CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 29, 2019 |
Dec. 30, 2018 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,461,697 | 27,259,212 |
Common stock, shares outstanding | 25,612,597 | 26,858,988 |
Treasury stock, shares | 1,493,495 | 112,358 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | ||
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Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
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Revenues: | |||
Revenues | $ 660,943,000 | $ 688,597,000 | $ 669,132,000 |
Costs and expenses: | |||
Cost of sales | 207,453,000 | 218,946,000 | 202,888,000 |
Restaurant wages and related expenses (including stock-based compensation expense of $195, $90, and $52, respectively) | 179,178,000 | 188,131,000 | 184,742,000 |
Restaurant rent expense | 47,805,000 | 36,034,000 | 36,936,000 |
Other restaurant operating expenses | 91,897,000 | 100,828,000 | 98,927,000 |
Advertising expense | 23,179,000 | 23,695,000 | 26,091,000 |
General and administrative (including stock-based compensation expense of $2,649, $3,379, and $3,493, respectively) | 56,195,000 | 54,525,000 | 59,633,000 |
Depreciation and amortization | 39,195,000 | 37,604,000 | 34,957,000 |
Pre-opening costs | 972,000 | 1,716,000 | 2,118,000 |
Impairment and other lease charges | 13,101,000 | 21,144,000 | 61,760,000 |
Goodwill impairment | 67,909,000 | 0 | 0 |
Closed restaurant rent expense, net of sublease income | 4,163,000 | 0 | 0 |
Other expense (income), net | 1,041,000 | (3,007,000) | 2,190,000 |
Total operating expenses | 732,088,000 | 679,616,000 | 710,242,000 |
Income (loss) from operations | (71,145,000) | 8,981,000 | (41,110,000) |
Interest expense | 3,872,000 | 3,966,000 | 2,877,000 |
Income (loss) before income taxes | (75,017,000) | 5,015,000 | (43,987,000) |
Provision for (benefit from) income taxes | 9,369,000 | (2,772,000) | (7,755,000) |
Net income (loss) | $ (84,386,000) | $ 7,787,000 | $ (36,232,000) |
Earnings (loss) per common share: | |||
Basic (usd per share) | $ (3.18) | $ 0.29 | $ (1.35) |
Diluted (usd per share) | $ (3.18) | $ 0.29 | $ (1.35) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 26,500,356 | 26,890,577 | 26,821,471 |
Diluted (in shares) | 26,500,356 | 26,894,083 | 26,821,471 |
Restaurant sales | |||
Revenues: | |||
Revenues | $ 658,263,000 | $ 685,925,000 | $ 666,584,000 |
Franchise royalty revenues and fees | |||
Revenues: | |||
Revenues | $ 2,680,000 | $ 2,672,000 | $ 2,548,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
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Stock-based compensation | $ 2,800 | $ 3,500 | $ 3,500 |
Restaurant Wages And Related Expenses | |||
Stock-based compensation | 195 | 90 | 52 |
General and Administrative Expense | |||
Stock-based compensation | $ 2,649 | $ 3,379 | $ 3,493 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
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Statement of Cash Flows [Abstract] | |||
Capitalized interest | $ 247 | $ 377 | $ 256 |
Basis of Presentation |
12 Months Ended | ||||||||||||||||||||||||||||||||
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Business Description. Fiesta Restaurant Group, Inc. ("Fiesta Restaurant Group" or "Fiesta") owns, operates and franchises two fast-casual restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively "Pollo Tropical") and Taco Cabana, Inc. and its subsidiaries (collectively "Taco Cabana"). Unless the context otherwise requires, Fiesta and its subsidiaries, Pollo Tropical and Taco Cabana, are collectively referred to as the "Company." At December 29, 2019, the Company owned and operated 142 Pollo Tropical® restaurants and 164 Taco Cabana® restaurants. All of the Company-owned Pollo Tropical restaurants are located in Florida, and all of the Company-owned Taco Cabana restaurants are located in Texas. At December 29, 2019, Fiesta franchised a total of 32 Pollo Tropical restaurants and eight Taco Cabana restaurants. The franchised Pollo Tropical restaurants include 17 in Puerto Rico, four in Panama, two in Guyana, one in Ecuador, one in the Bahamas, and six on college campuses and one at a hospital in Florida. The franchised Taco Cabana restaurants include six in New Mexico and two on college campuses in Texas. Basis of Consolidation. The consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. 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 fiscal years ended December 29, 2019; December 30, 2018; and December 31, 2017, each contained 52 weeks. Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates. Concentrations of Risk. Food and supplies are ordered from approved suppliers and are shipped to the restaurants via distributors. Performance Food Group, Inc. is the primary distributor of food and beverage products and supplies for both Pollo Tropical and Taco Cabana. In the twelve months ended December 29, 2019, and December 30, 2018, Performance Food Group, Inc. accounted for approximately 85% and 74%, respectively, of the food and supplies delivered to restaurants. The Company's limited distributor relationships could have an adverse effect on the Company's operations. Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Inventories. Inventories, primarily consisting of food and paper, are stated at the lower of cost (first-in, first-out) or market. Property and Equipment. The Company capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost. Application development stage costs for significant internally developed software projects are capitalized and amortized. Repairs and maintenance activities are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Leasehold improvements, including new buildings constructed on leased land, are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term for depreciation purposes. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. For significant leasehold improvements made during the latter part of the lease term prior to the adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), this extended term may differ from the lease term used to determine lease assets and liabilities. Building costs incurred for new restaurants on leased land are depreciated over the lease term, which is generally a 20-year period. Cloud-Based Computing Arrangements. The Company defers and amortizes application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement. Goodwill. Goodwill represents the excess purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets acquired by Carrols Restaurant Group, Inc. ("Carrols"), Fiesta's former parent company, from the acquisition of Pollo Tropical in 1998 and Taco Cabana in 2000. Goodwill is not amortized but is assessed for impairment at least annually as of the last day of the fiscal year or more frequently if impairment indicators exist. Long-Lived Assets. The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. See Note 5—Impairment of Long-Lived Assets. Deferred Financing Costs. Financing costs incurred in obtaining revolving credit facilities are capitalized and amortized over the life of the related obligation as interest expense on a straight-line basis. Leases. The Company assesses whether an agreement contains a lease at inception. Subsequent to the adoption of ASC 842, all leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20-year lease term for new restaurant properties, and subsequent to the adoption of ASC 842, when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component. See Note 7—Leases. Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Advertising Costs. All advertising costs are expensed as incurred. Cost of Sales. The Company includes the cost of food, beverage and paper, net of any discounts, in cost of sales. Cost of sales excludes depreciation and amortization expense, which are presented separately on the consolidated statement of operations. Pre-opening Costs. The Company's pre-opening costs are generally incurred beginning four to six months prior to a restaurant opening and generally include restaurant employee wages and related expenses, travel expenditures, recruiting, training, promotional costs associated with the restaurant opening and rent, including any non-cash rent expense recognized during the construction period. Insurance. The Company is insured for workers' compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and for general liability, medical insurance and certain workers' compensation claims in the aggregate. Losses are accrued based upon estimates of the aggregate liability for claims based on the Company's experience and certain actuarial methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. 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 under current market conditions. 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 management's own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
See Note 5 for discussion of the fair value measurement of non-financial assets. Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. Prior to adopting Accounting Standards Codification Topic 606 ("Topic 606"), the Company recognized initial franchise fees as revenue in the period that a franchised location opened for business. See Note 11—Business Segment Information. Gift cards. The Company sells gift cards to its customers in its restaurants and through select third parties. The Company recognizes revenue from gift cards upon redemption by the customer. For unredeemed gift cards that the Company expects to be entitled to breakage, the Company recognizes expected breakage as revenue in proportion to the pattern of redemption by the customers. The gift cards have no stated expiration dates. Revenues from unredeemed gift cards and gift card liabilities, which are recorded in other current liabilities, are not material to the Company's financial statements. Prior to adopting Topic 606, the Company did not recognize breakage on its gift cards. Guidance Adopted in 2019. In February 2016, and in subsequent updates, the Financial Accounting Standards Board ("FASB") issued ASC 842, which requires lessee recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The Company adopted this new accounting standard and all the related amendments as of December 31, 2018 using the modified retrospective method, with certain optional practical expedients including the transition practical expedient package, which among other things does not require reassessment of lease classification. The Company elected the transition method that allows it to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative period information has not been restated and continues to be reported under the accounting standard in effect for that period. The Company has recognized lease liabilities and corresponding right-of-use ("ROU") lease assets for substantially all of the leases it previously accounted for as operating leases, including leases related to closed restaurant properties. The initial ROU assets were calculated as the present value of the remaining operating lease payments using the Company's incremental borrowing rate as of December 31, 2018, reduced by accrued occupancy costs such as certain closed-restaurant lease reserves, accrued rent (including accruals to expense operating lease payments on a straight-line basis), unamortized lease incentives and any unamortized sale-leaseback gains that resulted from off-market terms and increased by unamortized lease acquisition costs. Upon the adoption of ASC 842, the Company no longer records closed restaurant lease reserves, and ROU lease assets are reviewed for impairment with the Company's long-lived assets. The Company elected the practical expedient to combine lease and non-lease components of real estate contracts, which resulted in classification of certain occupancy related expenses that are included in other restaurant operating expenses for periods prior to the adoption of ASC 842 as restaurant rent expenses in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company separately presents rent expense related to its closed restaurant locations and any sublease income related to these closed restaurant locations within closed restaurant rent expense, net of sublease income in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company recorded an initial adjustment to the opening balance of retained earnings of $14.0 million associated with previously deferred gains on sale-leaseback transactions and impairment of operating lease right-of-use assets as of the date of adoption. This adjustment consisted of $18.6 million in deferred gains on sale-leaseback transactions, net of a related deferred tax asset of $4.3 million and $0.2 million in impairment charges, net of tax. For any future sale-leaseback transactions, the gain (adjusted for any off-market terms) will be recognized immediately. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill if the fair value of a reporting unit is less than the carrying amount of the reporting unit. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. In 2019, the Company early adopted this new accounting standard and performed its interim impairment tests in accordance with ASU 2017-04. In the second quarter of 2019, the Company recognized a $46.5 million impairment of its Taco Cabana reporting unit goodwill, which represents the excess of the reporting unit's carrying value over its fair value at June 30, 2019. In the third quarter of 2019, the Company recognized a $21.4 million impairment of its Taco Cabana reporting unit goodwill. In the third quarter of 2019, the excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill. See Note 4—Goodwill. Recent Accounting Pronouncements. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance will be effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted and may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company does not expect the standard to have a material effect on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements.
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Prepaid Expenses and Other Current Assets |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets, consist of the following:
(1) One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of December 29, 2019.
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Property and Equipment |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment consisted of the following:
Assets subject to capital/finance leases primarily pertain to buildings leased for certain restaurant locations and fleet vehicles, and had accumulated amortization at December 29, 2019, and December 30, 2018, of $1.3 million and $1.1 million, respectively. Depreciation and amortization expense for all property and equipment for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $39.2 million, $37.6 million, and $35.0 million, respectively.
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Goodwill |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 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 the fiscal year and has determined its reporting units to be its operating segments, Pollo Tropical and Taco Cabana. There were no changes in goodwill or goodwill impairment losses recorded during the years ended December 30, 2018, and December 31, 2017. In performing its goodwill impairment test as of December 30, 2018, the Company compared the net book values of its reporting units to their estimated fair values, the latter determined by employing an income-based discounted cash flow analysis approach and a market-based approach, which was corroborated with other value indicators where available, such as comparable company earnings multiples. As of June 30, 2019, the Company determined that a triggering event had occurred due to a sustained decrease in the market price of the Company's common stock. In response to the triggering event, the Company performed a quantitative impairment test for both the Pollo Tropical and Taco Cabana reporting units. Fair value for each reporting unit was determined using a combination of the income-based approach and two market-based approaches. Based on the impairment test analysis, the fair value of the Pollo Tropical reporting unit substantially exceeded its carrying amount, while the carrying amount for the Taco Cabana reporting unit exceeded its estimated fair value, which indicated an impairment of the Taco Cabana reporting unit. Lower than expected profitability and a lower profitability and growth outlook for the Taco Cabana reporting unit reduced its income-based and market-based approach fair value. The Company early adopted ASU 2017-04, which eliminates Step 2 from the goodwill impairment test, and requires recognition of an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, limited to the carrying value of the reporting unit's goodwill. In the second quarter of 2019, the Company recorded an impairment charge on the goodwill of its Taco Cabana reporting unit of $46.5 million, which represented the excess of the reporting unit's carrying value over its fair value at June 30, 2019, and which was not deductible for tax purposes. In addition, in response to a further decrease in the market price of the Company's common stock and lower than expected profitability in the third quarter of 2019, the Company performed a quantitative impairment test for both the Pollo Tropical and Taco Cabana reporting units as of September 29, 2019. Based on the impairment test analysis, which utilized the same approach used in the second quarter of 2019, the fair value of the Pollo Tropical reporting unit continued to substantially exceed its carrying amount, while the carrying amount for the Taco Cabana reporting unit exceeded its estimated fair value. In the third quarter of 2019, the Company recorded an impairment charge on the goodwill of its Taco Cabana reporting unit of $21.4 million, of which $9.1 million was deductible for tax purposes and resulted in an income tax benefit of $2.1 million. The excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill. The Company's annual goodwill impairment assessment as of December 29, 2019, was performed using a qualitative assessment, which included examining key events and circumstances affecting fair value and indicated that it is more likely than not that the Pollo Tropical reporting unit's fair value is greater than its carrying value. There were no changes in goodwill or goodwill impairment losses for the Pollo Tropical reporting unit recorded during the year ended December 29,2019. A summary of changes in goodwill during the twelve months ended December 29, 2019, is as follows:
(2) Impairment charges during the twelve months ended December 29, 2019, include $0.7 million previously classified as an intangible asset and included in other assets.
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Impairment of Long-Lived Assets and Other Lease Charges |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets and Other Lease Charges | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. 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. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. Prior to the adoption of ASC 842 on December 31, 2018, for closed restaurant locations, the Company reviewed 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 recorded a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
On April 24, 2017, the Company announced a Strategic Renewal Plan (the "Plan") to drive long-term shareholder value creation that included the closure of 30 Pollo Tropical restaurants outside its core Florida markets. In September 2017, the Company also closed the six remaining Pollo Tropical restaurants in south Texas. In December 2017, the Company closed four additional underperforming Pollo Tropical restaurants in Atlanta, Georgia. Six Pollo Tropical restaurants that were closed in 2016 and 2017 in Texas were rebranded as Taco Cabana restaurants in 2017 and 2018 and one Pollo Tropical restaurant was rebranded as a Taco Cabana location in 2019. In December 2018, based on a restaurant portfolio examination, the Company closed 14 Pollo Tropical restaurants including all the remaining restaurants in Atlanta, Georgia, and nine Taco Cabana restaurants. The Company also closed six Taco Cabana restaurants in 2017 in conjunction with the Plan, two Taco Cabana restaurants in the second quarter of 2018 as a result of the sale of a property and a lease termination, one Taco Cabana restaurant in the fourth quarter of 2019 as a result of a lease termination, and 19 Taco Cabana restaurants in January 2020 as a result of a restaurant portfolio review. Impairment and other lease charges for the twelve months ended December 29, 2019, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants of $0.8 million and $13.2 million, respectively, and net lease charge recoveries for Pollo Tropical and Taco Cabana restaurants of $(0.8) million and $(0.1) million, respectively. Impairment charges in 2019, which also included right-of-use asset impairment, were related primarily to 19 Taco Cabana restaurants that were subsequently closed in 2020, five of which were initially impaired in prior years, as well as previously closed Pollo Tropical restaurants and other underperforming Taco Cabana restaurants that the Company continues to operate. Net lease charge recoveries in 2019 were related primarily to lease terminations for previously closed restaurants. Impairment and other lease charges for the twelve months ended December 30, 2018, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants of $13.1 million and $6.0 million, respectively, and lease and other charges for Pollo Tropical and Taco Cabana restaurants (as well as a Taco Cabana office location) of $0.5 million and $1.6 million, respectively, net of recoveries. Impairment charges in 2018 were related primarily to 14 Pollo Tropical restaurants that were closed in 2018, two of which were initially impaired in 2017, nine Taco Cabana restaurants that were closed in 2018, one of which was initially impaired in 2017, and one Pollo Topical restaurant and six Taco Cabana restaurants the Company continued to operate. Other lease charges, net of recoveries, in 2018 were related primarily to restaurants and an office location that were closed in 2018 as well as previously closed restaurants. Impairment and other lease charges for the twelve months ended December 31, 2017, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants and an office location of $52.1 million, $1.9 million, and $0.2 million, respectively, and lease and other charges for Pollo Tropical and Taco Cabana restaurants and an office location of $5.4 million, $1.6 million, and $0.5 million, respectively, net of recoveries. Impairment charges in 2017 were related primarily to 40 Pollo Tropical restaurants that were closed in 2017, seven of which were initially impaired in 2016, six Taco Cabana restaurants that were closed in 2017, four of which were initially impaired in 2016, and two Pollo Topical restaurants and five Taco Cabana restaurants the Company continued to operate. Impairment charges in 2017 also included charges with respect to an office location that was closed in December 2017. Other lease charges, net of recoveries, in 2017 were related primarily to restaurants and an office location that were closed in 2017 as well as previously closed restaurants. The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions, the Company's history of using these assets in the operation of its business and the Company's expectation of how a market participant would value the assets. In addition, for those restaurants reviewed for impairment where the Company owns the land and building, the Company utilized third-party information such as a broker quoted value to determine the fair value of the property. The Company also utilized discounted future cash flows to determine the fair value of assets for certain leased restaurants with positive discounted projected future cash flows. The Company utilized current market lease rent and discount rates to determine the fair value of right-of-use lease assets. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. The Level 3 assets measured at fair value associated with impairment charges recorded during the twelve months ended December 29, 2019, and December 30, 2018, totaled $5.8 million and $8.0 million, respectively.
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Other Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | Other Liabilities Other current liabilities consist of the following:
Other non-current liabilities consist of the following:
At December 30, 2018 accrued occupancy costs included obligations pertaining to closed restaurant locations and accruals to expense operating lease rental payments on a straight-line basis over the lease term. As a result of adopting ASC 842 on December 31, 2018, at December 29, 2019, accrued occupancy costs primarily consisted of obligations pertaining to closed restaurant locations. The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $4.4 million are included in non-current liabilities at December 29, 2019 and December 30, 2018, respectively, with the remainder in other current liabilities.
(1) As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions. Lease expense consisted of the following:
Supplemental balance sheet information related to leases is as follows:
Supplemental cash flow information related to leases is as follows:
Maturities of lease liabilities were as follows:
As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years. Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions. The undiscounted cash flows to be received under operating subleases were as follows:
Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
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Leases | Leases The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions. Lease expense consisted of the following:
Supplemental balance sheet information related to leases is as follows:
Supplemental cash flow information related to leases is as follows:
Maturities of lease liabilities were as follows:
As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years. Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions. The undiscounted cash flows to be received under operating subleases were as follows:
Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
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Leases | Leases The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions. Lease expense consisted of the following:
Supplemental balance sheet information related to leases is as follows:
Supplemental cash flow information related to leases is as follows:
Maturities of lease liabilities were as follows:
As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years. Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions. The undiscounted cash flows to be received under operating subleases were as follows:
Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
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Long-term Debt |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Long term debt at December 29, 2019, and December 30, 2018, consisted of the following:
Senior Credit Facility. In November 2017, the Company entered into a senior secured revolving credit facility with a syndicate of lenders. The senior credit facility provides for aggregate revolving credit borrowings of up to $150.0 million (including up to $15.0 million available for letters of credit) and matures on November 30, 2022. The senior credit facility also provides for potential incremental increases of up to $50.0 million to the revolving credit borrowings available under the senior credit facility. On December 29, 2019, there were $75.0 million in outstanding borrowings under the senior credit facility. Borrowings under the senior credit facility bear interest at a per annum rate, at the Company's option, equal to either (all terms as defined in the senior credit facility agreement):
In addition, the senior credit facility requires the Company to pay (i) a commitment fee based on the applicable Commitment Fee rate of 0.25% to 0.35%, based on the Company's Adjusted Leverage Ratio, (with a rate of 0.30% at December 29, 2019) and the unused portion of the facility and (ii) a letter of credit participation fee based on the applicable LIBOR margin and the dollar amount of outstanding letters of credit. All obligations under the Company's senior credit facility are guaranteed by all of the Company's material domestic subsidiaries. In general, the Company's obligations under the senior credit facility and its subsidiaries' obligations under the guarantees are secured by a first priority lien and security interest on substantially all of its assets and the assets of its material subsidiaries (including a pledge of all of the capital stock and equity interests of its material subsidiaries), other than certain specified assets, including real property owned by the Company or its subsidiaries. The outstanding borrowings under the Company's senior credit facility are prepayable subject to breakage costs as defined in the senior credit facility agreement. The senior credit facility requires the Company to comply with customary affirmative, negative and financial covenants, including, without limitation, those limiting the Company's and its subsidiaries' ability to (i) incur indebtedness, (ii) incur liens, (iii) loan, advance, or make acquisitions and other investments or other commitments to construct, acquire or develop new restaurants (subject to certain exceptions), (iv) pay dividends, (v) redeem and repurchase equity interests (subject to certain exceptions), (vi) conduct asset and restaurant sales and other dispositions (subject to certain exceptions), (vii) conduct transactions with affiliates and (viii) change its business. In addition, the senior credit facility requires the Company to maintain certain financial ratios, including minimum Fixed Charge Coverage and maximum Adjusted Leverage Ratios (all as defined in the senior credit facility agreement). The Company's senior credit facility contains customary default provisions, including without limitation, a cross default provision pursuant to which it is an event of default under this facility if there is a default under any of the Company's indebtedness having an outstanding principal amount of $5 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. As of December 29, 2019, the Company was in compliance with the financial covenants under its senior credit facility. After reserving $3.7 million for letters of credit, $71.3 million was available for borrowing under the senior credit facility at December 29, 2019. At December 29, 2019, principal payments required on borrowings under the senior credit facility were $75.0 million in 2022. The weighted average interest rate on the borrowings under the senior credit facility was 4.04% and 4.59% at December 29, 2019, and December 30, 2018, respectively. Interest expense on the Company's long-term debt, excluding lease financing obligations, was $3.7 million, $3.9 million and $2.7 million for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company's income tax provision (benefit) was comprised of the following:
Deferred income taxes reflect the effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred income tax assets and liabilities at December 29, 2019, and December 30, 2018, were as follows:
The Company establishes a valuation allowance to reduce the carrying amount of deferred income tax assets when it is more likely than not that it will not realize some portion or all of the tax benefit of its deferred tax assets. The Company evaluates whether its deferred income tax assets are probable of realization on a quarterly basis. In performing this analysis, the Company considers all available positive and negative evidence including historical operating results, the estimated timing of future reversals of existing taxable temporary differences and, when appropriate, estimated future taxable income exclusive of reversing temporary differences and carryforwards. In the fourth quarter of 2019, the Company determined that it is more likely than not that its deferred tax assets will not be fully realized in future periods and established a valuation allowance of $10.3 million against federal deferred tax assets and $3.2 million against state deferred tax assets. At December 29, 2019, the Company had a valuation allowance of $14.1 million against deferred income tax assets where it was determined to be more likely than not that the deferred income tax assets will not be realized through the reversal of existing deferred tax liabilities. At December 30, 2018, the Company had a valuation allowance of $0.7 million against net deferred income tax assets due to foreign income tax credit carryforwards where it was determined to be more likely than not that the deferred income tax asset amounts would not be realized. The valuation allowance increased $13.4 million in 2019 as a result of establishing a valuation allowance in the fourth quarter of 2019, and decreased $0.1 million in 2018 primarily due to expired foreign income tax credits. The Company's ability to utilize deferred income tax assets and estimate future taxable income for federal and state purposes can significantly change based on future events and operating results. The Company's effective tax rate was (12.5)%, (55.3)%, and 17.6% for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively. A reconciliation of the statutory federal income tax provision (benefit) to the effective tax provision (benefit) was as follows:
Tax Law Changes. On December 22, 2017, the Tax Cuts and Jobs Act (the "Act"), which includes a provision that reduced the federal corporate income tax rate from 35.0% to 21.0% effective January 1, 2018, was signed into law. In accordance with generally accepted accounting principles, the enactment of this new tax legislation required the Company to revalue its net deferred income tax assets at the new corporate statutory rate of 21.0% as of the enactment date, which resulted in an adjustment to its deferred income taxes of $9.0 million with a corresponding increase to the provision for income taxes as a discrete item during the fourth quarter of 2017. In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $4.0 million during the twelve months ended December 30, 2018. The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. As of December 29, 2019, and December 30, 2018, the Company had no unrecognized tax benefits and no accrued interest related to uncertain tax positions. The Company has deferred tax benefits of $2.8 million related to federal net operating loss carryforwards which have no expiration date and $1.3 million related to employment tax credits which, if unutilized after various times beginning in 2038, will have a reduced value of $0.3 million. The Company also has a deferred tax benefit of $0.4 million (for which a valuation allowance has been established) related to a Florida net operating loss carryforward that has no expiration date. The Company is currently under examination by the Internal Revenue Service for the tax years 2015–2017. It is not currently under examination by any other taxing jurisdictions. The tax years 2015–2019 remain open to examination by the 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 uncertainties regarding the timing of any examinations, the Company does not expect unrecognized tax benefits to significantly change in the next twelve months.
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Stockholders' Equity |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Purchase of Treasury Stock In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 1,381,137 shares and 112,358 shares of its common stock under the program in open market transactions during the twelve months ended December 29, 2019, and December 30, 2018, for $14.3 million and $2.8 million, respectively. The repurchased shares are held as treasury stock at cost. Stock-Based Compensation The Company established the Fiesta Restaurant Group, Inc. 2012 Stock Incentive Plan (the "Fiesta Plan") in order to be able to compensate its employees and directors by issuing stock options, stock appreciation rights, or stock awards to them under this plan. The aggregate number of shares of stock authorized for distribution under the Fiesta Plan is 3,300,000. As of December 29, 2019, there were 1,467,699 shares available for future grants under the Fiesta Plan. During the years ended December 29, 2019; December 30, 2018; and December 31, 2017, the Company granted certain employees, and in 2019 and 2018 a consultant, in the aggregate 243,948; 161,791; and 182,522 non-vested restricted shares, respectively, under the Fiesta Plan. Shares granted to employees during the years ended December 29, 2019; December 30, 2018; and December 31, 2017, vest and become non-forfeitable over a four-year vesting period. The shares granted to the consultant vest over a three-year vesting period. The weighted average fair value at the grant date for restricted non-vested shares issued during the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $13.06 per share, $18.70 per share, and $20.75 per share, respectively. During the years ended December 29, 2019; December 30, 2018; and December 31, 2017, the Company granted non-employee directors 43,054; 31,146; and 38,596 non-vested restricted shares, respectively, under the Fiesta Plan. The weighted average fair value at the grant date for restricted non-vested shares issued to directors during the twelve months ended December 29, 2019; December 30, 2018; and December 31, 2017, was $12.66 per share, $20.71 per share, and $21.25 per share, respectively. These shares vest and become non-forfeitable over a one-year vesting period, or for certain grants to new directors, over a five-year vesting period. During the year ended December 31, 2017, the Company granted certain employees 11,745 restricted stock units under the Fiesta Plan. Certain of the restricted stock units vest and become non-forfeitable over a four-year vesting period and certain of the restricted stock units vest and become non-forfeitable at the end of a four-year vesting period. The weighted average fair value at grant date for the restricted stock units issued to employees during the year ended December 31, 2017, was $20.75 per share. Also during the years ended December 29, 2019; December 30, 2018; and December 31, 2017 the Company granted certain employees 15,348; 112,169; and 92,171 restricted stock units, respectively, under the Fiesta Plan subject to continued service requirements and market performance conditions.
of a one-year period if the specified target stock price condition for that year is met. If the specified target stock price condition for any tranche is not met for the year, the cumulative unearned units will be rolled over to subsequent tranches on a pro rata basis. The number of shares into which these restricted stock units convert ranges from no shares, if the service and market performance conditions are not met, to 112,169 and 19,881 shares, if the service and market performance conditions are met in the third year. The weighted average fair value at grant date for the restricted stock units granted to executives in the years ended December 30, 2018, and December 31, 2017, was $6.96 per share and $9.31 per share, respectively.
Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable requisite service period of the award (the vesting period) using the straight-line method, or for restricted stock units subject to market performance conditions using the accelerated method. Stock-based compensation expense for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $2.8 million, $3.5 million, and $3.5 million, respectively. As of December 29, 2019, the total unrecognized stock-based compensation expense related to non-vested shares and restricted stock units was approximately $4.0 million. At December 29, 2019, the remaining weighted average vesting period for non-vested restricted shares was 2.4 years and restricted stock units was 0.7 years. A summary of all non-vested restricted shares and restricted stock units activity for the year ended December 29, 2019, is as follows:
The fair value of the non-vested restricted shares and all other restricted stock units is based on the closing price on the date of grant. The fair value of the restricted stock units subject to market conditions was estimated using the Monte Carlo simulation method. The assumptions used to value grant restricted stock units subject to market conditions are detailed below:
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Business Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Business Segment Information The Company owns, operates and franchises two restaurant brands, Pollo Tropical® and Taco Cabana®, each of which is an operating segment. Pollo Tropical restaurants feature fire-grilled and crispy citrus marinated chicken and other freshly prepared tropical-inspired menu items, while Taco Cabana restaurants specialize in Mexican-inspired food. Each segment's accounting policies are the same as those described in the summary of significant accounting policies in Note 1. Prior to the second quarter of 2017, the primary measures of segment profit or loss used to assess performance and allocate resources were income (loss) before taxes and an Adjusted EBITDA measure, which was defined as earnings attributable to the applicable operating segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense and other income and expense. In 2017, the Company's board of directors appointed a new Chief Executive Officer who initiated the Plan and uses an Adjusted EBITDA measure for the purpose of assessing performance and allocating resources to segments. The new Adjusted EBITDA measure used by the chief operating decision maker includes adjustments for significant items that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants. Beginning in the second quarter of 2017, the primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is now defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants as set forth in the reconciliation table below. The Company has included the presentation of Adjusted EBITDA for all periods presented. The "Other" column includes corporate-related items not allocated to reportable segments and consists primarily of corporate-owned property and equipment, lease assets, miscellaneous prepaid costs, capitalized costs associated with the issuance of indebtedness, corporate cash accounts, and a current income tax receivable.
A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows:
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Earnings (Loss) Per Share |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method. Weighted average outstanding restricted stock units totaling 560 shares were not included in the computation of diluted earnings per share for the twelve months ended December 30, 2018, because including these restricted stock units would have been antidilutive. For the twelve months ended December 29, 2019, and December 31, 2017, all restricted stock units outstanding were excluded from the computation of diluted earnings per share because including restricted stock units would have been antidilutive as a result of the net loss in the period. The computation of basic and diluted EPS is as follows:
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Commitments and Contingencies |
12 Months Ended |
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Dec. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Assignments. Taco Cabana has assigned two leases to various parties on properties where it no longer operates restaurants with lease terms expiring on various dates through 2029. The assignees are responsible for making the payments required by the leases. The Company is a guarantor under one of the leases, and it remains secondarily liable as a surety with respect to one of the leases. Pollo Tropical assigned one lease to a third party on a property where it no longer operates with a lease term expiring in 2033. The assignee is responsible for making the payments required by the lease. The Company is a guarantor under the lease. The maximum potential liability for future rental payments that the Company could be required to make under these leases at December 29, 2019, was $3.2 million. The Company could also be obligated to pay property taxes and other lease related costs. The obligations under these leases will generally continue to decrease over time as the operating leases expire. The Company does not believe it is probable that it will be ultimately responsible for the obligations under these leases. Legal Matters. The Company is a party to various legal proceedings incidental to the conduct of business. The Company does not believe that the outcome of any of these matters will have a material effect on its consolidated financial statements. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. Contingency Related to Insurance Recoveries. During the third quarter of 2017, Texas and Florida were struck by Hurricane Harvey and Irma (the "Hurricanes"). Forty-three Taco Cabana and two Pollo Tropical restaurants in the Houston metropolitan area and all Pollo Tropical restaurants in Florida and the Atlanta metropolitan area were temporarily closed and affected by the Hurricanes to varying degrees. In 2017, the Company recorded expected insurance proceeds of $0.7 million and $0.4 million for Pollo Tropical and Taco Cabana, respectively. In the twelve months ended December 30, 2018, the Company received business interruption and property damage insurance settlement proceeds of $2.8 million and $1.7 million, respectively, and recognized other income of $2.1 million and $1.4 million for Pollo Tropical and Taco Cabana, respectively, related to the Hurricanes. The Company has received a final settlement related to the Hurricanes as of December 30, 2018.
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Retirement Plans |
12 Months Ended |
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Dec. 29, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Fiesta offers the Company's salaried employees the option to participate in the Fiesta Corporation Retirement Savings Plan (the "Retirement Plan"). The Retirement Plan includes a savings option pursuant to section 401(k) of the Internal Revenue Code in addition to a post-tax savings option. Fiesta may elect to contribute to the Retirement Plan on an annual basis. Contributions made by Fiesta to the Retirement Plan for the Company's employees are made after the end of each plan year. For 2019, 2018 and 2017, Fiesta's discretionary annual contribution is equal to 50% of the employee's contribution up to the first 6% of eligible compensation for a maximum Fiesta contribution of 3% of eligible compensation per participating employee. Under the Retirement Plan, Fiesta contributions begin to vest after 1 year and fully vest after 5 years of service. A year of service is defined as a plan year during which an employee completes at least 1,000 hours of service. Participating employees may contribute up to 50% of their salary annually to either of the savings options, subject to other limitations. The employees have various investment options available under a trust established by the Retirement Plan. Retirement Plan employer matching expense for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $0.4 million, $0.5 million and $0.4 million respectively. Fiesta also has a Deferred Compensation Plan which permits employees not eligible to participate in the Retirement Plan because they have been excluded as "highly compensated" employees (as so defined in the Retirement Plan) to voluntarily defer portions of their base salary and annual bonus. All amounts deferred by the participants earn interest at 8% per annum. There is no Company matching on any portion of the funds. At December 29, 2019, and December 30, 2018, a total of $0.4 million and $0.9 million, respectively, was deferred by the Company's employees under the Deferred Compensation Plan, including accrued interest.
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Selected Quarterly Financial and Earnings Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial and Earnings Data (Unaudited) | Selected Quarterly Financial and Earnings Data (Unaudited)
(3) In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $3.9 million during the third quarter of 2018. See Note 9 for further information regarding income taxes. The federal corporate income tax rate changed from 35.0% to 21.0% effective January 1, 2018.
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SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (In thousands of dollars)
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Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
Basis of Consolidation | Basis of Consolidation. The consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
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Fiscal Year | Fiscal Year. The Company uses a 52–53 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended December 29, 2019; December 30, 2018; and December 31, 2017, each contained 52 weeks. | ||||||||||||||||||||||||
Use of Estimates | Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates.
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Concentrations of Risk | Concentrations of Risk. Food and supplies are ordered from approved suppliers and are shipped to the restaurants via distributors. Performance Food Group, Inc. is the primary distributor of food and beverage products and supplies for both Pollo Tropical and Taco Cabana. In the twelve months ended December 29, 2019, and December 30, 2018, Performance Food Group, Inc. accounted for approximately 85% and 74%, respectively, of the food and supplies delivered to restaurants. The Company's limited distributor relationships could have an adverse effect on the Company's operations.
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Cash and Cash Equivalents | Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
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Inventories | Inventories. Inventories, primarily consisting of food and paper, are stated at the lower of cost (first-in, first-out) or market.
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Property and Equipment | Property and Equipment. The Company capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost. Application development stage costs for significant internally developed software projects are capitalized and amortized. Repairs and maintenance activities are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Leasehold improvements, including new buildings constructed on leased land, are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term for depreciation purposes. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred without the renewal of the option. For significant leasehold improvements made during the latter part of the lease term prior to the adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), this extended term may differ from the lease term used to determine lease assets and liabilities. Building costs incurred for new restaurants on leased land are depreciated over the lease term, which is generally a 20-year period.
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Cloud-Based Computing Arrangements | Cloud-Based Computing Arrangements. The Company defers and amortizes application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement.
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Goodwill | Goodwill. Goodwill represents the excess purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets acquired by Carrols Restaurant Group, Inc. ("Carrols"), Fiesta's former parent company, from the acquisition of Pollo Tropical in 1998 and Taco Cabana in 2000. Goodwill is not amortized but is assessed for impairment at least annually as of the last day of the fiscal year or more frequently if impairment indicators exist. | ||||||||||||||||||||||||
Long-Lived Assets | Long-Lived Assets. The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. | ||||||||||||||||||||||||
Deferred Financing Costs | Deferred Financing Costs. Financing costs incurred in obtaining revolving credit facilities are capitalized and amortized over the life of the related obligation as interest expense on a straight-line basis.
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Leases | Leases. The Company assesses whether an agreement contains a lease at inception. Subsequent to the adoption of ASC 842, all leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20-year lease term for new restaurant properties, and subsequent to the adoption of ASC 842, when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component.
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Income Taxes | Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
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Advertising Costs | Advertising Costs. All advertising costs are expensed as incurred.
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Cost of Sales | Cost of Sales. The Company includes the cost of food, beverage and paper, net of any discounts, in cost of sales. Cost of sales excludes depreciation and amortization expense, which are presented separately on the consolidated statement of operations.
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Pre-opening Costs | Pre-opening Costs. The Company's pre-opening costs are generally incurred beginning four to six months prior to a restaurant opening and generally include restaurant employee wages and related expenses, travel expenditures, recruiting, training, promotional costs associated with the restaurant opening and rent, including any non-cash rent expense recognized during the construction period.
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Insurance | Insurance. The Company is insured for workers' compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and for general liability, medical insurance and certain workers' compensation claims in the aggregate. Losses are accrued based upon estimates of the aggregate liability for claims based on the Company's experience and certain actuarial methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. | ||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date under current market conditions. 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 management's own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
• Revolving Credit Borrowings. The fair value of outstanding revolving credit borrowings under the Company's senior credit facility, which is considered Level 2, is based on current LIBOR rates.
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Revenue Recognition | Gift cards. The Company sells gift cards to its customers in its restaurants and through select third parties. The Company recognizes revenue from gift cards upon redemption by the customer. For unredeemed gift cards that the Company expects to be entitled to breakage, the Company recognizes expected breakage as revenue in proportion to the pattern of redemption by the customers. The gift cards have no stated expiration dates. Revenues from unredeemed gift cards and gift card liabilities, which are recorded in other current liabilities, are not material to the Company's financial statements. Prior to adopting Topic 606, the Company did not recognize breakage on its gift cards. Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. Prior to adopting Accounting Standards Codification Topic 606 ("Topic 606"), the Company recognized initial franchise fees as revenue in the period that a franchised location opened for business.
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Guidance Adopted in 2019 and Recent Accounting Pronouncements | Guidance Adopted in 2019. In February 2016, and in subsequent updates, the Financial Accounting Standards Board ("FASB") issued ASC 842, which requires lessee recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The Company adopted this new accounting standard and all the related amendments as of December 31, 2018 using the modified retrospective method, with certain optional practical expedients including the transition practical expedient package, which among other things does not require reassessment of lease classification. The Company elected the transition method that allows it to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative period information has not been restated and continues to be reported under the accounting standard in effect for that period. The Company has recognized lease liabilities and corresponding right-of-use ("ROU") lease assets for substantially all of the leases it previously accounted for as operating leases, including leases related to closed restaurant properties. The initial ROU assets were calculated as the present value of the remaining operating lease payments using the Company's incremental borrowing rate as of December 31, 2018, reduced by accrued occupancy costs such as certain closed-restaurant lease reserves, accrued rent (including accruals to expense operating lease payments on a straight-line basis), unamortized lease incentives and any unamortized sale-leaseback gains that resulted from off-market terms and increased by unamortized lease acquisition costs. Upon the adoption of ASC 842, the Company no longer records closed restaurant lease reserves, and ROU lease assets are reviewed for impairment with the Company's long-lived assets. The Company elected the practical expedient to combine lease and non-lease components of real estate contracts, which resulted in classification of certain occupancy related expenses that are included in other restaurant operating expenses for periods prior to the adoption of ASC 842 as restaurant rent expenses in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company separately presents rent expense related to its closed restaurant locations and any sublease income related to these closed restaurant locations within closed restaurant rent expense, net of sublease income in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company recorded an initial adjustment to the opening balance of retained earnings of $14.0 million associated with previously deferred gains on sale-leaseback transactions and impairment of operating lease right-of-use assets as of the date of adoption. This adjustment consisted of $18.6 million in deferred gains on sale-leaseback transactions, net of a related deferred tax asset of $4.3 million and $0.2 million in impairment charges, net of tax. For any future sale-leaseback transactions, the gain (adjusted for any off-market terms) will be recognized immediately. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill if the fair value of a reporting unit is less than the carrying amount of the reporting unit. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. In 2019, the Company early adopted this new accounting standard and performed its interim impairment tests in accordance with ASU 2017-04. In the second quarter of 2019, the Company recognized a $46.5 million impairment of its Taco Cabana reporting unit goodwill, which represents the excess of the reporting unit's carrying value over its fair value at June 30, 2019. In the third quarter of 2019, the Company recognized a $21.4 million impairment of its Taco Cabana reporting unit goodwill. In the third quarter of 2019, the excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill.Recent Accounting Pronouncements. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance will be effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted and may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company does not expect the standard to have a material effect on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements.
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Impairment of Long-Lived Assets | The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. 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. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. Prior to the adoption of ASC 842 on December 31, 2018, for closed restaurant locations, the Company reviewed 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 recorded a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.
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Purchase of Treasury Stock | Purchase of Treasury Stock In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 1,381,137 shares and 112,358 shares of its common stock under the program in open market transactions during the twelve months ended December 29, 2019, and December 30, 2018, for $14.3 million and $2.8 million, respectively. The repurchased shares are held as treasury stock at cost.
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Segment Reporting | Each segment's accounting policies are the same as those described in the summary of significant accounting policies in Note 1. Prior to the second quarter of 2017, the primary measures of segment profit or loss used to assess performance and allocate resources were income (loss) before taxes and an Adjusted EBITDA measure, which was defined as earnings attributable to the applicable operating segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense and other income and expense. In 2017, the Company's board of directors appointed a new Chief Executive Officer who initiated the Plan and uses an Adjusted EBITDA measure for the purpose of assessing performance and allocating resources to segments. The new Adjusted EBITDA measure used by the chief operating decision maker includes adjustments for significant items that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants. Beginning in the second quarter of 2017, the primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is now defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants
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Earnings per Share | Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method.
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Basis of Presentation (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment Useful Lives | Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Property and equipment consisted of the following:
(1) Leasehold improvements include the cost of new buildings constructed on leased land.
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Prepaid Expenses and Other Current Assets (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets, consist of the following:
(1) One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of December 29, 2019.
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Property and Equipment (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Property and equipment consisted of the following:
(1) Leasehold improvements include the cost of new buildings constructed on leased land.
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Goodwill (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | A summary of changes in goodwill during the twelve months ended December 29, 2019, is as follows:
(2) Impairment charges during the twelve months ended December 29, 2019, include $0.7 million previously classified as an intangible asset and included in other assets.
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Impairment of Long-Lived Assets and Other Lease Charges (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets by Segment | A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
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Other Lease Charges (Recoveries) by Segment | A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
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Other Liabilities (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other current liabilities consist of the following:
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Other Non-current Liabilities | Other non-current liabilities consist of the following:
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Activity in the Closed-Store Reserve | The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $4.4 million are included in non-current liabilities at December 29, 2019 and December 30, 2018, respectively, with the remainder in other current liabilities.
(1) As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets.
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Leases (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Expense | Lease expense consisted of the following:
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Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases is as follows:
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Supplemental Cash Flow Information | Supplemental cash flow information related to leases is as follows:
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Maturities of Operating Lease Liabilities | Maturities of lease liabilities were as follows:
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Maturities of Finance Lease Liabilities | Maturities of lease liabilities were as follows:
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Minimum Rent Commitments Due Under Non-Cancelable Operating Leases | Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
(1) Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
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Minimum Rent Commitments Due Under Capital Leases | Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
(1) Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
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Undiscounted Cash Flows to be Received Under Operating Subleases | The undiscounted cash flows to be received under operating subleases were as follows:
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Total Rent Expense on Operating Leases, Including Contingent Rentals | Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
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Long-term Debt (Tables) |
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Dec. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long term debt at December 29, 2019, and December 30, 2018, consisted of the following:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Company’s Income Tax Provision (Benefit) | The Company's income tax provision (benefit) was comprised of the following:
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Components of Deferred Income Tax Assets and Liabilities | The components of deferred income tax assets and liabilities at December 29, 2019, and December 30, 2018, were as follows:
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Reconciliation of the Statutory Federal Income Tax Provision (Benefit) to the Effective Tax Provision (Benefit) | A reconciliation of the statutory federal income tax provision (benefit) to the effective tax provision (benefit) was as follows:
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Stockholders' Equity (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Non-Vested Restricted Shares and Restricted Stock Units Activity | A summary of all non-vested restricted shares and restricted stock units activity for the year ended December 29, 2019, is as follows:
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Restricted Stock Units Subject to Market Conditions Assumptions | The assumptions used to value grant restricted stock units subject to market conditions are detailed below:
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Business Segment Information (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
(2) Includes stock-based compensation expense of $2,649, $3,379 and $3,493 for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
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Reconciliation Of Consolidated Net Income (Loss) to Adjusted EBITDA | A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows:
|
Earnings (Loss) Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Income per Share | The computation of basic and diluted EPS is as follows:
|
Selected Quarterly Financial and Earnings Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
(3) In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $3.9 million during the third quarter of 2018. See Note 9 for further information regarding income taxes. The federal corporate income tax rate changed from 35.0% to 21.0% effective January 1, 2018.
|
Basis of Presentation - Fair Value Disclosures (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of senior credit facility | $ 75,000 | $ 78,000 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of senior credit facility | $ 75,000 | $ 78,000 |
Prepaid Expenses and Other Current Assets (Details) $ in Thousands |
Dec. 29, 2019
USD ($)
restaurant
|
Dec. 30, 2018
USD ($)
|
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid contract expenses | $ 4,410 | $ 4,232 |
Assets held for sale | 4,110 | 0 |
Other | 2,085 | 2,330 |
Prepaid expenses and other current assets | $ 10,605 | $ 6,562 |
Pollo Tropical | ||
Property, Plant and Equipment [Line Items] | ||
Restaurant properties classified as held for sale | restaurant | 1 | |
Taco Cabana | ||
Property, Plant and Equipment [Line Items] | ||
Restaurant properties classified as held for sale | restaurant | 2 |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 469,765 | $ 459,418 |
Less accumulated depreciation and amortization | (257,821) | (228,090) |
Property and equipment, net | 211,944 | 231,328 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,051 | 20,428 |
Owned buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,978 | 15,205 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 212,413 | 207,206 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 219,610 | 214,674 |
Assets subject to capital/finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,713 | $ 1,905 |
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Property, Plant and Equipment [Abstract] | |||
Assets subject to capital/finance leases, accumulated amortization | $ 1,300 | $ 1,100 | |
Depreciation and amortization | $ 39,195 | $ 37,604 | $ 34,957 |
Goodwill - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 29, 2019 |
Jun. 30, 2019 |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Goodwill [Line Items] | |||||
Changes in goodwill | $ 0 | $ 0 | |||
Changes in goodwill, impairment loss | $ 67,909,000 | $ 0 | $ 0 | ||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2017-04 | |||||
Goodwill [Line Items] | |||||
Changes in goodwill, impairment loss | $ 21,400,000 | $ 46,500,000 | |||
Goodwill impairment loss deductible for tax purposes | 9,100,000 | ||||
Goodwill impairment loss, income tax benefit | $ 2,100,000 |
Goodwill - Summary of Changes in Goodwill (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Goodwill | |||
Balance, December 30, 2018 | $ 123,484,000 | ||
Impairment charges | (67,909,000) | $ 0 | $ 0 |
Balance, December 29, 2019 | 56,307,000 | 123,484,000 | |
Accumulated impairment loss | 67,200,000 | 0 | |
Impairment loss for asset previously classified as intangible asset and included in other assets | 700,000 | ||
Pollo Tropical | |||
Goodwill | |||
Balance, December 30, 2018 | 56,307,000 | ||
Impairment charges | 0 | ||
Balance, December 29, 2019 | 56,307,000 | 56,307,000 | |
Taco Cabana | |||
Goodwill | |||
Balance, December 30, 2018 | 67,177,000 | ||
Impairment charges | (67,177,000) | ||
Balance, December 29, 2019 | $ 0 | $ 67,177,000 |
Impairment of Long-Lived Assets and Other Lease Charges - Schedule of Impairment and Other Lease Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 29, 2019 |
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 30, 2018 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | |||||||||||
Impairment and other lease charges | $ 8,400 | $ 3,300 | $ 1,800 | $ (300) | $ 14,600 | $ 6,400 | $ 800 | $ (700) | $ 13,101 | $ 21,144 | $ 61,760 |
Pollo Tropical | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Impairment and other lease charges | 15 | 13,587 | 57,947 | ||||||||
Taco Cabana | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Impairment and other lease charges | $ 13,086 | $ 7,557 | $ 3,813 |
Other Liabilities - Current (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Operating lease liabilities | $ 22,338 | $ 0 |
Accrued workers' compensation and general liability claims | 4,354 | 4,886 |
Sales and property taxes | 1,889 | 1,958 |
Accrued occupancy costs | 891 | 4,554 |
Other | 2,797 | 2,688 |
Other liabilities, current | $ 32,269 | $ 14,086 |
Other Liabilities - Noncurrent (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued occupancy costs | $ 78 | $ 21,534 |
Accrued workers' compensation and general liability claims | 7,348 | 6,808 |
Deferred compensation | 424 | 867 |
Other | 555 | 3,295 |
Other liabilities, long-term | $ 8,405 | $ 32,504 |
Other Liabilities - Narrative (Details) - Closed Stores - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Restructuring Cost and Reserve [Line Items] | |||
Closed-store reserve | $ 752 | $ 8,819 | $ 12,994 |
Other Liabilities, Noncurrent | |||
Restructuring Cost and Reserve [Line Items] | |||
Closed-store reserve | $ 100 | $ 4,400 |
Other Liabilities - Restructuring Reserve (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
|
Activity in the Closed-Store Reserve | ||
Operating lease cost | $ 45,414 | |
Closed Stores | ||
Activity in the Closed-Store Reserve | ||
Balance, beginning of period | 8,819 | $ 12,994 |
Provisions for restaurant closures | 0 | 2,228 |
Additional lease charges (recoveries), net | 0 | (152) |
Payments, net | (1,405) | (6,778) |
Other adjustments | (6,662) | 527 |
Balance, end of period | 752 | $ 8,819 |
Operating lease cost | $ 6,000 |
Leases - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 29, 2019
lease
| |
Lessee, Lease, Description [Line Items] | |
Lease term | 20 years |
Number of leases for restaurant properties that had not yet commenced | 5 |
Lease term of leases not yet commenced | 15 years |
Sublease includes options to extend sublease term, up to | 25 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 20 years |
Remaining lease term | 3 months 18 days |
Sublease, remaining lease term | 2 years 3 months 18 days |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 40 years |
Remaining lease term | 21 years 9 months 18 days |
Sublease, remaining lease term | 19 years 4 months 24 days |
Leases - Lease Expense (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 29, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 45,414 |
Finance lease costs: | |
Amortization of right-of-use assets | 202 |
Interest on lease liabilities | 226 |
Total finance lease costs | 428 |
Variable lease costs | 12,050 |
Sublease income | (4,037) |
Total lease costs | $ 53,855 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Operating Leases | ||
Operating lease right-of-use assets | $ 251,272 | $ 0 |
Other current liabilities | 22,338 | 0 |
Operating lease liabilities | 256,798 | $ 0 |
Total operating lease liabilities | 279,136 | |
Finance Leases | ||
Property and equipment, gross | 2,713 | |
Accumulated amortization | (1,323) | |
Property and equipment, net | 1,390 | |
Current portion of long-term debt | 212 | |
Long-term debt, net of current portion | 1,823 | |
Total finance lease liabilities | $ 2,035 | |
Weighted Average Remaining Lease Term (in Years) | ||
Operating leases | 12 years 1 month 6 days | |
Finance leases | 7 years 10 months 24 days | |
Weighted Average Discount Rate | ||
Operating leases | 7.67% | |
Finance leases | 12.67% |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 41,216 | |
Operating cash flows for finance leases | 226 | |
Financing cash flows for finance leases | 164 | |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating lease ROU assets | 12,654 | |
Finance lease ROU assets | 495 | |
Right-of-use assets and lease liabilities reduced for terminated leases: | ||
Operating lease ROU assets | 4,372 | |
Operating lease liabilities | 5,126 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease ROU assets | 251,272 | $ 0 |
Operating lease liabilities | 279,136 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease ROU assets | 267,743 | |
Operating lease liabilities | $ 291,373 |
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Operating Leases | ||
2020 | $ 42,479 | |
2021 | 40,189 | |
2022 | 38,917 | |
2023 | 35,742 | |
2024 | 32,481 | |
Thereafter | 251,977 | |
Total lease payments | 441,785 | |
Less amount representing interest | (162,649) | |
Total operating lease liabilities | 279,136 | |
Less current portion | (22,338) | $ 0 |
Long-term portion of lease liabilities | 256,798 | $ 0 |
Finance Leases | ||
2020 | 434 | |
2021 | 475 | |
2022 | 475 | |
2023 | 428 | |
2024 | 350 | |
Thereafter | 1,278 | |
Total lease payments | 3,440 | |
Less amount representing interest | (1,405) | |
Total finance lease liabilities | 2,035 | |
Less current portion | (212) | |
Long-term portion of lease liabilities | $ 1,823 |
Leases - Minimum Rent Commitments Under Capital and Non-Cancelable Operating Leases (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Operating | ||
2019 | $ 44,427 | |
2020 | 44,144 | |
2021 | 41,396 | |
2022 | 40,215 | |
2023 | 36,587 | |
Thereafter | 264,704 | |
Total minimum lease payments | 471,473 | |
Capital | ||
2019 | 323 | |
2020 | 327 | |
2021 | 342 | |
2022 | 342 | |
2023 | 349 | |
Thereafter | 1,646 | |
Total minimum lease payments | 3,329 | |
Less amount representing interest | (1,585) | |
Total obligations under capital leases | $ 2,035 | 1,744 |
Less current portion | (108) | |
Long-term debt under capital leases | 1,636 | |
Future minimum sublease rentals | $ 41,400 |
Leases - Operating Subleases (Details) $ in Thousands |
Dec. 29, 2019
USD ($)
|
---|---|
Operating Leases | |
2020 | $ 4,651 |
2021 | 4,878 |
2022 | 4,833 |
2023 | 4,828 |
2024 | 4,884 |
Thereafter | 45,031 |
Total | $ 69,105 |
Leases - Rent Expense, Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Operating Leased Assets [Line Items] | |||
Restaurant rent expense | $ 47,805 | $ 36,034 | $ 36,936 |
Total rent expense on operating leases | 37,745 | 38,780 | |
Operating Expense | |||
Operating Leased Assets [Line Items] | |||
Minimum rent on real property | 35,881 | 36,760 | |
Additional rent based on percentage of sales | 153 | 176 | |
Restaurant rent expense | 36,034 | 36,936 | |
Pre-Opening Costs | |||
Operating Leased Assets [Line Items] | |||
Minimum rent on real property | 861 | 856 | |
General and Administrative Expense | |||
Operating Leased Assets [Line Items] | |||
Minimum rent on real property | $ 850 | $ 988 |
Long-term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
Revolving credit facility | $ 75,000 | $ 78,000 |
Finance/capital leases | 2,035 | 1,744 |
Long-term debt and capital lease obligations | 77,035 | 79,744 |
Less: current portion of long-term debt | (212) | (108) |
Long-term debt and capital lease obligations, net of current portion | $ 76,823 | $ 79,636 |
Long-term Debt - Other Disclosures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | |||
Interest expense | $ 3,872 | $ 3,966 | $ 2,877 |
Revolving Credit | |||
Debt Instrument [Line Items] | |||
Principal payments required on borrowings in 2022 | $ 75,000 | ||
Weighted average interest rate | 4.04% | 4.59% | |
Interest expense | $ 3,700 | $ 3,900 | $ 2,700 |
Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Current: | |||
Federal | $ (2,347) | $ (10,378) | $ (5,718) |
Foreign | 336 | 355 | 346 |
State | 492 | 421 | 445 |
Current | (1,519) | (9,602) | (4,927) |
Deferred: | |||
Federal | (2,132) | 6,591 | (1,059) |
State | (425) | 297 | (1,649) |
Deferred | (2,557) | 6,888 | (2,708) |
Valuation allowance | 13,445 | (58) | (120) |
Provision for income taxes | $ 9,369 | $ (2,772) | $ (7,755) |
Income Taxes - Components of Deferred Taxes (Details) - USD ($) $ in Thousands |
Dec. 29, 2019 |
Dec. 30, 2018 |
---|---|---|
Deferred income tax assets: | ||
Accrued vacation benefits | $ 875 | $ 1,017 |
Incentive compensation | 1,024 | 959 |
Other accruals | 2,804 | 2,976 |
Deferred income on sale-leaseback of real estate | 0 | 4,591 |
Operating lease liabilities | 65,251 | 0 |
Occupancy costs | 175 | 6,038 |
Tax credit carryforwards | 1,949 | 1,534 |
Federal net operating loss | 2,770 | 1,040 |
Other | 973 | 839 |
Gross deferred income tax assets | 75,821 | 18,994 |
Deferred income tax liabilities: | ||
Right-of-use operating lease assets | (58,524) | 0 |
Property and equipment depreciation | (6,509) | (5,438) |
Amortization of other intangibles, net | (34) | (2,121) |
Cloud-based software deferred costs | (990) | 0 |
Other | (400) | (374) |
Gross deferred income tax liabilities | (66,457) | (7,933) |
Less: Valuation allowance | (14,123) | (678) |
Net deferred tax liabilities | $ (4,759) | |
Net deferred income tax assets | $ 10,383 |
Income Taxes - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Statutory federal income tax provision (benefit) | $ (15,753) | $ 1,053 | $ (15,394) | ||
State income taxes, net of federal benefit | 49 | 552 | (734) | ||
Change in valuation allowance | 13,445 | (58) | (120) | ||
Change in federal income tax rate and tax methods | $ (3,900) | $ 9,000 | (716) | (3,977) | 8,952 |
Net share-based compensation-tax benefit deficiencies | 235 | 178 | 228 | ||
Non-deductible goodwill | 12,357 | 0 | 0 | ||
Non-deductible expenses | 214 | 53 | 84 | ||
Foreign taxes | 336 | 355 | 346 | ||
Employment tax credits | (381) | (897) | (914) | ||
Foreign tax credits/deductions | (71) | (75) | (121) | ||
Other | (346) | 44 | (82) | ||
Provision for income taxes | $ 9,369 | $ (2,772) | $ (7,755) |
Stockholders' Equity - Purchase of Treasury Stock (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Feb. 26, 2018 |
|
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized to be repurchased | 3,000,000 | ||
Treasury stock purchases (in shares) | 1,381,137 | 112,358 | |
Treasury stock purchases | $ 14,282 | $ 2,769 | |
Share Repurchase Program 2018 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized to be repurchased | 1,500,000 | ||
Share Repurchase Program 2019 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized to be repurchased | 1,500,000 |
Stockholders' Equity - Restricted Stock Units Subject to Market Conditions (Details) - Market Performance-Based Restricted Stock Units (RSUs) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date stock price (usd per share) | $ 14.66 | $ 18.70 | $ 17.60 |
Fair value at grant date (usd per share) | $ 1.76 | $ 6.96 | $ 9.31 |
Risk free interest rate | 2.53% | 2.40% | 1.51% |
Expected term (in years) | 2 years | 3 years | 2 years 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 43.18% | 41.49% | 41.72% |
Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date stock price (usd per share) | $ 22.55 | ||
Fair value at grant date (usd per share) | $ 12.90 | ||
Risk free interest rate | 1.52% | ||
Expected term (in years) | 3 years 9 months 18 days | ||
Dividend yield | 0.00% | ||
Expected volatility | 39.06% |
Earnings (Loss) Per Share - Narrative (Details) |
12 Months Ended | |
---|---|---|
Dec. 30, 2018
shares
|
Dec. 29, 2019 |
|
Earnings Per Share [Abstract] | ||
Nonvested restricted shares right to receive dividends, per share ratio to common shares | 1 | |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 560 |
Earnings (Loss) Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 29, 2019 |
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 30, 2018 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Basic and diluted EPS: | |||||||||||
Net income (loss) | $ (21,053) | $ (22,182) | $ (43,440) | $ 2,289 | $ (7,937) | $ 2,047 | $ 9,493 | $ 4,184 | $ (84,386) | $ 7,787 | $ (36,232) |
Less: income allocated to participating securities | 0 | 85 | 0 | ||||||||
Net income (loss) available to common stockholders | $ (84,386) | $ 7,702 | $ (36,232) | ||||||||
Weighted average common shares—basic | 26,500,356 | 26,890,577 | 26,821,471 | ||||||||
Restricted stock units (in shares) | 0 | 3,506 | 0 | ||||||||
Weighted average common shares—diluted | 26,500,356 | 26,894,083 | 26,821,471 | ||||||||
Earnings (loss) per common share—basic (usd per share) | $ (0.82) | $ (0.84) | $ (1.62) | $ 0.08 | $ (0.30) | $ 0.08 | $ 0.35 | $ 0.15 | $ (3.18) | $ 0.29 | $ (1.35) |
Earnings (loss) per common share—diluted (usd per share) | $ (0.82) | $ (0.84) | $ (1.62) | $ 0.08 | $ (0.30) | $ 0.08 | $ 0.35 | $ 0.15 | $ (3.18) | $ 0.29 | $ (1.35) |
Commitments and Contingencies - Lease Assignments (Details) $ in Millions |
Dec. 29, 2019
USD ($)
restaurant
|
---|---|
Loss Contingencies [Line Items] | |
Lease assignment maximum exposure | $ | $ 3.2 |
Taco Cabana | |
Loss Contingencies [Line Items] | |
Number of subleases | 2 |
Pollo Tropical | |
Loss Contingencies [Line Items] | |
Number of subleases | 1 |
Commitments and Contingencies - Contingency Related to Insurance Recoveries (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017
restaurant
|
Dec. 29, 2019
USD ($)
|
Dec. 30, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Loss Contingencies [Line Items] | ||||
Other income | $ (1,041) | $ 3,007 | $ (2,190) | |
Taco Cabana | Loss from the Hurricanes | ||||
Loss Contingencies [Line Items] | ||||
Recorded expected insurance proceeds | 400 | |||
Insurance settlement proceeds | 1,700 | |||
Other income | 1,400 | |||
Taco Cabana | Loss from the Hurricanes | Houston | ||||
Loss Contingencies [Line Items] | ||||
Number of restaurants affected by the hurricanes | restaurant | 43 | |||
Pollo Tropical | Loss from the Hurricanes | ||||
Loss Contingencies [Line Items] | ||||
Recorded expected insurance proceeds | $ 700 | |||
Insurance settlement proceeds | 2,800 | |||
Other income | $ 2,100 | |||
Pollo Tropical | Loss from the Hurricanes | Houston | ||||
Loss Contingencies [Line Items] | ||||
Number of restaurants affected by the hurricanes | restaurant | 2 |
Selected Quarterly Financial and Earnings Data (Unaudited) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 29, 2019 |
Sep. 29, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 30, 2018 |
Jul. 01, 2018 |
Apr. 01, 2018 |
Dec. 31, 2017 |
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenues | $ 159,462,000 | $ 164,248,000 | $ 171,381,000 | $ 165,852,000 | $ 167,638,000 | $ 174,648,000 | $ 176,827,000 | $ 169,484,000 | $ 660,943,000 | $ 688,597,000 | $ 669,132,000 | |
Income (loss) from operations | (9,459,000) | (24,305,000) | (41,850,000) | 4,469,000 | (9,476,000) | (1,921,000) | 13,500,000 | 6,878,000 | (71,145,000) | 8,981,000 | (41,110,000) | |
Net income (loss) | $ (21,053,000) | $ (22,182,000) | $ (43,440,000) | $ 2,289,000 | $ (7,937,000) | $ 2,047,000 | $ 9,493,000 | $ 4,184,000 | $ (84,386,000) | $ 7,787,000 | $ (36,232,000) | |
Earnings (loss) per common share—basic (usd per share) | $ (0.82) | $ (0.84) | $ (1.62) | $ 0.08 | $ (0.30) | $ 0.08 | $ 0.35 | $ 0.15 | $ (3.18) | $ 0.29 | $ (1.35) | |
Earnings (loss) per common share—diluted (usd per share) | $ (0.82) | $ (0.84) | $ (1.62) | $ 0.08 | $ (0.30) | $ 0.08 | $ 0.35 | $ 0.15 | $ (3.18) | $ 0.29 | $ (1.35) | |
Impairment and other lease charges | $ 8,400,000 | $ 3,300,000 | $ 1,800,000 | $ (300,000) | $ 14,600,000 | $ 6,400,000 | $ 800,000 | $ (700,000) | $ 13,101,000 | $ 21,144,000 | $ 61,760,000 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Goodwill impairment | 67,909,000 | 0 | 0 | |||||||||
Valuation allowance on deferred income tax assets | $ 13,500,000 | |||||||||||
Change in federal income tax rate and tax methods | $ (3,900,000) | $ 9,000,000.0 | $ (716,000) | $ (3,977,000) | $ 8,952,000 | |||||||
ASU 2017-04 | New Accounting Pronouncement, Early Adoption, Effect | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Goodwill impairment | 21,400,000 | $ 46,500,000 | ||||||||||
Goodwill impairment loss deductible for tax purposes | $ 9,100,000 |
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (Details) - Deferred income tax valuation allowance - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 29, 2019 |
Dec. 30, 2018 |
Dec. 31, 2017 |
|
Movement in Valuation Allowances and Reserves | |||
Balance at beginning of period | $ 678 | $ 736 | $ 856 |
Charged to costs and expenses | 13,445 | (58) | (120) |
Charged to other accounts | 0 | 0 | 0 |
Deduction | 0 | 0 | 0 |
Balance at end of period | $ 14,123 | $ 678 | $ 736 |