Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jul. 02, 2017 | Aug. 07, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | CARROLS RESTAURANT GROUP, INC. | |
Entity Central Index Key | 809,248 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 2, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 36,158,711 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 02, 2017 | Jan. 01, 2017 |
ASSETS | ||
Cash | $ 33,721 | $ 2,002 |
Trade and other receivables | 10,591 | 7,623 |
Inventories | 8,131 | 7,761 |
Prepaid rent | 5,107 | 4,665 |
Prepaid expenses and other current assets | 7,202 | 7,465 |
Refundable income taxes | 153 | 153 |
Total current assets | 64,905 | 29,669 |
Property and equipment, net | 247,055 | 247,847 |
Franchise rights, net | 155,046 | 134,153 |
Goodwill | 36,346 | 22,869 |
Franchise agreements, net | 23,587 | 19,591 |
Favorable leases, net | 6,222 | 5,441 |
Deferred income taxes | 27,465 | 28,841 |
Other assets | 1,862 | 1,744 |
Total assets | 562,488 | 490,155 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 1,731 | 1,616 |
Accounts payable | 20,778 | 22,445 |
Accrued interest | 3,672 | 2,676 |
Accrued payroll, related taxes and benefits | 23,469 | 26,029 |
Accrued real estate taxes | 5,116 | 5,202 |
Other liabilities | 13,287 | 10,932 |
Total current liabilities | 68,053 | 68,900 |
Long-term debt, net of current portion | 279,388 | 215,108 |
Lease financing obligations | 1,196 | 2,938 |
Deferred income-sale-leaseback of real estate | 11,542 | 12,271 |
Accrued postretirement benefits | 4,693 | 4,566 |
Unfavorable leases, net | 13,945 | 11,686 |
Other liabilities | 23,052 | 20,030 |
Total liabilities | 401,869 | 335,499 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, par value $.01 | 0 | 0 |
Voting common stock, par value $.01 | 354 | 353 |
Additional paid-in capital | 142,918 | 141,133 |
Accumulated deficit | 18,691 | 14,514 |
Accumulated other comprehensive income | (1,203) | (1,203) |
Treasury stock, at cost | (141) | (141) |
Total stockholders' equity | 160,619 | 154,656 |
Total liabilities and stockholders' equity | $ 562,488 | $ 490,155 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 02, 2017 | Jan. 01, 2017 |
Property and equipment, accumulated depreciation | $ 270,965 | $ 254,807 |
Franchise rights, accumulated amortization | 97,061 | 93,799 |
Franchise agreements, accumulated amortization | 10,302 | 9,734 |
Favorable leases, accumulated amortization | 2,021 | 1,760 |
Unfavorable leases, accumulated amortization | $ 4,635 | $ 4,643 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 100 | 100 |
Preferred stock, shares outstanding | 100 | 100 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,158,711 | 35,835,800 |
Common stock, shares, outstanding | 35,427,401 | 35,258,579 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Revenues: | ||||
Restaurant sales | $ 279,478,000 | $ 241,368,000 | $ 519,330,000 | $ 463,887,000 |
Costs and expenses: | ||||
Cost of sales | 78,724,000 | 62,117,000 | 142,960,000 | 121,137,000 |
Restaurant wages and related expenses | 87,948,000 | 73,545,000 | 169,019,000 | 145,628,000 |
Restaurant rent expense | 18,892,000 | 16,118,000 | 36,489,000 | 31,996,000 |
Other restaurant operating expenses | 41,910,000 | 37,316,000 | 81,105,000 | 73,005,000 |
Advertising expense | 11,431,000 | 10,770,000 | 21,332,000 | 19,898,000 |
General and administrative | 14,411,000 | 14,355,000 | 29,987,000 | 27,561,000 |
Depreciation and amortization | 13,366,000 | 11,486,000 | 26,517,000 | 22,543,000 |
Impairment and other lease charges | 432,000 | 286,000 | 963,000 | 508,000 |
Other expense | 29,000 | 1,479,000 | 29,000 | 1,035,000 |
Total operating expenses | 267,143,000 | 227,472,000 | 508,401,000 | 443,311,000 |
Income from operations | 12,335,000 | 13,896,000 | 10,929,000 | 20,576,000 |
Interest expense | 5,029,000 | 4,520,000 | 9,830,000 | 9,055,000 |
Income (loss) before income taxes | 7,306,000 | 9,376,000 | 1,099,000 | 11,521,000 |
Provision (benefit) for income taxes | 1,267,000 | 0 | 656,000 | 0 |
Net income (loss) | $ 6,039,000 | $ 9,376,000 | $ 443,000 | $ 11,521,000 |
Basic and diluted net income (loss) per share | $ 0.13 | $ 0.21 | $ 0.01 | $ 0.25 |
Basic weighted average common shares outstanding | 35,415,416 | 35,117,463 | 35,399,820 | 35,109,610 |
Diluted weighted average common shares outstanding | 44,941,819 | 44,818,528 | 44,980,576 | 44,849,707 |
Other comprehensive income (loss), net of tax: | ||||
Net income (loss) | $ 6,039,000 | $ 9,376,000 | $ 443,000 | $ 11,521,000 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Comprehensive income (loss) | $ 6,039,000 | $ 9,376,000 | $ 443,000 | $ 11,521,000 |
Consolidated Statements of Ope5
Consolidated Statements of Operations And Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Stock-based compensation | $ 903 | $ 606 | $ 1,786 | $ 1,171 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Non-cash reduction of lease financing obligations | $ 1,744 | $ 0 |
Cash flows provided from (used for) operating activities: | ||
Net income (loss) | 443 | 11,521 |
Adjustments to reconcile net loss to net cash provided from (used for) operating activities | ||
Loss on disposals of property and equipment | 479 | (63) |
Stock-based compensation | 1,786 | 1,171 |
Impairment and other lease charges | 963 | 508 |
Depreciation and amortization | 26,517 | 22,543 |
Amortization of deferred financing costs | 437 | 395 |
Amortization of bond premium | (24) | 0 |
Amortization of deferred gains from sale-leaseback transactions | (839) | (904) |
Deferred income taxes | (656) | 0 |
Changes in other operating assets and liabilities | (1,689) | (6,886) |
Net cash provided from (used for) operating activities | 28,729 | 28,285 |
Cash flows used for investing activities: | ||
New restaurant development | (2,606) | (3,261) |
Restaurant remodeling | (12,681) | (26,085) |
Other restaurant capital expenditures | (7,810) | (8,531) |
Corporate and restaurant information systems | (3,717) | (1,629) |
Total capital expenditures | (26,814) | (39,506) |
Acquisition of restaurants, net of cash acquired | (36,563) | (19,207) |
Proceeds from sale-leaseback transactions | 2,717 | 17,687 |
Proceeds from insurance recoveries | 0 | 1,016 |
Net cash used for investing activities | (60,660) | (40,010) |
Cash flows provided from (used for) financing activities: | ||
Proceeds from issuance of 8% senior secured second lien notes | 79,875 | 0 |
Borrowings under senior credit facilities | 183,250 | 12,750 |
Repayments on prior revolving credit facilities | (196,750) | (12,750) |
Principal payments on capital leases | (804) | (716) |
Financing costs associated with issuance of debt | (1,921) | (102) |
Net cash provided from (used for) financing activities: | 63,650 | (818) |
Net increase (decrease) in cash | 31,719 | (12,543) |
Cash, beginning of period | 2,002 | 22,274 |
Cash, end of period | $ 33,721 | $ 9,731 |
Consolidated Statements Of Cas7
Consolidated Statements Of Cash Flows Supplemental Disclosures - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Statement of Cash Flows [Abstract] | ||
Interest paid on long-term debt | $ 9,198 | $ 8,608 |
Interest paid on lease financing obligations | 66 | 52 |
Accruals for capital expenditures | 1,992 | 4,453 |
Income taxes refunded (paid) | 0 | 0 |
Capital lease obligations acquired or incurred | $ 277 | $ 263 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholder's Equity Statement - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Stock [Member] |
Common stock, shares, outstanding | 35,039,890 | ||||||
Stockholders' Equity Attributable to Parent | $ 107,999,000 | $ 350,000 | $ 0 | $ 139,083,000 | $ (30,958,000) | $ (335,000) | $ (141,000) |
Other Comprehensive Income (Loss), Tax | 541,000 | ||||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 2,053,000 | $ 0 | 0 | 2,053,000 | 0 | 0 | 0 |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 218,689 | ||||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | 0 | $ 3,000 | 0 | (3,000) | 0 | 0 | 0 |
Net income (loss) | 45,472,000 | 0 | 0 | 0 | 45,472,000 | 0 | 0 |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax | $ (868,000) | $ 0 | 0 | 0 | 0 | (868,000) | 0 |
Common stock, shares, outstanding | 35,258,579 | 35,258,579 | |||||
Stockholders' Equity Attributable to Parent | $ 154,656,000 | $ 353,000 | 0 | 141,133,000 | 14,514,000 | (1,203,000) | (141,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | 3,734,000 | 0 | 0 | 0 | 3,734,000 | 0 | 0 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 1,786,000 | $ 0 | 0 | 1,786,000 | 0 | 0 | 0 |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 168,822 | ||||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | 0 | $ 1,000 | 0 | (1,000) | 0 | 0 | 0 |
Net income (loss) | $ 443,000 | $ 0 | 0 | 0 | 443,000 | 0 | 0 |
Common stock, shares, outstanding | 35,427,401 | 35,427,401 | |||||
Stockholders' Equity Attributable to Parent | $ 160,619,000 | $ 354,000 | $ 0 | $ 142,918,000 | $ 18,691,000 | $ (1,203,000) | $ (141,000) |
Consolidated Statements of Cha9
Consolidated Statements of Changes in Stockholder's Equity Parentheticals $ in Thousands | 12 Months Ended |
Jan. 01, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Other Comprehensive Income (Loss), Tax | $ 541 |
Basis Of Presentation (Notes)
Basis Of Presentation (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | Basis of Presentation Business Description. At July 2, 2017 Carrols Restaurant Group, Inc. ("Carrols Restaurant Group") operated, as franchisee, 799 restaurants under the trade name “Burger King ®” in 17 Northeastern, Midwestern and Southeastern states. Basis of Consolidation. Carrols Restaurant Group is a holding company and conducts all of its operations through its wholly-owned subsidiary, Carrols Corporation (“Carrols”) and Carrols' wholly-owned subsidiary, Carrols LLC, a Delaware limited liability company, and Carrols LLC's wholly-owned subsidiary Republic Foods, Inc., a Maryland corporation ("Republic Foods") . The unaudited condensed consolidated financial statements presented herein include the accounts of Carrols Restaurant Group and its wholly-owned subsidiary Carrols. Unless the context otherwise requires, Carrols Restaurant Group, Carrols, Carrols LLC and Republic Foods, Inc. are collectively referred to as the “Company.” All intercompany transactions have been eliminated in consolidation. Fiscal Year. The Company uses a 52 - 53 week fiscal year ending on the Sunday closest to December 31. The three and six months ended July 2, 2017 and July 3, 2016 each contained thirteen and twenty-six weeks, respectively. The 2017 fiscal year will end December 31, 2017 and will contain 52 weeks. Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the six months ended July 2, 2017 and July 3, 2016 have been prepared without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission and do not include certain of the information and the footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of such unaudited consolidated financial statements have been included. The results of operations for the three and six months ended July 2, 2017 and July 3, 2016 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended January 1, 2017 . The January 1, 2017 consolidated balance sheet data is derived from those audited consolidated financial statements. Use of Estimates. The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 dates of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include: accrued occupancy costs, insurance liabilities, evaluation for impairment of long-lived assets and franchise rights, lease accounting matters, the valuation of acquired assets and liabilities and the valuation of deferred income tax assets. Actual results could differ from those estimates. Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker in order to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made at a total-Company basis. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its Burger King restaurants as one reportable segment. Business Combinations. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its net identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third party valuation specialist to assist with the valuation of certain leasehold improvements, franchise rights and favorable and unfavorable leases. The Company estimates that the seller's carrying value of acquired restaurant equipment, subject to certain adjustments, is equivalent to fair value of this equipment at the date of the acquisition. The fair values of assumed franchise agreements are valued as if the remaining term of the agreement is at the market rate. The fair values of acquired land, buildings,certain leasehold improvements and restaurant equipment subject to capital leases are determined using both the cost approach and market approach. The fair value of the favorable and unfavorable leases acquired, as well as the fair value of land, buildings, leasehold improvements and restaurant equipment subject to capital leases acquired is measured using significant inputs observable in the open market. The Company categorizes all such inputs as Level 2 inputs under ASC 820. The fair value of acquired franchise rights is primarily determined using the income approach. Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. Financial instruments include cash, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. The fair value of the Carrols Restaurant Group 8.0% Senior Secured Second Lien Notes due 2022 is based on a recent trading value, which is considered Level 2, and at July 2, 2017 was approximately $293.6 million . Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. As described in Note 4, the Company recorded long-lived asset impairment charges of $0.2 million and $0.6 million during the three and six months ended July 2, 2017 , respectively, and $0.5 million and $0.6 million during the three and six months ended July 3, 2016 , respectively. Recently Issued Accounting Pronouncements. In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill by eliminating step 2 from the goodwill impairment test. Under the new ASU, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized for the amount by which the carrying amount exceeds its fair value. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company believes that this pronouncement will have no impact on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain cash receipts and payments in the statement of cash flows in order to eliminate diversity in practice. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the potential impact that adoption will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. This ASU is intended to improve the reporting of leasing transactions to provide users of financial statements with more decision-useful information. This ASU will require organizations that lease assets to recognize the assets and liabilities for the rights and obligations created by those leases on the balance sheet. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, using a modified retrospective approach. Early adoption is permitted. The Company is evaluating the potential impact that adoption will have on its consolidated financial statements and related disclosures, but expects it will have a material impact on its consolidated balance sheet as the ASU requires balance sheet recognition of assets and obligations for current operating leases. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies certain elements of accounting for employee share-based payment transactions, including income tax consequences, the classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this ASU in the first quarter of 2017. Upon adoption of this ASU, the Company elected to change its accounting policy and account for forfeitures when they occur. The Company recorded a $3.7 million cumulative-effect adjustment to increase deferred tax assets and retained earnings as a result of the recognition of excess tax benefits previously unrealized. Prior periods have not been adjusted for the adoption of this ASU. In May 2014, and in subsequent updates, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires recognition of revenue from contracts with customers upon transfer of promised goods or services in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services and expands related disclosure requirements. The new revenue guidance is effective for the Company beginning with our first quarter of fiscal 2018 and may be applied retrospectively to all periods presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company believes that impact of this adoption will have no impact on its consolidated financial statements and related disclosures. |
Acquisition (Notes)
Acquisition (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Business Combinations [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Acquisitions In 2012, as part of an acquisition of restaurants from Burger King Corporation ("BKC"), the Company was assigned BKC's right of first refusal on franchisee restaurant sales in 20 states (the "ROFR"). Since the beginning of 2016, the Company has acquired an aggregate of 116 restaurants from other franchisees in the following transactions, some of which were subject to the ROFR: Closing Date Number of Restaurants Purchase Price Fee-Owned (1) Market Location 2016 Acquisitions: February 23, 2016 (2) 12 $ 7,127 Scranton/Wilkes-Barre, Pennsylvania May 25, 2016 6 12,080 5 Detroit, Michigan July 14, 2016 (2) 4 5,445 3 Detroit, Michigan August 23, 2016 7 8,755 6 Portland, Maine October 4, 2016 3 1,623 Raleigh, North Carolina November 15, 2016 17 7,251 Pittsburgh and Johnstown, Pennsylvania December 1, 2016 7 5,807 1 Columbus, Ohio 56 48,088 15 2017 Acquisitions: February 28, 2017 43 20,373 Cincinnati, Ohio June 6, 2017 (2) 17 16,190 (3) Baltimore, Maryland and Washington, DC Total 2016 and 2017 Acquisitions 116 $ 84,651 15 (1) The 2016 acquisitions included the purchase of 15 fee-owned restaurants, of which 14 were sold in sale-leaseback transactions during 2016 for net proceeds of $19.1 million . (2) Acquisitions resulting from the exercise of the ROFR. (3) The purchase price and the related allocation for this acquisition (included in the presentation below) is preliminary and subject to adjustment related to working capital settlement and related deferred income tax considerations. The Company allocated the aggregate purchase price to the net tangible and intangible assets acquired in the acquisitions at their estimated fair values. The following table summarizes the preliminary allocation of the aggregate purchase price for the 2017 acquisitions reflected in the consolidated balance sheet as of July 2, 2017 . Trade and other receivables $ 486 Inventory 566 Prepaid expenses 192 Other assets 52 Restaurant equipment 3,244 Restaurant equipment - subject to capital lease 235 Leasehold improvements 2,326 Franchise fees 1,292 Franchise rights (Note 3) 24,156 Favorable leases (Note 3) 1,100 Deferred income taxes (4,456 ) Goodwill (Note 3) 13,477 Capital lease obligations for restaurant equipment (278 ) Unfavorable leases (Note 3) (2,997 ) Accounts payable (880 ) Accrued payroll, related taxes and benefits (270 ) Other liabilities (1,682 ) Net assets acquired $ 36,563 Goodwill recorded in connection with these acquisitions represents costs in excess of fair values assigned to the underlying net assets of acquired restaurants. Goodwill of $6.5 million is expected to be deductible for income tax purposes for the 2017 acquisitions. Deferred income tax assets and liabilities are due primarily to the book and tax bases difference of franchise rights, property and equipment, net favorable and unfavorable leases and other liabilities. The restaurants acquired in 2016 and 2017 contributed restaurant sales of $34.4 million and $55.1 million in the three and six months ended July 2, 2017 , respectively, and $5.1 million and $7.0 million in the three and six months ended July 3, 2016 , respectively. It is impracticable to disclose net earnings for the post-acquisition period for the acquired restaurants as net earnings of these restaurants were not tracked on a collective basis due to the integration of administrative functions, including field supervision. The unaudited pro forma impact on the results of operations for the restaurants acquired in 2017 and 2016 for the three and six months ended July 2, 2017 and July 3, 2016 is included below. The unaudited pro forma results of operations are not necessarily indicative of the results that would have occurred had the acquisitions been consummated at the beginning of the periods presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited pro forma operating results: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Restaurant sales $ 285,952 $ 266,630 $ 541,112 $ 523,210 Net income $ 6,659 $ 12,481 $ 1,716 $ 16,629 Basic and diluted net income per share $ 0.15 $ 0.28 $ 0.04 $ 0.37 This unaudited pro forma financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings or any integration costs related to the acquired restaurants. The unaudited pro forma financial results exclude transaction costs recorded as general and administrative expenses of $0.4 million and $1.2 million during the three and six months ended July 2, 2017 , respectively, and $0.2 million and $0.6 million during the three and six months ended July 3, 2016 , respectively. |
Intangible Assets (Notes)
Intangible Assets (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Franchise Rights [Text Block] | Intangible Assets Goodwill. The Company is required to review goodwill for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of its fiscal year and does not believe circumstances have changed since the last assessment date which would make it necessary to reassess its value. There have been no recorded goodwill impairment losses during the three or six months ended July 2, 2017 or July 3, 2016 . The change in goodwill for the six months ended July 2, 2017 is summarized below: Balance at January 1, 2017 $ 22,869 Acquisitions of restaurants (Note 2) 13,477 Balance at July 2, 2017 $ 36,346 Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty -year renewal period. The Company assesses the potential impairment of franchise rights whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an indicator of impairment exists, an estimate of the aggregate undiscounted cash flows from the acquired restaurants is compared to the respective carrying value of franchise rights for each acquisition. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. No impairment charges were recorded related to the Company’s franchise rights for the three or six months ended July 2, 2017 and July 3, 2016 . The change in franchise rights for the six months ended July 2, 2017 is summarized below: Balance at January 1, 2017 $ 134,153 Acquisitions of restaurants (Note 2) 24,156 Amortization expense (3,263 ) Balance at July 2, 2017 $ 155,046 Amortization expense related to franchise rights was $1.7 million and $1.5 million for the three months ended July 2, 2017 and July 3, 2016 , respectively, and $3.3 million and $2.9 million for the six months ended July 2, 2017 and July 3, 2016 , respectively. The Company expects annual amortization expense to be $6.8 million in 2017 and $7.1 million in each of the following five years. Favorable and Unfavorable Leases. Amounts allocated to favorable and unfavorable leases are being amortized using the straight-line method over the remaining terms of the underlying lease agreements as a net reduction of restaurant rent expense. Additions to favorable lease assets and unfavorable lease liabilities from the 2017 acquisitions included in Note 2 totaled $1.1 million and $3.0 million for the six months ended July 2, 2017 , respectively. The net reduction of rent expense related to the amortization of favorable and unfavorable leases was $0.2 million each of the three months ended July 2, 2017 and July 3, 2016 and $0.4 million in the each of the six months ended July 2, 2017 and July 3, 2016 . The Company expects the net annual reduction of rent expense to be $0.8 million in 2017 , $0.9 million in 2018 , $0.8 million and 2019 , $0.7 million in 2020 and $0.6 million and 2021 and 2022 . |
Impairment Of Long-Lived Assets
Impairment Of Long-Lived Assets And Other Lease Charges (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Asset Impairment Charges [Abstract] | |
Asset Impairment Charges [Text Block] | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. The Company determines the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of using these assets in the operation of its business. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. During the three months ended July 2, 2017 , the Company recorded impairment and other lease charges of $0.4 million which included $0.2 million of capital expenditures at previously impaired restaurants and $0.2 million of other lease charges associated with changes in estimates of future costs related to closed restaurants. During the six months ended July 2, 2017 , the Company recorded impairment and other lease charges of $1.0 million , which included $0.4 million of capital expenditures at previously impaired restaurants, $0.2 million of asset impairment charges at three underperforming restaurants and $0.4 million of other lease charges primarily due to three restaurants closed during the first quarter. During the three months and six months ended July 3, 2016 , the Company recorded asset impairment charges of $0.5 million and $0.6 million , respectively, primarily from capital expenditures at previously impaired restaurants. During the three months ended July 3, 2016 , the Company reduced other lease charges by $0.2 million due to favorable lease terminations for three previously closed restaurant properties. The following table presents the activity in the accrual for closed restaurant locations: Six Months Ended Year Ended July 2, 2017 January 1, 2017 Balance, beginning of the period $ 1,513 $ 2,088 Provisions for restaurant closures 179 59 Changes in estimates of accrued costs 118 (89 ) Payments, net (387 ) (691 ) Other adjustments, including the effect of discounting future obligations 382 146 Balance, end of the period $ 1,805 $ 1,513 Changes in estimates of accrued costs primarily relate to revisions or terminations of certain closed restaurant leases, changes in assumptions for sublease income and other costs. |
Other Liabilities, Long-Term (N
Other Liabilities, Long-Term (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Liabilities Disclosure [Text Block] | Other Liabilities, Long-Term Other liabilities, long-term, at July 2, 2017 and January 1, 2017 consisted of the following: July 2, 2017 January 1, 2017 Deferred rent $ 12,669 $ 11,498 Other accrued occupancy costs 3,143 3,254 Accrued workers’ compensation and general liability claims 4,629 3,364 Deferred compensation 2,394 1,756 Other 217 158 $ 23,052 $ 20,030 Other accrued occupancy costs above include long-term obligations pertaining to closed restaurant locations, contingent rent and unamortized lease incentives. |
Long-Term Debt (Notes)
Long-Term Debt (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-term Debt Long-term debt at July 2, 2017 and January 1, 2017 consisted of the following: July 2, 2017 January 1, 2017 Collateralized: Carrols Restaurant Group 8% Senior Secured Second Lien Notes $ 275,000 $ 200,000 Senior Credit Facility - Revolving credit borrowings — 13,500 Capital leases 6,514 7,039 281,514 220,539 Less: current portion (1,731 ) (1,616 ) Less: deferred financing costs (5,246 ) (3,815 ) Add: bond premium $ 4,851 $ — $ 279,388 $ 215,108 8% Notes. On April 29, 2015, the Company issued $200.0 million principal amount of 8.0% Senior Secured Second Lien Notes due 2022 (the "Existing Notes") pursuant to an indenture dated as of April 29, 2015 governing such notes. On June 23, 2017, the Company issued an additional $75.0 million principal amount of 8.0% Senior Secured Second Lien Notes due 2022 (the "Additional Notes" and together with the "Existing Notes", the "8% Notes") for net proceeds of $35.5 million after repayment of outstanding revolving credit borrowings of $42.6 million and transaction fees of $1.8 million . The 8% Notes mature and are payable on May 1, 2022. Interest is payable semi-annually on May 1 and November 1. The 8% Notes are guaranteed by the Company's subsidiaries and are secured by second-priority liens on substantially all of the Company's and its subsidiaries' assets (including a pledge of all of the capital stock and equity interests of its subsidiaries). The 8% Notes are redeemable at the option of the Company in whole or in part at any time after May 1, 2018 at a price of 104% of the principal amount plus accrued and unpaid interest, if any, if redeemed before May 1, 2019, 102% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 1, 2019 but before May 1, 2020 and 100% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 1, 2020. Prior to May 1, 2018, the Company may redeem some or all of the 8% Notes at a redemption price of 100% of the principal amount of each note plus accrued and unpaid interest, if any, and a make-whole premium. In addition, the indenture governing the 8% Notes also provides that the Company may redeem up to 35% of the 8% Notes using the proceeds of certain equity offerings completed before May 15, 2018. The 8% Notes are jointly and severally guaranteed, unconditionally and in full by the Company's subsidiaries which are directly or indirectly 100% owned by the Company. Separate condensed consolidating information is not included because Carrols Restaurant Group is a holding company that has no independent assets or operations. There are no significant restrictions on its ability or any of the guarantor subsidiaries' ability to obtain funds from its respective subsidiaries. All consolidated amounts in our unaudited condensed consolidated financial statements are representative of the combined guarantors. The indenture governing the 8% Notes includes certain covenants, including limitations and restrictions on the Company and its subsidiaries who are guarantors under such indenture to, among other things: incur indebtedness or issue preferred stock; incur liens; pay dividends or make distributions in respect of capital stock or make certain other restricted payments or investments; sell assets; agree to payment restrictions affecting certain subsidiaries; enter into transaction with affiliates; or merge, consolidate or sell substantially all of the Company's assets. The indenture governing the 8% Notes and the security agreement provide that any capital stock and equity interests of any of the Company's subsidiaries will be excluded from the collateral to the extent that the par value, book value or market value of such capital stock or equity interests exceeds 20% of the aggregate principal amount of the 8% Notes then outstanding. The indenture governing the 8% Notes contains customary default provisions, including without limitation, a cross default provision pursuant to which it is an event of default under the 8% Notes and the indenture governing the 8% Notes if there is a default under any of the Company's indebtedness having an outstanding principal amount of $20.0 million or more which results in the acceleration of such indebtedness prior to its stated maturity or is caused by a failure to pay principal when due. Senior Credit Facility. On May 30, 2012, the Company entered into a senior credit facility, which has a maturity date of February 12, 2021, and was most recently amended on June 20, 2017 to increase the permitted indebtedness of our second lien notes to a principal amount not to exceed $300.0 million in order to provide for the additional $75.0 million of the 8% Notes issued on June 23, 2017. On January 13, 2017, the senior credit facility was amended to, among other things, provide for maximum revolving credit borrowings of up to $73.0 million (including $20.0 million available for letters of credit). The amended senior credit facility also provides for potential incremental borrowing increases of up to $25.0 million , in the aggregate. As of July 2, 2017 , there were no revolving credit borrowings outstanding and $12.8 million of letters of credit were issued under the senior credit facility. After reserving for issued letters of credit and outstanding revolving credit borrowings, $60.2 million was available for revolving credit borrowings under the amended senior credit facility at July 2, 2017 . Borrowings under the senior credit facility bear interest at a rate per annum, at the Company’s option, of: (i) the Alternate Base Rate plus the applicable margin of 1.75% to 2.75% based on the Company’s Adjusted Leverage Ratio, or (ii) the LIBOR Rate plus the applicable margin of 2.75% to 3.75% based on the Company’s Adjusted Leverage Ratio (all terms as defined under the senior credit facility). At July 2, 2017 the Company's LIBOR Rate margin was 3.25% and the Alternate Base Rate margin was 2.25% based on the Company's Adjusted Leverage Ratio at the end of the first quarter of 2017. The Company’s obligations under the senior credit facility are jointly and severally guaranteed by its subsidiaries and are secured by first priority liens on substantially all of the assets of the Company and its subsidiaries, including a pledge of all of the capital stock and equity interests of its subsidiaries. Under the amended senior credit facility, the Company is required to make mandatory prepayments of borrowings in the event of dispositions of assets, debt issuances and insurance and condemnation proceeds (all subject to certain exceptions). The amended senior credit facility contains certain covenants, including without limitation, those limiting the Company’s and its subsidiaries' ability to, among other things, incur indebtedness, incur liens, sell or acquire assets or businesses, change the character of its business in all material respects, engage in transactions with related parties, make certain investments, make certain restricted payments or pay dividends. In addition, the amended senior credit facility requires the Company to meet certain financial ratios, including a Fixed Charge Coverage Ratio, Adjusted Leverage Ratio and First Lien Leverage Ratio (all as defined under the amended senior credit facility). The Company was in compliance with the financial covenants under its senior credit facility at July 2, 2017 . The amended senior credit facility contains customary default provisions, including that the lenders may terminate their obligation to advance and may declare the unpaid balance of borrowings, or any part thereof, immediately due and payable upon the occurrence and during the continuance of customary defaults which include, without limitation, payment default, covenant defaults, bankruptcy type defaults, cross-defaults on other indebtedness, judgments or upon the occurrence of a change of control. |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three and six months ended July 2, 2017 and July 3, 2016 was comprised of the following: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Current $ — $ — $ — $ — Deferred 1,267 2,605 656 2,641 Change in valuation allowance — (2,605 ) — (2,641 ) Provision for income taxes $ 1,267 $ — $ 656 $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The provision for income taxes for the three and six months ended July 2, 2017 was derived using an estimated effective annual income tax rate for all of 2017 of 14.5% , which excludes any discrete tax adjustments and is below the statutory rate due to the effect of fixed employment tax credits on taxable income. The income tax provision for the six months ended July 2, 2017 contains net discrete tax adjustments of $0.6 million of income tax expense. In 2014, the Company recorded a valuation allowance on all of its net deferred tax assets. For the six months ended July 3, 2016 , the Company determined that a valuation allowance was still needed for all of its net deferred income tax assets, based on the required weight of positive and negative evidence under ASC 740, including consideration of the Company’s three-year cumulative losses at that date. Consequently, the Company recorded no provision or benefit for income taxes in the three or six months ended July 3, 2016 . During the fourth quarter of 2016, the Company evaluated evidence to consider the reversal of the valuation allowance on its net deferred income tax assets and determined in the fourth quarter of fiscal 2016 that there was sufficient positive evidence to conclude that it is more likely than not its deferred income tax assets are realizable. In determining the likelihood of future realization of the deferred income tax assets as of January 1, 2017, the Company considered both positive and negative evidence and weighted the effect of such evidence based upon its objectivity as required by ASC 740. As a result, the Company believed that the weight of the positive evidence, including the cumulative income position in the three most recent years (as adjusted for non-recurring items and permanent differences between book and tax) and forecasts for a sustained level of future taxable income, was sufficient to overcome the weight of the negative evidence, and recorded a $30.4 million tax benefit to release the full valuation allowance against the Company's deferred income tax assets in the fourth quarter of 2016. The Company's federal net operating loss carryforwards expire beginning in 2033 . As of July 2, 2017 , the Company had federal net operating loss carryforwards of approximately $73.1 million . The Company's state net operating loss carryforwards expire beginning in 2017 through 2034. The Company's policy is to recognize interest and/or penalties related to uncertain tax positions in income tax expense. At July 2, 2017 and January 1, 2017 , the Company had no unrecognized tax benefits and no accrued interest related to uncertain tax positions. The tax years 2013 - 2016 remain open to examination by the major taxing jurisdictions to which the Company is subject. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase within the next twelve months due to the uncertainties regarding the timing of examinations, the Company does not expect unrecognized tax benefits to significantly change in the next twelve months. |
Stock-Based Compensation (Notes
Stock-Based Compensation (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for three months ended July 2, 2017 and July 3, 2016 was $0.9 million and $0.6 million , respectively, and was $1.8 million and $1.2 million for the six months ended July 2, 2017 and July 3, 2016 , respectively. A summary of all non-vested shares activity for the six months ended July 2, 2017 was as follows: Shares Weighted Average Grant Date Price Non-vested at January 1, 2017 577,221 $ 10.42 Granted 366,580 15.05 Vested (168,822 ) 10.05 Forfeited (43,669 ) 12.84 Non-vested at July 2, 2017 731,310 $ 12.68 The fair value of non-vested shares is based on the closing price on the date of grant. As of July 2, 2017 , the total non-vested stock-based compensation expense was approximately $7.7 million and the remaining weighted average vesting period for non-vested shares was 2.3 years. The Company expects to record an additional $1.7 million in stock-based compensation expense related to the vesting of these awards for the remainder of 2017 . |
Commitments And Contingencies (
Commitments And Contingencies (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Lease Guarantees. Fiesta Restaurant Group, Inc. ("Fiesta"), a former wholly-owned subsidiary of the Company, was spun-off in 2012 to the Company's stockholders. As of July 2, 2017 , the Company is a guarantor under 27 Fiesta restaurant property leases, with lease terms expiring on various dates through 2030, and is the primary lessee on five Fiesta restaurant property leases, which it subleases to Fiesta. The Company is fully liable for all obligations under the terms of the leases in the event that Fiesta fails to pay any sums due under the lease, subject to indemnification provisions of the Separation and Distribution Agreement entered into in connection with the spin-off of Fiesta. The maximum potential amount of future undiscounted rental payments the Company could be required to make under these leases at July 2, 2017 was $22.7 million . The obligations under these leases will generally continue to decrease over time as these operating leases expire. No payments related to these guarantees have been made by the Company to date and none are expected to be required to be made in the future. The Company has not recorded a liability for these guarantees in accordance with ASC 460 - Guarantees as Fiesta has indemnified the Company for all such obligations and the Company did not believe it was probable it would be required to perform under any of the guarantees or direct obligations. Litigation. The Company is a party to various litigation matters that arise in the ordinary course of business. The Company does not believe that the outcome of any of these other matters meet the disclosure or recognition standards, nor will they have a material adverse effect on its consolidated financial statements. |
Related Parties (Notes)
Related Parties (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Transactions with Related Parties In connection with an acquisition of restaurants from BKC in 2012, the Company issued to BKC 100 shares of Series A Convertible Preferred Stock which is convertible into 9,414,580 shares of the Company's Common Stock, which currently constitutes approximately 20.7% of the outstanding shares of the Company's common stock on a fully diluted basis. Pursuant to the terms of the Series A Convertible Preferred Stock, BKC also has two representatives on the Company's board of directors. Each of the Company's restaurants operates under a separate franchise agreement with BKC. These franchise agreements generally provide for an initial term of twenty years and currently have an initial franchise fee of fifty thousand dollars. Any franchise agreement, including renewals, can be extended at the Company's discretion for an additional twenty -year term, with BKC's approval, provided that among other things, the restaurant meets the current Burger King image standard and the Company is not in default under terms of the franchise agreement. In addition to the initial franchise fee, the Company generally pays BKC a monthly royalty at a rate of 4.5 % of sales. Royalty expense was $11.9 million and $10.2 million in the three months ended July 2, 2017 and July 3, 2016 , respectively and $22.1 million and $19.6 million for the six months ended July 2, 2017 and July 3, 2016 , respectively. The Company is also generally required to contribute 4 % of restaurant sales from its restaurants to an advertising fund utilized by BKC for its advertising, promotional programs and public relations activities, and additional amounts for participation in local advertising campaigns in markets that approve such additional spending. Advertising expense related to BKC was $11.2 million and $10.5 million in the three months ended July 2, 2017 and July 3, 2016 , respectively, and $20.8 million and $19.5 million for the six months ended July 2, 2017 and July 3, 2016 , respectively. As of July 2, 2017 , the Company leased 262 of its restaurant locations from BKC and 136 of these locations are subleased by BKC from a third-party lessor. Aggregate rent related to BKC leases was $6.8 million and $7.2 million for the three months ended July 2, 2017 and July 3, 2016 , respectively and $13.4 million and $14.5 million for the six months ended July 2, 2017 and July 3, 2016 , respectively. The Company believes the related party lease terms have not been significantly affected by the fact that the Company and BKC are deemed related parties. As of July 2, 2017 , the Company owed BKC $8.1 million related to the payment of advertising, royalties and rent, which is remitted on a monthly basis and recorded as a current liability within accounts payable on the consolidated interim balance sheet as of July 2, 2017 . |
Net Income (Loss) Per Share (No
Net Income (Loss) Per Share (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income per Share The Company applies the two-class method to calculate and present net income per share. The Company's non-vested share awards and Series A Convertible Preferred Stock issued to BKC contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net income per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. The following table sets forth the calculation of basic and diluted net income per share: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Basic net income (loss) per share: Net income $ 6,039 $ 9,376 $ 443 $ 11,521 Less: Income attributable to non-vested shares (104 ) (148 ) (8 ) (180 ) Less: Income attributable to preferred stock (1,246 ) (1,951 ) (91 ) (2,398 ) Net income available to common stockholders $ 4,689 $ 7,277 $ 344 $ 8,943 Weighted average common shares outstanding 35,415,416 35,117,463 35,399,820 35,109,610 Basic net income per share $ 0.13 $ 0.21 $ 0.01 $ 0.25 Diluted net income per share: Net income $ 6,039 $ 9,376 $ 443 $ 11,521 Shares used in computing basic net income per share 35,415,416 35,117,463 35,399,820 35,109,610 Dilutive effect of preferred stock and non-vested shares 9,526,403 9,701,065 9,580,756 9,740,097 Shares used in computing diluted net income per share 44,941,819 44,818,528 44,980,576 44,849,707 Diluted net income per share (1) $ 0.13 $ 0.21 $ 0.01 $ 0.25 Shares excluded from diluted net income per share computations (2) — — — — (1) Diluted net income per share is equal to basic net income per share for the periods presented due to the allocation of earnings to participating securities under the two-class method of calculating basic net income per share causing basic net income per share to be lower than diluted net income per share calculated under the treasury-stock method. (2) Shares issuable upon conversion of preferred stock and non-vested shares were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. |
Other Expense (Income) (Notes)
Other Expense (Income) (Notes) | 6 Months Ended |
Jul. 02, 2017 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | Other Income and Expense In the three months ended July 3, 2016 , the Company recorded a gain of $0.5 million related to an insurance recovery from a fire at one of its restaurants and expense of $1.85 million related to a litigation settlement. Additionally, in the six months ended July 3, 2016 , the Company recorded a gain of $0.5 million related to a settlement for a partial condemnation on one of its operating restaurant properties. |
Basis Of Presentation (Policies
Basis Of Presentation (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Consolidation. Carrols Restaurant Group is a holding company and conducts all of its operations through its wholly-owned subsidiary, Carrols Corporation (“Carrols”) and Carrols' wholly-owned subsidiary, Carrols LLC, a Delaware limited liability company, and Carrols LLC's wholly-owned subsidiary Republic Foods, Inc., a Maryland corporation ("Republic Foods") . The unaudited condensed consolidated financial statements presented herein include the accounts of Carrols Restaurant Group and its wholly-owned subsidiary Carrols. Unless the context otherwise requires, Carrols Restaurant Group, Carrols, Carrols LLC and Republic Foods, Inc. are collectively referred to as the “Company.” All intercompany transactions have been eliminated in consolidation. |
Fiscal Period, Policy [Policy Text Block] | Fiscal Year. The Company uses a 52 - 53 week fiscal year ending on the Sunday closest to December 31. The three and six months ended July 2, 2017 and July 3, 2016 each contained thirteen and twenty-six weeks, respectively. |
Basis of Presentation, Policy [Policy Text Block] | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the six months ended July 2, 2017 and July 3, 2016 have been prepared without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission and do not include certain of the information and the footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of such unaudited consolidated financial statements have been included. The results of operations for the three and six months ended July 2, 2017 and July 3, 2016 are not necessarily indicative of the results to be expected for the full year. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates. The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 dates of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include: accrued occupancy costs, insurance liabilities, evaluation for impairment of long-lived assets and franchise rights, lease accounting matters, the valuation of acquired assets and liabilities and the valuation of deferred income tax assets. Actual results could differ from those estimates. |
Segment Reporting, Policy [Policy Text Block] | Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker in order to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made at a total-Company basis. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its Burger King restaurants as one reportable segment. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. Financial instruments include cash, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. The fair value of the Carrols Restaurant Group 8.0% Senior Secured Second Lien Notes due 2022 is based on a recent trading value, which is considered Level 2, and at July 2, 2017 was approximately $293.6 million . Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. |
Intangible Assets (Policies)
Intangible Assets (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill. The Company is required to review goodwill for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of its fiscal year and does not believe circumstances have changed since the last assessment date which would make it necessary to reassess its value. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty -year renewal period. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Favorable and Unfavorable Leases. Amounts allocated to favorable and unfavorable leases are being amortized using the straight-line method over the remaining terms of the underlying lease agreements as a net reduction of restaurant rent expense. |
Impairment Of Long-Lived Asse24
Impairment Of Long-Lived Assets And Other Lease Charges (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Asset Impairment Charges [Abstract] | |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. The Company determines the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of using these assets in the operation of its business. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. |
Stock-Based Compensation Polici
Stock-Based Compensation Policies (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Costs, Policy [Policy Text Block] | The fair value of non-vested shares is based on the closing price on the date of grant. |
Net Income (Loss) Per Share (Po
Net Income (Loss) Per Share (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | The Company applies the two-class method to calculate and present net income per share. The Company's non-vested share awards and Series A Convertible Preferred Stock issued to BKC contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net income per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Business Acquisition [Line Items] | ||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the preliminary allocation of the aggregate purchase price for the 2017 acquisitions reflected in the consolidated balance sheet as of July 2, 2017 . Trade and other receivables $ 486 Inventory 566 Prepaid expenses 192 Other assets 52 Restaurant equipment 3,244 Restaurant equipment - subject to capital lease 235 Leasehold improvements 2,326 Franchise fees 1,292 Franchise rights (Note 3) 24,156 Favorable leases (Note 3) 1,100 Deferred income taxes (4,456 ) Goodwill (Note 3) 13,477 Capital lease obligations for restaurant equipment (278 ) Unfavorable leases (Note 3) (2,997 ) Accounts payable (880 ) Accrued payroll, related taxes and benefits (270 ) Other liabilities (1,682 ) Net assets acquired $ 36,563 Since the beginning of 2016, the Company has acquired an aggregate of 116 restaurants from other franchisees in the following transactions, some of which were subject to the ROFR: Closing Date Number of Restaurants Purchase Price Fee-Owned (1) Market Location 2016 Acquisitions: February 23, 2016 (2) 12 $ 7,127 Scranton/Wilkes-Barre, Pennsylvania May 25, 2016 6 12,080 5 Detroit, Michigan July 14, 2016 (2) 4 5,445 3 Detroit, Michigan August 23, 2016 7 8,755 6 Portland, Maine October 4, 2016 3 1,623 Raleigh, North Carolina November 15, 2016 17 7,251 Pittsburgh and Johnstown, Pennsylvania December 1, 2016 7 5,807 1 Columbus, Ohio 56 48,088 15 2017 Acquisitions: February 28, 2017 43 20,373 Cincinnati, Ohio June 6, 2017 (2) 17 16,190 (3) Baltimore, Maryland and Washington, DC Total 2016 and 2017 Acquisitions 116 $ 84,651 15 (1) The 2016 acquisitions included the purchase of 15 fee-owned restaurants, of which 14 were sold in sale-leaseback transactions during 2016 for net proceeds of $19.1 million . (2) Acquisitions resulting from the exercise of the ROFR. | |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table summarizes the Company's unaudited pro forma operating results: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Restaurant sales $ 285,952 $ 266,630 $ 541,112 $ 523,210 Net income $ 6,659 $ 12,481 $ 1,716 $ 16,629 Basic and diluted net income per share $ 0.15 $ 0.28 $ 0.04 $ 0.37 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The change in goodwill for the six months ended July 2, 2017 is summarized below: Balance at January 1, 2017 $ 22,869 Acquisitions of restaurants (Note 2) 13,477 Balance at July 2, 2017 $ 36,346 |
Schedule of Indefinite-Lived Intangible Assets [Table Text Block] | The change in franchise rights for the six months ended July 2, 2017 is summarized below: Balance at January 1, 2017 $ 134,153 Acquisitions of restaurants (Note 2) 24,156 Amortization expense (3,263 ) Balance at July 2, 2017 $ 155,046 |
Impairment Of Long-Lived Asse29
Impairment Of Long-Lived Assets And Other Lease Charges (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Asset Impairment Charges [Abstract] | |
Schedule of Closed-Store Restaurant Reserve by Type of Cost [Table Text Block] | The following table presents the activity in the accrual for closed restaurant locations: Six Months Ended Year Ended July 2, 2017 January 1, 2017 Balance, beginning of the period $ 1,513 $ 2,088 Provisions for restaurant closures 179 59 Changes in estimates of accrued costs 118 (89 ) Payments, net (387 ) (691 ) Other adjustments, including the effect of discounting future obligations 382 146 Balance, end of the period $ 1,805 $ 1,513 |
Other Liabilities, Long-Term (T
Other Liabilities, Long-Term (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Assets and Other Liabilities [Table Text Block] | Other liabilities, long-term, at July 2, 2017 and January 1, 2017 consisted of the following: July 2, 2017 January 1, 2017 Deferred rent $ 12,669 $ 11,498 Other accrued occupancy costs 3,143 3,254 Accrued workers’ compensation and general liability claims 4,629 3,364 Deferred compensation 2,394 1,756 Other 217 158 $ 23,052 $ 20,030 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt at July 2, 2017 and January 1, 2017 consisted of the following: July 2, 2017 January 1, 2017 Collateralized: Carrols Restaurant Group 8% Senior Secured Second Lien Notes $ 275,000 $ 200,000 Senior Credit Facility - Revolving credit borrowings — 13,500 Capital leases 6,514 7,039 281,514 220,539 Less: current portion (1,731 ) (1,616 ) Less: deferred financing costs (5,246 ) (3,815 ) Add: bond premium $ 4,851 $ — $ 279,388 $ 215,108 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision for income taxes for the three and six months ended July 2, 2017 and July 3, 2016 was comprised of the following: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Current $ — $ — $ — $ — Deferred 1,267 2,605 656 2,641 Change in valuation allowance — (2,605 ) — (2,641 ) Provision for income taxes $ 1,267 $ — $ 656 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Nonvested Share Activity [Table Text Block] | A summary of all non-vested shares activity for the six months ended July 2, 2017 was as follows: Shares Weighted Average Grant Date Price Non-vested at January 1, 2017 577,221 $ 10.42 Granted 366,580 15.05 Vested (168,822 ) 10.05 Forfeited (43,669 ) 12.84 Non-vested at July 2, 2017 731,310 $ 12.68 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the calculation of basic and diluted net income per share: Three Months Ended Six Months Ended July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Basic net income (loss) per share: Net income $ 6,039 $ 9,376 $ 443 $ 11,521 Less: Income attributable to non-vested shares (104 ) (148 ) (8 ) (180 ) Less: Income attributable to preferred stock (1,246 ) (1,951 ) (91 ) (2,398 ) Net income available to common stockholders $ 4,689 $ 7,277 $ 344 $ 8,943 Weighted average common shares outstanding 35,415,416 35,117,463 35,399,820 35,109,610 Basic net income per share $ 0.13 $ 0.21 $ 0.01 $ 0.25 Diluted net income per share: Net income $ 6,039 $ 9,376 $ 443 $ 11,521 Shares used in computing basic net income per share 35,415,416 35,117,463 35,399,820 35,109,610 Dilutive effect of preferred stock and non-vested shares 9,526,403 9,701,065 9,580,756 9,740,097 Shares used in computing diluted net income per share 44,941,819 44,818,528 44,980,576 44,849,707 Diluted net income per share (1) $ 0.13 $ 0.21 $ 0.01 $ 0.25 Shares excluded from diluted net income per share computations (2) — — — — (1) Diluted net income per share is equal to basic net income per share for the periods presented due to the allocation of earnings to participating securities under the two-class method of calculating basic net income per share causing basic net income per share to be lower than diluted net income per share calculated under the treasury-stock method. (2) Shares issuable upon conversion of preferred stock and non-vested shares were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. |
Basis Of Presentation (Details)
Basis Of Presentation (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 02, 2017USD ($)Rate | Jul. 03, 2016USD ($) | Jul. 02, 2017USD ($)Rate | Jul. 03, 2016USD ($) | Dec. 31, 2017 | Jan. 01, 2017USD ($) | |
Entity Information [Line Items] | ||||||
Senior Secured Second Lien Notes, Interest Rate | Rate | 8.00% | 8.00% | ||||
Number of Restaurants | 799 | 799 | ||||
Number of States in which Entity Operates | 17 | 17 | ||||
Weeks In Fiscal Period | 13 | 13 | 26 | 26 | ||
Long-term Debt, Fair Value | $ 293,600,000 | $ 293,600,000 | ||||
Asset Impairment Charges | $ 200,000 | $ 500,000 | $ 600,000 | $ 600,000 | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 3,734,000 | |||||
Minimum [Member] | ||||||
Entity Information [Line Items] | ||||||
Weeks In Fiscal Period | 52 | |||||
Maximum [Member] | ||||||
Entity Information [Line Items] | ||||||
Weeks In Fiscal Period | 53 | |||||
Subsequent Event [Member] | ||||||
Entity Information [Line Items] | ||||||
Weeks In Fiscal Period | 52 | |||||
Accounting Standards Update 2017-04 [Member] | ||||||
Entity Information [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 0 | |||||
Accounting Standards Update 2014-09 [Member] | ||||||
Entity Information [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 0 |
Acquisition (Details)
Acquisition (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | 18 Months Ended | ||||
Jul. 02, 2017USD ($) | Jan. 01, 2017USD ($) | Oct. 02, 2016USD ($) | Jul. 03, 2016USD ($) | Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($) | Jan. 01, 2017USD ($) | Jul. 02, 2017USD ($) | |
Business Acquisition [Line Items] | ||||||||
Right of First Refusal, Number of States | 20 | 20 | 20 | |||||
Number of Restaurants Acquired | 56 | 116 | ||||||
Business acquisitions, purchase price | $ 36,563 | $ 19,207 | $ 48,088 | $ 84,651 | ||||
Business acquisitions, properties purchased | 15 | 15 | ||||||
Proceeds from sale-leaseback transactions | 2,717 | 17,687 | ||||||
Restaurant sales | $ 279,478 | $ 241,368 | 519,330 | 463,887 | ||||
February 23, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 12 | |||||||
Business acquisitions, purchase price | $ 7,127 | |||||||
May 25, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 6 | |||||||
Business acquisitions, purchase price | $ 12,080 | |||||||
Business acquisitions, properties purchased | 5 | |||||||
July 14, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 4 | |||||||
Business acquisitions, purchase price | $ 5,445 | |||||||
Business acquisitions, properties purchased | 3 | |||||||
August 23, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 7 | |||||||
Business acquisitions, purchase price | $ 8,755 | |||||||
Business acquisitions, properties purchased | 6 | |||||||
October 4, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 3 | |||||||
Business acquisitions, purchase price | $ 1,623 | |||||||
November 15, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 17 | |||||||
Business acquisitions, purchase price | $ 7,251 | |||||||
December 1, 2016 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 7 | |||||||
Business acquisitions, purchase price | $ 5,807 | |||||||
Business acquisitions, properties purchased | 1 | |||||||
February 28, 2017 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 43 | |||||||
Business acquisitions, purchase price | $ 20,373 | |||||||
June 6, 2017 Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of Restaurants Acquired | 17 | |||||||
Business acquisitions, purchase price | $ 16,190 | |||||||
2016 Acquisitions [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Properties sold in sale-leaseback transactions | 14 | |||||||
Proceeds from sale-leaseback transactions | $ 19,100 | |||||||
2017 Acquisitions [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Tax deductible goodwill | 6,500 | 6,500 | $ 6,500 | |||||
Acquired Restaurants [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Restaurant sales | $ 34,400 | $ 5,100 | $ 55,100 | $ 7,000 |
Acquisition Purchase Price Allo
Acquisition Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 02, 2017 | Jan. 01, 2017 |
Business Acquisition [Line Items] | ||
Franchise rights | $ 24,156 | |
Goodwill | 36,346 | $ 22,869 |
2017 Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 486 | |
Inventory | 566 | |
Prepaid expenses | 192 | |
Other assets | 52 | |
Restaurant equipment | 3,244 | |
Restaurant equipment - subject to capital lease | 235 | |
Leasehold improvements | 2,326 | |
Franchise fees | 1,292 | |
Franchise rights | 24,156 | |
Favorable leases | 1,100 | |
Deferred income taxes | (4,456) | |
Goodwill | 13,477 | |
Capital lease obligations for restaurant equipment | (278) | |
Unfavorable leases | (2,997) | |
Accounts Payable | (880) | |
Accrued payroll and related benefits | (270) | |
Other liabilities | (1,682) | |
Net assets acquired | $ 36,563 |
Acquisition Pro Forma Informati
Acquisition Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Business Combinations [Abstract] | ||||
Business Acquisition, Pro Forma Restaurant Sales | $ 285,952 | $ 266,630 | $ 541,112 | $ 523,210 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 6,659 | $ 12,481 | $ 1,716 | $ 16,629 |
Business Acquisition, Pro Forma Earnings Per Share, Basic and Diluted | $ 0.15 | $ 0.28 | $ 0.04 | $ 0.37 |
Acquisition costs | $ 400 | $ 200 | $ 1,200 | $ 600 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | 22,869 | |||
Acquisition of restaurants | 13,477 | |||
Goodwill, end of period | $ 36,346 | $ 36,346 |
Franchise Rights (Details)
Franchise Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Franchise RIghts Rollforward [Abstract] | ||||
Balance, beginning | $ 134,153 | |||
Acquired franchise rights | $ 24,156 | 24,156 | ||
Amortization of intangible assets, franchise rights | 1,700 | $ 1,500 | 3,263 | $ 2,900 |
Balance, end | 155,046 | 155,046 | ||
Franchise Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Franchise rights impairment | 0 | $ 0 | 0 | $ 0 |
Amortization Expense, Expected Full Year | 6,800 | 6,800 | ||
Next Fiscal Year | 7,100 | 7,100 | ||
Second Fiscal Year | 7,100 | 7,100 | ||
Third Fiscal Year | 7,100 | 7,100 | ||
Fourth Fiscal Year | 7,100 | 7,100 | ||
Fifth Fiscal Year | $ 7,100 | $ 7,100 |
Favorable and Unfavorable Lease
Favorable and Unfavorable Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Leases, Acquired-in-Place, Market Adjustment [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 200 | $ 200 | $ 400 | $ 400 |
Amortization Expense, Expected Full Year | 800 | 800 | ||
Next Fiscal Year | 900 | 900 | ||
Second Fiscal Year | 800 | 800 | ||
Third Fiscal Year | 700 | 700 | ||
Fourth Fiscal Year | 600 | 600 | ||
Fifth Fiscal Year | 600 | 600 | ||
2017 Acquisitions [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Favorable leases | 1,100 | 1,100 | ||
Unfavorable leases | $ 2,997 | $ 2,997 |
Impairment Of Long-Lived Asse42
Impairment Of Long-Lived Assets And Other Lease Charges (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($) | Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($) | Jan. 01, 2017USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Impairment and other lease charges | $ 432 | $ 286 | $ 963 | $ 508 | |
Asset Impairment Charges | 200 | $ 500 | $ 600 | $ 600 | |
Asset Impairment Charges, Number of Restaurants | 3 | ||||
Other lease charges | $ 118 | $ (89) | |||
Other Lease Charges, Number of Restaurants | 3 | 3 | |||
Provisions for restaurant closures | $ 179 | $ 59 | |||
Previously Impaired [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Asset Impairment Charges | 400 | ||||
Underperforming Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Asset Impairment Charges | 200 | ||||
Closed Restaurants [Member] | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other lease charges | $ 200 | $ (200) | |||
Provisions for restaurant closures | $ 400 |
Impairment Of Long-Lived Asse43
Impairment Of Long-Lived Assets And Other Lease Charges Closed Restaurant Reserve Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 02, 2017 | Jan. 01, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Closed-restaurant reserve, beginning of the period | $ 1,513 | $ 2,088 |
Provisions for restaurant closures | 179 | 59 |
Changes in estimates of accrued costs | 118 | (89) |
Payments, net | (387) | (691) |
Other adjustments, including the effect of discounting future obligations | 382 | 146 |
Closed-restaurant reserve, end of the period | $ 1,805 | $ 1,513 |
Other Liabilities, Long-Term (D
Other Liabilities, Long-Term (Details) - USD ($) $ in Thousands | Jul. 02, 2017 | Jan. 01, 2017 |
Other Liabilities, Noncurrent [Abstract] | ||
Deferred rent | $ 12,669 | $ 11,498 |
Accrued occupancy costs | 3,143 | 3,254 |
Accrued workers' compensation and general liability claims | 4,629 | 3,364 |
Deferred compensation | 2,394 | 1,756 |
Other | 217 | 158 |
Other Liabilities | $ 23,052 | $ 20,030 |
Long-Term Debt Debt Balances (D
Long-Term Debt Debt Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jun. 28, 2015 | Jul. 02, 2017 | Jan. 01, 2017 | |
Debt Disclosure [Abstract] | ||||
Proceeds from Issuance of Debt | $ 75,000 | $ 200,000 | ||
Proceeds from Debt, Net of Issuance Costs | $ 35,500 | |||
Carrols Restaurant Group Senior Secured Second Lien Notes | 275,000 | 275,000 | $ 200,000 | |
Senior Credit Facility - Revolving credit borrowings | 0 | 0 | 13,500 | |
Capital leases | 6,514 | 6,514 | 7,039 | |
Long-term Debt | 281,514 | 281,514 | 220,539 | |
Less: current portion | (1,731) | (1,731) | (1,616) | |
Less: deferred financing costs | (5,246) | (5,246) | (3,815) | |
Add: bond premium | 4,851 | 4,851 | 0 | |
Long-term debt, net of current portion | $ 279,388 | 279,388 | $ 215,108 | |
Line of Credit Facility, Increase (Decrease), Other, Net | (42,600) | |||
Payments of Debt Issuance Costs | $ (1,800) |
Long-Term Debt Senior Secured S
Long-Term Debt Senior Secured Second Lien Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jun. 28, 2015 | Jul. 02, 2017 | Jan. 01, 2017 | |
Debt Instrument, Redemption [Line Items] | ||||
Carrols Restaurant Group Senior Secured Second Lien Notes | $ 275,000 | $ 275,000 | $ 200,000 | |
Senior Secured Second Lien Notes, Interest Rate | 8.00% | 8.00% | ||
Proceeds from Issuance of Debt | $ 75,000 | $ 200,000 | ||
Senior Notes, Amount Redeemable with Proceeds from Equity Offerings | 35.00% | |||
Collateral exclusion for material subsidiaries, percentage of Senior Notes | 20.00% | 20.00% | ||
Senior Notes, Cross Default Provision, Minimum Debt Principal Amount | $ 20,000 | $ 20,000 | ||
Debt Instrument, Redemption, Period Two [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Senior Notes, Redemption Price | 104.00% | |||
Debt Instrument, Redemption, Period Three [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Senior Notes, Redemption Price | 102.00% | |||
Debt Instrument, Redemption, Period Four [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Senior Notes, Redemption Price | 100.00% |
Long-Term Debt Senior Credit Fa
Long-Term Debt Senior Credit Facility (Details) - USD ($) $ in Thousands | Jul. 02, 2017 | Jan. 01, 2017 |
Debt Instrument [Line Items] | ||
Permitted indebtedness | $ 300,000 | |
Line of Credit Facility, Current Borrowing Capacity | 73,000 | |
Line of Credit Facility, Potential Incremental Increases | 25,000 | |
Senior Credit Facility - Revolving credit borrowings | 0 | $ 13,500 |
Letters of Credit Outstanding, Amount | 12,800 | |
Line of Credit Facility, Remaining Borrowing Capacity | 60,200 | |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Current Borrowing Capacity | $ 20,000 | |
Alternative Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Interest Rate | 2.25% | |
Alternative Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | |
Alternative Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Interest Rate | 3.25% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% |
Income Taxes Schedule of Compon
Income Taxes Schedule of Components of Income Tax Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred | 1,267,000 | 2,605,000 | 656,000 | 2,641,000 |
Change in valuation allowance | 0 | (2,605,000) | 0 | (2,641,000) |
Provision (benefit) for income taxes | $ 1,267,000 | $ 0 | $ 656,000 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jan. 01, 2017 | Jul. 02, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 14.50% | |
Effective Income Tax Rate Reconciliation, Tax Credit, Other, Amount | $ 600 | |
Valuation allowance increase (decrease) | $ (30,400) | |
Operating Loss Carryforwards | 73,100 | |
Unrecognized Tax Benefits | 0 | 0 |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 0 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 366,580 | |||
Stock-based compensation | $ 903 | $ 606 | $ 1,786 | $ 1,171 |
Unrecognized Stock-Based Compensation Expense, Non-vested Shares | 7,700 | $ 7,700 | ||
Weighted Average Remaining Vesting Period, Non-Vested Shares | 2 years 4 months | |||
Expected Stock-Based Compensation, Remainder of Fiscal Year | $ 1,700 | $ 1,700 |
Stock-Based Compensation Summar
Stock-Based Compensation Summary of Non-Vested Stock Activity (Details) | 6 Months Ended |
Jul. 02, 2017$ / sharesshares | |
Nonvested share activity [Roll Forward] | |
Nonvested, beginning of period | shares | 577,221 |
Weighted Average Grant Date Price, beginning of period | $ / shares | $ 10.42 |
Granted | shares | 366,580 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 15.05 |
Vested Shares | shares | 168,822 |
Weighted Average Grant Date Price, Vested Shares | $ / shares | $ 10.05 |
Forfeited Shares | shares | 43,669 |
Weighted Average Grant Date Price, Forfeited Shares | $ / shares | $ 12.84 |
Nonvested, end of period | shares | 731,310 |
Weighted Average Grant Date Price, end of period | $ / shares | $ 12.68 |
Commitments And Contingencies52
Commitments And Contingencies (Details) | 6 Months Ended |
Jul. 02, 2017USD ($) | |
Guarantor Obligations [Line Items] | |
Maximum potential future undiscounted rental payments | $ 22,700,000 |
Guarantor Obligations, Payments Made | 0 |
Guarantor Obligations, Expected Future Payments | $ 0 |
Property Lease Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Property leases | 27 |
Primary Lessee [Member] | |
Guarantor Obligations [Line Items] | |
Property leases | 5 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 6 Months Ended | |
Jul. 02, 2017USD ($)Rateshares | Jan. 01, 2017shares | |
Related Party Transaction [Line Items] | ||
Preferred stock, shares issued | shares | 100 | 100 |
Board of directors, number of members | 2 | |
Franchise Agreement, Term | 20 years | |
Accounts payable to BKC | $ | $ 8,100 | |
Affiliated Entity [Member] | ||
Related Party Transaction [Line Items] | ||
Convertible Preferred Stock, Common Shares Issuable upon Conversion | shares | 9,414,580 | |
Preferred stock, ownership percentage if converted | Rate | 20.70% | |
Initial Franchise Fees | $ | $ 50 | |
Franchise Term | 20 years | |
Property leases | 262 | |
BKC Subleases with third-party lessor [Member] | Affiliated Entity [Member] | ||
Related Party Transaction [Line Items] | ||
Property leases | 136 |
Related Parties Expense Disclos
Related Parties Expense Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Royalty Expense | $ 11.9 | $ 10.2 | $ 22.1 | $ 19.6 |
Advertising Expense | 11.2 | 10.5 | 20.8 | 19.5 |
Operating Leases, Rent Expense | $ 6.8 | $ 7.2 | $ 13.4 | $ 14.5 |
Selling and Marketing Expense [Member] | Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Rate | 4.00% | |||
Royalty Agreement Terms [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Rate | 4.50% |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Jan. 01, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income (loss) | $ 6,039 | $ 9,376 | $ 443 | $ 11,521 | $ 45,472 |
Net income (loss) available to common stockholders | $ 4,689 | $ 7,277 | $ 344 | $ 8,943 | |
Basic weighted average common shares outstanding | 35,415,416 | 35,117,463 | 35,399,820 | 35,109,610 | |
Basic net income (loss) per share | $ 0.13 | $ 0.21 | $ 0.01 | $ 0.25 | |
Dilutive effect of preferred stock and non-vested shares | 9,526,403 | 9,701,065 | 9,580,756 | 9,740,097 | |
Shares used in computing diluted net income (loss) per share | 44,941,819 | 44,818,528 | 44,980,576 | 44,849,707 | |
Diluted net income (loss) per share | $ 0.13 | $ 0.21 | $ 0.01 | $ 0.25 | |
Shares excluded from diluted net income (loss) per share computations (1) | 0 | 0 | 0 | 0 | |
Restricted Stock [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Less: Income attributable to participating securities | $ (104) | $ (148) | $ (8) | $ (180) | |
Preferred Stock [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Less: Income attributable to participating securities | $ (1,246) | $ (1,951) | $ (91) | $ (2,398) |
Other Expense (Income) (Details
Other Expense (Income) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 03, 2016USD ($) | Jul. 03, 2016USD ($) | Jul. 02, 2017 | |
Loss Contingencies [Line Items] | |||
Number of Restaurants | 799 | ||
Litigation Settlement, Amount | $ 1,850 | ||
Damage from Fire, Explosion or Other Hazard [Member] | |||
Loss Contingencies [Line Items] | |||
Insured Event, Gain (Loss) | $ (500) | ||
Number of Restaurants | 1 | 1 | |
Unfavorable Regulatory Action [Member] | |||
Loss Contingencies [Line Items] | |||
Gain (Loss) on Condemnation | $ 500 | ||
Number of Restaurants | 1 | 1 |