Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.19.2
Segment Reporting
6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Reporting

Note 16 – Segment Reporting

The Company operates in three segments: “Owned restaurants,” “Owned food, beverage and other,” and “Managed and licensed operations.” The Owned restaurants segment consists of leased restaurant locations and competes in the full-service dining industry. The Owned food, beverage and other segment consists of hybrid operations, such as where the Company has a leased restaurant location and also has a food and beverage agreement at the same location, typically a hotel, and offsite banquet offerings. The Managed and licensed operations segment includes all operations for which a management, incentive or license fee is received. Management agreements generate management fees on net revenue and incentive fees on operating profit as defined in the applicable management agreement. License agreements generate revenue primarily through royalties earned on net revenue at each location. Revenues associated with developmental support for licensed locations are also included within this segment.

The Company’s Chief Executive Officer (“CEO”), who has been deemed the Company’s Chief Operating Decision Maker, manages the business and allocates resources via a combination of restaurant sales reports and segment profit information (which is defined as revenues less operating expenses) related to the Company’s three segments, or sources of revenues, which are presented in their entirety within the consolidated statements of operations and comprehensive income.

The Company’s operating results by segment were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2019

 

For the three months ended June 30, 2018

 

 

 

 

 

Owned food,

 

Managed and

 

 

 

 

 

 

 

Owned food,

 

Managed and

 

 

 

 

 

Owned

 

beverage and

 

licensed

 

 

 

 

Owned

 

beverage and

 

licensed

 

 

 

 

    

restaurants

    

other

    

operations

    

Total

    

restaurants

    

other

    

operations

    

Total

Revenues:

 

 

  

 

 

  

 

 

  

 

 

 

 

 

  

 

 

  

 

 

  

 

 

 

Owned net revenues

 

$

18,809

 

$

2,134

 

$

 —

 

$

20,943

 

$

15,520

 

$

2,083

 

$

 —

 

$

17,603

Management, license and incentive fee revenue

 

 

 —

 

 

 —

 

 

2,656

 

 

2,656

 

 

 —

 

 

 —

 

 

2,708

 

 

2,708

Total revenues

 

 

18,809

 

 

2,134

 

 

2,656

 

 

23,599

 

 

15,520

 

 

2,083

 

 

2,708

 

 

20,311

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Owned operating expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost of sales

 

 

5,068

 

 

 —

 

 

 —

 

 

5,068

 

 

4,037

 

 

 —

 

 

 —

 

 

4,037

Other operating expenses

 

 

11,856

 

 

 —

 

 

 —

 

 

11,856

 

 

9,399

 

 

 —

 

 

 —

 

 

9,399

Owned food, beverage and other expenses

 

 

 —

 

 

2,225

 

 

 —

 

 

2,225

 

 

 —

 

 

2,025

 

 

 —

 

 

2,025

Total owned operating expenses

 

 

16,924

 

 

2,225

 

 

 —

 

 

19,149

 

 

13,436

 

 

2,025

 

 

 —

 

 

15,461

Segment income (loss)

 

$

1,885

 

$

(91)

 

$

2,656

 

$

4,450

 

$

2,084

 

$

58

 

$

2,708

 

$

4,850

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

General and administrative

 

 

  

 

 

  

 

 

  

 

 

2,704

 

 

  

 

 

  

 

 

  

 

 

2,615

Depreciation and amortization

 

 

  

 

 

  

 

 

  

 

 

1,004

 

 

  

 

 

  

 

 

  

 

 

901

Interest expense, net of interest income

 

 

  

 

 

  

 

 

  

 

 

218

 

 

  

 

 

  

 

 

  

 

 

290

Loss on early debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

437

 

 

 

 

 

 

 

 

 

 

 

 —

Equity in income of investee companies

 

 

  

 

 

  

 

 

  

 

 

 —

 

 

  

 

 

  

 

 

  

 

 

(134)

Other

 

 

  

 

 

  

 

 

  

 

 

265

 

 

 

 

 

  

 

 

  

 

 

695

(Loss) income before provision for income taxes

 

 

  

 

 

  

 

 

  

 

$

(178)

 

 

  

 

 

  

 

 

  

 

$

483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30, 2019

 

For the six months ended June 30, 2018

 

 

 

 

 

Owned food,

 

Managed and

 

 

 

 

 

 

 

Owned food,

 

Managed and

 

 

 

 

 

Owned

 

beverage and

 

licensed

 

 

 

 

Owned

 

beverage and

 

licensed

 

 

 

 

    

restaurants

    

other

    

operations

    

Total

    

restaurants

    

other

    

operations

    

Total

Revenues:

 

 

  

 

 

  

 

 

  

 

 

 

 

 

  

 

 

  

 

 

  

 

 

 

Owned net revenues

 

$

36,629

 

$

4,407

 

$

 —

 

$

41,036

 

$

30,596

 

$

4,088

 

$

 —

 

$

34,684

Management, license and incentive fee revenue

 

 

 —

 

 

 —

 

 

5,339

 

 

5,339

 

 

 —

 

 

 —

 

 

5,144

 

 

5,144

Total revenues

 

 

36,629

 

 

4,407

 

 

5,339

 

 

46,375

 

 

30,596

 

 

4,088

 

 

5,144

 

 

39,828

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Owned operating expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost of sales

 

 

9,637

 

 

 —

 

 

 —

 

 

9,637

 

 

8,071

 

 

 —

 

 

 —

 

 

8,071

Other operating expenses

 

 

22,771

 

 

 —

 

 

 —

 

 

22,771

 

 

18,777

 

 

 —

 

 

 —

 

 

18,777

Owned food, beverage and other expenses

 

 

 —

 

 

4,484

 

 

 —

 

 

4,484

 

 

 —

 

 

3,714

 

 

 —

 

 

3,714

Total owned operating expenses

 

 

32,408

 

 

4,484

 

 

 —

 

 

36,892

 

 

26,848

 

 

3,714

 

 

 —

 

 

30,562

Segment income (loss)

 

$

4,221

 

$

(77)

 

$

5,339

 

$

9,483

 

$

3,748

 

$

374

 

$

5,144

 

$

9,266

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

General and administrative

 

 

  

 

 

  

 

 

  

 

 

5,354

 

 

 

 

 

  

 

 

  

 

 

5,670

Depreciation and amortization

 

 

  

 

 

  

 

 

  

 

 

1,946

 

 

 

 

 

  

 

 

  

 

 

1,679

Interest expense, net of interest income

 

 

  

 

 

  

 

 

  

 

 

487

 

 

 

 

 

  

 

 

  

 

 

608

Loss on early debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

437

 

 

 

 

 

 

 

 

 

 

 

 —

Equity in income of investee companies

 

 

  

 

 

  

 

 

  

 

 

 —

 

 

 

 

 

  

 

 

  

 

 

(111)

Other

 

 

  

 

 

  

 

 

  

 

 

572

 

 

 

 

 

  

 

 

  

 

 

794

Income before provision for income taxes

 

 

  

 

 

  

 

 

  

 

$

687

 

 

  

 

 

  

 

 

  

 

$

626

 

The Company’s total assets by segment for the periods indicated were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

 

2019

 

2018

Total assets:

 

 

  

 

 

  

Owned restaurants

 

$

74,424

 

$

42,971

Owned food, beverage and other operations (1)

 

 

15,848

 

 

7,274

Managed and licensed operations

 

 

5,205

 

 

5,734

Total

 

$

95,477

 

$

55,979


(1)

Includes corporate assets and unallocated corporate assets

The Company’s total assets increased $39.4 million as of June 30, 2019 compared to December 31, 2018 as a result of adopting ASC Topic 842 during the first quarter of 2019. Refer to Note 12 for additional information regarding the adoption of ASC Topic 842.

The Company’s capital asset additions by segment for the periods indicated were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30, 

 

    

2019

    

2018

Capital assets additions:

 

 

  

 

 

  

Owned restaurants

 

$

2,530

 

$

1,837

Owned food, beverage and other operations (1)

 

 

387

 

 

89

Managed and licensed operations

 

 

 —

 

 

 —

Total

 

$

2,917

 

$

1,926


(1)

Includes corporate capital asset additions and unallocated corporate additions