Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.19.3
Segment Reporting
9 Months Ended
Sep. 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 (loss).

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 2019

 

For the three months ended September 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

 

$

17,120

 

$

2,065

 

$

 —

 

$

19,185

 

$

15,312

 

$

1,960

 

$

 —

 

$

17,272

Management, license and incentive fee revenue

 

 

 —

 

 

 —

 

 

2,921

 

 

2,921

 

 

 —

 

 

 —

 

 

2,688

 

 

2,688

Total revenues

 

 

17,120

 

 

2,065

 

 

2,921

 

 

22,106

 

 

15,312

 

 

1,960

 

 

2,688

 

 

19,960

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Owned operating expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost of sales

 

 

4,472

 

 

 —

 

 

 —

 

 

4,472

 

 

4,050

 

 

 —

 

 

 —

 

 

4,050

Other operating expenses

 

 

10,783

 

 

 —

 

 

 —

 

 

10,783

 

 

9,779

 

 

 —

 

 

 —

 

 

9,779

Owned food, beverage and other expenses

 

 

 —

 

 

1,971

 

 

 —

 

 

1,971

 

 

 —

 

 

2,068

 

 

 —

 

 

2,068

Total owned operating expenses

 

 

15,255

 

 

1,971

 

 

 —

 

 

17,226

 

 

13,829

 

 

2,068

 

 

 —

 

 

15,897

Segment income (loss)

 

$

1,865

 

$

94

 

$

2,921

 

$

4,880

 

$

1,483

 

$

(108)

 

$

2,688

 

$

4,063

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

General and administrative

 

 

  

 

 

  

 

 

  

 

 

2,352

 

 

  

 

 

  

 

 

  

 

 

2,266

Depreciation and amortization

 

 

  

 

 

  

 

 

  

 

 

1,103

 

 

  

 

 

  

 

 

  

 

 

896

Interest expense, net of interest income

 

 

  

 

 

  

 

 

  

 

 

230

 

 

  

 

 

  

 

 

  

 

 

294

Transaction costs

 

 

 

 

 

 

 

 

 

 

 

358

 

 

 

 

 

 

 

 

 

 

 

 —

Other

 

 

  

 

 

  

 

 

  

 

 

292

 

 

 

 

 

  

 

 

  

 

 

565

Income before provision for income taxes

 

 

  

 

 

  

 

 

  

 

$

545

 

 

  

 

 

  

 

 

  

 

$

42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2019

 

For the nine months ended September 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

 

$

53,749

 

$

6,472

 

$

 —

 

$

60,221

 

$

45,908

 

$

6,048

 

$

 —

 

$

51,956

Management, license and incentive fee revenue

 

 

 —

 

 

 —

 

 

8,260

 

 

8,260

 

 

 —

 

 

 —

 

 

7,832

 

 

7,832

Total revenues

 

 

53,749

 

 

6,472

 

 

8,260

 

 

68,481

 

 

45,908

 

 

6,048

 

 

7,832

 

 

59,788

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Owned operating expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cost of sales

 

 

14,109

 

 

 —

 

 

 —

 

 

14,109

 

 

12,121

 

 

 —

 

 

 —

 

 

12,121

Other operating expenses

 

 

33,554

 

 

 —

 

 

 —

 

 

33,554

 

 

28,556

 

 

 —

 

 

 —

 

 

28,556

Owned food, beverage and other expenses

 

 

 —

 

 

6,455

 

 

 —

 

 

6,455

 

 

 —

 

 

5,782

 

 

 —

 

 

5,782

Total owned operating expenses

 

 

47,663

 

 

6,455

 

 

 —

 

 

54,118

 

 

40,677

 

 

5,782

 

 

 —

 

 

46,459

Segment income (loss)

 

$

6,086

 

$

17

 

$

8,260

 

$

14,363

 

$

5,231

 

$

266

 

$

7,832

 

$

13,329

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

General and administrative

 

 

  

 

 

  

 

 

  

 

 

7,706

 

 

 

 

 

  

 

 

  

 

 

7,937

Depreciation and amortization

 

 

  

 

 

  

 

 

  

 

 

3,049

 

 

 

 

 

  

 

 

  

 

 

2,575

Interest expense, net of interest income

 

 

  

 

 

  

 

 

  

 

 

717

 

 

 

 

 

  

 

 

  

 

 

902

Transaction costs

 

 

 

 

 

 

 

 

 

 

 

510

 

 

 

 

 

 

 

 

 

 

 

 —

Loss on early debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

437

 

 

 

 

 

 

 

 

 

 

 

 —

Equity in income of investee companies

 

 

  

 

 

  

 

 

  

 

 

 —

 

 

 

 

 

  

 

 

  

 

 

(111)

Other

 

 

  

 

 

  

 

 

  

 

 

712

 

 

 

 

 

  

 

 

  

 

 

1,359

Income before provision for income taxes

 

 

  

 

 

  

 

 

  

 

$

1,232

 

 

  

 

 

  

 

 

  

 

$

667

 

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

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

2019

 

2018

Total assets:

 

 

  

 

 

  

Owned restaurants

 

$

73,753

 

$

42,971

Owned food, beverage and other operations (1)

 

 

16,204

 

 

7,274

Managed and licensed operations

 

 

5,463

 

 

5,734

Total

 

$

95,420

 

$

55,979


(1)

Includes corporate assets and unallocated corporate assets

The Company’s total assets increased $39.8 million as of September 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 nine months ended September 30, 

 

    

2019

    

2018

Capital assets additions:

 

 

  

 

 

  

Owned restaurants

 

$

2,861

 

$

2,792

Owned food, beverage and other operations (1)

 

 

648

 

 

446

Managed and licensed operations

 

 

 —

 

 

 —

Total

 

$

3,509

 

$

3,238


(1)

Includes corporate capital asset additions and unallocated corporate additions