| Business and Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 29, 2018 |
| Accounting Policies [Abstract] | |
| Fiscal Year | Fiscal Year We operate on a retail fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations. References herein to “fiscal year 2018 ,” “fiscal year 2017 ,” and “fiscal year 2016 ,” relate to the 52 weeks ended December 29, 2018 , December 30, 2017 and December 31, 2016 , respectively. Unless otherwise stated, references to years in this report relate to fiscal years rather than calendar years. |
| Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include our accounts and those of our subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. |
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
| Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of currency and demand deposits with financial institutions. We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. We maintain the majority of our cash and cash equivalents in one large national banking institution. Such amounts are in excess of federally insured limits. We also review cash balances on a bank by bank basis to identify book overdrafts. Book overdrafts occur when the amount of outstanding checks exceed the cash deposited at a bank. We reclassify book overdrafts, if any, to accounts payable in the accompanying consolidated balance sheets. |
| Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable associated with revenues consist primarily of trade receivables and credit card receivables. Trade receivables consist primarily of receivables from managed care payors and receivables from major retailers. While we have relationships with almost all vision care insurers in the United States and with all of the major carriers, currently, a relatively small number of payors comprise the majority of our managed care revenues, subjecting us to concentration risk. Trade receivables and credit card receivables are included in accounts receivable, net, on our consolidated balance sheets, and are presented separately in Note 2 . “Details of Certain Balance Sheet Accounts.” Accounts receivable are reduced by allowances for amounts that may become uncollectible. Estimates of our allowance for uncollectible accounts are based on our historical and current operating, billing and collection trends. |
| Inventories | Inventories The cost of inventory is determined using the weighted average cost method. Inventories at retail stores are comprised of finished goods and are valued at the lower of cost or estimated net realizable value (“NRV”). Manufactured inventories are valued using absorption accounting which includes material, labor, other variable costs and other applicable manufacturing overhead. Inventory values are adjusted for estimated obsolescence and written down to NRV based on estimates of current and anticipated demand, customer preference, merchandise age, planned promotional activities, contact lens vendor return acceptance activity, and estimates of future retail sales prices. Shrinkage is estimated and recorded throughout the period as a percentage of cost of sales based on historical results and current inventory levels. Actual shrinkage is recorded throughout the year based upon periodic physical counts. |
| Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets primarily include prepaid software maintenance and licensing fees, prepaid rent, prepaid advertising, prepaid insurance, supplies inventory and income taxes receivable. |
| Property and Equipment | Property and Equipment Property and equipment (“P&E”) is stated at cost less accumulated depreciation. Depreciation associated with P&E is included in depreciation and amortization in the accompanying consolidated statements of operations. When we retire or otherwise dispose of P&E, the cost and related accumulated depreciation are removed from the accounts and any gain or loss on sale of such assets is included in SG&A in the consolidated statements of operations. Major replacements, remodeling, or betterments are capitalized. Expenditures for maintenance and repairs are charged to SG&A. P&E is depreciated for financial accounting purposes using the straight-line method over the following estimated useful lives: Buildings 34 years Equipment 5 - 7 years Information systems hardware and software (a) 2 - 5 years Furniture and fixtures 6 years Leasehold improvements (b) 10 years P&E under capital leases (b) 10 years ____________ (a) Costs of developing or obtaining software for internal use, such as direct costs of materials or services and internal payroll costs related to the software development projects, are capitalized to information systems hardware and software. (b) Depreciation of leasehold improvements is recognized over the shorter of the estimated useful life of the asset or the term of the lease. The term of the lease includes renewal options for additional periods if the exercise of the renewal is considered to be reasonably assured. |
| Goodwill and Intangible Assets | Goodwill and Intangible Assets Indefinite-lived, non-amortizing intangible assets include goodwill and our trademarks and tradenames and are evaluated annually for impairment. Our annual testing date for impairment of goodwill and indefinite-lived intangible assets is the first day of the fourth fiscal quarter, which for fiscal years 2018 and 2017 was September 30, 2018 , and October 1, 2017, respectively. Definite-lived, amortizing intangible assets primarily consist of our contracts and relationships with certain retailers and our customer database tool. We amortize definite-lived intangible assets on a straight-line basis over their estimated useful lives, ranging from four to 23 years . Amortization expense associated with definite-lived intangible assets is included in depreciation and amortization in the accompanying consolidated statements of operations. |
| Equity Method Investment | Equity Method Investment The Company has an investment in a private start-up company whose principal business is licensing software to eyeglass retailers. We evaluate the recoverability of our investment by first reviewing the investment for any indicators of impairment. If indicators are present, we estimate the fair value of the investment. If the carrying value of the investment exceeds the estimated fair value, we make an assessment of whether the impairment is other-than-temporary (“OTTI”). In making this assessment, we consider the length of time and the extent to which fair value has been less than cost and our intent and ability to retain our interest long enough for a recovery in market value. Based on our current year assessment, we did not identify OTTI in our equity method investment. |
| Fair Value Measurement of Assets and Liabilities (Non-Recurring Basis) | Fair Value Measurement of Assets and Liabilities (Non-Recurring Basis) Non-financial assets such as P&E, intangible assets and goodwill are subject to nonrecurring fair value measurements if impairment indicators are present. Factors we consider important that could trigger an impairment review include a significant under-performance compared to expected operating results, a significant or adverse change in customer business climate, or a significant negative industry or economic trend. |
| Deferred Financing Costs and Loan Discounts | Deferred Financing Costs and Loan Discounts Costs incurred in connection with long-term debt which are paid directly to the Company’s lenders and to third parties are treated as debt discounts. Loan discounts are amortized over the term of the related financing agreement and included in interest expense in the accompanying consolidated statements of operations. |
| Self-Insurance Accruals | Self-Insurance Accruals We are primarily self-insured for workers’ compensation, employee health benefits and general liability claims. We record self-insurance liabilities based on claims filed, including the development of those claims and an estimate of claims incurred but not yet reported. Should a different amount of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, reserves may need to be adjusted accordingly. We periodically update our estimates and record such adjustments in the period in which such determination is made. Self-insurance reserves are recorded in other payables and accrued expenses (current portion) and other non-current liabilities on an undiscounted basis in the accompanying consolidated balance sheets. |
| Derivative Financial Instruments | Derivative Financial Instruments The Company uses interest rate swaps to manage its exposure to adverse fluctuations in interest rates by converting a portion of our debt portfolio from a floating rate to a fixed rate. We designate our interest rate swaps as cash flow hedges and formally document our hedge relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transactions. We record all interest rate swaps in our consolidated balance sheets on a gross basis at fair value. Fair value represents estimated amounts we would receive or pay upon a termination of interest rate swaps prior to their scheduled expiration dates. The fair value was based on information that is model-driven and whose inputs were observable (Level 2 inputs). We do not hold or enter into financial instruments for trading or speculative purposes. The gain or loss resulting from fair value adjustments on cash flow hedges are recorded in accumulated other comprehensive loss (“AOCL”) in the accompanying consolidated balance sheets until the hedged item is recognized as interest expense in the consolidated statements of operations. We perform periodic assessments of the effectiveness of our derivative contracts designated as hedges, including the possibility of counterparty default. To manage credit risk associated with our interest rate hedging program, we select counterparties based on their credit ratings and limit our exposure to any single counterparty. The counterparties to our derivative contracts are major domestic financial institutions with investment grade credit ratings. The impact of credit risk, as well as the ability of each party to fulfill its obligations under our derivative financial instruments, is considered in determining the fair value of the contracts. Credit risk has not had a significant effect on the fair value of our derivative instruments. We do not have any credit risk-related contingent features or collateral requirements associated with our derivative contracts. |
| Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss AOCL 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. Accumulated other comprehensive loss, net of income tax, is entirely comprised of the cumulative unrealized loss on our hedging instruments. See Note 16 . “Accumulated Other Comprehensive Loss” for details of reclassifications out of AOCL. |
| Revenue Recognition and Costs Applicable to Revenue | Revenue Recognition Product revenues include sales of prescription and non-prescription eyewear, contact lenses, related accessories to retail customers (including those covered by managed care) and sales of inventory in which our customer is another retail entity. Revenues from services and plans include eye exams, eye-care club membership fees, product protection plans (i.e. warranties) and HMO membership fees. Service revenue also includes fees we earn for managing certain Vision Centers and performing laboratory processing services for our legacy partner. At our America’s Best brand, our signature offer is two pairs of eyeglasses and a free eye exam for one low price (“ two -pair offer”). Since an eye exam is a key component in the ability for acceptable prescription eyewear to be delivered to a customer, we concluded that the eye exam service, while capable of being distinct from the eyeglass product delivery, was not distinct in the context of the two -pair offer. As a result, we do not allocate revenue to the eye exam associated with the two -pair offer, and we record all revenue associated with the offer in owned & host net product sales when the customer has received and accepted the merchandise. Our retail customers generally make payments for prescription eyewear products at the time they place an order. Amounts we collect in advance for undelivered merchandise are reported as unearned revenue in the accompanying consolidated balance sheets. Unearned revenue at the end of a reporting period is estimated based on processing and delivery times throughout the current month and generally ranges from four to 10 days with most sales having an average processing versus delivery time difference of seven to eight days. All unearned revenue at the end of a reporting period is recognized in the next fiscal period Revenue is recognized net of sales taxes and returns. The returns allowance is based on historical return patterns. Provisions for estimated returns are established and the expected costs continue to be recognized as contra-revenue when the products are sold. Refer to Note 7 . “Revenue from Contracts With Customers” for further details of our revenues. Costs Applicable To Revenue Costs applicable to revenue consist primarily of cost of products sold and costs of administering services and plans. Costs of products sold include (i) costs to procure non-prescription eyewear, contacts and accessories which we purchase and sell in their finished form, (ii) costs to manufacture finished prescription eyeglasses, including direct materials, labor and overhead and (iii) remake costs, warehousing and distribution expenses and internal transfer costs. Costs of services and plans include costs associated with warranty programs, eye-care club memberships, HMO memberships, eye-care practitioner and eye exam technician payroll, taxes and benefits and optometric and other service costs. Depreciation and amortization are excluded from costs applicable to revenue and are presented as separate items on the accompanying consolidated statements of operations. As a component of the Company's procurement program, the Company frequently enters into contracts with its vendors that provide for payments of rebates or other allowances. These vendor payments are reflected in the carrying value of the inventory when earned or as progress is made toward earning the rebate or allowance and as a component of cost of products as the inventory is sold. |
| Selling, General and Administrative Expenses | Selling, General and Administrative Expenses SG&A includes store associate payroll, taxes and benefits, occupancy and other store expenses, advertising and promotion, field supervision, and corporate support. Advertising and promotion costs, including online marketing arrangements, newspaper, direct mail, television and radio, are recorded in SG&A and expensed at the time the advertising first occurs. Production costs of future media advertising and related promotional campaigns are deferred until the advertising events occur. Non-capital expenditures associated with opening new stores, including rent, store remodels, marketing expenses, travel and relocation costs, and training costs, are recorded in SG&A as incurred. |
| Leases | Leases We lease our retail stores, optometric examination offices, distribution centers, vehicles, office space and optical laboratories, with the exception of our St. Cloud, Minnesota lab, which we own. Rent expense on operating leases is recorded in SG&A on a straight-line basis over the term of the lease, commencing on the date the Company obtains the right to use the leased property. Generally, the Company is required to pay base rent, real estate taxes, maintenance and insurance. Certain of our lease agreements include rent holidays and rent escalation provisions and may include contingent rent provisions for sales in excess of specified levels. The Company recognizes rent holidays, including the time period during which the Company has control of the property prior to the opening of the store, as well as escalating rent provisions, as deferred rent expense and amortizes these balances on a straight-line basis over the term of the lease. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more. The lease term includes renewal option periods when the renewal is reasonably assured, and is consistent with the depreciable life of corresponding leasehold improvements. Deferred rent is included in non-current other liabilities on the accompanying consolidated balance sheets. For capital leases, a lease asset is recorded as P&E and corresponding amounts are recorded as debt obligations at an amount equal to the lesser of the net present value of minimum lease payments to be made over the lease term or the fair value of the property. The Company allocates capital lease payments to reductions in the lease obligation and interest expense using the effective interest method. See Note 4 . “Long-term Debt” for further details related to our capital lease commitments and Note 12 . “Commitments and Contingencies” for further details related to our operating lease commitments. Tenant improvement allowances (“TIAs”) are contractual amounts received by a lessee from a lessor for improvements made to leased properties by the lessee. TIAs are recorded in other non-current liabilities in the accompanying consolidated balance sheets, and are amortized as a reduction in rental expense over the life of the respective leases. Receivables for TIA’s are recorded in accounts receivable in the accompanying consolidated balance sheets. In the event a leased store is closed before the expiration of the lease, the discounted remaining lease obligation (less estimated sublease rental income), asset impairment charges related to improvements and fixtures, inventory write-downs and other miscellaneous expenses are recognized when the store closes. Accruals for store closure costs are recorded in current and non-current other liabilities in the accompanying consolidated balance sheets and are not material. |
| Stock-Based Compensation | Stock-Based Compensation We measure stock-based compensation cost, which consists of grants of stock options, restricted stock units and restricted shares to employees, consultants and non-employee directors, based on the estimated grant date fair value of the awards. We recognize compensation expense for service-based vesting awards over the requisite service period. For awards that are subject to performance conditions, we recognize compensation expense once achievement of the conditions is considered to be probable. See Note 5 . “Stock Incentive Plan” for further details related to our stock-based compensation plans. |
| Impairment of P&E, Goodwill and Intangible Assets | Impairment of P&E We evaluate impairment of long-lived tangible store assets at the store level, which is the lowest level at which independent cash flows can be identified, when events or conditions indicate the carrying value of such assets may not be recoverable. If the store's projected undiscounted net cash flows expected to be generated by the related assets over the shorter of the remaining useful life or the remaining term of the lease are less than the carrying value of the subject assets, we then measure impairment based on a discounted cash flow model and record an impairment charge as the excess of carrying value and estimated fair value using Level 3 fair valuation inputs. As a result of our tests for impairment of our long-lived tangible store assets classified as held and used, an impairment of $2.5 million , $1.6 million and $1.2 million was recorded for fiscal years 2018 , 2017 and 2016 , respectively. There was $0.1 million remaining fair value of the assets that were impaired during fiscal year 2018 and no remaining fair value of the assets that were impaired during fiscal year 2017 . We assess non-store tangible assets, including capitalized software costs in use or under development, for impairment if events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. During fiscal years 2018 and 2016 there was no impairment of capitalized software. There was $1.5 million in impairment of capitalized software during fiscal year 2017 . |
| Income Taxes | Income Taxes We account for deferred income taxes based on the asset and liability method. The Company must make certain estimates and judgments in determining income tax expense. We are required to determine the aggregate amount of income tax expense to accrue and the amount which will be currently payable or refundable based upon tax statutes of each jurisdiction in which the Company does business. Deferred income taxes are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets also include future tax benefits to be derived from the utilization of tax loss carry-forwards and application of certain carry-forward credits. The net carrying amount of deferred income tax assets and liabilities is recorded in non-current deferred income tax liabilities in the accompanying consolidated balance sheets. Deferred income taxes are measured using enacted tax rates in effect for the years in which those differences are expected to be recovered or settled. The effect on deferred taxes from a change in the tax rate is recognized through continuing operations in the period that includes the enactment of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A valuation allowance is recorded if it is more-likely-than-not that some portion of a deferred tax asset will not be realized. Valuation allowances are released as positive evidence of future taxable income sufficient to realize the underlying deferred tax assets becomes available. We establish a liability for tax positions for which there is uncertainty as to whether the position will ultimately be sustained. We assess our tax positions by determining whether it is more-likely-than-not that the position will be sustained upon examination by the appropriate taxing authorities, including resolution of any related appeals or litigation, based solely on the technical merits of the position. These calculations and assessments involve estimates and judgments because the ultimate tax outcomes are uncertain and future events are unpredictable. See Note 6 . “Income Taxes” for further details. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Legislation”) was enacted into law. We are required to recognize the effect of tax law changes in the period of enactment, such as re-measuring and reassessing the net realizability of our deferred tax assets and liabilities. Pursuant to SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Legislation, the Company recognized provisional effects of the enactment of the Tax Legislation for which measurement could be reasonably estimated as of fiscal year end 2017. For fiscal year 2018 , the Company recorded adjustments to the provisional estimates related to depreciation expense. The adjustments to the provisional estimates of fiscal year end 2017 did not materially impact the effective tax rate of the Company during fiscal year 2018. See Note 6 . “Income Taxes” for additional information. |
| Recently Issued Accounting Pronouncements | Adoption of New Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 provides new guidance related to the core principle that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Under the new guidance, there is a five-step model to apply to revenue recognition, consisting of: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company adopted this new guidance in the first quarter of 2018 using the modified retrospective transition method. The adoption resulted in a $14.0 million and $11.8 million decrease in current and non-current deferred revenue, respectively, for certain contracts where we satisfy performance obligations over time and a related $6.8 million increase in deferred income tax liability, resulting in a net $19.0 million increase to retained earnings on the consolidated balance sheet as of December 30, 2017. Under previous guidance, we recognized revenue for eyecare club memberships on a ratable basis over the service period. Currently, we have selected the portfolio approach because our historical club membership data demonstrated that our club customers behave similarly, such that the difference between the portfolio approach and applying ASC 606 to each contract is not material. This change did not have a significant impact on our ongoing consolidated results of operations and the cumulative effect and the impact on revenues is described in Note 7 . “Revenue From Contracts with Customers”. Our results of operations for the reported periods after December 30, 2017 are presented under this amended guidance, while prior period amounts are not adjusted and continue to be reported in accordance with historical accounting guidance. Adoption of this new guidance did not result in significant changes to our business processes, systems or controls, or have a material impact on our results of operations and cash flows. The impact of adopting the amended guidance primarily relates to the timing of revenue recognition for our eyecare club memberships, which comprised approximately 3% of our consolidated net revenue during each of the most recent three fiscal years. See Note 7 . “Revenue From Contracts with Customers” for additional information. The following table summarizes the cumulative effect of adoption of ASC 606 on the Company’s consolidated balance sheet as of December 29, 2018 , which reflects the change in timing of revenue recognition relating to eyecare club memberships. In thousands With ASC 606 Adoption Without ASC 606 Adoption Impact of Adoption Current liabilities: Deferred revenue $ 52,144 $ 67,435 $ (15,291 ) Total current liabilities $ 211,652 $ 226,943 $ (15,291 ) Other non-current liabilities: Deferred revenue $ 20,134 $ 31,926 $ (11,792 ) Deferred income taxes, net $ 61,940 $ 55,002 $ 6,938 Total other non-current liabilities $ 136,038 $ 140,892 $ (4,854 ) Stockholders' equity: Retained earnings $ 74,840 $ 54,695 $ 20,145 Total stockholders' equity $ 743,154 $ 723,009 $ 20,145 The following table summarizes the impact of adoption on the Company’s consolidated statement of operations for the year ended December 29, 2018 : In thousands, except earnings per share With ASC 606 Adoption Without ASC 606 Adoption Impact of Adoption Revenue: Net sales of services and plans $ 267,242 $ 265,935 $ 1,307 Total net revenue $ 1,536,854 $ 1,535,547 $ 1,307 Income from operations $ 42,351 $ 41,044 $ 1,307 Earnings before income taxes $ 4,868 $ 3,561 $ 1,307 Income tax provision (benefit) $ (18,785 ) $ (19,119 ) $ 334 Net income $ 23,653 $ 22,680 $ 973 Earnings per share: Basic $ 0.31 $ 0.30 $ 0.01 Diluted $ 0.30 $ 0.29 $ 0.01 There were no other material impacts on our consolidated financial statements as a result of our adoption of this new guidance. Restricted Cash. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash . This new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted this new guidance during the first quarter of 2018 using full retrospective application to each period presented. The adoption of this new guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows. Share Based Payment Accounting. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This new guidance expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The Company adopted this new guidance effective beginning of fiscal year 2018 . The adoption of this new guidance did not have a material impact on Company’s financial condition, results of operations, or cash flows. Future Adoption of Accounting Pronouncements Lease. In February 2016, the FASB issued ASU No. 2016-02, Leases . This new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with such classification affecting the pattern of expense recognition in the statement of operations. Disclosure of key information about leasing arrangements will also be required. This new guidance is effective for fiscal years beginning after December 15, 2018, and interim reporting periods within that fiscal year. In July 2018, the FASB issued ASU 2018-11, “ Leases: Targeted Improvements ,” as an amendment to ASU 2016-02, “ Leases ,” which provides entities with an additional transition method to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We will adopt the accounting standard using a modified retrospective transition approach in the first quarter of 2019, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented, and will elect the package of practical expedients, short-term practical expedient and the expedient to not separate lease components from non-lease components. We currently believe the most significant impact of adopting this ASU relates to recording operating lease liabilities and related ROU assets estimated to be between $325.0 million and $345.0 million on the consolidated balance sheet as of December 30, 2018. The Company does not expect the adoption of this new guidance to have a significant impact on the recognition, measurement or presentation of lease expenses within our consolidated statements of operations. Other Comprehensive Income. In February 2018, the FASB issued Accounting Standards Update ASU 2018-02, Income Statement–Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02") . This guidance allows for an optional reclassification from accumulated other comprehensive income or loss to retained earnings for stranded tax effects as a result of the newly enacted federal corporate income tax rate under the Tax Legislation. This guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We will adopt the guidance during the first quarter of fiscal year 2019, and do not expect to reclassify the stranded income tax benefit resulting from adoption of the Tax Legislation from AOCL into earnings until the maturity of our interest rate derivative contracts. No other impact to the Company’s financial condition, result of operations, or cash flows is expected. Cloud Computing. In August 2018, the FASB issued ASU No. 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 (a consensus of the FASB Emerging Issues Task Force). This new guidance aligns 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 (and hosting arrangements that include an internal-use software license). This new guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The amendments in this new guidance may be applied either retrospectively or prospectively. The Company is in the process of assessing the new guidance. Correction of Errors in Previously Issued Financial Statements In conjunction with fiscal 2018 year end financial reporting process, the Company identified errors in its previously issued consolidated financial statements related to lease accounting, specifically the accounting for tenant improvement allowances, straight-line rent and leasehold improvements. For certain leases, we depreciated leasehold improvements over a period longer than the remaining lease term. In addition, rent expense was understated as a result of amortizing tenant improvement allowances and recording straight-line rent adjustments over a period that differed from the lease term, which was determined giving consideration to those renewal periods that were reasonably assured of being exercised. In accordance with SEC Staff Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements (codified as Topic 1-N) , the Company concluded that the correction of the errors was not material to any of its previously issued annual or interim financial statements. The Company has revised its previously issued consolidated financial statements contained in this Annual Report on Form 10-K to correct the effect of these immaterial errors for the corresponding periods. Accordingly, for these prior periods we revised the affected line items of our consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of stockholders’ equity, and consolidated statements of cash flows. The correction of the errors resulted in a $0.9 million increase in accumulated deficit as of January 2, 2016. The following table presents the impact of these corrections on affected consolidated statements of operations and comprehensive income line items for the years ended December 30, 2017 and December 31, 2016 : Fiscal Year Fiscal Year In thousands, except earnings per share As Previously Reported Adjustments As Corrected As Previously Reported Adjustments As Corrected Operating Expenses: Selling, general and administrative expenses $ 597,924 $ 2,086 $ 600,010 $ 524,238 $ 1,631 $ 525,869 Depreciation and amortization $ 61,115 $ 859 $ 61,974 $ 51,993 $ 684 $ 52,677 Total operating expenses $ 671,106 $ 2,945 $ 674,051 $ 585,030 $ 2,315 $ 587,345 Income from operations $ 67,236 $ (2,945 ) $ 64,291 $ 66,384 $ (2,315 ) $ 64,069 Earnings before income taxes $ 7,173 $ (2,945 ) $ 4,228 $ 27,292 $ (2,315 ) $ 24,977 Income tax provision (benefit) $ (38,647 ) $ (263 ) $ (38,910 ) $ 12,534 $ (900 ) $ 11,634 Net income $ 45,820 $ (2,682 ) $ 43,138 $ 14,758 $ (1,415 ) $ 13,343 Earnings per share: Basic $ 0.77 $ (0.05 ) $ 0.72 $ 0.26 $ (0.02 ) $ 0.24 Diluted $ 0.74 $ (0.04 ) $ 0.70 $ 0.26 $ (0.03 ) $ 0.23 Comprehensive income: $ 50,508 $ (2,682 ) $ 47,826 $ 11,486 $ (1,415 ) $ 10,071 The following table presents the impact of these corrections on affected consolidated balance sheet line items as of December 30, 2017 : As of In thousands As Previously Reported Adjustments As Corrected Property and equipment, net $ 304,132 $ (1,852 ) $ 302,280 Total non-current assets $ 1,421,314 $ (1,852 ) $ 1,419,462 Total assets $ 1,583,791 $ (1,852 ) $ 1,581,939 Other liabilities $ 46,044 $ 4,858 $ 50,902 Deferred income taxes, net $ 73,648 $ (1,722 ) $ 71,926 Total other non-current liabilities $ 150,914 $ 3,136 $ 154,050 Retained earnings $ 37,145 $ (4,988 ) $ 32,157 Total stockholders’ equity $ 659,588 $ (4,988 ) $ 654,600 Total liabilities and stockholders’ equity $ 1,583,791 $ (1,852 ) $ 1,581,939 The following table presents the impact of these corrections on affected consolidated statements of cash flows line items for fiscal years ended December 30, 2017 and December 31, 2016 : Fiscal Year Fiscal Year In thousands As Previously Reported Adjustments As Corrected As Previously Reported Adjustments As Corrected Net income $ 45,820 $ (2,682 ) $ 43,138 $ 14,758 $ (1,415 ) $ 13,343 Depreciation and amortization $ 61,115 $ 859 $ 61,974 $ 51,993 $ 684 $ 52,677 Deferred income tax expense (benefit) $ (39,734 ) $ (263 ) $ (39,997 ) $ 11,181 $ (900 ) $ 10,281 Changes in operating assets and liabilities: Other liabilities $ 12,879 $ 2,086 $ 14,965 $ 9,406 $ 1,631 $ 11,037 |
