|
Note 8 – Leases
The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
|
|
2024 |
|
2023 |
|
Lease cost |
|
|
|
|
|
|
|
Operating lease cost |
|
$ |
4,289 |
|
$ |
3,894 |
|
Finance lease cost |
|
|
|
|
|
|
|
Amortization of ROU assets |
|
|
55 |
|
|
51 |
|
Interest on lease liabilities |
|
|
19 |
|
|
21 |
|
Total finance lease cost |
|
|
74 |
|
|
72 |
|
Variable lease cost (1) |
|
|
3,089 |
|
|
2,610 |
|
Short-term lease cost |
|
|
316 |
|
|
275 |
|
Total lease cost |
|
$ |
7,768 |
|
$ |
6,851 |
|
|
|
|
|
|
|
|
|
Weighted average remaining lease term |
|
|
|
|
|
|
|
Operating leases |
|
|
13 years |
|
|
13 years |
|
Finance leases |
|
|
4 years |
|
|
5 years |
|
Weighted average discount rate |
|
|
|
|
|
|
|
Operating leases |
|
|
8.79 |
% |
|
8.45 |
% |
Finance leases |
|
|
9.16 |
% |
|
9.01 |
% |
| (1) |
Variable lease cost is comprised of percentage rent and common area maintenance. |
The components of finance lease assets and liabilities on the condensed consolidated balance sheet were as follows (in thousands):
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2024 |
|
2023 |
Finance lease right-of-use assets (1) |
|
$ |
794 |
|
$ |
850 |
Current portion of finance lease liabilities (1) |
|
|
266 |
|
|
222 |
Long-term portion of finance lease liabilities (1) |
|
|
609 |
|
|
658 |
| (1) |
Finance lease assets and liabilities are included in other assets, other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet. |
Supplemental cash flow information related to leases for the period was as follows (in thousands):
|
|
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
|
2024 |
|
2023 |
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
4,171 |
|
$ |
3,472 |
Operating cash flows from finance leases |
|
$ |
55 |
|
$ |
51 |
Financing cash flows from finance leases |
|
$ |
68 |
|
$ |
104 |
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
Operating leases |
|
$ |
— |
|
$ |
3,178 |
Finance leases |
|
$ |
— |
|
$ |
41 |
The Company has entered into six operating leases for future restaurants that have not commenced as of March 31, 2024. The present value of the aggregate future commitment related to these leases totals $6.8 million. The Company expects these leases, which have an initial lease term of 10 years, to commence within the next twelve months.
During the three months ended March 31, 2024, the Company decided not to renew the lease for STK Westwood, which will terminate within the next twelve months. As a result, the right-of-use asset was reduced by $5.5 million, and the right-of-use liability decreased $5.7 million.
As of March 31, 2024, maturities of the Company’s operating lease liabilities are as follows (in thousands):
|
|
|
|
2024, nine months remaining |
|
$ |
6,721 |
2025 |
|
|
16,669 |
2026 |
|
|
16,278 |
2027 |
|
|
16,671 |
2028 |
|
|
16,977 |
Thereafter |
|
|
146,779 |
Total lease payments |
|
|
220,095 |
Less: imputed interest |
|
|
(99,370) |
Present value of operating lease liabilities |
|
$ |
120,725 |
As of March 31, 2024, maturities of the Company’s finance lease liabilities are as follows (in thousands):
|
|
|
|
2024, nine months remaining |
|
$ |
265 |
2025 |
|
|
266 |
2026 |
|
|
266 |
2027 |
|
|
221 |
Total lease payments |
|
|
1,018 |
Less: imputed interest |
|
|
(143) |
Present value of finance lease liabilities |
|
$ |
875 |
|