related to new restaurants. Litigation —The Company is involved in various claims and legal actions that arise in the ordinary course of business. The Company and its directors have been named as defendants in a complaint filed in the United States District Court for the Southern District of New York alleging violations of federal securities laws in connection with the Merger. Management does not believe that the ultimate resolution of these actions will have a material adverse effect on the Company’s consolidated financial position, results of operations, liquidity and capital resources. A significant increase in the number of litigated claims or an increase in amounts owing under successfully litigated claims could materially adversely affect the Company’s business, financial condition, results of operations, and cash flows. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plan | Note 10—Employee Benefit Plan The Company maintains a qualified 401(k) retirement plan (the “401k Plan”). Certain employees are eligible to participate in the 401k Plan after completing one year of service and reaching the age of 21. The 401k Plan permits eligible employees to make contributions up to specified percentages of their compensation. The Company made discretionary matching contributions totaling approximately $0.2 million, $0.1 million and $0.1 million for the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. The Company also maintains a nonqualified deferred compensation plan. It allows eligible employees, including our executive officers, to defer a portion of their compensation. The Company made discretionary matching contributions totaling approximately $0.1 million, $0.1 million and $0.1 million for the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. |
Management Incentive Plans
Management Incentive Plans | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Management Incentive Plans | Stock-based compensation is included in general and administrative expenses on the accompanying consolidated statements of operations. The stock-based compensation expense related to the Amended and Restated 2014 Omnibus Incentive Plan and to units issued under The Habit Restaurants, LLC Management Incentive Plan is summarized in the table below for the periods indicated: (in thousands) December 31, December 25, December 26, 2019 2018 2017 Stock-based compensation expense $ 3,332 $ 2,714 $ 2,518 2014 Omnibus Incentive Plan Prior to the completion of the Company’s IPO, the board of directors adopted The Habit Restaurants, Inc. 2014 Omnibus Incentive Plan (the “2014 Omnibus Incentive Plan”) and, subsequent to the IPO, all equity-based awards have been granted under the 2014 Omnibus Incentive Plan. The 2014 Omnibus Incentive Plan also permits grants of cash bonuses. This plan authorized 2,525,275 total options and restricted stock units. No awards may be granted under the plan after November 19, 2024. In April 2019, our board of directors adopted the Amended and Restated 2014 Omnibus Incentive Plan, which required and received stockholder approval at our 2019 Annual Meeting of Stockholders. This amendment increased the authorized options and restricted stock units by 1,000,000 shares. This amendment also amended the 2014 Omnibus Incentive Plan to provide for an aggregate annual limit on compensation payable to each non-employee director (whether or not pursuant to the Amended and Restated 2014 Omnibus Incentive Plan), require a minimum vesting period of at least one year for 95% of awards, expressly prohibit automatic “reload” grants of additional awards upon exercise of a stock option or SAR, expand our authority to claw back awards granted under the Amended and Restated 2014 Omnibus Incentive Plan and proceeds on the exercise or disposition of such awards, expressly prohibit “gross-ups” or other payments in respect of any excise taxes assessed on any awards granted under the Amended and Restated 2014 Omnibus Incentive Plan and expressly prohibit the payment of dividends and dividend equivalents on unvested awards. The purpose of the 2014 Omnibus Incentive Plan is to advance the Company’s interests by providing for the grant to eligible individuals of equity-based and other incentive awards. The Amended and Restated 2014 Omnibus Incentive Plan is administered by our board of directors or a committee of our board of directors (the “Administrator”). The Administrator has the authority to, among other things, interpret the Amended and Restated 2014 Omnibus Incentive Plan, determine eligibility for, grant and determine the terms of awards under the Amended and Restated 2014 Omnibus Incentive Plan and to do all things necessary to carry out the purposes of the Amended and Restated 2014 Omnibus Incentive Plan. The Administrator’s determinations under the Amended and Restated 2014 Omnibus Incentive Plan are conclusive and binding. The Administrator will determine the time or times at which an award will vest or become exercisable. The maximum term of an award will not exceed ten years from the date of grant. Non-Qualified Stock Options: The following table sets forth information about the fair value of the non-qualified stock option grants on the date of grant using the Black-Scholes option-pricing model and the weighted average assumptions used for such a grant: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Beginning Balance at December 27, 2016 491,440 $ 22.69 9.1 $ — Granted 485,491 $ 16.13 Forfeited (15,263 ) $ 20.99 Exercised — Outstanding and expected to vest at December 26, 2017 961,668 $ 19.41 8.6 $ — Granted 479,000 $ 9.41 Forfeited (124,834 ) $ 17.65 Exercised — Outstanding and expected to vest at December 25, 2018 1,315,834 $ 15.71 8.2 $ — Granted 407,000 $ 10.09 Forfeited (56,105 ) $ 13.91 Exercised — Outstanding and expected to vest at December 31, 2019 1,666,729 $ 14.57 7.7 $ 674,435 Exercisable at December 31, 2019 535,972 $ 18.95 6.7 $ 106,074 Fiscal Year Ended Disclosure Information 2019 2018 2017 Weighted average fair value of options granted $ 2.96 $ 3.03 $ 4.30 Dividend yield 0.0 % 0.0 % 0.0 % Weighted average risk-free interest rate 2.31 % 2.73 % 1.92 % Weighted average volatility 25.1 % 28.6 % 28.8 % Forfeiture rate 6.7 % 6.0 % 4.4 % Expected term (years) 6.0 5.6 5.5 The assumptions above represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. The expected term of options granted during 2019 was based on a representative peer group within the industry. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury constant maturities rate in effect at the time of grant. The Company utilized a weighted rate for expected volatility based on a representative peer group within the industry. The aggregate intrinsic value in the table above is obtained by subtracting the weighted average exercise price from the fair value of the underlying common stock as of December 31, 2019, December 25, 2018 and December 26, 2017 and multiplying this result by the related number of options outstanding and expected to vest at December 31, 2019, December 25, 2018 and December 26, 2017 and exercisable at December 31, 2019. The fair values of the common stock used in the above calculations were $10.43 per share, $10.09 per share and $9.50 per share, the closing prices of the Company’s common stock on December 31, 2019, December 24, 2018 and December 26, 2017, respectively, the last trading day of each fiscal year. There was approximately $2.9 million of total unrecognized compensation costs related to options granted under the Plan as of December 31, 2019. That cost is expected to be recognized over a weighted average period of 2.8 years. Restricted Stock Units: A summary of stock-based compensation activity related to restricted stock units for fiscal years 2019, 2018 and 2017 is as follows: Units Weighted Average Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Beginning Balance at December 27, 2016 145,047 $ 22.38 2.2 $ 2,589,089 Granted 140,911 $ 15.81 Forfeited (5,107 ) $ 19.21 Vested (30,299 ) $ 23.08 Outstanding and expected to vest at December 26, 2017 250,552 $ 18.66 2.0 $ 2,380,244 Granted 175,213 $ 9.72 Forfeited (30,067 ) $ 17.13 Vested (56,465 ) $ 19.52 Outstanding and expected to vest at December 25, 2018 339,233 $ 14.04 1.9 $ 3,422,861 Granted 178,351 $ 10.18 Forfeited (19,007 ) $ 12.47 Vested (86,856 ) $ 15.46 Outstanding and expected to vest at December 31, 2019 411,721 $ 12.14 1.6 $ 4,294,250 The aggregate intrinsic value in the table above is obtained by multiplying the related number of units outstanding and expected to vest at December 31, 2019, December 25, 2018 and December 26, 2017, by the estimated fair value of the common stock as of December 31, 2019, December 25, 2018 and December 26, 2017. The estimated fair value of the common stock as of December 31, 2019, December 25, 2018 and December 26, 2017 used in the above calculation was $10.43, $10.09 and $9.50, the closing prices of the Company’s common stock on December 31, 2019, December 24, 2018 and December 26, 2017, respectively, the last trading day of the fiscal year. As of December 31, 2019, total unrecognized stock-based compensation expense related to non-vested restricted stock units was approximately $3.3 million. That cost is expected to be recognized over a weighted average period of 2.8 years. The Habit Restaurants, LLC Management Incentive Plan In connection with the IPO, the Company converted all of the outstanding vested and unvested Class C units into an equivalent amount of vested and unvested LLC Units of The Habit Restaurants, LLC, respectively. As of December 31, 2019, there was no unrecognized stock-based compensation expense related to these units. |
Membership Units
Membership Units | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Membership Units | Note 12—Membership Units The Habit Restaurants, LLC’s ownership structure prior to our recapitalization allowed for four classes of members: Class A members, Class B members, Class C members, and Class D members. Class C units could only have been issued under The Habit Restaurants, LLC’s management incentive plan discussed in Note 11—Management Incentive Plans. All classes of members were entitled to receive distributions, if any, in accordance with the provisions of the Company’s LLC operating agreement. In accordance with the provisions of the Company’s LLC operating agreement, if distributions were declared, Class D members had priority over distributions prior to Class B, Class A, and Class C members in that order. Class C member distributions were restricted based on whether the units were vested or unvested at the time of the distribution and cash was paid out only on vested units. Distributions of $1.0 million, $0.4 million and $1.1 million were declared and paid for the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively. Members of The Habit Restaurants, LLC who held unvested units did not receive their portion of the 2014 distribution until the units vested. Distributions of $0.1 million, $0.1 million and $0.2 million on such amounts were paid as of December 31, 2019, December 25, 2018 and December 26, 2017, respectively, and are included in the distributions above. There were no unpaid distributions as of December 31, 2019. As part of the Recapitalization, these membership units have been exchanged for common units. All units that were previously unvested continued to vest based on the vesting schedule of the outstanding unvested Class C unit from which it was converted. The Company has the right to determine, subject to certain tax distributions, when distributions will be made to holders of common units of The Habit Restaurants, LLC and the amount of any such distributions. If a distribution is authorized, such distribution will be made to the holders of common units (including the Company and its subsidiaries) pro rata in accordance with the percentages of their respective common units (other than, for clarity, certain non-pro-rata payments to the Company to satisfy certain of its obligations). Additionally, the new vested and unvested common units of The Habit Restaurants, LLC received upon the conversion of vested and unvested Class C units were entitled to receive distributions, if any, from The Habit Restaurants, LLC, provided, however, that distributions (other than tax distributions) in respect of unvested common units of The Habit Restaurants, LLC were only delivered to the holder thereof when, such common units ultimately vested. Pursuant to and subject to the terms of the LLC Agreement of The Habit Restaurants, LLC, the Continuing LLC Owners have the right to exchange their common units, together with a corresponding number of shares of Class B common stock (which such shares will be cancelled in connection with any such exchange) for, at the option of the Company, (i) cash consideration (calculated based on the volume-weighted average price of the Class A common stock of the Company, as displayed under the heading Bloomberg VWAP on the Bloomberg page designated for the Class A common stock of the Company for the 15 trading days immediately prior to the delivery date of a notice of exchange) or (ii) shares of the Company’s Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. At any time that an effective registration statement is on file with the Securities and Exchange Commission (“SEC”) with respect to the shares of Class A Common Stock to be issued upon an exchange, The Habit Restaurants, Inc. may not provide cash consideration upon an exchange to a Continuing LLC Owner without the Continuing LLC Owner’s prior consent. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13—Stockholders’ Equity The Company is authorized to issue 140,000,000 shares of capital stock, consisting of 70,000,000 shares of Class A common stock, par value $0.01 per share, and 70,000,000 shares of Class B common stock, par value $0.01 per share. In November 2014, the Company completed its IPO of 5,750,000 shares of its Class A common stock at a price to the public of $18.00 per share. As discussed in Note 12, the existing owners of The Habit Restaurants, LLC continue to hold common units in The Habit Restaurants, LLC, and such existing owners (other than The Habit Restaurants, Inc. and its wholly-owned subsidiaries) were issued a number of shares of our Class B common stock equal to the number of common units held by them in connection with the completion of the IPO. Each such share of Class B common stock provides its holder with no economic rights but entitles the holder to one vote on matters presented to The Habit Restaurants, Inc.’s stockholders. The Company’s Class A and Class B common stock generally vote together as a single class on all matters submitted to a vote of stockholders, except as otherwise required by applicable law. However, the Class B common stock is not publicly traded and does not entitle its holders to receive dividends or distributions upon a liquidation, dissolution or winding up of the Company. When a member of The Habit Restaurants, LLC exchanges common units for shares of Class A common stock, such corresponding shares of Class B common stock will be cancelled. Dividend Rights. Subject to preferences that may apply to shares of preferred stock outstanding at the time, holders of outstanding shares of Class A common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as the board of directors may from time to time determine. Holders of our Class B Common Stock do not have any right to receive dividends. Voting Rights. Holders of our Class A common stock and our Class B common stock have voting power over The Habit Restaurants, Inc., the sole managing member of The Habit Restaurants, LLC, at a level that is consistent with their overall equity ownership of our business. Pursuant to our amended and restated certificate of incorporation and amended and restated bylaws, each share of Class A common stock entitles the holder to one vote with respect to each matter presented to our stockholders on which the holders of Class A common stock are entitled to vote. Each holder of Class B common stock shall be entitled to the number of votes equal to the total number of LLC Units held by such holder multiplied by the exchange rate specified in the LLC Agreement with respect to each matter presented to our stockholders on which the holders of Class B common stock are entitled to vote. Accordingly, the holders of LLC Units collectively have a number of votes that is equal to the aggregate number of LLC Units that they hold. Subject to any rights that may be applicable to any then outstanding preferred stock, our Class A and Class B common stock vote as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise provided in our amended and restated certificate of incorporation or amended and restated bylaws or required by applicable law. Holders of our Class A and Class B common stock do not have cumulative voting rights. Except in respect of matters relating to the election and removal of directors on our board of directors and as otherwise provided in our amended and restated certificate of incorporation, our amended and restated bylaws, or as required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. Preemptive Rights. Neither the Class A common stock, nor the Class B common stock is entitled to preemptive or other similar subscription rights to purchase any of our securities. Conversion or Redemption Rights. Neither the Class A common stock, nor the Class B common stock is convertible or redeemable. Liquidation Rights. Upon our liquidation, the holders of our Class A common stock will be entitled to receive pro rata our assets which are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding. Holders of our Class B common stock do not have any right to receive a distribution upon a voluntary or involuntary liquidation, dissolution or winding up of our affairs. Notwithstanding the foregoing, The Habit Restaurants, LLC will bear the cost of or reimburse The Habit Restaurants, Inc. for certain expenses incurred by The Habit Restaurants, Inc. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14—Subsequent Events On January 5, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with YUM! Brands, Inc., a North Carolina corporation (“Parent”), and Parent’s wholly-owned subsidiary, YEB Newco Inc., a Delaware corporation (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. At the effective time of the Merger (the “Effective Time”), each: (i) share of Class A common stock, par value $0.01 per share, of the Company (“Class A Common Stock”) (1) that is issued and outstanding immediately prior to the Effective Time and (2) resulting from the exchange of LLC Units, as described below (other than, with respect to the foregoing clauses (1) and (2), any shares of Class A Common Stock (A) owned by the Company or any direct or indirect wholly-owned subsidiary of the Company, (B) owned by Parent, Merger Sub or any direct or indirect wholly-owned subsidiary of Parent or Merger Sub or (C) held by stockholders that have properly exercised and perfected appraisal rights under Delaware law) will be cancelled and automatically converted into the right to receive cash in an amount equal to $14.00, without interest thereon (the “Merger Consideration”), subject to applicable tax withholding; (ii) option (each, a “Company Stock Option”) to acquire shares of Class A Common Stock that is outstanding immediately prior to the Effective Time that has an exercise price per share that is less than the Merger Consideration will be cancelled and the former holder of such cancelled Company Stock Option will be entitled to receive (without interest), in consideration for the cancellation of such Company Stock Option, an amount in cash equal to the product of (x) the total number of shares subject to the unexercised portion of such Company Stock Option immediately prior to the Effective Time multiplied by (y) the excess of the Merger Consideration over the applicable exercise price per share under such Company Stock Option; provided that if the exercise price per share of any such Company Stock Option is equal to or greater than the Merger Consideration, such Company Option will be cancelled for no consideration; and (iii) restricted stock unit of the Company (each, a “Company RSU”) that is outstanding immediately prior to the Effective Time will be cancelled, and the former holder of such cancelled Company RSU will be entitled to receive (without interest), in consideration for the cancellation of such Company RSU, an amount in cash equal to the product of (x) the total number of shares subject to (or deliverable pursuant to) such Company RSU immediately prior to the Effective Time multiplied by (y) the Merger Consideration. Consideration payable to holders of Company Stock Options and Company RSUs will be made no later than three business days after the Effective Time, net of any required withholding of taxes. Concurrently with the Effective Time, each LLC Unit not held by the Company or one of its subsidiaries, whether vested or unvested, together with one share of or Class B common stock, par value $0.01 per share, of the Company (“Class B Common Stock,” and collectively with Class A Common Stock, “Company Common Stock”), will be exchanged for one share of Class A Common Stock (the “Exchange”), as is more particularly described in the Merger Agreement, and each share of Class B Common Stock will automatically be cancelled immediately upon consummation of the Exchange. The Merger Agreement includes customary representations, warranties and covenants of the Company, Parent and Merger Sub. The Company has agreed to operate its business in the ordinary course until the Effective Time. The Company has also agreed not to, and to cause its subsidiaries and instruct its representatives not to, solicit or initiate discussions with third parties regarding other proposals for a strategic transaction involving the Company. Parent and the Company have agreed to use their reasonable best efforts to take all actions necessary to consummate the Merger, subject to certain limitations, and as is more particularly described in the Merger Agreement. The obligation of the parties to consummate the Merger is subject to the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions. The Merger Agreement includes no financing contingency of any kind, and the Company has the ability to seek specific performance of enforce Parent’s obligation to close the Merger, as is more particularly described in the Merger Agreement. |
Quarterly Financial Reporting
Quarterly Financial Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Reporting | Note 15—Quarterly Financial Reporting (Unaudited) (amounts in thousands except per share data) Fiscal Quarter ( 1) 1Q19 2Q19 3Q19 4Q19 FY19 Total revenue $ 108,174 $ 117,928 $ 117,303 $ 122,654 $ 466,059 Income (loss) from operations (274 ) 3,435 1,553 1,032 5,747 Net income (loss) (231 ) 2,680 1,365 863 4,677 Net income (loss) attributable to non- controlling interests (55 ) 708 327 220 1,200 Net income (loss) attributable to The Habit Restaurants, Inc. $ (176 ) $ 1,972 $ 1,038 $ 643 $ 3,477 Basic income (loss) per share of Class A common stock $ (0.01 ) $ 0.10 $ 0.05 $ 0.03 $ 0.17 Diluted income (loss) per share of Class A common stock $ (0.01 ) $ 0.09 $ 0.05 $ 0.03 $ 0.17 Fiscal Quarter ( 1) 1Q18 2Q18 3Q18 4Q18 FY18 Total revenue $ 91,948 $ 102,852 $ 104,639 $ 102,708 $ 402,147 Income (loss) from operations 407 3,914 (899 ) 1,735 5,156 Net income (loss) 689 2,829 (864 ) 986 3,640 Net income (loss) attributable to non- controlling interests 35 773 (244 ) 299 863 Net income (loss) attributable to The Habit Restaurants, Inc. $ 654 $ 2,056 $ (620 ) $ 687 $ 2,777 Basic income (loss) per share of Class A common stock $ 0.03 $ 0.10 $ (0.03 ) $ 0.03 $ 0.14 Diluted income (loss) per share of Class A common stock $ 0.03 $ 0.10 $ (0.03 ) $ 0.03 $ 0.13 1) Certain totals may not sum exactly due to rounding. |
Schedule I_ Condensed Financial
Schedule I: Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Schedule I: Condensed Financial Information of Registrant | Schedule I: Condensed Financial Information of Registrant THE HABIT RESTAURANTS, INC. CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) December 31, December 25, 2019 2018 (in thousands, except share data) ASSETS Cash and cash equivalents $ 9,189 $ 6,181 Prepaid expenses and other current assets 3 — Total current assets 9,192 6,181 Deferred tax assets 86,678 87,918 Investment in subsidiaries 134,233 125,342 Total long-term assets 220,911 213,260 Total assets $ 230,103 $ 219,441 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Accrued expenses 15,586 12,408 Income tax payable — 104 Amounts payable to related parties under Tax Receivable Agreement, current portion 1,215 552 Total current liabilities 16,801 13,064 Amounts payable to related parties under Tax Receivable Agreement, net of current portion 81,567 82,142 Total liabilities 98,368 95,206 Commitments and contingencies (Note 3) Stockholders’ equity Class A common stock, par value $0.01 per share; 70,000,000 shares authorized and 20,779,567 shares issued and outstanding at December 31, 2019 and 20,667,718 shares issued and outstanding at December 25, 2018. 208 207 Class B common stock, par value $0.01 per share; 70,000,000 shares authorized and 5,336,807 shares issued and outstanding at December 31, 2019 and 5,381,550 shares issued and outstanding at December 25, 2018. 53 54 Additional paid-in capital 120,366 117,053 Retained earnings 11,108 6,921 Total stockholders’ equity 131,735 124,235 Total liabilities and stockholders’ equity $ 230,103 $ 219,441 See notes to condensed financial statements. THE HABIT RESTAURANTS, INC. CONDENSED STATEMENTS OF OPERATIONS (PARENT COMPANY ONLY) Fiscal Years Ended December 31, December 25, December 26, 2019 2018 2017 (amounts in thousands) Intercompany revenue $ 608 $ 449 $ 320 Operating expenses General and administrative expenses 608 449 320 Total operating expenses 608 449 320 Operating income — — — Other (income) expense Equity in net income of subsidiaries (4,661 ) (3,204 ) (5,049 ) Tax Receivable Agreement liability adjustment 372 1,555 (57,231 ) Interest (income) expense, net (149 ) (71 ) 11 Income before income taxes 4,438 1,720 62,269 Provision (benefit) for income taxes 961 (1,057 ) 65,388 Net income (loss) $ 3,477 $ 2,777 $ (3,119 ) See notes to condensed financial statements. THE HABIT RESTAURANTS, INC. CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) Fiscal Years Ended December 31, December 25, December 26, 2019 2018 2017 (amounts in thousands) Cash flows from operating activities: Net income (loss) $ 3,477 $ 2,777 $ (3,119 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Tax Receivable Agreement liability adjustment 372 1,555 (57,231 ) Deferred income taxes 961 (1,057 ) 65,388 Equity in net income of subsidiaries (4,661 ) (3,204 ) (5,049 ) Changes in assets and liabilities: Accrued expenses (33 ) 39 34 Income taxes payable (10 ) (13 ) (1 ) Net cash provided by operating activities 106 97 22 Cash flows from investing activities: Capital contribution in subsidiary — — (900 ) Net cash used in investing activities — — (900 ) Cash flows from financing activities: Tax receivable agreement payments to related parties (427 ) (1,464 ) (2,040 ) Tax distributions to LLC members 3,329 1,005 3,242 Net cash provided by (used in) financing activities 2,902 (459 ) 1,202 Net change in cash and cash equivalents 3,008 (362 ) 324 Cash and cash equivalents, beginning of period 6,181 6,543 6,219 Cash and cash equivalents, end of period $ 9,189 $ 6,181 $ 6,543 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 8 $ 26 $ 33 Cash paid for income taxes, net $ 10 $ 13 $ 1 See notes to condensed financial statements. THE HABIT RESTAURANTS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (PARENT COMPANY ONLY) Note 1—Organization The Habit Restaurants, Inc. (the "Company") was formed as a Delaware corporation on July 24, 2014, as a holding company for the purposes of facilitating an initial public offering (the “IPO”) of shares of Class A common stock. The Company acquired, by merger, entities that were members of The Habit Restaurants, LLC. On November 25, 2014, the Company completed the IPO of 5,750,000 shares of Class A common stock at a price to the public of $18.00 per share, raising net proceeds of $96.3 million after underwriting discounts and commissions but before expenses. The net proceeds were used to purchase, directly and indirectly, economic, non-voting interest in The Habit Restaurants, LLC (the "LLC Units") from The Habit Restaurants, LLC. On April 15, 2015, the Company completed a follow-on offering of 5,750,000 shares of Class A common stock at a price to the public of $30.96 per share (the “April 2015 Offering”). All of these shares were offered by the selling stockholders. The Company did not receive any proceeds from the offering. The Habit Restaurants, Inc. is a holding company with no direct operations that holds as its principal assets an equity interest in The Habit Restaurants, LLC and shares of subsidiaries, each of which in turn holds as its principal asset an equity interest in The Habit Restaurants, LLC, and relies on The Habit Restaurants, LLC to provide the Company with funds necessary to meet any financial obligations. As such, the Company has no independent means of generating revenue. Note 2—Basis of Presentation These condensed financial statements should be read in conjunction with the consolidated financial statements of The Habit Restaurants Inc. and the accompanying notes thereto, included in this annual report on Form 10-K. The Company is the sole managing member of The Habit Restaurants, LLC. The Company receives compensation from The Habit Restaurants, LLC for all costs associated with being a public company and maintaining its existence. These amounts are recorded in intercompany revenue on the condensed statements of operations. Note 3—Commitments and Contingencies In connection with the IPO that occurred in fiscal year 2014, the Company entered into a tax receivable agreement (the “TRA”). Under the TRA, the Company generally will be required to pay to the holders of economic, non-voting interest in The Habit Restaurants, LLC (the "Continuing LLC Owners") 85% of the amount of cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes that were created as a result of the IPO and any sales or exchanges (as determined for U.S. federal income tax purposes) to or with the Company of their interests in The Habit Restaurants, LLC for shares of our Class A common stock or cash, including any basis adjustment relating to the assets of The Habit Restaurants, LLC and (ii) tax benefits attributable to payments made under the TRA (including imputed interest). The Habit Restaurants, Inc. generally will retain 15% of the applicable tax savings. See Note 6 to the consolidated financial statements for more information regarding the TRA. As of December 31, 2019 and December 25, 2018, the Company recorded a liability of $82.8 million and $82.7 million, respectively, representing the payments due to the Continuing LLC Owners under the TRA. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Line Items] | |
Principles of Consolidation | Principles of Consolidation —The accompanying consolidated financial statements include the accounts of the Company, The Habit Restaurants, LLC and Franchise. All significant intercompany balances and transactions have been eliminated in consolidation. The Company had no operations prior to the IPO, other than (i) those incident to its formation, (ii) the merger transactions resulting in it holding interests, indirectly through its wholly-owned subsidiaries, the principal assets of which are equity interests in The Habit Restaurants, LLC (such interests collectively representing, as of December 31, 2019, a less than 20% interest in The Habit Restaurants, LLC) and (iii) the preparation of the IPO registration statement. |
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 amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s significant estimates include estimates for impairment of property and equipment, workers’ compensation insurance reserves, stock-based compensation expense, income tax receivable liabilities and lease liabilities which are determined based on the present value of the minimum rental payments using the Company’s incremental borrowing rate in effect at the time of lease commencement. |
Reclassifications | Reclassifications —Certain comparative prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications have no effect on previously reported net income or earnings per share. |
Segment Information | Segment Information —Management has determined that the Company has one reportable segment. Our chief operating decision maker (“CODM”) is our Chief Executive Officer; our CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents —For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of ninety days or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable —Accounts receivable consist of credit card receivables, amounts due from vendors and landlords, catering events and franchisees/licensees. Amounts are stated at the amounts management expects to collect from balances outstanding at fiscal year-end; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. |
Inventory | Inventory —Inventory consists of food, beverage, and paper goods and is stated at the lower of average cost or net realizable value. |
Concentration of Credit Risk | Concentration of Credit Risk —Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. At December 31, 2019 and December 25, 2018, the Company maintained approximately $9.7 million and $9.5 million, respectively, of its day-to-day operating cash balances with a major financial institution, of which $0.3 million and $0.4 million, respectively, represents restricted cash in an impound account for franchisees developing in states that require segregation of fees paid for stores not opened. At December 31, 2019 and December 25, 2018, the Company maintained approximately $0.4 million and $0.3 million, respectively, at the restaurant level for operating purposes. The remaining $24.3 million and $15.1 million at December 31, 2019 and December 25, 2018, respectively, was invested with a major financial institution and consisted entirely of U.S. Treasury instruments with a maturity of two months or less at the date of purchase. At December 31, 2019 and December 25, 2018 and at various times during the periods then ended, cash and cash equivalents balances were in excess of Federal Depository Insurance Corporation insured limits. While the Company monitors the cash balances in its operating accounts on a daily basis and adjusts the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Purchasing Concentration | Purchasing Concentration —The Company had four distributors covering different markets in fiscal year 2019. One of those distributors accounted for 45% of purchases for the fiscal year 2019. This vendor represented approximately 60% of accounts payable at December 31, 2019. That vendor accounted for 39% of purchases and 59% of accounts payable for the year ended December 25, 2018. The Company believes there are other available alternatives to the current vendors; however, the philosophy of the Company is to concentrate its purchases over a limited number of distributors in order to maintain quality, consistency, delivery requirements and cost controls and to increase the distributor’s commitment to the Company. The Company relies upon, and expects to continue to rely upon, several single source suppliers; however, management believes sufficient alternative suppliers exist in the marketplace. |
Fair Value Measurements | Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to the short maturities of these instruments. |
Property and Equipment | Property and Equipment —Property and equipment is generally carried at cost, less accumulated depreciation. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included in our consolidated statement of operations. Depreciation on property and equipment is determined using the straight-line method over the assets’ estimated useful lives, ranging from three to 10 years. Leasehold improvements are amortized using the straight-line method over the shorter of the term of the lease, including reasonably assured extensions, or their estimated useful lives. Maintenance and repairs are charged against income as incurred and additions, renewals, and improvements are capitalized. Smallwares which consist of pots, pans and other cooking utensils are carried at cost and any replacements are expensed when acquired. |
Goodwill | Goodwill —Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Under Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other, goodwill and indefinite lived intangible assets are not amortized but tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. For purposes of applying ASC 350, management has determined that the Company has one reporting unit for the analysis. As of September of 2011, the Financial Accounting Standards Board issued an amendment of the FASB Accounting Standards Codification 350 that has been coined the ASC 350 Impairment Analysis – “Step 0.” Step 0 allows for an entity to first assess qualitative factors to determine whether it is necessary to perform further analysis. If determined necessary after the qualitative test, the Company would assess if the carrying amount exceeds the reporting unit’s fair value and the Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Accordingly, the Company has not recorded any impairment charges related to goodwill. |
Tradenames | Tradenames —Tradenames acquired in a business combination and determined to have an indefinite useful life are not amortized because there is no foreseeable limit to the cash flows generated by the intangible asset, and have no legal, contractual, regulatory, economic or competitive limiting factors. Tradenames are evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. The Company also annually evaluates any tradenames that are not being amortized to determine whether events and circumstances continue to support an indefinite useful life. If a tradename that is not being amortized is determined to have a finite useful life, the asset will be amortized prospectively over the estimated remaining useful life and tested for impairment in the same manner as a long-lived asset. Accordingly, the Company has not recorded any impairment charges related to tradenames. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets —The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related assets to its estimated fair value. Fair value is generally based on a discounted cash flow analysis. Based on its review for fiscal year 2019, the Company does not believe that any indicators of impairment of its long-lived assets has occurred and accordingly no such write-downs have been recorded. The Company recorded a non-cash impairment charge of $3.1 million in fiscal year 2018 for three restaurants in the Orlando, Florida market. |
Restaurant Closure Charges | Restaurant Closure Charges —During fiscal year 2019, the Company closed three restaurants in the Orlando, Florida market, all of which were previously impaired during fiscal year 2018, and also decided not to move forward with the development of two restaurants. The Company recorded restaurant closure charges of $1.0 million during fiscal year 2019. Restaurant closure charges consist primarily of lease termination costs, rent expense related to closed restaurants, severance and other direct costs related to closed restaurants. |
Leases and Tenant Improvement Allowances | Leases and Tenant Improvement Allowances — In fiscal year 2019 we adopted ASC 842 Leases which required lessees to recognize a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with an expected term greater than 12 months on its balance sheet. Operating lease ROU assets and liabilities are recognized on our consolidated balance sheet at commencement date, which is the date we gain access to the property. The lease liability is determined based on the present value of the minimum rental payments using our incremental borrowing rate in effect at the time of lease commencement. The ROU asset is determined based on the lease liability adjusted for lease incentives received. Lease expense is recognized on a straight-line bases over the lease term. Certain leases require contingent rent above the minimum lease payments based on a percentage of sales, these contingent amounts are excluded in determining the lease liability and ROU asset and are accounted for as period expense. The option periods are not included in the determination of the lease liability and ROU asset as we are not reasonably certain if we will extend at the time of lease commencement. Lease expenses for the period prior to the restaurant opening are reported as pre-opening expense in the consolidated statements of operations. Lease expenses for the period after a restaurant opens are reported on the occupancy and other operating expenses line of the consolidated statements of operations. |
Asset Retirement Obligations (AROs) | Asset Retirement Obligations (AROs) —The Company has AROs arising from contractual obligations under certain leases to perform certain asset retirement activities at the time that certain leasehold improvements are disposed of. At the inception of a lease with such conditions, the Company records an AROs liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability was initially measured at fair value and subsequently is adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The Company’s AROs is $0.2 million and $0.2 million at December 31, 2019 and December 25, 2018, respectively. |
Self-insurance Program | Self-insurance Program —Beginning in fiscal year 2018, the Company began a modified self-insurance workers’ compensation program. In order to minimize the exposure under the self-insurance program, the Company purchased stop-loss coverage both on a per-occurrence and on an aggregate basis. The self-insured losses under the program are accrued based on the Company’s estimate of the expected liability for both claims incurred and incurred but not reported basis. The accruals for the modified self-insurance program involve certain management judgments and assumptions regarding the frequency and severity of claims, recent historical patterns of claim development, independent actuarial assessments, and the Company’s experience with claim-reserve management and settlement practices. These accruals are included in employee-related accruals in the accompanying condensed consolidated balance sheet. As of December 31, 2019 and December 25, 2018, the accruals related to the self-insurance workers’ compensation program were $5.5 million and $3.1 million, respectively. The Company’s actual losses may be significantly different than the estimates currently recorded. |
Revenue Recognition | Revenue Recognition —The Company recognizes revenue when products are delivered to the customers or meals are served. Revenue recognized excludes sales taxes. |
Franchise Area Development Fees | Franchise Area Development Fees —The Company receives area development fees from franchisees and licensees when they execute multi-unit area development agreements. The Company does not recognize revenue from the agreements until the related restaurants open or, in certain circumstances, the fees are applied to satisfy other obligations of the franchisee or licensee. In the event of a termination of a franchise/license agreement these fees may be recognized as revenue at the time of termination. There were franchise area development fees of $0.4 million, $1.2 million and $0.1 million recognized in fiscal years 2019, 2018 and 2017, respectively. Included in fiscal year 2019 is $0.3 million related to the termination of two agreements in fiscal year 2019 and included in fiscal year 2018 amount is $1.1 million related to the termination of two franchise agreements in fiscal year 2018. |
Sales Tax | Sales Tax —Sales tax collected from customers and remitted to governmental authorities is accounted for on a net basis and therefore is excluded from net revenue in the consolidated statements of operations. This obligation is included in sales taxes payable until the taxes are remitted to the appropriate taxing authorities. |
Advertising Costs | Advertising Costs —Advertising and promotional costs are expensed as incurred. Advertising and promotions expense totaled $4.7 million, $3.6 million and $3.2 million for the fiscal years ended December 31, 2019, December 25, 2018 and December 26, 2017, respectively, and is included in occupancy and other operating expenses, pre-opening costs and general and administrative expenses in the consolidated statements of operations. |
Pre-opening Costs | Pre-opening Costs —Pre-opening costs are costs incurred in connection with the hiring and training of personnel, as well as occupancy, which can include the amortization of lease expenses, and other operating expenses during the build-out period of new restaurant openings. Pre-opening costs are expensed as incurred. |
Income Taxes | Income Taxes —The Company records a tax provision for the anticipated tax consequences of the reported results of operations. The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company may record a valuation allowance, if conditions are applicable, to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes. ASC 740 prescribes a recognition threshold and measurement process for accounting for uncertain tax positions and also provides guidance on various related matters such as derecognition, interest, penalties, and required disclosures. The Company has no uncertain tax liabilities at December 31, 2019. In the future, if an uncertain tax position arises, interest and penalties will be accrued and included on the provision for income taxes line of the Statements of Consolidated Income. The Company files tax returns in the U.S. federal and state jurisdictions. Generally, the Company is subject to examination by U.S. federal (or state and local) income tax authorities for three to four years from the filing of a tax return. |
Non-controlling Interest | Non-controlling Interest —The non-controlling interest on the consolidated statement of operations represents the portion of earnings or loss before income taxes attributable to the economic interest in the Company’s subsidiary, The Habit Restaurants, LLC, held by the non-controlling Continuing LLC Owners. Non-controlling interest on the consolidated balance sheet represents the portion of net assets of the Company attributable to the non-controlling Continuing LLC Owners, based on the portion of the LLC Units owned by such unit holders. As of December 31, 2019 and December 25, 2018, the non-controlling interest was 20.4% and 20.7%, respectively. |
Management Incentive Plans | Management Incentive Plans —Prior to the completion of the Company’s IPO, the board of directors adopted The Habit Restaurants, Inc. 2014 Omnibus Incentive Plan which was amended and restated in April 2019. The provisions to this plan are detailed in Note 11-Management Incentive Plans. The Habit Restaurants, LLC maintained a management incentive plan that provided for the grant of Class C units. Class C units were intended to be “profits interests” for U.S. federal income tax purposes. The Class C units participated in distributions and, if vested, could have been converted to Class A units. Because of the ability of the Class C Unit-holder to convert his or her Class C units to Class A units, the Class C units were accounted for as equity classified awards. In conjunction with the Company’s IPO, all vested and unvested units issued under this plan were exchanged for Common Units of The Habit Restaurants, LLC. The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the award using the straight-line method. |
Comprehensive Income | Comprehensive Income —Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income is the same as net income for all periods presented. Therefore, a separate statement of comprehensive income is not included in the accompanying consolidated financial statements. |
Earnings Per Share | Earnings Per Share —Basic earnings per share (“basic EPS”) is computed by dividing net income attributable to the Habit Restaurants, Inc. by the weighted average number of shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect during the reporting period to all dilutive potential shares outstanding resulting from employee stock-based awards. The following table sets forth the calculation of basic and diluted earnings per share for fiscal years 2019, 2018 and 2017: Fiscal Years Ended December 31, December 25, December 26, (amounts in thousands, except share and per share data) 2019 2018 2017 Numerator: Net income (loss) attributable to controlling and non-controlling interests $ 4,677 $ 3,640 $ (1,580 ) Less: net income attributable to non-controlling interests $ (1,200 ) $ (863 ) $ (1,539 ) Net income (loss) attributable to The Habit Restaurants, Inc. $ 3,477 $ 2,777 $ (3,119 ) Denominator: Weighted average shares of Class A common stock outstanding Basic 20,736,551 20,538,637 20,285,780 Diluted 20,786,539 20,645,546 20,285,780 Net income (loss) attributable to The Habit Restaurants, Inc. per share Class A common stock Basic $ 0.17 $ 0.14 $ (0.15 ) Diluted $ 0.17 $ 0.13 $ (0.15 ) Below is a reconciliation of basic and diluted share counts Basic 20,736,551 20,538,637 20,285,780 Dilutive effect of stock options and restricted stock units 49,988 106,909 — Diluted 20,786,539 20,645,546 20,285,780 Diluted earnings per share of Class A common stock is computed similarly to basic earnings per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury method, if dilutive. The Company’s Class B common stock represent voting interests and do not participate in the earnings of the Company. Accordingly, there is no earnings per share related to the Company’s Class B common stock. The Company’s LLC Units are considered common stock equivalents for this purpose. The number of additional shares of Class A common stock related to these common stock equivalents is calculated using the if-converted method. The potential impact of the exchange of the 5,336,807 LLC Units on the diluted EPS had no impact and were therefore excluded from the calculation. As of December 31, 2019, there were 3,525,275 options authorized under our Amended and Restated 2014 Omnibus Incentive Plan of which 2,536,077, 1,950,726, and 1,296,513 had been granted as of December 31, 2019, December 25, 2018 and December 26, 2017, respectively. The number of dilutive shares of Class A common stock related to these options was calculated using the treasury stock method and 1,689,884, 5,576 and 56,782 shares have been excluded from the diluted EPS for fiscal years 2019, 2018 and 2017, respectively, because they were anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the standard on January 1, 2020. We do not expect the adoption of ASU 2018-15 to result in a material change to our consolidated financial statements. The Company has reviewed |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In February 2016, the FASB issued ASU No. 2016-02 Leases, which supersedes ASC 840 Leases and creates a new topic, ASC 842 Leases. This update requires lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with an expected term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. This transition method option is in addition to the existing transition method of using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company adopted this ASU in the beginning of the first quarter of fiscal year 2019 and used the cumulative-effect transition method. The Company elected the available practical expedient options which allows an entity to not reassess whether any existing or expired contracts contain leases, not reassess lease classifications for existing or expired leases, and an entity does not need to reassess initial direct costs for any existing leases. Upon transition, the Company recorded an increase to opening equity of $1.0 million, net of tax, of which $0.7 million was recognized in retained earnings and $0.3 million in non-controlling interests, with a corresponding decrease of $18.6 million in property and equipment, net, a decrease in deemed landlord financing of $19.8 million and a decrease of $0.2 million in deferred tax assets, related to the derecognition of the buildings that the Company had determined that it was the accounting owner of under build to suit lease guidance contained in ASC 840 Leases. The leases where the Company had previously determined that it was the accounting owner are now accounted for as operating leases under the new standard which will result in an increase in occupancy and other operating expenses and a decrease in depreciation and amortization expense and interest expense, net on its consolidated statement of operations. The new standard will not have a material impact on the Company’s consolidated statement of operations for its existing operating leases. In addition, upon transition, the Company also recognized $174.4 million for operating lease liabilities based on the present value of the remaining minimum rental payments using discount rates based on the Company’s borrowing rate as of the effective date and $149.8 million for right-of-use assets based upon the lease liabilities adjusted for deferred rent and lease incentives balances of $24.6 million at adoption. See Note 8—Leases for additional information. |
Franchise or License [Member] | |
Accounting Policies [Line Items] | |
Revenue Recognition | Franchise/License Fee Revenue —Franchise/license fee revenue consists of fees charged to franchise/license owners who enter into a franchise/license agreement with the Company. Initial franchise/license fees are recognized as revenue as the performance obligations of the contract are satisfied. The Company has identified separate performance obligations over the term of the contract and recognizes revenue as those performance obligations are satisfied. These performance obligations include rights to use trademarks and intellectual property, initial training and other operational support visits. There was franchise/license fee revenue of $0.1 million, $0.2 million and $0.1 million recognized in fiscal years 2019, 2018 and 2017, respectively. |
Royalty [Member] | |
Accounting Policies [Line Items] | |
Revenue Recognition | Royalty Revenue —Royalty revenue represents royalties earned from each of the franchisees in accordance with the financial disclosure document and the franchise agreement for use of the “The Habit Burger Grill” name, menus, processes, and procedures. The royalty rate in the franchise agreement is typically 5% of the gross sales of each restaurant operated by each franchisee. Such revenue is recognized when earned and is payable to the Company monthly before the sixth business day of the subsequent month. There was royalty revenue of $2.0 million, $1.5 million and $0.9 million recognized in fiscal years 2019, 2018 and 2017, respectively. |
Gift Cards [Member] | |
Accounting Policies [Line Items] | |
Revenue Recognition | Gift Cards —Revenue related to the sale of gift cards is deferred until the gift card is redeemed. Outstanding gift cards are tracked by a third-party administrator. The balance of unredeemed gift cards was $2.2 million and $2.1 million at December 31, 2019 and December 25, 2018, respectively, and is included in accrued expenses in the accompanying consolidated balance sheets. Gift cards do not carry an expiration date; therefore, customers can redeem their gift cards for products indefinitely and the Company does not deduct non-usage fees from outstanding gift card balances. A certain amount of gift cards will not be redeemed and may become breakage income or may need to be remitted to the various states. To date, the Company has not recognized breakage income of gift cards or remitted any amounts to the various states. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings Per Share | The following table sets forth the calculation of basic and diluted earnings per share for fiscal years 2019, 2018 and 2017: Fiscal Years Ended December 31, December 25, December 26, (amounts in thousands, except share and per share data) 2019 2018 2017 Numerator: Net income (loss) attributable to controlling and non-controlling interests $ 4,677 $ 3,640 $ (1,580 ) Less: net income attributable to non-controlling interests $ (1,200 ) $ (863 ) $ (1,539 ) Net income (loss) attributable to The Habit Restaurants, Inc. $ 3,477 $ 2,777 $ (3,119 ) Denominator: Weighted average shares of Class A common stock outstanding Basic 20,736,551 20,538,637 20,285,780 Diluted 20,786,539 20,645,546 20,285,780 Net income (loss) attributable to The Habit Restaurants, Inc. per share Class A common stock Basic $ 0.17 $ 0.14 $ (0.15 ) Diluted $ 0.17 $ 0.13 $ (0.15 ) Below is a reconciliation of basic and diluted share counts Basic 20,736,551 20,538,637 20,285,780 Dilutive effect of stock options and restricted stock units 49,988 106,909 — Diluted 20,786,539 20,645,546 20,285,780 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Summary of Net Income Attributable to Non-Controlling Interests | The non-controlling interests upon the completion of the IPO was 65.5%. Upon completion of the follow-on offering in April 2015, the non-controlling interests portion was 47.1%. The non-controlling interests portion changes as Continuing LLC Owners exchange their LLC Units, together with a corresponding number of shares of Class B common stock, for Class A common stock. The non-controlling interests on the consolidated balance sheet were adjusted to reflect the non-controlling interests portion as of December 31, 2019 and December 25, 2018, which was 20.4% and 20.7%, respectively. The amounts of these changes are reflected in the consolidated statements of stockholders’ equity. The amount recorded in equity for fiscal years 2019 2018 was $0.5 million and $1.5 million, respectively. Net income attributable to non-controlling interests is calculated based on the non-controlling interests ownership percentage in effect at that time. The table below represents the weighted average non-controlling interests for the periods presented (dollar amounts in thousands): Fiscal Year Ended December 31, December 25, December 26, 2019 2018 2017 Income before income taxes of The Habit Restaurants, LLC and its subsidiaries $ 5,861 $ 4,067 $ 6,609 Weighted average non-controlling interests ownership percentage 20.5 % 21.2 % 23.3 % Net income attributable to non-controlling interests $ 1,200 $ 863 $ 1,539 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: (amounts in thousands) Fiscal Year Ended December 31, December 25, 2019 2018 Leasehold improvements $ 139,749 $ 120,890 Equipment 83,406 68,532 Furniture and fixtures 30,966 28,487 Buildings under deemed landlord financing — 19,566 Smallwares 2,540 2,260 Vehicles 2,462 2,392 Construction in progress 7,279 8,370 266,402 250,497 Less: Accumulated depreciation and amortization (115,233 ) (89,751 ) $ 151,169 $ 160,746 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income before Provision for Income Taxes | Income before the provision for income taxes as shown in the accompanying consolidated statements of operations is all domestic and is as follows (in thousands): Fiscal Year Ended 2019 2018 2017 Income before provision for income taxes $ 5,638 $ 2,583 $ 63,808 |
Components of Provision for Income Taxes | Components of the provision for income taxes consist of the following (in thousands): Fiscal Year Ended 2019 2018 2017 Current Federal $ — $ — $ — State and local 5 13 8 Total current expense $ 5 $ 13 $ 8 Deferred expense Federal $ 1,075 $ 850 $ 58,778 State and local (119 ) (1,920 ) 6,602 Total deferred expense $ 956 $ (1,070 ) $ 65,380 Provision (benefit) for income taxes $ 961 $ (1,057 ) $ 65,388 |
Reconciliation of U.S. Statutory Income Tax Rate to Habit Restaurants, Inc. Effective Tax Rate | A reconciliation of the U.S. statutory income tax rate to The Habit Restaurants, Inc. effective tax rate is as follows: Fiscal Year Ended 2019 2018 2017 U.S. statutory tax rate 21.0 % 21.0 % 35.0 % State and local taxes, net of federal effect 4.3 % 4.7 % 4.8 % Permanent differences 1.0 % 4.1 % 0.4 % Shortfall from restricted stock units 1.5 % 5.8 % 0.2 % Remeasurement of deferred tax assets in connection with federal rate changes — — (6.8 )% Remeasurement of deferred tax assets in connection with state rate changes (5.3 )% (66.4 )% 5.7 % Hiring credits (0.8 )% (3.2 )% (0.1 )% Remeasurement of deferred tax assets in connection with the enactment of the Tax Cuts and Jobs Act — — 75.9 % Remeasurement of liabilities under Tax Receivable Agreement with the enactment of the Tax Cuts and Jobs Act — — (11.8 )% Income passed through to non-controlling interests (4.7 )% (6.9 )% (0.8 )% Effective tax rate 17.0 % (40.9 )% 102.5 % |
Summary of Deferred Tax Assets and Liabilities | These temporary differences result in taxable or deductible amounts in future years. Details of The Habit Restaurants, Inc. deferred tax assets and liabilities are summarized as follows (in thousands): Fiscal Year Ended December 31, 2019 December 25, 2018 Deferred tax assets Deferred income $ 2,440 $ 2,417 Deferred lease liability 41,460 1,874 Tax Receivable Agreement - imputed interest 5,022 4,999 Tax goodwill and intangibles 68,568 73,243 Net operating losses 15,146 11,792 Other 3,108 4,653 Total deferred tax assets 135,744 98,978 Deferred tax liabilities Property and equipment (11,939 ) (10,149 ) Prepaids (300 ) (163 ) Lease right-of-use assets (35,902 ) — Other (925 ) (748 ) Total deferred tax liabilities (49,066 ) (11,060 ) Net deferred tax assets $ 86,678 $ 87,918 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Lease Costs | The following table represents the lease costs for fiscal year 2019 (amounts in thousands): Fiscal year ended December 31, 2019 Operating lease cost 27,555 Contingent rent 999 Total lease cost $ 28,554 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases (amounts in thousands): Fiscal year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28,663 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases: Fiscal year ended December 31, 2019 Weighted Average Remaining Lease Term Operating leases 8.5 Weighted Average Discount Rate Operating leases 4.6% |
Maturities of Lease Liabilities | Maturities of lease liabilities (amounts in thousands): Fiscal year end Operating Leases 2020 $ 31,087 2021 31,093 2022 29,723 2023 28,180 2024 25,730 2025 and thereafter 85,641 Total lease payments 231,454 Less: imputed interest (42,088 ) Lease liabilities as of December 31, 2019 $ 189,366 |
Management Incentive Plans (Tab
Management Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Restricted Stock Units, Activity | A summary of stock-based compensation activity related to restricted stock units for fiscal years 2019, 2018 and 2017 is as follows: Units Weighted Average Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Beginning Balance at December 27, 2016 145,047 $ 22.38 2.2 $ 2,589,089 Granted 140,911 $ 15.81 Forfeited (5,107 ) $ 19.21 Vested (30,299 ) $ 23.08 Outstanding and expected to vest at December 26, 2017 250,552 $ 18.66 2.0 $ 2,380,244 Granted 175,213 $ 9.72 Forfeited (30,067 ) $ 17.13 Vested (56,465 ) $ 19.52 Outstanding and expected to vest at December 25, 2018 339,233 $ 14.04 1.9 $ 3,422,861 Granted 178,351 $ 10.18 Forfeited (19,007 ) $ 12.47 Vested (86,856 ) $ 15.46 Outstanding and expected to vest at December 31, 2019 411,721 $ 12.14 1.6 $ 4,294,250 |
Non-Qualified Stock Options [Member] | |
Schedule of Non-Qualified Stock Option Grants, Activity | The following table sets forth information about the fair value of the non-qualified stock option grants on the date of grant using the Black-Scholes option-pricing model and the weighted average assumptions used for such a grant: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Beginning Balance at December 27, 2016 491,440 $ 22.69 9.1 $ — Granted 485,491 $ 16.13 Forfeited (15,263 ) $ 20.99 Exercised — Outstanding and expected to vest at December 26, 2017 961,668 $ 19.41 8.6 $ — Granted 479,000 $ 9.41 Forfeited (124,834 ) $ 17.65 Exercised — Outstanding and expected to vest at December 25, 2018 1,315,834 $ 15.71 8.2 $ — Granted 407,000 $ 10.09 Forfeited (56,105 ) $ 13.91 Exercised — Outstanding and expected to vest at December 31, 2019 1,666,729 $ 14.57 7.7 $ 674,435 Exercisable at December 31, 2019 535,972 $ 18.95 6.7 $ 106,074 Fiscal Year Ended Disclosure Information 2019 2018 2017 Weighted average fair value of options granted $ 2.96 $ 3.03 $ 4.30 Dividend yield 0.0 % 0.0 % 0.0 % Weighted average risk-free interest rate 2.31 % 2.73 % 1.92 % Weighted average volatility 25.1 % 28.6 % 28.8 % Forfeiture rate 6.7 % 6.0 % 4.4 % Expected term (years) 6.0 5.6 5.5 |
2014 Omnibus Incentive Plan [Member] | |
Summary of Stock-Based Compensation Expense Related to Incentive Plan | The stock-based compensation expense related to the Amended and Restated 2014 Omnibus Incentive Plan and to units issued under The Habit Restaurants, LLC Management Incentive Plan is summarized in the table below for the periods indicated: (in thousands) December 31, December 25, December 26, 2019 2018 2017 Stock-based compensation expense $ 3,332 $ 2,714 $ 2,518 |
Quarterly Financial Reporting (
Quarterly Financial Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Reporting | (amounts in thousands except per share data) Fiscal Quarter ( 1) 1Q19 2Q19 3Q19 4Q19 FY19 Total revenue $ 108,174 $ 117,928 $ 117,303 $ 122,654 $ 466,059 Income (loss) from operations (274 ) 3,435 1,553 1,032 5,747 Net income (loss) (231 ) 2,680 1,365 863 4,677 Net income (loss) attributable to non- controlling interests (55 ) 708 327 220 1,200 Net income (loss) attributable to The Habit Restaurants, Inc. $ (176 ) $ 1,972 $ 1,038 $ 643 $ 3,477 Basic income (loss) per share of Class A common stock $ (0.01 ) $ 0.10 $ 0.05 $ 0.03 $ 0.17 Diluted income (loss) per share of Class A common stock $ (0.01 ) $ 0.09 $ 0.05 $ 0.03 $ 0.17 Fiscal Quarter ( 1) 1Q18 2Q18 3Q18 4Q18 FY18 Total revenue $ 91,948 $ 102,852 $ 104,639 $ 102,708 $ 402,147 Income (loss) from operations 407 3,914 (899 ) 1,735 5,156 Net income (loss) 689 2,829 (864 ) 986 3,640 Net income (loss) attributable to non- controlling interests 35 773 (244 ) 299 863 Net income (loss) attributable to The Habit Restaurants, Inc. $ 654 $ 2,056 $ (620 ) $ 687 $ 2,777 Basic income (loss) per share of Class A common stock $ 0.03 $ 0.10 $ (0.03 ) $ 0.03 $ 0.14 Diluted income (loss) per share of Class A common stock $ 0.03 $ 0.10 $ (0.03 ) $ 0.03 $ 0.13 1) Certain totals may not sum exactly due to rounding. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2019EmployeeRestaurantLicenseFranchiseshares | Dec. 25, 2018shares | Dec. 26, 2017shares | |
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | |||
Place of formation | DE | ||
Date of formation | Jul. 24, 2014 | ||
Common units held | 5,336,807 | ||
Voting rights description | Each share of Class B common stock provides its holder with no economic rights but entitles the holder to one vote on matters presented to The Habit Restaurants, Inc.’s stockholders. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law. | ||
Number of fast casual restaurants | Restaurant | 241 | ||
Number of employees | Employee | 6,437 | ||
Number of license agreements | License | 7 | ||
Number of franchise agreements | Franchise | 7 | ||
Number of licensed location | License | 7 | ||
Number of franchise location | Franchise | 23 | ||
Restricted Stock Units (RSUs) [Member] | |||
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | |||
Units, vested | 86,856 | 56,465 | 30,299 |
Units, forfeited | 19,007 | 30,067 | 5,107 |
Class B Common Stock [Member] | |||
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | |||
Conversion of common stock | 43,082 | ||
Habit Restaurants, LLC [Member] | |||
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | |||
Economic interest | 79.60% | ||
Habit Restaurants, LLC [Member] | |||
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | |||
Common units held | 20,779,567 | ||
Tax withholding obligations for the vesting of restricted stock units | 18,089 | ||
Units, forfeited | 1,661 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2019USD ($)Franchiseshares | Sep. 24, 2019USD ($) | [1] | Jun. 25, 2019USD ($) | [1] | Mar. 26, 2019USD ($) | [1] | Dec. 25, 2018USD ($)Franchise | Sep. 25, 2018USD ($) | [1] | Jun. 26, 2018USD ($) | [1] | Mar. 27, 2018USD ($) | [1] | Dec. 31, 2019USD ($)RestaurantFranchiseSegmentDistributorshares | Dec. 25, 2018USD ($)Franchiseshares | Dec. 26, 2017USD ($)shares | Apr. 30, 2015 | Nov. 25, 2014 | |||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Number of reportable segment | Segment | 1 | ||||||||||||||||||||||
Cash | $ 9,700,000 | $ 9,500,000 | $ 9,700,000 | $ 9,500,000 | |||||||||||||||||||
Restricted cash | 270,000 | 375,000 | 270,000 | 375,000 | |||||||||||||||||||
Cash | 400,000 | 300,000 | 400,000 | 300,000 | |||||||||||||||||||
U.S. Treasury instruments | 24,300,000 | 15,100,000 | $ 24,300,000 | 15,100,000 | |||||||||||||||||||
Non-cash impairment charge | 3,100,000 | ||||||||||||||||||||||
Number of closed restaurants | Restaurant | 3 | ||||||||||||||||||||||
Number of restaurants development not to move forward | Restaurant | 2 | ||||||||||||||||||||||
Restaurant closure charges | $ 1,000,000 | ||||||||||||||||||||||
Asset retirement obligation | 200,000 | 200,000 | 200,000 | 200,000 | |||||||||||||||||||
Self-insurance accruals | 5,500,000 | 3,100,000 | 5,500,000 | 3,100,000 | |||||||||||||||||||
Revenue | $ 122,654,000 | [1] | $ 117,303,000 | $ 117,928,000 | $ 108,174,000 | 102,708,000 | [1] | $ 104,639,000 | $ 102,852,000 | $ 91,948,000 | $ 466,059,000 | [1] | 402,147,000 | [1] | $ 331,386,000 | ||||||||
Royalty rate | 5.00% | ||||||||||||||||||||||
Number of franchise agreements | Franchise | 7 | 7 | |||||||||||||||||||||
Unredeemed gift cards | $ 2,200,000 | 2,100,000 | $ 2,200,000 | 2,100,000 | |||||||||||||||||||
Advertising and promotional costs | 4,700,000 | 3,600,000 | $ 3,200,000 | ||||||||||||||||||||
Uncertain tax liability | $ 0 | 103,000 | $ 0 | 103,000 | |||||||||||||||||||
Common units held | shares | 5,336,807 | 5,336,807 | |||||||||||||||||||||
Retained earnings | $ 11,108,000 | 6,921,000 | $ 11,108,000 | 6,921,000 | |||||||||||||||||||
Non-controlling interests | 26,027,000 | $ 25,759,000 | 26,027,000 | $ 25,759,000 | |||||||||||||||||||
Operating lease liabilities | 189,366,000 | 189,366,000 | |||||||||||||||||||||
Right-of-use asset expect to recognize | 163,980,000 | 163,980,000 | |||||||||||||||||||||
ASU No. 2016-02 [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Increase to opening equity | 1,000,000 | 1,000,000 | |||||||||||||||||||||
Retained earnings | 700,000 | 700,000 | |||||||||||||||||||||
Non-controlling interests | 300,000 | 300,000 | |||||||||||||||||||||
Decrease to property and equipment | 18,600,000 | ||||||||||||||||||||||
Decrease in deemed landlord financing | 19,800,000 | ||||||||||||||||||||||
Decrease in deferred tax assets | 200,000 | ||||||||||||||||||||||
Operating lease liabilities | 174,400,000 | 174,400,000 | |||||||||||||||||||||
Right-of-use asset expect to recognize | 149,800,000 | 149,800,000 | |||||||||||||||||||||
Deferred rent and lease incentives | $ 24,600,000 | $ 24,600,000 | |||||||||||||||||||||
Class A Common Stock [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Anti-dilutive shares | shares | 1,689,884 | 5,576 | 56,782 | ||||||||||||||||||||
Amended and Restated 2014 Omnibus Incentive Plan [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Options granted | shares | 2,536,077 | 1,950,726 | 1,296,513 | ||||||||||||||||||||
Options and Restricted Stock Units (RSUs) [Member] | Amended and Restated 2014 Omnibus Incentive Plan [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Number of shares authorized | shares | 3,525,275 | 3,525,275 | |||||||||||||||||||||
Habit Restaurants, LLC [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Non-controlling interests ownership percentage | 20.40% | 20.70% | 20.40% | 20.70% | 47.10% | 65.50% | |||||||||||||||||
Franchise/License [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Revenue | $ 100,000 | $ 200,000 | $ 100,000 | ||||||||||||||||||||
Royalty [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Revenue | 2,000,000 | 1,500,000 | 900,000 | ||||||||||||||||||||
Franchise area development fees [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Revenue | 400,000 | 1,200,000 | $ 100,000 | ||||||||||||||||||||
Termination of Franchise Agreements [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Revenue | $ 300,000 | $ 1,100,000 | |||||||||||||||||||||
Number of franchise agreements | Franchise | 2 | 2 | 2 | 2 | |||||||||||||||||||
Leasehold improvements [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Property and equipment useful life, description | Shorter of the term of the lease, including reasonably assured extensions, or their estimated useful lives. | ||||||||||||||||||||||
Purchasing Concentration Risk [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Number of distributor | Distributor | 4 | ||||||||||||||||||||||
Cost of Goods, Total [Member] | Purchasing Concentration Risk [Member] | Distributor One [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Concentration Risk, Percentage | 45.00% | 39.00% | |||||||||||||||||||||
Accounts Payable [Member] | Purchasing Concentration Risk [Member] | Distributor One [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Concentration Risk, Percentage | 60.00% | 59.00% | |||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Percentage of ownership interest | 20.00% | 20.00% | |||||||||||||||||||||
Property and equipment useful life | 10 years | ||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||
Property and equipment useful life | 3 years | ||||||||||||||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2019 | [1] | Sep. 24, 2019 | [1] | Jun. 25, 2019 | [1] | Mar. 26, 2019 | [1] | Dec. 25, 2018 | [1] | Sep. 25, 2018 | [1] | Jun. 26, 2018 | [1] | Mar. 27, 2018 | [1] | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |||
Numerator: | |||||||||||||||||||||
Net income (loss) attributable to controlling and non-controlling interests | $ 863 | $ 1,365 | $ 2,680 | $ (231) | $ 986 | $ (864) | $ 2,829 | $ 689 | $ 4,677 | [1] | $ 3,640 | [1] | $ (1,580) | ||||||||
Less: net income attributable to non-controlling interests | (220) | (327) | (708) | 55 | (299) | 244 | (773) | (35) | (1,200) | [1] | (863) | [1] | (1,539) | ||||||||
Net income (loss) attributable to The Habit Restaurants, Inc. | $ 643 | $ 1,038 | $ 1,972 | $ (176) | $ 687 | $ (620) | $ 2,056 | $ 654 | $ 3,477 | [1] | $ 2,777 | [1] | $ (3,119) | ||||||||
Class A Common Stock [Member] | |||||||||||||||||||||
Denominator: Weighted average shares of Class A common stock outstanding | |||||||||||||||||||||
Basic | 20,736,551 | 20,538,637 | 20,285,780 | ||||||||||||||||||
Diluted | 20,786,539 | 20,645,546 | 20,285,780 | ||||||||||||||||||
Net income (loss) attributable to The Habit Restaurants, Inc. per share Class A common stock | |||||||||||||||||||||
Basic | $ 0.03 | $ 0.05 | $ 0.10 | $ (0.01) | $ 0.03 | $ (0.03) | $ 0.10 | $ 0.03 | $ 0.17 | [1] | $ 0.14 | [1] | $ (0.15) | ||||||||
Diluted | $ 0.03 | $ 0.05 | $ 0.09 | $ (0.01) | $ 0.03 | $ (0.03) | $ 0.10 | $ 0.03 | $ 0.17 | [1] | $ 0.13 | [1] | $ (0.15) | ||||||||
Below is a reconciliation of basic and diluted share counts | |||||||||||||||||||||
Basic | 20,736,551 | 20,538,637 | 20,285,780 | ||||||||||||||||||
Dilutive effect of stock options and restricted stock units | 49,988 | 106,909 | |||||||||||||||||||
Diluted | 20,786,539 | 20,645,546 | 20,285,780 | ||||||||||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Non-controlling Interests - Add
Non-controlling Interests - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 25, 2018 | Apr. 30, 2015 | Nov. 25, 2014 | |
Habit Restaurants, LLC [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Non-controlling interests recorded in equity | $ 0.5 | $ 1.5 | ||
Habit Restaurants, LLC [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Non-controlling interests ownership percentage | 20.40% | 20.70% | 47.10% | 65.50% |
Non-controlling Interests - Sum
Non-controlling Interests - Summary of Net Income Attributable to Non-Controlling Interests (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2019 | [1] | Sep. 24, 2019 | [1] | Jun. 25, 2019 | [1] | Mar. 26, 2019 | [1] | Dec. 25, 2018 | [1] | Sep. 25, 2018 | [1] | Jun. 26, 2018 | [1] | Mar. 27, 2018 | [1] | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |||
Noncontrolling Interest [Line Items] | |||||||||||||||||||||
Income before income taxes of The Habit Restaurants, LLC and its subsidiaries | $ 5,861 | $ 4,067 | $ 6,609 | ||||||||||||||||||
Net income attributable to non-controlling interests | $ 220 | $ 327 | $ 708 | $ (55) | $ 299 | $ (244) | $ 773 | $ 35 | $ 1,200 | [1] | $ 863 | [1] | $ 1,539 | ||||||||
Habit Restaurants, LLC [Member] | |||||||||||||||||||||
Noncontrolling Interest [Line Items] | |||||||||||||||||||||
Weighted average non-controlling interests ownership percentage | 20.50% | 21.20% | 23.30% | ||||||||||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 25, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | $ 24.3 | $ 15.1 |
Marketable Securities [Member] | Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of investments | $ 24.3 | $ 15.1 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 266,402 | $ 250,497 |
Less: Accumulated depreciation and amortization | (115,233) | (89,751) |
Property and equipment, net | 151,169 | 160,746 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 139,749 | 120,890 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 83,406 | 68,532 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,966 | 28,487 |
Buildings under deemed landlord financing [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,566 | |
Smallwares [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,540 | 2,260 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,462 | 2,392 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,279 | $ 8,370 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 25, 2018USD ($)Buildings | Dec. 26, 2017USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 27,863 | $ 24,490 | $ 18,761 |
Capitalized internal payroll and other costs related to the new restaurants | $ 1,500 | $ 1,900 | $ 2,000 |
Buildings under deemed landlord financing [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Number of owned buildings under deemed landlord financing | Buildings | 31 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Nov. 30, 2014 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 30, 2014 | |
Income Tax Contingency [Line Items] | ||||||
Percentage of income tax rates | 17.00% | (40.90%) | 102.50% | |||
Percentage of cash savings required to pay to continuing LLC owners | 85.00% | |||||
Percentage of tax savings retained | 15.00% | |||||
Unrecognized tax benefits | $ 0 | $ 0 | $ 103,000 | |||
Accrued interest | 0 | 0 | 0 | |||
Accrued penalties | 0 | 0 | $ 0 | |||
Unrecognized tax benefits, amount of significant increase or decrease within the next twelve months of the reporting date | 0 | $ 0 | ||||
U.S. corporate effective income tax rate | 21.00% | 21.00% | 35.00% | |||
Percentage of bonus depreciation for qualified assets placed in service inclusion of commissions and performance based compensation | 100.00% | |||||
TRA payments including accrued interest to related parties | 400,000 | |||||
Amounts payable under Tax Receivable Agreement | 82,800,000 | $ 82,800,000 | ||||
Amounts payable under Tax Receivable Agreement, current portion | 1,215,000 | 1,215,000 | $ 552,000 | |||
Tax Receivable Agreement liability adjustment | (372,000) | $ (1,555,000) | $ 57,231,000 | |||
Increase in deferred tax asset | $ 100,000 | |||||
LIBOR [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Rate of interest to accrue | 2.00% | |||||
Minimum [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Income tax returns, examination period | 3 years | |||||
Payments anticipated period under Tax Receivable Agreement | 20 years | |||||
Payment obligation due period under Tax Receivable Agreement | 95 days | |||||
Maximum [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Income tax returns, examination period | 4 years | |||||
Payments anticipated period under Tax Receivable Agreement | 25 years | |||||
Payment obligation due period under Tax Receivable Agreement | 125 days | |||||
California [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Net operating loss carry forwards | 26,600,000 | $ 26,600,000 | ||||
Net operating loss carry forwards, expire year | will begin to expire in 2036 | |||||
Federal [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Net operating loss carry forwards | 61,200,000 | $ 61,200,000 | ||||
Net operating loss carry forwards, expire year | Will begin to expire in 2032 | |||||
Other State and Local Jurisdictions [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Net operating loss carry forwards | 8,700,000 | $ 8,700,000 | ||||
Net operating loss carry forwards, expire year | Will begin to expire in 2036 | |||||
Habit Restaurants, Inc. [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Percentage of income tax rates | 28.80% | 28.80% | 42.50% | |||
Percentage of cash savings required to pay to continuing LLC owners | 85.00% | |||||
Percentage of tax savings retained | 15.00% | |||||
Amounts payable under Tax Receivable Agreement | 82,800,000 | $ 82,800,000 | $ 82,700,000 | |||
Amounts payable under Tax Receivable Agreement, current portion | $ 1,215,000 | 1,215,000 | 552,000 | |||
Tax Receivable Agreement liability adjustment | $ (372,000) | $ (1,555,000) | $ 57,231,000 |
Income Taxes - Income before Pr
Income Taxes - Income before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Results Of Operations Income Before Income Taxes [Abstract] | |||
Income before provision for income taxes | $ 5,638 | $ 2,583 | $ 63,808 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Current | |||
Federal | $ 0 | $ 0 | $ 0 |
State and local | 5 | 13 | 8 |
Total current expense | 5 | 13 | 8 |
Deferred expense | |||
Federal | 1,075 | 850 | 58,778 |
State and local | (119) | (1,920) | 6,602 |
Total deferred expense | 956 | (1,070) | 65,380 |
Provision (benefit) for income taxes | $ 961 | $ (1,057) | $ 65,388 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Statutory Income Tax Rate to Habit Restaurants, Inc. Effective Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract] | |||
U.S. statutory tax rate | 21.00% | 21.00% | 35.00% |
State and local taxes, net of federal effect | 4.30% | 4.70% | 4.80% |
Permanent differences | 1.00% | 4.10% | 0.40% |
Shortfall from restricted stock units | 1.50% | 5.80% | 0.20% |
Remeasurement of deferred tax assets in connection with federal rate changes | (6.80%) | ||
Remeasurement of deferred tax assets in connection with state rate changes | (5.30%) | (66.40%) | 5.70% |
Hiring credits | (0.80%) | (3.20%) | (0.10%) |
Remeasurement of deferred tax assets in connection with the enactment of the Tax Cuts and Jobs Act | 75.90% | ||
Remeasurement of liabilities under Tax Receivable Agreement with the enactment of the Tax Cuts and Jobs Act | (11.80%) | ||
Income passed through to non-controlling interests | (4.70%) | (6.90%) | (0.80%) |
Effective tax rate | 17.00% | (40.90%) | 102.50% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 |
Deferred tax assets | ||
Deferred income | $ 2,440 | $ 2,417 |
Deferred lease liability | 41,460 | 1,874 |
Tax Receivable Agreement - imputed interest | 5,022 | 4,999 |
Tax goodwill and intangibles | 68,568 | 73,243 |
Net operating losses | 15,146 | 11,792 |
Other | 3,108 | 4,653 |
Total deferred tax assets | 135,744 | 98,978 |
Deferred tax liabilities | ||
Property and equipment | (11,939) | (10,149) |
Prepaids | (300) | (163) |
Lease right-of-use assets | (35,902) | |
Other | (925) | (748) |
Total deferred tax liabilities | (49,066) | (11,060) |
Net deferred tax assets | $ 86,678 | $ 87,918 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | Aug. 02, 2017 | Oct. 31, 2019 | Sep. 30, 2019 | Oct. 31, 2018 | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Jan. 04, 2018 |
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Covenant Compliance | As of December 31, 2019, The Company and The Habit Restaurants, LLC were in compliance with all covenants. | |||||||
Interest expense for the credit facility and prior credit facilities | $ 100,000 | $ 200,000 | $ 100,000 | |||||
Financial Standby Letter of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maturity | Oct. 31, 2020 | Jan. 5, 2021 | ||||||
Letter of credit workers compensation coverage | $ 1,400,000 | $ 3,250,000 | $ 1,500,000 | |||||
Habit Restaurants, LLC [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings amount outstanding under credit facility | $ 0 | |||||||
Habit Restaurants, LLC [Member] | Bank of The West [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 20,000,000 | |||||||
Credit facility, maturity | Aug. 2, 2019 | Aug. 1, 2021 | Aug. 1, 2020 | |||||
Unused commitment fees | $ 0 | |||||||
Credit facility, interest rate description | All borrowings under the Credit Facility will bear interest at a variable rate based upon LIBOR plus the applicable margin for LIBOR loans (as defined in the Credit Facility). | |||||||
Deferred financing fees | $ 300,000 | |||||||
Maximum lease adjusted leverage ratio | 400.00% | |||||||
Minimum adjusted EBITDA | $ 21,400,000 | |||||||
Debt Instrument, Covenant Description | The Credit Facility contains customary representations, warranties, negative and affirmative covenants, including a maximum lease adjusted leverage ratio of 4.00 to 1.00 and a minimum EBITDA of $21.4 million for the twelve-month period then ended at the end of each fiscal quarter. |
Leases - Additional Information
Leases - Additional Information (Detail) | Dec. 31, 2019USD ($) |
Lessee Lease Description [Line Items] | |
Remaining lease term | 8 years 6 months |
Finance leases | $ 0 |
Additional leases that have not yet commenced | $ 34,100,000 |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 10 years |
Renewal options term | 5 years |
Additional operating leases that have not yet commenced, lease terms | 10 years |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 20 years |
Renewal options term | 20 years |
Additional operating leases that have not yet commenced, lease terms | 15 years |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 27,555 |
Contingent rent | 999 |
Total lease cost | $ 28,554 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 28,663 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Detail) | Dec. 31, 2019 |
Weighted Average Remaining Lease Term | |
Operating leases | 8 years 6 months |
Weighted Average Discount Rate | |
Operating leases | 4.60% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 31,087 |
2021 | 31,093 |
2022 | 29,723 |
2023 | 28,180 |
2024 | 25,730 |
2025 and thereafter | 85,641 |
Total lease payments | 231,454 |
Less: imputed interest | (42,088) |
Lease liabilities as of December 31, 2019 | $ 189,366 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments related to new restaurants | $ 3 |
Commitments description | In connection with the build out of the restaurants, the Company may be obligated for a portion of the start-up and/or construction costs |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discretionary matching contributions | $ 0.2 | $ 0.1 | $ 0.1 |
Description of benefit | Certain employees are eligible to participate in the 401k Plan after completing one year of service and reaching the age of 21. | ||
Nonqualified Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discretionary matching contributions | $ 0.1 | $ 0.1 | $ 0.1 |
Management Incentive Plans - Su
Management Incentive Plans - Summary of Stock-Based Compensation Expense Related to Incentive Plan (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,332 | $ 2,714 | $ 2,518 |
2014 Omnibus Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,332 | $ 2,714 | $ 2,518 |
Management Incentive Plans - Ad
Management Incentive Plans - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2019 | Dec. 31, 2019 | Mar. 26, 2019 | Dec. 24, 2018 | Dec. 26, 2017 | |
Non-Qualified Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing stock price of common stock | $ 10.43 | $ 10.09 | $ 9.50 | ||
Unrecognized compensation costs related to options | $ 2,900,000 | ||||
Weighted average period, cost expected to be recognized | 2 years 9 months 18 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing stock price of common stock | $ 10.43 | $ 10.09 | $ 9.50 | ||
Weighted average period, cost expected to be recognized | 2 years 9 months 18 days | ||||
Unrecognized stock-based compensation expense related to non-vested restricted stock units | $ 3,300,000 | ||||
2014 Omnibus Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of additonal shares authorized | 1,000,000 | ||||
Award granted expiry period for additional shares | 1 year | ||||
Percentage of awards vested | 95.00% | ||||
Incentive plan description | The Amended and Restated 2014 Omnibus Incentive Plan is administered by our board of directors or a committee of our board of directors (the “Administrator”). The Administrator has the authority to, among other things, interpret the Amended and Restated 2014 Omnibus Incentive Plan, determine eligibility for, grant and determine the terms of awards under the Amended and Restated 2014 Omnibus Incentive Plan and to do all things necessary to carry out the purposes of the Amended and Restated 2014 Omnibus Incentive Plan. The Administrator’s determinations under the Amended and Restated 2014 Omnibus Incentive Plan are conclusive and binding. The Administrator will determine the time or times at which an award will vest or become exercisable. The maximum term of an award will not exceed ten years from the date of grant. | ||||
2014 Omnibus Incentive Plan [Member] | Options and Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 2,525,275 | ||||
2014 Omnibus Incentive Plan [Member] | Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award granted expiry date | Nov. 19, 2024 | ||||
Habit Restaurants LLC Management Incentive Plan [Member] | Class C Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense related to units | $ 0 |
Management Incentive Plans - Sc
Management Incentive Plans - Schedule of Non-Qualified Stock Option Grants, Activity (Detail) - Non-Qualified Stock Options [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, Outstanding and expected to vest, Beginning Balance | 1,315,834 | 961,668 | 491,440 | |
Options, Granted | 407,000 | 479,000 | 485,491 | |
Options, Forfeited | (56,105) | (124,834) | (15,263) | |
Options, Exercised | 0 | 0 | 0 | |
Options, Outstanding and expected to vest, Ending Balance | 1,666,729 | 1,315,834 | 961,668 | 491,440 |
Options, Exercisable | 535,972 | |||
Weighted Average Exercise Price, Outstanding and expected to vest, Beginning Balance | $ 15.71 | $ 19.41 | $ 22.69 | |
Weighted Average Exercise Price, Granted | 10.09 | 9.41 | 16.13 | |
Weighted Average Exercise Price, Forfeited | 13.91 | 17.65 | 20.99 | |
Weighted Average Exercise Price, Outstanding and expected to vest, Ending Balance | 14.57 | $ 15.71 | $ 19.41 | $ 22.69 |
Weighted Average Exercise Price, Exercisable | $ 18.95 | |||
Weighted Average Remaining Contractual Term (Years), Outstanding and expected to vest | 7 years 8 months 12 days | 8 years 2 months 12 days | 8 years 7 months 6 days | 9 years 1 month 6 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 6 years 8 months 12 days | |||
Aggregate Intrinsic Value, Outstanding and expected to vest | $ 674,435 | $ 0 | $ 0 | $ 0 |
Aggregate Intrinsic Value, Exercisable | $ 106,074 | |||
Weighted average fair value of options granted | $ 2.96 | $ 3.03 | $ 4.30 | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Weighted average risk-free interest rate | 2.31% | 2.73% | 1.92% | |
Weighted average volatility | 25.10% | 28.60% | 28.80% | |
Forfeiture rate | 6.70% | 6.00% | 4.40% | |
Expected term (years) | 6 years | 5 years 7 months 6 days | 5 years 6 months |
Management Incentive Plans - _2
Management Incentive Plans - Schedule of Restricted Stock Units, Activity (Detail) - Restricted Stock Units (RSUs) [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units, Outstanding and expected to vest, Beginning Balance | 339,233 | 250,552 | 145,047 | |
Units, Granted | 178,351 | 175,213 | 140,911 | |
Units, Forfeited | (19,007) | (30,067) | (5,107) | |
Units, Vested | (86,856) | (56,465) | (30,299) | |
Units, Outstanding and expected to vest, Ending Balance | 411,721 | 339,233 | 250,552 | 145,047 |
Weighted Average Fair Value, Outstanding and expected to vest, Beginning Balance | $ 14.04 | $ 18.66 | $ 22.38 | |
Weighted Average Fair Value, Granted | 10.18 | 9.72 | 15.81 | |
Weighted Average Fair Value, Forfeited | 12.47 | 17.13 | 19.21 | |
Weighted Average Fair Value, Vested | 15.46 | 19.52 | 23.08 | |
Weighted Average Fair Value, Outstanding and expected to vest, Ending Balance | $ 12.14 | $ 14.04 | $ 18.66 | $ 22.38 |
Weighted Average Remaining Contractual Term (Years), Outstanding and expected to vest | 1 year 7 months 6 days | 1 year 10 months 24 days | 2 years | 2 years 2 months 12 days |
Aggregate Intrinsic Value, Outstanding and expected to vest | $ 4,294,250 | $ 3,422,861 | $ 2,380,244 | $ 2,589,089 |
Membership Units - Additional I
Membership Units - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 25, 2018USD ($) | Dec. 26, 2017USD ($) | |
Members' Equity [Abstract] | |||
Distributions declared | $ 1,000,000 | $ 400,000 | $ 1,100,000 |
Distributions paid | 1,000,000 | 400,000 | 1,100,000 |
Unpaid distributions | $ 0 | ||
Class A Common Stock [Member] | |||
Members' Equity [Abstract] | |||
Common stock trading days | 15 days | ||
Stock split ratio | 1 | ||
Habit Restaurants, LLC [Member] | |||
Members' Equity [Abstract] | |||
Distributions paid | $ 100,000 | $ 100,000 | $ 200,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - $ / shares | 1 Months Ended | ||
Nov. 30, 2014 | Dec. 31, 2019 | Dec. 25, 2018 | |
Class Of Stock [Line Items] | |||
Common stock shares, authorized | 140,000,000 | ||
Class A Common Stock [Member] | |||
Class Of Stock [Line Items] | |||
Common stock shares, authorized | 70,000,000 | 70,000,000 | |
Common stock shares, par value | $ 0.01 | $ 0.01 | |
Class A Common Stock [Member] | Investor [Member] | Initial Public Offering [Member] | |||
Class Of Stock [Line Items] | |||
Common stock shares, issued | 5,750,000 | ||
Common stock shares price | $ 18 | ||
Class B Common Stock [Member] | |||
Class Of Stock [Line Items] | |||
Common stock shares, authorized | 70,000,000 | 70,000,000 | |
Common stock shares, par value | $ 0.01 | $ 0.01 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Jan. 05, 2020$ / sharesshares | Dec. 31, 2019$ / shares | Dec. 25, 2018$ / shares |
Class A Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Class B Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Subsequent Events [Member] | Merger Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Consideration payable to holders of stock options and restricted stock units, maximum period | 3 days | ||
Subsequent Events [Member] | Merger Agreement [Member] | Class A Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Cash received upon conversion of units | $ 14 | ||
Exchange ratio of each LLC unit | 1 | ||
Subsequent Events [Member] | Merger Agreement [Member] | Class B Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Number of shares included in exchange of each unit | shares | 1 |
Quarterly Financial Reporting_2
Quarterly Financial Reporting (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2019 | [1] | Sep. 24, 2019 | [1] | Jun. 25, 2019 | [1] | Mar. 26, 2019 | [1] | Dec. 25, 2018 | [1] | Sep. 25, 2018 | [1] | Jun. 26, 2018 | [1] | Mar. 27, 2018 | [1] | Dec. 31, 2019 | [1] | Dec. 25, 2018 | [1] | Dec. 26, 2017 | |
Quarterly Financial Information [Line Items] | |||||||||||||||||||||
Total revenue | $ 122,654 | $ 117,303 | $ 117,928 | $ 108,174 | $ 102,708 | $ 104,639 | $ 102,852 | $ 91,948 | $ 466,059 | $ 402,147 | $ 331,386 | ||||||||||
Income (loss) from operations | 1,032 | 1,553 | 3,435 | (274) | 1,735 | (899) | 3,914 | 407 | 5,747 | 5,156 | 7,165 | ||||||||||
Net income (loss) | 863 | 1,365 | 2,680 | (231) | 986 | (864) | 2,829 | 689 | 4,677 | 3,640 | (1,580) | ||||||||||
Net income (loss) attributable to non- controlling interests | 220 | 327 | 708 | (55) | 299 | (244) | 773 | 35 | 1,200 | 863 | 1,539 | ||||||||||
Net income (loss) attributable to The Habit Restaurants, Inc. | $ 643 | $ 1,038 | $ 1,972 | $ (176) | $ 687 | $ (620) | $ 2,056 | $ 654 | $ 3,477 | $ 2,777 | $ (3,119) | ||||||||||
Class A Common Stock [Member] | |||||||||||||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||||||
Basic income (loss) per share of Class A common stock | $ 0.03 | $ 0.05 | $ 0.10 | $ (0.01) | $ 0.03 | $ (0.03) | $ 0.10 | $ 0.03 | $ 0.17 | $ 0.14 | $ (0.15) | ||||||||||
Diluted income (loss) per share of Class A common stock | $ 0.03 | $ 0.05 | $ 0.09 | $ (0.01) | $ 0.03 | $ (0.03) | $ 0.10 | $ 0.03 | $ 0.17 | $ 0.13 | $ (0.15) | ||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Condensed Balance Sheets (Detai
Condensed Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 |
ASSETS | ||||
Cash and cash equivalents | $ 34,104 | $ 24,519 | ||
Prepaid expenses and other current assets | 7,489 | 3,383 | ||
Total current assets | 49,471 | 37,944 | ||
Deferred tax assets | 86,678 | 87,918 | ||
Total long-term assets | 428,757 | 274,662 | ||
Total assets | 478,228 | 312,606 | ||
Liabilities | ||||
Accrued expenses | 7,162 | 5,799 | ||
Income tax payable | 104 | |||
Amounts payable to related parties under Tax Receivable Agreement, current portion | 1,215 | 552 | ||
Total current liabilities | 71,172 | 39,262 | ||
Amounts payable to related parties under Tax Receivable Agreement, net of current portion | 81,567 | 82,142 | ||
Total liabilities | 320,466 | 162,612 | ||
Commitments and contingencies (Note 3) | ||||
Stockholders’ equity | ||||
Additional paid-in capital | 120,366 | 117,053 | ||
Retained earnings | 11,108 | 6,921 | ||
Total stockholders’ equity | 157,762 | 149,994 | $ 144,149 | $ 143,753 |
Total liabilities and stockholders’ equity | 478,228 | 312,606 | ||
Class A Common Stock [Member] | ||||
Stockholders’ equity | ||||
Common stock value | 208 | 207 | ||
Total stockholders’ equity | 208 | 207 | 204 | 202 |
Class B Common Stock [Member] | ||||
Stockholders’ equity | ||||
Common stock value | 53 | 54 | ||
Total stockholders’ equity | 53 | 54 | $ 56 | $ 58 |
Habit Restaurants, Inc. [Member] | ||||
ASSETS | ||||
Cash and cash equivalents | 9,189 | 6,181 | ||
Prepaid expenses and other current assets | 3 | |||
Total current assets | 9,192 | 6,181 | ||
Deferred tax assets | 86,678 | 87,918 | ||
Investment in subsidiaries | 134,233 | 125,342 | ||
Total long-term assets | 220,911 | 213,260 | ||
Total assets | 230,103 | 219,441 | ||
Liabilities | ||||
Accrued expenses | 15,586 | 12,408 | ||
Income tax payable | 104 | |||
Amounts payable to related parties under Tax Receivable Agreement, current portion | 1,215 | 552 | ||
Total current liabilities | 16,801 | 13,064 | ||
Amounts payable to related parties under Tax Receivable Agreement, net of current portion | 81,567 | 82,142 | ||
Total liabilities | 98,368 | 95,206 | ||
Commitments and contingencies (Note 3) | ||||
Stockholders’ equity | ||||
Additional paid-in capital | 120,366 | 117,053 | ||
Retained earnings | 11,108 | 6,921 | ||
Total stockholders’ equity | 131,735 | 124,235 | ||
Total liabilities and stockholders’ equity | 230,103 | 219,441 | ||
Habit Restaurants, Inc. [Member] | Class A Common Stock [Member] | ||||
Stockholders’ equity | ||||
Common stock value | 208 | 207 | ||
Habit Restaurants, Inc. [Member] | Class B Common Stock [Member] | ||||
Stockholders’ equity | ||||
Common stock value | $ 53 | $ 54 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) (Detail) - $ / shares | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | Dec. 27, 2016 |
Common stock, shares authorized | 140,000,000 | |||
Class A Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 20,779,567 | 20,667,718 | ||
Common stock, shares outstanding | 20,779,567 | 20,667,718 | 20,378,452 | 20,178,937 |
Class B Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 5,336,807 | 5,381,550 | ||
Common stock, shares outstanding | 5,336,807 | 5,381,550 | 5,646,572 | 5,821,122 |
Habit Restaurants, Inc. [Member] | Class A Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 20,779,567 | 20,667,718 | ||
Common stock, shares outstanding | 20,779,567 | 20,667,718 | ||
Habit Restaurants, Inc. [Member] | Class B Common Stock [Member] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 70,000,000 | 70,000,000 | ||
Common stock, shares issued | 5,336,807 | 5,381,550 | ||
Common stock, shares outstanding | 5,336,807 | 5,381,550 |
Condensed Statements of Operati
Condensed Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2019 | [1] | Sep. 24, 2019 | [1] | Jun. 25, 2019 | [1] | Mar. 26, 2019 | [1] | Dec. 25, 2018 | [1] | Sep. 25, 2018 | [1] | Jun. 26, 2018 | [1] | Mar. 27, 2018 | [1] | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | |||
Intercompany revenue | $ 122,654 | $ 117,303 | $ 117,928 | $ 108,174 | $ 102,708 | $ 104,639 | $ 102,852 | $ 91,948 | $ 466,059 | [1] | $ 402,147 | [1] | $ 331,386 | ||||||||
Operating expenses | |||||||||||||||||||||
General and administrative expenses | 42,442 | 38,918 | 32,559 | ||||||||||||||||||
Total operating expenses | 460,312 | 396,991 | 324,221 | ||||||||||||||||||
Income from operations | 1,032 | 1,553 | 3,435 | (274) | 1,735 | (899) | 3,914 | 407 | 5,747 | [1] | 5,156 | [1] | 7,165 | ||||||||
Other (income) expense | |||||||||||||||||||||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||||||||||||||||||
Interest (income) expense, net | (263) | 1,018 | 588 | ||||||||||||||||||
Income before income taxes | 5,638 | 2,583 | 63,808 | ||||||||||||||||||
Provision (benefit) for income taxes | 961 | (1,057) | 65,388 | ||||||||||||||||||
Net income (loss) | $ 863 | $ 1,365 | $ 2,680 | $ (231) | $ 986 | $ (864) | $ 2,829 | $ 689 | 4,677 | [1] | 3,640 | [1] | (1,580) | ||||||||
Habit Restaurants, Inc. [Member] | |||||||||||||||||||||
Intercompany revenue | 608 | 449 | 320 | ||||||||||||||||||
Operating expenses | |||||||||||||||||||||
General and administrative expenses | 608 | 449 | 320 | ||||||||||||||||||
Total operating expenses | 608 | 449 | 320 | ||||||||||||||||||
Other (income) expense | |||||||||||||||||||||
Equity in net income of subsidiaries | (4,661) | (3,204) | (5,049) | ||||||||||||||||||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||||||||||||||||||
Interest (income) expense, net | (149) | (71) | 11 | ||||||||||||||||||
Income before income taxes | 4,438 | 1,720 | 62,269 | ||||||||||||||||||
Provision (benefit) for income taxes | 961 | (1,057) | 65,388 | ||||||||||||||||||
Net income (loss) | $ 3,477 | $ 2,777 | $ (3,119) | ||||||||||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2019 | Sep. 24, 2019 | [1] | Jun. 25, 2019 | [1] | Mar. 26, 2019 | Dec. 25, 2018 | Sep. 25, 2018 | [1] | Jun. 26, 2018 | [1] | Mar. 27, 2018 | [1] | Dec. 31, 2019 | Dec. 25, 2018 | Dec. 26, 2017 | ||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income (loss) | $ 863 | [1] | $ 1,365 | $ 2,680 | $ (231) | [1] | $ 986 | [1] | $ (864) | $ 2,829 | $ 689 | $ 4,677 | [1] | $ 3,640 | [1] | $ (1,580) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||||||||||||||||||
Deferred income taxes | 961 | (1,057) | 65,388 | ||||||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||||
Accrued expenses | 1,395 | (854) | 1,272 | ||||||||||||||||||
Income taxes payable | (10) | (13) | (1) | ||||||||||||||||||
Net cash provided by operating activities | 45,425 | 42,096 | 33,607 | ||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Net cash used in investing activities | (34,360) | (43,399) | (46,025) | ||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Tax receivable agreement payments to related parties | (427) | (1,438) | (2,040) | ||||||||||||||||||
Tax distributions to LLC members | (862) | (288) | (920) | ||||||||||||||||||
Net cash used in financing activities | (1,585) | (2,080) | (3,497) | ||||||||||||||||||
Net change in cash and cash equivalents | 9,480 | (3,383) | (15,915) | ||||||||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | 24,894 | 24,894 | 28,277 | 44,192 | |||||||||||||||||
Cash and cash equivalents and restricted cash, end of period | 34,374 | 24,894 | 34,374 | 24,894 | 28,277 | ||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||||
Cash paid for interest | 15 | 1,120 | 890 | ||||||||||||||||||
Cash paid for income taxes, net | 10 | 13 | 1 | ||||||||||||||||||
Habit Restaurants, Inc. [Member] | |||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income (loss) | 3,477 | 2,777 | (3,119) | ||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||||
Tax Receivable Agreement liability adjustment | 372 | 1,555 | (57,231) | ||||||||||||||||||
Deferred income taxes | 961 | (1,057) | 65,388 | ||||||||||||||||||
Equity in net income of subsidiaries | (4,661) | (3,204) | (5,049) | ||||||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||||
Accrued expenses | (33) | 39 | 34 | ||||||||||||||||||
Income taxes payable | (10) | (13) | (1) | ||||||||||||||||||
Net cash provided by operating activities | 106 | 97 | 22 | ||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Capital contribution in subsidiary | (900) | ||||||||||||||||||||
Net cash used in investing activities | (900) | ||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Tax receivable agreement payments to related parties | (427) | (1,464) | (2,040) | ||||||||||||||||||
Tax distributions to LLC members | 3,329 | 1,005 | 3,242 | ||||||||||||||||||
Net cash used in financing activities | 2,902 | (459) | 1,202 | ||||||||||||||||||
Net change in cash and cash equivalents | 3,008 | (362) | 324 | ||||||||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | $ 6,181 | 6,181 | 6,543 | 6,219 | |||||||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ 9,189 | $ 6,181 | 9,189 | 6,181 | 6,543 | ||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||||
Cash paid for interest | 8 | 26 | 33 | ||||||||||||||||||
Cash paid for income taxes, net | $ 10 | $ 13 | $ 1 | ||||||||||||||||||
[1] | Certain totals may not sum exactly due to rounding. |
Organization - Additional Infor
Organization - Additional Information (Detail) - Habit Restaurants, Inc. [Member] - Class A Common Stock [Member] - Initial Public Offering [Member] - USD ($) $ / shares in Units, $ in Millions | Apr. 15, 2015 | Nov. 25, 2014 |
Nature Of Operations And Basis Of Accounting Presentation [Line Items] | ||
Initial public offering, share issued | 5,750,000 | 5,750,000 |
Net proceeds from initial public offering | $ 96.3 | |
Common stock, price per share | $ 30.96 | $ 18 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information1 (Detail) - USD ($) $ in Millions | 1 Months Ended | ||
Nov. 30, 2014 | Dec. 31, 2019 | Dec. 25, 2018 | |
Other Commitments [Line Items] | |||
Percentage of cash savings required to pay to continuing LLC owners | 85.00% | ||
Percentage of tax savings retained | 15.00% | ||
Amounts payable under Tax Receivable Agreement | $ 82.8 | ||
Habit Restaurants, Inc. [Member] | |||
Other Commitments [Line Items] | |||
Percentage of cash savings required to pay to continuing LLC owners | 85.00% | ||
Percentage of tax savings retained | 15.00% | ||
Amounts payable under Tax Receivable Agreement | $ 82.8 | $ 82.7 |